Thursday, July 24, 2008

Debt Slavery: Why Are Americans So Willing To Dig Themselves Deep Into Debt?

The New York Times has an article that tells the unfortunate tale of Diane McLeod and her love affair with debt. She started out "debt free" when she got married, but after a divorce she'd managed to accrue $25,000 in credit card debt. Despite not having a down payment or any assets, Diane was given a $135,000 mortgage. Over the next few years, illness, underemployment, and shockingly irresponsible spending combined disastrously with the bank's willingness to refinance her loan as her home appreciated (for a fee, of course). 5 years later, Diane owes $237,000 on her mortgage. She's in foreclosure now, and a recent sheriff's auction of the home did not draw a single bidder. A similar house down the street recently sold for $84,000 less than she owes on her home.

The NYT says there is a bright spot at the end of the tunnel for Diane. She's still getting credit card offers from "Urban Bank."

Recently an envelope arrived offering a “pre-qualified” Salute Visa Gold card issued by Urban Bank Trust. “We think you deserve more credit!” it said in bold type.

A spokeswoman at Urban Bank said the Salute Visa is part of a program “designed to provide access to credit for folks who would not otherwise qualify for credit.”

The Salute Visa offered Ms. McLeod a $300 credit line. But a closer look at the fine print showed that $150 of that would go, as annual fees, to Urban Bank.

Why are Americans so willing to do this to themselves? The article explains that as few as 40 years ago, we were a thrifty nation full of "savers," and that banks were focused on whether or not you could repay your loan and not the "fees" they could get from loans before they were sold to investors. We know that there were changes to the financial system. What happened to our values?

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Woman Kills Self Before Foreclosure

(TAUNTON, Mass.) — A 53-year-old wife and mother fatally shot herself shortly after faxing a letter to her mortgage company saying that by the time they foreclosed on her house that day, she would be dead.

Police said that Carlene Balderrama used her husband's high-powered rifle to kill herself Tuesday afternoon, shortly after faxing the letter at 2:30 p.m.

The mortgage company called police, who found Balderrama's body at 3:30 p.m. The auction was scheduled to start at 5 p.m. and interested buyers arrived at the property in Taunton, about 35 miles south of Boston, while Balderrama's body was still inside, according to Taunton police chief Raymond O'Berg.

Police did not immediately release the name of the mortgage company. O'Berg said Balderrama's fax read, in part, "By the time you foreclose on my house I'll be dead."

O'Berg also said a suicide note found next to Balderrama told her husband, John, and 24-year-old son to "take the (life) insurance money and pay for the house."

Joe Whitney, who works with Balderrama's husband, a plumber, said that Balderrama handled the bills and her husband didn't know about the foreclosure.

"John didn't even know about it, that's the surprise," Whitney said told The Boston Globe. "It's just one of those

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Selling the Family Jewels

Desperate American banks are selling everything that isn't nailed down (except the private jets).

Jewels for sale?

President Bush neatly summed up the complex problems in the financial sector last week in terms he could understand. "Wall Street got drunk," he said. "It got drunk and now it's got a hangover." And to pay for the hangover cure, Wall Street is now selling Grandma's silverware and little Billy's new bicycle.

In recent weeks, American financial services companies have moved from the post-binge phase of dilutive capital raising—running around the world with a tin cup, urging well-heeled foreigners to invest in the crippled firms on purportedly advantageous terms—into the phase of selling the family jewels. Over the past year, banks have taken write-downs and raised new cash from investors, only to take new write-downs within weeks, thus turning those new investors into losers. And so as they face the need to raise more capital, banks can no longer raise billions from Dubai gazillioniaries and Chinese investment funds, who've been burned once. Now banks are having to sell their hard assets—in some cases, extremely valuable hard assets that have been passed down from generation to generation.

Take E*Trade, the online brokerage/lending operation, which has been reporting loss after loss despite raising $2.5 billion from the hedge fund Citadel. So last week, E*Trade said it would sell its Canadian subsidiary to Scotiabank for $442 million.

Merrill Lynch has been among the biggest losers in the credit debacle. Last December, reeling from losses and with its stock trading at about $60, Merrill raised $6.2 billion by selling securities to Temasek Holdings of Singapore and Davis Selected Advisers. A few weeks later, having suffered further losses, Merrill raised another $6.6 billion by selling preferred stock, mostly to the Korea Investment Corp., Kuwait Investment Authority, and Mizuho Corporate Bank. In the months since, Merrill reported a big loss for the 2008 first quarter, and its stock has lost about 40 percent of its value. (This is a one-year chart of Merrill.) Oops. And so last week, as Merrill reported a $4.6 billion second-quarter loss, it announced that it was raising billions of capital the old-fashioned way: by selling valuable assets. Merrill sold its 20 percent stake in the financial information titan Bloomberg back to Bloomberg for $4.425 billion. (Merrill had acquired the stake for pretty close to nothing back in 1985.) Merrill also announced it had "signed a non-binding letter of intent to sell a controlling interest in Financial Data Services, Inc. (FDS)," a unit that provides back-office services to money managers, for $3.5 billion.

Atlanta-based SunTrust has enjoyed a symbiotic relationship with local icon Coca-Cola for nearly a century. The bank midwifed the beverage company's initial public offering in 1919, and as this article notes, Coca-Cola's ultra-valuable secret formula was allegedly stored in a vault at the bank. As Coca-Cola grew—and as its stock split, time and again—SunTrust found itself with a massive stake in the company. But during the past year, as it has been hit by credit issues, SunTrust has been selling off its shares of the real thing. In June, it sold 10 million shares, raising more than $500 million. And this month it announced it would 1) donate 3.6 million shares of Coca-Cola to SunTrust's charitable foundation and 2) enter a transaction in which the remaining 30 million shares of Coca-Cola would be sold during the next several years. Combined, the sales will allow SunTrust to raise about $2 billion (at Coke's current price) to shore up its capital and bring to an end 90 years of profitable ownership. (Here are the company's second-quarter results.)

There's likely more heirloom-hocking to come. The Wall Street Journal reports this morning that several regional banks, which have already raised cash from outside investors to shore up shaky balance sheets, are now looking to sell mutual-fund businesses. National City, which in April raised $7 billion by selling shares to existing investors and the private equity firm Corsair Capital, is now looking to sell its Allegiant Funds unit. Fifth Third Bancorp, which last month raised $1 billion, has said it would raise another $1 billion through "the anticipated sales of certain non-core businesses." The Journal suspects one of those businesses might be the bank's Fifth Third Asset Management unit.

Selling heirloom assets is frequently a last-ditch alternative. In instances in which assets have appreciated massively (such as SunTrust's Coca-Cola stock or Merrill's stake in Bloomberg), the sales can generate hefty tax bills. Such moves are also recognitions that management has screwed things up so royally in the core business that it has no alternative but to sell the remaining assets that the market still likes. But in this climate, many banks may find they don't have a choice. The worst of the housing debacle may be behind us, but there's plenty more trouble to come in loans to builders and corporations, and in the vast consumer finance sector. And with outside investors leery of jumping in again, executives will be scouring the basement for stuff to sell. Corporate headquarters and conference centers, corporate art collections and fast-growing foreign units that can be severed with relative ease—pretty much everything that isn't nailed down. Except the fleets of private planes! If big-shot bankers can't have access to Gulf Streams, there's really no point in being a big-shot banker.

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Peso power: Mexican currency nears six-year high vs. dollar

It’s good to be the peso.

The Mexican currency’s hot streak is about to take the official exchange rate through the 10-to-the-dollar threshold for the first time since 2002. American tourists, you’ve been warned.

Buttressed by rising interest rates and a surprisingly strong economy, the peso has been surging against the dollar in the last few weeks, continuing a run-up that began early in the year.

The official market rate -- meaning for large transactions at banks -- had the peso at 10.005 to the dollar this morning, down from 10.07 on Tuesday, according to Bloomberg data. Last August the dollar still was worth more than 11 pesos.

Pesopizza The last time the dollar bought fewer than 10 pesos was in October 2002.

For U.S. tourists the greenback already has crossed that line, because most bank exchange rates are much less favorable than the official rate. Wells Fargo & Co.’s online currency center today was quoting 9.2 pesos per dollar.

It’s the trend that’s important here: The peso’s strength indicates that global investors like what they see in Mexico.

For one, the nation’s central bank raised its benchmark short-term interest rate from 7.5% to 7.75% on June 20 to combat rising inflation, and lifted it again last week, to 8%. That is helping to attract more money to Mexican money market accounts and to bonds.

What’s more, "The economy has held up pretty well despite the U.S. slowdown," says Win Thin, senior currency strategist at Brown Bros. Harriman & Co. in New York.

As for the Mexican stock market, it also is holding up relatively well. Despite diving 8% in June amid the global market sell-off, the country’s IPC stock index is off a modest 6.7% year to date, about half the drop in the U.S. Standard & Poor’s 500 index.

And for U.S. investors in Mexico, the robust peso means Mexican stocks are worth more when translated into dollars. Measured in greenbacks, the IPC index is up 1.8% this year.

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Facing foreclosure, Taunton woman commits suicide

(Robert E. Kline for the Boston Globe)

By Michael Levenson, Globe Staff

TAUNTON -- The housing crunch has caused anguish and anxiety for millions of Americans. For Carlene Balderrama, a 53-year-old wife and mother, the pressure was apparently too much to bear.

Police say that Balderrama shot herself Tuesday afternoon 90 minutes before her foreclosed home on Duffy Drive was scheduled to be sold at auction. Chief Raymond O'Berg said that Balderrama faxed a letter to her mortgage company at 2:30 p.m., telling them that "by the time they foreclosed on the house today she'd be dead."

The mortgage company notified police, who found her body at 3:30 p.m. The auction had been scheduled to start at 5 p.m. Balderrama used her husband's high-powered rifle, O'Berg said.

She left a note for her family saying they should "take the [life] insurance money and pay for the house," O'Berg said.

Neighbors on this forested side street said Balderrama had lived in the two-story, brown-shingled, raised ranch for about four years with her husband, John, who is a plumber, and their 24-year-old son.

Joe Whitney, who works with her husband, said that Balderrama handled the bills in the household and that the husband was unaware of the foreclosure.

"John didn't even know about it, that's the surprise," Whitney said outside the home, where he had come to comfort the family. "It's just one of those awful, awful tragic events."

Noreen Mendes said she often spoke to Balderrama on her morning walks on Duffy Drive and described her as "quiet and sweet."

"I never would have guessed that she had any problems whatsoever," Mendes said. "All I can do this morning is pray and pray and pray."

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Families at risk in recession

WASHINGTON (MarketWatch) -- Women have become increasingly vulnerable to job losses during downturns, putting families at greater financial risk during these troubled times, according to a Tuesday report from the Democratic staff of Congress's Joint Economic Committee.
Video: Recession vulnerability
A new government report says women are more vulnerable in a recession. We turned to the experts at Spherion to talk tips on retaining a job and getting a job in a tough economic environment. Stacey Delo reports. (July 23)
"It now appears that, unlike in decades past, families can no longer rely on women's employment to help boost family income during a downturn," according to the report. "Families are more economically vulnerable as wives are no longer insulating families from economic hardship in times of higher unemployment and falling or stagnant real wages."
A family relies on the typical wife for more than one-third of its income, according to the report, which added that one-quarter of children are raised in single-mother families that are at particular risk. On Wednesday, the Joint Economic Committee is holding a hearing about the impact of higher household costs and stagnant wages.
Women have yet to regain their foothold in the labor force since the 2001 recession. At the business cycle's peak in March 2001, the employment-population ratio for women 20 years and older, seasonally adjusted, reached 58.8% -- a rate that hasn't been reached since and hit 58.2% in June, according to the Department of Labor.
"The remarkable fact is that this is going to be the first recession from one peak to the next that we've seen a decrease," said John Schmitt, is a senior economist with the Center for Economic and Policy Research. "We never got back to where we were."
The report noted that women's larger job losses in the 2001 recession could be due to their entry into a wider array of professions.
"Because of this, women may be more susceptible to the impact of the business cycle than they were when they were more highly concentrated in a smaller number of noncyclical occupations, like teaching and nursing," the report said.
The Democratic staff said there could be a "larger role" for fiscal policy than in prior slowdowns with moves such as: providing grants to states for revenue that may be lost in a downturn and loosening application standards for unemployment insurance benefits.
The report also found:
  • In the 2001 recession, women lost a larger share of jobs compared with men in manufacturing and trade, transportation and utilities. In the other high-job-loss industries, women lost about the same share of jobs as men.
  • The female employment rate as of 2008 is about six percentage points below where it would have been had employment stayed on its trend line from 1948-2000.
  • Families with a working wife have seen real increases in family income over the past three decades. Adjusting for inflation, families with a nonworking wife have income today that is about the same as it was in 1973.
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ACLU: Memos authorized CIA torture

Nick Juliano

As long as CIA agents could convince themselves they were not deliberately inflicting severe pain or suffering on detainees, they were free to do virtually anything in their questioning of suspected terrorists, including waterboarding. Furthermore, the agents' belief they weren't in fact torturing their captives didn't even need to be "reasonable."

These are the implications of a controversial August 2002 memo from the Justice Department to the CIA that was released Thursday. The American Civil Liberties Union obtained several internal Bush administration documents it says authorizes the CIA to torture detainees.

“These documents supply further evidence, if any were needed, that the Justice Department authorized the CIA to torture prisoners in its custody,” Jameel Jaffer, Director of the ACLU National Security Project, said in a news release. “The Justice Department twisted the law, and in some cases ignored it altogether, in order to permit interrogators to use barbaric methods that the U.S. once prosecuted as war crimes.”

The documents were heavily redacted. For example, the government blacked out 10 full pages of the 18-page August 2002 memo, written by then-Assistant Attorney General Jay Bybee, before releasing it in response to a Freedom of Information Act request. Most of the text on the remaining pages was similarly blacked out, but the released version of the Bybee memo does provide some insight.

Bybee outlined the definition of torture in Section 2340A of the United States code, focusing in part on its caveat that an act be "specifically intended to inflict severe physical or mental pain or suffering." Elaborating on his definition of the "specific intent" provision, Bybee narrows the definition to the point where it become functionally meaningless.

All that is required to avoid prosecution is a CIA agent's "good faith belief" that his actions will not cause torturous pain and suffering. Such a belief "need not be reasonable," Bybee writes.

Although any references to waterboarding have been scrubbed from the released Bybee memo, the government handed over to the ACLU a 2004 memo from the CIA that referrs to the "classified August 2002 DoJ opinion stating that [redacted] interrogation techniques including the waterboard, do not violate the Torture Statute."

The same memo raises the prospect of "future US judicial review of the Program," referencing the Supreme Court's decision that year in Rasul v. Bush.

A 2003 memo from the CIA to the Justice Department clarifying that "Enhanced Techniques" fall under those permissible by CIA headquarters, although it seems also to raise the possibility that even more coercive techniques could be "approved by Headquarters." Virtually all of the four-page memo is redacted, but the memo does make clear that in interrogations using Enhanced Techniques, "a contemporaneous record shall be created setting forth the nature and duration of each technique employed."

The CIA last year destroyed at least two videotapes of enhanced interrogations that may have included waterboarding. The Justice Department has started a criminal investigation into the tapes' destruction.

The ACLU first requested the documents it released Thursday in a FOIA lawsuit filed in 2004. While the documents provide some more evidence of torture during George W. Bush's presidency, the ACLU says his administration continues to do all it can to avoid full scrutiny.

“While the documents released today do provide more information about the development and implementation of the Bush administration's torture policies, even a cursory glance at the documents shows that the administration continues to use 'national security' as a shield to protect government officials from embarrassment, criticism and possible criminal prosecution,” Jaffer said. “Far too much information is still being withheld.”

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Gitmo prosecutor repeats al Qaeda deputy's claim: Flight 93 was shot down on 9/11

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GUANTANAMO BAY U.S. NAVAL BASE, Cuba, July 22 (Reuters) - Osama bin Laden's driver knew the target of the fourth hijacked jetliner in the Sept. 11 attacks, a prosecutor said on Tuesday in an attempt to draw a link between Salim Hamdan and the al Qaeda leadership in the first Guantanamo war crimes trial.

Hamdan's lawyer said in opening statements that the Yemeni, held for nearly seven years before his trial, was just a paid employee of the fugitive al Qaeda leader, a driver in the motor pool who never joined the militant group or plotted attacks on America.

But prosecutor Timothy Stone told the six-member jury of U.S. military officers who will decide Hamdan's guilt or innocence that Hamdan had inside knowledge of the 2001 attacks on the United States because he overheard a conversation between bin Laden and his deputy, Ayman al-Zawahiri.

"If they hadn't shot down the fourth plane it would've hit the dome," Stone, a Navy officer, said in his opening remarks, repeating Bin Laden's deputy's claim.

The tribunal's chief prosecutor, Col. Lawrence Morris, later explained that Stone was quoting Hamdan in evidence that will be presented at trial. Morris declined to say if the "dome" was a reference to the U.S. Capitol.

"Virtually no one knew the intended target, but the accused knew," Stone said.

Latest News: CBS scrubs McCain 9/11 gaffe from broadcast.

United Airlines Flight 93 crashed in a field in rural Pennsylvania. U.S. officials have never stated it was shot down although rumors saying that abound to this day.

Hamdan, a father of two with a fourth-grade education, is charged with conspiracy and providing material support for terrorism in the first U.S. war crimes trial since World War Two. He could face life in prison if convicted.

Prosecutors say Hamdan had access to al Qaeda's inner circle. Stone told the jury that Hamdan earned the trust of bin Laden and helped him flee after attacks on U.S. embassies in East Africa in 1998 and the Sept. 11 attacks.

"He served as bodyguard, driver, transported and delivered weapons, ammunition and supplies to al Qaeda," Stone said.

Hamdan was being tried in a hilltop courthouse at the U.S. Navy base in Guantanamo Bay, which has been a lightning rod for criticism of the United States since early 2002, when it began housing a prison camp to hold alleged Taliban and al Qaeda fighters from the battlefields of Afghanistan.

The war crimes tribunal system has been criticized by human rights groups and defense lawyers, some of them U.S. military officers. Detainees have been held for years without charges.

Washington has declared them unlawful enemy combatants not entitled to the rights afforded formal prisoners of war.

Responding to the widespread criticism, Morris, the chief prosecutor, said on Tuesday: "In my opinion they are seeing the most just war crimes trial that anyone has ever seen."


Defense lawyer Harry Schneider described Hamdan as a poor Yemeni who lost his parents at a young age and lived on the streets, where he developed a knack for fixing cars.

"The evidence is that he worked for wages. He didn't wage attacks on America," he said. "He had a job because he had to earn a living, not because he had a jihad against America."

"There will be no evidence that Mr. Hamdan espoused or believed or embraced any form of what you will hear about, radical Islam beliefs, extremist Muslim beliefs," he said.

The first two prosecution witnesses were U.S. military officers who were in Afghanistan during the early days of the U.S. invasion in 2001. Both addressed a key issue at trial -- whether Hamdan had surface-to-air missiles when he was captured at a checkpoint near Takhteh Pol in November 2001.

Defense lawyers dispute the prosecution's contention that Hamdan had the weapons. But a U.S. officer identified only as "Sergeant Major A" said the missiles were found in the "trunk of a car driven by Mr. Hamdan."

He said troops also found a mortar manual with "al Qaeda" on the front, a book by bin Laden and a card issued to al Qaeda fighters and signed by Mullah Omar, the Taliban commander.

Ali Soufan, an al Qaeda expert with the FBI, took the jury through a long description of al Qaeda's hierarchy and called bin Laden "the emir, the prince." He said Hamdan was part of bin Laden's security detail.

"The people who are around bin Laden have to be trusted ... true believers in the cause," he said. (Editing by Eric Beech)

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Obama says a nuclear Iran 'grave threat'

U.S. Democratic presidential candidate Senator Barack Obama (D-IL) and Israel's Defence Minister Ehud Barak (3rd L) look at the remains of a rocket, fired by Palestinian militants in Gaza, during a visit to a police station in the southern town of Sderot July 23, 2008. Obama pledged staunch support for Israel on Wednesday in Jerusalem, describing the Jewish state as a miracle and holding only a low-profile meeting with Palestinian leaders. REUTERS/Jack Guez/Pool  (ISRAEL)  (USA PRESIDENTIAL ELECTION CAMPAIGN 2008)
Reuters Photo: U.S. Democratic presidential candidate Senator Barack Obama (D-IL) and Israel's Defence Minister Ehud Barak (3rd...

SDEROT, Israel (AFP) - US presidential hopeful Barack Obama said on Wednesday that a nuclear Iran would pose a "grave threat" and that the world must prevent it from obtaining the atomic bomb.

"A nuclear Iran would pose a grave threat and the world must prevent Iran from obtaining a nuclear weapon," Obama said.

"I will take no options off the table in dealing with this potential Iranian threat," Obama said on the latest leg of talks in Israel and the Palestinian territories.

"A nuclear Iran would be a game-changing situation, not just in the Middle East but around the world."

Obama spoke of a series of "big sticks and big carrots" regarding the Iranian regime and repeated his openness to meeting with its representatives, if the conditions were appropriate.

"I would at my time and choosing be willing to meet with any leader if I thought it would promote the national security interest of the United States of America," he said.

"I think there are opportunities for us to mobilise a much more serious regime of sanctions on Iran but also to offer them the possibility of improved relations to the international community," he said in identifying the alternatives.

Obama was speaking in the southern Israeli town of Sderot, which has long been a target of rocket and mortar fire from Palestinians in the neighbouring Gaza Strip.

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No mistranslation in Maliki interview

It was the shot heard 'round the world: in an interview with German magazine Der Spiegel, Iraqi Prime Minister Nouri al-Maliki said of U.S. troop withdrawal from his country, "U.S. presidential candidate Barack Obama talks about 16 months. That, we think, would be the right timeframe for a withdrawal, with the possibility of slight changes."

Almost immediately, the Iraqi and U.S. governments made half-hearted attempts to walk Maliki's statement back. And supporters of the war have claimed that Maliki's words were mistranslated. But the Columbia Journalism Review has a bit of detail that should quiet such claims, at least to the extent that they haven't been quieted by events since Maliki's statement that have made clear he meant what he said.

CJR's Clint Hendler quotes the magazine's Mathias Müller von Blumencron as saying, "We have a policy at Der Spiegel when we do a question and answer session to provide a transcript to our counterparts in case they want to have a minor thing changed." In this case, Hendler reports, the magazine -- which has a content-sharing agreement with Salon -- verified that Maliki's aides had received the transcript. They reported no complaints.

World's biggest aircraft model unveiled at Heathrow

Transport Editor David Milward attends the opening of the world's biggest model aeroplane at Heathrow. ;

Weighing in at 45 tonnes, the plane is taking the place of the British Airways model Concorde, which greeted passengers as they arrived at the airport for 16 years, and has been moved to the Brooklands Museum at Weybridge, Surrey.

Its replacement, the Airbus, will remain on the site until 2013 under a deal signed by the airline and BAA, Heathrow's owners.

The model, in the Emirates livery, is as big as a smaller member of the Airbus family, the short-haul A320, and twice the size of the Concorde replica.

It has a wingspan of 28.5 yards and is 26.2 yards long and took 18 months to build and install yet it is still only a third of the size of the real thing.

The model needed 150 gallons of paint and 600 tonnes of concrete were needed for the foundation to support the structure.

It was built in California and shipped to Britain via Ontario in an Antonov cargo plane, arriving in the form of a huge model aircraft kit, which took 18 days and nights to be assembled.

Installing it was a feat of engineering in itself. Fred Diprose, who lead the 20-strong team, said that the site had to be excavated and then a crane brought in to drop the new model in place.

But given the site's proximity to the runway, much of the work could only be done during the early hours of the morning.

"It meant a lot of nights without sleep," he said. "I am feeling pretty shattered by now."

The model will be seen by around 25 million people a year as they approach Heathrow and is seen by advertisers as one of the prime slots in the whole of the country.

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Officer-involved shootings renew anger in Inglewood

When Jacqueline Seabrooks took over as Inglewood's police chief last year, city leaders and residents voiced high hopes that the veteran law enforcement outsider could restore trust in an institution crucial to a town struggling with waves of scandal and years of social change.

But this week the department and City Hall are once again under intense criticism from residents and civil rights activists after a fatal shooting Monday involving an officer already under investigation in the killing of a man two months ago.

Whether Officer Brian Ragan, one of two patrolmen under scrutiny for the May shooting of an unarmed man, acted properly in the latest confrontation remains to be seen.

But the incident, on the heels of other recent shootings, has given new energy to critics who question the city's leadership and whether Seabrooks is up to delivering needed reforms.

On Tuesday, many wanted to know why Ragan was returned to the streets so quickly, when an investigation of his actions and a $25-million lawsuit are still pending. More than 200 people showed up at the City Council meeting to vent their anger.

Some demanded Seabrooks' resignation. Others called for creation of a new, independent commission to investigate the Police Department, as well as deeper inquiries into Monday's fatal shooting of postal worker Kevin Wicks, 38, at his North Hillcrest Boulevard apartment.

"I want you, the community, to know that we are conducting a series of layered investigations," Seabrooks told the City Hall audience. But Seabrooks did not address concerns over why Ragan was returned to duty last month and asked that the public withhold judgment until all the facts are in on the latest shooting.

Police said Ragan and three other officers responded to a report of a family disturbance at the building. When officers knocked on Wicks' door, he answered it holding a handgun that he suddenly raised at the officers, according to police accounts. A gun registered to Wicks was recovered at the scene, officials said.

Neighbors and an investigator hired by the dead man's family questioned police accounts, saying Wicks was a quiet tenant who rarely had visitors and that officers hadn't clearly identified themselves.

At Tuesday evening's council meeting, community activists zeroed in on Seabrooks, 46, who was on vacation when the Wicks shooting occurred and had not appeared in public until she showed up at City Hall.

Seabrooks "spit in the face of every resident of Inglewood" by not speaking up sooner, said Najee Ali of Project Islamic H.O.P.E.

Willis Edwards, a board member of the National Assn. for the Advancement of Colored People, earlier criticized Seabrooks for not facing the public immediately after Monday's shooting and other incidents. After the May shooting, Seabrooks chided a Times reporter for calling her at home outside of business hours.

"We need to have a chief that will take calls 24 hours a day," Edwards said. Councilman Daniel Tabor who was traveling and not at Tuesday's council meeting, defended her leadership and said the personal attacks were unfair.

"We've got the right chief at the right time," he said in a telephone interview from Georgia.

The controversy adds to the turmoil that has plagued the community of nearly 130,000 for decades. In the 1970s, the city went through wrenching change, with court-ordered cross-town busing and white flight.

Sharp demographic and ethnic shifts -- from white to black, then black to Latino -- followed in the '80s and '90s.

In recent years, the city has seen sharp drops in crime, as well as growth as a commercial hub, but political and law enforcement scandals have hurt efforts to revive an image of stability and can-do leadership.

In June, Mayor Roosevelt Dorn was charged with conflict of interest and misappropriation of $500,000 in public funds.

Last year, The Times reported an ongoing federal probe of at least six current or former Inglewood officers accused of receiving sexual services at local massage parlors.

In December 2006, a visiting Florida woman accused an Inglewood officer of following her to her motel room and sexually attacking her. Her lawsuit against the city is still pending.

In 2002, Inglewood police arrested and handcuffed 16-year-old Donovan Jackson for failing to comply with orders. After the teenager was handcuffed, one of the officers picked him up and slammed him against a patrol car. The scene was captured on video, and national media compared the incident with the 1991 Rodney King beating by Los Angeles police. The incident triggered years of litigation and criminal prosecutions, including a $2.4-million jury award to two white officers involved in the incident who claimed they were unfairly punished.

The May shooting of 19-year-old Michael Byoune was the first law enforcement crisis on Seabrooks' watch.
Coming from a captain's job in the Santa Monica Police Department, she was named Inglewood's top cop last September, the first black female police chief in California. A product of racially mixed South Los Angeles, Seabrooks talked of her own disturbing treatment as a teenager at the hands of police officers and vowed to help the 200-officer agency regain a sense of mission and organizational confidence.

Her handling of the fatal Byoune incident, in which two other young men were injured, was carefully measured. She called it a tragedy, but stopped short of labeling the officers' actions a mistake.

Ragan, a 5 1/2 -year veteran of the department, and Officer Roman Fernandez, with the department less than a year, were responding to a call of shots fired. The officers suspected Byoune's group of being involved in the gunfire and opened fire when the car the men were in moved toward officers, police said. There was no evidence linking the men to the earlier gunfire, police later said.

After being placed on paid leave, Ragan and Fernandez were back on duty last month as the inquiry into their actions continued, officials said. Byoune's family last month announced a $25-million wrongful death lawsuit against the city.

Why Seabrooks risked the potential second-guessing and liability of placing Ragan back on the front lines so soon after the previous shooting was one of the many questions raised Tuesday.

Department officials said a psychologist had cleared Ragan to return to duty, and the department concurred.

Tabor, the councilman, said returning Ragan to patrol appeared routine and partly to protect the employee's rights.

But he added, "Obviously now we need to have a broader, more public conversation about that decision and about a number of issues relative to the current fear in the community and the appearance of fear of officers on the street."

Larger questions were being posed about Seabrooks' approach to the job.

Donald Nicholson, vice-chairman of the city's police oversight commission, said there had been a lack of communication between the new chief and the panel. Seabrooks had not sought commission advice, he said. But the chief had battled with the panel over complaints against officers, he said, specifically whether members should see the reports and whether officers' names should be included.

Nicholson complained that the watchdog panel has had no real power. "The commission needs to be given some teeth."

In that vein, Earl Ofari Hutchinson, chairman of the Los Angeles Urban Policy Roundtable, met with Mayor Dorn on Tuesday to call for a new commission to overhaul the Inglewood Police Department's policies and practices on the use of deadly force.


Times staff writer Joanna Lin and researcher Robin Mayper contributed to this report.

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Key Benazir Bhutto assassination witness shot dead

The body of personal security guard of slain former Pakistani premier Benazir Bhutto, Khalid Shahenshah is removed from a hospital in Karachi Photo: AFP / GETTY

Khalid Shahenshah, who was the former Pakistan prime minister's security chief at the time of her assassination, was killed in a drive-by shooting as he left his house in the southern port city of Karachi on Tuesday, police said.

Mr Shahenshah, 45, was riding in Mrs Bhutto's bullet-proof car when she was killed in a suicide attack in the northern city of Rawalpindi on December 27.

He was expected to be called to give evidence at a United Nations probe into her death.

"He was a key witness in the case and was also interviewed by the Scotland Yard experts who came to Pakistan to investigate her killing," said Waqar Mehdi, the junior information minister of Sindh province.

"There is a possibility that his killing could be linked to his status as a witness, although investigations are still underway."

A team of Scotland Yard detectives concluded in February that Mrs Bhutto was killed by a suicide bomb and not by gunfire, backing the previous Pakistani government's claim the attack was masterminded by Baitullah Mehsud, Pakistan's top Taliban commander.

But the UN earlier this month agreed to set up an independent panel to investigate her slaying, following a request by Pakistan's new government.

In elections held in February, a coalition led by Mrs Bhutto's Pakistan People's Party (PPP) defeated allies of President Pervez Musharraf, who seized power in a military coup in 1999.

PPP officials have accused Pakistan's powerful military and intelligence services of involvement in her killing, rejecting suggestion the Taliban were responsible.

Party officials suspect that more than one attacker was involved in the murder.

Hundreds of mourners attended the funeral of Mr Shahenshah, a father of three, in Karachi. He was most recently employed as a security chief at the home of Mrs Bhutto's widower, Asif Ali Zardari.

Police have recovered the car which Mr Shahenshah's assailants used in his murder and were still investigating, Iqbal Mehmood, a senior Karachi police official said.

Zulfikar Mirza, the Sindh home minister, said it was "premature to say that Khalid was killed for being a witness in Benazir Bhutto's assassination case".

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