China: 'Bribery is widespread' in Rio case

from China Daily

Executives from all 16 Chinese steel mills participating in iron ore price talks this year have been bribed by Rio Tinto employees, an industry insider claimed Tuesday, amid reports that the government is considering invalidating 20 iron ore import licenses to regulate the chaotic ore import business.

The startling claim comes amid a widening probe of alleged business espionage linked to the world's second-largest iron ore miner, Rio Tinto.

Executives from five leading domestic steel makers and officials from the industry association are reportedly under investigation following last week's detention of four employees of Rio Tinto's China operation, including an Australian.

"Rio Tinto got to know the key executives of the 16 steel mills, who have sensitive industry information, when the China Iron and Steel Association (CISA) brought them to the bargaining table," said a senior manager at a large steel company, who requested anonymity.

"And then Rio Tinto bribed them (to get access to industry data), which has become an unwritten industry practice," the source said.

"If companies didn't accept, they would have cut supplies and so the whole steel industry has been bribed."

His words come as the CISA is reportedly mulling over re-examining the iron ore import licensing system because some license holders are said to have abused their rights.

"It is very likely for CISA to cancel about 20 iron ore import licenses held by steel makers and trading companies, with a focus on trading companies," the 21st Century Business Herald reported, citing an anonymous source.

Another industry insider, who also requested to be unnamed, told China Daily: "There are about 1,200 steel mills in China. Most small- and medium-sized mills without import licenses have to buy ore from big ones with licenses.

"Therefore, some big mills don't care about the ore prices because they could transfer the increasing cost to small- and medium-sized ones. Meanwhile, those small- and medium-sized steel mills are forced to sign contracts with global miners privately."

And, Hu Kai, analyst with Umetal, a steel consulting firm, said: "Because of their own interest and intense competition among various steel makers in China, it's unlikely for them to present a united front when bargaining with overseas ore providers."

Related readings: Secrets of Chinese steel mills found in Rio's computers Australia: Rio case not to affect trade ties Detained Rio Tinto executive in good health: Australian FM Govt: Proof against Rio spies sticks FM: China to handle Rio spy case 'according to the law'

But Hu said such measures can't solve the root problems, because huge demand for iron ore in China determines that the price talks will continue and disorder will continue to exist.

"I suggest the country should first control the output of the iron and steel industry. Besides, China should also enhance exploration of domestic mines and increase investment in overseas mining resources," Hu said.

CISA started reducing iron ore import licenses in 2005. By the end of last September, the number of firms possessing licenses in China has been reduced from 500 in 2005 to 112 now, and trading firms from 250 to 40.

The Shanghai State Security Bureau earlier this month detained Stern Hu, an Australian citizen and Rio's chief iron ore salesman in Shanghai, and three of his Chinese colleagues. They are accused of stealing sensitive industry data critical to China's iron ore price talks.

Calling "Balls and Strikes"

As the New York Times highlighted this weekend, the image of the judge as umpire has become a dominant analogy in discussions of judicial restraint. Chief Justice John G. Roberts said in the opening remarks of his own confirmation hearings in 2005: ”Judges are like umpires. Umpires don’t make the rules; they apply them. The role of an umpire and a judge is critical. They make sure everybody plays by the rules. But it is a limited role.” Today, members of the Senate Judiciary committee frequently used this statement to frame their opinions about what role Judge Sonia Sotomayor might play on the Supreme Court (the rare venue in which sitting on the bench is a good thing).

An (incomplete) review of the senators’ written statements and oral testimony finds the phrase “balls and strikes” used 11 times, “umpire” or “umpires” used 16 times, and “playing field” used twice today. Sen. John Cornyn, R-Tex., perhaps appealing to his Big 12 base, went for a football simile instead. Once all of the written statements are submitted to the record and the transcripts are finalized, I’ll update with a complete word count. Excerpts of the senators’ sports infused language are below the jump:

Sen. Jeff Sessions, R-Ala.:

Such an approach to judging means that the umpire calling the game is not neutral, but instead feels empowered to favor one team over the other.

Sen. Dianne Feinstein, D-Calif.:

Also, it showed me that Supreme Court justices are much more than umpires calling balls and strikes and that the word activist often is used only to describe opinions of one side.

So I do not believe that Supreme Court justices are merely umpires calling balls and strikes. Rather I believe that they make the decisions of individuals who bring to the court their own experiences and philosophies.

Sen. Russ Feingold, D-Wis.:

It made these decisions by interpreting and applying open-ended language in our Constitution like ‘equal protection of the laws,’ ‘due process of law,’ ‘freedom of the press,’ ‘unreasonable searches and seizures,’ and ‘the right to bear arms.’ These momentous decisions were not simply the result of an umpire calling balls and strikes.

Sen. Charles Schumer, D-N.Y.:

Just short of four years ago, then-Judge Roberts sat where Judge Sotomayor is sitting. He told us that his jurisprudence would be characterized by “modesty and humility.” He illustrated this with a now well-known quote: “Judges are like umpires. Umpires don’t make the rules. They apply them.”

It made these decisions by interpreting and applying open-ended language in our Constitution like ‘equal protection of the laws,’ ‘due process of law,’ ‘freedom of the press,’ ‘unreasonable searches and seizures,’ and ‘the right to bear arms.’ These momentous decisions were not simply the result of an umpire calling balls and strikes.

But any objective review of Judge Sotomayor’s record on the Second Circuit leaves no doubt that she has simply called balls and strikes for 17 years far more closely than Chief Justice Roberts has during his four years on the Supreme Court.

Sen. John Cornyn, R-Tex.:

To borrow a football analogy, a lower court judge is like the quarterback who executes the plays - not the coach who calls the plays.

But a few of your opinions do raise questions - because they suggest the kinds of plays you’d call if you were promoted to the coaching staff.

Sen. Tom Coburn, R-Okla.:

We expect a judge to merely call balls and strikes? Maybe so, maybe not. But we certainly don’t expect them to sympathize with one party over the other, and that’s where empathy comes from.

Sen. Sheldon Whitehouse, D-R.I.:

I particularly reject the analogy of a judge to an “umpire” who merely calls “balls and strikes.” If judging were that mechanical, we would not need nine Supreme Court Justices. The task of an appellate judge, particularly on a court of final appeal, is often to define the strike zone, within a matrix of Constitutional principle, legislative intent, and statutory construction.

The “umpire” analogy is belied by Chief Justice Roberts, though he cast himself as an “umpire” during his confirmation hearings.

…the infamous Ledbetter decision, for instance; the Louisville and Seattle integration cases; the first limitation on Roe v. Wade that outright disregards the woman’s health and safety; and the DC Heller decision, discovering a constitutional right to own guns that the Court had not previously noticed in 220 years. Some “balls and strikes.”

The liberties in our Constitution have their boundaries defined, in the gray and overlapping areas, by informed judgment. None of this is “balls and strikes.”

Sen. Ted Kaufman, D-Dela.:

A judge, or a court, has to call the game the same way for all sides. Fundamental fairness requires that in the courtroom, everyone comes to the plate with the same count of no balls and no strikes.

One of the aspirations of the American judicial system is that it is a place where the powerless have a chance for justice on a level playing field with the powerful.

Sen. Al Franken, D-Minn.:

Second, I am concerned that Americans are facing new barriers to defending their individual rights. The Supreme Court is the last court in the land where an individual is promised a level playing field and can seek to right a wrong.

The Sky Is Falling

Image credit: Stéphane Guisard, www.astrosurf.com/sguisard

Breakthrough ideas have a way of seeming obvious in retro­spect, and about a decade ago, a Columbia University geophysicist named Dallas Abbott had a breakthrough idea. She had been pondering the craters left by comets and asteroids that smashed into Earth. Geologists had counted them and concluded that space strikes are rare events and had occurred mainly during the era of primordial mists. But, Abbott realized, this deduction was based on the number of craters found on land—and because 70 percent of Earth’s surface is water, wouldn’t most space objects hit the sea? So she began searching for underwater craters caused by impacts rather than by other forces, such as volcanoes. What she has found is spine-chilling: evidence that several enormous asteroids or comets have slammed into our planet quite recently, in geologic terms. If Abbott is right, then you may be here today, reading this magazine, only because by sheer chance those objects struck the ocean rather than land.



Abbott believes that a space object about 300 meters in diameter hit the Gulf of Carpentaria, north of Australia, in 536 A.D. An object that size, striking at up to 50,000 miles per hour, could release as much energy as 1,000 nuclear bombs. Debris, dust, and gases thrown into the atmosphere by the impact would have blocked sunlight, temporarily cooling the planet—and indeed, contemporaneous accounts describe dim skies, cold summers, and poor harvests in 536 and 537. “A most dread portent took place,” the Byzantine historian Procopius wrote of 536; the sun “gave forth its light without brightness.” Frost reportedly covered China in the summertime. Still, the harm was mitigated by the ocean impact. When a space object strikes land, it kicks up more dust and debris, increasing the global-cooling effect; at the same time, the combination of shock waves and extreme heating at the point of impact generates nitric and nitrous acids, producing rain as corrosive as battery acid. If the Gulf of Carpentaria object were to strike Miami today, most of the city would be leveled, and the atmospheric effects could trigger crop failures around the world.

What’s more, the Gulf of Carpentaria object was a skipping stone compared with an object that Abbott thinks whammed into the Indian Ocean near Madagascar some 4,800 years ago, or about 2,800 B.C. Researchers generally assume that a space object a kilometer or more across would cause significant global harm: widespread destruction, severe acid rain, and dust storms that would darken the world’s skies for decades. The object that hit the Indian Ocean was three to five kilometers across, Abbott believes, and caused a tsunami in the Pacific 600 feet high—many times higher than the 2004 tsunami that struck Southeast Asia. Ancient texts such as Genesis and the Epic of Gilgamesh support her conjecture, describing an unspeakable planetary flood in roughly the same time period. If the Indian Ocean object were to hit the sea now, many of the world’s coastal cities could be flattened. If it were to hit land, much of a continent would be leveled; years of winter and mass starvation would ensue.

At the start of her research, which has sparked much debate among specialists, Abbott reasoned that if colossal asteroids or comets strike the sea with about the same frequency as they strike land, then given the number of known land craters, perhaps 100 large impact craters might lie beneath the oceans. In less than a decade of searching, she and a few colleagues have already found what appear to be 14 large underwater impact sites. That they’ve found so many so rapidly is hardly reassuring.

Other scientists are making equally unsettling discoveries. Only in the past few decades have astronomers begun to search the nearby skies for objects such as asteroids and comets (for convenience, let’s call them “space rocks”). What they are finding suggests that near-Earth space rocks are more numerous than was once thought, and that their orbits may not be as stable as has been assumed. There is also reason to think that space rocks may not even need to reach Earth’s surface to cause cataclysmic damage. Our solar system appears to be a far more dangerous place than was previously believed.

read more:

Weekly Address: Recovery and the Jobs of the Future

President Barack Obama on Saturday touted his administration’s economic stimulus spending, saying that it pulled "our financial system and our economy back from the brink."

His remarks in an unusually long edition of his weekly radio and internet address came after a week in which unemployment hit 9.5 percent and Republicans increasingly denounced the stimulus as a failure.

After beginning with a recap of his "progress on these challenges abroad" during his trip overseas this week, Obama quickly pivoted to the stimulus and offered a direct challenge to right-wing critics of the government spending, saying they "have yet to offer a plausible alternative."

First, he sought to reframe the public’s expectations for the spending program. “The Recovery Act wasn’t designed to restore the economy to full health on its own, but to provide the boost necessary to stop the free fall,” Obama said. “It was designed to spur demand and get people spending again and cushion those who had borne the brunt of the crisis.”

And then he pronounced the stimulus plan a success: “In a little over one hundred days, this Recovery Act has worked as intended. It has already extended unemployment insurance and health insurance to those who have lost their jobs in this recession. It has delivered $43 billion in tax relief to American working families and businesses. Without the help the Recovery Act has provided to struggling states, its estimated that state deficits would be nearly twice as large as they are now, resulting in tens of thousands of additional layoffs – layoffs that would affect police officers, teachers, and firefighters.”

That’s in part a rebuke of GOP lawmakers like House Minority Leader John Boehner (R-Ohio) who pounced on rumblings in Washington of a second stimulus package. “All of this talk of a second stimulus bill, I think, is an admission on the part of the administration that their stimulus plan is not working,” Boehner said earlier in the week.

The president, though, said it’s too soon to label the stimulus a failure, and offered a response to both "those who felt that doing nothing was somehow an answer" and also those who wanted a bigger stimulus and "are already calling for a second recovery plan":

“As I made clear at the time it was passed, the Recovery Act was not designed to work in four months – it was designed to work over two years,” Obama said. “We also knew that it would take some time for the money to get out the door, because we are committed to spending it in a way that is effective and transparent.”

What's So Scary About Offering People the Option of a Public Health Plan?

By Dean Baker, AlterNet Independence Day is a time to reflect on the United States and to ask what it is that we really value about our country. Most people would probably list the freedoms that it has usually guaranteed to most members of society. The opportunities for economic success, while not as great as often touted, are nonetheless impressive.

However, some members of Congress were apparently celebrating our system of employer-provided health insurance last weekend. Or, at least that is what they want us to believe.

As Congress starts to delve into the dirt of a health care reform package, the clearest point of conflict is over the existence and structure of a public health care plan. Some members of Congress have thrown down the gauntlet, insisting that they could never allow the public to have the option of buying into a government-run plan.

These members tell us that a government-run plan will be like having the post office manage our health care. While the post office actually does a pretty good job where I live, if the point is that a government-run plan is going to be bureaucratic and inefficient, then why are opponents of a public plan so worried about giving people the choice to buy into it? If the public plan is bad, then people will just stay with the options currently available in the private sector. As those of who believe in the free markets like to say: "what's wrong with giving people a choice?"

In addition to the members who just say "no" when it comes to a public plan, there are also members who are willing to allow a public plan, but only if they can be sure that it will not provide real competition with existing private plans. This route involves crippling the public plan in various ways to make it less competitive.

For example, one proposal is to establish a series of health insurance cooperatives, which would be prohibited from acting jointly to maximize their bargaining power. The idea is that a newly formed Nebraska health insurance cooperative, insuring a few thousand people, will not be able to put too much pressure on Pfizer or the American Medical Associations when negotiating prices. It also will not be able to provide much competition for Aetna, Cigna, and the other major insurers.

Several members of Congress have made protecting these insurers and the current system of employer-provided health insurance into a basic principle. Max Baucus, the head of the Senate Finance Committee, who will probably have more to say in the final bill than anyone else in the Senate, falls into this camp. Senator Baucus has explicitly said that he would not support a bill that jeopardized our system of employer-provided health insurance.

This is truly bizarre. The United States has employer-provided health care insurance as an accident -- it came about as a way to evade wage controls during World War II -- it was not some grand principle.

It is almost impossible to imagine why someone would consider employer-provided insurance as an end in itself. I say this both as an economist and as an employer. I am going to waste several hours tomorrow discussing my center's health insurance plan with an insurance broker.

It is very difficult to compare the merits of the different insurance plans that we are considering. There is an endless list of conditions that are or are not covered (which can change after the fact). There are also issues about how quickly and consistently the insurer will pay bills. We can ask people with other insurers about their experience, but there is no guarantee that our experience will be comparable.

Of course, our broker is of little use. She will only get paid if she persuades us to change insurers. How much can we trust her?

I am trying to do research and run a think tank. Senator Baucus might think that it is a good idea that I have to waste my time dealing with insurance brokers, but I don't, and I suspect that millions of other small employers feel the same way.

So, why not give us a choice of a good, simple, public plan? Employers that want to read through insurance contracts will still have that option. The rest of us can get back to our work.

Dean Baker is co-director of the Center for Economic and Policy Research.

When In Rome...? Actually, not so much

President Obama and French President Nicolas Sarkozy trade places on a dais with "Junior G8" delegates.

On first glance, the snapshot appears to show President Obama caught in a moment of less than lofty analysis. But upon looking at the video, the moment might seem to appear quite innocent -- one of those times when a picture can be misleading. The president was on a higher step and was stepping down -- so he looked down to assure his footing as the woman was walking up the stairs.

Although: not everyone agrees. Judge for yourself.

A blow for Illinois’s Blagojevich in corruption case

John Harris,Blagojevich's former chief of staff, pleaded guilty to one count of wire fraud and pledged cooporation with prosecutors in exchange for a lighter sentence if convicted.
Chicago

Former Illinois Gov. Rod Blagojevich’s campaign to clear his name of corruption charges suffered a major blow Wednesday when John Harris, his former chief of staff, entered a plea agreement with the US Attorney’s Office in Chicago.

Mr. Harris pleaded guilty to one count of wire fraud, and he pledged cooporation with prosecutors in exchange for a lighter sentence if convicted.

Mr. Blagojevich is charged with 16 counts of corruption including racketeering conspiracy, wire fraud, extortion conspiracy, attempted extortion, and making false statements to federal agents. He has insisted he is innocent of all charges.

Harris served as Blagojevich’s chief of staff from late 2005 until last December. He and the governor are among six people charged in April with 19 counts of “pervasive fraud.”

The plea agreement is the first in this case, although political insiders say that between now and the trial’s opening day in June 2010 there probably will be more.

“[Blagojevich] will soon be the last man standing,” says Andy Shaw, executive director of the Better Government Association, a watchdog group in Chicago. Mr. Shaw, who was a long-time political reporter for WLS-TV, says “this case is over” due to a growing number of cooperating witnesses who were close to Blagojevich when he was governor.

Last month, Christopher Kelly, Blagojevich’s former adviser and chief fundraiser, was sentenced to 37 months in prison on federal tax fraud charges for concealing the use of corporate funds from a roofing company he owned to cover gambling debts. Mr. Kelly is also involved in a second case in which he is charged in a kickback scheme against United Airlines and American Airlines at O’Hare International Airport. The trial for that case starts in September.

Those cases were not connected to the Blagojevich indictments because they did not involve the misuse of public funds.

Rod Blagojevich

Prosecutors also have access to the possible cooperation of Antoin “Tony” Rezko, a top Blagojevich adviser and fundraiser who was convicted in June 2008 on 16 federal corruption charges for trading his clout.

Shaw says prosecutors “now have a litany of cooperating witnesses, people who were right there in the room as Senate seats were being bartered and contracts traded for contributions, and jobs and positions on boards were sold off for cash.”

“They’re all going to stand up, one by one, and paint a picture of the worst pay-to-play corruption this state has ever seen,” says Shaw.

Under the plea deal, Harris faces a maximum of 35 months in prison, providing the testimony he offers proves accurate. Without the plea arrangement, the maximum for the charge is 20 years. Randall Samborn, spokesman with the US Attorney’s Office, says as of Wednesday Harris “is the only one to plead guilty at this point.”

The plea agreement states that in 2008 Harris aided Blagojevich’s attempts to sell the US Senate seat vacated by President Obama. Harris also was alleged to have threatened the Chicago Tribune with the withholding of state funds if the newspaper did not fire editorial staffers critical of the governor. He also was charged with pressuring financial institutions that did business with the state to give his wife a job.

Messages left for Harris’s attorney and Blagojevich’s spokesperson were not returned at time of writing.