Lindsay Lohan pushed for Elizabeth Taylor TV role

LOS ANGELES (Reuters) – Lindsay Lohan so wanted to play Elizabeth Taylor in the upcoming film “Liz & Dick” that she cut out the middle man and went straight to the producer herself, the tabloid-favorite star said in an interview on Friday.

Lohan, 26, plays Taylor in an upcoming television movie that dramatizes the long love affair between the late Hollywood legend and actor Richard Burton.

“It’s a funny story, actually. I had seen that they were going to be making the movie and I got the producers’ numbers and started harassing (producer) Larry Thompson,” Lohan said on ABC’s “Good Morning America.”

“I didn’t even care if my agents were going to do it or not, I just did it myself, too,” the “Mean Girls” actress said. “Because I was like, ‘No one else is going to play this role, I have to do this.’”

Early reviews of “Liz & Dick,” which premieres on U.S. cable channel Lifetime on November 25, have ranged from middling to poor. But TV critics noted the similarities between Lohan and Taylor, both often-troubled actresses who started life as child stars.

“‘Liz & Dick’ truly drags,” said the Hollywood Reporter. “Luckily, you can’t take your eyes off of Lohan playing Taylor, which the producers clearly thought would work because they share similar back stories.”

Lohan’s acting alongside New Zealand’s Grant Bowler as Burton was described by Variety on Friday as “adequate, barring a few awkward moments, thanks largely to the fabulous frocks and makeup … she gets to model.”

Lohan’s reputation, much like Taylor’s, has been built from her tabloid persona more than on-screen performance.

In and out of legal trouble, jail and rehab since 2007, Lohan faced media blow-back this week after canceling an in-depth interview with ABC’s Barbara Walters, who said she suspected the actress’ publicity team pulled the plug knowing Walters would ask tough questions.

(Reporting by Eric Kelsey; editing by Jill Serjeant and Matthew Lewis)

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Twinkies maker Hostess plans to go out of business

(Reuters) – Hostess Brands Inc, the bankrupt maker of Twinkies snack cakes and Wonder Bread, is seeking a U.S. court’s permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.

The 82-year-old Hostess, which has about $ 2.5 billion in sales and is one of the largest wholesale bakers and distributors of breads and snack cakes in the United States, filed the request with the U.S. Bankruptcy Court in New York early Friday morning. A hearing on the matter is set for Monday.

The Irving, Texas-based company said the liquidation would mean that most of its 18,500 employees would lose their jobs. Hostess immediately suspended operations at all of its 33 plants across the United States as it moves to start selling assets.

“We’ll be selling the brands and as much of the infrastructure as we can,” said company spokesman Lance Ignon. “There is value in the brands. But some bakeries will never open again as bakeries.”

Ignon said the company made final deliveries on Friday of products made on Thursday night. Hostess’s top-selling products are its chocolate cupcakes, Twinkies cakes and its powdered sugar and frosted “Donettes.”

Hostess products, particularly the golden, cream-filled Twinkies cakes, are deeply ingrained in American pop culture and have long been packed in school children’s lunch boxes. Entrepreneurs on auction site eBay Inc were asking as much as $ 100 for a box of 10 Twinkies on Friday morning.

Raj Patel, owner of Sarah’s Market in Cambridge, Massachusetts, said he was sorry to see the company go out of business.

“It’s been around for ages,” said Patel, 40. “A lot of people are familiar with the brand and it’s going to be tough for some people to do without.”

NOT INTERESTED IN BREAD

Hostess blamed heavy debt and burdensome wage and pension obligations for its financial woes. It said a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), which began November 9, was part of a long series of battles between labor and management that contributed to the company’s inability to restructure its finances and produce and deliver products at several facilities.

But union officials and line workers said union workers had already agreed to a series of concessions over the years and the company had failed to invest in brand marketing and modernization of plants and trucks and had focused instead on enriching owners such as private equity firm Ripplewood Holdings and hedge funds Silver Point Capital and Monarch Alternative Capital.

Officials at the three firms declined to comment.

“Our members decided… they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and ‘restructuring specialists’ walk away with untold millions of dollars,” said BCTGM International Union President Frank Hurt.

Picketing workers echoed the sentiment.

“The people who are running this company are not interested in making bread,” said Roger Harrison, 56, who bags buns at the Hostess plant in Lenexa, Kansas, and has been with the company for 35 years.

“They are not in the baking industry; they are just interested in the money,” Harrison said.

The company had started implementing an 8 percent pay cut, a 20 percent increase in healthcare costs, and changes to pension and workday provisions when workers went on strike on November 9. Hostess had given employees a deadline to return to work on Thursday, but the union held firm, saying it had already given far more in concessions than workers could bear and that it would not bend further.

“The union has been the death of this company,” said a human resources manager who recently left Hostess.

LONG LABOR BATTLES

Hostess’s battle with its workforce has brewed for years. Formerly known as Interstate Bakeries Corp (IBC), the company for decades was based in Kansas City, Missouri. It filed for bankruptcy in September 2004 and emerged in 2009 with a host of employee concessions from various unions.

A source with knowledge of the situation who spoke on condition of anonymity said the company was well positioned when it emerged from bankruptcy in 2009, but the recession, a spike in commodity prices and consolidation of major competitors reshaped the landscape and forced more restructuring.

“We tried to get the senior creditors and the unions together and it dragged on and on and on and the company got weak,” said the source. “I’m still praying, literally, that something is worked out and they don’t liquidate the business.”

When Hostess filed for bankruptcy protection in January of this year the company said it must withdraw from multi-employer pension plans, address legacy health and welfare costs and secure new capital to modernize its operations.

The company has spent the last several months battling for wage cuts and other concessions from 12 unions representing Hostess workers. At one point earlier this year, Hostess had a potential outside equity investor lined up, but failure to gain pension relief from the International Brotherhood of Teamsters union killed that option, the company said in its court filing on Friday.

The company submitted offers to both the Teamsters and the bakery union in August, in what the company said was a final effort to save the company. The Teamsters accepted the proposal but the bakery union balked.

With court approval, Hostess implemented the contract changes in October. The bakery workers then launched strikes that disrupted operations at 24 bakeries. Hostess said the strikes were the final blow to the already “daunting obstacles” to reorganization.

The company’s court filing said that it hopes it can arrange the sale of groups of assets to be operated as going concerns.

WIND-DOWN PLAN

Hostess has 565 distribution centers and 570 bakery outlet stores, as well as the 33 bakeries. Besides Twinkies and Wonder Bread, its brands include Nature’s Pride, Dolly Madison, Drake’s, Butternut, Home Pride and Merita.

The company said in Friday’s court filing that it would probably take about a year to wind down. It will need about 3,200 employees to start that process, but only about 200 after the first few months.

Hostess had been gauging acquisition interest for certain brands for months and in late September received “a number of potentially viable proposals” to purchase certain assets.

Pabst Brewing Co owner, C. Dean Metropoulos & Co, is considering making an offer to buy Hostess Brands Inc, Daren Metropoulos, a principal at the private-equity firm, told Bloomberg News. Metropoulos did not return a request for comment.

SunTrust Robinson Humphrey analyst William Chappell Jr. said Flowers Foods Inc could be among the potential buyers for some Hostess assets. And he said the company’s liquidation was a “positive step” for the sector because it will reduce the number of major vendors.

In addition to Flowers, Bimbo Bakeries USA, a division of Mexico-based Grupo Bimbo, and Pepperidge Farm, a division of Campbell Soup Co, were considered prospective buyers, analysts said.

It is not a given that all of the better-known brands will survive, analysts said. “I’d be surprised if the Twinkies brand isn’t gone for good,” said Timothy Ramey, analyst at D.A. Davidson & Co.

The company has canceled all orders with its suppliers and said any product in transit would be returned to the shipper.

The company’s last operating report, filed with the bankruptcy court in late October, listed a net loss of $ 15.1 million for the four weeks that ended in late September, mostly due to restructuring charges and other expenses.

The case is In re: Hostess Brands Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.

(Reporting by Carey Gillam in Kansas City and Jonathan Stempel in New York; Additional reporting by Tanya Agrawal in Bangalore, Ben Berkowitz, Nick Zieminski and Phil Wahba in New York; Editing by Lisa Von Ahn, Phil Berlowitz, Andre Grenon, Tim Dobbyn and Carol Bishopric)

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NBC to replace “Today Show” producer, source says

(Reuters) – NBC is expected to name Alexandra Wallace, a senior vice president of the network’s news division, as the executive in charge of “The Today Show,” the latest reshuffling of the show’s personnel after it slipped to second in ratings this year behind “Good Morning America.”

Wallace, who would be the first woman in charge of the long-running NBC show that pioneered early morning TV in the United States, will be named along with a producer to replace Jim Bell, according to a person familiar with the decision.

Bell, who has headed the show since 2005, was blamed this year for the controversial firing of Ann Curry as anchor alongside Matt Lauer.

Curry was replaced by Savannah Guthrie in June.

“Good Morning America” or GMA, produced by Walt Disney‘s ABC unit, closed the gap with “Today.”

“Today,” the top-rated morning show for 16 consecutive years, started the current TV season number two. In late October, NBC drew 7,000 more viewers than GMA among 25 to 54 year-old viewers, the age group advertisers most want to reach, its first lead since September 10. GMA still led among overall viewers.

The first two hours of “The Today Show,” from 7 a.m. to 9 a.m., collected $ 485 million in ad revenues in 2011, up 6.6 percent from 2010, according to Kantar Media, which provides data to advertisers. GMA took in $ 299 million last year.

It is unclear when the changes at “The Today Show” will take effect, according to The New York Times, which first reported the shakeup.

Bell this summer produced NBC’s Summer Olympics coverage and is expected to become the full-time executive producer of the network’s ongoing Olympic coverage.

NBC, a unit of Comcast Corp., is also in the midst of layoffs at its entertainment unit, shedding 500 positions primarily at its cable channels. Jay Leno’s late night TV show cut about two dozen of its crew members about two months ago.

(Reporting By Ronald Grover)

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World stocks flat on Europe, US woes; Japan gains

BANGKOK (AP) — Trading on world stock markets was lethargic Friday after data showed Europe slipped back into recession and several big U.S. retailers disappointed investors with weak forecasts.

The European Union’s statistics agency said Thursday that the combined economy of the 17 countries that use the euro contracted 0.1 percent in the third quarter from the previous quarter. Surveys pointing to difficult conditions ahead suggest the recession could deepen.

“Although unsurprising, data in Europe confirmed that the region fell back into recession, an outcome that will do little to ease tensions,” analysts at Credit Agricole CIB in Hong Kong said in an email commentary.

European stocks were flat in early trading. Britain’s FTSE 100 fell 0.1 percent to 5,672.68. Germany‘s DAX was almost unchanged at 7,044.06. France‘s CAC-40 inched up less than 0.1 percent to 3,385.29.

Wall Street also flat-lined ahead of the open. Dow Jones industrial futures were almost unchanged at 12,524. S&P 500 futures inched up marginally to 1,352.10.

Trading in Asia was slightly more energetic. Hong Kong’s Hang Seng rose 0.2 percent to 21,159.01. South Korea‘s Kospi fell 0.5 percent to 1,860.83. Australia‘s S&P/ASX 200 lost 0.3 percent to 4,336.80.

Benchmarks in Taiwan, New Zealand and mainland China fell. The Shanghai Composite Index lost 0.8 percent to 2,014.72 and the Shenzhen Composite Index fell 0.7 percent to 800.20. Benchmarks in Singapore, Thailand and the Philippines rose.

Japan‘s Nikkei 225 stock index jumped 2.2 percent to close at 9,024.16, rallying for a second straight day on expectations that the opposition Liberal Democratic Party may win elections next month and pursue more aggressive stimulus policies than the current leadership.

LDP leader Shinzo Abe has said he is determined to push for such policies and to find ways to weaken the yen, whose strength against other currencies has hammered exporters.

Stan Shamu, strategist at IG Markets in Melbourne, said Abe wants an inflation target of between 2 and 3 percent as a way to cheapen the Japanese currency, perhaps by printing yen or bulking up on purchases of assets like Japanese government bonds. Still, the target might be difficult to achieve, given the economy’s weakness, he said.

“With such a big export economy, the yen has massive significance on how the local economy performs,” Shamu said.

Japan’s exporters, whose fortunes are linked to the yen’s valuation, were buoyed by the prospect of a changing of the guard. Mazda Motor Corp. soared 7.1 percent. Nissan Motor Co. jumped 5.1 percent. Nikon Corp. surged 7.2 percent and Canon Inc. gained 5.8 percent.

In Australia, Whitehaven Coal fell 1.8 percent after announcing it would scale back some operations due to the decline in global coal prices.

In the U.S., investors were dealt dual blows Thursday: worse-than-expected revenue from global retailing giant Wal-Mart and data showing that manufacturing weakened in the Philadelphia and New York regions, reflecting damage from Superstorm Sandy.

Wal-Mart, Ross Stores and Limited Brands, the owner of Victoria’s Secret, also disappointed investors by issuing profit forecasts that fell short of expectations.

Benchmark oil for December delivery was up 13 cents to $ 85.58 in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to close at $ 85.45 a barrel in New York on Thursday.

In currencies, the dollar weakened to 80.98 yen from 81.21 yen late Thursday in New York. The euro fell to $ 1.2748 from $ 1.2773.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

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Migration officials say cholera in Haiti on rise

GENEVA (AP) — The world’s largest agency that deals with global migration says cholera is again on the rise in Haiti.

The International Organization for Migration says Haitian officials have confirmed 3,593 cholera cases and another 837 suspected cases since Hurricane Sandy‘s passage.

IOM spokesman Jumbe Omari Jumbe told reporters Friday in Geneva “the numbers are going up” particularly in camps around the capital, Port-au-Prince.

He said his organization has responded by handing out about 10,000 cholera kits in 31 camps this week “badly hit by cholera in the area.”

Cholera is a bacterial infection that spreads through water, and Haiti’s lack of proper sanitation and sewage systems makes the country more vulnerable.

Haiti was spared a direct hit from Hurricane Sandy on Oct. 24, but received heavy rain for several days.

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Analysis: New Microsoft mantra after Sinofsky – teamwork

SEATTLE/SAN FRANCISCO (Reuters) – The sudden departure of powerful Windows boss Steven Sinofsky this week is the first step in a plan by CEO Steve Ballmer to remodel Microsoft Corp as a much more integrated operation in an attempt to take on Apple Inc and Google Inc at their own game.

After nearly 13 years at the helm of the world’s largest software maker, which just launched its first own-brand computer, sources inside the company say Sinofsky‘s departure signals Ballmer‘s new-found focus on co-operation between its self-sufficient – and sometimes warring – units.

“What I’m hearing over and over is collaboration and horizontal integration is the new mantra,” said one Microsoft insider, who asked not to be named. “They (top management) understand that, if they don’t move to a model where devices and software are more integrated across the entire Microsoft system, they are in a weak position.”

After floundering for most of the last decade, Microsoft is trying emulate the way Apple‘s software and hardware – such as iTunes and the iPhone – work perfectly together; or how Google‘s online suite from Web search to YouTube and Gmail are seamlessly joined.

Microsoft – which Ballmer rechristened as a “devices and services company” last month – has all the parts, analysts say, but has failed to put them together. Now Ballmer looks set to reshape the company to try to make that a reality.

“I certainly expect the org chart to look a lot different six months from now,” said Brad Silverberg, who ran the Windows unit during its massive growth spurt in the 1990s. “There will be attrition from Steven’s (Sinofsky’s) people and Steve Ballmer will have a chance to create a more harmonious organization.”

Ballmer replaced Sinofsky with two executives with a reputation for co-operation. The move marks the third time in the last few years that Ballmer has replaced a single unit head with two leaders sharing responsibilities.

“Sinofsky really centralized all the power under himself. We’ll see how it shakes out from here,” said one manager in the Windows unit.

More fundamental organizational shifts could be in the cards.

“A lot of things are up for grabs,” said David Smith at tech research firm Gartner. “How the management is structured – there could be more changes.”

NO ROOM FOR AN EMPIRE BUILDER

Sinofsky, a 23-year Microsoft veteran, built up a walled empire around his Windows unit.

His hard-charging but methodical style, which took on the name “Sinofskyization,” alienated other groups in the company, especially the Office unit, the other financial pillar of Microsoft‘s success.

“Steven is a brilliant guy who made tremendous contributions to Microsoft,” said Silverberg. “But he was also a polarizing guy and the antibodies ultimately caught up with him.”

The decision not to share the latest internal test versions of Windows 8 and keep the Surface tablet a secret until just before its announcement especially upset the Office group, which insiders say accounts for the lack of a fully featured Office suite on the Surface RT tablet.

“All good leaders create friction, but my guess is the cost of doing business with Sinofsky ended up outweighing the benefits,” said a former Microsoft staffer who saw Sinofsky operate at close quarters.

“If you work in Steven’s team, you love him,” said a former colleague who now works for a financial technology firm in Seattle. “If he’s outside of your team? That’s where his reputation of being hard to work with came from.”

Ballmer has made it clear that executives have to work together better. Next year, top managers will get bonuses based on company-wide performance, not just their own unit, which Ballmer hopes will lead to “deeper cross-organization collaboration.”

But there is no guarantee Ballmer can radically redirect almost four decades of culture at Microsoft – which he is partly responsible for – that gave Windows primacy and intentionally pitted teams against one another to get the best results.

Nothing will change without new leaders from outside the company, said Trip Chowdhry, managing director at Global Equities Research.

“Microsoft is clinging to the past and they keep bringing in the people from the past. This is a fundamental flaw in the logic,” Chowdhry said.

CEO THRONE

Despite urging collaboration, Ballmer – a 32-year Microsoft veteran who took over as CEO from Bill Gates in 2000 – does not let any junior executive get too close to challenging his authority.

Sinofsky, widely touted as Ballmer’s successor for the past three years, was just the latest in a line of would-be CEOs. Over the last five years alone, Ballmer has seen off a clutch of rising stars that were discussed as potential leaders.

Windows and online head Kevin Johnson went to run Juniper Networks Inc, Office chief Stephen Elop went to lead phone maker Nokia, while Ray Ozzie – the software guru Bill Gates designated as Microsoft‘s big-picture thinker – left to start his own project.

“They’ve gone through quite a bit of senior management talent in the past few years. The bench is not what it used to be,” said Smith at Gartner. “The overall management structure, career path, replacements, succession planning – a lot of that is an issue for Microsoft.”

Ballmer’s promotion of Julie Larson-Green and Tami Reller to jointly fill Sinofsky’s role may only be temporary, Microsoft-watchers say.

“The question is what comes after, like in the next three years,” said Rob Helm at Directions on Microsoft, an independent firm that advises business customers on how to deal with Microsoft.

(Reporting By Bill Rigby in Seattle and Alexei Oreskovic in San Francisco.; Editing by Edward Tobin, Martin Howell and Andre Grenon)

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Jamaica to abolish slavery-era flogging law

KINGSTON, Jamaica (AP) — Jamaica is preparing to abolish a slavery-era law allowing flogging and whipping as means of punishing prisoners, the Caribbean country’s justice ministry said Thursday.

The ministry said the punishment hasn’t been ordered by a court since 2004 but the statutes remain in the island’s penal code. It was administered with strokes from a tamarind-tree switch or a cat o’nine tails, a whip made of nine, knotted cords.

Justice Minister Mark Golding says the “degrading” punishment is an anachronism which violates Jamaica’s international obligations and is preventing Prime Minister Portia Simpson Miller‘s government from ratifying the U.N. convention against torture.

“The time has come to regularize this situation by getting these colonial-era laws off our books once and for all,” Golding said in a Thursday statement.

The Cabinet has already approved repealing the flogging law and amendments to other laws in the former British colony, where plantation slavery was particularly brutal.

The announcement was welcomed by human rights activists who view the flogging law as a barbaric throwback in a nation populated mostly by the descendants of slaves.

“We don’t really see that (the flogging law) has any part in the approach of dealing with crime in a modern democracy,” said group spokeswoman Susan Goffe.

But there are no shortage of crime-weary Jamaicans who feel that authorities should not drop the old statutes but instead enforce them, arguing that thieves who steal livestock or violent criminals who harm innocent people should receive a whipping to teach them a lesson.

“The worst criminals need strong punishing or else they’ll do crimes over and over,” said Chris Drummond, a Kingston man with three school-age children. “Getting locked up is not always enough.”

The last to suffer the punishment in Jamaica was Errol Pryce, who was sentenced to four years in prison and six lashes in 1994 for stabbing his mother-in-law.

Pryce was flogged the day before being released from prison in 1997 and later complained to the U.N. Human Rights Committee, which ruled in 2004 that the form of corporal punishment was cruel, inhuman and degrading and violated his rights. Jamaican courts then stopped ordering whipping or flogging.

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Michael Jackson’s assistant files class-action lawsuit against “This Is It” tour promoter

LOS ANGELES (TheWrap.com) – Michael Jackson has been dead for more than three years now – but apparently he lives on in the halls of America’s legal system.

Jackson’s former assistant, Michael Amir Williams, filed a class-action lawsuit against concert promoters AEG Live in Los Angeles Superior Court on Friday, claiming he and others hired to attend to the “Beat It” singer during his would-be “This Is It” tour at London’s O2 Arena were deprived of at least $ 7.5 million dollars in pay.

According to the suit, AEG was responsible for the financial loss because it hired Dr. Conrad Murray — who was found guilty of causing the singer’s death – to care for Jackson.

The suit claims that Jackson “bargained for the addition of Class to help Michael Jackson give the ‘first class performance’ as required by Contract. The express terms of the Contract allowed for class to be paid by AEG up to $ 7.5 million and any amount over $ 7.5 million to be paid for by Michael Jackson.”

Unfortunately, AEG also hired Murray, who administered a fatal dose of Propofol to Jackson in June 2009, before the concerts could take place. (Murray was convicted of involuntary manslaughter for Jackson’s death in November 2011.)

AEG’s lawyer, Marvin Putnam of O’Melveny & Myers, calls the lawsuit “frivolous” and “truly unfortunate.”

“This lawsuit is clearly frivolous; it is literally barred by at least four different legal doctrines,” Putnam said in a statement provided to TheWrap. “The easiest is that Mr. Williams was a personal employee of Michael Jackson’s, and was never a beneficiary of Mr. Jackson’s contract with AEG Live. As such he has no legal standing to sue on that contract. Nor can he legally bring a claim for Mr. Jackson’s wrongful death. The idea that Mr. Williams purports to sue on behalf of the many persons who did enter into relationships with AEG Live and Jackson in connection with the This Is It Tour, and with whom AEG Live parted ways with the utmost friendship and respect, is disgraceful. It is truly unfortunate that so many see Mr. Jackson’s demise as an opportunity to grab as much for themselves as possible. This is just the latest wrongful death lawsuit with someone hoping to profit from Michael Jackson’s tragic death in the same way they profited from his life.”

Williams’ suit alleges breach of express terms of contract; breach of implied terms of contract; and breach of implied covenant of good faith and fair dealing. The complaint seeks unspecified damages, plus court costs and attorneys’ fees.

(Pamela Chelin contributed to this report)

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World stocks fall as talks on US budget deal stall

AMSTERDAM (AP) — World stocks slid Thursday as the eurozone fell into recession and hopes faded for a quick agreement among U.S. leaders not to hike taxes and cut government spending — a potential double whammy which could derail the world’s biggest economy.

President Barack Obama has said he is willing to extend current tax cuts for all but the richest 2 percent, but Congress opposes that. Unless they reach a compromise, across-the-board tax increases and spending reductions will take effect automatically in 2013 at a cost of about $ 800 billion. Economists say that could knock the U.S. economy back into recession.

Meanwhile, the European Union’s statistics agency confirmed that the eurozone countries are in recession, with GDP contracting 0.1 percent in the third quarter from the previous three-month period.

European stocks fell in early trading. Britain’s FTSE 100 lost 0.3 percent to 5,704.60 while Germany’s DAX fell 0.5 percent to 7,063.42. France’s CAC-40 shed 0.3 percent to 3,389.17.

After sharp falls Wednesday, U.S. stock futures rose fractionally ahead of the release of several manufacturing surveys that some analysts said could show a modest improvement in activity in November. Dow Jones industrial futures rose 0.2 percent to 12,563 and S&P 500 futures added 0.3 percent to 1,357.

Analysts at Credit Agricole CIB said in a market commentary that a “cautious tone” is likely to permeate trading, given the uncertainty over the situation in the U.S. Obama is expected to meet the top leaders of both political parties at the White House on Friday for discussions.

Asian indexes tumbled, though Japanese stocks rose thanks to a drop in the value of the yen, which helps the country’s exporters.

Hong Kong’s Hang Seng tumbled 1.6 percent to 21,108.93. South Korea’s Kospi shed 1.2 percent to 1,870.72. Australia’s S&P/ASX 200 fell 0.9 percent to 4,349.20. Benchmarks in Singapore, Taiwan and Thailand also fell.

In mainland China, the Shanghai Composite Index lost 1.2 percent to 2,030.29, the lowest close in more than a month. The Shenzhen Composite Index lost 1.6 percent to 805.91.

In Japan, the Nikkei 225 index rallied 1.9 percent to close at 8,829.72 due to the impact of a weaker yen, which fell after Prime Minister Yoshihiko Noda reportedly pledged to dissolve the parliament by Friday if the opposition agreed to key reforms. Parliamentary elections could be set for Dec. 16.

Investors “hope that there may be some more stimulatory policies as a result of that,” said Peter Elston, strategist at Aberdeen Asset Management in Singapore.

Overall, many investors remain uneasy with the persistent weakness in the world’s biggest economies and a lack of confidence, which discourages companies and households from spending despite stimulus programs by central banks.

“The concern that I have is that when economies were weak three years ago, governments were able to come to the rescue,” Elston said. “They are not as able to provide support now because their balance sheets are a lot weaker than they were.”

Benchmark oil for December delivery was down 9 cents to $ 86.23 in electronic trading on the New York Mercantile Exchange, after a sharp rise Wednesday after Israel bombed targets in the Gaza Strip.

In currencies, the euro rose to $ 1.2765 from $ 1.2745 late Wednesday in New York. The dollar jumped to 81.21 yen from 80.17 yen, its second rise of more than one percent in two days.

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Pamela Sampson in Bangkok contributed to this story.

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Congress, Obama face dynamite in “fiscal cliff”: CEOs

BOSTON (Reuters) – Corporate America is raising the volume of its plea that the U.S. government avert a year-end “fiscal cliff” that could send the nation back into recession, but chief executives aren’t pushing the panic button just yet.

With a heated election season in the rear-view mirror, executives are calling on the White House and congressional leaders to head off a self-imposed deadline that could bring $ 600 billion in spending cuts and higher taxes early in 2013 if they are unable to reach a deal on cutting the federal budget deficit.

The Business Roundtable on Tuesday kicked off a print, radio and online ad campaign on which it plans to spend hundreds of thousands of dollars featuring the chiefs of Honeywell International Inc , Xerox Corp and United Parcel Service Inc calling on lawmakers to resolve the issue.

In an opinion piece published on Tuesday evening on the Wall Street Journal’s website, Goldman Sachs Chief Executive Officer Lloyd Blankfein urged the business community and the Obama administration to compromise and reconcile so as not to derail the fragile recovery.

One of the more dramatic warnings of the consequences of allowing the U.S. economy to go over the fiscal cliff came from Honeywell CEO David Cote.

“If the last debt ceiling discussion was playing with fire, this time they’re playing with nitroglycerin,” Cote said in an interview. “If they go off the cliff, I think it would spark a recession that’s a lot bigger than economists think. Some think it would just be a small fire. I think it could turn into a conflagration.”

The nonpartisan Congressional Budget Office (CBO) estimates that the U.S. economy would contract 0.5 percent in 2013 if the government fails to stop the budget cuts and tax increases – far below the 2 percent growth economists currently forecast.

A failure in Washington to solve the crisis by the year’s end could prompt major companies to curtail investment plans, said Duncan Niederauer, CEO of NYSE Euronext , operator of the New York Stock Exchange.

“We simply won’t be investing in the United States. We will be investing elsewhere where we have more certainty of the outcome,” Niederauer said in an interview.

About a dozen top U.S. CEOs, including General Electric Co’s Jeff Immelt, Aetna Inc’s Mark Bertolini, American Express Co’s Ken Chenault and Dow Chemical Co’s Andrew Liveris are scheduled to meet with President Barack Obama on Wednesday to discuss the issue.

The four are members of “Fix the Debt,” an ad-hoc lobbying organization that this week launched an advertising campaign that advocates long-term debt reduction.

UNCERTAINTY FACTOR

Bank of America Corp CEO Brian Moynihan said on Tuesday that worries about the cliff have companies holding off on spending.

“That uncertainty continues to hold back the recovery,” Moynihan said, speaking at an investor conference in New York.

Sandy Cutler, CEO of manufacturer Eaton Corp , shared his concern.

“Until we solve the fiscal issues (in the United States and Europe), you’re not going to get back to normal GDP growth,” Cutler told investors on Tuesday.

CEOs are not alone in this worry. The CBO report warned that failure to reach a deal could push the U.S. unemployment rate up to 9.1 percent, the highest since July 1991. It is currently 7.9 percent.

Obama and the Republican leadership of the House of Representatives have signaled a more conciliatory tone since last week’s election, when Obama soundly defeated Republican challenger Mitt Romney, whose party retained a majority in the House.

Wilbur Ross, an investor known for taking stakes in distressed companies, is bracing for higher tax rates in 2013.

“We, like many people, have been trying to utilize gains this year. It does seem that the probability is that rates will go up,” Ross said in an interview with Reuters Insider. “We don’t have a “for sale” sign on anything. But we are mindful that there is a benefit to concluding things this year rather than next.

NO SIGNS OF PANIC

Concerns about the cliff have not prompted customers to cancel orders, though they have added to an overall level of uneasiness that has companies wary of making large capital purchases or hiring significant numbers of new workers.

“We haven’t seen the panicking, like, ‘I’m not going to order something because of the fiscal cliff,’” said Steve Shawley, chief financial officer of heating and cooling systems maker Ingersoll Rand Plc . “Customers are being very judicious with their orders.”

Likewise, JPMorgan Chase & Co CEO Jamie Dimon last month told investors he did not expect the negotiations to hurt lending in the fourth quarter.

“The fiscal cliff isn’t going to change us,” Dimon said, referring to JPMorgan’s commercial bank, which loans money to businesses. The bank’s investment banking side could be more vulnerable if the debate makes investors jittery, he allowed.

WEAPONS, MEDICINES IN THE CROSS-HAIRS

The defense and healthcare sectors are the most vulnerable to the fiscal cliff, as they face the threat of sequestration — automatic, across-the-board cuts to their funding.

Makers of weapons systems note that they have long been preparing for declining sales as the United States winds down two long wars in Iraq and Afghanistan. The industry has already shed tens of thousands of jobs and closed facilities.

Lockheed Martin Corp’s new president and chief operating officer, Marillyn Hewson, told analysts on Monday her company had been preparing for tighter defense budgets for years, even before the sequestration deal.

“We aren’t going to see a major change,” said Hewson. “We’ve been very proactive as a leadership team in taking actions in recent years to address our cost structure, to look at how we can make our product more affordable.”

Automatic cuts to the federal budget could reduce federal health spending by $ 21.5 billion in 2013, potentially affecting everything from Medicare to the Food and Drug Administration, according to an analysis by PwC’s Health Research Institute.

Vincent Forlenza, the CEO of Becton Dickinson & Co , said the labs he supplies have held off on buying new instruments because of the threat of spending cuts.

“If we don’t get to a deal we will have another year of paralysis and putting off research,” Forlenza said. “The impact of uncertainty on the (National Institutes of Health) budget is causing our research customers to put off research.”

(The story corrects spelling of company name in penultimate paragraph to “Becton Dickinson” instead of “Beckton Dickinson”)

(Additional reporting by John McCrank, Nick Zieminski, Caroline Humer, Jed Horowitz, Sharon Begley and Daniel Wilchins in New York, Rick Rothacker in Charlotte, North Carolina, Nichola Groom in Los Angeles, Andrea Shalal-Esa in Washington, Debra Sherman in Chicago and Anna Driver in Houston; Editing by Patricia Kranz and Steve Orlofsky and Carol Bishopric)

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RIM to offer free voice calls over Wi-Fi with BBM

TORONTO (AP) — BlackBerry users will soon be able to make free voice calls over a Wi-Fi network using the popular BBM messaging service.

Research In Motion Ltd. announced Wednesday that it’s adding the feature to BBM. Users will be able to switch back and forth from a text chat to a voice call. A split-screen option will let them talk and text at the same time.

The new feature is a free update for existing customers and comes months before RIM introduces its new BlackBerry 10 smartphones, which are seen critical to RIM’s survival.

RIM made a surprise disclosure in its most recent earnings report in announcing that the number of subscribers grew, thanks in part to emerging markets and its popular BBM service. It’s struggling in North America as customers migrate to flashier iPhones and Android phone.

RIM stopped short of offering the BBM voice feature over wireless carriers’ own cellular networks. Doing so would have potentially created more congestion on cellular data networks and deprive carriers of revenue for voice calls. With the new feature, the free calls are limited to times and places where Wi-Fi is available.

The Canadian company said the BBM voice feature is especially attractive for developing markets. Unlike regular texts, BBM messages are not charged on a per-text basis.

Although RIM is struggling in North America, the BlackBerry continues to sell well in such markets as South Africa, Nigeria and Indonesia.

The BBM service has long been a reason for BlackBerry users to not defect to other smartphones but there are rival messaging services.

RIM said the BBM voice update is currently available for BlackBerry smartphones running the BlackBerry 6 operating system or higher, with plans for BlackBerry 5 later. RIM’s latest phones run the 7 operating system. The next version, BlackBerry 10, will come soon after a Jan. 30 launch event.

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Canada’s Carney says rate hikes “less imminent”

TORONTO (Reuters) – Interest rate hikes have become less imminent than the Bank of Canada once expected, although rates are still likely to rise, central bank Governor Mark Carney said in an interview published on Saturday.

“Over time, rates are likely to increase somewhat, but over time, so a less imminent timing relative to our expectation,” Carney said in an interview with the National Post newspaper.

Canada’s economy rebounded better than most from the global economic recession, and the Bank of Canada is the only central bank in the Group of Seven leading industrialized nations that is currently hinting at higher interest rates.

But Carney has also made clear that there will be no rate rise for a while, despite high domestic borrowing rates that he sees as a major risk to a still fragile economy.

“We’ve been very clear in terms of lines of defense in addressing financial vulnerabilities,” he said in the interview. “And the most prominent one, obviously, in Canada, is household debt.”

He said the bank was monitoring the impact of four successive government moves to tighten mortgage lending, which aimed to take the froth out of a hot housing market without causing a damaging crash in prices.

A Reuters poll published on Friday showed the majority of 20 forecasters believe the government has done enough to rein in runaway prices, preventing the type of crash that devastated the U.S. market.

The experts expect Canadian housing prices to fall 10 percent over the next several years, but they do not expect the recent property boom to end in a U.S.-style collapse.

(Reporting by Janet Guttsman; Editing by Vicki Allen)

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Accuser recants sex claims against Elmo puppeteer: report

LOS ANGELES (Reuters) – The man who claimed he had underage sex with the puppeteer behind “Sesame Street” character Elmo recanted his claims on Tuesday, U.S. media reported.

The unnamed man, now 23, had claimed that Elmo puppeteer Kevin Clash had a sexual relationship with him when the accuser was 16 years old, potentially engulfing one of the biggest childhood brands in an underage sex scandal.

“He wants it to be known that his sexual relationship with Mr. Clash was an adult consensual relationship,” the law firm Andreozzi and Associates, who represent the man, told U.S. media outlets in a statement.

Clash, 52, who had denied the allegations, said in a statement obtained by Reuters on Tuesday: “I am relieved that this painful allegation has been put to rest. I will not discuss it further.”

New York-based Sesame Workshop said on Monday that its own inquiry had concluded that the claims of underage sexual conduct against Clash were unsubstantiated.

“We are pleased that this matter has been brought to a close, and we are happy that Kevin can move on from this unfortunate episode,” Sesame Workshop said in a statement on Tuesday.

Clash, 52, the voice of Elmo for nearly three decades, had acknowledged a past relationship with his accuser but said on Monday the pair were both consenting adults at the time. He termed the allegations “false and defamatory.”

“I am a gay man. I have never been ashamed of this or tried to hide it,” Clash said on Monday, saying he was taking a break from the TV show to deal with the situation.

Sesame Workshop said the allegations involving Clash came to its attention in June when the accuser first contacted the company by email. A company executive said it had found “absolutely no evidence that the allegations were true.”

The Elmo character debuted on “Sesame Street” in 1979. While Clash was the third performer to animate the child-like shaggy red monster, Sesame Workshop credits him with turning Elmo into the international sensation he became.

(Reporting By Eric Kelsey and Piya Sinha-Roy, editing by Jill Serjeant and Cynthia Johnston)

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UK unemployment continues to fall

14 November 2012 Last updated at 06:01 ET

Live: Bank of England inflation report and news conference

The number of people out of work in the UK has fallen to its lowest total for more than a year.

Unemployment fell by 49,000 to 2.51 million in the three months to September, taking the jobless rate to 7.8% from 7.9%.

The Office for National Statistics said that almost all the 49,000 fall was due to a decline in youth unemployment.

But the ONS said that the claimant count rose by 10,100 last month to 1.58 million, the highest since July.

The unemployment total is now 110,000 lower than for the July-September quarter last year, the ONS said. The number of people in work increased by 100,000 in the latest quarter to just under 30 million, a rise of more than half a million over the past year.

However, economists suggested that the figures indicated that the pace of job creation is slowing.

“The data therefore add to recent signs from business surveys that growing uncertainty about the economic outlook is causing increasing numbers of firms to retrench and focus on cost cutting,” said Chris Williamson, economist at economic research firm Markit.

Continue reading the main story

Even if employment in the private sector rises modestly rather than falls, it will likely not be enough to offset job cuts in the public sector as well as cater for an increasing labour force”

End Quote Howard Archer IHS Global Insight

Speaking at a news conference to present the Bank of England’s quarterly economic outlook, governor Sir Mervyn King said the figures showed that the labour market was “pretty strong”.

But he said it was hard to reconcile this with the weak growth in the economy.

Sir Mervyn said the economy had barely grown over the past two years and forecast that the recovery would be “subdued”.

“The road to recovery will be long and winding, but there are good reasons to suggest we are travelling in the right direction,” he said.

Other figures from the ONS showed that long-term unemployment – those out of work for over a year – increased by 12,000 in the quarter to September to 894,000, while 443,000 people have been jobless for more than two years, up by 21,000.

Part-time employment increased by 49,000 to 8.1 million, close to a record high, while there were 51,000 more people in full-time jobs, at 21.4 million. Unemployment among women fell by 10,000 to 1.09 million, and by 39,000 among men to 1.43 million.

Although the latest fall in unemployment was due to a reduction in youth unemployment, the ONS said that the jobless rate among 16 to 24-year-olds was still 963,000. This figure includes 315,000 unemployed young people in full-time education, the ONS said.

‘Challenges’

Nick Palmer from the ONS: “The basic message is that unemployment has continued to fall”

Mark Hoban, the Employment Minister, told the BBC: “This is another good set of figures. We’ve seen the number of people in work increase by 100,000 and youth unemployment is below a million again.”

But he insisted that there was “no room for complacency and that much hard work” remained to be done to get people back to work. “There are still some real challenges out there. We still need to tackle… long-term unemployment.”

Howard Archer, chief UK economist at IHS Global Insight, said the figures suggest “signs of some softening in the labour market’s recent impressive resilience”.

He said: “The most obvious sign of softening in the labour market came in a 10,100 rise in the number of claimant count unemployed, which was the largest increase for 13 months and followed a small rise of 800 in September.

“Even if employment in the private sector rises modestly rather than falls, it will likely not be enough to offset job cuts in the public sector as well as cater for an increasing labour force.”

The breakdown showed wide disparities across the UK, with unemployment falling in the North East and North West, but rising in Scotland and Northern Ireland.

The ONS also released pay data showing that average earnings increased by 1.8% in the year to August, 0.1% up on the previous month.

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Planned Parenthood seeks injunction over Oklahoma health program

OKLAHOMA CITY (Reuters) – Planned Parenthood asked a federal judge on Tuesday to stop Oklahoma from blocking it from participating in a federally funded nutrition program that helps poor women and children at three clinics in the Tulsa area.

The request, filed in federal court in Oklahoma City, appeared aimed at combating a move similar to those taken by conservative Republicans in more than a dozen states over the past two years to eliminate funding for health services provided by Planned Parenthood.

The non-profit women’s health organization has administered a federal program called Women, Infants & Children for 18 tears in Oklahoma’s Tulsa County, but the state health department said in September it would let other clinics provide the services, blocking Planned Parenthood from taking part.

That decision followed a failed attempt in the Republican-controlled Oklahoma legislature in May to prohibit WIC benefits from being administered by Planned Parenthood because it provides abortion referrals.

The state health department has denied its decision was tied to Planned Parenthood’s position on abortion, citing decreasing caseloads, high costs and billing questions with the Planned Parenthood clinics as reasons for its decision. State health officials were not immediately available for comment.

The Oklahoma Policy Institute, a nonprofit organization that examines public policy, has called the health department’s reasons inaccurate.

Planned Parenthood attorney Tamya Cox said the group was seeking the injunction to protect access to nutritional services for about 3,000 women and children that used the three clinics in September.

The group’s request said that other clinics in Tulsa County can’t absorb the caseload that the Planned Parenthood clinics handled and that there was a three-month waiting list to make an appointment at the other clinics.

“Politics should never interfere with a woman’s access to health services – or food for her children,” Cox said.

(Editing by Cynthia Johnston and Eric Walsh)

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Cellphones may get smaller Holiday lift: Gartner

(Reuters) – The pre-Christmas shopping season is likely to boost cellphone sales less that usual this year as a weaker global economy forces consumers to cut back, research firm Gartner said on Wednesday.

“It will be a cautious quarter. Consumers are either cautious with their spending or finding new gadgets like tablets, as more attractive presents,” Gartner analysts said.

Gartner said sales of cellphones declined 3 percent in the third quarter from a year earlier, falling for the third quarter in a row, while sales of smartphones grew 47 percent.

Smartphone growth this year is boosted by strong demand in China, where annual sales will grow to 165-170 million from 78 million a year earlier, it said.

“There is huge growth coming from the Chinese market,” said Gartner analyst Anshul Gupta.

This is helping local players to climb in global cellphone rankings, with ZTE, Huawei and TCL now among the seven largest cellphone vendors globally, Gartner said.

Samsung Electronics continues to lead the global cellphone sales ranking, ahead of Nokia and Apple. In smartphone sales Nokia, which still lead the market early last year, dropped to No 7, Gartner said.

(Reporting By Tarmo Virki)

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Beating tax cheats key to Italy’s recovery plan

ROME (AP) — Good plumbers may be worth their weight in gold, but when one was spotted zipping around in a bright red Ferrari, Italian tax police were fast on his trail.

Stamping out entrenched tax evasion is crucial to Premier Mario Monti‘s quest to keep Italy from succumbing to the European debt crisis, and it is critical to fellow eurozone members in more dire straits, such as Greece and Spain — which are also notorious for making cheating the taxman a way of life.

Indeed, Greece’s international rescue creditors have been pressing Greece for two years to reform its ailing tax system, citing poor collection as a key factor keeping the country mired in crisis. In Spain, where tax fraud is rampant, as much as €90 billion ($ 150 billion) is lost each year to tax fraud — the equivalent of the country’s national debt, according to Spain’s main tax inspectors union.

To succeed in Italy, authorities will have to catch the legions of self-employed and small business owners who brazenly lie about their earnings, like the plumber in the eastern town of Pescara, who socked away undeclared income in 30 bank accounts, or a successful pastry shop owner in Calabria, who on his tax return claimed he was earning next to crumbs.

And those are the less sophisticated schemers.

Tax police officials say that wealthy Italians, their companies and foreigners who make their money in Italy are increasingly trying to avoid taxes by using such strategies as falsely declaring that their base of operations or residence is abroad.

Another daunting challenge is the so-called “submerged” economy, a term embracing Italians who declare only a fraction or nothing at all of their earnings — and dentists, lawyers, doctors and other big-earning professionals are frequently among the worst offenders.

Tax evasion of all types in Italy totals about euros 240 billion ($ 300 billion), or 15 percent of the country’s gross domestic product of €1.6 trillion ($ 2 trillion), tax police estimate. Winning the war on tax cheats could therefore more than wipe out the country’s budget deficit, which is expected to increase to euros 42 billion ($ 53 billion), or 2.6 percent of GDP this year. That would start knocking away at the nation’s colossal public debt of €2 trillion ($ 2.5 trillion), or 125 percent of GDP.

But “big international frauds are up,” lamented Lt. Col. Gianluca Campana, in charge of the income tax unit revenue protection office at the Guardia di Finanza, Italy’s financial police corps which reports to the Economy Ministry.

The entrenched practice by many cafes, eateries, hair dressers and similar small business of neglecting to give customers mandatory cash register receipts commonly grabs the attention in crackdowns on tax evasion in Italy.

But, cautioned Campana, “one false (big business) invoice can equal no cash register receipts for coffees for two months.”

Over all of 2011, the total of non-declared income discovered by tax police amounted to some €50 billion ($ 65 billion), of which some 20 percent was due to international tax evasion, he said. By comparison, in the first nine months of this year, tax police discovered some €40 billion in undeclared income, with 30 percent of that blamed on international tax evasion, Campana said.

With the economic crisis shrinking bottom lines, and Italy increasingly on the hunt for big-time evasion, especially by big businesses, “there is a tendency to move capital abroad, using maneuvers apparently legal but which really are not,” Campana said. A classic technique consists of declaring one’s formal residence abroad in tax havens like Monte Carlo. Also common are companies that clearly have their business base in Italy but claim it is abroad in countries with far lower tax brackets.

Campana is armed with three degrees, including a masters in tax law from Milan’s Bocconi University, the prestigious economics institute formerly headed by Monti. He brings skills to this specialized police corps that are as finely tuned as sharp-shooting.

“We are going after the big cases (of evasion) in order to rake in more money,” Campana said.

The Ferrari-driving plumber hid some €2 million ($ 2.6 million) of his income over several years by giving his customers invoices — for jobs ranging from fixing leaks to installing new bathrooms — for the actual cost of his work, but kept a second, false registry of much lower figures for tax purposes, said Pescara tax police Col. Mauro Odorisio.

Armed with a 2008 law, authorities confiscated assets belonging to the plumber equivalent to the approximately €1 million ($ 1.3 million) they contend he owed in taxes, Odorisio said.

With Ferraris in red or yellow, and snazzy Porsches parked inside, Guardia di Finanza garages practically resemble luxury car dealerships.

The cars get sold to help recoup unpaid taxes and interest.

Overall, tax revenues in Italy were up by 4.1 percent, says the Economy Ministry, when comparing figures from the first eight months of 2012 with the same period in 2011, but much of that was due to new taxes, and not necessarily a revolution in citizens’ consciences about tax obligations.

Monti’s recipe relies heavily on taxes that are nearly impossible to avoid, such as sales tax. He also revived a property tax that his populist predecessor, Premier Silvio Berlusconi, had abolished in a promise to voters.

The ministry’s report last month noted that the property tax figured prominently in the “tendency toward growth” in tax revenues. But sales tax revenue dropped slightly despite higher sales tax rates, indicating that consumers were feeling the pinch of the stagnant economy.

The heavier fiscal burden seems to have driven some honest citizens to rebel against the engrained culture of tax evasion.

The number of phone calls from the public to the tax police’s hotline to report stores, restaurants and other businesses that didn’t give customers sales receipts has almost doubled in the first nine months of this year, compared with the same period in 2011.

It’s apparently dawning on Italians that shirking taxes in the end only costs them, in terms of ever-higher levies and cutbacks in public services.

Citizens now increasingly understand that “the lack of revenue over time caused by tax evaders forced the government to stiffen the tax burden on categories where you can’t evade taxes,” Campana said, referring to workers whose taxes are deducted from paychecks. Another area where evasion is close to impossible is real estate ownership.

Odorisio noted the crackdown included extending the statute of limitations on tax evasion from six to eight years and establishing prison as a penalty for big-time evasion.

Other weapons include a measure promoted by the Monti government that limits cash payments to no more than €1,000. Paying by credit card or personal check is a relatively new habit for Italians, who are used to carrying wads of cash in their pockets, even for big-ticket items like home renovations or vacations.

Past governments in Italy sometimes resorted to tax amnesties to try to boost revenues. But critics, contending some Italians counted on such a possibility, described that strategy as only perpetuating the tax cheat culture.

Spain hasn’t had much success with its own tax amnesty introduced by the conservative government in March. That measure, expiring soon, allows undeclared assets or those hidden in tax havens to be repatriated by paying a 10 percent tax without criminal penalty. The amnesty is estimated to recuperate far less than the expected €2.5 billion ($ 3.25 billion).

Greece saw demands for tax system reform from international rescue creditors added on to conditions for future rescue loan payments, as Greek authorities acknowledged that a high-profile campaign to crack down on major tax cheats has produced disappointing results.

The cash-strapped government over the last 10 months recovered just €19 million ($ 25 million) of the €13 billion ($ 17 billion) of arrears on the list. A prominent Greek magazine publisher recently tapped anger over rich tax evaders by publishing a list of people allegedly holding Swiss bank accounts. He was acquitted this month of breaching privacy laws.

Meanwhile, Italian tax police are chasing after cheats who have shown some of the most chutzpah about not paying their fair share of taxes, like the Padua woman who advertised on the Internet that she had a couple of “cash-only” bed and breakfast rooms to let.

Tax police discovered the lodgings are part of an apartment in public housing she was given after falsely declaring she was indigent on her annual tax forms.

____

AP reporters Derek Gatopoulos in Athens and Ciaran Giles in Madrid contributed to this report.

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General investigated for emails to Petraeus friend

PERTH, Australia (AP) — In a new twist to the Gen. David Petraeus sex scandal, the Pentagon said Tuesday that the top American commander in Afghanistan, Gen. John Allen, is under investigation for alleged “inappropriate communications” with a woman who is said to have received threatening emails from Paula Broadwell, the woman with whom Petraeus had an extramarital affair.

Defense Secretary Leon Panetta said in a written statement issued to reporters aboard his aircraft, en route from Honolulu to Perth, Australia, that the FBI referred the matter to the Pentagon on Sunday.

Panetta said that he ordered a Pentagon investigation of Allen on Monday.

A senior defense official traveling with Panetta said Allen’s communications were with Jill Kelley, who has been described as an unpaid social liaison at MacDill Air Force Base, Fla., which is headquarters to the U.S. Central Command. She is not a U.S. government employee.

Kelley is said to have received threatening emails from Broadwell, who is Petraeus’ biographer and who had an extramarital affair with Petraeus that reportedly began after he became CIA director in September 2011.

Petraeus resigned as CIA director on Friday.

Allen, a four-star Marine general, succeeded Petraeus as the top American commander in Afghanistan in July 2011.

The senior official, who discussed the matter only on condition of anonymity because it is under investigation, said Panetta believed it was prudent to launch a Pentagon investigation, although the official would not explain the nature of Allen’s problematic communications.

The official said 20,000 to 30,000 pages of emails and other documents from Allen’s communications with Kelley between 2010 and 2012 are under review. He would not say whether they involved sexual matters or whether they are thought to include unauthorized disclosures of classified information. He said he did not know whether Petraeus is mentioned in the emails.

“Gen. Allen disputes that he has engaged in any wrongdoing in this matter,” the official said. He said Allen currently is in Washington.

Panetta said that while the matter is being investigated by the Defense Department Inspector General, Allen will remain in his post as commander of the International Security Assistance Force, based in Kabul. He praised Allen as having been instrumental in making progress in the war.

The FBI’s decision to refer the Allen matter to the Pentagon rather than keep it itself, combined with Panetta’s decision to allow Allen to continue as Afghanistan commander without a suspension, suggested strongly that officials viewed whatever happened as a possible infraction of military rules rather than a violation of federal criminal law.

Allen was Deputy Commander of Central Command, based in Tampa, prior to taking over in Afghanistan. He also is a veteran of the Iraq war.

In the meantime, Panetta said, Allen’s nomination to be the next commander of U.S. European Command and the commander of NATO forces in Europe has been put on hold “until the relevant facts are determined.” He had been expected to take that new post in early 2013, if confirmed by the Senate, as had been widely expected.

Panetta said President Barack Obama was consulted and agreed that Allen’s nomination should be put on hold. Allen was to testify at his confirmation hearing before the Senate Armed Services Committee on Thursday. Panetta said he asked committee leaders to delay that hearing.

NATO officials had no comment about the delay in Allen’s appointment.

“We have seen Secretary Panetta‘s statement,” NATO spokeswoman Carmen Romero said in Brussels. “It is a U.S. investigation.”

Panetta also said he wants the Senate Armed Services Committee to act promptly on Obama’s nomination of Gen. Joseph Dunford to succeed Allen as commander in Afghanistan. That nomination was made several weeks ago. Dunford’s hearing is also scheduled for Thursday.

___

Associated Press writer Slobodan Lekic in Kabul, Afghanistan, contributed to this report.

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Storm volunteers mingle with stars at Glamour fest

NEW YORK (AP) — Sandra Kyong Bradbury was star struck. She had just spied Supreme Court Justice Ruth Bader Ginsburg a few feet away.

“How can you top that?” asked Bradbury, a New York City neonatal nurse who had helped evacuate infants from a hospital that lost power during the height of Superstorm Sandy. She was amazed that she was being honored at the same event as a Supreme Court justice — the annual Glamour Women of the Year awards, where stars of film, TV, fashion and sports share the stage with lesser-known women who have equally impressive achievements to their name.

Few events bring together such an eclectic group of honorees, not to mention presenters. At the Carnegie Hall ceremony Monday night, HBO star Lena Dunham, creator of “Girls” and a heroine to a younger generation, was introduced by Chelsea Handler and paid tribute in her speech to Nora Ephron, who died earlier this year. Ethel Kennedy was praised by her daughter, Rory, who has made a film about her famous mother. Olympic gymnast Gabby Douglas, 17, was honored along with swimming phenom Missy Franklin, also 17, and other Olympic athletes, introduced by singer Mary J. Blige and serenaded by American Idol winner Phillip Phillips. Singer-actress Selena Gomez was lauded by her friend, the actor Ethan Hawke.

But the most moving moments of the Glamour awards, now in their 22nd year, are often those involving people of whom the audience hasn’t heard. This year, the most touching moment came when one honoree, Pakistani activist and filmmaker Sharmeen Obaid-Chinoy, brought onstage a woman who’d been the victim of an acid attack in her native Pakistan. Obaid-Chinoy won this year’s documentary short Oscar for a film about disfiguring acid attacks on Pakistani women by the men in their lives.

The evening carried reminders of Superstorm Sandy, with Newark, N.J. Mayor Cory Booker introducing some 20 women who’d been heavily involved in storm relief work. “They held us together when Sandy tried to blow us apart,” Booker said. The women worked for organizations like the American Red Cross, but also smaller volunteer groups like Jersey City Sandy Recovery, an impromptu group formed by three women in Jersey City, N.J., who wanted a way to help storm-ravaged communities.

Singer-rapper Pharrell Williams introduced one of his favorite architects, the Iraqi-born Zaha Hadid, 62, who designed the aquatic center for the London Olympics and is now at work on 43 projects around the world.

Activist Erin Merryn was honored for her work increasing awareness of child sex abuse — a horror she had endured during her own childhood. A law urging schools to educate children about sex abuse prevention, Erin’s Law, has now passed in four states. “I won’t stop until I get it passed in all 50 states,” Merryn insisted in her speech.

Vogue editor Anna Wintour saluted a fellow fashion luminary, honoree Annie Leibovitz, the creator of so many iconic photographs over the years. Jenna Lyons, the president of J. Crew, got kind words from her presenter, former supermodel Lauren Hutton. Chelsea Clinton brought up a stageful of women from across the country who had been involved in politics this year, noting that, while there is still a long way to go, progress was made in 2012.

The lifetime achievement award went to Ginsburg, 79, who made a few quips about being honored by a fashion magazine. “The judiciary is not a profession that ranks very high among the glamorously attired,” the justice said. She also noted that although she was only the second female Supreme Court justice (Sandra Day O’Connor came first), she was the first justice to be honored by Glamour.

An affectionate tribute to the late Ephron followed, with three actresses — Cynthia Nixon, and two Meryl Steep daughters, Mamie and Grace Gummer, reading from a graduation speech she had given at Wellesley College.

Actress Dunham, in her speech, touched on politics and expressed her own relief that President Barack Obama had won re-election, saying she felt it was crucial for reproductive freedom and other issues of women’s rights. “I wanted control of my womb before I really knew what my womb was,” she quipped.

After the ceremony, which was presided over by Glamour editor in chief Cindi Leive, honorees and presenters headed to a private dinner. There, Sandy volunteers mingled with the stars. One woman, Lynier Harper, had spent six nights during Sandy at the Brooklyn YMCA where she works, taking care of other people. “When I finally went back home, my house was totally destroyed,” she said. She has moved in with her sister while she seeks a new home.

A group of seven nurses came from New York University’s Langone Medical Center, which lost power during the storm. The neonatal intensive care nurses had to carry the babies down nine flights of stairs, in the dark, squeezing oxygen into their lungs, to get them to safety.

And there were the three women from Jersey City Sandy Recovery, sinking in the proximity to the so many impressive people.

“I just shook Ruth Bader Ginsburg‘s hand,” exulted one of them, Candice Osborne. “How awesome!”

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To Forgive Is Divine (Then Comes the Tax Bill)

The people who brought you Occupy Wall Street have come up with an extremely clever idea: raising money to buy random citizens’ overdue debt, and then—poof!—forgive it. One day a debtor is fielding calls from a collection agency; the next day, she’s not.

If this vanishing act sounds too good to be true—and it might be, but we’ll get to that—it helps to start at the beginning. Debt is easiest to think about as a negative thing: It’s money you owe somebody. From that somebody’s perspective, though, debt is money coming due. That makes it an asset that can be bought and sold—at a discount based on the likelihood it will be repaid.

When debt becomes overdue, it gets cheaper, and when it becomes really overdue, it sells for pennies on the dollar. Whoever buys debt can do whatever they like with it—including forgive it. That’s the idea that Strike Debt, a group that grew out of the Occupy Wall Street movement, says it will put into practice with a project it calls the Rolling Jubilee. For every dollar contributed, the group expects to be able to buy and forgive $ 20 of distressed debt.

David Rees, a humorist best known for his Get Your War On comic and How to Sharpen Pencils book, wrote on his blog that Strike Debt has successfully tested the idea with a $ 500 purchase of $ 14,000 in debt, a ratio of 1 to 28. “Now, after many consultations with attorneys, the IRS, and our moles in the debt-brokerage world, we are ready to take the Rolling Jubilee program LIVE and NATIONWIDE,” Rees wrote, “buying debt in communities that have been struggling during the recession.” Strike Debt is advertising the effort as “a buyout of the people, by the people.”

It’s a laudable idea—although the $ 1 million target Strike Debt has floated amounts to a drop in the bucket of American consumers’ overall indebtedness, which stood at $ 11.38 trillion as of June 30, according (PDF) to the Federal Reserve Bank of New York. (That’s actually a generous comparison, given standard measurements of drops and buckets.) So if this is a people’s bailout, it’s a symbolic one, dwarfed by the lifelines that major financial institutions got during the crisis.

Slate’s Matthew Yglesias quibbles that the Rolling Jubilee benefits people who have racked up debt while it ignores those who are simply poor. “Given two struggling families, one of which is indebted and one of which isn’t, it’s not clear why you’d think that the family that’s borrowed heavily in the past is more worthy of assistance,” he writes. “And similarly, for any particular indebted family it’s not obvious that on a dollar-per-dollar basis debt forgiveness is more helpful than just handing over some cash.”

This is all nitpicking, though, compared with the big, inevitable catch: taxes. A person’s debt can’t truly disappear with no consequences. The amount forgiven is technically income—“cancellation of debt income,” in Internal Revenue Service terms. It’s a dollar-for-dollar conversion, says Robert Willens, a tax expert based in New York. For example, a person with regular income of $ 50,000 who has $ 25,000 in credit-card debt discharged will be taxed on April 15 as if she earns $ 75,000.

“There’s not any doubt about the tax outcome at all,” says Willens. “That’s almost always the case with debt discharges—you wind up with this tax problem that almost always mitigates the benefit of the discharge.”

There are exceptions—such as when the taxpayer is insolvent, in which case taxes are only due on the amount of the forgiveness that exceeds her insolvency, says David Miller, a tax attorney at Cadwalader, Wickersham & Taft. Bankruptcy is another exception.

Strike Debt didn’t make a representative available for an interview despite several requests, so I wasn’t able to ask about the particulars of who the group plans to buy debt from, or about its legal structure. Miller suggests that the group form a 501(c)3 organization that negotiates directly with credit-card companies on behalf of individual debtors and structures its payments as grants. Solvent people would still owe tax, but donors to the cause would be able to get a tax deduction. (Strike Debt, if you’re reading, Miller says he is happy to help you set up this structure pro bono.)

Credit scores also go down when debt is written off, as opposed to repaid.

David Graeber, whom Bloomberg Businessweek profiled as “the anti-leader of Occupy Wall Street” in an October 2011 cover story, wrote about the concept of jubilees in his book Debt: The First 5,000 Years. They’re rare today, but in ancient Babylon, Assyria, and Egypt, rulers regularly forgave their subjects’ debt during lean years as a means of staving off revolt.

A fundraiser to kick off the Rolling Jubilee is scheduled for Nov. 15 in New York, featuring Janeane Garofalo, Max Silvestri, Jeff Mangum, Tunde Adebimpe, and other artists. The cheapest ticket goes for $ 25 (enough to erase $ 500 in debt).

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