Timeline: Kim Dotcom’s year, from Megaupload to Mega






AUCKLAND (Reuters) – Here are the milestones in the past year for Megaupload founder Kim Dotcom. Dotcom plans to launch on January 20 a new online file storage system, known as Mega.


January 20, 2012 – Seventy armed New Zealand police raid Megaupload founder Kim Dotcom’s mansion outside Auckland, acting on a request from the U.S. Federal Bureau of Investigation.






Dotcom and his colleagues Finn Batato, Mathias Ortmann and Bram van der Kolk are served extradition and search warrants, arrested, and taken into custody. As operators of the website, they are charged with online piracy, fraud and money laundering, and their computers and files are seized. Megaupload is closed down. The raid occurs on the same day U.S. lawmakers axe anti-piracy legislation following heavy public opposition.


February 22 – Dotcom is released on bail, but his movements are restricted and he is prohibited from leaving New Zealand. His bail conditions are eventually relaxed to allow him free movement within the country, while the millionaire is given some access to his frozen funds to pay his legal team and living costs.


June 28 – A New Zealand court rules that search warrants used by local police to raid the Dotcom mansion were illegal, and moves by the FBI to copy data from Dotcom’s computers to take offshore were also unlawful. The court’s action is seen by many as weakening the extradition case against Megaupload.


August 16 – U.S. efforts to extradite Dotcom are dealt another blow as a New Zealand court rules that prosecutors must show evidence to support charges of internet piracy and copyright breaches. The judge in the case says withholding evidence from Dotcom would give Washington a significant advantage in the extradition hearing. She also rules that the document used to order his extradition was illegal.


September 27 – New Zealand’s Prime Minister admits that the country’s spy agency illegally carried out surveillance on Dotcom, a resident of the country, despite a law which prohibits monitoring citizens and residents.


October 10 – A U.S. federal judge rules that the U.S. government’s criminal case against Megaupload will proceed, while leaving open the option of dismissing the case at a later date on grounds including the possibility that delays in proceedings have denied Megaupload to its right to due process.


January 20, 2013 – Dotcom is due to launch his new cyberlocker, Mega.co.nz, whose encryption system is designed to offer water-tight privacy protection of user files. The launch comes as Dotcom and his colleagues await their extradition hearing, which has been delayed until August.


(Reporting by Naomi Tajitsu)


Internet News Headlines – Yahoo! News





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Eagles talk about new Showtime documentary


PARK CITY, Utah (AP) — The Eagles picked the producer of their new Showtime documentary "The History of the Eagles" — but they insist that's about all the control they had in the making of it.


"It's really not a film that represents our point of view so much," Glen Frey said Saturday as the quartet spoke at the Sundance Film Festival hours before the film's premiere.


The film was directed by Alison Ellwood and produced by Alex Gibney, whose other documentaries include the Academy Award-winning "Taxi to the Dark Side" and "Enron: The Smartest Guys in the Room."


"The History of the Eagles" will be shown in two parts on Showtime Feb. 15-16. It includes 40-year-old footage that was in the band's archives, as well as recent interviews with the band.


Henley said he was interested in someone making a documentary about the Rock and Roll Hall of Famers but was unimpressed with recent music documentaries. So, he asked to see the work of Oscar-winning documentary filmmakers and was led to Gibney.


From there, he worked to convince Gibney that he should tell the band's story, and they had "zero" influence on its outcome.


"We have a good story to tell and I think he's a great storyteller," Frey said, adding that Gibney told him, "We're going to make a movie, and we're going to tell the truth."


Don Henley said the band hasn't even seen the final cut yet. "I hope we like it," he joked.


Frey said what surprised him most about the film, and seeing the old footage, was "how much fun we had."


That may surprise people who are familiar with the band's well-documented discord, including their acrimonious breakup in 1982 (they got back together in 1994).


"Most of the things that have been written about this band have focused on conflict — the journalism of conflict," Henley said. "It sells papers and magazines, but one thing that Glen said that people will see in this documentary is that we had a lot of fun. Some of it's not on film, and that's good."


"The bitter fighting that the media loved to talk about really didn't take place. We argued a lot, we discussed stuff a lot, and that tension had a lot of to do with the creative process," Walsh said. "We didn't hate each other; we didn't have fist fights, none of that."


Walsh, Henley, Frey and Timothy Schmit were expected to attend the premiere later Saturday.


Frey said the band might eventually make new music together. Their last album together was 2007's "Long Road Out of Eden."


"I think what we realized is how good we are together and how things have changed, and it would be a shame if we didn't try to find a way to create some more new music," Frey said. "People really like to hear us sing, we really do well, we still perform at a very high level, so for me, it would be great."


___


Nekesa Mumbi Moody is the AP's global entertainment and lifestyles editor. Follow her at http://www.twitter.com/nekesamumbi .


___


Online:


http://www.eaglesband.com


http://www.sundance.org/festival


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Well: Holly the Cat's Incredible Journey

Nobody knows how it happened: an indoor housecat who got lost on a family excursion managing, after two months and about 200 miles, to return to her hometown.

Even scientists are baffled by how Holly, a 4-year-old tortoiseshell who in early November became separated from Jacob and Bonnie Richter at an R.V. rally in Daytona Beach, Fla., appeared on New Year’s Eve — staggering, weak and emaciated — in a backyard about a mile from the Richter’s house in West Palm Beach.

“Are you sure it’s the same cat?” wondered John Bradshaw, director of the University of Bristol’s Anthrozoology Institute. In other cases, he has suspected, “the cats are just strays, and the people have got kind of a mental justification for expecting it to be the same cat.”

But Holly not only had distinctive black-and-brown harlequin patterns on her fur, but also an implanted microchip to identify her.

“I really believe these stories, but they’re just hard to explain,” said Marc Bekoff, a behavioral ecologist at the University of Colorado. “Maybe being street-smart, maybe reading animal cues, maybe being able to read cars, maybe being a good hunter. I have no data for this.”

There is, in fact, little scientific dogma on cat navigation. Migratory animals like birds, turtles and insects have been studied more closely, and use magnetic fields, olfactory cues, or orientation by the sun.

Scientists say it is more common, although still rare, to hear of dogs returning home, perhaps suggesting, Dr. Bradshaw said, that they have inherited wolves’ ability to navigate using magnetic clues. But it’s also possible that dogs get taken on more family trips, and that lost dogs are more easily noticed or helped by people along the way.

Cats navigate well around familiar landscapes, memorizing locations by sight and smell, and easily figuring out shortcuts, Dr. Bradshaw said.

Strange, faraway locations would seem problematic, although he and Patrick Bateson, a behavioral biologist at Cambridge University, say that cats can sense smells across long distances. “Let’s say they associate the smell of pine with wind coming from the north, so they move in a southerly direction,” Dr. Bateson said.

Peter Borchelt, a New York animal behaviorist, wondered if Holly followed the Florida coast by sight or sound, tracking Interstate 95 and deciding to “keep that to the right and keep the ocean to the left.”

But, he said, “nobody’s going to do an experiment and take a bunch of cats in different directions and see which ones get home.”

The closest, said Roger Tabor, a British cat biologist, may have been a 1954 study in Germany which cats placed in a covered circular maze with exits every 15 degrees most often exited in the direction of their homes, but more reliably if their homes were less than five kilometers away.

New research by the National Geographic and University of Georgia’s Kitty Cams Project, using video footage from 55 pet cats wearing video cameras on their collars, suggests cat behavior is exceedingly complex.

For example, the Kitty Cams study found that four of the cats were two-timing their owners, visiting other homes for food and affection. Not every cat, it seems, shares Holly’s loyalty.

KittyCams also showed most of the cats engaging in risky behavior, including crossing roads and “eating and drinking substances away from home,” risks Holly undoubtedly experienced and seems lucky to have survived.

But there have been other cats who made unexpected comebacks.

“It’s actually happened to me,” said Jackson Galaxy, a cat behaviorist who hosts “My Cat From Hell” on Animal Planet. While living in Boulder, Colo., he moved across town, whereupon his indoor cat, Rabbi, fled and appeared 10 days later at the previous house, “walking five miles through an area he had never been before,” Mr. Galaxy said.

Professor Tabor cited longer-distance reports he considered credible: Murka, a tortoiseshell in Russia, traveling about 325 miles home to Moscow from her owner’s mother’s house in Voronezh in 1989; Ninja, who returned to Farmington, Utah, in 1997, a year after her family moved from there to Mill Creek, Wash.; and Howie, an indoor Persian cat in Australia who in 1978 ran away from relatives his vacationing family left him with and eventually traveled 1,000 miles to his family’s home.

Professor Tabor also said a Siamese in the English village of Black Notley repeatedly hopped a train, disembarked at White Notley, and walked several miles back to Black Notley.

Still, explaining such journeys is not black and white.

In the Florida case, one glimpse through the factual fog comes on the little cat’s feet. While Dr. Bradshaw speculated Holly might have gotten a lift, perhaps sneaking under the hood of a truck heading down I-95, her paws suggest she was not driven all the way, nor did Holly go lightly.

“Her pads on her feet were bleeding,” Ms. Richter said. “Her claws are worn weird. The front ones are really sharp, the back ones worn down to nothing.”

Scientists say that is consistent with a long walk, since back feet provide propulsion, while front claws engage in activities like tearing. The Richters also said Holly had gone from 13.5 to 7 pounds.

Holly hardly seemed an adventurous wanderer, though her background might have given her a genetic advantage. Her mother was a feral cat roaming the Richters’ mobile home park, and Holly was born inside somebody’s air-conditioner, Ms. Richter said. When, at about six weeks old, Holly padded into their carport and jumped into the lap of Mr. Richter’s mother, there were “scars on her belly from when the air conditioner was turned on,” Ms. Richter said.

Scientists say that such early experience was too brief to explain how Holly might have been comfortable in the wild — after all, she spent most of her life as an indoor cat, except for occasionally running outside to chase lizards. But it might imply innate personality traits like nimbleness or toughness.

“You’ve got these real variations in temperament,” Dr. Bekoff said. “Fish can by shy or bold; there seem to be shy and bold spiders. This cat, it could be she has the personality of a survivor.”

He said being an indoor cat would not extinguish survivalist behaviors, like hunting mice or being aware of the sun’s orientation.

The Richters — Bonnie, 63, a retired nurse, and Jacob, 70, a retired airline mechanics’ supervisor and accomplished bowler — began traveling with Holly only last year, and she easily tolerated a hotel, a cabin or the R.V.

But during the Good Sam R.V. Rally in Daytona, when they were camping near the speedway with 3,000 other motor homes, Holly bolted when Ms. Richter’s mother opened the door one night. Fireworks the next day may have further spooked her, and, after searching for days, alerting animal agencies and posting fliers, the Richters returned home catless.

Two weeks later, an animal rescue worker called the Richters to say a cat resembling Holly had been spotted eating behind the Daytona franchise of Hooters, where employees put out food for feral cats.

Then, on New Year’s Eve, Barb Mazzola, a 52-year-old university executive assistant, noticed a cat “barely standing” in her backyard in West Palm Beach, struggling even to meow. Over six days, Ms. Mazzola and her children cared for the cat, putting out food, including special milk for cats, and eventually the cat came inside.

They named her Cosette after the orphan in Les Misérables, and took her to a veterinarian, Dr. Sara Beg at Paws2Help. Dr. Beg said the cat was underweight and dehydrated, had “back claws and nail beds worn down, probably from all that walking on pavement,” but was “bright and alert” and had no parasites, heartworm or viruses. “She was hesitant and scared around people she didn’t know, so I don’t think she went up to people and got a lift,” Dr. Beg said. “I think she made the journey on her own.”

At Paws2Help, Ms. Mazzola said, “I almost didn’t want to ask, because I wanted to keep her, but I said, ‘Just check and make sure she doesn’t have a microchip.’” When told the cat did, “I just cried.”

The Richters cried, too upon seeing Holly, who instantly relaxed when placed on Mr. Richter’s shoulder. Re-entry is proceeding well, but the mystery persists.

“We haven’t the slightest idea how they do this,” Mr. Galaxy said. “Anybody who says they do is lying, and, if you find it, please God, tell me what it is.”

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Downtown L.A.'s edgy arts district is neighborhood in transition









When Gideon Kotzer set out to open a discount electronics store in the mid-1990s, he deliberately chose an old warehouse in the cultural middle of nowhere — the arts district of downtown Los Angeles, which charitably could be called sketchy.


Crazy Gideon's on Traction Avenue became an island of commerce in an area that saw little other retail activity beyond illegal drug sales. The store's remoteness in an otherwise unwelcoming warren of aging brick and concrete industrial buildings was central to Kotzer's business strategy.


"He bought that space with the mind-set that if people would drive to a desolate, faraway neighborhood, they wouldn't want to leave empty-handed," his son Daniel Kotzer said.








PHOTOS: A neighborhood in transition


Crazy Gideon's has closed, and its formerly shabby space in the 1917 structure is expected to open to the public again this year as an expansive brew pub serving house-made beer with meals. The upgrade is emblematic of changes going on throughout the arts district.


The neighborhood along the Los Angeles River east of downtown's Civic Center is drawing favorable comparisons to New York's meatpacking district, where trendy shops, restaurants, hotels and offices have taken over many industrial buildings that were strictly blue collar for decades.


The transformation has such momentum that some of the neighborhood's biggest supporters expect that it will be difficult to find artists in the arts district in another decade as gentrification drives up rents and pushes low-paid artists to cheaper locales.


But for now, the arts district is in a sweet spot of transition for many. Vegetable wholesalers and furniture makers share streets with top-flight restaurants and front-line technology and entertainment firms. Its walls sport elaborate murals — and foreboding razor wire.


"There are very rough patches," said architect Scott Johnson, who lives in a condominium on Industrial Street. "It's muscular. It's complicated. It's interesting."


Part of the appeal for Johnson, who lived in the meatpacking district in the late 1970s, is the roughness most suburbanites would find off-putting. He calls it "authenticity" in a time when "we're getting bombarded with fake stuff."


The spine of the arts district is Mateo Street, a truck-laden thoroughfare named after early landowner Matthew "Don Mateo" Keller. The district evolved from agricultural uses including Mateo's winery in the mid-1800s to being the city's industrial heart in the early 20th century.


One of the most ambitious private developments of that era was Union Terminal Annex, which was connected by rail to the city's seaport and was the second-largest wholesale terminal in the world. Two of the four large remaining buildings are occupied by clothing manufacturer American Apparel Inc., and the owners are improving and divvying up long-vacant remaining space for other business tenants including the makers of Splendid and Ella Moss apparel.


The advanced age of the neighborhood's buildings worked against the district in recent decades as businesses moved to more modern, efficient industrial properties elsewhere in the region. Those that remained often barricaded themselves behind tall gates and barbed wire as the area gained a reputation for crime and homelessness.


"There were drug addicts and prostitutes on the corner when we started," said restaurateur Yassmin Sarmadi, who began working on French bistro Church & State seven years ago. "Now limousines pull up on a regular basis."


Sarmadi opened her bistro in the former West Coast headquarters of National Biscuit Co., a seven-story factory built in 1925 that was renovated and converted to condos in 2006. She was attracted to the historic nature of the building, she said, and the fact that it was remote from the elite restaurant enclaves of the Westside.


"It was far more exciting for me to be in a place that wasn't already 'there,' so to speak," Sarmadi said.


She lives in the arts district and enjoys the company of artists who are neighbors, but knows that the march of prosperity will make it hard for some of them to stay. It may take 10 more years to become as affluent as once-lowly Venice, Sarmadi said, but gentrification will come.


"I think it's inevitable," she said. "It brings a tear to my eye, but it's also progress."


Guiding change is Tyler Stonebraker, who helps young businesses such as film and television production company Skunk set up shop in old warehouses and factories.


Stonebraker's real estate firm Creative Space caters to creative companies that consider nontraditional offices essential to their identities and part of their appeal to desirable workers in the millennial generation.





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Obama loyalists are now Organizing for Action









WASHINGTON — Underscoring its potential to become a political heavyweight, a new advocacy group launched Friday to push President Obama's second-term agenda will be guided by his most-trusted strategists and have access to his reelection campaign's most-prized assets, including its intricately detailed voter databases.


In an email to supporters with the subject line "Say you're in," Obama vowed that the group, Organizing for Action, would be "an unparalleled force in American politics."


"It will work to turn our shared values into legislative action — and it'll empower the next generation of leaders in our movement," the president wrote.





Jim Messina, who managed Obama's 2012 campaign, will be chairman of the board, and longtime Obama advisor David Axelrod will serve as a consultant. David Plouffe, Obama's top political advisor, will also have a role when he leaves the White House, a move expected to happen soon.


"If we can take the enthusiasm and passion that people showed throughout the campaign and channel it into the work ahead of us, we will be unstoppable," Messina wrote in an email to campaign donors.


To accomplish that, however, the organization must avoid the fate of a previous effort Obama officials made in 2009 to transform his first presidential campaign into a permanent advocacy force. That project, the similarly named Organizing for America, was criticized by many Democrats for failing to effectively harness the president's grass-roots supporters.


The new group, unlike its predecessor, will be independent of the Democratic National Committee. It is being run by Jon Carson, who most recently directed the White House Office of Public Engagement. Based in Chicago and Washington, the organization's board is stocked with veteran Obama aides Robert Gibbs, Stephanie Cutter, Jennifer O'Malley Dillon, Erik Smith and Julianna Smoot, as well as technology entrepreneur Frank White, a top campaign fundraiser.


Set up as an tax-exempt advocacy group, Organizing for Action will have freer rein to operate, as well as the ability to deploy the sophisticated databases and software developed for Obama's reelection campaign. The campaign will lease those valuable assets to the advocacy group, retaining control for the foreseeable future.


The arrangement gives Obama allies supervision over the campaign's voter files, technology and email lists, which are coveted by other Democratic candidates and interest groups. The campaign has not yet made any decisions about who else will get access to them.


The decision about how — and if — the campaign's infrastructure will be shared is one of the most pressing questions being raised in Democratic circles in the wake of the group's launch.


"We've never had a presidential campaign that created and retained the kind of information that the Obama 2012 campaign built," said Democratic strategist Steve Hildebrand, who served as a top Obama campaign official in 2008. "So it's going to take more than a few weeks to figure this new environment out and how it should apply to future elections."


Those assets could give other candidates a strong edge, and party strategists warn of a backlash if the Obama campaign does not share its resources. But deciding who would get to use them could be tricky — particularly in the fight for the 2016 Democratic presidential nomination, which could see Vice President Joe Biden competing against Secretary of State Hillary Rodham Clinton.


The current arrangement raises many questions, including whether the campaign will have the funds for the costly project of keeping the files current. "They are a hot commodity right now, but these lists quickly become like stinky cheese," said Steve Rosenthal, a veteran Democratic organizer. "If you don't keep updating them, they have pretty limited value."


Officials said Friday that Organizing for Action, which was set up under the tax code's section 501(c)4 as a nonprofit social welfare organization, will accept unlimited individual and corporate donations but not contributions from lobbyists, similar to the self-imposed rules governing the 2013 Presidential Inaugural Committee.


The organization plans to disclose its donors, as the inaugural committee does, even though tax-exempt advocacy groups are not required to do so. But it remains to be seen how frequently Organizing for Action will share that information and whether it will reveal the amount of the donations.


matea.gold@latimes.com





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Twitter co-founders move Obvious Corp into spacious new digs






SAN FRANCISCO (Reuters) – Evan Williams and Biz Stone, the co-founders of Twitter, have leased three sprawling floors in a historic downtown San Francisco tower for their low-profile start-up incubator, The Obvious Corporation.


Obvious said Friday it leased 75,000 square feet at the busy 760 Market Street location – known as the Phelan Building – in one of the city’s larger commercial real estate deals in recent months.






The downtown space will be able to hold roughly 500 employees and signals ambitions at Obvious, which was re-constituted when Williams and Stone both left Twitter in 2011.


The incubator, with no more than two dozen employees, has mostly stayed out of the press except when it unveiled two new blogging platforms called Medium and Branch last September.


Although still thinly staffed, Obvious’s new space is larger than start-up Pinterest’s recently inked lease in the city.


“We need the right space from which to grow the Medium team and position Obvious to focus on bringing our new ideas to life,” Obvious CEO Williams said in a statement Friday about the new lease.


The company will occupy the seventh, eighth and ninth floors of the triangular building, which wraps around a central courtyard, said Jenny Haeg, a real estate agent who has brokered leases for Square Inc, Dropbox, Airbnb and other large tech startups.


(Reporting by Gerry Shih; Editing by Bob Burgdorfer)


Internet News Headlines – Yahoo! News





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J.J. Abrams to produce Lance Armstrong biopic


LOS ANGELES (AP) — He's already gotten the Oprah treatment. Now Lance Armstrong is headed for the silver screen.


Paramount Pictures and J.J. Abrams' production company, Bad Robot, are planning a biopic about the disgraced cyclist, a studio spokeswoman said Friday.


They've secured the rights to New York Times reporter Juliet Macur's upcoming book "Cycle of Lies: The Fall of Lance Armstrong," due out in June. Macur covered the seven-time Tour de France winner for over a decade.


No director, writer, star or start date have been set.


Armstrong is in the midst of a two-part interview with Oprah Winfrey in which he admits to using performance-enhancing drugs to reach his historic victories, something he'd defiantly denied for years. The International Olympic Committee stripped him of his 2000 bronze medal this week.


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Well: A Great Grain Adventure

This week, the Recipes for Health columnist Martha Rose Shulman asks readers to go beyond wild rice and get adventurous with their grains. She offers new recipes with some unusual grains you may not have ever cooked or eaten. Her recipes this week include:

Millet: Millet can be used in bird seed and animal feed, but the grain is enjoying a renaissance in the United States right now as a great source of gluten-free nutrition. It can be used in savory or sweet foods and, depending on how it’s cooked, can be crunchy or creamy. To avoid mushy millet, Ms. Shulman advises cooking no more than 2/3 cup at a time. Toast the seeds in a little oil first and take care not to stir the millet once you have added the water so you will get a fluffy result.

Triticale: This hearty, toothsome grain is a hybrid made from wheat and rye. It is a good source of phosphorus and a very good source of magnesium. It has a chewy texture and earthy flavor, similar to wheatberries.

Farro: Farro has a nutty flavor and a chewy texture, and holds up well in cooking because it doesn’t get mushy. When using farro in a salad, cook it until you see that the grains have begun to splay so they won’t be too chewy and can absorb the dressing properly.

Buckwheat: Buckwheat isn’t related to wheat and is actually a great gluten-free alternative. Ms. Shulman uses buckwheat soba noodles to add a nutty flavor and wholesomeness to her Skillet Soba Salad.

Here are five new ways to cook with grains.

Skillet Brown Rice, Barley or Triticale Salad With Mushrooms and Endive: Triticale is a hybrid grain made from wheat and rye, but any hearty grain would work in this salad.


Skillet Beet and Farro Salad: This hearty winter salad can be a meal or a side dish, and warming it in the skillet makes it particularly comforting.


Warm Millet, Carrot and Kale Salad With Curry-Scented Dressing: Millet can be tricky to cook, but if you are careful, you will be rewarded with a fluffy and delicious salad.


Skillet Wild Rice, Walnut and Broccoli Salad: Broccoli flowers catch the nutty, lemony dressing in this winter salad.


Skillet Soba, Baked Tofu and Green Bean Salad With Spicy Dressing: The nutty flavor of buckwheat soba noodles makes for a delicious salad.


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Robert L. Citron caused 'great hardship' but also some good









Eighteen years after Orange County crashed into the largest municipal bankruptcy, with a $1.6-billion trading loss, the collapse remains the leading example of foolhardy investments, Wall Street greed and lazy government supervision.


That is an enduring legacy of Robert L. Citron, the soft-spoken but high-rolling former treasurer who died this week at age 87. His legacy, though, also includes the state Legislature's subsequent overhaul of investment rules, which were tightened to prevent budget-strapped local governments from ever becoming so reckless again.


Indeed, it was other pressures — soaring pension obligations, diving revenues, higher unemployment and a glut of foreclosures — that sank San Bernardino, Stockton and other cities into recent bankruptcies.





Jefferson County, Ala., became the largest municipal failure two years ago, with $4.2 billion in losses. But no local government has yet overshadowed the Orange County debacle in sheer shock value.


"Everybody comes back to Orange County because it's one of the wealthiest counties in the country, the surprising amount of debt and the types of investments that Bob Citron made," said Mark Baldassare, a former UC Irvine urban planning expert who wrote a book on the bankruptcy.


Had Citron's speculations in complex securities not imploded, more cities, schools and local agencies would have taken similar risks to plug budget gaps that seemed only to increase over the years, Baldassare and other observers said.


"Did a great big disaster happening early help avoid an outcome of multiple bankruptcies that together would have been bigger? That's not hard to imagine," banker Christopher Varelas, whom the county hired as a financial advisor after the bankruptcy, said Friday.


Without the example of Orange County, there probably would have been a robust market offering complex, higher-yielding securities to California cities and schools, Varelas said.


"It's hard to believe Wall Street could have stayed away from such a large market. And it's hard to believe municipalities could have resisted the temptation to find a quick fix for their budget problem," he said.


Citron offered just such a quick fix to Orange County during the deep recession of the early 1990s when aerospace jobs evaporated and home prices cratered.


Originally elected tax collector, Citron, who had no formal financial training, became treasurer as well when the United States' fifth-most-populous county consolidated operations. He was elected seven times.


In the years before the collapse, he was bringing in an extra $160 million a year by what proved to be sheer wagers on low interest rates, magnified by heavy borrowing that converted $7.8 billion in local government funds into a $20-billion investment portfolio.


After huge losses were disclosed in late 1994, Orange County blamed its former financial and legal partners for the debacle. It ultimately won $900 million in settlements, about half from Merrill, Lynch & Co., which concocted many of the complicated securities that fell apart. One called an inverse Swiss floater incorporated two bets: one that the Swiss franc would decline in value, the other that interest rates would stay low.


The county had to take on $1 billion in new debt largely to repay 200 cities, school districts and public agencies that invested in Citron's county funds.


Orange County refinanced the debt at a lower rate in 2005, keeping its annual payment at about $90 million but allowing a projected payoff in 2015 or 2016 instead of 2027, said John M.W. Moorlach, who replaced Citron as county treasurer and is on the county's Board of Supervisors.


Repayment has forced the county to budget conservatively, ignoring or postponing projects in such areas as flood control and mental health, Moorlach said. When the debt is retired, he hopes the funds can be redirected to paying down Orange County's unfunded pension liabilities, which top $5 billion.


Back when the money from Citron was rolling in, making belt-tightening unimportant, few had raised questions about its source.


"I don't know how in the hell he does it, but he makes us all look good," Thomas F. Riley, a former Board of Supervisors chairman, famously said.


Citron's bets paid off so well in the early 1990s that he and his assistant Matthew Raabe skimmed off $89 million due to cities, schools and agencies to put in the county's coffers for discretionary use.


Both later were convicted of fraud. Citron was sentenced to a year of clerical duty in the jails during the day and spent nights at home; Raabe's conviction was overturned on appeal.


William J. Popejoy, the financial executive brought in as county chief executive after the meltdown, says the lesson for other governments is to speak up when something looks too good to be true.


"A lot of people in the county government and at the cities and especially the special districts knew there was a huge amount of money coming in. But no one asked the question; they didn't want to stop the golden flow of funds coming from Citron," Popejoy said. "And somebody should have."


Actually, someone had — Moorlach.


Although had lost his bid in 1994 to unseat Citron as treasurer, Moorlach had predicted a financial disaster a year earlier and tried to make it a campaign issue. Citron dismissed the talk as political posturing and was reelected.


Popejoy and other officials proposed raising taxes to help right the county's finances, but voters refused. The county froze hiring, laid off thousands of workers and cut spending on social programs.


"It caused great hardship, and that is part of the legacy Bob Citron left as well," Popejoy said. "To my knowledge, however, he never did so for personal gain."


Citron's defense attorney David W. Wiechert said Citron, however misguided, "was an incredibly loyal and caring individual" who believed himself to be acting in the county's best interests.


Forgiveness is in order, Wiechert said, "especially now, when we have seen that even the brightest minds on Wall Street could bring the world's economy to an apocalyptic precipice."


scott.reckard@latimes.com





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White House launches campaign for support of gun control measures









WASHINGTON — A day after President Obama announced a wide-ranging series of gun-control initiatives, the administration kicked off its campaign to create public support and pressure lawmakers to pass the most comprehensive legislation since the mid-1990s.


"We're going to take this fight to the halls of Congress. We're going to take it beyond that," Vice President Joe Biden told the U.S. Conference of Mayors on Thursday. "We're going to take it to the American people. We're going to go around the country making our case, and we're going to let the voice of the American people be heard."


The administration will use Obama's fearsome campaign infrastructure to try to galvanize supporters around an issue that faces a protracted fight on Capitol Hill. To do so, the administration will pit its own grass-roots network against gun-rights groups, such as the National Rifle Assn.





"If you think we've suffered too much pain to allow this to continue, put down the paper, turn off the computer, and get your members of Congress on record," Obama wrote in an opinion piece in the Connecticut Post. "Ask them why getting an A-grade from the gun lobby is more important than giving parents some peace of mind when they drop their child off for first grade."


The newspaper is based in Bridgeport, near Newtown, the site of last month's school shooting that left 20 children and six staff members dead and set off calls for new gun laws.


The mobilization efforts by the president's campaign committee began in earnest Thursday, with campaign manager Jim Messina emailing supporters an online petition and urging them to "stand with the president."


Biden, in his speech to the mayors, acknowledged that there may not be "absolute unanimity" on how to mitigate gun violence, but emphasized consensus.


"Everyone acknowledges we have to do something.... I hope we all agree that mass shootings like the ones that we witnessed in Newtown 34 days ago cannot continue to be tolerated," he said.


Biden outlined many of the initiatives announced by Obama on Wednesday, including administrative actions to improve federal research on gun-related violence and to direct the attorney general to reevaluate the categories of people who should be prohibited from owning a gun. And he made a forceful pitch for the policies that must pass Congress, including a universal background-check system for every gun sale and a ban on high-capacity magazines.


"High-capacity magazines don't have a practical sporting purpose or hunting purpose. As one hunter told me, if you got 12 rounds, it means you've already missed the deer 11 times," Biden said. "You should pack the sucker in at that point."


But Biden spent much less time speaking about an assault weapons ban, which will face stiff opposition in Congress. He also contended that the gun industry would exploit any loopholes in a new law to continue to manufacture the weapons.


"I know as well as anyone, having written the first assault weapons ban, that the industry will do whatever it can to get around it, and they'll figure out a way," the vice president said. "But I also know we have to try."


Chris Koos, the mayor of Normal, Ill., said a "surprising" number of his constituents have voiced support for an assault weapons ban. "I thought there'd be some push-back," Koos said, in his city of 52,000 people in a rural region. But he said Vietnam veterans have been particularly outspoken in their support for a ban, having used similar firearms in combat.


"They know what they are for," Koos said.


But Betsy Price, mayor of Fort Worth, Texas, said most residents of her city were opposed to bans on assault weapons or high-capacity magazines.


"Good, outstanding citizens really want to keep their guns," she said.


But Price praised the president's efforts to improve mental health treatment and record-keeping, especially the executive action informing healthcare providers that they are not prevented from sharing relevant information about people who are prohibited from owning guns for mental health reasons.


Biden took pains to assert that the White House respected the 2nd Amendment.


Omaha Mayor Jim Suttle said that message may resonate in his state. "Nebraska is certainly a very, very conservative state. A red state, solid. But when you start polling people, particularly my constituents, you start seeing there is a public concern about the gun violence," he said.


"That's what the vice president is trying to do," Suttle said. "He's saying, 'Hey, the 2nd Amendment is your right. It's our right. Let's move on to the other aspects.'"


Dick Moore, the mayor of Elkhart, Ind., said Biden's choice for his first day on the stump was a savvy one. "He just sent a whole bunch of emissaries back home with what he said," Moore said. "Whether you're for or you're against, you get the word around the country pretty fast this way."


melanie.mason@latimes.com





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