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2nd June 2006

10:24pm: Foreign Trade Zones not always exempt from State Taxes
Central Valley Business Times:

Taxing ruling for Central Valley’s foreign trade zones

•  Court rules businesses in FTZs not immune from certain state taxes

•  The case of the 4,432 cases

Businesses operating in any of the Central Valley’s four foreign trade zones or any of the 14 others around California are not absolutely protected from having to pay all state taxes, the 9th U.S. Circuit Court of Appeals has ruled.

“We hold that an importer of goods destined for domestic consumption is not exempt from state excise taxes and administrative searches by federal Customs officials simply because it stores its merchandise in a foreign trade zone,” a three-judge panel of the court ruled Friday.

The Central Valley has four foreign trade zones. They are located in:

• Atwater, with locations serving Merced, Madera, Tulare and Fresno counties;

• West Sacramento at the Port of Sacramento;

• Stockton, serving the Stockton Port District; and,

• Oroville, operated by the Oroville Economic Development Corp.

Normally, merchandise from foreign countries stored within a foreign trade zone is not subject to United States customs duties so long as it remains in the FTZ. The law thus allows international shippers to use American ports as a duty-free way station in international commerce.

Companies operating within FTZs are also permitted to manipulate or alter the foreign goods by repackaging, breaking up, assembling, sorting, mixing with other foreign or domestic parts before reshipment abroad, without incurring Customs duties unless they are entered into the United States for sale.

This case involves the storage in an FTZ in Carson of 4,432 “master cases” of cigarettes, supposedly made in Switzerland, with an estimated domestic market value of between $1.7 million and $5.5 million.

The company storing them did not have state tax stamps, the court says.

“We hold, contrary to the district court, that the California cigarette tax is an excise tax, not expressly precluded by the FTZ Act, the appeals court says.

Ultimately the cigarettes were seized and auctioned off.

“California has made the decision to impose its cigarette tax on unlicensed distributors who store cigarettes within the state for future sale in another state, including those cigarettes stored in FTZs,” the court ruling says. “That decision is not preempted by the express language of the Foreign Trade Zones Act, nor does it conflict with the general purpose or intent of Congress in establishing foreign trade zones.”

Because the cigarettes were found in California without California tax stamps, the federal government could seize and sell them, the court says.

1st June 2006

10:12pm: California economy lost 2,600 payroll jobs in April

California's economy posted a net loss of 2,600 payroll jobs in April, with the construction sector shedding the most jobs over the month, the state Employment Development Department said Friday.

In all, more than 14.9 million people in the state held payroll jobs during the month.

April's employment figures followed a revised loss of 13,400 payroll jobs in March.

Payroll employment totals are drawn from a survey of employers and don't include farm workers and the self-employed.

A separate survey of households suggested an additional 1.9 million Californians held jobs during the month, the EDD said.

Nationally, employers added 138,000 payroll jobs in April, the smallest increase since October when businesses still reeling from the impact of hurricanes striking the Gulf Coast added only 37,000 jobs.

Much of the national decline in April's payrolls reflected job losses in retailing. In February and March, payrolls grew by 200,000 in each month nationwide.

Some 870,000 Californians were seeking work in April, up by 22,000 from the previous month and down by 91,000 a year ago, the EDD said.

The state's unemployment rate edged up to 4.9 percent during the month. It was 4.8 percent in March and 5.4 percent in April 2005.

The U.S. unemployment rate held steady in April at 4.7 percent.

Over the 12-month period ending in April, payroll employment in California grew by 215,700 jobs, or 1.5 percent, the EDD said.

Some 8,300 payroll jobs in construction were lost during the month. Among the other employment industries to shed hires was the financial activities sector, which includes jobs in real estate, credit and insurance companies.

Retailers, warehouse operators, media and transportation companies also were among those to lose jobs over the month.

The manufacturing sector posted the biggest employment gains since March, adding 4,200 jobs.

Other industries to add jobs during the month included professional and business services, educational and health services, leisure and hospitality and government, the EDD said.

The professional and business services sector, which includes jobs in legal services, accounting and other office support positions, generated the most jobs since April 2005, adding 62,400 for a 2.9 percent increase.

The resources and mining sector saw the biggest annual percentage gain, adding 800 jobs for a 3.4 percent increase.

The largest annual decline in payroll jobs occurred in the manufacturing sector, which shed 7,400 jobs compared to April 2005.

9:04pm: Mendocino wine producers to launch marketing effort
San Francisco Business Times

Grape growers and vintners in Mendocino County have approved launching and funding the Mendocino Winegrape & Wine Commission, an effort to put marketing oomph behind their North Coast products.

The county's nearly 400 winegrape growers and 43 vintners hope to raise $650,000 to $750,000 annually for a marketing campaign to put their wines and grapes on the map.

Mendocino County growers sell about 80 percent of their grapes to winemakers in Napa and Sonoma counties, and often are the first to feel the effects of economic instability, said John Enquist, executive director of the Mendocino Winegrowers Alliance, which is spearheading the effort.

"We're hit first and hurt the hardest," he told the San Francisco Business Times on Tuesday. "We need to get more Mendocino wineries to produce more wines and create more of a marketplace for our products."

The state law authorizing creation of the commission took effect Jan. 1. It required that a referendum be approved by at least 5 percent of producers who would be affected by assessments.

Producers have now done that, showing they're willing to put their own cash up front to chip away at adjacent counties' historical advantages.

Mendocino County growers and vintners agreed to be assessed $10 per ton for grapes sold or processed to help market Mendocino's county's wines and winegrapes, along with some support of viticultural and enological research.

During a 30-day industry referendum that ended May 13, 85 percent of the county's growers and winemakers favored funding the commission, Enquist said. Ninety percent of the county's wineries participated in the referendum, with 82.4 percent of participants favoring creating the commission, he said; 58.2 percent of the county's 378 growers participated, with 88.2 percent of participants agreeing to launch the marketing effort.

Enquist said the successful drive for a wine and grape commission was modeled on similar efforts in Washington state, Lodi and Lake County, and creates the only California agricultural commission to include both growers and wineries.

According to a recent report in the trade publication Western Farm Press, Sonoma County grape growers spend about $400,000 to market their products, while the Napa Valley Vintners Association boasts a $4 million annual budget. Producers in Paso Robles, on the central California coast, and Washington state each chip in $1.4 million annually for promotion.

Mendocino, which boasts more than 40 vintners, many of them specializing in organic or biodynamic wines, is competing with much-better-known Napa and Sonoma producers. "I'm thrilled for our local industry, because Mendocino County will now have the opportunity to dramatically increase the promotion of our wines and grapes and compete at a much higher level," Enquist said.
8:58pm: Home sales in California continute to slide

Home sales fell across California and in Los Angeles County during April, but prices continued increasing from year-ago levels in most markets, a trade association said Thursday.

Last month, sales declined an annual 21.4 percent and slipped 4.1 percent from March, said the L.A.-based California Association.

April continued the sales slide that began at the start of last year's fourth quarter. The April 2005 sales total was the second-highest since the association began tracking the market.

Sales are softening in part because of high prices and rising mortgage rates. While the latter is still low historically, the 30-year fixed mortgage rate is at its highest point since June 2002. The rate for adjustable mortgages is at its highest since August 2001.

Last month 30-year fixed mortgage interest rates averaged 6.51 percent, up 11.1 percent from 5.86 percent a year ago, according to Freddie Mac. Adjustable mortgage interest rates averaged 5.62 percent in April, up 32.2 percent from 4.25 percent a year ago.

"Concerns about the likelihood of future interest rate increases continue to influence the market," said association president Vince Malta.

The association annualizes sales each month, which means that 516,960 previously owned single-family houses would change owners this year if each month's market matched April's. A year ago the annualized rate was 658,060 sales.

The report is based on information from 90 associations across the state. Even though sales are falling, Leslie Appleton-Young, the association's vice president and chief economist, said this could end up being the third best market ever.

"We've been calling the turning point for three years and we're finally getting it right."

The median price, the point at which half the houses cost more and half less, increased an annual 10.2 percent to $562,380 and was unchanged from April. In Los Angeles County, where sales fell an annual 12.8 percent, the median price increased an annual 17.3 percent to $567,480 and inched up 1.9 percent from March.

"It's still a good market," Appleton-Young said. "I just think we have transitioned to a balanced market and it's just challenging because people have such short memories."

The latter would be sellers who benefited from strong demand, tight inventories and annual gains of 20 percent or more in the median price.

The association's report also showed that:

- In Ventura County the median price increased an annual 4.9 percent to $681,190 and sales fell 38 percent from a year ago.

- In the High Desert, which includes the Antelope Valley, the median price increased an annual 22.8 percent and rose 2.5 percent from March. Sales fell 13.9 percent annually.

- The median price increased in 18 of 20 markets tracked by the association. In Northern California it fell an annual 0.8 percent to $412,110 and dropped by 3.5 percent to $1.3 million on Santa Barbara's south coast.

The median price increased in 84.5 percent of 401 cities and communities, according to a separate report compiled by the association and DataQuick Information Systems.

"We're seeing price appreciation trend toward a more sustainable rate for the California housing market," Appleton-Young said.

Inventory is building and hit a 5.6-month supply in April but is still short of a seven-month supply that is considered normal.

Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said that the local market has some lingering strength price-wise.

"L.A. County continues to surprise people. That's a pretty strong year-over-year price increase. What you are seeing is the market level off, and hopefully it's going to come in for that soft landing."

31st May 2006

4:25pm: Sun Micro says to cut up to 5,000 jobs
Wahington Post:

Sun Microsystems Inc. (SUNW.O), which has struggled in recent years to turn a profit and boost revenue, said on Wednesday it would cut as many as 5,000 jobs, or 13 percent of its workforce, over the next six months.

Shares of the computer server maker rose about 1 percent after the news, though one analyst said Wall Street had already factored in the job cuts. The restructuring is the first big move by Chief Executive Jonathan Schwartz, who took over last month from Sun CEO and co-founder Scott McNealy.
Sun, which made an operating loss last quarter, also set a goal of posting operating income of at least 4 percent of revenue for its current fiscal fourth quarter -- in line with some analysts' expectations -- and 10 percent in the long term.

Since the implosion of the dot-com and telecommunications investment bubbles in 2000 and 2001, Sun has suffered more than rivals International Business Machines Corp. (IBM.N) and Dell Inc. (DELL.O) as the market shifted to cheaper servers using Intel Corp. (INTC.O)-compatible chips and the Linux operating system.

"It's a mixed bag in that Sun is finally taking more significant cuts to its cost structure," said Pacific Crest Securities analyst Brent Bracelin. "It's negative in the fact that some people were expecting more."

Some analysts have called for cuts of 12,000 or more to the company's 37,500-strong workforce. In addition to the job cuts, Sun said it was selling its Newark, California campus and exiting leased facilities in Sunnyvale, California. Both cities are in Silicon Valley.

Santa Clara, California-based Sun said the job cuts, among other moves, should yield annual savings of between $480 million and $590 million, with the full impact expected in the fourth quarter of fiscal 2007.

Sun expects restructuring charges of $340 million to $500 million over the next several quarters, with the majority expected in the quarter ending June 30, the company said in a statement.

For the first time in many quarters, Sun issued a revenue forecast, saying it expects fiscal 2007 revenue growth in "the low-to-middle single digits" and a gross margin of "around 43 percent."

"By no means is this going to make Sun really compelling unless we do start to see sustainable growth," Bracelin said.

Analysts had forecast Sun would generate $13.8 billion in fiscal 2007 revenue, an 8 percent rise from the $12.8 billion Wall Street expects for fiscal 2006, according to Reuters Estimates.

Shares of Sun rose 1.1 percent in extended trade to $4.68, after climbing 8 cents, or 1.8 percent, to close at $4.63 in regular trade.

26th May 2006

8:19pm: Apple Loses Bid to Unmask Bloggers' Sources

A California appeals court has smacked down Apple's legal assault on bloggers and their sources, finding that the company's efforts to subpoena e-mail received by the publishers of Apple Insider and PowerPage.org runs contrary to federal law, California's reporter's shield law, and the state Constitution.

The Sixth District Court of Appeals on Friday roundly rejected (.pdf) Apple's argument that the bloggers weren't acting as journalists when they posted internal document about future Apple products. "We decline the implicit invitation to embroil ourselves in questions of what constitutes 'legitimate journalis(m).' The shield law is intended to protect the gathering and dissemination of news, and that is what petitioners did here," the court wrote.

"Beyond casting aspersions on the legitimacy of petitioners’ enterprise, Apple offers no cogent reason to conclude that they fall outside the shield law’s protection."

Apple had also claimed that the inside information "could have been obtained only through a breach of an Apple confidentiality agreement." The company argued that even if the bloggers were journalists, there's no protection for anonymous sources who have committed the crime of trade secret theft.

Here, too, the three-judge panel disagreed. "Apple has failed to demonstrate that it cannot identify the sources of the challenged information by means other than compelling petitioners to disclose unpublished information. This fact weighs heavily against disclosure, and on this record is dispositive." Additionally:

    Apple alludes repeatedly to the notion that the publication of trade secrets cannot be found to serve the public interest because of the policy embodied in trade secret law itself, which presupposes that trade secrets possess social utility justifying special protections against wrongful disclosure. This is, of course, a false dichotomy. It is true that trade secrets law reflects a judgment that providing legal protections for commercial secrets may provide a net public benefit. But the Legislature’s general recognition of a property-like right in such information cannot blind courts to the more fundamental judgment, embodied in the state and federal guarantees of expressional freedom, that free and open disclosure of ideas and information serves the public good.

The case began in late 2004, when Apple Insider and PowerPage published drawings, artists' sketches, pricing and release dates for a planned product codenamed "Asteriod." Incensed, Apple lawyers sued the anonymous sources of the information as Doe defendants, and promptly issued subpoenas to the bloggers' ISPs seeking any e-mail pertaining to Asteroid, in a bid to unmask the leakers.

That prompted the EFF to intervene. The trial judge sided with Apple, and EFF appealed.

The ruling is a significant victory for journalists, and, I'd argue, the public. It's also good for ISPs, says EFF lawyer Kurt Opsahl, because the court found that the federal Stored Communications Act protects private e-mail from civil subpoenas.

"That is going to be very useful to internet service providers in the Valley, who now know that they don't have to provide the contents of e-mails when they receive subpoenas in civil litigation," Opsahl told me. "It is a significant victory for ISPs."

A separate case against Apple fan site Think Secret is still pending in a lower court.

24th May 2006

11:17pm: California Space Agency wins Innovation Grant
BASIC to Participate in $15M Innovation Study
Creating Jobs Through Innovation

SAN FRANCISCO, CA -- (MARKET WIRE) -- 05/22/2006 -- Reporters are invited to an interview opportunity with leaders of the WIRED project: Jaime Fall, assistant secretary, Workforce Strategies, CA Labor and Workforce Development Agency; California Space Authority executive director Andrea Seastrand; Bay Area Science and Innovation Consortium chair Regis Kelly; and Bay Area Economic Forum president Sean Randolph will be available for interviews on Wednesday, May 24 from 9:30 - 10:00 a.m. PST at Rock Hall Auditorium, Room GD-102 (across courtyard from Byers Hall), Mission Bay, 1700 4th Street, San Francisco, CA 94107. A news conference to announce details of the project will follow immediately at the same location.

The Bay Area Science and Innovation Consortium (BASIC) and the Bay Area Economic Forum are partners in the winning federal grant developed by the California Space Authority (CSA) to promote entrepreneurship, develop innovation-oriented talent and support industrial competitiveness throughout a 13-county region from San Diego to Alameda dubbed the "California Innovation Corridor."

The $15 million "Workforce Transformation" project is a three-year effort funded by the U.S. Department of Labor as part of its Workforce Innovation in Regional Economic Development (WIRED) grant process. The California project seeks to drive systemic transformation to increase sustainable entrepreneurship, advance and sustain global competitiveness in manufacturing and the supply chain; and to create the next generation of innovators and technicians. BASIC and the Bay Area Economic Forum are lead partners in three of the project goals: moving innovation to commercialization, developing the 21st Century workforce, and accelerating technology commercialization.

"Partnering with the CSA on this project is a perfect fit in BASIC's focus on advancing the interests of science, technology and innovation in the Bay Area," said Regis Kelly, BASIC chair. "With this funding we can capture Bay Area innovation more efficiently and aggressively, which should enhance the global competitiveness of our region, state and nation."

"This is an extremely important opportunity for BASIC and CSA to work together on this critical effort to ensure California's future economic prosperity and success," said Andrea Seastrand, CSA executive director. "A highly skilled, technical workforce is vital to the future of our state and the nation. BASIC and the CSA will work together to achieve that goal -- in the Bay Area and throughout the California corridor."

Jaime Fall, Assistant Secretary for Workforce Strategies in the California Labor and Workforce Development Agency, said, "Innovation and entrepreneurship are critical factors in keeping California and the nation competitive in global markets. The Schwarzenegger Administration is excited about the potential of this project, and our Agency will be working closely with CSA, BASIC and all the partners."

"The California Innovation Corridor project is a natural complement to the National Innovation Initiative, and the president's American Competitiveness initiative and it provides an avenue through which California can respond to the National Academies challenge in its report, 'Rising Above the Gathering Storm,' said Sean Randolph, president of the Bay Area Economic Forum.

The WIRED initiative focuses on labor market areas in multiple jurisdictions within a state or across state boundaries. It supports innovative approaches to education and workforce development that go beyond the traditional strategies of training individuals for existing jobs.

BASIC and the Bay Area Economic Forum will collaborate with the CSA, the U.S. Department of Labor Employment and Training Administration, the State of California's Labor and Workforce Development Agency and its Employment Development Department, and more than 60 industry, workforce and economic development partners.

The Bay Area Science and Innovation Consortium is a program of the Bay Area Economic Forum, co-sponsored by the Bay Area Council and the Association of Bay Area Governments. BASIC's mission is to develop innovative collaborative programs that take advantage of the unique capabilities of Bay Area R&D institutions to provide solutions addressing major national and regional challenges. For more information, go to:


The California Space Authority is a non-profit organization representing the diverse interests of the California space community in commercial, civil and national security domains. As the state's designated space authority, CSA works closely with industry, government, academia and workforce entities. For more information, go to:


23rd May 2006

2:55pm: California, Mongolia sign trade agreement
Sacramento Business Journal:

Lt. Gov. Cruz Bustamante has signed an agreement to establish a public-private partnership to promote trade between California and Mongolia.

The partnership will be known as the California-Mongolia Business Forum-Ulaanbaatar.

California exported $12.3 million in goods, services and agricultural commodities to Mongolia during the last five years, according to the U.S. Dept. of Commerce.

Two California firms will receive assistance from the Business Forum as they conduct a feasibility study and develop a contract with the Mongolian government to build a hospital in Ulaanbaatar and equip it with state-of-the-art technology.

The companies are TTE International Development Corp. of Santa Maria and Oscar Larson & Associates Consulting Engineers and Land Surveyors Inc. of Eureka.

The Steppe Link Association, a non-profit organization financed by businesses in Mongolia, will manage the partnership and assist business people in California and the host country.

19th May 2006

10:24pm: E-Trade to close its call center: 500 jobs will be relocated
Sac Bee:

E-Trade to close its call center: 500 jobs will be relocated when the Rancho Cordova facility shuts at the end of August.

Online brokerage giant E-Trade Financial Corp. will close its Rancho Cordova operations at the end of August, relocating some 500 jobs, mostly call center positions.

Company spokeswoman Connie Dotson said Thursday the jobs will be spread among six other E-Trade call centers around the United States, including those formerly operated by brokerages BrownCo. and Harrisdirect, both of which E-Trade acquired last year for a combined $2.3 billion.

In a region considered a mini-hub for company call center operations, economic development officials say E-Trade's departure is unfortunate but at least two new call center operations are considering moving into the market.

Dotson said E-Trade officials weighed numerous factors, which she declined to specify, before making the decision to relocate. "It's about the acquisitions ... and efficiency and consolidations," Dotson said. "The people here are phenomenal. This move has nothing to do with this team."

She said some employees will be offered transfers to other locations, including Salt Lake City and Charlotte, N.C. All those laid off will be given a financial package pegged to length of employment, with at least a month of severance pay.

A pioneer in online stock trading, New York-based E-Trade was founded in 1982 and opened its Rancho Cordova operations a decade ago as a data storage center and a call center. It quickly grew from 50 employees to more than 500, including accounting specialists, software experts and licensed securities brokers.

"They employed a lot of folks in the region and their loss is one that will be felt," said Barbara Hayes, executive director of the Sacramento Area Commerce and Trade Organization.

However, two other call centers are considering moving into the region, Hayes said. Both companies, which she declined to identify, are seeking an existing call center facility that would allow them to move in and began operations immediately. "We're working very hard to make that happen," she said.

One of the two has indicated it would hire more than 500 workers, and the other would hire about 250, she said.

E-Trade was one of a number of companies that rushed to set up call center operations in the Sacramento region during the 1990s, Hayes said.

With its seismic stability, well-trained work force and plentiful fiber optic lines to handle telecommunications needs, the area attracted such companies as Franklin Templeton Investments, Apple Computer and Electronic Data Systems Corp., all of which retain operations here.

SACTO estimated in 1999 that call centers employed some 12,000 in the area.

But the technology bust earlier this decade, plus outsourcing and other factors have shrunk the industry here, Hayes said.

In recent years, such companies as EarthLink Inc. and Providian Financial Corp. have shut their call center operations in the area, laying off hundreds. But others such as Bank of America Corp., the California State Automobile Association and Comcast Corp. still have significant call-center operations in the region.

The laid-off workers at E-Trade will likely be able to find new jobs relatively easily, said David Lyons, a labor market consultant with the California Employment Development Department.

He said many have developed skills transferrable to the region's financial services sector.

"And I'm sure they will have opportunities at other call centers," he said, becausesuch centers "have relatively high turnover."

17th May 2006

8:22pm: Hewlett-Packard will close 79 data centers, Profits up
Bloomberg News, The New York Times

Hewlett-Packard, the personal computer and printer maker, said Wednesday it would close 79 data centers worldwide as part of a plan to save $1 billion.
Six existing data centers would be made into larger offices to handle Hewlett-Packard's storehouse of information, such as e-mails and records of business transactions, the company said.
Any job reductions in the move would be part of the company plan announced in July to cut the total work force by 15,300, said a spokesman, Michael Moeller. The company said it was already halfway through that process, helping the company post a 51 percent jump in profit for its latest quarter.
The data centers would be closed in the next three to four years, the spokesman said. The company would add more automated equipment when it expanded six centers in Atlanta, Houston and Austin, Texas. The existing facilities were not as automated, relying on more workers, he said.
In its profit report Tuesday, HP said that strong sales of laptop computers and printer supplies along with cost- cutting helped push its quarterly profit up 51 percent.
The company also said that its market share in personal computers had increased by 1.4 percentage points.
The quarter reflects a strategy by Mark Hurd, chief executive, to balance revenue growth with increased profit. In almost all its divisions, including those with flat or declining revenue, the company improved its profit margins.
"This was emblematic of the HP story today - very good execution and a focus on cost," said A.M. Sacconaghi Jr., senior research analyst with the investment firm Sanford C. Bernstein.
Hewlett-Packard's net profit for the second quarter rose to $1.46 billion from $966 million a year earlier. Revenue rose 5 percent to $22.6 billion.
The net profit and revenue, reported after the U.S. market closed, exceeded company projections as well as analysts' average forecasts.
The company continued to show strength in its PC business, where operating profit increased 69 percent as revenue grew 10 percent. Laptop sales increased 27 percent.
HP said it was earning more on each computer sale. The profit margin in the PC unit increased to 3.6 percent, from 2.3 percent a year earlier.
The 1.4 percentage point increase in Hewlett-Packard's PC market share received more attention than usual because Dell, a larger rival, recently began cutting prices on some of its models aggressively to gain share. Dell, which will report earnings Thursday, has said that its profit would be lower than analysts had expected because of the price cuts.
Analysts are watching to see how much Hewlett-Packard will have to cut its computer prices to hold market share and whether that will affect profit margins. Hurd had an answer. Even though the company gained market share, "it is not our sole objective," he told analysts and investors. "Our objective is to run a better business."
He said the improvement in the PC unit had been steady. "It predates me," he said. "It is just one more installment."
Because personal computers contribute only about 30 percent of Hewlett- Packard's revenue, in contrast to 60 percent for Dell, price-cutting in PCs has less impact on HP's profitability, analysts said.
Instead, Hewlett-Packard's earnings are largely driven by the performance of its printing unit, where revenue grew 5 percent in the latest quarter, to $6.7 billion. The printing business provided about $1 billion in operating profit, up 23 percent from the year-earlier period.
The profit margin in that unit was 15.5 percent, up from 12.7 percent a year earlier.

16th May 2006

6:06pm: Another California Representative arrested at Sudan Embassy
SF Gate:

East Bay's Lee, other lawmakers arrested during D.C. rally

Rep. Barbara Lee of Oakland was among seven members of Congress who were arrested today when they blocked the front entrance at the Embassy of Sudan in Washington, D.C.

Today's protest and civil disobedience was designed to embarrass the Sudan's military dictatorship for its ongoing genocide in the troubled Darfur region and to build public support for a United Nations peacekeeping mission there.

"The world stood by when nearly one million people died in Rwanda," Lee, a Democrat, said before her arrest by Secret Service agents. "The most that our country unfortunately did was say 'I am sorry,' after the fact. Now, over 400,000 people have died as a result of the genocidal actions of the Khartoum government against the people of Darfur ... Not on our watch will we allow another genocide to take place."

It was the second recent protest and civil disobedience at the Sudanese Embassy involving the arrest of members of Congress. Rep. Tom Lantos, D-San Mateo, was among five members of Congress arrested April 28 outside the embassy.

Lee chairs the Congressional Black Caucus, which includes 43 African American members of the House and one member of the senate, Sen. Barack Obama, D-Illinois.

The other members of Congress arrested today include Rep. Mel Watt, D-N.C., and Congressional Black Caucus members Rep. John Lewis, D-Ga., Rep. Al Green, D-Tex., Delegate Eleanor Holmes Norton, D-D.C)., Rep Eddie Bernice Johnson, D-Tex and Rep. Gwen Moore, D-Wisc..

A peace treaty was signed May 5 between the Sudanese government and Darfur's largest rebel group, but two other rebel groups refused to sign. Meanwhile, more than 2 million civilians remain displaced from their homes and continue to be vulnerable to attacks by armed militias. In addition, the UN World Food Program recently cut rations in Darfur to 1,050 calories per day.

"Already too many, far too many people have died or been displaced, have been raped, villages have been burned down," Lee told a crowd of protesters. "The people of Darfur deserve to return home."

Lee and her colleagues on the Congressional Black Caucus called today for a specific plan of action:

-- An immediate stop to the violence against the people of Darfur by the government of Sudan and its Janjaweed militias;

-- A Chapter 7 UN peacekeeping mission to assist 7,200 African Union peacekeeping troops in Darfur;

-- Protection of civilians who remain vulnerable;

-- Accountability for government officials and Janjaweed responsible for war crimes and genocide; In addition, Lee and her colleagues urged President Bush to persuade the government of Sudan to release its 300,000-500,000 metric tons of grain reserves to feed the starving people of Darfur and to take immediate measures to restore security so that the refugees can return to their homes.

Lee, who has traveled twice to Darfur with congressional colleagues, is the most senior Democratic woman on the House International Relations committee, where she serves on the Africa Subcommittee. She has been a leader in the movement to divest state pension funds and university endowments from companies doing business in Sudan.

"I saw the desperation in the eyes of the people. I saw the violence, the results of the violence, the results of the genocide," Lee said. "We saw and talked with people who wanted to go home. We saw the gloom and felt the pain and suffering of what is taking place."

After she was taken into custody, Lee was transported to a nearby Metropolitan police headquarters in Washington, D.C. She was held for about two hours before being released. She was charged with the misdemeanor offense of trespassing and paid a $50 fine.

"We are going to put the squeeze on the Sudanese government until they stop this horrific genocide," Lee said.

14th May 2006

10:11am: State has No. 3 poverty rate in U.S., study shows
Contra Costa Times:

California's high housing costs and large population of working poor drove the state nearly to the top of a new poverty ranking, a study released today shows.

When the federal poverty threshold -- $19,157 for a family of four in 2004 -- is adjusted to take into account housing costs, California has the third-highest poverty rate in the nation; 17 percent of Californians are poor. Washington, D.C., and New York lead the list, the Public Policy Institute of California found.

And the state's poverty rate has been rising faster than the nation's since 2001.

"This study is a step toward a better understanding of who are the poor and how many are poor and how we can get beyond saying California is a high-income state," said study author Deborah Reed.

There are a few reasons that the poverty rate -- particularly among people with jobs -- is increasing in California but not in other parts of the country.

Among low-income California families, earnings have decreased 4 percent since 1969, while nationwide they have risen 14 percent.

Less-educated workers make less money in California than in other parts of the country and a larger number of low-education, low-wage workers live here, including many who are foreign-born.

"There's been a shift away from good jobs for people with lower education levels," Reed said.

In addition, California's higher housing costs drive up the poverty rate.

Reed said a large segment of the state's poor are immigrants but that the longer immigrants have lived in the country, the more money they earn.

For foreign-born Latinos in California, Reed's adjusted poverty rate is 27 percent, but for U.S.-born Latinos the rate is nearly halved, to 14 percent.

"It's very consistent with work we've been doing on intergenerational progress of Latinos and particularly Mexican-Americans," Reed said.

Whites born in the United States have a 9 percent adjusted poverty rate, blacks 20 percent and U.S.-born Asians 12 percent, according to Reed's calculations.

Researchers for years have debated how the federal poverty guidelines are set, but there has been very little policy discussion of how to change it.

Other studies have put the cost of living in California much higher than Reed's poverty-line adjustment -- up to $80,000 for a family of four in one study.

Reed said housing and utility costs are the largest budget items that have wide regional variations, but other studies take into account costs of transportation, food and health care.

"This is about hours and wages," said University of Washington researcher Diana Pearce. "Low wages and not enough hours."

Pearce's study of California, which took into account more cost factors, found that a full 30 percent of the population was not making ends meet. She is working on similar studies in other states.

Reed found one factor cutting into California's poverty rate is an increased number of working single mothers.

The percentage of such mothers in the work force following changes in welfare policy increased from 69 percent to 80 percent in the late 1990s and early 2000s. That led to a decrease in poverty rates in single-mother families, though the rate is still high, at 41 percent.

12th May 2006

8:35pm: Windfall allows for spending boost in governor's budget

Gov. Arnold Schwarzenegger's plan released Friday increases general fund spending to $101 billion, from $90 billion in the current fiscal year. AP/Rich Pedroncelli
Gov. Arnold Schwarzenegger on Friday released a $131.1 billion state budget that benefits from a massive tax windfall this year, allowing him to spend more on public education and sock away money for reserves. The overall spending plan for the 2006-07 fiscal year is $13.8 billion higher than last year, reflecting the state's rebounding economy and providing an expected boost to Schwarzenegger's re-election campaign.

Billions in unanticipated tax revenue have enabled him to boost spending on programs popular with his critics, such as schools and children's health care, while appeasing conservatives who have been critical of the state's deficit spending.

The governor's plan increases general fund spending to $101 billion, from $90 billion in the current fiscal year. The balance of the spending goes to special funds and bond payments.

Speaking at a press conference in Sacramento, Schwarzenegger vowed not to raise taxes and touted his spending plan as fiscally responsible. He said his proposed increases in education and health care spending reflect Californians' priorities.

The governor also proposes putting $2 billion into the state's reserve fund and an additional $142.2 million into public safety programs. That money will more than double spending for law enforcement efforts targeting methamphetamine dealers, direct $50 million to reduce recidivism among mentally ill offenders and add about $21 million to programs aimed at reducing crime among at-risk youth.

Schwarzenegger also wants to roll back a January proposal to block increases in welfare payments for the elderly and disabled, a plan Democrats had vowed to fight.

The Legislature faces a June 15 deadline that it has failed to meet since 2000 to approve the budget, which takes effect July 1.

The spending plan has benefited from unexpected tax revenue that has flowed into California's coffers in recent months. The windfall primarily is a result of increased revenue from stock gains, home sales, business profits and taxes on rising gas prices.

In January, the governor announced a revenue increase of $9.2 billion in tax receipts from the current fiscal year and projected new revenue in the coming budget year. Since then, administration officials have said they expected that revenue to rise by an additional $5 billion. On Friday, Schwarzenegger said the state treasury had taken in $7.5 billion in unanticipated revenue.

Earlier in the week, Schwarzenegger announced a plan to spend the bulk of the windfall on education, in conjunction with a deal that also would settle a lawsuit and long-running feud with the state's teachers union.

Under that plan, Schwarzenegger proposed directing an additional $2.8 billion more to education than he initially proposed in January. The governor's spending plan will lift overall education spending in California from $50 billion in the current year to $55.1 billion in the budget year beginning July 1.

In addition, his settlement with the teachers union calls for repaying another $2.9 billion to schools over seven years that educators claimed he has owed since the two sides struck a budget-balancing deal in 2003. The governor's finance director said the deal would be partially funded by "re-funding a tobacco securitization" deal from 2003 and would not add significantly to the state's ongoing deficit.

Schwarzenegger said that if his budget proposal is approved by the Legislature, education funding will have increase from $46 billion to more $55 billion since he took office.

For fiscal conservatives, Schwarzenegger also proposed making accelerated payments on bonds approved by voters to balance the state's 2004-05 budget. The bonds would be paid off a year early, in 2009.

Retiring the deficit-reduction bonds early will give Schwarzenegger a stronger argument with voters to approve a $37.3 billion public works spending package that will be on the November ballot. The state will be able to absorb the debt more easily.

On its face, Schwarzenegger's savings plan would boost state reserves to their highest level in nearly 30 years and put a down payment on creating an $8 billion rainy-day reserve fund that voters approved in 2004.

In reality, those reserves likely would be only temporary because much of the money may be needed to cover pending lawsuits, federal program cuts, higher prison costs and as yet undetermined raises for state employees whose contracts expire this year. All those costs were not fully accounted for in the governor's preliminary budget in January.

11th May 2006

9:50pm: Amgen to open office in Dubai biotechnology park
Channel 3 News:

Thousand Oaks' Amgen to open office in Dubai biotechnology park
DUBAI, United Arab Emirates Southern California biotechnology company Amgen announced today it will open its Mideast headquarters in a Dubai free trade zone developed to lure biotechnology research and development firms.
Amgen says the office will focus on selling cancer and arthritis drugs to an estimated 300-thousand patients throughout the Middle East and Africa.

Amgen vice president Ugo Di Francesco says the Thousand Oaks-based company could move some of its research and development work to Dubai in the future. Its chief labs are in the United States, Britain and Germany.

Di Francesco says Amgen was attracted to Dubai's business-friendly setting, with intellectual property protection and no taxes or restrictions on foreign ownership, expatriate employees or sending profits outside the country.

Amgen is the world's largest biotech company with revenue of 12-point-four (b) billion dollars last year.
9:24pm: California company settles payola probe for $12 million

Universal Music Group Recordings Inc., the world's largest record company, has agreed to pay $12 million to settle a payola case that claimed the company provided vacations, electronics and other bribes to increase radio play for their artists, New York Attorney General Eliot Spitzer said Thursday.

The bribes and gifts were used to gain airplay for songs that included records by Nick Lachey, Ashlee Simpson, Brian McKnight, Big Tymers, and Lindsay Lohan, Spitzer said.

The Santa Monica, Calif.-based company agreed to pay the cash to charity along with $100,000 to cover the cost of the investigation and to adopt reforms, Spitzer said. The company didn't admit guilt, but acknowledged "various employees and independent promoters acting on behalf of the company" engaged in the illegal practice, Spitzer said.

"UMG has illegally provided radio stations with financial benefits to obtain airplay and boost the chart position of its songs," Spitzer said in papers filed in state Supreme Court along with the settlement. "UMG has obtained airplay for its songs through such deceptive and illegal practices as bribing radio station employees, on occasion, to play UMG songs, providing a stream of financial benefits to radio stations, to assist with stations' overhead costs or to provide promotional support, on condition that UMG records receive airplay," Spitzer stated. UMG was also accused of "engaging in fraudulent call-in campaigns to increase airplay."

In January 2003, a WFLY-FM program director was provided use of a Miami hotel room for playing "Shoulda, Coulda, Woulda" by Brian McKnight and putting it on the Albany, N.Y., station's playlist, Spitzer said.

The room was listed as a contest prize for accounting purposes. UMG e-mails showed WFLY asked UMG to provide an airplane trip to Madrid to see U2 perform last year, but required assigning the better seats to the program director and less expensive seats to contest winners, according to the court filing.

The same program director was provided a Miami hotel stay to play a Nick Lachey song and he received use of a hotel room in New York City in April 2004 along with Yankees tickets.

"We have been working cooperatively with the attorney general's office in resolving these promotion issues and are pleased to have completed the process with this agreement," UMG said in a statement. "The reforms that we have agreed to with the attorney general are consistent with the policies that we voluntarily implemented over a year ago."

"Consumers have a right not to be misled about the way in which the music they hear on the radio is selected," Spitzer said. "Pay-for-play makes a mockery of claims that only the 'best' or 'most popular' music is broadcast."

The $12 million payment will be distributed through the Rockefeller Philanthropy Advisors to non-profit groups in New York state to fund music education and appreciation programs.

Spitzer said UMG used interns and employees and "outside vendors" to pose as listeners requesting UMG songs. In July 2004 UMG started pushing "Rain on Me" by Ashanti through its Island Def Jam label, paying $3,500 for six weeks. For the first two weeks, WGCI in Chicago and WQHT in New York City each received 25 calls. Forty calls were made to these and other stations in the final four weeks targeting black women between 18 and 24 years old, Spitzer said.

Its Island Def Jam label hired another group to drum up airplay for Ludacris' "Stand Up" at numerous radio stations including CKEY and WBLK in Buffalo and WDKX in Rochester.

UMG has a nearly 26 percent share of the world market and sells one in three albums sold in the United States, according to the court filing. UMG's labels include Interscope Geffen A&M Records, Island Def Jam Music Group, Universal Motown Records Group, UMG Nashville and Verve Music Group. The types of music involved included Top 40, Urban, Alternative Rock and Adult Contemporary.

Spitzer launched a nationwide investigation in 2004 into alleged wrongdoing by music and radio companies. Earlier this year, Spitzer sued Entercom Communications Corp., accusing its executives of running scams to trade cash for airplay of songs.

Entercom has denied the allegations.

Sony's music arm has already agreed to pay $10 million to settle with Spitzer, and Warner Music agreed to a $5 million settlement.

9th May 2006

10:40pm: Nevada fires another salvo
KOLO, News 8- Reno

New Round of Ads From Nevada Targets Companies in California

In early 2004, Coca-Cola introduced an ad campaign in which Sharlene Hector sang “I Wish I Knew How It Would Feel to Be Free,” a tune the soft drink maker hoped would supplant “I Want to Buy the World a Coke.”
It’s long forgotten.
About the same time, Nevada economic development groups rolled out a gritty campaign spotlighting California’s lousy climate for business and encouraging companies to migrate east.
It’s still running.
In fact, another rendition of the campaign hit the media last week with print ads, wallscapes and Webcasts targeting Los Angeles, Sacramento, San Diego and San Francisco.
This time around, the campaign features missing California icons — the Golden Gate Bridge and the Hollywood sign — that migrated to Nevada.
Economic development officials in Nevada decided to roll out a new version of the campaign for a simple reason: It works.
But even though 65 companies and more than 2,300 jobs have migrated to Nevada from California since 2004, economic officials don’t measure the campaign’s effectiveness that way.
Instead, they watch how much news coverage the campaign generates in media in California and elsewhere, hoping to leverage a relatively modest amount of paid advertising into a good-sized chunk of publicity.
This time around, the campaign carries a budget of $560,000, and Nevada executives hope to generate $6 million to $8 million worth of news coverage, said Chuck Alvey, president and chief executive officer of the Economic Development Authority of Western Nevada.
The campaign is funded by EDAWN, Northern Nevada Development Authority in Carson City, Nevada Development Authority in Las Vegas, the state Commission on Economic Development and Sierra Pacific Power Co.
The $6 million to $8 million in free coverage that backers hope to generate with the new ad campaign compares with coverage worth about $12 million in the campaign’s first year and $10 million the next.
“We keep hearing about it,” Alvey said.
He said economic development officials in Nevada think they have a fresh and strong message to deliver to California businesses.
This time around, the campaign makes a point that California businesses are tired of waiting around for slow changes in the Golden State’s business environment.
And it refreshes the pitch that workers compensation costs and taxes are lower in Nevada. Those were important elements of earlier campaigns that warned California businesses that their home state’s business climate threatened their very survival.
Important as those factors may be, research by Nevada officials finds that quality of life and affordability also are an important incentive for companies to move, said Lt. Gov. Lorraine Hunt, chair of the Commission on Economic Development.
The campaign strategy and creative elements were developed by KPS|3 Marketing of Reno.

8th May 2006

9:41am: Apple wins Beatles Lawsuit
LA Times

Apple Computer Inc. is entitled to use the apple logo on its iTunes Music Store, a judge ruled Monday, rejecting a suit filed by Apple Corps Ltd., the guardian of The Beatles' commercial interests.

Apple Corps, which claimed that the computer company had broken a 1991 agreement in which each side agreed not to enter into the other's field of business, said it would appeal.

Judge Anthony Mann of Britain's High Court ruled that Apple Computer used the fruit logo in association with the store, not the music, and thus did not breach the agreement.

"I conclude that the use of the apple logo ... does not suggest a relevant connection with the creative work," Mann said in his written judgment. "I think that the use of the apple logo is a fair and reasonable use of the mark in connection with the service, which does not go further and unfairly or unreasonably suggest an additional association with the creative works themselves."

Though Apple Computer CEO Steve Jobs said he was "glad to put this disagreement behind us," the case appears far from over. Neil Aspinall, the manager of Apple Corps, said his company would immediately appeal.

"We felt that during the course of the trial we clearly demonstrated just how extensively Apple Computer has broken the agreement," Aspinall said in a statement.

Apple Computer has sold more than 1 billion songs through the iTunes Music Store, which is available throughout Europe as well as in the United States, Canada, Australia and Japan. Though there are more than 3 million tracks available for purchase in the U.S. -- and 2 million in Britain -- there are no Beatles' songs listed. The band's catalog is not available on iTunes.

In his brief statement, Jobs said he hoped the ruling would help rectify that situation: "We have always loved the Beatles, and hopefully we can now work together to get them on the iTunes Music Store."

Apple Computer shares rose 1.2 percent to $72.73 on the Nasdaq Stock Market.

Lawyers for Cupertino, Calif.-based Apple Computer had argued that the company was conducting its business legally and consumers are smart enough to tell the difference between the logos. Apple Corps uses a shiny green apple as its logo, while Apple Computer has a cartoon-like apple with a neat bite taken out.

Lawyers for each side tussled during the hearing over advertisements for iTunes featuring musical acts U2, Eminem and Coldplay, using the logo. The judge confessed early on that he owned an iPod.

The 1991 agreement ended previous lengthy litigation over the logo. Apple Computer told the court that it paid the Fab Four's company $26.5 million as part of the 1991 out-of-court settlement, and in return had received "a considerably expanded field of use." The terms of the deal were kept confidential at the time.

Mann refused Apple Computer's application for an immediate interim payment of 1.5 million pounds ($2.8 million) from Apple Corps toward its legal costs, pending further hearings. Apple Corps faces a similar bill for its own legal expenses.

While the case may have seemed glamorous because of the litigants, it really came down to the interpretation of a contract -- the 1991 agreement -- said Jonathan Riley, an intellectual property lawyer with London firm Lawrence Graham.

"It was watched with interest, but also some distance, because I don't think it's hugely significant for either the computer industry or the music industry," he said.

Apple Corps was started by the Beatles in 1968 and is still owned by Paul McCartney, Ringo Starr, the widow of John Lennon and the estate of George Harrison. Apple Computer was formed in 1976, when college dropouts Steve Jobs and Steve Wozniak filed partnership papers on April Fools' Day.

5th May 2006

9:46pm: New Foreign Trade Zones
Show media Loading... Foreign Trade Zone declared
Parcels in Industry, Whittier designated

Some big hunks of Southern California have just become foreign soil, at least as far as trade goes.

Officials announced Monday that parts of Industry, Whittier, Chino and Rialto have been declared a Foreign Trade Zone, which means that import companies can temporarily - sometimes permanently - avoid paying tariffs on goods shipped directly into the zone from a foreign country.

The U.S. Department of Commerce sent word Monday that it approved an application to expand a Foreign Trade Zone (FTZ) based at the Southern California Logistics Airport in Victorville to business parks in other parts of Los Angeles and San Bernardino counties.

Companies in an FTZ can move products from foreign countries directly into the zone without paying import fees.

"This is good news, not only for city of Industry but for the whole San Gabriel Valley and Southern California," said Industry Mayor Dave Perez. "It's another tool to expand economic opportunity for the companies here that bring in products from all over the world."

About 600 acres in eastern Industry will be included in the zone. In Whittier, the 72-acre Gateway Pointe business park along the San Gabriel River (605) Freeway became part of the zone. Also included is a 425-acre
Majestic Spectrum business park in Chino and the ProLogis Park along the Foothill (210) Freeway in Rialto.

The zone will help companies avoid risk by reducing the amount of capital they need to import products, said David Harlow of FTZ Consultants, which helped process the application for expansion of the zone.

Harlow said that firms shipping products from a foreign country to a trade zone and then directly out to a third country never have to pay U.S. import fees.

Businesses interested in signing up for the zone can now apply to the federal government to participate, he said.

The FTZ status lasts until April30, 2011, when the application will need to be renewed.

"We think this is going to save a lot of companies a lot of money," he said.

For more information about the program, contact Harlow at (562)843-6962.


(626)962-8811, Ext.2703
9:30pm: Ameriquest laying off 3,800 workers
ORANGE, CA, United States (UPI) -- California`s ACC Capital Holdings Corp., owner of Ameriquest Mortgage Co., is dismissing 3,800 workers and closing 229 branches.

Closely held ACC said the job cuts at its Ameriquest and Town & Country Credit mortgage lending units will shrink its total work force by about a third as rising interest rates and a weakening real estate market hit lenders.

Ameriquest is the No. 1 U.S. subprime mortgage lender, according to trade journal Inside Mortgage Finance.

3rd May 2006

5:35pm: Southland trade faces bumps

Southern California's international trade sector, a powerful economic engine, should produce another record year in 2006 but it will likely be a rough ride, according to a report released today.

The number of containers processed at the Los Angeles/Long Beach port complex is expected to increase this year by 10.2 percent, to 15.6 million units, said the analysis from the Los Angeles County Economic Development Corp.

The total value of two-way trade moving through the Los Angeles Customs District should grow 11 percent, to $326.1 billion. The district also includes Port Hueneme, the Los Angeles International and Ontario International airports, several oil terminals and McCarran International Airport in Las Vegas.

The district has been the nation's top international trade center every year but one since since 1993.

"This is a sector that has been zipping right along, but now we're dealing with a set of complications," said Jack Kyser, the business development group's chief economist.

One is the environmental issues stemming from the heavy use of diesel fuel aboard ships, in trucks hauling product to and from the ports and railroad locomotives.

And while cargo generally moves easily within the port, once outside the facilities it can get held up on roadways and rail lines that are at or near capacity.

One major concern is that a state infrastructure bond that would have paid for some transportation improvements failed to make it on the June ballot.

There are efforts to get the issue before voters in November, which could include as much as $18 billion for transportation, including up to $6 billion for internationaltrade, said Bill Allen, the LAEDC's president and chief executive officer.

"I think it is absolutely essential that we address these infrastructure issues as quickly as possible. The growth in trade is accelerating and we have to develop the capacity to handle the increased growth efficiently," Allen said.

Other areas of concern are port security, port truck driver unrest about a program that requires nighttime work and cargo being diverted to other facilities over concern about congestion.

Rachel Campbell, a spokeswoman at the Port of Los Angeles, said officials there had not seen the LAEDC report so they could not comment on it.

Officials at the Port of Long Beach did not return several calls seeking comment.

On the upside of the balance sheet, the economies of the nation's major trading partners remain healthy, which should signal future growth.

Currently about 450,000 people work in international trade and employment increased 11.2 percent last year. Kyser expects this sector to add 45,500 new jobs this year and remain the region's second-biggest employer behind the service sector.
11:23am: San Diego Mayor calls Mexico Drug Legalization a "hostile act"
Legalizing Drug Use in Mexico Called 'Reckless'
By Sam Enriquez and Tony Perry, Times Staff Writers
10:47 AM PDT, May 3, 2006

SAN DIEGO -- A move in Mexico to legalize narcotics represents a serious danger to the United States, Mayor Jerry Sanders said today.

The move by the Mexican Congress to allow possession of drugs that are illegal in the United States is "appalling, reckless and incredibly dangerous," said Sanders, the city's former police chief.

He said he fears that Americans will travel to Mexico to buy drugs and then return to the United States — in many cases through San Diego, which faces Tijuana across the border.

The mayor said he has written to President Bush and Mexican President Vicente Fox to express his opposition. The measure constitutes a "hostile action by a long-time ally of our country," Sanders said.

Fox will sign the bill that would legalize the use of nearly every drug and narcotic sold by the same Mexican cartels he's vowed to fight during his five years in office, his spokesman said Tuesday.

The list of illegal drugs approved for personal consumption by Mexico's Congress last week is enough to make one dizzy — or worse.

Cocaine. Heroin. LSD. Marijuana. PCP. Opium. Synthetic opiates. Mescaline. Peyote. Psilocybin mushrooms. Amphetamines. Methamphetamines.

And the per-person amounts approved for possession by anyone 18 or older could easily turn any college party into an all-nighter: half a gram of coke, a couple of Ecstasy pills, several doses of LSD, a few marijuana joints, a spoonful of heroin, 5 grams of opium and more than 2 pounds of peyote, the hallucinogenic cactus.

The law would be among the most permissive in the world, putting Mexico in the company of the Netherlands. Critics, including U.S. drug policy officials, already are worrying that it will spur a domestic addiction problem and make Mexico a narco-tourism destination.

Even the Netherlands, famous for coffeehouses that sell small quantities of potent marijuana and hashish, forbids the possession and sale of narcotics. Colombia allows personal use of marijuana, cocaine and heroin, but not LSD or PCP.

Selling drugs or using them in public still would be a crime in Mexico. Anyone possessing drugs still could be held for questioning by police, and each state could impose fines even on the permitted quantities, the bill stipulates. But it includes no imprisonment penalties.

Lawmakers who voted for decriminalization, some of whom have expressed surprise over the details of the bill, said it would for the first time empower local police to make drug arrests and allow law enforcement in general to focus on intercepting large drug shipments and major traffickers. The bill also would stiffen penalties for selling drugs near schools and authorize state and local police to detain users to check whether amounts were over the legal limit.

"The law constitutes an important step forward by the Mexican state in its battle against drug dealing," said Eduardo Medina Mora, secretary of public security and Mexico's top law enforcement officer.

Presidential spokesman Ruben Aguilar said Tuesday that Fox would sign the measure, calling it an important tool in the fight against drug trafficking. Fox has avoided public comments on the bill and did not attend a news conference about it Tuesday.

Since the vote by Congress last week, lawmakers have said they are unsure who amended the bill, originally aimed at legalizing possession of small quantities of drugs among addicts, to make it apply to all "consumers."

The Bush administration is refraining from public criticism of Mexico. But in private meetings Monday with Mexican officials in Washington, U.S. officials tried to discourage passage of the law, U.S. Embassy officials here said.

"Any country that embarks on policies that encourage drug use will get more drug use and more drug addiction," said Tom Riley, a spokesman for the White House Office of National Drug Control Policy.

"Many countries, including the U.S. and Mexico, see the drug problem as a trafficking problem," he said. "But the real problem isn't trafficking, it's drug use. The costs of drug addiction are staggering."

Mexico has for years blamed Americans for fueling the multibillion-dollar illegal drug trade with their $10, $50 and $100 drug purchases. One cartoon here showed Uncle Sam kneeling over a map of the United States and Mexico, snorting a giant line of cocaine piled along the border.

News of the pending Mexican law spread quickly over the Internet, reaching the website of High Times, a glossy monthly magazine that features photo spreads of marijuana from around the world.
1:28am: More California homes nearing foreclosure

Increasing foreclosure activity in California may be a sign of worse to come, but for now remains well below historic norms.

Lending institutions sent 18,668 default notices to state homeowners from January to March, up 23.4 percent from the fourth quarter and 28.7 percent from the year-ago period, according to La Jolla-based DataQuick Information Systems.

However, the number of notices is still well below the state's historic average of 33,000 default notices per quarter.

"It seems like a high increase, but it's only above abnormally low levels," DataQuick analyst Andrew LaPage said. "And it tends to lurch whenever it's coming off the bottom like that."

Economist Stephen Levy agreed that the jump isn't worrisome in itself, but said it could be a sign of building stress in the housing market. He believes that many home owners will be at greater risk for default in the coming months, as teaser rates on the adjustable-rate or interest-only loans that helped fuel the recent real estate boom adjust to higher minimum payments.

"That may put a lot more people into danger," said Levy, senior economist with the Center for Continuing Study of the California Economy in Palo Alto.

The percentage of East Bay buyers who opted for interest-only loans leapt from 1 percent in 2000 to 42.4 percent in 2005, according to San Francisco-based LoanPerformance. The use of option adjustable-rate mortgages increased from 3.4 percent to 28.2 percent.

There were 564 default notices in Alameda County during the first quarter, up 23.7 percent from the prior quarter and 9.3 percent from a year ago. Contra Costa notices increased to 605, up 11.8 percent and 5 percent, respectively, over those periods.

2nd May 2006

5:49pm: Intel to spend $1 bln to push Net in poor nations


Intel Corp. said on Tuesday it plans to spend $1 billion over five years to promote Internet use and computer training in developing countries, the latest move in the No. 1 chip maker's effort to break into new markets.

The program, which Intel has dubbed "World Ahead," aims to bring high-speed wireless Internet access to 1 billion people who can't now get online, while training 10 million teachers to use technology in education.

"Decades of providing technology in growing volume and at decreasing costs have driven great gains for developing nations, communities and people worldwide, but there is still much to do," Intel Chief Executive Paul Otellini said in a statement.

Otellini is expected to give details of the initiative at a technology conference in Austin, Texas, on Wednesday.

The program includes Intel's ongoing effort to promote cheap PCs that it hopes will find enthusiastic buyers among schools and villages in developing countries, where most people cannot afford to buy their own personal computers.

It also extends Intel's push to popularize a new wireless technology called WiMax. WiMax's fast speed and long range has led many companies and industry groups to think it is ideal for poorer regions.

Intel, which makes the microprocessors that power the vast majority of personal computers around the world, has grappled with slowing growth in PCs as wealthy markets in the United States, Europe and Japan have become saturated.

Shares of the Santa Clara, California-based company rose 4 cents to $19.53 in Nasdaq morning trade.

12:56pm: Gavilan College to lose SBDC Funding
Hollister Free Lance

Gavilan College Will Fight for SBDC Funding

Gilroy - Gavilan College plans to fight a federal decision to stop funding the Small Business Development Center, calling charges of fiscal mismanagement at the school "unsubstantiated," according to Gavilan President Steve Kinsella.

On Monday, Kinsella learned the school would not have its contract renewed to administer an $80,000 federal grant for the Gavilan College Small Business Development Center, a program the college has operated for 18 years. The notice - issued by the parent SBDC at the University of California, Merced - means the school also will lose a matching $140,000 economic development grant from the state. The program will continue to operate in the area with some federal funding, but likely will not be connected to the community college.

The decision to search for a new host agency comes after months of wrangling between Gavilan and U.C. Merced officials over the community college's accounting practices. According to a Merced official, the change is necessary to rescue the business center from the college's outdated accounting practices.

After nearly a year of delay, Gavilan College untangled the various funding streams that sustained its SBDC and submitted the information to Merced in recent weeks - long after a federal auditor visited the school and declared its ledgers "un-auditable," according Chris Rosander, director of the SBDC at U.C. Merced.

"The accounting division of the [Gavilan College] administration department - they didn't assign anyone senior to the program," Rosander said earlier this week. "They didn't take it seriously."

Kinsella acknowledged "it did take a while" to update ledgers tracking various funding streams for the Gavilan SBDC, but he said "it was never stressed to us that you've got to do this by this deadline or the grant is in jeopardy."

No formal appeal process exists and it appears the school can do little beside argue its case to Merced officials. If that fails, the school can enter the general bidding pool in coming months in hopes of restoring its sponsorship of the agency. Although located in downtown Gilroy, the Gavilan College SBDC serves San Benito County, east Monterey County and southern Santa Clara County.

Federal guidelines allow any city, community college or other public agency to receive SBDC grants and channel the funds to local agencies such as the one based in Gilroy.

But it remains unclear if Gavilan College can mend relations with a federal hierarchy that has developed a negative view of its grant management.

Rosander pointed out that Gavilan took 10 months to upgrade its accounting practices while two other community colleges required only a month.

In past years, the center has met or exceeded "milestone" markers for providing one-on-one counseling and training workshops to people looking to grow a business. But last year, the center only served a third of the 990 people set as its target.

"None of that can be chalked up to lack of interest," Rosander said. "Most small business centers get close to the milestones or exceed them … There's a reason for the 33.7 percent and it's because (Gavilan's) accounting department kept starting and stopping the funding."

Kinsella challenged that assertion, saying that "we were getting requests for expenditures that were in excess of the budget" from Richard Gillis, the director of the Gavilan College SBDC.

Gillis has declined to comment on any matters related to funding issues or his relationship with the college administration, but a regional accreditation board singled him out last year for his accomplishments.

Federal officials in charge of small business grants are instead blaming Gavilan College for mishandling SBDC funds and blunting the effectiveness of the program.

Rosander said his superiors at the federal Small Business Administration office in Fresno, as well as auditors at SBA headquarters in Washington, agree on the need to "rebid" the contract for a host agency. The economic and workforce development branch at the California Community Colleges Chancellor's Office - the source of a matching $140,000 grant to the Gavilan SBDC - feels the same, according to Rosander.

The regional center at Merced is one of six lead agencies in California that doles out hundreds of thousands of dollars each year from the federal Small Business Administration. Those monies were administered by the California Trade and Commerce Agency for more than a decade, until the state dissolved the agency in 2003.

The college never had an accounting issue until U.C. Merced took on oversight, Kinsella said, acknowledging that so far, things are not going well with the new administrator.

"If you asked, 'Do we have a bad working relationship?,'" Kinsella said, "I'd say 'Yeah. We do.'"

29th April 2006

6:05pm: Lantos, four other Congressmen arrested at Sudan Embassy
Wash Post:

Rep. James P. Moran Jr. (D-Va.) was among five members of Congress who were willingly arrested and led away from the Sudanese Embassy in plastic handcuffs during a protest yesterday.

Four other Democratic House members -- Tom Lantos (Calif.), Jim McGovern and John W. Olver of Massachusetts, and Sheila Jackson Lee (Texas) -- were among 11 protesters arrested on charges of disorderly conduct and unlawful assembly, a misdemeanor subject to a fine. The demonstrators said they were targeting the Sudanese government's role in atrocities in the Darfur region.
Dozens of demonstrators attended the protest, and they cheered as the House members and others were led to a white police van by U.S. Secret Service uniformed officers. The arrests were expected. Lantos's office even issued a news release about them in advance.
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