Paterno Family Challenges Accusation of Cover-Up

The 238-page report, which was compiled by a team led by Richard Thornburgh, a former United States attorney general, and released Sunday, said an even larger investigation into the scandal by Louis Freeh, the former F.B.I. director, was “factually wrong, speculative and fundamentally flawed.”

According to the Thornburgh report, the Freeh inquiry, which was ordered by the Penn State board of trustees and released in July, falsely accused Mr. Paterno of helping to cover up Sandusky’s repeated abuse to shield the school from adverse publicity, and wrongly blamed the “football culture” at Penn State for helping foster Sandusky’s crimes.

Unlike a legal proceeding, no one testified under oath and witnesses were allowed to speak anonymously in the Freeh report, which also failed to conduct interviews with “most of the key witnesses,” the Thornburgh report said, including the university’s top executives and Police Department as well as the district attorney’s office in Centre County, where Penn State is.

“Having never talked with these individuals, the Freeh report still claimed to know what they did and why they did it,” the Thornburgh report said.

Since Sandusky was arrested in late 2011, the Paterno family has been adamant that Paterno, who died a year ago, did not cover up Sandusky’s crimes and that he followed university protocol in 2001 when he reported the matter to his superiors.

The university fired Paterno soon after the scandal broke, driving a wedge through the Penn State community where the longtime coach had been a beloved figure. While many students and alumni stood by the coach and his family, the university removed a statue of Paterno. The N.C.A.A. later imposed punitive sanctions on the school and football program.

The Thornburgh report repeated many of the claims made by the family in the past. Freeh, who has declined to address criticisms of his report, issued his own statement on Sunday.

“I respect the right of the Paterno family to hire private lawyers and former government officials to conduct public media campaigns in an effort to shape the legacy of Joe Paterno,” Freeh said. “However, the self-serving report the Paterno family has issued today does not change the facts established in the Freeh report or alter the conclusions reached in the Freeh report.”

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Insight: Apple and Samsung, frenemies for life

SAN FRANCISCO/SEOUL (Reuters) - It was the late Steve Jobs' worst nightmare.

A powerful Asian manufacturer, Samsung Electronics Co Ltd, uses Google Inc's Android software to create smartphones and tablets that closely resemble the iPhone and the iPad. Samsung starts gaining market share, hurting Apple Inc's margins and stock price and threatening its reign as the king of cool in consumer electronics.

Jobs, of course, had an answer to all this: a "thermo-nuclear" legal war that would keep clones off the market. Yet nearly two years after Apple first filed a patent-infringement lawsuit against Samsung, and six months after it won a huge legal victory over its South Korean rival, Apple's chances of blocking the sale of Samsung products are growing dimmer by the day.

Indeed, a series of recent court rulings suggests that the smartphone patent wars are now grinding toward a stalemate, with Apple unable to show that its sales have been seriously damaged when rivals, notably Samsung, imitated its products.

That, in turn, may usher in a new phase in the complex relationship between the two dominant companies in the growing mobile computing business.

Tim Cook, Jobs' successor as Apple chief executive, was opposed to suing Samsung in the first place, according to people with knowledge of the matter, largely because of that company's critical role as a supplier of components for the iPhone and the iPad. Apple bought some $8 billion worth of parts from Samsung last year, analysts estimate.

Samsung, meanwhile, has benefited immensely from the market insight it gained from the Apple relationship, and from producing smartphones and tablets that closely resemble Apple's.

While the two companies compete fiercely in the high-end smartphone business - where together they control half the sales and virtually all of the profits - their strengths and weaknesses are in many ways complementary. Apple's operations chief, Jeff Williams, told Reuters last month that Samsung was an important partner and they had a strong relationship on the supply side, but declined to elaborate.

As their legal war winds down, it is increasingly clear that Apple and Samsung have plenty of common interests as they work to beat back other potential challengers, such as BlackBerry or Microsoft.

The contrast with other historic tech industry rivalries is stark. When Apple accused Microsoft in the 1980s of ripping off the Macintosh to create the Windows operating system, Apple's very existence was at stake. Apple lost, the Mac became a niche product, and the company came close to extinction before Jobs returned to Apple in late 1996 and saved it with the iPod and the iPhone. Jobs died in October 2011.

Similarly, the Internet browser wars of the late 1990s that pitted Microsoft against Netscape ended with Netscape being sold for scrap and its flagship product abandoned.

Apple and Samsung, on the other hand, are not engaged in a corporate death match so much as a multi-layered rivalry that is by turns both friendly and hard-edged. For competitors like Nokia, BlackBerry, Sony, HTC and even Google - whose Motorola unit is expected to launch new smartphones later this year - they are a formidable duo.

THE WAY THEY WERE

The partnership piece of the Apple-Samsung relationship dates to 2005, when the Cupertino, California-based giant was looking for a stable supplier of flash memory. Apple had decided to jettison the hard disc drive in creating the iPod shuffle, iPod nano and then-upcoming iPhone, and it needed huge volumes of flash memory chips to provide storage for the devices.

The memory market in 2005 was extremely unstable, and Apple wanted to lock in a supplier that was rock-solid financially, people familiar with the relationship said. Samsung held about 50 percent of the NAND flash memory market at that time.

"Whoever controls flash is going to control this space in consumer electronics," Jobs said at the time, according to a source familiar with the discussions.

The success of that deal led to Samsung supplying the crucial application processors for the iPhone and iPad. Initially, the two companies jointly developed the processors based on a design from ARM Holdings Plc, but Apple gradually took full control over development of the chip. Now Samsung merely builds the components at a Texas factory.

The companies built a close relationship that extended to the very top: in 2005, Jay Y. Lee, whose grandfather founded the Samsung Group, visited Jobs' home in Palo Alto, California, after the two signed the flash memory deal.

The partnership gave Apple and Samsung insight into each other's strategies and operations. In particular, Samsung's position as the sole supplier of iPhone processors gave it valuable data on just how big Apple thought the smartphone market was going to be.

"Having a relationship with Apple as a supplier, I am sure, helped the whole group see where the puck was going," said Horace Dediu, a former analyst at Nokia who now works as a consultant and runs an influential blog. "It's a very important advantage in this business if you know where to commit capital."

Samsung declined to comment on its relationship with a specific customer.

As for Apple, it reaped the benefit of Samsung's heavy investments in research and development, tooling equipment and production facilities. Samsung spent $21 billion (23 trillion won) on capital expenditures in 2012 alone, and plans to spend a similar amount this year.

By comparison, Intel Corp spent around $11 billion in 2012, and Taiwan Semiconductor Manufacturing Co Ltd (TSMC) expects to spend $9 billion in 2013.

But component expertise, cash and good market intelligence did not assure success when Samsung launched its own foray into the smartphone market. The Omnia, a Windows-based product introduced in 2009, was so reviled that some customers hammered it to bits in public displays of dissatisfaction.

Meanwhile, Samsung publicly dismissed the iPhone's success.

"The popularity of iPhone is a mere result of excitement caused by some (Apple) fanatics," Samsung's then-president, G.S. Choi, told reporters in January 2010.

Privately, though, Samsung had other plans.

"The iPhone's emergence means the time we have to change our methods has arrived," Samsung mobile business head J.K. Shin told his staff in early 2010, according to an internal email filed in U.S. court.

Later that year, Samsung launched the Galaxy S, which sported the Android operating system and a look and feel very similar to the iPhone.

STANDOFF

Jobs and Cook complained to top Samsung executives when they were visiting Cupertino. Apple expected, incorrectly, that Samsung would modify its design in response to the concerns, people familiar with the situation said.

Apple's worst fears were confirmed with the early 2011 release of the Galaxy Tab, which Jobs and others regarded as a clear rip-off of the iPad.

Cook, worried about the critical supplier relationship, was opposed to suing Samsung. But Jobs had run out of patience, suspecting that Samsung was counting on the supplier relationship to shield it from retribution.

Apple filed suit in April 2011, and the conflagration soon spread to courts in Europe, Asia and Australia. When Apple won its blockbuster billion-dollar jury verdict against Samsung last August, it appeared that it might be able to achieve an outright ban on the offending products - which would have dramatically altered the smartphone competition.

But Apple has failed to convince U.S. judges to uphold those crucial sales bans - in large part because the extraordinary profitability and market power of the iPhone made it all but impossible for Apple to show it was suffering irreparable harm.

"Samsung may have cut into Apple's customer base somewhat, but there is no suggestion that Samsung will wipe out Apple's customer base, or force Apple out of the business of making smartphones," U.S. District Judge Lucy Koh wrote. "The present case involves lost sales - not a lost ability to be a viable market participant."

Samsung, meanwhile, came under pressure from antitrust regulators and pulled back on its effort to shut down Apple sales in Europe over a related patent dispute.

A U.S. appeals court recently rejected Apple's bid to fast-track its case, meaning its hopes for a sales ban are now stuck in months-long appeals, during which time Samsung may very well release the next version of its hot-selling Galaxy phone.

THE WORLD IS OURS

The legal battles have been less poisonous to the relationship than some of the rhetoric suggests.

"People play this stuff up because it shows a kind of drama, but the business reality is that the temperature isn't that high," said one attorney who has observed executives from both companies.

Still, the hostilities appear to have put some dents in the partnership. Apple is likely to switch to TSMC for the building of application processors, according to analysts at Goldman Sachs, Sanford Bernstein and other firms. But analysts at Korea Investment & Securities and HMC Securities point out that Apple will not be able to eliminate Samsung as a flash supplier because it remains the dominant producer of the crucial chips.

Apple declined to comment on the details of its relationships with any one supplier.

Meanwhile, both companies are deploying strategies out of the other's playbook as they seek to maintain and extend their lead over the pack.

Samsung has developed a cheeky, memorable TV ad that mocks Apple customers, and dramatically ramped up spending on marketing and advertising, a cornerstone of Apple's success. U.S. ad spending on the Galaxy alone leaped to nearly $202 million in the first nine months of 2012, from $66.6 million in 2011, according to Kantar Media.

For its part, Apple is investing in manufacturing by helping its suppliers procure the machinery needed to build large-scale plants devoted exclusively to the company.

Apple spent about $10 billion in fiscal 2012 on capital expenditures, and it expects to spend a further $10 billion this year. By contrast, the company spent only $4.6 billion in fiscal 2011 and $2.6 billion in fiscal 2010.

But Apple and Samsung retain very different strategies. Apple has just one smartphone and only four product lines in total, and tries to keep variations to a bare minimum while focusing on the high end of the market.

Samsung, by contrast, has 37 phone products that are tweaked for regional tastes and run the gamut from very cheap to very expensive, according to Mirae Asset Securities. The company also makes chips, TVs, appliances and a host of other products (and its brethren in the Samsung Group sell everything from ships to insurance policies).

Apple devices are hugely popular in the United States; Samsung enjoys supremacy in developing countries like India and China. Apple keeps its core staff lean - it has only 60,000 employees worldwide - and relies on partners for manufacturing and other functions. Samsung Electronics, part of a sprawling "chaebol," or conglomerate, that includes some 80 companies employing 369,000 people worldwide, is far more vertically integrated.

It is those differences, combined with the formidable strengths that both companies bring to the market, that may render quiet cooperation a better strategy than all-out war for some time to come.

Said Brad Silverberg, a former Microsoft executive who was involved in the Mac vs. Windows wars, "Apple had learnt a lot of lessons from those days."

(Reporting by Dan Levine and Poornima Gupta in San Francisco, and Miyoung Kim in Seoul; Editing by Jonathan Weber, Tiffany Wu and Peter Cooney)

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Beckham weaves some English influences into fall

NEW YORK (AP) — Of course Victoria Beckham had hot cups of tea at the ready at her New York Fashion Week show on Sunday. It was cold outside, and Beckham knows how to take care of her guests, just like she does her customers.

The cozy, refined, do-it-the-right-way vibe made it to the runway. She has figured out how to keep the signature chic that has made her label a fashion powerhouse instead of celebrity flavor of the week, while pushing the envelope just enough to keep it interesting.

The most unexpected looks at the show at the New York Public Library's grand entrance hall were the flashes of bright yellow, including a sleeveless trench; the techno shine she added to pleated skirts that the audience could only see as the models walked; and the long cape-style tuxedo coat. That coat looked like it belonged to a husband or boyfriend and would be draped over a woman's shoulders as she made her way home from a fancy wintertime event. "It's sharp, refined ... feels very sexy."

It's worth mentioning her that David Beckham sat in the front row, as he always does, and then held their young daughter, Harper, in his arms backstage as his wife did post-show interviews.

The designer said she is "spending more time in England, although I miss America, but you see England in the fabrics."

Beckham's opening look was a windowpane plaid coat, and she also incorporated more sweaters and knits into the collection. There was a nod to mod with some geometric, colorblocked shift dresses.

One of the important evolutions for fall is the softer shoulder, which she used to tweak one of her popular zip-back, slim-fit dress silhouettes.

For shoes, she put models in lower kitten heels, made in collaboration with Manolo Blahnik, which was a bit of a surprise for a woman known for skyscraper stilettos.

"I'm always designing what I want to wear," she said.

She also confirmed that she'll continue to show her clothes to retailers, editors and stylists in New York each season, even though her studio — and now her family — is back in London. And David Beckham recently announced that he was joining a Paris-based soccer club.

"I am excited about spending more time in Paris," Victoria Beckham added.

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For Families Struggling with Mental Illness, Carolyn Wolf Is a Guide in the Darkness

When a life starts to unravel, where do you turn for help?

Melissa Klump began to slip in the eighth grade. She couldn’t focus in class, and in a moment of despair she swallowed 60 ibuprofen tablets. She was smart, pretty and ill: depression, attention deficit disorder, obsessive-compulsive disorder, either bipolar disorder or borderline personality disorder.

In her 20s, after a more serious suicide attempt, her parents sent her to a residential psychiatric treatment center, and from there to another. It was the treatment of last resort. When she was discharged from the second center last August after slapping another resident, her mother, Elisa Klump, was beside herself.

“I was banging my head against the wall,” the mother said. “What do I do next?” She frantically called support groups, therapy programs, suicide prevention lines, anybody, running down a list of names in a directory of mental health resources. “Finally,” she said, “somebody told me, ‘The person you need to talk to is Carolyn Wolf.’ ”

That call, she said, changed her life and her daughter’s. “Carolyn has given me hope,” she said. “I didn’t know there were people like her out there.”

Carolyn Reinach Wolf is not a psychiatrist or a mental health professional, but a lawyer who has carved out what she says is a unique niche, working with families like the Klumps.

One in 17 American adults suffers from a severe mental illness, and the systems into which they are plunged — hospitals, insurance companies, courts, social services — can be fragmented and overwhelming for families to manage. The recent shootings in Newtown, Conn., and Aurora, Colo., have brought attention to the need for intervention to prevent such extreme acts of violence, which are rare. But for the great majority of families watching their loved ones suffer, and often suffering themselves, the struggle can be boundless, with little guidance along the way.

“If you Google ‘mental health lawyer,’ ” said Ms. Wolf, a partner with Abrams & Fensterman, “I’m kinda the only game in town.”

On a recent afternoon, she described in her Midtown office the range of her practice.

“We have been known to pull people out of crack dens,” she said. “I have chased people around hotels all over the city with the N.Y.P.D. and my team to get them to a hospital. I had a case years ago where the person was on his way back from Europe, and the family was very concerned that he was symptomatic. I had security people meet him at J.F.K.”

Many lawyers work with mentally ill people or their families, but Ron Honberg, the national director of policy and legal affairs for the National Alliance on Mental Illness, said he did not know of another lawyer who did what Ms. Wolf does: providing families with a team of psychiatrists, social workers, case managers, life coaches, security guards and others, and then coordinating their services. It can be a lifeline — for people who can afford it, Mr. Honberg said. “Otherwise, families have to do this on their own,” he said. “It’s a 24-hour, 7-day-a-week job, and for some families it never ends.”

Many of Ms. Wolf’s clients declined to be interviewed for this article, but the few who spoke offered an unusual window on the arcane twists and turns of the mental health care system, even for families with money. Their stories illustrate how fraught and sometimes blind such a journey can be.

One rainy morning last month, Lance Sheena, 29, sat with his mother in the spacious family room of her Long Island home. Mr. Sheena was puffy-eyed and sporadically inattentive; the previous night, at the group home where he has been living since late last summer, another resident had been screaming incoherently and was taken away by the police. His mother, Susan Sheena, eased delicately into the family story.

“I don’t talk to a lot of people because they don’t get it,” Ms. Sheena said. “They mean well, but they don’t get it unless they’ve been through a similar experience. And anytime something comes up, like the shooting in Newtown, right away it goes to the mentally ill. And you think, maybe we shouldn’t be so public about this, because people are going to be afraid of us and Lance. It’s a big concern.”

Her son cut her off. “Are you comparing me to the guy that shot those people?”

“No, I’m saying that anytime there’s a shooting, like in Aurora, that’s when these things come out in the news.”

“Did you really just compare me to that guy?”

“No, I didn’t compare you.”

“Then what did you say?”

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Boeing 787 Completes Test Flight

A Boeing 787 test plane flew for more than two hours on Saturday to gather information about the problems with the batteries that led to a worldwide grounding of the new jets more than three weeks ago.

The flight was the first since the Federal Aviation Administration gave Boeing permission on Thursday to conduct in-flight tests. Federal investigators and the company are trying to determine what caused one of the new lithium-ion batteries to catch fire and how to fix the problems.

The plane took off from Boeing Field in Seattle heading mostly east and then looped around to the south before flying back past the airport to the west. It covered about 900 miles and landed at 2:51 p.m. Pacific time.

Marc R. Birtel, a Boeing spokesman, said the flight was conducted to monitor the performance of the plane’s batteries. He said the crew, which included 13 pilots and test personnel, said the flight was uneventful.

He said special equipment let the crew check status messages involving the batteries and their chargers, as well as data about battery temperature and voltage.

FlightAware, an aviation data provider, said the jet reached 36,000 feet. Its speed ranged from 435 to 626 miles per hour.

All 50 of the 787s delivered so far were grounded after a battery on one of the jets caught fire at a Boston airport on Jan. 7 and another made an emergency landing in Japan with smoke coming from the battery.

The new 787s are the most technically advanced commercial airplanes, and Boeing has a lot riding on their success. Half of the planes’ structural parts are made of lightweight carbon composites to save fuel.

Boeing also decided to switch from conventional nickel cadmium batteries to the lighter lithium-ion ones. But they are more volatile, and federal investigators said Thursday that Boeing had underestimated the risks.

The F.A.A. has set strict operating conditions on the test flights. The flights are expected to resume early this week, Mr. Birtel said.

Battery experts have said it could take weeks for Boeing to fix the problems.

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Heavy Snow and Winds Batter Northeast

A powerful storm swept fast and furiously across the Northeast on Saturday, dumping mountains of snow, forcing hundreds of motorists to abandon their cars at the height of the blizzard and knocking out power for hundreds of thousands of people.

The storm played out the way many forecasters said it would — with New York City spared the worst, and points to the north and east hit harder.

With the storm still raging on Saturday morning, officials in Massachusetts ordered the evacuation of some communities along the coast as waves lashed the shoreline and high tide brought a surge of water inland.

MayorMichael R. Bloombergof New York, at a Saturday morning news conference, offered to help neighboring states.

“They have gotten an enormous amount of snow, and the snow continues to come down,” he said.

Most of the roads in the city, he said, were well on the way to being cleared and he thanked people for staying off the roads during the storm.

“I think it is fair to say we were very lucky,” he said.

Through the night, winds gusted with hurricane force in some places, downing power lines and creating white-out conditions. More than three feet of snow fell in parts of Connecticut, and more than two feet were reported on Long Island and in Massachusetts.

States of emergency were declared in four states on Friday. The governor of Massachusetts banned travel on all roads as night fell, an order that remained in effect on Saturday. In Connecticut, where the governor had ordered no cars on state highways on Friday night, residents were told early Saturday morning to stay off all roads.

On Long Island, the storm descended so quickly that hundreds of drivers who were trying to beat the nor’easter home on Friday night were forced to abandon their cars on the highways and streets as roads became impassable.

Snowplow drivers worked furiously to clear roads, but the snow limited what they could do.

“It’s really hard right now, it’s wet, it’s heavy and it’s freezing, so everything is going slow,” said Jack Mandaneza, 31, as he took a break from plowing on the Long Island Expressway at the height of the storm.

“This has been a record breaking storm,” Gov. Dannel P. Malloyof Connecticut said on Saturday. He said there were cars stranded across his state, too, and that rescuers were working to dig them out. There were several people who needed to be treated for hypothermia after spending hours trapped in their cars, he said.

The storm’s impact was felt by more than 40 million people, from northern New Jersey to Maine.

In Massachusetts, state officials said at a briefing on Saturday morning that the most immediate problem was moving people out of homes where they had lost power. National Guard soldiers had been deployed, mainly in the southeastern part of the state, to retrieve people and take them to warming centers and shelters. National Guard troops were assisting with evacuations in part of Salisbury, north of Boston, after a wave crashed into a home there, and in Hull, on the south shore of the state, as well as other south shore towns like Marshfield, Scituate and Weymouth.

“We had pre-positioned National Guard troops and equipment vehicles, basically along the south coast from the town of Hull, all the way to Cape Cod, the town of Sandwich,” said Peter Judge, of the Massachusetts Emergency Management Agency.

But even some members of the Guard were trapped at home; only about 2,000 soldiers of a force of more than 5,000 were able to respond initially.

As high tide wore on Saturday morning, the National Weather Service posted multiple preliminary reports of flooding. Two feet of water were observed in Winthrop, Mass., just north of Boston. Waters breached a sea wall in the Humarock section of Scituate, while roads in Gloucester, Marblehead, and Revere were reported flooded or impassable.

Nate Schweber, Katharine Q. Seelye and Jess Bidgood contributed reporting.

This article has been revised to reflect the following correction:

Correction: February 9, 2013

An earlier version of this article misstated the location of Winthrop, Mass. It is north of Boston, not south.

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Google's Schmidt to sell roughly 42 percent of stake

SAN FRANCISCO (Reuters) - Google Inc Executive Chairman Eric Schmidt is selling roughly 42 percent of his stake in the Internet search company, a move that could potentially net the former chief executive a $2.51 billion windfall.

Schmidt, 57, will sell 3.2 million shares of Class A common stock through a stock trading plan, Google said in a filing with the U.S. Securities and Exchange Commission on Friday.

The plan, which Google said would give Schmidt "individual asset diversification and liquidity," allows Schmidt to spread trades out over a period of one year to reduce the market impact.

Shares of Google were down $4.11 at $781.26 in after-hours trading on Friday.

A Google spokeswoman would not comment on why Schmidt is selling the shares at this time.

Wedbush Securities analyst James Dix said Schmidt's stock sales did not worry him or signal a loss of confidence in the company by Schmidt.

"I'd be more worried if the current CEO or CFO sold a lot of their stake," said Dix.

Schmidt, who served as Google's chief executive until 2011, currently owns roughly 7.6 million shares of Class A and Class B common stock. The shares represent 2.3 percent of Google's outstanding stock and roughly 8.2 percent of the voting power of Google's stock.

The fact that Schmidt will still own a significant amount of shares after the sales means he'll have a good deal of "skin in the Google game," said Needham & Co analyst Kerry Rice. But he said it could hint at Schmidt playing a less central role within the company going forward.

"My speculation is that Eric's relationship with Google is evolving," said Rice. "I would assume that as he decides he wants to diversify away from Google - both his career and financially - he's got ideas of what he would like to do with some of his funds."

Schmidt, who helped turn Google into the world's No.1 search engine during his decade as CEO, handed the reins to Google co-founder Larry Page in April 2011.

As executive chairman, Schmidt has been particularly involved in government relations, taking a leading role in the company's discussions with antitrust regulators in the United States and the European Union. The U.S. Federal Trade Commission ended its investigation into Google last month without any action. Google has offered to change some of its business practices to appease European competition regulators.

"As Google moves to maybe more tactical battles, as opposed to the strategic battles it's been waging with the government, once those are concluded, maybe his role can be lessened," said Needham & Co's Rice.

Schmidt has also made headlines apart from Google. In January, Schmidt traveled to North Korea with former New Mexico Governor Bill Richardson for a "personal" trip. The trip was criticized by the U.S. State Department as ill-timed - coming weeks after North Korea conducted a rocket launch in violation of U.N. Security Council sanctions.

Shares of Google are trading at all-time highs, finishing Friday's regular session at a record closing price of $785.37. At that price, Schmidt's share sales would be worth $2.51 billion.

Google said that Schmidt entered into the stock trading plan in November.

Schmidt was ranked 138 on the Forbes list of global billionaires with a net worth of $6.9 billion in March 2012.

Given Schmidt's changed role at the company and the amount of his wealth tied up in Google's stock, it was not unreasonable for him to diversify his holdings, said Wedbush Securities analyst Dix.

"As good as Google stock is, it isn't as good as cash if you actually want to buy something," he said.

(Reporting by Alexei Oreskovic; Editing by Tim Dobbyn and Lisa Shumaker)

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Stars salute MusiCares honoree Bruce Springsteen

LOS ANGELES (AP) — Be it concert or charity auction, Bruce Springsteen can bring any event to a crescendo.

Springsteen briefly took over auctioneering duties before being honored as MusiCares person of the year Friday night, exhorting the crowd to bid on a signed Fender electric guitar by amping up the deal. The 63-year-old rock 'n' roll star moved the bid north from $60,000 by offering a series of sweeteners.

"That's right, a one-hour guitar lesson with me," Springsteen shouted. "And a ride in my Harley Davidson sidecar. So dig in, one-percenters."

That moved the needle past $150,000. He added eight concert tickets and backstage passes with a bonus tour conducted by Springsteen himself. That pushed it to $200,000, but he wasn't done.

"And a lasagna made by my mother!" he shouted as an in-house camera at the Los Angeles Convention Center cut to his 87-year-old mother Adele Ann Springsteen.

And with an extra $250,000 in the musicians charity's coffers, Springsteen sat down and spent most of the evening in the unusual role of spectator as a string of stars that included Elton John, Neil Young, Sting, Kenny Chesney, John Legend, Faith Hill and Tim McGraw, Patti Smith, Jackson Browne took the stage two nights before the Grammy Awards.

"Here's a little secret about Bruce Springsteen: He loves this," host Jon Stewart joked. "There's nothing he'd rather do than come to Los Angeles, put on a suit ... and then have people talking about him like he's dead."

Alabama Shakes kicked things off with "Adam Raised A Cain" and over the course of the evening there were several interesting takes on Springsteen's voluminous 40-year catalog of hits. Natalie Manes, Ben Harper and Charlie Musselwhite played a stripped down "Atlantic City." Mavis Staples and Zac Brown put a gospel spin on "My City of Ruins." John added a funky backbeat to "Streets of Philadelphia." Kenny Chesney offered an acoustic version of "One Step Up."

Jim James and Tom Morello burned through a scorching version of "The Ghost of Tom Joad" that brought the crowd out of their seats as Morello finished the song with a fiery guitar solo. And Mumford & Sons took it the opposite way, playing a quiet, acoustic version of "I'm On Fire" in the round that had the crowd leaning in.

Legend offered a somber piano version of "Dancing in the Dark" and Young shut down the pre-Springsteen portion of the evening with a "Born in the USA" that included two sign-language interpreters dressed as cheerleaders signing along to the lyrics.

"John Legend made me sound like Gershwin," Springsteen said. "I love that. Neil Young made me sound like the Sex Pistols. I love that. What an evening."

Springsteen spoke of the "miracle of music," the importance of musicians in human culture and making sure everyone is cared for. And he joked that he somehow ended up being honored by MusiCares, a charity that offers financial assistance to musicians in need run by The Recording Academy, after his manager called up Grammys producer Ken Ehrlich to seek a performance slot on the show in a "mercenary publicity move."

In the end, though, he was moved by the evening.

"It's kind of a freaky experience, the whole thing," Springsteen said. "This is the huge Italian wedding Patti (Scialfa) and I never had. It's a huge Bar Mitzvah. I owe each and every one of you. You made me feel like the person of the year. Now give me that damn guitar."

He asked the several thousand attendees to move toward the stage — "Come on, it's only rock 'n' roll" — and kicked off his five-song set with his Grammy nominated song "We Take Care Of Our Own." At the end of the night he brought everyone on stage for "Glory Days."

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Online:

http://grammy.com

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Follow AP Music Writer Chris Talbott: http://twitter.com/Chris_Talbott.

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In Nigeria, Polio Vaccine Workers Are Killed by Gunmen

At least nine polio immunization workers were shot to death in northern Nigeria on Friday by gunmen who attacked two clinics, officials said.

The killings, with eerie echoes of attacks that killed nine female polio workers in Pakistan in December, represented another serious setback for the global effort to eradicate polio.

Most of the victims were women and were shot in the back of the head, local reports said.

A four-day vaccination drive had just ended in Kano State, where the killings took place, and the vaccinators were in a “mop-up” phase, looking for children who had been missed, said Sarah Crowe, a spokeswoman for the United Nations Children’s Fund, one of the agencies running the eradication campaign.

Dr. Mohammad Ali Pate, Nigeria’s minister of state for health, said in a telephone interview that it was not entirely clear whether the gunmen were specifically targeting polio workers or just attacking the health centers where vaccinators happened to be gathering early in the morning. “Health workers are soft targets,” he said.

No one immediately took responsibility, but suspicion fell on Boko Haram, a militant Islamist group that has attacked police stations, government offices and even a religious leader’s convoy.

Polio, which once paralyzed millions of children, is now down to fewer than 1,000 known cases around the world, and is endemic in only three countries: Nigeria, Pakistan and Afghanistan.

Since September — when a new polio operations center was opened in the capital and Nigeria’s president, Goodluck Jonathan, appointed a special adviser for polio — the country had been improving, said Dr. Bruce Aylward, chief of polio eradication for the World Health Organization. There have been no new cases since Dec. 3.

While vaccinators have not previously been killed in the country, there is a long history of Nigerian Muslims shunning the vaccine.

Ten years ago, immunization was suspended for 11 months as local governors waited for local scientists to investigate rumors that it caused AIDS or was a Western plot to sterilize Muslim girls. That hiatus let cases spread across Africa. The Nigerian strain of the virus even reached Saudi Arabia when a Nigerian child living in hills outside Mecca was paralyzed.

Heidi Larson, an anthropologist at the London School of Hygiene and Tropical Medicine who tracks vaccine issues, said the newest killings “are kind of mimicking what’s going on in Pakistan, and I feel it’s very much prompted by that.”

In a roundabout way, the C.I.A. has been blamed for the Pakistan killings. In its effort to track Osama bin Laden, the agency paid a Pakistani doctor to seek entry to Bin Laden’s compound on the pretext of vaccinating the children — presumably to get DNA samples as evidence that it was the right family. That enraged some Taliban factions in Pakistan, which outlawed vaccination in their areas and threatened vaccinators.

Nigerian police officials said the first shootings were of eight workers early in the morning at a clinic in the Tarauni neighborhood of Kano, the state capital; two or three died. A survivor said the two gunmen then set fire to a curtain, locked the doors and left.

“We summoned our courage and broke the door because we realized they wanted to burn us alive,” the survivor said from her bed at Aminu Kano Teaching Hospital.

About an hour later, six men on three-wheeled motorcycles stormed a clinic in the Haye neighborhood, a few miles away. They killed seven women waiting to collect vaccine.

Ten years ago, Dr. Larson said, she joined a door-to-door vaccination drive in northern Nigeria as a Unicef communications officer, “and even then we were trying to calm rumors that the C.I.A. was involved,” she said. The Iraq and Afghanistan wars had convinced poor Muslims in many countries that Americans hated them, and some believed the American-made vaccine was a plot by Western drug companies and intelligence agencies.

Since the vaccine ruse in Pakistan, she said, “Frankly, now, I can’t go to them and say, ‘The C.I.A. isn’t involved.’ ”

Dr. Pate said the attack would not stop the newly reinvigorated eradication drive, adding, “This isn’t going to deter us from getting everyone vaccinated to save the lives of our children.”

Aminu Abubakar contributed reported from Kano, Nigeria.

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Fair Game: Credit-Rating Club Is Tough to Get Into

Ozier Muhammad/The New York Times

Ann Rutledge and her husband, Sylvain Raynes, of R&R Consulting, which has been trying to gain S.E.C. recognition as a debt ratings agency.

That was probably a common response to the news last week that the Justice Department had filed a civil suit against Standard & Poor’s, one of the two big credit ratings agencies that were so central to the mortgage boom and bust. The department said that S.& P. misled investors by presenting its ratings as the product of objective analyses when, the suit says, they were more about generating revenue to the firm. S.& P. denied the allegations, saying it was prepared to go to trial. 

Many people have been disappointed that S.& P. and Moody’s Investors Service, the big and powerful companies that are supposed to assess the creditworthiness of bonds, have escaped culpability. Not only do these companies still hold sway in securities markets, they’ve also hung on to their lush profits from the glory days of mortgage origination. During 2005 and 2006, for example, Moody’s made $238 million by rating complex mortgage instruments. Investors who trusted those ratings lost billions.

Given that the financial crisis began unfolding more than five years ago, it is discouraging to see how entrenched the large and established ratings companies remain. Ratings are still used to determine bank capital requirements, and investors rely heavily on them.

Over the years, lawmakers have tried to open up the duopolistic world of ratings agencies to greater competition and, therefore, better performance. Legislation in 2006 encouraged the Securities and Exchange Commission to let new companies into the ratings club. The commission set up the Office of Credit Ratings to register new entrants and to monitor all participants’ activities. Today, 10 credit ratings agencies are recognized by the S.E.C.

But gaining regulatory approval to join the ratings arena is exceedingly burdensome. That, at least, has been the experience of R&R Consulting, a firm with a stable of highly respected credit analysts and an enviable record of having predicted the mortgage mess in 2003.

R&R has been trying to get recognition as a credit rating agency since 2011. Frustrated by what it perceives as roadblocks erected by the S.E.C., its executives are beginning to wonder if the commission really wants increased competition.

The firm was founded in 2000 by Ann Rutledge and Sylvain Raynes, experts in structured finance who previously worked at Moody’s. It is a small shop, with seven employees, but its clients include investors, small and medium-size banks, financial regulators and other institutions. R&R’s specialty is risk measurement for all asset types.

R&R’s approach differs from traditional ratings agencies because, in addition to being able to rate new issues, it analyzes risks in securities that are trading in the secondary, or resale, market, after they are issued. By contrast, S.& P. and Moody’s became known for giving mortgage securities high ratings and downgrading them only when defaults were soaring. 

 “In the primary market, everyone prices a security around the credit rating,” Ms. Rutledge says. “In the secondary market, no one cares about the credit rating; what they want is valuation. We connect primary-market ratings with secondary-market valuations.”

THE R&R distinction between a rating and a valuation, however, seems to pose a problem when it comes to getting S.E.C. approval as a ratings agency, Ms. Rutledge says.

By law, many requirements must be met before a firm can become a ratings agency. Chief among them is that the applicant must provide letters from 10 “qualified institutional buyers” that have used the company’s ratings over the previous three years.

R&R has had difficulties with its letters. One was rejected because its writer identified the firm’s work as ratings or valuations, not simply as ratings, Ms. Rutledge says. Another letter failed to pass muster because it was from a German institution that characterized itself as the equivalent of a qualified institutional buyer. When a foreign institution could not get its letter notarized as required — notaries are not as common overseas — it was not good enough for the S.E.C.

And not all clients want to write such a letter for use by the S.E.C. Instead, some said they would discuss the company’s work by telephone. The S.E.C. rejected the idea.

“It’s extremely difficult for us to satisfy the ‘10 qualified institutional buyers’ requirement,” Ms. Rutledge says. “Proof that you’ve done business with them is not enough; it says you must have letters. And they have a suggested text for the letter. When we changed the text slightly they said it was not in conformity.”

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