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If you can’t trust hedge-fund managers, who can you trust? Six high-level figures in the business and finance worlds were arrested and charged on Friday with what authorities are describing as the biggest insider-trading ring in a generation. Sri Lankan native Raj Rajaratnam, founder of the New York-based Galleon Group, is accused of being the ringleader of a group that included IBM and Intel executives and profited by as much as $20 million in improper gains. The group’s information network spread far enough that Rajaratnam and his associates could gain inside information on companies like Google, Sun Microsystems, and Hilton Hotels—off of whom Galleon Technology Funds made $4 million after Blackstone took the hotel chain private. The criminal complaint relies heavily on phone wiretaps—some recorded by a cooperating witness, as yet unnamed, who is said to be a former Galleon employee—which show Rajaratnam and his alleged accomplices operating under a high degree of secrecy: “I’m dead if this leaks,” says co-defendant Danielle Chiesi in one recording, “and my career is over. I’ll be like Martha f—ing Stewart.”
Sen. John Kerry said Saturday it would be "irresponsible" for President Obama to send more troops to Afghanistan while the country's presidential elections are still undecided. "Look, it would be entirely irresponsible for the president of the United States to commit more troops to this country, when we don't even have an election finished and know who the president is and what kind of government we're working in," said Kerry, chair of the Senate Foregin Relations Committee, speaking from Kabul. Allegations of election fraud have left the country in political uncertainty, and Taliban insurgents pose a considerable threat to the government’s stability as well. The U.S. commander in Afghanistan, Gen. Stanley McChrystal has recommended sending another 40,000 troops. Kerry's interview with CNN airs Sunday on State of the Union.
Seeking to put an end to terror attacks that have killed more than 150 people in several cities in recent days, Pakistan moved some 30,000 troops into the Taliban's home base of South Wazirstan on Saturday. The offensive follows several weeks of air and artillery attacks against Taliban positions. Tens of thousands of civilians had fled the area after the military dropped leaflets telling them to leave. Phone lines were down in the region on Saturday, so information is scarce, but the Associated Press reports that five soldiers and 11 militants have already been killed. Officials say the offensive’s top target is Qari Hussein, a Mehsud ally who is considered a mastermind of suicide bombings. The region borders Afghanistan and the U.S. government has long pressured Pakistan to take action against the militants, whose territory is considered a sanctuary for terrorists.
Insurance companies are paying the price for their decision to turn against health-care reform as fallout continues over an industry study warning of higher premiums under Democratic legislation. Now President Obama is returning fire personally, using his Saturday radio address to blast their "deceptive and dishonest ads" and accusing companies of only caring about their "profits and bonuses" in opposing a bill. “It’s smoke and mirrors,” Obama said. “It’s bogus. And it’s all too familiar. Every time we get close to passing reform, the insurance companies produce these phony studies as a prescription and say, ‘Take one of these, and call us in a decade.’ Well, not this time.” Obama said that Congress could look into ending the insurance companies' longstanding antitrust exemption. With every relevant committee in Congress now behind a health-care bill, negotiations are at a crucial point and the White House is trying to complete a bill by the end of the year.
Journalist Mazair Bahari had been reporting from Iran for a decade when he was arrested in the wake of the contested re-election of Iranian President Mahmoud Ahmadinejad in June. Humanitarian considerations may have played a role in his release from prison, as Bahari is expecting his first child October 26, and the mother has suffered serious health complications. The Wall Street Journal reported that the reporter’s case was raised when the U.S. and Iran held talks in Geneva recently. Bahari is an award-winning filmmaker, and had a solid reputation for balanced reporting while working as a correspondent in Iran.
Enough with the permanent campaign, writes Peggy Noonan in the Wall Street Journal, and both former JFK advisor Ted Sorensen and former Reagan advisor Ken Duberstein—two supporters of Barack Obama in 2008—agree. Speaking at a panel hosted by Harvard’s Kennedy School of Government, both men said the president should not get sucked into perpetual campaign mode—a legacy of Bill Clinton—or he risks alienating voters who are skeptical of his health-care overhaul. And that skepticism is warranted, Noonan argues, because unlike in FDR’s time, government expansion is not new territory today. Americans have watched government programs grow and multiply across the country for years, and they know the costs in money and autonomy that come with it. Citing an interview by The Daily Beast’s Lloyd Grove, Noonan says Republican Rep. Paul Ryan has a clear-eyed understanding of the real price of health-care reform.
Reverend Al Sharpton is threatening to file suit against Rush Limbaugh for an op-ed published Saturday, which Sharpton says “erroneously” describes him as involved in violent activities in New York in the early 90s. Sharpton "played a leading role in the 1991 Crown Heights riot (he called neighborhood Jews ‘diamond merchants’) and 1995 Freddie's Fashion Mart riot,” Limbaugh wrote in an op-ed in the Wall Street Journal in which he describes the “intimidation tactics” used to push him out of the world of the NFL. The Crown Heights riot began after a Hasidic rabbi ran over and killed an African American boy with his car by accident. Four nights of rioting followed. Sharpton rallied on behalf of the boy’s family and the African American community. "Mr. Limbaugh's blatant and defamatory statements regarding the Crown Heights Riots falsely give the impression that Rev. Sharpton was present during the violence that occurred when in reality he had been called in by the family after the violence," Sharpton’s statement says. He is demanding Limbaugh apologize or clarify his remarks or he will move forward with a lawsuit. Limbaugh’s bid for the St. Louis Rams was overshadowed by controversy over Limbaugh's race-related comments.
Members of the Maldives’ cabinet held a meeting at the bottom of a lagoon—20 feet underwater—to make a dramatic statement about the risk global warming poses to the island nation. The Maldives sit only seven feet above sea level, and the melting of polar ice caps could make the archipelago slip below the surface of the Indian Ocean within a century. President Mohammed Nasheed, who has a reputation as a colorful voice on climate change, says, ''What we are trying to make people realize is that the Maldives is a frontline state.” Nasheed is a certified diver, but other cabinet members had to take diving lessons weeks before the meeting, and two had to miss out because they were not given permission from their doctors. But the 14 officials who took the dive sat at a long conference table complete with waterproof name placards and signed a document calling on all countries to cut their carbon emissions—all while bubbles floated up from their masks.
The federal deficit was $1.4 trillion for the 2009 fiscal year, making it the largest relative to the size of the economy—nearly 10 percent—in more than 60 years. The damage was nearly $1 trillion more than in fiscal 2008, when it was $459 billion. Economists believe that annual deficits should not top 3 percent of gross domestic product, a mark President Obama has promised to hit by the end of his first term. Though somewhat lower than predicted earlier this year, the deficit number shows the dilemma the Obama administration faces in wanting to push through an ambitious domestic agenda without creating crushing levels of debt. Peter Orszag, director of the Office of Management and Budget, said that for the president’s next budget, “we are considering proposals to put our country back on firm fiscal footing.” But both the administration and Congress are in early discussions about extending tax cuts and spending measures from last winter’s $787 billion stimulus plan.
Colorado officials announced Saturday night that criminal charges will be filed against the father whose balloon captivated a nation last week, believing that a six-year-old boy was board. Whatever the truth is, one of these guys is going to come out looking pretty terrible. A former assistant to Richard Heene, father of balloon boy Falcon Heene, has offered a long narrative of his former boss’ tyrannical eccentricity in his quest to get another TV show after his appearance on Wife Swap. In a post for Gawker, the assistant and self-described web entrepreneur, Robert Thomas, alleges that Heene planned to manufacture a UFO controversy “bigger than Roswell,” and to create show episodes that would “shock people and maximize his exposure.” Thomas says it’s impossible that 6-year-old Falcon could hide in the tiny Heene attic, and furthermore, that given the family’s lack of discipline, Falcon would have never had the inclination to hide from punishment even if he could. (In what some suspected was an unintentional slip, Falcon told CNN, “we did it for the show.”)
Earthquake party? The San Francisco mayor’s office is sponsoring a week’s worth of city-wide festivities in remembrance of the 6.9 Loma Prieta quake that hit the San Andreas fault in 1989 and killed 63 people (and injured thousands more) in the Bay Area. The festivities, which the city has dubbed the “Big Rumble” kicks off Saturday, and will include 20 neighborhood block parties rife with barbeque and potato salad, martial arts demonstrations, drum circles, break dancers, and electro-pop dance groups such as “My First Earthquake.” The city will also, appropriately, run panels on emergency management and conferences on structural engineering. The Big Rumble, which is also held near the anniversary of the 1906 quake that killed 3,000 people, is meant to “reinvigorate our commitment, not just to earthquake preparedness but to any type of hazard,” said a spokesperson. And, apparently, to have a really big excuse to party.
The Anaheim Angels better hope their first playoff game against the New York Yankees was just an isolated case of the jitters. The team looked abysmal, committing three errors and securing only four hits en route to a 4-1 New York victory. "Honestly, it probably makes it a little easier to turn the page because we know we didn't play up to our abilities,'' Angels starter John Lackey told Sports Illustrated. "We can just chalk it up to that and come back and get them tomorrow. We know we can play better.'' The Los Angeles Dodgers eked out a 2-1 win the same night to even up their series against the Philadelphia Phillies. Vicente Padilla pitched seven and one third innings for the Dodgers, surrendering only one run before turning it over to the bullpen.
George Clooney and his girlfriend Elisabetta Canalis are the toasts of the London and Rome Film Festivals this weekend as they make the rounds to promote his very busy winter. His film, Fantastic Mr. Fox, opened the London Film Festival, and Clooney provides the titular character’s voice in Wes Anderson’s first foray into animation. He also stars in the Oscar shoo-in Up In the Air, a romantic comedy-drama co-starring Vera Farmiga and directed by Jason Reitman. In it, Clooney plays a corporate downsizing expert who flies around the United States with bad news, but the most surprising part of the role wasn’t his job. “I was watching Up In The Air and I thought, 'Jesus, who’s the old gray-haired guy?’ And it was me,” he told the Telegraph. He’s predictably wry on the subject: “But I’m kind of comfortable with getting older because it’s better than the other option, which is being dead.” He won’t be a stranger to the media this season—Clooney also stars in The Men Who Stare at Goats. “All three films,” he said, “are ones I don’t have to be embarrassed about—and that’s rare.” Clooney’s next gig, the hit man story The American is currently being filmed in Italy, not far from his villa on Lake Como. Not a bad gig for a self-described “old guy.”
"This plan wasn't just a means to defend against the media's desire to attack the messenger, it was also a means to attack the media and to expose them,” said Andrew Breitbart, the Internet entrepreneur who leaked the now-famous Acorn scandal to the world. Controversial journalistic practices aside, Breitbart’s treatment of the video expose has had a huge impact not only on the liberal organization (all employees involved have been fired and the Obama administration immediately dropped its funding), but also, and perhaps more significantly, on mainstream media. Breitbart says that he forced Democrat-prone media to cover the scandal by leaking different tapes at different times—strategically refuting accusations ranging from racism to doctoring tapes. "At every step of the way, we were correct…At every step of the way, the mainstream media attempted to cover up for Acorn…If they think that Acorn or the Democratic Party or the NEA or the Office of Public Engagement is the primary target, they couldn't be more wrong. It is the Democrat-media complex.”
Well, there are certainly better things to think about on a honeymoon. It appears Keith Bardwell, the Louisiana Justice of the Peace who refused to officiate the marriage of an interracial couple last week, may lose his job as a result, reports CNN. "We are used to the closet racism, but we're not going to tolerate that overt racism from an elected official,” said bride-to-be Beth McKay, who is white, who asked Bardwell to officiate her marriage to fiancé Terrence McKay, who is black. McKay is joined by Louisiana Gov. Bobby Jindal and Louisana Senator Mary Landrieu in advocating that the Justice be fired. "He's not representing all the people that he is supposed to be representing," McKay said. "He's only representing the people with his same opinions." Interracial marriage has been legal in the U.S. since 1967, and Bardwell’s views are also out-of-date in terms of the country’s history of interracial couplings: Almost 8.5 million Americans were joined in interracial marriages as of 2005, a number that has almost quadrupled since 1970.
First comes Disney, then comes Sex. Forever expanding her global tween empire, 17-year-old star Miley Cyrus of Hannah Montana fame was spotted shooting a scene for Sex and the City 2 on Friday. Donning matching dresses with Samantha Jones (Kim Cattrall), the teen actress and singer also joined SatC 2 cast members Chris Noth (Mr. Big), Mario Cantone (Anthony Marantino) and Sarah Jessica Parker (Carrie Bradshaw) on set at New York’s Ziegfeld Theater to shoot a scene for a fictional movie premiere starring Samantha’s ex-boyfriend, Smith Jerrod (Jason Lewis). Penelope Cruz, Tim Gunn, and Liza Minnelli will also make cameos in the film, which comes out next May.
After months of untangling a complicated internal debate, the Obama administration is set to announce a new Sudan policy, The Washington Post reports. Led by Obama's special envoy to Sudan, retired Air Force Maj. Gen J. Scott Gration, the U.S. will try to use "pressure and incentives" to push Sudan's government toward making peace in its violent Darfur region. The new softer approach is a shift from Obama's campaign rhetoric, when he suggested taking a tougher line against Sudan's leader, Omar Hassan al-Bashir, that would have included more sanctions and a no-fly zone to protect Darfur residents. Bashir is an indicted war criminal who is widely held responsible for the deaths of over 300,000 people in Darfur, making any engagement between countries difficult. Under the new policy, the American government will acknowledge that genocide "is taking place" in Darfur, a clarification of an earlier remark by Gration that what was happening there was "the remnants of genocide."
Normally under the radar, Nancy Pelosi's investor husband, Paul Pelosi, is drawing attention for his latest purchase: a football franchise. Pelosi, a real-estate developer, paid $12 million for the California Redwoods, one of the teams in the United Football League, a new professional football league created to challenge the NFL. Pelosi, 69, whose fortune is estimated somewhere between $28 million and $104 million, has always been careful to make uncontroversial investments and stay out of the limelight to avoid undercutting his wife and her very public political career. Investing in friend Bill Hambrecht’s new league will undoubtedly put the spotlight on Pelosi in a new way. "This is a business. I look at it as a business," Pelosi told The Washington Post. "I'm in this because I think it is a very solid financial investment that is going to be very successful." As far as Nancy goes: "She thinks it's great," he said.
The much-hyped Spike Jonze film adaptation of Maurice Sendak’s beloved Where the Wild Things Are hit theaters nationwide on Friday night to mostly positive reviews. Where The Wild Things Are is Spike Jonze’s third feature film and the project—over a decade in the making—boasts a screenplay by Dave Eggers, Tom Hanks as a producer, young Max Records as the hero, and Catherine Keener and James Gandolfini as characters’ voices. “Profoundly beautiful and affecting,” Entertainment Weekly's review read, calling the film “a breath-taking act of transubstantiation.” The New York Times, Wall Street Journal, and Chicago Tribune also give favorable reviews. The New York Post and Los Angeles Times were a little more harsh (the Post calls it “overly earnest” and “a noble failure”), but the L.A. Times still considers the film a shoo-in as an Oscar contender, which has recently expanded the Best Picture category to 10 nominations. The film scored 71 at MetaCritic and 67 at Rotten Tomatoes.
It just isn’t Lindsay’s month—but then again, what was the last good month La Lohan had? After last week’s disastrously reviewed fashion show in Paris—replete with nipple-tassled models—the troubled starlet arrived at a Friday probation hearing an hour late. The mood didn’t improve from there: Judge Marsha N. Revel did what fashion critics wished they could have done last week and extended her three-year probation (originally handed down in 2007) by another year, citing Lohan’s truancy from her alcohol-education classes. “I don’t want to get any more notices again, no warrants… where you’re thumbing your nose at the court,” said Revel to a largely mute Lohan. The Mean Girls star is due back in court for a progress hearing on December 15.
Delays in production mean that only about three-quarters as many swine flu vaccines as expected will be available this month. In a Friday news conference, CDC immunization official Anne Schuchat said that 28 million to 30 million vaccines at most will be shipped, instead of the 40 million expected. The reason? Schuchat said there's been a slowdown in the production of antigen, a critical element of the virus, which is tougher to grow for H1N1 than for seasonal flu. "We aren't expecting widespread availability until the end of the month or until November," Schuchat said. "It will be pretty challenging to find vaccine." The delay in vaccine production comes at a bad time—the WHO warned on Friday that the H1N1 strain, which reaches further into the lungs than the seasonal flu, can cause severe viral pneumonia and encouraged doctors to treat the flu with antiviral drugs as early as possible. Swine flu outbreaks have been reported in 41 states, up from last week’s tally of 37, and the virus has claimed the lives of at least 86 Americans under 18. “These are very sobering statistics,” said Schuchat.
Richard Heene, father of Balloon Boy Falcon Heene, emerged from his Colorado home today to again announce that last week’s flying saucer incident was not a media hoax. Carrying a cardboard box, he asked reporters to submit their questions in writing, and said he would answer them again later tonight at 7:30. Heene also met investigators at the Sherriff’s office this afternoon. Authorities say police continue to believe the family’s story that they thought their son was accidentally on board the balloon when it came untied. Public skepticism fueled by Falcon’s statement in an interview Thursday that “we did this for a show,” convinced them to reopen an investigation. Heene, twice a participant on the reality show Wife Swap, has been trying to sell producers another reality show, called Richard Heene: Science Detective. It would be based on his eccentric family life. Police say the family’s emotional response and the fact that the boy’s “hyperactive” nature would make it difficult for him to hide quietly for five hours lead them to believe their story is true.
