Rep. Frank Wants to See if AIG Bonuses Recoverable

Filed at 11:43 a.m. ET

WASHINGTON (Reuters) - U.S. Representative Barney Frank, chairman of the House Financial Services Committee, said on Sunday the government needs to determine if millions in employee bonuses at American International Group Inc can be recovered.

"We need to find out whether these bonuses are legally recoverable," Frank, a Democrat, told the "Fox News Sunday" program, adding that the timing of the company's commitment to make the awards to its employees was important.

Embattled insurer AIG, which has received three government bailouts totaling $180 billion, had promised to pay about $1 billion in retention bonuses over a period of several years, half of which has already been paid.

AIG Chairman Edward Liddy said in a letter to U.S. Treasury Secretary Timothy Geithner that the firm was legally obligated to make already-committed 2008 employee-retention payments, the value of which were set early last year before problems at the Financial Products unit became public.

About half of the $1 billion was due to be paid to staff of AIG's main insurance businesses and the rest to employees of the largely unregulated AIG Financial Products.

AIG Financial Products was the unit that made bad bets on toxic mortgages and credit default swap contracts that led to the company's near collapse.

According to company documents obtained by Reuters on Saturday, the financial products unit is obligated to pay $220 million in employee retention payments for 2008, $55 million of which were paid in December and $165 million required to be paid by Sunday.

Liddy said in the letter the company agreed to revamp its system for paying bonuses after the Obama administration objected to the payouts.

(Reporting by Philip Barbara and John O'Callaghan; Editing by Bill Trott)

Hate cleric leads jihad cash appeal

Anjem Choudary, who led protests against returning British troops, has urged his followers to send money to 'mujaheddin'

Democrats show no fear in Orange County

The out party is determined to play in even in the most Republican districts.

Dena Bunis

Washington Bureau Chief
The Orange County Register
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Orange County Democrats have become so emboldened by how well President Barack Obama did here on election night that as far as they're concerned they can compete for any seat in this Republican rich environment.

Case in point: Irvine Councilwoman and former Mayor Beth Krom. She made it official this week that she is going to take on Republican Rep. John Campbell.

Doesn't Krom know that the 48th Congressional District is not only one of the most Republican in California, it's one of the most solid GOP districts in the nation?

She does. But she says she also knows that Obama carried that Republican stronghold and believes she's got a chance there as well.

Krom might want to talk to Newport Beach lawyer Steve Young who has run against Campbell three times. And unlike previous Democratic challengers, Young worked tirelessly to try to raise the money he needed and build an organization in the 48th. Even though Obama carried the district, Young lost to Campbell 55 percent to 41 percent. Two years before that he lost 59 percent to 38.1 percent.

But the very fact that Krom is willing to work to raise the money and pound the pavement in that district shows that Democrats with some chops are serious about playing here.

Jack Pitney, a political scientist at Claremont-McKenna College and former GOP congressional staffer – believes the Democrats' opening in Orange County comes in Obama's appeal to upper income professionals.

"The polls showed both in the primaries and the general elections that professionals really like him. And there are a lot of upper income professionals in Orange County,'' Pitney said. And obviously, he said, these days it's easier for Democrats than Republicans to raise money.

Krom's race is also likely to give Democrats – who not that very many years ago wouldn't admit to being Democrats in Orange County – a reason to believe that two parties can play in this traditional Republican stronghold.

And while Krom's announcement is not at all related, Orange County Democrats are going to really get a chance to crow on Wednesday when the leader of the free world holds a town meeting in Santa Ana.

It will be Obama's 57th day in office. And he's coming to Orange County.

President Bill Clinton was in office two and a half years before he stepped foot in O.C. as commander-in-chief.

Soon after I posted the item that Obama was coming I began to get e-mails from people asking me how they could get a glimpse of him.

"I would give both my dead ovaries and one healthy kidney to have a chance just to be in the same acre of land as our new President,'' wrote one woman whose name I won't give because I don't think she meant the comment for public consumption. "Any tips? Any help y'all might be willing to offer this old lady who's dreamed of this her entire life? (OK, since I was 11 and JFK was elected…)."

Unfortunately I couldn't help her. The White House is keeping the details secret so far in part I think because they haven't nailed down exactly where this town hall is going to be and how many people will be allowed to attend.

Democrats were even surprised when Obama carried the likes of Campbell's 48th District. But they had been working at it and the excitement around Obama's candidacy helped fuel their most successful voter registration drive in decades.

There are more than half a million Democrats in O.C. now. That's still almost 200,000 fewer than Republicans. But the party hasn't been so strong here in decades.

Two congressional races were actually in play in the county in 2008 – the challenges to Rep. Dana Rohrabacher of Huntington Beach and Ken Calvert of Corona.

And even some folks at the Democratic Congressional Campaign Committee here are a little sheepish when they talk about the fact that Democratic candidate Bill Hedrick was closing in on Calvert as Election Day approached and still they wouldn't put any money into the race.

Wylie Aitken, who was Rep. Loretta Sanchez's campaign chairman when no one believed she had a chance to beat Bob Dornan, is kicking himself for not seeing the Hedrick possibilities sooner and promises not to repeat that mistake.

Hedrick is intent on trying again and more than one political observer believes that's the race to watch.

Pitney said one factor that Calvert needs to be mindful of the next time around is the large number of Hispanics in his district. Hispanics tend to overwhelmingly vote Democratic.

According to an analysis Pitney pointed me to, only six incumbent Republicans in the nation have a higher concentration of Latino voters in their districts than Calvert's does. The 44th District is 42 percent Hispanic.

To be fair, less than 15 percent of Calvert's district is in Orange County but the demographics of Riverside are pretty similar.

One obvious wild card in all this speculation is that none of the Republicans in these safe Orange County districts have really been challenged before. It may be that we just haven't seen them in full campaign mode because they haven't needed to be.

In Rohrabacher's case, for example, he saw an early poll that he could be vulnerable to Huntington Beach Mayor Debbie Cook. So Rohrabacher, who hates to raise money and has barely run campaigns in the past, got into high gear and did cable television ads, mailings, fundraisers and in the end comfortably beat Cook.

It's hard to believe we're already talking about the 2010 election. It's only been four months since the last one.

But for political junkies who like to see good races, 2010 could be more electoral fun that we've had in a long time. We'll be watching.

Bunis is the Register's Washington Bureau Chief

1. Weary of Looking for Work, Some Create Their Own
2. Your Money: Thoughts on Walking Away From Your Home Loan
3. Talking Business: Madoff Had Accomplices: His Victims
4. The TV Watch: High Noon on the Set: Cramer vs. Stewart
5. Foreclosing on a Plane, Then Flying It Away
6. Nicholas D. Kristof: Our Pigs, Our Food, Our Health
7. State of the Art: One Number to Ring Them All
8. Op-Ed Contributor: Let Me Chew My Coca Leaves
9. The Pleasure Principle
10. Lucca Journal: A Walled City in Tuscany Clings to Its Ancient Menu

Bailout money is flowing abroad

Study casts doubt on the effectiveness of Bank of England’s ‘quantitative easing’ policy

By Sean O'Grady, Economics editor

Weary of Looking for Work, Some Create Their Own

Alex Andon with one of the jellyfish tanks he builds. He started his business after he was laid off.

SAN FRANCISCO — Alex Andon, 24, a graduate of Duke University in biology, was laid off from a biotech company last May. For months he sought new work. Then, frustrated with the hunt, he turned to jellyfish.

In an apartment he shares here with six roommates, Mr. Andon started a business in September building jellyfish aquariums, capitalizing on new technology that helps the fragile creatures survive in captivity. He has sold three tanks, one for $25,000 to a restaurant, and is starting a Web site to sell desktop versions for $350.

“I keep getting stung,” he said. And his crowded home office is filled with beakers and test tubes of jellyfish food. “But it beats looking for work. I hate looking for work.”

Plenty of other laid-off workers across the country, burned out by a merciless job market, are building business plans instead of sending out résumés. For these people, recession has become the mother of invention.

Economists say that when the economy takes a dive, it is common for people to turn to their inner entrepreneur to try to make their own work. But they say that it takes months for that mentality to sink in, and that this is about the time in the economic cycle when it really starts to happen — when the formerly employed realize that traditional job searches are not working, and that they are running out of time and money.

Mark V. Cannice, executive director of the entrepreneurship program at the University of San Francisco, calls the phenomenon “forced entrepreneurship.”

“If there is a silver lining, the large-scale downsizing from major companies will release a lot of new entrepreneurial talent and ideas — scientists, engineers, business folks now looking to do other things,” Mr. Cannice said. “It’s a Darwinian unleashing of talent into the entrepreneurial ecosystem.”

Even in prosperous times, entrepreneurs have a daunting failure rate. But those who succeed could play a big role in turning the economy around because tiny companies are actually big employers. In 2008, 3.8 million companies had fewer than 10 workers, and they employed 12.4 million people, or roughly 11 percent of the private sector work force, according to the Bureau of Labor Statistics.

Economists say there are some peculiarities to this wave of downturn start-ups. Chiefly, the Internet has given people an extraordinary tool not just to market their ideas but also to find business partners and suppliers, and to do all kinds of functions on the cheap: keeping the books, interacting with customers, even turning a small idea into a big idea.

The goal for many entrepreneurs nowadays is not to create a company that will someday make billions but to come up with an idea that will produce revenue quickly, said Jerome S. Engel, director for the center for entrepreneurship at the Berkeley Haas School of Business. Mr. Engel said many people will focus on serving immediate needs for individuals and businesses.

“It’s a very painful thing,” he said of the pressure people feel to find new ways to make money. “But it’s a healthy thing.”

Mr. Engel noted that the dot-com bust helped propel a pack of hardy companies. One of those, in fact, was Google. While it was started in the late 1990s, the company succeeded during the bust in part because it was highly focused and did not need much capital, Mr. Engel said.

Ryan Kuder, 35, understands the notion of scaled-down start-up fervor — and the worry and exhilaration that goes along with it. He was laid off in February 2008 from Yahoo, where he was a senior marketing manager. He job-hunted for a bit, then decided to start an Internet company that would let people do social networking at the neighborhood level.

Mr. Kuder and his business partner toiled until November, when he realized his big dreams had run headlong into reality. He needed money to pay the mortgage and buy health insurance for his family.

They transformed the company into a new one called Koombea that designs and builds Web sites for businesses. Koombea has grown to nine people, most of them in Colombia, where the cost of living allows them to do Web design relatively inexpensively.

Mr. Kuder and his wife agreed that he would give up working for Koombea at the end of January if he did not hit certain revenue goals. They narrowly missed the target. For a few days, Mr. Kuder sent out résumés. He found no work, so he is back investing himself full time in Koombea — and says he is feeling transformed.

“My sleeves are rolled up, and I’m dirtier than I’ve ever been before,” he said. “It’s incredibly nerve-wracking. I wake up nauseous everyday. But it’s probably easier right now to find a problem, solve it and charge people than it is to find a job.”

Monica Zamiska, 25, said it was “traumatizing” when she was laid off in January from her first postcollege job as a junior account executive with the public relations firm Ogilvy & Mather. After meeting with five recruiters, she began to realize how barren the job market was. “You can only send out so many résumés,” Ms. Zamiska said.

So she turned her full attention to a pet project called the Confoodant, a Web site with restaurant reviews written by a by-invitation-only network of food enthusiasts. Her main financial obligation is her rent, but with her savings and four weeks of severance pay, she is confident that she can devote at least six months to getting the project off the ground.

“I love working,” Ms. Zamiska said. “So I made work for myself.”

The surge of interest in entrepreneurship can be seen in the demand for related workshops and networking events. Monica Doss, director of FastTrac, an organization that offers training to aspiring entrepreneurs, said she expected participation to double this year from the 10,000 people it had last year.

“People are thinking, ‘These jobs aren’t going to come back in three years. I’ve got to find something else to do,’ ” Ms. Doss said.

Mr. Andon, for one, seems to have found his niche. He said he recently received an order for a large jellyfish tank that should sell for tens of thousands of dollars.

His entrepreneurial fever seems to be catching: at least four of his roommates are starting companies. Two of those — Erin Kitchell, 28, and her brother Andrew, 25 — are making laminated, fold-out language guides for travelers. In the next few days they plan to print their first 8,000 copies and start trying to sell them.

Ms. Kitchell took a voluntary buyout in June from Wachovia, sensing a layoff would come anyway, and is not sanguine about finding good work.

“This is as good a time as any to try something entrepreneurial,” she said. “There is not a lot of opportunity right now in finance.”

Matt Richtel reported from San Francisco, and Jenna Wortham from New York.

Longest Time Fighting Crime? Not the Prosecutor, but Close

Ida Van Lindt joined the Manhattan district attorney’s office right out of high school, “when we were using quill pens,” she jokes.

When Frank S. Hogan left his post as the Manhattan district attorney after 32 years, few thought anyone would match his longevity. Then came Robert M. Morgenthau, who recently announced that this year, his 35th, would be his last.

But neither of these legal titans can come close to the remarkable career of Ida Van Lindt, their secretary.

She is in her 53rd year at the district attorney’s office, a tenure that has taken her through eras of raging street crime and sophisticated white-collar swindles; of corrupt police officers, public officials and Wall Street schemers. As the gatekeeper of the personal and public lives of Mr. Hogan and Mr. Morgenthau — considered New York institutions in their own right — Ms. Van Lindt has had a courtside seat to crime fighting in the city unlike anyone else.

“I jokingly say to people that I started when we were using quill pens,” said Ms. Van Lindt, who will be 70 on Friday. “I don’t think anybody can say that they’ve had the experience I’ve had.”

Ms. Van Lindt has worked just outside the district attorney’s office nearly her entire career and was almost as close to the men as their wives were, knowing when to keep people out of their way, when their doctor’s appointments were and what they liked on their sandwiches.

In many ways, people consider Ms. Van Lindt the internal face of the district attorney’s office; she has long been the first person to greet every lawyer interviewing for a job there.

“It would be a disaster area without her,” said Mr. Morgenthau, 89. “She’s more important than any two lawyers in the office.”

In a manner of speaking, Ms. Van Lindt has been married to the office: Both her former and current husbands were assistant district attorneys when she met them. (“I don’t go anyplace, so that’s where I have to meet my husbands,” she said.) Her second daughter is an assistant district attorney, and Mr. Hogan and his wife, Mary, were the daughter’s godparents.

She is privy to the details of many of the office’s major investigations. She also is known to share her opinions with the boss. She told Mr. Morgenthau that she was unhappy with the decision to prosecute Bernhard Goetz, who was eventually acquitted of attempted murder after shooting four men who he believed were about to rob him in the subway in 1984.

She offered Mr. Morgenthau comforting words in 2002 when new evidence cast doubt on the guilt of five men his office had prosecuted in the rape and beating of a jogger in Central Park. Mr. Morgenthau told Ms. Van Lindt to hold all his calls and clear his calendar while he discussed the case at length with his aides.

“You could tell he was uptight,” Ms. Van Lindt said. “He had this rigid look on his face.” With Mr. Morgenthau’s blessing, the convictions were eventually thrown out.

Though Mr. Hogan and Mr. Morgenthau were from different eras, they approached their work in the same manner, she said.

“They both shared that similarity: very aggressive and persuasive,” she said.

Their differences lie elsewhere, she said. Mr. Hogan was belly-aching funny, while Mr. Morgenthau has a dry sense of humor. Mr. Hogan drank Scotch, his successor red wine. Mr. Hogan preferred reading classical literature; Mr. Morgenthau is more into history. Mafia cases excited Mr. Hogan most; complex financial cases are Mr. Morgenthau’s calling. And the current prosecutor keeps a much busier social schedule than Mr. Hogan did.

Ms. Van Lindt, who was born in Bensonhurst, Brooklyn, began working in the office on June 25, 1956, the day after she graduated from St. Joseph’s High School in Brooklyn. She was 17 and worked as a stenographer, typing documents for the assistant district attorneys.

Ms. Van Lindt, an attractive woman with jet black hair (now dyed blond) who occasionally wore a miniskirt to the office, planned to leave after a year to go to college full time, but Mr. Hogan talked her out of it because he needed a secretary.

“He looked at me with those piercing blue eyes,” she said. “He had this lovely shirt with beautiful cuff links. I succumbed. I said, ‘O.K.’ ”

(A repository of office lore, Ms. Van Lindt is not shy about her own place in it. She said that after Mr. Hogan’s brother, Joseph, met her for the first time, he went into Mr. Hogan’s office and said to him: “Where did you get that one? Make sure Mary does not see her.”)

Over the next decade and a half, Mr. Hogan mentored Ms. Van Lindt, who received a degree in education from Hunter College after seven years of night school. He recommended reading material, discouraged her from staying out late because of crime and encouraged her to go to law school at night, though she did not do so. And he teased her occasionally: “Ida, if I had your shoulders I would have been an all-American,” he once told her, referring to his days as a football player.

“He never had children,” Ms. Van Lindt said. “He treated me as if I were his daughter, in a lot of ways.”

Mr. Hogan was forced into retirement in December 1973 after learning he had lung cancer; he died the next year. “I don’t think he went to the doctor enough,” Ms. Van Lindt said.

Lawyers who have worked with her praise her charm, kindness and disarming touch. On a recent afternoon, the phone was ringing every minute and although she was busy trying to find birthday gifts for Mr. Morgenthau’s great-grandchildren, she greeted everyone who shuffled in with a broad smile.

She confessed to at least one outburst. When Mr. Morgenthau started in 1975, he brought his longtime personal secretary, Josephine Guercio, to work alongside Ms. Van Lindt. The two clashed immediately, Ms. Van Lindt said, and one day, after Ms. Guercio made an unflattering remark, they began screaming at each other. Ms. Van Lindt threatened Ms. Guercio with a stapler.

Mr. Morgenthau separated them and put their desks in different rooms. But Ms. Van Lindt and Ms. Guercio, who died in 2004, eventually became close friends.

For now, Ms. Van Lindt still signs Mr. Morgenthau’s name on checks, writes letters on his behalf, reads his e-mail messages (recently learning terms like “derivatives,” “default swaps” and “the uptick rule”), and makes sure there is skim milk in his coffee and no mayonnaise on his sandwiches.

If Mr. Morgenthau remains active in community affairs once he retires, Ms. Van Lindt said, she would probably leave the office and remain his personal assistant. But she has not ruled out staying on for another district attorney

Obama's New Tack: Blaming Bush
President Points to 'Inherited' Economy

By Charles Krauthammer
Friday, March 13, 2009; A17

Last week, the White House invited me to a signing ceremony overturning the Bush (43) executive order on stem cell research. I assume this was because I have long argued in these columns and during my five years on the President's Council on Bioethics that, contrary to the Bush policy, federal funding should be extended to research on embryonic stem cell lines derived from discarded embryos in fertility clinics.

I declined to attend. Once you show your face at these things you become a tacit endorser of whatever they spring. My caution was vindicated.

President Bush had restricted federal funding for embryonic stem cell research to cells derived from embryos that had already been destroyed (as of his speech of Aug. 9, 2001). While I favor moving that moral line to additionally permit the use of spare fertility clinic embryos, President Obama replaced it with no line at all. He pointedly left open the creation of cloned -- and noncloned sperm-and-egg-derived -- human embryos solely for the purpose of dismemberment and use for parts.

I am not religious. I do not believe that personhood is conferred upon conception. But I also do not believe that a human embryo is the moral equivalent of a hangnail and deserves no more respect than an appendix. Moreover, given the protean power of embryonic manipulation, the temptation it presents to science and the well-recorded human propensity for evil even in the pursuit of good, lines must be drawn. I suggested the bright line prohibiting the deliberate creation of human embryos solely for the instrumental purpose of research -- a clear violation of the categorical imperative not to make a human life (even if only a potential human life) a means rather than an end.

On this, Obama has nothing to say. He leaves it entirely to the scientists. This is more than moral abdication. It is acquiescence to the mystique of "science" and its inherent moral benevolence. How anyone as sophisticated as Obama can believe this within living memory of Mengele and Tuskegee and the fake (and coercive) South Korean stem cell research is hard to fathom.

That part of the ceremony, watched from the safe distance of my office, made me uneasy. The other part -- the ostentatious issuance of a memorandum on "restoring scientific integrity to government decision-making" -- would have made me walk out.

Restoring? The implication, of course, is that while Obama is guided solely by science, Bush was driven by dogma, ideology and politics.

What an outrage. Bush's nationally televised stem cell speech was the most morally serious address on medical ethics ever given by an American president. It was so scrupulous in presenting the best case for both his view and the contrary view that until the last few minutes, the listener had no idea where Bush would come out.

Obama's address was morally unserious in the extreme. It was populated, as his didactic discourses always are, with a forest of straw men. Such as his admonition that we must resist the "false choice between sound science and moral values." Yet, exactly 2 minutes and 12 seconds later he went on to declare that he would never open the door to the "use of cloning for human reproduction."

Does he not think that a cloned human would be of extraordinary scientific interest? And yet he banned it.

Is he so obtuse as not to see that he had just made a choice of ethics over science? Yet, unlike Bush, who painstakingly explained the balance of ethical and scientific goods he was trying to achieve, Obama did not even pretend to make the case why some practices are morally permissible and others not.

This is not just intellectual laziness. It is the moral arrogance of a man who continuously dismisses his critics as ideological while he is guided exclusively by pragmatism (in economics, social policy, foreign policy) and science in medical ethics.

Science has everything to say about what is possible. Science has nothing to say about what is permissible. Obama's pretense that he will "restore science to its rightful place" and make science, not ideology, dispositive in moral debates is yet more rhetorical sleight of hand -- this time to abdicate decision-making and color his own ideological preferences as authentically "scientific."

Dr. James Thomson, the pioneer of embryonic stem cells, said "if human embryonic stem cell research does not make you at least a little bit uncomfortable, you have not thought about it enough." Obama clearly has not.

This e-mail address is being protected from spam bots, you need JavaScript enabled to view it