Friday, June 13, 2008

Digital TV coupons tough to redeem

Lawmakers seek to extend life of government-issued vouchers for converter boxes, as consumers find the devices hard to obtain.

tv_millions.03.jpgLawmakers are concerned that digital-TV conversion boxes are just out of reach for some consumers.

WASHINGTON (AP) -- Some Americans are finding the government-issued coupons used to help pay for digital television converter boxes are expiring before they can be redeemed, House lawmakers said Tuesday.

Consumers also are having a tough time finding converter boxes, which are sold out in some stores, and should be given more time to buy them even after the coupons expire, several lawmakers said during a House Energy and Commerce subcommittee hearing.

"If you can't get a box within the 90 days, what good is this?" said Rep. Bart Stupak, D-Mich., who held up one of the coupons that resemble plastic gift cards.

The government established a $1.5 billion coupon program to help millions of consumers buy the converter boxes before the nationwide transition to digital programming in February.

Households are eligible for two $40 coupons, which are aimed primarily at up to 21 million owners of the older-model sets that rely on antennas to watch TV. If they don't get a converter box when the country's broadcasters complete the switchover, they will wind up staring at a blank screen. Cable and satellite TV subscribers do not need the boxes.

Overall, about 8.5 million households have requested 16 million coupons since the program started earlier this year, according to the National Telecommunications and Information Administration, which is overseeing the coupon program. Nearly 3 million coupons have been redeemed so far.

There are 1,819 participating retailers in the coupon program, such as Best Buy Co (BBY, Fortune 500)., RadioShack Corp (RSH)., Target Corp (TGT, Fortune 500). and Wal-Mart Stores Inc (WMT, Fortune 500).

Rules violations: While Stupak said there has been some evidence that several retailers have defrauded customers, NTIA Associate Administrator Bernadette McGuire-Rivera said there have been "no egregious instances of waste, fraud and abuse" in the coupon program.

Still, several unnamed retailers have been decertified from the program for various rules violations, and the agency has taken action to ensure that stores correct adverse effects on consumers.

"We have had to pull a dozen bad apples out of the barrel," McGuire-Rivera said.

Of the roughly 840,000 coupons that recently expired, 42% were redeemed, the agency said. Under current government rules, consumers with expired coupons cannot reapply for new ones.

Rep. Charles Gonzalez, D-Texas, said if 58% of consumers are ineligible to get new coupons that could present "some real serious problems."

Deadline dilemma: Several lawmakers have urged the NTIA to be flexible with consumers whose coupons expire, either by extending the deadline or allowing them to reapply for new coupons.

The statutory deadline cannot be changed, said NTIA spokesman Todd Sedmak, but the agency is examining the "new idea" that consumers can reapply for new coupons. He said the agency is weighing several factors, including whether there are enough funds to implement the idea.

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Jeff Weiner's Departure From Yahoo Imminent, Speculation on Successor Begins

Yahoo's EVP Network Division Jeff Weiner, who's been the subject of rabid speculation since the weekend, has submitted his resignation, our sources within the company say. Yahoo and Weiner are still negotiating his separation agreement, and will make an announcement "imminently" about his departure. But the big question is - who will replace him?

Weiner first joined Yahoo when former CEO Terry Semel took charge in 2000. He is considered by many employees to be, after Jerry Yang, the spiritual leader of the company and the guy who's actually holding things together. His departure leaves a gaping hole in the senior management of the company.

Going forward, Weiner will likely become an entrepreneur-in-residence with both Accel Partners and Greylock Partners. Weiner is close to Accel via Andrew Braccia, who used to run Yahoo search and reported to Jeff. His relationship with Greylock stems from James Slavet, who previously ran Yahoo Autos and also reported directly to Weiner.

I had dinner with Weiner last month, where we discussed his passion for socially responsible investing (he's on the board of and actively involved with Donor's Choose and Malaria No More, Peter Chernin's pet charity), social media and Yahoo's ongoing " open strategy."

Weiner's direct reports, Brad Garlinghouse, Tapan Bhat, Scott Moore, and Vish Makhijani, run Yahoo's U.S. property. Presumably Yahoo would move one of the four into his position - bringing in an outsider at this point, with Yahoo's future uncertain, would be less likely, say our sources. It's also possible, we hear, that Yahoo may undergo a new round of exec reorganization.

Here are the likely contenders for the job:

Brad Garlinghouse

Garlinghouse, the SVP Communications and Communities, is the author of the infamous Peanut Butter Manifesto. He runs Yahoo's communities and communications services. His properties include Mail, Messenger, Groups, Flickr and Zimbra. Prior to joining Yahoo!, Brad served as CEO of Dialpad Communications. Earlier in his career, Brad led VC investments in communications and Internet businesses at @Ventures. He also spent time in leadership roles at @Home Network and SBC Communications.

Scott Moore

Scott Moore is the SVP of Content Operations for Yahoo. He works from Yahoo's Santa Monica offices and controls all media properties and content verticals - things like news, finance, sports, movies, television, music, fantasy sports, games, OMG and video. Niche verticals like Kids and Shine also fall under Moore. He was previously a well respected long term executive with Microsoft at MSN, responsible for their news, finance and sports sites. He joined Yahoo in 2005.

Vish Makhijani

Vish Makhijani is Senior Vice President and General Manager of Yahoo Search. He controls Yahoo Search, Delicious and other properties. Previously he was Vice President and General Manager of Yahoo!s consumer International Search business. Before joining Yahoo!, Vish served as Vice President and General Manager of Inktomi, and joined Yahoo when Inkomi was acquired. Before joining Inktomi, Mr. Makhijani worked at PricewaterhouseCoopers in both the company?s New York Metro and Silicon Valley practices where he helped Fortune 500 clients and leading technology, media and start up companies with financial reporting, mergers, acquisitions, and public offering issuances.

Tapan Bhat

Bhat, the Vice President of Front Doors and Network Services, controls the Yahoo home page, My Yahoo and other properties like Buzz. 500 million people a month enter Yahoo through properties he controls. He?s responsible for developing the front door strategy for Yahoo across all network ?front doors?. Additionally, he has direct management and P&L responsibility for the front door of the network ( and My Yahoo.

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Microsoft: What Cost the Vista Fiasco?

After a survey of corporate customers, one Wall Street analyst cuts his expectations for revenue and profit growth

Microsoft CEO Steve Ballmer. Bertrand Guay/AFP/Getty Images

by Aaron Ricadela

Microsoft has irked consumers and corporate customers with the most recent version of its Windows operating system, which they complain requires hefty investments in PC hardware and offers a paucity of compelling new features in return. Now there are signs that companies' reluctance to install Vista is starting to weigh on Wall Street's outlook for the company's stock.

Charles Di Bona, a senior analyst at Sanford C. Bernstein and a noted bull on Microsoft (MSFT), said in a June 10 report that "dampening" adoption of Vista by corporate customers will shave $395 million in revenues and 2¢ a share in earnings from the company's financial results for the 2009 fiscal year, which begins July 1. According to a Bernstein Web survey of 372 information technology professionals fielded in May, companies expect just 26% of their PCs to be running Vista by the beginning of 2011, down from an estimate of nearly 68% of computers by respondents to a similar survey a year ago.

Shares Down for the Year

The new survey, conducted primarily in the U.S. in conjunction with Ziff Davis Media and Peerstone Research, also shows Vista's requirement of running on PCs crammed with lots of memory and powerful processors to be a deterrent. Companies expect to install Vista on only about 10% of the PCs they already own, compared with estimates last year that they'd be able to do so on 27% of their machines.

"It seems like the IT community has turned tepid to negative" on Vista, says Di Bona in an interview. "There aren't any features in there they find compelling—even ones that haven't had bad PR." For example, companies said in the survey that they were indifferent to Vista's Windows Presentation Foundation technology for building visually compelling programs, according to Di Bona.

Windows Vista, which debuted in January, 2007, has suffered from a number of shortcomings. Besides the hardware requirements, customers have complained about clumsy new security procedures and a lack of compatibility with some companies' existing software programs. As a result, companies including General Motors (GM) are considering bypassing the system altogether (BusinessWeek, 5/15/08) and waiting for Microsoft's next operating system, code-named Windows 7. Tepid Vista sales have also begun to affect Microsoft's financial results: Sales of desktop Windows fell 2%, to $4.03 billion, and contributed to flat revenues (, 4/25/08) during Microsoft's third quarter, reported Apr. 24. Shares of Microsoft closed June 11 up 18¢, or 0.65%, to 27.89. The shares are down nearly 22% this year.

No Surge in Sales Expected

To be sure, Di Bona's assertion that slow Vista uptake will remove $395 million from his estimates of Microsoft's fiscal 2009 sales, and $49 million in sales from the remainder of fiscal '08, amount to a drop in the bucket for the world's largest software company. Wall Street expects Microsoft to earn $1.89 a share on $60.25 billion in sales for the fiscal year that ends June 30, and analysts expect earnings of $2.16 and revenues of $67.31 billion in fiscal 2009.

Di Bona's 2009 earnings estimate of $2.17 per share is still a penny above analysts' consensus estimate. And he raised his revenue estimate for 2010 by $429 million to reflect what he expects to be strong retail following the launch of Windows 7. The Bernstein analyst maintains an outperform rating on Microsoft's stock, in spite of the latest survey findings.

Other analysts on Wall Street are more cautious because of the slow Vista sales. Andy Miedler, a senior technology analyst at Edward Jones who has a hold rating on Microsoft's stock, says he expects Microsoft to earn $2.14 per share in fiscal 2009 and has "taken a more conservative view" on the company's performance. "In a challenging economic environment like we are in, an upgrade to Windows Vista is an area that can be cut to save money with little business impact," he says. Israel Hernandez, an analyst at Lehman Brothers (LEH) who has an equal rate rating on Microsoft, hasn't changed his outlook on the company, but says Vista has been a "disappointment" in the corporate market. "I'm not holding my breath for any big surge in Vista enterprise sales."

Windows 7 Allure

On the other hand, Mike Olson, an analyst at Piper Jaffray (PJC), who rates Microsoft a buy and expects 2009 earnings of $2.16 per share, says he doesn't expect enough delayed installations of Vista at companies to affect his expectations.

For Microsoft, a key challenge in its Windows business right now is to encourage companies to keep installing Vista while it trickles out information about Windows 7. At a recent conference, Microsoft Chairman Bill Gates and CEO Steve Ballmer demonstrated Windows 7's new user interface, which allows users to manipulate objects on a PC screen using their fingertips.

There are signs Microsoft is stepping up marketing of Vista to corporations as well. On June 4, the company released a white paper citing "five reasons to deploy now," including security and better performance on laptops. According to Di Bona, the company needs to do more to market Vista's capabilities to businesses. "They've said they're going to let the facts speak for themselves," he says. "Sometimes you need to give the facts a megaphone."

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What's in your spouse's wallet?

spouses_wallets.03.jpgIn a recent poll, four out of five respondents revealed that they hide purchases from the one they love.

(Money Magazine) -- If Silda Spitzer had only made it her business to look at her husband's bank statements, the story might have ended so differently.

Maybe seeing the mysterious multi-thousand-dollar wire transfers would have tipped her off that something was awry, and she could have dealt with the situation privately. Then, perhaps, her husband Eliot might still be governor of New York.

Alas, discussing their money was apparently not at the top of the Spitzers' agenda. In that, they're hardly unusual. A growing body of research shows that married couples are astonishingly clueless about many aspects of their financial life together.

Consider: Half of the pairs in a 2003 study came up with completely different figures when asked to estimate their family's income and net worth. In a survey last year of couples ages 43 to 70, some 35% were more than two years off when guessing when their spouse planned to retire.

About a third of those surveyed admitted to lying to their partner about money. And four out of five respondents in another poll revealed that they hide purchases from the one they love.

What in heaven's name is going on here? Blame at least part of the problem on the way so many couples divide financial labor in the family. Maybe he does the investing and she pays the bills, or he buys the insurance while she files their taxes. As long as there are no obvious snafus, each is content to let the other handle whatever he or she is handling.

Then too, couples these days marry later than they used to and come into the union with their own credit cards, bank accounts and investments, which often stay separate. And if you're convinced that sharing what you've spent or saved will spark criticism or a fight, it's understandable you might choose to keep a few details to yourself.

Understandable, yes, but hardly optimal. You can't come to smart decisions - or even joint decisions - if you don't know what assets and liabilities you're working with and what your partner's goals and priorities are. "You also lose out on the benefit of collective thinking," says family lawyer and financial planner Violet Woodhouse, author of Divorce and Money.

In other words, two heads really are better than one for solving financial problems. The blinders-on approach also makes a crisis more difficult to handle. Should your spouse pass away, you'll be left scrambling to find bank accounts and insurance policies. And if you divorce, you'll be at a real disadvantage in getting your fair share.

Fortunately, the solution is simple: Mostly, what you have to do is talk to each other. Here are the big questions you need to tackle and how to approach them.

What have you got?

You may think you know the basics, like how much your spouse earns and saves, but don't be so sure. When queried about their household's finances, half of the couples in a 2003 study by Ohio State University's Center for Human Resource Research differed by more than 10% in quoting the family's income and by 30% in assessing net worth - mostly because one spouse didn't have a good grip on the other's side of the ledger.

See if you can nail this:

All source of income Just knowing his or her salary (gross and take-home) isn't enough. You should also have a ball-park figure on any bonuses, commissions and other compensation (such as stock options or profit sharing) your spouse receives.

If he or she has a business, freelance or otherwise, you should know its revenue and net income.

Savings and investments Apart from your home, retirement savings are likely to be your spouse's biggest asset. You should have a solid idea of how much is in his or her 401(k) and IRAs and roughly how those assets are invested.

Split 60-40 between diversified stocks and bonds? Excellent. The whole portfolio in company stock and emerging growth funds? Uh-oh.

In addition to your joint holdings, does your spouse have a separate checking, savings or investment account? That's fine as long as you're aware of its existence and have a pretty good idea of how much is in it.

You should both make a list of the financial institutions where you keep your money, plus account and phone numbers. Leave a copy at your office or with your lawyer in case you lose it.

Any debts or obligations This is the thorny one. Your spouse may not want you to know individual charges like the $200 she spent on her BFF's birthday lunch at L'Escargot Très Cher - and that's okay - but she should at least share her credit-card balance.

Also to be included: business loans and ongoing obligations such as child or parental support. All of this material should sit in one or two file drawers in your den or home office where you both have access, rather than in piles scattered around the house or at one person's place of business.

That way, when you sit down together to discuss any kind of financial planning, everything you need to work with will be readily available. Plus, you need to be able to grab this stuff in a hurry if one of you is injured or you have to leave your home because of a natural catastrophe.

Not every husband or wife is eager to talk about or share financial information, of course. So you should be prepared for a bit of resistance, especially if you've been married for years and never expressed interest in these matters before; your spouse may be understandably taken aback, perhaps even worried that you're about to clean out all your bank accounts and run away with your tennis coach.

Getting stonewalled? If so, a little financial forensic work may be in order. Your best source of data is likely to be your joint tax return. Since you have to report interest and dividend income to the feds, your 1040 should reveal the existence of all bank and investment accounts. You may glean information from the business and personal write-offs claimed. (Look on Schedules A, B and D in addition to the 1040.)

"You might learn of an interest deduction for a house you didn't know about," says David Seror, a Los Angeles divorce attorney who has seen it all. It could be an investment property - or a love nest he forgot to mention. If you do find something amiss, it's better to know and deal with the problem before it gets worse. Just ask Silda Spitzer.

You probably already swap a fair amount of information about how you're spending, saving and investing your money in the course of daily conversation.

Amid inquiries about what's on TV tonight or why you bought paper towels when there were still five dozen rolls left, your spouse may drop vital dollops of information such as "We've got to fire the lawn service," which probably means that the bill is soaring out of control, or "Hey, I withdrew $5,000 from my money-market fund to buy 50 shares of," which means he's been watching too much CNBC.

But such exchanges are not thorough enough to give either of you a clear picture of what's going on with your finances or to nail down goals and your progress toward them.

Do you know when she wants to retire and what kind of lifestyle she's hoping for? Does she know the same about you? Possibly not, to judge by a 2007 Fidelity survey. It asked 503 married couples when they would retire, and 30% got the answer completely wrong.

Since talking about money matters often makes couples tense, New York City psychologist Bonnie Eaker Weil, author of Financial Infidelity, suggests taking regular "walk and talks," which allow you to converse about difficult subjects while enjoying mild endorphin rushes from the exercise.

The promenade, which she says should last about 15 minutes, is an ideal time to indulge your financial fantasies - for example, what you'd each like to do if you won the lottery. Maybe you dream about spending a month in Brazil while your partner wants to collect Chinese ceramics.

You may conclude that you want to rev up your savings or cut expenses to accommodate such items. Conversely, you could decide that times are tough and that the fantasies will all have to wait until little Lulu and Tubby finish college.

Walk-and-talks can make it easier to air problems too, Weil says. Maybe you noticed your joint checking account was looking a bit anemic. "If you ask, they'll usually tell," says Weil. You might find out that your partner spent $3,000 on a case of Doyac 2005 Haut-Medoc instead of putting the money toward a new furnace.

Refrain from immediately jumping down your spouse's throat. "You may not agree about it, but it's important to know," says planner Woodhouse. Being married makes each of you legally responsible for the other's financial mistakes. If your spouse takes out a second mortgage on the house to underwrite a business, you're just as liable to repay the debt.

And if you're not the one filling out your 1040, better make sure you thoroughly review the return before you sign it because the IRS could hold you accountable for any unpaid taxes, even if you subsequently divorce. That's why it's important to reinforce informal talks about money with a more pointed sit-down in which you review each other's savings, checking and investment accounts in detail.

If such a get-together sounds like as much fun as attending a local zoning board meeting, you'll be cheered by the fact that most financial advisers say you have to do it only once or twice a year.

In the real world, marriages break up and people die or become ill. Before you have to face such situations, you should know what you can count on financially to help you through the tough times.

If your spouse dies, what you'll get and how quickly you'll get it depends partly on how your assets are titled. You will gain immediate access to and full ownership of anything that you hold as joint tenants with right of survivorship - your house, probably, and perhaps most or all of your financial accounts.

Your spouse's share of anything that you own as tenants in common is distributed to heirs named in a will. But even if your spouse dies without a will or tries to cut you out of one, you'll still get a good portion of anything he owned since most states don't allow married people to disinherit each other.

Unless you have waived your right to it in writing, your spouse's 401(k) will also come to you, and you may be able to collect a death benefit too if your spouse was vested in a pension plan.

If your husband or wife named you as a beneficiary on life insurance policies or IRAs, you should receive those funds as well. But there's no requirement that a spouse be named as beneficiary on those accounts. So if your husband or wife spouse designated Aunt Mabel instead, you're likely out of luck.

Finally, if you have minor children, you can count on a little help from the government. Social Security provides survivors benefits to children under 18 and to spouses or exes caring for kids under 16.

Divorce is another story. Different states' laws vary wildly. But don't count on getting permanent alimony unless you've been out of the workplace for years raising children. Many courts nowadays are apt to award what's called rehabilitative alimony, a lump sum that's enough to allow you to retrain for a higher-paying job.

What property gets divided? Some states consider everything - "even Grandpa's antique roadster that he gave you before you were married," notes Barbara Glesner Fine, a law professor at the University of Missouri.

Other states include only property acquired during the marriage. A third batch take into account only assets the couple earned; gifts and inheritances are off limits. Those marital assets are then divided equally or "equitably," meaning that the court will weigh the length of the marriage, the ages of the partners, their earnings and other factors.

Effort counts too. Even if you made all the house payments, if your spouse spent every weekend rehabbing the place, he or she will get a share. To find out how your state divides property, consult a lawyer or search online for "divorce" and your state.

You may also be entitled to part of your soon-to-be-ex's 401(k). If the court awards it to you under what's called a qualified domestic relations order, you won't have to pay a 10% early-withdrawal penalty on the money, even if you and your spouse have not reached age 59½.

And if you were married for at least 10 years, you may be able to get Social Security benefits based on your ex's service when you turn 62, assuming you haven't remarried.

Maybe you'll never have to worry about who has the rights to the house, the stock options, the Picasso ashtray and the poodle. But it's better to know than not to know - just in case. In fact, your marriage may be all the stronger for it.

Are you prepared for a financial emergency?

With a recession and rising inflation, it's more crucial than ever to have a six to 12-month living-expense cushion in cash for an emergency. Don't have it? Drop us a line at Include your name, age, city, state, marital status, occupation, how much you have in cash savings and retirement savings. Please send a photo of you (and your spouse, where applicable) too

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Rising Midwest rivers force evacuations, expose vulnerable dams and levees

Residents blaming the worst flooding in the Midwest in some 15 years on aging and weak infrastructure that seem barely able — or in many cases unable — to hold back the waters

Colin Taylor watches the swollen Cedar River as it nearly reaches the underside of a bridge in downtown Cedar Rapids, Iowa. (Tribune photo by E. Jason Wambsgans / June 11, 2008)
CEDAR RAPIDS, Iowa – With rumbling force, the Cedar River on Wednesday ripped through this eastern Iowa city toward a historic crest while unleashing floodwaters into businesses and homes.

With thunderstorms looming, thousands of residents quickly evacuated the downtown area as state officials warned the levee barely holding back the river could burst overnight and inundate city streets with water for miles around.

Churning currents licked at the city's bridges closed to traffic by nightfall and in danger of its footings being crippled.

The worst flooding in the Midwest in some 15 years has exposed the vulnerability of aging and weak dams, levees and bridges that seem barely able — or in many cases unable — to hold back floodwaters.

Spectacular breakdowns were seen this week in Indiana, Illinois, Iowa and Wisconsin leaving questions as to whether the region is prepared to handle such a disaster.

Up the Cedar River in Washburn, Iowa, Joann Vanee's farm was an island Wednesday after mom 'n' pop dikes failed to contain floodwaters.

Built by local residents to keep the river at bay at a 19-foot height, the walls were overrun by some five feet and turned acre after acre of choice agriculture land into a sea of misery.

"There's nothing you can do when you get that much water," said Vanee, whose farm was accessible only by a rescue boat that brought out a generator so she could pump her basement. "It's just too much."

In southeastern Illinois, residents in Lawrenceville saw homes submerged after a levee breached on the Embarras River on Tuesday. The water turned farmland into lakes.

Officials in Wisconsin, where heavy rains loom, were warily monitoring dams that were filled to the brink and spilling over. The state was still trying to figure out how a wall of earth crumbled, leading Lake Delton to empty out and become nearly bone day.

While state officials place much blame on last weekend's torrential rains that dumped in excess of 12 inches of water, some residents say the lake was vulnerable because of weakened walls and dams.

Don Kubenik, whose $1.3 million vacation home was cut in half by raging lake waters, says officials should have known that the collapsed wall and roadway above it was structurally deficient. Nor did officials act quickly enough to release some lake water through the lake's main dam, he said.

"We thought everything was done to make sure the lake was safe and now we find out that it was a time bomb," he said. "I built on high ground thinking this could never happen and now I have no ground."

The severity and frequency of flooding in the Midwest has alarmed flood plain managers and others who monitor the effects of raging water on the public infrastructure.

A December report from the Association of State Floodplain Managers warned that "millions of citizens and hundreds of communities neither recognize their flood risk nor accept responsibility for reducing that risk."

Experts say the increasing frequency of severe storms and flooding is undermining the integrity of aging levees, bridges and dams that were not designed to withstand the water flow and pressure that contributed to destruction like that seen at Lake Delton.

Barry Drazkowski, director of GeoSpatial Services at St. Mary's University in Winona, Minn., said the idea of "normal" heavy rainfall is changing.

"If we look over the past 100 years, it is not normal to get so many large amounts of rain like those we've seen in such a short period of time," he said.

"This is going to start to affect a lot of our river cities that are protected by levees [that] don't assume 15 inches of rain at a time," Drazkowski said. "As these events become more frequent, all of a sudden that 100-year protection might become 50 years and communities won't be as protected as they originally were."

Officials in several Iowa communities closed bridges earlier this week as high water crept closer to road levels. That takes a structural toll on bridges, many of which were built decades ago.

"We're dealing with a lot of bridges built in the last 80 to 100 years and they weren't designed for today's standards," said Larry Larson, executive director of the flood plain managers group in Madison, Wis.

At a flood policy forum last fall in Washington, D.C., officials warned that the combination of climate change, dramatic population increases and the destruction of natural ecological protections, such as wetlands, will add to the already existing strain on aging infrastructure.

"We as a nation have ignored our infrastructure for the past 50 years. We haven't gone back to maintain the old roads and bridges and we just keep building new ones," Larson said. "We've given up the public safety of existing structures in the name of economic development."

Even before the recent flooding, federal officials were wary of aging levees. Amid blistering public condemnation following the failure of levees during Hurricane Katrina, the U.S. Army Corps of Engineers moved to evaluate some 2,000 levees under its purview.

On the Illinois side of the Mississippi River, officials in metro St. Louis were stunned to learn last summer that its levee that stretches 83 miles south from Alton was suffering from underground seepage and rusting mechanics.

More than 175,000 residents and business with some 50,000 jobs are in danger if the levees fail. Officials also fear environmental disaster because a major refinery and oil transmission pipelines are just yards from the levees.

Acting quickly, local officials decided to levy a quarter cent sales tax to pay for a share of the $180 million needed for upgrades. Work is set to begin this summer.

But with raging waters from the Upper Midwest set to dump into the Mississippi in the coming days, the river could rise past levels seen during the last major flood in 1993.

"The question is why didn't they keep those levees up to par?" Wood River resident Helen Crause asked last week. "If that levee goes, we'd all be underwater and contaminated by the mix of water and oil. That's a terrifying thought."

E. A. Torriero reported from Iowa and Tim Jones from Chicago.

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Lawmakers say Capitol computers hacked by Chinese

WASHINGTON (AP) -- Multiple congressional computers have been hacked by people working from inside China, lawmakers said Wednesday, suggesting the Chinese were seeking lists of dissidents.

Two congressmen, both longtime critics of Beijing's record on human rights, said the compromised computers contained information about political dissidents from around the world. One of the lawmakers said he'd been discouraged from disclosing the computer attacks by other U.S. officials.

Rep. Frank Wolf, R-Va., said four of his computers were compromised beginning in 2006. New Jersey Rep. Chris Smith, a senior Republican on the House Foreign Affairs Committee, said two of the computers at his global human rights subcommittee were attacked in December 2006 and March 2007.

Wolf said that following one of the attacks, a car with license plates belonging to Chinese officials went to the home of a dissident in Fairfax County, Va., outside Washington and photographed it.

During the same time period, The House International Relations Committee - now known as the House Foreign Affairs Committee - was targeted at least once by someone working inside China, said committee spokeswoman Lynne Weil.

Wednesday's disclosures came as U.S. authorities continued to investigate whether Chinese officials secretly copied the contents of a government laptop computer during a visit to China by Commerce Secretary Carlos M. Gutierrez and used the information to try to hack into Commerce Department computers.

The Pentagon last month acknowledged at a closed House Intelligence committee meeting that its vast computer network is scanned or attacked by outsiders more than 300 million times each day.

Wolf said the FBI had told him that computers of other House members and at least one House committee had been accessed by sources working from inside China. The Virginia Republican suggested that Senate computers could have been attacked as well.

He said the hacking of computers in his Capitol Hill office began in August 2006, that he had known about it for a long time and that he had been discouraged from disclosing it by people in the U.S. government he refused to identify.

"The problem has been that no one wants to talk about this issue," he said. "Every time I've started to do something I've been told 'You can't do this.' A lot of people have made it very, very difficult."

The FBI and the White House declined to comment.

The Bush administration has been increasingly reluctant publicly to discuss or acknowledge cyber attacks, especially ones traced to China.

In the Senate, the office of Sen. Dick Durbin, D-Ill., who chairs the Senate's subcommittee on humanitarian issues, asked the sergeant at arms to investigate whether Senate computers have been compromised.

Wolf said the first computer hacked in his office belonged to the staffer who works on human rights cases and that others included the machines of Wolf's chief of staff and legislative director.

"They knew which ones to get," said Dan Scandling, who currently is on leave of absence from his job as Wolf's chief of staff. "It was a very sophisticated operation," he said. "The FBI verified that it had been done."

Smith said the attacks on his office computers were "very much an orchestrated effort."

He said that after the first intrusion in December 2006, "that was the last time" his office put the names of dissidents on its computers.

Smith said the intrusions were discovered when House technicians found a virus that seemed designed to take control of the computers. Technical experts who cleaned the computers reported that the attacks seemed to come from the People's Republic of China.

In Beijing, the Chinese Ministry of Foreign Affairs had no immediate comment on the allegations by Wolf and Smith.

Last week, China denied the accusations regarding Gutierrez's laptop and the alleged effort to hack Commerce Department computers.

Wolf said he was introducing a House resolution that would help ensure protection for all House computers and information systems.

It calls for the chief administrative officer and sergeant at arms of the House, in consultation with the FBI, to alert members and their staffs to the danger of electronic attacks. Wolf also wants lawmakers to be fully briefed on ways to safeguard official records from electronic security breaches.

"My own suspicion is I was targeted by China because of my long history of speaking out about China's abysmal human rights record," Wolf said in a draft of remarks he prepared to give on the House floor.

He said Congress should hold hearings, specifically the House Intelligence Committee, Armed Services Committee and Government Operations Committee.

Speaking generally in May 2006, Wolf called Chinese spying efforts "frightening" and said it was no secret that the United States is a principal target of Chinese intelligence services.

Wolf thinks that President Bush should stay away from the Olympics because of China's human rights record.

He also has been outspoken on the subject of violence in the Darfur region of Sudan, where China has major oil interests.

Smith has introduced the Global Online Freedom Act which would prohibit U.S. Internet companies from cooperating with countries such as China that restrict information about human rights and democracy on the Internet.

Wolf and Smith both traveled to Beijing 17 years ago seeking the release of 77 people imprisoned or under house arrest because of their religious activities.


Associated Press writers Ted Bridis and Laurie Kellman contributed to this report.

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Papers give peek inside al Qaeda in Iraq

An Iraqi army officer shows a fake ID taken off an al Qaeda suspect in Mosul in May.

BAGHDAD, Iraq (CNN) -- With Christmas 2005 approaching, the princes of al Qaeda's western command were gathering. They'd been summoned for something special: to plot a three-month campaign of coordinated suicide, rocket and infantry attacks on American bases, checkpoints and Iraqi army positions.

In al Qaeda in Iraq's hierarchy, prince designates a senior leader, and these princes had been gathered by the most senior among them, the prince of Anbar province itself.

This commander, his name not recorded in al Qaeda's summaries of the meetings and referred to only by rank, spent that December fleshing out his vision for the wave of assaults with the gathered subordinates who would lead his combat brigades.

The gathering was a council of war, its meetings remarkably detailed in al Qaeda records. In minutes of their secretive meetings, a grim notation was made: Operation Desert Shield had been approved and would "hopefully commence in mid-January 2006."

With the operation approved, the prince of Anbar listened to the briefings of his assembled commanders: the chairmen of both his military and his security committees, plus the various princes from the sectors he controlled -- Falluja, Ramadi, Anbar-West and Anbar-Central. All boundary demarcations strikingly similar to those used by the American soldiers they were fighting.

The overall plan, too, was similar to any that the U.S. army would devise. First, the military committee chairman outlined plans to seal off the U.S. targets as much as possible by harassing supply lines, damaging bridges and targeting helicopters and their landing zones, in a bid to restrict reinforcement or resupply.

Then the security chairman spoke of the need to maintain strict "operational security," ordaining that only the princes, or leaders, involved in the meetings be informed of the grand strategy, leaving cell leaders and battalion commanders to believe their individual attacks were being launched in isolation.

All this would be Phase I, a precursor to the 90 days of attacks of Phase II, to be timed across not just Anbar but across much of Sunni Iraq to stretch and distract America's war commander, Gen. David Petraeus.

Flowing from the memo approving Operation Desert Shield, a stream of reports follow.

On January 7, 2006, a memo called for Iraqis who'd infiltrated various U.S. bases to conduct site surveys to help identify the camps that would be hit. The two-page note also spoke of placing ammunition stores well in advance of the attacks so the fighters could resort to them during the battles.

The January memo also commented on training and rehearsals for the offensive and the extraction routes their fighters would use after the attacks, and it dictated the need to obtain pledges from the foot soldiers of their willingness to die.

In another memo, reports were compiled from al Qaeda field commanders recommending which U.S. Army and Marine bases or Iraqi checkpoints or police stations should be targeted. Baghdad International Airport was one of the targets named. Beside each entry were notes on weapons each target would require: Grad surface-to-surface missiles, Katyusha rockets, roadside bombs and suicide bombers.

Phase II, the 90-day offensive, commenced around March 2006, with al Qaeda's records from Anbar that month reading like a litany of what the U.S. Army would call AARs, or After Action Reports, listing each attack's successes and failures. It also noted the losses suffered by both al Qaeda or, in what Americans would call Battle Damage Assessments, the losses suffered by the coalition.

Al Qaeda's folder on Operation Desert Shield expresses the depth, structure and measure of its military command. It is perhaps the most compelling illustration of how al Qaeda works.

Yet the Desert Shield folder is but one found among the thousands of pages of records, letters, lists and hundreds of videos held in the headquarters of al Qaeda's security prince for Anbar province, a man referred to in secret correspondence as Faris Abu Azzam.

After he was killed 18 months ago, Faris' computers and filing cabinets were captured by anti-al Qaeda fighters from a U.S-backed militia, or Awakening Council (the militias made up of former Sunni insurgents, now on the U.S. payroll and praised by President Bush for gutting al Qaeda in Iraq). The Awakening militiamen handed the massive haul of al Qaeda materials to both their U.S handlers from the Navy, Marine Corps and Army, and to CNN.

In all, these Anbar files form the largest collection of al Qaeda in Iraq materials to ever fall into civilian hands, giving an insight into the organization that few but its members or Western intelligence agents have ever seen.

Rear Adm. Patrick Driscoll, the American military's spokesman in Baghdad, says the document trove is unique, "a kind of comprehensive snapshot" of al-Qaeda during its peak.

"It reveals," Driscoll said, "first of all, a pretty robust command and control system, if you will. I was kind of surprised when I saw the degree of documentation for everything -- pay records, those kind of things -- and that [al Qaeda in Iraq] was obviously a well-established network."

That network is now under enormous stress, primarily from the more than 100,000 nationalist insurgents who formed the Awakening Council militias and initiated an extremely effective assassination program against al Qaeda, but also from recent U.S. and Iraqi government strikes into their strongholds.

As a result, says Lt. Col. Tim Albers, the coalition's director of military intelligence for Baghdad, "al Qaeda in Iraq is fighting to stay relevant."

So, what do these captured documents from 2006 tell us about al Qaeda in Iraq today? A lot, according to a senior U.S. intelligence analyst in Iraq, who cannot be named because of the sensitivity of his position.

"We're still finding documents like these throughout the country, but I would say that's starting to lessen in amount as the organization shrinks," the analyst said.

The al Qaeda command mechanism and discipline seen in the documents, he said, persist.

"The hard-core senior leadership is still trucking along, and there are always going to be internal communications, documents and videos," he said.

With as many as six suicide attacks and three car bombings in the past 10 days in Iraq (including one attack that killed a U.S. soldier and wounded 18 others), Driscoll agrees the picture the documents paint of a well-oiled, bureaucratic organization is relevant today.

"Certainly, we see that in several different ways how they communicate ... as they've got to be able to talk to their troops in the field to maintain morale, especially when we're pursuing them very aggressively," Driscoll said.

Be it then, in 2006, or be it now, al Qaeda in Iraq is nothing if not bureaucratic.

Included in the headquarters of the security prince, Faris, are bundles of pay sheets for entire brigades, hundreds of men carved into infantry battalions and a fire support -- or rocket and mortar -- battalion. To join those ranks, recruits had to complete membership forms.

"These are the application forms filled in by the people who join al Qaeda," Abu Saif said, holding one of the documents obtained by CNN. Until recently, Abu Saif was himself a senior-level al Qaeda commander.

"They took information about [the recruits], and if the applicant lied about something -- because they were investigated -- they would whip him," Abu Saif said.

Induction into al Qaeda, he said, would take up to four months. In one case, Abu Saif recounted, an applicant lived for four months at the home of what he thought was a local supporter of the organization providing a safe house. Finally accepted and called to a cell leaders' meeting, he discovered that his host was actually a senior recruiter who'd been studying his every move for those four months.

Al Qaeda's bookkeeping was orderly and expansive: death lists of opponents, rosters of prisoners al Qaeda was holding, along with the verdicts and sentences (normally execution) the prisoners received, plus phone numbers from a telephone exchange of those who'd called the American tip line to inform on insurgents, and motor pool records of vehicle roadworthiness.

And there are telling papers with a window into al Qaeda's ability to spy on its pursuers. One is a document leaked from the Ministry of Interior naming all the foreign fighters held in government prisons. Other documents discuss lessons al Qaeda learned from its members captured by American forces and either released or still in U.S.-run prisons. The leadership studied and discussed the nature of the American interrogations, the questioning techniques used and the methods that had been employed to ensnare its men.

And an Iraqi contractor even wrote the Anbar security prince, asking permission to oversee a $600,000 building project on a U.S. base, attaching the architectural drawings of the bunkers he was to make, with an offer to spy and steal weapons during the construction.

It seems al Qaeda in Iraq is almost as pedantically bureaucratic as was Saddam Hussein's Ba'ath party, a trait that really shouldn't surprise.

Though al Qaeda was denied a foothold in Iraq during Hussein's regime, with its ideology unappealing to the mostly secular professional military officers in the former dictator's armies, that has now changed.

According to the internal al Qaeda correspondence in the files, Iraqis have taken to, and effectively run, al Qaeda in Iraq. Foreign fighters' roles seem mostly relegated to the canon fodder of suicide attacks.

Though the upper tiers of the organization are still dominated by non-Iraqis, in Anbar, at least, all the princes and brigade and battalion commanders are homegrown.

"Correct. They're all Iraqis," Abu Saif said. "In my house [one time], there were about 18 Arab fighters under Iraqi commander Omar Hadid, mercy of God upon him, and the [foreigners] did not object, they just did their duty."

That Iraqification of the network is what perhaps enabled al Qaeda to foresee its demise years before the Americans did.

Documents from 2005 and 2006 show that top-ranking leaders feared the imposition of strict religious law and brutal tactics were turning their popular support base against them.

One memorandum from three years ago warned executions of traitors and sinners condemned by religious courts "were being carried out in the wrong way, in a semi-public way, so a lot of families are threatening revenge, and this is now a dangerous intelligence situation."

That awareness led al Qaeda to start killing tribesmen and nationalist insurgents wherever they began to rally against it, long before America ever realized that it had potential allies to turn to.

Yet those same practices that accelerated al Qaeda in Iraq's undoing were breathtakingly documented.

In a vein similar to the Khmer Rouge's grisly accounting of its torture victims, within the files of one al Qaeda headquarters in Anbar alone was a library of 80 execution videos, mostly beheadings, none of which had been distributed or released on the Internet. And all were filmed after al Qaeda in Iraq ended its policy of broadcasting such horrors.

So why keep filming? According to former member Abu Saif and the senior U.S. intelligence analyst, to verify the deaths to al Qaeda superiors and to justify continued funding and support.

The videos also bear insight into al Qaeda's media units. Raw video among the catalog of beheadings shows how al Qaeda's editing skills hide not just its members' faces (caught in candid moments on the un-edited films) but also their failures.

When three Russian diplomats were kidnapped and killed in June 2006, a well-polished propaganda piece was released. It showed two diplomats being gruesomely beheaded, and yet the third diplomat was shot with a pistol, in a different location. The full video of the slayings answers why.

Though bound and blindfolded, the third diplomat struggled so defiantly that his ailing executioners could not draw their knife across his throat. In the horrific and chaotic scenes, the faces of his killer and the cameraman are seen.

And those scenes, like the intricacy of the prince of Anbar's planning and internal analysis of Operation Desert Shield, reveal an al Qaeda in Iraq that the world still barely knows.

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