Friday, June 5, 2009

Plan to double infra spending to 9% of GDP

The government is planning a raft of new measures to pitchfork investment in infrastructure to about 9 per cent of gross domestic product (GDP) over the next five years – double the current level of 4.5 per cent.

The measures would include steps to make it attractive for banks to lend to long gestation infrastructure projects, develop a deeper bond market powered with tax breaks and incentivise insurance companies park funds in infrastructure firms by investing in debt instruments.

An estimated investment of $500 billion (Rs 23 lakh crore) is required to upgrade roads, highways, ports and airports in the next five years, about 10 times the current level. A senior government official, who did not wish to be identified, told Hindustan Times that the objective was to hit the 9 per cent figure by 2014.

The increasing hesitation of banks to lend to infrastructure projects have rung alarm bells in the government as several projects could get delayed by several months.

Finance Ministry data show that banks are charging interest rates of more than 15 per cent for infrastructure projects, up about 2 points in the past two years. Banks are also stipulating variable interest rates, even while construction is on, exposing the projects to severe interest rate risks.

“The objective is to ensure that banks lend at a stable rate for infrastructure projects,” said the official.

“There is an urgent need to ensure a stable lending regime for infrastcuture projects at about 12 per cent. The average effective rate of lending is currently at around 14 per cent,” said Vinayak Chatterjee, Chairman, Feedback Ventures, an
infrastructure consulting firm. The government is also planning to put in place an effective monitoring mechanism with stringent penal and regulatory powers to ensure timely execution of projects.

India’s largest SEZ in limbo

The future of India’s largest free-trade zone, the 10,000-hectare Mumbai Special Economic Zone (MSEZ) in Maharashtra’s Raigad district, appeared to be in jeopardy on Friday after the Supreme Court refused to give MSEZ — promoted by Mukesh Ambani (52) and expected to cost Rs 40,000 crore — more time to acquire land for the project.

At one-third the size of Mumbai, MSEZ was to be built on a site close to the new international airport as well as the Mumbai-Pune Expressway. It was also to be connected to the metropolis by India’s most ambitious sea bridge, the 22.5-km Trans-Harbour Sealink.

First cleared in 2005, only 20 per cent of the land — occupied by 45 villages comprising mostly paddy farmers — has been acquired despite getting two extensions for the acquisition by a government board. The remaining land was not acquired because of opposition from villagers.

This could seriously impact the SEZ’s fate. The acquisition process must end between June 9 and July 26, leaving MSEZ virtually no time to wrap it up.

An MSEZ spokesperson only said “the company would decide on a course of action later”.

Ambani, through Sea King Infrastructure, is also developing the Navi Mumbai SEZ with City and Industrial Development Corporation as a partner. MSEZ adjoins it at its southern end.

The road ahead

There are two possible scenarios. The project could be scrapped or Ambani, who’s worth an estimated $20.8 billion (Rs 1.04 lakh crore), could try to rescue it.

That would almost certainly jack up the cost to Rs 50,000 crore, said an independent analyst, requesting anonymity.
The land acquired so far — at Rs 10 lakh per acre for fertile land and Rs 5 lakh per acre for unproductive land — is in the Uran and Pen talukas and is not contiguous. Because it is acquired in patches scattered apart from each other, the company cannot even go ahead with the first 2,126-hectare phase.

There are other regulatory problems. The government’s Board of Approvals cannot grant it full approval unless 90 per cent of the land has been acquired.

Even if MSEZ goes ahead, it would have to pay higher rates for the remaining land due to the vehement opposition from villagers who would be displaced by the project.

In a state-run referendum in September 2008, land-owners in 22 villages were said to have opposed the land acquisition. The government has not yet formally revealed the result
MSEZ petitioned the Supreme Court against a Bombay High Court order that refused to stay the land acquisition. On Friday, the Supreme Court upheld the high court order. A stay would have allowed MSEZ to go beyond the acquisition deadline.

The SEZ Board of Approvals can still extend the deadline, though.

A bench headed by Justice B Sudarshan Reddy came down hard on MSEZ. It wondered why the company moved the high court only on May 22, 2009, when it knew that the deadline expired less than a month. “You moved the court around May 22 and you expect that the matter will be decided… You pressurised the high court to pass the order, which it refused to do so… What is going on in this country?” the bench said.

The deadlock over the deadline stems from the fact that the Maharashtra government had invoked the Land Acquisition Act (1894) for MSEZ. As per this law, the transfer of ownership must be completed within three years or the entire process lapses.

This means that the state would no longer be required to acquire the remaining land, forcing MSEZ to approach land-owners individually and convince them to part with their property. The price for each property would then have to be negotiated individually.

State officials are tightlipped over what could happen next. “The law is clear. I don’t remember when the procedure lapses. The matter is sub-judice,” said JP Dange, forest secretary in charge of the acquisition.

State to the rescue? Unlikely

Sources said the government could technically still announce land transfers, despite farmers’ protests, if procedures like hearings before the collector are over. The other alternative could be to amend the law. Both seem unlikely.

The Democratic Front government, stung by electoral reverses in Raigad in the recent Lok Sabha elections, is reluctant to do anything remotely unpopular. The Assembly elections are just three months away.

“We have no plan to amend the law. I am yet to see the apex court ruling, but our government stands by the policy that land should not be forced from farmers,” said Revenue Minister Patangrao Kadam. Chief Secretary Johny Joseph said: “We will work within the framework of the law.”

Ulka Mahajan, of the Anti-Globalisation Front that is at forefront of the anti-SEZ protests, said: “We are happy that the Supreme Court rejected [MSEZ’s] plea. This is victory for farmers. We hope the government gets the message.”

In court, MSEZ counsels Shanti Bhushan and PP Rao said if they were not given more time, farmers who had sold their property would be affected, not to mention the whole project would be in jeopardy. The lawyers pointed out that those who had sold their property would lose out on the “attractive” rehabilitation schemes, which included jobs in the SEZ as well as an option to buy the equivalent of 12.5 per cent of their land holdings elsewhere at a subsidised price.

On behalf of the farmers, senior counsel Rakesh Dwivedi said the project was “unworkable”.

Flat-tailed horned lizard is between a rock and extinction

As the sun rose over a wind-swept stretch of desert just east of Palm Springs, Cameron Barrows tramped over a series of dunes, identifying animal tracks in the sand -- kangaroo rat, shovel-nosed snake, cottontail, pocket mouse, sidewinder rattlesnake.


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Endangered species: An article in Tuesday's Section A about the legal battle to protect the flat-tailed horned lizard said the U.S. Fish and Wildlife Service had agreed to reconsider the Tehachapi slender salamander for listing as an endangered species. It is the first action the agency has taken on the salamander. —

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It took nearly two hours to find what he was looking for in the desolate patch framed by Interstate 10, two golf courses, retirement homes, country clubs and stores: fresh tracks of a flat-tailed horned lizard, one of the rarest and most legally contested reptiles in the United States.

"This is the last corner in the Coachella Valley that still has a population of these lizards," said Barrows, a research ecologist at UC Riverside and an expert on the secretive creature with a face that resembles the parched and thorny landscape it prefers. "Nearly all of its habitat in this region has been lost since 1970."


In the latest chapter in a long-running battle to keep the lizard safe from urban encroachment, the U.S. 9th Circuit Court of Appeals recently ordered the U.S. Fish and Wildlife Service to reconsider its earlier decisions not to list it as an endangered species.

Environmentalists were elated by the ruling, which rejected a Bush administration policy they said favored development and corporate interests at the expense of the flat-tailed horned lizard and scores of other fragile plants and animals.

"This is the third time in 15 years since the lizard was first proposed for listing that a court has told the Fish and Wildlife Service to go back and review its refusal to protect it," Kara Gillon, senior staff attorney with Defenders of Wildlife, said in a statement. "We're hoping the third time is the charm. These lizards are running out of time."

The flat-tailed horned lizard is only the latest creature in recent weeks to be reconsidered for special federal protection. In response to lawsuits and petitions, the U.S. Fish and Wildlife Service has also agreed to reconsider the Tehachapi slender salamander and critical habitat for the Sonoma County population of California tiger salamander.

Over the years, federal wildlife authorities insisted that the flat-tailed horned lizard was simply hard to find and, as a result, difficult to classify as threatened by extinction.

But biologists contend the lizard continues to decline throughout its historic range in Arizona, California and Baja California. In the Coachella Valley, it has been pushed into the tiny refuge by the growing desert metropolis that stretches from Palm Springs to the Salton Sea.

A century ago, the lizard was widespread and dynamic, moving east and west with changes in climate and the availability of sand in what was then a wide-open, treeless landscape. The first waves of significant habitat loss occurred in the 1930s, '40s and '50s as a result of a boom in agriculture.

Later, its historic haunts were fragmented and destroyed by roads, off-road vehicles, light industry, suburban tracts, condominiums and commercial centers. In the Palm Springs area -- the western edges of its range -- some populations were stranded by development and disappeared.

Today, the sole remnant of the population clings to existence in a pocket of dunes, creosote and salt bush within the Coachella Valley National Wildlife Refuge, where a new, unanticipated danger threatens its future. Power poles and exotic palm trees favored by landscapers have become perches used by small falcons to spot prey and launch hunting sorties.

As a result, "flat-tailed horned lizards are no longer found on the edges of their last habitat," Barrows said. "I've suggested that the surrounding palm trees be trimmed in the spring to keep small predatory birds from nesting in them."

Striding across a trio of dunes while scanning the ground for signs of the lizard, he said, "This animal is hard to find even in the best of times. So we count their tracks, which requires a lot of patience and training."

A full day of searching on a recent Saturday yielded six tracks.

The lizard -- 3 1/2 inches long and a voracious consumer of harvester ants -- has been the focus of court battles since it was first proposed for listing in 1993.

Now, in response to legal challenges brought by a coalition of environmental groups -- the Tucson Herpetological Society, Defenders of Wildlife, the Center for Biological Diversity, the Horned Lizard Conservation Society and the Sierra Club -- the 9th Circuit Court has ordered the agency to think again about the lizard's survival.

In the meantime, it shares the sun-scorched refuge with another unique and controversial representative of Coachella Valley desert life also threatened with extinction: the fringe-toed lizard, a small reptile with a patchwork of brick-like markings and feet shaped so it can "swim" through loose sand.

Judging from the number of tracks the lizards leave etched in the sand, there many more fringe-toed lizards.

"Will the flat-tailed horned lizard survive? We don't know," said Allan Muth, a plaintiff in the lawsuit and director of the Boyd Deep Canyon Desert Research Center, south of Palm Desert.

"Small, isolated populations tend to wink out. That's why there is so much importance attached to this case."

Temecula denied annexation of land intended for gravel quarry

Temecula's efforts to derail a proposed gravel mine near a pristine environmental reserve just outside of town were dealt a severe setback Thursday when officials voted against letting the city annex the land.

The 5-2 vote came after 10 hours of contentious public debate in which hundreds of avocado farmers, scientists, doctors, Native Americans and ordinary citizens tried to convince members of the Local Agency Formation Commission that an open pit quarry would spell disaster for southwest Riverside County.


Opponents said the mine would ruin the region's air quality, sever the last remaining wildlife corridor linking inland California to the coast, increase truck traffic and cause irreparable harm to the Santa Margarita Ecological Reserve.

"We are citizens from all walks of life joining together to protect Temecula's southwest hills from being scarred for life," Barbara Wilder said. "The opposition has made it clear that it's all about them. This land should not be handed over to them for a commercial venture. Open spaces are rare and declining daily."

Mark Macarro, chairman of the Pechanga Band of LuiseƱo Indians, told commissioners the annexation would protect the place where tribal tradition says the Earth was created and the tribe was born.


"This is our Eden," he said. "We cannot re-create where the world was created. There is only one Eden."

Liberty Quarry, owned by Granite Construction, has been on the drawing board for more than three years. The mile long, 1,000-foot-deep quarry would be one of the largest operations of its kind in the state, producing 5 million tons of gravel a year with annual revenues expected to top $60 million. An estimated 1,400 trucks would come and go each day.

Temecula had hoped to annex 5,000 acres that included the mining site and put a stop to the plans.

Proponents of the 415-acre quarry, which include cities like Banning, labor unions, mining interests and those hoping to sell their homes to Granite, say the hazards have been grossly exaggerated by those who simply don't want the gravel mine in their backyards. They also say the fast-growing region needs gravel and that it's better to have it nearby and accessible rather than trucking it in from remote areas.

"Locally generated aggregate is actually a green industry," said Gregg Albright, deputy secretary for environmental policy for the state Business, Transportation and Housing Agency. "The further you have to drive, the more greenhouse gases you emit."

Redlands economist John Husing also spoke Thursday in support of the quarry. He said the economic effect on the community wouldn't be especially great with only 277 jobs created but added that the growth of the area would boost demand for gravel. Ultimately, he said, such decisions require regional solutions.

Other backers derided opponents as environmental extremists more concerned with animals than people.

"If you have ever gone to the quarry site, you would see it's just a pile of rocks," Bob Kowell said. "If we only build things based on emotions, we will never go anywhere and our country will go downhill."

When it came time to vote, only commissioners Bob Buster and John Tavaglione supported annexation. Both men are also county supervisors.

Buster seemed especially troubled by the proposed mine.

"This isn't a small mine; it's a mega-mine. This is the introduction of a huge new land use in one of the most fragile areas we have," he said. "This will be right at the entrance to Temecula, right on the front doorstep. Can we cut Temecula out of the decision-making process?"

Despite their disappointment with the vote, opponents of the mine were heartened by the support of Buster and Tavaglione. In the months ahead, it will be the Board of Supervisors who ultimately decide whether the mine goes in.

"We will just go to the next phase now," said Kathleen Hamilton, president of Save Our Southwest Hills, which began efforts to oppose the quarry. "I think we will have a good chance with the Board of Supervisors."

Veteran LAPD detective arrested in 1986 killing

A well-regarded, veteran Los Angeles Police Department detective was arrested today in connection with the 1986 slaying of her ex-boyfriend's wife, marking one of the few times in the department's history that one of its own officers has been accused of murder.

Stephanie Ilene Lazarus, 49, was arrested this morning at 8 while working at Parker Center, the LAPD's downtown headquarters. Police allege that Lazarus beat and fatally shot Sherri Rae Rasmussen, a hospital nursing director, according to sources familiar with the investigation.


It's very bittersweet. Our goal is to always bring people to justice, but this is somebody we know," said Deputy Chief Charlie Beck, who oversees the detective bureau.

Rasmussen's badly beaten body was found by her husband in the living room of the couple's Van Nuys condominium on Feb. 24, 1986. Shortly after the slaying, two men robbed another woman in the area at gun point and homicide detectives came to believe the pair had killed Rasmussen when she came upon them burglarizing her home, according to news reports. Rasmussen's parents, newspapers reported, offered a $10,000 reward for the men's capture.

The search for the two men led nowhere. Like thousands of other homicides from the period, the case remained open and was left to collect dust on department storage shelves as detectives struggled to keep pace with L.A.'s dramatic surge in murders and violent crimes.


But with homicides in the city falling to historic lows, LAPD detectives have had unusual freedom in recent months to revisit cold cases. Detectives returned to the Rasmussen killing, testing DNA material allegedly left by the killer. The tests showed that it belonged to a woman, disproving the theory that the victim had been killed by a man.

The original case file, Beck said, contained a reference to Lazarus, who was known at the time to have had a romantic relationship with the victim's husband, John Ruetten. When suspicion fell on an LAPD cop, the case took on sensitive and explosive tones inside the LAPD. Only a small circle of detectives and high-ranking officials were made aware of the investigation, in order to minimize the chances that word would leak to Lazarus that the Rasmussen case had been reopened.

Last week, undercover officers surreptitiously trailed Lazarus as she did errands one day, waiting until she discarded a coffee cup, straw or something else with her saliva on it, Beck said.

Her saliva sample was sent to a lab for comparison with DNA evidence Rasmussen's killer left at the crime scene. The genetic code in the two samples matched conclusively, police allege.

Lazarus was not pursued as a suspect at the time of Rasmussen's slaying, police said. There is no indication that any other active or retired LAPD officer knew about Lazarus's alleged role in the killing, Beck said.

Lazarus joined the department in 1983, LAPD records show. After several years as a rank-and-file patrol officer in the San Fernando Valley, she was promoted to detective and, in 2006, won a high-profile assignment to a unit dedicated to tracking stolen artwork. There are references in department publications to Lazarus earning commendation from the public for her work.

She hardly shunned the spotlight. In a recent LA Weekly article profiling Lazarus and her partner, Don Hrycyk, she joked that all she knew about art was that it "hangs on the wall," and added, "after working here and seeing all the phony art, I said, 'I can do that.' " Lazarus, who has an adopted 5-year-old daughter, according to Beck, told the newspaper that she had started taking oil-painting classes and had first become interested in art when she visited Europe as a teenager. Last year, she gave interviews to reporters after helping to capture two men convicted of a string of thefts of bronze statues and sculptures in the Wilshire area and in Beverly Hills.

A black-and-white photograph taken for a magazine profile in 2007 shows a petite, relaxed-looking Lazarus with curly hair leaning against a wall, her hands informally stuck in civilian clothes.

Until her death, Rasmussen was director of critical care nursing at Glendale Adventist Medical Center and her slaying stunned colleagues, who referred to her as a vital member of the medical staff, according to news reports. She had reportedly stayed home from work the day she was killed after straining her back in an aerobics class. In an article about the family's reward, her father said Rasmussen had entered college at 16 and had taught for a period at UCLA.

Iran Has Centrifuge Capacity for Nuclear Arms, Report Says

A week before Iran’s presidential election, atomic inspectors reported Friday that the country has sped up its production of nuclear fuel and increased its number of installed centrifuges to 7,200 — more than enough, weapon experts said, to make fuel for up to two nuclear weapons a year, if the country decided to use its facilities for that purpose.

In its report, the International Atomic Energy Agency said that it had found no evidence that any of the fuel in Iran’s possession had been enriched to the purity needed to make a bomb, a step that would take months.

But it said that the country had blocked its inspectors for more than a year now from visiting a heavy-water reactor capable of being modified to produce plutonium that could be used in weapons. It also said that Tehran had continued to refuse to answer the agency’s questions about reports of Iranian studies obtained by Western intelligence agencies that suggest that its scientists had performed research on the design of a nuclear warhead.

Iran is required under three United Nations Security Council resolutions to cease the enrichment of uranium and to provide answers to those questions. The Iranian authorities have vigorously denied the authenticity of the studies on warhead design.

The report, one of a series made quarterly to the agency’s board, described how the pace of enrichment and the installation of new centrifuges is accelerating at an enormous underground bunker in the desert at Natanz. It said that nearly 4,920 centrifuges were currently enriching uranium, and that 2,300 more were ready to go. That represents an increase of 30 percent in the total number of installed centrifuges since a February report.

Campaigning for re-election next week, President Mahmoud Ahmadinejad has vowed that he will never bend to demands from the West or the United Nations that Iran halt its uranium enrichment. His political opponents have largely agreed, but have urged a more cooperative attitude.

Meanwhile, Israel is constantly assessing Iran’s capability of producing a nuclear weapon. Last year, it asked the Bush administration for the equipment needed in case it decided to take unilateral military action against Iran. Mr. Bush declined to provide the equipment.

In a separate report released Friday, the agency said it had found new evidence to support the claim that the complex that Israel bombed in the Syrian desert in 2007 was in fact a clandestine nuclear reactor. The clue, it said, was information uncovered on Syria’s procurement of “a large quantity of graphite,” a material that American intelligence officials have said was central to the reactor’s operation.

The agency also reported its discovery of particles of uranium in a Damascus laboratory and their “possible connection” to uranium traces already discovered at the bombed desert site. Firming up that link, it added, would require further analysis.

Significantly, the agency’s Iranian report disclosed an expansion not only in the number of centrifuges, but also in the production of nuclear fuel, said David Albright, president of the Institute for Science and International Security, a private group in Washington that tracks nuclear proliferation. “They’re improving the output,” he said. “And they can do better” by feeding uranium into the 2,300 machines that now stand empty.

Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, a research organization in Washington, said Iran’s 7,200 centrifuges, if suitably arranged, could annually produce enough nuclear fuel for up to two bombs. “The facts on the ground continue to change,” he said in an interview, “and not in our favor.”

The report from the International Atomic Energy Agency noted that Iran is refusing not only to let inspectors visit a heavy-water reactor that Tehran has under construction, but also to let them verify design information about the sprawling project, as the agency’s statutes require.

The report also said Tehran had refused to give access to “relevant Iranian authorities” who could address allegations surrounding Iran’s research on the design of nuclear warheads. In the absence of that cooperation and enhanced powers of inspection, the report said, the agency “will not be in a position to provide credible assurance” about nuclear materials and activities.

New Scrutiny of Judge’s Most Controversial Case

Near the end of a long and heated appeals court argument over whether New Haven was entitled to throw out a promotional exam because black firefighters had performed poorly on it, a lawyer for white firefighters challenging that decision made a point that bothered Judge Sonia Sotomayor.
Firefighters die every week in this country,” the lawyer, Karen Lee Torre said. Using the test, she said, could save lives.

“Counsel,” Judge Sotomayor responded. “We’re not suggesting that unqualified people be hired. The city’s not suggesting that. All right?”

The exchange was unusually charged. Almost everything about the case of Ricci v. DeStefano — from the number and length of the briefs to the size of the appellate record to the exceptionally long oral argument — suggested that it would produce an important appeals court decision about how the government may use race in decisions concerning hiring and promotion.

But in the end the decision from Judge Sotomayor and two other judges was an unsigned summary order that contained a single paragraph of reasoning that simply affirmed a lower court’s decision dismissing the race discrimination claim brought by Frank Ricci and 17 other white firefighters, one of them Hispanic, who had done well on the test.

That cursory treatment suggested that the case was routine and unworthy of careful scrutiny. Yet the case turned out to be important enough to warrant review by the Supreme Court, which heard arguments in April and is likely to issue a decision this month.

The Ricci case, bristling with important issues, has emerged as the most controversial and puzzling of the thousands of rulings in which Judge Sotomayor participated, and it is likely to attract more questions at her Supreme Court confirmations hearings than any other. The result Judge Sotomayor endorsed, many legal scholars say, is perfectly defensible. The procedure the panel used, they say, is another matter.

There is evidence that the three judges in the case agreed to use a summary order rather than a full decision in an effort to find common ground. Allies of Judge Sotomayor, who was the junior judge on the panel of the United States Court of Appeals for the Second Circuit, correctly point out that the Second Circuit often decides even significant cases with summary orders that adopt the reasoning of the lower court. They add that the panel’s decision reflected a respect for precedent, though it cited none. Judge Sotomayor certainly made no suggestion at the argument that she was constrained by precedent to rule for one party or the other.

At the argument, Judge Sotomayor did not indicate that she was inclined to use the case to make a larger statement about affirmative action. She was focused, instead, on the array of factual and legal issues before her.

“Race on some level was a part of this discussion” when New Haven’s civil service board decided to throw out the test, Judge Sotomayor told Ms. Torre, the lawyer for the plaintiffs.

“The entire discussion before the board was, ‘Was there an adverse impact on the minority candidates by this testing procedure?’ ” Judge Sotomayor said.

That sort of race consciousness, she said, may be perfectly lawful. “You can’t have a racially neutral policy that adversely affects minorities,” Judge Sotomayor said, “unless there is a business necessity.”

Her extensive and probing questions at the argument were typical of her methodical approach to cases, and they offer sometimes conflicting hints about her views on when the government may take account of race in decisions concerning hiring and promotion.

At times, her questions were small lectures on the governing legal standards.

“You have to look at the test and determine whether the test was in fact fair or not,” Judge Sotomayor told a lawyer for the defendants, Richard A. Roberts. “If you’re going to say it’s unfair, point to specifics, of ways it wasn’t, and make sure that there really are alternatives.”

But the summary order Judge Sotomayor joined drew none of those distinctions.

Catherine O’Hagan Wolfe, the clerk of the court, said in an e-mail message that such an order “ordinarily issues when the determination of the case revolves around well-settled principles of law.”

The Ricci case does not meet that standard, Judge Jose A. Cabranes wrote for himself and five other judges in a dissent from the full court’s decision not to rehear the case. The questions posed in the Ricci case, Judge Cabranes wrote, were exceptionally important “constitutional and statutory claims of first impression” — meaning ones where no binding precedent exists.

The district court judge in New Haven, whose opinion the appeals court panel affirmed and adopted, did identify three earlier Second Circuit decisions concerning the use of race by the government in hiring and promotional exams. But they did not involve precisely the same issues.

The panel’s brief decision in the Ricci case was conversational in tone, and it does not reflect Judge Sotomayor’s somewhat bureaucratic writing style.

It did strike a note of empathy, though one couched in a double negative: “We are not unsympathetic to the plaintiffs’ expression of frustration. Mr. Ricci, for example, who is dyslexic, made intensive efforts that appear to have resulted in his scoring highly on one of the exams, only to have it invalidated.”

The decision ruled that New Haven’s civil service board “had no good alternatives” and was protected because it “was simply trying to fulfill its obligations” under a federal civil rights law when it was “confronted with test results that had a disproportionate racial impact.”

In the Second Circuit, Judge Sotomayor was the junior judge on the panel, which also included Judge Rosemary S. Pooler, who was the presiding judge at the argument, and Judge Robert D. Sack, who did not attend due to illness.

In the end, according to court personnel familiar with some of the internal discussions of the case, the three judges had difficulty finding consensus, with Judge Sack the most reluctant to join a decision affirming the district court. Judge Pooler, as the presiding judge, took the leading role in fashioning the compromise. The use of a summary order, which ordinarily cannot be cited as precedent, was part of that compromise.

Paterson and Unions Agree on Limits for New Pensio

Gov. David A. Paterson and the state’s public employee unions announced an agreement on Friday that would reduce pension benefits for future public employees and save the state billions of dollars in an attempt to control ballooning costs for retirees.

To win their support for the deal, the governor provided the unions with significant incentives and backed off earlier demands for concessions from current employees.

Mr. Paterson will shelve his plan to lay off 8,700 workers and will drop a proposal to require existing workers to give up their 3 percent annual pay raise this year and to defer a week’s pay. In addition, 4,500 workers will be offered $20,000 buyouts.

Paterson administration officials said the agreement would save the state $30 billion over 30 years, but much of the savings will not be realized for another decade.

“This agreement is a huge win for New York’s taxpayers and will lead to the most significant reform of our public pension system in decades,” the governor said in a statement. “This is real reform to the pension system, which will substantially reduce costs to the taxpayers of New York State.”

The agreement will raise the retirement age for future employees from 55 to 62, and require them to contribute 3 percent of their salaries to their pensions for their entire careers, instead of for their first decade of service, which is the current requirement.

New workers will not become vested in the pension plan until they reach 10 years of service, rather than the current five. The deal will also limit the amount of overtime that employees can use in their last years of work to increase their pension benefits.

The agreement requires legislative approval, though endorsements by the governor and the labor unions virtually assure its success.

The deal covers state workers and local governments outside New York City; the Paterson administration hopes to negotiate a similar agreement for New York City employees, but city unions are adamantly opposed to doing so. New York City has its own retirement system. The deal also does not affect police officers, correction officers, teachers and firefighters.

The urgency of the need for changes in retirement benefits was underscored last week when the state comptroller’s office reported that the pension fund, hobbled by losses amid the market’s collapse, had shrunk to $109.9 billion at the end of March from $153.9 billion a year earlier.

The deal comes days after Mr. Paterson shocked and angered police and fire union leaders by refusing to allow new officers and firefighters across the state to continue to enroll in enviable pension benefits that were phased out in the 1970s for other public employees. The governor vetoed routine legislation that would have extended the benefits — similar bills have been signed by a series of governors going back to 1981.

While his veto was praised by budget watchdogs as a sign of rare resolve from the governor, his latest labor deal received mixed reviews.

Though the administration is hoping that the buyouts and an offer to allow employees to choose a reduced workweek will still generate immediate savings, the cash-poor state will be providing raises to the 129,000 employees covered under the deal announced Friday. Those raises will cost $180 million, at a time when some other states are freezing salaries and furloughing workers. There is also a cost of up to $90 million for the buyouts.

Further, New York has a history of reversing its pension cutbacks. The state has previously required that employees contribute to their retirement beyond 10 years of service, only to roll back the requirement in an election year. Union leaders, who had criticized the governor during months of negotiations, succeeded in their insistence that existing labor contracts not be reopened.

“The governor moved significantly from his original demands for major contract concessions from the state’s work force,” said Kenneth Brynien, president of the Public Employees Federation. “Considering the deteriorating condition of the state’s finances, this represents a reasonable accommodation.”

Danny Donohue, the president of the Civil Service Employees Association, said his union “recognizes these are extraordinary times with unprecedented challenges, and we have tried to find ways to help without reopening contracts.”

The agreement creates the first new pension category for state employees since 1983 — it is called Tier V because it is one of five such classifications, and provides the least generous benefits.

But it is not likely to encompass the city. A key labor leader in New York City called it a nonstarter, given that only this week city unions concluded negotiations that led them to amend health benefits for more than 550,000 current and retired employees, guaranteeing $400 million in savings over two years.

“The city unions just completed long, tough negotiations with Mayor Bloomberg,” said Harry Nespoli, the head of the Municipal Labor Committee. “As far as Tier V is concerned, it’s not negotiable,” he said, adding, “We’ve done our share.”

Financial analysts had varying views on the agreement.

“Obviously the benefits to the state, or its taxpayers, are not immediate,” said Jeremy Gold, a New York actuary and economist who has contended that governments often understate the ultimate costs of pension benefits. But he added that restraining the benefits of future hires “may be the beginning of the way out.”

Edmund J. McMahon, director of the Empire Center for New York State Policy, a conservative-leaning research group, said the governor had not gone nearly far enough. Referring to the 4,500 buyouts, he said the deal “allows you to pay more money to union members who are already ready to retire.”

Mr. McMahon said he believed New York and other states needed to follow the shift embraced by the private sector away from the traditional defined-benefit pension plan to a 401(k)-style retirement program to prepare for a potentially calamitous future increase in pension costs.

Speaking of the governor’s deal, Mr. McMahon said, “If you contrast this to what is happening in other major states, where you have union agreements of givebacks or furloughs, it’s remarkable.”

Elizabeth Lynam, the deputy research director of the Citizens Budget Commission, a nonprofit policy group, called the move “a really good start.”

“It’s going to be tough to find the money to do the buyouts, but the pension tier is significant,” she said. “If you think about the $45 billion the pension fund lost this year, a new pension tier is desperately needed.”

England humiliated by Broad's last-ball blunder

England face the prospect of being thrown out of their own party at the very first stage of the World Twenty20 after a humiliating defeat by Holland in yesterday's opening match. They were beaten by four wickets from the last delivery of a thrilling contest as orange shone bright in the murky twilight of a memorable evening at Lord's. MCC members, who presumably feared the worst, mostly stayed away.

England must now beat Pakistan in their remaining group match at The Oval on Sundayand hope they can squeeze through on net run rate. If they fail they will perhaps be looking to arrange some warm-down matches over the next few days.

Holland did beat England in 1989 and 1993. But both games, played in Holland and on matting, were essentially hit-and-giggle matches against England XIs.

If there was any giggling last night it came from the direction of the Australia and Pakistan camps as England, desperate to win a global competition for the first time, were fairly beaten by one of the three qualifiers in their worst ever one-day defeat.

It was the Essex all-rounder Ryan ten Doeschate who used his experience to see Holland over the line but it was Tom de Grooth (which means The Great in Dutch) who propelled his side towards this unlikely win. De Grooth, 30, nicknamed Two Thumbs and a youth coach in The Hague, is not one of the four players in the Holland side with county experience but it was his striking which set England back on their heels as he hit 49 from 30 deliveries with six fours and a six straight back over the bowler Stuart Broad's head.

There was always a niggling feeling in English hearts that their side's total of 162 could be pursued with some optimism by the Dutch after another fine start by Ravi Bopara and Luke Wright was not capitalised on by the rest of the batsmen.

Darron Reekers had given his side a fiery start with two sixes in a 13-ball 20 and then De Grooth maintained the impetus. But when he too was out, lobbing the ball up to Rob Key at mid-off to leave Holland 116-4 at the end of the 13th over, the outsiders looked likely to falter.

Instead they kept going, even though they hit only three boundaries off the last six overs. They wanted 42 off five overs, 30 off four, 21 off three, 17 off two and then seven off the last six balls.

It was a generally good over by Broad, with five singles coming off the first five deliveries. But his bowling was better than his fielding, as he missed a sharp return catch and three run-out chances, including that of Edgar Schiferli off the last ball of the innings.

It would have won the game had he hit – but he missed, and Schiferli and Ten Doeschate scampered through for an overthrow to win the game.

There had been a strong sense of anti-climax before the match – there always would be with England, a full member of the ICC, playing Holland, an associate member. England versus Pakistan would have been a much more attractive competition opener. Or so everyone thought.

Essentially, this World20 launcher was one that few people wanted to watch. Perhaps it was their protest against the flashing signs in front of the pavilion. The rain did not help and nor did the cancellation of the opening ceremony. In fact the ceremony was, eventually, a very English compromise.

At first it was delayed then cancelled and finally it was decided to do away with the main and interesting bit (the singing of Alesha Dixon) but carry on with some tedious speeches. The dancers, meanwhile, wore fleeces to keep themselves warm which detracted from any sense of celebration. When, eventually, Holland trotted down the pavilion steps, looking anxious to make up for the 20 minutes lost to the weather, they were promptly sent back by officials; the black-clad umpires and the sponsors' girls were not in their proper positions. But at least the lights worked and once the cricket started it skittered along.

England's in-form opener Bopara drove Dirk Nannes' opening delivery into the ground and over backward point for four and the 50 came up from 39 balls with seven fours.

The left-arm Nannes bowled quickly enough to drive his captain and wicket-keeper Jeroen Smits back to the edge of the circle but he was unable to make the breakthrough which Holland desperately needed.

For the second time in three days Bopara and Wright put on a century opening partnership but this time it was in an official Twenty20 game and it represented England's best in this form of the game, beating the 65 shared by Wright and Phil Mustard in Christchurch last year. Bopara played the classier innings, Wright the more muscular. But after reaching 100 off 11 overs England failed to kick on or even maintain their healthy momentum. Bopara had struck 46 from 34 balls when he was caught at long-on in the 12th over. Wright continued to cudgel away for 71 from 49 balls, with eight fours. But in the absence of Kevin Pietersen there was a shortage of testosterone in the middle order.

Owais Shah had scored just five when he hit the ball straight to deep square leg, Eoin Morgan,reverse-swept to destruction for just six and after Wright was caught at wide long-on neither Paul Collingwood nor Rob Key could hit the much needed boundaries: England scored nine of them from their first 10 overs but just five in the second half of their innings. They would pay for that.

"We were looking to get up to 170-180," the captain Paul Collingwood shrugged after the game. "They bowled well at the back end of our innings and we should have defended a total like that, but unfortunately they were better on the day. ­Holland had no fear and every time we got a wicket we thought we were on top.

"We had a lot of chances at the back end. We do it in practice but you need to do it out in the middle in pressure situations and tonight we didn't do it. There's a fine line between winning and losing

Hopes for US recovery grow as job losses ease

The US unemployment rate edged up to a 25-year high of 9.4% last month as employers shed 345,000 jobs, although economist took comfort in signs that the rate of erosion in the workforce slowed down sharply.

Non-farm payroll figures released by the US commerce department revealed that the headline rate of unemployment rose by half a percentage point from April's figure of 8.9%.

However, the number of jobs disappearing from the economy was the lowest since September. Job losses significantly dropped in comparison with revised figures of 652,000 and 504,000 for March and April.

"Good news at last," said Kurt Karl, the chief US economist at Swiss Re in New York. "At some point, we had to start moving to the 300,000 range; after all, we already laid off an incredible amount of people."

Since the economic slump began at the end of 2007, the US has lost more than 6m jobs. But the slowdown in job losses is likely to provide succour for those who believe "green shoots" are beginning to emerge on the financial landscape.

In construction, job losses of 59,000 in May were considerably lower than the 108,000 positions shed in April; in the service sector, about 120,000 positions disappeared compared with 230,000 the previous month.

Nigel Gault, the chief US economist at IHS Global Insight, said: "The message is: the most extreme phase of hiring cuts in capital spending, that's now behind us. Firms were very quick to react to the downturn in the economy."

Experts remain concerned about the likely impact of woes in the Detroit carmaking industry on employment over the coming months. General Motors and Chrysler have filed for bankruptcy and are idling many of their vehicle plants.

Yet a cautious mood of optimism has powered Wall Street upwards, with the Dow Jones industrial average up by 27% since early March. Activity has increased in the battered housing market and there are signs that credit crunch has begun to thaw, with banks proving more willing to lend money.

Mother starved daughter to death, murder trial hears

The body of a seven-year-old girl who died after being starved under a "punishment regime" looked like an African famine victim, a court heard today.

Khyra Ishaq's "emaciated" body was found in May last year after she had allegedly been held captive by her mother, Angela Gordon, and Gordon's boyfriend, Junaid Abuhamza.

Khyra and five other children had been locked out of a fully stocked kitchen for up to six months, Birmingham crown court was told. On the rare occasions they were fed, they were given dry bread or porridge, which they had to eat with their hands on the floor. If the children were caught "stealing" food they were punished with "detention", made to stand outside in the cold, beaten with a cane or made to overeat until they were sick, the court heard.

Neighbours reported hearing screams of "let me out, let me out" in the middle of the night, and saw the "abnormally thin" Khyra in the garden in her underwear.

Police and social workers went to the home in Handsworth, Birmingham, several times but Gordon would not let them in, the court heard.

Jurors wept when they were shown pictures of Khyra taken before and after her death on 17 May last year. Handing over the first picture, taken in April 2007, the prosecution barrister, Timothy Raggatt QC, said: "That is Khyra Ishaq as she was in life, about a year before the events you are going to be concerned with.

"You see there a picture of a normally developing healthy girl. That is how her wider family remember her and describe her in life." Raggatt then asked the jury to turn to the picture taken at postmortem, which he suggested was reminiscent of something seen in an African famine. "That did not happen naturally – it was not a result of accident or disease. It was result of deliberate action. That is why there's a charge of murder."

The jury were shown photographs of a fully stocked kitchen and fridge. The court heard a lock was fitted high up on the kitchen door to keep the children out.

Raggatt said: "That household was not a household that was short of food, there was ample food in it for everyone. The supply of food was controlled, it was controlled by these two [defendants]."

The court was told Khyra died of an infection. But Raggatt said the fact she died of an infection was "really neither here nor there. The cause of her death was the physical state that she was in. In a nutshell, their [position] is exactly the same as anyone who kept a prisoner and sets out to starve them to the point where their life is at risk. It's just as much murder ... as if they had shot, stabbed, beaten or strangled Khyra to death."

Gordon, 34, and Abuhamza, 30, had a duty in law to care for Khyra but had betrayed that duty in every possible sense, while also mistreating five other children in their control, the prosecutor said.

"All of them, as well as being starved, were subjected to violence of differing degrees," Raggatt said.

The jury was told that Abuhamza, who denies murder, pleaded guilty on Wednesday to child cruelty charges relating to the five other children.

Gordon denies murder and five charges of child cruelty alleged to have been committed between December 2007 and 17 May 2008.

The court heard Khyra had lived a "normal and happy family life" while her natural parents were together. But the marriage failed and in 2007 Gordon and Abuhamza became a couple, with Abuhamza moving into the home.

In December 2007 things changed "dramatically", Raggatt said, when Khyra was removed from school and Gordon refused to admit visitors.

Summarising defence case statements prepared before the trial, Raggatt said Gordon had denied depriving Khyra of food.

"She is saying that none of this is her doing. Angela Gordon believes Khyra may have suffered from E coli or been poisoned by food given to her by her neighbours."

Abuhamza had acknowledged he was party to the unlawful killing of Khyra, ­Raggatt said.

The trial continues.

Two charged as Cuban spies in US

former US official and his wife have been charged with spying for the Cuban government over a 30-year period.

Washington DC residents Walter Myers, 72, and Gwendolyn Myers, 71, are accused of acting as illegal agents for Cuba and wire fraud.

The couple could face up to 20 years in prison if found guilty.

The arrest follows a sting operation by the FBI, in which an agent posing as a Cuban spy persuaded the couple to give him information about their activities.

Undercover agent

Mr Myers first began working for the US State Department in 1977 as an instructor at the Foreign Service Institute, where he was given security clearance to access information classified as Top Secret.

He was later granted an even higher security clearance, performing periodic work for the State Department's Bureau of Intelligence and Research (INR) until 1999, when he joined INR on a permanent basis.

He retired in 2007.

Mr Myers married his wife Gwendolyn in 1982. She worked as an analyst at a Washington DC bank, and was never granted security clearance by the US government.

In an affidavit released by the US Justice Department, offiicals have revealed details of the sting operation conducted by the FBI.

According to the affidavit, an undercover agent posing as a member of the Cuban Intelligence Service approached Mr Myers, telling him that he had been sent by the Cuban government to obtain information from him.

During a subsequent meeting, Mr Myers and his wife agreed to provide information about US government personnel to the undercover agent, and made statements about their past activities for the Cuban government, the affidavit alleges.

Mr Myers was first approached by the Cuban government in 1978, the Justice Department says, and he and his wife agreed shortly afterwards to provide information to Cuban intelligence.

Officials instigated the undercover operation after an analysis of Mr Myers' State Department computer hard drive revealed that in 2006-2007 he accessed more than 200 sensitive or classified intelligence reports on the subject of Cuba, which were unrelated to his official work as a senior INR analyst for the European region.

Uranium found at second Syria site - IAEA

The UN nuclear watchdog, the IAEA, says traces of undeclared man-made uranium have been found at a second site in Syria, at a reactor in Damascus.

The IAEA is investigating US claims that a Syrian site destroyed in a 2007 Israeli raid was a nuclear reactor that was not yet operational.

Separately, the agency says Iran is continuing to enrich uranium in defiance of the UN Security Council.

Both Iran and Syria deny allegations of illicit nuclear activities.

'Link unclear'

Last year, the IAEA (International Atomic Energy Agency) found particles of man-made uranium at the al-Kibar site in Syria, which was destroyed by Israeli missiles in September 2007.

Now in a confidential report obtained by the BBC, it says it has discovered new traces of uranium of a type not included in Syria's declared nuclear material.

The traces were found at a small reactor used for teaching in Damascus.

The IAEA says it is not clear whether there is a link between the particles found at the two sites.

In a separate report, the IAEA says Iran now has about 7,000 centrifuges - the machines used for enriching uranium. The agency says that Tehran is running almost 5,000 of them.

It also says that Iran has boosted its stockpile of low-enriched uranium (LEU) by 500kg to more than 1,300kg in the last six months.

David Albright of the Washington-based Institute for Science and International Security think-tank has said that Iran now had enough LEU to convert into high-enriched uranium (HEU) to make one atomic bomb.

However, he said Iran would need to overcome some technical hurdles to achieve this - a process that could take several years or more.

A senior official close to the IAEA says the agency has made little progress in its investigations in Iran and in Syria.

The agency has urged both countries to co-operate with its inspectors.

won't walk away, insists Brown

Gordon Brown has unveiled a reshuffled cabinet and vowed to "fight on" with his "resilient" team to rescue the economy and clean up politics.

He admitted Labour had suffered "a painful defeat" in Thursday's polls but added: "I will not waver. I will not walk away. I will get on with the job."

And he unveiled Glenys Kinnock as Europe minister in a surprise move.

Two more cabinet ministers - Geoff Hoon and John Hutton - have stepped down but neither backed a challenge to the PM.

Speaking at a Downing Street media conference, Mr Brown said the current political crisis, fuelled by the Westminster expenses scandal "is a test of everyone's nerve - mine, the government's, the country's".

He added: "If I didn't think I was the right person to lead these challenges I would not be standing here.

"I have faith in doing my duty... I believe in never walking away in difficult times."

Mr Brown defended Chancellor Alistair Darling as a "very good personal friend" and said the idea that the pair were split over the economy was "ridiculous".

Three new ministerial councils - the Democratic Renewal Council, the Domestic Policy Council and an enhanced National Economic Council - would report weekly to the cabinet, said Mr Brown.

Mandelson's role

But speculation about his future continued as Labour MP Ian Gibson said he was standing down to force a by-election in Norwich North - and said he thinks Mr Brown's days "are close to being numbered".

BBC Political Editor Nick Robinson said if ministers had followed James Purnell in calling for Mr Brown to quit "we would today have had a new prime minister".

But the PM had still been forced to carry out an "emergency reshuffle based on his own personal survival", which had left him "not that much stronger".

In other moves, Alan Johnson becomes home secretary and Andy Burnham succeeds him at health.

Caroline Flint has quit as Europe minister, with Glenys Kinnock, wife of former Labour leader Neil Kinnock, who recently stood down as an MEP as her successor - she will be appointed to the House of Lords to be able to take the job.

Ms Flint is understood to have quit after Mr Brown failed to promote her to a full cabinet job.

In her resignation letter she launches a stinging attack on Mr Brown for allegedly treating women ministers "like female window dressing" and running a "two tier cabinet".

She said Mr Brown had "strained every sinew" of her loyalty to the government.

There has been speculation all week that Ms Flint was about to quit, yet she had taken to the airwaves to defend Mr Brown and declare her loyalty to him.

Labour's deputy leader, and minister for women and equality, Harriet Harman: "I can understand the frustration of any woman in politics, but I don't accept that Gordon doesn't take women in politics seriously - not at all."
Lord Mandelson's role has been expanded, giving him responsibility for higher education and training.

In what Nick Robinson said amounted to a deputy prime minister's role, he has also been given the titles of First Secretary of State and Lord President of the Council.

Mr Hoon has agreed to be the prime minister's European policy adviser ahead of the climate change talks in Copenhagen at the end of the year.

Bob Ainsworth becomes defence secretary and Peter Hain returns to the cabinet in his old job of Welsh Secretary. Ben Bradshaw joins the cabinet for the first time as culture secretary and Lord Adonis takes over at transport.

Universities Secretary John Denham succeeds Hazel Blears as communities secretary and Yvette Cooper replaces Mr Purnell as work and pensions secretary, with Liam Byrne replacing her as Chief Secretary to the Treasury.

Margaret Beckett and Tony McNulty are amongst those leaving the cabinet, the latter quitting his job as employment minister in an effort to clear his name over allegations about his expenses claims which are being investigated by the standards watchdog.

Election losses

John Hutton earlier quit as defence secretary and James Purnell quit on Thursday as work and pensions secretary - but no ministers have so far backed Mr Purnell's call for Mr Brown to "stand aside
Mr Hutton backed the prime minister and said he thought fellow Blairite Mr Purnell had made "the wrong decision" in calling for him to quit.

Alan Johnson, touted by some backbenchers as a possible leadership challenger, said he backed Mr Brown "to the hilt" to continue as prime minister.

He said he would "never say never" to becoming Labour leader at some point but could see no circumstances at present where he would mount a bid for the job.

He added that he was "really pleased" to be going to the Home Office, describing the job - regarded as something of a poisoned chalice - as an "invigorating challenge
But although no cabinet ministers have backed Mr Purnell, several backbench Labour MPs have continued to call for him to stand down.

Dr Gibson - stripped of the right to stand for Labour at the next election because of his expenses - said he would stand down now to trigger what is likely to be a potentially difficult by-election for Labour.

With the majority of results now in, the scale of Labour's defeat at the English local elections is also clear after it lost control of its four remaining English county councils.

According to the BBC's projected share of the national vote at a general election, based on the English local election results in so far, the Conservatives would poll 38%, the Lib Dems 28% and Labour would be third on 23%.

Conservative leader David Cameron said it showed his party was on course to win the next general election, adding that Labour had "lost the right to govern".

"We have clearly won this election and turned in some remarkably good results," he told BBC News.

Mr Clegg said Mr Brown's future as PM was "irrelevant" because the Labour government was "finished".

Labour is braced for another poor performance when the results of European elections are announced on Sunday.

And, in sign of the continuing febrile atmosphere, Nick Robinson said Gordon Brown had been forced to defend his expenses again over suggestions in the Daily Telegraph he claimed for electricity bills and service charges on two properties between 2005 and 2007.

A 10 spokesman insisted Mr Brown had complied with the rules at all times, a fact backed up by the Commons authorities, but he had agreed to repay about £180 "for the avoidance of doubt".