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October 2009

Islamists kill six Algerian guards in ambush

ALGIERS (AFP) –
An armed Islamist group on Thursday killed seven private security guards in an ambush in the Kabylie region east of the capital, residents and security sources said.

The group of guards were on their way to pick up employees of the Canadian engineering firm SNC-Lavalin when they were attacked 25 kilometres (16 miles) south of Tizi Ouzou.

Six of the guards were killed instantly and the body of the seventh was found near the site of the ambush.

The driver of the bus was badly wounded in the attack and taken to hospital in the nearby town of Boghni.

It was the deadliest attack in the country since July, when Islamists killed 11 in an attack on a military convoy.

Canadian firm SNC-Lavalin is building a water pipe network in the drought-hit area south of Tizi Ouzou.

Shortly after the ambush, security forces launched a sweep of the area, local people said.

The string of attacks has been blamed on Al-Qaeda in the Islamic Maghreb (AQIM), which emerged out of the Algerian fundamentalist Salafist Group for Preaching and Combat and sees itself as the north African wing of Osama bin Laden's network.

Earlier this month Algerian government forces killed an armed Islamist identified as AQIM commander Mourad Louzai.

In recent weeks, the security forces claim to have killed several dozen armed Islamists, including Bilal Abou Adnane, who was one of AQIM's deputy regional chiefs.

Corzine Looks to Beltway for N.J. Campaign Support

Oct. 22 (Bloomberg) -- New Jersey Governor Jon Corzine has
stood beside President Barack Obama in Hackensack and Holmdel.
He shared a stage with Vice President Joseph Biden in
Philadelphia this summer and again this week in Edison. Even
former President Bill Clinton got called in.

With less than two weeks until the state’s gubernatorial
election, Corzine is counting on the star power of the national
Democratic leadership to attract the 23 percent of Democrats who
said they remain undecided in an Oct. 14 Quinnipiac University
poll. Obama stumped for Corzine yesterday at Fairleigh Dickinson
University in Hackensack.

“He’s one of the best partners I have in the White
House,” Obama said during a 27-minute speech in which he said
Corzine helped craft economic stimulus legislation. “New Jersey
needs to give Jon Corzine four more years.”

Democrats outnumber Republicans by more than 720,000 voters
across the most densely populated area in the country, where
residents haven’t elected a Republican to statewide office since
1997. Corzine, 62, is the only U.S. governor seeking re-election
this year, as voters blame him for a variety of fiscal woes.

Until this month, Corzine trailed Republican Christopher
Christie in polls. The governor caught Christie, 47, after
launching ads attacking the Republican’s support for ending
health insurance mandates and his links as a fundraiser for
former President George W. Bush.

Obama Factor

In the spots, Corzine questioned Christie’s driving record
following a 2002 traffic accident in which Christie turned the
wrong way down a one-way street, hit a motorcyclist and wasn’t
issued a ticket; and his ethics for giving a loan to an aide who
worked for him when he was U.S. Attorney for New Jersey.

Corzine, former chairman of Goldman, Sachs & Co., tied with
Christie, each with about 40 percent, in this month’s Quinnipiac
poll, which had a margin of error of 2.8 percentage points. Two
days before the president’s July 16 visit, the incumbent trailed
Christie, 41 percent to 53 percent, in a poll that had an error
margin of 2.5 percentage points.

Sixty-one percent of voters approved of Obama in that July
poll; among Democrats, the president got a 90 percent rating. In
an August poll, Obama’s approval was 56 percent, while 89
percent of Democrats liked his performance.

“The tactical edge Corzine wants here is mobilization,”
said Peter Woolley, director of Fairleigh Dickinson’s PublicMind
polling center. “The Democratic game plan seems to be simply to
outmuscle the Republicans and convince their strong and broad
base of voters to stick with the party.”

Biden, Clinton

Earlier this week, Biden told a cheering crowd in a
gymnasium at Middlesex County College in Edison that he trusted
Corzine’s views on the economy so much that he had sought out
the governor’s opinion on how to handle the recession.

“It’s great to be here with one of the best partners that
Barack and I have in the country,â€

Clinton, speaking Oct. 20 to South Jersey Democrats at a
ballroom in Collingswood, said Corzine’s re-election was
important for the country and the state. Clinton joined the
first-term governor for a second rally later that day at Rutgers
University in New Brunswick.

Obama rallied 3,500 Democratic voters yesterday, telling
them that Corzine extended unemployment benefits for 600,000
jobless and added more than 100,000 children to health-care
rolls. The campaign distributed tickets to the event.

During his address delivered as the local evening news was
being broadcast, Obama said he wasn’t speaking solely to those
in attendance. Rather, he said, he was aiming his remarks at
“all of those watching out there,â€

‘Motivating Folks’

“Motivating folks to get to the polls and vote is going to
be part of what we have to do,” said Union Assemblyman Joseph
Cryan, head of the Democratic State Committee. “We do that
well, but the president can always help us do it better.”

Adenah Bayoh, 31, who owns an International House of
Pancakes restaurant in Irvington, said she was undecided before
attending the rally. She voted for the governor in 2005. Bayoh,
a Fairleigh Dickinson alumnus who was drawn to the event by
Obama, said she’s behind Corzine now.

“Obama made some great points in that right now, people
everywhere are losing their jobs and the economy is bad,” she
said in an interview. “I’ve always been a Democrat, but I
haven’t been that inspired in this election.”

Overcoming Indifference

Krishna Yalla, 24, said he was indifferent before attending
the rally. Yalla, who’s unemployed after graduating from the
university in May with an economics degree, said the event
energized him.

“For me, it was Obama,” Yalla said as he filed out of the
auditorium. “To have a public endorsement from the president,
who I support, is a huge push.”

Christie released a Web video yesterday ahead of Obama’s
visit titled “Yes We Can,” which features the president
talking about the need for change. “If you want real change,
start by changing governors,” Christie’s campaign said in the
video description.

The Republican candidate was scheduled today to make stops
at a diner in Newton and a retirement community in Hackettstown.
Corzine planned to be in Camden this morning for an event at
Cooper University Hospital, where he spent 18 days after a near-
fatal car crash in 2007. The governor then was headed to
Woodbridge this afternoon to receive a New Jersey State
Policemen’s Benevolent Association endorsement, according to his
campaign schedule.

Last Debate

Both candidates were scheduled to appear along with
independent Chris Daggett in their third and final debate
tonight at 8 p.m. on WBGO Radio. Daggett, a former commissioner
of the state Department of Environmental Protection, received 14
percent of the vote in Quinnipiac’s poll this month, up from 8
percent in July.

Daggett has helped Corzine by taking voters from Christie,
said David Redlawsk, director of the Rutgers-Eagleton Poll and a
political science professor at Rutgers.

A Rutgers-Eagleton poll released today had Corzine leading
Christie, 39 percent to 36 percent, within an error margin of
4.1 percentage points. Daggett garnered support from 20 percent
in the survey of 583 likely voters, conducted Oct. 15-20.

Campaign Spending

Corzine has spent at least $16.8 million on the race, more
than triple Christie’s $5.4 million, according to campaign
finance data released Oct. 7. Daggett, 59, has spent about $1
million. Christie, who is accepting public matching funds, has
said he expected to be outspent by the governor, who is not
taking taxpayer funds. The Republican is limited under state
public-finance laws to $10.9 million for the campaign.

Corzine spent a total of $100 million on his runs for U.S.
Senate and his first race for governor four years ago.

“You’ve got a lot more Democrats in New Jersey,” said
Maurice Carroll, director of the Quinnipiac polling institute in
Hamden, Connecticut. “Are they all going to be swayed by Obama
and Biden? Probably most aren’t. But some are.”

To contact the reporter on this story:
Terrence Dopp in Trenton, New Jersey, at
tdopp@bloomberg.net .

Prison time sought for Alaska corruption figure

ANCHORAGE, Alaska – Federal prosecutors say the former chief executive of a company that did construction work for oil companies should be sentenced to nearly four years in prison for offering bribes in exchange for legislation favorable to the petroleum industry.
The government's recommendation was filed late Wednesday, a week before Bill Allen, 72, and another VECO executive are scheduled to be sentenced for their 2007 guilty pleas to conspiracy, bribery and tax charges.
Judge John W. Sedwick on Thursday morning denied Allen's request to postpone sentencing until February, saying in his order: "It's time to turn Allen's page in the lamentable chapter of Alaska's history."
"The actions of Bill Allen were corrupt, sustained, and damaging to the integrity of the legislative process," prosecutors said in the filing obtained by the Anchorage Daily News.
In a separate filing, prosecutors recommended a 3 1/2-year prison sentence for Rick Smith, 64, a former vice president of VECO, an Anchorage-based company that performed maintenance, construction and design work for oil companies.
Lawyers for Allen and Smith have asked for much lighter prison sentences, pointing out the pair worked extensively with the FBI and prosecutors, testifying at trials and giving detailed evidence in multiple debriefings about their illegal activities. They also recorded phone calls at the government's request to elicit admissions from politicians.
The sentencing recommendations were accompanied by documents filed by prosecutors and defense attorneys. Some of the paperwork involved U.S. Rep. Don Young, who has been known for more than two years to be under investigation by federal authorities.
Allen and Smith admitted breaking federal campaign finance laws on Young's behalf, using corporate funds to pay the expenses of a yearly fundraiser from 1993 to 2006. The illegal corporate donations were not reported.
The total spent by VECO over the years was between $130,000 and $195,000.
Young has denied wrongdoing. His campaign has spent more than $1 million on his legal expenses.
Allen was the lead witness in the trial of U.S. Sen. Ted Stevens. Allen and Smith testified during the trials of former House speaker Pete Kott, R-Eagle River, and former Rep. Vic Kohring, R-Wasilla.
Charges against Stevens were tossed when the Justice Department admitted it failed to turn over evidence favorable to the defense prior to trial. The same issue has led to the release of Kott and Kohring from prison while a judge decides whether to dismiss charges or order new trials.
Prosecutors said their sentencing recommendations don't take into consideration anything involving Young or Stevens, only the state legislators mentioned in Allen's 2007 charging document.
"The defendant was the pivotal figure in a conspiracy that lasted from 2002 to 2006, which included a series of corrupt acts that were designed to, and did, influence the Alaska legislature," prosecutors said.
___
Information from: Anchorage Daily News, http://www.adn.com

U.S. should engage with North Korea economy: report

WASHINGTON (Reuters) –
Ambitious U.S. economic engagement with North Korea would help end Pyongyang's isolation and moderate its behavior, aiding efforts to rid that country of nuclear arms, a task force report said on Thursday.

The study by leading U.S. experts on North Korea, released as Washington weighs whether to engage in bilateral talks with Pyongyang, argues that sanctions alone will not denuclearize the North and will tend to strengthen hostile forces there.

"Sanctions alone cannot provide protection from the threat posed now or in the future by North Korea," said the report by the Asia Society and the University of California Institute on Global Conflict and Cooperation.

"Instead, economic engagement starts a process that may lead to significant benefits without enhancing the DPRK's military capabilities or making the U.S. or its allies more vulnerable," it said.

A U.S. outreach -- through academic exchanges, development projects, and helping North Korea work with the International Monetary Fund and Asian Development Bank -- could spur better behavior by Pyongyang while helping its impoverished citizens, the task force argues.

With approaches similar to those the Obama administration is attempting with Iran and Myanmar, Pyongyang could be shown incentives that "generate vested interests in continued reform and opening, and in less hostile foreign relations," it said.

The task force acknowledges that North Korea has not shown much interest in economic reform or opening, and that a delicate leadership transition to succeed leader Kim Jong-il means Pyongyang's hardliners appear to be ascendant.

BOLSTER MODERATE FORCES

North Korea held its second nuclear test in May and conducted a series of missile tests, drawing fresh U.N. Security Council sanctions designed to restrict its arms sales and proliferation activities.

But the North also signaled it wanted better relations with Washington, freeing two jailed U.S. journalists in August and signaling that it could return to multilateral region talks but wanted to talk to the United States first.

Washington should be patient and determined and take steps to bolster forces in North Korea that want to engage, while promoting interactions that increase the importance of markets in the North's economy, said the report.

"Military and civilian hardliners in Pyongyang flourish in an international atmosphere of hostility, distrust, and isolation; pragmatists will be unable to advance their agenda without contact with the world outside," it said.

The State Department last week said it had decided to grant a visa to Ri Gun, North Korea's No. 2 official at six-party talks, to attend unofficial meetings in New York and San Diego at which U.S. officials are also expected to appear.

The task force recommended Washington expand official contacts "as widely as possible with North Korea," while also utilizing so-called "track two" unofficial dialogues like the ones Ri will attend later this month.

In addition, academic exchanges with North Korea should be expanded, U.S. aid and development groups should be encouraged to work there, and the United States should end policies aimed at keeping Pyongyang out of the IMF and other international financial institutions, it said.

(Editing by Eric Walsh)

Will new executive pay rules cause a brain drain?

NEW YORK – The Obama administration's decision to cut the pay of top executives at companies on taxpayer life support will help quiet the popular outrage over excessive compensation. But it introduces a new concern: brain drain.
The 175 executives targeted by "pay czar" Kenneth Feinberg are not only the highest-paid but also considered among the most talented and productive. And competitors outside the restrictions are likely to woo them, recruiters and compensation expects say.
Losses like that could be devastating to the very companies the government spent so much money to save.
"These people are considered the brains of the machine. They are who can pull you through the tough times," said Steven Hall, who runs an executive compensation firm that bears his name. "This will give them reason to leave."
Feinberg announced Thursday that he has ordered seven companies that have received billions of dollars in taxpayer money to slash the base salaries of their top executives by an average of 90 percent and cut total compensation — cash, stock and perks — in half.
That applies to the five top executives and the next 20 highest-paid employees at Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.
Another 525 employees at the companies will also face new curbs on pay from Feinberg, but those details have not yet been released.
Those facing pay restrictions outside the executive suite hold leadership positions in areas like finance and investment banking at the banks, and in manufacturing, brand management and design at the auto companies.
They come with years of experience, whether it's making deals or overseeing car design. For example, Ford Motor Co., which is in far better shape than its two Detroit rivals, could lure auto executives who would be difficult for Chrysler and GM to replace.
"There will be a fallout," said Janice Reals Ellig, co-CEO of the executive search firm Chadick-Ellig. "Talent that is short-term-focused because they have big mortgages, college education payments and other things will feel more pressure to leave."
A Bank of America spokesman, Scott Silvestri, said competitors not subject to pay restrictions "already are exploiting this situation by identifying our top performers and using pay concerns to recruit them away for fair market compensation."
Feinberg, in speaking engagements over the last month, acknowledged the difficulty of balancing "conflicting principles" on pay: Compensation needed to be high enough to attract talent without rewarding risk.
But he also has to deal with Americans angry that their tax dollars have been used to save these companies. The Obama administration has blamed misplaced compensation incentives as one cause of the financial crisis.
Feinberg will limit cash salaries to $500,000. Executives who had been guaranteed certain compensation will have those payments made in company stock to be held over the long term.
Most other pay will also have to come in long-term stock awards, and executives won't be able to sell that stock until the company repays its bailout money. Incentive stock awards can only be paid if executives stick around for three years and the company pays back the government.
Feinberg also gets to sign off on any performance goals used as incentives.
The pay restrictions for all seven companies will also require any executive seeking more than $25,000 in special benefits — things such as country club memberships, private planes and company cars — to get permission for those perks from the government.
Feinberg did say exceptions were made "where necessary to retain talent and protect taxpayer interests." Base salaries above $1 million were approved for the new CEO of AIG, and for two employees of Chrysler Financial.

Under a package approved by Feinberg over the summer, AIG CEO Robert Benmosche will get a pay package of about $10.5 million.

Competitors of all seven companies that have repaid bailout money are free to pay whatever they want — although the Federal Reserve did propose Thursday to monitor executive pay at thousands of banks.

Goldman Sachs, which paid back its $10 billion in government bailout funds in June, has set aside $16.7 billion for compensation and benefits so far this year, on track for a record.

"People who produce the top revenues will always be in demand. They will always be wanted," said recruiter Danny Sarch, president of Leitner Sarch Consultants in White Plains, N.Y. "That's just capitalism."

News group asks court to stop NJ exit poll ban

TRENTON, N.J. – Six major media outlets who use Election Day polling to gauge the mood and attitudes of the nation on Friday asked a federal judge to stop enforcement of a state court ruling that bans exit polling near voting sites.
The lawsuit was filed in U.S. District Court by the National Election Pool, a consortium that includes The Associated Press, CNN, Fox, ABC, NBC and CBS.
A Sept. 30 state Supreme Court decision bars exit polling and all "expressive activity" within 100 feet of polling places.
New Jersey is the only state to keep exit pollsters and journalists from approaching voters within 100 feet of a polling place. The request for a preliminary injunction comes less than three weeks before the state's Nov. 3 gubernatorial election.
The news group argues that exit polling is constitutionally protected. Federal courts have struck down similar attempts in other states.
"We think exit polling is very different from the kinds of activity that anti-electioneering laws like New Jersey's are aimed at, and every court that has given its full attention to that question has agreed with us," said Dave Tomlin, associate general counsel for the AP.
Polling experts say the ban means error rates for exit polls will be much higher.
Both the quality and quantity of the information decreases significantly because interviewers are supposed to approach voters in a preset pattern, such as every fourth voter. As the distance from polling places increases, experts say, so does the likelihood that voters get into their car without being approached or blend into a crowd that includes people who didn't vote.
"The public interest will be better served by the prevention of any such chilling effect, which would deprive citizens, political leaders, journalists, and scholars of some or all of the uniquely accurate and detailed information that is provided by exit polling," lawyers for the National Election Pool said in court papers.
In establishing the buffer zone, the New Jersey court said it is a reasonable restriction of free speech because all activity is banned within the 100-foot perimeter. The court noted that political speech is protected by the First Amendment but can be barred near a polling station to protect the right to vote.
"The last 100 feet leading to a polling place belong to the voters on Election Day," the court wrote.
In the case that led to this state court ruling, the American Civil Liberties Union of New Jersey petitioned the attorney general for permission to hand out wallet-size voter-rights card. The state denied the request, saying such an exemption would allow political groups inside the perimeter.
The ACLU appealed and the state Supreme Court denied its request. The court took the extra step of barring all form of "expressive activity," including exit polling.

U.S. charges 6 with hedge fund insider trading

NEW YORK (Reuters) –
Galleon hedge fund partner Raj Rajaratnam and five others were charged with crimes including securities fraud and conspiracy involving insider trading that generated more than $20 million in profits, U.S. prosecutors and the FBI said on Friday.

The insider trading at Galleon Technology Funds, New Castle fund and Intel Capital took place in the stocks of Polycom Inc, Hilton Hotels Corp, Google Inc, International Business Machines Corp, Advanced Micro Devices Inc, Sun Microsystems Inc and others, according to two complaints filed in U.S. District Court in New York.

All six accused have been arrested, a spokeswoman for the U.S. Attorney's office in Manhattan said. A statement from the office described the charges and arrests as a "takedown of a $20 million hedge fund insider trading case."

One of the criminal complaints accuses Rajaratnam of conspiring with Intel Capital employee Rajiv Goel and Anil Kumar, a director of McKinsey & Co global management consulting firm. The alleged offenses took place for about three years from January 2006.

Galleon had as much as $7 billion under management, the complaint said. Intel Capital is the investment arm of Intel Corp.

A statement by an FBI agent cited in the complaint said: "On or about January 9, 2006 an individual who subsequently became a cooperating witness sent the following instant message to Raj Rajaratnam 'donot (sic) buy plcm till i het (sic) guidance; want to make sure guidance OK."

On or about January 12 Rajaratnam purchased 60,000 shares of Polycom for Galleon Technology Funds, a complaint said. It said in July 2007 he bought 400,000 shares of Hilton Hotels Corp for Galleon and about 1,000 put options in Google and arranged to short about 25,000 shares of Google stock.

Rajaratnam and Goel conspired from at least March 2008 to October 2008, the complaint said. Rajaratnam purchased 125,800 shares of Clearwire Corp on March 24, 2008.

A co-conspirator made a phone call to Rajaratnam on July 24, 2008 and the next day Rajaratnam sold short about 138,550 shares of Akamai Technologies Inc stock, a complaint alleged. Also as part of the purported scheme, Rajaratnam and Kumar conspired to buy 2.1 million shares of Advanced Micro Devices.

"The cooperating witness obtained inside information regarding Polycom, Hilton and Google from various sources who disclosed the inside information in violation of duties of trust and confidence," the FBI agent's statement in the complaint said.

"The cooperating witness communicated this inside information to Rajaratnam, who caused the Galleon Technology Funds to execute securities transactions, earning a total profit of more than $12.7 million from the scheme.

"In exchange Rajaratnam provided the cooperating witness with inside information regarding other technology companies."

Typically, securities fraud charges carry possible maximum prison sentences of up to 20 years.

A second complaint accused three other people -- Danielle Chiesi, Mark Kurland and Robert Moffat -- of securities fraud and conspiracy to commit insider trading, earning millions of dollars in profits.

Chiesi worked for New Castle, which was the equity hedge fund group of Bear Stearns Asset Management. Bear Stearns Cos folded in 2008. Kurland was a senior managing director of BSAM and Moffat was employed by IBM.

It was not immediately known who were the lawyers for the accused.

Representatives for the hedge funds were not immediately available. An Intel Corp spokesman declined to comment.

U.S. Attorney for Manhattan Preet Bharara; Joseph Demarest, assistant director-in-charge of the FBI in New York; and Robert Khuzami, director of enforcement, U.S. Securities and Exchange Commission, were expected to give more details later on Friday at a news conference.

(Reporting by Grant McCool and Joe Giannone, editing by Gerald E. McCormick, Phil Berlowitz)

Men found guilty of Australian terror plot

SYDNEY – Five men were convicted Friday of plotting a terrorist attack by stockpiling bomb-making instructions and purchasing explosive chemicals in Australia's largest terrorist conspiracy.
A jury deliberated for a month before finding the men guilty of conspiring to commit acts in preparation for a terrorist attack. Each face a maximum sentence of life in prison.
During the trial, which began in November 2008, prosecutor Richard Maidment told the jury in New South Wales state Supreme Court that the men planned to use explosive devices or firearms to commit "extreme violence" in a bid to force Australia's government to change its policy on Middle East conflicts.
Justice Anthony Whealy restricted the media from publishing the men's names on the Internet.
The men, aged between 25 and 44, were arrested in a series of raids on their homes in 2005. Maidment said during the trial that the raids turned up bomb-making instructions and militant Islamist material — including footage of planes flying into the World Trade Center on Sept. 11, 2001, and images of beheadings. The prosecutor also said the men purchased explosive chemicals and guns between July 2004 and November 2005.
The jury, which viewed more than 3,000 exhibits and heard from more than 300 witnesses, was also told one man participated in a terrorist-run paramilitary training camp in Pakistan, and three others attended similar camps in New South Wales to prepare for an attack.
Lawyers for the men argued there were innocent explanations for the material. Outside court, supporters of some of the men shouted angrily after the verdict.
Whealy had instructed the jury to put aside any prejudices when coming to its verdict, and to remember the Muslim faith was not on trial.
The sentencing hearing was scheduled to begin Dec. 14.