Treasury gives banks multi-billion tax break windfall

Some of the nation's biggest banks are in for a windfall – on top of the $700 billion government bailout – thanks to a new tax policy quietly issued by the Treasury Department. The notice gives big tax breaks to companies that acquire struggling banks hit hard by the mortgage crisis. In some cases, the tax breaks could exceed the cost of acquiring the banks, according to analyses by private tax experts. The change could cost the Treasury as much as $140 billion by enabling firms that acquire struggling banks to use more losses incurred by those banks to offset their own taxable profits. San Francisco's Wells Fargo & Co., which made a bid to acquire Wachovia Corp. just days after the notice was issued, stands to reap about $20 billion in additional tax savings because of the change, according to the analyses. Wells Fargo paid $14.8 billion in a stock deal to buy Wachovia. The notice was issued Sept. 30 as Congress debated the $700 billion bailout plan. Some members of Congress are upset that such a sweeping tax change was issued with no public hearings or congressional input. "I am concerned that the notice, which was never debated by Congress, could end up costing taxpayers tens of billions of more dollars on top of the hundreds of billions of dollars already approved by Congress in the financial rescue plan," Sen. Chuck Schumer, D-N.Y., said in a letter last week to Treasury Secretary Henry Paulson. Some tax lawyers questioned the legality of the notice. Before the notice was issued, the merged bank could write off only a limited amount of the losses. The notice removed those restrictions, enabling the acquiring banks to make huge reductions in their tax liabilities.

Has Anyone Seen a Stray H-Bomb?

A hydrogen bomb is missing from the United States' arsenal and has been, evidently, for 40 years. When last seen, the bomb was one of four aboard an Air Force B-52 bomber that crashed on a frozen bay near Thule Air Force Base in northern Greenland on Jan. 21, 1968. Two years later, the United States and Denmark reported that they agreed "that the accident caused no danger to man or animal and plant life in the area." The 96-page report of the investigation indicated that all four nuclear warheads aboard the plane had disintegrated on impact. Case closed. Well, maybe not, the BBC says this week. Declassified documents that the BBC obtained under the United States Freedom of Information Act indicate that only three of the bombs were accounted for, and that the United States searched secretly for the fourth bomb, without success. By April [1968], a decision had been taken to send a Star III submarine to the base to look for the lost bomb, which had the serial number 78252. (A similar submarine search off the coast of Spain two years earlier had led to another weapon being recovered.) But the real purpose of this search was deliberately hidden from Danish officials. One document from July reads: "Fact that this operation includes search for object or missing weapon part is to be treated as confidential NOFORN", the last word meaning not to be disclosed to any foreign country. "For discussion with Danes, this operation should be referred to as a survey repeat survey of bottom under impact point," it continued. And what does the Pentagon have to say about all this now? It had no comment for the BBC.

All Fall Down

I spent Sunday afternoon brooding over a [New York Times] front-page article, entitled ["Citigroup Saw No Red Flags Even as It Made Bolder Bets”]. In searing detail it exposed ... how some of our country’s best-paid bankers were overrated dopes who had no idea what they were selling, or greedy cynics who did know and turned a blind eye. But it wasn’t only the bankers. This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics. So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so. Citigroup was involved in, and made money from, almost every link in that chain. And the bank’s executives, including ...the former Treasury Secretary Robert Rubin, were ... so ensnared by the cronyism between the bank’s risk managers and risk takers (and so bought off by their bonuses) that they had no interest in stopping it. These are the people whom taxpayers bailed out on Monday to the tune of what could be more than $300 billion.

US diluted loan rules before crash

The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents. "Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job. Bowing to aggressive lobbying - along with assurances from banks that the troubled mortgages were OK - regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way. The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s. Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Those proposals all were stripped from the final rules.

The Madoff Economy

The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend. Yet ... how different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole? The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated. High pay on Wall Street was a major cause of that divergence. Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials ... who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms ... politicians have walked when money talked. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.

U.S. Embassy in Iraq Largest, Most Expensive Ever

After much delay the United States opened its new $700 million embassy in Iraq on Monday, inaugurating the largest — and most expensive — embassy ever built. The compound is six times larger than the United Nations compound in New York, and two-thirds the size of the National Mall in Washington. It has space for 1,000 employees with six apartment blocks and is 10 times larger than any other U.S. embassy. Critics have said that the embassy's fortress-like design and immense size show a fundamental disconnect between the U.S. and conditions on the ground in Iraq. “The presence of a massive U.S. embassy — by far the largest in the world — co-located in the Green Zone with the Iraqi government is seen by Iraqis as an indication of who actually exercises power in their country,” the International Crisis Group, a European-based research group, said in 2006. "The idea of an embassy this huge, this costly, and this isolated from events taking place outside its walls is not necessarily a cause for celebration," architectural historian Jane Loeffler wrote in Foreign Affairs in 2007. “Although the U.S. Government regularly proclaims confidence in Iraq’s democratic future, the U.S. has designed an embassy that conveys no confidence in Iraqis and little hope for their future. Instead, the U.S. has built a fortress capable of sustaining a massive, long-term presence in the face of continued violence.”

Whistleblower exposes spying on Americans

OLBERMANN: It has taken less than 24 hours after the Bush presidency ended for a former analyst at the National Security Agency to come forward to reveal new allegations about how this nation was spied on by its own government. Russell Tice [reveals] that under the collar of fighting terrorism, the Bush administration was also targeting specific groups of Americans for surveillance. TICE: The National Security Agency had access to all Americans‘ communications, faxes, phone calls, and their computer communications. They monitored all communications. What was done was a sort of an ability to look at the meta data, the signaling data for communications, and ferret that information to determine what communications would ultimately be collected. Basically, filtering out sort of like sweeping everything with that meta data, and then cutting down ultimately what you are going to look at and what is going to be collected, and in the long run have an analyst look at, you know, needles in a haystack for what might be of interest. OLBERMANN: I mention that you say specific groups were targeted. What group or groups can you tell us about? TICE: [Some of the groups they] collected on were U.S. news organizations and reporters and journalists. The collection ... was 24/7, and you know, 365 days a year, and it made no sense.

Solar Panel Drops to $1 per Watt

A long-sought solar milestone was eclipsed on Tuesday, when Tempe, Ariz.–based First Solar Inc. announced that the manufacturing costs for its thin-film photovoltaic panels had dipped below $1 per watt for the first time. With comparable costs for standard silicon panels still hovering in the $3 range, it's tempting to conclude that First Solar's cadmium telluride (CdTe) technology has won the race. But if we're concerned about the big picture (scaling up solar until it's a cheap and ubiquitous antidote to global warming and foreign oil) a forthcoming study from the University of California–Berkeley and Lawrence Berkeley National Laboratory suggests that neither material has what it takes compared to lesser-known alternatives such as—we're not kidding—fool's gold. Even if the solar cell market were to grow at 56 percent a year for the next 10 years—slightly higher than the rapid growth of the past year—photovoltaics would still only account for about 2.5 percent of global electricity, LBNL researcher Cyrus Wadia says. "First Solar is great, as long as we're talking megawatts or gigawatts," he says. "But as soon as they have to start rolling out terawatts, that's where I believe they will reach some limitations." Even the current rate of growth won't be easy to sustain. Despite the buck-per-watt announcement, First Solar's share price plummeted more than 20 percent on Wednesday, thanks to warnings from CEO Mike Ahearn about the effect of the credit crisis on potential solar customers—as much as 10 to 15 percent of current orders might default.

The $700 trillion elephant

There's a $700 trillion elephant in the room and it's time we found out how much it really weighs on the economy. Derivative contracts total about three-quarters of a quadrillion dollars in "notional" amounts, according to the Bank for International Settlements. These contracts are tallied in notional values because no one really can say how much they are worth. But valuing them correctly is exactly what we should be doing because these comprise the viral disease that has infected the financial markets and the economies of the world. Try as we might to salvage the residential real estate market, it's at best worth $23 trillion in the U.S. We're struggling to save the stock market, but that's valued at less than $15 trillion. And we hope to keep the entire U.S. economy from collapsing, yet gross domestic product stands at $14.2 trillion. Compare any of these to the derivatives market and you can easily see that we are just closing the windows as a tsunami crashes to shore. The total value of all the stock markets in the world amounts to less than $50 trillion, according to the World Federation of Exchanges. To be sure, the derivatives market is international. But much of the trouble we're in began with contracts "derived" from the values associated with U.S. residential real estate market. These contracts were engineered based on the various assumptions tied to those values. Few know what derivatives are worth. I spoke with one derivatives trader who manages billions of dollars and she said she couldn't even value her portfolio because "no one knows anymore who is on the other side of the trade."

Several Clay County Officials Arrested On Federal Charges

Five Clay County [Kentucky] officials, including the circuit court judge, the county clerk, and election officers were arrested Thursday after they were indicted on federal charges accusing them of using corrupt tactics to obtain political power and personal gain. The 10-count indictment, unsealed Thursday, accused the defendants of a conspiracy from March 2002 until November 2006 that violated the Racketeering Influenced and Corrupt Organizations Act (RICO). The defendants were also indicted for extortion, mail fraud, obstruction of justice, conspiracy to injure voters' rights and conspiracy to commit voter fraud. According to the indictment, these alleged criminal actions affected the outcome of federal, local, and state primary and general elections in 2002, 2004, and 2006. Clay County Circuit Court Judge Russell Cletus Maricle, 65, and school superintendent Douglas C. Adams, 57, allegedly used their status in the county to influence the appointment of corrupt members to the Clay County Board of Election Officials. [They also] caused election officers to commit acts of extortion, mail fraud, and bribery. Clay County Clerk, Freddy Thompson, 45, allegedly provided money to election officers to be distributed by the officers to buy votes. He also instructed officers how to change votes at the voting machine. Paul E. Bishop, 60, ... hosted alleged meetings at his home where money was pooled together by candidates and distributed to election officers, including himself. He was also accused of instructing the officers how to change votes at the voting machine. The investigation preceding the indictment was conducted by the FBI, Kentucky State Police, and Appalachia

The Road to Area 51

Area 51. It's the most famous military institution in the world that doesn't officially exist. If it did, it would be found about 100 miles outside Las Vegas in Nevada's high desert. Then again, maybe not — the U.S. government refuses to say. You can't drive anywhere close to it, and until recently, the airspace overhead was restricted — all the way to outer space. Any mention of Area 51 gets redacted from official documents, even those that have been declassified for decades. It has become the holy grail for conspiracy theorists, with UFOlogists positing that the Pentagon reverse engineers flying saucers and keeps extraterrestrial beings stored in freezers. Urban legend has it that Area 51 is connected by underground tunnels and trains to other secret facilities around the country. Well, now, for the first time, someone is ready to talk — in fact, five men are, and their stories rival the most outrageous of rumors. Colonel Hugh "Slip" Slater, 87, was commander of the Area 51 base in the 1960s. Edward Lovick, 90, ... spent three decades radar testing some of the world's most famous aircraft. Kenneth Collins, 80, a CIA experimental test pilot, was given the silver star. Thornton "T.D." Barnes, 72, was an Area 51 special-projects engineer. And Harry Martin, 77, was one of the men in charge of the base's half-million-gallon monthly supply of spy-plane fuels. As for the underground-tunnel talk ... Barnes worked on a nuclear-rocket program ... in Area 51's backyard. "Three test-cell facilities were connected by railroad, but everything else was underground," he says.

'Bailout psychology' destroying the economy

President Obama must stop the bailouts and start the prosecutions. It's time to focus on anti-poverty programs to protect the growing unemployed from hunger and homelessness. Stealth payments to billionaire bondholders must cease immediately. Since the mid-1970s, average Americans' wages have stayed flat when adjusted for inflation. Productivity rose, profits rose, but not wages. To compensate for stagnant wages and the desire to consume more each year, Americans worked more, retired later, spouses went to work, and many burned savings. Then they started borrowing. Debt became America's growth industry. The scheme collapsed because Americans' wages weren't sufficient to pay the interest on existing debts. The administration and the banks keep talking about a credit crisis, but there isn't one. Banks are lending. If you want a mortgage and can afford to pay it back, you can borrow at low rates today. But most Americans don't want more debt because it is a debilitating path to poverty. The average American family already pays 14 percent of annual income in interest to banks. To fix this fake crisis, there are fake discussions about what the government must do. The endlessly recycled plan to buy "troubled" assets isn't to get banks lending again, because they haven't stopped lending. The plan seeks for taxpayers to buy worthless assets at high prices to absorb rich investors' losses. That's it. It keeps coming back as a different plan, but with that same goal. There is no goal beyond that one goal: keep rich people from taking losses.

Cold Fusion Is Hot Again

Twenty years ago it appeared, for a moment, that all our energy problems could be solved. It was the announcement of cold fusion - nuclear energy like that which powers the sun - but at room temperature on a table top. It promised to be cheap, limitless and clean. Cold fusion would end our dependence on the Middle East and stop those greenhouse gases blamed for global warming. It would change everything. But then, just as quickly as it was announced, it was discredited. So thoroughly, that cold fusion became a catch phrase for junk science. Well, a funny thing happened on the way to oblivion - for many scientists today, cold fusion is hot again. "We can yield the power of nuclear physics on a tabletop. The potential is unlimited. That is the most powerful energy source known to man," researcher Michael McKubre told 60 Minutes correspondent Scott Pelley. McKubre says he has seen that energy more than 50 times in cold fusion experiments he's doing at SRI International, a respected California lab that does extensive work for the government. McKubre is an electro-chemist who imagines, in 20 years, the creation of a clean nuclear battery. "For example, a laptop would come pre-charged with all of the energy that you would ever intend to use. You're now decoupled from your charger and the wall socket," he explained. The same would go for cars. "The potential is for an energy source that would run your car for three, four years, for example. And you'd take it in for service every four years and they'd give you a new power supply," McKubre told Pelley.

Bank Bonuses Far Exceeded Profits

Several financial giants that received federal bailout money in the last year paid out bonuses to employees in 2008 that greatly exceeded the amount of profit generated by the banks, according to a study on executive compensation released by New York State Attorney General Andrew Cuomo Thursday. Despite claims by bank executives that bonuses are tied to the company's performance, the report states that "there is no clear rhyme or reason to how the banks compensate or reward their employees." Cuomo's investigation "suggests a disconnect between compensation and bank performance that resulted in a 'heads I win, tails you lose' bonus system." According to the report: • Goldman Sachs, which earned $2.3 billion last year and received $10 billion in TARP funding, paid out $4.8 billion in bonuses in 2008 - more than double their net income. • Morgan Stanley, which earned $1.7 billion last year and received $10 billion in bailout funds, handed out $4.475 billion in bonuses, nearly three times their net income. • JPMorgan Chase, which earned $5.6 billion in 2008 and received $25 billion from the government, paid out $8.69 billion in bonus money. • Citigroup and Merrill Lynch lost a combined $54 billion last year. They received a total of $55 billion in bailouts and paid out $9 billion in combined bonuses. ($5.33 billion for Citigroup; $3.6 billion for Merrill Lynch, which was subsequently acquired by Bank of America.) Bonuses have been a hot-button issue surrounding these federally bailed out banks for months, with company executives facing heat from ... local officials like Cuomo angered by the exorbitant compensation plans for the same people widely seen as responsible for the country's financial crisis

The Bloom Box: An Energy Breakthrough?

In the world of energy, the Holy Grail is a power source that's inexpensive and clean, with no emissions. Over 100 start-ups in Silicon Valley are working on it. One of them, Bloom Energy, is about to make public its invention: a little power-plant-in-a-box they want to put literally in your backyard. You'll generate your own electricity with the box and it'll be wireless. The idea is to one day replace the big power plants and transmission line grid. K.R. Sridhar ... says he knows it works because he originally invented a similar device for NASA. He really is a rocket scientist. He invented a new kind of fuel cell, which is like a very skinny battery that always runs. Sridhar feeds oxygen to it on one side, and fuel on the other. The two combine within the cell to create a chemical reaction that produces electricity. There's no need for burning or combustion, and no need for power lines from an outside source. "It's cheaper than the grid, it's cleaner than the grid." Twenty large, well-known companies have quietly bought and are testing Bloom boxes in California. The first customer was Google. Four units have been powering a Google datacenter for 18 months. They use natural gas, but half as much as would be required for a traditional power plant. John Donahoe, eBay's CEO, says its five boxes were installed nine months ago and have already saved the company more than $100,000 in electricity costs. eBay's boxes run on bio-gas made from landfill waste, so they're carbon neutral. "In five to ten years, we would like to be in every home." [Sridhar] said a unit should cost an average person less than $3,000

Mind-Control Studies Had Origins in Trial of Mindszenty

It may be difficult for Americans to comprehend the frame of mind of the men who ... started the Central Intelligence Agency's effort to manipulate human behavior. The C.I.A. leaders were certain the Communists had embarked on a campaign to control men's minds and they were determined to find a defense, setting out in earnest the next year—1950—with Project Bluebird, which evolved into Project Artichoke, then became MK-ULTRA - MK-DELTA. With each code name change, they broadened their sweep, until there remained virtually no avenue of human behavior control they were not exploring. There was an "urgent need," the C.I.A. and other intelligence agencies argued, to develop "effective and practical techniques" to "render an individual subservient to an imposed will or control." The C.I.A. men ... acknowledged among themselves that much of what they were setting out to do was "unethical," bordered on the illegal and would be repugnant to the American people. "Precautions must be taken," one agency official wrote in an internal memo, "not only to protect the operation from exposure to enemy forces, but also to conceal these activities from the American public in general." They wanted to be able to get away with murder without leaving a trace. In attempts to develop ways to administer lethal and mind-altering drugs surreptitiously through clothing as thick as a leather jacket, they tried out small spray guns and pencil-like injectors. They studied the writing of the psychologist who worked with Adolf Hitler, wondered about the use of the "occult" and of "black psychiatry."

Is Al Qaeda Just a Bush Boogeyman?

Is it conceivable that Al Qaeda, as defined by President Bush as the center of a vast and well-organized international terrorist conspiracy, does not exist? To even raise the question amid all the officially inspired hysteria is heretical. Yet a brilliant new BBC film produced by one of Britain's leading documentary filmmakers systematically challenges this. "The Power of Nightmares: The Rise of the Politics of Fear" ... argues coherently that much of what we have been told about the threat of international terrorism "is a fantasy that has been exaggerated and distorted by politicians. It is a dark illusion that has spread unquestioned ... around the world." Why have we heard so much frightening talk about "dirty bombs" when experts say it is panic rather than radioactivity that would kill people? Why did Defense Secretary Donald Rumsfeld claim on "Meet the Press" in 2001 that Al Qaeda controlled massive high-tech cave complexes in Afghanistan, when British and U.S. military forces later found no such thing? The film ... directly challenges the conventional wisdom by making a powerful case that the Bush administration, led by a tight-knit cabal of Machiavellian neoconservatives, has seized upon the false image of a unified international terrorist threat to replace the expired Soviet empire in order to push a political agenda. "The nightmare vision of a uniquely powerful hidden organization waiting to strike our societies is an illusion. Wherever one looks for this Al Qaeda organization, from the mountains of Afghanistan to the 'sleeper cells' in America, the British and Americans are chasing a phantom enemy."

Enron Schemes Caught On Tape

During the West Coast Power crisis homes went dark and streetlights were out ... causing injuries and accidents. But the danger didn't stop Enron's energy traders from having a good laugh. CBS ... reports on the Enron scheme, as caught on new audio tape. The traders and plant operator laugh and plot in a display that seems to prove the theory that years before the energy crisis, Enron manipulated markets. "They had to do a rolling blackout through the town and there was a red light there he didn't see," one Enron trader says on tape. "That's beautiful," a second voice responds. Enron secretly shut power plants down so they could cause, and then cash in on, the crisis. Enron also pulled power out of states like California, causing emergency conditions to worsen. "Sorry California," an Enron trader says. "I'm bringing all our power out of state today." Plant operators were coached on how to lie to officials. "We want you guys to get a little creative..." one voice says on the tape, "and come up with a reason to go down. Just call 'em, Hey guys…we're coming down." The plant operator replies, "OK, so we're just comin' down for some maintenance?" "Right," the trader says. "And that's cool?" the plant operator asks. "Hopefully," the trader responds, to which the men are heard laughing. Enron also pulled power out of states like California, causing emergency conditions to worsen. The "shut downs" and "pull outs" triggered sky high power prices. "We're just making money hand over fist!" one voice is heard saying on the tape. And when states complained, the guys at Enron seemed to have a response. "Get a f****** clue," one says. "Yeah," another chimes in. "Leave us alone. Let us make a little bit of money."

FAA Received Alert About 9/11 Hijacker

Federal aviation authorities were alerted in early 2001 that an Arizona flight school believed one of the eventual Sept. 11 hijackers lacked the English and flying skills necessary for the commercial pilot's license he already held. A Federal Aviation Administration inspector even sat next to the hijacker, Hani Hanjour, in one of the Arizona classes, checked records to ensure Hanjour's 1999 pilot's license was legitimate but concluded no other action was warranted. Hanjour is believed to have piloted the plane that crashed into the Pentagon on Sept. 11. The operations manager for the now-defunct JetTech flight school in Phoenix said she called the FAA inspector that oversaw her school three times in January and February 2001 to express her concerns about Hanjour. "I couldn't believe he had a commercial license of any kind with the skills that he had," said Peggy Chevrette, the JetTech manager. She also has been interviewed by the FBI. Marilyn Ladner, a vice president for the Pan Am International Flight Academy that owned JetTech before it closed in the aftermath of Sept. 11, said the flight school expressed its concerns and believes the FAA official observed Hanjour's weaknesses firsthand. The Arizona school's alert is the latest revelation about the extent of information the government possessed before Sept. 11

The Lowdown on Sweet?

When Dr. Morando Soffritti ... saw the results of his team's seven-year study on aspartame, he knew he was about to be injected into a bitter controversy over this sweetener. Aspartame is sold under the brand names Nutra-Sweet and Equal and is found in such popular products as Diet Coke, Diet Pepsi, Diet Snapple and Sugar Free Kool-Aid. Hundreds of millions of people consume it worldwide. Dr. Soffritti ... oversees 180 scientists and researchers in 30 countries. Dr. Soffritti's study concluded that [aspartame] was associated with unusually high rates of lymphomas, leukemias and other cancers. The study ... involved 1,900 laboratory rats and cost $1 million. Soffritti said he was inspired to look at aspartame because of what he calls "inadequacies" in the cancer studies done by Searle in the 1970's. Others have also challenged Searle's studies. Years before the F.D.A. approved aspartame, the agency had serious concerns about the accuracy and credibility of Searle's aspartame studies. From 1977 to 1985 -- during much of the approval process -- Searle was headed by Donald H. Rumsfeld, who is now the secretary of defense. Searle was acquired by Monsanto in 1985. Dr. Soffritti said ... more research and open debate were needed on whether aspartame was a carcinogen. "It is very important to have scientists who are independent and not funded by industry looking at this."

Free-hug man speaks out

The man behind the latest YouTube sensation has spoken out for the first time about his global cuddling controversy. Serial hugger Juan Mann describes the free hugs he hands out...as fast-food emotion. His cuddling campaign received an international dose of publicity today, after a clip showing his public displays of affection won a coveted front page spot on the video sharing website. An American television audience of millions also watched him at work, when the video was broadcast on the prime-time breakfast program Good Morning America yesterday. Today, the hugger was at it again, brandishing his "free hugs" sign in the busy pedestrian thoroughfare, and having quite a few people take him up on his offer. "It's a way to make people smile," Mann said. "For every person who gets a hug, you see five walk past with a smile on their face." But his efforts to spread the love became a little too popular for some people's liking, according to a blurb on the YouTube video, which said: "As this symbol of human hope spread across the city, police and officials ordered the Free Hugs campaign BANNED." Undeterred, Mann collected more than 10,000 signatures on a petition he presented to the City of Sydney council. Demands for a halt to the hugs petered out shortly after, and the end of the clip shows Mann hugging an official. City worker Elly Mitchell, who handed out a few free hugs on her lunch break today, said she was inspired to organise [an] event after seeing the video online. "We're going to hug the city," Ms Mitchell said.

CIA and DOD Human Subjects Research Scandals

In December 1974, the New York Times reported that the CIA had conducted illegal domestic activities, including experiments on U.S. citizens during the 1960s. That report prompted investigations by both Congress (in the form of the Church Committee) and a presidential commission (known as the Rockefeller Commission) into the domestic activities of the CIA, the FBI, and intelligence-related agencies of the military. Congressional hearings and the Rockefeller Commission report revealed to the public for the first time that the CIA and the DOD had conducted experiments on both cognizant and unwitting human subjects as part of an extensive program to influence and control human behavior through the use of psychoactive drugs (such as LSD and mescaline) and other chemical, biological, and psychological means. They also revealed that at least one subject had died after administration of LSD. Frank Olson, an Army scientist, was given LSD without his knowledge or consent in 1953 as part of a CIA experiment and apparently committed suicide a week later. Subsequent reports would show that another person ... died as a result of a secret Army experiment involving mescaline. The CIA program, known principally by the codename MKULTRA, began in 1950 and was motivated largely in response to alleged Soviet, Chinese, and North Korean uses of mind-control techniques on U.S. prisoners of war in Korea. Most of the MKULTRA records were deliberately destroyed in 1973 by order of then-Director of Central Intelligence Richard Helms.

Patents Over Patients

We could make faster progress against cancer by changing the way drugs are developed. In the current system, if a promising compound can’t be patented, it is highly unlikely ever to make it to market — no matter how well it performs in the laboratory. The development of new cancer drugs is crippled as a result. The reason for this problem is that bringing a new drug to market is extremely expensive. In 2001, the estimated cost was $802 million; today it is approximately $1 billion. To ensure a healthy return on such staggering investments, drug companies seek to formulate new drugs in a way that guarantees watertight patents. In the meantime, cancer patients miss out on treatments that may be highly effective and less expensive to boot. In 2004, Johns Hopkins researchers discovered that an off-the-shelf compound called 3-bromopyruvate could arrest the growth of liver cancer in rats. The results were dramatic; moreover, the investigators estimated that the cost to treat patients would be around 70 cents per day. Yet, three years later, no major drug company has shown interest in developing this drug. The hormone melatonin, sold as an inexpensive food supplement in the United States, has repeatedly been shown to slow the growth of various cancers when used in conjunction with conventional treatments. Early this year, another readily available industrial chemical, dichloroacetate, was found by researchers at the University of Alberta to shrink tumors in laboratory animals by up to 75 percent. However ... dichloroacetate is not patentable, and the lead researcher is concerned that it may be difficult to find funding from private investors to test the chemical. Potential anticancer drugs should be judged on their scientific merit, not on their patentability.

A New Look at the 9-11 Commission

Former New Jersey attorney general John Farmer served as senior counsel to the 9/11 Commission, tasked with investigating the government response to the attacks. His new book, The Ground Truth, picks up where the commission left off — taking a deeper look at the government's ... response to the attacks and exposing officials determined to hide their failings from the inquiry. Farmer uses newly released transcripts and recordings to cast doubt on the official version of events. He spoke with TIME. [Time:] Why do you think officials tried to obscure [the truth about 9/11]? [Farmer:] It's almost a culture of concealment. You have someone like Sandy Berger ... taking rather extreme measures to remove documents from the National Archives and hide them at a construction site where he could retrieve them later and destroy them. There were interviews made at the FAA's New York center the night of 9/11 and those tapes were destroyed. The CIA tapes of the interrogations were destroyed. The story of 9/11 itself, to put it mildly, was distorted and was completely different from the way things happened. If what the government is telling you isn't true, then the truth could be anything. I think there is evidence that the truth wasn't told and that at least some of that was deliberate.

A New Look at the 9-11 Commission

Former New Jersey attorney general John Farmer served as senior counsel to the 9/11 Commission, tasked with investigating the government response to the attacks. His new book, The Ground Truth, picks up where the commission left off — taking a deeper look at the government's ... response to the attacks and exposing officials determined to hide their failings from the inquiry. Farmer uses newly released transcripts and recordings to cast doubt on the official version of events. He spoke with TIME. [Time:] Why do you think officials tried to obscure [the truth about 9/11]? [Farmer:] It's almost a culture of concealment. You have someone like Sandy Berger ... taking rather extreme measures to remove documents from the National Archives and hide them at a construction site where he could retrieve them later and destroy them. There were interviews made at the FAA's New York center the night of 9/11 and those tapes were destroyed. The CIA tapes of the interrogations were destroyed. The story of 9/11 itself, to put it mildly, was distorted and was completely different from the way things happened. If what the government is telling you isn't true, then the truth could be anything. I think there is evidence that the truth wasn't told and that at least some of that was deliberate.

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