Friday, April 15, 2005

The Medical Money Pit

The New York Times
April 15, 2005

The Medical Money Pit
By PAUL KRUGMAN

A dozen years ago, everyone was talking about a health care crisis. But then the issue faded from view: a few years of good data led many people to conclude that H.M.O.'s and other innovations had ended the historic trend of rising medical costs.

But the pause in the growth of health care costs in the 1990's proved temporary. Medical costs are once again rising rapidly, and our health care system is once again in crisis. So now is a good time to ask why other advanced countries manage to spend so much less than we do, while getting better results.

Before I get to the numbers, let me deal with the usual problem one encounters when trying to draw lessons from foreign experience: somebody is sure to bring up the supposed horrors of Britain's government-run system, which historically had long waiting lists for elective surgery.

In fact, Britain's system isn't as bad as its reputation - especially for lower-paid workers, whose counterparts in the United States often have no health insurance at all. And the waiting lists have gotten shorter.

But in any case, Britain isn't the country we want to look at, because its health care system is run on the cheap, with total spending per person only 40 percent as high as ours.

The countries that have something to teach us are the nations that don't pinch pennies to the same extent - like France, Germany or Canada - but still spend far less than we do. (Yes, Canada also has waiting lists, but they're much shorter than Britain's - and Canadians overwhelmingly prefer their system to ours. France and Germany don't have a waiting list problem.)

Let me rattle off some numbers.

In 2002, the latest year for which comparable data are available, the United States spent $5,267 on health care for each man, woman and child in the population. Of this, $2,364, or 45 percent, was government spending, mainly on Medicare and Medicaid. Canada spent $2,931 per person, of which $2,048 came from the government. France spent $2,736 per person, of which $2,080 was government spending.

Amazing, isn't it? U.S. health care is so expensive that our government spends more on health care than the governments of other advanced countries, even though the private sector pays a far higher share of the bills than anywhere else.

What do we get for all that money? Not much.

Most Americans probably don't know that we have substantially lower life-expectancy and higher infant-mortality figures than other advanced countries. It would be wrong to jump to the conclusion that this poor performance is entirely the result of a defective health care system; social factors, notably America's high poverty rate, surely play a role. Still, it seems puzzling that we spend so much, with so little return.

A 2003 study published in Health Affairs (one of whose authors is my Princeton colleague Uwe Reinhardt) tried to resolve that puzzle by comparing a number of measures of health services across the advanced world. What the authors found was that the United States scores high on high-tech services - we have lots of M.R.I.'s - but on more prosaic measures, like the number of doctors' visits and number of days spent in hospitals, America is only average, or even below average. There's also direct evidence that identical procedures cost far more in the U.S. than in other advanced countries.

The authors concluded that Americans spend far more on health care than their counterparts abroad - but they don't actually receive more care. The title of their article? "It's the Prices, Stupid."

Why is the price of U.S. health care so high? One answer is doctors' salaries: although average wages in France and the United States are similar, American doctors are paid much more than their French counterparts. Another answer is that America's health care system drives a poor bargain with the pharmaceutical industry.

Above all, a large part of America's health care spending goes into paperwork. A 2003 study in The New England Journal of Medicine estimated that administrative costs took 31 cents out of every dollar the United States spent on health care, compared with only 17 cents in Canada.

In my next column in this series, I'll explain why the most privatized health care system in the advanced world is also the most bloated and bureaucratic.

E-mail: krugman@nytimes.com

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Frist Set to Use Religious Stage on Judicial Issue

The New York Times
April 15, 2005
Frist Set to Use Religious Stage on Judicial Issue
By DAVID D. KIRKPATRICK

WASHINGTON, April 14 - As the Senate heads toward a showdown over the rules governing judicial confirmations, Senator Bill Frist, the majority leader, has agreed to join a handful of prominent Christian conservatives in a telecast portraying Democrats as "against people of faith" for blocking President Bush's nominees.

Fliers for the telecast, organized by the Family Research Council and scheduled to originate at a Kentucky megachurch the evening of April 24, call the day "Justice Sunday" and depict a young man holding a Bible in one hand and a gavel in the other. The flier does not name participants, but under the heading "the filibuster against people of faith," it reads: "The filibuster was once abused to protect racial bias, and it is now being used against people of faith."

Organizers say they hope to reach more than a million people by distributing the telecast to churches around the country, over the Internet and over Christian television and radio networks and stations.

Dr. Frist's spokesman said the senator's speech in the telecast would reflect his previous remarks on judicial appointments. In the past he has consistently balanced a determination "not to yield" on the president's nominees with appeals to the Democrats for compromise. He has distanced himself from the statements of others like the House majority leader, Tom DeLay, who have attacked the courts, saying they are too liberal, "run amok" or are hostile to Christianity.

The telecast, however, will put Dr. Frist in a very different context. Asked about Dr. Frist's participation in an event describing the filibuster "as against people of faith," his spokesman, Bob Stevenson, did not answer the question directly.

"Senator Frist is doing everything he can to ensure judicial nominees are treated fairly and that every senator has the opportunity to give the president their advice and consent through an up or down vote," Mr. Stevenson said, adding, "He has spoken to groups all across the nation to press that point, and as long as a minority of Democrats continue to block a vote, he will continue to do so."

Some of the nation's most influential evangelical Protestants are participating in the teleconference in Louisville, including Dr. James C. Dobson, founder of Focus on the Family; Chuck Colson, the born-again Watergate figure and founder of Prison Fellowship Ministries; and Dr. Al Mohler, president of the Southern Baptist Theological Seminary.

The event is taking place as Democrats and Republicans alike are escalating their public relations campaigns in anticipation of an imminent confrontation. The Democratic minority has blocked confirmation of 10 of President Bush's judicial nominees by preventing Republicans from gaining the 60 votes needed to close debate, using the filibuster tactic often used by political minorities and most notoriously employed by opponents of civil rights.

Dr. Frist has threatened that the Republican majority might change the rules to require only a majority vote on nominees, and Democrats have vowed to bring Senate business to a standstill if he does.

On Thursday, one wavering Republican, Senator John McCain of Arizona, told a television interviewer, Chris Matthews, that he would vote against the change.

"By the way, when Bill Clinton was president, we, effectively, in the Judiciary Committee blocked a number of his nominees," Mr. McCain said.

On Thursday the Judiciary Committee sent the nomination of Thomas B. Griffith for an appellate court post to the Senate floor. Democrats say they do not intend to block Mr. Griffith's nomination.

That cleared the way for the committee to approve several previously blocked judicial appointees in the next two weeks.

The telecast also signals an escalation of the campaign for the rule change by Christian conservatives who see the current court battle as the climax of a 30-year culture war, a chance to reverse decades of legal decisions about abortion, religion in public life, gay rights and marriage.

"As the liberal, anti-Christian dogma of the left has been repudiated in almost every recent election, the courts have become the last great bastion for liberalism," Tony Perkins, president of the Family Research Council and organizer of the telecast, wrote in a message on the group's Web site. "For years activist courts, aided by liberal interest groups like the A.C.L.U., have been quietly working under the veil of the judiciary, like thieves in the night, to rob us of our Christian heritage and our religious freedoms."

Democrats accused Dr. Frist of exploiting religious faith for political ends by joining the telecast. "No party has a monopoly on faith, and for Senator Frist to participate in this kind of telecast just throws more oil on the partisan flames," said Senator Charles E. Schumer, Democrat of New York.

But Mr. Perkins stood by the characterization of Democrats as hostile to faith. "What they have done is, they have targeted people for reasons of their faith or moral position," he said, referring to Democratic criticisms of nominees over their views of cases about abortion rights or public religious expressions.

"The issue of the judiciary is really something that has been veiled by this 'judicial mystique' so our folks don't really understand it, but they are beginning to connect the dots," Mr. Perkins said in an interview, reciting a string of court decisions about prayer or displays of religion.

"They were all brought about by the courts," he said.

Democrats, for their part, are already stepping up their efforts to link Dr. Frist and the rule change with conservatives statements about unaccountable judges hostile to faith.

On Thursday, Mr. Schumer released an open letter calling on Dr. Frist to denounce such attacks. "The last thing we need is inflammatory rhetoric which on its face encourages violence against judges," he wrote.

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Thursday, April 14, 2005

Dragnet nabs 10,000 fugitives

CNN.com

Dragnet nabs 10,000 fugitives

WASHINGTON (CNN) -- More than 10,000 fugitives from justice have been captured in a nationwide, weeklong dragnet involving federal, state and local authorities, said the U.S. Marshals Service, which led the effort.

Operation FALCON lasted from April 4 - 10 and marks the largest number of arrests ever recorded during a single operation.

Of priority: suspects wanted in homicides, sexual assaults, gang-related crimes, kidnappings, major drug offenses, and crimes against children and the elderly.

The operation captured 10,340 people, of whom 162 were wanted for murder, 638 had outstanding arrest warrants for armed robbery and 553 were wanted for rape or sexual assault.

Also captured were 106 unregistered sex offenders and 154 gang members.

"We will use all of our nation's law-enforcement resources to serve the people, to pursue justice, and to make our streets and nation safer," Attorney General Alberto Gonzales said.

More than 70 percent of those arrested had prior arrests for violent crimes, said Gonzales.

And some were considered especially dangerous. In one case, an armed man was found in a cave under a trap door in his kitchen floor, Gonzales said.

Other fugitives who were caught include operators of two methamphetamine labs and an illegal alcohol-producing still.

Officials acknowledge the decision to provide such a massive show of force at one time was expected to prompt publicity and help highlight the mission.

But they insist the operation was strictly designed to carry out law enforcement objectives.

One federal law enforcement official, who asked not to be identified, expressed surprise at the level of cooperation among the 25 federal agencies and the operation's success.

"We didn't know what to expect, but the response from law enforcement personnel everywhere was truly amazing."

Operation FALCON -- Federal and Local Cops Organized Nationally -- involved more than 3,000 law enforcement officials participating in fugitive searches. As many as 10,000 may have helped at least part of the time, officials said. Five national and 83 district fugitive task forces coordinated raids under the U.S. Marshals Service.

In addition to the Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI, the Secret Service, even the U.S. Department of Housing and Urban Development got involved.

Some fugitives relied on housing benefits, others on various Social Security benefits, sources said.

Much of the law enforcement muscle came from 206 state law enforcement agencies, 302 county sheriffs' departments and 366 city police departments.

Officials said fugitives were tracked in every state, in addition to Puerto Rico and Guam.

Gonzales said that the operation demonstrates to victims that perpetrators can be caught and prosecuted for their crimes.

The dragnet coincided with Crime Victims Rights Week.

Congress gave the Marshals Service more money and authority to go after fugitives when it refocused the FBI's mission toward stopping terrorism in the wake of the September 11, 2001, attacks, said the agency's spokesman David Turner.

Previous coordinated roundups did not involve as many officers or agencies and resulted in arrests in the hundreds, he added.

A comparison with Marshals Service arrests in all of last year gives an idea of the scope of last week's sweep.

In 2004, U.S. Marshals caught more than 36,000 federal felons and worked with state and local authorities to arrest an additional 31,600 fugitives.

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Broadcasters Must Reveal Video Clips' Sources, FCC Says

washingtonpost.com
Broadcasters Must Reveal Video Clips' Sources, FCC Says

By Frank Ahrens
Washington Post Staff Writer
Thursday, April 14, 2005; Page A02


Television broadcasters must disclose to viewers the origin of video news releases produced by the government or corporations when the material runs on the public airwaves, the Federal Communications Commission said yesterday.

The FCC's ruling comes as video news releases produced by the Bush administration and aired as part of local television news reports have come under attack from critics who call them unlabeled Republican propaganda.

Some members of Congress say greater disclosure is needed. Sens. Frank Lautenberg (D-N.J.) and John F. Kerry (D-Mass.) plan to introduce an amendment to a junk fax bill today that would require government agencies -- such as the Department of Health and Human Services, whose video news release on Medicare and Medicaid was deemed propaganda by the Government Accountability Office last year -- to tell viewers that a clip was produced and paid for by the U.S. government.

"The bottom line is, the government's role in these news stories needs to be disclosed," said Lautenberg, a member of the Commerce Committee, which will consider the amendment.

Yesterday, the FCC unanimously clarified rules applying to broadcasters, saying they must disclose to the viewer the origins of video news releases, though the agency does not specify what form the disclosure must take.

"We have a responsibility to tell broadcasters they have to let people know where the material is coming from," said FCC Commissioner Jonathan S. Adelstein, a Democrat. "Viewers are hoodwinked into thinking it's really a news story when it might be from the government or a big corporation trying to influence the way they think. This will put them in a better position to decide for themselves what to make of it."

Critics of the video news releases say their style -- often featuring an actor portraying a reporter interviewing a government official, giving the government's side of a issue -- easily can be confused for the journalistic reports they appear alongside of. The TV news industry is increasingly inclined to air such releases in an era of 24-hour news channels and shrinking budgets that hamper news organizations' ability to produce their own reports, experts say.

Corporations also produce and distribute video news releases to promote products or burnish their image.

The Lautenberg-Kerry amendment follows a GAO recommendation to include on-screen disclaimers during the video news release, explaining the piece was produced by the U.S. government, Lautenberg staffers said. The GAO report said the administration had violated the law by using federal money to produce propaganda.

"The government makes these things," said Dan Katz, Lautenberg's chief counsel. "If they would identify themselves upfront it would be a much more efficient way of dealing with this problem."

The Bush administration's Office of Management and Budget disagreed with the GAO's finding.

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When This Tax Hits, There's No Alternative

latimes.com

When This Tax Hits, There's No Alternative

As Americans' earnings rise, more are facing this costly levy first aimed at the very rich. The outlook for ending or reducing it is unclear.

By Joel Havemann
Times Staff Writer

April 14, 2005

WASHINGTON — As Friday's tax filing deadline approaches, more Americans are finding that a little-understood feature of the tax code called the alternative minimum tax is forcing their tax bills higher than expected.

And though cutting taxes has been a defining characteristic of President Bush and GOP congressional leaders, prospects for change are uncertain.

Instituted in 1969, the alternative minimum tax was designed to keep the richest of the rich from sheltering all their income from taxes. But due to inflation-generated wage increases, that tax has reached into the ranks of middle-income Americans, and is on course to raise the tax bills of millions of additional taxpayers in future years.

"The people who are hit by the alternative minimum tax are wage-earning salesmen, teachers, pharmacists, people that have lots of children or paid lots of local taxes — real estate, income and property taxes," said Patrick O'Malley, owner of Tax Help, a tax preparation service in Omaha. "They are not typical high-income people. And so they are shocked that their country would do this to them."

For the moment, Congress is waiting for the recommendations of the panel that President Bush has assigned to study changes to the nation's tax system. The President's Advisory Panel on Federal Tax Reform will almost surely propose eliminating or scaling back the tax, but whether its recommendations will go anywhere in Congress is uncertain.

"I would think that addressing the alternative minimum tax will be part of all the options the panel identifies," said Jeff Kupfer, the chief of the panel's staff. "It is one of the biggest problems that we've found in the tax code, and we'll certainly aim to fix it."

One option is to kill the tax. But that would deprive the government of more than $50 billion in revenue next year and $670 billion over the next decade, says the Tax Policy Center, a joint enterprise of the Brookings Institution and the Urban Institute, two nonpartisan think tanks in Washington.

Bush asked his advisory panel to structure its recommendations so that they would neither gain nor lose revenue for the government.

When combined with Bush's proposal to extend a variety of his first-term tax cuts that are due to expire, abolishing the alternative minimum tax would require the panel to find $1.2 trillion in revenue from other sources over the next 10 years, the Tax Policy Center estimates.

Lawmakers could raise about that same amount by eliminating the deduction for charitable contributions and the deduction given to homeowners on mortgage interest payments. But Bush has already ruled out those options.

Another approach would be to raise regular income tax rates. The Tax Policy Center calculates that rates would have to rise by 4% overall. For example, today's 10% bracket would rise to 10.4%, and the 35% bracket would increase to 36.4%.

The alternative minimum tax operates alongside the income tax. Taxpayers who meet certain income and deduction thresholds must calculate their taxes both ways and pay whichever is greater.

To determine what they would owe under the alternative minimum tax, taxpayers add up their income, subtract a $58,000 exemption (if they are married and filing jointly) and pay taxes on the difference — 26% on the first $175,000 and 28% on the rest. The alternative minimum tax allows no personal exemptions, and so, as O'Malley said, families with many children lose a substantial tax break. It also disallows most deductions, including those for state and local taxes.

Unlike most features of the tax code, the $58,000 exemption does not automatically rise each year with inflation, so routine wage increases have pushed increasing numbers of taxpayers into the grasp of the alternative minimum tax.

The 132,000 taxpayers who paid the alternative minimum tax in 1990 paid about $830 million more than they would have if subject to the traditional income tax, the IRS says. By 2002, the last year for which numbers are available, 1.9 million taxpayers owed $6.9 billion more than their bill would have been under the traditional income tax.

Congress has taken steps to limit the number of people affected by the tax. But those measures expire next year, and complaints from taxpayers are sure to follow. Burman estimates that the number hit by the alternative minimum tax is scheduled to soar from 3.4 million in 2005 to 18.4 million in 2006. The amount collected by the tax — beyond what people would owe if they were subject to the traditional income tax — is set to rise from $19.8 billion to $53.3 billion, he said.

Californians pay a disproportionate share of the alternative minimum tax, largely because it does not allow deductions for California's high state and local taxes. In 2003, 3.1% of federal income tax returns from California included alternative minimum tax payments, compared with 1.8% nationally. The alternative minimum tax accounted for 2.1% of Californians' tax payments, compared to 1.3% nationally.

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Times staff writer Elise Castelli contributed to this report.

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Disaster, Not Diplomacy

washingtonpost.com
Disaster, Not Diplomacy

By Richard Cohen

Thursday, April 14, 2005; Page A27


It is my impression -- gleaned from reviews -- that Malcolm Gladwell's book "Blink" posits that first impressions often are right on the nose. Nonetheless, for reasons having to do with caution, prudence and a debilitating sense of fair play, I have until now withheld my first -- and only -- impression of John Bolton, probably destined to be the next U.S. ambassador to the United Nations: He's nuts.

I recognize that, as a diagnosis, the word leaves something to be desired. But it is nevertheless the impression I took away back in June 2003 when Bolton went to Cernobbio, Italy, to talk to the Council for the United States and Italy. Afterward he took questions. Some of them were about weapons of mass destruction, which, you may remember, the Bush administration had claimed would be found in abundance in Iraq but which by then had not materialized.

The literal facts did not in the least give Bolton pause. Weapons of mass destruction would be found, he insisted. Where? When? How come they had not yet been discovered? The questions were insistent, but they were coming, please remember, from Italians, whose government was one of the few in the world to actively support the U.S. invasion of Iraq.

Bolton bristled. I have never seen such a performance by an American diplomat. He was dismissive. He was angry. He clearly thought the questioners had no right, no standing, no justification and no earthly reason to question the United States of America. The Bush administration had said that Iraq was lousy with WMD and Iraq therefore was lousy with WMD. Just you wait.

This kind of ferocious certainty is commendable in pit bulls and other fighting animals, but it is something of a problem in a diplomat. We now have been told, though, that Bolton's Italian aria was not unique and that the anger I sensed in the man has been felt by others. (I went over to speak to him afterward, but he was such a mass of scowling anger that I beat a retreat.) Others have testified to how he berated subordinates and how, to quote Sen. Barbara Boxer (D-Calif.), he "needs anger management." From what I saw, a bucket of cold water should always be kept at hand.

The rap against Bolton's nomination as U.N. ambassador is that he has maximum contempt for that organization. He once went so far as to flatly declare that "there is no United Nations," just an international community that occasionally "can be led by the only real power left in the world -- and that's the United States." He has expressed these sorts of feelings numerous times over the years -- so much so that it is not clear whether he has been rewarded with this appointment or punished with it. Whatever President Bush's motive, the fact remains that he has not sent the United Nations an ambassador so much as a poke in the eye. Still, no U.N. ambassador makes policy; he merely implements it. Bolton, no matter what his views, can do only limited damage.

But there are things that the United States will want done at the United Nations -- and Bolton is the wrong guy to get them done. After all, once an ambassador is instructed as to a policy or personnel issue, it is up to him or her to implement it. That means constructing the argument, persuading opponents, flattering friends. It means, in short, diplomacy.

After Bolton's appearance in Italy almost two years ago, I wrote a column expressing my dismay. I did not, however, know for sure if what I had seen was typical of him -- although others said it was. Now, though, it is clear that he is often as he was that day -- abrasive, insolent and so insufferably self-righteous that he cannot allow the possibility of his being wrong.

Why the Bush administration would want such a person at the United Nations is beyond me. As always, the administration is entitled to great leeway when it comes to presidential appointments. If it wants a neocon, fine. If it wants a hard-liner, fine. If it wants a U.N.-trasher, it can have that, too. But it should not have someone who will be ineffectual in implementing its own policies -- who, if he is himself, will alienate other delegates and further isolate the United States.

This is what Bolton did one glorious spring day on the shores of bella Lake Como. What he will do on the shores of the non-bella East River on a cold, gray day in New York will be far, far worse. Bolton's is not a bad appointment. It's a downright disaster.

cohenr@washpost.com

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Transcript of interview with Tom DeLay

The Washington Times
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Transcript of interview with Tom DeLay
Published April 14, 2005
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THE WASHINGTON TIMES
Transcript of an interview between editors and reporters from The Washington Times and House Majority Leader Tom DeLay, Texas Republican, yesterday at his Capitol office:
National Editor Ken Hanner: Ten years ago, Republicans won control of the House by running on the Contract with America, which was a blueprint for limited government. Recently, Republicans have championed expansion of federal role in education, huge new entitlement programs, including prescription drugs, and overall increases of federal spending. When did the Republicans become the party of big government?
Mr. DeLay: Well, I hope we can shed anybody's notion that that's where we are headed. First, in full disclosure, I voted against No Child Left Behind. But, that's the president's agenda. And he worked very hard to accomplish that agenda. We will revisit No Child Left Behind, look at its effectiveness and those kinds of issues. I know the president wants to extend it. But I think we have to see if No Child Left Behind is actually working before we talk about extending it.
I'm not using it as an excuse, because I came here to limit government and reduce the size of government. And as important as those two are, what I find the most important is to redesign the government, now that we have the opportunity to do that. And I'm not trying to point the finger at anybody, but I'm very proud of the fact that the House has taken the lead on many of these issues. If you look at the House bills, you couldn't make that statement.
If the House bills had become law, whether it be tax relief or spending or budgets or any of those kinds of things, the House has taken the lead in holding the line. With the small margins in the Senate, starting back when Clinton was president, we had to buy him out of town. It was obvious the Senate wouldn't go along with our aggressive tactics right at the beginning. So that cost us spending under Clinton.
When Bush came here, the Senate was still the lowest common denominator. And we had to deal with them. Now that sounds like an excuse, and I guess it is. But if you look at the real record, sans the effort to fight a war - and we'll spend whatever it takes to win the war on terror - but if you look at the other spending, it's actually been going down.
The rate of growth has gone from - I'll get you the numbers, but as I can recall - after the first year, in the second year - that's when Bush really had control and provided discipline - the rate of growth was about 5 percent. The next year, it was 4 percent. The next year, it was 3 percent. Last year, on discretionary spending, we increased spending ever so slightly, but you can say we froze discretionary spending.
The biggest spending in this government is mandatory. This House leadership has started out this new Congress, with this president and knowing that we have a better Senate, forcing the issue on looking at all mandatory spending. We started out last November working on this issue when the leadership got together ... with the White House. The White House was reluctant because it didn't think we could actually succeed. We had quite contentious discussions in that leadership meeting. The White House agreed, the Senate agreed, we were sort of moving forward on the budget that could address mandatory spending.
Our budget that we just passed just a few weeks ago is the toughest budget that we've had since 1997. And it includes a very healthy look at all mandatory spending in reconciliation. So we're headed in that direction. We know that we have to show fiscal responsibility. And we're trying to do that.
On the redesigning government part, it's been my own personal project to redesign government. We have a whole effort that started two years ago called the 21st Century Careers Initiative, which is an effort to use regulatory reform as redesigning government, and we will even get more aggressive in this part of our agenda this year and next.
Secondly, you can't redesign government till you redesign this place. I started an effort to redesign the Appropriations Committee to make it harder to spend - to make it easier to spend on our priorities and harder to spend on the Democrats' priorities. We accomplished that, and the Senate followed. We are taking an aggressive approach on the budget process. And we're going to have a budget process bill. And I've got all my chairmen who are interested in this working on that bill, along with other members. [Rep.] David Dreier [California Republican] has been charged with looking at the entire jurisdictions and committees of the House.
Remember, when we came in, we cut 30 percent of the committees budgets, we changed some jurisdiction - not a whole lot, but it was that kind of effort. And we're continuing in that effort.
Reporter Charles Hurt: A lot of smart people say that no matter how you limit the growth of spending, it's not going to have a dramatic impact on shrinking government. What three big-ticket items would you personally like to see the government get out of the business of doing?
Mr. DeLay: Well, I'm not sure I want to go there. Let me put it a different way. What people don't notice is this House has led the way and has had tax relief - sometimes more than once in a year - every year since we've been in the majority. That's really important. Some of it actually has become law. More important than that is that it's been over 10 years since we voted to raise any federal taxes. How did we do that? We grew the economy. Through our policies, we helped the economy grow.
The idea is to hold the line on spending and let the economy catch up. Balanced budgets can be done [House Minority Leader] Nancy Pelosi's way. We could do that tomorrow. We could raise enough taxes to balance the budget. That's what they did in 1993. That's not where we're going. We're holding down spending. In our budget, we actually are cutting nondefense discretionary spending. We're actually cutting it. Not just freezing it, cutting. And so you hold down spending and let the economy grow. Part of our agenda is the tax reform. We're very strong on throwing out this tax code and replacing it with a 21st century tax code that will probably allow us to double the economy in less than 10 years.
Managing Editor Fran Coombs: Isn't the reason you don't want to name big-ticket items that once you start a program ... it's difficult to get rid of the program?
Mr. DeLay: That's certainly been the case. And the Department of Education, the Department of Commerce - you're absolutely right. But the opposite is also true. If I named anything I would like to get rid of, then my ability to actually get rid of it is over.
Because the minute the press gets a hold of it, the tsunami comes in, and there's no way to make it happen.
Mr. Hurt: Does that mean that shrinking or limiting government is not the priority, but that the priority is to grow into the government we have?
Mr. DeLay: No, no, no. Shrinking government and limiting government are actually two different things. Limiting the government in your life, regulatory, social issues and all that and shrinking the size of government or reprioritizing - or as I like to say it, 'redesigning' - government to reflect our values are very important.
I know some may have opposed what we did in Medicare. I'm very proud of what we did in Medicare.
Reporter Ralph Z. Hallow: Why?
Mr. DeLay: Because if we didn't do anything, it would break this country. What we did, we instituted - not in a pretty way - but we instituted our philosophy and our values, bringing in competition, trying to eliminate third-party payments, bringing in co-payments ... now they are instituted. And they are part of the Medicare program.
Mr. Hallow: Why are so few conservatives in your own conference on board?
Mr. DeLay: Let me finish. Let me finish. We'e got value - our values - instituted in there. And the most important thing that will change health care in this country is health savings accounts. That was the biggest victory in the Medicare system. So if Medicare gets out of whack and is not going like we think it will go, and the cost curve will be bent because of what we've instituted, then we've got those institutions and we can dial them in and out and make them happen. If you go with the philosophy of the Democrats - a government-run health care program for the senior citizens - you can't do that. You have limited choices. You can raise taxes, raise premiums, or you can cut benefits, do those types of Democrat adjustments.
Now we have opportunities to bring in more competition. If it isn't working, we can raise co-payments, we can put the decisions for health care for senior citizens in the consumers' hands, not in the government's hands. It's a huge sea change. Huge. That's why the Democrats are fighting so hard against Social Security. They think we'll do the same thing to Social Security. Now I'll answer your question.
Mr. Hallow: Why do so few conservatives on your own conference agree with you on this?
Mr. DeLay: A few of them don't. Last time I checked, it was only about five or six who actually voted against the Medicare bill.
Reporter Stephen Dinan: Senate Majority Leader Bill Frist wants you to drop the Real ID Act from the supplemental spending bill, and Minority Leader Harry Reid has threatened to stall it by turning it into a debate over immigration. Do you support keeping the Real ID Act, and how will you ensure it remains in the supplemental bill?
Mr. DeLay: Stay strong. I think [Rep.] James Sensenbrenner [Wisconsin Republican] did a fantastic job in bringing America's attention to what he was trying to do in protecting our borders. What we did with border security, it's not immigration. We have told Bill Frist and all those who wanted to do immigration that we intend to do immigration reform as part of this Congress. And we are more than willing to work with the Senate in doing that.
I don't know if [Senate Minority Leader] Harry Reid [Nevada Democrat] can hold his members or more importantly get some Republicans to go along with him on his efforts. That's not my job. My job is to protect the borders of this country. We have tried to do that and answer the recommendations of the 9/11 commission. That's what these are. And in the supplemental - a supplemental that fights the war on terror, and part of that is protecting our borders - if there are senators that have a problem with that, they ought to go to their constituents and tell them why.
Mr. Dinan: So if Tom DeLay has anything to say about this conference report, it will have Real ID?
Mr. DeLay: Well, I'd just as soon not make it about me. The House has stated its position, and the House is going to stand by its position. It's not Tom DeLay.
Editorial Page Editor Tony Blankley: What about the proposal by Sen. Larry Craig [Idaho Republican] to grant amnesty to [illegal immigrant] farm workers?
Mr. DeLay: Well, I'm one of those that supports a guest-worker approach of a different kind. Now as for Larry Craig's approach, I am not sure we want to do that now in isolation to an overall --
Mr. Blankley: If that comes back in the conference report, isn't that going to create a conflict for a lot of conservatives?
Mr. DeLay: It certainly will. Anybody that takes any immigration and puts it in the supplemental is jeopardizing the supplemental, because we need to go through regular order on immigration. We don't need to drop it in the conference report. This is too important for the American people. We need a national debate about this, and we're going to have that national debate.
Mr. Blankley: Is that the position of the House conferees?
Mr. DeLay: Uh-huh.
Mr. Coombs: What kind of immigration reform do you want to see in this Congress?
Mr. DeLay: Well, I hate to bias what I'd like to see. I think it's incredibly important - before we even look at guest worker or anything else - to convince the American people that we are protecting our borders. I personally think that we ought to use the eyes and ears of our military. You'll never build a wall high enough or deep enough to keep people from coming over the Rio Grande River. They're gonna come to feed their families no matter what you do. But you can build a seeing-eye wall. I mean, we can read your license plate from satellites. We can set up our systems with Predators [remote-control unmanned surveillance planes] and everything. We don't need these guys down there - and God bless them for doing it - to watch people coming over the border. We can use our military -Mr. Hallow: Mr. DeLay: Yes. We can spot them, pick up the phone, call the Border Patrol and let them go pick them up. I mean, how hard is that? Ultimately, we need to enforce our laws. The American people need to see us protect our borders and enforce our laws. And then, they'll be willing to talk about a guest-worker program, understanding that once you've gone after those that are here illegally ? you won't get them all - and protecting the borders, then, when you have a guest-worker program that is properly done, for instance, don't let people that have broken the law get up to the front of the line. A simple thing like, if you want to be in the guest-worker program, you have to go home and apply for it in the country of origin. That kind of thing. You got to go back, you can't bring your family. That kind of stuff.
Mr. Hallow: It sounds like you're at odds with the White House on this.
Mr. DeLay: No. I've talked to the president about this. He thinks the country of origin is a good idea. He's open to other ideas. He's a little tough on bringing your family. But the key here is you don't want to bring your family, don't allow it - they go home anyway now illegally. They go back and forth all the time. It's not a matter of breaking up families, it's a matter of good sense. If they bring the family and they get established here, they'll never go home.
Mr. Coombs: Will the House then be pushing for more Border Patrol funding and things like that?
Mr. DeLay: Oh yeah. Absolutely. And we'll be looking at the ideas that are out there like I have stated in using the military ?
Mr. Hallow: Is the White House on board with that?
Mr. DeLay: Not yet. You cannot put soldiers on the border. Soldiers are trained to kill. They're not trained as border patrol or police, and you cannot do that. But you can use their technology.
Mr. Coombs: Is it realistic to think that the millions of illegal immigrants in this country will be willing to return to their countries of origin to apply for a guest-worker program?
Mr. DeLay: If we're enforcing the law, they will. Because it puts a lot of pressure on them if they know that we're not just looking the other way like we're doing now.
Mr. Coombs:[Homeland Security Undersecretary] Asa Hutchinson told The Washington Times about six months ago that the American public didn't have the will to deal with illegal immigration, to push these people out if necessary.
Mr. DeLay: Well, there is a conflict here. I'll never forget a rather elderly lady that I was sitting by at a lunch who was just ranting and raving about all these illegals that are over here. And I said, 'Well, fine.' We got to talking. You know, she had a yard man, she had a maid, she had some illegals living across the street. I said, 'Well, I'll tell you what, I'll call up right now and pick up your maid, your yard man and the people living across the street.' [She said,] 'Oh, don't you do that. Don't you do that. I want the ones that are up there in North Houston to be picked up.'
Mr. Hanner: Do you agree with the president that the Minuteman Project on the border right now are vigilantes?
Mr. DeLay: No. I'm not sure the president meant that. I think that they're providing an excellent service. It's no different than neighborhood-watch programs and I appreciate them doing it, as long as they can do it safely and don't get involved and do it the way they seem to be doing it, and that's just identifying people for the Border Patrol to come pick up.
Mr. Coombs: Are all the recent stories and questions about your ethical behavior undercutting your agenda? How badly are they hurting?
Mr. DeLay: No. I'm very proud of what we've already done. I mean, we've sent a class action bill. Our lawsuit abuse reform is well on track. This week, we're going to send the president a bankruptcy bill. We passed the budget as I mentioned. That was tough to do, but we did it. I'm very proud of that. We're doing an energy bill next week. We're going to do [Central American Free Trade Agreement] sometimes in the next few weeks. We've got a very ambitious appropriations schedule. If we pull it off for the first time since I've been here, we're going to have every appropriations bill out of the House by the July Fourth break. We're going to do a lot more lawsuit abuse reform, tax reform. Nothing has slowed down here.
Mr. Coombs: At your regular press conference later today, 30 minutes will be devoted to answering questions about your ethics.
DeLay: I'm not going to answer them.
Mr. Coombs: Aren't members of your conference going to be scared of the charges?
Mr. DeLay: No, actually, what's going on is I just came from a conference. What they are doing is, they are solidifying and unifying the Republican conference.
Mr. Coombs:Who is ?they??
Mr. DeLay: The Democrats. This is the Democrats' agenda. They don't have an agenda.
Mr. Coombs:Where's your public support?
Mr. DeLay: Have you not seen the television in the last few days? Members are out on television, they're talking about it. There's a huge conservative movement out there that's working very hard. There's friends all over the place working hard. Listen, if I didn't have any support, I'd have been gone a long time ago. The members - you need to talk to the members. But my sense is they understand what this is. They're looking at the charges and they're just shaking their heads.
The fact is that I have certain international responsibilities given to me by my leadership position but, more importantly, by my interests. They're not writing about my trips to the Soviet Union in the 1980s to get persecuted Jews out of the Soviet Union, participating in the Refusenik Movement. They're not writing about the trips that - I went to Central America fighting the communists and Sandinistas. They're not writing about the fact that I'm heavily involved in stopping human trafficking, especially of children in Southeast Asia and in Africa, and using children as sex toys and taking children and putting them in guerilla organizations. They're not talking about human rights violations when I went to China, talking about religious freedom and human rights violations in China. They're not talking about the fact that I was in England, working on a conservative movement there - working with Margaret Thatcher, that's why I was there - in trying to build a conservative movement in England.
I do a lot of things that require me to travel. We do it legally. Back then - particularly eight years ago, when I was talking about the Russia trip - back then, we were being criticized as a body for taking [congressional delegations on taxpayer-funded trips]. And so, I felt if somebody - a conservative organization - invites me to go on the efforts I just outlined, it's better to go on that private money than on [taxpayer-funded trips]. And we did it all legally, fully disclosed who we went with. Now, if I'm responsible for each organization and if I have to go in any time I talk to a group and I have to go through their donor lists - which are not disclosable, by the way - and ask them to give me a list of their donors so I can decide whether to talk to you or not, I can't do that.
Mr. Dinan: You have one of the most extensive and effective alumni employee network in Washington, and yet it seems you were late to realize the onslaught you were going to be facing. How much do you fight back.
Mr. DeLay: Well, first of all, we aren't late to this. This started when the [Democratic Congressional Campaign Committee] brought a [Racketeer Influenced and Corrupt Organizations] suit against me five or six years ago. We've been involved in this. Now it's not as heated as it is now. I don't have 18 to 20 news organizations that are spending full time on me back then. But this is a new - we haven't done this before. Thanks to campaign-finance reform, the Democrats have been very good at using 527s and their 'good government' groups and all these groups and using them to develop a strategy to advance their agenda. No one's had to deal with this before. So yeah, we're late in getting our organizations together, but I feel pretty good about where we are right now in pushing back and telling the truth, which is really important.
Mr. Coombs: Why are 18 to 20 news organizations jumping through that hoop?
Mr. DeLay: I think you ought to ask them that. I think that's a very good question to ask them - why they are spending all these resources just to print old news that's been written. The same news has been written over the last 10 years, and they're just simply printing the old news.
Now they failed to print the fact that admonishments are not a sanction of the House, that admonishments in this ethics committee - we don't know if I'm the most admonished member of the House, because it used to be when you were admonished, in other words warned, that you ought to look at what you were doing, there was a private letter to you, undisclosed. This committee not only admonished me, but released all the facts of the admonishment, which is not a sanction, and they failed to report that all the charges [former Rep.] Chris Bell [Texas Democrat] brought against me were dismissed, and he was sanctioned for violating the House rules and using the ethics committee for political purposes.
Somebody ought to ask the New York Times why they're shopping an op-ed piece. I mean, that's activist journalism. Somebody ought to look at the organizations and ask the New York Times, the Washington Post, the L.A. Times, Time, Newsweek, AP why they're spending all these resources they are, who they talked to ... are they collaborating with all these organizations that are funded by George Soros and his heavy hitters, and do these organizations ever talk to each other? Of course they do, they have people that are on the same boards. I mean, different boards but same people.
Mr. Hallow: Let me ask you about why Sen. Santorum told you to come clean.
Mr. DeLay: Santorum answered it properly.
Mr. Hallow: He did?
Mr. DeLay: Absolutely. I appreciate what he said. Everything he said. There is nothing wrong with what he said. He did not attack me, nor did he remove himself from me.
Mr. Dinan: But he did encourage you to come forward.
Mr. DeLay: I have been coming forward, and he did it in the context of the way to fight this is to come forward, which is exactly what I have been doing. In fact, I am putting together the entire case and everything that we have, and I'm going to give it to the ethics committee and ask them to look at it.
Mr. Dinan: You've been talking about that for a few weeks. How do you do that specifically?
Mr. DeLay: First of all, you have to go to present conditions. The Democrats don't want an ethics committee for two reasons. One, they know that all of this is privileged and that the only way I can be cleared is through the ethics committee, so they don't want one. Secondly, one of their best friends, [Rep.] Jim McDermott [Washington Democrat], is being investigated, and they don't want him to be kicked out of Congress. I mean, this guy has been found guilty - guilty by a court of law - and they don't want an ethics committee.
What the speaker [of the House] did, I did not do. I had no contact with the speaker when he was working on the rules changes, I had no contact with the speaker when his choices of who goes on the committee - I want to get that very clear. What the speaker did, though, is recognize that the Democrats used the rules of the House to politicize the ethics committee. The Chris Bell issue is a perfect example of that. And it's because of a quirk in the rules that Democrats found and used, and that is, if they don't vote, then you're held in limbo. And all we did was change the rule that said in order to go to the investigative subcommittee, you have to have an affirmative vote of the committee, which means a majority. That's all he did. And, two other process provisions: One, you are allowed to have your lawyer, not a lawyer picked by the ethics committee, to represent you. And two, go back to this admonishment thing. When we were admonished, [Rep.] Candice Miller [Michigan Republican] and I were admonished, first of all we didn't know we were the subject of the investigation, and secondly we had no right to plead our case. They did not ask us, they just admonished us and turned out the stuff to the public. That is absolutely contrary to the Constitution of the United States.
Mr. Dinan: In terms of going to the committee with all of the information, how do you see that happening? What's the mechanism?
Mr. DeLay: The mechanism is, the chairman and the ranking member look at the facts and determine whether they ought to recommend to the committee to proceed with an investigative subcommittee.
Mr. Dinan: You'll provide them with all the documents and yourself as well?
Mr. DeLay: Absolutely. I've been trying to do this for four weeks. I sent them two letters. But [Rep.] Alan Mollahan [West Virginia Democrat] does not want - and we'll see if he'll sit down, look at the facts and talk to me as his appointed position dictates him to do, or is he more interested in politics.
Mr. Hurt: When the committee admonished you for the 2002 fundraiser, you said you accepted their guidance. How have you changed the manner in which you've raised money since then?
Mr. DeLay: Well, first and foremost, I agree that perception now is a new standard for me, and that's what this was about, was perception. And everything we do, we add a new standard when we are doing our job, no matter whether it's in policy, or outside, or whatever we're doing, a new standard is: 'What is it going to look like on the front page of The Washington Times?' And that perception is incredibly important, and so we discuss it and we deal with it that way.
First of all, there was nothing wrong with that fundraiser, any different than fundraisers all over this country. I'm not saying everybody does it. The point is there's nothing wrong with it. There was nothing wrong in this case. I accept their guidance. I don't accept their admonishment. I don't accept the way it was done, because I had no due process, and it was put out into the public. Now my admonishments are treated as if I was convicted of a felony in the press. And secondly, there is nothing wrong in having fundraisers or going on trips or meeting with the lobbyists or citizens of any ilk. They have a right to petition the government. And there's nothing that connects me with that fundraiser, and I don't do this, and any policy decisions or votes. Now they're trying to do that.
Secondly, I was admonished for calling up the [Federal Aviation Administration] for information I could get on the internet. I was called by a constituent, as I see it, the speaker of the House of the Texas Legislature, wanting me to find an airplane, and gave me the tail number. I asked a staffer to do it, called it up, there's nothing wrong with that. And there's nothing unethical about that. My job is to interface with the federal government. There's nothing illegal about it. It's on the internet. What I should have done is turned around to my internet and looked it up.
Mr. Dinan: You said perception is a new standard. Do you believe you crossed the line in perception in that instance?
Mr. DeLay: No, absolutely not. I am doing my job. These Democrats were breaking Texas law [by leaving the state to prevent the Legislature from passing a redistricting plan].
Mr. Blankley: Is there any public procedure you can use to show Democrats have frozen the ethics committee?
I have been wrongly accused for five to six years of frivolous things, we have beaten back all of those frivolous things. This stuff that's in the press is frivolous, and the only way I know to vindicate myself is through the ethics process.
Mr. Hurt: Have you ever crossed the line of ethical behavior in terms of dealing with lobbyists, your use of government authority or with fundraising?
Mr. DeLay: Ever is a very strong word. Let me start out by saying, you can never find anything that I have done for personal gain. Period. What I'm doing is what I believe in, I'm doing it the way I believe in it. Yes, I'm aggressive. I'm passionate about what I believe in, and I'm passionate about winning and accomplishing our agenda. I know since 1995 that everything that we have done has been checked by lawyers, double-checked by lawyers, triple-checked by lawyers, because I know I have been watched and investigated probably more than even Bill Clinton. They can't find anything, so they're going back to my childhood, going to my family, going to things that happened eight years ago. There's nothing there. And they can keep looking. There's nothing there. I have tried to act ethically, I have tried to act honestly. I have tried to keep my reputation - to fight for my reputation - while it's been besmirched, and I have tried to do it in a way that brings honor to the House.
Mr. Hallow: Is there anything you want to change in perception about what you're asking on judges?
Mr. DeLay: Look, I'm for an independent judiciary. I don't know where they get this. When you attack the left's legislative body, they get really upset. But I'm for an independent judiciary. I'm for an independent Congress. I'm for an independent executive. But the Constitution of the United States gives us responsibility for oversight and checks and balances over the executive as well as the judiciary. And we all know that this judiciary is extremely active. I have asked the Judiciary Committee to look at it and give recommendations as to what we ought to do. Read the book Men in Black.
Mr. Dinan: You've been talking about going after activist judges since at least 1997. The [Terri] Schiavo case gives you a chance to do that, but you've recently said you blame Congress for not being zealous in oversight.
Mr. DeLay: Not zealous. I blame Congress over the last 50 to 100 years for not standing up and taking its responsibility given to it by the Constitution. The reason the judiciary has been able to impose a separation of church and state that's nowhere in the Constitution is that Congress didn't stop them. The reason we had judicial review is because Congress didn't stop them. The reason we had a right to privacy is because Congress didn't stop them.
Mr. Dinan: How can Congress stop them?
Mr. DeLay: There's all kinds of ways available to them.
Mr. Dinan: You tried two last year on the Defense of Marriage Act and the Pledge of Allegiance, and the Senate didn't go along with those.
Mr. DeLay: We're having to change a whole culture in this - a culture created by law schools. People really believe that these are nine gods, and that all wisdom is vested in them. This means it's a slow, long-term process. I mean, we passed six bills out of the House limiting jurisdiction. We passed an amendment last September breaking up the Ninth Circuit. These are all things that have passed the House of Representatives.
Mr. Dinan: Are you going to pursue impeaching judges?
Mr. DeLay: I'm not going to answer that. I have asked the Judiciary Committee to look at this. They're going to start holding hearings on different issues. They are more capable than me to look at this issue and take responsibility, given the, whatever, the Constitution.
Mr. Hallow: The president told [Israeli Prime Minister Ariel] Sharon no more settlements.
Mr. DeLay: You're not going to get me in a fight with the president.
Mr. Coombs: In today's Republican conference, you're saying they are solidly behind you?
Mr. DeLay: I feel their support. It is absolutely incredibly energizing and confidence-building, and more importantly heartwarming, the expressions of support members have given to me, not just individually but corporately in the conference.
Mr. Coombs: You don't see a lessening of support?
Mr. DeLay: Not at all.

Read More...

Political Payrolls Include Families

latimes.com

Political Payrolls Include Families

Dozens of members of Congress have paid relatives for campaign work, records show. The practice, though legal, is coming under scrutiny.
By Richard Simon, Chuck Neubauer and Rone Tempest
Times Staff Writers

April 14, 2005

WASHINGTON — At least 39 members of Congress have engaged in the controversial practice of paying their spouses, children or other relatives out of campaign funds, or have hired companies in which a family member had a financial interest, records and interviews show.

House campaign funds have paid more than $3 million to lawmakers' relatives over the last two election cycles, records show.

The practice is not illegal but has come under new scrutiny following reports that House Majority Leader Tom DeLay's wife and daughter had received hundreds of thousands of dollars since 2001 from his political action and congressional campaign committees. It also comes after disclosures that relatives of members of Congress have been hired by special interests as lobbyists or consultants.

Lawmakers are barred from putting relatives on their congressional payrolls, but they can pay them to work on their campaigns as long as the family member does bona fide work and isn't paid significantly more than the market rate.

The bipartisan practice has been increasingly criticized by government watchdogs and members of Congress.

"Instinctively, it doesn't pass the smell test for me, and I don't think it would for my constituents," said Rep. Ray LaHood (R-Ill.). LaHood said he had never employed relatives and thought the practice was wrong.

"Public service should not be a way to build a family fortune," said Celia Wexler, vice president for advocacy at Common Cause.

Many lawmakers who have hired relatives say their motivation is confidence, not profit.

"I need a campaign manager I can trust," said Rep. Dana Rohrabacher (R-Huntington Beach), whose wife, Rhonda, is now paid $40,000 a year to run his campaign. Over the last four years, she has received $114,894, records show.

DeLay, a Texas Republican, has defended the payments to his wife, Christine, and his daughter, Danielle DeLay Ferro, saying his family members provided valuable service to his campaign. They received $473,801 over the last two election cycles, records show.

His daughter has managed some of his recent congressional campaigns and has worked as a fundraiser for his political action committee, and his wife provides "strategic guidance" for the political action committee.

The Times developed a list of names of relatives and businesses owned by relatives on campaign payrolls from interviews, news accounts and personal financial disclosure reports. Campaign reports do not have to disclose whether recipients of funds are related to a candidate, so The Times' list is most likely incomplete.

The Times analyzed Federal Election Commission data compiled by the Center for Responsive Politics, a nonprofit, nonpartisan organization that researches campaign finance issues. The analysis, which covered 2001 through 2004, did not include such items as reimbursements for travel or other routine campaign expenses.

Among the recipients of the largest payments were members of DeLay's family and those of Rep. Richard W. Pombo (R-Tracy). Pombo paid his wife and brother $357,325 from his political fund over the last four years for duties listed as bookkeeping, fundraising, consulting and other unspecified services, records show.

The amount paid to Pombo's family members in the last election cycle was more than his opponent spent on his entire campaign. Pombo declined to be interviewed.

Including Pombo, five of the top six congressional families in The Times' analysis of two election cycles were Californians. The campaign fund of Rep. Zoe Lofgren (D-San Jose) paid $251,853 to her husband's firm, according to the candidate's campaign filings. She was followed by Rep. Howard L. Berman (D-North Hollywood), $205,500; Rep. Bob Filner (D-San Diego), $154,504; and Rep. Howard P. "Buck" McKeon (R-Santa Clarita), $152,362.

Altogether, at least 10 lawmakers in the 53-member California House delegation have hired family members, according to records and interviews.

Rep. Pete Stark (D-Hayward) paid his wife, Deborah, $119,000 from his campaign fund over the last four years to serve as his campaign manager, records show. In the last election, she earned $2,400 a month as campaign manager and was awarded a $2,400 bonus.

"It's just a matter of paying her for the professional job she was doing," Stark said.

In addition, Sen. Barbara Boxer (D-Calif.) paid her son, a lawyer, $130,000 over four years to run her political action committee, according to her campaign filings.

A spokesman for Sen. Dianne Feinstein (D-Calif.) said that she had not put family members on the campaign payroll.

No computer database was available to allow for a comprehensive search of Senate campaign expenditure records.

In the case of Pombo, 44, politics has been a family affair since the former ranch hand, butcher and truck driver first ran for Congress.

Beginning with his first House race in 1991, Pombo's younger brother Randy has been his campaign manager and treasurer. Another younger sibling, Ray, sometimes catered the congressman's tri-tip and oysters barbecue fundraisers.

In the early years, wife Annette remained in the background, managing the couple's Tracy household, raising their three children and contributing a recipe for Apple Walnut Crisscross Pie to her husband's official website.

But by March 2003, Annette, a Tracy High School valedictorian who has a degree from Loyola Marymount University, had joined the campaign. She was paid $85,275 for her work over the last two years, records show.

Randy Pombo has been paid $272,050 in the last four years, records show.

In the 2003-04 campaign cycle, Pombo paid more to his family members — $217,000 — than his opponent, Jerry McNerney, spent on his campaign. McNerney, a Pleasanton mathematician, spent $154,677. He lost to Pombo 61% to 39%.

Wayne Johnson, a partner in the Sacramento political consulting firm JohnsonClark Associates, which also worked for Pombo, described a family-run campaign operation.

"Randy has been there from the beginning, back when they were bootstrapping everything and Richard, who was then a Tracy city councilman, was not even expected to make it out of the primary," Johnson said. "And I know that when you called down there during the last campaign season, Annette was the one answering the phone."

Lawmakers offer a variety of reasons for putting family members on the campaign payroll.

Rep. Ron Lewis (R-Ky.), whose wife, Kayi, receives $40,000 a year from the congressman's campaign fund to serve as his campaign manager, acknowledged being "very nervous about appearances." But he said he would "rather run the risk of a bad appearance than to have somebody steal all my money or to have some errors [in campaign finance reports] costing me big fines."

Boxer said that she had heard horror stories from colleagues about campaign workers who had absconded with funds, and she knew that she would never have that problem if she put her son, Doug, in charge.

Boxer added that she turned to her son because he was the most qualified candidate. "Who is the best person to run your operation — that's the key thing to me," she said.

Several lawmakers said the family members they hired were professional consultants who had worked for other candidates. And, they said, they often obtained services at bargain prices.

"My wife did this for many years before she worked on our campaign," said Filner, whose wife Jane's company, Campaign Resources, was paid $154,504 in campaign funds during the last two election cycles.

Berman's campaign paid $205,500 to two firms headed by his brother Michael, a longtime campaign consultant, over the four-year period. The congressman said he thought the payments included debts he carried over from his 1998 and 2002 campaigns.

"The good news for me is that one of the most talented campaign strategists happens to be my brother," Berman said.

Berman, a former member of the House ethics committee, said that according to the chamber's rules, "you are not supposed to use your campaign funds for personal expenses or matters unrelated to politics. The test is what kind of work they are performing. I'm getting one of the most talented campaign strategists at a pretty good price. Out on the commercial marketplace, my brother makes a lot more money."

Lofgren's campaign paid her husband's company, Collins Day, $251,853 during the four-year period for fundraising, filing campaign finance reports and other political activities.

Lofgren noted that Collins Day also worked for other politicians.

"It's really important that [campaign finance reports] be done right," Lofgren said. She joked that when she was a county supervisor, her husband did the work as a volunteer — "and it was always late." Now that she pays his company, she said, "it gets done."

Rep. Elton Gallegly (R-Simi Valley) said his wife, Janice, worked as an unpaid volunteer for his campaign for 18 years before she began receiving $2,600 a month last year for tasks such as keeping the campaign books. He said her compensation was far less than what she made before giving up her job as an escrow officer to work on the campaign. She has been paid a total of $28,636, records show.

"She's always been an independent woman," Gallegly said. "So it was at my suggestion that she get some kind of compensation so she wouldn't have to come to me every time she wanted to buy something for one of the grandkids. If you average it over 18 years, she's made about $140 a month."

A spokesman for McKeon said the congressman's wife, Patricia, was a "valuable part of the congressman's campaign team" who ran the campaign office, filed campaign finance reports and oversaw all of the congressman's fundraising. Records show she was paid $152,362 over four years by McKeon's campaign committee.

"There is no one who the congressman trusts more," the spokesman said, noting that McKeon's wife worked on the congressman's campaign without pay for seven years.

Opinions vary on whether hiring relatives is appropriate and ethical.

Kenneth Gross, a former chief of enforcement at the FEC, said, "When you're in a high position, so many people are trying to get a piece of you that sometimes you have to retreat to family as among the few people who you really, truly can trust — who you believe have only your best interest in mind."

As long as a family member is performing legitimate campaign work and payments are disclosed, "there certainly shouldn't be any rule against it," said Gross, a Washington lawyer.

Fred Wertheimer, president of Democracy 21, a campaign finance watchdog group in Washington, said the practice should be prohibited. Campaign payments to family members could potentially become a way to get around the ban on the personal use of political funds, he said.

"In many races for Congress, there is no serious opposition, and members build up substantial war chests that can easily lead to the temptation to start making payments to family members, which can in effect become payments … to the benefit of members themselves," he said. "This kind of activity does create problems in terms of public perceptions. It does create the potential for self-dealing."

FEC regulations permit salary payments to family members for "bona fide, campaign-related services," according to a 2001 advisory opinion issued to Rep. Jesse L. Jackson Jr. (D-Ill.). Jackson had asked the commission whether he could hire his wife, Sandi, as a paid campaign consultant.

"Any salary in excess of fair market value of the services provided is personal use," the opinion said, noting that it was illegal for candidates to use campaign funds for personal use.

There is one complaint before the FEC about a member of Congress paying relatives for campaign work.

The Colorado Democratic Party filed a complaint against former Rep. Scott McInnis (R-Colo.) last year questioning McInnis' payment of $39,000 to his wife, Lori, from his congressional campaign committee after he announced he would not be seeking reelection. Democrats labeled the payments excessive and "unseemly."

McInnis said that the payments to his wife were legitimate and complied with FEC rules. He said a response to the complaint had been filed with the FEC.

"Her work is public and all her payments are public," McInnis said, adding that his wife's salary had been based on the pay scale for congressional employees with similar responsibilities. "She ran the campaign with an iron fist."

Rep. Ralph M. Hall (R-Texas), whose political committee paid his daughter-in-law Jody $123,761 for the last two campaigns, said, "I don't see anything wrong with it if she's doing real work for real pay."

*

ON THE WEB

Previous stories on the practice of hiring lawmakers' family members can be found at latimes.com/lawmakers.

*

Staff writers Walter F. Roche Jr. and Mary Curtius in Washington and researchers Mark Madden in Washington and Janet Lundblad in Los Angeles contributed to this report. Tempest reported from Sacramento.

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Wednesday, April 13, 2005

U.S. Hostage in Iraq Appeals for Life on Video-TV

Yahoo! News
Reuters
U.S. Hostage in Iraq Appeals for Life on Video-TV

DUBAI (Reuters) - An American contractor taken hostage in Iraq has urged the U.S. government to negotiate with his captors to save his life, according to a video aired by Al Jazeera television on Wednesday.

The video showed the man, named by the U.S. officials as Jeffrey Ake from Indiana, holding up his passport as armed and masked insurgents stood at his side.

Ake was seized from the site of a reconstruction project near Baghdad on Monday. It is not known who he was working for.

Al Jazeera said the hostage "urged the U.S. administration to open a dialogue with the Iraqi resistance ... to save his life."

He also called on U.S. forces to withdraw swiftly from Iraq, the Arabic television channel said.

Dressed in a light shirt, Ake looked nervous on the video, which showed him behind a desk and reading from a statement.

In Washington, White House spokesman Scott McClellan said officials were in contact with Ake's family.

Asked if the Bush administration would consider opening a dialogue with insurgents, McClellan said: "Our position is well known when it comes to negotiating ... Obviously this is a sensitive matter and it's a high priority for us."

Unlike many previous tapes issued by militants, the video did not name the group behind the kidnapping or show a flag or identifying banner.

More than 150 foreigners have been kidnapped in Iraq in the past year, either by Muslim militant groups seeking to drive out foreign troops or criminal gangs demanding ransom. About a third of those kidnapped have been killed.

A French journalist, Florence Aubenas, who was kidnapped in January, is still being held by militants, as are three Romanian journalists abducted last month.

Iraqi officials estimate around 5,000 Iraqis have been kidnapped over the last year, most of them by criminal gangs looking to profit from ransoms.

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Karzai to Ask Bush for Security Deal

Yahoo! News
AP
Karzai to Ask Bush for Security Deal

By ROBERT BURNS, AP Military Writer

KABUL, Afghanistan - President Hamid Karzai said Wednesday he is preparing a formal request to President Bush for a long-term security partnership that could include a permanent U.S. military presence.

At a joint news conference with U.S. Defense Secretary Donald H. Rumsfeld, Karzai said he had consulted many of his country's citizens in recent weeks about "a strategic security relationship," with the United States that could help Afghanistan avoid foreign interference and military conflicts.

"The conclusion we have drawn is that the Afghan people want a long-term relationship with the United States," Karzai said. "They want this relationship to be a sustained economic and political relationship and most importantly of all, a strategic security relationship to enable Afghanistan to defend itself, to continue to prosper, to stop the possibility of interferences in Afghanistan."

Karzai said he has previously discussed this with Bush, but is now planning to formalize the request, but did not say when.

Rumsfeld was asked about America's willingness to offer security guarantees to Afghanistan and to establish permanent military bases here. He said this was a matter for President Bush to decide.

In Washington, White House press secretary Scott McClellan said Wednesday that "discussions are ongoing" with Karzai on future security arrangements but would not comment on Bush's position on a permanent U.S. military presence in Afghanistan or other long-term partnership. "I don't want to speculate about anything beyond that," McClellan said.

Rumsfeld described the military-to-military relationship between Afghanistan and the United States as good, and said it had grown and strengthened, but he was noncommittal on whether Washington hoped to establish permanent military bases.

"What we generally do when we work with another country is what we have been doing. We find ways we can be helpful, maybe training, equipment or other types of assistance. We think in terms of what we are doing rather than the question of military bases and that type thing," Rumsfeld said.

Rumsfeld was on an unannounced, whistlestop visit to the war-torn country before flying on to Pakistan later Wednesday for meetings with President Gen. Pervez Musharraf and other leaders.

Earlier, Rumsfeld met with U.S. troops in the southeastern cities of Kandahar and Qalat, following Tuesday's visit to Iraq.

In Qalat, where U.S. troops are running what they call a provincial reconstruction team that provides civic aid as well as security for reconstruction projects, Rumsfeld visited U.S. soldiers on a morale boosting mission mixed with official talks on the future U.S. role in Afghanistan.

U.S. commanders told Rumsfeld in detailed briefing on their operations in Zabul Province along the Pakistan border that Taliban fighters still have some sanctuaries and support among the local population, but that U.S. forces operating with newly trained Afghan troops are making steady progress in eroding that support.

Qalat is in a region about 90 miles north of Kandahar and 30 miles from the Pakistan border where the Afghan government is struggling with a counternarcotics campaign while also fighting remnants of the Taliban militia that ruled the country before U.S. forces invaded in October 2001.

Rumsfeld's visit to Qalat underscored the importance the Pentagon places on the approach of using troops to facilitate reconstruction and civil affairs work.

He shook hands and posed for photographs with a group of soldiers in Qalat and thanked them for their work before flying back to Kandahar where he spoke to several hundred soldiers and answered questions from several of them.

One soldier asked when the Army would shorten tours from 12 to six months for those serving in Afghanistan or Iraq. As he also had said a day earlier in Iraq, Rumsfeld said the Army was thinking about that, but had not made a decision.

Rumsfeld, whose itinerary was not being disclosed in advance by U.S. officials for security reasons, told the soldiers that both Afghans and Americans one day will look back on this period as a turning point in the spread of freedom. "You're earning your place in history," he said.

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Labs race to destroy deadly virus

BBC NEWS
Labs race to destroy deadly virus
Health experts have begun to destroy samples of a potentially lethal flu strain sent to laboratories around the world by a US testing organisation.

The samples are of Asian flu, which killed between one and four million people in 1957 but disappeared by 1968.

Testing kits containing the virus were sent to more than 3,700 laboratories in 18 countries from Brazil to Lebanon.

The World Health Organization said the virus could "easily cause an influenza epidemic" if not handled properly.

Canada, Hong Kong, South Korea and Singapore have all destroyed their samples, the WHO said, and Germany said it had disposed of its virus as well.

Taiwan was said to be moving "very, very fast" to destroy the samples it had received, and Japan said its health ministry had ordered it destroyed in the nine labs that had it.

The WHO was unable to confirm how much had been destroyed in US labs, which received the vast majority of the samples.

The full list of countries and areas where laboratories received the virus is: Bermuda, Belgium, Brazil, Canada, Chile, France, Germany, Hong Kong, Israel, Italy, Japan, Lebanon, Mexico, Saudi Arabia, Singapore, South Korea, Taiwan and the US.

No immunity

Because the virus has not been in circulation since 1968, people born after that do not have antibodies against it - and current vaccines do not guard against it.

"If this virus were to infect one person, it would spread very rapidly," Klaus Stohr of the WHO told the BBC.


WHERE THE VIRUS WENT
Europe: Belgium, France, Germany, Italy
Americas: Bermuda, Brazil, Canada, Chile, Mexico, the US
Asia: Hong Kong, Japan, Singapore, South Korea, Taiwan
Middle East: Israel, Lebanon, Saudi Arabia

The College of American Pathologists sent out kits between October 2004 and February of this year.

On 8 April, the US government asked the body to write to the laboratories affected - of which 61 are outside the US and Canada - telling them to destroy the samples.

Given the concerns that the virus could be used in bio-terrorism, letters were sent to the laboratories before the mistake was made public.

Dr Stohr said the College of American Pathologists had not violated US regulations, which are now being revised.

The virus - technically known as H2N2 - was classified as Biological Safety Level 2, meaning that it was not considered particularly dangerous.

Reclassification

But the US government agency responsible for classifying viruses, the Centers for Disease Control and Prevention, says it was in the process of deciding whether to change the strain's classification when it found out that it had been widely circulated.

The WHO says there is no guarantee that every sample of the virus can be traced and destroyed because some of the laboratories may have sent derivatives of the sample elsewhere.

But there have been no reports of anyone becoming ill from handling the virus, which the WHO called reassuring.

"The risk is considered to be low... but as long as this is out, it is possible laboratory technicians can become infected," Dr Stohr said.

Laboratories use the kits to show they can correctly identify different strains of a virus.

They normally include strains in current or recent circulation.

It is hoped the laboratories will have destroyed the vials by the end of the week.

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LexisNexis theft much worse than thought

MSNBC.com

LexisNexis theft much worse than thought
Data broker: Up to 10 times as many affected
The Associated Press
Updated: 12:11 p.m. ET April 12, 2005

LONDON - Publisher and data broker Reed Elsevier Group PLC said Tuesday that up to 10 times as many people as originally thought may have had their profiles stolen from one of its U.S. databases.

The company reported last month that intruders may have accessed personal details of 32,000 people via a breach of its legal and business information service LexisNexis’ recently acquired Seisint unit. It now says that figure is closer to 310,000 people.

The breach, discovered during internal checking procedures of customers’ accounts, is being investigated by U.S. law enforcement authorities.

Information accessed included names, addresses, Social Security and driver license numbers, but not credit history, medical records or financial information, the Anglo-Dutch group said in a statement to the London Stock Exchange.

“LexisNexis is notifying all these individuals and is offering free support services, including credit bureau reports, credit monitoring for one year and fraud insurance, to monitor and protect them from possible fraud associated with identity theft,” the company said.

Boca Raton, Fla.-based Seisint stores millions of personal records. Customers include police and legal professionals and public and private sector organizations.

Reed Elsevier bought Seisint — which provides data for Matrix, a crime and terrorism database project funded by the U.S. government that has raised concerns among civil liberties groups — for $775 million in August.

Reed Elsevier said only 2 percent of the 32,000 people it notified about the possible theft of their personal information in March have contacted LexisNexis to accept its offer of free credit reports and credit monitoring, and none has so far advised LexisNexis that they have experienced any form of identity theft.

The company said the incidents “predominantly relate to misappropriation by third parties of IDs and passwords from legitimate customers of Seisint” and stressed that neither LexisNexis nor the Seisint technology infrastructure was breached by hackers.

The company played down the impact of the security breach on its profits, reaffirming its target of higher earnings and at least 5 percent growth in revenues excluding acquisitions.

The breach at Seisint is the second of its kind at a major information provider in recent months. Rival data broker ChoicePoint Inc. announced last month that the personal information of 145,000 Americans may have been compromised in a breach in which people posing as small business customers gained access to its database.

In the ChoicePoint situation, at least 750 people were defrauded, authorities say. The incident in the United States fueled consumer advocates’ calls for federal oversight of the loosely regulated data-brokering business, and Capitol Hill hearings are being held on the issue.

Reed Elsevier specializes in the education, legal and science sectors, publishing more than 10,000 journals, books and compact discs, as well as almost 3,000 Web sites and portals. It also organizes 430 trade exhibitions.

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Tuesday, April 12, 2005

Official blasts Bush UN nominee

BBC NEWS

Official blasts Bush UN nominee

A former US official has said President Bush's choice to be US ambassador to the UN, John Bolton, is a bully who is unsuitable for the job.

Ex-state department official Carl Ford was testifying before the Senate Foreign Affairs Committee examining Mr Bolton's nomination.

Mr Bolton, a critic of the UN, has denied trying to have people who disagreed with him sacked.

Intelligence director nominee John Negroponte has also faced a hearing.

It is very unusual for a nomination hearing to concentrate so intensely on an individual's alleged personal failings, but Democrats claim that Mr Bolton has shortcomings which genuinely interfere with his ability to do the UN job, says the BBC's Justin Webb in Washington.


JOHN BOLTON
-Yale Law School graduate
-As assistant secretary of state under George Bush senior,
helped organise anti-Saddam alliance
-Made under-secretary of state for arms control and international security
in May 2001
-In July 2003, condemned North Korean leader Kim Jong-il for living like
royalty while people lived in "hellish nightmare"

Mr Ford used to run the state department's intelligence arm.

He said Mr Bolton was a serial abuser of junior staff and that his treatment of an intelligence analyst who disagreed with him on the subject of Cuba damaged the work of the department.

"The collateral damage and the personal hurt that he causes is not worth the price that had to be paid. It simply is out of bounds for the federal bureaucracy to allow a bully to run wild over people," he told the Senate committee.

He described Mr Bolton as a "kiss up, kick down" bureaucrat.

Mr Bolton will probably be approved by the Senate later this week, but this has been an extremely bruising process, our correspondent says.

Democrats oppose Mr Bolton's nomination, but they need the support of at least one Republican on the committee to block it.

Rhode Island Senator Lincoln Chafee had been considering voting against Mr Bolton, but said he was impressed with his opening statement.

Tough negotiator

On Monday, Mr Bolton said the UN needed US leadership to get it back on track, and should focus more on human rights violations and international terrorism.

He outlined his four priorities if he was given the job:

* Strengthening UN institutions

* Stemming the proliferation of weapons of mass destruction

* Supporting the global war on terror

* Addressing humanitarian crises

Mr Bolton is one of the toughest campaigners in the Bush administration for a foreign policy based on US power and catering to narrowly defined US interests, correspondents say.

He is a staunch defender of the US-led military occupation of Iraq, and as Washington's top arms control negotiator has taken a hard line over North Korea's nuclear programme.

Supporters say he is intellectually capable and achieves results.

Intelligence nominee

In a separate nomination hearing, Mr Bush's choice for new Director of National Intelligence, John Negroponte, has said his priority would be to make fundamental reforms to the US intelligence community.

He said he had built on the lessons learned about the shortcomings of the intelligence system both before and after the attacks on 11 September.

"Good intelligence is our first line of defence. It is difficult and often dangerous to produce... but it is the best way for us to ensure that freedom, democracy and our national security are protected in the 21st Century," he said.

Mr Negroponte, 65, a veteran diplomat, faced tough questioning by the Senate Intelligence Committee about his time as ambassador to Honduras, where human rights groups allege that he was aware of abuses by death squads.

He said he had done nothing improper and nothing which broke the laws applicable at the time.

He argued he had met the president of Honduras to urge him to improve the way justice was administered.

"I've a good conscience," Mr Negroponte insisted.

Some members of the committee expressed concern that he might not be the man to tell President Bush what he did not want to hear about intelligence failures.

But Mr Negroponte maintained that information gathered on his watch would not be shaded or changed for political ends.

The new post of national intelligence director was created on the recommendation of the commission that investigated the 11 September 2001 attacks.

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U.S. Audit Probes $212 Mln in Halliburton Iraq Work

Reuters

U.S. Audit Probes $212 Mln in Halliburton Iraq Work

By Sue Pleming

WASHINGTON (Reuters) - U.S. oil services giant Halliburton Co. may have overcharged by at least $212 million to get fuel to Iraqi civilians under a no-bid deal with the U.S. military, said Pentagon audits released on Monday.

California Rep. Henry Waxman, a leading critic of Halliburton's work in Iraq, released portions of audits by the Defense Contract Audit Agency (DCAA) that identified overcharges and questioned costs for fuel delivered in Iraq by Halliburton unit Kellogg Brown & Root in 2003 and 2004.

In one case, the overcharges exceeded 47 percent of the total value of one work order, said Waxman in a letter to Rep. Christopher Shays, chairman of the House of Representatives Subcommittee on National Security, Emerging Threats and International Relations.

Halliburton, which was run by Vice President Dick Cheney until he joined the race for the White House in 2000, has said its KBR subsidiary delivered fuel for the best possible price in Iraq and has consistently denied it overcharged.

Neither Halliburton nor the Pentagon immediately responded to questions over the latest audits.

KBR is the U.S. military's biggest contractor in Iraq and is under investigation by several U.S. government departments over whether it overcharged for some services.

Last month, an ex-employee of KBR and a Kuwaiti citizen were indicted for defrauding the U.S. government of more than $3.5 million by inflating the cost of fuel tankers for military operations in Kuwait.

Also last month, the Defense Department said its internal auditors still had major issues with Halliburton after Waxman and others released an audit questioning $108 million in costs.

Waxman, a Democrat, is pressing for hearings on Halliburton's work in Iraq, particularly for the delivery of fuel.

More than $1.7 billion in Iraqi money, drawn from the Development Fund for Iraq (DFI), were paid to Halliburton to bring fuel to Iraq.

The DFI is made up of proceeds from Iraq oil sales, frozen assets from foreign governments and surplus from the United Nation's oil-for-food program, itself the target of numerous investigations.

"The new DCAA audits add to the mounting evidence of waste, fraud and abuse involving the DFI," said Waxman.

KBR brought fuel into Iraq under a no-bid deal it had with the U.S. military. It also has a giant logistics contract with the Army that has so far clocked up more than $7 billion in work and has another deal to rebuild parts of Iraq's oil sector.

originally published Apr 11, 2005

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Three Indicted on Terror Charges in U.S.

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AP
Yahoo! News

Three Indicted on Terror Charges in U.S.

By MARK SHERMAN, Associated Press Writer

WASHINGTON - Three men have been indicted on charges they plotted to attack financial institutions in New York, New Jersey and Washington.

A four-count indictment unsealed Tuesday accuses Dhiran Barot, Nadeem Tarmohammed and Qaisar Shaffi of scouting the New York Stock Exchange and Citicorp Building in New York, the Prudential Building in Newark, N.J., and the International Monetary Fund and World Bank in the District of Columbia.

The three men, already in custody in England, were charged with three conspiracy counts and providing material support to terrorists.

U.S. officials claim that Barot is a senior al-Qaida figure, known variously as Abu Eisa al-Hindi, Abu Musa al-Hindi and Issa al-Britani, who scouted prominent financial targets in the United States at the behest of al-Qaida leader Osama bin Laden.

Prosecutors say the men conducted surveillance on the buildings between August 2000 and April 2001, including video surveillance in Manhattan around April 2001. U.S. officials have previously described detailed surveillance photos and documents, which they believe came from Barot, that were found on a computer that was seized in Pakistan last summer.

That information prompted the government, in August, to raise the risk of a terrorist attack to "high" for those specific financial institutions. The color-coded threat level for the rest of the nation remained at yellow, or elevated, the middle of a five-point scale.

Federal authorities, who acknowledged the threat was based mainly on years-old intelligence, said the decision to raise the threat level was based on an abundance of caution and because of the lengthy planning and plotting record of the terrorist network known as al-Qaida.

The decision was made during a summer of unease over the possibility that terrorists might launch attacks on the political conventions or otherwise try to disrupt the presidential election. In March, bombs on trains in Madrid killed 191people days before Spanish elections.

Critics ascribed the elevated threat level to political calculations by the Bush administration.

The threat level was lowered to yellow for the buildings in November.

The men were among eight people arrested in England on terrorism-related charges in August.

Barot, 32, was charged there with possessing reconnaissance plans for the U.S. institutions and notebooks containing information on explosives, poisons, chemicals and related matters "of a kind likely to be useful to a person committing or preparing an act of terrorism."

Tarmohammed, 26, was charged there, along with Barot, with possessing plans of the Prudential building. Shaffi, 25, also was charged in Britain with possessing an extract from the "Terrorist's Handbook" on the preparation of chemicals, explosive recipes and other information.

The U.S. intends to seek their extradition once the British prosecutions are completed, Justice Department spokeswoman Tasia Scolinos said.

Their trial in England is expected to begin in January, according to the Crown Prosecution Service.

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