Rebates for California electricity ratepayers clear hurdle









SACRAMENTO — California electricity ratepayers could get rebates of as much as $1.6 billion from more than a dozen power wholesalers that allegedly manipulated the market during the energy crisis of 2000, the state Public Utilities Commission announced.


The commission in a statement released late Tuesday praised an "initial decision" issued Friday by a federal administrative law judge who ruled in favor of the state in a complaint filed with the Federal Energy Regulatory Commission.


The judge's ruling, which still must be endorsed by the full federal commission, found the power wholesalers guilty of overcharging California utilities and limiting electricity supplies in the summer of 2000. That resulted in high prices and rolling brownouts and blackouts throughout the state that drove one utility, Pacific Gas & Electric Co., into bankruptcy.





The alleged manipulators, the PUC said, citing the judge's ruling, included Powerex, a wholly owned subsidiary of Canadian firm BC Hydro; Shell Energy North America, a subsidiary of Shell Oil Co.; TransAlta Corp. of Alberta, Canada; and the Bonneville Power Administration, part of the U.S. Department of Energy.


A Bonneville spokesman said the government-owned power agency is "disappointed with the outcome" of the judge's initial ruling but needs more time to analyze the decision.


PUC President Michael Peevey called the initial ruling by the judge a vindication for complaints brought by California officials on behalf of electricity ratepayers.


"We've been relentless in our pursuit of economic justice for Californians who were grievously overcharged for electricity during and after the energy crisis of 2000-2001," Peevey said. "We look forward to the day when all of these cases can come to a close and consumers can see the benefit of refunds of the overcharges."


marc.lifsher@latimes.com





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At least 16 hurt in blast and fire at Kansas City restaurant









At least 16 people were hurt and a popular wine bar was destroyed by an apparent natural gas explosion and ensuing fire at an upscale shopping district in Kansas City, Mo., Tuesday evening.


Residents reported smelling natural gas and seeing utility crews in the area before the conflagration. A strong scent of gas hung in the air afterward.


“Early indications are that a contractor doing underground work struck a natural gas line, but the investigation continues,” Missouri Gas Energy, a natural-gas provider, said in a statement.





The Kansas City Fire Department said the incident was under investigation. “It does seem to be an accident,” Fire Chief Paul Berardi said during a late-night news briefing.


JJ's Restaurant and wine bar, just off Country Club Plaza, had apparently been partially evacuated before the blast occurred about 6 p.m.


"This was happy hour at the restaurant. There were patrons in the restaurant," Berardi said.


No fatalities were reported, but officials brought in cadaver dogs to check the rubble. The Kansas City Star reported that one JJ's employee was missing.


The fire raged for two hours, with thick smoke visible for miles. Victims streamed to hospitals; at least four people were in critical condition.


Initially, police said a car had hit a gas main, but officials later discounted that explanation.


Witnesses described a chaotic scene. 


"I was sitting in my living room folding laundry, and felt in my chest -- and heard -- an explosion," said Jamie Lawless, who lives about two blocks from JJ's. "I started freaking out, and I was looking around, and then I saw other people walking outside. You could see giant black smoke billowing up from the plaza area, and nobody really knew what it was."


Sally McVey, who lives across the street from JJ's, said the fire "was growing exponentially, incredibly quickly. It was not like a fire I’ve seen before, where it takes a long time to spread.”


A crowd gathered to watch firefighters battle the blaze. At an apartment building on JJ's block, a woman on a top-floor balcony called down to onlookers.  "'Is my building on fire?' and everybody says, 'Yes, come down!' " McVey said. "She’s like, 'Oh my gosh,' and a lot of people come out of that building with their computers and dogs. She did too.”


JJ's owner, Jimmy Frantze, was out of town, said Kansas City Mayor Sly James, who used to be a fixture at the restaurant. The business, which boasted a selection of 1,800 bottles, had been on the site for 28 years.


“It was 28 years of a great restaurant, and then it has to end like this,” Frantze told the Kansas City Star while driving back from Oklahoma. “I want to make sure to check on my employees to make sure they are all right.”


Kansas City Police Department's bomb squad and officials with the Bureau of Alcohol, Tobacco, Firearms and Explosives were expected to investigate the accident after the search dogs finished looking for victims, Berardi said.


 matt.pearce@latimes.com


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Anne Hathaway honored by Costume Designers Guild


LOS ANGELES (AP) — Anne Hathaway was deemed best dressed — by people who dress her for work.


The "Alice in Wonderland" and "The Dark Knight Rises" actress, who's nominated for the supporting actress Academy Award for her role in "Les Miserables," was honored Tuesday evening with the spotlight award at the 15th annual Costume Designers Guild Awards. The spotlight award honors actors and directors for their collaborations with costume designers.


"I especially treasure the moment that happens on set when all the choices have been made, rehearsal is done, you're about to start, you look down and you believe in what you're wearing, so that way when you look up, you are gone, and it's finally the character's moment to come alive," said Hathaway while accepting her trophy.


Other celebrity attendees at the Beverly Hills Hotel ceremony hosted by "Community" star Joel McHale included Jon Hamm, Connie Britton, Shirley MacLaine, Amy Poehler, Maya Rudolph and Russell Crowe, who presented Hathaway with her prize.


The costume designers behind "Skyfall," ''Anna Karenina" and "Mirror Mirror" won the night's top prizes. Unlike the Oscars, which lump costume design into one category, the Costume Designers Guild divides film honors across three genres.


The winners were Jany Temime ("Skyfall") for contemporary film, Jacqueline Durran ("Anna Karenina") for period film and Eiko Ishioka ("Mirror Mirror") for fantasy film.


Durran and the late Ishioka will compete against Joanna Johnston ("Lincoln"), Paco Delgado ("Les Miserables") and Colleen Atwood ("Snow White and the Huntsman") for the costume design Oscar at Sunday's 85th annual Academy Awards.


In the TV categories, the winners were Caroline McCall ("Downton Abbey") for period/fantasy series, Molly Maginnis ("Smash") for contemporary series, Lou Eyrich ("American Horror Story: Asylum") for TV movie or mini-series and Judianna Makovsky in the commercial category for a Captain Morgan ad.


"Ugly Betty" and "Once Upon a Time" costume designer Eduardo Castro received the career achievement in TV honor. Makovsky, whose credits include "Big" and "The Hunger Games," was awarded the career achievement award in film.


"I completely forgot I put Tom Hanks in a pair of child's underpants," Makovsky said following a montage of her work.


Other winners included "Titanic" and "Minority Report" assistant costume designer David Le Vey for the distinguished service award and "Saturday Night Live" executive producer Lorne Michaels for the distinguished collaborator award, which was presented by funnyman and "SNL" alum Steve Martin.


"Congratulations, Lorne. I'm so proud of you," said Martin. "It's going to be a long time before I forget this night, but believe me when I tell you, I will forget it."


___


Online:


http://costumedesignersguild.com


___


Follow AP Entertainment Writer Derrik J. Lang on Twitter at http://www.twitter.com/derrikjlang


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The New Old Age Blog: The Reluctant Caregiver

Now and then, I refer to the people that caregivers tend to as “loved ones.” And whenever I do, a woman in Southern California tells me, I set her teeth on edge.

She visits her mother-in-law, runs errands, helps with the paperwork — all tasks she has shouldered with a grim sense of duty.  She doesn’t have much affection for this increasingly frail 90something or enjoy her company; her efforts bring no emotional reward. Her husband, an only child, feels nearly as detached. His mother wasn’t abusive, a completely different scenario, but they were never very close.

Ms. A., as I’ll call her because her mother-in-law reads The Times on her computer, feels miserable about this. “She says she appreciates us, she’s counting on us. She thanks us,” Ms. A. said of her non-loved one. “It makes me feel worse, because I feel guilty.”

She has performed many services for her mother-in-law, who lives in a retirement community, “but I really didn’t want to. I know how grudging it was.”

Call her the Reluctant Caregiver. She and her husband didn’t invite his parents to follow them to the small city where they settled to take jobs. The elders did anyway, and as long as they stayed healthy and active, both couples maintained their own lives. Now that her mother-in-law is widowed and needy, Ms. A feels trapped.

Ashamed, too. She knows lots of adult children work much harder at caregiving yet see it as a privilege. For her, it is mere drudgery. “I don’t feel there’s anybody I can say that to,” she told me — except a friend in Phoenix and, anonymously, to us.

The friend, therapist Randy Weiss, has served as both a reluctant caregiver to her mother, who died very recently at 86, and a willing caregiver to her childless aunt, living in an assisted living dementia unit at 82. Spending time with each of them made Ms. Weiss conscious of the distinction.

Her visits involved many of the same activities, “but it feels very different,” she said. “I feel the appreciation from my aunt, even if she’s much less able to verbalize it.” A cherished confidante since adolescence, her aunt breaks into smiles when Ms. Weiss arrives and exclaims over every small gift, even a doughnut. She worked in the music industry for decades and, despite her memory loss, happily sings along with the jazz CDs Ms. Weiss brings.

Because she had no such connection with her mother, whom Ms. Weiss described as distant and critical, “it’s harder to do what I have to do,” she said. (We spoke before her mother’s death.) “One is an obligation I fulfill out of duty. One is done with love.”

Unlike her friend Ms. A, “I don’t feel guilty that I don’t feel warmly towards my mother,” Ms. Weiss said. “I’ve made my peace.”

Let’s acknowledge that at times almost every caregiver knows exhaustion, anger and resentment.  But to me, reluctant caregivers probably deserve more credit than most. They are not getting any of the good stuff back, no warmth or laughter, little tenderness, sometimes not even gratitude.

Yet they are doing this tough work anyway, usually because no one else can or will. Maybe an early death or a divorce means that the person who would ordinarily have provided care can’t. Or maybe the reluctant caregiver is simply the one who can’t walk away.

“It’s important to acknowledge that every relationship doesn’t come from ‘The Cosby Show,’” said Barbara Moscowitz when I called to ask her about reluctance. Ms. Moscowitz, a senior geriatric social worker at Massachusetts General Hospital, has heard many such tales from caregivers in her clinical practice and support groups.

“We need to allow people to be reluctant,” she said. “It means they’re dutiful; they’re responsible. Those are admirable qualities.”

Yet, she recognizes, “they feel oppressed by the platitudes. ‘Your mother is so lucky to have you!’” Such praise just makes people like Ms. A. squirm.

Ms. Moscowitz also worries about reluctant caregivers, and urges them to find support groups where they can say the supposedly unsay-able, and to sign up early for community services — hotlines, senior centers, day programs, meals on wheels — that can help lighten the load.

“Caregiving only goes one way – it gets harder, more complex,” she said. “Support groups and community resources are like having a first aid kit. It’s going to feel like even more of a burden, and you need to be armed.”

I wonder, too, if reluctant caregivers have a romanticized view of what the task is like for everyone else. Elder care can be a wonderful experience, satisfying and meaningful, but guilt and resentment are also standard parts of the job description, at least occasionally.

For a reluctant caregiver, “the satisfaction is, you haven’t turned your back,” Ms. Moscowitz said. “You can take pride in that.”


Paula Span is the author of “When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions.”

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Macy's seeks to block Martha Stewart Living's pact with Penney









Macy's Inc., the second-largest U.S. department store chain, will go to court in New York on Wednesday to try to persuade a judge to permanently block Martha Stewart Living Omnimedia Inc.'s pact with J.C. Penney Co.


Macy's sued Martha Stewart Living in New York State Supreme Court in Manhattan in January 2012 to stop it from proceeding with an agreement announced with J.C. Penney the previous month. Macy's claims that it has an exclusive right to sell Martha Stewart-branded products in categories such as bedding and cookware.


Opening statements in the nonjury trial will be before state Supreme Court Justice Jeffrey K. Oing.





J.C. Penney Chief Executive Ron Johnson and Macy's CEO Terry Lundgren probably will testify next week, as will Martha Stewart, her company's nonexecutive chairwoman, Macy's spokesman Jim Sluzewski said Tuesday.


In July, Oing granted Cincinnati-based Macy's a preliminary injunction blocking Martha Stewart Living from taking any steps with J.C. Penney on products in the exclusive categories.


In August, Macy's sued J.C. Penney in the same court, seeking to block it from proceeding with the Martha Stewart Living agreement. Oing denied Macy's request in that case.


Macy's said J.C. Penney and Martha Stewart Living "made a conscious business decision" not to disclose their talks to Macy's until the contract was signed to avoid the risk of a restraining order that would bar the agreement.


"Macy's contracted with [Martha Stewart Living Omnimedia] at a time when the MSLO brand was associated with the significantly downscale Kmart and Ms. Stewart was just being released from prison," lawyers for Macy's said in a pretrial memorandum. "Taking losses at first, Macy's moved the brand in soft home goods upscale, a herculean task under the circumstances.


"Now defendants, in complete disregard of the Macy's agreement, seek to reap the rewards of Macy's work and to usurp the benefits of Macy's contract."


Martha Stewart Living has defended its agreement with J.C. Penney, accusing Macy's of breach of contract and saying the retailer stocked and priced Martha Stewart products in a manner that favors private-label brands. Martha Stewart Living also said Macy's couldn't have exercised a five-year renewal option on the agreement because of the breach.


Martha Stewart Living has argued that its original 2006 contract with Macy's allows Martha Stewart Living to design and sell products within the exclusive categories as long as they are sold through the Internet, television or at any retail store branded with the Martha Stewart name that's operated by the company or its affiliates or "prominently" features the brand, according to court filings in the case.


The agreement "gives Macy's the exclusive right, with important exceptions, to sell Martha Stewart-branded products in certain exclusive product categories," Martha Stewart Living said in a pretrial memorandum. "The agreement does not, however, give Macy's any exclusivity — as to design, promotion, sale or anything else — with respect to products that are not Martha Stewart-branded."


J.C. Penney acquired a 17% stake in Martha Stewart Living for $38.5 million in December 2011. The Plano, Texas, department store chain is seeking to revive sales with new mini-stores dedicated to Martha Stewart and other brands.


Martha Stewart Living said in July that J.C. Penney agreed to pay at least $282.9 million in sales commissions over a 10-year period under an amended agreement, a $110.5-million increase from the terms disclosed in December. The amended pact also adds new products.


For Martha Stewart Living, selling its goods to multiple retailers is important to reversing declining sales. The company, which also publishes magazines, has posted losses and decreasing revenue for four straight years, hurt by a drop in advertising demand, and analysts estimate the same for 2012. Its stock lost 44% of its value last year. The New York company announced in November that it was cutting publishing jobs as it focuses on the Web.


Macy's Lundgren has revived the department store partly by adding more exclusive merchandise including Martha Stewart's cookware, kitchen utensils and bed and bath items.


The judge said he has scheduled the trial to run through March 8.





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Civilian deaths in war in Afghanistan drop for first time in 6 years










KABUL, Afghanistan -- Civilian deaths in the war in Afghanistan dropped in 2012 for the first time in six years, a sign of lessening hostilities, but insurgents dramatically expanded their campaign of assassinating government supporters, the United Nations said Tuesday.


The annual U.N. report on civilian casualties in Afghanistan documented a 12% decline in civilian deaths, largely due to fewer ground operations, new limits on airstrikes by U.S.-led coalition forces and fewer suicide bombings by insurgents. Coalition operations resulted in 39% fewer civilian deaths, the report said.





A harsh winter that limited combat operations and insurgent movements also contributed to the drop in casualties as the 11-year conflict shifts to a new phase in which foreign forces step back and Afghan soldiers and police, who possess less deadly weapons, are almost entirely in the lead.


In all, 2,754 civilians died in the war last year, bringing the death toll to 14,728 since 2007, when the U.N. began tracking civilian casualties.


But the report said that targeted killings -- attacks against government employees, tribal and religious leaders and Afghans involved in peace efforts -- resulted in more than twice as many deaths and injuries in 2012, in part because Taliban-led insurgents increased their use of homemade bombs that spread damage over a wider area.


U.N. officials said they were particularly disturbed by a seven-fold increase in casualties among government workers, including the murders of the two top officials in the women’s affairs department in Laghman province, east of Kabul.


"Steep increases in the deliberate targeting of civilians perceived to be supporting the government demonstrates another grave violation of international humanitarian law," Jan Kubis, the U.N. special envoy to Afghanistan, said in a statement. He said the Taliban leaders’ promises to protect civilians so far amounted to "only words."


Insurgents were responsible for 81% of civilian casualties last year, compared to 72% in 2011, the report said, with improvised bombs being the single deadliest weapon.


Civilian deaths and injuries from operations by U.S.-led international forces and Afghan soldiers and police fell by 46%, the U.N. said, due largely to new restrictions by coalition commanders on airstrikes on residential dwellings.


Still, a NATO airstrike last week in eastern Kunar province reportedly killed 10 civilians in addition to four Taliban commanders, provoking fresh ire from President Hamid Karzai. The Afghan leader on Monday ordered his country’s security forces "not to request foreign airstrikes on residential areas" – a move that could further reduce civilian deaths but also hinder Afghan forces that have no air power of their own.


Marine Gen. Joseph F. Dunford, the coalition commander, said this week that his forces would comply with Karzai's order and could continue to operate effectively. The order does not apply to unilateral NATO operations, but experts say that in practice it could give U.S. forces cover for stepping back even further from combat operations as the Obama administration seeks to withdraw half of the remaining 66,000 American troops from Afghanistan by next February.


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TV special shows glory, trauma of military dogs


LOS ANGELES (AP) — It's been almost seven months since a bomb exploded on a strip of dirt in Kandahar Province, Afghanistan. Air Force Tech. Sgt. Leonard Anderson can only remember a reassuring voice.


He has seen the ambush and its aftermath on film, though: The man behind the voice putting a tourniquet on Anderson's leg as a medic tended to the other, listening to his own cries for help and his dog's whines of worry.


The blast that severely wounded the military dog handler was captured on film by one of four camera crews that were embedded with front line troops last year. The voice that reassured him belonged to Craig Constant, a cameraman for Animal Planet's "Glory Hounds" TV special, which airs Thursday.


It took the network a year to get permission to film the two-hour special, which followed the animals into combat zones where insurgents and buried explosives could be around any bend or under any pile of dirt.


Military dogs are prized targets for Taliban insurgents, Anderson said. They sniff out bombs, making safe passage for troops to follow and saving countless lives. The U.S. Department of Defense calls each dog a piece of equipment, but Constant says they're much more than that.


"They call them tools, and they are not. They are soldiers. They just have four paws instead of two feet. They walk in front of the platoons. It's a deadly game, and they die all the time. But they save lives by finding IEDs that technology can't find," said Constant, referring to the military terminology for improvised explosive devices.


Anderson became the handler for an 8-year-old Belgian Malinois named Azza when he asked for the job as kennel master at the base in Sperwan Ghar, said the 29-year-old who loves animals.


The breed is among four — including Dutch shepherd, German shepherd and Labrador retriever — that is commonly used by the military because they are of similar size and temperament, easy to train and enjoy working, said Ron Aiello, president of the U.S. War Dogs Association.


Azza became a military dog when she was 3 and detecting explosives was her specialty, said Anderson.


On the day of the blast, early morning on July 28, Azza and Anderson were about a mile from the base camp. They didn't need to go into the field — Anderson's job was to assess daily needs, plot routes and assign teams. But the self-described adrenaline junkie said he couldn't do his job if he didn't know where his men and dogs were headed and what they were facing.


Constant and his sound technician were about 10 feet behind them when the bomb went off. Military experts who examined the blast site said it was activated by remote control, not set off by touch.


But the dog bore the guilt: Constant remembers most vividly the anguished look on her face and her whines.


"Azza just looked at him. She had a human face. She was helpless. She was concerned. She was fixated on him," Constant said.


The explosion knocked the camera out of Constant's hands. He picked it up, planning to film, but dropped it when he saw Anderson.


"I don't know how he survived. There was a 6-foot-by-5-foot crater, and he was right on top of it," said Constant, who suffered ear drum damage and shrapnel wounds. The sound technician was wounded in the leg.


Anderson slipped in and out of consciousness while a medic and Constant, who is a former Marine, worked on his legs. Azza watched and whined.


"The only thing I remember from that day is Craig's voice talking to me telling me to 'calm down,' 'be easy,' 'it's going to be all right,'" Anderson said. "I woke up in Texas and that's when I asked, 'Where is my dog?' and 'What's going on?'"


Anderson doesn't know how many surgeries he had in Afghanistan, Germany and San Antonio, Texas, but he estimates around 20 based on what doctors and relatives have told him. He lost his left forearm and four fingers on his right hand, suffered upper body injuries and lost the skin on both legs.


Azza has been retired and was adopted by Anderson, his wife and their sons, ages 1 and 2. Memories of combat still haunt her, he said.


"She has some pretty bad nightmares, moving, breathing real heavy. I will slowly wake her up. She will get up and pace the house," he said.


Constant believes "Glory Hounds" shows the importance of dogs and their combat work.


"They really showed the truth and consequences of what these guys do. It's sad to watch because the story is told as much as you can tell it in two hours," he said.


His only regret from filming the show was that he didn't have his camera trained on Azza while they were helping Anderson.


"I wish to God I could have shot that. I wish I could have gotten that on film," Constant said. "It would have changed people's ideas about dogs" being viewed as merely equipment or property, he added.


___


"Glory Hounds" airs Thursday at 8 p.m. ET/PT and repeats on Feb. 24 at 9 a.m. ET/PT.


___


Online:


http://www.animalplanet.com


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National Briefing | South: Abortion Curbs Clear Senate in Arkansas



The State Senate voted 25 to 7 on Monday to ban most abortions 20 weeks into a pregnancy. The measure goes back to the House to consider an amendment that added exceptions for rape and incest. The legislation is based on the belief that fetuses can feel pain 20 weeks into a pregnancy, and is similar to bans in several other states. Opponents say it would require mothers to deliver babies with fatal conditions. Gov. Mike Beebe has said he has constitutional concerns about the proposal but has not said whether he will veto it.


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Audit of Fed's gold finds it's safe, more pure than expected









NEW YORK — Turns out the Federal Reserve's gold is secure and a bit more pure than previously thought — or so the government says.


Auditors spent weeks last year in a vault five stories beneath Manhattan counting, weighing and drilling small holes into gold bars owned by the U.S. Treasury.


It was the first time the Treasury's inspector general had audited the department's gold held by the Federal Reserve Bank of New York, which has captured the imagination of Hollywood as well as government skeptics.





The audit's results are in: The New York Fed's operations and controls are up to snuff, and the U.S. gold on deposit is a bit finer than Treasury records had indicated.


Still, the audit probably will not lay to rest questions over whether the New York Fed has secretly lent the gold or otherwise encumbered it in a swap transaction with another government or bank.


"There's no way to prove there's not a secret agreement," said Ted Truman, a former assistant Treasury secretary and top Fed official.


The audit of the Fed gold came after 2012 presidential contender and former Rep. Ron Paul (R-Texas) questioned the central bank's gold holdings.


While he was in Congress, Paul questioned whether the Fed had lent or otherwise encumbered U.S. gold in financial arrangements. At a congressional hearing in 2011, the Treasury Department's inspector general, Eric Thorson, assured Paul that "not one troy ounce is encumbered."


Paul has called for a full, independent audit and assay of the country's gold reserves. But as part of its audit, the Treasury tested a sample — not all — of the government's 34,021 gold bars in the New York Fed's vault.


In three of the 367 tests, the gold was more pure than Treasury records indicated, according to the inspector general. As a result, the government notched up the value of its gold holdings by approximately 27 fine troy ounces — or about $43,500, based on gold's market price Monday.


The assaying process consumed 10 ounces of gold, and the remaining 69 ounces removed for sampling were returned to the Treasury, according to the inspector general's office.


The U.S. gold at the New York Fed has been placed under so-called Official Joint Seals, attesting to the results of the audit.


"At this point, we do plan to conduct this audit annually," the inspector general's office said in emailed responses to questions. "However, since the gold is now under Official Joint Seal, we would not anticipate weighing, counting and assaying unless the seal shows signs of tampering."


The audit also examined internal controls, security and operations at the New York Fed. "Our audit disclosed no material weaknesses and no instances of reportable noncompliance with laws and regulations," the Treasury's audit report said.


The New York Fed holds 99.98% of the U.S.-owned gold bars and coins in the custody of the Federal Reserve. The rest of the gold is on display at Fed banks in cities such as Richmond, Va.; Kansas City, Mo.; and San Francisco.


As of Sept. 30, when the market price of gold was $1,776 an ounce, the Fed banks held $23.9 billion in U.S. gold. (Gold has since declined in value, and on Monday the precious metal was hovering around $1,610 an ounce.) The vast majority — about 95% — of the country's gold reserves is held elsewhere, in Ft. Knox, Ky.; West Point, N.Y.; and Denver.


Truman, the former Treasury and Fed official, was not surprised by the audit's findings.


"I would be flabbergasted if they found some huge discrepancy or even a substantial discrepancy between what they said they had and what they found," Truman said.


Still, the audit won't end conspiracy theories that involve the government's gold held by the Fed, he said.


"I would surprised if anyone's convinced of anything," he said. "They'll conspire now about whether the audit was aboveboard."


andrew.tangel@latimes.com





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Mary Jo White could face conflicts of interest as SEC chairwoman









NEW YORK — As a lawyer in private practice, Mary Jo White worked for Wall Street all-stars: banking giant JPMorgan Chase & Co., auditor Deloitte & Touche, former Bank of America Corp. chief Ken Lewis.


White, President Obama's pick to lead the U.S. Securities and Exchange Commission, even did legal work for former Goldman Sachs Group Inc. director Rajat Gupta, the highest-profile catch in the federal government's crackdown on insider trading, according to disclosures White filed ahead of her U.S. Senate confirmation hearing.


If she wins approval to lead the country's top financial watchdog, government ethics rules could force White to sit out of some SEC decisions. Potential conflicts of interest — or the appearances of conflicts — could arise from her work at the high-powered New York law firm Debevoise & Plimpton, and that of her husband John White, a partner at the prestigious firm Cravath, Swaine & Moore.





Obama's appointment of White, a former U.S. attorney in Manhattan known for high-profile prosecutions of mobsters and terrorists, was seen as a signal the administration was getting tougher on Wall Street. Her confirmation hearing in the Senate has not yet been scheduled but is expected in the next several weeks.


"She would have quite a minefield to navigate," said Robert Kelner, an attorney who is an expert in government ethics rules at the law firm Covington & Burling in Washington. "But this is not unusual for a senior-level appointee coming out of a law firm."


White could have to abstain from votes on matters involving former clients at a time when the SEC has been struggling to regain investor confidence among regulators and financial markets.


Government ethics rules generally prevent commissioners from participating in matters in which they or their spouses have any financial stake, or have any interest that could raise questions about their impartiality, Kelner said.


These rules generally restrict commissioners from taking part in cases they worked on while in the private sector — whether to bring a securities fraud lawsuit against a former client, for example, Kelner said.


White could still be involved in other matters dealing with former clients, just as long as she hasn't previously worked on the other side of particular cases before the SEC, Kelner said.


What could also complicate White's tenure at the SEC is an ethics pledge Obama has required executive-branch appointees to sign since he took office.


Aiming to limit the effects of the "revolving door" between government officials and the private sectors they regulate, the ethics pledge precludes appointees from participating in any matter involving "specific parties that is directly and substantially related" to their "former employer or former clients." Kelner said the pledge generally would not apply to broad regulations or policies.


The White House could grant White a waiver from the ethics pledge.


White did not respond to an email request for comment. Nominees typically do not speak publicly ahead of their confirmation hearings.


White would take over the SEC at a time when the agency faces major regulatory issues, aside from enforcement issues. The five-member commission, under former Chairwoman Mary Schapiro, failed to pass a sweeping overhaul of money-market funds, which federal officials say remain a weak link in the financial system.


Also before the SEC are rules governing high-speed stock trading and how the increasingly fragmented stock market is structured. The agency still must mete out myriad regulations called for by the Dodd-Frank financial overhaul of 2010.


John Coffee, a securities law expert at Columbia University in New York, said White has no apparent conflicts involving the marquee regulatory matters facing the SEC.


"There is just a forest of bayonets waiting out there if she looked like she was protecting a former client from an enforcement action," Coffee said. "I think she's also too smart to put herself in that kind of position."


andrew.tangel@latimes.com


Times staff writer Jim Puzzanghera in Washington contributed to this report.





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