Feckless, indeed

The editorial in The New York Times reads Feckless and Cruel, and that's exactly fecking right:

In a shameful bout of election-year politicking, the House has rejected badly needed help for rescue workers and residents still suffering from the 11 September 2001 destruction of the World Trade Center. What should have been swift bipartisan approval of a plan for medical and economic compensation turned into an ugly political brawl.
The House action was an insult, especially to the tens of thousands of ordinary citizens who pitched in selflessly for weeks in the cleanup, and have since developed grave illnesses from the toxic dust and debris of Ground Zero. Their needs were pushed aside as lawmaking degenerated into a game of election-year chicken.
The Democratic leadership, cowed by the Republicans’ relentless campaign-focused bluster no matter what the bill, foolishly ordered limited debate. That meant they had to accept an impossible two-thirds vote for approval. Republicans then voted no in near lock step. Mayor Michael Bloomberg was correct in pronouncing a pox on all as the bill fell short, 255 to 159.
The measure, which calls for $3.2 billion in medical aid over eight years and $4.2 billion in economic compensation, should have been put to a simple majority vote. If Republicans chose to oppose it with campaign boilerplate, the blame for failure would undeniably be theirs.
The House leadership needs to bring the measure back for a second vote requiring a simple majority. A small window remains after the summer recess. Lawmakers will have a chance to show that, beyond the fear and loathing that’s driving vicious House partisanship, a shred of comity can still be managed, especially when it comes to the victims of 11 September.
The main sponsors, Representatives Carolyn Maloney and Jerrold Nadler, both Democrats of New York, and Representative Peter King, a Republican of New York, are rightly still pressing to get the bill passed this year. This September marks the ninth anniversary of the 11 September attacks. The country must not forget any of its victims.

Wikideath

Seymour Topping has an article in The New York Times about what Wikileaks has wrought:

A Taliban spokesman announced that the group is poring over the tens of thousands of classified military documents published by WikiLeaks this week, looking for the names of pro-American Afghans.
As in the past, those identified will likely be added to lists of people to be assassinated, or rounded up once the United States and its allies leave the country. We’re already seeing this in Iraq where, as American troops prepare to withdraw, there is a campaign by insurgents to kill members of the Awakening movement and others who have cooperated with the United States.
With the United States’ deadlines for leaving Afghanistan only a year away, we need to plan for what will happen to our allies once we’re gone. And we must certainly not allow a repetition of what happened in Indochina after the withdrawal in 1975 of our military forces, our diplomatic establishment, and the Central Intelligence Agency.
Because the United States made virtually no provision for the security of its friends and collaborators, millions of people accused of being American sympathizers were killed, imprisoned, or compelled to flee as the North Vietnamese took power in South Vietnam, the Khmer Rouge in Cambodia and the Pathet Lao in Laos.
In South Vietnam, only a small number of collaborators was evacuated by Marine helicopters to ships off the coast. Just weeks later, as the North Vietnamese seized full control of the South, Le Duan, the hard-line Marxist successor to Ho Chi Minh, instituted a purge of American allies, consigning as many as 400,000 people to prison camps.
More than a million others fled the country by boat over the next fifteen years. Some were picked up at sea by the United States and resettled here. But American policymakers never seriously considered the fate of our South Vietnamese allies.
Conditions were even worse in Cambodia. Pol Pot, the genocidal leader of the Khmer Rouge, ordered the immediate execution of Cambodian soldiers and officials who served in the American-supported government of Lon Nol. Over the next four years, the United States stood by while an estimated 1.7 million Cambodians died by execution, starvation and maltreatment as Pol Pot set about cleansing the country of “foreign influence”.
In Laos, the United States abandoned its most loyal allies, the Hmong hill people, who had been employed by the CIA to battle the Communist-led Pathet Lao and disrupt North Vietnamese military traffic along the Ho Chi Minh Trail, which snaked through Laos on its way into South Vietnam. True, from 2000 to 2005 the United States gave asylum to 15,000 of the estimated 100,000 Hmong who had fled to Thailand. But it did nothing when, last December, Thailand deported more than 4,000 of the remaining refugees back to Communist-ruled Laos, where they could face retribution.
There are many parallels between the American experience in Indochina and the occupations of Afghanistan and Iraq. As the United States prepared to withdraw from Indochina, particularly Vietnam, it undertook a program of, in President Nixon’s words, “Vietnamization”, in which American forces trained and equipped allied armies to take over the fighting.
That we are doing the same in Afghanistan and Iraq should raise concerns. Vietnamization was predicated on the promise of continued American air support and other military aid. But as Congress became impatient with the ineptitude of the allied leaders and the war’s continued costs, that assistance was cut off, leaving our allies practically defenseless.
We can see similar tendencies in Congress today. Criticism of government leaders in Iraq and Afghanistan, as well as demands for reductions in military spending and accelerated withdrawal timetables, could be a harbinger of cuts to financial and military aid after we leave.
We must plan now to protect our allies in the future. We should consider leaving behind residual forces to ensure their security. We should refuse to negotiate political settlements with Taliban factions without iron-clad security guarantees for those who cooperated with the United States. We should seek international arrangements, possibly with United Nations support, to assure peaceful and humane political transitions.
And, if need be, we should offer asylum to anyone directly endangered for helping us. Having fought brutal wars in their countries to protect our interests, we owe them nothing less.

Seymour Topping, an emeritus journalism professor at Columbia and a former correspondent for The Times, is the author of On the Front Lines of the Cold War: An American Correspondent’s Journal from the Chinese Civil War to the Cuban Missile Crisis and Vietnam.

War on Number One

Ioan Grillo has the story at Time.com:

The operation was swift and deadly: Mexican military intelligence, without any aid from police forces or American agents, zeroed in on a safe house of Ignacio "Nacho" Coronel, aka "The King of Ice", one of the continent's most wanted drug traffickers. After clearance from high command, the troops went in on 29 July. Three helicopters covered from the air while 200 paratroppers rushed the target in a plush suburb of Guadalajara. The operation commander was the first through the door, and was shot dead with a pistol by a startled Coronel. The next soldier through fired two shots into the drug lord's chest, killing him instantly. A bodyguard rapidly surrendered. The reign of the King of Ice was over.
A triumphant-looking President Felipe Calderón appeared in the same city of Guadalajara less than four hours later to speak at a scheduled meeting with business leaders. Looking his most upbeat in several months, he assured the executives that he will succeed in bringing down the drug cartels that appear to have brought Mexico to the brink of the abyss. "We will firmly carry on the combat of crime that affects our society and community," he said to cheers. "We are going to deepen this effort, not only in the combat of organized crime in its most violent expression but in the combat of all law breaking."
After months of bad news on the drug war— including massacres, car bombs, and prison breakouts— the conservative Calderón has some reason for celebration. Coronel, 56, was one of the biggest players in the drug industry on the planet, estimated to smuggle tons of cocaine and crystal meth into the United States every month. The FBI had a $5 million dollar reward for his capture. But, more pertinently, Coronel was one of the key figures in Mexico's oldest and most powerful trafficking organization: the Sinaloa Cartel. For years Calderón's forces have picked away at the other six crime groups, leading to a flurry of accusations that they were somehow protecting the Sinaloans. Now Calderón can deflect this criticism and argue he is going after public enemy Number One.
Located 265 miles south of the US border at Arizona, the Pacific state of Sinaloa has produced narcotics since Washington first made them illegal. Peasant farmers grew opium poppies for heroin at the dawn of the Twentieth Century, and the crime family they developed then branched into marijuana, cocaine, and, more recently, crystal meth. Working with this omnipotent mafia since he was teenager, Coronel rose to be Number Three in the organization. The co-leaders of Sinaloa are Joaquin "Shorty" Guzman— whose worth Forbes magazine values at a billion dollars— and Ismael "The Mayo Indian" Zambada. Calderón's government will have to bring down one of these bosses to show it is really tearing up the cartel.
However, critics point to a fundamental problem facing Calderón in his war on the drug cartels. Whenever you shoot or arrest one capo, you simply get more bloodbaths as rivals fight to take their place. After the slaying of kingpin Arturo Beltrán Leyva, aka "The Beard," in December of 2009, his two lieutenants began a particularly vicious war in his old turf in central Mexico. One of them, the blond Edgar Valdez, alias "The Barbie," is accused by police of being the mastermind of killings that left behind 56 bodies and four severed heads, all found in an abandoned mine shaft.
The Sinaloa Cartel's chief rivals are the ultra-violent Zetas, led by army special forces defectors. On the same day the soldiers killed Coronel, the Zetas dumped fifteen bodies on a road in northern Mexico with the letter 'Z' drawn on their clothes. In total, there have been 26,000 drug related killings since Calderón took power in December of 2006 and launched his frontal attack on the traffickers.
"The logic is that the death of Coronel will also cause more violence," says José Reveles, who wrote a recent book on the Sinaloa cartel. "Information is that the Zetas are trying to move into his territory in Guadalajara. But his death could also have repercussions in a number of other states, because the networks of these criminal organizations spiral right across the country." Reveles argues that social programs aimed at stopping young people from falling into drugs and crime would be more effective in reducing the violence. But, while Calderón has promised such schemes, he has not put his money where his mouth is, says Reveles. "In the United States, spending on drug law enforcement compared to prevention is two to one. In Mexico it is 99 to one," he says. "If we don't change the social fabric that is turning young men into paid assassins, we are going to keep on having this problem."

Learned from Bill Gates, perhaps?

Time.com has an article by Jessie Jiang about a good Communist gone bad as a capitalist:

Tang Jun seemed to embody the ideal of a successful, globally minded Chinese businessman. After leaving his post as president of Microsoft's China operation, he went on to help build a Chinese online gaming empire and, in 2008, landed a huge salary as the head of a Chinese investment conglomerate. But it appears that the business titan's academic achievements were significantly embellished— a fact that doesn't seem to concern many of his Chinese fans, but has nonetheless catalyzed a nationwide debate over the place of integrity in Chinese society.
Earlier this month, Fang Shimin, a biologist-turned-science-writer, who has become famous in his own right for exposing academic frauds, revealed on his micro-blog that Tang never earned a doctorate from the California Institute of Technology, otherwise known as CalTech, as he claimed in an early version of his autobiography and various other occasions. Fang said that he had checked the Caltech alumni list and an online doctoral dissertation database, but had failed to locate Tang's name on either one of them.
Tang denied ever having made the claim, dismissing it as a communication glitch between he and his book's publisher. Five days after Fang's initial accusation, Tang told the China Daily that he received his Ph.D. at the California-based Pacific Western University, a school that Fang later pointed out was categorized as a diploma mill by a 2004 United States General Accounting Office report, and was not acknowledged by the Chinese Ministry of Education. Tang has yet to respond to that allegation, but has since been quoted by a Chinese magazine saying, "If your sincerity fools everyone, then it's a skill and a sign of success."
Diploma frauds are hardly unheard of in Chinese business culture. In 2001, Richard Li, a Hong Kong-based Internet tycoon, was exposed as having never graduated from Stanford University, even though he had claimed to have earned a degree from that prestigious campus. Later that year, Wu Zheng, a co-chairman of the biggest Chinese-language web portal, went through a similar embarrassment when he was found to have received his Ph.D. from an unaccredited school in the U.S.
Tang's scandal has triggered an avalanche of mixed reactions in the Chinese blogosphere that boil down to how honesty is valued in society. Indignant netizens have called for Tang to apologize and resign as chief executive of the New Huadu Industrial Group, a Chinese investment corporation that owns companies listed on both the mainland China and Hong Kong stock markets. But Tang's many supporters argue for tolerance, holding "a diploma-oriented society" more responsible for this phenomenon than fraudulent individuals. "Tang Jun is a talented person after all," wrote an Internet user. "Why should we dwell so much on his diploma?"
That attitude has critics up in arms. "The fact that so many people are apathetic to the scandal, or sympathize with Tang reflects the moral corruption of our society as a whole," says Ge Jianxiong, professor of history at Fudan University in Shanghai. "Trust is practically nonexistent in this society."
For now, the two camps are about evenly split. According to a recent online survey conducted by a Beijing-based market research company, 45.5% of the 3,500 participants believe that Tang's alleged misconduct, if true, should be "treated with tolerance". The same percentage of people viewed "ability" as the most important aspect of a person, while nearly as many respondents picked "honesty".
In an email response to Time, Fang says he expected Tang would just ignore the accusation, because that was the reaction he had got when exposing other big shots. "In today's China, honesty is not only unacknowledged, but often regarded as stupidity," he says. "I know many Chinese think Americans are naïve and easily fooled."
It is hard to gauge how much Tang has benefited, if at all, from the academic credentials he claimed to possess. Born in 1962, Tang was hired by Microsoft in 1994 as a senior manager and was promoted to president of Microsoft China in 2002. Two years later, he joined Shanda Interactive Entertainment Limited, a Shanghai-based online gaming company that became listed on NASDAQ in May of 2004. Tang's latest move to New Huadu gained national attention, as he reportedly brokered an annual salary package worth $146 million in company stock shares. Over the years, Tang has emerged as a household name in China as he frequented television talk shows and university podiums, sharing rags-to-riches stories with audiences often gripped by admiration. His autobiography, My Success Can Be Replicated, has been reprinted five times since its release in 2008.
It has been weeks since the accusations against Tang first caught the public's eye, and yet the dust is far from settled. An independent director with New Huadu said that he would investigate the matter as soon as possible, but no official decision has been reached by the company thus far. No matter what the result, Fudan University's Ge believes that the widespread problem of academic fraud will take much more than individual whistleblowers like Fang to solve. "I don't see how trust can be restored without an entirely different social belief system," he says. "I'm not optimistic about it at all."

Invidious comparisons

Courtesy of Rico's friend Bill Calloway, this relative-spill cartoon by Ramirez:

Civil War for the day

Parrott rifles

Oops is now a Russian police term

Quote for the day

Time.com has its own 'quote for the day':

I shouldn't think the owners will worry too much about paying a couple of hundred quid to have the clamps taken off.

An onlooker,as traffic wardens clamped a $1.9m Koenigsegg CCXR— one of only six ever made— and a $550,000 Lamborghini Murcielago SuperVeloce, both belonging to the Qatari owners of luxury department store Harrods

Careful, or you'll put an eye out. (Oops, too late.)

Isabel Kershner has an article in The New York Times about protests in Israel:

A macabre legal wrangle is under way over who should pay the hospital bill for an American art student who lost an eye after being struck by a tear-gas canister fired by an Israeli border police officer at a Palestinian-led protest in the West Bank. The student, Emily Henochowicz, 21, was injured on 31 May after she joined Palestinian and foreign activists protesting that morning’s deadly raid by Israeli naval commandos on a Turkish boat trying to breach the blockade of Gaza. Israeli security forces fired tear gas to disperse the demonstration after a few Palestinian youths threw rocks.
Witnesses at the protest, by the Qalandiya checkpoint near Ramallah, said that a border police officer had fired the tear-gas directly at the demonstrators, rather than into the air in line with regulations. The Israeli police have begun a criminal investigation.
But the lawyer representing Ms. Henochowicz, Michael Sfard, recently received a letter from the Israeli Ministry of Defense rejecting any demand for compensation or payment of hospital costs. The reason, the ministry stated, was that the protest was violent and that the tear-gas canister was not fired directly at her but had ricocheted off a concrete barricade.
Ms. Henochowicz, who is Jewish and is a student at the Cooper Union in New York, arrived in Israel in February for what was supposed to be a six-month student exchange. Her father was born in Israel to Holocaust survivors, whom he described as “ardent Zionists".
Speaking by telephone from her home in Potomac, Maryland this week, Ms. Henochowicz said it was “upsetting, when someone gets an injury, not only to have to deal with the physical consequences of something you did not do to yourself, but the economic consequences as well.”
Ms. Henochowicz, who was treated at Hadassah University Medical Center in Ein Kerem, had her left eye removed and suffered fractures that required the insertion of titanium plates. She returned to the United States in early June, where she is continuing to visit doctors and specialists.
But more than the cost of the treatment in Israel, which amounted to about $10,000, there are clearly legal principles and interests at stake. The student’s father, Dr. Stuart Henochowicz, said by telephone that he had not yet explored the question of whether his daughter’s insurance would cover the bill, because he was under the impression that it would be paid by the Ministry of Defense. The ministry stated that, according to preliminary checks, the border police dealt lawfully with the “violent protest at Qalandiya”, and that the firing of tear gas was justified. While expressing sorrow over Ms. Henochowicz’s injury, the ministry added that it did not cover hospitalization expenses in circumstances such as these.
The ministry said it had acted similarly in the case of Tristan Anderson, an American severely wounded by a tear-gas projectile in 2009. The ministry said that Mr. Anderson had filed a suit in the Tel Aviv District Court, where the issue of hospital expenses would be settled.
Mr. Sfard, the lawyer, said that from the start he told Dr. Henochowicz, who flew to Israel from the United States to be at his daughter’s bedside, “not to touch his wallet or to sign any check.” In a letter to the ministry, Mr. Sfard wrote, “It is insolent and preposterous to expect someone who was shot by the security forces, whether unintentionally, negligently, or with criminal intention, to fund her own medical treatment.”
Yuval Weiss, the director of the medical center in Ein Kerem, said the hospital was “not a party to the argument. It makes no difference to us who pays, as long as somebody does,” he said. “We cannot work for free.”
After her arrival in Israel, Ms. Henochowicz, who came to Jerusalem’s Bezalel Academy of Arts and Design, got involved with the pro-Palestinian International Solidarity Movement after meeting activists at a demonstration in Sheikh Jarrah, an East Jerusalem neighborhood where settlers have won court cases and evicted several Palestinian families from their homes. From Sheikh Jarrah, Ms. Henochowicz frequented the regular Palestinian protest spots in the West Bank like Bilin, Nilin, and Nabi Saleh. The late May protest was her first at Qalandiya. “I did not know what it would be like,” she said.
The demonstration came hours after Israel’s raid on an aid flotilla. Violent clashes broke out on the Turkish boat and nine activists— eight Turks and an American-Turkish youth— were killed.
Ms. Henochowicz said she was not standing near the stone throwers. She was holding a Turkish and an Austrian flag when she was struck.
Avi Issacharoff, an Israeli journalist from the newspaper Haaretz, was watching the demonstration. “The police fired a tear-gas grenade, and then another and another,” he wrote in June. “I remember that what surprised me was the volley of grenade fire directly aimed directly at the demonstrators, not at the sky. After the fourth grenade, if I am not mistaken, a shout was heard about a hundred meters away.”
Unusual for a foreign activist in a conflict where battle lines are often starkly drawn, Ms. Henochowicz says she feels a certain affinity with both sides. She said she had wanted to help the Palestinians, but because of her background, she said she also felt “very attached” to Israel “in lots of ways.” She added, “If I did not really care about what was happening in the country, I would have hung out on the beach all day.”
Dr. Henochowicz said he found the whole episode “hurtful”, and was upset that no Israeli officials made any contact with him or his daughter during the five days they were at the hospital. Israel’s ambassador to Washington, Michael B. Oren, has since visited the family’s home in Maryland, Dr. Henochowicz said. If it was an accident, “Why didn’t they come to the hospital and talk to me?” he asked.

Rico says he would repeat the old 60s phrase from Chicago: "The whole world is watching", but it's not...

If they're not using it any more, can we?

Andrew Jacobs has an article in The New York Times about the end of public shaming in China:

The Chinese government has called for an end to the public shaming of criminal suspects, a time-honored cudgel of Chinese law enforcement, but one that has increasingly rattled the public. According to the state-run media, the Ministry of Public Security has ordered the police to stop parading suspects in public and has called on local departments to enforce laws in a “rational, calm and civilized manner”. The new regulations are thought to be a response to the public outcry over a recent spate of “shame parades”, in which those suspected of being prostitutes are shackled and forced to walk in public.
Last October, the police in Henan Province took to the Internet, posting photographs of women suspected of being prostitutes. Other cities have been publishing the names and addresses of convicted sex workers and those of their clients. The most widely circulated images, taken this month in the southern city of Dongguan, included young women roped together and paraded barefoot through crowded city streets. The police later said they were not punishing the women, but only seeking their help in the pursuit of an investigation.
The public response, at least on the internet, has tended toward outrage, with many postings expressing sympathy for the women: “Why aren’t corrupt officials dragged through the streets?” read one posting. “These women are only trying to feed themselves.”
But much of the anger has been directed at the police, who are a focus of growing public mistrust. Although corruption among the police is rife in China, the disdain has been further heightened by a series of widely publicized episodes involving the torture of detainees, suspects who mysteriously died in custody, and innocent people jailed on trumped-up evidence. One man spent ten years in prison for murder after the police extracted his confession, only to be freed when his supposed victim turned out to be alive.
Mao Shoulong, a professor of public policy at People’s University in Beijing, said the new regulations were necessary to rein in the worst impulses of the police. “There are more modern tools for law enforcement,” he said. “Besides, if these kinds of tactics are allowed, the police will get used to dealing with problems outside of the law.”
The most recent wave of prostitution arrests involving thousands of suspects is part of a seven-month “strike hard” campaign aimed at gambling, drug use, and violent crime. As part of the increased law enforcement efforts, judicial authorities have been encouraged to mete out swifter, and harsher, punishment. It is the fourth such campaign since 1983.
Public shaming of the accused and the condemned has been a long tradition in China, one that the Communist Party embraced with zeal during episodes of class struggle and anticrime crusades. Although public executions have been discontinued, provincial cities still hold mass sentencing rallies, during which convicts wearing confessional placards are driven though the streets in open trucks.
The practice has also taken hold in some Chinese neighborhoods of New York, with some supermarket owners threatening to post photographs of shoplifters and call the police unless the suspects hand over cash, sometimes demanding hundreds of dollars. The legality of the practice, however, remains in question.
It is unclear whether the directive against the humiliation of suspects will have the desired effect. Similar rules and regulations have been passed down through the years beginning in 1988, when the Supreme People’s Court ordered prosecutors and the police to protect the identities of the accused. In 2007, the country’s top judicial and law enforcement bodies issued a similar notice that forbade the parading of convicts.
Even if such directives must be issued repeatedly, Joshua Rosenzweig of the Dui Hua Foundation, a human rights group, said he was somewhat encouraged that the government recognized the need to abolish such practices. “Repetition can increase pressure and help force change, but ultimately it will take a great deal of political will to implement these kinds of changes,” he said.

Rico says it's a great idea, and we should steal it fair and square from the Chinese, now that they're no longer using it. He can think of a long list of people who deserve public shaming (and only because the whole 'public beatings' notion hasn't caught on). But the whole 'perp walk' thing is a long-standing tradition, in certain circles, anyway...

That sound? Steve Jobs gnashing his teeth

Adam Cohen has a story at Time.com about 'jailbreaking' the iPhone:

Over the years, Apple has become almost as well known for the tight control it imposes on its innovations as for the tech and marketing genius behind them. If you buy an iPhone in the US, for instance, Apple makes you use AT&T as your carrier, and it requires you to buy any new applications from its App Store. But some owners have been hacking their iPhones to get around these rules— a process known as 'jailbreaking'— and this week the Federal government gave them what amounts to a get-out-of-jail-free card by ruling that the hacks do not violate Apple's copyright. It is the right decision, and one that promises to give customers more freedom in how they use all kinds of new technology.
The jailbreaking battle is part of a larger war raging right now over copyright law. Corporations have been pushing to extend copyright protections further than they were intended to go, to reduce competition and increase their profits. This week's ruling pushes back against this copyright mission creep.
Apple's rules for the iPhone are pretty unusual. When you buy a television, you can choose between a cable or satellite provider (and in some cases a telephone provider as well) and watch any television shows you want. When you buy a DVD player, you can play any DVDs. But buyers of iPhones are told precisely what they can buy and where they have to buy it.
The reason Apple has gotten away with locking down its phones to this degree is simple: customers like their iPhones so much that Apple can dictate its terms and most people will play along. (I get it: I am one of those wild iPhone fans.)
Jailbreakers are the customers who refuse to fall into line. They hack their iPhones so they can use T-Mobile or other carriers, and they download unapproved software from websites like Rock Your Phone, which bills itself as an "independent iPhone application store." Some of the jailbreakers are classic tech-geek rebels. But others insist that they are acting out of necessity, because Apple's approved products do not meet their needs.
Apple has fought back. It has warned customers that if they install unauthorized apps they risk damaging their iPhones. It has told them that jailbreaking may invalidate warranties. And it has accused jailbreakers of violating copyright law.
Now the Library of Congress, which operates the Copyright Office, has taken away Apple's copyright argument. Jailbreaking is "fair use", it decided, and therefore not a copyright violation. This ruling on jailbreaking was one of several good decisions issued by the Copyright Office this week. Another one makes it easier for college professors and documentary filmmakers to use small video clips without running afoul of the law.
The Electronic Frontier Foundation (EFF), which made the formal application to the Copyright Office to give the green light to jailbreaking, hailed the Copyright Office's decision as a major breakthrough. According to the EFF, as many as one million users may have jailbroken their iPhones, and this week's ruling takes them out of legal danger.
Others are cautioning, however, that there may be less to the decision than meets the eye. Harvard Law professor Jonathan Zittrain points out that, even with the ruling, it is still illegal to market tools whose purpose is to help people hack. That means that, while jailbreakers are off the hook, the developers who provide the unapproved apps may still be violating the law.
Still, the ruling clearly sends a message, and one that goes beyond the category of smartphones. It reaffirms a much broader principle: that making programs "interoperable" is not a copyright violation. That should give consumers a lot more freedom in how they use all sorts of devices, even ones that have not been invented yet.
Apple's attack on jailbreaking is only the latest in a long line of attempts by large corporations to extend copyright law farther than it should go. At the behest of big business, Congress passed the Sonny Bono Copyright Term Extension Act in 1998, adding decades to existing copyrights. Critics argued that the law, which was upheld by the Supreme Court in 2003, locks up creative works longer than is necessary or appropriate. As a result, they say, the public domain is diminished, and works that should be freely available are not.
Yet if companies like Apple are taking too extreme a position in the war over copyright, so is the other side. A growing anticopyright movement has emerged in recent years. Using the rallying cry "Information wants to be free", it argues that protection of intellectual property should be scaled way back. If this side prevails, there is a real danger that creativity will be stifled because artists and inventors will not be adequately compensated for their work, and they may lose their incentive to produce.
Given the extremes to which both sides in the copyright debate are prone, the government needs to work hard to stake out a sensible middle ground. Congress, the courts, and agencies like the Copyright Office have to protect legitimate intellectual property while at the same time ensure that copyright is not abused. With its ruling on iPhone jailbreaking, the Copyright Office struck just the right balance.

Not likely to do as well in Texas

Hiary Hylton has a Time.com article about the legal woes of Warren Jeffs:

Almost four years ago, the lanky, pale-skinned, wide-eyed "prophet" of a polygamist sect stepped out of a red Cadillac Escalade during a routine traffic stop just north of Las Vegas and said: "I am Warren Jeffs." FBI agents arrived to cuff the man who had shared a slot with Osama bin Laden on the most-wanted list that summer. With that arrest, the then-fifty-year-old Jeffs took his first step into a four-year legal maze that this week produced yet another surprising twist: the decision by the Utah Supreme Court to throw out the only successful conviction of the self-styled seer.
Jeffs once foretold that he would be in a long fight against dark forces, and he seems to have won a major victory in that war. He has suffered for it: his health debilitated by frequent hunger strikes, his knees cankered with sores from long sessions of prayer, according to prison officials. But the war between the prophet and the law is not over. While Utah prosecutors ponder their next move and consider whether to retry Jeffs, the state of Texas is in hot pursuit.
The Utah high-court ruling stunned prosecutors and prompted cries of vindication from Jeffs' legal team. In 2007, Utah won a conviction on charges that Jeffs was, in effect, an accomplice to rape when he performed a marriage between Elissa Wall, fourteen at the time, and her then-nineteen-year-old first cousin, Allen G. Steed, both members of his Fundamentalist Church of Jesus Christ of Latter-Day Saints (FLDS). Steed was charged with rape only after Jeffs' trial— an anachronism emphasized in the Utah high-court ruling— and the younger man's case has yet to go to trial.
The high court declared that jury instructions delivered by the trial judge and authored by the prosecution were wrong: "The question of accomplice liability cannot enter the equation until after a determination has been made that a crime has been committed," the opinion read, noting Steed was not facing rape charges when Jeffs was charged. The high court also noted the Utah criminal statute calls for the "actor" in a rape to be in a position of "special trust" with the victim. In the jury instructions, prosecutors defined Jeffs as the "actor" who held a position of trust over Wall. But Jeffs' appellate team argued the instructions were erroneous and "focused the jury on Jeffs' actions and position of special trust, rather than on Steed's, for the purpose of determining whether Wall consented."
The ruling drew fire from Marci Hamilton, a lawyer who specializes in church-state relations and who holds the Paul R. Verkuil Chair in Public Law at the Benjamin Cardozo School of Law. She has been an outspoken critic of the pace and dearth of prosecutions in polygamy cases in Arizona and Utah. "It's not terribly surprising" Hamilton told Time. "Their reading of the statute strikes me as mechanical." She notes that, although the opinion expressed sympathy for the victim, the unanimous opinion did not invite the state legislature to revisit the statute to make prosecutions in child-marriage cases easier. Hamilton says the politics of Arizona and Utah, where an estimated 10,000 members of the FLDS live and polygamy has a long, complicated history, have made prosecutions and even civil cases against the FLDS difficult. Local prosecutors "are awful on these issues", Hamilton says, adding that federal authorities have failed despite numerous violations of the Mann Act, the 1910 so-called "white slave" trade act enacted to fight interstate human trafficking.
State prosecutors in several western states have promised to pursue the FLDS in child-marriage cases, but prosecutions have been difficult given the tight-knit FLDS community, in which members are closely related by blood and tied together by business. As for federal prosecutions, they have not been forthcoming, despite lingering rumors of a federal grand jury seated somewhere in the west. When FBI agents accompanied Texas Rangers on the 2008 raid of the FLDS Yearning for Zion Ranch in Eldorado, longtime FLDS observers speculated that the federal authorities might be investigating the group.
Utah's attorney general Mark Shurtleff said he was "disappointed" in the ruling. His office will consult with prosecutors in Washington County, where Jeffs was convicted, to determine whether to ask for a rehearing on the appeal (unlikely, legal observers say) or go forward with a retrial. But the ruling may be a barrier to a retrial. "It is going to make it difficult... in cases where some of these men are in positions of power, almost complete power like Warren Jeffs, to prosecute them for forcing these girls into these marriages," assistant attorney general Laura Dupaix said.
Roger Hoole, a Salt Lake City attorney for Elissa Wall, the alleged victim in the Jeffs' trial, said his client is willing to endure another trial if prosecutors go ahead. Just last month, Arizona dropped two cases against Jeffs, one involving Wall and another of Hoole's clients, Susie Barlow. The alleged victims agreed to the move because Jeffs had already served more time in Utah's Mohave County jail than he would have received if convicted in their Arizona-based cases. And Wall and Barlow had apparently been under huge stress. "They have been reviled. They are hated and they have been scapegoated" in the FLDS community, Hoole claimed.
The best bet for those in pursuit of Jeffs may be the pending Eldorado charges in Texas, where he is facing trial for bigamy, sexual assault of a child, and aggravated assault. "Texas is the place for justice on these issues," says Hamilton. "He is more likely to get serious jail time." Texas prosecutors have been racking up a list of successful prosecutions against twelve FLDS members, based on evidence obtained in the Eldorado raid and DNA samples from FLDS children taken into Texas custody. So far, seven men have been found guilty of various child-abuse, bigamy and other felony charges with sentences ranging from seven to 75 years. Jeffs is alleged to have performed and blessed the marriages involved in these cases.
The Utah high-court ruling came down on the same day Jeffs was scheduled to appear in court in an extradition hearing. But, after the high-court ruling, Texas pulled down its paperwork on a technicality: it had been requesting temporary custody of Jeffs under an interstate agreement relating to prisoners and, at least technically, Jeffs is no longer a convicted prisoner. A spokesman for Texas attorney general Greg Abbott said the governor's office was redrafting the papers, and said the attorney general was committed to seeing Jeffs stand trial in Texas.
For now, Jeffs will be transferred from Utah state prison back to the Washington County Purgatory jail as Utah prosecutors mull over their options. They have fourteen days to seek a rehearing on the appeal and thirty days to announce a new trial. If they opt for a retrial, the case will be sent back to the trial court, according to high-court spokesman Nancy Volmer, and the judge will set a hearing to determine if Jeffs will be detained or released on bail. Given his fugitive history, Hamilton says, Jeffs is likely to be deemed a "huge" flight risk. Meanwhile, the clock also is ticking for Texas prosecutors, and Jeffs' lawyers have promised a vigorous fight. But Texas only has to confirm Jeffs' identity to a Utah court, not the merit of the charges. As long as they know where Jeffs is, it is likely Texas will get its man.

Rico says the guy's gonna go down, eventually and somewhere...

Aryn Baker has the story of the 'Oprah of Afghanistan' at Time.com:

The singer clutches the wireless microphone to his lips and croons the words to a traditional Afghan love song. The house band struggles to keep the beat. Listeners beam, some furtively tap their feet. They shift in their folding chairs as television cameras pan the audience. By the time the song is over, the studio guests have loosened up a little. They applaud politely. It's only when the real star of the show steps on stage that everyone lets loose. Men whistle, women clap ferociously. Little girls, dressed in sequins and bows, rush the stage. Mozhdah Jamalzadah is in the house.
Part Oprah, part Hannah Montana, The Mozhdah Show is the latest sensation to hit Afghanistan's television screens. Airing every Thursday and Friday night (the Afghan weekend), the program is a lively mix of music, games, skits, and pop psychology couched in the format of an American daytime talk show. It is also Jamalzadah's subversive stab at fixing the ills of Afghan society, one television show at a time. "Today, we will be talking about problems in the family," Jamalzadah informs the audience from her perch on a pink and yellow fake-leather sofa. Next to her is the day's guest speaker, a psychology professor from Kabul University. "Sometimes families have problems that they cannot solve, and when that happens, they have to separate. Today we will talk about divorce." The audience freezes. Divorce is a taboo subject in Afghanistan, one spoken of in whispers, if spoken of at all. Jamalzadah senses the mood and quickly ad-libs in her trademark no-nonsense style. "This is the truth. We should not run away from the truth."
Born in Afghanistan, and raised as a refugee in Canada, Jamalzadah, 26, is best known as one of Afghanistan's most famous pop singers. Her hit single Afghan Girl was recorded in Canada, but quickly spread throughout the Afghan diaspora, eventually reaching Afghanistan, where it was recently voted best song of the year. She cannot leave her house without getting mobbed by fans snapping photos on their mobile phones and demanding autographs. In March she performed Afghan Girl at the White House in celebration of International Women's Day, fulfilling one of her life's goals of meeting President Barack Obama.
Jamalzadah never wanted to be a singer. She says she doesn't even like karaoke. What she wanted was to help Afghanistan, and singing, she says, was the best way to get her message out. "Afghan Girl is a song for the men of Afghanistan. It is about all the great female heroes in Afghan history, and I try to remind men that women too can be powerful."
The song struck a chord, and Jamalzadah, who had never had a singing lesson before she turned eighteen, went on to record several more. Her concerts in Canada were mobbed by expatriate and second-generation Afghans hungry for music in their own language. But not everyone was a fan. Her Facebook page and video posts on YouTube are often littered with threats and expletives. She has been called a "disgrace to Afghanistan" and "poison" by those who are offended by women singing.
Fan-site forums spend as much time discussing her outfits as they do her lyrics. The clothes she wears on television could be described best as following the letter of the typical Afghan dress code rather than the spirit. At a taping last week she wore four-inch platform sandals, a full-length skirt, a tight long-sleeved shirt, and a headscarf that did nothing to conceal her waist-length, highlighted hair. Not an inch of improper flesh was showing, but the effect was provocative nonetheless. She laughs when asked about a recent letter from the Ministry of Information and Culture warning her to dress more appropriately on the show. It's all part of her grand plan, she says, flirting with boundaries in order to expand them. "I want to bring in new things, new ideas, but I don't want to do it in a way that I alienate people."
Jamalzadah acknowledges that it's a delicate line to walk. For a while she engaged each of her Facebook detractors directly, taking on those with the worst threats first, and seeking to get to the bottom of what, exactly, was so offensive about a woman singing. Many enemies she turned into fans. "Like Obama says, you change the world one person at a time," she says.
But Facebook evangelism could only go so far. That's where her television show came in. When a start-up station in Kabul contacted her last year about hosting a music program, she jumped at the chance. Not only did it give her an opportunity to go to Afghanistan, she thought it would give her a wider platform to spread her message of hope and change. Once in the country, she realized that she could do so much more. Armed with a boxed DVD set of Oprah episodes, she convinced her producers that a talk show focused on family issues was just what the market wanted and Afghanistan needed. "By securing the family, you can secure the nation." So many of Afghanistan's problems start at home, she says: poverty, a lack of education, child abuse, domestic violence, disrespect for women, an ignorance of basic human rights. "How we treat our children affects our future, so what I decided to do on the show is to focus on women and children."
The soft focus doesn't mean Jamalzadah shies away from tough themes. If anything, it allows her to tackle the controversial subject of women's rights without risking a backlash from Afghanistan's religious conservatives. "I don't go into it directly, because you can't just force it on people," she says. "What I am trying to do is introduce women's rights slowly, without people noticing." On one recent program she took on the practice of forced marriage. She didn't condemn it; rather, she aired the potential pitfalls and problems through a humorous skit acted out by studio actors. Then she opened up the floor to questions and comments by the audience. The goal is to start a discussion, to get people thinking. So far she is pleased with the results. "I see through my audience an opening up of Afghan society." In the beginning, she says, no one dared ask a question. Now she doesn't have time to get to all the audience members who raise their hands. "Even the women and girls, they feel like they can speak out. They are more confident." Except of course, when it comes to divorce. Off camera, Jamalzadah admitted to being nervous about introducing such a potentially toxic subject. But under the studio lights, her television personality came to the fore. When no one raised a hand to comment after the divorce segment, she directly challenged her audience. "Are you afraid?" she asked, daring a group of young men to speak up. Finally one raised his hand. Trembling with awe, and perhaps a little stage fright, he suggested that one problem leading to divorce might be the practice of newly married couples moving in with their in-laws. The audience erupted in laughter, and the ice was broken. Hands shot up. Jamalzadah was back on a roll.
Jamalzadah— whose first name, roughly translated, means "good news"— takes her inspiration from Oprah Winfrey, the woman next on the list of people she is dying to meet. When asked what she would say to her idol, she laughs. "Oh, my God, it's a total cliché. I'd tell her how much she changed my life." But then Jamalzadah pauses and corrects herself. "Oprah inspired me to come here and do what she has done in America: to fix families and through them change society. Because of Oprah, I have been able to change the life of my nation." That is hardly a cliché.

Rico says now there's a phrase you never thought you'd hear: the Oprah of Afghanistan...

Hankooking

John Edge has the story in The New York Times about the latest food craze:

Tomas Lee has long dreamed of selling American consumers on Korean barbecue. Mr. Lee, a 42-year-old native of Seoul, South Korea, who grew up in Mustang, Oklahoma, took a step toward realizing that dream in October of 2009 when he opened Hankook Taqueria in Atlanta, serving tacos stuffed with soy- and garlic-marinated beef, along with chicken and pork, all barbecued in the Korean style. “I was going to open a traditional Korean barbecue restaurant,” Mr. Lee said. Then his wife, Mackenzie, had an idea. “She saw this thing about Kogi on the web,” he recalled. “And I thought tacos might be a way to get Korean food on everybody’s table.” What had captured Ms. Lee’s attention was Kogi Korean BBQ-To-Go, a retrofitted catering truck that rolled onto the streets of Southern California in November of 2008, selling corn tortillas piled with Korean-style barbecued short ribs known as kalbi, garnished with onion, cilantro, and a hash of chili-soy-dressed lettuce.
Eighteen months later, dozens of entrepreneurs across the country are selling Korean tacos. Like Buffalo wings and California rolls, Korean tacos have gone national, this time with unprecedented speed. Few of these entrepreneurs appear to have made pilgrimages to Southern California to eat at a Kogi truck. (There are now five.) Many, especially those of Korean ancestry, say they studied news media reports of the Kogi concept, recognized their culture at the core, and made the concept their own.
“You get the feeling that this is our chance to mainstream Korean food,” said Jae Kim, a Seoul native, selling Korean tacos since February at his Chi’Lantro truck in Austin, Texas. “And it’s happening so quickly. It’s like everybody is realizing that it’s now or never.”
“I’ve never tasted anything like this before,” said Tim Burroughs, a recent customer at Hankook Taqueria. “It’s as if they’re making up a cuisine as they go.”
Granted, Koreans have long eaten kalbi wrapped in lettuce leaves, in a taco-like fashion. But it’s a 21st-century paradox that Korean food, still considered exotic by many Americans, has begun to gain widespread acceptance when wrapped in a Mexican flatbread and topped with taco truck embellishments.
Last month in Indianapolis, John Ban, 31, raised in Indiana by Korean parents, and Arnold Park, 28, a native of Seoul, began selling $2 tacos— corn tortillas piled with nubs of beef, chopped onions, cilantro leaves, and red jalapeño salsa— late at night to club kids who visited their West Coast Tacos truck. “First we were going to move to Korea and open a regular taco truck,” said Mr. Ban, who has worked as a D.J. and hip-hop artist. “Then we thought we’d do a Korean taco truck in Korea. We settled on doing a Korean taco truck in Indianapolis.”
“The meat makes it Korean,” said Mr. Ban, who marinates chuck roll in a soy and garlic sauce that is traditionally used with Korean barbecue dishes. “The tortilla and the toppings are a way to tell our customers that this food is okay, that this food is American.”
Cecilia Hae-Jin Lee, a native of Seoul, raised in Southern California by parents who ran a bodega that catered to a Mexican clientele, said the Mexican-Korean culinary connection was born of proximity. “The idea of Korean tacos isn’t new,” said Ms. Lee, who wrote a guidebook to South Korea and recently finished writing a Mexican cookbook. “Koreans run stores. They hire Mexican workers. They eat together. Before, when Koreans ran out of rice and grabbed a tortilla to go with our kalbi, we called it lunch,” she added. “Now we call it a Korean taco.”
The dish may have honest folk roots, but many Korean taco makers across the country recognize Roy Choi, a Kogi founder, as the pioneering force. “Chef Roy was the alpha,” said Bo Kwon, who has been serving Korean Oregon Infusion BBQ from his Koi Fusion trucks in Portland, Oregon since May of 2009. “We just Portlandize what he did in L.A.,” said Mr. Kwon, whose menu borrowed from Mr. Choi’s in the manner that 50 Cent sampled Biggie Smalls.
Mr. Choi respects the work of Koi Fusion, where the specialty is a marinated short-rib taco, a virtual Kogi knockoff dressed with shredded cabbage, chopped onions, scallions, bean sprouts, cilantro, daikon sprouts, and salsa. But he worries about what will happen as more and more restaurateurs adopt the form. “If Kogi-inspired trucks change how American eats, I’ll be a pig in slop,” Mr. Choi told a November 2009 gathering of chefs at the Culinary Institute of America’s Greystone campus in St. Helena, California. “But if their food isn’t any good, I’ll be Kurt Cobain.”
Mr. Choi’s day of reckoning may come soon, for Kogi-inspired tacos are now legion. Four Portland vendors compete with Koi Fusion, including Boolkogi, Bulkogi, and Korean Twist.
Ten or more trucks now roll through Southern California, where Bool Korean BBQ Tacos & Pastels serves Korean, Mexican, and Brazilian foods. Calbi Fusion Tacos and Burritos, financed by an investor in the Baja Fresh Mexican Grill chain, is selling franchises.
In the Bay Area, home to a half-dozen or so operators, Jomar Guevarra, a Filipino, and Sam Pak, born in California to Korean parents, work the MoGo truck, dishing short-rib tacos as well as bacon-wrapped and kimchi-topped hot dogs.
Although Korean taco saturation is greatest in California, the growth of the genre is not restricted to the West Coast. At Meritage in Philadelphia, Anne Coll, former chef of the Chinese-French restaurant Susanna Foo, serves a Wednesday night special of braised short-rib tacos, topped with kimchi. (The sous chef Ann Suk Miller, whose mother is Korean, previously served a very similar dish at Ansill, another restaurant in the city.)
In Austin, Mr. Kim, the owner of Chi’Lantro, dishes tofu tacos with a soy vinaigrette salad. “Korean tacos are what’s next,” he said. “After that, maybe it’s Korean pizza.”
In Chicago, Steve Lee, born in the countryside outside Seoul, serves chips and salsa, aguas frescas, and kimchi-topped tacos at Taco Chino, a restaurant he opened in December in a strip mall. “A lot of Mexican restaurants have just one flavor,” Mr. Lee said. “I wanted to add another flavor.”
Also in town, Del Seoul, featuring Korean-inspired dishes like kalbi tacos stuffed with short ribs and the rice dish bibimbap threaded with turnip greens, plans to open late this summer.
Trend-conscious restaurateurs, some with few apparent ties to Korea, have also adopted Korean tacos as their own. In Brooklyn, the Oaxaca restaurants advertise “traditional Mexican fare”, but serve specials of kalbi tacos topped with Asian pear slaw. Sagaponack, a seafood restaurant and raw bar in the Flatiron district of Manhattan named for a Long Island village, serves kalbi tacos and pesto fries. Meanwhile, in January, Ducks Eatery, set within Spin, a table tennis parlor in the Flatiron district, began serving short-rib tacos with oyster kimchi and miso aioli.
While the trend, which Mr. Kwon of Koi Fusion has called “the movement”, shows no signs of abating, a few Korean taco businesses have already come and gone.
Yummo, a frozen yogurt cafe in Kansas City, Missouri, that sold short-rib tacos with homemade kimchi, closed last fall. Kogi Shop, a Korean taco truck in Oklahoma City that was started in November of 2009 by a Korean husband-and-wife team from Los Angeles, last updated its Twitter feed in March.
Variations on the Korean taco form were inevitable.
Julia Sharaby, of German and Cherokee descent, runs Fusion Taco, a truck serving short-rib quesadillas and chicken satay tacos in Houston. In Los Angeles, Masamichi Kiyomiya, proprietor of LA Chicken, serves Japanese chicken tacos.
In August of 2009, Tan Truong and Jonathan Ward rolled out Kung Fu Tacos, a bright yellow truck, selling nun chuk chicken and wu shu char siu to office workers in San Francisco’s financial district. The partners had planned a trip to Los Angeles to sample Kogi’s food. But then it hit them. “My wife is Chinese,” Mr. Ward recalled. “Why would I try Korean tacos when I could try Chinese tacos? So I texted Tan. I wrote ‘char siu taco.’ And he wrote back ‘brilliant.’ ”
Recalibration has already begun.
Namu is a sleek restaurant in San Francisco operated by the brothers Dennis, Daniel and David Lee. They call their cookery “cutting edge, new California.” Born in the United States to Korean parents, the Lees serve dishes like asparagus with guanciale, maitake mushrooms, and a tofu-sesame purée. Now on the dinner menu are “real Korean tacos”, of kalbi and sesame rice, topped with kimchi remoulade and daikon salsa, folded into toasted seaweed pouches. “Every time someone from the press called, they asked if we made Korean tacos,” David Lee said. “It was like we were being typecast. They were thinking, ‘Hey, you’re Korean, you must make Korean tacos.’ So we gave them they wanted,” Mr. Lee said. “Korean tacos, but on our own terms.”

Rico says he probably won't see this in Philly any time soon (not a big Koreatown), but maybe some day...

1968 all over again

Maureen Dowd has an op-ed piece in The New York Times about Afghanistan:

The waterfall of leaks on Afghanistan underlines the awful truth: we’re not in control. Not since Theseus fought the Minotaur in his maze has a fight been so confounding.
The more we try to do for our foreign protectorates, the more angry they get about what we try to do. As Congress passed $59 billion in additional war funding, not only are our wards not grateful, they’re disdainful.
Washington gave the Wall Street banks billions, and, in return, they stabbed us in the back, handing out a fortune in bonuses to the grifters who almost wrecked our economy.
Washington gave the Pakistanis billions, and, in return, they stabbed us in the back, pledging to fight the militants even as they secretly help the militants.
We keep getting played by people who are playing both sides.
Robert Gibbs recalled that President Obama said last year that “we will not and cannot provide a blank check” to Pakistan. But, only last week, Secretary of State Hillary Clinton arrived in Pakistan to hand over a juicy check: $500 million in aid to a country that’s been getting a billion a year for most of this decade and in 2009 was pledged another $7.5 billion for the next five. She vowed to banish the “legacy of suspicion” and show that “there is so much we can accomplish together as partners joined in common cause”.
Gibbs argued that the deluge of depressing war documents from the whistle-blower website WikiLeaks, reported by The New York Times and others, was old. But it reflected one chilling fact: the Taliban has been getting better and better every year of the insurgency. So why will 30,000 more troops help?
We invaded two countries, and allied with a third, all renowned as masters at double-dealing. And now, lured into their mazes, we still don’t have the foggiest idea, shrouded in the fog of wars, how these cultures work. Before we went into Iraq and Afghanistan, both places were famous for warrior cultures. And, indeed, their insurgents are world class.
But whenever America tries to train security forces in Iraq and Afghanistan so that we can leave behind a somewhat stable country, it’s positively Sisyphean. It takes eons longer than our officials predict. The forces we train turn against us or go over to the other side or cut and run. If we give them a maximum security prison, as we recently did in Iraq, making a big show of handing over the key, the imprisoned al-Qaeda militants are suddenly allowed to escape.
The British Empire prided itself on discovering warrior races in places it conquered— Gurkhas, Sikhs, and Pathans, as the Brits called Pashtuns. But why are they warrior cultures only until we need them to be warriors on our side? Then they’re untrainably lame, even when we spend $25 billion on building up the Afghan military and the National Police Force, dubbed “the gang that couldn’t shoot straight” by Newsweek.
Maybe we just can’t train them to fight against each other. But why can’t countries that produce fierce insurgencies produce good standing armies in a reasonable amount of time? Is it just that insurgencies can be more indiscriminate?
Things are so bad that Robert Blackwill, who was on W.’s national security team, wrote in Politico that the Obama administration should just admit failure and turn over the Pashtun South to the Taliban, since it will inevitably control it anyway. He said that the administration doesn’t appreciate the extent to which this is a Pashtun nationalist uprising.
We keep hearing that the last decade of war, where we pour in gazillions to build up Iraq and Afghanistan even as our own economy sputters, has weakened al-Qaeda.
But, at his confirmation hearing before the Senate Armed Services Committee, General James Mattis, who is slated to replace General David Petraus, warned that al-Qaeda and its demon spawn represent a stark danger all over the Middle East and Central Asia. While we’re anchored in Afghanistan, the al-Qaeda network could roil Yemen “to the breaking point,” as Mattis put it in written testimony. Pakistan’s tribal areas “remain the greatest danger, as these are strategic footholds for al-Qaeda and its senior leaders, including Osama bin Laden and Ayman al-Zawahiri,” the blunt four-star general wrote, adding that they “remain key to extremists’ efforts to rally Muslim resistance worldwide.” Questioned by John McCain, General Mattis said that we’re not leaving Afghanistan; we’re starting “a process of transition to the Afghan forces”. But that process never seems to get past the starting point.
During the debate over war funds, Representative Jim McGovern, a Massachusetts Democrat, warned that we are in a monstrous maze without a ball of string to find our way out. “All of the puzzle has been put together, and it is not a pretty picture,” he told Carl Hulse of The Times. “Things are really ugly over there.”

Rico says half a billion dollars might not be a blank check, but it might as well be...

What's a hundred million, unless it's yours?

Carol Vogel has an article in The New York Times about an art collection in the wrong hands, twice:

For more than two decades, the heirs of a world-renowned Jewish collector have been petitioning the Hungarian government to return more than $100 million worth of art, most of which has been hanging in Hungarian museums where it was left for safekeeping during World War Two, or placed after being stolen by the Nazis and later returned to Hungary.
The requests have been rebuffed, as have appeals to the government from current and former United States senators including Democrats Christopher J. Dodd, Hillary Rodham Clinton, and Edward M. Kennedy. Finally, in 2008, a Hungarian court ruled that the government was not required to return the art.
Now, in what experts say is the world’s largest unresolved Holocaust art claim, the heirs of the Hungarian banker Baron Mor Lipot Herzog have filed a lawsuit in United States District Court in Washington demanding the return of the art collection they say is rightfully theirs. The lawsuit has been filed against Hungary and several museums that it oversees.
The suit includes an unprecedented twist: in addition to the more than forty artworks explicitly identified in the filing— including paintings, sculptures and other works by masters like El Greco, Lucas Cranach the Elder, Zurbarán, van Dyck, Velázquez, and Monet— lawyers are also asking the Hungarian government for an accounting of all art from the Herzog family in its possession.
“It’s a very emotional subject,” David de Csepel, a great-grandson of Baron Herzog who lives in Los Angeles, said of the collection’s fate in a telephone interview. Mr. de Csepel, who said he was speaking on behalf of about a dozen relatives, explained that this lawsuit had come after decades of frustration with the Hungarian government. “I want to see justice done. My great-grandfather was one of the most famous collectors in all of Europe. His passion and love of art is well known.”
Mr. de Csepel, 44, remembers hearing about the art from his grandmother when he was a boy growing up just outside of New York. “It was something she held dear to her,” he said. “She got a book of the collection from one of the museums, cut out the pictures, and hung them around her apartment.”
Michael S. Shuster, a lawyer for the Herzog family, said that Hungary had been “one of the countries that has been the most recalcitrant” about returning looted art. “While other countries have cooperated,” he said, “Hungary has been bucking that trend.”
Gabor Foldvari, Hungary’s deputy consul general in New York, said in a telephone interview that it was not a question of Hungary’s refusing to cooperate but that, in the case of the Herzog heirs, “it was not the government’s decision, but the court’s decision” to keep the art.
Hungary is not the only country with looted Herzog art. Over the years the family has made legal claims in Poland, Russia, and Germany, seeking the return of art and objects seized during and after World War Two. This year the German government returned three works: an 18th-century snuffbox said to have belonged to Frederick the Great; a painting by Zeitblom, a 15th-century German artist; and a 1545 portrait by Georg Pencz, which the Herzogs sold at Christie’s in London this month for $8.5 million. That money is being used to support the heirs’ litigation, according to Mr. Shuster and Charles A. Goldstein, counsel to the Commission for Art Recovery, a thirteen-year-old nonprofit organization that helps victims of Nazi art thefts. (Asked if the Herzog heirs were planning to auction some or all of the collection if art were returned, as many families in similar situations have done, both Mr. Shuster and Mr. Goldstein said nothing had been decided.)
Part of the family’s frustration, Mr. Shuster said— and one reason the lawsuit requests a Hungarian inventory— is that it appears impossible to know just how much art is actually missing. Russia, for example, where some family members filed a lawsuit in 1999 that is still pending, is believed to have a number of works by artists including El Greco, Goya, and Renoir that were stolen by the Nazis and then seized by the Soviets in Germany. Those works may be just a small segment of what was lost.
And in Hungary, the Herzogs believe, there may be many more than the works named in the suit, which are valued at a total of about $100 million. (That figure was arrived at after asking dealers and auction-house experts to value the property from photographs and visits to some of the museums.)
“About twelve years ago, I was put in touch with one of the Herzog heirs through friends,” said George Wachter, who runs Sotheby’s old master paintings department worldwide. “I was asked to go to Budapest to meet with their lawyer and look at” several paintings. Mr. Wachter took the trip and described the art he saw as “good, solid, quality pictures,” adding, “I can understand why Hungary wouldn’t let them go.”
Before this latest lawsuit, the heirs tried to compromise with the Hungarian museums. “Fifteen years ago, the family offered to split the paintings with the government, and got turned down,” Mr. Goldstein said. “Germany and Austria have come to terms with this issue, but Hungary has not. They have refused to take responsibility.”

Rico says that Germany stole them, then Hungary stole them back fair and square, what's the problem?

Civil War for the day

A Union gun crew, ready to fire.

An oldie but a goodie

Some Westerns you don't see when they come out, and Rico's been watching this one for a couple of days, a piece at a time. Great stars: Sam Elliott, Tom Conti, Kate Capshaw (but no photo available of her 'under the waterfall' shower scene, alas; too bad, too, because she's hot in wet, white undergarments), and Clayton Moore (yup, the old Lone Ranger) in a a minor role. The story's the usual bad-men-get-killed-by-a-good-man-while-he-doesn't-screw-another-man's-wife, but done well. Rico says get it from Netflix...

Oh, now they're pissed

Elaine Ganley has the story for the AP:

France has declared war on al-Qaeda, and matched its fighting words with an attack on a base camp of the terror network's North African branch, after the terror network killed a French aid worker it took hostage in April.
The declaration and attack marked a shift in strategy for France, usually discrete about its behind-the-scenes battle against terrorism.
"We are at war with al-Qaeda," Prime Minister Francois Fillon said Tuesday, a day after President Nicolas Sarkozy announced the death of 78-year-old hostage Michel Germaneau. The humanitarian worker had been abducted on April 20 or 22 in Niger by al-Qaeda in the Islamic Maghreb, and was later taken to Mali, officials said.
The killers will "not go unpunished," Sarkozy said in unusually strong language, given France's habit of employing quiet cooperation with its regional allies— Mauritania, Mali, Niger, and Algeria— in which the al-Qaeda franchise was spawned amid an Islamist insurgency. The Salafist Group for Call and Combat formally merged with al-Qaeda in 2006 and spread through the Sahel region in parts of Mauritania, Mali, and Niger.
Officials suggest France will activate accords with these countries to stop the terrorists in their tracks. "It's a universal threat that concerns the entire world... not just France or the West," Defense Minister Herve Morin said Tuesday on France-2 television. "We will support local authorities so these assassins and their commanders are tracked, judged, and taken before justice and punished. And, yes, we will help them."
Algeria, Mauritania, Mali and Niger in April opened a joint military headquarters deep in the desert to respond to threats from traffickers and the al-Qaeda offshoot. U.S. Special Forces have helped the four nations train troops in recent years. The United States said it would help the French "in any way that we can" to bring those who killed Germaneau to justice, according to State Deptartment spokesman P.J. Crowley. "There is no religion that sanctions what can only be described as cold-blooded murder," Crowley said Tuesday.
Fillon refused to say how France would act. "But we will," he said in an interview with Europe 1 radio. And perhaps it already has. On Thursday, French-backed Mauritanian forces attacked an al-Qaeda camp on the border with Mali, killing at least six suspected terrorists. It is the first time France is known to have attacked an al-Qaeda base. France said it was a last-ditch effort to save its citizen, while Mauritania said it was trying to stop an imminent attack by fighters gathering at the base.
For the French, the move may have backfired. The al-Qaeda group said in an audio message broadcast Sunday that it had killed Germaneau in retaliation for the raid. French officials suggested, however, that the hostage, who had a heart problem, may already have been dead. Even now, "We have no proof of life or death," Morin said.
"We can expect an increase in the French riposte," said Antoine Sfeir, an expert on Islamist terrorists who has traveled in the region.
An estimated 400-500 such fighters are thought to roam the Sahel region, a desert expanse as large as the European Union. Despite meager numbers, the region's al-Qaeda fighters pose a clear threat. Among the more recent victims, a British captive was beheaded last year, and two Spanish aid workers were taken hostage in Mauritania in November. Spain is working to free them. Mauritanian soldiers also have fallen in numerous attacks.
The head of the French Institute of Strategic Analysis suggested the French government's rhetoric was normal. "It's important to make that kind of announcement," Francois Gere said. "I think it's made of the same stuff" as former U.S. President George W. Bush's tough line on al-Qaeda. But "a government has to make clear it must respond strongly" while maintaining the discretion needed to ensure cooperation, Gere said. In the past France has been cautious because those governments don't want the appearance of interference from the West, he said.
Spain has maintained a low profile, as videos by the al-Qaeda franchise regularly call for the conquest of al-Andalus— a reference to the period of Muslim rule of much of Spain in medieval times.

Rico says that's funny, we've been 'at war with al-Qaeda' since the 11th of September, 2001. Nice of the French to catch up...

Prudential, at it again

David Evans has a long, ugly story at Bloomberg.com:

The package arrived at Cindy Lohman’s home in Great Mills, Maryland just two weeks after she learned that her son, Ryan, a 24-year-old Army sergeant, had been killed by a bomb in Afghanistan. It was a thick, 9x12-inch envelope from Prudential Financial, which handles life insurance for the Department of Veterans Affairs.
Inside was a letter about Ryan’s $400,000 policy. And there was something else, which looked like a checkbook. The letter told Lohman that the full amount of her payout would be placed in a convenient interest-bearing account, allowing her time to decide how to use the benefit. “You can hold the money in the account for safekeeping for as long as you like,” the letter said. In tiny print, in a disclaimer that Lohman says she didn’t notice, Prudential disclosed that what it called its Alliance Account was not guaranteed by the Federal Deposit Insurance Corp., Bloomberg Markets magazine reports in its September issue.
Lohman, 52, left the money untouched for six months after her son’s death in August of 2008. “It’s like you’re paying me off because my child was killed,” she says. “It was a consolation prize that I didn’t want.” As time went on, she says, she tried to use one of the “checks” to buy a bed, and the salesman rejected it. That happened again this year, she says, when she went to a Target store to purchase a camera on Armed Forces Day, 15 May.
Lohman, a public health nurse who helps special-needs children, says she had always believed that her son’s life insurance funds were in a bank insured by the FDIC. That money— like $28 billion in 1 million death-benefit accounts managed by insurers— wasn’t actually sitting in a bank. It was being held in Prudential’s general corporate account, earning investment income for the insurer. Prudential paid survivors like Lohman one percent interest in 2008 on their Alliance Accounts, while it earned a 4.8 percent return on its corporate funds, according to regulatory filings.
“I’m shocked,” says Lohman, breaking into tears as she learns how the Alliance Account works. “It’s a betrayal. It saddens me as an American that a company would stoop so low as to make a profit on the death of a soldier. Is there anything lower than that?”
Millions of bereaved Americans have unwittingly been placed in the same position by their insurance companies. The practice of issuing what they call “checkbooks” to survivors, instead of paying them lump sums, extends well beyond the military.
In the past decade, these so-called retained-asset accounts have become standard operating procedure in an industry that touches virtually every American: There are more than 300 million active life insurance policies in the US, and the industry holds $4.6 trillion in assets, according to the American Council of Life Insurers.
Insurance companies tell survivors that their money is put in a secure account. Neither Prudential nor MetLife, the largest life insurer in the US, segregates death benefits into a separate fund. Newark, New Jersey-based Prudential, the second-largest life insurer, holds payouts in its own general account, according to regulatory filings. New York-based MetLife has told survivors in a standard letter: “To help you through what can be a very difficult, emotional and confusing time, we created a settlement option, the Total Control Account Money Market Option. It is guaranteed by MetLife.” The company’s letter fails to note that the money is in MetLife’s corporate investment account, isn’t in a bank, and has no FDIC insurance. “All guarantees are subject to the financial strength and claims-paying ability of MetLife,” it says.
Both MetLife, which handles insurance for nonmilitary federal employees, and Prudential paid 0.5 percent interest in July to survivors of government workers and soldiers. That’s less than half of the rate available at some banks, with accounts insured by the FDIC up to $250,000.
Bank of New York Mellon Corp. handles the paperwork and monthly statements for customers with MetLife “checking accounts”. The insurance company, not the bank, most recently reported holding about $10 billion in death benefits, in 2008.
The “checkbook” system cheats the families of those who die, says Jeffrey Stempel, an insurance law professor at the William S. Boyd School of Law at the University of Nevada, Las Vegas, who wrote Stempel on Insurance Contracts. “It’s institutionalized bad faith,” he says. “In my view, this is a scheme to defraud by inducing the policyholder’s beneficiary to let the life insurance company retain assets they’re not entitled to. It’s turning death claims into a profit center.”
Prudential’s Alliance Account is helpful to families of soldiers, says company spokesman Bob DeFillippo. “For some families, the account is the difference between earning interest on a large amount of money and letting it sit idle,” he says. Prudential follows the law, he says. “We fully and regularly disclose the nature and terms of the account to account holders,” DeFillippo says. “We make it clear that the money can be withdrawn at any time by simply writing a draft.”
Metlife spokesman Joseph Madden says his company’s customers are very happy with the Total Control Account. “The feedback from TCA customers has been overwhelmingly positive,” he says. “The TCA affords beneficiaries security, peace of mind and time to make an informed decision -- while earning interest in the interim.” Madden says the company was paying some survivors 0.5 percent in July while some others got 1.5 percent or 3 percent, depending on the age and origin of insurance accounts. The accounts don’t violate any laws, Madden says, and are authorized by New York state insurance law.
Insurers are holding onto at least $28 billion owed to survivors, according to three firms that handle retained-asset accounts for about 130 life insurance companies. There are no public records showing how much companies are holding in these accounts.
The “checks” that Cindy Lohman wrote, the ones rejected by retailers, were actually drafts, or IOUs, issued by Prudential. Even though the “checks” had the name of JPMorgan Chase & Co. on them, Lohman’s funds weren’t in that bank; they were held by Prudential.
Before a check could clear, Prudential would have to send money to JPMorgan, bank spokesman John Murray says. Insurance companies, in addition to holding onto the money of survivors, paying them uncompetitive interest rates, and giving them misleading guarantees, may be violating a federal bank law. A 1933 statute makes it a felony for any company to accept deposits without state or federal authorization.
That means only banks or credit unions can accept deposits, says Arthur Wilmarth, a professor at George Washington University Law School in Washington who has testified before Congress about banking regulations. If a prosecutor pressed an insurance company, retained-asset accounts could be outlawed because insurers say they deposit money into these accounts and don’t have bank charters or banking regulation, Wilmarth says. MetLife also offers its own version of certificates of deposit. “If it swims, quacks, and flies like a duck, the court could decide that it is indeed a duck,” he says. “You then potentially could have a criminal violation.”
This unregulated quasi-banking system operated by insurers has none of the protections of the actual banking system. Lawrence Baxter, a professor at Duke University School of Law in Durham, North Carolina, says the potential exists for a catastrophe. If one insurer is unable to meet its obligations on retained-asset accounts, people could lose faith in other companies and demand immediate payment, triggering a panic, says Baxter, who has consulted with federal agencies on financial regulation. The government established the FDIC in 1933 after frantic depositors tried to pull their money from banks. The federal government has no such program for death-benefit accounts. “There’s more than $25 billion out there in these accounts,” Baxter says. “A run could be triggered immediately by one insurance company not being able to honor its payout. The whole point of creating the FDIC was to put an end to bank runs.”
The sweeping financial regulatory legislation signed by President Barack Obama on 21 July doesn’t address retained-asset accounts. It creates a new federal insurance office, which won’t be a regulator. It will collect information, monitor the industry for systemic risk, and consult with state insurance regulators.
An industry with $19.1 trillion in potential liabilities will remain unregulated by the federal government. In 2008, insurers approved claims totaling $60 billion in death benefits, according to the life insurance council. The federal government doesn’t even regulate the life insurance it supplies, via MetLife, to its own employees in a program called Federal Employees’ Group Life Insurance. As the VA does for soldiers, the U.S. Office of Personnel Management sends handbook to nonmilitary government workers: some four million active employees and retirees. The handbook says their life insurance policies automatically pay out death benefits in the form of a “money- market-account checkbook”. The 217-page handbook omits that the money isn’t FDIC insured and will stay with MetLife until someone writes a “check”.
This lack of disclosure is unconscionable, says Harvey Goldschmid, a commissioner of the U.S. Securities and Exchange Commission from 2002 to 2005. “I can’t imagine why bank regulators haven’t been requiring a prominent ‘no FDIC insurance’ disclosure,” says Goldschmid, who’s now a law professor at Columbia University in New York. “This system works very badly for the bereaved. It takes unfair advantage of people at their time of weakness.”
The closest relative to retained-asset accounts may be money-market mutual funds, which are pools of cash invested in short-term debt securities. The SEC requires fund companies to warn investors that money market funds don’t have FDIC insurance. It also mandates that fund managers provide a prospectus, that they invest in specific types of safe debt and that they post a detailed schedule of their investments monthly on their websites. Insurers’ retained-asset accounts have none of those regulatory protections.
A June 2009 MetLife standard condolence letter to survivors leaves out that accounts aren’t in a bank and aren’t federally insured. In June of 2010, 25 years after MetLife invented retained- asset accounts, the company released a customer agreement that does disclose that retained assets aren’t in a money market account, nor in a bank, and that they have no FDIC insurance. “The assets backing the Total Control Accounts are maintained in MetLife’s general account and are subject to MetLife’s creditors,” the agreement says. That language contradicts the federal employee handbook, which says survivors get a money market account.
Gerry Goldsholle, the man who invented retained-asset accounts, says MetLife makes $100 million to $300 million a year from investment returns on the death benefits it holds. A former president of MetLife Marketing Corp., Goldsholle, 69, devised the accounts in 1984. He’s now a lawyer in private practice in Sausalito, California. Goldsholle says he pondered the billions of dollars of death-benefit proceeds the company paid out each year. “I looked at this and said, this is crazy,” says Goldsholle, who left the firm in 1991. “What are we doing to retain some of this money? It’s very expensive to bring money in the front door of an insurance company. You’re paying very large commissions and sales expenses.” So he came up with a way for MetLife to hold onto death benefits. “The company would win because we would make a nice spread on the money,” Goldsholle says, while customers would earn interest on their accounts. MetLife, he says, can earn 1 to 3 percentage points more from its investment income -- mostly from bonds -- than it pays out to survivors.
The accounts Goldsholle invented have spread much faster than the ability of state regulators to track them, or even to understand how they work. Ted Hamby, North Carolina’s deputy insurance commissioner for life and health, says he believes retained-asset accounts have FDIC protection. “Whatever money is on deposit in that checking account will be insured, up to the limits of the FDIC,” he says. He’s wrong. No retained-asset accounts have FDIC coverage.
In Connecticut, where 106 insurance companies are based, state insurance department manager for market conduct Kurt Swan also says that retained-asset accounts are kept in banks, with FDIC coverage. “I think they’re just trying to offer some flexibility to the beneficiary,” he says. Swan and his colleague, William Arfanis, the department’s principal financial examiner, both say the insurers don’t profit from the retained-asset accounts. That too is wrong. The companies do earn investment gains on death benefits.
Just six states had any rules for retained-asset accounts as of July of 2009, according to the National Association of Insurance Commissioners. Arkansas, Colorado, Kansas, Nevada, North Carolina, and North Dakota require insurers to disclose fees and interest rates and to tell survivors they may withdraw all of the money by writing a single check. Maryland, which isn’t on the NAIC list, also has rules. Pennsylvania Insurance Commissioner Joel Ario, whose state has no rules for retained-asset accounts, says he has asked his staff to prepare a regulation forbidding insurance companies from using such accounts as the default method of paying a death claim. “I haven’t heard a plausible argument about why these accounts are better for the consumer,” Ario says.
If state insurance regulators have paid scant attention to retained-asset accounts, state bank regulators have taken an even more hands-off approach. “Quite honestly, we deal with issues that our members want us to deal with,” says Michael Stevens, senior vice president for regulatory policy at the Washington-based Conference of State Bank Supervisors. “This is not one that has drawn their attention.”
Three companies have not only noticed but have also profited by handling retained-asset accounts for insurers. Open Solutions, based in Glastonbury, Connecticut, oversees 400,000 accounts for 67 insurance companies. Open Solutions sends out “checkbooks,” prints periodic statements, and computes accrued interest for accounts with total deposits of $10 billion, says Jay Woldar, director of sales and account management at Open Solutions.
One of its competitors, Bank of New York Mellon, administers more than 500,000 retained-asset accounts holding a total of $14 billion, including MetLife’s retained assets. Chicago-based Northern Trust Corp. handles about $4 billion in 125,000 accounts, spokesman John O’Connell says.
Survivors generally don’t touch these accounts immediately. “About forty percent of the money stays in for more than a year,” Woldar says. Insurers can have use of survivors’ money for years, even decades, says Randi Lichtenstein, a product line manager at Bank of New York. “They can stick around for quite a while,” she says. “There are accounts that all insurance companies have on these platforms that go back 10, 15, 20 years.”
MetLife’s Madden says most of its customers’ retained-asset accounts are closed within one year. About 28 percent of survivors of soldiers and veterans keep their retained-asset accounts open for more than two years, the VA says.
During a routine audit completed in 2004, the New York State Insurance Department found that 1,476 retained-asset accounts, worth a total of $33.5 million, at Hartford, Connecticut-based Phoenix Life Insurance had been dormant for more than three years.
In New York, funds in an account that remains dormant for more than three years may be turned over to the state. Phoenix spokeswoman Alice Ericson says the company now has a policy of sending letters to people whose accounts have been inactive for two years.
Almost one-third of the 6,890 retained-asset accounts run by Mony Life Insurance were inactive for more than three years, New York auditors found in 2002. Mony is now owned by Axa SA, Europe’s second-largest insurer by market value.
A few people have sued insurers over the use of retained- asset accounts. Prudential won a lawsuit in 2009 in which a survivor complained about the Alliance Account. MetLife has a case pending in which a survivor says that she was cheated by the retained-asset account. In court-filed papers, MetLife denies any wrongdoing.
There has been only one ruling by a federal appellate court on the substance of such accounts, and it went against an insurance company. After a federal judge in Boston dismissed a policyholder suit claiming that Chattanooga, Tennessee-based insurer Unum Group was stealing account earnings from survivors, the U.S. Court of Appeals for the First Circuit overruled the lower court in 2008. It reinstated the case. “The euphemistically named ‘Security Account’, accompanied with a checkbook, was no more than an IOU which did not transfer the funds to which the beneficiaries were entitled out of the plan assets,” the three-judge panel wrote. Unum spokeswoman Mary Clarke Guenther says retained-asset accounts are a commonly accepted practice in the industry. The case is pending.
Absent regulatory or legal intervention, bereaved family members like Cindy Lohman will continue to find death benefits going into retained-asset accounts. Her son, Ryan, posthumously received a Purple Heart and Bronze Star Medal for sacrificing his life to save fellow soldiers in Afghanistan in August of 2008. He had ordered a Humvee to swerve to avoid an explosive device, exposing himself to its deadly blast.
Three days after learning of her son’s death, Lohman says, an Army casualty assistance officer came to her home, explaining that Ryan had a life insurance policy and that her signature was needed to release the money. “By signing that, it forced me to accept the reality that he was dead and not coming back,” she says.
Since 1999, the VA has allowed Prudential to send survivors “checkbooks” tied to its Alliance Account. In 2009 alone, the families of U.S. soldiers and veterans were supposed to be paid death benefits totaling $1 billion immediately, according to their insurance policies. They weren’t. Prudential’s VA policies promise either a lump sum payout or 36 monthly payments. About ninety percent of survivors, including Lohman, choose to receive the full amount upfront. When they do, they don’t get a check; they get a “checkbook”. Under a 2008 law, survivors covered by Prudential’s VA policy are allowed one year to put death benefits into a Roth IRA, allowing them to earn investment gains for the rest of their lives tax-free. Prudential never informed Lohman, she says. “I definitely would have done that if they had told me,” Lohman says.
Even Stephen Wurtz, deputy assistant director for insurance at the VA, who has overseen the insurance program for 25 years, has been kept in the dark by Prudential. “Prudential runs the program on a cost-reimbursement basis only,” he initially said, referring to the $4.2 million in fees the VA paid Prudential in 2009. “They’re really good guys. They do it patriotically. They don’t make any money from the Alliance Account.” Wurtz, 62, said he had believed that the Alliance Account money went into a bank. After he learned that the payouts actually stayed in Prudential’s general fund, Wurtz says, he asked Prudential how much money the insurance company made from these accounts and how many dollars it held in retained assets. Prudential declined to answer, saying that information was proprietary, Wurtz says. Prudential, which has had the insurance contract with the VA since 1965, pitched the checkbook payout to the VA in 1999 as an added benefit to survivors, Wurtz says. The government agency accepted Prudential’s offer, he says. “Maybe I didn’t ask enough questions,” he says.
Printed on each “check,” next to “Prudential’s Alliance Account” is the name of JPMorgan, the second-biggest U.S. bank by assets. JPMorgan spokesman Murray declined to say how much the bank is paid for its role with Prudential. The way Prudential has set up the “checks” implies that JPMorgan stands behind the accounts and that they are thus backed by the FDIC, Duke’s Baxter says. “That’s misleading the beneficiaries,” he says.
“We disclose the roles of all companies involved in administering these accounts,” Prudential’s DeFillippo says. JPMorgan’s Murray declined to comment. Prudential’s general account earned 4.4 percent in 2009, mostly from bond investments, according to SEC filings. The company has paid survivors 0.5 percent in 2010.
“It’s shameful that an insurance company is stealing money from the families of our fallen servicemen,” says Paul Sullivan, who served in the 1991 Gulf War as an Army cavalry scout and is now executive director of Veterans for Common Sense, a nonprofit advocacy group based in Washington. “I’m outraged.” Sullivan, a project manager at the VA’s benefits unit from 2000 to 2006, says he was never told Prudential kept money and earned investment gains from soldiers’ insurance payouts instead of sending it to survivors. “There shouldn’t be secret profits,” he says. “This should be transparent. The lack of oversight is appalling.”
It’s not much different for the 4 million nonmilitary U.S. government employees and retirees, including staff of the FDIC, covered by MetLife policies. That program, begun in 1965, averages more than $2 billion in death benefits claimed every year, the government says. Payouts are handled by the Office of Federal Employees’ Group Life Insurance. That makes it look like the government is taking care of its employees’ insurance coverage. It isn’t. That “office” is a unit of MetLife. Edmund Byrnes, a spokesman for the Office of Personnel Management, which oversees MetLife’s federal employee contract, says MetLife segregates death benefits into beneficiary accounts after it approves death claims. “Once MetLife transfers the funds to the Total Control Account, the monies are no longer under MetLife’s control,” Byrnes says.
MetLife spokesman Madden says something different. “The assets that back the liabilities on all the TCAs are placed in MetLife’s general account,” he says.
Back at the Veterans Affairs office, Deputy Assistant Director Wurtz, who’s a civilian employee, says he now understands for the first time that since he’s covered by the federal insurance program, his own wife could receive a MetLife “checkbook” someday. “Uncle Sam is ripping off their own,” Wurtz says. “My wife would get the money, and they would blood-suck some of it out of her.” It took Wurtz, who’s been working with insurers for most of his career, more than a decade to understand how retained-asset accounts work. Companies like MetLife and Prudential have never told millions of Americans with insurance policies that, when they die, the insurer plans to hold their family’s money in its own account to make investment gains from the death benefit.
“It’s outrageous that somebody’s profiting off other people’s grief,” says Mark Umbrell of Doylestown, Pennsylvania. His 26-year-old son, Colby, an Army Airborne Ranger who earned a Bronze Star and a Purple Heart, was killed in Iraq in May 2007. Umbrell was among those who got a “checkbook” account. “I think we’re being taken,” he says.
The question for Umbrell, Lohman, and a million others with these accounts is whether anything will change. State bank regulators say if there are to be any reforms, they should be made by insurance departments. Officials at those state agencies often say they don’t even understand what a retained-asset account is.
“It’s flown under the radar,” professor Stempel says. “Regulators have not done their job.”
Until public officials wake up, the bereaved will remain a secret profit center for the life insurance industry.

Rico says this is, as usual, a fucking outrage, and people should be dragged out of their comfortable insurance offices and publicly whipped, preferably on national television, until this is fixed...