Pharmaceutical Fraud - search results
Protect your body and family from the allopathic assault of cigarettes, pharmaceuticals, vaccines and...
Amazon.com running deceptive pharmaceutical ads on its website, promoting dangerous drugs as if they...
Gates Foundation’s “Corporate Merry-go-round”: Spearheading the Neo-liberal Plunder of African Agriculture
Africa is the Western world’s testing ground for microchip implants, weaponized viruses and experimental...
- Republican Civil War Erupts: Business Groups v. Tea Party (BBG)
- Budget fight leaves Boehner 'damaged' but still standing (Reuters)
- Madoff Was Like a God, Wizard of Oz, Lawyers Tell Jury (BBG) - just like Bernanke
- Republicans press U.S. officials over Obamacare snags (Reuters)
- Brilliant: Fed Unlikely to Trim Bond Buying in October (Hilsenrath)
- More brilliant: Fed could taper as early as December (FT)
- Russia Roofing Billionaires Seen Among Country’s Youngest (BBG)
- Ford's Mulally won't dismiss Boeing, Microsoft speculation (Reuters)
- China reverses first-half slowdown (FT)
- NY Fed’s Fired Goldman Examiner Makes Weird Case (BBG)
- Italian protests against Letta government disrupt transport (Reuters)
- Transit workers strike again, will hamper Bay Area commute (Reuters)
Overnight Media Digest
* SAC Capital and federal prosecutors have agreed in principle on a penalty exceeding $1 billion in a potential criminal settlement that would be the largest ever for an insider-trading case.
* Insurers say the federal healthcare marketplace is generating flawed data that is straining their ability to handle even the trickle of enrollees who have gotten through so far.
* Chinese PC maker Lenovo is actively considering a bid for all of BlackBerry and has signed a non-disclosure agreement with the smartphone maker. ()
* A late surge of cases against low-level offenders will push the SEC's case total close to last year's levels, masking a steep drop in enforcement actions related to the financial crisis. While the total hasn't been announced, it likely will be down at least 5 percent from a near-record high of 734 enforcement cases in fiscal 2012.
* Google posted a 12 percent increase in third-quarter revenue, as it tries to keep pace with its users' shift to mobile devices.
* Video-streaming service Hulu on Thursday named Mike Hopkins as its new chief executive, effective immediately. Hopkins has been president of Fox Networks Group, a division of 21st Century Fox Inc, since 2008 and a member of Hulu's board since 2011.
* A U.S. district judge ordered subprime lender Household International Inc - now part of HSBC Holdings PLC - to pay investors $2.46 billion in a class-action lawsuit, a move that comes several years after a jury found the company liable for securities fraud.
* IBM is shaking up leadership of its growth-markets unit, following disappointing third-quarter results that prompted a critical internal email from CEO Virginia Rometty. She wrote that IBM's strategy is correct, but criticized the company for failing to execute in sales of computer hardware as well as in the growth markets unit, whose sales territory includes markets in Southeast Asia, Eastern Europe, the Middle East and Latin America.
Paul Tucker, the Bank of England's outgoing deputy governor, said regulators need to keep a stronger eye on hedge funds and shadow banks and added it would be disastrous if the economic fragility of banks was recreated outside the mainstream banking sector.
The U.S. Federal Reserve could begin reducing its asset purchases as early as December after the government shutdown sabotaged a crucial month of data and dealt a blow to the world's largest economy.
The next U.S. monthly employment report became a casualty of the U.S. government shutdown with the Department of Labor saying the data would be released after a delay of more than two weeks on Tuesday.
Scottish National Party leader and Scotland's first minister, Alex Salmond was involved in the talks between the management and workers Grangemouth refinery and petrochemicals complex. The management has closed off the refinery demanding that workers accept changes to pay, pensions and union representation in what has turned out to be Scotland's biggest industrial dispute in years.
Google shares rose 8 percent to a record high after the company managed a smooth transition of its advertising business to smartphones and tablets from PCs.
Goldman Sachs managed to protect its profits by slashing the amount of money set aside for year-end bonuses after its fixed-income trading was worse than any other large Wall Street bank's.
Barclays has approached the Court of Appeal to overturn an earlier ruling that allowed Guardian Care Homes, which is suing Barclays over interest-rate swaps, to amend its claim to include Libor-related allegations.
UK Ministers will look at the green measures that have contributed to rising fuel bills after British Gas became the second energy company to increase energy prices.
* Britain said on Thursday that it would allow Chinese firms to buy stakes in British nuclear power plants and eventually acquire majority holdings. The agreement, which comes with caveats, opens the way for China's fast-growing nuclear industry to play a significant role in Britain's plans to proceed with construction of its first new reactor in nearly two decades.
* The hedge fund SAC Capital Advisors is moving closer to a plea deal with prosecutors that would force it to wind down its business of managing money for outside investors, punctuating its decline from the envy of Wall Street to a firm caught in the government's cross hairs. An agreement to stop operating as an investment adviser is one feature of a larger agreement SAC is negotiating as it seeks to resolve insider trading charges, according to people briefed on the case.
* On Thursday Goldman Sachs Group Inc announced that revenue in its fixed-income, currency and commodities division, a powerful unit inside the bank that in better years has produced more than 35 percent of its entire revenue, dropped 44 percent from year-ago levels. The weakness renewed worries about the headwinds that Goldman and other banks are facing in big money-producing areas like fixed-income trading.
* Google Inc impressed investors, but people's changing behavior on mobile phones and even on desktops threatens the company's main business. The results revealed the company's deep challenges: as its desktop search and advertising businesses mature, along with overall business in the United States, its growth rate is slowing and the amount of money it makes from each ad it sells is falling.
* The United States government sputtered back to life Thursday after President Obama and Congress ended a 16-day shutdown, reopening tourist spots and clearing the way for federal agencies to deliver services and welcome back hundreds of thousands of furloughed workers.
* There is a confusion over the text of the deal that Congress just approved and President Obama signed, but it does not kill the debt ceiling. At first glance, the "default prevention" section of the bill seemed to imply that the president would have the authority in the future to increase the country's debt unilaterally, and that Congress could stop him only by passing a bill forbidding it.
* Roughly 1,500 fires burn above western North Dakota because of the deliberate burning of natural gas by companies rushing to drill for oil without having sufficient pipelines to transport their production. With cheap gas bubbling to the top with expensive oil, the companies do not have an economic incentive to build the necessary gas pipelines, so they flare the excess gas instead.
* As European interest in American craft beers begins to mirror the mania for them stateside, the Duvel Moortgat Brewery of Belgium on Thursday announced a deal to buy the Boulevard Brewing Co, a craft brewery in Kansas City, Missouri.
THE GLOBE AND MAIL
* Canadian provinces have approved the free-trade agreement with the European Union, but key players Ontario and Quebec are insisting the federal government open its wallet to mitigate some of the impact, notably by compensating dairy producers. Prime Minister Stephen Harper arrived in Brussels on Thursday night and plans to meet with Jose Manuel Barroso, president of the European Commission, on Friday afternoon to sign the agreement.
* The shortage of skilled employees in Canada is deepening, and government policies that tightened the rules governing foreign workers have made the situation worse. That is the message of a new study from global recruiting firm Hays Plc, which surveyed the skills gap in 30 developed countries around the world.
Reports in the business section:
* Lenovo Group Ltd is joining the list of suitors considering a bid for BlackBerry Ltd , raising concerns that the Canadian company's ultra-secure communications network for the global elite might end up owned by a firm based in China.
* Imperial Oil Ltd is looking at a major revamp of its Mackenzie gas project that would see the stalled northern venture reborn as part of an expansive liquefied natural gas development, the company's chief executive says. A shift to LNG is under "serious" consideration as the Mackenzie pipeline's economics remain weak due to the flood of cheap shale gas across the continent, CEO Rich Kruger said in an interview at the company's Calgary headquarters.
* The Quebec government has announced that it will contest the latest nomination to the Supreme Court of Canada, adding a new layer of controversy to the process. The provincial government says it is weighing different options to block the Harper government's appointment of Marc Nadon, which is already under attack.
* Canada's campaign to win approval in the United States for the Keystone XL pipeline may seem pricey, aggressive, and perhaps out of character - but it is a drop in the bucket compared with the resources and tactics of those rallying against it.
* Air Canada's chief executive, Calin Rovinescu, says he is pleased investors are starting to get on board with the dramatic transformation underway at his airline, including the near-elimination of its multi-billion-dollar pension funding deficit that has twice threatened to upend the company in recent years. But he said there are still plenty of challenges ahead for the country's largest carrier.
CHINA SECURITIES JOURNAL
- The China Securities Regulatory Commission approved China Everbright Bank Co Ltd's request to list H shares on Wednesday, according to sources. The bank plans to list in Hong Kong as early as November, but listing is subject to Hong Kong Stock Exchange approval.
- China has started laying the foundations for its fifth-generation mobile telephony network, said Dai Xiaohui, the deputy director of the Ministry of Science and Technology on Thursday at a communications forum.
- China has investigated 129 officials at prefectural level or higher for suspected corruption and bribery from January through August this year, the Supreme People's Procuratorate said on Thursday.
- Chinese officials should not blindly follow customary practices if such practices lead to waste or are not legal, said a commentary in the paper that acts as the government's mouthpiece. The article highlighted extravagance during opening and closing ceremonies as an example of a traditional practice best curbed.
- Beijing will take half the cars off the city's roads and suspend school classes when there are three straight days of heavy pollution, an official said on Thursday. The plan includes measures to increase buses and extend subway operating hours.
Fly On The Wall 7:00 AM Market Snapshot
AMAG Pharmaceuticals (AMAG) upgraded to Outperform from Neutral at RW Baird
Align Technology (ALGN) upgraded to Buy from Hold at Cantor
Amazon.com (AMZN) upgraded to Buy from Neutral at UBS
CBOE Holdings (CBOE) upgraded to Buy from Neutral at UBS
Essex Property Trust (ESS) upgraded to Buy from Neutral at UBS
Intuit (INTU) upgraded to Buy from Neutral at BofA/Merrill
Peabody Energy (BTU) upgraded to Outperform from Market Perform at BMO Capital
Union Pacific (UNP) upgraded to Buy from Neutral at Goldman
VMware (VMW) upgraded to Overweight from Neutral at JPMorgan
Verizon (VZ) upgraded to Buy from Hold at Deutsche Bank
AMD (AMD) downgraded to Neutral from Buy at BofA/Merrill
Alpha Natural (ANR) downgraded to Underperform from Market Perform at BMO Capital
Amarin (AMRN) downgraded to Neutral from Buy at Citigroup
Aspen Technology (AZPN) downgraded to Neutral from Overweight at JPMorgan
Baxter (BAX) downgraded to Market Perform from Outperform at Raymond James
Fairchild Semiconductor (FCS) downgraded to Hold from Buy at Canaccord
Home Bancshares (HOMB) downgraded to Market Perform from Outperform at Raymond James
International Rectifier (IRF) downgraded to Market Perform at Wells Fargo
LG Display (LPL) downgraded to Neutral from Outperform at Credit Suisse
Monolithic Power (MPWR) downgraded to Market Perform from Outperform at Wells Fargo
Navistar (NAV) downgraded to Underweight from Equal Weight at Barclays
Qualys (QLYS) downgraded to Neutral from Overweight at JPMorgan
SL Green Realty (SLG) downgraded to Hold from Buy at Cantor
Total (TOT) downgraded to Neutral from Buy at UBS
Ultratech (UTEK) downgraded to Hold from Buy at Canaccord
UnitedHealth (UNH) downgraded to Hold from Buy at Cantor
Clean Harbors (CLH) initiated with an In-Line at Imperial Capital
Covanta (CVA) initiated with a Hold at Stifel
Fidelity National (FNF) initiated with a Neutral at Janney Capital
Finish Line (FINL) initiated with a Neutral at UBS
First American (FAF) initiated with a Buy at Janney Capital
Gaming & Leisure (GLPIV) initiated with an In-Line at Imperial Capital
Masonite International (DOOR) initiated with an Outperform at RBC Capital
New Residential (NRZ) initiated with a Buy at Sterne Agee
Spectrum Brands (SPB) initiated with an Outperform at BMO Capital
Stewart (STC) initiated with a Neutral at Janney Capital
U.S. Cellular (USM) initiated with an Underperform at FBR Capital
Google CEO said 40% of YouTube traffic comes from mobile
Schlumberger (SLB) said global economic outlook remains unchanged
Fitch cut Darden (DRI) IDR to 'BBB-' from 'BBB', outlook stable
LabCorp (LH) board authorized additional $1B share repurchase program
AMD (AMD) sees PC shipments down 10% in 2013 and 2014
Waste Management (WM) to build renewable natural gas facility
Companies that beat consensus earnings expectations last night and today include:
Sensient (SXT), F.N.B. Corp. (FNB), AMD (AMD), Las Vegas Sands (LVS), Capital One (COF), Covenant Transportation (CVTI), WD-40 (WDFC), Google (GOOG), Align Technology (ALGN)
Companies that missed consensus earnings expectations include:
Valmont (VMI), Kaiser Aluminum (KALU), B&G Foods (BGS), athenahealth (ATHN), Greenhill & Co. (GHL), Acacia Research (ACTG), Stryker (SYK), Chipotle (CMG)
Companies that matched consensus earnings expectations include:
OceanFirst Financial (OCFC), Western Alliance (WAL), Werner (WERN)
- The long-running drama about when the Fed will start scaling back its $85B a-month bond-buying program might now last longer. It isn't clear when the first move will occur. The Fed is unlikely to start curtailing its bond buying at its next policy meeting Oct. 29-30, the Wall Street Journal reports
- Bank of America (BAC) is considering a checking account that wouldn't permit customers to overdraw their balances at an ATM or when making an automatic bill payment, sources say, the Wall Street Journal reports
- Ford (F) CEO Alan Mulally would not confirm or deny media reports that he is being sought to join Boeing (BA) and Microsoft (MSFT), Reuters reports
- Air France -KLM (AFLYY) is open to giving Alitalia its rightful role in a merged entity but only if certain conditions are met, CEO Alexandre de Juniac told French television. He said Alitalia needs deeper restructuring if Air France is to eventually hike its 25% stake and take control, Reuters reports
- DBS Group (DBSDY) is among banks that have advanced in bidding for Societe Generale’s (SCGLY) SA’s private banking assets in Asia, sources say. The division oversees about $13B, Bloomberg reports
- JPMorgan Chase (JPM) agreed to sell 1 Chase Manhattan Plaza to Fosun International, the investment arm of China’s biggest closely held industrial group, for $725M, Bloomberg reports
Cinedigm Digital (CIDM) files to sell 7.91M shares of Class A common stock
Crestwood Midstream (CMLP) files to sell 14M common units for limited partners
EV Energy (EVEP) files to sell 5M common units for limited partners
Evercore Partners (EVR) files to sell 3M shares of common stock
Stemline (STML) files to sell $90M of common stock
Voxeljet (VJET) 6.5M share IPO priced at $13.00
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In an empty, muted family court, with armed guards at its doors, D.C. Superior Court Judge J. William Ryan released a discovery order revealing that the DEA’s analysts are producing false marijuana test reports resulting in wrongful convictions. By critiquing DEA chemist Heather Hartshorn’s reports and testimony through the prism of the 2009 National Academy of Sciences (NAS) report on forensic tests, Ryan showed that her marijuana report mirrored the NAS’s example of a totally deficient report. Their example read: “Results: The green-brown plant material in item 1 was identified as marijuana.” Hartshorn’s report read: “Exhibit 1 contains a measurable amount of marijuana.”
A number of state courts have “held that the [prosecution] should provide more than the bare test results and reports to the defendant in discovery under similar [expert notice] rules.” For instance, the Court of Appeals of North Carolina has ruled that a defendant charged with selling heroin was entitled to the state laboratory analyst’s “laboratory protocols, incidences of false positive test results, quality control and quality assurance, and proficiency tests.” 
The Supreme Court in Jackson v. Virginia has ruled that reports such as Hartshorn’s, based on non-specific, screening tests are not worth the paper they’re printed on because they do not provide proof beyond a reasonable doubt of the presence of marijuana in a seized substance. Hartshorn herself admitted she used non-specific, screening tests yet testified erroneously that they positively confirmed the presence of marijuana.
Ryan also disclosed that Hartshorn’s report lacked adequate details and data to allow a review of her work by an independent defense analyst to see whether she used valid, reliable tests and applied them correctly. This was a significant failing as the NAS report concluded that many forensic tests “are not based on a body of knowledge that recognizes the underlying limitations of the scientific principles and methodologies for problem solving and discovery (Hartshorn claimed there were no limitations) [and] are not informed by scientific knowledge, or are not developed within the culture of science.”
According to Dr. Vedoster Ingram, a 29-year-veteran of the DEA, this was typical of the DEA. “As reports are normally presented, an official report of analysis is introduced into the court records for litigation without significant explanation.” Reviewable data for Hartshorn’s tests should have included microphotographs of the suspected marijuana sample, highlighting the relevant morphological characteristics; photographs of the Duquenois-Levine (D-L) color chemical test results, including side-by-side contemporaneous images of the suspected marijuana and actual marijuana standard for proper comparison; and photographs or photocopies of the Thin Layered Chromatography (TLC) plate with the measured values and observed colors recorded contemporaneously with the testing.
The NAS report said that such reports were unacceptable and should lead to dismissals of charges. In fact, much of Hartshorn’s report was indecipherable with abbreviations known only to herself. She dismissed this concern by stating that: “It’s not our policy to keep [reviewable data]; it’s not needed.” 
Reviewability and reproducibility are at the heart of verification and the scientific method. Regarding the Supreme Court’s ruling in Daubert v. Merrell Dow Pharmaceuticals, Inc., the Ninth Circuit Court declared that: “Something doesn’t become ‘scientific knowledge’ just because it’s uttered by a scientist nor can an expert’s self-serving assertions that his conclusions were ‘derived by the scientific method’ be deemed conclusive, else the Supreme Court’s opinion could have ended with footnote 2. As we read the Supreme Court’s teaching in Daubert, therefore, though we are largely untrained in science and certainly no match for any of the witnesses whose testimony we are reviewing, it is our responsibility to determine whether those experts’ proposed testimony amounts to ‘scientific knowledge,’ constitutes ‘good science,’ and was ‘derived by the scientific method.’
Judge Kozinski’s Ninth Circuit opinion noted further that a gate keeping court must decide in part whether “ ‘… scientists have derived their findings through the scientific method or whether their testimony is based on scientifically valid principles….’ (Daubert, 43F. 3d at 1316). In its gate keeping role, the court should view reliability as follows: ‘this means that the expert’s bald assurance of validity is not enough. Rather, the party presenting the expert must show that the expert’s findings are based on sound science, and this will require some objective, independent validation of the expert’s methodology.’” – i.e., review and reproduction of test findings.
The Court of Appeals of Maryland has ruled that: “Access to laboratory information generally is significant for another reason. The validity of testing procedures and principles is assessed in the scientific community by publishing the data in peer review journals …. [P]ublication of a laboratory’s work product and data used in [scientific] analysis, as well as independent replication and validation studies, are essential prerequisites to reliability.” Replication and validation of Hartshorn’s findings were impossible since she presented no supporting data.
For independent reviewability, replication, and validation, lab reports should contain sufficient information to evaluate case notes and interpret the data as well as procedures, standards, blanks, observations, and test results. Supporting documentation should include charts, graphs, and spectra generated during an analysis.  Since Hartshorn provided none of these details, her reports could not be checked out and proved nothing, least of all that the suspected sample was marijuana.
The DEA founded and presently chairs Scientific Working Group on the Analysis of Seized Drugs (SWGDRUG) which provides minimum standards for scientifically sound lab and testing procedures. According to SWGDRUG:
Laboratories shall have documented policies establishing protocols for technical and administrative review.
Laboratories shall have and follow documented analytical procedures.
Laboratories shall have in place protocols for the sampling of evidence.
Laboratories shall monitor the analytical processes using appropriate controls and traceable standards.
Laboratories shall have and follow documented guidelines for the acceptance and interpretation of data.
Analytical procedures shall be validated in compliance with Section 11.
When analysts determine the identity of a drug in a sample, they shall ensure that the result relates to the right submission. This is best established by the use of at least two appropriate techniques based on different principles and two independent samplings.
Method validation is required to demonstrate that methods are suitable for their intended purpose. For qualitative analysis (identifying drugs), the parameters that need to be checked are selectivity, limit or detection and reproducibility.
Minimum acceptability criteria should be described along with the means for demonstrating compliance.
Validation documentation is required. Laboratories adopting methods validated elsewhere should verify their methods and establish their own limits of detection and reproducibility.
Documentation shall contain sufficient information to allow a peer to evaluate case notes and interpret the data.
Analytical documentation should include documentation including charts, graphs, and spectra generated during analysis.
Laboratories shall perform proficiency testing in order to verify the laboratory’s performance. 
Hartshorn was asked whether she followed DEA protocols or at least the guidelines of SWGDRUG. “[T]hey aren’t laws, and so, as of right now, that is not our policy,” she casually responded. In other words, the DEA does not follow its own regulatory body. Even worse, the “DEA does not have such guidance set forth in one particular document type or ‘protocol’ that would provide instruction on how one is to test cocaine or marijuana. . . There are no mandatory methods, and the forensic chemists are afforded considerable discretion in determining which testing methods and instruments to use.” This according to Harshorn’s lab director, James Malone, who testified that the DEA has no protocol or standard methodology and does not validate its drug tests; calibrate its testing instrumentation right before testing; or run contemporaneous scientific controls to prevent and detect contamination.
Judge: For marijuana in this case, for example, there is no calibration?
James Malone: There is not. . . So we’re not running a positive control on the Duquenois-Levine (marijuana test) on a daily basis.
Prosecutor: Now with regard to standard methodologies, DEA has a standard methodology on how to do examinations?
JM: No, we don’t.
P: So for qualitative analysis, the actual identification of a drug, you don’t have such (validation) studies, as you understood her (defense expert) to mean, correct?
JM: Correct. . . Identification – (validation) studies related to identification are not generally – there are no requirements for that. (SWGDRUG: “Method validation is required to demonstrate that methods are suitable for their intended purpose.”)
According to SWGDRUG Recommendations at Part IV.A.6.1.1 (“Laboratories shall have and follow documented analytical procedures”); id at Part IV.A.6.1.6 (“Analytical procedures shall be validated in compliance with Part IV B Validation”); id, at Part IV.B.IA (“All methods shall be validated or verified to demonstrate that they will perform in the normal operational environment when used by individuals expected to utilize the methods on casework”); id at Part IV.B.1.5 (“The entire validation/verification process shall be documented and the documentation shall be retained. Documentation shall include … personnel involved, dates, observations from the process, analytical data, a statement of conclusions and/or recommendations, authorization approval signature”).”
In short, the DEA is not engaged in scientific testing; a conviction machine. Voodoo science as someone commented. It also means that the DEA labs are, in fact, unaccredited because they received their accreditation on the basis that they follow strict protocols and SOPs, determine error rates and test limitations, validate its tests, and run positive and negative controls.
What really set off Ryan, however, was Hartshorn’s testimony that the DEA’s marijuana tests as well as her testing are infallible. She claimed a zero percent (0%) error rate with the tests and her testing. “Ridiculous on its face,” said Ryan. “Ms. Hartshorn makes a bold statement in her testimony in which she asserted that the three tests performed in these cases are infallible in their combined ability to conclusively identify marijuana,” wrote defense expert Heather Harris. “She was unable to offer any scientific studies to confirm this assertion, which is a scientific impossibility.” The NAS report concluded that “no forensic method has been rigorously shown to have the capacity to consistently, and with a high degree of certainty, demonstrate a connection between evidence and a specific individual or source.”
Infallibility claims fly in the face of the fact that uncertainty enters testing in many ways, and each life stage of the evidence is susceptible to error. Contamination or misidentification can occur during the collection of the evidence. Analytical methods have practical and technical limitations. Reference standards and controls may fail quality control checks. Laboratory analysts who oversee the entire analytical process may make mistakes. Transcription errors can occur. In short, contrary to Hartshorn’s testimony, there is a panoply of errors that can occur. The three tests she used were: a microscopic examination, a presumptive color test named Duquenois-Levine (D-L), and Thin Layer Chromatography (TLC). None of these tests provide a specific identification to the exclusion of all other possible substances, and each of these tests has an associated degree of uncertainty or error rate.
With the microscopic exam, DEA analysts look for so-called cystolith hairs which occur on marijuana plants. But many other plant species unrelated to marijuana have cystolith hairs. Thus, a false positive (error) is possible with this examination. Also according to the NAS report, the microscopic exam can only be done properly by a qualified botanist. The DEA does not employ botanists.
George Nakamura, who is not a botanist, established use of the microscopic exam as a marijuana test. He examined 600 plants and found 80 with cystolith hairs. He then subjected the 80 “similar” plants to the D-L test, and only marijuana passed the entire test. However there was an elementary scientific flaw in Nakamura’s procedure for which reason his report should not have been published, let alone adopted as a protocol. His plant population sample was woefully inadequate since there are 200 –500, 000 plants he did not examine, and there are at least 24 species of plants with cystolith hairs. Nakamura himself admitted that there were some 30,000 plants which he did not examine.
Nakamura also claimed that the D-L was confirmatory of, and, specific to, marijuana, i. e. identified it to the exclusion of all other substances and did not render false positives. In fact, with the D-L test, false positives are expected based on the analytical mechanism of color tests. Color tests are screening tests that look at molecular groups rather than the specific molecule as a whole. Many unrelated molecules share common molecular groups, so any substance containing the target molecular group would give a positive response. In other words, the D-L test solely identifies the group of chemicals to which marijuana belongs. And there are other chemicals in that group which could give a positive D-L response, i.e., a false positive. Moreover, Nakamura himself reported that there were 25 substances that had been shown to cause false positives with the D-L test. So his claim was contrary to chemical facts and scientific demonstrations, and, again, should not have been published.
The D-L test is actually a combination of two individual tests. With the Duquenois test, a petroleum ether or chloroform extract of the plant extract is added to an ethanolic solution of vanillin and acetaldehyde, followed by addition of concentrated hydrochloric acid. Marijuana gives a deep blue-violet color. With the Levine modification, the blue-violet test mixture obtained in the Duquenois test is shaken with chloroform. With marijuana, the blue-violet color is transferred into the chloroform layer. However, at least 50 legal substances have been shown to give the same color reactions.
As early as 1938, the French pharmacist Pierre Duquenois, who developed the Duquenois test, found that it was not specific and gave false positives. Yet, he reported that the test was specific. Although he claimed it was specific, he worked to modify the original test into the D-L test to eliminate false positives – which as noted above was impossible given the nature of the D-L test. As he should have known in advance, the D-L test was no better and rendered false positives. Still, he reported that the D-L test was specific. Duquenois’s lie was repeated in 1972 by John Thornton and George Nakamura who falsely claimed that the D-L test was specific and in conjunction with a microscopic exam was a confirmatory, identification test. Their study is still the protocol for marijuana identification in crime labs throughout the country even though it was false and rebutted by Fullerton and Kurzman and Whitehurst.
With regard to TLC, its ability to identify a substance, which in this case is not marijuana but rather its active ingredient THC, is limited by the number of distinguishable responses possible. TLC is a method of separation, not of identification. “It is prone to confusion because of the appearance of unrecognized peaks or spots on a chromatograph, particularly when an analyst is dealing with a wide variety of biological samples from a number of sources.” The TLC test as generally performed for marijuana evidence has 100 distinct measurable values and 2 to 3 distinguishable colors. This allows for the distinct identification of at most 300 compounds without taking into account the possibility of compounds that will behave the same as the target molecule, THC. In other words, a positive TLC test could indicate any one of some 300 compounds in addition to THC.
When these three tests are performed in sequence, the uncertainty of the final result is the sum of the uncertainties attributable to each test. In this case, where each of the tests can produce errors, the uncertainty can be great. Moreover, a main concern with this sequence of testing is that the D-L and TLC tests produce results that are heavily dependent on the analyst’s subjective interpretation of the colors produced. What’s dark blue to one analyst, is purple to another. At a minimum, a standard reference material (a sample of known marijuana) should be tested along with the evidence sample as a comparison sample. The DEA does not do this. In addition, without the proper determination of the variability of positive results, the final identification is still simply the analyst’s subjective opinion.
Confirmation bias is also a concern with this sequence of testing. This is the tendency of an analyst to interpret analytical information in a way that confirms his/her preconceptions about an item of evidence as well as the results of the previous test. In a sequence of testing that relies entirely upon an analyst’s interpretation of test results, this is a likely source of error.
Hartshorn admitted that separately each of the tests is a screening test that renders false positives, i.e. errors. But miraculously when they are conducted in concert, they are error-free as is the analyst. In direct contradiction of Hartshorn’s claims of infallibility was a study done at her own lab which found false positives and a very high 20% error rate. And every independent scientific study has found an error rate and false positives with these tests. For instance, a comprehensive series of studies in 1974 involving no fewer than 14 scientists and two attorneys concluded, in part, as follows.
The probability of error in using screening tests for forensic identification is particularly great with marijuana because:
1. Screening tests are not specific;
2. Many common plants are confused with marijuana by “users” and law officers alike;
3. Inexpertly collected plant samples are not necessarily homogenous, i. e., only a single plant; and
4. The flowering plants include some 200,000 – 500,000 species besides marijuana.
As many as 20% (An Army study found 30%.) of the samples presumed to be marijuana and submitted to forensic laboratories have been found in recent years not to be Cannabis. “If BNDD (Bureau of Narcotics and Dangerous Drugs, predecessor to DEA) files are any indication, many. . . marijuana users are getting ‘high’ on parsely, alfalfa, or some other weed.” Common plants which have been confused with marijuana include tobacco, catnip, parsley, oregano, tea and other substances – sometimes laced with various chemicals.
Inexpertly collected plant samples commonly contain some extraneous plant materials – a weed grabbed by mistake, a plant which looked like the others, etc. The forensic analyst then needs to be concerned with one plant passing one screening test, and a contaminant passing another. (Furthermore, it’s not possible to determine if ground-up plant samples are from the same species. To avoid a misidentification, the analyst should assume the sample is adulterated or contaminated.) Because of this factor, and the common presence of added chemicals, the specificity of marijuana screening tests, even when used in combination, is no greater than the specificity of the most specific single test.
Because Hartshorne’s testimony raised serious concerns about her qualifications and “integrity” as well as a “flaw” in her testing, Ryan ordered that the prosecution produce all information verifying that the three tests in combination were infallible. What Ryan apparently did not realize was that Hartshorn was repeating unsupported infallibility claims made by DEA lab directors since at least 1999. For instance, on April 9, 1999, Joseph P. Bono, director of the DEA’s Mid-Atlantic Laboratory submitted a sworn affidavit to the courts that all DEA analyses and tests are “incapable of producing a false positive. . . In other words, even if the test results are inaccurate, the results will not indicate the presence of a controlled substance when none is present in the unknown sample. Even if the instruments used in the testing are not properly calibrated, if no controlled substance is present in the exhibit, then no controlled substance will be identified . . . even when an instrument is not functioning properly, it will not identify cocaine, or any other controlled substance, as being present in a sample, unless that controlled substance is actually present.”
Bono’s successor at this lab, Richard Fox, was more specific in his sworn affidavit which stated, in part, that:
“There is no other plant material that will give a positive result for all three tests. . . Neither the analyst in this case, nor any other DEA analyst, has ever misidentified marijuana. . . As such, the uncertainty measurement associated with the conclusions reached by the analyst resulting in the identification of marijuana is zero.”
Fox’s successor, James Malone, who is also Hartshorn’s supervisor who has signed off on her reports, has testified, in part, as follows in another marijuana case in D.C.
Prosecutor: To your knowledge, while you’ve been at the lab, has the laboratory ever misidentified a controlled substance?
James Malone: No.
P: And when you say – what are you basing that on?
JM: On my knowledge of the operations of the laboratory. We have not misidentified anything.
P: Are you aware of anything which shows that a mis-calibrated system or chromatographer in this case, but any system that was not calibrated correctly would create a false positive for cocaine or a controlled substance?
P: Have you ever seen it in the lab?
JM: Have I ever seen what?
P: A false positive from a mis-calibrated system.
Judge: But Mr. Chawla’s position was, can it ever – can a mis-calibrated machine ever give a false positive?
JM: No. A mis-calibrated machine isn’t going to give you a positive cocaine if there’s not cocaine.
Judge: Why not?
JM: It just wouldn’t. . .
P: More specifically, if the reagent isn’t working, is it going to show that the substance isn’t marijuana? In other words, if the reagent isn’t working, what’s the result of the Duquenois-Levine going to be?
JM: It’s going to be negative.
P: Would I get a positive out of a Duquenois-Levine test? If I used a reagent that wasn’t working anymore and tried to run a Duquenois-Levine with that reagent, what would happen?
JM: You wouldn’t get a false positive, no.
P: With regard to identification techniques, is there any – do you have any reason to believe that a mis-calibrated or non-calibrated device would result in a false positive?
JM: No, I don’t.
Malone’s testimony makes clear that he is basing his infallibility claim on ipse dixit evidence as were Bono and Fox who have never presented data to support their unheard of assertions.
Decades before their infallibility claims, several high courts including the U.S. Supreme Court found that the tests did not prove the presence of marijuana beyond a reasonable doubt. The Supreme Court of Wisconsin ruled in 1973 that: “An expert opinion that the substance is probably marijuana (based on a microscopic examination, D-L test and TLC) is not sufficient to meet the burden of proving the identity of the substance beyond a reasonable doubt. . . If this were a possession case, the tests would be insufficient. . . It is quite true that the tests used by Mr. Michael Rehburg, a chemist and witness for the prosecution, were not specific for marijuana. . . . He admitted, . . . these tests were not specific for marijuana.”
In 1979, a trial judge in North Carolina found that the D-L test was “not specific for marijuana” and had “no scientific acceptance as a reliable and accurate means of identifying the controlled substance marijuana.” This finding was upheld by the North Carolina Court of Appeals as well as the North Carolina Supreme Court which found that: “The determination that the test used was not scientifically acceptable because it was not specific for marijuana was amply supported by the facts. . . The trial court’s ruling that the results of the tests conducted on green vegetable matter by using the Duquenois-Levine color test in the Sirchie drug kit were inadmissible in evidence was supported by the court’s findings that the test is not scientifically accepted, reliable or accurate and that the test is not specific for marijuana because it reportedly also gives a positive reaction for some brands of coffee and aspirin. . . . The conclusion to exclude the test results is amply supported by these findings of fact . . . and the test results were properly suppressed . . .”
Also in 1979, the U.S. Supreme Court in Jackson v Virginia ruled that nonspecific tests could not be the basis for advancing a prosecution or a conviction because they do not provide proof beyond a reasonable doubt.
Ultimately, Judge Ryan concluded that “such claims of infallibility belie one of the most basic tenets of science: that some degree of error is inherent in every scientific test, process, or analysis. . .While explaining that each of these tests used alone is presumptive, as distinct from confirmatory, Ms. Hartshorn nonetheless maintained their infallibility when used in concert. With the designation that these tests are merely presumptive, the DEA chemist acknowledged that there is some degree of inherent error calculable with respect to each of these tests when they are performed in isolation. That there is some distinct and additional degree of error calculable with respect to this analyst’s performance of each test is also without question.”
It is clear from Judge Ryan’s remarks that he would have denied admission of the test results as evidence as well as Hartshorn’s testimony at trial, and this would have resulted in a withdrawal of the charges. He did not do so because defense counsel did not request it. Since Kurzman’s study and others occurred before this case as well as applicable court decisions such as Jackson, Daubert and Kumho Tire, defense counsel should have requested an evidentiary hearing for challenging the tests and sufficiency of evidence. Their failure to do so amounted to ineffective counsel.
This is exactly what U.S. District Court Judge Nancy Gertner concluded in a similar case wherein the defense counsel did not request an evidentiary hearing to challenge the forensic evidence. This is seen if one simply substitutes “marijuana” in her following remarks. “Under the ‘prevailing professional norms,’ reasonably competent counsel should have moved for a Daubert/Kumho Tire hearing before trial on all the expert testimony — a) on the [marijuana] laboratory analysis based on the investigator’s failure to use a comparison or control sample and not test beyond the generic finding of [“Exhibit 1 contains a measurable amount of marijuana”]; b) on the [marijuana] evidence, highlighting problems with proficiency testing and emphasizing the limited scope of the testimony; and, c) on the expert cause-and-origin testimony, when the expert’s proposed testimony was scientifically flawed. If counsel had requested such a hearing, there is more than a ‘reasonable probability’ that it would have been granted, that the laboratory analysis and the [marijuana] evidence would have been excluded, or severely limited, at the very least. . . . As the Court held in Daubert, some testimony may be so problematic that the usual trial techniques are just not enough to prevent a jury from giving it far more credence than it deserves. See Daubert, 509 U.S. at 596-97. The testimony should not reach the jury at all. (This was absolutely true with Judge Ryan’s case.) Here, the scientific literature cast doubt on the significance of the [marijuana tests] and even raised concerns about . . . “proficiency” testing, concerns counsel never raised. . . just what the law and literature caution against”
It is instructive to compare the two cases in detail because like Judge Ryan, Judge Gertner also critiqued the government’s evidence and experts through the prism of the NAS report. Gertner pointed out that it was significant that by 2006, a number of articles in legal journals and cases had cast a critical eye on the scientific reliability of arson evidence, methodologies, and techniques. Because of this, competent counsel should have been aware that defendants had been convicted and sentenced on the basis of flawed arson evidence and taken appropriate steps to litigate the issues using all the tools available including challenging the tests and requesting an evidentiary hearing.
The same was even more true of marijuana evidence by the time of Judge Ryan’s case. The marijuana tests had been scientifically established as unreliable and inaccurate, and previous court decisions had excluded admission of the marijuana test results as evidence.
Gertner found that there was ineffective counsel because the defense attorneys did not move for a Daubert hearing prior to trial on any expert issue. They did not seek exclusion of any of the proposed expert testimony or move for its limitation. They did not argue that the expert testimony failed to meet the minimal threshold for reliability of scientific evidence and should not have been admitted at all. They did not alert the Court to the ways in which the government’s investigation undermined their very ability to present a defense.
The same was true with the case of Judge Ryan who called Hartshorn’s testimony “[R]idiculous on its face” and lacking in “integrity.”
In addition, Gertner argued that it was crucial to try to exclude expert testimony before trial because “a certain patina attaches to an expert’s testimony unlike any other witness; this is ‘science,’ a professional’s judgment, the jury may think, and give more credence to the testimony than it may deserve. United States v. Hines, 55 F. Supp. 2d 62, 64 (D. Mass. 1999); see also Michigan Millers Mut. Ins. Corp. v. Benfield, 140 F.3d 915, 920 (11th Cir. 1998) (‘The use of ‘science’ to explain how something occurred has the potential to carry great weight with a jury, explaining both why counsel might seek to couch an expert witness’s testimony in terms of science, as well as why the trial judge plays an important role as the gate-keeper in monitoring the evidentiary reliability of such testimony.’).”
This again was even more true with Judge Ryan’s case because DEA chemists were poised to testify that the marijuana tests as well as their testing were infallible, and that no DEA analyst had ever misidentified marijuana. In fact, defense counsel in Judge Ryan’s case had been involved in previous marijuana case wherein DEA analysts had claimed infallibility under oath. All the more reason why they should have sought to exclude the evidence.
For its part, the DEA was ethically and scientifically bound to suspend Hartshorn and Malone and investigate all their previous marijuana cases. In fact, Hartshorn and Malone were subsequently both witnesses in another discovery hearing in the same court room opposed by the same defense counsel who again had not requested an evidentiary hearing to challenge the same marijuana tests. This hearing was presided over by Judge Florence Y. Pan who had read Judge Ryan’s order. Heather Harris, who was highly praised by Judge Ryan, was the defense expert in this hearing as well. With no justification, Pan found Hartshorn and Malone to be credible as opposed to Harris even though Malone claimed infallibility without any proof. “On my knowledge of the operations of the laboratory,” he said, “We have not misidentified anything.” He also said that “a mis-calibrated instrument would never cause a false positive result.” Asked why by Pan, he replied: “It just wouldn’t.”
As we saw, Malone further testified that the DEA has no protocols or standard operating procedures and does not validate its tests or run sufficient numbers of controls. He threw in that the Analysis of Drugs Manual and the Analytical Sufficiency Document are “the closest thing the DEA has to standard operating procedures for the chemists.” Again, no problem for Pan even though Malone said these documents were “DEA proprietary,” and SWGDRUG and scientific practice require protocols, test validations, and controls. Malone claimed there were published studies validating the tests, but this is not true.
Harris disagreed with Malone on all accounts. No problem for Pan who decreed that: “To the extent the testimony of the witnesses conflicts, however, the Court credits the testimony of Mr. Malone. . . the Court found the testimony of Mr. Malone to be extremely credible and persuasive [and was] impressed by Mr. Malone’s candor, expertise, and professional demeanor. . . His testimony was very clear and logical, and the Court found him to be forthright.” Pan did not mention the lack of scientific data or explanations for Malone’s testimony or that it showed the DEA was at odds with SWGDRUG requirements and scientific practice.
In short, there were more than enough scientific studies and favorable case law before Judge Pan’s case, not to mention Judge Ryan’s order, to justify requesting an evidentiary hearing in an attempt to deny admission of the test results as evidence. Defense counsel also had a highly qualified expert to confirm that the tests results did not provide proof beyond a reasonable doubt, and that the DEA’s proffered evidence and testimony were false.
As Judge Gertner observed: “If the lawyers do not tee up the issue, the evidence will be introduced without objection.” This is exactly what happens in nearly all marijuana cases. Defense attorneys do not challenge the tests or the sufficiency of the evidence. In 2010, 853, 839 people were arrested on marijuana charges, and you can count on one hand the number of defense attorneys who challenged the tests or even the subjective opinions of arresting police officers.
This failure on the part of defense attorneys is particularly irresponsible because claims of infallibility can be to the advantage of a defendant as they undermine the admissibility of marijuana test results and the credibility of a prosecutor’s expert witnesses. Before a trial, a defense attorney can request an evidentiary hearing wherein he or she can examine the qualifications of the prosecution’s forensic analysts, the laboratory, and the nature and manner of the testing procedures used in identifying the drug the defendant was charged with possessing or selling. If this examination reveals deficiencies or inadequacies, the attorney can challenge the sufficiency of the prosecution’s evidence and seek a dismissal. Dr. Bruce Stein et al have reported that: “Based on our survey, such a challenge would be warranted in many cases.”
The possibilities of these challenges was seen in a recent case in Michigan in 2010. Defense attorney Michael Nichols obtained a pre-trial evidentiary hearing and cross examined Michigan State Police lab analyst Jerome Waldron who testified that in more than 6,000 cases, he had never encountered a false positive, and that the marijuana tests had an error rate of zero. Nichols then entered a motion to exclude Waldron’s testimony from trial as well as use of the test results as evidence, citing scientific articles, prior court decisions, and Waldron’s lack of credibility. Even before the judge rendered his decision, the prosecutor withdrew the charges.
If lab conditions or procedures do not conform to scientific guidelines and principles or court rulings such as Daubert, the defense attorney can motion to exclude the test results as well as testimony from the analyst at trial. Below is a list of such requests which have led to pre-trial dismissals of marijuana charges because they revealed deficiencies in the lab.
1. Evidence collection forms or logs (description of evidence, packaging, identification of specimens, identification of individuals collecting samples, sample collection procedures.
2. Chain-of-custody records (field-to-lab transfers, and all transfers of evidence and associated analytical samples within the laboratory).
3. Laboratory receiving records (records documenting the date, time and condition of receipt of the evidence in question; laboratory-assigned identifiers; storage location).
4. Laboratory procedures for subsampling (collection of analytical aliquots) and contamination control.
5. Copies of technical procedures in effect at the time the subject testing was performed (often termed Standard Operating Procedures, or SOP’s) for each procedure used during sample screening and confirmation, including; sample preparation, sample analysis, data reporting, and instrument operation.
6. Copies of the two bracketing controlled substance proficiency results for each analyst and technician responsible for preparation or analysis of subject specimens, including raw data and reported results, target values and acceptance ranges, performance scores, and all related correspondence.
7. Copies of traceability documentation for standards and reference materials used during analysis, including unique identifications, origins, dates of preparation and use, composition and concentration of prepared materials, certifications or traceability records from suppliers, assigned shelf lives and storage conditions.
8. Sample preparation records, including dates and conditions of preparation, responsible analyst, procedural reference, purity, concentration and origins of solvents, reagents, and control materials prepared and used, samples processed concurrently, extract volume.
9. Copies of bench notes, log books, and any other records pertaining to case samples or instruments; records documenting observations, notations, or measurements regarding case testing.
10. Instrument run log with identification of all standards, reference materials, sample blanks, rinses, and controls analyzed during the day/shift with subject samples (as appropriate: run sequence, origins, times of analysis and aborted run sequences).
11. Record of instrument operating conditions and criteria for variables, including as appropriate: Gas chromatograph column, instrument file identification, tuning criteria, instrument performance check (e.g., ion abundance criteria), initial calibration, continuing calibration checks, calibration verification.
12. Record of instrument maintenance status and activities for instruments used in subject testing, documenting routine and as-needed maintenance activities in the weeks surrounding subject testing.
13. Raw data for the complete measurement sequence (opening and closing quality control included) that includes the subject samples. For GC-MS analysis, this would include: areas and retention times, injection volumes, dilution factors, chromatograms and mass spectra. As prepared and as determined values for all quality control samples.
14. A description of the library used for spectral matches for the purpose of qualitative identification of controlled substances, including source(s) and number of reference spectra.
15. Copy of records documenting computation of illicit drug laboratory’s theoretical production yield, including the basis for the computation, and the algorithm used, as appropriate.
16. Procedure(s) for operation and calibration checks of analytical balances used to weigh controlled substances
17. Results of calibration checks and documentation of mass traceability for gravimetric determinations.
18. Results of contamination control surveys for trace level analytes relevant to test methods at the time of analysis, including sampling design and analytical procedures.
19. Records and results of internal reviews of subject data.
20. Method validation records documenting the laboratory’s performance characteristics for qualitative identification and quantitative determinations of the controlled substance, to include data documenting specificity, accuracy, precision, linearity, and method detection limits.
21. Copy of the laboratory’s Quality Manual in effect at the time the subject samples were tested as well as the laboratory’s most recent Quality Manual (however named; the document that describes the laboratory’s quality objects and policies).
22. Copy of the laboratory’s ASCLD-LAB application for accreditation, and most recent Annual Accreditation Review Report, as appropriate.
23. Statement of qualifications of each analyst and/or technician responsible for processing case samples to include all names, locations and jurisdictions of cases in which these personnel testified concerning the same substances found in the present case.
24. Copy of the laboratory’s ASCLD-LAB on-site inspection report, as appropriate, as well as any reports of on-site inspections by any other testing laboratory audit organization.
25. Copy of internal audit reports generated during the period subject samples were tested..
26. List of capital instrumentation in the laboratory at the time subject testing was performed, including manufacturer, model number, and major accessories.
27. Production throughput data for the drug testing section: numbers of tests performed per month or per year, and the number of Full Time Equivalent personnel in the drug testing section of the laboratory.
Marijuana field tests also have specific requirements that are seldom observed by the police. For instance, the field tests used by police officers have expiration dates because the chemicals and reagents in the tubes deteriorate over time and as a result of heat or cold. Before going to a hearing or trial, a defense attorney can find out exactly what brand of field test kit was used with his/her client. This can be done through a public records request and sometimes by simply asking the prosecutor. The defense attorney can then purchase the exact same kit online. In court, the defense attorney can show the judge that the test has an expiration date after which the test would be inaccurate. If the police officer did not check the expiration date before using the test, then the test results should be assumed to be invalid. Under the law, any tests or equipment that are not in good working order produce results that are inadmissible as evidence. If the police officer cannot attest to the expiration date or whether the test was used after its expiration date, the drug charges should be dismissed. Some search warrants are based on positive kit results and may be ruled invalid if the police officer did not know the expiration date of the kit. This should also result in a dismissal of charges.
Even if the field test has not expired, the test does not prove the presence of marijuana in a seized substance because it is a presumptive or screening test only. Information accompanying the kits indicate this fact. For instance, the carton containing one commonly used NIK field test states that it is: “A specially formulated reagent system for the presumptive identification of Marijuana.” In other words, the company itself is saying that the test does not prove the presence of marijuana. It is further stated that: “The results of a single test may or may not yield a valid result. . . There is no existing chemical reagent test, adaptable to field use that will continually eliminate the occurrence of an occasional invalid test results [sic]. A complete forensic laboratory would be required to qualitatively identify an unknown suspect substance.” A defense attorney can show this to a judge or jury and explain what it means. Therefore, if the only evidence is positive results from a field test, the charges should be dismissed or the defendant acquitted.
Recently, defense attorneys in Colorado did challenge the DEA’s test results and blocked their admission as evidence including results from Gas Chromatography/Mass Spectrometry (GC/MS) analysis, the gold standard of drug testing. U.S. District Court Judge Marcia S. Krieger of Colorado ruled on April 21, 2011 that based on DEA information and the testimony of DEA chemist Anthea Chan, the prosecution failed to show the existence of reliable, accurate testing being reliably applied that proved the presence of amphetamines. She therefore denied admission of the test results as evidence at trial.
The hearing, known as a Rule 702 (of the Federal Rules of Evidence) Hearing, provided a rare glimpse into the inner workings of a DEA lab. It was meant to determine whether their testing conformed to Rule 702 requirements for scientifically sound testing. Rule 702 requirements are all but identical to Daubert requirements. Krieger’s first task was to determine whether Chan had correctly tested according to DEA protocols and SOPs. Chan testified that she followed no protocols or SOPs and, in fact, was not aware of any protocols or SOPs. These facts alone, said Krieger, were enough to deny admission of the test results as evidence because it was impossible to determine whether Chan reliably applied reliable tests.
Krieger did, not, however, rule at this point because she wanted her ruling to encompass defense expert Janine Arvizu’s findings. Arvizu attempted to reconstruct the practices, protocols, and results relevant to Chan’s qualitative and quantitative test conclusions and whether they adhered to quality requirements and universally accepted standards designed to ensure the quality and reliability of tests, specifically, what’s known as ISO 17025 standards. However, as was the case in Washington, only a very limited amount of laboratory discoverable material was made available making it impossible to determine or evaluate the laboratory’s technical requirements or quality controls during the subject testing.
“That’s exactly the position the Court finds itself in,” noted Judge Krieger, “because it does not have evidence as to the protocol that was used, the reliability of the protocol compared to other labs, or whether Ms. Chan complied with the protocol in a reliable fashion.”
Arvizu was, however, able to determine that Chan’s testing in particular was unreliable and inaccurate. Chan first used the Marquis chemical color test as a screening test, and the suspected substance turned orange/brown suggesting it was amphetamines. But the test was unreliable and meaningless because she did not use a color chart with which to compare her results. As she herself testified: “I believe it’s the same as you saying something is blue and me saying it’s light blue. It’s subjective.” Subjective tests are unreliable by definition.
Her next test was a GC/MS analysis. Chan first ran a “blank” or negative control to check for contamination. The test consisted of putting the suspected amphetamines into a solution and then placing this solution onto the machine. But she first put the solution alone onto the machine, to see whether it would register positive. It did, meaning the machine was contaminated. As Arvizu testified: “When quality control samples fail, the run should be terminated and the failure should be investigated and corrective action taken before unknown sample are tested.” Inexplicably, Chan continued the testing with the contaminated machine.
Actually, even before beginning her test, Chan should have also run a positive control by placing a known quantity of amphetamines, known as a standard, on the machine to calibrate it and see whether it was working properly. DEA analysts are required under ASCLD/LAB and ISO 17025 guidelines to run standards immediately before testing. Chan said she was not familiar with these guidelines and was not required to do so. Chan’s superior Shana Irby, who approved her testing, also testified that it is not required to run contemporaneous standards, and that it suffices if the machine has been checked ten months prior. She claimed to have never seen any protocol requiring the running of contemporaneous standards, and that “as soon as I walk up to an instrument, I know – I generally know if it’s working or not.” She also claimed it was not necessary to check beforehand whether the standard had disintegrated because “[M]ethamphetamine to my knowledge does not degrade.” This is false, and these standards come with an expiration date beyond which they are not useable.
DEA labs are accredited by the American Society of Crime Laboratory Directors/ Laboratory Accreditation Board ((ASCLD/LAB) under the international criteria detailed in ISO/IEC 17025:2005 and the 2006 ASCLD/LAB International Supplemental Requirements. Accreditation certifies that the management and technical operations of the laboratory comply with the program requirements, including any corrective action that was required during any of audits. (Details regarding the accreditation program may be obtained from www.ascld-lab.org.) In other words, DEA labs are accredited on the basis that they ascribe to ISO/IEC 17025 and ASCLD/LAB International Supplemental Requirements. Arvizu said the DEA adheres to neither, and is, therefore, de facto, unaccredited.
Many of us have a vision, an alternative vision to the tyranny of those who control the world. But we are ridiculed, dismissed, put on trial (Manning), confined to a small embassy in
“Some cockroaches have been known to live up to three months without food and a month without water. They are even resilient enough to survive occasional freezing temperatures. This makes them difficult to eradicate once they have infested an area.” – Wikipedia
tribunal) defines aggression as the supreme international crime, differing from other war crimes, and it encompasses all of the evil that follows. The Nuremberg and British invasion of US was a textbook example of aggression, which means that we were responsible for all the evil that followed. Serious conflict arose. It spread all over the region. In fact the region is being torn to shreds by this conflict. That’s part of the evil that follows…Take a look at the International criminal court (ICC) – black Africans or other people the West doesn’t like. Bush and Blair ought to be up there. There is no recent crime worse than the invasion of Iraq . Obama’s got to be there for the terror war... it’s just murder on executive whim” Noam Chomsky (1) Iraq
A former partner of McKinsey, the management consultancy, is poised to be named on Thursday as the next chairman of Rolls-Royce, the aircraft engine-maker.
I can reveal that Ian Davis, who sits on the board of BP, is to join the board of Rolls-Royce in the coming months. He is expected to replace Sir Simon Robertson as the chairman of Britain's most important manufacturing company following its annual meeting in May.
The appointment will end months of uncertainty about the leadership of Rolls-Royce after it became mired in corruption allegations relating to payments made by its subsidiaries in China and Indonesia.
Mr Davis's appointment is expected to be announced alongside a bumper set of full-year numbers from Rolls-Royce, which analysts say will have notched up about £1.4bn in annual profit last year.
Mr Davis is well-known to the Rolls-Royce board member who led the search for Sir Simon’s successor. Iain Conn, the senior independent director at the aircraft engine-maker, is also the chief executive of BP’s refining and marketing operation, and insiders said that Mr Davis had been in discussions with Rolls-Royce for several months about taking the job.
Sources said tonight that Rolls-Royce was unlikely to provide a detailed update on the progress of the corruption probes alongside its results.
Last month, it said it had appointed Lord Gold, the eminent City lawyer, "to lead a review of its compliance procedures, reporting to the Ethics Committee of the Board. This follows the previous announcement by Rolls-Royce that it has provided information to the Serious Fraud Office (SFO) relating to concerns about bribery and corruption involving intermediaries in overseas markets".
The corruption allegations have cast a shadow over Rolls-Royce, which has enjoyed a largely unblemished reputation even as its rapid expansion during the last decade saw it accelerate sales in fast-growing emerging markets in Asia.
Mr Davis will need to tackle the ongoing inquiries and build a strong relationship with John Rishton, the Rolls-Royce chief executive, who has only been in the job for about a year.
In addition to his role on the board of BP, Mr Davis sits on the board of Johnson & Johnson, the US pharmaceuticals group, and is a senior adviser to Apax Partners, the private equity firm. He is also a non-executive member of the board of the Cabinet Office.
Rolls-Royce today announced that it had struck a deal with the Ministry of Defence to supply nuclear propulsion technology to the military, a contract that it said would save the Government £200m and protect 2,000 British jobs.
Rolls-Royce declined to comment.
- Obama to meet with Goldman's Blankfein, other CEOs Tuesday (Reuters)
- Chinese Firms Shrug at Rising Debt (WSJ)
- McGraw-Hill, S&P Sued by U.S. Over Mortgage-Bond Ratings (BBG)... but not Moody's or Fitch
- Dime a Dozen: Dollar Stores Pinched by Rapid Expansion (WSJ)
- Dell Board Said to Vote Monday Night on $24 Billion LBO (BBG)
- BOJ Governor Shirakawa to step down on March 19 (Reuters)
- Alberta may offer more to smooth way for Keystone (Reuters)
- Facebook Is Said to Create Mobile Location-Tracking App (BBG)
- Barclays takes another $1.6 billion hit for mis-selling (Reuters)
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- Texas School-Finance System Unconstitutional, Judge Rules (BBG)
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Overnight Media Digest
* Michael Dell is close to finishing a risky $23 billion deal to take private the computer company he founded nearly 30 years ago, in an effort to remake Dell Inc for a post-PC era.
* The Justice Department in the United States sued Standard & Poor's Ratings Services late Monday, alleging the firm ignored its own standards to rate mortgage bonds that imploded in the financial crisis and cost investors billions.
* Investigators remain stumped on the cause of burning batteries aboard two Boeing 787 Dreamliners, fueling pessimism about how quickly the grounded aircraft can resume flying.
* British regulators are considering forcing banks to raise billions of pounds in fresh capital to address concerns around a key gauge of their financial health.
* Oracle Corp said it will acquire telecommunications gear maker Acme Packet Inc in a deal valued at $1.7 billion, making its biggest move yet into the market for equipment that transports Internet data.
* Bridgewater Associates told its investors that it will launch a new hedge fund this year, and had sold another minority equity stake in the firm to an unidentified buyer to help ensure its long-term viability.
* The U.S. Securities and Exchange Commission, expanding a high-profile investigation, is gathering data on a broad number of trades by corporate executives in shares of their own companies, according to people familiar with the probe.
Standard & Poor's is likely to face a lawsuit filed by the U.S. Department of Justice alleging that the credit rating agency defrauded banks by issuing overly rosy ratings for mortgage-related securities in the lead-up to the financial crisis.
SGX, the Singapore stock exchange, is in talks to buy a stake in clearing house LCH.Clearnet. The Asian exchange may participate in the London Stock Exchange Group's purchase of LCH or buy a separate stake.
Mercuria - one of the world's top five energy traders, has hired Credit Suisse to carry out a strategic stake sale.
The Moscow Exchange is set become Europe's largest exchange by market capitalisation after it set a price range for its initial public offering, that values the company at $4 billion to $4.6 billion.
BP Plc is likely to face a year or more of uncertainty over the cost of the 2010 Deepwater Horizon disaster as any decision on civil penalties and environmental damages is not expected to come until next year.
Former chief executive of Thales - Denis Ranque, has emerged as the front runner to become chairman of European aerospace and defence company EADS, according to two people familiar with the situation. EADS shareholders will meet next month to approve a new board and corporate governance structure at the company.
Dutch telecoms group KPN, is finalising plans to raise as much as 4 billion euros in new capital. The company whose stakeholders include Mexican billionaire Carlos Slim, is seeking to raise 2 billion euros to 4 billion euros in the form of a rights issue.
* The Justice Department in the United Status filed civil fraud charges late Monday against the nation's largest credit-ratings agency, Standard & Poor's, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck.
* Dell Inc neared an agreement on Monday to sell itself to a group led by its founder and the investment firm Silver Lake for more than $23 billion, people briefed on the matter said, in what would be the biggest buyout since the financial crisis.
* China Petroleum and Chemical Corp , the state-owned oil and refining giant better known as Sinopec, is selling new shares worth up to $3.1 billion, in what ranks as one of Asia's biggest equity deals so far this year.
* Japan Airlines said that the grounding of its Boeing 787 Dreamliner fleet would cost it 700 million yen, or $7.5 million, in earnings through March and that it would seek compensation from Boeing Co.
* British regulators will have the power to split up banks that fail to separate risky trading activity from retail banking, George Osborne, the country's chancellor of the Exchequer, said.
* Microsoft Corp, taking aim at the world's fastest-growing smartphone market, said on Monday that it would team up with Huawei of China to sell a low-cost Windows smartphone in Africa.
THE GLOBE AND MAIL
* Alberta Premier Alison Redford has replaced two of her cabinet ministers, a minor shuffle she says is evidence of her government "leading by example" as it focuses on economic development and looks for savings leading up to next month's budget.
* Amid a standoff between buyers and sellers, the number of homes sold in Greater Vancouver fell 14.3 percent last month. There were 1,351 property sales in the region in January, down from 1,577 in the same month of 2012, the Real Estate Board of Greater Vancouver said Monday.
Reports in the business section:
* The end of the penny has given the Royal Canadian Mint 20 percent more capacity, and it plans to put it to use producing other countries' coins. The Mint struck its final penny last May after the federal government announced it would kill the coin as a cost-saving measure. Monday marks beginning of the penny's phase-out as the Mint will stop distributing them to retailers and banks.
* The official word on the progress of free trade negotiations between Canada and the European Union is that "no deal is imminent." Unofficially, trade sources suggest a framework deal is sitting on the Prime Minister's desk, waiting for him to decide whether the terms are likely to cause him unacceptable political headaches.
* Canadian Pacific Railway Ltd's decision to hire away a top Canadian National Railway Co executive came with the hefty price in the form of a deal not to hire about 60 of its rivals' top marketing and operations executives through 2016. Canadian Pacific said Monday it had appointed Canadian National's chief operating officer, Keith Creel, as its new president, chief operating officer, and the likely successor to Hunter Harrison as its chief executive.
CHINA SECURITIES JOURNAL
--China could raise crude oil prices after the Chinese Spring Festival holiday (Feb. 9 to 17), due to a rise in global oil prices, the official paper said citing industry sources.
--China may announce plans this year to develop 120 trading posts along its borders to stimulate the country's struggling exports and boost investment.
--China Vanke Co Ltd, the country's largest real estate developer by turnover, said its board had approved a plan to move trading of its foreign currency shares to Hong Kong from Shenzhen.
SHANGHAI SECURITIES NEWS
--The State Council said it plans to implement paid vacation rules to boost domestic tourism. Analysts said this could boost tourism revenues by 50 billion yuan ($8.02 billion) per year.
--China's yuan deposits in Hong Kong could rise to 700 billion yuan this year, from 600 billion yuan last year, analysts told the official paper.
--China's Ministry of Public Security said it has handled 120 food safety cases and arrested 350 people since it started a crackdown on illegal food and food safety in January.
--Police seized more than 40 tons of fake mutton and beef rolls in China's northeastern Liaoning province. The fake food was made from duck and laced with large amounts of carcinogens.
Fly on the Wall 7:00 AM Market Snapshot
Alon USA Partners (ALDW) upgraded to Buy from Neutral at Goldman
Armstrong World (AWI) upgraded to Overweight from Equal Weight at Barclays
Bed Bath & Beyond (BBBY) upgraded to Buy from Neutral at Citigroup
Cullen/Frost (CFR) upgraded to Outperform from Perform at Oppenheimer
D.R. Horton (DHI) upgraded to Overweight from Equal Weight at Barclays
Harmony Gold (HMY) upgraded to Neutral from Sell at Citigroup
Macy's (M) upgraded to Buy from Neutral at Citigroup
Marvell (MRVL) upgraded to Outperform from Sector Perform at RBC Capital
Stillwater Mining (SWC) upgraded to Overweight from Neutral at JPMorgan
Target (TGT) upgraded to Buy from Neutral at Citigroup
UnitedHealth (UNH) upgraded to Conviction Buy from Neutral at Goldman
Zynga (ZNGA) upgraded to Buy from Neutral at BofA/Merrill
Alon USA Energy (ALJ) downgraded to Neutral from Buy at Goldman
American Science & Engineering (ASEI) downgraded to Hold from Buy at Benchmark Co.
Associated Banc-Corp (ASBC) downgraded to Perform from Outperform at Oppenheimer
AvalonBay (AVB) downgraded to Hold from Buy at Jefferies
Baidu (BIDU) downgraded to Market Perform from Outperform at Raymond James
Equity Residential (EQR) downgraded to Hold from Buy at Jefferies
Iconix Brand (ICON) downgraded to Neutral from Buy at Citigroup
Invesco (IVZ) downgraded to Market Perform from Outperform at BMO Capital
KB Home (KBH) downgraded to Equal Weight from Overweight at Barclays
Kohl's (KSS) downgraded to Neutral from Buy at Citigroup
PulteGroup (PHM) downgraded to Equal Weight from Overweight at Barclays
Realogy (RLGY) downgraded to Equal Weight from Overweight at Barclays
Royal Caribbean (RCL) downgraded to Market Perform from Outperform at Raymond James
Ryland Group (RYL) downgraded to Underweight from Equal Weight at Barclays
Scientific Games (SGMS) downgraded to Sell from Hold at Deutsche Bank
Stryker (SYK) downgraded to Neutral from Buy at UBS
Toll Brothers (TOL) downgraded to Underweight from Equal Weight at Barclays
Yum! Brands (YUM) downgraded to Neutral from Outperform at RW Baird
hhgregg (HGG) downgraded to Underperform from Neutral at Credit Suisse
ASML (ASML) initiated with an Outperform at Cowen
Applied Materials (AMAT) initiated with an Outperform at Cowen
Broadcom (BRCM) initiated with an Outperform at Cowen
ChipMOS (IMOS) initiated with an Outperform at Cowen
Health Care REIT (HCN) initiated with an Overweight at Barclays
Intel (INTC) initiated with a Neutral at Cowen
KLA-Tencor (KLAC) initiated with a Neutral at Cowen
Lam Research (LRCX) initiated with a Neutral at Cowen
Neurocrine Biosciences (NBIX) initiated with a Buy at Lazard Capital
Repros Therapeutics (RPRX) initiated with a Buy at Lazard Capital
SanDisk (SNDK) initiated with a Neutral at Cowen
Teradyne (TER) initiated with an Outperform at Cowen
Texas Instruments (TXN) initiated with a Neutral at Cowen
Ulta Salon (ULTA) initiated with an Outperform at Credit Suisse
Vanda Pharmaceuticals (VNDA) initiated with a Buy at Lazard Capital
Vitamin Shoppe (VSI) initiated with an Outperform at Credit Suisse
Workday (WDAY) initiated with a Neutral at Citigroup
Dell (DELL) board said to meet last night to vote on buyout, Bloomberg reports
Yum! Brands (YUM) CEO Novak: We no longer expect to achieve EPS growth in 2013
Sees KFC China SSS improving as the year progresses
Virgin Media (VMED) confirms talks with Liberty Global (LBTYA) over possible transaction
J.C. Penney (JCP) said notice of default from bondholders is invalid, without merit
Arbitron (ARB) and Nielsen (NLSN) voluntarily provided FTC additional time for merger review
Baker Hughes (BHI) to retain process and pipeline services business
Spectra (SE) targets investments of $25B in capital expansion projects through decade
U.S. Bancorp's (USB) Elavon acquired Collective POS, terms not disclosed
A.T. Cross (ATX) to explore strategic alternatives for Cross accessory division
Vitamin Shoppe (VSE) said FTC ended investigation into Super Supplements deal
Companies that beat consensus earnings expectations last night and today include:
Becton Dickinson (BDX), Diamond Offshore (DO), NYSE Euronext (NYX), BP (BP), Yum! Brands (YUM), Array BioPharma (ARRY), Baidu (BIDU), SolarWinds (SWI), Hartford Financial (HIG), Luminex (LMNX), Anadarko (APC), Gilead (GILD), Edwards Lifesciences (EW)
Companies that missed consensus earnings expectations include:
Centene (CNC), Symetra Financial (SYA), Anadarko (APC)
Companies that matched consensus earnings expectations include:
Santander Chile (BSAC), BCD Semiconductor (BCDS)
- Dollar stores (DG, FDO, DLTR) are finding it harder to make money as sales-growth has slowed and in some cases margins have been shrinking as competition for their target customer—the cash-strapped consumer—has increased, the Wall Street Journal reports.
- Money-market funds have a high-quality problem: investors are entrusting them with too much cash. The flood of money is prompting the funds to seek higher returns in investments that until recently were seen as too risky. Investors put $149B into U.S.-based money-market funds between the start of November and January 30, bringing total assets under management to $2.695T according to the Investment Company Institute, the Wall Street Journal reports
- President Obama will meet today with CEOs from 12 companies including Goldman Sachs Group (GS) Lloyd Blankfein and Yahoo's (YHOO) Marissa Mayer to discuss immigration and deficit reduction. Others include Arne Sorenson of Marriott International (MAR), Jeff Smisek of United Continental Holdings (UAL) and Klaus Kleinfeld of Alcoa (AA), Reuters reports
- The euro zone's economy has turned a corner, according to a business survey that showed businesses are more optimistic about the future but highlighted a growing split between the region's economies. Markit's Eurozone Composite PMI, jumped in January to a 10-month high of 48.6 from 47.2 in December, Reuters reports
- Facebook (FB) is developing a smartphone application, expected to be released next month, that will track the location of users, sources say, bolstering efforts to benefit from growing use of social media on mobile computers, Bloomberg reports
- Wells Fargo & Co. (WFC), which counts Warren Buffett’s company (BRK.A) as its largest shareholder, is planning to target Persian Gulf sovereign wealth funds to expand its client base in the Middle East, Bloomberg reports
Celldex (CLDX) files to sell $75M in common stock
Enterprise Products (EPD) announces offering of 8M common units
Fidus Investment (FDUS) files to sell common stock
KCAP Financial (KCAP) files to sell 4M shares of common stock
MagnaChip (MX) files to sell 5M shares of common stock
Your rating: None
Submitted by Brandon Smith of Alt-Market blog,
In our modern world there exist certain institutions of power. Not government committees, alphabet agencies, corporate lobbies, or even standard military organizations; no, these are the mere “middle-men” of power. The errand boys. The well paid hitmen of the global mafia. They are not the strategists or the decision makers.
Instead, I speak of institutions which introduce the newest paradigms. Who write the propaganda. Who issue the orders from on high. I speak of the hubs of elitism which have initiated nearly every policy mechanism of our government for the past several decades. I am talking about the Council On Foreign Relations, the Tavistock Institute, the Heritage Foundation (a socialist organization posing as conservative), the Bilderberg Group, as well as the corporate foils that they use to enact globalization, such as Monsanto, Goldman Sachs, JP Morgan, the Carlyle Group, etc.
Many of these organizations and corporations operate a revolving door within the U.S. government. Monsanto has champions, like Donald Rumsfeld who was on the board of directors of its Searle Pharmaceuticals branch, who later went on to help the company force numerous dangerous products including Aspartame through the FDA. Goldman Sachs and JP Morgan have a veritable merry-go-round of corrupt banking agents which are appointed to important White House and Treasury positions on a regular basis REGARDLESS of which party happens to be in office. Most prominent politicians are all members of the Council on Foreign Relations, an organization which has openly admitted on multiple occasions that their goal is the destruction of U.S. sovereignty and the formation of a “one world government” or “supranational union” (their words, not mine).
However, one organization seems to rear its ugly head at the forefront of the most sweeping mass propaganda operations of our time, and has been linked to the creation of the most atrocious military methodologies, including the use of false flag events. I am of course referring to the Rand Corporation, a California based “think tank” whose influence reaches into nearly every sphere of our society, from politics, to war, to entertainment.
The Rand Corporation deals in what I would call “absolute gray”. The goal of the group from its very inception was to promote a social atmosphere of moral ambiguity in the name of personal and national priority. They did this first through the creation of “Rational Choice Theory”; a theory which prescribes that when making any choice, an individual (or government) must act as if balancing costs against benefits to arrive at an action that maximizes personal advantage. Basically, the ends justify the means, and moral conscience is not a factor to be taken seriously if one wishes to be successful.
Hilariously, rational choice theory has been attacked in the past by pro-socialist (collectivist) critics as “extreme individualism”; a philosophy which gives us license to be as “self serving” as possible while feeling patriotic at the same time. In reality, the socialists should have been applauding Rand Corporation all along.
What Rand had done through its propaganda war against the American people was to infuse the exact culture of selfishness needed to push the U.S. towards the socialist ideal. At the onset of any communist or national socialist society (sorry socialists, but they do indeed come from the same collectivist mindset), the masses are first convinced to hand over ultimate power to the establishment in order to safeguard THEMSELVES, not others. That is to say, the common collectivist man chooses to hand over his freedoms and participate in totalitarianism not because he wants what is best for the world, but because he wants what is best for himself, and he believes servitude to the system will get him what he wants with as little private sacrifice as possible (you know, except for his soul…).
The psychologist Carl Jung notes in his observations of collectivism in Nazi Germany and Stalinist Russia that most citizens of those nations did not necessarily want the formation of a tyrannical oligarchy, but, they went along with it anyway because they feared for their own comfort and livelihoods. Many a German supported the Third Reich simply because they did not want to lose a cushy job, or a steady paycheck, or they liked that the “trains ran on time”. Socialism is by far the most selfish movement in history, despite the fact that they claim to do what they do “for the greater good of the greater number”.
Rand also used Rational Choice Theory as a means to remove questions of principle from the debate over social progress. Rational Choice propaganda commonly presents the target audience with a false conundrum. A perfect example would be the hardcore propaganda based television show ‘24’ starring Kiefer Sutherland, in which a government “anti-terrorism” agent is faced with a controlled choice scenario in nearly every episode. This choice almost always ends with the agent being forced to set aside his morals and conscience to torture, kill, and destroy without mercy, or, allow millions of innocents to die if he does not.
Of course, the real world does not work this way. Life is not a chess game. Avenues to resolution of any crisis are limited only by our imagination and intelligence, not to mention the immense number of choices that could be made to defuse a crisis before it develops. Yet, Rand would like you to believe that we (and those in government) are required to become monstrous in order to survive. That we should be willing to forgo conscience and justice now for the promise of peace and tranquility later.
This is the age old strategy of Centralization; to remove all choices within a system, by force or manipulation, until the masses think they have nothing left but the choices the elites give them. It is the bread and butter of elitist institutions like Rand Corporation, and is at the core of the push for globalization.
In my studies on the developing economic disaster (or economic recovery depending on who you talk to) I have come across a particular methodology many times which set off my analyst alarm (or spidey-sense, if you will). This latest methodology, called “Linchpin Theory”, revolves around the work of John Casti, a Ph.D. from USC, “complexity scientist” and “systems theorist”, a Futurist, and most notably, a former employee of Rand Corporation:
Casti introduces his idea of “Linchpin Theory” in his book “X-Events: The Collapse Of Everything”, and what I found most immediately striking about the idea of “Linchpin Events” was how they offered perfect scapegoat scenarios for catastrophes that are engineered by the establishment.
Linchpin Theory argues that overt social, political, and technological “complexity” is to blame for the most destructive events in modern human history, and it is indeed an enticing suggestion for those who are uneducated and unaware of the behind the scenes mechanics of world events. Casti would like you to believe that political and social tides are unguided and chaotic; that all is random, and disaster is a product of “chance” trigger events that occur at the height of a malfunctioning and over-complicated system.
What he fails to mention, and what he should well know being a member of Rand, is that global events do not evolve in a vacuum. There have always been those groups who see themselves as the “select”, and who aspire to mold the future to there personal vision of Utopia. It has been openly admitted in myriad official observations on historical events that such groups have had a direct hand in the advent of particular conflicts.
For instance, Casti would call the assassination of Archduke Franz Ferdinand of Austria an “X-event”, or linchpin, leading to the outbreak of WWI, when historical fact recalls that particular crisis was carefully constructed with the specific mind to involve the U.S.
Norman Dodd, former director of the Committee to Investigate Tax Exempt Foundations of the U.S. House of Representatives, testified that the Committee was invited to study the minutes of the Carnegie Endowment for International Peace as part of the Committee's investigation. The Committee stated:
"The trustees of the Foundation brought up a single question. If it is desirable to alter the life of an entire people, is there any means more efficient than war.... They discussed this question... for a year and came up with an answer: There are no known means more efficient than war, assuming the objective is altering the life of an entire people. That leads them to a question: How do we involve the United States in a war. This was in 1909."
So, long before the advent of Ferdinand’s assassination, plans were being set in motion by globalist interests to draw the U.S. into a large scale conflict in order to “alter the life, or thinking, of the entire culture”. When a group of people set out to direct thinking and opportunity towards a particular outcome, and the end result is a culmination of that outcome, it is obviously not coincidence, and it is definitely not providence. It can only be called subversive design.
In the economic arena, one might say that the collapse of Lehman Bros. was the “linchpin” that triggered the landslide in the derivatives market which is still going on to this day. However, the derivatives market bubble was a carefully constructed house of cards, deliberately created with the help of multiple agencies and institutions. The private Federal Reserve had to artificially lower interest rates and inject trillions upon trillions into the housing market, the international banks had to invest those trillions into mortgages that they KNEW were toxic and likely never to be repaid. The Federal Government had to allow those mortgages to then be chopped up into derivatives and resold on the open market. The ratings agencies had to examine those derivatives and obviously defunct mortgages and then stamp them AAA. The SEC had to ignore the massive fraud being done in broad daylight while sweeping thousands of formal complaints and whistle blowers under the rug.
This was not some “random” event caused by uncontrolled “complexity”. This was engineered complexity with a devious purpose. The creation of the derivatives collapse was done with foreknowledge, at least by some. Goldman Sachs was caught red handed betting against their OWN derivatives instruments! Meaning they knew exactly what was about to happen in the market they helped build! This is called Conspiracy…
One might attribute Casti’s idea to a sincere belief in chaos, and a lack of insight into the nature of globalism as a brand of religion. However, in his first and as far as I can tell only interview with Coast To Coast Radio, Casti promotes catastrophic “X-Events” as a “good thing” for humanity, right in line with the Rand Corporation ideology. Casti, being a futurist and elitist, sees the ideas of the past as obsolete when confronted with the technological advancements of the modern world, and so, describes X-event moments as a kind of evolutionary “kickstart”, knocking us out of our old and barbaric philosophies of living and forcing us, through trial by fire, to adapt to a more streamlined culture. The linchpin event is, to summarize Casti’s position, a culture’s way of “punishing itself” for settling too comfortably into its own heritage and traditions. In other words, WE will supposedly be to blame for the next great apocalypse, not the elites…
I might suggest that Casti's attitude seems to be one of general indifference to human suffering in the wake of his "X-Events", and that he would not necessarily be opposed to the deaths of millions if it caused the "advancement" of humanity towards a particular ideology. His concept of "advancement" and ours are likely very different, though. I suspect that he is well aware that X-Events are actually tools at the disposal of elitists to generate the "evolution" he so desires, and that evolution includes a collectivist result.
With almost every major economy on the globe on the verge of collapse and most now desperately inflating, taxing, or outright stealing in order to hide their situation, with multiple tinderbox environments being facilitated in the Pacific with China, North Korea, and Japan, and in the Middle East and Africa with Egypt, Syria, Iran, Pakistan, Yemen, Mali, etc., there is no doubt that we are living in a linchpin-rich era. It is inevitable that one or more of these explosive tension points will erupt and cause a chain reaction around the planet. The linchpin and the chain reaction will become the focus of our epoch, rather than the men who made them possible in the first place.
Strangely, Casti’s theory was even recently featured in an episode of the ABC mystery/drama show “Castle”, called “Linchpin” (what else?), in which a writer turned detective uncovers a plot by a “shadow group” to use the research of the innocent Dr. Nelson Blakely (apparently based on Casti) to initiate a collapse of the U.S. economy by assassinating the ten-year-old daughter of a prominent Chinese businessman, triggering a dump of U.S. Treasuries by China and fomenting WWIII:
Now, I think anyone with any sense can see where this is going. Casti and Rand Corporation are giving us a glimpse into the future of propaganda. This is what will be written in our children’s history books if the globalists have their way. The fact that Linchpin Theory is featured in a primetime television show at all is a testament to Rand Corporation’s influence in the media. But, as for the wider picture, are the trigger points around us really just a product of complex coincidence?
Not a chance.
Each major global hot-spot today can easily be linked back to the designs of international corporate and banking interests and the puppet governments they use as messengers. Casti claims that “X-events” and “linchpins” cannot be accurately predicted, but it would seem that they can certainly be purposely instigated.
The globalists have stretched the whole of the world thin. They have removed almost every pillar of support from the edifice around us, and like a giant game of Jenga, are waiting for the final piece to be removed, causing the teetering structure to crumble. Once this calamity occurs, they will call it a random act of fate, or a mathematical inevitability of an overly complex system. They will say that they are not to blame. That we were in the midst of “recovery”. That they could not have seen it coming.
Their solution will be predictable. They will state that in order to avoid such future destruction, the global framework must be “simplified”, and what better way to simplify the world than to end national sovereignty, dissolve all borders, and centralize nation states under a single economic and political ideal?
Is it the Hegelian Dialectic all over again? Yes. Is it old hat feudalism and distraction? Yes. But, I have to hand it to Casti and Rand Corporation; they certainly have refined the argument for collectivism, centralization, technocracy, slavery, moral relativism, and false-flag dupery down to a near science…
Your rating: None Average: 5 (1 vote)
- Risky Student Debt Is Starting to Sour (WSJ)
- Political scandal in Spain as PP secret accounts revealed (El Pais)
- New York Times claims Chinese hackers hijacked its systems (NYT)
- Spain's Rajoy, ruling party deny secret payment scheme (Reuters)
- Iran crude oil exports rise to highest since EU sanctions (Reuters)
- BlackBerry 10’s Debut Fizzles as U.S. Buyers Left Waiting (BBG)
- Costs drag Deutsche Bank to €2.2bn loss (FT)
- And the gaming of RWA continues - Deutsche Bank Beats Capital Goal as Jain Shrugs Off Loss (BBG)
- More fun out of London - Barclays, RBS May Pay Billions Over Improper Derivatives Sales (BBG)
- Hagel to face grilling by Senate panel on Mideast, budget (Reuters)
Overnight Media Digest
* Israel bombed a suspected shipment of anti-aircraft missiles in Syria on Wednesday, according to regional and U.S. officials, in its most ambitious strike inside its neighbor's territory in nearly two chaotic years of civil war there.
* Research in Motion Ltd executives excused more than a year of delays by saying they wanted the next BlackBerrys to be just right. But the smartphones that took more than two years to develop won't be available for the key U.S. market until mid-March, when carriers are expected to complete their tests.
* The U.S. economy shrank for the first time in more than three years in the fourth quarter, underscoring the halting nature of the recovery. But the strength of consumer spending and business investment suggested that the economy will grow, albeit slowly, this year.
* The U.S. Treasury for the first time auctioned holdings in U.S. banks that had missed a series of dividend payments, allowing the government to close out financial-crisis era investments only at steep discounts.
* Facebook reported a 40 percent fourth-quarter revenue jump as it ramped up its mobile business and offered new tools to advertisers, but the firm's shares slipped in after-hours trading.
* Boeing Co executives said it was business as usual despite the crisis surrounding its 787 Dreamliner, though airlines worldwide made preparations for an extended grounding of the aircraft.
* Illinois took the rare step Wednesday of postponing a bond auction just hours before it was expected to launch, as concerns grew among investors over the state's deep pension hole.
FLEE 'SAFE' SOVEREIGN DEBT, SAYS HASENSTAB - The man who oversees 175 billion dollars in bonds for Californian asset manager, Franklin Templeton, says its time to get out of government debt now before it is too late.
UNION REQUESTS IAG MEETING ON IBERIA - The chief executive of International Airlines Group, Willie Walsh will reject a request from a pilots' union to discuss the restructuring of Iberia.
MPS ATTACK BARCLAYS OVER BONUS CULTURE - The parliamentary commission on banking standards accused Barclays of empty rhetoric, tearing into the bank's remuneration committee.
FACEBOOK MOBILE AD GROWTH DRIVES SALES - An aggressive advertising drive by the Facebook during the U.S. presidential elections and shopping season saw the website post its first quarterly revenue growth since going public.
DEUTSCHE BANK CHIEFS MAINTAIN COURSE - To the dismay of analysts and some investors, Deutsche Bank's Anshu Jain and Jurgen Fitschen are firmly rejecting the need for the bank to raise more capital.
RIMLESS BLACKBERRY HOPES TO REGAIN TOUCH - The struggling handset maker Blackberry is taking a gamble by launching two touchscreen smartphones in a direct challenge to Apple and Samsung.
ÇUKUROVA WINS RIGHT TO CONTROL TURKCELL - A court decision by the UK Privy Council will allow one of Turkey's richest men, Mehmet Karamehmet, the chance to regain control of the country's biggest mobile phone operator, Turkcell.
* For the last four months, Chinese hackers have persistently attacked The New York Times, infiltrating its computer systems and getting passwords for its reporters and other employees.
* Research in Motion Ltd introduced a new operating system and a new generation of phones, along with a new corporate name, with the hope of restoring its products' status as a symbol of executive cool.
* The U.S. government played a role in slowing the economic recovery as cuts in military spending and other factors overwhelmed the Federal Reserve's expanded campaign to spur growth.
* Despite two serious safety failures and new questions about the reliability of its lithium-ion batteries, Boeing Co's chief executive said Wednesday that he saw no reason to retreat from using the new but volatile technology on its 787 jets.
* Chrysler, the smallest of the American automakers, on Wednesday reported a big increase in 2012 earnings that helped its Italian parent company, Fiat SpA, become profitable for the year as well.
* Time Inc joined the many news organizations trying to tighten their belts in a tough advertising climate by announcing layoffs and offering employees buyout packages on Wednesday.
* In a legal dispute that had been closely watched by multinational companies and environmental organizations, a Dutch court dismissed most of the claims brought by Nigerian farmers seeking to hold Royal Dutch Shell accountable for damage by oil spilled from its pipelines.
CHINA SECURITIES JOURNAL
-- Livzon Pharmaceutical Group Inc said in a statement it will become the third company to move its dollar-denominated B shares to the Hong Kong H-share market.
-- Metallurgical Corporation of China Ltd said it expected to book a loss of 7.2 billion yuan ($1.16 billion) in 2012.
21st CENTURY BUSINESS HERALD
-- Galaxy Securities could give up its plan for a dual listing of yuan-denominated shares in Shanghai and Hong Kong, but it still expects to list H-shares in May.
CHINA DAILY (www.chinadaily.com.cn)
-- The State Council, China's cabinet, has approved an energy consumption target as part of efforts to correct overuse and foster greener growth. The government aims to keep total energy consumption below 4 billion metric tonnes of standard coal equivalent by 2015, with electricity consumption below 6.15 trillion kwh.
-- Domestic and foreign inbound mergers and acquisition deals by strategic investors fell to a five-year low last year, but activity will rebound in 2013, a report by accounting firm PricewaterhouseCoopers said.
* Germany plans a modest reform of its banking sector that would put a cap on risky activities but not lead to the breakup of banks or significantly impair big institutions like flagship lender Deutsche Bank, according to a draft law seen by Reuters.
* Prosecutors are investigating the former management of Italy's troubled Monte dei Paschi bank for bribery and fraud, judicial sources said on Wednesday, as pressure grew on the Bank of Italy and bourse watchdog Consob.
* Endo Health Solutions Inc has held talks in recent weeks with drugmakers potentially interested in buying the maker of pain relief medication, people familiar with the matter said.
* Russian state technology firm Rusnano is planning to sell through a private placing of 10 percent of its shares between March and June, its chief executive Anatoly Chubais said in an interview with the Interfax news agency.
* Quintiles Transnational Corp, the largest provider of testing services to drugmakers, has chosen Morgan Stanley, Barclays Plc and JPMorgan Chase & Co as joint bookrunners for a planned initial public offering, people familiar with the matter said.
* Germany's second-biggest lender Commerzbank by 2015 plans to shed half of the workforce at its mortgage unit Hypothekenbank Frankfurt, formerly known as Eurohypo, according to an internal paper obtained by Reuters
Fly On The Wall 7:00 AM Market Snapshot
Arthur J. Gallagher (AJG) upgraded to Buy from Neutral at BofA/Merrill
Arthur J. Gallagher (AJG) upgraded to Outperform from Market Perform at Keefe Bruyette
AudioCodes (AUDC) upgraded to Outperform from Perform at Oppenheimer
Citrix Systems (CTXS) upgraded to Buy from Neutral at BofA/Merrill
Core Laboratories (CLB) upgraded to Outperform from Market Perform at FBR Capital
MB Financial (MBFI) upgraded to Outperform from Market Perform at Keefe Bruyette
Vale (VALE) upgraded to Buy from Neutral at BofA/Merrill
Comerica (CMA) downgraded to Underperform from Market Perform at Bernstein
Endo Health (ENDP) downgraded to Perform from Outperform at Oppenheimer
Facebook (FB) downgraded to Hold from Buy at Stifel Nicolaus
Facebook (FB) downgraded to Market Perform from Outperform at BMO Capital
Facebook (FB) downgraded to Neutral from Buy at Citigroup
Fusion-io (FIO) downgraded to Neutral from Outperform at Credit Suisse
Fusion-io (FIO) downgraded to Neutral from Overweight at JPMorgan
Fusion-io (FIO) downgraded to Neutral from Overweight at Piper Jaffray
KeyCorp (KEY) downgraded to Underperform from Market Perform at Bernstein
Netgear (NTGR) downgraded to Equal Weight from Overweight at Barclays
Regions Financial (RF) downgraded to Underperform from Market Perform at Bernstein
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A recent article in The New York Times reported on a cost-control exception provided to Amgen, the world’s largest biotechnology firm. According to the report, the sweetheart deal — hidden in the Senate’s final “fiscal cliff” bill — will cost taxpayers half a billion dollars. Bill talks to U.S. Representative Peter Welch (D-VT) about the bi-partisan bill he recently sponsored to repeal that giveaway, and the political factors that allow such crony capitalism to occur.
“When there is this back room dealing that comes at enormous expense to taxpayers and enormous benefit to a private, well-connected, for-profit company, we’ve got to call it out,” Welch tells Bill. “Those members of Congress who are concerned about the institution, about our lack of credibility, about the necessity of us doing things that are in the public good as opposed to private gain, we’ve got to call it out.”
Bill Moyers: Welcome. Like just about everyone else, I enjoy a good show, and the inauguration of a president is one of those spectacles of democracy that can make us remember we're part of something big and enduring.
So for a few hours this past Monday the pomp and circumstance inspired us to think government of, by, and for the people really is just that, despite the predatory threats that stalk it. Unfortunately the mood didn't last.
So help me, every now and then, as the cameras panned upward to that great dome towering over the ceremony, I was reminded of something the good feeling of the moment could not erase. It's the journalist's curse -- to have a good time spoiled by the reality beyond the pageantry.
In particular on this crisp January day, I thought about the latest revelation of the skullduggery that often goes on in the shadows below that dome. Just a couple of days before the inaugural festivities, The New York Times published some superb investigative reporting by the team of Eric Lipton and Kevin Sack, and their revelations kept running through my mind. The story told us of a pharmaceutical giant, Amgen, and three senators so close to it they might be entries on its balance sheet: Republican Minority Leader Mitch McConnell, Senate Finance Committee Chair Max Baucus – a Democrat -- and that powerful committee’s ranking Republican, Orrin Hatch. A trio of perpetrators who treat the United States Treasury as if it were a cash-and-carry annex of corporate America.
The Times story described how Amgen got a huge hidden gift from unnamed members of Congress and their staffers. They slipped an eleventh hour loophole into the New Year’s Eve deal that kept the government from going over the fiscal cliff. And when the sun rose in the morning there it was, a richly embroidered loophole for Amgen that will cost taxpayers -- that's you and me -- a cool half a billion dollars. Yes -- half a billion dollars.
Amgen is the world’s largest biotechnology firm, a drug manufacturer that sells a variety of medications. The little clause secretly sneaked into the fiscal cliff bill gives the company two more years of relief from Medicare cost controls for certain drugs used by patients on kidney dialysis.
The provision didn’t mention Amgen by name, but according to reporters Lipton and Sack, the news that it had been tucked into the fiscal cliff deal "was so welcome that the company’s chief executive quickly relayed it to investment analysts.” Tipping them off, it would seem, to a jackpot in the making.
Amgen has 74 lobbyists on its team in Washington and lobbied hard for that loophole, currying favor with friends at the White House and on Capitol Hill. The Times reporters traced its “deep financial and political ties” to Baucus, McConnell and Hatch, “who hold heavy sway over Medicare payment policy.”
All three have received hefty campaign donations from the company whose bottom line mysteriously just got padded at taxpayer expense. Lo and behold, among those 74 lobbyists are the former Chief of Staff to Senator Baucus and the former Chief of Staff to Senator McConnell.
You get the picture: two guys nurtured at public expense, paid as public servants, disappear through the gold-plated revolving door of Congress and presto -- return as money changers in the temple of crony capitalism. Inside to welcome them is a current top aide to Senator Hatch – one who helped weave this lucrative loophole – who used to work for -- you guessed it: Amgen. The trail winds deeper into the sordid swamp beneath that great dome, a sinkhole where shame has all but disappeared. As reporters Lipton and Sack remind us, just two weeks before this backroom betrayal of the public trust by elected officials and the mercenaries they have mentored, Amgen pleaded guilty to fraud. Fraud, look it up. Trickery, cheating, duplicity.
Amgen agreed to pay $762 million in criminal and civil penalties. The company had been caught illegally marketing another one of its drugs. The fact that their puppet master had been the subject of fines and a massive federal investigation mattered not to its servile pawns in the Senate, where pomp and circumstance are but masks for the brute power of money.
With me now is Congressman Peter Welch, Democrat from Vermont. He has just introduced bipartisan legislation to repeal that half billion-dollar giveaway to Amgen. We asked one of its co-sponsors, Republican Richard Hanna of New York, to join us but a previous commitment made it impossible for him to do so. Congressman Welch, welcome.
Peter Welch: Thank you.
Bill Moyers: What is it you're actually trying to do?
Peter Welch: Well, there's two things. One, I want to get the taxpayers their money back. This is half a billion dollars, more than that, that is vintage crony-capitalism at the eleventh hour, in a small room, unknown to 430 members of Congress and probably 98 or 97 senators. A small paragraph, innocent looking, in the fiscal cliff bill, a must-pass piece of legislation for all Americans. And it benefits a single company, turns out to be Amgen, maybe a few others, but this is an Amgen-inspired plan that's going to cost Medicare and taxpayers half a billion dollars. Now I want that money back. But there's a second reason that's even in many ways much more important. Congress is not trusted as an institution.
And when there is no trust for that institution, and then we take actions like this, where for the benefit of a company that's very powerful and well-connected, we charge taxpayers a half a billion dollars extra. That means that that institutional disrespect increases. And it's going to make much more difficult the challenge we have to essentially make the tough decisions on all kinds of policies.
Bill Moyers: You made a tough statement in Washington in which you said actually Congress is less popular than cockroaches and root canals because of actions like these.
Peter Welch: No, but that's true. I mean, that poll that came out, it actually says it all. People don't trust the institution. And you know what? They're right not to trust it when this kind of thing happens. When there is this back room dealing that comes at enormous expense to taxpayers and enormous benefit to a private, well-connected, for-profit company, we've got to call it out. Those members of Congress who are concerned about the institution, about our lack of credibility, about the necessity of us doing things that are in the public good as opposed to private gain, we've got to call it out.
Bill Moyers: You voted for the fiscal cliff deal. When did you know that this language was in it?
Peter Welch: I never knew it. I didn't know until I read the story in the Times, when I was outraged. What happened here was a couple of things. One, this was a lame duck session negotiation. And it didn't even involve Congress, the truth of the matter is. It involved the president and his staff. It involved the Speaker. And it involved the Senate leaders. And that's pretty much it. But it didn't go through any committee process. So there was no opportunity for members to get a heads up that this was something that was cooking. Because had this been made public that Amgen was asking for this sweetheart deal, people would have objected. And they would have been so embarrassed.
Bill Moyers: You mean other members of Congress?
Peter Welch: Other members of Congress would have been very concerned, Republicans, too, by the way. I mean, this type of crony capitalism, they don't -- a lot of them really do not like. So we didn't have the process work in its normal way, where something that is going to cost taxpayers a half a billion dollars goes through a committee process and then people can raise questions, challenge the argument that is made by the special interests, and crack and bring it down. This was done just in the secrecy of a private negotiation.
Bill Moyers: Describe how they get this in without almost no one else knowing it's happening.
Peter Welch: They immediately get it in because when these negotiations are going on, it involves a very few people. And again, since this was a lame duck session and it was the fiscal cliff, no committees were involved. So it really was at that moment, at the very end of the fiscal cliff negotiations, when the Finance Committee leaders had some opportunity to fashion the final details and put a paragraph in or take a paragraph out, they were able to do it.
Now why did they do it? They did it because Amgen had longstanding ties built carefully and slowly and methodically over time. And obviously, that's a function of their campaign contributions. It's a function of their 74 lobbyists on the Hill. It's their constant care and feeding of members of Congress. And then at a certain point, when the lights are off and the press isn't--
Bill Moyers: Metaphorically speaking.
Peter Welch: And Congress doesn't know what's going on, members of Congress -- they can move. And they did.
Bill Moyers: Some member of Congress, some Senator--
Peter Welch: That's right.
Bill Moyers: --had to say, "Okay."
Peter Welch: That's correct. The information I have on who that was or how that happened is fromThe New York Times article. But that's exactly right. Because the committee staff is doing a lot of the detailed work. And if a paragraph is going to be put in or taken out, they have to get the okay, usually from the Chair or a ranking member or the two of them.
So those are the people who have the authority to tell a staff, you know, do it. And obviously, staff play a role, because they will advocate to their boss, "We ought to put this in for Amgen." But members of Congress have to act with some restraint.
You know, if you have an enormous position of authority, just because you can do it doesn't mean you should do it. And that's important in the long run, you know? In the short run, this is good for Amgen, really bad for the process, really bad for taxpayers.
But what it does is it breaks down, brick by brick, the trust that we need in each other in an institution in order for it to function. And, you know, every day Americans lose that little brick of trust in that institution, the power of the institution to do good things, even when it wants to, is diminished.
Bill Moyers: I was struck that just at the time many members of Congress were crying, "We've got to cut spending. We've got to reduce this deficit," some members in the Senate were putting this in in a way that will cost that will add to spending and add to the deficit.
Peter Welch: And that's true. And it's even worse than that. Because as you mentioned in your opening, two weeks before this, Amgen paid an over $700 million criminal and civil penalty for illegally marketing another drug that they manufacture. So the effect of this is largely that taxpayers are picking up $500 million of the $700 million fine. And you know what--
Bill Moyers: Amgen's getting about two thirds of the fine it paid back from the taxpayer.
Peter Welch: That's right. And this is what -- you know that if this were put on the floor for an up or down vote, people would have to put a mask on to vote for it. It would never pass. So, you know, there's some chance we may get this reversed. Because you can't defend what Amgen did. You cannot--
Bill Moyers: How are you going to get it reversed, Congressman? Because too many of your colleagues want the same process to work for them at some point in their own strategy.
Peter Welch: Well, that's the obstacle. And the obstacle, too, is that to get -- we've got a simple repeal provision. It's like a one paragraph bill that says, "Repeal this giveaway," in effect. And the challenge for us will be to get that on the floor. The Republicans are the majority. They have the authority to say yes or no as to whether this will get on the floor. So the challenge for us will be to advocate this and essentially correct a mistake.
One of the other complaints people have been making about Congress a lot is that when we have a big bill like the fiscal cliff, that certain provisions get snuck in. And they're right about that. And that's where the process has to act with more restraint. If the bill is about the fiscal cliff, urgent issue for this country and its wellbeing, let's not use that as a freight train for certain members on behalf of certain special interests to get sweetheart deals part of this.
Bill Moyers: There are a lot of Tea Party members in the House, elected in 2010, when the Republican surged back. But many of them were elected opposing government spending and corporate giveaways like this. Do you think you'll get some support from the Tea Party in the House?
Peter Welch: I do. I actually do. You know, a lot of the Tea Party folks are ferociously concerned about spending. And they especially hate the crony capitalism type of spending. In these giveaways to private companies for private gain. I mean, the Amgen CEO in 2010 made $21 million. It's a $17 billion company in sales. It has a $64 billion market capitalization.
In the news, even though this is, you know, small potatoes for them in some ways as you mentioned in your opening the head of Amgen gave the good news. To the Wall Street analyst to give a little bit of boost to the Amgen stock price.
So I mean, you can't -- it doesn't get worse than this. And it confirms people's expectations or their views that this institution is not on the level. And you know what? Those of us in Congress from the Tea Party to progressive members of the Congress have a responsibility to do everything we can to build trust in that institution so that when it does make tough decisions on taxes, on spending, on energy policy, that America has some credibility that we got it more right than wrong.
Bill Moyers: Tell me about the lobbyists. Who are these people?
Peter Welch: Well, the problem with lobbyists, a lot of them come off the Hill, a lot of them come out of Congress. Many members of Congress leave the capital and go to K Street. And it's a real reflection of how money has overtaken politics. And the real problem with that system is not the individual lobbyists. A lot of times they'll have legitimate points to present to members of Congress.
The problem is the amount of money that lobbyists represent. And what tends to happen in Congress is that the concerns of those lobbyists, the concerns of Amgen, become much more of the topic of discussion, debate, and resolution than the concerns of middle America, the concerns of the farmers.
You know, in Congress, we didn't even vote in the House on a farm bill. This is the first time in the history of this country where a House Agriculture Committee, on which I sat, but in a bipartisan vote, we worked together, passed the farm bill, and the House didn't even take it up for a vote. But Amgen was able to have their provision, $500 million, put into the bill with no problem.
Bill Moyers: I brought with me the Justice Department press release that came out in December about Amgen's crime. Quote, "Earlier today, at the federal courthouse in Brooklyn, New York, U.S. District Judge Sterling Johnson, Jr. accepted a guilty plea by American biotechnology giant Amgen Inc. for illegally introducing a misbranded drug into interstate commerce. The plea is part of a global settlement with the United States in which Amgen agreed to pay $762 million to resolve criminal and civil liability arising from its sale and promotion of certain drugs. The settlement represents the single largest criminal and civil false claims act settlement involving a biotechnology company in U.S. history." How does a company that just pleaded guilty to criminal charges in federal court and is slapped with three quarters of a billion dollars in fines even allowed a place in the negotiations in the Senate?
Peter Welch: Yeah, you would think they would be shunned. And you would think that they would have absolutely no opportunity to come in and get the fine paid by the taxpayer. But the way it works is that they've established relationships with those 74 lobbyists. They've established relationships with the very substantial political contributions they've made to all kinds of people on the Hill. And they have established relationships in part because they have facilities in many districts that members of Congress represent.
And they were able, in effect, to be in the room when most of us in Congress, let's say in the House, 435 members were not in the room. We were not in the discussion. We didn't know it was happening. So if you're that well connected to the people who will be at that table, at that moment, when the final draft is being put together, and no one has a chance to get a heads up to review it, to ask a question, then you can sneak something in and get away with it. And that's essentially what happened.
Bill Moyers: Yeah, what you're saying is that Amgen's friends in the Senate recouped some two thirds of the fine they just paid for fraud?
Peter Welch: That's right. That's exactly right.
Well, a lot of the worst things that happen in eroding trust and really hurting the economy are legal. This is legal. What Amgen did now is legal. Should it be? Is it ethical? Is it the right thing for the country? Absolutely not. But they literally accomplished in the back room, with their access to important people, what they could never have accomplished on the floor of the House or on the floor of the Senate.
Bill Moyers: Congressman, people out there -- you're right, people out there are disgusted. But they're also despairing. They've seen this time and again. They've see, we report on it. They see it. They get angry. And then nothing happens.
Peter Welch: Well, that's right. And that's why I'm so glad that Congressman Hanna, we've got a bipartisan bill here.
Bill Moyers: Republican.
Peter Welch: A Republican, a very good member from New York. And there's a lot of us who really take seriously that we've got two jobs. One is to try to make good decisions on policy that are going to get America going again. But the other (and each of us with a vote has this job) is to try to restore trust in the institution. And that means that when there is this kind of egregious rip off, we've got to stand up and do everything we can to help expose it and to help reverse it. So I want the money back for the taxpayers. I mean, I'm a frugal Vermonter. So that matters. And let's get it.
Bill Moyers: Don't you fear retaliation? You're up against a powerful corporation, a whole system that works, as you've just described it, and mighty members of the Senate?
Peter Welch: Well, I don't. Vermont's a great state to represent. And people there are practical and they're fair. They won't like this. And they're going to have the final say about whether I pay some price, because I'm standing up to this Amgen deal.
But secondly, what's the point? I mean, I've got a job to do. This is clearly wrong. And, every day, if I can get up and try to fight the battle that is nowhere near as tough as what it is for middle class families raising kids, trying to figure out how to pay the tuition, trying to figure out how to pay the heating bill in a cold winter, how to make it by the end of the month. I mean, that's the people that have the tough job. So everything that I can do to just display some fairness and awareness of what they're doing, let's do it.
Bill Moyers: Congressman Peter Welch, thanks for coming by. And good luck to you.
Peter Welch: Thank you.
The inauguration of a president is one of those spectacles of democracy that can make us remember we’re part of something big and enduring. So for a few hours this past Monday the pomp and circumstance inspired us to think that government of, by, and for the people really is just that, despite the predatory threats that stalk it.The exterior view of Amgen Inc. offices in Fremont, Calif. (AP Photo/Paul Sakuma)
But the mood didn’t last. Every now and then, as the cameras panned upward, the Capitol dome towering over the ceremony was a reminder of something the good feeling of the moment couldn’t erase. It’s the journalist’s curse to have a good time spoiled by the reality beyond the pageantry. Just a couple of days before the inaugural festivities, The New York Times published some superb investigative reporting by the team of Eric Lipton and Kevin Sack, and their revelations were hard to forget, even at a time of celebration.
The story told us of a pharmaceutical giant called Amgen and three senators so close to it they might be entries on its balance sheet: Republican Minority Leader Mitch McConnell, Democratic Senator Max Baucus, chair of the Senate Finance Committee, and that powerful committee’s ranking Republican, Orrin Hatch. A trio of perpetrators who treat the United States Treasury as if it were a cash-and-carry annex of corporate America.
The Times story described how Amgen got a huge hidden gift from unnamed members of Congress and their staffers. They slipped an eleventh hour loophole into the New Year’s Eve deal that kept the government from going over the fiscal cliff. When the sun rose in the morning, there it was, a richly embroidered loophole for Amgen that will cost taxpayers a cool half a billion dollars.
“Two guys nurtured at public expense, paid as public servants, disappear through the gold-plated revolving door of Congress and presto, return as money changers in the temple of crony capitalism.”
Amgen is the world’s largest biotechnology firm, a drug maker that sells a variety of medications. The little clause secretly sneaked into the fiscal cliff bill gives the company two more years of relief from Medicare cost controls for certain drugs used by patients who are on kidney dialysis, including a pill called Sensipar, manufactured by Amgen.
The provision didn’t mention Amgen by name, but according to reporters Lipton and Sack, the news that it had been tucked into the fiscal cliff deal “was so welcome, that the company’s chief executive quickly relayed it to investment analysts.” Tipping them off, it would seem, to a jackpot in the making.
Amgen has 74 lobbyists on its team in Washington and lobbied hard for that loophole, currying favor with friends at the White House and on Capitol Hill. The Times reporters traced its “deep financial and political ties” to Baucus, McConnell and Hatch, “who hold heavy sway over Medicare payment policy.”
All three have received hefty campaign donations from the company whose bottom line mysteriously just got padded at taxpayer expense. Since 2007, Amgen employees and its political action committee have contributed nearly $68,000 to Senator Baucus, $73,000 to Senator McConnell’s campaigns, and $59,000 to Senator Hatch.
And lo and behold, among those 74 Amgen lobbyists are the former chief of staff to Senator Baucus and the former chief of staff to Senator McConnell. You get the picture: Two guys nurtured at public expense, paid as public servants, disappear through the gold-plated revolving door of Congress and presto, return as money changers in the temple of crony capitalism.
Inside to welcome them is a current top aide to Senator Hatch, one who helped weave this lucrative loophole. He used to work as a health policy analyst for — you guessed it — Amgen.
So the trail winds deeper into the sordid swamp beneath that great Capitol dome, a sinkhole where shame has all but disappeared. As reporters Lipton and Sack remind us, just weeks before this backroom betrayal of the public interest by elected officials and the mercenaries they have mentored, Amgen pleaded guilty to fraud. Look it up: fraud means trickery, cheating and duplicity. Amgen agreed to pay $762 million in criminal and civil penalties; the company had been caught illegally marketing another one of its drugs.
The fact that their puppet master had been the subject of fines and a massive federal investigation mattered not to its servile pawns in the Senate, where pomp and circumstance are but masks for the brute power of money.
Peter Welch, Vermont’s Democratic congressman, has just introduced bipartisan legislation to repeal the half billion-dollar giveaway to Amgen [see the video clip below]. Its co-sponsors include Republican Richard Hanna of New York and Democrats Jim Cooper of Tennessee and Bruce Braley of Iowa.
The Amgen deal “confirms the American public’s worst suspicions of how Congress operates,” Representative Welch told us this week. “As the nation’s economy teetered on the edge of a Congressional-created fiscal cliff, lobbyists for a private, for-profit company seized an opportunity to feed at the public trough. It’s no wonder cockroaches and root canals are more popular than Congress.”
In his inaugural address, Barack Obama said the commitments we make to each other through Medicare, Medicaid, and Social Security don’t make us a nation of takers. But the actions of Amgen and its cronies under the dome on Capitol Hill show who the real takers are — not those who look to government for support in old age and hard times but the ones at the top whose avarice and lust for profit compel them to take as much as they can from that government at the expense of everyone else
Journalist Bill Moyers is the host of the new show Moyers & Company, a weekly series of smart talk and new ideas aimed at helping viewers make sense of our tumultuous times through the insight of America’s strongest thinkers.. His previous shows on PBS included NOW with Bill Moyers and Bill Moyers Journal. Over the past three decades he has become an icon of American journalism and is the author of many books, including Bill Moyers Journal: The Conversation Continues, Moyers on Democracy, and Bill Moyers: On Faith & Reason. He was one of the organizers of the Peace Corps, a special assistant for Lyndon B. Johnson, a publisher of Newsday, senior correspondent for CBS News and a producer of many groundbreaking series on public television. He is the winner of more than 30 Emmys, nine Peabodys, three George Polk awards and is the author of three best-selling books.
Michael Winship, senior writing fellow at Demos and president of the Writers Guild of America-East, is senior writer for Bill Moyers' new weekend show Moyers & Company.
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Overnight Media Digest
* Microsoft Corp entered discussions in recent days with private equity firm Silver Lake Partners and Dell Inc founder Michael Dell to help finance a leveraged buyout of the computer maker, according to people familiar with the deliberations. (http://link.reuters.com/vuq45t)
* Google Inc reversed the trend of slowing revenue growth in its core online advertising business, signaling that the internet giant is beginning to get a handle on how the consumer shift toward mobile devices is affecting the online ad industry. (http://link.reuters.com/xuq45t)
* Johnson & Johnson officials learned of problems with a metal hip-replacement implant in 2008, a year before the company stopped making the joints and two years before recalling them, according to documents unsealed in a California state court. (http://link.reuters.com/gyq45t)
* Allergan Inc said it will buy MAP Pharmaceuticals Inc in a $958 million deal that would help the Botox maker expand sales of medical treatments. (http://link.reuters.com/jyq45t)
* IBM Corp got back on track in the fourth quarter after disappointing investors the previous quarter as its software business and sales in emerging markets returned to growth. (http://link.reuters.com/byq45t)
* The White House offered a tacit endorsement of a House Republican plan to defer a fight over the U.S.'s borrowing limit, likely clearing the way for a deal that would forestall a showdown over the country's borrowing limit until late spring. (http://link.reuters.com/tuq45t)
* Prime Minister David Cameron plans to let the British people vote in about five years on whether or not to stay in the European Union, a surprise move critics say will hurt both economies and cast a new shadow over the troubled bloc. (http://link.reuters.com/suq45t)
* Two prominent names in semiconductors, Advanced Micro Devices Inc and Texas Instruments Inc, provided more evidence of soft demand for personal computers and other products. (http://link.reuters.com/myq45t)
* Dish Network Corp plans to close a further 300 Blockbuster stores in the U.S. in the coming weeks, leaving the video chain with less than one-third of the stores acquired by the satellite-television company in 2011. (http://link.reuters.com/nyq45t)
* Banks are fighting an effort by Fannie Mae to cut costs on backup insurance policies often imposed on cash-strapped homeowners, a step that would crimp the lucrative fees the lenders collect on the coverage. (http://link.reuters.com/hyq45t)
* The U.S. Securities and Exchange Commission barred Egan-Jones Ratings Co from issuing ratings on certain bonds, an unprecedented step by the regulator and a setback for a small credit-rating firm. (http://link.reuters.com/zuq45t)
* IKEA is poised to embark on a global spending spree, but its departing chief executive says red tape is slowing how fast the home-furnishings retailer can open its pocket book. (http://link.reuters.com/dyq45t)
CAMERON TO PROMISE IN-OUT EU BALLOT David Cameron will on Wednesday vow to settle Britain's future in the European Union with a straight in-out referendum by 2017, in a high-risk strategy which will test the willingness of Paris and Berlin to cut the UK a better membership deal.
KING STANDS BY INFLATION TARGETING The governor of the Bank of England has called for it to shed some of the burden of reviving Britain's economy, suggesting the UK government should do more to support the "disappointingly slow" recovery.
POSEN ATTACKS BANK OF ENGLAND'S CULTURE A former policy maker at the Bank of England has attacked the management and culture of the bank, saying its directors abdicated responsibility for reining in a governor who had become far too powerful.
BoJ ACTION TRIGGERS CURRENCY WAR FEARS The Bank of Japan bowed to domestic political pressure and pledged to buy government bonds in potentially unlimited quantities as international policy makers aired fresh concern about the possibility of a global currency war.
BARCLAYS REVAMP TO COST UP TO 2,000 JOBS Barclays is cutting up to 2,000 jobs in its investment bank as part of a strategic overhaul by the bank's chief executive Antony Jenkins. BUMI MOVES CLOSER TO TAKING LEGAL ACTION Bumi intends to take legal action to recover lost funds at its Indonesian subsidiary, Berau Coal, as well as considering other claims resulting from a four-month long investigation into "financial irregularities" at its mining businesses.
* Microsoft Corp is in talks to help finance a takeover bid for Dell Inc that would exceed $20 billion, a person briefed on the matter said. Microsoft is expected to contribute up to several billion dollars. (http://link.reuters.com/gar45t)
* A closer look at Google Inc's results shows that while the company continues to be a moneymaking machine, its most lucrative business, search on desktop computers, is slowing, while it has not yet figured out how to make equivalent profits on mobile devices. (http://link.reuters.com/har45t)
* Allergan Inc has agreed to pay nearly $1 billion to acquire MAP Pharmaceuticals and gain full control of its experimental treatment for migraine headaches, the two companies announced Tuesday night. (http://link.reuters.com/par45t)
* Investigators in the United States and Japan indicated on Tuesday that many questions remained unanswered in their search for the cause of two incidents in which lithium-ion batteries burned on Boeing Co's 787 aircraft. (http://link.reuters.com/var45t)
* An internal analysis conducted by Johnson & Johnson in 2011 not long after it recalled a troubled hip implant estimated that the all-metal device would fail within five years in nearly 40 percent of patients who received it, newly disclosed court records show. (http://link.reuters.com/kar45t)
* Celgene Corp's drug Abraxane prolonged the lives of patients with advanced pancreatic cancer by almost two months in a clinical trial, researchers reported Tuesday, signifying an advance in treating a notoriously difficult disease but not as big a leap as some doctors and investors had hoped. (http://link.reuters.com/nar45t)
* A hotly contested tax on financial trades took a big step forward on Tuesday when European Union finance ministers allowed a vanguard of member states to proceed with the plan. (http://link.reuters.com/qar45t)
* The governor of Nebraska on Tuesday approved a revised route through the state for the Keystone XL pipeline, setting up a decision for President Obama that pipeline opponents say will be a crucial test of his intentions on climate change. (http://link.reuters.com/rar45t)
* Facing criticism for selling garments made at a Bangladesh factory where 112 workers died in a fire last November, Wal-Mart Stores Inc told its worldwide suppliers that it was adopting tougher rules on fire safety at its contractors and would have "zero tolerance" for suppliers that used unauthorized subcontractors.
THE GLOBE AND MAIL
* British Columbia community minister Bill Bennett said on Tuesday that the final regulatory pieces have fallen in place for a new liquefied natural gas plant to be built on a native reserve near Kitimat.
The massive LNG plant, a joint venture by Apache Canada Ltd and Chevron Canada Ltd, in cooperation with the Haisla First Nation, will process about 700 million cubic feet of gas per day, becoming a key link in the transportation chain between the province's northeast gas fields and off-shore markets.
* Cash-strapped Parks Canada is consulting the public on a long list of proposed fee hikes for the country's national parks and historic sites, pointing out that the rates have been frozen since 2008 and costs are on the rise.
But at the same time as fees are going up, many services are in decline following C$55 million in announced budget cuts and the resultant 600 jobs lost across the system.
Reports in the business section:
* Quebecor Inc may be the next Canadian regional cable company that will strike a deal to eventually sell some of its unused wireless spectrum, predicts a new analyst report.
* The Canadian federal government is ready to offer financial incentives as part of a pitch to get Volkswagen AG to locate some manufacturing facilities in the country.
Industry minister Christian Paradis said he urged senior Volkswagen executives to "look north" during meetings in Berlin this week, offering the prospect of tapping into Ottawa's newly-replenished C$250 million ($252 million) auto innovation fund.
* Calgary energy firm Griffiths Energy International Inc (GEI) pleaded guilty to a bribery charge under the Corruption of Foreign Public Officials Act and faces fines in excess of C$10.3 million. The company admitted that it paid C$2 million to officials in Chad to get an advantage in two exploration blocks in the oil-rich African country.
* Manitoba chiefs meeting in Winnipeg this week are reportedly slated to consider pulling out of the Assembly of First Nations, highlighting the fragility of a national body that some say needs a reset of its own.
* Inmet Mining Corp made its long-awaited rejection of First Quantum Minerals Ltd's C$5.1 billion hostile bid on Tuesday.
The Toronto-based miner disputed First Quantum's assertion that it could realize enormous cost savings at Cobre Panama project by using its internal project team and hiring far fewer contractors.
* Supermarket chain Metro Inc will sell about half of its 25-year investment in convenience store operator Alimentation Couche-Tard to three Canadian banks for C$479 million.
The Montreal-based company said on Tuesday that it has agreed to sell 10 million Class B subordinate voting shares to BMO Nesbitt Burns, National Bank Financial and TD Securities for C$47.90 per share.
* Air Canada's Chief Executive Calin Rovinescu said he had faith that Boeing Co will be able to resolve the issues plaguing its 787 Dreamliner and believed in the benefits the plane will bring the country's largest carrier.
CHINA SECURITIES JOURNAL
--Analysts expect China's inflation to fall below 2 percent in January due to a high base from last year and as food prices have remained stable.
--China could cut its reserve requirement ratio twice at the beginning of this year with a reduction of 0.5 percent each time, the Bank of Communications said in its outlook report.
SHANGHAI SECURITIES NEWS
--Party Chief Xi Jinping took his campaign against corruption to the petty bureaucracy and minor infractions of low-level officials. Xi said it was just as important to go after junior officials as it was to tackle the seniors in the battle against graft. He called for a "disciplinary prevention and guarantee mechanism" to be set up to prevent corruption.
--Investors who lost money in a wealth management product sold in Hua Xia Bank have recouped their principal amount from the credit guarantee firm, a local TV station reported. Investors recently recovered their principal after Zhongfa Investment Guarantee Co stepped in to acquire the whole investment plan, Shanghai TV station said.
--The national security fund and foreign investors were the two biggest net buyers of Chinese mainland shares last year, the top securities regulator said.
CHINA DAILY (www.chinadaily.com.cn)
--China's State Development and Investment Corp (SDIC), the country's major investment holding company, saw profit grow 16 percent in the first eleven months of 2012 and plans to expand its overseas businesses, its chairman said. SDIC plans to raise the share of its overseas investment business, currently focused on fuel tank manufacturing, to 10 percent in the near future.
--Turnover in China's land market fell 14 percent in 2012, the finance ministry said.
Fly On The Wall 7:00 am Market Snapshot
Alcatel-Lucent (ALU) upgraded to Neutral from Sell at Citigroup
Costco (COST) upgraded to Market Perform from Underperform at Bernstein
D.R. Horton (DHI) upgraded to Market Perform from Underperform at Raymond James
Honda (HMC) upgraded to Outperform from Neutral at Macquarie
IBM (IBM) upgraded to Hold from Sell at Societe Generale
KB Home (KBH) upgraded to Market Perform from Underperform at Raymond James
Middleby (MIDD) upgraded to Outperform from Neutral at RW Baird
Novartis (NVS) upgraded to Buy from Neutral at Citigroup
Platinum Group (PLG) upgraded to Outperform from Sector Perform at RBC Capital
Questar (STR) upgraded to Buy from Neutral at Citigroup
Spirit Realty (SRC) upgraded to Outperform from Market Perform at Raymond James
Unum Group (UNM) upgraded to Overweight from Equal Weight at Barclays
Verizon (VZ) upgraded to Buy from Hold at Canaccord
Ellie Mae (ELLI) downgraded to Market Perform from Outperform at William Blair
Ford (F) downgraded to Hold from Buy at Deutsche Bank
France Telecom (FTE) downgraded to Underperform from Market Perform at Bernstein
GrafTech (GTI) downgraded to Neutral from Buy at Davenport
Grupo Aeroportuario (ASR) downgraded to Equal Weight at Morgan Stanley
Hartford Financial (HIG) downgraded to Market Perform from Outperform at FBR Capital
Incyte (INCY) downgraded to Underweight from Equal Weight at Morgan Stanley
NewBridge (NBBC) downgraded to Market Perform from Outperform at Keefe Bruyette
Synovus (SNV) downgraded to Market Perform from Outperform at Bernstein
Allot Communications (ALLT) initiated with an Overweight at Barclays
Avago (AVGO) initiated with an Outperform at RBC Capital
Emulex (ELX) initiated with a Neutral at Piper Jaffray
FIS (FIS) initiated with a Buy at UBS
Fiserv (FISV) initiated with a Neutral at UBS
Global Eagle Acquisition (EAGL) initiated with an Outperform at Imperial Capital
Harbinger Group (HRG) initiated with a Buy at Jefferies
Mellanox (MLNX) initiated with an Overweight at Piper Jaffray
QLogic (QLGC) initiated with a Neutral at Piper Jaffray
Starz (STRZA) initiated with a Neutral at ISI Group
Workday (WDAY) initiated with a Neutral at RW Baird
Allergan (AGN) to acquire MAP Pharmaceuticals (MAPP) for $25 per share
IBM (IBM) said good opportunities to drive profit growth, margin expansion in FY13
Said 1H13 growth rate will be “slightly higher” than 2H13
Texas Instruments (TXN) CEO Templeton said demand environment still weak
Praxair (PX) said backlog will contribute 4%-6% growth in 2013
Reported $2.6B project backlog at FY12-end
Heinz (HNZ) made $60M earn-out payment to China business
First Cash Financial (FCFS) to open 75-85 new stores in 2013, majority in Mexico
Gannett's (GCI) USA TODAY, American Media announced partnership
Choice Hotels (CHH) and Bluegreen (BXG) announced strategic alliance
Companies that beat consensus earnings expectations last night and today include:
Air Products (APD), Wellpoint (WLP), Novartis (NVS), Texas Instruments (TXN), International Game (IGT), AMD (AMD), IBM (IBM), Celestica (CLS), Norfolk Southern (NSC), CA Technologies (CA), Google (GOOG), Cree (CREE)
Companies that missed consensus earnings expectations include:
Textron (TXT), Southwest Bancorp (OKSB), Praxair (PX), Baker Hughes (BHI), Woodward (WWD), Total System (TSS)
The estimated $1.7T that American companies say they have indefinitely invested overseas is actually sitting right here at home. Some companies, including Google (GOOG), Microsoft (MSFT) and EMC Corp. (EMC), keep over three-quarters of the cash owned by their foreign subsidiaries at U.S. banks, held in U.S. dollars or parked in U.S. government and corporate securities, sources say, the Wall Street Journal reports
U.K. Prime Minister Cameron today pledged to hold a referendum on whether the country should remain a member of the EU within two and a half years of the next general election, due in 2015, the Wall Street Journal reports
Fewer investors are taking corporate America to court for fraud as the number of new federal securities fraud lawsuits seeking class-action status fell to a seven year low in 2012, according to a study by Stanford Law School and Cornerstone Research, Reuters reports
In 2007, the FAA cleared Boeing's (BA) use of a highly flammable battery in the 787 Dreamliner, deciding it was safe to let the lithium-ion battery burn out if it caught fire mid-air as long as the flames were contained, and smoke and fumes vented properly, according to documents reviewed by Reuters.That decision is now coming under scrutiny, Reuters reports
Clients of the largest U.S. banks withdrew funds this month at the fastest weekly pace since the September 11 attacks as a deposit-insurance program ended and customers tapped into a year-end cash hoard. Net withdrawals at the 25 largest U.S. banks totaled $114.1B in the week ended January 9, pushing deposits down to $5.37T, according to Federal Reserve data, Bloomberg reports
Global investors say the state of the U.S. government’s finances is the greatest risk to the world economy and nearly 50% are curbing their investments in response to continuing budget battles, according to a Bloomberg poll
Invesco Mortgage (IVR) files to sell 15M shares of common stock
KB Home (KBH) files to sell $100M in common stock; $150M in convertible senior notes
Numerex (NMRX) files to sell common stock
Senior Housing (SNH) files to sell 8M shares of common stock
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