Wal-Mart Inquiry Reflects Alarm on Corruption

Wal-Mart on Thursday reported that its investigation into violations of a federal antibribery law had extended beyond Mexico to China, India and Brazil, some of the retailer’s most important international markets.

The disclosure, made in a regulatory filing, suggests Wal-Mart has uncovered evidence into potential violations of the Foreign Corrupt Practices Act, as the fallout continues from a bribery scheme involving the opening of stores in Mexico that was the subject of a New York Times investigation in April.

The announcement underscores the degree to which Wal-Mart recognizes that corruption may have infected its international operations, and reflects a growing alarm among the company’s internal investigators. People with knowledge of the matter described how a relatively routine compliance audit rapidly transformed into a full-blown investigation late last year — involving hundreds of lawyers and three former federal prosecutors — when the company learned that The Times was examining problems with its operations in Mexico.

A person with direct knowledge of the company’s internal investigation cautioned that Thursday’s disclosure did not mean Wal-Mart had concluded it had paid bribes in China, India and Brazil. But it did indicate that the company had found enough evidence to justify concern about its business practices in the three countries — concerns that go beyond initial inquiries and that are serious enough that shareholders needed to be told.

A Wal-Mart spokesman declined to elaborate on the filing.

The Justice Department and the Securities and Exchange Commission, with Wal-Mart’s cooperation, are also looking into the company’s compliance with the antibribery law.

The Times reported in April that seven years ago, Wal-Mart had found credible evidence that its Mexican subsidiary had paid bribes in its effort to build more stores, a violation of the corrupt practices act, and that an internal investigation had been suppressed by executives at the company’s Arkansas headquarters.

Wal-Mart has so far spent $35 million on a compliance program that began in the spring, and has more than 300 outside lawyers and accountants working on it, the company said. It has spent $99 million in nine months on the current investigation.

Consequences of the expanding investigation could include slower expansion overseas and the identification of even more problems. The company said in the filing on Thursday that new inquiries had begun in countries “including but not limited to” China, India and Brazil.

While the disclosure did not specify the nature of the possible bribery problems in the three countries, it “clearly will cause more scrutiny on every real estate project being considered, and one would think at the minimum it will slow down the process as more controls need to be passed through,” said Colin McGranahan, an analyst with Sanford C. Bernstein.

International growth is critical to Wal-Mart, the world’s largest retailer, and Brazil, India, China and Mexico together make up the largest portion of the company’s foreign locations.

Wal-Mart’s international division had been on a growth binge, though that has been slowing lately. In third-quarter results reported Thursday, the company said international sales rose 2.4 percent to $33.2 billion, making up about 29 percent of the company’s overall sales.

More than half of Wal-Mart’s 10,150 stores are international. Mexico has 2,230 stores. Brazil has 534, China, 384.

C. Douglas McMillon, chief executive of Walmart International, said in June that he did not expect the investigation to hinder international growth. “Only time will tell,” he said.

Wal-Mart’s expanding investigation began in spring 2011 as a relatively routine audit of how well its foreign subsidiaries were complying with its anticorruption policies. It is keeping the Justice Department and the S.E.C. apprised of the investigation.

The review was initiated by Jeffrey J. Gearhart, Wal-Mart’s general counsel, who had seen news reports about how Tyson Foods had been charged with relatively minor violations of the Foreign Corrupt Practices Act. He decided it made sense to test Wal-Mart’s internal defenses against corruption.

The audit began in Mexico, China and Brazil, the countries Wal-Mart executives considered the most likely source of problems. Wal-Mart hired the accounting firm KPMG and the law firm Greenberg Traurig to conduct the audit. The firms conducted interviews and spot checks of record systems to check whether Wal-Mart’s subsidiaries were carrying out required compliance procedures.

Charlie Savage, Vikas Bajaj and Andrew Downie contributed reporting.

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Changing of the Guard: Corruption in China Military Poses Test

Sim Chi Yin for The New York Times

Hostesses posed outside the Great Hall of the People in Beijing on Wednesday as the Communist Party Congress closed.

BEIJING — An insider critique of corruption in China’s military, circulating just as new leadership is about to take over the armed forces, warns that graft and wide-scale abuses pose as much of a threat to the nation’s security as the United States.

Col. Liu Mingfu, the author of the book, “Why the Liberation Army Can Win,” is not a lone voice.

Earlier this year, a powerful army official gave an emotional speech describing corruption as a “do-or-die struggle,” and days later, according to widely published accounts, a prominent general, Gu Junshan, a deputy director of the logistics department, was arrested on suspicion of corruption. He now awaits trial. The general is reported to have made huge profits on illicit land deals and given more than 400 houses intended for retired officers to friends.

Those excesses may be mere trifles compared with the depth of the overall corruption, the speech by Gen. Liu Yuan, an associate of the presumptive new party leader, Xi Jinping, suggested.

For Mr. Xi, who boasts a military pedigree from his father — a guerrilla leader who helped bring Mao Zedong to power in 1949 — China’s fast modernizing army will be a bulwark of his standing at home and influence abroad.

But the depth of graft and brazen profiteering in the People’s Liberation Army poses a delicate problem for the new leader, one that Colonel Liu and others have warned could undermine the status of the Communist Party.

As part of the nation’s once-a-decade handover of power, Mr. Xi is also expected to assume the chairmanship of the 12-member Central Military Commission immediately. Hu Jintao, the departing party leader, is expected to break precedent and not retain his position atop the body, which oversees the armed forces, for an extended period after his retirement, unlike previous leaders.

Recent territorial disputes with Japan and Southeast Asian neighbors have raised nationalist sentiment in China, and the popular desire for a strong military could make it politically dangerous for Mr. Xi to embark on a campaign that unmasks squandering of public funds.

In his opening speech to the 18th Party Congress, Mr. Hu said China would aim to become “a maritime power.” It was one of the few references in the address about foreign affairs, and one that suggested the government would continue the double-digit increases in expenditures for the military.

But along with the modernization and bigger budgets has come more corruption, a problem that pervades China’s ruling party and its government.

For the first time in the history of the People’s Liberation Army, Chinese analysts say, the land-based army has had to give up its dominance of the military commission.

The former commander of the air force, Xu Qiliang, will be a vice chairman, giving the air force new weight in big decisions, they said. An army general, Fan Changlong, the former commander of the Jinan Military Region, will also be a vice chairman.

These two men will run the day-to-day operations of the military, Chinese analysts said.

In his book, Colonel Liu, a former professor at China’s National Defense University, wrote that the army had not been tested in decades and had grown complacent. “As a military that has not fought a war for 30 years, the People’s Liberation Army has reached a stage in which its biggest danger and No. 1 foe is corruption,” he wrote.

Colonel Liu first became prominent in 2010 with the publication of his book “The China Dream,” an ultranationalist tract arguing that China should build the world’s strongest military and move swiftly to supplant the United States as the global “champion.”

In his new work, the colonel drew a parallel with 1894, when China’s forces were swiftly defeated by a rapidly modernizing Japan, even though the Chinese were equipped with expensive ships from Europe. Historians often attribute the defeat to corruption.

Another retired army officer, and a member of the aristocratic class known as the princelings, said that corruption existed throughout the military but that the new commission would probably refrain from a sustained campaign against it.

Bree Feng contributed research.

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Android 4.2 For Nexus 7, Galaxy Nexus Now Available

When Google’s Nexus 10 tablet was unveiled recently, it was running Android 4.2, a new version which adds several features. That version is coming to your Nexus 7 or Galaxy Nexus device as well. Here’s what Android 4.2 brings, where to get it, and which Nexus devices are missing out.

​New features in Android 4.2

Mashable’s Christina Warren has the scoop on what Android 4.2′s bringing. Flashy additions include Daydream, a sort of screensaver for your smartphone or tablet, and Photo Sphere, a new way to take panoramic photographs that capture the whole world around you. Right now you can only see Photo Sphere images on Google+ or in Google Maps, but according to David Ruddock of the Android Police blog Google has made it so “Anyone could, in theory, build a Photo Sphere viewer.”

Less immediately noticeable improvements include a Swype-style gesture keyboard, where you don’t need to type individual letters, and a feature that lets multiple people share the same Android tablet without their apps and things getting in each others’ way. You’ll also be able to mirror your Android device’s screen on your HDTV, Apple AirPlay style, although instead of an Apple TV box you’ll need a third-party wireless display adapter.

​Who’s getting the upgrade now

Nexus 7 owners are already beginning to receive the Android 4.2 upgrade over the air. Your tablet will automatically check for it every so often, but if you want to hurry it along you can go to Settings -> About tablet -> System updates, and tell it to check again. You can also download it from Google and manually install it using Liam Spradlin’s instructions, although this is not recommended unless you’re an experienced Android hacker and are using the Wi-Fi version of the Nexus 7.

Galaxy Nexus owners who bought their phones from a wireless carrier have had to wait an unusually long time for upgrades, as long as several months after a new Android version’s announced. If you bought your Galaxy Nexus phone from a wireless carrier, an upgrade probably won’t be available anytime soon. People who purchased their Galaxy Nexus from the Google Play store are reporting that they are getting the upgrade, though, and Spradlin again has instructions for how to install manually if you are using a Galaxy Nexus bought from the Google Play store.​

Who’s being left out

While announcing that Android 4.2′s programming code was being released to the Android Open-Source Project, Google rep Jean-Baptiste Queru said “There is no support for 4.2 on Nexus S and Xoom.” The Nexus S was a Nexus smartphone released about two years ago, in late 2010, while the Motorola Xoom was the first tablet released (in early 2011) running the Honeycomb version of Android. The Xoom was not an official Nexus device, but was also made in close partnership with Google, and showcased the latest Android software.

Both devices received upgrades to Android 4.1, the first Jelly Bean version. It looks like this is where the upgrade train ends for them, though, after almost two years of support. In contrast, Apple’s iPhone 3GS, released in mid-2009, just recently received an upgrade to the latest version of iOS.

Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.

Linux/Open Source News Headlines – Yahoo! News

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Price, Dickey win Cy Young awards

NEW YORK (AP) — David Price of the Tampa Bay Rays and knuckleballer R.A. Dickey of the New York Mets won baseball's Cy Young awards on Wednesday.

Price barely beat out 2011 winner Justin Verlander for the American League prize in one of the closest votes ever. Dickey was an easy choice for the NL honor in balloting by the Baseball Writers' Association of America.

The 38-year-old Dickey became the first knuckleball pitcher to win the Cy Young Award, an achievement mentors such as Hall of Famer Phil Niekro are quite proud of.

"I am not a self-made man by any stretch of the imagination," Dickey said on MLB Network. "This is a victory for all of us."

Runner-up two years ago, Price was the pick this time by the slimmest of margins. He received 14 of 28 first-place votes and finished with 153 points to 149 for Verlander, chosen first on 13 ballots.

Other than a 1969 tie between Mike Cuellar and Denny McLain, it was the tightest race in the history of the AL award.

Rays closer Fernando Rodney got the other first-place vote and came in fifth.

"It means a lot," Price said. "It's something that I'll always have. It's something that they can't take away from me."

Price went 20-5 to tie Jered Weaver for the American League lead in victories and winning percentage. The 27-year-old lefty had the lowest ERA at 2.56 and finished sixth in strikeouts with 205.

Verlander, also the league MVP a year ago, followed that up by going 17-8 with a 2.64 ERA and pitching the Detroit Tigers to the World Series. He led the majors in strikeouts (239), innings (238 1-3) and complete games (six).

Price tossed 211 innings in 31 starts, while Verlander made 33. One factor that might have swung some votes, however: Price faced stiffer competition in the rugged AL East than Verlander did in the AL Central.

"I guess it's a blessing and a curse at the same time," Price said. "There's not an easy out in the lineups every game. It feels like a postseason game."

Weaver came in third with 70 points, but was listed second on a pair of ballots. The right-hander threw a no-hitter and had a 2.81 ERA in his first 20-win season but missed time with injuries and totaled only 188 2-3 innings for the Los Angeles Angels.

The top pick in the 2007 amateur draft out of Vanderbilt, Price reached the majors the following year and has made three straight All-Star teams.

Despite going 19-6 with a 2.72 ERA in 2010, he finished a distant second in Cy Young voting to Felix Hernandez, who won only 13 games for last-place Seattle but dominated most other statistical categories that year.

Verlander was trying to become the first AL pitcher to win back-to-back Cy Youngs since Boston's Pedro Martinez in 1999 and 2000. San Francisco right-hander Tim Lincecum did it in the National League in 2008-09.

Dickey garnered 27 of 32 first-place votes and easily outdistanced 2011 winner Clayton Kershaw of the Los Angeles Dodgers. Gio Gonzalez of Washington finished third.

Dickey joined Dwight Gooden (1985) and three-time winner Tom Seaver as the only Mets pitchers to win the award. The right-hander was the club's first 20-game winner since Frank Viola in 1990. And perhaps most impressive, Dickey did it during a season when the fourth-place Mets finished 74-88.

"It just feels good all over," he said.

Price and Dickey are both from Tennessee, making them the fourth pair of Cy Young winners to be born in the same state, according to STATS.

The two MVP awards will be announced Thursday. Verlander's teammate, Triple Crown winner Miguel Cabrera, is a leading contender in the American League.

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Alzheimer’s Tied to Mutation Harming Immune Response

Alzheimer’s researchers and drug companies have for years concentrated on one hallmark of Alzheimer’s disease: the production of toxic shards of a protein that accumulate in plaques on the brain.

But now, in a surprising coincidence, two groups of researchers working from entirely different starting points have converged on a mutated gene involved in another aspect of Alzheimer’s disease: the immune system’s role in protecting against the disease. The mutation is suspected of interfering with the brain’s ability to prevent the buildup of plaque.

The discovery, researchers say, provides clues to how and why the disease progresses. The gene, known as TREM2, is only the second found to increase Alzheimer’s risk substantially in older people.

“It points very specifically to a potential metabolic pathway that you could intervene in to change the course of Alzheimer’s disease,” said William Thies, chief medical and scientific officer of the Alzheimer’s Association.

Much work remains to be done before scientists understand precisely how the newly discovered gene mutation leads to Alzheimer’s, but already there are some indications from studies in mice. When the gene is not mutated, white blood cells in the brain spring into action, gobbling up and eliminating the plaque-forming toxic protein, beta amyloid. As a result, Alzheimer’s can be staved off or averted.

But when the gene is mutated, the brain’s white blood cells are hobbled, making them less effective in their attack on beta amyloid.

People with the mutated gene have a threefold to fivefold increase in the likelihood of developing Alzheimer’s disease in old age.

The intact gene, says John Hardy of University College London, “is a safety net.” And those with the mutation, he adds, “are living life without a safety net.” Dr. Hardy is lead author of one of the papers.

The discovery also suggests that a new type of drug could be developed to enhance the gene’s activity, perhaps allowing the brain’s white blood cells to do their work.

“The field is in desperate need of new therapeutic agents,” said Alison Goate, an Alzheimer’s researcher at Washington University in St. Louis who contributed data to Dr. Hardy’s study. “This will give us an alternative approach.”

The fact that two research groups converged on the same gene gives experts confidence in the findings. Both studies were published online Wednesday in The New England Journal of Medicine. “Together they make a good case that this really is an Alzheimer’s gene,” said Gerard Schellenberg, an Alzheimer’s researcher at the University of Pennsylvania who was not involved with the work.

The other gene found to raise the odds that a person will get Alzheimer’s, ApoE4, is much more common and confers about the same risk as the mutated version of TREM2. But it is still not clear why ApoE4, discovered in 1993, makes Alzheimer’s more likely.

Because the mutations in the newly discovered gene are rare, occurring in no more than 2 percent of Alzheimer’s patients, it makes no sense to start screening people for them, Dr. Thies said. Instead, the discovery provides new clues to the workings of Alzheimer’s disease.

To find the gene, a research group led by Dr. Kari Stefansson of deCODE Genetics of Iceland started with a simple question.

“We asked, ‘Can we find anything in the genome that separates those who are admitted to nursing homes before the age of 75 and those who are still living at home at 85?’ ” he said.

Scientists searched the genomes of 2,261 Icelanders and zeroed in on TREM2. Mutations in that gene were more common among people with Alzheimer’s, as well as those who did not have an Alzheimer’s diagnosis but who had memory problems and might be on their way to developing Alzheimer’s.

The researchers confirmed their results by looking for the gene in people with and without Alzheimer’s in populations studied at Emory University, as well as in Norway, the Netherlands and Germany.

The TREM2 connection surprised Dr. Stefansson. Although researchers have long noticed that the brain is inflamed in Alzheimer’s patients, he had dismissed inflammation as a major factor in the disease.

“I was of the opinion that the immune system would play a fairly small role, if any, in Alzheimer’s disease,” Dr. Stefansson said. “This discovery cured me of that bias.”

Meanwhile, Dr. Hardy and Rita Guerreiro at University College London, along with Andrew Singleton at the National Institute on Aging, were intrigued by a strange, rare disease. Only a few patients had been identified, but their symptoms were striking. They had crumbling bones and an unusual dementia, sclerosing leukoencephalopathy.

“It’s a weird disease,” Dr. Hardy said.

He saw one patient in her 30s whose brain disease manifested in sexually inappropriate behavior. Also, her bones kept breaking. The disease was caused by mutations that disabled both the copy of TREM2 that she had inherited from her mother and the one from her father.

Eventually the researchers searched for people who had a mutation in just one copy of TREM2. To their surprise, it turned out that these people were likely to have Alzheimer’s disease.

They then asked researchers around the world who had genetic data from people with and without Alzheimer’s to look for TREM2 mutations.

“Sure enough, they had good evidence,” Dr. Hardy said. The mutations occurred in one-half of 1 percent of the general population but in 1 to 2 percent of patients with Alzheimer’s disease.

“That is a big effect,” Dr. Hardy said.

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Obama Meets C.E.O.’s as Fiscal Reckoning Nears

Luke Sharrett for The New York Times

Ursula M. Burns, chief of Xerox, said the president discussed few specifics of a potential agreement but emphasized that “we cannot go over the fiscal cliff.”

WASHINGTON — President Obama extended an olive branch to business leaders Wednesday, seeking their support as he prepared to negotiate with Congressional Republicans over the fiscal impasse in Washington.

If Congress and the president cannot reach a deal to reduce the deficit by January, more than $600 billion in tax increases and spending cuts will go into effect immediately — a prospect many chief executives and others warn could tip the economy back into recession.

Even so, Mr. Obama has some fence-mending to do before he can count on any serious backing from the business community.

“The president brought up that he hadn’t always had the best relationship with business, and he didn’t think he deserved that, but he understood that’s where things were and wanted it to be better,” said David M. Cote, chief executive of Honeywell. He was one of a dozen corporate leaders invited to meet Mr. Obama at the White House for 90 minutes Wednesday afternoon, after the president’s first news conference since the election.

While Mr. Obama did not present a detailed plan at Wednesday’s meeting or reveal what he would propose in terms of new corporate taxes, he strongly reiterated that he would not allow tax cuts for the middle class to expire. The president, according to attendees and aides, said he was committed to a balanced approach of reductions in entitlements and other government spending and increases in revenue.

With time running out, many observers expect the president and Republican leaders in Congress to come up with a short-term compromise that prevents the full slate of tax increases and spending cuts from hitting in January. That would give both sides more time to come up with a far-reaching deal on entitlement spending, even as they work on a broad tax overhaul later next year.

One corporate official briefed on the meeting said that the chief executives came away with a sense that Mr. Obama was poised to present a more formal proposal in the next few days, but that he did not press them for support on particular policies. “It was more of a back and forth,” he said.

The chief executives from some of the country’s biggest and best-known companies, including Procter & Gamble and I.B.M., were not unified on everything, according to one who was interviewed after the meeting.

Many of the executives who described the meeting would speak only on condition of anonymity.

The outreach to business comes as both the White House and corporate America maneuver ahead of the year-end deadline, as well as the beginning of Mr. Obama’s second term. Many executives were put off by what they saw as antibusiness rhetoric coming from the White House in his first term, and many also oppose tax increases on the rich that Mr. Obama favors but would hit them personally.

Both sides have plenty to gain from a better relationship. Business leaders want to buffer their image after the recession and the financial crisis, while Mr. Obama would gain valuable leverage if he could persuade even a few chief executives to come out in favor of higher taxes on people with incomes over $250,000.

Lloyd C. Blankfein, chief executive of Goldman Sachs, publicly endorsed higher tax rates in an opinion article published in The Wall Street Journal on Wednesday.

“I believe that tax increases, especially for the wealthiest, are appropriate, but only if they are joined by serious cuts in discretionary spending and entitlements,” he wrote.

While Mr. Blankfein and other Wall Street leaders have been speaking out about the dangers of the fiscal impasse, only one executive from the financial services industry, Kenneth I. Chenault of American Express, was at Wednesday’s meeting.

Afterward, the corporate leaders seemed pleased with the tone of the meeting but cautious about the prospect of finding common ground with the White House on the budget choices facing Congress and the president.

“I’d say everybody came away feeling pretty good about the whole discussion,” Mr. Cote said. “Now, all of us are C.E.O.’s, so we’ve learned not to confuse words with results. And that’s what we still need to see.”

Ursula M. Burns, chief executive of Xerox, who was also at the meeting, said afterward that it was clear that “we’re going to have to work through some sticking points.” But while “we didn’t get into too many specifics,” she said, it was also made clear that “we cannot go over the fiscal cliff.”

Ms. Burns’s comments about the potentially dire consequences of the fiscal impasse echoed those of other chief executives, including many in the Business Roundtable, which began an ad campaign Tuesday calling on lawmakers to resolve the issue quickly. The Campaign to Fix the Debt, a new group with a $40 million budget and the support of many Fortune 500 chiefs, began its own ad campaign on Monday.

Michael T. Duke, chief executive of Wal-Mart Stores, warned in a statement after the meeting that “before the end of the year, Washington needs to find an agreement to avoid the fiscal cliff.” He said Walmart customers “are working hard to adapt to the ‘new normal,’ but their confidence is still very fragile. They are shopping for Christmas now, and they don’t need uncertainty over a tax increase.”

 

Helene Cooper reported from Washington and Nelson D. Schwartz from New York. Jackie Calmes contributed reporting from Washington.

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White House Supports Top U.S. Commander in Afghanistan

WASHINGTON — Conflicting portrayals of e-mails written by Gen. John R. Allen, the top American and NATO commander in Afghanistan, emerged Tuesday after it was disclosed that the general was under investigation for what the Pentagon called “inappropriate communication” with the woman whose complaint to the F.B.I. set off the scandal involving David H. Petraeus’s extramarital affair.

Defense Secretary Leon E. Panetta and other officials traveling with him to Australia overnight on Monday disclosed the inquiry into General Allen’s e-mails with Jill Kelley, the woman in Tampa, Fla., who was seen by Paula Broadwell, Mr. Petraeus’s lover, as a rival for his attentions.

Mr. Panetta, along with Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, referred the Allen matter to the Pentagon’s inspector general, according to Mr. Panetta’s aides, after a team of military and civilian lawyers reviewed what defense officials say are thousands of pages of documents, including hundreds of e-mails between General Allen and Ms. Kelley, that the F.B.I. forwarded to the Pentagon.

Associates of General Allen said Tuesday that the e-mails were innocuous. Some of them used terms of endearment, but not in a flirtatious way, the associates said. “If you know Allen, he’s just the kind of guy to respond dutifully to every e-mail he gets — ‘you’re the best,’ ‘you’re a sweetheart,’ that kind of thing,” according to a senior American official who is familiar with the investigation.

Even so, other Pentagon officials briefed on the content of the e-mails said that some of the language did, on initial reading, seem “overly flirtatious” and warranted further inquiry.

The Pentagon’s top lawyer, Jeh Johnson, recommended sending the matter to the inspector general, senior defense officials said. An inappropriate communication could violate military rules.

Senior officials in the Obama administration and lawmakers from both parties expressed shock at what could be a widening scandal into two of the most prominent generals of their generation: Mr. Petraeus, who was the top commander in Iraq and Afghanistan before he retired from the military to become director of the C.I.A., only to resign on Friday because of his affair, and General Allen, who also served in Iraq and now commands 68,000 American troops in Afghanistan.

President Obama, however, voiced support for General Allen through his spokesman on Tuesday. “The president thinks very highly of General Allen,” the spokesman, Jay Carney, said at a White House news briefing. “He has faith in General Allen.”

But the matter has created enough concern that General Allen’s recent nomination to become NATO’s top military officer was delayed at Mr. Panetta’s request, pending the investigation’s outcome.

Aides traveling with Mr. Panetta, reacting to anger from some of General Allen’s associates who said he was being unfairly treated, described Mr. Panetta as having great respect for General Allen. But they said that Mr. Panetta had little choice in referring the matter to the inspector general. General Dempsey informed General Allen of the investigation on Monday from Perth, where he had traveled for a security meeting that Mr. Panetta is also attending.

General Allen, a Marine, succeeded Mr. Petraeus as the top allied commander in Afghanistan in July 2011. He also served as Mr. Petraeus’s deputy when both officers led the military’s Central Command, based in Tampa, from 2008 until 2010.

General Allen’s connection to the scandal appears to have originated with an e-mail he received from an account that was registered under a fake name and has now been linked to Ms. Broadwell, according to a senior American official. The e-mail warned General Allen to be wary of Ms. Kelley and was vaguely threatening. Though he did not know who had written the e-mail, he was concerned and passed it on to Ms. Kelley. She then discussed it with an agent she knew at the F.B.I.’s field office in Tampa, Fla., whose cyber crime unit opened an investigation that eventually linked Ms. Broadwell to General Petraeus.

A senior law enforcement official in Washington said Tuesday that F.B.I. investigators, looking into Ms. Kelley’s complaint about anonymous e-mails she had received, examined all of her e-mails as a routine step. Officials familiar with the investigation said it covers 20,000 to 30,000 page of documents, but Pentagon officials cautioned against making too much of that number, since some might be from e-mail chains, or brief messages printed out on a whole page.

On Monday night, F.B.I. agents searched Ms. Broadwell’s home in Charlotte, N.C., and local television news crews filmed them carrying away boxes of material in what officials said was part of that continuing investigation.

The defense official said that the e-mails between Ms. Kelley and General Allen spanned the years 2010 to 2012.

American officials familiar with the social dynamics at the upper echelons of the Central Command described Ms. Kelley as wealthy socialite who knew “almost every” high- ranking officer serving in Tampa. Her ties were close enough that Mr. Petraeus and General Allen both intervened last September in a messy custody dispute on behalf of Jill Kelley’s twin sister, Natalie Khawam.

A senior official said Ms. Kelley was close to both General Allen and his wife. She would often send e-mails, hundreds over the course of any given year, to the couple about parties or people she had met or trips she was considering. General Allen was never alone with Ms. Kelley,  the official said, and while he may have been “affectionate in a few e-mails with her, there’s nothing he’s embarrassed about or embarrassed to tell his wife about.” 

Eric Schmitt reported from Washington, and Elisabeth Bumiller from Perth, Australia. Matt Rosenberg, Thom Shanker and Ron Nixon contributed reporting from Washington.

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FTC chief: Kids’ Internet privacy rules done by year’s end

WASHINGTON (Reuters) – Regulators will likely finish a long-awaited update to rules protecting children’s online privacy by the end of the year, the head of the Federal Trade Commission said on Tuesday.

The original rules were developed when most computers were large beige boxes sitting under office desks instead of smartphones slung into backpacks and permeating most aspects of daily life.

FTC Chairman Jon Leibowitz said the agency was moving forward on two issues: self-regulatory “do not track” guidance, and regulations to update the Children’s Online Privacy Protection Act, or COPPA.

The law requires that website and online service operators obtain verifiable consent from parents before collecting information about children.

Leibowitz, who is thought keen to leave the agency within months, said he was more confident of finishing an update of COPPA’s rules, which were written following the 1998 legislation.

Under revised rules, the FTC would make websites, mobile apps and data brokers all responsible for getting parental consent before collecting data about children aged 12 and younger. Currently it is unclear who has the responsibility.

Data brokers buy and sell consumer data.

Speaking at the Wall Street Journal’s annual CEO Conference in Washington, Leibowitz said the process would most likely be done by the end of the year.

“We are looking at all the comments that came in and weighing how to tweak the regulation,” he said.

Leibowitz was slightly less optimistic about the fate of “do not track,” an effort to allow Internet users to tell companies they did not want to be tracked online.

Some large technology companies, like Microsoft and Google, have agreed to let consumers opt out of being tracked, but advertisers have pushed back hard.

“We’re still making forward progress,” Leibowitz said when asked if the efforts would be done by the end of the year. “We continue to be optimistic. It’s not a certainty though.”

(Reporting By Diane Bartz; Editing by Ros Krasny and Kenneth Barry)

Internet News Headlines – Yahoo! News

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AP source: Marlins trade Josh Johnson to Blue Jays

MIAMI (AP) — A person familiar with the deal says the Miami Marlins have traded right-hander Josh Johnson to the Toronto Blue Jays.

The person confirmed the trade to The Associated Press on condition of anonymity Tuesday because the teams weren't commenting amid talk they had agreed to a blockbuster deal.

Johnson, who led the NL in ERA in 2010, went 8-14 this year with a 3.81 ERA for the Marlins, who endured a dismal season in their new ballpark and began dismantling the team in July.

Johnson was limited to nine starts in 2011 because of right shoulder inflammation.

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Kidney Donors Given Mandatory Safeguards

ST. LOUIS — Addressing long-held concerns about whether organ donors have adequate protections, the country’s transplant regulators acted late Monday to require that hospitals thoroughly inform living kidney donors of the risks they face, fully evaluate their medical and psychological suitability, and then track their health for two years after donation.

Enactment of the policies by the United Network for Organ Sharing, which manages the transplant system under a federal contract, followed six years of halting development and debate.

Meeting at a St. Louis hotel, the group’s board voted to establish uniform minimum standards for a field long regarded as a medical and ethical Wild West. The organ network, whose initial purpose was to oversee donation from people who had just died, has struggled at times to keep pace with rapid developments in donations from the living.

“There is no question that this is a major development in living donor protection,” said Dr. Christie P. Thomas, a nephrologist at the University of Iowa and the chairman of the network’s living donor committee.

Yet some donor advocates complained that the measures did not go far enough, and argued that the organ network, in its mission to encourage transplants, has a conflict of interest when it comes to safeguarding donors.

Three years ago, the network issued some of the same policies as voluntary guidelines, only to have the Department of Health and Human Services insist they be made mandatory.

Although long-term data on the subject is scarce, few living kidney donors are thought to suffer lasting physical or psychological effects. Kidney donations, known as nephrectomies, are typically done laparoscopically these days through a series of small incisions. The typical patient may spend only a few nights in a hospital and feel largely recovered after several months.

Kidneys are by far the most transplanted organs, and there have been nearly as many living donors as deceased ones over the last decade. What data is available suggests that those with one kidney typically live as long as those with two, and that the risk of a donor dying during the procedure is roughly 3 in 10,000.

But kidney transplants, like all surgery, can sometimes end in catastrophe.

In May at Montefiore Medical Center in the Bronx, a 41-year-old mother of three died when her aorta was accidentally cut during surgery to donate a kidney to her brother. In other recent isolated cases, patients have received donor kidneys infected with undetected H.I.V. or hepatitis C.

Less clear are any longer-term effects on donors. Research conducted by the United Network for Organ Sharing shows that of roughly 70,000 people who donated kidneys between late 1999 and early 2011, 27 died within two years of medical causes that may — or may not — have been related to donation. For a small number of donors, their remaining kidney failed, and they required dialysis or a transplant.

The number of living donors — 5,770 in 2011 — has dropped 10 percent over the last two years, possibly because the struggling economy has made it difficult for prospective donors to take time off from work to recuperate. With the national kidney waiting list now stretching past 94,000 people, and thousands on the list dying each year, transplant officials have said they must improve confidence in the system so more people will donate.

The average age of donors has been rising, posing additional medical risks. And new ethical questions have been raised by the emergence of paired kidney exchanges and transplant chains started by good Samaritans who give an organ to a stranger.

Brad Kornfeld, who donated a kidney to his father in 2004, told the board that it had been impossible to find good information about what to expect, leaving him to search for answers on unreliable Internet chat rooms. He said he had almost backed out.

“If information is power,” said Mr. Kornfeld, a Coloradan who serves on the living donor committee, “the lack of information is crippling.”

Under the policies approved this week, the organ network will require hospitals to collect medical data, including laboratory test results, on most living donors to study lasting effects. Results must be reported at six months, one year and two years.

Similar regulations have been in place since 2000, but they did not require blood and urine testing, and hospitals were allowed to report donors who could not be found as simply lost.

That happened often. In recent years, hospitals have submitted basic clinical information — like whether donors were alive or dead — for only 65 percent of donors and lab data for fewer than 40 percent, according to the organ network. Although the network holds the authority, no hospital has ever been seriously sanctioned for noncompliance.

“It’s time we put some teeth into our policy,” said Jill McMaster, a board member from Tennessee.

By 2015, transplant programs will have to report thorough clinical information on at least 80 percent of donors and lab results on at least 70 percent. The requirements phase in at lower levels for the next two years.

Dr. Stuart M. Flechner of the Cleveland Clinic, the chairman of a coalition of medical societies that made recommendations to the organ network, said 9 of 10 hospitals would currently not meet the new requirement.

Donna Luebke, a kidney donor from Ohio who once served on the organ network’s board, said the new standards would matter only if enforcement were more rigorous. She noted that the organization was dominated by transplant doctors: “UNOS is nothing but the foxes watching the henhouse,” she said.

Another of the new regulations prescribes in detail the medical and psychological screenings that hospitals must conduct for potential donors. It requires automatic exclusion if the potential donor has diabetes, uncontrolled hypertension or H.I.V., among other conditions.

The new policies also require that hospitals appoint an independent advocate to counsel and represent donors, and that donors receive detailed information in advance about medical, psychological and financial risks.

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