Pentagon staffer guilty of handing secrets to China agent

Mar 31 06:12 PM US/Eastern
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A Pentagon official pleaded guilty Monday to passing US military secrets to an agent working for China after being showered with gifts and gambling money, the Department of Justice said.
Gregg William Bergersen, 51, faces up to 10 years in jail after admitting to one count of conspiracy to disclose national defense information to persons not entitled to receive it, the department said in a statement.

It said Bergersen started handing secret information in March 2007 to Tai Shen Kuo, 58, a Taiwan-born US citizen with business interests in New Orleans.

Bergersen worked as a weapons systems policy analyst at the Defense Security Cooperation Agency, which implements the Pentagon's foreign military sales program.

Unbeknown to Bergersen, Kuo was passing the information to an unnamed Chinese government official. But the DoJ statement said the US official knew the documents, many of which were about US weapons sales to Taiwan, were classified and should not be shared with outsiders.

"During the course of the conspiracy, Kuo cultivated a friendship with Bergersen, bestowing on him gifts, cash payments, dinners, and money for gambling during trips to Las Vegas," it said.

Bergersen will be sentenced on June 20 and faces up to 10 years behind bars, the statement said. Both Kuo and an alleged conspirator, Chinese citizen Yu Xin Kang, remain held without bond pending espionage charges.

Patrick Rowan, acting assistant attorney general for national security, said Bergersen had "betrayed his oath to serve and protect our nation."

"This case serves as a reminder that espionage networks are relentless in their efforts to steal our secrets and continue to pose a serious threat to our national security," he said.

China's foreign secret service is among the "most aggressive" in trying to steal sensitive US military technology and information, US Director of National Intelligence Michael McConnell charged last September.

A week ago, Chinese-born US engineer Chi Mak was jailed for 24 years after being convicted of conspiring to smuggle sensitive technology about US Navy submarines to China.

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Thanks Raul: Cubans can stay in hotels
By WILL WEISSERT, Associated Press Writer
29 minutes ago
Raul Castro's government opened luxury hotels and resorts to all Cubans Monday, ending a ban despised across the island as "tourist apartheid" and taking another step toward the creation of a consumer economy in the socialist state.

Cuba has made a series of crowd-pleasing announcements in the past few days. Cubans with enough cash will be able to buy computers, DVD players and plasma televisions starting Tuesday, and soon they'll even be able to have their own cell phones — consumer goods only companies and foreigners were previously permitted to buy.

But the latest surprise, allowing ordinary citizens into luxury hotels and resort beaches long reserved for rich foreigners, is a particularly symbolic victory for Cuba's everyman.

"I was born here and live here. I believe, as a Cuban, I have the right to it all," said Elizabeth Quintana, a Havana resident. "It's good. Really good."

While there was no official word from the government, hotel employees said Ministry of Tourism officials told them that as of Monday, Cubans can stay in hotels and resorts across the island, and pay to use gyms, hair salons and other previously off-limit facilities. Cubans can even rent cars for the first time.

For now, few Cubans can afford a night at a hotel on a government salary, but that could change if Castro succeeds in increasing his citizens' spending power.

Meanwhile, the government is creating the kinds of consumer incentives any economy needs to thrive. For many years, Cubans haven't been able to buy certain electronic goods, lounge by the rooftop pool at the Hotel Capri or enjoy a drink at sunset on the grounds of the historic Hotel Nacional, no matter how much money they earned

As with other guests, the hotels will charge Cubans in convertible pesos, or CUCs, worth 24 times the regular pesos most Cubans earn. The four-star Ambos Mundos, a favorite of Ernest Hemingway in Old Havana, charges $173 a night in high season — more than eight times the average monthly state salary of about $20.

Still, at least 60 percent of Cubans have some access to convertible pesos and foreign currency, either through jobs in tourism or foreign firms, or cash sent by U.S. relatives. And these initiatives give them more reason to spend that cash, enabling the government to increase its reserves, said Arch Ritter, an expert on the Cuban economy at Carleton University in Ottawa, Canada.

"I think this will get rid of many of the CUCs floating around on the street," said Magaly, a 69-year-old retiree who, like many Cubans interviewed, declined to have her full name appear in the foreign press, citing unspecified reprisals.

But the new government also risks increasing class tensions by suddenly making income discrepancies more evident in a society founded on the ideal of promoting social and economic equality.

"Authorization to stay in hotels is fine because it was unfair discrimination of Cubans with respect to foreigners," said Tatiana, a doctor in the capital's Vedado district. "But, I have to ask, 'What Cubans can pay a night in a hotel with a normal salary?'"

Fidel Castro spent decades rallying against any reforms that could promote a new class of rich Cubans, writing as recently as July that Cuba's poor are frustrated that the island is awash in convertible pesos.

But since he succeeded his ailing brother as president in February, Raul Castro has begun to do away with what he called "excessive restrictions" on daily life.

Relaxing the hotel ban eliminates a glaring historical contradiction within the Cuban revolution. When the Castro brothers' rebels took power in 1959, they joyfully overran beach resorts and hotels that had been the playgrounds of high-rolling foreigners, declaring them open to all Cubans.

Hotel restrictions were eventually imposed after the collapse of the Soviet Union, Cuba's chief economic benefactor, to maintain equality when Cuba embraced tourism to jump-start its economy.

Hotel guards have stopped anyone who looks Cuban, limiting guests' exposure to hustlers and black-market peddlers, and police have turned away Cubans trying to enter the glittering, white-sand tourist resort of Varadero.

On Monday, tourism officials at Varadero said Cubans would now be allowed to walk the beach without restrictions, though none would divulge their names, citing government rules.

In Havana, doormen still guarded hotel entrances, and receptionists reported no immediate run on reservations in the luxurious but slightly shabby lobby of the Nacional.

Despite the restrictions, Cubans have been able to clearly see what they've been missing. The tourism industry now generates $2 billion a year, and while the U.S. travel and economic embargo limits contact with Americans, Cubans mix freely with other foreigners.

Also, unlike North Korea and other closed societies, the overwhelming majority of Cubans have family in the United States, and illegal satellite hookups beam American TV into many homes.

Now some of the gadgets they have seen on TV are finally becoming more available on the island — and not just to the elite few.

An internal memo distributed to Cuba's largest retailer and obtained by The Associated Press describes a long list of previously restricted products that go on sale nationwide Tuesday.

In one store, La Copa, where DVD players were offered for $125 and Dell desktop computers for $540, a cashier said that starting Tuesday, a sign saying "only for companies and foreigners" would be removed.

"This is a dream," gasped Miguel, who joined other shoppers gawking at the shiny red, blue, silver and wine-colored electric bicycles suddenly on display at a shopping center in the upscale Vedado neighborhood. The Chinese-made bikes are charged through a power cord and had been prohibited for general sale because the government feared excessive use of electricity.

Cuba analysts say it's hard to predict where this is going in the long term.

"They're trickling out policy moves one by one, and there's no road map," said Phil Peters of the Lexington Institute, a pro-democracy think tank based outside Washington.

"I would doubt if Raul has a complete model in mind, Chinese, Vietnamese, whatever," added Ritter, the Canadian economist. "I think he's going with things that work in the short run. And where it's going, I don't think he could even say or would want to say."

___

Associated Press writers Anne-Marie Garcia and Katherine Corcoran in Mexico City contributed to this report.

Doctors support universal health care: survey
Mon Mar 31, 2008 5:14pm EDT
WASHINGTON (Reuters) - More than half of U.S. doctors now favor switching to a national health care plan and fewer than a third oppose the idea, according to a survey published on Monday.

The survey suggests that opinions have changed substantially since the last survey in 2002 and as the country debates serious changes to the health care system.

Of more than 2,000 doctors surveyed, 59 percent said they support legislation to establish a national health insurance program, while 32 percent said they opposed it, researchers reported in the journal Annals of Internal Medicine.

The 2002 survey found that 49 percent of physicians supported national health insurance and 40 percent opposed it.

"Many claim to speak for physicians and represent their views. We asked doctors directly and found that, contrary to conventional wisdom, most doctors support national health insurance," said Dr. Aaron Carroll of the Indiana University School of Medicine, who led the study.

"As doctors, we find that our patients suffer because of increasing deductibles, co-payments, and restrictions on patient care," said Dr. Ronald Ackermann, who worked on the study with Carroll. "More and more, physicians are turning to national health insurance as a solution to this problem."

PATCHWORK

The United States has no single organized health care system. Instead it relies on a patchwork of insurance provided by the federal and state governments to the elderly, poor, disabled and to some children, along with private insurance and employer-sponsored plans.

Many other countries have national plans, including Britain, France and Canada, and several studies have shown the United States spends more per capita on health care, without achieving better results for patients.

An estimated 47 million people have no insurance coverage at all, meaning they must pay out of their pockets for health care or skip it.

Contenders in the election for president in November all have proposed various changes, but none of the major party candidates has called for a fully national health plan.

Insurance companies, retailers and other employers have joined forces with unions and other interest groups to propose their own plans.

"Across the board, more physicians feel that our fragmented and for-profit insurance system is obstructing good patient care, and a majority now support national insurance as the remedy," Ackermann said in a statement.

The Indiana survey found that 83 percent of psychiatrists, 69 percent of emergency medicine specialists, 65 percent of pediatricians, 64 percent of internists, 60 percent of family physicians and 55 percent of general surgeons favor a national health insurance plan.

The researchers said they believe the survey was representative of the 800,000 U.S. medical doctors.

(Reporting by Maggie Fox; Editing by Will Dunham and Xavier Briand)

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Reuters journalists are subject to the Reuters Editorial Handbook which requires fair presentation and disclosure of relevant interests.

Fed eyes Nordic-style nationalisation of US banks
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 2:58pm BST 31/03/2008

The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis.

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The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers

The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers.

A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region's economy to its knees.

It is understood that Fed vice-chairman Don Kohn remains very concerned by the depth of the US crisis and is eyeing the Nordic approach for contingency options.

Scandinavia's bank rescue proved successful and is now a model for central bankers, unlike Japan's drawn-out response, where ailing banks were propped up in a half-public limbo for years.

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While the responses varied in each Nordic country, there a was major effort to avoid the sort of "moral hazard" that has bedevilled efforts by the Fed and the Bank of England in trying to stabilise their banking systems.

Norway ensured that shareholders of insolvent lenders received nothing and the senior management was entirely purged. Two of the country's top four banks - Christiania Bank and Fokus - were seized by force majeure.

"We were determined not to get caught in the game we've seen with Bear Stearns where shareholders make money out of the rescue," said one Norwegian adviser.

"The law was amended so that we could take 100pc control of any bank where its equity had fallen below zero. Shareholders were left with nothing. It was very controversial," he said.

Stefan Ingves, governor of Sweden's Riksbank, said his country passed an act so it could seize banks where the capital adequacy ratio had fallen below 2pc. Efforts were also made to protect against "blackmail" by shareholders.

Mr Ingves said there were parallels with the US crisis, citing the use of off-balance sheet vehicles to speculate on property. All the Nordic banks were nursed back to health and refloated or merged.

The tough policies contrast with the Fed's bail-out of Bear Stearns, where shareholders forced JP Morgan to increase its Fed-led rescue offer from $2 to $10 a share. Christopher Wood, chief strategist at brokers CLSA, says the Fed's piecemeal approach has led to "appalling moral hazard".

"Shareholders have been able to lobby for a higher share price only because the Fed took over the credit risk on $30bn of the investment bank's dubious paper. The whole affair also amounts to a colossal subsidy for JP Morgan," he said.

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April 1, 2008
Turkey Court Takes Politically Explosive Case

By SABRINA TAVERNISE
ISTANBUL — Turkey’s highest court said Monday it had decided to take a case on closing Turkey’s governing party and banning its top political leaders, moving the country closer to a final confrontation between religious and secular Turks over who will rule Turkey.

Alifeyyaz Paksut, deputy chairman of the court, known as the Constitutional Court, said its justices had voted unanimously to hear the case, which was filed by Turkey’s top prosecutor on March 14.

The case calls for the closure of the Justice and Development Party, and the banning from politics of 71 party members, including Prime Minister Recep Tayyip Erodgan and his ally, President Abdullah Gul, from politics.

Turkey has shut down other parties in the past. In 1998, it banned the Welfare Party, an openly Islamist group that claimed Mr. Erdogan and Mr. Gul as members, and has also banned Kurdish parties. But Mr. Erdogan’s current party maintains that it is secular, having moved away from its earlier involvement with political Islam.

The court’s acceptance of the case significantly increases the chances that the party, which was elected to power in 2002 and remains highly popular, could be closed. Turkey’s secular establishment — its courts, military and parts of government bureaucracy — are struggling with it for power.

Staunchly secular Turkish politicians tried to block Mr. Gul from the presidency this spring, but were routed in national elections in July, and now are trying to obstruct the party through the legal system where they still have immense sway. Eight of the 11 judges on the constitutional court were appointed by Mr. Gul’s predecessor, Ahmed Necdet Sezer, who was a strong opponent of the party.

Monday’s acceptance raised troubling new questions about the future of the party, but its closure was still considered unlikely.

Turkey’s secular bureaucracy has closed political parties in the past, but none were as broadly popular as Mr. Erdogan’s, which won nearly 47 percent of the national vote in July, the most in decades.