Changing of the Guard: Signals in China of a More Open Economy

Carlos Barria/Reuters

In November, Xi Jinping made his official debut as party chief at the 18th party congress, which military officers attended.

BEIJING — In a strong signal of support for greater market-oriented economic policies, Xi Jinping, the new head of the Communist Party, made a visit over the weekend to the special economic zone of Shenzhen in south China, which has stood as a symbol of the nation’s embrace of a state-led form of capitalism since its growth over the last three decades from a fishing enclave to an industrial metropolis.

The trip was Mr. Xi’s first outside Beijing since becoming party chief on Nov. 15. Mr. Xi visited a private Internet company on Friday and went to Lotus Hill Park on Saturday to lay a wreath at a bronze statue of Deng Xiaoping, the leader who opened the era of economic reforms in 1979, when Shenzhen was designated a special economic zone. Mr. Deng famously later visited the city in 1992 to encourage reviving those economic policies after they had stalled following the violent crackdown on pro-democracy protests in 1989.

“Reform and opening up is a guiding policy that the Communist Party must stick to,” Mr. Xi said, according to Phoenix Television, one of several Hong Kong news organizations that covered the trip. “We must keep to this correct path. We must stay unwavering on the road to a prosperous country and people, and there must be new pioneering.”

In the months before the transition, there were widespread calls, including from people close to Mr. Xi, to adopt more liberal economic policies and even to experiment with greater political openness as a way for the party to maintain its rule. Without much success so far, reformers have long been encouraging the leadership to move toward a more sustainable growth model for China, one that relies more on domestic consumption rather than infrastructure investment and exports, and where state enterprises play less of a role.

Mr. Xi, known as a skillful consensus builder, has kept his ideas carefully veiled throughout his career, but his trip to Shenzhen is the strongest sign yet that he may favor more open policies. In a speech in Beijing on Nov. 29, Mr. Xi spoke of the “Chinese dream” of realizing the nation’s “revival,” which, besides being a call for renewal, also signaled strong nationalist leanings.

Mr. Xi’s father, Xi Zhongxun, was a revered senior official handpicked by Mr. Deng to help shape the new economic policies and oversee the creation of the Shenzhen zone. Mr. Xi’s mother lives in Shenzhen, and he visited her on his trip, according to Hong Kong news reports.

“If he indeed went to Shenzhen, that means he intends to make reform a subject of priority,” said Li Weidong, a liberal political analyst. “That would really be a phenomenon.”

Mr. Li cautioned, though, that the so-called reform policies that followed Mr. Deng’s 1992 southern tour, in his view, “ended up being fake” because China’s boom resulted in widespread corruption and the expansion of state enterprises at the expense of private entrepreneurship.

When Mr. Xi’s predecessor, Hu Jintao, became party chief in 2002, he was seen by many as a potential reformer, but his tenure was marked by conservative policies. For his first trip outside Beijing as party chief, Mr. Hu went in December 2002 to Xibaipo, a hallowed site for the revolution, where he reiterated a speech given by Mao Zedong.

Over the weekend, video footage from Phoenix Television showed a line of minibuses and police cars winding its way through Shenzhen. Mr. Xi and other officials walked outdoors in dark suits. The party’s official news organizations did not immediately report on the trip, but some prominent mainland Chinese news Web sites cited the Hong Kong reports.

Mr. Xi’s early moves as party leader seem aimed at emphasizing national “revival,” a theme he highlighted when he appeared on Nov. 29 with the party’s new seven-man Politburo Standing Committee in a history museum at Tiananmen Square. According to People’s Daily, the party mouthpiece, Mr. Xi stood in front of an exhibition called “The Road to Rejuvenation” and said, “After the 170 or more years of constant struggle since the Opium Wars, the great revival of the Chinese nation enjoys glorious prospects.”

He added: “Now everyone is discussing the Chinese dream, and I believe that realizing the great revival of the Chinese nation is the greatest dream of the Chinese nation in modern times.”

The emphasis on a “Chinese dream” is particular to Mr. Xi, and could prove to be a recurring motif throughout his tenure. The notion of a grand revival — “fu xing” in Mandarin — has been popular with Chinese leaders for at least a century, but Mr. Xi appears to be tapping more deeply into that nationalist vein than his recent predecessors, perhaps recognizing that traditional Communist ideology no longer has popular appeal.

Patrick Zuo contributed research.

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You for Sale: Company Envisions ‘Vaults’ for Personal Data

Peter DaSilva for The New York Times

Michael Fertik, the founder and chief executive of Reputation.com, at its offices in Redwood City, Calif., where he has amassed a database of information collected on millions of consumers.

“YOU are walking around naked on the Internet and you need some clothes,” says Michael Fertik. “I am going to sell you some.”

Naked? Not exactly, but close.

Mr. Fertik, 34, is the chief executive of Reputation.com, a company that helps people manage their online reputations. From his perch here in Silicon Valley, he views the digital screens in our lives, the smartphones and the tablets, the desktops and the laptops, as windows of a house. People go about their lives on the inside, he says, while dozens of marketing and analytics companies watch through the windows, sizing them up like peeping Toms.

By now many Americans are learning that they are living in a surveillance economy. “Information resellers,” also known as “data brokers,” have collected hundreds to thousands of details — what we buy, our race or ethnicity, our finances and health concerns, our Web activities and social networks — on almost every American adult. Other companies that specialize in ranking consumers use computer algorithms to covertly score Internet users, identifying some as “high-value” consumers worthy of receiving pitches for premium credit cards and other offers, while dismissing others as a waste of time and marketing money. Yet another type of company, called an ad-trading platform, profiles Internet users and auctions off online access to them to marketers in a practice called “real-time bidding.”

As these practices have come to light, several members of Congress, and federal agencies, have opened investigations.

At least for now, however, these companies typically do not permit consumers to see the records or marketing scores that have been compiled about them. And that is perfectly legal.

Now, Mr. Fertik, the loquacious, lion-maned founder of Reputation.com, says he has the free-market solution. He calls it a “data vault,” or “a bank for other people’s data.”

Here at Reputation.com’s headquarters, a vast open-plan office decorated with industrial-looking metal struts and reclaimed wood — a discreet homage to the lab where Thomas Edison invented the light bulb — his company has amassed a database on millions of consumers. Mr. Fertik plans to use it to sell people on the idea of taking control of their own marketing profiles. To succeed, he will have to persuade people that they must take charge of their digital personas.

Pointing out the potential hazards posed by data brokers and the like is part of Mr. Fertik’s M.O. Covert online profiling and scoring, he says, may unfairly exclude certain Internet users from marketing offers that could affect their financial, educational or health opportunities — a practice Mr. Fertik calls “Weblining.” He plans to market Reputation.com’s data vault, scheduled to open for business early next year, as an antidote.

“A data privacy vault,” he says, “is a way to control yourself as a person.”

Reputation.com is at the forefront of a nascent industry called “personal identity management.” The company’s business model for its vault service involves collecting data about consumers’ marketing preferences and giving them the option to share the information on a limited basis with certain companies in exchange for coupons, say, or status upgrades. In turn, participating companies will get access both to potential customers who welcome their pitches and to details about the exact products and services those people are seeking. In theory, the data vault would earn money as a kind of authorization supervisor, managing the permissions that marketers would need to access information about Reputation.com’s clients.

To some, the idea seems a bit quixotic.

Reputation.com, with $67 million in venture capital, is not making a profit. Although the company’s “privacy” products, like removing clients’ personal information from list broker and marketing databases, are popular, its reputation management techniques can be controversial. For instance, it offers services meant to make negative commentary about individual or corporate clients less visible on the Web.

And there are other hurdles, like competition. A few companies, like Personal, have already introduced vault services. Also, a number of other enterprises have tried — and quickly failed — to sell consumers on data lockers.

Even so, Mr. Fertik contends Reputation.com has the answer. The company already has several hundred thousand paying customers, he says, and patents on software that can identify consumers’ information online and score their reputations. He intends to show clients their scores and advise them on how to improve them.

“You can’t just build a vault and wish that vendors cared enough about your data to pay for it,” Mr. Fertik says. “You have to build a business that gives you the lift to accumulate a data set and attract consumers, the science to create insights that are valuable to vendors, and the power to impose restrictions on the companies who consume your data.”

THE consumer data trade is large and largely unregulated.

Companies and organizations in the United States spend more than $2 billion a year on third-party data about individuals, according to a report last year on personal identity management from Forrester Research, a market research firm. They spend billions more on credit data, market research and customer data analytics, the report said.

Read More..

Italy Grapples With Polluting by Ilva, a Giant Steel Maker

Alessandro Penso for The New York Times

The Ilva steel plant, in Taranto, Italy, above, employs thousands of workers but is seen as a health threat by residents and courts.

TARANTO, Italy — Every morning, Graziella Lumino cleans the black soot from her kitchen window, which looks out on the hulking Ilva steel plant where her husband, Giuseppe Corisi, worked for 30 years.

After he died this year at the age of 64 from violent, sudden-onset lung cancer, his friends put a plaque on the wall of their apartment building: “Here lived the umpteenth death from lung cancer. Taranto, March 8, 2012.”

Today, Ilva, which is among the largest plants in Europe and produces more than 30 percent of Italy’s raw steel, is at the heart of a clash over the future of Italian industry, one that pits economic concerns against environmental ones and the power of the government against the judiciary amid Italy’s struggle to compete in a global economy.

After a court ordered sections of the plant closed and steel from it impounded last month, arguing that it had violated environmental laws and was raising serious health concerns in the area, the government passed an emergency decree that would allow it to continue operating while cleaning up its act, saving 20,000 jobs nationwide. Magistrates said that the new law, which must be approved by Parliament, violated the Constitution by allowing the executive branch to circumvent the judiciary.

In many ways, the Ilva plant is an emblem of the Italian economy that the technocratic government of Prime Minister Mario Monti inherited last year and has been trying to repair before elections expected early next year. It is the product of decades of physical and political neglect, an aging industrial giant that came of age in the economic boom of the late 20th century and is struggling to keep pace in the 21st.

For Italy, though, the plant is too big to fail. It produces about 8 percent of European steel — and the government estimates that stopping production would cost the Italian economy more than $10 billion a year.

But the environmental concerns are real. Dark plumes of smoke billow from stacks dominating the landscape, while dust from the plant stains the white tombstones in the local cemetery a rusty pink. An ordinance forbids children from playing in unpaved lots. In 2008, a local farmer was forced to slaughter 2,000 sheep after they were deemed contaminated with dioxin.

Some studies have found that cancer rates in Taranto, an ancient harbor in the heel of Italy’s boot, are over 30 percent higher than the national average, and far higher for certain cancers, particularly of the lungs, kidneys and liver, as well as melanomas.

Bruno Ferrante, the president of Ilva, said that the Riva Group, which owns the plant, has been spending from $325 million to $400 million a year to upgrade the plant since it bought it in 1995.

Mr. Ferrante added that cancer rates had been falling recently — government-approved studies bear that out — but acknowledged that there was more to be done. “The pink dust is certainly a problem, and we are aware of it,” he said.

Arguments about the plant’s economic importance fall on deaf ears here. “Health comes first,” Ms. Lumino said, sitting in her apartment with photos of her husband, including one on a chain that hung from her neck. He was one of many Ilva workers sent into early retirement in 1998 after the plant found evidence of asbestos contamination. “If you have money but not your health, what good is it?” she asked.

Ms. Lumino remembered a time before the plant was built. “There were farms, clean air, olive and almond trees,” she said. “We would picnic by the coast every Easter Monday.”

Even with the new decree, the conflict is far from over. The decree orders the Riva Group to invest $3.8 billion to reduce its emissions and bring the plant up to code before 2016, the deadline for other European countries to modernize.

If Riva fails to do so, the new law would give the government more powers to intervene. If Riva is unable to raise enough money to modernize, it could ask for European Union subsidies or sell the plant, which could jeopardize Italy’s European standing.

Brazilian companies are already eying Ilva, according to Italian news media reports. Mr. Ferrante said that Riva had no intention of selling and had a “pretty significant” ability to borrow more money and also draw on European Union cofinancing.

Gaia Pianigiani contributed reporting.

Read More..

Italy Grapples With Polluting by Ilva, a Giant Steel Maker

Alessandro Penso for The New York Times

The Ilva steel plant, in Taranto, Italy, above, employs thousands of workers but is seen as a health threat by residents and courts.

TARANTO, Italy — Every morning, Graziella Lumino cleans the black soot from her kitchen window, which looks out on the hulking Ilva steel plant where her husband, Giuseppe Corisi, worked for 30 years.

After he died this year at the age of 64 from violent, sudden-onset lung cancer, his friends put a plaque on the wall of their apartment building: “Here lived the umpteenth death from lung cancer. Taranto, March 8, 2012.”

Today, Ilva, which is among the largest plants in Europe and produces more than 30 percent of Italy’s raw steel, is at the heart of a clash over the future of Italian industry, one that pits economic concerns against environmental ones and the power of the government against the judiciary amid Italy’s struggle to compete in a global economy.

After a court ordered sections of the plant closed and steel from it impounded last month, arguing that it had violated environmental laws and was raising serious health concerns in the area, the government passed an emergency decree that would allow it to continue operating while cleaning up its act, saving 20,000 jobs nationwide. Magistrates said that the new law, which must be approved by Parliament, violated the Constitution by allowing the executive branch to circumvent the judiciary.

In many ways, the Ilva plant is an emblem of the Italian economy that the technocratic government of Prime Minister Mario Monti inherited last year and has been trying to repair before elections expected early next year. It is the product of decades of physical and political neglect, an aging industrial giant that came of age in the economic boom of the late 20th century and is struggling to keep pace in the 21st.

For Italy, though, the plant is too big to fail. It produces about 8 percent of European steel — and the government estimates that stopping production would cost the Italian economy more than $10 billion a year.

But the environmental concerns are real. Dark plumes of smoke billow from stacks dominating the landscape, while dust from the plant stains the white tombstones in the local cemetery a rusty pink. An ordinance forbids children from playing in unpaved lots. In 2008, a local farmer was forced to slaughter 2,000 sheep after they were deemed contaminated with dioxin.

Some studies have found that cancer rates in Taranto, an ancient harbor in the heel of Italy’s boot, are over 30 percent higher than the national average, and far higher for certain cancers, particularly of the lungs, kidneys and liver, as well as melanomas.

Bruno Ferrante, the president of Ilva, said that the Riva Group, which owns the plant, has been spending from $325 million to $400 million a year to upgrade the plant since it bought it in 1995.

Mr. Ferrante added that cancer rates had been falling recently — government-approved studies bear that out — but acknowledged that there was more to be done. “The pink dust is certainly a problem, and we are aware of it,” he said.

Arguments about the plant’s economic importance fall on deaf ears here. “Health comes first,” Ms. Lumino said, sitting in her apartment with photos of her husband, including one on a chain that hung from her neck. He was one of many Ilva workers sent into early retirement in 1998 after the plant found evidence of asbestos contamination. “If you have money but not your health, what good is it?” she asked.

Ms. Lumino remembered a time before the plant was built. “There were farms, clean air, olive and almond trees,” she said. “We would picnic by the coast every Easter Monday.”

Even with the new decree, the conflict is far from over. The decree orders the Riva Group to invest $3.8 billion to reduce its emissions and bring the plant up to code before 2016, the deadline for other European countries to modernize.

If Riva fails to do so, the new law would give the government more powers to intervene. If Riva is unable to raise enough money to modernize, it could ask for European Union subsidies or sell the plant, which could jeopardize Italy’s European standing.

Brazilian companies are already eying Ilva, according to Italian news media reports. Mr. Ferrante said that Riva had no intention of selling and had a “pretty significant” ability to borrow more money and also draw on European Union cofinancing.

Gaia Pianigiani contributed reporting.

Read More..

Morsi Extends Compromise to Egyptian Opposition

Tara Todras-Whitehill for The New York Times

Protesters against President Mohamed Morsi next to a destroyed barricade near the presidential palace in Cairo on Saturday. More Photos »

CAIRO — Struggling to quell violent protests that have threatened to derail a referendum on an Islamist-backed draft constitution, President Mohamed Morsi of Egypt moved Saturday to appease his opponents with a package of concessions hours after state news media reported that he was moving toward imposing a form of martial law to secure the streets and allow the vote.

Mr. Morsi did not budge on a critical demand of the opposition: that he postpone the referendum set for next Saturday to allow a thorough overhaul of the proposed charter, which liberal groups say has inadequate protection of individual rights and provisions that could someday give Muslim religious authorities new influence.

But in a midnight news conference, his prime minister said Mr. Morsi was offering concessions that he had appeared to dismiss out of hand a few days before. The president rescinded most of his sweeping Nov. 22 decree that temporarily elevated his decisions above judicial review and drew tens of thousands of protesters into the streets calling for his downfall. He also offered a convoluted arrangement for the factions to negotiate constitutional amendments this week that would be added to the charter after the vote.

Taken together, the announcements, rolled out over a confusing day, appeared to indicate the president’s determination to do whatever it takes to get to the referendum, which his Islamist supporters say will lay the foundation of a new democracy and a return to stability.

Amid growing concerns among his advisers that the Interior Ministry might be unable to secure either the polls or the institutions of government in the face of renewed violent protests, the state media reported early Saturday that he would soon order the armed forces to keep order and authorize its solders to arrest civilians.

In recent days, mobs have attacked more than two dozen Muslim Brotherhood offices and ransacked the group’s headquarters, and more than seven people have died in street fighting between Islamists and their opponents.

As of early Sunday, Mr. Morsi had not yet formally issued an order calling out the military, raising the possibility that the announcement was intended as a warning to tell his opponents their protests would not derail the vote.

The moves on Saturday offered little hope of fully resolving the standoff, in part because opposition leaders had ruled out — even before his concessions were announced — any rushed attempt at a compromise just days before the referendum.

“No mind would accept dialogue at gunpoint,” said Mohamed Abu El Ghar, an opposition leader, alluding to previously floated ideas about last-minute talks for constitutional amendments.

Nor did Mr. Morsi’s Islamist allies expect his proposals to succeed. Many said they had concluded that much of the secular opposition was primarily interested in obstructing the transition to democracy at all costs, to try to block the Islamists from winning elections. Instead, some of the president’s supporters privately relished the bind they believed Mr. Morsi had built for the opposition by giving in to some demands, forcing their secular opponents to admit they are afraid to take their case to the ballot box.

For now, the military appears to back Mr. Morsi. Soon after the state newspaper Al Ahram suggested the president would impose martial law, a military spokesman read a statement over state television that echoed Mr. Morsi’s own speeches.

The military “realizes its national responsibility for maintaining the supreme interests of the nation and securing and protecting the vital targets, public institutions and the interests of the innocent citizens,” the spokesman said, warning of “divisions that threaten the State of Egypt.”

“Dialogue is the best and sole way to reach consensus that achieves the interests of the nation and the citizens,” he added. “Anything other than that puts us in a dark tunnel with drastic consequences, which is something that we will not allow.”

If Mr. Morsi goes through with the plan, it would represent a historic role reversal. For six decades, Egypt’s military-backed authoritarian presidents used martial law to hold on to power and to jail Islamists like Mr. Morsi, a former leader of the Muslim Brotherhood. It would also come just four months after he managed to pry power out of the hands of the country’s top generals, who had seized control when Hosni Mubarak was ousted last year and then held on to it for three months after Mr. Morsi’s election.

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You for Sale: Company Envisions ‘Vaults’ for Personal Data

Peter DaSilva for The New York Times

Michael Fertik, the founder and chief executive of Reputation.com, at its offices in Redwood City, Calif., where he has amassed a database of information collected on millions of consumers.

“YOU are walking around naked on the Internet and you need some clothes,” says Michael Fertik. “I am going to sell you some.”

Naked? Not exactly, but close.

Mr. Fertik, 34, is the chief executive of Reputation.com, a company that helps people manage their online reputations. From his perch here in Silicon Valley, he views the digital screens in our lives, the smartphones and the tablets, the desktops and the laptops, as windows of a house. People go about their lives on the inside, he says, while dozens of marketing and analytics companies watch through the windows, sizing them up like peeping Toms.

By now many Americans are learning that they are living in a surveillance economy. “Information resellers,” also known as “data brokers,” have collected hundreds to thousands of details — what we buy, our race or ethnicity, our finances and health concerns, our Web activities and social networks — on almost every American adult. Other companies that specialize in ranking consumers use computer algorithms to covertly score Internet users, identifying some as “high-value” consumers worthy of receiving pitches for premium credit cards and other offers, while dismissing others as a waste of time and marketing money. Yet another type of company, called an ad-trading platform, profiles Internet users and auctions off online access to them to marketers in a practice called “real-time bidding.”

As these practices have come to light, several members of Congress, and federal agencies, have opened investigations.

At least for now, however, these companies typically do not permit consumers to see the records or marketing scores that have been compiled about them. And that is perfectly legal.

Now, Mr. Fertik, the loquacious, lion-maned founder of Reputation.com, says he has the free-market solution. He calls it a “data vault,” or “a bank for other people’s data.”

Here at Reputation.com’s headquarters, a vast open-plan office decorated with industrial-looking metal struts and reclaimed wood — a discreet homage to the lab where Thomas Edison invented the light bulb — his company has amassed a database on millions of consumers. Mr. Fertik plans to use it to sell people on the idea of taking control of their own marketing profiles. To succeed, he will have to persuade people that they must take charge of their digital personas.

Pointing out the potential hazards posed by data brokers and the like is part of Mr. Fertik’s M.O. Covert online profiling and scoring, he says, may unfairly exclude certain Internet users from marketing offers that could affect their financial, educational or health opportunities — a practice Mr. Fertik calls “Weblining.” He plans to market Reputation.com’s data vault, scheduled to open for business early next year, as an antidote.

“A data privacy vault,” he says, “is a way to control yourself as a person.”

Reputation.com is at the forefront of a nascent industry called “personal identity management.” The company’s business model for its vault service involves collecting data about consumers’ marketing preferences and giving them the option to share the information on a limited basis with certain companies in exchange for coupons, say, or status upgrades. In turn, participating companies will get access both to potential customers who welcome their pitches and to details about the exact products and services those people are seeking. In theory, the data vault would earn money as a kind of authorization supervisor, managing the permissions that marketers would need to access information about Reputation.com’s clients.

To some, the idea seems a bit quixotic.

Reputation.com, with $67 million in venture capital, is not making a profit. Although the company’s “privacy” products, like removing clients’ personal information from list broker and marketing databases, are popular, its reputation management techniques can be controversial. For instance, it offers services meant to make negative commentary about individual or corporate clients less visible on the Web.

And there are other hurdles, like competition. A few companies, like Personal, have already introduced vault services. Also, a number of other enterprises have tried — and quickly failed — to sell consumers on data lockers.

Even so, Mr. Fertik contends Reputation.com has the answer. The company already has several hundred thousand paying customers, he says, and patents on software that can identify consumers’ information online and score their reputations. He intends to show clients their scores and advise them on how to improve them.

“You can’t just build a vault and wish that vendors cared enough about your data to pay for it,” Mr. Fertik says. “You have to build a business that gives you the lift to accumulate a data set and attract consumers, the science to create insights that are valuable to vendors, and the power to impose restrictions on the companies who consume your data.”

THE consumer data trade is large and largely unregulated.

Companies and organizations in the United States spend more than $2 billion a year on third-party data about individuals, according to a report last year on personal identity management from Forrester Research, a market research firm. They spend billions more on credit data, market research and customer data analytics, the report said.

Read More..

Doping at U.S. Tracks Affects Europe’s Taste for Horse Meat

PARIS — For decades, American horses, many of them retired or damaged racehorses, have been shipped to Canada and Mexico, where it is legal to slaughter horses, and then processed and sold for consumption in Europe and beyond.

Christinne Muschi for The New York Times

A slaughterhouse in Saint-André-Avellin, Quebec, where meat is processed for sale in Europe.

Lately, however, European food safety officials have notified Mexican and Canadian slaughterhouses of a growing concern: The meat of American racehorses may be too toxic to eat safely because the horses have been injected repeatedly with drugs.

Despite the fact that racehorses make up only a fraction of the trade in horse meat, the European officials have indicated that they may nonetheless require lifetime medication records for slaughter-bound horses from Canada and Mexico, and perhaps require them to be held on feedlots or some other holding area for six months before they are slaughtered.

In October, Stephan Giguere, the general manager of a major slaughterhouse in Quebec, said he turned away truckloads of horses coming from the United States because his clients were worried about potential drug issues. Mr. Giguere said he told his buyers to stay away from horses coming from American racetracks.

“We don’t want them,” he said. “It’s too risky.”

The action is just the latest indication of the troubled state of American racing and its problems with the doping of horses. Some prominent trainers have been disciplined for using legal and illegal drugs, and horses loaded with painkillers have been breaking down in arresting numbers. Congress has called for reform, and state regulators have begun imposing stricter rules.

But for pure emotional effect, the alarm raised in the international horse-meat marketplace packs a distinctive punch.

Some 138,000 horses were sent to Canada or Mexico in 2010 alone to be turned into meat for Europe and other parts of the world, according to a Government Accountability Office report. Organizations concerned about the welfare of retired racehorses have estimated that anywhere from 10 to 15 percent of the population sent for slaughter may have performed on racetracks in the United States.

“Racehorses are walking pharmacies,” said Dr. Nicholas Dodman, a veterinarian on the faculty of Tufts University and a co-author of a 2010 article that sought to raise concerns about the health risks posed by American racehorses. He said it was reckless to want any of the drugs routinely administered to horses “in your food chain.”

Horses being shipped to Mexico and Canada are by law required to have been free of certain drugs for six months before being slaughtered, and those involved in their shipping must have affidavits proving that. But European Commission officials say the affidavits are easily falsified. As a result, American racehorses often show up in Canada within weeks — sometimes days — of their leaving the racetrack and their steady diets of drugs.

In October, the European Commission’s Directorate General for Health and Consumers found serious problems while auditing the operations of equine slaughter facilities in Mexico, where 80 percent of the horses arrive from the United States. The commission’s report said Mexican officials were not allowed to question the “authenticity or reliability of the sworn statements” about the ostensibly drug-free horses, and thus had no way of verifying whether the horses were tainted by drugs.

“The systems in place for identification, the food-chain information and in particular the affidavits concerning the nontreatment for six months with certain medical substances, both for the horses imported from the U.S. as well as for the Mexican horses, are insufficient to guarantee that standards equivalent to those provided for by E.U. legislation are applied,” the report said.

The authorities in the United States and Canada acknowledge that oversight of the slaughter business is lax. On July 9, the United States Food and Drug Administration sent a warning letter to an Ohio feedlot operator who sells horses for slaughter. The operator, Ronald Andio, was reprimanded for selling a drug-tainted thoroughbred horse to a Canadian slaughterhouse.

The Canadian Food Inspection Agency had tested the carcass of the horse the previous August and found the anti-inflammatory drug phenylbutazone in the muscle and kidney tissues. It also discovered clenbuterol, a widely abused medication for breathing problems that can build muscle by mimicking anabolic steroids.

Because horses are not a traditional food source in the United States, the Food and Drug Administration does not require human food safety information as it considers what drugs can be used legally on horses. Patricia El-Hinnawy, a spokeswoman for the agency, said agency-approved drugs intended for use in horses carried the warning “Do not use in horses intended for human consumption.”

She also said the case against Mr. Andio remained open.

“On the warning letter, the case remains open and no further information can be provided at this time,” Ms. El-Hinnawy said.

Read More..

Doping at U.S. Tracks Affects Europe’s Taste for Horse Meat

PARIS — For decades, American horses, many of them retired or damaged racehorses, have been shipped to Canada and Mexico, where it is legal to slaughter horses, and then processed and sold for consumption in Europe and beyond.

Christinne Muschi for The New York Times

A slaughterhouse in Saint-André-Avellin, Quebec, where meat is processed for sale in Europe.

Lately, however, European food safety officials have notified Mexican and Canadian slaughterhouses of a growing concern: The meat of American racehorses may be too toxic to eat safely because the horses have been injected repeatedly with drugs.

Despite the fact that racehorses make up only a fraction of the trade in horse meat, the European officials have indicated that they may nonetheless require lifetime medication records for slaughter-bound horses from Canada and Mexico, and perhaps require them to be held on feedlots or some other holding area for six months before they are slaughtered.

In October, Stephan Giguere, the general manager of a major slaughterhouse in Quebec, said he turned away truckloads of horses coming from the United States because his clients were worried about potential drug issues. Mr. Giguere said he told his buyers to stay away from horses coming from American racetracks.

“We don’t want them,” he said. “It’s too risky.”

The action is just the latest indication of the troubled state of American racing and its problems with the doping of horses. Some prominent trainers have been disciplined for using legal and illegal drugs, and horses loaded with painkillers have been breaking down in arresting numbers. Congress has called for reform, and state regulators have begun imposing stricter rules.

But for pure emotional effect, the alarm raised in the international horse-meat marketplace packs a distinctive punch.

Some 138,000 horses were sent to Canada or Mexico in 2010 alone to be turned into meat for Europe and other parts of the world, according to a Government Accountability Office report. Organizations concerned about the welfare of retired racehorses have estimated that anywhere from 10 to 15 percent of the population sent for slaughter may have performed on racetracks in the United States.

“Racehorses are walking pharmacies,” said Dr. Nicholas Dodman, a veterinarian on the faculty of Tufts University and a co-author of a 2010 article that sought to raise concerns about the health risks posed by American racehorses. He said it was reckless to want any of the drugs routinely administered to horses “in your food chain.”

Horses being shipped to Mexico and Canada are by law required to have been free of certain drugs for six months before being slaughtered, and those involved in their shipping must have affidavits proving that. But European Commission officials say the affidavits are easily falsified. As a result, American racehorses often show up in Canada within weeks — sometimes days — of their leaving the racetrack and their steady diets of drugs.

In October, the European Commission’s Directorate General for Health and Consumers found serious problems while auditing the operations of equine slaughter facilities in Mexico, where 80 percent of the horses arrive from the United States. The commission’s report said Mexican officials were not allowed to question the “authenticity or reliability of the sworn statements” about the ostensibly drug-free horses, and thus had no way of verifying whether the horses were tainted by drugs.

“The systems in place for identification, the food-chain information and in particular the affidavits concerning the nontreatment for six months with certain medical substances, both for the horses imported from the U.S. as well as for the Mexican horses, are insufficient to guarantee that standards equivalent to those provided for by E.U. legislation are applied,” the report said.

The authorities in the United States and Canada acknowledge that oversight of the slaughter business is lax. On July 9, the United States Food and Drug Administration sent a warning letter to an Ohio feedlot operator who sells horses for slaughter. The operator, Ronald Andio, was reprimanded for selling a drug-tainted thoroughbred horse to a Canadian slaughterhouse.

The Canadian Food Inspection Agency had tested the carcass of the horse the previous August and found the anti-inflammatory drug phenylbutazone in the muscle and kidney tissues. It also discovered clenbuterol, a widely abused medication for breathing problems that can build muscle by mimicking anabolic steroids.

Because horses are not a traditional food source in the United States, the Food and Drug Administration does not require human food safety information as it considers what drugs can be used legally on horses. Patricia El-Hinnawy, a spokeswoman for the agency, said agency-approved drugs intended for use in horses carried the warning “Do not use in horses intended for human consumption.”

She also said the case against Mr. Andio remained open.

“On the warning letter, the case remains open and no further information can be provided at this time,” Ms. El-Hinnawy said.

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Wealth Matters: Protect Yourself from Investment Fraud This Madoff Day

Left to right: Louis Lanzano/Associated Press; Stephen Chernin/Getty Images; Richard Carson/Reuters

Three men accused of defrauding clients arriving at federal court. From left, Marc Dreier in Manhattan on May 11, 2009; Bernard Madoff in Manhattan on March 12, 2009; and R. Allen Stanford in Houston last Feb. 29.

THIS is the time of year when most people think of gifts and holiday gatherings. I couldn’t help thinking of frauds past.

Four years ago this week, Marc S. Dreier, a high-flying lawyer, was arrested and later charged with defrauding his clients of $700 million. A few days later, Bernard L. Madoff’s fraud was uncovered. Totaling an estimated $65 billion, Mr. Madoff’s fraud was in a class by itself. And then, a short time afterward, some of the brokers who had been selling fraudulent certificates of deposit for R. Allen Stanford began to turn on him; he was arrested in February 2009 and later convicted of a $7 billion fraud.

These schemes collapsed with the economy in 2008. But on their anniversaries, it may be a good time to ask whether you have done all you can to lower your risk of being caught up in a similar fraud. Call it Madoff Day (celebrated on Dec. 11, the day of his arrest).

Protecting yourself against fraud, or simply bad advice, is easier said than done. The most common advice is to make sure your money is held by an independent custodian or firm whose job is to keep your money safe. That wasn’t the case with either the Madoff or Stanford fraud. But that is only one small step.

So what else can investors do to protect themselves, not only from unscrupulous advisers but also from rushing into an investment that is clearly too good to be true?

Marc H. Simon, a lawyer who lost two years of bonuses, his job and months of unreimbursed expenses when Mr. Dreier’s law firm collapsed, said he has thought a lot about what he could have done differently.

Mr. Simon said that six or seven years before the fraud was uncovered, he knew of inconsistencies in the firm’s 401(k) plans. But the big red flag should have been that Mr. Dreier had sole control over every major decision at the law firm. Still, that had been Mr. Dreier’s pitch: work for him and don’t worry about the irksome details partners typically face.

“People like Drier and Madoff were highly intelligent individuals, they were very charismatic and they were giving people what they wanted,” Mr. Simon said. “It is harder to bring into question those who are providing you something you want.”

Randall A. Pulman, a lawyer in San Antonio who represents many victims of Mr. Stanford’s fraud, agreed that the will to believe was what ensnared people.

“For you and me, it’s too good to be true,” he said. “For the guy who has been working in the oil fields, how is he supposed to know?”

Of course, fraud and just plain bad advice are not limited to the poor or unsophisticated. Robert P. Rittereiser, the former chief financial officer of Merrill Lynch and former chief executive of E. F. Hutton, is working as the receiver for two funds suing J. Ezra Merkin, a former money manager who steered money to Mr. Madoff. Mr. Rittereiser did not think investors in Mr. Merkin’s funds knew that their money was simply being passed on to Mr. Madoff. But even if they did, they may not have seen anything to be concerned about.

“They were investing money and getting appropriate returns for the kind of fund it was,” Mr. Rittereiser said. “Most of them had a relationship of some kind and confidence with Merkin and the people he was dealing with.”

So how do you protect yourself? The first step would seem to be picking an honest adviser. The good news is that only about 7 percent of advisers have disciplinary records, said Nicholas W. Stuller, president and chief executive of AdviceIQ, a company that evaluates advisers. The bad news is that those violations appear only after someone has filed a complaint.

Mr. Stuller’s company, which has now approved some 2,400 advisers, rejects anyone with any type of infraction — from a securities fine to a misdemeanor for getting into a fight. He said this policy might keep some good advisers off the site, but his goal is to search the records of federal and state regulators to find advisers he knows are clean.

“There are advisers who have significant negative disciplinary history with one regulator but appear to be pristine with another regulator,” Mr. Stuller said. “There was a guy in Minnesota who was stealing insurance premiums. In his enforcement record, it says, ‘We’re going to alert Finra,’ but his Finra record is clean,” he said, referring to the Financial Industry Regulatory Authority. “That’s where the regulators don’t talk to each other.”

AdviceIQ’s main competitor, BrightScope, takes a different approach. It notes disciplinary actions taken against advisers but leaves it up to the consumer to go to regulators to determine what the violations were.

“We want the consumer to go to the source data, because there is a lot of liability in publishing that,” said Mike Alfred, co-founder and chief executive of BrightScope. “Many of these folks are good advisers, and they’ll take care of you. But what if they had one crazy client who put all his money in Internet stocks in 2000 and then sued?”

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Business Briefing | Fraud: Fraud Accusation by Solar Panel Maker

A Chinese solar panel maker, Suntech Power Holdings, already under pressure from the collapse in the price of its products, said an internal investigation had determined that the company was defrauded by a partner in a solar development fund. As a result, Suntech will reduce its 2010 net income by $60 million to $80 million, it said. The accusation involves a Luxembourg investment fund, GSF Sicar, a solar power plant developer that is 80 percent owned by Suntech and 10 percent by Zhengrong Shi, who founded Suntech in 2001. The accusation relates to a minority shareholder, GSF Capital PTE, which owns the remaining 10 percent of the fund. Suntech, which plans to file restated consolidated results in early 2013, said it had concluded that a security interest it received from GSF Capital to finance Italian solar projects did not exist. It said in August that the 560 million euro ($727 million) security was in the form of German bonds. Suntech is also weighing alternatives to cover a $541 million convertible bond due in 2013. Suntech is grappling with a global glut of solar panels that has sent prices into a tailspin. The company also said revenue fell 18 percent in the third quarter from the second because subsidies were cut in Europe, a top solar market. Shipments of photovoltaic solar panels are expected to be lower than planned. Suntech also said that its results for 2011 and the first quarter of 2012 should not be relied on, although the impact was expected to be immaterial. The Chinese solar panel industry received a vote of confidence, too, on Friday, when a Suntech rival, JinkoSolar Holding, said its Swiss unit would get up to $1 billion over five years from the China Development Bank Corporation to provide money for projects outside China.

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