Experts Say Thimerosal Ban Would Imperil Global Health Efforts


A group of prominent doctors and public health experts warns in articles to be published Monday in the journal Pediatrics that banning thimerosal, a mercury compound used as a preservative in vaccines, would devastate public health efforts in developing countries.


Representatives from governments around the world will meet in Geneva next month in a session convened by the United Nations Environmental Program to prepare a global treaty to reduce health hazards by banning certain products and processes that release mercury into the environment.


But a proposal that the ban include thimerosal, which has been used since the 1930s to prevent bacterial and fungal contamination in multidose vials of vaccines, has drawn strong criticism from pediatricians.


They say that the ethyl-mercury compound is critical for vaccine use in the developing world, where multidose vials are a mainstay.


Banning it would require switching to single-dose vials for vaccines, which would cost far more and require new networks of cold storage facilities and additional capacity for waste disposal, the authors of the articles said.


“The result would be millions of people, predominantly in low- and middle-income countries, with significantly restricted access to lifesaving vaccines for many years,” they wrote.


In the United States, thimerosal has not been used in children’s vaccines since the early 2000s after the Food and Drug Administration and public health groups came under pressure from advocacy groups that believed there was an association between the compound and autism in children.


At the time, few, if any, studies had evaluated the compound’s safety, so the American Academy of Pediatrics called for its elimination in children’s vaccines, a recommendation that the authors argued was made under the principle of “do no harm.”


Since then, however, there has been a lot of research, and the evidence is overwhelming that thimerosal is not harmful, the authors said. Louis Z. Cooper, a former president of the academy and one of the authors, said that if the members had known then what they know now, they never would have recommended against using it. “Science clearly documented that we can’t find hazards from thimerosal in vaccines,” he said. “The preservative plays a critical role in distribution of vaccine to the global community. It was a no-brainer what our position needed to be.”


Advocacy groups have lobbied to include the substance in the ban, and some global health experts worry that because the government representatives due to vote next month are for the most part ministers of environment, not health, they may not appreciate the consequences of banning thimerosal in vaccines. The Pediatrics articles are timed to raise a warning before the meeting.


“If you don’t know about this, and you’re a minister of environment who doesn’t usually deal with health, it’s confusing,” said Heidi Larson, senior lecturer at the London School of Hygiene and Tropical Medicine, who runs the Vaccine Confidence Project.


In an open letter to the United Nations Environmental Program and the World Health Organization this year, the Coalition for Mercury-Free Drugs, a nonprofit group that supports the ban, disputed the assertion that scientific studies had offered proof that thimerosal is safe, and urged member states to include it in the ban.


That it is being used in developing countries, but not developed countries, is an “injustice,” the letter said.


The World Health Organization has also weighed in. In April, a group of experts on immunization wrote in a report that they were “gravely concerned that current global discussions may threaten access to thimerosal-containing vaccines without scientific justification.”


Dr. Larson said she believed that the efforts of pediatricians and global health experts, including the W.H.O., would influence the negotiations in Geneva and that the compound would most likely be left out of the final ban.


“You can’t just pull the plug on something without having a plan for an alternative,” she said.


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Developer is buying group of buildings in Pacific Palisades









Los Angeles developer Rick Caruso is buying 10 retail properties on three parcels in the tony town center of Pacific Palisades, according to people who know about the deal.


The acquisition will give Caruso the opportunity to restyle a significant portion of the affluent neighborhood's commercial district in his vision.


Caruso, owner of the upscale Grove shopping center in Los Angeles, is in escrow on a 2.8-acre collection of commercial buildings on both sides of East Swarthmore Avenue and Sunset Boulevard known as Pacific Palisades village.





Terms of the purchase are not public, but local real estate experts value the pending sale at $40 million to $50 million. A representative of Caruso Affiliated declined to comment.


Several of the commercial buildings dating from the 1950s are unoccupied, and others have short-term leases offering the new owner "the ability to execute its vision for the property" and redevelop the site, according to marketing materials from broker CBRE Group Inc.


The current owner is the Wilson Family Trust, real estate data provider CoStar Group said.


Caruso also developed the Americana at Brand shopping and residential complex in Glendale. In September, he agreed to buy 48 acres in Carlsbad, where he is expected to build a large-scale retail and entertainment center.


Glendale apartment complex nears completion


An apartment complex with small units intended to appeal to young people eager to get away from roommates and parents is nearing completion in downtown Glendale.


The $34-million mixed-use project named Eleve Lofts & Skydeck is designed for the tastes and needs of Generation Y — people ages 20 to 34, said Alan Dibartolomeo, an executive at AMF Development.


Research by the Huntington Beach company found many young adults would prefer to live in a small place alone than in a larger space with a roommate, even if it costs more to do so.


AMF razed a former Circuit City electronics warehouse store at North Maryland Avenue and East Broadway in Glendale's urban shopping district to make way for Eleve. It will have three underground parking levels, shops and restaurants at street level and six stories of apartments with 208 units above the retail spaces.


The "micro" one-bedroom units will be about one-third smaller than average one-bedroom units at less than 400 square feet. There will also be "dual master" units with two bedrooms and two bathrooms.


The roof "sky deck" is intended to be an open-air social space with cabanas, barbecues, fire pits, a dog park, media center, hot and cold spas, and a "poet's corner" that includes a piano.


Eleve will also have a fitness center and furnished business center with workstations.


"Our target audience is an environmentally conscious and technologically savvy generation made up of young renters who are delaying marriage and family in favor of careers," said Greg Parker, chief executive of AMF.


Rents are expected to range from $1,600 to $2,800 a month when the complex opens in early spring, the company said. Eleve is the prototype for similar complexes AMF hopes to build in other urban centers, including Los Angeles, San Diego, San Francisco and Seattle.


Corona apartment property is sold


A gated 312-unit residential property in Corona called Parcwood Apartment Homes has been sold as demand for apartments in the Inland Empire grows, a real estate brokerage said.


Irvine apartment developer and manager Western National Group bought the garden-style complex at 1700 Via Pacifica from Essex Property Trust Inc., according to broker Jones Lang LaSalle. The new owners are expected to upgrade the 1980s-era property and raise rents.


Terms of the transaction were not disclosed, but a real estate expert familiar with the property valued the deal at $43 million.


Parcwood has 26 two-story apartment buildings, a fitness center, movie theater, clubhouse, tennis courts, children's playground and business center.


The housing collapse and subsequent lull in construction has driven up demand for Inland Empire apartments over the last three years, said broker Javier Rivera of Jones Lang LaSalle. Apartment demand is expected to continue to grow for the next two years.


roger.vincent@latimes.com





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In Connecticut, a mother coped silently with a troubled son









NEWTOWN, Conn. — On the outside, Nancy Lanza was the picture of contented motherhood: volunteering at her sons' school, gardening, keeping a picture-perfect home so well-ordered a neighbor described it as pristine.


Outside public view, say some who knew her, she had a struggle on her hands, and that was her son Adam: a brilliant but sometimes difficult boy.


Lanza battled with the school district over Adam and eventually quit her job, pulled him out of school and educated him at home, said her sister-in-law, Marsha Lanza.





"I know she had issues with the school. … In what capacity, I'm not 100% certain if it was behavior, if it was learning disabilities, I really don't know," Marsha Lanza told reporters. The investigation widened Saturday into the still-baffling shootings at Sandy Hook Elementary School in Newtown, Conn., with police releasing the identities of the 26 students and teachers they say Adam Lanza shot before turning the gun on himself.


His mother, police said, was shot at the family home before her son set out on his deadly rampage through the school.


"Adam, he was … definitely the challenge to the family in that house," Marsha Lanza said. "Every family has one. I have one. They have one. … But he was a very bright boy, he was smart."


Jim Leff, who knew Nancy Lanza casually through a friend, said he had been put off by an impression that she was high-strung, until he came to understand what she was trying to cope with as Adam's mother.


"Now that I've been filled in by friends about how difficult her troubled son … was making things for her, I understand that it wasn't that Nancy was overwrought about the trivialities of everyday life, but that she was handling a very difficult situation with uncommon grace," he wrote in a testimonial to her on his blog.


Neighbors said the Lanzas moved several years ago into the hilly neighborhood of graceful houses and pastoral views and immediately fit into the social scene, attending the picnic after the annual Labor Day parade and a rotating ladies' night at several homes.


By the accounts of some who knew her, Nancy Lanza, who grew up in rural New Hampshire, was comfortable using guns and kept several in the house.


Landscaper Dan Holmes said Lanza often talked about her gun collection, and about taking her sons target practicing. "One thing I will note is that she was a big, big gun fan," Leff wrote on his blog.


Police have said the three weapons found near Adam Lanza's body inside the school were legally purchased and registered to his mother.


Yet it appears that Adam may have tried to buy a weapon of his own before Friday's shootings. Just days before, two federal law enforcement officials say, the 20-year-old attempted to purchase a single "long gun" rifle from a Dick's Sporting Goods store in Canton, Conn., but was turned away because he did not want to wait for a required background check.


"He didn't want to wait the 14 days," said one source, declining to be identified because the case was still under review. "The sale did not take place."


Marsha Lanza, whose husband is the brother of Adam's father, Peter Lanza, said the entire family was trying to understand what happened. She said her sister-in-law never talked of being threatened by her son, or about any violence he had committed.


"And if he did, I know she wouldn't tolerate it," she said. "If he needed help, I know they would have gotten it for him.


"Because they were the type of parents — when they were married, as well as being separated — if the kids had a need, they would definitely fulfill it."


She said Nancy Lanza divorced in 2009 and was awarded the house and enough money — up to $12,450 a month in alimony, according to local news outlets that reviewed the divorce files — that she didn't have to work.


A law enforcement source said the couple were ordered to undergo parental counseling as a condition of their divorce, but another source familiar with the case said that is a standard condition of divorces in Connecticut involving a minor child.


Other Lanza family members emerged from seclusion Saturday, and, like Marsha Lanza, expressed disbelief.


"The family of Nancy Lanza shares the grief of a community and nation as we struggle to … comprehend the loss that we all share. ... On behalf of Nancy's mother and siblings, we reach out to the community… and express our heartfelt sorrow for their incomprehensible tragedy and loss of innocence that has affected so many," the family said in a statement.


It was read at a news conference by the sheriff of Rockingham County, N.H., where Nancy Lanza's brother is employed as a law enforcement officer.


Adam Lanza's father, Peter, also issued a statement.


"Our family is grieving along with all those who have been affected by this enormous tragedy. No words can truly express how heartbroken we are," it said. "We are in a state of disbelief and trying to find whatever answers we can. We too are asking why."


molly.hennessy-fiske@latimes.com


kim.murphy@latimes.com


richard.serrano@latimes.com


Hennessy-Fiske reported from Newtown, Murphy from Seattle and Serrano from Washington, D.C.





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Why does Google build apps for its rival Apple’s iPhone?






Why help a key competitor? Two words: Advertising and data


There isn’t any other way to say it: Apple and Google really don’t like each other. Apple CEO Steve Jobs vowed to destroy the Google geniuses behind the Android operating system for allegedly stealing the basic mechanics of the iPhone. Apple and Google-partner Samsung are constantly at one another’s throats over patents. And most recently new Apple CEO Tim Cook gave two of Google’s most popular products — Google Maps and YouTube — the boot from iOS 6.






Then the unthinkable happened: Fans started turning on Apple. Even the most gushy tech critic had to admit that Apple’s replacement for Google Maps was a train wreck, a rare blight on the company’s otherwise stainless track record (a failure, notes Zara Kessler at Bloomberg, which ironically might ultimately benefit Apple).


Why, then, would Google throw its chief rival a life preserver this week and deliver Google Maps to iOS — as well as handing over Chrome and an awesome new Gmail app in recent weeks? Two main reasons: 


1. Potential advertising: “Google doesn’t make money off of Android which is open source; they make money when people use Google services,” Joel Spolsky, CEO of Stack Overflow, tells Wired. Google Maps on the iPhone doesn’t have ads yet, although the Android version does. In the end, Google’s primary concern is to get its services in front of as many eyeballs as possible — even if those eyeballs are peering into an iPhone.


SEE MORE: Steve Jobs’ mysterious iMac-controlled yacht


2. More data with which to make its products better: Google Maps is every marketer’s dream. Mapping software gives them invaluable consumer data to work with, like the city you live in, the stores you shop at, the restaurants you frequent, where you get your coffee, and much, much more. “Google needs the traffic that iOS users bring,” says Casey Newton at CNET. Those millions of iPhone owners unknowingly feed Google the analytics it needs to make Google Maps the superior, celebrated product it’s become. The same goes for Chrome. And Gmail.  


And “Google is hardly the first company to aggressively support a rival platform for selfish reasons,” says Ryan Tate at Wired


Microsoft was a strong backer of Apple’s Macintosh for decades because its core business was selling applications [Word, Excel, etc.], not Microsoft’s competing operating system Windows… Google’s willingness to ship iOS apps could look smarter as time goes on. The company trounces Apple when it comes to all things cloud, not just maps and e-mail; its social network, search engine, and highly optimized data centers could give its iOS apps an even bigger edge in the coming years.


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A children's choir opens 'SNL' with 'Silent Night'


NEW YORK (AP) — "Saturday Night Live" paid tribute to the children and adults killed at a Connecticut elementary school.


Not known for taking anything seriously or tenderly, the show made a sweet departure in its opening moments. Rather than the usual comical opening, a children's choir appeared on camera and angelically sang "Silent Night."


Then the members of the New York City Children's Chorus bellowed out the show's time-honored introduction: "Live from New York, it's 'Saturday Night!'"


Later in the show, actor Samuel L. Jackson made a distinctive contribution of his own in a cameo appearance. He pretended to be miffed at being cut short as a guest on the mock talk show "What Up with That?" and dropped a couple of vulgarities, including an F-bomb and the term sometimes shortened to "B.S."


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Dr. William F. House, Inventor of Cochlear Implant, Dies





Dr. William F. House, a medical researcher who braved skepticism to invent the cochlear implant, an electronic device considered to be the first to restore a human sense, died on Dec. 7 at his home in Aurora, Ore. He was 89.




The cause was metastatic melanoma, his daughter, Karen House, said.


Dr. House pushed against conventional thinking throughout his career. Over the objections of some, he introduced the surgical microscope to ear surgery. Tackling a form of vertigo that doctors had believed was psychosomatic, he developed a surgical procedure that enabled the first American in space to travel to the moon. Peering at the bones of the inner ear, he found enrapturing beauty.


Even after his ear-implant device had largely been supplanted by more sophisticated, and more expensive, devices, Dr. House remained convinced of his own version’s utility and advocated that it be used to help the world’s poor.


Today, more than 200,000 people in the world have inner-ear implants, a third of them in the United States. A majority of young deaf children receive them, and most people with the implants learn to understand speech with no visual help.


Hearing aids amplify sound to help the hearing-impaired. But many deaf people cannot hear at all because sound cannot be transmitted to their brains, however much it is amplified. This is because the delicate hair cells that line the cochlea, the liquid-filled spiral cavity of the inner ear, are damaged. When healthy, these hairs — more than 15,000 altogether — translate mechanical vibrations produced by sound into electrical signals and deliver them to the auditory nerve.


Dr. House’s cochlear implant electronically translated sound into mechanical vibrations. His initial device, implanted in 1961, was eventually rejected by the body. But after refining its materials, he created a long-lasting version and implanted it in 1969.


More than a decade would pass before the Food and Drug Administration approved the cochlear implant, but when it did, in 1984, Mark Novitch, the agency’s deputy commissioner, said, “For the first time a device can, to a degree, replace an organ of the human senses.”


One of Dr. House’s early implant patients, from an experimental trial, wrote to him in 1981 saying, “I no longer live in a world of soundless movement and voiceless faces.”


But for 27 years, Dr. House had faced stern opposition while he was developing the device. Doctors and scientists said it would not work, or not work very well, calling it a cruel hoax on people desperate to hear. Some said he was motivated by the prospect of financial gain. Some criticized him for experimenting on human subjects. Some advocates for the deaf said the device deprived its users of the dignity of their deafness without fully integrating them into the hearing world.


Even when the American Academy of Ophthalmology and Otolaryngology endorsed implants in 1977, it specifically denounced Dr. House’s version. It recommended more complicated versions, which were then under development and later became the standard.


But his work is broadly viewed as having sped the development of implants and enlarged understanding of the inner ear. Jack Urban, an aerospace engineer, helped develop the surgical microscope as well as mechanical and electronic aspects of the House implant.


Karl White, founding director of the National Center for Hearing Assessment and Management, said in an interview that it would have taken a decade longer to invent the cochlear implant without Dr. House’s contributions. He called him “a giant in the field.”


After embracing the use of the microscope in ear surgery, Dr. House developed procedures — radical for their time — for removing tumors from the back portion of the brain without causing facial paralysis; they cut the death rate from the surgery to less than 1 percent from 40 percent.


He also developed the first surgical treatment for Meniere’s disease, which involves debilitating vertigo and had been viewed as a psychosomatic condition. His procedure cured the astronaut Alan B. Shepard Jr. of the disease, clearing him to command the Apollo 14 mission to the moon in 1971. In 1961, Shepard had become the first American launched into space.


In presenting Dr. House with an award in 1995, the American Academy of Otolaryngology-Head and Neck Surgery Foundation said, “He has developed more new concepts in otology than almost any other single person in history.”


William Fouts House was born in Kansas City, Mo., on Dec. 1, 1923. When he was 3 his family moved to Whittier, Calif., where he grew up on a ranch. He did pre-dental studies at Whittier College and the University of Southern California, and earned a doctorate in dentistry at the University of California, Berkeley. After serving his required two years in the Navy — and filling the requisite 300 cavities a month — he went back to U.S.C. to pursue an interest in oral surgery. He earned his medical degree in 1953. After a residency at Los Angeles County Hospital, he joined the Los Angeles Foundation of Otology, a nonprofit research institution founded by his brother, Howard. Today it is called the House Research Institute.


Many at the time thought ear surgery was a declining field because of the effectiveness of antibiotics in dealing with ear maladies. But Dr. House saw antibiotics as enabling more sophisticated surgery by diminishing the threat of infection.


When his brother returned from West Germany with a surgical microscope, Dr. House saw its potential and adopted it for ear surgery; he is credited with introducing the device to the field. But again there was resistance. As Dr. House wrote in his memoir, “The Struggles of a Medical Innovator: Cochlear Implants and Other Ear Surgeries” (2011), some eye doctors initially criticized his use of a microscope in surgery as reckless and unnecessary for a surgeon with good eyesight.


Dr. House also used the microscope as a research tool. One night a week he would take one to a morgue for use in dissecting ears to gain insights that might lead to new surgical procedures. His initial reaction, he said, was how beautiful the bones seemed; he compared the experience to one’s first view of the Grand Canyon. His wife, the former June Stendhal, a nurse, often helped.


She died in 2008 after 64 years of marriage. In addition to his daughter, Dr. House is survived by a son, David; three grandchildren; and two great-grandchildren.


The implant Dr. House invented used a single channel to deliver information to the hearing system, as opposed to the multiple channels of competing models. The 3M Company, the original licensee of the House implant, sold its rights to another company, the Cochlear Corporation, in 1989. Cochlear later abandoned his design in favor of the multichannel version.


But Dr. House continued to fight for his single-electrode approach, saying it was far cheaper, and offered voluminous material as evidence of its efficacy. He had hoped to resume production of it and make it available to the poor around the world.


Neither the institute nor Dr. House made any money on the implant. He never sought a patent on any of his inventions, he said, because he did not want to restrict other researchers. A nephew, Dr. John House, the current president of the House institute, said his uncle had made the deal to license it to the 3M Company not for profit but simply to get it built by a reputable manufacturer.


Reflecting on his business decisions in his memoir, Dr. House acknowledged, “I might be a little richer today.”


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United Airlines pilots ratify new labor contract









CHICAGO — After years of divisive negotiations between United Airlines and its pilots, union members on Saturday ratified a new labor agreement, shedding a bankruptcy-era contract for pilots and marking an important step toward fully integrating United and Continental airlines, which officially merged in 2010.


The Air Line Pilots Assn., which over the last couple of years has staged pickets about its lack of a contract and had taken a preliminary strike vote, said 67% of its 10,000 members voted over the last several weeks to ratify the deal, with nearly 98% casting votes. Voting closed Saturday morning.


The four-year contract will go into effect immediately. It provides gains in pay, job protections, retirement and benefits compensation and work rules.





"The era of bankruptcy and concessionary contracts is now over," union leaders said in a statement. "For too long, the pilots of United and Continental have had to shoulder more than their share of the burden as our respective airlines struggled through the difficult economic times of the past decade. We now stand ready to embark on a fresh start for the pilots and the airline."


With help from federal mediators, the two sides agreed in principle to a deal in August, then took until mid-November to work out language for a contract and send the proposal to the union membership for a vote.


"The ratification of this agreement is an important step forward for our pilots and the company," said Fred Abbott, United senior vice president of flight operations, in a statement.


The finished contract is a bit of good news in what has otherwise been a rocky merger for Chicago-based United Continental Holdings.


Most notable to passengers were rampant flight delays and cancellations after a conversion to a combined passenger reservation system in March. Those operational woes were severe over the summer, and customers started to flee to other airlines. But the problems have subsided in recent months, with United hitting its goal of an 80% on-time rate.


United is still in joint negotiations with other major unions, including those for flight attendants, passenger service agents, dispatchers and ramp and fleet workers. Pilot contracts are traditionally done first and tend to be the most contentious.


gkarp@tribune.com





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Man named in Connecticut shooting recalled as shy, awkward









Adam Lanza was memorably smart and heartbreakingly shy during his years at Newtown High School in Connecticut.


He'd correct people's Latin in ninth and 10th grades, students who knew him recall. He made the honor roll with highest honors. By his sophomore year he got into honors English, tackling "Of Mice and Men" and "Catcher in the Rye." While other youths sported T-shirts and backpacks, Lanza showed up every day in button-down shirts, carrying a briefcase.


"It was almost painful to have a conversation with him, because he felt so uncomfortable," recalls Olivia DeVivo, who sat behind him in English. "I spent so much time in my English class wondering what he was thinking."





On Friday, much of the country was engaging in the same exercise — trying to understand how Lanza, 20, could have walked into an elementary school near his home in Sandy Hook and fired a hail of bullets at terrified children and teachers, leaving 26 people dead, all but six of them children.


Police sources say the gunman shot and killed his mother at home before driving her Honda to the school, where he died of a self-inflicted gunshot wound after the rampage.


"We're looking at all the history. We're going backwards as far as we can go … and hopefully we'll stumble on some answers," said Lt. Paul Vance of the Connecticut State Police.


In interviews with neighbors and people who grew up with him, no one claimed to know the tall, gangly young man well. Family members told others he had Asperger's syndrome, a mild form of autism whose sufferers are often brilliant but socially inept.


He joined the tech club at Newtown High School, and was seen at shows and assemblies working on the sound and light equipment. But there is no record of his having finished high school.


"He was actually really smart. But I think he might have had some social disorder or something," said Hannah Basch-Gold, who went to elementary school with Lanza. "He kind of kept to himself, kind of a loner."


Fellow students said nobody made fun of Lanza; they just had a hard time connecting.


"He didn't have any friends, but he was a nice kid if you got to know him," said Kyle Kromberg, now a junior in business administration at Endicott College in Massachusetts. He studied Latin with Lanza.


"He didn't fit in with the other kids," Kromberg said. "He was very, very shy. He wouldn't look you in the eyes when he talked. He didn't really want to lock eyes with you for very long."


The Lanzas lived for many years in Sandy Hook, where neighbors said they were a quiet family that didn't attract much notice. The mother, Nancy Lanza, "was very nice. I can't say anything very bad about them," said Beth Israel, whose daughter was friends with Adam Lanza in elementary school. As for Adam, she said, "There was definitely some issues with him."


Nancy Lanza and her husband, Peter, divorced in 2008. Peter Lanza, a vice president at GE Energy Financial Services, recently remarried, and appeared to be caught off guard when reporters approached him near his home in Stamford, Conn.


"Is there something I can do for you?" he asked a reporter waiting at his house as he arrived home Friday, according to the Stamford Advocate. Told that his name had been linked to the school shooting in Newtown, his face darkened suddenly and he rolled up the window and drove into his garage.


Law enforcement sources initially identified Lanza's brother, Ryan, 24, as the shooter. Adam apparently had brother's identification with him. Ryan Lanza's photograph was distributed widely on the Internet until a post appeared on what seemed to be his Facebook page: "Everyone shut … up, it wasn't me."


Brett Wilshe, who lives near Ryan Lanza in New Jersey, said he sent his friend an instant message.


"I asked him if he was all right, and what was going on," Wilshe said. "His message back to me was it was his brother, and that was it."


Police still were trying to answer questions about how Adam Lanza got into the locked school. According to some reports, his mother was a former employee there.


A federal law enforcement source said it appeared Lanza shot himself as police arrived. The officers, he said, never had to fire their weapons. "It was over when they got there."


sam.quinones@latimes.com


kim.murphy@latimes.com


Times staff writers Matt Pearce and Richard A. Serrano contributed to this report.





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Owner of Rivera plane being investigated by DEA


PHOENIX (AP) — The company that owns a luxury jet that crashed and killed Latin music star Jenni Rivera is under investigation by the U.S. Drug Enforcement Administration, and the agency seized two of its planes earlier this year as part of the ongoing probe.


DEA spokeswoman Lisa Webb Johnson confirmed Thursday the planes owned by Las Vegas-based Starwood Management were seized in Texas and Arizona, but she declined to discuss details of the case. The agency also has subpoenaed all the company's records, including any correspondence it has had with a former Tijuana mayor who U.S. law enforcement officials have long suspected has ties to organized crime.


The man widely believed to be behind the aviation company is an ex-convict named Christian Esquino, 50, who has a long and checkered legal past. Corporate records list his sister-in-law as the company's only officer, but insurance companies that cover some of the firm's planes say in court documents that the woman is merely a front and that Esquino is the one in charge.


Esquino's legal woes date back decades. He pleaded guilty to a fraud charge that stemmed from a major drug investigation in Florida in the early 1990s and most recently was sentenced to two years in federal prison in a California aviation fraud case. Esquino, a Mexican citizen, was deported upon his release. Esquino and various other companies he has either been involved with or owns have also been sued for failing to pay millions of dollars in loans, according to court records.


The 43-year-old California-born Rivera died at the peak of her career when the plane she was traveling in nose-dived into the ground while flying from the northern Mexican city of Monterrey to the central city of Toluca early Sunday morning. She was perhaps the most successful female singer in grupero, a male-dominated Mexico regional style, and had branched out into acting and reality television.


It remained unclear Thursday exactly what caused the crash and why Rivera was on Esquino's plane. The 78-year-old pilot and five other people were also killed. Esquino was not on the plane.


The late singer's brother, Pedro Rivera Jr., said that he didn't know anything about the owner or why or how she ended up in his plane.


Esquino told the Los Angeles Times in a telephone interview from Mexico City earlier this week that the singer was considering buying the aircraft from Starwood for $250,000 and the flight was offered as a test ride. He disputed reports that he owns Starwood, maintaining that he is merely the company's operations manager "with the expertise."


In response to an email from The Associated Press, Esquino said he did not want to comment. Calls to various phone numbers associated with him rang unanswered.


Esquino is no stranger to tangles with the law. He was indicted in the early 1990s along with 12 other defendants in a major federal drug investigation that claimed the suspects planned to sell more than 480 kilograms of cocaine, according to court records. He eventually pleaded guilty to conspiring to conceal money from the IRS and was sentenced to five years in prison, but much of the term was suspended for reasons that weren't immediately clear.


He served about five months in prison before being released.


Cynthia Hawkins, a former assistant U.S. attorney who handled the case and is now in private practice in Orlando, remembered the investigation well.


"It was huge," Hawkins said Thursday. "This was an international smuggling group."


She said the case began with the arrest of Robert Castoro, who was at the time considered one of the most prolific smugglers of marijuana and cocaine into Florida from direct ties to Colombian drug cartels in the 1980s. Castoro was convicted in 1988 and sentenced to life in prison, but he then began cooperating with authorities, leading to his sentence being reduced to just 10 years, Hawkins said.


"Castoro cooperated for years," she said. "We put hundreds of people in jail."


He eventually gave up another smuggler, Damian Tedone, who was indicted in the early 1990s along with Esquino and 11 others in a conspiracy involving drug smuggling in Florida in the 1980s at a time when the state was the epicenter of the nation's cocaine trade.


Tedone also cooperated with authorities and has since been released from prison. Telephone messages left Thursday for both Tedone and Castoro were not returned.


Esquino eventually pleaded guilty to the lesser offense of concealing money from the IRS.


Joseph Milchen, Esquino's attorney at the time, said Thursday the case eventually revolved around his client "bringing money into the United States without declaring it."


However, Milchen acknowledged that a plane purchased by Esquino was "used to smuggle drugs."


He denied his former client has ever had anything to do with illegal narcotics.


"The only thing he has ever done is with airplanes," Milchen said.


Court filings also indicate Esquino was sentenced to two years in federal prison after pleading guilty in 2004 to committing fraud involving aircraft he purchased in Mexico, then falsified the planes' log books and re-sold them in the United States.


Also in 2004, a federal judge ordered him and one of his companies to pay a creditor $6.2 million after being accused of failing to pay debts to a bank.


As the years passed, Esquino's troubles only grew.


In February this year, a Gulfstream G-1159A plane the government valued at $500,000 was seized by the U.S. Marshals Service on behalf of the DEA after landing in Tucson on a flight that originated in Mexico


Four months later, the DEA subpoenaed all of Starwood's records dating to Dec. 13, 2007, including federal and state income tax documents, bank deposit information, records on all company assets and sales, and the entity's relationship with Esquino and more than a dozen companies and individuals, including former Tijuana Mayor Jorge Hank-Rhon, a gambling mogul and a member of one of Mexico's most powerful families. U.S. law enforcement officials have long suspected Hank-Rhon is tied to organized crime but no allegations have been proven. He has consistently denied any criminal involvement.


He was arrested in Mexico last year on weapons charges and on suspicion of ordering the murder of his son's former girlfriend. He was later freed for lack of evidence.


The subpoena was obtained by the U-T San Diego newspaper.


A Starwood attorney listed on the subpoena, Jeremy Schuster, declined Thursday to provide details.


"We don't comment on matters involving clients," he said.


In September, the DEA seized another Starwood plane — a 1977 Hawker 700 with an insured value of $1 million — after it landed in McAllen, Texas, from a flight from Mexico.


Insurers of both aircraft have since filed complaints in federal court in Nevada seeking to have the Starwood policies nullified, in part, because they say Esquino lied in the application process when he noted he had never been indicted on drug-related criminal charges. Both companies said they would not have issued the policies had he been truthful.


Another attorney for Starwood has not responded to phone and email messages seeking comment, and no one was at the address listed at its Las Vegas headquarters. The address is a post office box in a shipping and mailing store located between a tuxedo rental shop and a supermarket in a shopping center several miles west of the Las Vegas Strip.


___


Associated Press writers Elliot Spagat in San Diego and Ken Ritter in Las Vegas contributed to this report.


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PUC plan would put trust funds at risk








Even the most inattentive 401(k) owner surely understands today that the markets can bite you where it hurts, that promises of long-term investment gains can evaporate in the blink of a short-term crash and that the less understandable an investment scheme is, the more dangerous it is.


Why, then, is California Public Utilities Commissioner Timothy A. Simon pressing so hard to subject billions of dollars of public trust fund money earmarked for the decommissioning of the state's two major nuclear plants to the same sorts of risks?


Simon's initiative is on the PUC agenda for Thursday — the commission's last meeting of the year and, as it happens, Simon's last as commissioner. He returns to the private sector at the end of the year.






If this is to be his legacy, it's a curious one. The trust funds he wants to monkey with contain about $6 billion raised from ratepayers' bills and conservative investments in stocks and bonds. Simon's proposal laments that the money is invested in an "ultra-conservative" way, as though that's a bad thing in an era when non-conservative investing has produced non-trivial losses.


Simon's alternative is to broaden the permissible investments to include derivatives, real estate, hedge funds and other wild and crazy categories. He favors allowing the utilities to turn over more of the funds to investment managers whose performance, as a group, is none too impressive — and to double or even quadruple the maximum fees those managers can be paid.


His idea is for the trust funds to harvest the higher investment yields that more aggressive investing can produce over the long term.


But it's not certain that Diablo Canyon and San Onofre, the state's two big nuclear plants, will be with us for the long term. Originally it was assumed that they would both operate until their federal licenses expire in the early 2020s, when they would obtain routine 20-year extensions.


But Pacific Gas & Electric recently suspended its application for a license extension for Diablo Canyon, pending a seismic study inspired by the 2011 earthquake and tsunami that wrecked Japan's Fukushima nuclear plant. And San Onofre has been offline almost all year, thanks to a botched generator upgrade that has raised doubts whether it will ever operate again.


The trust funds are calculated to be 90% on their way to covering their needs, assuming average investment earnings in the future. That puts a lot at stake in changing the investment rules, which is why ratepayer advocates are unnerved at the prospect.


"With a great deal of uncertainty about the continuing life of Diablo Canyon and San Onofre, this is not the time to decide we're going to take on additional risk to pump up our returns," Truman Burns, a program supervisor at the PUC's Division of Ratepayer Advocates, told me.


Here's the background:


Under PUC rules dating back to the 1980s, the state's three major utilities must accumulate trust funds out of customer rates to pay for the eventual dismantling and cleanup of Diablo Canyon and San Onofre.


These are big jobs. They involve disassembling the plants, excavating and decontaminating the soil and finding some way to dispose of radioactive equipment and spent fuel — especially since federal plans to store spent fuel in a central depository have come to nought.


The whole process, including hanging on to spent fuel until it cools down, can take 30 years. As a result, estimates of the cost range widely, depending on forecasts of investment returns, inflation and the time and complexity of the job. Estimates on San Onofre from Southern California Edison, its majority owner (San Diego Gas & Electric owns a small piece), have run from a little less than $4 billion to nearly $9 billion.


Since the plants went into operation, the utilities have placed a decommissioning charge on every bill and paid the money into the trust funds, which are kept separate from their general corporate coffers. Edison customers currently pay about $24 million a year.


That brings us to what to do with the trust-fund money until it's needed. The rules have been conservative — though not conservative enough to avoid a hit in 2008. No more than 60% can be in stocks and no more than 20% in foreign stocks. At least 50% of the stock portfolio must invested in low-cost index funds.


Bonds have to be investment grade, not junk. No "alternative" investments like derivatives and real estate, which really cratered go-go portfolios in the crash, are permitted. And overall fees to investment managers can't be more than 0.3% of the portfolio value.


Under the changes favored by Simon, the cap on stocks would be raised to 80%, the minimum portion required to be passively managed would drop from 50% to 25%; and riskier alternatives such as junk bonds, real estate, commodities and hedge funds would be permitted to varying extent. These options would become available when the plants get their license extensions, but the federal Nuclear Regulatory Agency has never turned down an application.


What perplexes consumer advocates is that Simon's interest in alternative investments came out of the blue. The utilities never asked for such latitude. And since the trust funds aren't their money, but their customers', it's unclear why they would care. For the record, they've said they'd be OK with the changes.


Simon's background does includes work in the investment field. A family friend of former Assembly Speaker Willie Brown, he was associated with several investment firms until Gov. Arnold Schwarzenegger named him his appointments secretary in 2006. The next year Schwarzenegger named Simon, a novice in utility regulation with a recent bankruptcy on his record, to the PUC.


In 2008, Simon raised eyebrows by soliciting donations from Edison, PG&E and SDG&E for a conference hosted by the nonprofit Willie L. Brown Jr. Institute on Politics and Public Service — while the firms were seeking an important ruling from the PUC. Two weeks after the conference, they got it.


When I called Simon's office to ask about the genesis of the investment plan and about his career plans for the future, his office replied by email that he couldn't speak about the proposal because it's "pending before the commission." The email said Simon's goal is "to maximize ratepayer returns while minimizing risk." As any responsible investment manager knows, however, you can't do both. You can only maximize returns by increasing risk.


One provision of the Simon plan — increasing the ratio of actively managed investments — is particularly perplexing.


The performance of active managers has been so grisly it makes "Reservoir Dogs" look like an episode of "Teletubbies." To get technical, in the 12 months through mid-2012, S&P stock indexes beat 89.84% of corresponding actively managed funds. Yet for the privilege of watching an investment hotshot send your money down the drain, you pay a much higher management fee. On Wall Street, this must be what they mean by "twofer."


Conceivably, any broader investment alternative can pay off over a suitably long time span. But when the commission meets this week to ponder the future of the investment markets, the question will be whether they understand the risks involved, especially if there's a shortfall and the money is needed sooner, not later.


Then, in the words of Matthew Freedman, a lawyer at the Utility Reform Network, a ratepayer advocacy group: "The utilities will say it's not their responsibility to make up the shortfall, and the ratepayers will be left holding the bag."


Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.






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