The Trade: A Revolving Door in Washington With Spin, but Less Visibility

Obsess all you’d like about President Obama’s nomination of Mary Jo White to head the Securities and Exchange Commission. Who heads the agency is vital, but important fights in Washington are happening in quiet rooms, away from the media gaze.

After a widely praised stint as a tough United States attorney, Ms. White spent the last decade serving so many large banks and investment houses that by the time she finishes recusing herself from regulatory matters, she may be down to overseeing First Wauwatosa Securities.

Ms. White maintains she can run the S.E.C. without fear or favor. But the focus shouldn’t be limited to whether she can be effective. For lobbyists, the real targets are regulators and staff members for lawmakers.

Ms. White, at least, will have to sit for Congressional testimony, answer occasional questions from the media and fill out disclosure forms. Staff members, however, work in untroubled anonymity for the most part. So, while everyone knows there’s a revolving door — so naïve to even bring it up! — few realize just how fluidly it spins.

Take what happened late last month as Washington geared up for more fights about the taxing, spending and the deficit. The Senate majority leader, Harry Reid, Democrat of Nevada, decided to bolster his staff’s expertise on taxes.

So on Jan. 25, Mr. Reid’s office announced that he had appointed Cathy Koch as chief adviser to the majority leader for tax and economic policy. The news release lists Ms. Koch’s admirable and formidable experience in the public sector. “Prior to joining Senator Reid’s office,” the release says, “Koch served as tax chief at the Senate Finance Committee.”

It’s funny, though. The notice left something out. Because immediately before joining Mr. Reid’s office, Ms. Koch wasn’t in government. She was working for a large corporation.

Not just any corporation, but quite possibly the most influential company in America, and one that arguably stands to lose the most if there were any serious tax reform that closed corporate loopholes. Ms. Koch arrives at the senator’s office by way of General Electric.

Yes, General Electric, the company that paid almost no taxes in 2010. Just as the tax reform debate is heating up, Mr. Reid has put in place a person who is extraordinarily positioned to torpedo any tax reform that might draw a dollar out of G.E. — and, by extension, any big corporation.

Omitting her last job from the announcement must have merely been an oversight. By the way, no rules prevent Ms. Koch from meeting with G.E. or working on issues that would affect the company.

The senator’s office, which declined to make Ms. Koch available for an interview, says that she will support the majority leader in his efforts to close corporate tax loopholes. His office said in a statement that the senator considered her knowledge of the private sector to be an asset and that she complied with “all relevant Senate ethics rules and disclosures.”

In a statement, the senator’s spokesman said, “The impulse in some quarters to reflexively cast suspicion on private sector experience is part of what makes qualified individuals reluctant to enter public service.”

Over in bank regulatory land, meanwhile, January was playing out like a Beltway remake of “Freaky Friday.”

Julie Williams, chief counsel for the Office of the Comptroller of the Currency and a major friend of the banks for years, had been recently shown the door by Thomas J. Curry, the new head of the regulator. Banking reform advocates took that to be an omen that a new era might be dawning at the agency, which has often been a handmaiden to large banks.

Ms. Williams, of course, landed on her feet. She’s now at the Promontory Financial Group, a classic Washington creature that is a private sector mirror image of a regulatory body. Promontory is the Shadow O.C.C. The firm was founded by a former head of the agency, Eugene A. Ludwig, and if you were to walk down the halls swinging a copy of the Volcker Rule, you would be sure to hit a former O.C.C. official. Promontory says only about 5 percent of its employees come from the O.C.C., but concedes that more than a quarter are former regulators.

Promontory, as the firm explains on its Web site, “excels at helping financial companies grapple with and resolve critical issues, particularly those with a regulatory dimension.” But it plays for the other team, too, by helping the O.C.C. put into effect regulatory reviews. The dreary normality of this is a Washington scandal in the Michael Kinsley sense: a perfectly legal one.

Promontory, which demurred on a request to talk with Ms. Williams, has a different view. The firm doesn’t lobby or help in litigation. It argues that after banks stop fighting regulators and lobbying against rules, then they come to Promontory to figure out how to fix their problems and comply.

“We are known in the industry as the tough-love doctors,” said Mr. Ludwig, the chief executive of Promontory. “I am deeply committed to financial stability, and the only way to have stability is to do the right thing in both the spirit and letter of the law.”

Hmm. Remember the Independent Foreclosure Review, the program that the O.C.C. and other federal bank regulators trumpeted as the largest effort to compensate victims of big banks’ foreclosure abuses? As my colleague at ProPublica, Paul Kiel, detailed last year, that review involved consultants like Promontory essentially letting banks decide who was victimized. How well did that work? So well that the regulators had to scuttle the program because it hadn’t given one red cent to homeowners but somehow, I don’t know how, managed to send more than $1.5 billion to consultants — including Promontory.

Promontory maintains that it complied with the conditions set out by the O.C.C. And the review was replaced by a settlement, which the regulators say will compensate victims — though the average payout is small beer.

Who, exactly, makes the rules at the O.C.C.? I mentioned “Freaky Friday.” That’s because at the agency, Ms. Williams is being replaced by Amy Friend. And where is Ms. Friend coming from? Wait for it … Promontory. In March, maybe they’ll do the switcheroo back.

The O.C.C. didn’t make Ms. Friend available but said that her “talent, integrity and commitment to public service are beyond reproach” and would be subject to the rule requiring her to recuse herself for a year on matters specifically relating to her former employer.

I spoke with people who said she was a smart and dedicated public servant, an expert on the Dodd-Frank Act who can help complete the scandalously long list of unfinished rules and expedite its adoption.

“Amy Friend is absolutely rowing in the right direction,” said a Senate staff member who worked on efforts to push for stronger financial regulation.

Let’s hope so.

But people also described Ms. Friend as pragmatic. In Washington, that’s the ultimate compliment. Sadly, that has come to mean someone who seeks compromise and never pushes for an overhaul when a quarter-measure will do.

Washington today resembles something like the end of “Animal Farm.” People move from one side of the table to the other and up and down the Acela corridor with ease. An outsider looking at a negotiating table would glance from lobbyist to staff member, from colleague to former colleague, from pig to man and from man to pig and find it impossible to say which is which.

---

Read More..

Well: Caffeine Linked to Lower Birth Weight Babies

New research suggests that drinking caffeinated drinks during pregnancy raises the risk of having a low birth weight baby.

Caffeine has long been linked to adverse effects in pregnant women, prompting many expectant mothers to give up coffee and tea. But for those who cannot do without their morning coffee, health officials over the years have offered conflicting guidelines on safe amounts during pregnancy.

The World Health Organization recommends a limit of 300 milligrams of caffeine a day, equivalent to about three eight-ounce cups of regular brewed coffee. The American College of Obstetricians and Gynecologists stated in 2010 that pregnant women could consume up to 200 milligrams a day without increasing their risk of miscarriage or preterm birth.

In the latest study, published in the journal BMC Medicine, researchers collected data on almost 60,000 pregnancies over a 10-year period. After excluding women with potentially problematic medical conditions, they found no link between caffeine consumption – from food or drinks – and the risk of preterm birth. But there was an association with low birth weight.

For a child expected to weigh about eight pounds at birth, the child lost between three-quarters of an ounce to an ounce in birth weight for each 100 milligrams of average daily caffeine intake from all sources by the mother. Even after the researchers excluded from their analysis smokers, a group that is at higher risk for complications and also includes many coffee drinkers, the link remained.

One study author, Dr. Verena Sengpiel of the Sahlgrenska University Hospital in Sweden, said the findings were not definitive because the study was observational, and correlation does not equal causation. But they do suggest that women might put their caffeine consumption “on pause” while pregnant, she said, or at least stay below two cups of coffee per day.

---

This post has been revised to reflect the following correction:

Correction: February 20, 2013

An earlier version of this article described incorrectly the relationship between the amount of caffeine a pregnant woman drank and birth weight. For a child expected to weigh about eight pounds at birth, the child lost between three-quarters of an ounce to an ounce in birth weight for each 100 milligrams of average daily caffeine intake by the mother, not for each day that she consumed 100 milligrams of caffeine.

Read More..

Well: Caffeine Linked to Lower Birth Weight Babies

New research suggests that drinking caffeinated drinks during pregnancy raises the risk of having a low birth weight baby.

Caffeine has long been linked to adverse effects in pregnant women, prompting many expectant mothers to give up coffee and tea. But for those who cannot do without their morning coffee, health officials over the years have offered conflicting guidelines on safe amounts during pregnancy.

The World Health Organization recommends a limit of 300 milligrams of caffeine a day, equivalent to about three eight-ounce cups of regular brewed coffee. The American College of Obstetricians and Gynecologists stated in 2010 that pregnant women could consume up to 200 milligrams a day without increasing their risk of miscarriage or preterm birth.

In the latest study, published in the journal BMC Medicine, researchers collected data on almost 60,000 pregnancies over a 10-year period. After excluding women with potentially problematic medical conditions, they found no link between caffeine consumption – from food or drinks – and the risk of preterm birth. But there was an association with low birth weight.

For a child expected to weigh about eight pounds at birth, the child lost between three-quarters of an ounce to an ounce in birth weight for each 100 milligrams of average daily caffeine intake from all sources by the mother. Even after the researchers excluded from their analysis smokers, a group that is at higher risk for complications and also includes many coffee drinkers, the link remained.

One study author, Dr. Verena Sengpiel of the Sahlgrenska University Hospital in Sweden, said the findings were not definitive because the study was observational, and correlation does not equal causation. But they do suggest that women might put their caffeine consumption “on pause” while pregnant, she said, or at least stay below two cups of coffee per day.

---

This post has been revised to reflect the following correction:

Correction: February 20, 2013

An earlier version of this article described incorrectly the relationship between the amount of caffeine a pregnant woman drank and birth weight. For a child expected to weigh about eight pounds at birth, the child lost between three-quarters of an ounce to an ounce in birth weight for each 100 milligrams of average daily caffeine intake by the mother, not for each day that she consumed 100 milligrams of caffeine.

Read More..

Hacking Victims Edge Into Light

Steve Ruark for The New York Times

Alan Paller of the SANS Institute said recently hacked companies were seeking safety in numbers.

SAN FRANCISCO — Hackers have hit thousands of American corporations in the last few years, but few companies ever publicly admit it. Most treat online attacks as a dirty secret best kept from customers, shareholders and competitors, lest the disclosure sink their stock price and tarnish them as hapless.

Rarely have companies broken that silence, usually when the attack is reported by someone else. But in the last few weeks more companies have stepped forward. Twitter, Facebook and Apple have all announced that they were attacked by sophisticated cybercriminals. The New York Times revealed its experience with hackers in a front-page article last month.

The admissions reflect the new way some companies are calculating the risks and benefits of going public. While companies once feared shareholder lawsuits and the ire of the Chinese government, some can’t help but notice that those that make the disclosures are lauded, as Google was, for their bravery. Some fear the embarrassment of being unable to fend off hackers who may still be in high school.

But as hacking revelations become more common, the threat of looking foolish fades and more companies are seizing the opportunity to take the leap in a crowd.

“There is a ‘hide in the noise’ effect right now,” said Alan Paller, director of research at the SANS Institute, a nonprofit security research and education organization. “This is a particularly good time to get out the fact that you got hacked, because if you are one of many, it discounts the starkness of the announcement.”

In 2010, when Google alerted some users of Gmail — political activists, mostly — that it appeared Chinese hackers were trying to read their mail, such disclosures were a rarity. In its announcement, Google said that it was one of many — two dozen — companies that had been targeted by the same group. Google said it was making the announcement, in part, to encourage other companies to open up about the problem.

But of that group, only Intel and Adobe Systems reluctantly stepped forward, and neither provided much detail.

Twitter admitted that it had been hacked this month. Facebook and Apple followed suit two weeks later. Within hours after The Times published its account, The Wall Street Journal chimed in with a report that it, too, had been attacked by what it believed to be Chinese hackers. The Washington Post followed.

Not everyone took advantage of the cover. Bloomberg, for example, has repeatedly denied that its systems were also breached by Chinese hackers, despite several sources that confirmed that its computers were infected with malware.

Computer security experts estimate that more than a thousand companies have been attacked recently. In 2011, security researchers at McAfee unearthed a vast online espionage campaign, called Operation Shady Rat, that found more than 70 organizations had been hit over a five-year period, many in the United States.

“I am convinced that every company in every conceivable industry with significant size and valuable intellectual property and trade secrets has been compromised (or will be shortly) with the great majority of the victims rarely discovering the intrusion or its impact,” Dmitri Alperovitch, then McAfee’s vice president for threat research, wrote in his findings.

“In fact,” said Mr. Alperovitch, now the chief technology officer at Crowdstrike, a security start-up, “I divide the entire set of Fortune Global 2000 firms into two categories: those that know they’ve been compromised and those that don’t yet know.”

Of that group, there are still few admissions. A majority of companies that have at one time or another been the subject of news reports of online attacks refuse to confirm them. The list includes the International Olympic Committee, Exxon Mobil, Baker Hughes, Royal Dutch Shell, BP, ConocoPhillips, Chesapeake Energy, the British energy giant BG Group, the steel maker ArcelorMittal and Coca-Cola.

David E. Sanger contributed reporting from Washington.

Read More..

World Briefing | Africa: Nigeria: Security Service Says It Halted Group Watching Israeli and U.S. Targets

Nigeria’s State Security Service said Wednesday that it broke up what it characterized as a terrorist group, backed by “Iranian handlers,” that wanted to gather intelligence about locations frequented by Americans and Israelis. The service said it arrested three suspects, but one remained at large. A spokeswoman, Marilyn Ogar, who was reading from a statement, identified the head of the group as Abdullahi Mustaphah Berende, a leader of a local Shiite sect. “He personally took photographs of the Israeli culture center in Ikoyi, Lagos,” she said. The group also conducted surveillance on USAID and the United States Peace Corps, she said. Ms. Ogar did not take questions.

Read More..

A Digital Shift on Health Data Swells Profits

Jeff Swensen for The New York Times

Dr. Vivek Reddy, a neurologist at the University of Pittsburgh Medical Center, also works on its digital records effort.

It was a tantalizing pitch: come get a piece of a $19 billion government “giveaway.”

The approach came in 2009, in a presentation to doctors by Allscripts Healthcare Solutions of Chicago, a well-connected player in the lucrative business of digital medical records. That February, after years of behind-the-scenes lobbying by Allscripts and others, legislation to promote the use of electronic records was signed into law as part of President Obama’s economic stimulus bill. The rewards, Allscripts suggested, were at hand.

But today, as doctors and hospitals struggle to make new records systems work, the clear winners are big companies like Allscripts that lobbied for that legislation and pushed aside smaller competitors.

While proponents say new record-keeping technologies will one day reduce costs and improve care, profits and sales are soaring now across the records industry. At Allscripts, annual sales have more than doubled from $548 million in 2009 to an estimated $1.44 billion last year, partly reflecting daring acquisitions made on the bet that the legislation would be a boon for the industry. At the Cerner Corporation of Kansas City, Mo., sales rose 60 percent during that period. With money pouring in, top executives are enjoying Wall Street-style paydays.

None of that would have happened without the health records legislation that was included in the 2009 economic stimulus bill — and the lobbying that helped produce it. Along the way, the records industry made hundreds of thousands of dollars of political contributions to both Democrats and Republicans. In some cases, the ties went deeper. Glen E. Tullman, until recently the chief executive of Allscripts, was health technology adviser to the 2008 Obama campaign. As C.E.O. of Allscripts, he visited the White House no fewer than seven times after President Obama took office in 2009, according to White House records.

Mr. Tullman, who left Allscripts late last year after a boardroom power struggle, characterized his activities in Washington as an attempt to educate lawmakers and the administration.

“We really haven’t done any lobbying,” Mr. Tullman said in an interview. “I think it’s very common with every administration that when they want to talk about the automotive industry, they convene automotive executives, and when they want to talk about the Internet, they convene Internet executives.”

Between 2008 and 2012, a time of intense lobbying in the area around the passage of the legislation and how the rules for government incentives would be shaped, Mr. Tullman personally made $225,000 in political contributions. While tens of thousands of those dollars went to the Democratic Senatorial Campaign Committee, money was also being sprinkled toward Senator Max Baucus, the Democratic senator from Montana who is chairman of the Senate Finance Committee, and Jay D. Rockefeller, the Democrat from West Virginia who heads the Commerce Committee. Mr. Tullman said his recent personal contributions to various politicians had largely been driven by his interest in supporting President Obama and in seeing his re-election.

Cerner’s lobbying dollars doubled to nearly $400,000 between 2006 and last year, according to the Center for Responsive Politics. While its political action committee contributed a little to some Democrats in 2008, including Senator Baucus, its contributions last year went almost entirely to Republicans, with a large amount going to the Mitt Romney campaign.

Current and former industry executives say that big digital records companies like Cerner, Allscripts and Epic Systems of Verona, Wis., have reaped enormous rewards because of the legislation they pushed for. “Nothing that these companies did in my eyes was spectacular,” said John Gomez, the former head of technology at Allscripts. “They grew as a result of government incentives.”

Executives at smaller records companies say the legislation cemented the established companies’ leading positions in the field, making it difficult for others to break into the business and innovate. Until the 2009 legislation, growth at the leading records firms was steady; since then, it has been explosive. Annual sales growth at Cerner, for instance, has doubled to 20 percent from 10 percent.

“We called it the Sunny von Bülow bill. These companies that should have been dead were being put on machines and kept alive for another few years,” said Jonathan Bush, co-founder of the cloud-based firm Athenahealth and a first cousin to former President George W. Bush. “The biggest players drew this incredible huddle around the rule-makers and the rules are ridiculously favorable to these companies and ridiculously unfavorable to society.”

Read More..

A Digital Shift on Health Data Swells Profits

Jeff Swensen for The New York Times

Dr. Vivek Reddy, a neurologist at the University of Pittsburgh Medical Center, also works on its digital records effort.

It was a tantalizing pitch: come get a piece of a $19 billion government “giveaway.”

The approach came in 2009, in a presentation to doctors by Allscripts Healthcare Solutions of Chicago, a well-connected player in the lucrative business of digital medical records. That February, after years of behind-the-scenes lobbying by Allscripts and others, legislation to promote the use of electronic records was signed into law as part of President Obama’s economic stimulus bill. The rewards, Allscripts suggested, were at hand.

But today, as doctors and hospitals struggle to make new records systems work, the clear winners are big companies like Allscripts that lobbied for that legislation and pushed aside smaller competitors.

While proponents say new record-keeping technologies will one day reduce costs and improve care, profits and sales are soaring now across the records industry. At Allscripts, annual sales have more than doubled from $548 million in 2009 to an estimated $1.44 billion last year, partly reflecting daring acquisitions made on the bet that the legislation would be a boon for the industry. At the Cerner Corporation of Kansas City, Mo., sales rose 60 percent during that period. With money pouring in, top executives are enjoying Wall Street-style paydays.

None of that would have happened without the health records legislation that was included in the 2009 economic stimulus bill — and the lobbying that helped produce it. Along the way, the records industry made hundreds of thousands of dollars of political contributions to both Democrats and Republicans. In some cases, the ties went deeper. Glen E. Tullman, until recently the chief executive of Allscripts, was health technology adviser to the 2008 Obama campaign. As C.E.O. of Allscripts, he visited the White House no fewer than seven times after President Obama took office in 2009, according to White House records.

Mr. Tullman, who left Allscripts late last year after a boardroom power struggle, characterized his activities in Washington as an attempt to educate lawmakers and the administration.

“We really haven’t done any lobbying,” Mr. Tullman said in an interview. “I think it’s very common with every administration that when they want to talk about the automotive industry, they convene automotive executives, and when they want to talk about the Internet, they convene Internet executives.”

Between 2008 and 2012, a time of intense lobbying in the area around the passage of the legislation and how the rules for government incentives would be shaped, Mr. Tullman personally made $225,000 in political contributions. While tens of thousands of those dollars went to the Democratic Senatorial Campaign Committee, money was also being sprinkled toward Senator Max Baucus, the Democratic senator from Montana who is chairman of the Senate Finance Committee, and Jay D. Rockefeller, the Democrat from West Virginia who heads the Commerce Committee. Mr. Tullman said his recent personal contributions to various politicians had largely been driven by his interest in supporting President Obama and in seeing his re-election.

Cerner’s lobbying dollars doubled to nearly $400,000 between 2006 and last year, according to the Center for Responsive Politics. While its political action committee contributed a little to some Democrats in 2008, including Senator Baucus, its contributions last year went almost entirely to Republicans, with a large amount going to the Mitt Romney campaign.

Current and former industry executives say that big digital records companies like Cerner, Allscripts and Epic Systems of Verona, Wis., have reaped enormous rewards because of the legislation they pushed for. “Nothing that these companies did in my eyes was spectacular,” said John Gomez, the former head of technology at Allscripts. “They grew as a result of government incentives.”

Executives at smaller records companies say the legislation cemented the established companies’ leading positions in the field, making it difficult for others to break into the business and innovate. Until the 2009 legislation, growth at the leading records firms was steady; since then, it has been explosive. Annual sales growth at Cerner, for instance, has doubled to 20 percent from 10 percent.

“We called it the Sunny von Bülow bill. These companies that should have been dead were being put on machines and kept alive for another few years,” said Jonathan Bush, co-founder of the cloud-based firm Athenahealth and a first cousin to former President George W. Bush. “The biggest players drew this incredible huddle around the rule-makers and the rules are ridiculously favorable to these companies and ridiculously unfavorable to society.”

Read More..

A Digital Shift on Health Data Swells Profits

Jeff Swensen for The New York Times

Dr. Vivek Reddy, a neurologist at the University of Pittsburgh Medical Center, also works on its digital records effort.

It was a tantalizing pitch: come get a piece of a $19 billion government “giveaway.”

The approach came in 2009, in a presentation to doctors by Allscripts Healthcare Solutions of Chicago, a well-connected player in the lucrative business of digital medical records. That February, after years of behind-the-scenes lobbying by Allscripts and others, legislation to promote the use of electronic records was signed into law as part of President Obama’s economic stimulus bill. The rewards, Allscripts suggested, were at hand.

But today, as doctors and hospitals struggle to make new records systems work, the clear winners are big companies like Allscripts that lobbied for that legislation and pushed aside smaller competitors.

While proponents say new record-keeping technologies will one day reduce costs and improve care, profits and sales are soaring now across the records industry. At Allscripts, annual sales have more than doubled from $548 million in 2009 to an estimated $1.44 billion last year, partly reflecting daring acquisitions made on the bet that the legislation would be a boon for the industry. At the Cerner Corporation of Kansas City, Mo., sales rose 60 percent during that period. With money pouring in, top executives are enjoying Wall Street-style paydays.

None of that would have happened without the health records legislation that was included in the 2009 economic stimulus bill — and the lobbying that helped produce it. Along the way, the records industry made hundreds of thousands of dollars of political contributions to both Democrats and Republicans. In some cases, the ties went deeper. Glen E. Tullman, until recently the chief executive of Allscripts, was health technology adviser to the 2008 Obama campaign. As C.E.O. of Allscripts, he visited the White House no fewer than seven times after President Obama took office in 2009, according to White House records.

Mr. Tullman, who left Allscripts late last year after a boardroom power struggle, characterized his activities in Washington as an attempt to educate lawmakers and the administration.

“We really haven’t done any lobbying,” Mr. Tullman said in an interview. “I think it’s very common with every administration that when they want to talk about the automotive industry, they convene automotive executives, and when they want to talk about the Internet, they convene Internet executives.”

Between 2008 and 2012, a time of intense lobbying in the area around the passage of the legislation and how the rules for government incentives would be shaped, Mr. Tullman personally made $225,000 in political contributions. While tens of thousands of those dollars went to the Democratic Senatorial Campaign Committee, money was also being sprinkled toward Senator Max Baucus, the Democratic senator from Montana who is chairman of the Senate Finance Committee, and Jay D. Rockefeller, the Democrat from West Virginia who heads the Commerce Committee. Mr. Tullman said his recent personal contributions to various politicians had largely been driven by his interest in supporting President Obama and in seeing his re-election.

Cerner’s lobbying dollars doubled to nearly $400,000 between 2006 and last year, according to the Center for Responsive Politics. While its political action committee contributed a little to some Democrats in 2008, including Senator Baucus, its contributions last year went almost entirely to Republicans, with a large amount going to the Mitt Romney campaign.

Current and former industry executives say that big digital records companies like Cerner, Allscripts and Epic Systems of Verona, Wis., have reaped enormous rewards because of the legislation they pushed for. “Nothing that these companies did in my eyes was spectacular,” said John Gomez, the former head of technology at Allscripts. “They grew as a result of government incentives.”

Executives at smaller records companies say the legislation cemented the established companies’ leading positions in the field, making it difficult for others to break into the business and innovate. Until the 2009 legislation, growth at the leading records firms was steady; since then, it has been explosive. Annual sales growth at Cerner, for instance, has doubled to 20 percent from 10 percent.

“We called it the Sunny von Bülow bill. These companies that should have been dead were being put on machines and kept alive for another few years,” said Jonathan Bush, co-founder of the cloud-based firm Athenahealth and a first cousin to former President George W. Bush. “The biggest players drew this incredible huddle around the rule-makers and the rules are ridiculously favorable to these companies and ridiculously unfavorable to society.”

Read More..

Pistorius Denies Murdering Girlfriend

Siphiwe Sibeko/Reuters

Oscar Pistorius wept at a hearing on Tuesday seeking bail.

PRETORIA, South Africa — Early on Feb. 14, Oscar Pistorius says, he heard a strange noise coming from inside his bathroom, climbed out of bed, grabbed his 9-millimeter pistol, hobbled on his stumps to the door and fired four shots.

“I fail to understand how I could be charged with murder, let alone premeditated,” Mr. Pistorius said in an affidavit read Tuesday to a packed courtroom by his defense lawyer, Barry Roux. “I had no intention to kill my girlfriend.”

Prosecutors painted a far different picture, one of a calculated killer, a world-renowned athlete who had the presence of mind and calm to strap on his prosthetic legs, walk 20 feet to the bathroom door and open fire as his girlfriend, Reeva Steenkamp, cowered inside, behind a locked door.

“The applicant shot and killed an unarmed, innocent women,” Gerrie Nel, the chief prosecutor, said in court on Tuesday. That, Mr. Nel argued, amounted to premeditated murder, a charge that could send Mr. Pistorius to prison for life.

In court, Mr. Pistorius, a Paralympic track star who competed against able-bodied athletes at the London Olympics despite having lost both his lower legs as an infant, wept uncontrollably as Mr. Roux gave the runner’s account of the fateful early morning. At one point, Magistrate Desmond Nair called a recess to allow Mr. Pistorius, who was sobbing loudly, his face contorted, to regain his composure.

“My compassion as a human being does not allow me to just sit here,” Magistrate Nair said.

As the defense and prosecution laid out their competing versions of the shooting, some details were beyond dispute.

Mr. Pistorius and Ms. Steenkamp were alone in the house, having spent the evening there. Around 3 a.m., Mr. Pistorius shot Ms. Steenkamp through the bathroom door, fatally wounding her. He broke down the door and carried her down the stairs, where she died in the foyer of his upscale home in a highly secured compound.

The young woman, a model, was cremated Tuesday on the other side of the country in her hometown, Port Elizabeth. Her family and friends mourned her and called for the authorities to deal harshly with Mr. Pistorius.

“There’s a space missing inside all the people that she knew that can’t be filled again,” her brother, Adam Steenkamp, told reporters after the memorial service.

In court, Mr. Pistorius is seeking bail on the charge of premeditated murder, but he faces an uphill battle. Magistrate Nair ruled Tuesday that the case would be treated as the most serious kind of offense, which means bail will be granted only if the defense can prove extraordinary circumstances requiring it.

The court proceedings, though they concerned only whether Mr. Pistorius would receive bail, offered the first real glimpse into what unfolded at his home on the day of the shooting.

In his affidavit, Mr. Pistorius said that he and Ms. Steenkamp had decided to stay in for the night. He canceled plans with his friends for a night on the town in Johannesburg, while she opted against movies with one of her friends. They had a quiet evening, he said. She did yoga. He watched television. About 10 p.m., they went to sleep.

In the early morning hours, he said, he woke up to move a fan from the balcony and to close the sliding doors in the bedroom.

“I heard a noise in the bathroom and realized that someone was in the bathroom,” he said. “I felt a sense of terror rushing over me.”

He had already said in the affidavit that he feared South Africa’s rampant violent crime, and later added that he was worried because there were no bars on the window to the bathroom. Construction workers had left ladders in his garden, he said.

“I believed someone had entered my house,” he said in the affidavit. “I grabbed my 9-millimeter pistol from underneath my bed. On my way to the bathroom I screamed words to the effect for him/them to get out of my house and for Reeva to phone the police. It was pitch dark in the bedroom, and I thought Reeva was in bed.”

Walking on his stumps, he heard the sound of movement inside the toilet, a small room within the bathroom.

Alan Cowell contributed reporting from London.

Read More..

DealBook Column: A Reputation, Once Sullied, Acquires a New Shine

How do you describe Steven L. Rattner?

Up until three years ago, he was typically referred to in these pages as a former journalist turned successful financier — the vice chairman of the investment bank Lazard and then a co-founder of the Quadrangle Group, the private equity firm.

With much fanfare, he then became the White House auto czar assigned to fix General Motors and Chrysler, after years of trying to become part of the Washington firmament like so many on Wall Street who have wanted to make the leap.

He was the ultimate consigliere to power. Then, it all fell apart.

He was accused of using “pay to play” practices while raising money from a New York state pension fund when he was still at Quadrangle. In 2010 he paid more than $16 million to Andrew M. Cuomo, who was then New York’s attorney general, and the Securities and Exchange Commission to settle the civil cases without admitting or denying wrongdoing.

He was “banned from appearing in any capacity before any public pension fund within the State of New York for five years” and for “associating with any investment adviser or broker dealer” for two years, according to the suits. As the case proceeded, he stepped down from his position in the Obama administration.

Among the cocktail party circuit in Manhattan, Mr. Rattner was Topic A. And the schadenfreude was thick. Mr. Rattner, the narrative developed, had become Wall Street’s Icarus, flying too close to the sun. The New Republic headlined one article: “Rattner Hoisted on His Own Petard.” The question was asked: Would he ever eat lunch in this town again? And what about Washington?

Now, two years later, Mr. Rattner is lunching all over town. And, in truth, he may have never stopped.

As Mr. Rattner sat across from me in Midtown Manhattan two weeks ago, his re-emergence as power magnate was well under way. He is the overseer of Mayor Michael R. Bloomberg’s fortune of billions of dollars — you could call Mr. Rattner a money manager but that doesn’t capture the scope of it. He has appeared as a pundit about the economy on television (MSNBC’s “Morning Joe,” ABC’s “This Week” and “Fox News Sunday,” among others) and in newspapers (The Financial Times, Politico and The New York Times). And to take the story full circle, the Obama administration, which had eased Mr. Rattner out of his role, appears to have re-embraced him, even using him to campaign for the president last fall.

“It was the worst thing that ever happened in my professional life,” Mr. Rattner, who had taken off his trademark tortoise-rim glasses, said of the accusations and the settlement. “If you asked me, do I wish I had done some things differently about this whole situation, of course I wish I had done some things differently.” More on that in a moment, but he also has clearly worked unremittingly to move on. “Looking back, it was a bit like the half life of a radioactive isotope. Every few months the intensity of what happened seemed to go down by half,” Mr. Rattner added, as he sipped English Breakfast tea.

If there was a question about his current status — and whether the chattering classes had moved on — the guest list of his 60th birthday party this last summer, overlooking Rockefeller Center, may provide the answer: Mr. Bloomberg, Barry Diller, Jamie Dimon, Harvey Weinstein, Senator Charles E. Schumer, Ralph Lauren, Brian Roberts and Fred Wilpon, among others, were all in attendance.

When Vice President Biden held his holiday party in December, Mr. Rattner was there. And at the home of Hillary Clinton last month for her farewell party from the State Department, where Mr. Rattner’s wife, Maureen White, works, he was there, too. (His wife was the finance co-chairwoman of the Hillary Clinton for President campaign.)

In a city where powerful figures are dropped at the whiff of trouble — and rarely return to positions of significant influence despite efforts at comebacks — Mr. Rattner’s narrative of a meteoric rise to embarrassing scandal and back again is notable.

His re-emergence may also be a telling commentary about the way the nation’s elite flock to people with power — and those with powerful friends.

Some of his friends, many of whom declined to comment on the record, said they were willing to overlook his past transgressions because they felt he had paid for them, through the fines and the negative publicity. Others said that he had always been honest with them. Still, there are other friends who say they have distanced themselves from him but haven’t cut him off entirely for fear of alienating themselves from other people in his circle.

Mr. Diller, the chairman of IAC, counts himself among Mr. Rattner’s friends. “Whatever complications there were, I never thought he was culpable.” He added, “When you get anybody who is up there, then the takedown is going to have a pile-on effect. It is the nature of public life.”

That may be a truism. But at the time of the scandal, Mr. Cuomo used particularly pointed language: “Steve Rattner was willing to do whatever it took to get his hands on pension fund money including paying kickbacks, orchestrating a movie deal, and funneling campaign contributions.”

In the S.E.C.’s case, David Rosenfeld of the New York regional office said then that Mr. Rattner “delivered special favors and conducted sham transactions that corrupted the Retirement Fund’s investment process.”

Before we go any further, some disclosures are in order: It is well documented that Mr. Rattner is a longtime friend and confidant of the publisher of this newspaper, Arthur Sulzberger Jr. (Mr. Sulzberger was in attendance at Mr. Rattner’s birthday party, too.) Mr. Rattner was a reporter for The Times in the late 1970s and early 1980s. He also now writes a monthly Op-Ed column in The Times, arguably providing him with a powerful platform that increases his influence. I purposely haven’t discussed anything about Mr. Rattner with Mr. Sulzberger before writing this column. Now that that’s done, let’s continue.

Mr. Rattner’s re-emergence was not assured.

“There were some people inevitably who I thought were my friends who I found out were more fair weather and especially some in the political world,” he said. “I’m sure they said to themselves, let’s just keep a little space here and see what happens to Steve as opposed to let’s embrace Steve and say he’s my friend.”

One friend who never left was Mr. Bloomberg. When news of Mr. Cuomo’s case against him first broke, Mr. Rattner sent him an e-mail to give him a heads-up about the situation. Mr. Bloomberg’s reply? “The only thing wrong with you is your golf game.”

In an interview, Mr. Bloomberg said, “Steve is a good friend. You stick by your friends. And I don’t worry about what people say.” And despite all the chatter about Mr. Rattner, Mr. Bloomberg added, “I never heard anyone say they wouldn’t invite Steven Rattner to a party because of what was happening.”

The White House was less forgiving. While the Obama administration and Mr. Rattner portrayed his exit from Washington in July 2009 as a natural time to leave since his role helping G.M. through a government supported bankruptcy was finished, the president clearly made no effort to keep him, given the investigation hanging over him.

On the merits of the case that Mr. Rattner settled with Mr. Cuomo — which Mr. Rattner once described as “close to extortion” — he still has strong views. He and several other private equity firms, including the Carlyle Group, were accused of using Hank Morris, a political consultant, to help the firms obtain hundreds of millions of dollars to manage for the New York state pension fund.

Mr. Morris pleaded guilty to a felony count of violating the Martin Act for paying kickbacks and went to prison. Mr. Rattner was also accused of influencing a film distribution company that Quadrangle owned to secure a DVD distribution deal for a low-budget movie called “Chooch” that was produced by a pension fund official’s brother.

Mr. Rattner said: “I can’t imagine that any of the many firms that hired Hank Morris wouldn’t do that differently, given what he turned out to be. I appreciate clearly how important it is to avoid even the appearance of impropriety.”

Mr. Rattner and Mr. Cuomo chose to settle the case on what some lawyers described as benign terms given the penalty of a $26 million fine and a lifetime ban from the securities industry that Mr. Cuomo originally sought. Mr. Rattner settled for $10 million and a ban from working with New York State pension funds for five years, none of which has prevented him from continuing his role of managing Mr. Bloomberg’s money.

Unusually, Mr. Cuomo even agreed that Mr. Rattner’s settlement would include none of the usual language about admitting or denying wrongdoing, which allows Mr. Rattner to deny he ever broke the law. Mr. Rattner said he chose to settle the case, rather than fight what he said he expected to be a drawn-out court battle, because he wanted to move on with his life. He also paid $6.2 million to settle the S.E.C. case.

He clearly feels a sense of regret about some his actions, but declined to discuss the accusations in detail, citing the settlements.

A spokesman for Governor Cuomo declined to comment.

Mr. Rattner said he discovered a unique indicator to measure the impact of the scandal, which might just prove his theory that he should be compared with a radioactive isotope.

Right after the settlement, Mr. Rattner, who has long been active in political fund-raising for Democrats, said nobody would take his money. In fact, one politician, whom he declined to name, sent back a $500 donation from 2011. Several months later, he began to receive solicitations from politicians looking for his help in raising funds, he said. But does that say more about the state of Washington politics or Mr. Rattner?

Despite his past, the White House called him last fall and talked about his campaigning for the president in Ohio, where the auto bailout was an important issue. (Mr. Rattner published a book in September 2010 about his experience in trying to fix Detroit called “Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry.”)

David Axelrod, who was President Obama’s senior strategist for his re-election campaign, said in an e-mail of Mr. Rattner, “Whatever happened in New York didn’t obviate the great service he rendered.” He added: “Steve did an extraordinary job for the administration and the country in helping to shape the auto plan, which was a clear success.”

So will Mr. Rattner ever have a chance to work in government again? For years, his name was always part of the parlor game of potential nominees for Treasury secretary.

He had a quick answer about returning to Washington: “Probably not.” He said now that he had worked in the capital and lived in the glare of the spotlight, he better appreciates the upside and downside. He said: “I had a great experience, but I also found out how thankless and frustrating it can be.”

Read More..