Mussolini's secret mistress and their love child come to life in a film by Italian director Marco Bellocchio showing in competition at the Cannes film festival on Tuesday.
"Vincere" recounts the ends to which the dictator went to hide the mother and child who potentially could have put a brake on his rise to power in pre-war Italy.
"The Mussolini I talk about is not the affectionate pater familias sometimes shown on television whose only mistake was to ally himself with Hitler," Bellocchio told the leading Italian daily Corriere della Sera.
Two works inspired the film, Mussolini's Wife by Marco Zeni and The Secret Son of Il Duce by Alfredo Pieroni.
"He's a violent, calculating, merciless man, even towards the woman he loved and his own son," said Bellocchio, 69.
In 1914, Mussolini, then aged 31, belonged to the Socialist Party, directed the daily newspaper Avanti! and had lived for two years in northern Milan with Rachele Guidi, who would later become his wife.
But he chalked up numerous affairs, including with Ida Irene Dasler, a strong-willed woman three years his senior who ran a beauty salon.
Ida staunchly supported him when he was expelled by the Socialist Party for backing Italy's entry into World War I.
She even sold her salon to help him found his own newspaper, Il Popolo d'Italia (The People of Italy).
Some journalists and historians say the couple married in 1914, but this is disputed.
Ida was seven months pregnant when Mussolini left for the front in August 1915. She gave birth to their son Benito Albino on November 11.
She informed Mussolini of the news in a letter, but received no reply.
Instead, she heard he was hospitalised with jaundice and went to his side with the babe in arms.
The day before, Mussolini had married another lover, Rachele, at the hospital.
Nevertheless he promised Dasler that he would recognise their child, and he followed through a few months later before returning to the front.
He also sent a monthly allowance for the boy.
But Mussolini soon turned his back on his former mistress, ignoring her letters and putting her under police surveillance. The young mother doggedly continued to write to him and complained of her situation to the authorities.
Once Mussolini rose to the height of power in November 1922, he ordered even closer surveillance of Dasler lest she make more waves.
In 1926, when Il Duce had become undisputed dictator, muzzling the press and the opposition, Dasler was arrested and thrown into a mental hospital. The boy was forcibly taken from her and put in the care of a tutor.
Dasler, after being moved to two more institutions and never allowed visits or correspondence, finally died aged 57 in 1937.
The boy, who was 11 when his mother was first sent to an institution, studied at boarding school until he was 18 when he entered the marines.
Although Mussolini had no contact with him, he had a close eye kept on the boy.
The fact that the young Benito kept in touch with his mother's family troubled the authorities, who sent him without warning to Asia in 1934.
The next year when Benito returned to Italy he was hospitalised, and like his mother transferred to a psychiatric facility in 1936, where he died six years later, aged only 26.
He and his mother were both buried in unmarked graves
Monday, May 18, 2009
Distressed property sales hit upscale condos
More than 170 people crowded the ballroom of a Long Beach hotel for what amounted to an upscale fire sale.
The event was an auction. The products were 38 posh waterfront condominiums. And bidders like Mike Murphy came looking for bargains.
The Internet marketing worker snapped up a two-bedroom unit for $376,000, less than half the original price. In all, he and other eager buyers ponied up $14.9 million in less than 90 minutes.
Last Monday's event represented the latest evolution in distressed-property auctions: These last-resort sales are going high-end. In contrast to auctions of foreclosed homes, which are as ubiquitous as trashed houses in the suburban hinterlands, these sales involve brand-new, often luxurious condominium units in prime locations.
Across Southern California, projects conceived during the housing boom, but completed after the bust, are sitting largely vacant. Developers are desperate to unload these units, but they face some particular challenges. Banks often won't provide mortgages to buyers in buildings that are less than 50% occupied, reducing the pool of eligible purchasers. Converting the projects to rentals means even steeper losses because the cash flow often won't cover a developer's construction costs.
Condo developers are now hosting their own auctions to attract a critical mass of buyers fast. It's a practice that Irvine real estate consultant John Burns projects will become more widespread this year.
"I don't think you have much choice," he said. "You either turn it into an apartment rental complex or find some other way to turn it into 50% occupied very quickly. An auction seems like a logical choice."
Real estate values continue to fall across much of Southern California, keeping many buyers on the fence for fear of paying too much. An auction gives them real-time assurance that the price is set by an open, competitive process, not the seller's whim, said David Parsky, director of West Coast investments for Citi Property Investors. That's a unit of Citigroup Inc. that is the controlling owner of West Ocean Two, the Long Beach building that auctioned its units last week.
"If people don't have to buy, they're not going to unless there's a reason," Parsky said. "If the market had more demand than supply, we wouldn't be doing this."
Other recent auctions include new condominium projects in downtown Los Angeles and South Pasadena. More are coming in places including Pacific Palisades and Playa del Rey.
At last week's sell-off in Long Beach, the lowest price paid was $228,000 for a one-bedroom unit on the second floor of the 22-story building. The developers had originally listed it for $512,800. The highest price paid, $718,000, was for a three-bedroom unit on the 19th floor originally priced at $1,415,600.
Whether these deep discounts were truly bargains depends on how much further the market has to fall. The median resale price for condominium units in Southern California was $230,000 in March, down 30% from the same month the previous year, according to the real estate research firm MDA DataQuick.
Some auction buyers did pay less than others who bought last year. In November, a two-bedroom, 1,040-square-foot unit in West Ocean Two sold for $545,000, public records show. Last week, similar-size units were auctioned for $430,000 and $419,000.
The auction was the second for the building. The first was held in August, after only 20 of the building's 114 units had been sold. That gathering resulted in 33 sales, prompting Parsky to hold last week's event.
Auction participant Murphy showed up at the Long Beach Hilton more than an hour early to get a crack at the bidding. A resident of Long Beach, he had been watching the market for an opportunity to move up from his 700-square-foot condo.
Murphy, 41, said he had been biding his time in his new home search, but the chance to get a bargain at auction sped up his plans.
"It forced me to get my ducks in a row and get a firm idea of where I want to go," he said.
Murphy said he wasn't overly concerned that the value of his new purchase might decline. No one can call the bottom with certainty, he figures, and he believes that he got a deal. Comparable units in the neighborhood are selling for almost $25,000 more than what he paid, Murphy said. Besides, the extra storage in his new garage will be perfect for his hockey equipment.
Converting foot-dragging looky-loos into buyers is the magic of the auction, developer Alon Zakoot said. He plans to unload the last seven condos in his 16-unit Pacific Palisades building at a public sale May 31.
Buyers these days can be downright surly, Zakoot said, because they consider every property to be overpriced.
An auction "is kind of a trick. They don't come in so negative," he said. "They allow themselves the mentality to love the unit.
"You tell them there is an auction, they talk about how pretty the building is, how beautiful. Before, when you set one price . . . all you get is negativity."
Zakoot now gets about 150 weekend visitors to open houses, about double the traffic he got when he was trying, without success, to sell the units conventionally.
More important, "before, when somebody comes, they stay 15 minutes. Now they stay two hours," he said.
Zakoot resorted to an auction because he wanted to cut his losses quickly so he could move on to other projects, he said.
He began designing and planning the project in 2003, when the housing market was still hot.
In 2006, someone offered him $12 million for the still-bare land and project plans. The sum would have yielded an instant profit. Zakoot, a jocular, self-deprecating Israeli immigrant, said he turned it down because "I am a smart guy."
Minimum bids for his upcoming auction start at $449,000 for a two-bedroom unit and $1.149 million for a four-bedroom unit. What he'll get is anybody's guess, Zakoot said.
But he's certain of one thing: Whatever the outcome of the auction, he's done as a condominium developer.
"Never a condominium," he said. "Never again."
The event was an auction. The products were 38 posh waterfront condominiums. And bidders like Mike Murphy came looking for bargains.
The Internet marketing worker snapped up a two-bedroom unit for $376,000, less than half the original price. In all, he and other eager buyers ponied up $14.9 million in less than 90 minutes.
Last Monday's event represented the latest evolution in distressed-property auctions: These last-resort sales are going high-end. In contrast to auctions of foreclosed homes, which are as ubiquitous as trashed houses in the suburban hinterlands, these sales involve brand-new, often luxurious condominium units in prime locations.
Across Southern California, projects conceived during the housing boom, but completed after the bust, are sitting largely vacant. Developers are desperate to unload these units, but they face some particular challenges. Banks often won't provide mortgages to buyers in buildings that are less than 50% occupied, reducing the pool of eligible purchasers. Converting the projects to rentals means even steeper losses because the cash flow often won't cover a developer's construction costs.
Condo developers are now hosting their own auctions to attract a critical mass of buyers fast. It's a practice that Irvine real estate consultant John Burns projects will become more widespread this year.
"I don't think you have much choice," he said. "You either turn it into an apartment rental complex or find some other way to turn it into 50% occupied very quickly. An auction seems like a logical choice."
Real estate values continue to fall across much of Southern California, keeping many buyers on the fence for fear of paying too much. An auction gives them real-time assurance that the price is set by an open, competitive process, not the seller's whim, said David Parsky, director of West Coast investments for Citi Property Investors. That's a unit of Citigroup Inc. that is the controlling owner of West Ocean Two, the Long Beach building that auctioned its units last week.
"If people don't have to buy, they're not going to unless there's a reason," Parsky said. "If the market had more demand than supply, we wouldn't be doing this."
Other recent auctions include new condominium projects in downtown Los Angeles and South Pasadena. More are coming in places including Pacific Palisades and Playa del Rey.
At last week's sell-off in Long Beach, the lowest price paid was $228,000 for a one-bedroom unit on the second floor of the 22-story building. The developers had originally listed it for $512,800. The highest price paid, $718,000, was for a three-bedroom unit on the 19th floor originally priced at $1,415,600.
Whether these deep discounts were truly bargains depends on how much further the market has to fall. The median resale price for condominium units in Southern California was $230,000 in March, down 30% from the same month the previous year, according to the real estate research firm MDA DataQuick.
Some auction buyers did pay less than others who bought last year. In November, a two-bedroom, 1,040-square-foot unit in West Ocean Two sold for $545,000, public records show. Last week, similar-size units were auctioned for $430,000 and $419,000.
The auction was the second for the building. The first was held in August, after only 20 of the building's 114 units had been sold. That gathering resulted in 33 sales, prompting Parsky to hold last week's event.
Auction participant Murphy showed up at the Long Beach Hilton more than an hour early to get a crack at the bidding. A resident of Long Beach, he had been watching the market for an opportunity to move up from his 700-square-foot condo.
Murphy, 41, said he had been biding his time in his new home search, but the chance to get a bargain at auction sped up his plans.
"It forced me to get my ducks in a row and get a firm idea of where I want to go," he said.
Murphy said he wasn't overly concerned that the value of his new purchase might decline. No one can call the bottom with certainty, he figures, and he believes that he got a deal. Comparable units in the neighborhood are selling for almost $25,000 more than what he paid, Murphy said. Besides, the extra storage in his new garage will be perfect for his hockey equipment.
Converting foot-dragging looky-loos into buyers is the magic of the auction, developer Alon Zakoot said. He plans to unload the last seven condos in his 16-unit Pacific Palisades building at a public sale May 31.
Buyers these days can be downright surly, Zakoot said, because they consider every property to be overpriced.
An auction "is kind of a trick. They don't come in so negative," he said. "They allow themselves the mentality to love the unit.
"You tell them there is an auction, they talk about how pretty the building is, how beautiful. Before, when you set one price . . . all you get is negativity."
Zakoot now gets about 150 weekend visitors to open houses, about double the traffic he got when he was trying, without success, to sell the units conventionally.
More important, "before, when somebody comes, they stay 15 minutes. Now they stay two hours," he said.
Zakoot resorted to an auction because he wanted to cut his losses quickly so he could move on to other projects, he said.
He began designing and planning the project in 2003, when the housing market was still hot.
In 2006, someone offered him $12 million for the still-bare land and project plans. The sum would have yielded an instant profit. Zakoot, a jocular, self-deprecating Israeli immigrant, said he turned it down because "I am a smart guy."
Minimum bids for his upcoming auction start at $449,000 for a two-bedroom unit and $1.149 million for a four-bedroom unit. What he'll get is anybody's guess, Zakoot said.
But he's certain of one thing: Whatever the outcome of the auction, he's done as a condominium developer.
"Never a condominium," he said. "Never again."
Jewish day schools facing an economic crisis
At Harkham Hillel Hebrew Academy in Beverly Hills, increasing numbers of cash-strapped families are asking for financial assistance or more time to pay tuition.
Trustees at Yeshivat Yavneh in Hancock Park are setting aside additional funds for financial aid even as some families consider home schooling.
In Orange County, Morasha Jewish Day School lost 15 financially ailing families over the summer and will close after this term.
Jewish day schools in Southern California and across the nation face an economic crisis that is prompting calls for major education reforms and increased support from the wider Jewish community.
The Orthodox Union, a New York-based education and service organization, recently proposed a plan to create stripped-down, low-cost schools targeted at families who can't afford to send their children to established institutions.
Other proposals drafted by the group include nationwide, low-cost health insurance for staff and teachers, a solar energy conversion plan and a dedicated fund to which the local Orthodox community would contribute, whether or not they have children in school.
"If things continue the way they are, schools are going to be so cost-prohibitive the system will collapse," said Rabbi Saul Zucker, director of educational services at the Orthodox Union. "There are Orthodox Jewish students attending public schools because of financial issues that a generation ago would never have, and young married couples having fewer children because of tuition costs."
About 200,000 students attend more than 700 Jewish day schools in the United States. Tuitions at the schools average about $14,000 and in the past five years have typically increased about 7% per year, outpacing wage increases for most families, Zucker said.
The most radical of Zucker's proposals would create alternative schools that would charge reduced fees of about $6,500 annually but operate with larger class sizes, scaled-down computer labs and no extracurricular activities unless staffed by volunteers.
Zucker acknowledged concerns about creating a two-tier system but predicted that parents would go along if it were a choice between a basic Jewish education or public schools.
In Los Angeles, 36 Jewish day schools serve about 10,000 students, according to the Bureau of Jewish Education of Greater Los Angeles. About 40% of Jewish day students in Los Angeles receive financial aid, a number expected to grow even as philanthropic dollars for some schools decrease.
"While there are a handful of philanthropists who heavily support their favorite Jewish institution, until Jewish education becomes more of a priority for the larger Jewish community, we will have this crisis," said Rabbi Moshe Dear, head of school at Yeshivat Yavneh.
His school, which charges $15,000 in annual tuition, is offering delayed payment plans. But Dear said he has heard that some parents are considering home schooling to save money.
Jewish schools are suffering many of the same economic pressures as secular prep schools and parochial campuses, but many shoulder the added expense of a religious-training curriculum that requires additional staff.
Orthodox families also tend to be larger than many others, which contributes to a heavier tuition burden, Dear and others said. And most consider a Jewish education -- with its emphasis on religious traditions -- indispensable.
That is the case for parents Gil and Iris Harel, who have two children attending Hillel, another at a local Jewish high school and a son in college.
But it has been a financial struggle to keep their children in school. Family vacations, investments, choice of vehicles and day-to-day purchases such as clothing have been affected as the "uncertainty of the economy harms everyone," said Gil Harel, a specialized general contractor.
Meanwhile, there will probably be more scenarios like that in Rancho Santa Margarita, where Morasha Jewish Day School, a pre-kindergarten-through-sixth-grade campus with 60 students, is closing after 23 years.
Even though the school expected to increase enrollment next year, it could not close a $200,000 deficit, said head of school Eve Fein. Morasha lost 15 families this year and had trouble selling two acres of property when the real estate market crashed.
"We had over 50% of our students on tuition assistance and were happy to be able to do so because we didn't want Jewish education to be just for the elite or rich," Fein said. "But it caught up with us."
Trustees at Yeshivat Yavneh in Hancock Park are setting aside additional funds for financial aid even as some families consider home schooling.
In Orange County, Morasha Jewish Day School lost 15 financially ailing families over the summer and will close after this term.
Jewish day schools in Southern California and across the nation face an economic crisis that is prompting calls for major education reforms and increased support from the wider Jewish community.
The Orthodox Union, a New York-based education and service organization, recently proposed a plan to create stripped-down, low-cost schools targeted at families who can't afford to send their children to established institutions.
Other proposals drafted by the group include nationwide, low-cost health insurance for staff and teachers, a solar energy conversion plan and a dedicated fund to which the local Orthodox community would contribute, whether or not they have children in school.
"If things continue the way they are, schools are going to be so cost-prohibitive the system will collapse," said Rabbi Saul Zucker, director of educational services at the Orthodox Union. "There are Orthodox Jewish students attending public schools because of financial issues that a generation ago would never have, and young married couples having fewer children because of tuition costs."
About 200,000 students attend more than 700 Jewish day schools in the United States. Tuitions at the schools average about $14,000 and in the past five years have typically increased about 7% per year, outpacing wage increases for most families, Zucker said.
The most radical of Zucker's proposals would create alternative schools that would charge reduced fees of about $6,500 annually but operate with larger class sizes, scaled-down computer labs and no extracurricular activities unless staffed by volunteers.
Zucker acknowledged concerns about creating a two-tier system but predicted that parents would go along if it were a choice between a basic Jewish education or public schools.
In Los Angeles, 36 Jewish day schools serve about 10,000 students, according to the Bureau of Jewish Education of Greater Los Angeles. About 40% of Jewish day students in Los Angeles receive financial aid, a number expected to grow even as philanthropic dollars for some schools decrease.
"While there are a handful of philanthropists who heavily support their favorite Jewish institution, until Jewish education becomes more of a priority for the larger Jewish community, we will have this crisis," said Rabbi Moshe Dear, head of school at Yeshivat Yavneh.
His school, which charges $15,000 in annual tuition, is offering delayed payment plans. But Dear said he has heard that some parents are considering home schooling to save money.
Jewish schools are suffering many of the same economic pressures as secular prep schools and parochial campuses, but many shoulder the added expense of a religious-training curriculum that requires additional staff.
Orthodox families also tend to be larger than many others, which contributes to a heavier tuition burden, Dear and others said. And most consider a Jewish education -- with its emphasis on religious traditions -- indispensable.
That is the case for parents Gil and Iris Harel, who have two children attending Hillel, another at a local Jewish high school and a son in college.
But it has been a financial struggle to keep their children in school. Family vacations, investments, choice of vehicles and day-to-day purchases such as clothing have been affected as the "uncertainty of the economy harms everyone," said Gil Harel, a specialized general contractor.
Meanwhile, there will probably be more scenarios like that in Rancho Santa Margarita, where Morasha Jewish Day School, a pre-kindergarten-through-sixth-grade campus with 60 students, is closing after 23 years.
Even though the school expected to increase enrollment next year, it could not close a $200,000 deficit, said head of school Eve Fein. Morasha lost 15 families this year and had trouble selling two acres of property when the real estate market crashed.
"We had over 50% of our students on tuition assistance and were happy to be able to do so because we didn't want Jewish education to be just for the elite or rich," Fein said. "But it caught up with us."
Found money: L.A. council close to compromise on LAPD [Updated]
threatened cut to the ranks of the Los Angeles Police Department apparently will be averted in a compromise reached by members of the City Council.
The council has been considering a police hiring freeze as one way to reach the $530 million in cuts needed to close the city’s looming budget shortfall.
Over the weekend, however, aides to the council and Mayor Antonio Villaraigosa said they found enough money to hire replacements for up to 480 of the 520 officers who typically leave each year through retirements and such. Apparently, the city’s share of property taxes next year will be $20 million greater than expected, and $4 million provided by the federal government could also be used to hire officers. Plus, the council may decide to use some of the $18 million held in city reserves.
The money will only allow the city to maintain close to its current level of police staffing. It won’t be enough for Villaraigosa to continue his goal to grow the Police Department by 1,000 officers, one of the top priorities of his administration.
The council is expected to vote on the compromise this evening.
-- Phil Willon
A threatened cut to the ranks of the Los Angeles Police Department apparently will be averted in a compromise reached between the City Council and Mayor Antonio Villaraigosa.
The council has been considering a police hiring freeze as one way to reach the $530 million in cuts needed to close the city’s looming budget shortfall.
Over the weekend, however, aides to the council and mayor said they found enough money to hire replacements for up to 480 of the 520 officers who typically leave each year through retirements and such. Apparently, the city’s share of property taxes next year will be $20 million greater than expected, and $4 million provided by the federal government could also be used to hire officers. Plus, the council may decide to use some of the $18 million held in city reserves.
The money will only allow the city to maintain close to its current level of police staffing. It won’t be enough for Villaraigosa to continue his goal to grow the Police Department by 1,000 officers, one of the top priorities of his administration.
The council is expected to vote on the compromise this evening
The council has been considering a police hiring freeze as one way to reach the $530 million in cuts needed to close the city’s looming budget shortfall.
Over the weekend, however, aides to the council and Mayor Antonio Villaraigosa said they found enough money to hire replacements for up to 480 of the 520 officers who typically leave each year through retirements and such. Apparently, the city’s share of property taxes next year will be $20 million greater than expected, and $4 million provided by the federal government could also be used to hire officers. Plus, the council may decide to use some of the $18 million held in city reserves.
The money will only allow the city to maintain close to its current level of police staffing. It won’t be enough for Villaraigosa to continue his goal to grow the Police Department by 1,000 officers, one of the top priorities of his administration.
The council is expected to vote on the compromise this evening.
-- Phil Willon
A threatened cut to the ranks of the Los Angeles Police Department apparently will be averted in a compromise reached between the City Council and Mayor Antonio Villaraigosa.
The council has been considering a police hiring freeze as one way to reach the $530 million in cuts needed to close the city’s looming budget shortfall.
Over the weekend, however, aides to the council and mayor said they found enough money to hire replacements for up to 480 of the 520 officers who typically leave each year through retirements and such. Apparently, the city’s share of property taxes next year will be $20 million greater than expected, and $4 million provided by the federal government could also be used to hire officers. Plus, the council may decide to use some of the $18 million held in city reserves.
The money will only allow the city to maintain close to its current level of police staffing. It won’t be enough for Villaraigosa to continue his goal to grow the Police Department by 1,000 officers, one of the top priorities of his administration.
The council is expected to vote on the compromise this evening
Bank Stocks Help Rally the Markets
Wall Street’s recent buying spree, interrupted last week, revved up again on Monday.
Traders seized on last week’s stock declines as a chance to get back in at lower prices, and they pushed shares of financial firms sharply higher. Rising oil prices lifted energy producers, and a better than-expected profit at the home improvement chain Lowe’s helped to bolster consumer stocks.
At the close, the Dow Jones industrial average was up 235.44 points or 2.8 percent, at 8,504.08. The broader Standard & Poor’s 500-stock index rose 26.83 points, or 3 percent, to close at 909.71, while the Nasdaq was up 52.22 points, 3.1 percent, at 1,732.36. Last week the Dow fell 3.6 percent and the S.&P. 500 skidded 5 percent.
Shares of Bank of America were up nearly 10 percent at $11.73 after analysts at Goldman Sachs named the company a “conviction buy.” The financial services provider Corporation rose 8.5 percent after announcing that it would raise more than $1 billion in stock and debt not backed up by the government’s liquidity-guarantee program as it seeks to repay its bailout funds.
Bailout recipients like Wells Fargo and Morgan Stanley have been raising new unsecured capital in recent weeks, intending to get out of the government’s Troubled Asset Relief Program.
Weaker retail sales helped to stifle some of the momentum of Wall Street’s recent rally last week, raising concerns that talk of economic hope and “green shoots” of recovery could be overblown. But on Monday, many investors used the market dip as an excuse to buy.
“The pullback last week created a little bit of breathing room, and buyers might be more apt to step in at these levels,” said Todd Salamone, senior vice president of research at Schaeffer’s Investment Research.
Shares of Lowe’s, the home improvement chain, rose 8.1 percent to $19.94 after it reported lower earnings that nevertheless beat analysts’ expectations, and rival Home Depot ended up 6.6 percent at $26.02. The results warmed hopes that wary consumers would come out of hibernation this spring and take on building projects and home renovations, breathing some life into the construction and home-improvement industries.
Also, the National Association of Home Builders said its index of builder confidence in the housing market rose in May, ticking up to 16 points from 14 last month. Shares of large home builders like Toll Brothers, Pulte Homes and Centex paced the broader markets.
Other retailers also gained ground after sliding last week. Shares of Wal-Mart Stores were 3.7 percent higher at $49.92, and department stores including Macy’s, Kohl’s and J. C. Penney were all higher.
Although stock markets have surged more than 30 percent from their 12-year lows set in early March, some analysts warn that investors seem to be betting on a quick economic recovery, one that may not materialize.
“That’s going to be quite difficult,” said John Brady, a senior vice president at MF Global. “Unemployment is going to move higher, and consumers are going to continue to increase savings.”
Interest rates were slightly higher. The Treasury’s benchmark 10-year note fell 26/32, to 99 3/32, and the yield, which moves in the opposite direction from the price, was 3.23 percent, up from 3.13 percent late Friday.
Following are the results of Monday’s Treasury auction of three- and six-month bills:
Traders seized on last week’s stock declines as a chance to get back in at lower prices, and they pushed shares of financial firms sharply higher. Rising oil prices lifted energy producers, and a better than-expected profit at the home improvement chain Lowe’s helped to bolster consumer stocks.
At the close, the Dow Jones industrial average was up 235.44 points or 2.8 percent, at 8,504.08. The broader Standard & Poor’s 500-stock index rose 26.83 points, or 3 percent, to close at 909.71, while the Nasdaq was up 52.22 points, 3.1 percent, at 1,732.36. Last week the Dow fell 3.6 percent and the S.&P. 500 skidded 5 percent.
Shares of Bank of America were up nearly 10 percent at $11.73 after analysts at Goldman Sachs named the company a “conviction buy.” The financial services provider Corporation rose 8.5 percent after announcing that it would raise more than $1 billion in stock and debt not backed up by the government’s liquidity-guarantee program as it seeks to repay its bailout funds.
Bailout recipients like Wells Fargo and Morgan Stanley have been raising new unsecured capital in recent weeks, intending to get out of the government’s Troubled Asset Relief Program.
Weaker retail sales helped to stifle some of the momentum of Wall Street’s recent rally last week, raising concerns that talk of economic hope and “green shoots” of recovery could be overblown. But on Monday, many investors used the market dip as an excuse to buy.
“The pullback last week created a little bit of breathing room, and buyers might be more apt to step in at these levels,” said Todd Salamone, senior vice president of research at Schaeffer’s Investment Research.
Shares of Lowe’s, the home improvement chain, rose 8.1 percent to $19.94 after it reported lower earnings that nevertheless beat analysts’ expectations, and rival Home Depot ended up 6.6 percent at $26.02. The results warmed hopes that wary consumers would come out of hibernation this spring and take on building projects and home renovations, breathing some life into the construction and home-improvement industries.
Also, the National Association of Home Builders said its index of builder confidence in the housing market rose in May, ticking up to 16 points from 14 last month. Shares of large home builders like Toll Brothers, Pulte Homes and Centex paced the broader markets.
Other retailers also gained ground after sliding last week. Shares of Wal-Mart Stores were 3.7 percent higher at $49.92, and department stores including Macy’s, Kohl’s and J. C. Penney were all higher.
Although stock markets have surged more than 30 percent from their 12-year lows set in early March, some analysts warn that investors seem to be betting on a quick economic recovery, one that may not materialize.
“That’s going to be quite difficult,” said John Brady, a senior vice president at MF Global. “Unemployment is going to move higher, and consumers are going to continue to increase savings.”
Interest rates were slightly higher. The Treasury’s benchmark 10-year note fell 26/32, to 99 3/32, and the yield, which moves in the opposite direction from the price, was 3.23 percent, up from 3.13 percent late Friday.
Following are the results of Monday’s Treasury auction of three- and six-month bills:
In Advising U.S., BlackRock Thrives in Uncertain Time
The financial crisis has ravaged many a Wall Street giant, but it has also produced a handful of winners. BlackRock, a money manager that is much admired but little known outside financial circles, is fast emerging as one of the nation’s financial powerhouses.
BlackRock, which started in a one-room office 21 years ago, now manages $1.3 trillion in assets for big private clients, including hedge funds and foreign governments.
But it is the company’s highly prized role as a government adviser and contractor that is now drawing attention.
By dint of its expertise and track record, it has won contracts to help the government manage the complex rescues of Bear Stearns, the American International Group and Citigroup.
It also won a bid to carry out a Federal Reserve program to stimulate the moribund housing market, and it has been hired to help evaluate Fannie Mae and Freddie Mac, the government-created mortgage finance giants.
Other firms have been hired by the government to assist with the bailout, illustrating the increasingly symbiotic relationship between Washington and Wall Street.
It makes sense for the government to turn to financial experts for help, but BlackRock has become so ubiquitous that some lawmakers, federal auditors and watchdog groups are now asking if the firm does too much, and if its roles as government adviser, giant federal contractor and private money manager will inevitably collide.
Can a company that is being paid to price and sell troubled assets for the government buy the same kinds of assets for private clients without showing preference? And should the government seek counsel from a company whose clients stand to make or lose billions if those policies are enacted?
“They have access to information when the Federal Reserve will try to sell securities, and what price they will accept. And they have intricate financial relations with people across the globe,” Senator Charles E. Grassley, Republican of Iowa, said. “The potential for a conflict of interest is great and it is just very difficult to police.”
Without naming BlackRock, federal auditors have warned that any private parties that purchase distressed assets on the government’s behalf could use generous federal subsidies to overpay, artificially pushing up the price of similar assets that they manage for their own portfolios.
“In other words, the conflict results in an enormous profit for the fund manager at the expense of the taxpayer,” Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report last month.
Some of BlackRock’s advice to the government has in fact helped the company. For example, in its role as an informal adviser, it urged the Fed to intervene in the markets in a way that made investors feel it was safe to put money back into money market funds, including BlackRock’s.
The Federal Reserve will not reveal what it is paying BlackRock, disclosing only that on one of its five contracts, it will pay at least $71 million over three years to BlackRock and other firms to manage a portfolio of mortgage assets once owned by Bear Stearns. BlackRock says that rate is discounted and that the fees it collects on bailout-related work are only a tiny portion of its overall revenue.
BlackRock has many admirers for the range and the quality of services it has provided to the federal government. James R. Wilkinson, who served until January as the chief of staff to the former Treasury secretary, Henry M. Paulson Jr., described BlackRock’s co-founder and chief executive, Laurence D. Fink, as a “patriot.”
He added, “He is willing to help our country when we need it most.”
Mr. Fink said he was proud that his company was helping pull the economy back from the brink, and he bristled at the suggestion of impropriety.
Treasury and Fed officials have begun to take precautions. BlackRock’s dominance has prompted the Fed to seek an alternative partner as it prepares to expand its rescue efforts, a government official close to the situation said, requesting anonymity because the actions could affect the market.
And Treasury is holding off announcing the winning bidders for perhaps the most anticipated of all the bailout programs — the $1 trillion federally subsidized plan to purchase troubled assets from banks — in part to make sure the bidders cannot game the system. BlackRock is widely expected to win one of the contracts, in which the government would be a partner with private firms.
Andrew Williams, a Treasury Department spokesman, said that BlackRock had no special status and was among a large group of industry players consulted about bailout programs.
“We take this very seriously,” Mr. Williams said. “We talk to a lot of people — as we should.”
Now 47 percent owned by Bank of America, BlackRock offers traditional services like managing other people’s money. But the unit that has grabbed most of the attention lately is BlackRock Solutions, whose sophisticated software, fine-tuned over many years, can take apart the thousands of loans in a mortgage-backed security to estimate what it is now worth and what it will most likely be worth in the future, helping investors decide whether to hold or sell the asset.
During one frantic weekend in March 2008, when Bear Stearns was collapsing, BlackRock’s omnipresence became evident.
On a Saturday, the firm was hired by JPMorgan Chase — which was considering buying Bear Stearns — to value one type of Bear Stearns security.
The next day the Federal Reserve hired BlackRock, through a no-bid contract, to analyze and eventually sell off a $30 billion pool of risky mortgage securities that JPMorgan did not want.
BlackRock, which started in a one-room office 21 years ago, now manages $1.3 trillion in assets for big private clients, including hedge funds and foreign governments.
But it is the company’s highly prized role as a government adviser and contractor that is now drawing attention.
By dint of its expertise and track record, it has won contracts to help the government manage the complex rescues of Bear Stearns, the American International Group and Citigroup.
It also won a bid to carry out a Federal Reserve program to stimulate the moribund housing market, and it has been hired to help evaluate Fannie Mae and Freddie Mac, the government-created mortgage finance giants.
Other firms have been hired by the government to assist with the bailout, illustrating the increasingly symbiotic relationship between Washington and Wall Street.
It makes sense for the government to turn to financial experts for help, but BlackRock has become so ubiquitous that some lawmakers, federal auditors and watchdog groups are now asking if the firm does too much, and if its roles as government adviser, giant federal contractor and private money manager will inevitably collide.
Can a company that is being paid to price and sell troubled assets for the government buy the same kinds of assets for private clients without showing preference? And should the government seek counsel from a company whose clients stand to make or lose billions if those policies are enacted?
“They have access to information when the Federal Reserve will try to sell securities, and what price they will accept. And they have intricate financial relations with people across the globe,” Senator Charles E. Grassley, Republican of Iowa, said. “The potential for a conflict of interest is great and it is just very difficult to police.”
Without naming BlackRock, federal auditors have warned that any private parties that purchase distressed assets on the government’s behalf could use generous federal subsidies to overpay, artificially pushing up the price of similar assets that they manage for their own portfolios.
“In other words, the conflict results in an enormous profit for the fund manager at the expense of the taxpayer,” Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report last month.
Some of BlackRock’s advice to the government has in fact helped the company. For example, in its role as an informal adviser, it urged the Fed to intervene in the markets in a way that made investors feel it was safe to put money back into money market funds, including BlackRock’s.
The Federal Reserve will not reveal what it is paying BlackRock, disclosing only that on one of its five contracts, it will pay at least $71 million over three years to BlackRock and other firms to manage a portfolio of mortgage assets once owned by Bear Stearns. BlackRock says that rate is discounted and that the fees it collects on bailout-related work are only a tiny portion of its overall revenue.
BlackRock has many admirers for the range and the quality of services it has provided to the federal government. James R. Wilkinson, who served until January as the chief of staff to the former Treasury secretary, Henry M. Paulson Jr., described BlackRock’s co-founder and chief executive, Laurence D. Fink, as a “patriot.”
He added, “He is willing to help our country when we need it most.”
Mr. Fink said he was proud that his company was helping pull the economy back from the brink, and he bristled at the suggestion of impropriety.
Treasury and Fed officials have begun to take precautions. BlackRock’s dominance has prompted the Fed to seek an alternative partner as it prepares to expand its rescue efforts, a government official close to the situation said, requesting anonymity because the actions could affect the market.
And Treasury is holding off announcing the winning bidders for perhaps the most anticipated of all the bailout programs — the $1 trillion federally subsidized plan to purchase troubled assets from banks — in part to make sure the bidders cannot game the system. BlackRock is widely expected to win one of the contracts, in which the government would be a partner with private firms.
Andrew Williams, a Treasury Department spokesman, said that BlackRock had no special status and was among a large group of industry players consulted about bailout programs.
“We take this very seriously,” Mr. Williams said. “We talk to a lot of people — as we should.”
Now 47 percent owned by Bank of America, BlackRock offers traditional services like managing other people’s money. But the unit that has grabbed most of the attention lately is BlackRock Solutions, whose sophisticated software, fine-tuned over many years, can take apart the thousands of loans in a mortgage-backed security to estimate what it is now worth and what it will most likely be worth in the future, helping investors decide whether to hold or sell the asset.
During one frantic weekend in March 2008, when Bear Stearns was collapsing, BlackRock’s omnipresence became evident.
On a Saturday, the firm was hired by JPMorgan Chase — which was considering buying Bear Stearns — to value one type of Bear Stearns security.
The next day the Federal Reserve hired BlackRock, through a no-bid contract, to analyze and eventually sell off a $30 billion pool of risky mortgage securities that JPMorgan did not want.
Those multiple roles created the potential for conflict, BlackRock’s own executives acknowledge. The company would be trying to sell assets on behalf of the government that were similar to assets it buys and sells for thousands of other private investors.
For example, if BlackRock Solutions signaled to BlackRock’s asset managers the timing of a planned sale, that could benefit BlackRock’s investors, but harm taxpayers and the Federal Reserve.
“We were very sensitive to it,” said Mark Wiedman, a managing director at BlackRock Solutions.
To avoid this, BlackRock Solutions and BlackRock asset management employees are housed in separate buildings, working on separate computer networks. The firm also sells the Bear Stearns securities only through an independent broker, meaning BlackRock does not know who the buyers are. The Fed, in addition, has prohibited BlackRock from knowingly buying any of the Fed-controlled assets.
But some remain skeptical that such firewalls really protect taxpayers.
“How can one company have so much control over the process?” said Scott Amey, general counsel at the Project on Government Oversight, a Washington-based non-profit group. “Isn’t there somebody else they can turn to?”
The concerns about BlackRock also extend to its role as an informal adviser. Mr. Fink has been known to call Treasury officials several times a day, Bush and Obama administration officials said, between occasional visits.
Last fall Mr. Fink urged the Fed to take action to unlock the frozen market for short-term lending to companies — a business that BlackRock’s money market mutual funds played a major role in. Investors had withdrawn $48 billion from those BlackRock funds, but once the Fed adopted the policy Mr. Fink was advocating, the money came pouring back.
Mr. Fink said his advice was for the good of the economy, and that his was one of many industry voices calling for such a move.
Still, Mr. Fink has not been shy in boasting about his access. “I mean it is a great seal of approval,” Mr. Fink told Wall Street analysts in December, as he simultaneously coached the Bush administration and the incoming Obama team. “We are asked to help navigate new policy. I’m running out of here to go meet with Treasury to talk about plans later this afternoon.”
But it is clear that the income from fees is a lesser benefit than the buffing of its global reputation, a point Mr. Fink has made. “It gives comfort to our clients that we are being involved in some of the solutions of our economy, and it allows us to show our clients that we are being asked in these difficult situations to provide advice,” he said at the same event.
BlackRock has not been immune to market turmoil, but its stock over the last year has held up better than its peers’. While BlackRock’s share price tumbled 33 percent, Federated Investors shares have lost 34 percent and Legg Mason, 65 percent. BlackRock ended 2008, a disastrous year for Wall Street, with $786 million in profit on $5 billion in revenue.
Some lawmakers remain wary, even though they cannot cite any specific impropriety. “The very nature of what we are asking them to do almost guarantees that it is going to be to the benefit of BlackRock,” said Representative Darrell Issa of California, the ranking Republican on the House Committee on Oversight and Government Reform. “You can have separate pews, but if you go to the same church, it will cross over
BlackRock, which started in a one-room office 21 years ago, now manages $1.3 trillion in assets for big private clients, including hedge funds and foreign governments.
But it is the company’s highly prized role as a government adviser and contractor that is now drawing attention.
By dint of its expertise and track record, it has won contracts to help the government manage the complex rescues of Bear Stearns, the American International Group and Citigroup.
It also won a bid to carry out a Federal Reserve program to stimulate the moribund housing market, and it has been hired to help evaluate Fannie Mae and Freddie Mac, the government-created mortgage finance giants.
Other firms have been hired by the government to assist with the bailout, illustrating the increasingly symbiotic relationship between Washington and Wall Street.
It makes sense for the government to turn to financial experts for help, but BlackRock has become so ubiquitous that some lawmakers, federal auditors and watchdog groups are now asking if the firm does too much, and if its roles as government adviser, giant federal contractor and private money manager will inevitably collide.
Can a company that is being paid to price and sell troubled assets for the government buy the same kinds of assets for private clients without showing preference? And should the government seek counsel from a company whose clients stand to make or lose billions if those policies are enacted?
“They have access to information when the Federal Reserve will try to sell securities, and what price they will accept. And they have intricate financial relations with people across the globe,” Senator Charles E. Grassley, Republican of Iowa, said. “The potential for a conflict of interest is great and it is just very difficult to police.”
Without naming BlackRock, federal auditors have warned that any private parties that purchase distressed assets on the government’s behalf could use generous federal subsidies to overpay, artificially pushing up the price of similar assets that they manage for their own portfolios.
“In other words, the conflict results in an enormous profit for the fund manager at the expense of the taxpayer,” Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report last month.
Some of BlackRock’s advice to the government has in fact helped the company. For example, in its role as an informal adviser, it urged the Fed to intervene in the markets in a way that made investors feel it was safe to put money back into money market funds, including BlackRock’s.
The Federal Reserve will not reveal what it is paying BlackRock, disclosing only that on one of its five contracts, it will pay at least $71 million over three years to BlackRock and other firms to manage a portfolio of mortgage assets once owned by Bear Stearns. BlackRock says that rate is discounted and that the fees it collects on bailout-related work are only a tiny portion of its overall revenue.
BlackRock has many admirers for the range and the quality of services it has provided to the federal government. James R. Wilkinson, who served until January as the chief of staff to the former Treasury secretary, Henry M. Paulson Jr., described BlackRock’s co-founder and chief executive, Laurence D. Fink, as a “patriot.”
He added, “He is willing to help our country when we need it most.”
Mr. Fink said he was proud that his company was helping pull the economy back from the brink, and he bristled at the suggestion of impropriety.
Treasury and Fed officials have begun to take precautions. BlackRock’s dominance has prompted the Fed to seek an alternative partner as it prepares to expand its rescue efforts, a government official close to the situation said, requesting anonymity because the actions could affect the market.
And Treasury is holding off announcing the winning bidders for perhaps the most anticipated of all the bailout programs — the $1 trillion federally subsidized plan to purchase troubled assets from banks — in part to make sure the bidders cannot game the system. BlackRock is widely expected to win one of the contracts, in which the government would be a partner with private firms.
Andrew Williams, a Treasury Department spokesman, said that BlackRock had no special status and was among a large group of industry players consulted about bailout programs.
“We take this very seriously,” Mr. Williams said. “We talk to a lot of people — as we should.”
Now 47 percent owned by Bank of America, BlackRock offers traditional services like managing other people’s money. But the unit that has grabbed most of the attention lately is BlackRock Solutions, whose sophisticated software, fine-tuned over many years, can take apart the thousands of loans in a mortgage-backed security to estimate what it is now worth and what it will most likely be worth in the future, helping investors decide whether to hold or sell the asset.
During one frantic weekend in March 2008, when Bear Stearns was collapsing, BlackRock’s omnipresence became evident.
On a Saturday, the firm was hired by JPMorgan Chase — which was considering buying Bear Stearns — to value one type of Bear Stearns security.
The next day the Federal Reserve hired BlackRock, through a no-bid contract, to analyze and eventually sell off a $30 billion pool of risky mortgage securities that JPMorgan did not want.
BlackRock, which started in a one-room office 21 years ago, now manages $1.3 trillion in assets for big private clients, including hedge funds and foreign governments.
But it is the company’s highly prized role as a government adviser and contractor that is now drawing attention.
By dint of its expertise and track record, it has won contracts to help the government manage the complex rescues of Bear Stearns, the American International Group and Citigroup.
It also won a bid to carry out a Federal Reserve program to stimulate the moribund housing market, and it has been hired to help evaluate Fannie Mae and Freddie Mac, the government-created mortgage finance giants.
Other firms have been hired by the government to assist with the bailout, illustrating the increasingly symbiotic relationship between Washington and Wall Street.
It makes sense for the government to turn to financial experts for help, but BlackRock has become so ubiquitous that some lawmakers, federal auditors and watchdog groups are now asking if the firm does too much, and if its roles as government adviser, giant federal contractor and private money manager will inevitably collide.
Can a company that is being paid to price and sell troubled assets for the government buy the same kinds of assets for private clients without showing preference? And should the government seek counsel from a company whose clients stand to make or lose billions if those policies are enacted?
“They have access to information when the Federal Reserve will try to sell securities, and what price they will accept. And they have intricate financial relations with people across the globe,” Senator Charles E. Grassley, Republican of Iowa, said. “The potential for a conflict of interest is great and it is just very difficult to police.”
Without naming BlackRock, federal auditors have warned that any private parties that purchase distressed assets on the government’s behalf could use generous federal subsidies to overpay, artificially pushing up the price of similar assets that they manage for their own portfolios.
“In other words, the conflict results in an enormous profit for the fund manager at the expense of the taxpayer,” Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report last month.
Some of BlackRock’s advice to the government has in fact helped the company. For example, in its role as an informal adviser, it urged the Fed to intervene in the markets in a way that made investors feel it was safe to put money back into money market funds, including BlackRock’s.
The Federal Reserve will not reveal what it is paying BlackRock, disclosing only that on one of its five contracts, it will pay at least $71 million over three years to BlackRock and other firms to manage a portfolio of mortgage assets once owned by Bear Stearns. BlackRock says that rate is discounted and that the fees it collects on bailout-related work are only a tiny portion of its overall revenue.
BlackRock has many admirers for the range and the quality of services it has provided to the federal government. James R. Wilkinson, who served until January as the chief of staff to the former Treasury secretary, Henry M. Paulson Jr., described BlackRock’s co-founder and chief executive, Laurence D. Fink, as a “patriot.”
He added, “He is willing to help our country when we need it most.”
Mr. Fink said he was proud that his company was helping pull the economy back from the brink, and he bristled at the suggestion of impropriety.
Treasury and Fed officials have begun to take precautions. BlackRock’s dominance has prompted the Fed to seek an alternative partner as it prepares to expand its rescue efforts, a government official close to the situation said, requesting anonymity because the actions could affect the market.
And Treasury is holding off announcing the winning bidders for perhaps the most anticipated of all the bailout programs — the $1 trillion federally subsidized plan to purchase troubled assets from banks — in part to make sure the bidders cannot game the system. BlackRock is widely expected to win one of the contracts, in which the government would be a partner with private firms.
Andrew Williams, a Treasury Department spokesman, said that BlackRock had no special status and was among a large group of industry players consulted about bailout programs.
“We take this very seriously,” Mr. Williams said. “We talk to a lot of people — as we should.”
Now 47 percent owned by Bank of America, BlackRock offers traditional services like managing other people’s money. But the unit that has grabbed most of the attention lately is BlackRock Solutions, whose sophisticated software, fine-tuned over many years, can take apart the thousands of loans in a mortgage-backed security to estimate what it is now worth and what it will most likely be worth in the future, helping investors decide whether to hold or sell the asset.
During one frantic weekend in March 2008, when Bear Stearns was collapsing, BlackRock’s omnipresence became evident.
On a Saturday, the firm was hired by JPMorgan Chase — which was considering buying Bear Stearns — to value one type of Bear Stearns security.
The next day the Federal Reserve hired BlackRock, through a no-bid contract, to analyze and eventually sell off a $30 billion pool of risky mortgage securities that JPMorgan did not want.
Those multiple roles created the potential for conflict, BlackRock’s own executives acknowledge. The company would be trying to sell assets on behalf of the government that were similar to assets it buys and sells for thousands of other private investors.
For example, if BlackRock Solutions signaled to BlackRock’s asset managers the timing of a planned sale, that could benefit BlackRock’s investors, but harm taxpayers and the Federal Reserve.
“We were very sensitive to it,” said Mark Wiedman, a managing director at BlackRock Solutions.
To avoid this, BlackRock Solutions and BlackRock asset management employees are housed in separate buildings, working on separate computer networks. The firm also sells the Bear Stearns securities only through an independent broker, meaning BlackRock does not know who the buyers are. The Fed, in addition, has prohibited BlackRock from knowingly buying any of the Fed-controlled assets.
But some remain skeptical that such firewalls really protect taxpayers.
“How can one company have so much control over the process?” said Scott Amey, general counsel at the Project on Government Oversight, a Washington-based non-profit group. “Isn’t there somebody else they can turn to?”
The concerns about BlackRock also extend to its role as an informal adviser. Mr. Fink has been known to call Treasury officials several times a day, Bush and Obama administration officials said, between occasional visits.
Last fall Mr. Fink urged the Fed to take action to unlock the frozen market for short-term lending to companies — a business that BlackRock’s money market mutual funds played a major role in. Investors had withdrawn $48 billion from those BlackRock funds, but once the Fed adopted the policy Mr. Fink was advocating, the money came pouring back.
Mr. Fink said his advice was for the good of the economy, and that his was one of many industry voices calling for such a move.
Still, Mr. Fink has not been shy in boasting about his access. “I mean it is a great seal of approval,” Mr. Fink told Wall Street analysts in December, as he simultaneously coached the Bush administration and the incoming Obama team. “We are asked to help navigate new policy. I’m running out of here to go meet with Treasury to talk about plans later this afternoon.”
But it is clear that the income from fees is a lesser benefit than the buffing of its global reputation, a point Mr. Fink has made. “It gives comfort to our clients that we are being involved in some of the solutions of our economy, and it allows us to show our clients that we are being asked in these difficult situations to provide advice,” he said at the same event.
BlackRock has not been immune to market turmoil, but its stock over the last year has held up better than its peers’. While BlackRock’s share price tumbled 33 percent, Federated Investors shares have lost 34 percent and Legg Mason, 65 percent. BlackRock ended 2008, a disastrous year for Wall Street, with $786 million in profit on $5 billion in revenue.
Some lawmakers remain wary, even though they cannot cite any specific impropriety. “The very nature of what we are asking them to do almost guarantees that it is going to be to the benefit of BlackRock,” said Representative Darrell Issa of California, the ranking Republican on the House Committee on Oversight and Government Reform. “You can have separate pews, but if you go to the same church, it will cross over
Ex-U.S. Envoy in Talks for Key Role in Afghan Government
Zalmay Khalilzad, who was President George W. Bush’s ambassador to Afghanistan, could assume a powerful, unelected position inside the Afghan government under a plan he is discussing with Hamid Karzai, the Afghan president, according to senior American and Afghan officials.
Mr. Khalilzad, an American citizen who was born in Afghanistan, had considered challenging Mr. Karzai for the presidency in elections scheduled for this summer.
But Mr. Khalilzad missed the May 8 filing deadline, and the American and Afghan officials say that he has been talking with Mr. Karzai for several weeks about taking on a job that the two have described as the chief executive officer of Afghanistan.
Such an alliance would benefit Mr. Karzai by co-opting a potential rival. For its part, the White House has made no secret of its growing disenchantment with Mr. Karzai, and some Afghanistan experts said that enlisting Mr. Khalilzad would have the virtue of bringing a strong, competent leader into an increasingly dysfunctional Afghan government.
The position would allow Mr. Khalilzad to serve as “a prime minister, except not prime minister because he wouldn’t be responsible to a parliamentary system,” a senior Obama administration official said. Taking the unelected position would also allow Mr. Khalilzad to keep his American citizenship.
Administration officials insisted that the United States was not behind the idea of enlisting Mr. Khalilzad to serve in the Afghan government, and they gave no further details on what his duties might be.
They said that Mr. Karzai had sought out Mr. Khalilzad, but that the idea of enlisting a chief executive had also been raised by Gordon Brown, the British prime minister.
American and British officials expressed concern that any belief that the West was behind the plan would harm its chances inside Afghanistan. They spoke on the condition of anonymity because they were not authorized to discuss the matter publicly.
“This has the makings of a really bad movie,” said Teresita C. Schaffer, a South Asia expert at the Center for Strategic and International Studies in Washington.
“The idea of having an American as a major senior official of Afghanistan is a very risky one both for the Afghan government and the person in question.”
But, she added: “Whoever is going to run Afghanistan will have to have both feet on the ground there, and I know Zal has intimate knowledge of the country and was involved to a degree that was virtually unheard of for an ambassador.”
Mr. Khalilzad met with Mr. Karzai about the job when Mr. Karzai visited Washington two weeks ago, and they discussed the proposal then.
Mr. Khalilzad then flew to Kabul, the country’s capital, several days ago to continue talks with Mr. Karzai, whose re-election campaign comes at a time when security in Afghanistan is deteriorating.
During his visit to Washington, Mr. Karzai also outlined his plan to Secretary of State Hillary Rodham Clinton and Richard C. Holbrooke, the special representative to the region, the officials said.
Administration officials say that President Obama, Mrs. Clinton and Mr. Holbrooke all told Mr. Karzai that it was up to him and Mr. Khalilzad to decide whether to proceed.
A plan that puts Mr. Khalilzad near the top of a Karzai government would provide the Obama administration with a strong conduit to push American interests in Afghanistan, particularly in cracking down on corruption and the drug trade, which American officials say has helped to fuel the resurgence of the Taliban.
While Mr. Khalilzad served in the Bush administration — including as ambassador to Iraq and the United Nations — he has maintained ties with the Obama administration, as well, and has twice been to the State Department to meet with Mr. Holbrooke.
Mr. Khalilzad could not be reached for comment on Monday.
Mr. Karzai has already successfully defused the candidacies of other potential rivals for the presidency.
One of them, Gul Agha Shirzai, the popular governor of Nangarhar Province, announced after a four-hour meeting with Mr. Karzai that he was pulling out of the presidential race.
Another, Muhammad Qasim Fahim, a former warlord who later became defense minister, was identified by Mr. Karzai as one of two vice-presidential running mates, in a move widely interpreted as an attempt to bolster Mr. Karzai’s standing among former mujahedeen parties.
Kai Eide, the United Nations special representative to Afghanistan, criticized the choice of Mr. Fahim because of human rights concerns.
It remains unclear whether Mr. Karzai and Mr. Khalilzad can strike a deal on an alliance, the American and Afghan officials said.
Several of Mr. Karzai’s own ministers have opposed such a pact, they said, and it is not certain whether Mr. Karzai remains willing to bring Mr. Khalilzad aboard now that the filing deadline for presidential candidates has passed.
Mr. Karzai and Mr. Khalilzad have had a long and sometimes bumpy relationship. They worked closely when Mr. Khalilzad was ambassador to Afghanistan, from 2003 to 2005, and Mr. Karzai, the new president of a fledgling democracy, was viewed as a darling of the West.
But as the United States and Britain have become increasingly disenchanted with Mr. Karzai amid widespread corruption allegations, the two men have also put some distance between themselves, which expanded further as Mr. Khalilzad began to make plans to run against Mr. Karzai for president.
While he was working for the Bush administration, Mr. Khalilzad often brushed up against other officials, including Secretary of State Condoleezza Rice.
He got in trouble for appearing on a panel with Iran’s foreign minister without getting permission from the White House first. And he annoyed State Department officials when he arranged to meet in Dubai with Asif Ali Zardari to talk about Mr. Zardari’s bid for the presidency of Pakistan, just when the United States was trying to convince Pakistanis that America was not interfering in their internal politics.
Mr. Khalilzad, an American citizen who was born in Afghanistan, had considered challenging Mr. Karzai for the presidency in elections scheduled for this summer.
But Mr. Khalilzad missed the May 8 filing deadline, and the American and Afghan officials say that he has been talking with Mr. Karzai for several weeks about taking on a job that the two have described as the chief executive officer of Afghanistan.
Such an alliance would benefit Mr. Karzai by co-opting a potential rival. For its part, the White House has made no secret of its growing disenchantment with Mr. Karzai, and some Afghanistan experts said that enlisting Mr. Khalilzad would have the virtue of bringing a strong, competent leader into an increasingly dysfunctional Afghan government.
The position would allow Mr. Khalilzad to serve as “a prime minister, except not prime minister because he wouldn’t be responsible to a parliamentary system,” a senior Obama administration official said. Taking the unelected position would also allow Mr. Khalilzad to keep his American citizenship.
Administration officials insisted that the United States was not behind the idea of enlisting Mr. Khalilzad to serve in the Afghan government, and they gave no further details on what his duties might be.
They said that Mr. Karzai had sought out Mr. Khalilzad, but that the idea of enlisting a chief executive had also been raised by Gordon Brown, the British prime minister.
American and British officials expressed concern that any belief that the West was behind the plan would harm its chances inside Afghanistan. They spoke on the condition of anonymity because they were not authorized to discuss the matter publicly.
“This has the makings of a really bad movie,” said Teresita C. Schaffer, a South Asia expert at the Center for Strategic and International Studies in Washington.
“The idea of having an American as a major senior official of Afghanistan is a very risky one both for the Afghan government and the person in question.”
But, she added: “Whoever is going to run Afghanistan will have to have both feet on the ground there, and I know Zal has intimate knowledge of the country and was involved to a degree that was virtually unheard of for an ambassador.”
Mr. Khalilzad met with Mr. Karzai about the job when Mr. Karzai visited Washington two weeks ago, and they discussed the proposal then.
Mr. Khalilzad then flew to Kabul, the country’s capital, several days ago to continue talks with Mr. Karzai, whose re-election campaign comes at a time when security in Afghanistan is deteriorating.
During his visit to Washington, Mr. Karzai also outlined his plan to Secretary of State Hillary Rodham Clinton and Richard C. Holbrooke, the special representative to the region, the officials said.
Administration officials say that President Obama, Mrs. Clinton and Mr. Holbrooke all told Mr. Karzai that it was up to him and Mr. Khalilzad to decide whether to proceed.
A plan that puts Mr. Khalilzad near the top of a Karzai government would provide the Obama administration with a strong conduit to push American interests in Afghanistan, particularly in cracking down on corruption and the drug trade, which American officials say has helped to fuel the resurgence of the Taliban.
While Mr. Khalilzad served in the Bush administration — including as ambassador to Iraq and the United Nations — he has maintained ties with the Obama administration, as well, and has twice been to the State Department to meet with Mr. Holbrooke.
Mr. Khalilzad could not be reached for comment on Monday.
Mr. Karzai has already successfully defused the candidacies of other potential rivals for the presidency.
One of them, Gul Agha Shirzai, the popular governor of Nangarhar Province, announced after a four-hour meeting with Mr. Karzai that he was pulling out of the presidential race.
Another, Muhammad Qasim Fahim, a former warlord who later became defense minister, was identified by Mr. Karzai as one of two vice-presidential running mates, in a move widely interpreted as an attempt to bolster Mr. Karzai’s standing among former mujahedeen parties.
Kai Eide, the United Nations special representative to Afghanistan, criticized the choice of Mr. Fahim because of human rights concerns.
It remains unclear whether Mr. Karzai and Mr. Khalilzad can strike a deal on an alliance, the American and Afghan officials said.
Several of Mr. Karzai’s own ministers have opposed such a pact, they said, and it is not certain whether Mr. Karzai remains willing to bring Mr. Khalilzad aboard now that the filing deadline for presidential candidates has passed.
Mr. Karzai and Mr. Khalilzad have had a long and sometimes bumpy relationship. They worked closely when Mr. Khalilzad was ambassador to Afghanistan, from 2003 to 2005, and Mr. Karzai, the new president of a fledgling democracy, was viewed as a darling of the West.
But as the United States and Britain have become increasingly disenchanted with Mr. Karzai amid widespread corruption allegations, the two men have also put some distance between themselves, which expanded further as Mr. Khalilzad began to make plans to run against Mr. Karzai for president.
While he was working for the Bush administration, Mr. Khalilzad often brushed up against other officials, including Secretary of State Condoleezza Rice.
He got in trouble for appearing on a panel with Iran’s foreign minister without getting permission from the White House first. And he annoyed State Department officials when he arranged to meet in Dubai with Asif Ali Zardari to talk about Mr. Zardari’s bid for the presidency of Pakistan, just when the United States was trying to convince Pakistanis that America was not interfering in their internal politics.
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