Iraq's deadliest day in two years

 

By Lara Jakes

A startling spasm of violence shook more than a dozen Iraqi cities Monday, killing more than 100 people in coordinated bombings and shootings and wounding twice as many in the country's deadliest day in more than two years.

The attacks came only days after al-Qaida announced it would attempt a comeback with a new offensive against Iraq's weakened government.

With the US military gone and the government mired in infighting, the Iraqi wing of al-Qaida has vowed to retake areas it once controlled and push the nation back toward civil war. Though there was no immediate claim of responsibility for Monday's attacks, nearly all of them struck in the capital and in northern Iraqi cities where al-Qaida can most easily regain a foothold.

"Terrorists are opening another gate of hell for us," said Kamiran Karim, a sweets-seller in the northern city of Kirkuk, which was hit by five exploding cars throughout the morning. He suffered shrapnel wounds when one of the car bombs blew up about 200 metres from his cart.

So far this summer, militants linked to al-Qaida have claimed responsibility for a steady drumbeat of attacks designed to keep the government off-balance as it struggles to overcome a power struggle that pits Sunni and Kurdish leaders against the Shiite prime minister. The infighting, which escalated the day after the US military withdrew last December, has all but paralysed the government and deepened sectarian tensions around the country.

Iraqi and US officials insist al-Qaida is incapable of sowing the kind of widespread violence that would return Iraq to sectarian warfare. And indeed, Shiite militias so far have held back from returning fire. But Monday's attacks prove al-Qaida's continued ability to thwart security, undermine the government and create chaos in a fragile democracy that experts fear is headed toward a failed state.

Iraqi President Jalal Talabani, a Kurd, accused militants of "spreading panic and fear" and urged political parties to resolve their differences and help restore stability.

Many of Monday's attacks were stunning in their scope and boldness. They bore the hallmarks of al-Qaida, happening within a few hours of each other and striking mainly at security forces, government officials and Shiite neighbourhoods.

In one brazen assault, three carloads of gunmen pulled up at an Iraqi army base near the northeastern town of Udaim and opened fire, killing 13 soldiers before escaping, two senior police officials said.

In another, a car bomb exploded outside a government office in Sadr City, the poor, sprawling Shiite neighbourhood in northeast Baghdad. Sixteen people died.

"The only thing I remember was the smoke and fire, which was everywhere," said Mohammed Munim, an employee at the office who woke up in a nearby emergency room with shrapnel in his neck and back.

The deadliest attack, however, took place just north of Baghdad in the town of Taji, where a double bombing killed at least 41 people. The blasts were timed to hit as police rushed to help victims from a series of five explosions minutes earlier.

The death toll of at least 108 was the worst for a single day in Iraq since May 10, 2010, when a string of nationwide attacks killed at least 119 people. The sheer breadth of Monday's bloodshed harkened back to the bloodiest days of Iraq's sectarian fighting in 2007, when it was common for more than 100 people to die in a day.

It appeared to be the start of a new al-Qaida campaign in Iraq dubbed "Breaking the Walls", which was announced late last week by the local insurgency's leader, Abu Bakr al-Baghdadi.

In a statement issued Saturday on a militant website, al-Baghdadi warned that his Islamic State of Iraq is returning to strongholds that it was driven from by the American military. The Islamic State of Iraq is the formal name for the al-Qaida linked group.

"The majority of the Sunnis in Iraq support al-Qaida and are waiting for its return," al-Baghdadi said.

At its peak, al-Qaida in Iraq brutalised its victims with publicised beheadings, suicide bombings and roadside bombs that targeted the Shiite government, the US military and Iraqi civilians alike. In an attempt to goad Shiite militias to respond, al-Qaida bombed the revered al-Askari Shiite shrine in Samarra in 2006 - an attack that launched Iraq's descent into more than three years of sectarian fighting.

But the Iraqi wing of al-Qaida was shunned by the worldwide terror network's central leadership, which chided it for killing civilians. The insurgency made a series of other missteps - imposing overly strict Islamic discipline and alienating tribal leaders - that undercut its support in Iraq's Sunni communities and helped lead to the widespread defection of fighters to groups allied with the US.

As a result, the flow of funding, arms and fighters slowed to a trickle, and al-Qaida in Iraq has struggled to command much power.

Baghdad political analyst Hadi Jalo said the insurgency now feels emboldened by the success of the Sunni-dominated uprising in neighbouring Syria against Damascus' Alawite rulers. The Alawites are an offshoot of Shiite Islam.

"It is leading a sectarian war, and Iraq is part of its war and ideology in this region," Jalo said.

Since late last year, Prime Minister Nouri al-Maliki, a Shiite, has courted Sunni tribal leaders to gain their support. With their help, he's sought to ease the political crisis that has largely broken down along sectarian and ethnic lines. Earlier this month, al-Maliki offered to reinstate former army officers from Sunni provinces who were forced out after the 2003 US invasion because of suspected ties to Saddam Hussein's regime.

But the political stonewalling shows no sign of breaking, and many of Iraq's leaders have left Baghdad during the holy Muslim month of Ramadan, which began late last week.

Antony J Blinken, national security adviser to Vice President Joe Biden, predicted last week that al-Qaida will fail to lure Iraq back toward war. He said the level of violence in Iraq today is roughly what it was before the invasion.

"Iraq remains, relative to other counties, violent, and the Iraqi people suffer from it," Blinken said in the July 18 briefing at the US Embassy in Baghdad. "But again, I think it's very important to put all of this in context. Compared to where Iraq was a few years ago, there's been a dramatic change for the better."

Statements like that infuriate some Iraqi leaders who say Washington is helping al-Maliki gloss over Iraq's dire situation.

"Things are not good. Things are bad," Ayad Allawi, the Shiite leader of the secular but Sunni-dominated Iraqiya political coalition said in a July 16 interview with The Associated Press. "The society is split and we don't have a real democracy - we have a mockery."

Bombings and drive-by shootings were virtually unheard-of in Iraq during Saddam's regime, which kept a tight grasp on society through intimidation and threats. But hundreds of thousands of Kurds and Shiites were either executed or "disappeared" during Saddam's 24-year rule, targeted because of their political opposition.

Sunnis and Kurds complain they have been either sidelined from real authority in the Shiite-led government or blocked by Baghdad from making lucrative regional business deals. Last month, the anti-American cleric Muqtada al-Sadr became the most influential Shiite to join the Sunni-Kurd demand for al-Maliki to resign.

Recent backroom dealing has quieted the recent bickering, and little progress is expected to be made during Ramadan.

However, Monday's attacks made clear that al-Qaida's plans to continue its operations in what the Interior Ministry called "a flagrant violation" of "the sanctity of the holy month of Ramadan".

It was a chilling cause for celebration among jihadists, who quickly went to militant websites and called the wave of violence proof of al-Baghdadi's new campaign.

AP

 

 

US drones fired eight missiles at a compound owned by a powerful militant commander in northwest Pakistan on Monday, killing nine suspected insurgents, Pakistani intelligence officials said.

It was unclear whether the commander, Sadiq Noor, was at the compound in Dre Nishter village in the North Waziristan tribal area during the attack. Noor is the most important commander for Hafiz Gul Bahadur, a prominent Pakistani militant focused on fighting in Afghanistan.

The nine suspected militants who were killed were believed to be Bahadur's fighters, said the intelligence officials, speaking on condition of anonymity because they were not authorised to talk to reporters.

US officials rarely discuss the covert CIA-run drone program in Pakistan in detail.

The strikes have caused tension between Washington and Islamabad. They are extremely unpopular in Pakistan because many people believe they mostly kill civilians, an allegation disputed by the US

Pakistani officials regularly denounce the attacks as a violation of the country's sovereignty, but the government has supported some of the strikes in the past. That cooperation has come under strain as the relationship between the US and Pakistan has deteriorated.

Pakistani officials say they want the drone strikes to stop and are asking the US to feed intelligence gathered by the pilotless aircraft to Pakistani jets and ground forces so that they can target militants.

US officials say Pakistan has proved incapable or unwilling to target militants the US considers dangerous, so the CIA drone campaign, considered the most effective tool in the US counterterrorist arsenal, will continue.

Pakistan allegedly has a nonaggression pact with Bahadur, the militant whose men were targeted Monday, though the country's military has never acknowledged that. Pakistan has also refused US demands to go after the Afghan Taliban as well as the Haqqani network, one of the most dangerous militant groups fighting in Afghanistan.

Pakistan says its forces are stretched too thin targeting domestic insurgents at war with the state. But many analysts believe the government is reluctant to target militants with whom it has historical ties and could be useful allies in Afghanistan after foreign forces withdraw.

Also Monday, a Pakistani court ordered police to protect an Afghan couple who eloped and feared being murdered by the bride's relatives, said police officer Kamal Hussain.

Miryam and her husband, Hewad, fled Afghanistan and settled in Abbottabad, the northwest city where US commandos killed al-Qaida chief Osama bin Laden last year. They were arrested by police for allegedly entering the country illegally but pleaded that their lives would be in danger if they returned to Afghanistan.

The high court in the northwest city of Peshawar took up their case and ordered the police to provide the couple with accommodation, food, clothes and proper security, Hussain said. The judges scheduled another hearing for next week.

Women who are seen as sullying a family's honour are often killed in both Pakistan and Afghanistan, conservative Muslim societies. The court's ruling to protect a couple fleeing such danger in Afghanistan is unusual.

AP

 

 

By Raphael Satter

British police are investigating new tabloids in the country's growing phone hacking scandal, including the Trinity Mirror PLC newspaper group as well as the U.K.'s Express Newspapers, a senior Scotland Yard official said Monday.

More than 100 new allegations of "data intrusion" also are being probed.

Deputy Assistant Commissioner Sue Akers' comments to a judge-led inquiry into media ethics indicated that the scandal, which erupted last year at Rupert Murdoch's News of the World and has involved hundreds of victims, could end up burning the now-defunct tabloid's U.K. competitors as well.

Akers gave as an example payments of tens of thousands of pounds (dollars) allegedly made to the same prison officer by all three newspaper groups.

"Our assessment is that there are reasonable grounds to suspect offenses have been committed and that the majority of these stories reveal very limited material of genuine public interest," Akers told Lord Justice Brian Leveson, who is leading a government inquiry into media misbehavior set up in the wake of the scandal.

Separately, prosecutors said they would announce Tuesday whether to levy criminal charges against an unspecified number of people caught up in the investigation.

So far more than 40 journalists and public officials have been arrested as part of the sprawling inquiry. Only a handful, including former News International chief executive Rebekah Brooks, have been charged. Brooks has denied any wrongdoing

In her testimony, Akers also said her force was combing through a mountain of electronic information to find evidence for more than 100 claims of what she called "data intrusion" - a category which includes computer hacking and improper access to medical records.

In what might be a newly discovered tabloid espionage technique, she said that in at least two cases detectives had discovered data which "appears to come from stolen mobile telephones."

Police were examining "whether these are just isolated incidents or just the tip of the iceberg," Akers said.

The phone hacking scandal erupted last July after it emerged that journalists at the News of the World routinely eavesdropped on cell phones' voicemail boxes in order to score scoops. The probe has since grown to take in allegations of computer hacking and bribe-paying across Murdoch's News International - and beyond.

Several calls to Express Newspapers, owned by Richard Desmond's Northern and Shell PLC, weren't immediately returned. In an email statement, Trinity Mirror spokesman Nick Fullagar said that "we take any accusation against the company very seriously and we are cooperating with the police on this matter," noting that the newspaper group remained engaged with Leveson's inquiry.

He added: "This is all we are saying."

Police have been widely criticized for their failure to come to grips with the hacking issue when it first emerged nearly seven years ago. Police repeatedly ignored crucial leads and dismissed new evidence, claiming that phone hacking was a limited practice affecting only a handful of people.

On Monday, Akers gave the force's most up-to-date accounting yet, telling the inquiry that more than 702 people "are likely to be victims."

AP

 

 

Europe is on the brink again. The region's debt crisis flared on Monday as fears intensified that Spain would be next in line for a government bailout.

A recession is deepening in Spain, the fourth-largest economy that uses the euro currency, and a growing number of its regional governments are seeking financial lifelines to make ends meet. The interest rate on Spanish government bonds soared in a sign of waning market confidence in the country's ability to pay off its debts.

The prospect of bailing out Spain is worrisome for Europe because the potential cost far exceeds what's available in existing emergency funds. Financial markets are also growing uneasy about Italy, another major European economy with large debts and a feeble economy.

Stocks fell sharply across Europe and around the world. Germany's DAX plunged 3.18 percent. Britain's FTSE dropped 2 percent and France's CAC 40 fell 2.89 percent. In midday trading on Wall Street, the Dow Jones industrial average was down 1.35 percent. The euro slipped just below US$1.21 against the dollar, its lowest reading since June 2010.

The interest rate on its 10-year bond hit 7.56 percent in the morning, its highest level since Spain joined the euro in 1999.

Concern over Spain increased Monday after the country's central bank said the economy shrank by 0.4 percent during the second quarter, compared with the previous three months. The government predicts the economy won't return to growth until 2014 as new austerity measures hurt consumers and businesses.

On top of that, Spain is facing new costs as a growing number of regional governments ask federal authorities for assistance. The eastern region of Valencia revealed Friday it would need a bailout from the central Madrid government. Over the weekend, the southern region of Murcia said it may also need help.

Spain has already required an emergency loan package of up to (EURO)100 billion (US$121 billion) to bail out its banks. But that aid hasn't quelled markets because the government is ultimately liable to repay the money. It had been hoped that responsibility for repayments would shift from the government to the banks. But that shift is a long way off - a pan-European banking authority would have to be created first and that could be years away.

Yet it is far more than Spain's struggle that has unnerved markets.

Greece is still struggling with a mountain of debt and international creditors will visit the country Tuesday to check on the country's attempts reform its economy. There is concern that officials from the European Commission, European Central Bank and the International Monetary Fund will find that that Greece is not living up to the terms of its bailouts and could withhold future funds.

Italy has also been caught up in fears that it may be pushed into asking for aid. Italy's economy is stagnating and markets are worried that it may soon not be able to maintain its debt burden of (EURO)1.9 trillion (US$2.32 trillion) - the biggest in the eurozone after Greece. Interest rates on Italy's government bonds rose steeply Monday while its stock market dropped 2.76 percent.

The collapse in stock prices in Italy and Spain prompted regulators to introduce temporary bans on short-selling - a practice where traders sell stocks they don't already own in the hope they can make a profit if the stock falls in price.

Pascal Lamy, director of the World Trade Organisation, said after a meeting with French President Francois Holland that the situation in Europe is "difficult, very difficult, very difficult, very difficult."

Ireland, Greece and Portugal have already taken bailout loans after they could no longer afford to borrow on bond markets. Yet those countries are tiny compared to Italy and Spain, the third- and fourth-largest economies in the eurozone. Analysts say a full bailout for both could strain the other eurozone countries' financial resources.

Spain has already received a commitment of up to (EURO)100 billion from other eurozone countries to bail out its banks, which suffered heavy losses from bad real estate loans. Eurozone finance ministers signed off on the aid Friday and said (EURO)30 billion would be made available right away. But that incremental step cuts little ice with investors. If Spain's borrowing rates continue to rise, the government may end up being locked out of international markets and be forced to seek a financial rescue.

"Events since Friday have been a clear wake-up call to anyone who thought that the Spanish bank rescue package had bought a calm summer for the euro crisis," analyst Carsten Brzeski said.

The eurozone's bailout fund, the European Stability Mechanism, has only (EURO)500 billion in lending power, with (EURO)100 billion potentially committed to Greece. Italy and Spain together have debt burdens of around (EURO)2.5 trillion. And the ESM hasn't yet been ratified by member states plus eurozone governments have made it clear they won't put more money into the pot.

That once again pushes the European Central Bank into the frontline against the crisis.

On Saturday, Spain's Foreign Minister José Manuel García Margallo pleaded for help, saying that only the European Central Bank could halt the panic. But the ECB has shown little willingness to restart its program to purchase the government bonds of financially troubled countries. The central bank has already bought more than (EURO)200 billion in bonds since May 2010, with little lasting impact on the crisis.

The central bank has also cut its benchmark interest rates to a record low of 0.75 percent in the hope of kick-starting lending. Yet many economists question how much stimulus this provides as the rates are already very low - and no one wants to borrow anyway.

There has been speculation the ECB could eventually have to follow the Bank of England and the US Federal Reserve and embark on a program of "quantitative easing" - buying up financial assets across the eurozone to increase the supply of money. That could assist governments by driving down borrowing costs as well.

But so-called QE is fraught with potential legal trouble for the ECB - a European treaty forbids it from helping governments borrow.

In the case of Greece, the country is dependent on foreign bailout loans to pay its bills. A cutoff of aid over its inability to meet the loan conditions would leave it without any source of financing - and could push it to exit the euro so it can print its own money to cover its debts.

Germany's economy minister, Phillip Roesler, said the prospect of Greece leaving the euro was now so familiar it had "had lost its horror" and that he was skeptical Athens would meet conditions for continuing rescue money.

The deteriorating situation follows a summit June 28-29 that many hoped would convince markets political leaders were getting a handle on things. The summit agreed on easier access to bailout money and to set up a single banking regulator that could take the burden of bank bailouts off national governments. Yet many of those changes will take months or years to introduce - and there has been no increase in bailout money.

It is an echo of a similar summit in July 2011, when leaders agreed on a second bailout and debt reduction for Greece, only to see borrowing costs spike dramatically as leaders headed off for August vacations.

Stephen Lewis, chief economist at Monument Securites Ltd, said that "events are following a pattern often repeated in the course of the eurozone's troubles, in which the powers-that-be hail progress only to see confidence, almost instantaneously, plumb fresh depths."

AP

 

 

As a wildfire closed in on them, five members of a vacationing French family abandoned their car and stumbled through thick smoke down a steep hillside in a desperate bid to reach the waters of the Mediterranean. Instead of a beach, they found themselves at the edge of a cliff with no choice but to jump or try to climb down. Two plummeted to their deaths.

The deaths of the father and daughter off the 20-meter (65-foot) high cliff were among the most tragic tales from Spain as it battles blazes during one of its driest summers in decades. The fire involved was likely sparked by someone throwing a lit cigarette out of a car along a small road inundated by vehicles heading to France, police said.

The deaths occurred Sunday night in Portbou, a Spanish town just five kilometers (three miles) from the French border. Because wildfires elsewhere had forced the closure of the main highway linking Spain to France, traffic was diverted to the smaller road via Portbou.

The tossed cigarette apparently started a fire on the pavement which quickly spread to woods along the road before the cars could escape and officials could shut the thoroughfare, Deputy Mayor Elisabet Cortaba said Monday. Around 150 people were soon running from their vehicles and down into the rocky terrain toward the beach.

The deadly northern regional wind phenomenon called "Tramontana" led to intense gusts in the heavily forested area, spreading the blaze quickly. During all this, the family of five became separated from the rest of the group on the way down and found itself at the edge of the cliff as the fire closed in, Cortaba said.

The mother tried to scale down the crumbly cliff-face, but lost her grip and fell, said Tony Buixeda, the town's port manager, who was at the scene in a boat. One daughter told rescuers that she jumped, but Buixeda said he did not know if the others jumped or fell because he was already swimming toward the mother.

Some witnesses "said they threw themselves off, others said they fell," Buixeda said. "The only thing they could do was go to the water."

The 60-year-old father died instantly when he hit submerged rocks, and his 15-year-old daughter drowned, Cortaba said.

The mother was in a critical condition Monday with a back injury, and the son and other daughter were pulled from the water without suffering life-threatening injuries. Their identities were not released, said Cortaba, who knew only that they had been vacationing in Spain and were on their way home.

Two other French also died in the weekend fires in northeastern Spain that have burned 90 square kilometers (35 square miles), including one man who had a heart attack dousing flames around his home and another who died of burns, French Foreign Ministry spokesman Bernard Valero said.

Many of the tourists that made it to the beach in Portbou suffered injuries ranging from broken bones and burns to smoke inhalation in their dash down the hillsides with no well-used paths, Cortaba said. "The only way out was to flee and head down toward the sea," she said.

The billowing smoke seriously reduced visibility, making the trip down the hillside even more perilous. The French family of five "just had bad luck that they went down the wrong way," Buixeda said.

Many of those who arrived safely at the beach spent the night in homes of Spaniards from Portbou before leaving Monday. Surprisingly, most of the cars on the road were spared by the fire, Cortaba said.

The fires that broke out Sunday in several parts of the Catalonia region forced more than 1,400 people to stay the night in shelters. Fires were still burning Monday in many places, with roads cut off because of the smoke. In some areas, farmers were helping firefighters by driving water tanker trucks to burning areas.

Train service in the region was suspended and several cross-border roads linking Barcelona with France closed because of the advancing flames, regional government spokesman Felip Puig said Sunday.

Santiago Villa, mayor of Figueres, which houses the famous Salvador Dali museum, said he had ordered the city's 44,000 residents to stay indoors until further notice.

Eighty teams of firefighters had been deployed to combat the wildfires, and specially equipped aircraft were dumping water on them.

AP

 

 

By Nicholas Riccardi

In a world where Amazon can track your next book purchase and you must show ID to buy some allergy medicine, James Holmes spent months stockpiling thousands of bullets and head-to-toe ballistic gear without raising any red flags with authorities.

The suspect in the mass theater shooting availed himself of an unregulated online marketplace that allows consumers to acquire some of the tools of modern warfare as if they were pieces of a new wardrobe. The Internet is awash in sites ranging from BulkAmmo.com, which this weekend listed a sale on a thousand rifle rounds for US$335, to eBay, where bidding on one armored special forces helmet has risen to US$799.

"We're different than other cultures," said Dudley Brown, executive director of Rocky Mountain Gun Owners, which advocates for firearms owners' rights. "We do allow Americans to possess the accoutrements that our military generally has."

Gun rights activists like Brown celebrate that freedom, but even some involved in the trade are troubled by how easily Holmes stocked up for his alleged rampage.

Chad Weinman runs TacticalGear.com, which caters to police officers looking to augment their equipment, members of the military who don't want to wait on permission from the bureaucracy for new combat gear, and hobbyists like survivalists and paintballers. The site receives "thousands" of orders daily, sometimes from entire platoons that are about to deploy to war zones.

On July 2, Holmes placed a US$306 order with the site for a combat vest, magazine holders and a knife, paying extra for expedited two-day shipping to his Aurora apartment. The order, Weinman said, didn't stand out.

"There's a whole range of consumers who have an appetite for these products, and 99.9 percent of them are law-abiding citizens," Weinman said. But he said that "it makes me sick" that Holmes bought material from him. He added that he doesn't sell guns or ammunition and that he was "shocked" at the amount of bullets that Holmes allegedly bought online.

Authorities say all of Holmes' purchases were legal -- and there is no official system to track whether people are stockpiling vast amounts of firepower.

There is no restriction on the sale of bullets in the United States, except for armor-piercing rounds, which can only be bought by law enforcement, said Ginger Colbrun, a spokeswoman for the Bureau of Alcohol, Tobacco and Firearms. Hence the proliferation of websites offering Amazon.com-style wish-lists for hollow-point rifle rounds or tracer bullets.

There is a federal law that bars selling body armor to violent felons -- which Holmes was not -- but it is rarely used because there are is no requirement to check whether purchasers of the material have criminal records, according to Dan Gross, president of the Brady Campaign Against Gun Violence.

Over four months, authorities said, Holmes received more than 50 packages at his Aurora apartment and the University of Colorado medical school, where he was studying neuroscience. As the boxes piled up, he began to shop for guns at sporting goods stores -- because of the need to pass a background check to buy a firearm, they are still generally bought at brick-and-mortar locations.

On May 22, law enforcement officials said Holmes bought a Glock pistol. Less than a week later, he upgraded to a shotgun. The following week he bought an AR-15 rifle, versions of which had been outlawed under the assault weapon ban in 1994. But that prohibition expired in 2004 and Congress, in a nod to the political clout of gun enthusiasts, did not renew it.

Holmes also acquired explosive materials and equipment to rig his entire apartment with a complex series of booby traps that took authorities days to dismantle. Officials have not said how he obtained the material for the devices.

Holmes capped off his gun purchases with another pistol on July 7. Authorities say that, 12 days later, Holmes bought a ticket to the midnight premiere of the Batman movie "The Dark Knight Rises" and entered the theater with the crowd, then slipped out the side door and returned dressed for battle.

Oates said the shooter wore a ballistic helmet, gas mask, throat-protector, tactical vest and pants -- such complete protective gear that responding officers almost mistook him for a member of the SWAT team. He lobbed gas canisters at the crowd, then opened fire. By the time police arrived, 90 seconds later, Holmes had shot dozens of people because his rifle was modified with a high-powered drum magazine that allowed him to fire immense amounts of bullets without reloading. "It was a pretty rapid pace of fire in that theater," Oates said.

The high-capacity magazine had also been prohibited under the assault weapon ban, and even though the federal law expired a few states outlaw the devices. Colorado, which has relatively permissive gun laws, does not.

Colorado State Senator John Morse, a Democrat, said he wished the state barred large-capacity magazines and guns like the AR-15, but he does not expect the attack to make that likely. "The NRA has managed to convince the country that this has to happen to protect our Second Amendment rights," Morse said. "As long as we let people buy these guns, we will bury our children."

Rep Carolyn McCarthy (D-NY), whose husband was killed in a mass shooting on the Long Island Railroad in 1993, has proposed a ban on high-capacity magazines in Congress but acknowledges it has little chance of passage. She said she was horrified by the shooting but most shocked by the other material that Holmes allegedly accumulated -- the bullets and combat gear.

"It befuddles me to think those things should be sold to the general public," she said.

Colorado State Rep. Mark Waller cautioned against trying to limit purchases of ammunition. He noted that Holmes reportedly bought 300 rounds for his shotgun. "My 13-year-old son and I go out to the shooting range all the time," said Waller, a Republican. "I buy more than 300 rounds of shotgun shells when I do that."

He said there may be discussion of limiting the sale of the sort of protective clothing that Holmes allegedly donned. "Is that what the right to bear arms means, that you can purchase tactical gear to stop law enforcement from preventing you from perpetrating a crime?" Waller asked. "In the days and weeks to come, this is going to be a significant conversation."

But gun enthusiasts caution against over-reacting to the massacre. Brown, of Rocky Mountain Gun Owners, said he thinks citizen's access to weaponry has made the United States "a stronger country." And he doesn't see anything unusual about many of Holmes' alleged purchases.

"If I only had 6,000 rounds for my AR-15s, I'd literally feel naked," Brown said. Then he totaled up Holmes' firearms purchases: "Two handguns, a shotgun and a rifle. That's the average male in Colorado.

AP

 

 

By Julie Pace and Thomas Beaumont

President Barack Obama is defending his foreign policy record - and taking veiled shots at Republican Mitt Romney over the wars in Iraq and Afghanistan.

Speaking to the Veterans of Foreign Wars, Obama said he's delivered on his promise to end Iraq "responsibly" and to wind down the Afghan fight.

Not mentioning Romney by name, he noted some critics have opposed his Afghan timeline. But Obama says he owes it to the troops.

Romney addresses the VFW on Tuesday before leaving on a three-country foreign trip.

The comments came as the candidates resumed campaign attacks that were paused after the Colorado movie theater shooting.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Silenced for a weekend, the race for the White House reverted to divisive form Monday, as President Barack Obama and Republican Mitt Romney found enough distance from a national tragedy to get back to the politics of getting elected.

Obama tried to put the squeeze on Romney, with the president's campaign aides demanding "substantive" expectations for the Romney's upcoming trip to England, Israel and Poland. Headed for Nevada, Obama was touting his foreign policy record to the Veterans of Foreign Wars a day before Romney addresses the group.

Romney, addressing donors, returned to his critique that Obama is "out of ideas, out of excuses, and we've got to make sure in November we put him out of office." He cautioned the public not to look to government for answers in response to the Colorado shooting. Instead, he urged people to reach out locally to help people in need.

Still in the shadow of a rampage that united the nation in grief, the campaigns weighed how much and how fast to calibrate their tones. They seemed intent on returning to the business of defining their message and their opponents, albeit not quite yet with the vitriol of earlier weeks.

The race is tight, both nationally and in the select states expected to decide the outcome, polls show.

That leaves little time for either side to dial down.

Foreign policy and national security, marginalized in this economy-centreed election year, moved briefly to the fore.

In a conference call with reporters, Obama campaign officials challenged Romney to offer specific policy ideas during his three-country trip this week. Romney's travels are highly anticipated as a measure of how well he can stand up on the world stage. Obama took an even broader such trip as a candidate in 2008.

"If Romney wants to be president, if he is ready to be commander in chief, he needs to prove that he's willing to have open and honest discussions about his world views, about his beliefs, about his policies with some of our strongest allies," said Michele Flournoy, a campaign adviser and former top policy official at the Pentagon.

Four years ago, trying to burnish his own credentials against military hero Sen. John McCain, Obama traveled extensively to the Middle East and Europe, with stops in both war fronts of Afghanistan and Iraq. Obama adviser Robert Gibbs said the question for Romney is whether his trip "will be similar substantively" for voters.

In California, Romney was raising money in the wealthy and Republican heavy area of Orange County on Monday after holding three fundraisers in the San Francisco Bay area the previous night. He was expected to raise US$10 million during the swing.

Romney was scheduled to hold a business discussion in Irvine, Calif., before heading to Reno, Nev. for his VFW speech on Tuesday.

Obama is on a previously scheduled three-day trip that includes campaign fundraisers Monday in California and Tuesday in Seattle. He was expected to raise more than US$6 million on the West Coast.

Both campaigns were keeping their largely negative television advertisements off the air in Colorado, a key battleground state in the November election.

The presidential race resumed as the accused Colorado shooter appeared in court Monday for the first time.

Vice President Joe Biden, campaigning for his boss in Florida, jettisoned his typical speech to focus on the shooting victims and the stories of heroism from that night.

He told National Association of Police Organisations: "There's a hell of a lot more good out there than the evil you're sworn to take on."

The massacre stalled a race for the White House that had becoming increasingly bitter.

Romney made a low-key return to political activity Sunday night at his fundraisers, telling supporters he would tone down his political rhetoric, at least for the night, in "keeping with the seriousness of the day." The former Massachusetts governor avoided attacking Obama by name.

Obama on Sunday spent hours in emotional private meetings with the families of the dead and also met with some of those injured in the attacks.

"I hope that over the next several days, next several months, we all reflect on how we can do something about some of the senseless violence that ends up marring this country," Obama said. Romney said Obama's trip was "the right thing for the president to be doing on this day."

The Obama campaign launched the week with a web video titled "Welcome Home Our Veterans," celebrating Obama's record on veterans' issues. It includes personal testimonials from former servicemen and women who thank him for supporting the troops.

The film takes special note of Obama's work to end the US military role in Iraq.

Much of Romney's week will be focused on America's role abroad. In his first trip overseas as the presumptive Republican presidential nominee, he is expected to attend the opening ceremonies of the Olympics in London and then meet with foreign dignitaries in England, Israel and Poland.

AP

 

 

 

By Lauren Neergard

 Science now has the tools to slash the spread of HIV even without a vaccine - and the US is donating an extra US$150 million to help poor countries put them in place, the Obama administration told the world's largest AIDS conference Monday.

"We want to get to the end of AIDS," declared the top US HIV researcher, Dr. Anthony Fauci of the National Institutes of Health.

How long it takes depends on how quickly the world can adopt those tools, he said - including getting more of the millions of untreated people onto life-saving drugs that come with the bonus of keeping them from infecting others.

"No promises, no dates, but we know it can happen," Fauci told the International AIDS Conference.

Some 34.2 million people worldwide are living with HIV, and 2.5 million were infected last year.

Secretary of State Hillary Rodham Clinton said the goal is an AIDS-free generation. That would mean no babies would be born infected, young people would have a much lower risk than today of becoming infected and people who already have HIV would receive life-saving drugs so they wouldn't develop AIDS or spread the virus.

"I am here today to make it absolutely clear the US is committed and will remain committed to achieving an AIDS-free generation," Clinton told the more than 20,000 scientists, people living with HIV and policymakers assembled for the conference.

But it will require smart targeting of prevention tools where they can have the greatest effect - including to high-risk populations that are particularly hard to reach because of stigma.

"If we want to save more lives, we need to go where the virus is," she said.

First, Clinton said it's possible to virtually eliminate the transmission of HIV from infected pregnant women to their babies by 2015, by getting the mothers onto anti-AIDS drugs. HIV-infected births are rare in the United States and are dropping steadily worldwide, although some 330,000 children became infected last year. Clinton said the US has invested more than US$1 billion toward that goal in recent years and is providing an extra US$80 million to help poor countries finish the job.

Much of the AIDS conference is focused on how to get treatment to all people with HIV, because good treatment can cut by 96 percent their chances of spreading the virus to sexual partners. Fauci pointed to South Africa, where healthy people who live in a region that has increased medication now have a 38 percent lower risk of infection compared with neighbours in an area where HIV treatment is less common.

Drugs aren't the only effective protection. Fauci said male circumcision is "stunningly successful," too, at protecting men from becoming infected by a heterosexual partner. Clinton said the US will provide US$40 million to help South Africa reach its goal of providing voluntary circumcision to half a million boys and men this year.

A tougher issue is how best to reach particularly high-risk populations: gay and bisexual men, sex workers and injecting drug users. In many countries, stigma and laws that make their activities illegal drive those populations away from AIDS programs that could teach them how to reduce their risk of infection, Clinton said.

"If we're going to beat AIDS, we can't afford to avoid sensitive conversations, and we can't afford not to reach the people who are at the highest risk," she said.

So the US will spend an additional US$15 million on research to identify the best HIV prevention tools to reach those key populations in different countries, and then launch a US$20 million challenge fund to support country-led efforts to implement that science.

The world spent US$16.8 billion fighting AIDS in poor countries, the hardest-hit, last year, and the United States is the leading donor.

But Bill Gates, the Microsoft founder and philanthropist, said the world is facing incredible uncertainty about whether wealthy nations will continue funding AIDS programs with the same vigor as in the past.

"As these budget tradeoffs are made, the voices of the AIDS community and the global health community are going to have to be louder than ever," said Gates, whose Bill & Melinda Gates Foundation has pledged more than US$1 billion to global AIDS efforts.

Another US$7 billion a year is needed to get to 15 million people in low- and middle-income countries by 2015, a United Nations goal. A record 8 million received potentially life-saving drugs last year.

"This gap is killing people," UNAIDS chief Michel Sidibe told the conference. "My friends, the end of AIDS is not free. It is not too expensive. It is priceless."

The prices of generic AIDS drugs in developing countries are dropping every year. One philanthropy, the Clinton Health Access Initiative, said 70 countries in Africa, Asia, Eastern Europe, Latin America and the Caribbean that participate in its drug-procurement program now can purchase the main combination for less than US$200 a year.

"We have to be innovative," said Sheila Tlou, the former health minister of Botswana, now with UNAIDS. "We have to look at new ways of funding."

Speaking to the conference via video, French President Francois Hollande said his country was doing that by beginning what's called a financial transaction tax next month. The tax idea has received a lukewarm reception in other parts of Europe and the US

AP

 

 

 

By Bernard Condon    

Stocks have fallen for a second straight day amid fear that Spain's government may need a bailout.

The Dow Jones industrial average was down 101 to 12,721 at the close Monday. Yields for US government bonds sank to record lows as traders sought the safety of American debt.

Borrowing costs rose sharply for Spain and Italy after news that the Spanish economy contracted by a quarterly rate of 0.4 percent in the second quarter. Falling economic output makes it more difficult for Spain to deal with its debts.

The Standard & Poor's 500 index fell 12 points to 1,351. The Nasdaq composite index dropped 35 to 2,890.

All 10 industry groups in the S&P 500 fell, with materials and health care off more than 1 percent.

AP

 

 

By Lauran Neergard

Scientists are hot on the trail of a new tuberculosis treatment. A small study presented Monday at the International AIDS Conference found a novel three-drug combination passed a first-stage test to show it might work by killing as much TB bacteria in two weeks as older, more problematic therapy.

There haven't been new drugs to treat TB in four decades. The lung disease kills more than 1.5 million people a year, is the leading killer of people with AIDS, and is fast becoming resistant to standard treatment.

It is noteworthy that the experimental drug trio doesn't include the older drugs that are spurring that resistance. New studies are beginning in South Africa, Tanzania and Brazil to better tell how well the combination will work.

AP

 

 

 Iran chef de mission Bahram Afsharzadeh says his country's athletes will compete against Israelis at the London Olympics.

Iran has been criticized in the past because some of its athletes withdrew from events against Israelis at the 2004 Athens Games and 2008 Beijing Games.

Afsharzadeh says "we will be truthful to sport."

Afsharzadeh also says Iran would "respect" a minute of silence if it was held in the opening ceremony to remember the 11 Israelis murdered at the 1972 Munich Olympics. The IOC, though, has rebuffed Israel's plea for the commemoration.

Afsharzadeh spoke in the athletes village after signing the "truce wall," an initiative calling on warring parties around the world to end hostilities during the games.

AP

 

 

By Candice Choi

Not even McDonald's Corp. has an iron stomach when it comes to the global economic downturn.

The world's largest hamburger chain has thrived in boom and bust times by selling cheap eats and constantly updating its menu with popular items such as fruit smoothies and snack wraps. But the company is starting to show signs of wear and tear from global economic pressures, intensifying competition and penny-pinching customers who are eating out less often in some hard-hit regions around the world.

The Oak Brook, Ill.-based company said Monday that its net income fell 4 percent in the second quarter as a strong dollar ate into results.

When the dollar is strong, international sales translate into fewer dollars back at home. That's problematic for McDonald's, which does two-thirds of its business overseas. Making matters worse, the dollar hit a two-year high against the euro Monday amid ongoing fears that Spain may need a government bailout.

McDonald's is also facing higher costs for labor and ingredients, although it said it now expects commodity costs to rise between 3.5 percent and 4.5 percent for the full year, down from the previous forecast of up to 5.5 percent.

Suggesting more challenges ahead, McDonald's said global sales at restaurants open at least a year rose 3.7 percent for the three months ended June 30. The figure, which is a key metric because it strips out the impact of newly opened and closed locations, represents the slowest growth since the company reported sales growth of 2.3 percent in the fourth-quarter of 2009.

"We've been in situations like this before," CEO Don Thompson said in a conference call with investors, noting that the company will draw on its past experiences in the past to navigate the current challenges.

In a note to investors, Janney analyst Mark Kalinowski pointed out that the company was nevertheless able to deliver relatively strong overall growth at a time of economic uncertainty as a result of "best-in-class" execution.

McDonald's has exceeded expectations in recent years, in large part by emphasizing value and continually evolving its menu to keep up with changing tastes. Some of its most successful new offerings in recent years - such as snack wraps and specialty coffees - give customers a way to treat themselves for just a few bucks. They also happen to have high profit margins.

Kalinowski said he thinks that McDonald's will continue to grab market share. He maintained his "buy" rating on the stock.

Still, other analysts have noted that McDonald's growth has slowed in recent times, which could reflect stiffer competition from newer chains like Panera Bread Co., which offers higher-end food in a fast casual atmosphere. Long-time rivals such as Wendy's Inc. and Burger King Worldwide Inc. are also reworking their menus, renovating restaurants and launching new ad campaigns to win back customers.

In the US, McDonald's said sales rose 3.6 percent in the quarter, with increased traffic contributing to growth.

In Europe, where McDonald's does 40 percent of its business, the company said customer traffic was down in several economically hard-hit regions. But the company said that it's faring better than its competitors and, overall, sales rose 3.8 percent.

In the region that includes Asia Pacific, the Middle East and Africa - where McDonald's is looking to expand its presence - the figure edged up just 0.9 percent. Results from Australia and China offset weakness in Japan, where consumers are still reeling from last year's earthquake and tsunami and eating at home more often.

For the quarter, McDonald's says it earned US$1.35 billion, or US$1.32 per share. That's down from US$1.4 billion, or US$1.35 per share, in the year-ago period. McDonald's said unfavorable currency exchange rates hit its results by 7 cents per share.

In the third quarter, the company expects exchange rates to hurt results by 8 cents to 10 cents per share.

Total revenue for the quarter was US$6.92 billion, up slightly from US$6.91 billion a year ago. When stripping out the impact of exchange rates, the company said revenue rose 5 percent.

Analysts polled by FactSet on average expected US$1.38 per share on revenue of US$6.94 billion.

Shares of McDonald's, which has 33,000 locations around the world, were down US$2.69, or almost 3 percent, at US$88.89.

AP

 

 

By Jonathan Cooper

Police in Oregon say a 63-year-old man called authorities in Texas and confessed to two Portland homicides in the 1970s.

Portland detectives arrested Jeffrey Paul Cutlip over the weekend in Brownsville, Texas. Police said he admitted his involvement in two slayings - one in 1975, the other in 1977. Authorities haven't released the names of the victims or other information about the crimes.

Cutlip is being held in the Cameron County Jail awaiting extradition to Portland.

Oregon Department of Corrections records show Cutlip has spent most of the past three decades behind bars, in and out of prison for crimes including sodomy, burglary and robbery. He was required to register as a sex offender following a 1982 sodomy conviction. Records say he targets female strangers using threats and weapons.

AP

 

 

The August edition of Marie Claire South Africa featuring an illustration of Kate Middleton has raised eyebrows with some saying the magazine bypassed traditional routes of securing a cover girl.

The magazine cover appears to show the Duchess of Cambridge wearing African-style designer clothes but a closer look reveals that an illustrator and a real-life model were used to create a likeness of Prince William's wife.

The cover claims Middleton wears South Africa's "best local designs" only to acknowledge in a well-hidden small print that "of course she doesn't. But she should."

Some readers on the magazine's website described the cover as "misleading" but others thought it was "pure genius."

Editor Aspasia Karras says the cover was meant to be a playful tribute harking back to the covers of the 1940s and 50s.

AP

 

 

 

By Colleen Barry

Italy's market watchdog on Monday imposed a week-long ban on the short-selling of financial stocks as the Milan index plunged amid fears that if Spain needs a bailout, Italy could be next.

The main stock index, the FTSE-MIB, closed 2.8 percent lower after being down by more than 5 percent in the morning.

European markets have been battered by fears that Spain - which has already sought a bailout for its banks - could need a sovereign bailout as its borrowing rates remain prohibitively high.

A bailout for Spain would stretch Europe's financial resources and put all eyes on Italy, which has the eurozone's third-largest economy and very high public debt. The continent's bailout fund would have no more money to help Italy.

In a short sale, investors sell stock that they do not own, betting that they can buy it back at a lower price. Short-selling of shares has been blamed for driving down markets during the financial crisis and several European regulators have in the past imposed temporary bans on the practice. Italy in February let expire a ban that had been imposed the previous summer.

Premier Mario Monti said the situation for the eurozone was "difficult."

`'It is a motive for us to search for solid relations in the real industrial and commercial economy," Monti said during a visit to Russia that included the signing of business deals. He emphasized the strategic importance of Russia for Italy, highlighting (EURO)46 billion (US$55.68 billion) in annual trade.

Meanwhile, the Italian government's borrowing rates rose on concern that it may eventually need a bailout. The 10-year bond yield rose 0.25 percentage points to 6.32 percent.

Fresh figures from Eurostat showed that Italy's debt to GDP ratio has reached 123 percent, the second highest in Europe after Greece.

Monti has expressed disappointment that investors have continued to demand higher interest rates to lend to Italy even though his government of technocrats has passed big reforms since it came to power last November. Monti says the reforms, which include making the labor market more flexible, will help the economy grow in the medium-term.

As the financial crisis rages on, reports have persisted about the chance of early elections, possibly in the fall. That could happen if Monti's government loses the support of the main political parties.

Monti indicated in an interview with a Russian newspaper that he intends to stay until the current legislative session ends next spring, and that he has no intention of seeking office.

`'I place great hope that the political parties will know how to assume the responsibility," Monti told the Rossiyskaya Gazeta.

In Milan, trading in some banks and financial groups - such as banks UniCredit and Intesa Sanpaolo and insurance company Generali - was halted temporarily in the morning because of excessive losses.

After trading resumed, Unicredit shares recovered to close down only 0.2 percent to (EURO)2.43 while Intesa shares closed 1.8 percent lower at (EURO)0.92.

AP

 

 

By Maria Danilova

If a group of Ukrainian lawmakers succeeds in its mission, TV shows and movies sympathetically portraying homosexuals such as "Brokeback Mountain" will be banned. So will gay pride parades.

The recently introduced bill, supported by the president's representative in parliament, would impose prison terms of up to five years and unspecified fines for spreading "propaganda of homosexuality" - defined as positive public depiction of gays in public.

It has sparked an outcry from rights organisations in Ukraine and beyond, who condemn the bill as a throwback to Soviet times when homosexuality was a criminal offense. They also warn that harassing the gay community could lead to a spike in the HIV/AIDS epidemic in Ukraine, one of Europe's most severe, by driving gays further underground.

Although homosexuality was decriminalized in Ukraine and neighbouring Russia after the fall of communism, animosity toward gays remains high across the former Soviet sphere. St. Petersburg, Russia's second-largest city and regarded as one of the country's most sophisticated, this year passed a law mandating fines of up to US$33,000 for promoting homosexuality among minors. A gay pride parade in the Georgian capital ended in a scuffle with opponents in March.

The Ukrainian bill comes in the wake of organisers' decision to cancel the country's first gay-pride parade in May, which they made after hearing that hundreds of potentially violent opponents of gay rights had come to the capital.

Two Ukrainian gay rights activists have been brutally attacked in recent months.

The hostility toward homosexuals raises concern wider questions about tolerance in Ukraine and whether the country is truly capable of embracing Western values as strives to join the European Union. In the run-up to last month's European football championship, co-host Ukraine was rocked by allegations of racism, as fans at one stadium performed monkey chants directed at black players.

Pavlo Ungurian, one of the six lawmakers from various parties who authored the bill, told reporters Monday that growing acceptance of gay rights in the West is "not evolution, but degradation" and needed to be fought.

"Our goal is the preservation of the moral, spiritual and physical health of the nation," Ungurian said. "We must stop the propaganda, the positive description and the publicity ... of this abnormal lifestyle."

Ruslan Kukharchuk, who heads the group "Love Against Homosexuality" and campaigns in support of the bill, said the legislation would make TV dating shows involving same-sex couples and movies like "Brokeback Mountain," which explores the romantic relationship of two cowboys in the United States, illegal. Gay pride events and parades would also be banned.

Kukharchuk charged that homosexuality is an illness and that people must be treated for it. In 1990, the World Health Organisation removed homosexuality from the international classification of illnesses.

"We believe that homosexuality is a disease, it is a psychological disorder of a person and without a doubt there must be institutions, perhaps even financed by the government, to help such people get rehabilitation therapy," Kukharchuk said.

No date has been set for a vote on the bill in parliament, but Kukharchuk hopes it will be considered in September before a parliamentary election in October.

President Viktor Yanukovych has remained mum about the initiative, but the fact that his parliamentary representative Yuri Meroshnichenko supports the bill is an indication that Yanukovych may back it as well. It was unclear how much support the bill enjoys among lawmakers.

Anastasia Zhivkova, a gay rights activist, called the bill "a throwback to the Middle Ages" that would even further clamp down on Ukraine's gays and lesbians, most of whom already hide their lifestyle because of a severe public stigma. For every one gay Ukrainian who is out, another 80 are forced to conceal their sexuality, according to gay groups.

The United Nations Development Program said in a statement that the bill amounts to "state-supported discrimination against" gay, lesbian and transgender groups and could fuel the AIDS epidemic in Ukraine, by preventing them from getting proper information on preventing and living with sexually transmitted diseases.

Zhivkova said gays are forced to hide their relationships not only from their work colleagues, but also from their relatives, often cutting vacation photos in two, to avoid showing who accompanied them.

"A great part of our life remains in the shadows," Zhivkova said. "All the time you balance between being an outcast or a criminal."

AP

 

 

Authorities say a shark killed a 22-year-old surfer in the Indian Ocean waters off France's Reunion Island.

Island government spokesman Serge Bideau says the man was in a surfing spot west of the island Monday when a shark bit off his right leg.

Witnesses helped the victim, identified as island resident Alexandre Rassica, to shore where rescue workers tried in vain to resuscitate him.

The type of shark involved was not immediately clear.

The number of shark attacks has risen in Reunion Island in the last two years. There have been seven attacks - not all fatal - since the start of 2011.

France launched an investigation this year into the reasons behind the growing number of such attacks.

AP

 

 

Iraqi state TV says Prime Minister Nouri al-Maliki has formally authorised the entry of Syrian refugees into his country.

No details were released following Monday's announcement.

The 17-month conflict in Syria has sent tens of thousands of refugees streaming out of the country. But the idea of Syrians fleeing to Iraq is notable.

For years, Iraqis would head to Syria to escape widespread sectarian fighting during the worst of violence in their homeland between 2005 and 2007.

Now the refugee traffic is going the other way.

AP

 

 

 

Spain's market regulator says it has temporarily banned short-selling of shares on its stock indexes owing to volatility in Spanish and European markets.

The country's CNMV stock market watchdog said the measure would be kept in place for three months. It noted that Italy took similar steps Monday.

In a short sale, investors sell stock that they do not own, betting that they can buy it back at a lower price. The investor seeks a profit by betting that the price of certain shares will fall.

Short-selling of shares has been blamed for driving down markets during the financial crisis.

AP

 

By Alexa Olesen

A cancer-causing toxin linked to mildewed cattle feed has been found in baby formula in China, an official said Monday, the latest quality problem to plague the nation's dairy industry since a 2008 tainted formula scandal that caused six babies' deaths.

Aflatoxin was found in five batches of Nanshan Bywise brand formula made last year by Hunan Ava Dairy Industry Co. in Hunan province's Nanshan city that were being sold in Guangzhou, said a man surnamed Gong from the Guangzhou Administration of Industry and Commerce General Office.

The five problem batches were boxes, bags or tins of powder weighing between 400 and 900 grams and manufactured between July and December last year. It wasn't known if any of the problem formula was fed to babies. A low dose of aflatoxin is not considered harmful, but high doses are linked to cancer, especially in the liver.

The contamination was first reported by the administration in a statement posted online Friday. A woman who answered the phone at a Nanshan Bywise service hotline but who refused to give her name, said the company had no immediate comment on the case.

The woman referred calls to food safety officials in Changsha, the capital of Hunan. A man who answered the phone at the Changsha Food Safety Office said the person in charge of the investigation was not available for comment.

The state-run Global Times newspaper on Monday quoted a Nanshan Bywise employee who refused to give her name saying that the brand had yet to receive test results on the formula from the Guangzhou authority. She said the company would not speak about it before the news was verified.

Aflatoxin is produced by a fungus that can grow on hay or grains and appear in the milk of animals that eat the mildewed feed. It previously has been detected in milk from China's biggest dairy company, Mengniu, and another company, Changfu.

Last month, another industry leader, Yili Industrial Group, announced it had recalled infant formula because it was tainted with "unusual" levels of mercury.

China's food chain, and especially the dairy industry, has come under increased scrutiny in recent years because of a series of safety problems.

In 2008, at least six babies died and 300,000 became sick after being feed milk powder tainted with melamine. The industrial chemical is illegally added to watered-down dairy products to make their protein content appear normal.

A dairy farmer and a milk salesman were executed and 19 other people were jailed for their role in that scandal.

AP

 

 

By Peter Svensson

n Tuesday, Apple is set to report financial results for the second quarter. Analysts are expecting net income of US$9.8 billion. But whatever figure Apple reports won't reflect its true profit, because the company hides some of it with an unusual tax maneuver.

Apple Inc., already the world's most valuable company, understates its profits compared with other multinationals. It's building up an overlooked asset in the form of billions of dollars, tucked away for tax bills it may never pay.

Tax experts say the company could easily eliminate these phantom tax obligations. That would boost Apple's profits for the past three years by as much US$10.5 billion, according to calculations by The Associated Press.

While investors might rejoice if Apple suddenly added US$10.5 billion to its profits, unilaterally erasing a massive US tax obligation could tarnish its reputation as a relatively responsible payer of US taxes. Instead, the company is lobbying to change US law so that it can erase its liabilities in a less conspicuous fashion. The issue has become part of the presidential campaign.

Like other companies, Apple typically keeps profits on overseas sales in overseas accounts. When someone buys an iPad in Paris or Sydney, for instance, the profit stays outside the United States.

Apple may pay some corporate income taxes on that profit to the country where it sells the iPad, but it minimizes these by using various accounting moves to shift profits to countries with low tax rates. For example the strategy known as "Double Irish With a Dutch Sandwich," routes profits through Irish and Dutch subsidiaries and then to the Caribbean.

When it comes to using creative tax techniques, Apple is no different from other multinational corporations, says Robert Willens, an independent accounting expert.

And just like other corporations, Apple leaves cash overseas. If it brought it home to the US, it would have to pay federal income taxes on the money (though it would get a credit for foreign taxes already paid). In Apple's case, those overseas accounts have grown to a staggering US$74 billion - equal to the market value of Citigroup Inc.

The money is accumulating overseas because corporations are counting on lower US tax rates in the future. At 35 percent, the US corporate tax rate is among the highest for developed countries. In 2004, Congress enacted a one-year "tax holiday" for overseas earnings, and multinationals are hoping for a repeat of that. Presidential candidate Mitt Romney wants to permanently eliminate federal taxes on overseas profits. President Barack Obama attacked that idea last week, saying it won't create US jobs, like the Romney campaign contends.

Where Apple does differ from other companies is that it sets aside a portion of these overseas profits, marking them as subject to US taxes sometime in the future. Essentially, it's saying "this is money that we'll likely have to pay US federal income taxes on" because we intend to repatriate it, says Willens.

But because Apple doesn't actually bring the profits into US accounts, it doesn't pay the taxes. Instead, it records a tax liability. When Apple reports quarterly results, it subtracts these liabilities from its profits, even though it hasn't actually paid the taxes.

The liabilities accumulate, and as Apple's profits grow, they're piling up faster and faster.

"When you capitalize that into the future, it might be tens of billions of dollars," said Martin Sullivan, an economist with Tax Analysts, a nonprofit publisher.

The company had a net US$6 billion of tax liabilities at the end of September, the last reported figure. It's had two blow-out quarters since then and is expected to report another one Tuesday. Based on reported and expected profits for the last three quarters, the liabilities can be estimated at around US$10.5 billion.

Apple declined to comment on the specifics of its tax strategies or why it records tax liabilities that other multinationals avoid.

"Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules," the Cupertino, Calif., company said in a statement.

Yet Apple has made clear that it has no intention of repatriating its profits from overseas at the current US tax rate. When CEO Tim Cook announced that the company would start paying a dividend this summer, he said the board determined the size of the dividend solely by looking at the amount of cash the company has in US accounts.

"We do not want to incur the tax cost to repatriate the foreign cash at this time," Chief Financial Officer Peter Oppenheimer told investors in March.

Apple's net tax liabilities started building three years ago, when its sales started rocketing because of the iPhone. In that time, the company has reported a total of US$69 billion in net income. If it had applied the same accounting practices as other multinational technology companies, and not marked some overseas profits as subject to US taxes, its profits would have been about US$78 billion, or 13 percent higher.

The boost to net income could mean a boost to the stock, since companies are usually valued on their earnings. If investors were to value Apple based on the last 12 months of earnings, with the tax liabilities added to earnings, the stock might be 13 percent higher.

Willens and Sullivan say that Apple could erase its liabilities by considering the profits "permanently reinvested" overseas, acknowledging that they will never be brought home. That would erase the tax liability, but it could make Apple look like a less responsible corporate citizen.

"I doubt they're going to do that on their own, because they don't want to be set up for criticism," said Willens.

Groups such as Citizens for Tax Justice compile lists of the tax rates corporations report. Apple looks like a relatively good taxpayer on such lists, with a 24 percent rate. But Apple doesn't actually pay the 24 percent, since it isn't repatriating its overseas profits. The actual taxes Apple pays are 13 percent of profits, as computed by Sullivan. That's a relatively low rate compared with other multinationals.

But keeping the money overseas limits what Apple can do with it. It means, for instance, that Apple can't use it to buy another US company, or give it to shareholders.

To get the money home without paying full US taxes on it, the company advocates a change in US tax law. It's a member of Working to Invest Now in America, or WinAmerica. The coalition is lobbying for two congressional bills that would temporarily reduce the tax rate on such earnings to 5.25 percent. That would encourage the repatriation of some of the US$1.4 trillion in cash that US companies have sitting in overseas accounts, the group says.

The temporary tax amnesty enacted in 2004, resulted in hundreds of billions being brought home to the US But according to the Congressional Research Service, it didn't create jobs or stimulate the economy, as had been hoped.

Google Inc., Oracle Corp., Microsoft Corp. and Cisco Systems Inc. are also members of WinAmerica, but none of them stand to gain as much as Apple from a tax amnesty, because they have less cash overseas.

AP

 

 

News Corp. on Monday named its grade school education business Amplify and said it and AT&T would fund a pilot project that aims to put tablet computers in students' hands in the coming school year.

AT&T will provide tablet computers that work on its 4G network and Wi-Fi network. None of the schools selected to participate will have to pay for the program. The company did not say which schools would take part or how they'd be selected.

The idea is to put tablet computers into the hands of students for use at school and at home. The system tracks their progress and is meant to tailor lessons to each student's level.

Amplify is being spun off from News Corp. along with newspapers in a planned reorganisation of the company. It brings together the student assessment software business Wireless Generation with a new curriculum it is developing.

News Corp., based in New York, announced in November 2010 that it would take a 90 percent stake in Brooklyn, N.Y.-based Wireless Generation, a creator of software tools for educators, for US$360 million.

Former New York City schools chancellor Joel Klein, who joined News Corp. in January 2011 to head up its education initiatives, will lead the company.

Wireless Generation founder Larry Berger said the pilot project was not just meant to convert participating schools into future customers. He said it was a way to improve the system and prove it works.

"There's no way to do high quality research and development without working in schools," he said. Once the pilot project is complete, the company hopes to market its services to as many schools as possible.

Wireless Generation says it currently provides services to more than 200,000 teachers and 3 million students in all 50 states. It supports different ways of paying for tablets. Sometimes parents pay for them, sometimes schools pay for them, sometimes school districts lease them and sometimes schools rely mostly on students to bring whatever mobile device they have.

Klein said News Corp. aims to be a major provider of educational services and said the US education market exceeds US$600 billion annually.

He said that school districts spend money on computers, connectivity, textbooks and professional development and hoped that Amplify would be among the things schools spend money on.

"If we have the impact that I hope we'll have, people will find room in their budgets to support the work," he said.

AP

 

 

By Kevin Begos

High-tech security? Forget those irksome digital eye scans. Meet the biometric shoe.

A new lab is working to perfect special shoe insoles that can help monitor access to high-security areas, like nuclear power plants or special military bases.

The concept is based on research that shows each person has unique feet, and ways of walking. Sensors in the bio-soles check the pressure of feet, monitor gait, and use a microcomputer to compare the patterns to a master file for that person. If the patterns match the bio-soles go to sleep. If they don't, a wireless alarm message can go out.

"It's part of a shoe that you don't have to think about," said Marios Savvides, head of Carnegie Mellon University's new Pedo-Biometrics Lab, in Pittsburgh.

The lab, which has US$1.5 million in startup funding, is a partnership with Autonomous ID, a Canadian company that is relocating to several US cities. Todd Gray, the company president, said he saw the potential when his daughter was in a maternity ward decorated with representations of different baby feet all along a wall.

Autonomous ID has been working on prototypes since 2009, with the goal of making a relatively low cost ID system. Gray said they've already run tests on sample bio-soles, which are no thicker than a common foot pad sold in pharmacies, and achieved an accuracy rate of more than 99 percent. He said Carnegie Mellon will broaden the tests to include "a full spectrum of society: big, tall, thin, heavy, athletic, multicultural, on a diet, twins and so on."

Gray wouldn't speculate on what the system will cost or when it might reach the marketplace, but each worker at a site would have his or her own pair of bio-soles.

"Within the third step, it knows it's you, and it goes back to sleep," he said. "If I put on yours, it would know almost instantly that I'm not you."

The idea may seem far-fetched, but scientists have known for centuries that individuals have unique ways of walking, and in recent years the US Department of Defense has been funding millions of dollars of gait research, as has the Chinese government.

The Institute of Intelligent Machines is doing extensive research into gait biometrics, including reports of systems where a floor monitors footsteps without people's knowledge.

One expert who is not connected with the CMU lab said the biometric sole seems promising.

"I must admit I find this news very exciting," said John DiMaggio, an Oregon podiatrist who has worked with law enforcement to use foot information in forensic investigations. While it is too early to fully judge the CMU research plan, DiMaggio said using feet as a biometric identification source makes sense.

While researchers have noted that gait can vary with injuries, fatigue and other factors, Savvides said the bio-soles can detect signs of those things, too.

The bio-soles might also have medical uses. Several papers presented this month at the Alzheimer's Association International Conference in Vancouver suggest changes in how elderly people walk - such as a slowing pace or variable stride - can provide early warnings of dementia.

Gray said the technology is less invasive of privacy than eye scans and other biometrics, in part because the individual data stays inside the bio-soles.

But one group that has followed biometrics and privacy issues said there could still be problems.

"Any biometric capture device is a potential tracking device, just like every iPhone is a potential tracking device. That's just the way these things are," said Lee Tien, an attorney with the Electronic Frontier Foundation, a San Francisco nonprofit that monitors free speech and privacy issues.

Tien said that the bio-soles themselves "might make a person feel a little bit better" than other security systems and that Gray's claim that the system can ID a person within three steps is "pretty impressive."

But he added that if the project is successful, bio-soles could also be implanted in shoes secretly.

"I wouldn't expect Nike to build these in. But it's potentially covert," he said, meaning it could be used to help spy on people.

AP

 

 

 Police believe a woman hit the gas instead of the brake as she left a New Jersey car wash, sending her vehicle into a river.

An employee and a customer at Spotless Auto Laundry jumped into the Hackensack River to rescue the woman on Sunday.

Employee John Goez tells The Record newspaper (http://bit.ly/MD64eh ) they couldn't open the door because of the water pressure. They managed to get the woman out through the window.

A tow truck retrieved the vehicle and the woman was treated at a hospital for minor injuries.

AP

 

 

By Pat Eaton-Robb

A radio signal being transmitted out of a submarine base is likely behind reports of garage doors failing to open and close in southeastern Connecticut, the US Navy said Monday.

The signal is part of the Enterprise Land Mobile Radio system, which is used by the military to coordinate responses with civil emergency workers, said Chris Zendan, a spokesman for submarine base in Groton.

The problem, first reported by The Day of New London, is that the same frequency is used at very low levels by the manufacturers of garage door openers. The signals from remote controls to open or close the doors are blocked by the signal from the base.

Overhead Door Co. of Norwich Inc. told the newspaper it has been receiving complaints from several towns near the base and has found no problem with its equipment. The Associated Press left messages with the company Monday.

Sondra Tuchman, of Montville, told the newspaper she has to get out of her car, stand in front of the door and press the remote for the opener to work. She said an installation company told her she would have to pay about US$300 to change her system to another frequency.

The garage-door companies do not need to be licensed to use the frequency because the remote controls transmit at such low levels, Zendan said. But the homeland security needs for the signal take precedence, he said.

"Because garage door openers are unlicensed devices, they are not offered any protection from interference by licensed users in the same frequency band, and in fact are required by federal law to accept interference from licensed users," Zendan said. "Base commanding officers do not have the authority to change those systems, and unfortunately we cannot offer compensation to the unlicensed users."

For decades, the military has held a portion of the radio spectrum, from 138 to 450 megahertz, in reserve. But that range came back into use after the Sept. 11, 2001, terrorist attacks, when officials discovered they needed a new system to allow civil and military first responders to communicate.

The ELMR system, which uses radio frequencies between 380 and 399.9 megahertz, was developed. It began operating at the sub base last summer but is not unique to the state.

In 2006, residents around an Air Force facility in Colorado Springs, Colo., saw their garage-door remotes stop working when the 21st Space Wing began testing a frequency for use during homeland security emergencies or threats. In 2005, testing of a similar system in Fort Detrick in Maryland resulted in similar problems.

In May, Overhead Door Co. said it would offer free installation and parts to change the signal on remote garage door openers near a naval base in Newport, R.I.

AP

 

 

An experimental heat shield for future spacecraft landings successfully survived a test launch Monday that brought it through the earth's atmosphere at speeds of up to 7,600 mph, NASA said.

The demonstration launch from Wallops Flight Facility on Virginia's Eastern Shore involved a 680-pound cone of high-tech rings covered by a thermal blanket of layers of heat-resistant materials. The Inflatable Reentry Vehicle Experiment, or IRVE-3, was launched from a three-stage Black Brant rocket for a suborbital flight.

IRVE-3 separated from the launch vehicle about six minutes into the flight about 280 miles in the Atlantic Ocean off North Carolina.

An inflation system pumped nitrogen into IRVE-3 until it expanded to a mushroom shape almost 10 feet in diameter. Engineers in the Wallops control room watched as four onboard cameras confirmed the inflatable shield held its shape despite the force and high heat of re-entry, NASA said.

A high-speed Navy Stiletto boat based at Joint Expeditionary Base Little Creek-Fort Story was dispatched to retrieve the capsule.

The purpose of the launch was to determine whether a space capsule can use an inflatable outer shell to slow and protect itself as it enters an atmosphere at hypersonic speed during a planetary entry and descent.

"We're pushing the boundaries with this flight," said Lesa Roe, director of NASA Langley Research Centre in Hampton. "We look forward to future test launches of even bigger inflatable aeroshells."

AP