Sunday, April 29, 2007

1992 And Its Broken Promises

15 years after L.A. riots, tension still high

Promises made in the wake of three days of violence remain unfulfilled, residents tell city officials at two South Los Angeles events.

By Deborah Schoch and Rong-Gong Lin II

April 29, 2007

Although a 15th anniversary typically does not carry the emotional cachet of, say, a 10- or 25-year milestone, hundreds of residents gathered Saturday at two South Los Angeles events to call attention to a community still racked by the poverty and violence that fueled the 1992 Los Angeles riots.

The message from both gatherings on the eve of today's anniversary was stern and angry: The city's southern neighborhoods are still largely ignored.

A standing-room-only crowd at the Community Coalition lambasted city officials for failing to close nuisance liquor stores and motels that the nonprofit group has pinpointed as hot spots of illegal drinking, drug dealing, prostitution and violence.

Six months ago, coalition members gave city Planning Director Gail Goldberg a list of the 21 "most egregious" businesses and pleaded for their closure or improvements within six months. They learned Saturday that public hearings have been held or set for only eight stores, frustrating many who said they expected more from the city.

"We have heard this so many times," an angry Manya Anderson, 58, told Goldberg as nearly 200 people looked on at the coalition's offices on South Vermont Avenue.

"We are dying. This community is dying. The bottom line is, this never would have been allowed in any other community."

Resident Jackie Garrett, 60, was equally discouraged.

"I feel like we're living in Iraq," she said. "Tell me we lost the war in Iraq — we lost the war in L.A."

Across town at First AME Church on Harvard Boulevard, civic leaders warned 70 to 100 listeners that the conditions that sparked the riots still fester, despite the myriad post-riot promises of better jobs, schools and supermarkets. Many promises never materialized, leaving some residents embittered and resigned.

Without a massive effort to undertake these underlying issues, "We're going to be right here after the next riots," said veteran civil rights attorney Connie Rice.

"You don't have racial tensions when there's enough prosperity."

The nation's worst rioting in more than a century began April 29, 1992, lasted three days and took at least 53 lives, injured 2,300 people and damaged more than 1,100 buildings.

Los Angeles County Sheriff Lee Baca said he felt a sense of desperation at the forum.

"The key to our public officials is to go out, learn and listen to voices and offer solutions," he said.

Los Angeles Mayor Antonio Villaraigosa, who spoke briefly at the event, cast a more optimistic view of race relations.

"Make no mistake, every single day you see people working together," he said. "People love to focus on the negative, on the conflicts."

Villaraigosa left the forum after his remarks to attend a tree-planting for Big Sunday, a citywide volunteer effort, missing most of the discussion. One of the panelists, actor and author Hill Harper, suggested the mayor should have stayed.

"It's wonderful to plant trees," he said, "but I believe the discussion we're having here is more important than going to plant trees."

Around 5 p.m. 15 years ago today, after a Simi Valley jury acquitted five LAPD officers in the videotaped beating of black motorist Rodney G. King, looters spilled into Tom's Liquor at Florence and Normandie avenues, yanking beer cartons off shelves and igniting the Los Angeles riots.

Four days ago, George Graham, a Community Coalition employee, drove up to Tom's Liquor on one of his regular "liquor store patrols," intending to snap photos and take notes to give to Goldberg on Saturday.

He encountered an overhead helicopter, ambulances, police cruisers and yellow "caution" tape — a scene that he said felt like "a reincarnation" of the riots.

Just minutes before, a shooting at the corner critically injured a man, who stumbled into the store and collapsed.

"I was appalled," said Graham, 58, who has worked for the coalition since 1993. "This goes on and on. It's a cycle."

Speakers at Saturday's events said they are paying close attention to how the 22-month-old Villaraigosa administration grapples with problems in South Los Angeles. Adding to their angst over the anniversary is that many of the new retail centers and manufacturing plants promised after the riots have not materialized.

At the meeting, Rice referred to a 1992 consultant's analysis for Rebuild LA, the private post-riot recovery agency. The study said that an infusion of $6 billion was needed to reverse decades of stagnation in South Los Angeles. When the agency shut down in 1997, corporate investment totaled only $389 million.

State records show that the area has 517 stores selling liquor. That is 150 fewer than the 667 stores in business when the riots began, but about 200 liquor stores burned down during the unrest.

Residents say that they are increasingly frustrated that the Villaraigosa administration's planning and zoning officials appear to be treating their pleas as a low priority.

"How long do we have to wait? How many murders do we have to go through? How much do our children have to see before they take some action?" said Joanne Kim, chief operating officer of the coalition, which responded to the 1992 riots with a campaign to rebuild South Los Angeles without liquor stores.

Goldberg, hired by Villaraigosa, met with coalition members six months ago and promised to address their list of 21 trouble spots.

Coalition leaders who reviewed the status of those sites Saturday gave the city a failing grade, although some said they believe that Goldberg has good intentions and deserves praise for meeting with them.

Goldberg said that her department is only one player in a process that also involves the city attorney's office and other agencies.

"I wish I could do it alone," she said, adding that evidence of wrongdoing is needed to reprimand or close a liquor store.

Residents countered that they have provided the city with evidence on some stores for 10 or 15 years.

"They're asking us all over again. What other community has to do it all over again?" Kim said.

Some moments Saturday were more upbeat.

Residents released 53 butterflies outside the Community Coalition offices to signify hope that South Los Angeles can be rejuvenated.

At the forum, Rice praised efforts by law enforcement leaders to launch community-based policing and seek the trust of the neighborhood and church leaders.

"It's been stunning to see the sea change at the top. They're trying to change the culture," Rice said.

Some residents expressed frustration as they left the First AME meeting.

"If you have a 40 to 50% dropout rate in high school, there is no hope for you to have a meaningful life," said the Rev. Brenda Lamonthe, an executive assistant at First AME Church. "It's like there's a psychological and emotional imprisonment of our kids because our community does not equip them to get beyond poverty, gangs or drugs."

Karen Robinson, 46, of Inglewood said she felt little was accomplished at the forum.

"There are still no jobs. Our youth are still turning to gangs, and not education," she said.

"I can't say I'm walking out of here feeling that we know what we're going to do. Talk is cheap."

*

deborah.schoch@latimes.com

ron.lin@latimes.com

http://www.latimes.com/news/local/la-me-riots29apr29,1,154064.story
From the Los Angeles Times

Rebuilding LA Never Happened

South L.A.'s growing pain

Plans to revive the area after the 1992 riots have been largely unfulfilled.
By Molly Selvin
Times Staff Writer

April 27, 2007

Fifteen years after the 1992 riots, South Los Angeles has seen dramatic population shifts — but frustratingly little economic progress.

Latinos are a growing presence in a community that was once the center of African American life. Many middle-class black and Latino families have moved out of the area for better schools and safer streets. Those remaining are disproportionately poorer and have fewer job skills.

New grocery stores have opened since the riots — a longtime goal of residents and activists. Yet the area still suffers the region's highest unemployment and underemployment rates.

By almost any economic measure, South Los Angeles has lost ground compared with the city and county. The area, bordered roughly by the Santa Monica and Century freeways between Alameda Boulevard and west to the city limits, grew jobs by only 0.4% from 1993 to 2005, versus 24.6% growth for L.A. County as a whole, according to the state Employment Development Department. The area's average wage grew 21.3% in that period, versus 47.3% for the county.

Grandiose plans to revive the community as a hub for manufacturing and other service-sector industries are largely unrealized. With so few jobs in the area, many residents commute to low-paying service jobs as maids in airport-area hotels, as day laborers on the Westside or as security guards.

Fourteen percent of the city's labor force now lives in South Los Angeles, but only 3% of jobs in the formal economy are located there, said Dan Flaming, president of the Los Angeles-based Economic Roundtable, a Los Angeles-based research group. Many others work in the informal "underground" economy, he said, for employers that don't offer benefits or workers' compensation.

The lack of opportunities in the area prompted Raul Gaona, 32, to commute to Van Nuys for a job with a fencing company.

South Los Angeles resident Gregory Talley, a 48-year-old security guard who works the graveyard shift at a downtown Los Angeles hotel, said "It's hard to get a good job, everybody's downsizing."

There are some positives. Local activists credit Mayor Antonio Villaraigosa with renewing interest in the area by sparking construction of several shopping centers and housing units. They also point to more projects in the pipeline. Organizers of a job fair slated for today, part of a planned "Weekend of Peace," hope the event draws attention to the community's labor pool.

Area activists say that lifting a community long mired in poverty and urban blight depends on improved education, housing and business development.

"The Rebuild L.A. claim that the private sector can do it turned out to be hollow," said Robert Gottlieb, who teaches urban policy at Occidental College, referring to the nonprofit organization formed after the riots to spearhead economic development. "We need to have a much more aggressive role in developing jobs, including public-private partnerships and new industry incubators."

Manufacturing firms that paid middle-class salaries, once the area's backbone, have largely disappeared in South L.A. as they have from other cities.

And although some grocery chains have opened new stores in recent years — including Food 4 Less and Gigante — other grocery chains and retailers have shut their doors.

Moreover, new grocery clerks earn lower wages than they did before the 2003 Southern California supermarket strike and lockout that involved Albertsons, Vons and Ralphs. And at Food 4 Less, which has opened 11 stores in South Los Angeles since 1992, shoppers bag their own groceries, eliminating those jobs at the checkout counter.

The area now includes stores from Starbucks Corp., Walgreen Co. and other retailers, but still harbors too many liquor stores, abandoned lots and boarded-up buildings, residents complain.

Although the same pattern of slow inner-city job growth has occurred in other major cities, demographic shifts and long-standing residential segregation in Los Angeles have accelerated the decline of poor neighborhoods such as South Los Angeles, according to a study last year by the California Budget Project, a Sacramento-based nonprofit research group.

Many middle-class African American and Latino families have moved to such places as Baldwin Hills, the Inland Empire and Lancaster. From 1990 to 2000, the African American population of San Bernardino County rose 34% and the number of Latino residents surged by 79%, according to census data.

Those who remain in South L.A. have less education and fewer job skills, Flaming said. Forty-five percent of adults in the community do not have high school diplomas, and 37% of those with jobs are considered to be among the state's working poor, he said.

And more of the residents are Latino. Although experts disagree on the exact numbers, South L.A.'s Latino population has grown dramatically since the 1992 riots, hitting 54% by 2000 versus 38% for African Americans, according to the Los Angeles City Planning Department.

The demographic shifts have created tensions. Local union campaigns to organize janitors and security guards, many of whom live in South Los Angeles, initially fanned distrust between Latinos and African Americans over employment opportunities, said Mike Garcia, president of Local 1877 of the Service Employees International Union.

The two groups are developing coalitions, he said, "but there have been hard adjustments."

The riots, which followed acquittals of four police officers charged in the videotaped beating of motorist Rodney King, exacerbated the area's already severe economic problems, said Madeline Janis, executive director of the nonprofit Los Angeles Alliance for a New Economy.

The years that followed saw "a lot of broken promises," she said. Today's job fair has a more modest goal: linking residents to better-paying jobs. The event will draw about 40 employers, including Fox Entertainment Group, Kaiser Permanente and Wells Fargo & Co., to the First African Methodist Episcopal Church in South Los Angeles. Organizers expect as many as 500 job seekers.

First AME, which was a key gathering place during the riots, decided on the job fair because residents badly need "jobs, food and hope," said Rev. Brenda Lamothe, who helped organize the weekend's events. South Los Angeles resident Cynthia Fowler, 41, plans to attend the job fair and hopes for a position in health services, "maybe working with elderly people."

Beyond the job fair, several community and government groups believe that the area's future is linked to residential and commercial development and luring manufacturing and industrial employers.

Villaraigosa is lobbying to win state bond money for area projects, said Cecilia Estolano, chief executive of the city's Community Redevelopment Agency.

Estolano said the agency was also pushing for workforce development. That includes education and apprenticeship programs to teach residents skills that will help them land well-paying jobs, and set-asides for local hiring on construction projects and for permanent jobs.

She said previous redevelopment efforts, such as Rebuild L.A., failed to take into account the area's infrastructure and what Flaming of the Economic Roundtable calls "the strong attachment of the labor force to manufacturing."

The Alameda Corridor could generate significant new factory jobs, Flaming believes. The 20-mile rail line speeds products worth millions of dollars from the ports of L.A. and Long Beach through South Los Angeles to other communities for assembly or additional manufacturing.

"Why not do more of that [manufacturing] at the base of the distribution system, in South Los Angeles?" he asks.

molly.selvin@latimes.com

*

(INFOBOX BELOW)

Wide disparity

L.A. County job growth, '93-'05
Santa Clarita/Valencia 102.2%
Antelope Valley 55.4
Westside 28.7
San Gabriel Valley 27.5
Long Beach/Lakewood
(South Gateway) 22.2
East L.A./Eagle Rock 21.9
East San Fernando Valley 21.2
Crenshaw/Mid-City/
Hollywood 17.6
South Bay/LAX 16.0
West San Fernando Valley 15.1
North Gateway 13.6
Central/Downtown L.A. 5.8
South L.A. 0.4
Source: California Employment Development Department

*

(INFOBOX BELOW)

Wage differential

Increase in average wage from 1993 to 2005 in L.A. County
Central/Downtown L.A. 59.1%
Westside 57.5
East San Fernando Valley 54.7
South Bay/LAX 54.4
Santa Clarita/Valencia 54.3
Crenshaw/Mid-City/Hollywood 53.1
West San Fernando Valley 48.9
East L.A./Eagle Rock 46.7
San Gabriel Valley 41.3
Long Beach/Lakewood (S. Gateway) 40.6
North Gateway 37.2
Antelope Valley 33.8
South L.A. 21.3
Source: California Employment Development Department

http://www.latimes.com/business/la-fi-newlaecon27apr27,1,338127.story

Rebuild LA 15 Years Later: Why It Failed

Why South L.A. rebuilding hasn't worked

Post-riot commercial investments and a Starbucks aren't enough to overhaul the area.

By Franklin D. Gilliam Jr.

FRANKLIN D. GILLIAM JR. is a professor of political science at UCLA and associate vice chancellor of community partnerships.

April 29, 2007

IT HAS BEEN 15 years since angry residents took to the streets in South Los Angeles, leaving smoke hovering over the neighborhood and a swath of destruction on the ground. Since then, as much as $1 billion has been invested to rebuild and revitalize the community.

But to what effect? It's true that Starbucks has come to Crenshaw Boulevard. Yet, in spite of such generous financial balm, it remains unclear if anything has really changed.

Two studies, one published in 2005 by the Urban League and the other released several weeks ago by the United Way, report that despite the enormous financial investment — designed not just to upgrade the neighborhood but to set the stage for improving the lives of African American and Latino residents — significant race-based differences still exist. The premature death rate for African Americans in L.A., for example, is still nearly 10 times that of whites. And Latino and African American median family incomes are, on average, about half those of whites.

How can so much investment have made so little difference? The answer, I believe, lies in the misperceptions of those who created the rebuilding plan.

The organization that took the lead was known as Rebuild L.A. Its titular leader was Peter Ueberroth, who immediately before the unrest had chaired the Council on California Competitiveness, a committee appointed by then-Gov. Pete Wilson to examine job loss and job creation in the state. The council gave primary importance to the private sector, and when Ueberroth got to Rebuild L.A., he did the same — seeking to spur commercial development in South-Central L.A.

Well-intentioned, no doubt, but the problem with an exclusive focus on commercial development is that it pays only cursory attention to the deeper, more basic needs of the community. People cannot succeed where the starting rungs of the "prosperity grid" are fractured, broken or nonexistent.

The prosperity grid is the network of conditions that make prosperity possible — thriving educational institutions, access to quality healthcare, safe streets and green spaces for children to play. Mending the grid is necessary for residents of South L.A. to build wealth and create a stronger economy.

Other shortcomings of Rebuild L.A.'s approach were quickly spotted as well. In a 1992 article in Time magazine, community activist Janet Clark said: "What people want is an active voice at the table…. They want their needs to be discussed so it's not something shoved down their throats."

Yet engaging the community wasn't at the top of Rebuild L.A.'s agenda; its focus was on bringing in outside investment.

I'm not against commercial development. I imagine it is a good thing that Starbucks, Wal-Mart, Washington Mutual and Rite Aid all came to Crenshaw. It also is heartening that commercial and residential development is underway at the intersection of Western and Slauson and that there is ongoing development around Manchester and Vermont.

But community development has to be about more than a chai mocha latte. New commercial establishments, and even new residential housing, don't get at the heart of the problems.

So where do we go from here? First, we must seek the community's input, guidance and wisdom. It's no longer appropriate to simply parachute into communities with pre-developed agendas. There are many folks throughout the Southside who know what works and what doesn't.

Second, as Robert Ross, president of the California Endowment, a private health foundation, argued in a recent speech, we must understand that fixing the prosperity grid requires an integrated approach. We cannot dramatically improve the quality of life in South L.A. without simultaneously providing better schools and public safety as well as access to healthcare, employment and housing.

This is an enormous undertaking, of course. For that reason, it's critical that it be done neighborhood by neighborhood, in model projects that can eventually serve as blueprints for engagement elsewhere. The Urban League's plan to revitalize the 70 square blocks around Crenshaw High School, and the plans for the 60-block area in New York known as the Harlem Children's Zone, represent new models of community development that simultaneously address multiple issues.

Third, we must develop a compelling narrative about how and why this is important to the future of L.A. This is a battle over public will, and we have to provide a rationale for people to act. We must convince them that everyone benefits when communities such as South L.A. thrive. If we can't make it happen, we will continue to face the same social unrest that has plagued L.A. sporadically since 1965.

As the Rev. Martin Luther King Jr. said: "We are tied in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly."


http://www.latimes.com/news/opinion/commentary/la-op-gilliam29apr29,1,3515131.story

Racism Blocks Support for Public Services

April 29, 2007

The Divisions That Tighten the Purse Strings

By EDUARDO PORTER
MANY Americans are skeptical about government spending on social programs, and they cite a litany of familiar reasons: big government programs aren’t effective, they are vulnerable to waste and abuse, and they run counter to the libertarian, self-reliant spirit of the nation’s founders.

But a growing body of research suggests that America’s antipathy toward big government has another, less-often-acknowledged underpinning: the nation’s racial and ethnic diversity.

Recent studies by economists and other social scientists have found that this mix tends to undermine support for government spending on “public goods” of all types, whether health care, roads or welfare programs for the disadvantaged.

Some of these studies suggest that America’s rich diversity — not only ethnic and racial but also religious and linguistic — goes a long way toward explaining why government spending on social welfare programs is much lower than it is in the more homogeneous nations of Europe. Other studies have found that within the United States, local support for various types of public spending falls as diversity rises.

“Racial divisions and ethnic divisions reduce incentives for people to be generous to others through social welfare,” said Alberto Alesina, a professor of economics at Harvard. “This is very unfortunate. But as social scientists, we can’t close our eyes to something we don’t like.”

In America, government spending on social transfers — everything from food stamps and unemployment insurance to health care and pensions — is about a third less than it is in Italy, France or Belgium, when expressed as a share of the economy, according to data from the Organization for Economic Cooperation and Development. And it is about half the level of Sweden’s. Moreover, Americans pay less in taxes than the citizens of nearly every other wealthy nation in the O.E.C.D.

In their 2004 book, “Fighting Poverty in the U.S. and Europe,” Mr. Alesina and Edward Glaeser, another Harvard economist, applied statistical regression techniques to correlate data on government spending with data on racial, ethnic, linguistic and religious diversity in Western Europe and the United States. The professors concluded that about half the gap between Europe and the United States in public spending on social programs could be explained by America’s more varied racial and ethnic mix. (They said that much of the rest resulted from stronger left-wing parties in Europe.)

As William Julius Wilson suggested in his 1996 book, “When Work Disappears: the World of the New Urban Poor,” many white Americans turned against spending on welfare during the 1970s because they thought that it mostly served blacks. “White taxpayers saw themselves as being forced, through taxes, to pay for medical and legal services that many of them could not afford for their own families,” Mr. Wilson wrote.

In the relative homogeneity of Sweden, by contrast, most taxpayers are confident that social spending programs will be directed to people much like themselves.

This doesn’t mean Americans are stingy. In fact, they contribute much more than Europeans to charity, selecting who they want to help. “It’s not that Americans are bad guys,” Mr. Glaeser said. “They just want to target it.”

But in drawing on a wide range of data like population surveys and patterns of municipal spending, researchers have found ample evidence of how ethnic and racial diversity has undermined support for spending on social welfare in the United States.

In a study in 2001, Erzo F. P. Luttmer, an associate professor at the Kennedy School of Government at Harvard, reported that the percentage of people who say they support welfare spending decreases as the share of local recipients from their own racial group falls. His report was based on data from the General Social Survey, a social-attitudes poll conducted across the United States nearly every year since 1972.

In another study, published in 1996, James Poterba, a professor of economics at the Massachusetts Institute of Technology, found that public spending on education falls as the percentage of elderly people in a given area rises. The reduction, he found, “is particularly large when the elderly residents and the school-age population are from different racial groups.”

In a 1997 study, Mr. Alesina, along with Reza Baqir, an economist at the International Monetary Fund, and William Easterly, an economics professor at New York University, looked at the relationship between social spending and ethnic diversity in 2,700 cities, counties and metropolitan areas across the United States.

They found that in more diverse cities and counties, the share of local government spending on public goods — in this case, roads, sewage treatment, trash clearance and education — was generally lower than it was in more homogeneous localities. “Our results are consistent with the idea that white majorities vote to reduce the supply of productive public goods as the share of blacks and other minorities increases,” they wrote.

Of course, there are some exceptions to the pattern. New York and California, for instance, are among the most highly taxed and most diverse states, although there is evidence that racial and ethnic tensions have whittled away at support for public spending. In California, to cite just one example, Proposition 187, barring illegal immigrants from access to public services, passed in 1994 on the support of 63 percent of whites, despite the opposition of four of every five Latinos.

New York’s history also has examples of ethnic tensions. But New York City, in a way, is a special case: so diverse that no single ethnic or racial majority controls the public purse. “There is no cleavage between an Anglo majority and some poor minority,” Mr. Glaeser said. “In New York, everybody is a minority.”

New York City’s experience, in fact, underscores that diversity does not automatically lead to hostility among ethnic groups or toward government spending as a whole. From public education to intermarriage to the many institutions in civil society promoting mutual understanding, there are countervailing forces acting to overcome ethnic, religious or linguistic cleavages.

Ethnic diversity doesn’t inevitably reduce spending on public goods. Rather, spending tends to fall when elected officials choose to run and govern on platforms that heighten racial and ethnic divisions. Over the long term, governments usually find it in their interest to bridge the centrifugal forces of diversity rather than to exploit them, if only to promote stability.

STILL, there is little reason to believe that the racial, ethnic, religious and linguistic antagonisms that have eroded support for social welfare programs in the United States are likely to abate any time soon. Indeed, the arrival of hundreds of thousands of illegal immigrants a year from Latin America seems to be sapping support for public welfare.

Last year, laws were enacted in Arizona, Colorado, Rhode Island and Hawaii barring illegal immigrants from access to some government programs. This month, the State Senate in Oklahoma overwhelmingly passed legislation that would bar illegal immigrants from receiving public benefits.

And these restrictive attitudes can easily turn against spending on domestic programs as a whole. Representative Tom Tancredo, a Colorado Republican running for president on an anti-immigration platform, says that Americans pay too much in taxes and that the Internal Revenue Service should be abolished. His candidacy may not prosper, but the issues on which he is running are likely to be around for some time.

Mr. Alesina certainly expects further conflicts. “One can expect public support for public goods to erode further,” he said. “Public spending in law and order might not go down. What would go down is spending on redistribution.”


Copyright 2007 The New York Times Company

Enron Helper-Banks Protected by Courts

April 29, 2007

Enron, the Supreme Court and Shareholders on the Brink

By BEN STEIN
LONG ago and far away, when I was a little tyke studying economics under the tutelage of C. Lowell Harriss at Columbia, and finance under Jan Ginter Deutsch and Henry Wallich at Yale, we were taught that the stockholder was the ultimate owner of a public company, the ultimate boss, the ultimate trustor to whom the highest standards of fiduciary duty were owed.

These included the duty to put the interests of the stockholder ahead of the interests of the managers and their agents in each and every situation, to avoid even the appearance of a conflict of interest, to disclose each and every material fact and to avoid any subterfuge that would operate to conceal a material fact.

These duties were common-law obligations, but some of them had also been codified in federal and state law. Federal law, in particular, enacted after the disclosure of huge securities fraud surrounding the 1929 stock market crash that started the Great Depression, prohibited the use of any artifice or device to conceal material facts or to keep them from being disclosed to the investing public.

Section 10(b) of the Securities Exchange Act of 1934 specifically barred the use of any manipulative device or contrivance that would defraud or mislead. A rule adopted by the Securities and Exchange Commission under that act, the famous Rule 10b-5 said that it would be unlawful for any person “directly or indirectly” to “engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.”

That, you would think, would have special relevance to the huge scandal at Enron. In that sad story, managers of the company used various devices to conceal from the markets and the investing public that the company was essentially a huge fraud.

In that effort, the managers were helped considerably by a number of very large investment banks. These banks and brokerages used complex transactions that made it look as if Enron were making money when in fact it was insolvent. Andrew S. Fastow, the former finance boss at Enron, testified during legal proceedings about Enron that he saw the large banks as “problem solvers” who would come up with these schemes and thus help the company conceal the reality of its dire situation.

Now, you would think that if this were true, Merrill Lynch, Credit Suisse and Barclays — named in an investor lawsuit — might possibly be liable to the defrauded stockholders, whose losses were in the tens of billions of dollars, and might owe some little pittance to them. (Banks including Citigroup, JPMorgan Chase and CIBC have already paid more than $7.3 billion to settle with Enron shareholders.) You would think that there would at least be a trial about it.

Ah, but then you would be missing the point that the law is a wily, cunning beast of utter unpredictability. Some years ago, in 1994, after a series of disastrous missteps by accounting firms in connection with an earlier series of securities frauds, the Supreme Court brought out an opinion in the case called Central Bank of Denver v. First Interstate Bank of Denver.

In this long and incomprehensible case, the high court basically said that there would be no 10(b) liability for players who “merely” aided and betted securities fraud.

Just as an opinion, by little me, this was done to save the accounting firms from completely immolating themselves by their misconduct. However, the facts of that case were somewhat limited. The defendant, Central Bank, had been the trustee for $26 million in defaulted bonds issued by a local public building authority. But Central was not its investment bank and did not issue investment analysis and, moreover, the securities in question were not publicly traded.

The Enron fraud involved a public company and had a much wider scope. In a huge class-action case where millions of documents had been collected in a federal district court, and in which many witnesses had been deposed, a jury trial was headed to daylight. But suddenly last month, something happened. A three-judge panel of the Fifth Circuit United States Court of Appeals in New Orleans ruled that the class-action suit against investment banks over Enron could not proceed. (Individuals’ ability to pursue claims was not affected.)

The panel held that although its ruling might prevent justice from being done and satisfaction from being had, the acts of the investment bankers were at most aiding and abetting, not direct acts, and therefore not actionable under 10(b) as construed in the Central Bank case.

Ouch. Yes, the defendant banks are accused of concealing the true facts about Enron and likely led investors to buy when they should have sold. Yes (and this is a beauty), at the same time the investment banks were helping Enron with its questionable financials, their “analysts” were praising Enron. (As the petitioners’ brief notes in an appeal to the Supreme Court to overturn the Fifth Circuit decision, these were “full service” banks.)

But, according to the Fifth Circuit panel, this was not enough. This was not a scheme or contrivance to defraud, they said. Yes, the facts were completely different from those of the Central Bank case, but the banks were to be let off the hook. This was in the name of offering predictability in these cases (apparently the predictability that the stockholders would be mistreated).

But not all hope is lost. A tasty appeal has been filed, which is a little masterpiece of legal argumentation.

Now, the Supreme Court can have another look at this case. It can return some dignity and rights to Enron stockholders and send up a warning flare to investment banks to avoid helping out with financial fraud. It can let this case go forward to trial.

This is a potential golden moment for the stockholders — or another step down the dreary alley toward extinction of the rights of those poor whipped dogs: the actual owners of America’s public companies. It is up to the Supreme Court to right the ship.

Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com.


Copyright 2007 The New York Times Company

News Flash: Friedman Is No Einstein

April 27, 2007

China Needs an Einstein. So Do We.

By THOMAS L. FRIEDMAN

I’ve been thinking about China as I read Walter Isaacson’s new biography of Albert Einstein. China isn’t even mentioned in the book — “Einstein: His Life and Universe” — but Mr. Isaacson’s stimulating and provocative retelling of Einstein’s career plays into two very hot debates about China.

First, what does Einstein’s life tell us about the relationship between freedom and creativity? Or to put it bluntly: Can China become as innovative as America, can it dominate the 21st century, as many predict, when China censors Google and maintains tight political controls while establishing its market economy?

Second, how do we compete with China, no matter how free we are, when so many of China’s young people are studying math and science and so many of ours are dropping out? Or to put it more bluntly: If Einstein were alive today and learned science the boring way it is taught in so many U.S. schools, wouldn’t he have ended up at a Wall Street hedge fund rather than developing theories of relativity for a Nobel Prize?

Mr. Isaacson’s take on Einstein’s life is that it is a testimony to the unbreakable link between human freedom and creativity.

“The whole theme of the last century, and of Einstein’s life,” Mr. Isaacson said in an interview, “is about people who fled oppression in order to go places to think and express themselves. Einstein runs away from the rote learning and authoritarianism of Germany as a teenager in the 1890s and goes to Italy and Switzerland. And then he flees Hitler to come to America, where he resists both McCarthyism and Stalinism because he believes that the only way to have creativity and imagination is to nurture free thought — rebellious free thought.”

If you look at Einstein’s major theories — special relativity, general relativity and the quantum theory of light — “all three come from taking rebellious imaginative leaps that throw out old conventional wisdom,” Mr. Isaacson said. “Einstein thought that the freest society with the most rebellious thinking would be the most creative. If we are going to have any advantage over China, it is because we nurture rebellious, imaginative free thinkers, rather than try to control expression.”

My gut tells me that’s right, but my mind tells me not to ignore something Bill Gates said in China the other day: that putting PCs, education and the Internet in the hands of more and more Chinese is making China not only a huge software market, “but also a contributor to this market. Innovation here is really at a rapid pace.”

Will China hit a ceiling on innovation because of its political authoritarianism? That’s what we need to watch for.

In the meantime, we should heed another of Mr. Isaacson’s insights about Einstein: he found sheer beauty and creative joy in science and equations. If only we could convey that in the way we teach science and math, maybe we could nurture another Einstein — male or female — and not have to worry that so many engineers and scientists in our graduate schools are from China that the classes could be taught in Chinese.

“What Einstein was able to do was to think visually,” Mr. Isaacson explained. “When he looked at Maxwell’s equations as a 16-year-old boy, he visualized what it would be like to ride alongside a light wave and try to catch up. He realized those equations described something wondrous in reality.

“By being able to visualize and think imaginatively about science, he was able to see what more academic scientists failed to see, which is that as you try to catch up with a light beam, the waves travel just as fast, but time slows down for you. It was a leap that better-trained scientists could not make because they did not have the visual imagination.”

If we want our kids to learn science, we can’t treat science as this boring or intimidating thing. “We have to remind our kids ... that a math equation or a scientific formula is just a brush stroke the good Lord uses to paint one of the wonders of nature,” Mr. Isaacson said, “and we should look at it as being as beautiful as art or literature or music.”

My favorite Einstein quotation is that “imagination is more important than knowledge.” A society that restricts imagination is unlikely to produce many Einsteins — no matter how many educated people it has. But a society that does not stimulate imagination when it comes to science and math won’t either — no matter how much freedom it has.

So my sense, from reading Mr. Isaacson’s book, is that if Einstein were alive today, he would be telling both America and China that they have homework to do.


Copyright 2007 The New York Times Company

Arnold Stops the Train

High-speed rail system may be derailed

Schwarzenegger moves to slash funding for the system, citing other transportation needs.

By Marc Lifsher

April 29, 2007

SACRAMENTO — For more than a decade, policymakers have debated, studied and scoped out a high-speed rail line that would whisk travelers between downtown Los Angeles and San Francisco in 2 1/2 hours.

But, this year, the $40-billion dream of building a Japanese- or European-style bullet train through the Central Valley may find itself stopped in its tracks.

Even as state lawmakers visited France earlier this month for a glimpse of a passenger train as it set a world rail speed record of 357 mph, Gov. Arnold Schwarzenegger was applying the brakes to California's plan for a high-speed system.

The governor wants "to quietly kill this — and not go out and tell the people that high-speed rail isn't in the future," said state Sen. Dean Florez (D-Shafter). The lawmaker from the southern San Joaquin Valley is counting on the trains to help bring jobs to his district.

Schwarzenegger asked the Legislature in his 2007 budget to slash money for the California High-Speed Rail Authority. The governor also wants lawmakers to postpone indefinitely a $9.95-billion rail bond issue that is slated to appear on the November 2008 ballot.

Adam Mendelsohn, a spokesman for the governor, said Schwarzenegger still wanted to build a bullet train — just not any time soon: "Right now, the voters are crying for relief from congested freeways. That's the immediate priority."

The governor's moves come as the rail authority, which already has cleared its first environmental hurdles, is about to begin some crucial steps, including engineering, right-of-way acquisition and financial planning.

At stake is a 700-mile rail corridor with no potentially dangerous vehicle crossings. It would follow several routes from Sacramento and the San Francisco Bay Area south through Bakersfield to Los Angeles and San Diego.

Rolling along at up to 220 mph, the electricity-powered train would zip passengers between Los Angeles' Union Station and downtown San Francisco as fast as the fastest plane trip, planners say — factoring in the time to get to the airport and go through security.

And commuters could speed from Anaheim to downtown L.A. in 20 minutes, instead of today's 45-minute Metrolink journey.

Critics see the high-speed train as a potential boondoggle that would be a drain on the state treasury and a loser that would never pay for itself. Consider, they say, the poor performance of most long-distance U.S. passenger rail service.

They also note that an effort to build a bullet train system between San Diego and Los Angeles in the early 1980s collapsed after coastal residents balked at environmental problems with a route close to the ocean.

Subsequent attempts to link Southern California and Las Vegas with high-speed rail have failed to gain traction.

Supporters disagree. They cite the train's speed, convenience and its less-controversial route. Backers say that based on ridership estimates, the train could rack up an annual operating surplus of as much as $2 billion by 2030.

California's bullet trains should wow passengers when they take a ride, said Quentin Kopp, chairman of the High-Speed Rail Authority. "Now, when you say trains, people think of Amtrak. But Amtrak is pitiful."

Although slow, three heavily subsidized Amtrak trains crisscross the state. The routes, operated jointly with the California Department of Transportation, have grown in popularity and in fares collected.

The big increases in the three lines operated by Amtrak and Caltrans have not been shared by Amtrak's Coast Starlight train between the Pacific Northwest, the Bay Area and Los Angeles.

Ridership dropped 34% from 1999 to 2006 on the legendary train that offers dramatic views — and notoriously long delays. The Bay Area-to-Los Angeles portion is scheduled to take just over 11 hours but consistently runs from five to 11 hours late.

For her part, Kathryn Hardy, a daily commuter on Amtrak's lumbering San Joaquins line between Sacramento and Modesto, is more than ready for high-speed rail.

"If it's fast and more on time, people would take it because driving is becoming more and more of a hassle," she said.

"A nice, long train ride is romantic and nostalgic, but it's not what people want," Hardy said as she and hundreds of other passengers on a nearly full San Joaquins crawled through the outskirts of towns at 10 mph and repeatedly stopped for passing freight trains.

Rail travel in California could remain Amtrak-slow for years to come if the governor succeeds in putting off the bond vote, said Jo Linda Thompson, a lobbyist for the Assn. for California High-Speed Trains.

"It would be the kiss of death for the train," she said.

If the Legislature goes along with the governor, it would be the third time a state rail bond has been delayed, and boosters said another postponement could kill the measure for good.

Schwarzenegger, who is gaining an international reputation as an environmentalist, recognizes that a network of high-speed trains could help combat global warming, his spokesman said.

But work on the train should wait for improved highways, new dams and prisons, Mendelsohn said. "There are millions of millions of working families who use freeways and roads in California. It's a reality."

Schwarzenegger's budget would reduce the authority to an office with no more than six full-time employees — without the 75 consulting firms with 300 employees it has now. Outside contracts would need to be canceled, route planning put on hold and environmental and engineering work frozen.

The time is now to make the train a reality, said Assemblywoman Fiona Ma (D-San Francisco), who heads the Legislature's informal "high-speed rail caucus." Ma said her recent ride on the speed-record-setting French train made her a believer.

"It felt like we were ready to take off on a jet, but we kept on going faster," she said just after getting off the train.

Another member of the delegation, Assemblyman Bob Huff (R-Diamond Bar), said high-speed rail would be a good transportation alternative for California, but as a fiscal conservative he was worried about the cost.

Ma's supporters in the Legislature and in local governments want to get Schwarzenegger to change his mind. Failing that, they'll try to allocate about $100 million for the rail authority that the governor wants eliminated. They also oppose his plan to strike the rail bond proposal from the 2008 ballot.

But a top aide to Schwarzenegger says the governor doesn't want to commit state money before lining up private financing.

Asking voters to approve nearly $10 billion in state borrowing, without first lining up at least $20 billion in private capital investments, is like the "tail wagging the dog," said David Crane, a former investment banker whom Schwarzenegger recently appointed to the rail authority board.

High-speed rail advocates agree that they'll need to attract billions of dollars from the private sector. However, they caution that investors are unlikely to risk their money without first seeing state dollars upfront.

"We've got to put enough public investment in to see if there is a system that others find appealing" to invest in, said Anaheim Mayor Curt Pringle, a Republican and another new Schwarzenegger appointee to the rail authority.

However it's financed, the idea of streaking from Sacramento to Southern California in a few hours sounded great to Bill Cullifer and his 16-year-old daughter, Katie, as they slowly cruised through Stockton on a 10-hour train and bus trip to Disneyland.

"We could watch a movie on the train and then we'd be there," Katie said before nodding off to sleep.

*

marc.lifsher@latimes.com

*

Begin text of infobox

Proposed high-speed train

A proposed high-speed train that would link Northern and Southern California would be competitive with air travel by 2020 and would relieve pressure on air and highway corridors, according to proponents. Here are the proposed routes and estimated door-to-door times between selected cities.

Sample trip Auto Air High-speed train*
Los Angeles to 7 hours, 3 hours, 3 hours,
San Francisco 36 minutes 26 minutes 30 minutes
Fresno to 4 hours, 3 hours 2 hours,
Los Angeles 18 minutes 33 minutes
San Diego to 2 hours 2 hours 2 hours
Los Angeles 41 minutes 46 minutes 16 minutes
Burbank to 6 hours, 3 hours 3 hours
San Jose 32 minutes 8 minutes 2 minutes
Sacramento to 2 hours, No 1 hour
San Jose 33 minutes service 53 minutes


* Express times, including travel time to and from train station.

Note: Air travel includes time needed to get to and from airports and to pass through airport security.

**

Source: California High-Speed Rail Authority

http://www.latimes.com/news/local/la-fi-rail.29apr29,1,2348865.story
Copyright 2007 Los Angeles Times | Privacy Policy | Terms of Service

Grotesque Inequality: Hammering on the Obvious

April 27, 2007

Gilded Once More

By PAUL KRUGMAN

One of the distinctive features of the modern American right has been nostalgia for the late 19th century, with its minimal taxation, absence of regulation and reliance on faith-based charity rather than government social programs. Conservatives from Milton Friedman to Grover Norquist have portrayed the Gilded Age as a golden age, dismissing talk of the era’s injustice and cruelty as a left-wing myth.

Well, in at least one respect, everything old is new again. Income inequality — which began rising at the same time that modern conservatism began gaining political power — is now fully back to Gilded Age levels.

Consider a head-to-head comparison. We know what John D. Rockefeller, the richest man in Gilded Age America, made in 1894, because in 1895 he had to pay income taxes. (The next year, the Supreme Court declared the income tax unconstitutional.) His return declared an income of $1.25 million, almost 7,000 times the average per capita income in the United States at the time.

But that makes him a mere piker by modern standards. Last year, according to Institutional Investor’s Alpha magazine, James Simons, a hedge fund manager, took home $1.7 billion, more than 38,000 times the average income. Two other hedge fund managers also made more than $1 billion, and the top 25 combined made $14 billion.

How much is $14 billion? It’s more than it would cost to provide health care for a year to eight million children — the number of children in America who, unlike children in any other advanced country, don’t have health insurance.

The hedge fund billionaires are simply extreme examples of a much bigger phenomenon: every available measure of income concentration shows that we’ve gone back to levels of inequality not seen since the 1920s.

The New Gilded Age doesn’t feel quite as harsh and unjust as the old Gilded Age — not yet, anyway. But that’s because the effects of inequality are still moderated by progressive income taxes, which fall more heavily on the rich than on the middle class; by estate taxation, which limits the inheritance of great wealth; and by social insurance programs like Social Security, Medicare and Medicaid, which provide a safety net for the less fortunate.

You might have thought that in the face of growing inequality, there would have been a move to reinforce these moderating institutions — to raise taxes on the rich and use the money to strengthen the safety net. That’s why comparing the incomes of hedge fund managers with the cost of children’s health care isn’t an idle exercise: there’s a real trade-off involved. But for the past three decades, such trade-offs have been consistently settled in favor of the haves and have-mores.

Taxation has become much less progressive: according to estimates by the economists Thomas Piketty and Emmanuel Saez, average tax rates on the richest 0.01 percent of Americans have been cut in half since 1970, while taxes on the middle class have risen. In particular, the unearned income of the wealthy — dividends and capital gains — is now taxed at a lower rate than the earned income of most middle-class families.

Those hedge fund titans, by the way, have an especially sweet deal: loopholes in the law let them use their own businesses as, in effect, unlimited 401(k)s, sheltering their earnings and accumulating tax-free capital gains.

Meanwhile, the tax-cut bill Congress passed in 2001 set in motion a complete phaseout of the estate tax. If the Bush administration hadn’t been too clever by half, hiding the true cost of its tax cuts by making the whole package expire at the end of 2010, we’d be well on our way toward becoming a dynastic society.

And as for the social insurance programs —— well, in 2005 the Bush administration tried to privatize Social Security. If it had succeeded, Medicare would have been next.

Of course, the administration’s attempt to undo Social Security was a notable failure. The public, it seems, isn’t eager to return to the days before the New Deal. And the G.O.P.’s defeat in the midterm election has put on hold other plans to restore the good old days.

But it’s much too soon to declare the march toward a New Gilded Age over. If history is any guide, one of these days we’ll see the emergence of a New Progressive Era, maybe even a New New Deal. But it may be a long wait.


Copyright 2007 The New York Times CompanyNeo

Our Poodle Press

April 29, 2007

All the President’s Press

By FRANK RICH

SOMEHOW it’s hard to imagine David Halberstam yukking it up with Alberto Gonzales, Paul Wolfowitz and two discarded “American Idol” contestants at the annual White House Correspondents’ Association dinner. Before there was a Woodward and Bernstein, there was Halberstam, still not yet 30 in the early 1960s, calling those in power to account for lying about our “progress” in Vietnam. He did so even though J.F.K. told the publisher of The Times, “I wish like hell that you’d get Halberstam out of there.” He did so despite public ridicule from the dean of that era’s Georgetown punditocracy, the now forgotten columnist (and Vietnam War cheerleader) Joseph Alsop.

It was Alsop’s spirit, not Halberstam’s, that could be seen in C-Span’s live broadcast of the correspondents’ dinner last Saturday, two days before Halberstam’s death in a car crash in California. This fete is a crystallization of the press’s failures in the post-9/11 era: it illustrates how easily a propaganda-driven White House can enlist the Washington news media in its shows. Such is literally the case at the annual dinner, where journalists serve as a supporting cast, but it has been figuratively true year-round. The press has enabled stunts from the manufactured threat of imminent “mushroom clouds” to “Saving Private Lynch” to “Mission Accomplished,” whose fourth anniversary arrives on Tuesday. For all the recrimination, self-flagellation and reforms that followed these journalistic failures, it’s far from clear that the entire profession yet understands why it has lost the public’s faith.

That state of denial was center stage at the correspondents’ dinner last year, when the invited entertainer, Stephen Colbert, “fell flat,” as The Washington Post summed up the local consensus. To the astonishment of those in attendance, a funny thing happened outside the Beltway the morning after: the video of Mr. Colbert’s performance became a national sensation. (Last week it was still No. 2 among audiobook downloads on iTunes.) Washington wisdom had it that Mr. Colbert bombed because he was rude to the president. His real sin was to be rude to the capital press corps, whom he caricatured as stenographers. Though most of the Washington audience failed to find the joke funny, Americans elsewhere, having paid a heavy price for the press’s failure to challenge White House propaganda about Iraq, laughed until it hurt.

You’d think that l’affaire Colbert would have led to a little circumspection, but last Saturday’s dinner was another humiliation. And not just because this year’s entertainer, an apolitical nightclub has-been (Rich Little), was a ludicrously tone-deaf flop. More appalling — and symptomatic of the larger sycophancy — was the press’s insidious role in President Bush’s star turn at the event.

It’s the practice on these occasions that the president do his own comic shtick, but this year Mr. Bush made a grand show of abstaining, saying that the killings at Virginia Tech precluded his being a “funny guy.” Any civilian watching on TV could formulate the question left hanging by this pronouncement: Why did the killings in Iraq not preclude his being a “funny guy” at other press banquets we’ve watched on C-Span? At the equivalent Radio and Television Correspondents’ Association gala three years ago, the president contributed an elaborate (and tasteless) comic sketch about his failed search for Saddam’s W.M.D.

But the revelers in the ballroom last Saturday could not raise that discrepancy and challenge Mr. Bush’s hypocrisy; they could only clap. And so they served as captive dress extras in a propaganda stunt, lending their credibility to the president’s sanctimonious exploitation of the Virginia Tech tragedy for his own political self-aggrandizement on national television. Meanwhile the war was kept as tightly under wraps as the troops’ coffins.

By coincidence, this year’s dinner occurred just before a Congressional hearing filled in some new blanks in the still incomplete story of a more egregious White House propaganda extravaganza: the Pat Tillman hoax. As it turns out, the correspondents’ dinner played an embarrassing cameo role in it, too.

What the hearing underscored was the likelihood that the White House also knew very early on what the Army knew and covered up: the football star’s supposed death in battle in Afghanistan, vividly described in a Pentagon press release awarding him a Silver Star, was a complete fabrication, told to the world (and Tillman’s parents) even though top officers already suspected he had died by friendly fire. The White House apparently decided to join the Pentagon in maintaining that lie so that it could be milked for P.R. purposes on two television shows, the correspondents’ dinner on May 1, 2004, and a memorial service for Tillman two days later.

The timeline of events in the week or so leading up to that dinner is startling. Tillman was killed on April 22, 2004. By the next day top officers knew he had not been killed by enemy fire. On April 29, a top special operations commander sent a memo to John Abizaid, among other generals, suggesting that the White House be warned off making specific public claims about how Tillman died. Simultaneously, according to an e-mail that surfaced last week, a White House speechwriter contacted the Pentagon to gather information about Tillman for use at the correspondents’ dinner.

When President Bush spoke at the dinner at week’s end, he followed his jokes with a eulogy about Tillman’s sacrifice. But he kept the circumstances of Tillman’s death vague, no doubt because the White House did indeed get the message that the Pentagon’s press release about Tillman’s losing his life in battle was fiction. Yet it would be four more weeks before Pat Tillman’s own family was let in on the truth.

To see why the administration wanted to keep the myth going, just look at other events happening in the week before that correspondents’ dinner. On April 28, 2004, CBS broadcast the first photographs from Abu Ghraib; on April 29 a poll on The Times’s front page found the president’s approval rating on the war was plummeting; on April 30 Ted Koppel challenged the administration’s efforts to keep the war dead hidden by reading the names of the fallen on “Nightline.” Tillman could be useful to help drown out all this bad news, and to an extent he was. The Washington press corps that applauded the president at the correspondents’ dinner is the same press corps that was slow to recognize the importance of Abu Ghraib that weekend and, as documented by a new study, “When the Press Fails” (University of Chicago Press), even slower to label the crimes as torture.

In his PBS report last week about the journalism breakdown before the war, Bill Moyers said that “the press has yet to come to terms with its role in enabling the Bush administration to go to war on false pretenses.” That’s not universally true; a number of news organizations have owned up to their disasters and tried to learn from them. Yet old habits die hard: for too long the full weight of the scandal in the Gonzales Justice Department eluded some of the Washington media pack, just as Abu Ghraib and the C.I.A. leak case did.

After last weekend’s correspondents’ dinner, The Times decided to end its participation in such events. But even were the dinner to vanish altogether, it remains but a yearly televised snapshot of the overall syndrome. The current White House, weakened as it is, can still establish story lines as fake as “Mission Accomplished” and get a free pass.

To pick just one overarching example: much of the press still takes it as a given that Iraq has a functioning government that might meet political benchmarks (oil law, de-Baathification reform, etc., etc.) that would facilitate an American withdrawal. In reality, the Maliki “government” can’t meet any benchmarks, even if they were enforced, because that government exists only as a fictional White House talking point. As Gen. Barry McCaffrey said last week, this government doesn’t fully control a single province. Its Parliament, now approaching a scheduled summer recess, has passed no major legislation in months. Iraq’s sole recent democratic achievement is to ban the release of civilian casualty figures, lest they challenge White House happy talk about “progress” in Iraq.

It’s our country’s bitter fortune that while David Halberstam is gone, too many Joe Alsops still hold sway. Take the current dean of the Washington press corps, David Broder, who is leading the charge in ridiculing Harry Reid for saying the obvious — that “this war is lost” (as it is militarily, unless we stay in perpetuity and draft many more troops). In February, Mr. Broder handed down another gem of Beltway conventional wisdom, suggesting that “at the very moment the House of Representatives is repudiating his policy in Iraq, President Bush is poised for a political comeback.”

Some may recall that Stephen Colbert offered the same prediction in his monologue at the correspondents’ dinner a year ago. “I don’t believe this is a low point in this presidency,” he said. “I believe it is just a lull before a comeback.” But the fake pundit, unlike the real one, recognized that this was a joke.


Copyright 2007 The New York Times Company

Thursday, April 26, 2007

California Prison Deal

State seeks $7.4 billion for prisons

Under intense pressure to ease crowding, officials back plan to add beds and aid released inmates.

By Jenifer Warren
Times Staff Writer

April 26, 2007

SACRAMENTO — Facing mounting pressure from the federal courts, legislative leaders and Gov. Arnold Schwarzenegger agreed Wednesday to spend $7.4 billion on new jail and prison beds while doing more to help inmates succeed once released.

The complex deal, reached after weeks of negotiations, represents an effort to ease overcrowding in California's sprawling correctional system, where 172,000 convicts are packed into space intended for about 100,000.

The crowding crisis has become so severe that federal judges, who already control large portions of the state system, are considering whether to cap the inmate population. Hearings on that issue are set for June.

The deal, which would create 53,000 beds at prisons, jails and new urban "reentry" centers, is set for a vote in the Legislature today. Contained in an urgency bill, it requires approval by two-thirds of the members in each house and would take effect immediately. The beds would be funded by lease revenue bonds, which do not require voters' approval.

The bill would also break new ground by giving the governor temporary authority to transfer up to 8,000 inmates to out-of-state facilities against their will. Schwarzenegger initiated such transfers in October to free up space and moved 350 inmates, all volunteers. But the transfers were stalled by the courts after unions challenged the governor's authority to order them.

Senate Democratic leader Don Perata (D-Oakland) praised the agreement as a balanced response to the prison crisis that would reduce the state's alarming recidivism rate.

"Every negotiation requires compromise, and this agreement provides both a big increase in prison beds as well as a strong commitment to rehabilitation programs and greater oversight of the Department of Corrections," Perata said.

In a statement, Schwarzenegger said that after ignoring the prison crisis for decades, California was on the verge of making history.

"This proposal will bring critical new rehabilitation programs and create desperately needed space to relieve overcrowding," the governor said, praising legislative leaders for joining him in addressing "this very real threat to public safety."

But critics called the plan disappointing, saying that it falls far short of what California needs to quickly ease the overcrowded conditions and reduce recidivism. About 70% of felons who are released are back in prison within a few years, a rate that leads the nation.

Several proposals that might have brought a more immediate drop in the population — but are considered politically risky — were omitted from the deal. They include keeping tens of thousands of parole violators out of state prison by using other sanctions to punish them — an approach used in numerous other states.

The agreement does not include the creation of a commission to review and change the state's sentencing laws, which scholars believe is essential to controlling the prison population. Perata said that controversial issue would be dealt with through separate legislation.

Lawyers for inmates in three class-action suits against the state were among those expressing dismay. They predicted that the package would not satisfy the judges considering a population cap.

"The deal is mostly a prison construction program, which is going to cost billions without any significant effect on crime," said Donald Specter, executive director of the nonprofit Prison Law Office. "It really ignores any meaningful short-term reforms and it assumes the department will provide quality rehabilitation programs, which is almost a flight of fancy."

A spokesman for the powerful prison guards' union also had harsh words for the deal and said the organization would work today to sway legislators against it.

"We are going to do everything we can to point out the dangers of this plan," said Lance Corcoran of the California Correctional Peace Officers Assn.

He said the union was particularly concerned about the mandatory out-of-state transfers authorized by the deal, noting that inmates who did not wish to move would create peril for officers.

"We're going to have to fight them out of their cells," he said, adding that putting in more beds at prisons that are already crowded would also endanger officers.

The agreement proposes adding beds in two phases, with the second round of construction authorized only if the Department of Corrections and Rehabilitation meets certain conditions. In addition, all new beds would be accompanied by increases in rehabilitation programs, including substance abuse counseling, academic and vocational training and mental health services. In the first year, $50 million would be allocated for such programs.

The first phase calls for spending $3.6 billion on 32,000 beds at jails, existing prisons and smaller community "reentry" facilities for convicts nearing the end of their terms. The total also would include 6,000 medical beds requested by the federal receiver in charge of inmate healthcare.

In order to obtain funding for the second phase, officials would have to meet about a dozen benchmarks tied to enhanced rehabilitation for inmates. Among those are the creation of 4,000 drug treatment slots; formation of a California rehabilitation oversight board to monitor the department's progress; individual inmate assessments to ensure that each receives suitable education or mental health treatment; and overall expansion of vocational and academic training behind bars.

If the goals were met, the department would receive $2.5 billion in bond money to build an additional 16,000 beds at state facilities; 5,000 beds would be added to county jails.

The state money would be matched in both phases by county funds totaling more than $1.2 billion.

Pressure for a deal has been building since last summer, when a special session on prisons called by Schwarzenegger failed to yield results. In October, the governor declared a state of emergency in the prisons, saying that extreme peril existed for staff and inmates.

In December, lawyers representing inmates in three class-action lawsuits — concerning medical and mental health care, as well as the treatment of disabled prisoners — filed motions seeking the population cap.

The lawyers argue that overcrowding has become so severe that it is preventing state officials from resolving problems they committed to fix as part of the litigation. They say that only a significantly lower population would enable the state to raise medical and mental health care to constitutionally adequate standards.

Two of the judges, Thelton E. Henderson of San Francisco and Lawrence K. Karlton of Sacramento, have already indicated that they may be inclined to move toward a population cap.

At a December hearing, Karlton gave the state six months to continue to show progress, and said that although he hopes to avoid what he called "a radical step," he would do it if pushed.

In a February order, Henderson indicated that he expects the state to reduce the population from its current level. He directed officials to report by May 15, "each concrete measure" they are taking to reduce the population by next March, and by March 2009.

jenifer.warren@latimes.com

http://www.latimes.com/news/local/la-me-prisons26apr26,1,445038.story?coll=la-headlines-california

California Prison Deal

State seeks $7.4 billion for prisons

Under intense pressure to ease crowding, officials back plan to add beds and aid released inmates.

By Jenifer Warren
Times Staff Writer

April 26, 2007

SACRAMENTO — Facing mounting pressure from the federal courts, legislative leaders and Gov. Arnold Schwarzenegger agreed Wednesday to spend $7.4 billion on new jail and prison beds while doing more to help inmates succeed once released.

The complex deal, reached after weeks of negotiations, represents an effort to ease overcrowding in California's sprawling correctional system, where 172,000 convicts are packed into space intended for about 100,000.

The crowding crisis has become so severe that federal judges, who already control large portions of the state system, are considering whether to cap the inmate population. Hearings on that issue are set for June.

The deal, which would create 53,000 beds at prisons, jails and new urban "reentry" centers, is set for a vote in the Legislature today. Contained in an urgency bill, it requires approval by two-thirds of the members in each house and would take effect immediately. The beds would be funded by lease revenue bonds, which do not require voters' approval.

The bill would also break new ground by giving the governor temporary authority to transfer up to 8,000 inmates to out-of-state facilities against their will. Schwarzenegger initiated such transfers in October to free up space and moved 350 inmates, all volunteers. But the transfers were stalled by the courts after unions challenged the governor's authority to order them.

Senate Democratic leader Don Perata (D-Oakland) praised the agreement as a balanced response to the prison crisis that would reduce the state's alarming recidivism rate.

"Every negotiation requires compromise, and this agreement provides both a big increase in prison beds as well as a strong commitment to rehabilitation programs and greater oversight of the Department of Corrections," Perata said.

In a statement, Schwarzenegger said that after ignoring the prison crisis for decades, California was on the verge of making history.

"This proposal will bring critical new rehabilitation programs and create desperately needed space to relieve overcrowding," the governor said, praising legislative leaders for joining him in addressing "this very real threat to public safety."

But critics called the plan disappointing, saying that it falls far short of what California needs to quickly ease the overcrowded conditions and reduce recidivism. About 70% of felons who are released are back in prison within a few years, a rate that leads the nation.

Several proposals that might have brought a more immediate drop in the population — but are considered politically risky — were omitted from the deal. They include keeping tens of thousands of parole violators out of state prison by using other sanctions to punish them — an approach used in numerous other states.

The agreement does not include the creation of a commission to review and change the state's sentencing laws, which scholars believe is essential to controlling the prison population. Perata said that controversial issue would be dealt with through separate legislation.

Lawyers for inmates in three class-action suits against the state were among those expressing dismay. They predicted that the package would not satisfy the judges considering a population cap.

"The deal is mostly a prison construction program, which is going to cost billions without any significant effect on crime," said Donald Specter, executive director of the nonprofit Prison Law Office. "It really ignores any meaningful short-term reforms and it assumes the department will provide quality rehabilitation programs, which is almost a flight of fancy."

A spokesman for the powerful prison guards' union also had harsh words for the deal and said the organization would work today to sway legislators against it.

"We are going to do everything we can to point out the dangers of this plan," said Lance Corcoran of the California Correctional Peace Officers Assn.

He said the union was particularly concerned about the mandatory out-of-state transfers authorized by the deal, noting that inmates who did not wish to move would create peril for officers.

"We're going to have to fight them out of their cells," he said, adding that putting in more beds at prisons that are already crowded would also endanger officers.

The agreement proposes adding beds in two phases, with the second round of construction authorized only if the Department of Corrections and Rehabilitation meets certain conditions. In addition, all new beds would be accompanied by increases in rehabilitation programs, including substance abuse counseling, academic and vocational training and mental health services. In the first year, $50 million would be allocated for such programs.

The first phase calls for spending $3.6 billion on 32,000 beds at jails, existing prisons and smaller community "reentry" facilities for convicts nearing the end of their terms. The total also would include 6,000 medical beds requested by the federal receiver in charge of inmate healthcare.

In order to obtain funding for the second phase, officials would have to meet about a dozen benchmarks tied to enhanced rehabilitation for inmates. Among those are the creation of 4,000 drug treatment slots; formation of a California rehabilitation oversight board to monitor the department's progress; individual inmate assessments to ensure that each receives suitable education or mental health treatment; and overall expansion of vocational and academic training behind bars.

If the goals were met, the department would receive $2.5 billion in bond money to build an additional 16,000 beds at state facilities; 5,000 beds would be added to county jails.

The state money would be matched in both phases by county funds totaling more than $1.2 billion.

Pressure for a deal has been building since last summer, when a special session on prisons called by Schwarzenegger failed to yield results. In October, the governor declared a state of emergency in the prisons, saying that extreme peril existed for staff and inmates.

In December, lawyers representing inmates in three class-action lawsuits — concerning medical and mental health care, as well as the treatment of disabled prisoners — filed motions seeking the population cap.

The lawyers argue that overcrowding has become so severe that it is preventing state officials from resolving problems they committed to fix as part of the litigation. They say that only a significantly lower population would enable the state to raise medical and mental health care to constitutionally adequate standards.

Two of the judges, Thelton E. Henderson of San Francisco and Lawrence K. Karlton of Sacramento, have already indicated that they may be inclined to move toward a population cap.

At a December hearing, Karlton gave the state six months to continue to show progress, and said that although he hopes to avoid what he called "a radical step," he would do it if pushed.

In a February order, Henderson indicated that he expects the state to reduce the population from its current level. He directed officials to report by May 15, "each concrete measure" they are taking to reduce the population by next March, and by March 2009.

jenifer.warren@latimes.com

http://www.latimes.com/news/local/la-me-prisons26apr26,1,445038.story?coll=la-headlines-california

Wednesday, April 25, 2007

Biggest Incomes in History?

Top 25 hedge-fund chiefs earn $14 billion
Their pay rose 57% in '06, a study says. Labor union slams Wall Street.
By Walter Hamilton
Times Staff Writer

April 25, 2007

NEW YORK — The Masters of the Universe on Wall Street keep getting richer — and that has some people worried.

A report released Tuesday shows that Wall Street's elite are making more money than ever, with the 25 highest-paid hedge-fund managers averaging $570 million in compensation last year. The top three pocketed more than $1 billion each.

But the investment environment that is making these men rich (and yes, the top 25 are all men) is coming at the expense of working Americans in the form of job losses, reduced health benefits and depleted retirement savings, according to a very different study released Tuesday by a labor union.

Taken together, the studies encapsulate the two ends of today's economic spectrum in which Wall Street is enjoying transcendent profits while many rank-and-file workers feel left behind.

"You see this extraordinary accumulation of wealth in the hands of a relatively small group of people," said Stephen Lerner of the Service Employees International Union, which represents government and healthcare workers.

"It's just not healthy for society."

The SEIU study focused on private equity funds, which buy and restructure companies in hopes of selling them at a profit. These funds are close cousins of hedge funds, which are private investment pools that pursue a wide range of investment strategies.

Increasingly the lines between the two are blurring as each tiptoes into the other's line of business, but big money has always been a shared trait.

In its annual survey of hedge-fund managers, investors magazine Alpha found that average compensation of the top 25 jumped 57% last year from 2005 and 127% from 2004.

Collectively, the managers earned more than $14 billion. If you didn't make at least $240 million last year, you didn't make the list.

Some critics contend that hedge-fund managers are vastly overpaid. These wizards of Wall Street have taken advantage of favorable economic conditions, buoyant financial markets and a cachet borne of their secretive investment styles to fool starry-eyed investors into thinking they are worth their outsize paychecks, this view holds.

"How does anybody say, 'I worked hard enough. I earned [my] $300 million'?" said Peter Schiff, head of brokerage firm Euro Pacific Capital in Darien, Conn. "That's ridiculous."

Investments in hedge funds typically come from pension plans, wealthy individuals and others looking for returns that will beat what they can get from plain-vanilla stocks, bonds and mutual funds.

But many hedge-fund managers use borrowed money, Schiff noted — a strategy that beefs up returns when investment bets pay off but can escalate losses when they go sour.

The highest-paid manager on Alpha's list was James Simons, a former Defense Department code breaker who runs Renaissance Technologies Corp. in East Setauket, N.Y. Simons took home an estimated $1.7 billion last year.

Next was Kenneth Griffin, head of Chicago-based Citadel Investment Group at $1.4 billion. Edward Lampert, whose Greenwich, Conn.-based ESL Investments controls the Sears department store chain, was third at $1.3 billion.

The Alpha survey notes that most hedge-fund managers don't earn anywhere near these sums.

Most Americans don't either, which is the point of the SEIU study.

The labor union's report contends that the vast profits being earned by private-equity managers as they buy and resell companies show that profits are high enough to share a larger portion with employees.

"The buyout deals and money-generating strategies that are generating immense wealth for this industry and its investors can have harsh consequences for workers and the companies they buy and sell," the report said.

Yet a third study released Tuesday underscored the broader issue of affluence in America and how the rising wealth of those at the top was forcing some to rethink the definition of rich.

The annual survey of affluent Americans by U.S. Trust Co. used to define wealthy people as those with household income of $300,000 or total net worth, including their homes, of $5.9 million.

But U.S. Trust altered its formula this year to define wealthy people as those with $5 million in investable assets, not including homes. It also added an "ultra" high-net-worth category for those with assets of $25 million or more.

The change reflects the fast-rising net worth of the wealthiest 1% of Americans, said Tracey Warson, head of the Western region for U.S. Trust, a money manager for the affluent.

"With the strength of the markets overall and the strength in real estate, there is greater wealth in our country and throughout the world," Warson said.

walter.hamilton@latimes.com

*

(INFOBOX BELOW)

Wall Street riches

Here is a list of the top 10 hedge-fund earners in 2006, along with what fund they worked for and how much they were paid:

1. James Simons, Renaissance Technologies, $1.7 billion

2. Ken Griffin, Citadel Investment, $1.4 billion

3. Edward Lampert, ESL Investments, $1.3 billion

4. George Soros, Soros Fund Management, $950 million

5. Steven Cohen, SAC Capital, $900 million

6. Bruce Kovner, Caxton Associates, $715 million

7. Paul Tudor Jones, Tudor Investment, $690 million

8. Tim Barakett, Atticus Capital, $675 million

9. David Tepper, Appaloosa Management, $670 million

10. Carl Icahn, Icahn Partners, $600 million.

Source: Alpha magazine

http://www.latimes.com/business/la-fi-wealth25apr25,0,301233.story?coll=la-home-headlines
From the Los Angeles Times

Death Comes to Class

A deadly hush in Room 211 — then the killer returned
Bodies lay where only moments before the students were laughing about their French. 'Shhh,' one warned.

By Erika Hayasaki
Times Staff Writer

April 25, 2007

Blacksburg, Va. — — The first pops echoed from a distance, but nobody thought much of it.

Construction crews had been hammering and drilling for weeks below the window of Room 211 in Norris Hall at Virginia Tech. Professor Jocelyne Couture-Nowak went on teaching.

The pops turned to muffled bangs — then loud staccato blasts. They sounded close, like they were coming from the hall.

Please tell me that isn't what I think it is, Madame Couture said.

It's just hammers, a student reassured her. The professor opened the door and peeked outside, then slammed it shut.

Her face was white with terror.

Get to the back! Get under your desks! Madame Couture ordered. Call 911!

Emily Haas pressed herself against a back wall and squeezed her eyes shut. Her sorority sister, Allison Cook, curled up nearby.

"Put the desks in front of the door!" cried Clay Violand from the back of the room, as students scattered onto the floor, lying behind desks.

The professor pushed several lightweight desks made of metal and plastic in front of the door. She backed up against a wall.

Colin Goddard, lying in front of Violand, shielded his 6-foot-3 body under a desk. But his limbs stuck out. He dialed 911. Room 211, Norris Hall, he told the operator. He thought of jumping out of a window, but it had to be cranked open with a lever. There wasn't enough time.

Goddard saw bullets pierce the door. The 911 operator was still talking. He saw the gunman's boots and pants. Goddard did not look at his face.



It was a class of 22 intermediate French students. Madame Couture, as they called her, was its heart.

Since the start of the spring semester in January, the students met three days a week. Madame Couture was so passionate about the language she would break into a French song during class, urging the students to sing along. She would flail her arms like a conductor and they would follow her lead, botching lyrics and singing out of tune. The French-Canadian woman loved teaching the language. Sometimes, she got so excited about a lesson it made her breathless.

On Monday before class, Madame Couture stopped by the foreign languages department at Major Williams Hall. Fabrice Teulon, an associate professor of French, talked to her briefly about the spring chill. Madame Couture told her she had recently planted flowers in her garden. She worried they would die in the frost.

Goddard, 21, woke up at 8:40 a.m. He showered and put on a blue long-sleeved shirt. He was an international studies major who had lived in Somalia, Bangladesh and Indonesia. He was drawn to people like classmate Kristina Heeger, who had also lived in different parts of the world. She was having car trouble so he swung by to pick her up. They talked about cutting French, but decided not to. They arrived a few minutes late, and sat together a few rows back near the door.

Haas, 19, put on jeans, her mother's old yellow T-shirt and a blue fleece. She arrived early and sat in the middle of the room next to Cook, her Pi Beta Phi sorority sister. The two had known each other for years and had attended the same church in Richmond, Va. Haas talked about the horse race she went to over the weekend. Minutes later, Haas moved to the back of the room because Madame Couture paired her with a freshman who was known for her sweet smile.

Violand, 20, usually sat near the front. He was a bass player who had untamed long hair. He was sluggish in the mornings. As he often did, Violand arrived late and took a seat in the back row. The professor did not get mad at his tardiness. It was not her way.

The others floated in. One young man wearing his Virginia Tech Corps of Cadets uniform sat in his usual seat in the front near the door. A poet and computer techie sat nearby wearing a black newsboy cap. An Alpha Delta Pi sorority member arrived in sweat pants. She sat against a wall. A former high school basketball star sat in the third row in the middle. Her mother always told her to sit close to the teacher to get the best learning experience.

The class started at 9:05 a.m. with a cheerful "Bonjour!" This was how Madame Couture, 49, always greeted her students. She had lived in Quebec and Nova Scotia. She had helped found a French-language grade school in 1997. She was the mother of two daughters and a stepdaughter. Her husband was the head of Virginia Tech's horticulture department. The professor's pebble-gray and white hair fell past her shoulders, and she glowed with a dimpled smile.

Snowflakes swirled outside Norris Hall, a square-shaped building made of stone and surrounded by bare trees.

On this blustery April morning, 28 students and five teachers at Virginia Tech would die — including 12 from Room 211. Witnesses would later say the gunman, Seung-hui Cho, 23, killed himself in this classroom.

But inside Room 211, death had yet to taint the students' thoughts. The television was tuned to a French newscast. The lesson was superlatives and comparative vocabulary.

It was a course largely based on conversation, and Madame Couture saw to it that everyone talked. They learned a lot about each other this way. If someone spent the weekend drinking beer, the class found out. If someone didn't do the homework, it was no secret.

Halfway through the class, the professor stood with her back facing a blackboard writing students' sentences on a clear sheet on an overhead projector. She got to Haas' sentence. It translated: Britney Spears has been married more often than Christina Aguilera.

Students laughed.

There were about 30 desks in the small rectangular room. The aisles were crammed with book bags. There was little space to walk, much less anyplace to hide.

The shooting begins

Cho started shooting people near the window first, moving up and down the aisles. Girls screamed. Goddard felt a rush of air rip through his leg. He smelled gunpowder. He had been hit. He dropped the phone.

Haas felt sharp pangs at the back of her head. She wasn't sure if she had been shot or grazed.

Violand locked eyes with Cook, who was next to him. Both were still alive, but neither knew how long they would be. They stared at each other as shots exploded around them. Her eyes gave him comfort. With every shot and every moan, Violand thought another student was down. He waited to die.

The shooting paused. Haas heard the gunman leave. The pounding of bullets sounded softer now. They were coming from outside the room. Haas opened her eyes and saw a shell lying next to her face on the multicolored carpet. She picked up Goddard's phone and told the operator again: Room 211, Norris Hall. The operator told her to keep talking. Haas told the operator she had to be quiet because she thought the gunman could come back. Just breathe, the operator said, just breathe. Goddard asked Heeger if she was OK.

"Shhh," said Violand, raising his head. He told everyone to be quiet. He didn't want the gunman to know they were still alive.

All around them, students played dead. Others were. There were sounds of people gurgling and gasping for breath. About 10 minutes later, Cho came back. He went around the room again, emptying his gun. The floor was crowded, making it hard for Cho to get to the back of the room. He fired more rounds. He reloaded.

Goddard saw Cho's shoes. He was coming toward him again. Cho shot Goddard twice more, this time in the shoulder and buttocks.

There was a final blast.

The students did not know whether the gunman was still alive, waiting to shoot anyone who moved.

Outside, sirens blared.

Goddard waited for Madame Couture to give the class directions. He figured she would tell them what to do next. But he did not hear her voice.

Haas heard police in the hall. They were trying to open the door, but something was blocking it. Haas got up. She did not look around the room. She did not want to see. When Haas reached the door, she glanced down. She saw the professor sprawled in front of the door, lifeless.

Haas put down the cellphone and pulled the door open. She waved a hand outside, and slipped out of the room. Six others had survived. Only Violand was not shot. He came out next. Cook followed him. She had been shot in the arm. Violand took her hand. Hilary Strollo, the girl in sweat pants, had been shot in the stomach and buttocks, and a bullet had grazed her head. She got up, took three steps and collapsed.

Goddard couldn't walk. Next to him, Heeger was bleeding too. She had been shot in the back. Nearby, a freshman had been shot in the leg.

Police entered Room 211. Goddard heard an officer yell, "Shooter down." Cho was dead.

They can't forget

The gunfire was over. The snow had stopped falling. Madame Couture was dead, and so were 11 students from Room 211. Among them: the former high school basketball player, the cadet, the girl with the sweet smile, the computer whiz with the newsboy cap.

Cho killed people inside four classrooms at Norris Hall that day. Room 211 suffered the greatest death toll.

The survivors cannot forget.

Photos of dead classmates pop up on televisions and Madame Couture's former students pause: "There's Matt." "There's Reema." "There's Ross."

Violand has flashbacks in the middle of conversations. He cannot shake the dreadful sounds of death. Alone at night, he cries.

Haas, who had been grazed in the back of the head, received two stitches and went home to Richmond. But she wanted badly to be back at Virginia Tech, reunited with her French classmates. Haas didn't think anyone else could understand how she felt — the guilt for living when so many others did not, this longing to hear Madame Couture say "Bonjour!" once more.

Seven days passed. Candles flickered and burned out. Roses wilted. The weather turned warm and students returned to campus. Mourners replaced dead flowers with fresh ones.

On Tuesday, several of the classmates attended Madame Couture's funeral at the campus horticulture garden, a meadow by a rippling stream. Haas saw Violand. He was holding a white rose. She hugged him. They had not seen each other since that fateful class.

A few minutes later, Goddard showed up in a wheelchair. Violand and Haas went over to him. Three other students from the French class joined them, including Luke Sponholz, who had missed class last Monday. His best friend was killed, and Madame Couture had been his favorite teacher.

Before last week, they had been classmates, linked by their passionate professor. Now they were friends, united in her death. It was a bittersweet bond that no one else could really understand.

During the service, Violand bowed his head. Haas patted his back. They listened silently as Sponholz offered these words in French on his classmates' behalf: "Madame, have you touched all of us in a profound way that we will never forget, and will we always love you?"

"Mais oui, Madame. Mais oui."

erika.hayasaki@latimes.com

Times staff writer Richard Fausset contributed to this report.


http://www.latimes.com/news/nationworld/nation/la-na-french25apr25,1,763724.story?coll=la-headlines-nation
From the Los Angeles Times