Michigan Movie Studio Gets Tax Breaks, but Results in Few Jobs





PONTIAC, Mich. — Even the great and powerful Oz could not save the film studio that was supposed to save this town.




The studio, a state-of-the-art facility fit for Hollywood blockbusters, had risen from the ruins of a General Motors complex here. It was the brainchild of a small group of investors with big plans: the studio would attract prestigious filmmakers, and the movie productions would create jobs and pump money into the local economy. A glamorous sheen would rub off on this down-on-its-luck town.


But in Pontiac, happy endings do not usually come Hollywood-style. The tale behind the studio, though, was cinematic in its own right, filled with colorful characters, calls from the White House and a starring role for Michigan’s taxpayers. Rounding out the cast was a big-budget Disney movie, “Oz: The Great and Powerful.”


It all started back in August 2007, when Gov. Jennifer M. Granholm met with Mike Binder, a Michigan-born actor and director who was lamenting the state’s lackluster program to award financial aid — otherwise known as film credits — to the movie industry. Ms. Granholm, an aspiring actress when she was in her early 20s, became determined to make Michigan competitive, she recalled.


Eight months later, the capital of the flailing auto industry became the capital of film tax credits. For every dollar spent locally, filmmakers would receive almost half back from Michigan. That sort of money turns heads at even the richest film studios, and word spreads fast. Janet Lockwood, the director of the state’s film office, said that a week after the enhanced credits were announced, she was besieged at a movie conference in Santa Monica, Calif., by “the baby studios to the big guys.”


Hollywood may make movies about the evils of capitalism, but it rarely works without incentives, which are paid for by taxpayers. Nationwide, about $1.5 billion in tax breaks is awarded to the film industry each year, according to a state-by-state survey by The New York Times.


Within two months, 24 movies had signed up to film in Michigan — up from two the entire year before. The productions estimated that they would spend $195 million filming there, and in return they would be refunded about $70 million in cash.


Before long, residents were rushing out on their lunch breaks to catch a glimpse of celebrities like Drew Barrymore, who was filming her movie “Whip It” in Ann Arbor, and Clint Eastwood, who was shooting “Gran Torino” in the Detroit area. Even Michael Moore, who was filming a movie about corporate welfare called “Capitalism: A Love Story,” sought and received incentives.


A ‘No-Brainer’ for Michigan


It was a time when most financial news was bad. Housing prices plunged, and thousands of automobiles went unsold. Michigan was facing growing budget shortfalls, and some lawmakers who voted for the film credits soon began questioning whether the state could actually afford them.


In Pontiac, tax revenue plummeted as General Motors pulled out and workers left. Half of downtown was boarded up, and landlords accepted rent checks through slits in doors locked for safety. For some, Hollywood provided distraction and hope.


By 2008, a plan was being hatched for what would become the movie studio in Pontiac. The man behind it, Linden Nelson, was a well-connected local entrepreneur with a charismatic personality. He had made a name for himself by creating the removable key chain for valet parkers in the 1980s. His company later manufactured promotional trinkets for brands like AT&T and Harley-Davidson. In the late 1990s, Mr. Nelson found himself in the headlines when a fire broke out at his office in Beverly Hills, Mich. It was ruled accidental.


Mr. Nelson got the idea for the studio, he said, from his college-age son, who had heard that the Michigan tax credits were the talk of the Cannes Film Festival in France that year. Mr. Nelson soon met an old friend, Ari Emanuel, over coffee in Aspen, Colo., to discuss the idea. Mr. Emanuel was the force behind what would become William Morris Endeavor Entertainment, and his fast-talking, take-no-prisoners style had been immortalized in HBO’s “Entourage.” His brother Rahm would soon be named the chief of staff to President Obama.


Intrigued, Mr. Emanuel did not take long to sign on. “I’m, like, blown away by it,” he told a gathering of the Detroit Regional Chamber of Commerce. “Not to use an L.A. phrase — I think this is a no-brainer for the state of Michigan.”


Motown Motion Pictures LLC was incorporated in May 2008, and two more partners came on board. One, John Rakolta Jr., had building expertise as the head of a commercial construction company. The other, A. Alfred Taubman, was a longtime friend of Mr. Nelson and a prominent investor who made billions building shopping malls nationwide.


Mr. Taubman is among the most generous donors to universities and institutions in Michigan and elsewhere. He went to prison for nearly 10 months in 2002 over price-fixing accusations related to Sotheby’s auction house, which his company owned. He has maintained that he was innocent.


When Mr. Taubman first visited the vacated General Motors site in Pontiac, he was brought to tears. “What happened to all the people?” he said, according to Mr. Nelson, who was at his side. “Where are the cars? What happened to their families?”


In early 2009, the four investors bought the property from G.M. for “virtually nothing,” said Mr. Rakolta. General Motors, which had just received a hefty federal bailout, “spent more on the carpet than we spent on this building,” he said.


The investors agreed that they would put in a total of $10 million to $12 million of their own money, according to the studio’s chief financial officer. They would pay for the rest — $70 million or so — using borrowed money and state and federal incentives. “Michigan’s current tax incentive program appears to be the largest competitive advantage for the company,” one studio document said.


Ms. Lockwood, the film commissioner at the time, said she visited Mr. Taubman’s office in early 2009. Over lunch served by a butler, Mr. Taubman filled her in on the plan. “He believed that there was money to be made,” she recalled.


A Town on the Ropes


In public, the investors extolled the studio as an altruistic effort on behalf of Pontiac. “I go into things to make money, but on this, I don’t really care,” Mr. Taubman told The Detroit Free Press. “I just want to help create jobs, and this can create 3,600 jobs.”


Pontiac desperately needed them. In March of that year, roughly one of every two residents was without work, according to federal data. Food pantries had record requests. Pontiac was consistently listed among the top 10 most dangerous cities by the F.B.I. The city had made national news when a group of teenagers approached homeless people on the street and beat them to death.


Ms. Granholm declared the city in a financial crisis in February 2009 and appointed an emergency manager, Fred Leeb. The city’s budget was $54 million a year, but it was overspending by an estimated $7 million to $12 million. Pontiac was also still weighted down by old incentives it had given to businesses like G.M.


The movie studio was an added challenge, since it was seeking financial incentives from the city — not to mention from other branches of the government. It won redevelopment tax credits from the federal government and separate aid from the state that included incentives for technology companies that hire residents.


Job creation became a point of contention with beleaguered Pontiac, which was being asked to waive virtually all property taxes for the studio. The investors claimed that thousands of people would be employed, but Mr. Leeb said that when he asked for job numbers to be written into the contract, the investors refused. “We started seeing some backpedaling,” said Mr. Leeb, who added that the negotiations featured “knock-down, drag-out fights.”


Mr. Nelson said he did not recall that request, but added that his company could not have guaranteed jobs anyway, since they were mainly supposed to be created by filmmakers renting out the studio.


Under pressure from the governor’s office, Mr. Leeb said he had little choice but to approve the investors’ requests.


Ms. Granholm announced the project in her 2009 State of the State address, saying she thought the industry would create a flood of new jobs. “It was very exciting,” recalled Ms. Granholm, a Democrat. “A classic transformation, the phoenix rising from the ashes. This plant in Pontiac — it was a really great moment for a community that really wanted and needed hope.”


That summer, as the studio moved forward, Mr. Nelson was in local headlines for a second fire, this one at his 23,000-square-foot lakefront home in Bloomfield Hills. The fire extensively damaged the home, and its cause was not determined. Mr. Nelson declined to discuss it.


Not long after, he and the other studio investors hit a major hurdle. They would be borrowing around $18 million in municipal bonds, but they needed someone to back them.


Over the objections of some local officials, the state agreed to use the state workers’ pension funds to guarantee the bonds. If the investors failed to pay, the retirees would be on the hook.


At the time of the deal, the governor was speaking regularly with Mr. Obama, who was negotiating the General Motors bailout. Edward B. Montgomery, who was leading the White House’s efforts on communities and workers affected by the automaker’s bankruptcy, was engaged on the studio plans.


Mr. Montgomery said in an interview that he had expressed support for the studio and other projects that he believed would help diversify Michigan’s economy. He said the studio’s investors received assistance from the Treasury Department to qualify for a federal tax credit program. Mr. Montgomery said he was unaware of the bond guarantee involving the state pension fund.


On July 27, 2010, the governor and other officials gathered for the studio’s groundbreaking. Also on hand were Hollywood players like Mr. Binder, a creator of HBO’s “The Mind of the Married Man,” who had been instrumental in persuading the governor to expand the film subsidies.


Mr. Nelson, the studio’s main impresario, talked up the job numbers on local radio that day and said the incentives were necessary. “It’s a very competitive landscape out there,” he said. “There are very, very competitive rebates going on with other states. People don’t realize this, but 40 states have some kind of rebate or another in this industry. It’s an industry that’s fought after.”


Even as Michigan celebrated the studio, the Motion Picture Association of America was facing criticism of the use of film credits in a report by a Washington tax research group. The film association estimated that the industry employs just over two million people and supports 115,000 businesses. The report, conducted by the nonprofit Tax Foundation, which opposes film incentives, said that states justified them using “fanciful estimates of economic activity.”


The Pontiac studio was complete by the summer of 2011. Its first big production moved in after being awarded about $40 million from the state — the largest single movie payout yet. The Disney “Oz” film was being directed by Sam Raimi, a Michigan native who made the recent “Spider-Man” movies.


Over the coming months, the studio’s seven stages were filled with a yellow brick road and a haunted forest. The designers planted live grass and built a huge waterfall and pond where James Franco, the star of the film, could land in a hot-air balloon. Perhaps the most elaborate set was the courtyard around the good witch Glinda’s castle, which took 75,000 hours of work to build and used $9 million worth of wood, according to Mr. Nelson.


Sahir Rashid, a 35-year-old production assistant and Detroit resident, said that walking into the studio had been overwhelming. It was his first time on a soundstage, and he was thankful that the state’s movie boom allowed him to give up construction work. “For me, the films saved my life,” he said. “It’s not a dead-end job. It’s actually a career.”


As for the crew and actors, “the majority of them I think were from L.A.,” said London Moore, a local actress. Ms. Moore was the body double for Michelle Williams, who was playing Glinda. “I went into this thinking these people were probably going to be stuck up, but they welcomed me with open arms. They are like a family to me.”


Film Jobs Prove Scarce


The studio had created only 200 positions by the summer of 2011, according to correspondence between the company and local officials. And when temporary construction workers were excluded from the tally, Pontiac’s records show, the studio reported only two employees in 2010 and 12 the next year. The studio’s chief financial officer said it had not been able to cash in on $110 million in tax credits that were contingent on creating jobs. But the studio did cash in on other credits, including $14 million for a “Film and Digital Media Infrastructure Investment Tax Credit,” he said.


As the “Oz” shoot was under way, Pontiac moved on to its third emergency manager, Louis Schimmel, and he was not a fan of incentives. A former municipal bond analyst, Mr. Schimmel spent decades warning Michigan towns against trading tax revenues for jobs. “I’m just about the biggest critic of these programs, because giving away the taxes of the city is so detrimental,” he said. “The money is needed for police, fire and trash pickup.”


Mr. Schimmel said Disney had offered to prepay its workers’ personal income tax to the city, but Pontiac declined. The city later had problems collecting some of the taxes because Disney operated through a separate business entity that was difficult to track down, he said.


“This is a glamorous industry if you want to talk about Hollywood, but it’s not very glamorous for the municipality that wants to collect something,” Mr. Schimmel said. Pontiac, he said, was outgunned.


Disney declined to comment. Mr. Nelson said the studio and Disney were responsive to the city.


Mr. Schimmel was not alone in his opposition to incentives. Michigan elected a new governor in 2010, Rick Snyder, a Republican who believed that it made better sense to lower taxes for all businesses. The governor’s budget director, John Nixon, said in an interview, “States harm themselves by competing on tax credits.” The governor quickly began reining in the program.


Almost immediately, filmmakers pulled out of Michigan. The change hit hard at “Hollywood-land in Pontiac,” as Mr. Nelson sometimes refers to his studio, now called Michigan Motion Picture Studios. He said the makers of “Iron Man 3” had been considering filming there but opted for North Carolina after Mr. Snyder slashed incentives.


When the bill for the studio’s bond interest came due in February this year, it paid only a portion, $210,000. The state pension fund had to pick up the remaining $420,000. Mr. Nelson said he and his partners would have made the payment if the state had not changed the tax credit program. “No one would have missed a bond payment,” he said. “No one would have missed anything.”


The situation is galling to even longtime government officials, who over the years have seen plenty of economic development deals fail. “Taubman could write the whole check for that himself,” said Doug Smith, an official at the state’s economic development agency. The state pension fund may “end up owning these studios,” he said.


One of the development agency’s board members is Mr. Rakolta, the construction executive who invested in the Pontiac studio. He and Mr. Nelson said in separate interviews that they had never considered personally paying for the bond interest. A deal is a deal, they said, and the state agreed to cover the bond. The studio’s chief financial officer said the investors already stood to lose twice as much as they originally intended to invest.


A spokesman for Mr. Emanuel said he was not willing to discuss the situation on the record. A spokesman for Mr. Taubman said he was unavailable.


In August, the studio defaulted on the entire $630,000 payment on the bond, despite a decision by Mr. Snyder to temporarily allocate some film incentives.


The investors are lobbying state lawmakers to put more money into the tax credits and have formed a political action committee. Donating to the PAC are the four investors; Mr. Emanuel’s agency, William Morris Endeavor; and the Teamsters union. To rally public support, the studio offers public tours. “Please don’t hesitate to contact your state representative,” Mr. Nelson tells visitors. “Tell them you’ve been here, you believe in it, so please appropriate enough money so it will work.”


Mr. Nelson said that if the state did not improve the incentives, the Pontiac studio would probably shut down. For now, the soundstages are empty. Filming wrapped up last month on a Warner Brothers movie called “Black Sky.” It is about a town ravaged by deadly tornadoes.

Read More..

Sign Language Researchers Broaden Science Lexicon





Imagine trying to learn biology without ever using the word “organism.” Or studying to become a botanist when the only way of referring to photosynthesis is to spell the word out, letter by painstaking letter.




For deaf students, this game of scientific Password has long been the daily classroom and laboratory experience. Words like “organism” and “photosynthesis” — to say nothing of more obscure and harder-to-spell terms — have no single widely accepted equivalent in sign language. This means that deaf students and their teachers and interpreters must improvise, making it that much harder for the students to excel in science and pursue careers in it.


“Often times, it would involve a lot of finger-spelling and a lot of improvisation,” said Matthew Schwerin, a physicist with the Food and Drug Administration who is deaf, of his years in school. “For the majority of scientific terms,” Mr. Schwerin and his interpreter for the day would “try to find a correct sign for the term, and if nothing was pre-existing, we would come up with a sign that was agreeable with both parties.”


Now thanks to the Internet — particularly the boom in online video — resources for deaf students seeking science-related signs are easier to find and share. Crowdsourcing projects in both American Sign Language and British Sign Language are under way at several universities, enabling people who are deaf to coalesce around signs for commonly used terms.


This year, one of those resources, the Scottish Sensory Centre’s British Sign Language Glossary Project, added 116 new signs for physics and engineering terms, including signs for “light-year,”  (hold one hand up and spread the fingers downward for “light,” then bring both hands together in front of your chest and slowly move them apart for “year”), “mass” and “X-ray” (form an X with your index fingers, then, with the index finger on the right hand, point outward). 


The signs were developed by a team of researchers at the center, a division of the University of Edinburgh in Scotland that develops learning tools for students with visual and auditory impairments. The researchers spent more than a year soliciting ideas from deaf science workers, circulating lists of potential signs and ultimately gathering for “an intense weekend” of final voting, said Audrey Cameron, science adviser for the project. (Dr. Cameron is also deaf, and like all non-hearing people interviewed for this article, answered questions via e-mail.)


Whether the Scottish Sensory Centre’s signs will take hold among its audience remains to be seen. “Some will be adopted, and some will probably never be accepted,” Dr. Cameron said. “We’ll have to wait and see what happens.”


Ideally, the standardization of signs will make it easier for deaf students to keep pace with their hearing classmates during lectures. “I can only choose to look at one thing at a time,” said Mr. Schwerin of the F.D.A., recalling his science education, “and it often meant choosing between the interpreter, the blackboard/screen/material, or taking notes. It was like, pick one, and lose out on the others.”


The problem doesn’t end at graduation. In fact, it only intensifies as new discoveries add unfamiliar terms to the scientific lexicon. “I’ve had numerous meetings where I couldn’t participate properly because the interpreters were not able to understand the jargon and they did not know any scientific signs,” Dr. Cameron said.


One general complaint about efforts to standardize signs for technical terms is the idea that, much like spoken language, sign language should be allowed to develop organically rather than be dictated from above.


“Signs that are developed naturally — i.e., that are tested and refined in everyday conversation — are more likely to be accepted quickly by the community,” said Derek Braun, director of the molecular genetics laboratory at Gallaudet University in Washington, D.C., which he said was the first biological laboratory designed and administered by deaf scientists.


Since at least the 1970s, deaf scientists have tried to address the lack of uniformity by gathering common signs for scientific terms in printed manuals and on videotapes. The problem has always been getting deaf students and their interpreters to adopt them.


Often, at science conferences, “local interpreters that we never met before would often use different signs for the same terms, leading to confusion,” said Caroline Solomon, a biology professor at Gallaudet University who is deaf.


This article has been revised to reflect the following correction:

Correction: December 4, 2012

An earlier version of this article misstated the origin of the ASL-STEM Forum.  It was developed by researchers at the University of Washington, not Gallaudet University.  Researchers at Gallaudet and the National Institute for the Deaf work with the University of Washington to provide content and help the forum grow.



Read More..

Sign Language Researchers Broaden Science Lexicon





Imagine trying to learn biology without ever using the word “organism.” Or studying to become a botanist when the only way of referring to photosynthesis is to spell the word out, letter by painstaking letter.




For deaf students, this game of scientific Password has long been the daily classroom and laboratory experience. Words like “organism” and “photosynthesis” — to say nothing of more obscure and harder-to-spell terms — have no single widely accepted equivalent in sign language. This means that deaf students and their teachers and interpreters must improvise, making it that much harder for the students to excel in science and pursue careers in it.


“Often times, it would involve a lot of finger-spelling and a lot of improvisation,” said Matthew Schwerin, a physicist with the Food and Drug Administration who is deaf, of his years in school. “For the majority of scientific terms,” Mr. Schwerin and his interpreter for the day would “try to find a correct sign for the term, and if nothing was pre-existing, we would come up with a sign that was agreeable with both parties.”


Now thanks to the Internet — particularly the boom in online video — resources for deaf students seeking science-related signs are easier to find and share. Crowdsourcing projects in both American Sign Language and British Sign Language are under way at several universities, enabling people who are deaf to coalesce around signs for commonly used terms.


This year, one of those resources, the Scottish Sensory Centre’s British Sign Language Glossary Project, added 116 new signs for physics and engineering terms, including signs for “light-year,”  (hold one hand up and spread the fingers downward for “light,” then bring both hands together in front of your chest and slowly move them apart for “year”), “mass” and “X-ray” (form an X with your index fingers, then, with the index finger on the right hand, point outward). 


The signs were developed by a team of researchers at the center, a division of the University of Edinburgh in Scotland that develops learning tools for students with visual and auditory impairments. The researchers spent more than a year soliciting ideas from deaf science workers, circulating lists of potential signs and ultimately gathering for “an intense weekend” of final voting, said Audrey Cameron, science adviser for the project. (Dr. Cameron is also deaf, and like all non-hearing people interviewed for this article, answered questions via e-mail.)


Whether the Scottish Sensory Centre’s signs will take hold among its audience remains to be seen. “Some will be adopted, and some will probably never be accepted,” Dr. Cameron said. “We’ll have to wait and see what happens.”


Ideally, the standardization of signs will make it easier for deaf students to keep pace with their hearing classmates during lectures. “I can only choose to look at one thing at a time,” said Mr. Schwerin of the F.D.A., recalling his science education, “and it often meant choosing between the interpreter, the blackboard/screen/material, or taking notes. It was like, pick one, and lose out on the others.”


The problem doesn’t end at graduation. In fact, it only intensifies as new discoveries add unfamiliar terms to the scientific lexicon. “I’ve had numerous meetings where I couldn’t participate properly because the interpreters were not able to understand the jargon and they did not know any scientific signs,” Dr. Cameron said.


One general complaint about efforts to standardize signs for technical terms is the idea that, much like spoken language, sign language should be allowed to develop organically rather than be dictated from above.


“Signs that are developed naturally — i.e., that are tested and refined in everyday conversation — are more likely to be accepted quickly by the community,” said Derek Braun, director of the molecular genetics laboratory at Gallaudet University in Washington, D.C., which he said was the first biological laboratory designed and administered by deaf scientists.


Since at least the 1970s, deaf scientists have tried to address the lack of uniformity by gathering common signs for scientific terms in printed manuals and on videotapes. The problem has always been getting deaf students and their interpreters to adopt them.


Often, at science conferences, “local interpreters that we never met before would often use different signs for the same terms, leading to confusion,” said Caroline Solomon, a biology professor at Gallaudet University who is deaf.


This article has been revised to reflect the following correction:

Correction: December 4, 2012

An earlier version of this article misstated the origin of the ASL-STEM Forum.  It was developed by researchers at the University of Washington, not Gallaudet University.  Researchers at Gallaudet and the National Institute for the Deaf work with the University of Washington to provide content and help the forum grow.



Read More..

Partnership Offers Support for Media Ventures


Can the nascent entrepreneurial ideas bouncing around Silicon Valley help reinvent public media?


Matter Ventures, a start-up accelerator that will provide four months of financial and logistical support for budding media entrepreneurs, will be unveiled Monday by its partners: KQED, a public television and radio station operator; the John S. and James L. Knight Foundation; and the Public Radio Exchange, known as PRX.


KQED, based in San Francisco, and the Knight Foundation are each investing $1.25 million in the initial $2.5 million fund and will have an equity stake in any projects that become viable businesses. PRX, based in Cambridge, Mass., is contributing strategic and management support. The project was announced a year ago as a PRX endeavor to be financed by Knight, before KQED became an investor.


While the partners would love to find the next Google, KQED, which just had two years of record-setting revenue, does not expect to get rich from the venture, John Boland, KQED’s president, said in a telephone interview.


Instead, Mr. Boland said, he is looking for ideas, whether new ways to distribute and share content, raise money or allow KQED’s audience to “engage more deeply with the content and with others.”


The goal is to help KQED reinvent itself in an era where its television ratings have been steadily declining and its radio audience is flat, he said. Broadcast audiences have stagnated even as KQED’s online and mobile audiences have boomed. Demand for its increased offering of local and regional news has been strong as commercial newspapers and television stations have cut back.


Being in the Silicon Valley area, KQED should be “tapping into the innovation ecosystem” outside its doors, Mr. Boland said. He said the accelerator was “specifically designed to attract creative people, entrepreneurs, who have ideas that relate to what we’re calling ‘media for good.’ ”


Mark Perry, a KQED board member who is a general partner in the venture capital firm NEA, called the accelerator “a tremendous opportunity.”


“As this new media world evolves we’re going to need more innovation around — not the content development, because that we know how to do — but how these productions can be distributed in the most effective way across these multiple platforms,” Mr. Perry said by telephone.


“It’s as much to stimulate the innovative side of our entire organization as it is to come up with any particular technique, particular technology or particular insight that may come out,” he said. But entrepreneurs are likely to be attracted to the model because KQED is a potential customer for any project that does work, he said.


Michael Maness, Knight Foundation’s vice president for journalism and media innovation, in a telephone interview said the accelerator also has the potential to speed the learning process for entrepreneurs in the news business. The foundation will also be able to publicly share insights gained from the projects, unlike those generated by private equity accelerators, he added.


The accelerator will be led by Corey Ford, a former producer for the PBS program “Frontline.” Mr. Ford most recently built Runway, an accelerator for the Google chairman Eric E. Schmidt’s early stage venture capital firm, Innovation Endeavors.


Matter Ventures will finance four rounds of five teams each over two years. Each of the 20 teams selected will get $50,000, mentoring from the KQED staff, and educational workshops, as well as work space in the Matter Ventures’ headquarters in the South Park section of San Francisco, just blocks from KQED.


“A big part of this is about the culture and the community that you create,” Mr. Ford said. Each round will end with a day of presentations to potential investors.


Applications for the first class, which will begin work in late February, are being accepted through Jan. 6 at www.matter.vc.


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Malaysia Urged to Protect Domestic Workers





KUALA LUMPUR, Malaysia — Malaysia must punish the recruitment agents accused of forcing more than 100 foreign women to work as domestic help without pay and enforce laws to protect migrant workers, the Indonesian Embassy in Kuala Lumpur and a migrant workers’ support group said on Monday.




Malaysian immigration officers on Saturday rescued 105 women, mostly Indonesians, who said they had been forced to work as domestic helpers and at food stalls, been given little food and been confined to a four-story building at night in the port town of Klang, near Kuala Lumpur.


“A few of them said they had been beaten by the supervisors,” said Chandran Muniandy, the assistant deputy director of immigration in Klang. “They locked them up. They couldn’t go anywhere.”


Some of the women in the group, which included 95 Indonesians, 6 Filipinos and 4 Cambodians, said that they had been forced to work for up to six months and had not been paid, Mr. Chandran added.


Twelve people who worked for the agency, including Malaysians and foreigners, have been arrested under Malaysia’s antitrafficking laws, Mr. Chandran said, adding that he expected to make more arrests.


The case is the latest in a series of episodes involving Indonesian domestic workers that have at times strained diplomatic relations between Indonesia and Malaysia. Last month, two Indonesian domestic workers reported that they had been raped. One alleged that she had been raped by three police officers, while the other woman said her employer had raped her.


In December 2011, Indonesia lifted a ban in place since 2009 that had prevented women from coming to Malaysia to work as domestic helpers.


“We will send a diplomatic note to the Malaysian government asking for tough punishment against them,” said Suryana Sastradiredja, a spokesman for the Indonesian Embassy, referring to those alleged to be the perpetrators in the Klang case.


Yusnida, an Indonesian woman, said that the agency had taken her and other women to work as maids in different homes each day from 5 a.m. to 8 p.m., according to a report in The Star, a Malaysian newspaper. “My hands and legs were swollen from the long hours of work every day,” she was quoted as saying. “The agent only provided us with two meals a day. There was not enough food, and the workload was heavy.”


The agency told her that she could leave only once she had paid the agency a fee for bringing her to Malaysia, according to the report.


Mr. Suryana, of the Indonesian Embassy, urged the Malaysian authorities to take swift action against those who committed crimes against domestic workers.


He expressed anger that the three police officers charged with the rape of the Indonesian worker last month had been released on bail.


“I’m very, very angry with the situation,” he said. “If one Indonesian commits a crime, the Malaysian government is very quick to react, but a crime involving Malaysians, they are very slow.”


Irene Fernandez, the executive director of Tenaganita, an advocacy group for migrant workers in Kuala Lumpur, said the Malaysian authorities needed to provide better protection for domestic helpers and more effectively prosecute unscrupulous agents who abuse workers.


“A lot of homes are looking for part-time workers and cleaners, and so they are using that now and providing this form of labor where the workers are in a slavery-like situation,” she said, adding that women were often lured to Malaysia by agents who promised them factory jobs, only to find themselves forced to work as domestic helpers after their arrival.


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Texas Business Incentives Highest in Nation


DALLAS — The Preston Hollow neighborhood has been home to many of Texas’ rich and powerful — George and Laura Bush, Mark Cuban, T. Boone Pickens, Ross Perot. So it is hardly surprising that a recent political fund-raiser was held there on the back terrace of a 20,000-square-foot home overlooking lush gardens with life-size bronze statues of the host’s daughters.


The guest of honor was Gov. Rick Perry, but the man behind the event was not one of the enclave’s boldface names. He was a tax consultant named G. Brint Ryan.


Mr. Ryan’s specialty is helping clients like ExxonMobil and Neiman Marcus secure state and local tax breaks and other business incentives. It is a good line of work in Texas.


Under Mr. Perry, Texas gives out more of the incentives than any other state, around $19 billion a year, an examination by The New York Times has found. Texas justifies its largess by pointing out that it is home to half of all the private sector jobs created over the last decade nationwide. As the invitation to the fund-raiser boasted: “Texas leads the nation in job creation.”


Yet the raw numbers mask a more complicated reality behind the flood of incentives, the examination shows, and raise questions about who benefits more, the businesses or the people of Texas.


Along with the huge job growth, the state has the third-highest proportion of hourly jobs paying at or below minimum wage. And despite its low level of unemployment, Texas has the 11th-highest poverty rate among states.


“While economic development is the mantra of most officials, there’s a question of when does economic development end and corporate welfare begin,” said Dale Craymer, the president of the Texas Taxpayers and Research Association, a group supported by business that favors incentives programs.


In a state that markets itself as “wide open for business,” the lines are often blurred between decision makers and beneficiaries, according to interviews with dozens of state and local officials and corporate representatives. The government in many instances is relying on businesses and consultants like Mr. Ryan for suggestions on what incentives to grant and which companies should receive them, as well as on other factors that directly affect public spending and budgets, the interviews show.


Mr. Ryan does not claim to be neutral on where the money should go. “It’s widely known that I represent a lot of taxpayers,” he said in an interview. “I have client relationships with people who hopefully, if they invest in Texas, they’ll receive incentives.”


Granting corporate incentives has become standard operating procedure for state and local governments across the country. The Times investigation found that the governments collectively give incentives worth at least $80 billion a year.


The free flow of tax breaks and subsidies in Texas makes it particularly fertile ground to examine these economic development deals and the fundamental trade-off behind them: the more states give to businesses, the less they have available in the short term to spend on basic services, a calculation made more stark by the recession.


To help balance its budget last year, Texas cut public education spending by $5.4 billion — a significant decrease considering that it already ranked 11th from the bottom among all states in per-pupil financing, according to recent data from the Census Bureau. Yet highly profitable companies like Dow Chemical and Texas Instruments continue to enjoy hefty discounts on their school tax bills through one of the state’s economic development programs.


In the Manor school district, which comprises the town and part of Austin, Samsung has been awarded more than $231 million in incentives from state and local officials. But the recent budget cuts have left the district with crowded classes and fewer programs.


Mr. Perry, who took office at the end of 2000, has been a longtime proponent of lowering taxes. He said in an interview that companies could put the money to better use than the government and would spend it in ways that would create jobs and help Texans.


“Facebook, eBay, Apple — all of those within the last two years have announced major expansions in Texas,” Mr. Perry said. “They’re coming because it is given, it is covenant, in these boardrooms across America, that our tax structure, regulatory climate and legal environment are very positive to those businesses.”


He acknowledged that the state’s job growth was not erasing persistent poverty, saying that “we are going to have people that fall through the cracks.” He said creating jobs was the best way to help Texans, who “don’t want government assistance when they can do it themselves.”


But relying on companies does not always turn out well. When Amazon set up a distribution center outside Dallas, it received incentives from the state. Six years later, when the company got into a tax dispute with the state, it shut the warehouse, which employed as many as 2,000 people during its peak season.


Nationwide, a whole industry of consultants has grown up around state efforts to lure companies with incentives. Companies like Ernst & Young, Deloitte and Automatic Data Processing, a payroll company, have divisions dedicated to helping companies search for the best deals.


Mr. Ryan’s Dallas-based firm, Ryan LLC, operates in 27 states and seven countries and represents numerous Fortune 500 companies. Texas alone is a big source of business for Mr. Ryan, who has won tax refunds of more than $20 million each for ExxonMobil and Raytheon. This year, he sought similar amounts for Verizon, Freescale Semiconductor and several other companies, according to state documents obtained through an open records request.


At the same time, Mr. Ryan has become one of the state’s most generous political donors. He co-founded a political action committee last year that supported Mr. Perry’s bid for the Republican presidential nomination and donated $250,000.


Even as business leaders press local governments to give out more incentives, they warn against requiring too much in return.


In Travis County, which includes Austin, commissioners recently passed new rules for companies that receive tax abatements. One requires paying employees $11 an hour, an amount the county considers to be a living wage.


The rules had been contested by the business community. “The more stipulations you put into an agreement, the more complicated it becomes and the less competitive we become,” Gary Farmer, a local business leader who runs an insurance company, told the county commissioners at a hearing. “We’re concerned about including a living wage into the policy, as we believe that could have a chilling effect on certain companies.”


The Money Starts Flowing


When Mr. Perry became governor in 2000, Texas was not a major player in the incentives game. He quickly got his first taste during a bidding war among states when Boeing was hunting for a new location for its headquarters.


Texas ultimately lost to Illinois, which awarded Boeing $52.5 million in incentives, but the episode was a turning point. “We came back in here after we lost that,” Mr. Perry said, “and we analyzed our economic development efforts, and that’s when we started making some changes.”


Mr. Perry got the money flowing through two new cash funds created to recruit businesses. One, the Texas Enterprise Fund, awarded more than $410 million over eight years, according to the governor’s office, and the recipients said they would create more than 54,000 jobs. The fund requires companies that do not meet their job targets to return incentive money.


The state has also embraced a popular program that establishes enterprise zones where companies can receive refunds on some taxes they pay in exchange for moving there. The exemption has added up to big money for retailers like Walmart. Not coincidentally, the company has opened stores in similar enterprise zones across the country.


Walmart owed some of its other tax savings to Mr. Ryan, who counted the retailer among his earliest clients in the 1990s. Once an accounting firm, Ryan LLC transformed itself in recent years into a powerhouse focused on corporate tax breaks.


Mr. Ryan is a familiar presence at the state comptroller’s office in Austin, which must sign off on many tax breaks. He is known there for his laser focus and forceful negotiating skills. “It’s gloves-off, full-frontal assault,” said a former official, who requested anonymity because of state confidentiality rules.


Mr. Ryan agrees that he is aggressive, saying that “guys like me are all that stand between the government fleecing taxpayers.” He has at times filed lawsuits over tax rules he does not like, including one against the head of the Internal Revenue Service and Treasury Secretary Timothy F. Geithner.


In one of his most lucrative deals, Mr. Ryan in 2006 helped Texas Instruments win tens of millions of dollars in tax refunds, according to the comptroller’s office. Ryan LLC often gets to keep around 30 percent of its clients’ awards, according to former employees.


That same year, Mr. Ryan was a top donor to the campaign of the comptroller at the time, Carole Keeton Strayhorn, personally giving $250,000, according to campaign finance records. Over the course of Ms. Strayhorn’s tenure, Mr. Ryan, his employees and his company’s PAC would donate nearly $3 million, including when the comptroller ran for governor, the records show. He and his employees have made campaign contributions to the current comptroller, Susan Combs, totaling more than $600,000.


Ms. Strayhorn declined to comment, and a representative for Ms. Combs said the donations did not affect her decisions.


Since 2000, Mr. Ryan and his wife, Amanda, have contributed over $4 million to a variety of state officials and political causes, including the governor. Mr. Perry declined to comment on Mr. Ryan, but at a local event in 2010 he called him “the type of visionary that every community wants to have,” according to The Abilene Reporter-News.


Mr. Ryan said that he gave to candidates in many states and that his donations brought extra scrutiny, not favorable treatment.


Others see it differently. “When you give money to a state regulator who you appear before, there are potential conflicts of interest,” said Craig McDonald, the executive director of Texans for Public Justice, a liberal watchdog group. “And Texas law is way too weak in allowing those conflicts to exist.”


Mr. Ryan set his own sights on public office in 2009, running for the Dallas City Council on a platform that pushed cutting public spending. Simultaneously, Mr. Ryan was pursuing state aid for his own company, applying for an enterprise zone designation for his business.


Mr. Ryan lost the race but won the incentive. “In these tough economic times, our city officials must use every tool available to ensure job growth and expand the tax base,” he said of the award in a news release.


Mr. Perry has made corporate recruitment a hallmark of his administration. The governor frequently makes trips to cities like Chicago, New York and San Francisco to lure prospective businesses.


During a visit to San Diego in June, he proudly told local officials that about a third of the companies moving to Texas were from California, said Ruben Barrales, the chief executive of the San Diego Regional Chamber of Commerce.


“Governor Perry is here quite a bit,” Mr. Barrales said. “He meets with companies. He’s letting people know if they’re interested in further growth, Texas will greet them with open arms. He’s not very shy about it.”


Asked if he had qualms about taking jobs from other states, Mr. Perry said, “Competition is what drives this country.”


A nonprofit group called TexasOne recommends potential businesses to the governor and then pays for his travel and other expenses during the recruiting trips. The group is financed by large corporations like Shell and AT&T, as well as by consultants like Ryan LLC.


The governor’s office allocates the awards, which state records show amount to millions of dollars each year. In the enterprise zone program, 82 of the 222 awards granted from March 2008 to June 2012 went to companies represented by Mr. Ryan’s firm, according to public records provided by the governor’s office. The list included General Motors, Tyson Foods and the German chemical giant BASF.


Until recently, the cash incentives were overseen in Mr. Perry’s office by a top aide, Roberto De Hoyos. In September, Mr. De Hoyos took a new job — at Ryan LLC.


Companies Gain, Schools Lose


Lines of new students show up each August at the public schools in Manor. The town is mostly rural, with fields of hay and cattle in every direction. Some of the students’ families came to double up with relatives or friends, others were pushed outward by Austin’s gentrification.


Downtown Manor consists of a couple of blocks lined with spots like Ramos Cocina and a smoke-filled convenience store. There are few doctors and no real place to buy groceries.


About six miles away, a fabrication plant for the South Korean company Samsung looms over one of Manor’s elementary schools, a symbol of corporate interests juxtaposed with a pillar of public spending. The complex, which makes memory chips for smartphones and other products, includes some of the largest buildings in the area: one covers 1.6 million square feet, or about nine football fields.


Since Mr. Perry took office, companies have seen a drop in their school property taxes because of a special incentives program, as well as an across-the-board cut in the school tax rate. The recession has made the squeeze all the more difficult for schools.


In the Manor district, spending shrank by about $540 per student this year, according to the Equity Center, an advocacy group for Texas schools. The cuts came even as school enrollment has nearly tripled since 2000.


The cracks in financing were on display this summer, as families filled a school cafeteria to register for a prekindergarten program with shortened days. For parents like Tommy and Melissa Sifuentes, the cutback means they have to leave work early or hire a baby sitter. “It’s harder,” said Ms. Sifuentes, who is still grateful that her son will learn socialization skills at school.


About 80 percent of Manor’s students are low-income, according to the E3 Alliance, a nonprofit group in Austin that focuses on education. For about a third of the 8,000 students, English is a second language.


In 2005, Manor’s school board gave Samsung eight years of tax abatements worth $112 million as part of the company’s incentives package for its fabrication plant. Under the special incentives program, known as Chapter 313, school boards approve tax abatements for companies. The state then reimburses the district for the amounts they give up.


In many districts, the awards were granted after little review. Robert Schneider, a member of Austin’s school board, said the district was nonchalant when it gave an abatement to Hewlett-Packard in 2006.


“The board took it as ‘we don’t lose in this deal,’ because we knew we were going to get reimbursed by the state,” Mr. Schneider said. “I can tell you there wasn’t any analysis done that said, ‘Ten, 15 years from now, they will be here and we’ll get such and such out of it.’ ”


School boards statewide have approved abatements worth at least $1.9 billion through the program, according to the comptroller’s office. Although the districts are not paying for the abatements themselves, budget experts point out that the reimbursements come from the state’s general fund, which like most state treasuries is running low.


In Texas, tax revenues for schools took a direct hit when Mr. Perry created a commission in 2005 to evaluate the state’s tax system. The State Supreme Court was questioning districts’ property tax rates and warned of a school shutdown if legislators did not intervene. The tax rates had been criticized for years by businesses and residents, but some districts countered that they could not afford to cut them without additional state financing.


Mr. Perry turned to John Sharp, a Democrat and former comptroller, to lead the commission. At the time, Mr. Sharp worked for Ryan LLC. The commission called for districts to cut school property taxes by around one-third. To make up for some of the lost revenue, it recommended adding a business tax, as well as increasing some sales taxes.


“I did what I thought was the best for the state of Texas,” said Mr. Sharp, adding that his position at Ryan LLC did not affect his decisions. “We saved the state of Texas from complete collapse of the school system, and I’m very proud of that.” Mr. Sharp left Ryan last year to become the chancellor of Texas A&M University.


In 2006, the Legislature largely adopted the commission’s proposals and required the state to give districts billions of dollars to allow time for the business tax to make up the difference.


Some six years later, things have not worked out as planned.


The business tax has not yielded anywhere near what Mr. Sharp’s panel projected, and the state has cut its aid to the districts by $5.4 billion. A spokeswoman for Mr. Perry noted that one of the state’s cash incentive funds was also cut back.


Leslie Whitworth, who oversees the curriculum in Manor, said that the district was doing its best to make do with less, but that “it wears on people, the constant crisis, the constant increases in students and constant pressure on budgets.”


Among other things, the cuts have meant overcrowding across Texas: the number of classrooms over the state’s student limit nearly quadrupled last year.


Some companies recognize the trade-off. Daimler, the German maker of the Mercedes-Benz, accepts incentives in the United States but tries to avoid ones that come out of school budgets, said David Trebing, who manages the company’s relationship with local governments. “We want to make sure they have enough money for their schools,” Mr. Trebing said. “Our workers send their kids there.”


Even members of the Austin Technology Council, which includes Samsung, identified an educated work force as among their biggest concerns for the area, according to a recent survey.


Of the $231 million in incentives Samsung received, it donated $1 million back to Manor for a scholarship fund. The company also mentors district students.


Catherine Morse, Samsung Austin’s general counsel, said the abatements from the Manor school board were crucial because of the company’s expensive machinery. Samsung also received $10.8 million from Mr. Perry’s cash fund, but Ms. Morse said the money had not swung the decision. “It was more like it showed respect,” she said.


Ms. Morse noted that Samsung was still the county’s largest taxpayer and that locating the facility in Texas had been a tough sell inside the company. “It was very unpopular to take jobs out of South Korea,” she said.


Samsung said it had created 2,500 jobs on its payroll and 2,000 more for contract employees. Ms. Morse said that 495 of those on its payroll lived in the Manor school district. The company is currently seeking additional incentives for a $4 billion retooling of its facility, though it is not expected to add many jobs.


Amazon Plays Hardball


Tarik Carlton gathered with other workers in February 2011 to hear the bad news: Amazon was shutting its distribution center in Irving, where he loaded trucks for $12.75 an hour.


Business had been strong, but the online retailer did not want to pay a $269 million tax bill from the state comptroller. A standoff with the state ensued, and Amazon laid off the workers. “They didn’t have our interests in heart, truth be told,” Mr. Carlton said.


Amazon opened the distribution facility in 2005 in Irving, near Dallas-Fort Worth International Airport, and local officials awarded the company tax breaks on its inventory.


Positions at the warehouse included product pickers, dock crews and truck loaders. The employees were typically on the young side, and some had served in the military. The warehouse churned through workers because many could not meet the quota of products they were supposed to move each day, according to Frankie Lloyd, who helped Amazon find temporary workers to fill many of the jobs.


“It’s all about what you can do physically,” Ms. Lloyd said. “Like manufacturing, but without the great pay.”


The distribution business grew as manufacturing moved overseas and online shopping boomed. It is big in the Dallas area because two main train lines run here from Long Beach, Calif., where goods arrive from Asia.


The work is highly physical. One Amazon worker wore a step counter that logged five miles during one shift, according to Mr. Carlton, who only recently found a new job. He was among 12 former Amazon workers, including two warehouse managers, who agreed to be interviewed.


There was no air-conditioning in the warehouse, and Mr. Carlton and others said the temperature could reach 115 degrees. They said it was difficult to take breaks given the production quotas.


The pay was typically $11 to $15 an hour, Ms. Lloyd said. Amazon gave out small shares of stock and some bonuses, but the amounts were minimal, she said.


Amazon said it had been working to upgrade its warehouses, which it calls fulfillment centers. The company has installed air-conditioning in all its centers over the past year, said Dave Clark, the vice president for global customer fulfillment.


Mr. Clark said workers always received breaks, and sometimes free ice cream when the facilities did not have air-conditioning. He said the quotas were akin to “expectations that go along with every job, mine included.”


“I really do think these jobs get a bad rap,” Mr. Clark said. “They’re great jobs. They’re safe jobs.”


Mr. Carlton said he had no idea the company was being partly subsidized. “If you give them money, I think more should be expected,” he said, adding that Amazon should have been required to hire more people to handle the heavy workload.


John Bonnot, the director of business recruitment for the Irving Chamber of Commerce, said the city did not impose wage or benefit requirements on companies that received incentives. Irving had required that Amazon create only 10 jobs to receive the tax break.


Mr. Bonnot said Amazon “would have nothing but praise” for the original assistance from the state and the city, which outsources its economic development to the local chamber.


Things began to slide downhill in late 2010 when the state comptroller, Ms. Combs, demanded that Amazon pay the $269 million sales tax bill. The retailer had never charged its Texas customers the tax, giving it an advantage over on-the-ground competitors.


The company hired three powerful advocates with ties to the governor, according to state lobbyist disclosure records. One, Luis Saenz, had been the director of Mr. Perry’s political operation. Days after the warehouse closed, Mr. Perry said he disagreed with the comptroller’s decision to demand the taxes.


As it was battling with the comptroller, Amazon began negotiating with the Legislature, which was debating whether online businesses should be required to charge sales tax. The company told lawmakers that it would create up to 6,000 jobs in exchange for delaying sales tax collections, similar to a compromise it had struck in states like South Carolina and Tennessee.


The lawmaker with the most power in the decision was John Otto, a Republican member of the Texas House of Representatives. Like all Texas legislators, Mr. Otto’s government job is part time. He also works at Ryan LLC — a job that is not disclosed on his legislative Web site.


Mr. Otto drafted legislation that said online retailers like Amazon would not have to charge sales tax as long as it did not have distribution facilities in Texas. By then, the company had already shut the Irving warehouse.


Mr. Otto and Mr. Saenz declined to comment about the legislation. Amazon would not comment on its negotiations with Texas.


In July, Amazon began collecting sales tax from customers in Texas after the comptroller agreed to release the company from most of its $269 million bill. The company has also promised to open new distribution facilities and hire 2,500 workers. Amazon will owe the state a $1 million penalty if it fails to deliver.


The math on the new deal angers former Amazon workers, especially those who are still unemployed. For Texas to give up more than $250 million in tax revenues in exchange for 2,500 jobs amounts to about $100,000 per job. Most distribution workers are paid $20,000 to $30,000 a year. The rest benefits the company’s bottom line, which generally increases executive bonuses and shareholder returns.


King White, a consultant who helps Amazon choose locations, would not comment on the online retailer but said that companies in general had come to view incentives as entitlements. “Everybody thinks they deserve something,” Mr. White said. “ ‘If I’m creating jobs, what’s in it for me?’ ”


The deal on the sales tax did not require Amazon to reopen the Irving facility. That touched off the latest state competition to win over Amazon.


Last month, the city of Schertz beat out neighboring San Antonio for one of Amazon’s warehouses. The company is currently in negotiations with Coppell, outside of Dallas, about an additional center. Like Schertz, Coppell has offered Amazon a deal to keep a part of the sales tax it collects there, among other incentives.


If Amazon accepts, it will be located near Irving and many of its former workers. Sharon Sylvas, 47, had moved from Kansas seven years ago to help Amazon set up the Irving facility. She lives nearby in a one-bedroom apartment with her partner, daughter and two grandchildren.


After Amazon closed, she was out of a job for over a year. With limited options, Ms. Sylvas took a temporary position in October at another company’s distribution center. It is a tougher job than the one at Amazon, and it pays less. For $11 an hour, Ms. Sylvas moves heavy inventory and other items.


She said that if Amazon returned to the area, she would work there again, despite the rigors of warehouse jobs. “It’s real miserable,” Ms. Sylvas said. “But you do it to make a living.”


Both Player and Referee


For the past few months, a commission created by the Texas Legislature has been taking a broad look at the state’s economic development efforts. It will report back in January with recommendations. Four members of the commission are specifically focused on evaluating the state’s cash grants and the school tax abatement programs. This means that companies in Texas have a lot at stake in the panel’s work.


So does at least one of the commissioners: G. Brint Ryan.


He was appointed to the commission by the state’s lieutenant governor, David Dewhurst, who has received more than $150,000 in campaign donations from Mr. Ryan.


At a meeting in mid-September, the panel invited business representatives to testify. Among them was Ms. Morse, the general counsel at Samsung Austin, who urged the commission to continue the school property tax program that benefits her company in the Manor district.


During Ms. Morse’s testimony, it went unmentioned that Samsung is a Ryan client. Ryan LLC had helped the company gain designation as an enterprise zone in 2010, enabling it to receive sales tax refunds from the state on many of its purchases, according to documents obtained by The Times under a public records request.


Mr. Ryan said the commission had never asked him whom he represents.


No representatives from Texas schools spoke at the hearing. But Mr. Ryan said in an interview that school financing and poverty could best be addressed by emphasizing economic activity. He noted his own humble beginnings. “Frankly, I never got one single government handout,” he said.


Over the years, of course, Mr. Ryan has profited by helping many companies obtain checks from the government. In at least one instance, he was more eager to get the money than his client was.


The client, a computer chip maker called Advanced Micro Devices, had hired Mr. Ryan’s firm to review its books. But when the firm found what it believed would be a way to save more than $30 million in taxes, the chip maker decided it was not worth pursuing. Ryan LLC responded by suing its client, saying AMD owed it to the firm to seek the money. Ryan LLC would have received a cut of the savings.


AMD declined to comment on the case, which was settled last year. But in a deposition contained in the court filings, a representative of the chip maker described numerous e-mails and phone calls by Mr. Ryan, who was trying to persuade the company to file for the refunds.


“It’s continuing evidence that they’ve placed their interest above our own and continued to press this issue,” the representative said. The company said Ryan LLC’s behavior “bordered on harassment.”


At one point, Mr. Ryan wrote to the chip maker’s chief financial officer. “At stake is tens of millions of dollars in tax recovery and future tax savings on an issue I have WON for other fabs in Texas,” he said, referring to fabrication facilities.


The company’s choice not to seek the tax break, Mr. Ryan said in a deposition, was an “irrational and unreasonable decision.”

Read More..

Call That Kept Nursing Home Patients in Sandy’s Path


Chang W. Lee/The New York Times


Workers were shocked that nursing and adult homes in areas like Rockaway Park, Queens, weren’t evacuated.







Hurricane Sandy was swirling northward, four days before landfall, and at the Sea Crest Health Care Center, a nursing home overlooking the Coney Island Boardwalk in Brooklyn, workers were gathering medicines and other supplies as they prepared to evacuate.




Then the call came from health officials: Mayor Michael R. Bloomberg, acting on the advice of his aides and those of Gov. Andrew M. Cuomo, recommended that nursing homes and adult homes stay put. The 305 residents would ride out the storm.


The same advisory also took administrators by surprise at the Ocean Promenade nursing home, which faces the Atlantic Ocean in Queens. They canceled plans to move 105 residents to safety.


“No one gets why we weren’t evacuated,” said a worker there, Yisroel Tabi. “We wouldn’t have exposed ourselves to dealing with that situation.”


The recommendation that thousands of elderly, disabled and mentally ill residents remain in more than 40 nursing homes and adult homes in flood-prone areas of New York City had calamitous consequences.


At least 29 facilities in Queens and Brooklyn were severely flooded. Generators failed or were absent. Buildings were plunged into a cold, wet darkness, with no access to power, water, heat and food.


While no immediate deaths were reported, it took at least three days for the Fire Department, the National Guard and ambulance crews from around the country to rescue over 4,000 nursing home and 1,500 adult home residents. Without working elevators, many had to be carried down slippery stairwells.


“I was shocked,” said Greg Levow, who works for an ambulance service and helped rescue residents at Queens. “I couldn’t understand why they were there in the first place.”


Many sat for hours in ambulances and buses before being transported to safety through sand drifts and debris-filled floodwaters. They went to crowded shelters and nursing homes as far away as Albany, where for days, they often lacked medical charts and medications. Families struggled to locate relatives.


The decision not to empty the nursing homes and adult homes in the mandatory evacuation area was one of the most questionable by the authorities during Hurricane Sandy. And an investigation by The New York Times found that the impact was worsened by missteps that officials made in not ensuring that these facilities could protect residents.


They did not require that nursing homes maintain backup generators that could withstand flooding. They did not ensure that health care administrators could adequately communicate with government agencies during and after a storm. And they discounted the more severe of the early predictions about Hurricane Sandy’s surge.


The Times’s investigation was based on interviews with officials, health care administrators, doctors, nurses, ambulance medics, residents, family members and disaster experts. It included a review of internal State Health Department status reports. The findings revealed the striking vulnerability of the city’s nursing and adult homes.


On Sunday, Oct. 28, the day before Hurricane Sandy arrived, Mr. Bloomberg ordered a mandatory evacuation in Zone A, the low-lying neighborhoods of the city. But by that point, Mr. Bloomberg, relying on the advice of the city and state health commissioners, had already determined that people in nursing homes and adult homes should not leave, officials said.


The mayor’s recommendations that health care facilities not evacuate startled residents of Surf Manor adult home in Coney Island, said one of them, Norman Bloomfield. He recalled that another resident exclaimed, “What about us! Why’s he telling us to stay?”


The commissioners made the recommendation to Mr. Bloomberg and Mr. Cuomo because they said they believed that the inherent risks of transporting the residents outweighed the potential dangers from the storm.


In interviews, senior Bloomberg and Cuomo aides did not express regret for keeping the residents in place.


“I would defend all the decisions and the actions” by the health authorities involving the storm, said Linda I. Gibbs, a deputy mayor. “I feel like I’m describing something that was a remarkable, lifesaving event.”


Dr. Nirav R. Shah, the state health commissioner, who regulates nursing homes, said: “I’m not even thinking of second-guessing the decisions.”


Still, officials in New Jersey and in Nassau County adopted a different policy, evacuating nursing homes in coastal areas well before the storm.


Contradictory Forecasts


The city’s experience with Tropical Storm Irene last year weighed heavily on state and city health officials and contributed to their underestimating the impact of Hurricane Sandy, according to records and interviews.


Before Tropical Storm Irene, the officials ordered nursing homes and adult homes to evacuate. The storm caused relatively minor damage, but the evacuation led to millions of dollars in health care, transportation, housing and other costs, and took a toll on residents.


As a result, when Hurricane Sandy loomed, the officials were acutely aware that they could come under criticism if they ordered another evacuation that proved unnecessary.


Read More..

Call That Kept Nursing Home Patients in Sandy’s Path


Chang W. Lee/The New York Times


Workers were shocked that nursing and adult homes in areas like Rockaway Park, Queens, weren’t evacuated.







Hurricane Sandy was swirling northward, four days before landfall, and at the Sea Crest Health Care Center, a nursing home overlooking the Coney Island Boardwalk in Brooklyn, workers were gathering medicines and other supplies as they prepared to evacuate.




Then the call came from health officials: Mayor Michael R. Bloomberg, acting on the advice of his aides and those of Gov. Andrew M. Cuomo, recommended that nursing homes and adult homes stay put. The 305 residents would ride out the storm.


The same advisory also took administrators by surprise at the Ocean Promenade nursing home, which faces the Atlantic Ocean in Queens. They canceled plans to move 105 residents to safety.


“No one gets why we weren’t evacuated,” said a worker there, Yisroel Tabi. “We wouldn’t have exposed ourselves to dealing with that situation.”


The recommendation that thousands of elderly, disabled and mentally ill residents remain in more than 40 nursing homes and adult homes in flood-prone areas of New York City had calamitous consequences.


At least 29 facilities in Queens and Brooklyn were severely flooded. Generators failed or were absent. Buildings were plunged into a cold, wet darkness, with no access to power, water, heat and food.


While no immediate deaths were reported, it took at least three days for the Fire Department, the National Guard and ambulance crews from around the country to rescue over 4,000 nursing home and 1,500 adult home residents. Without working elevators, many had to be carried down slippery stairwells.


“I was shocked,” said Greg Levow, who works for an ambulance service and helped rescue residents at Queens. “I couldn’t understand why they were there in the first place.”


Many sat for hours in ambulances and buses before being transported to safety through sand drifts and debris-filled floodwaters. They went to crowded shelters and nursing homes as far away as Albany, where for days, they often lacked medical charts and medications. Families struggled to locate relatives.


The decision not to empty the nursing homes and adult homes in the mandatory evacuation area was one of the most questionable by the authorities during Hurricane Sandy. And an investigation by The New York Times found that the impact was worsened by missteps that officials made in not ensuring that these facilities could protect residents.


They did not require that nursing homes maintain backup generators that could withstand flooding. They did not ensure that health care administrators could adequately communicate with government agencies during and after a storm. And they discounted the more severe of the early predictions about Hurricane Sandy’s surge.


The Times’s investigation was based on interviews with officials, health care administrators, doctors, nurses, ambulance medics, residents, family members and disaster experts. It included a review of internal State Health Department status reports. The findings revealed the striking vulnerability of the city’s nursing and adult homes.


On Sunday, Oct. 28, the day before Hurricane Sandy arrived, Mr. Bloomberg ordered a mandatory evacuation in Zone A, the low-lying neighborhoods of the city. But by that point, Mr. Bloomberg, relying on the advice of the city and state health commissioners, had already determined that people in nursing homes and adult homes should not leave, officials said.


The mayor’s recommendations that health care facilities not evacuate startled residents of Surf Manor adult home in Coney Island, said one of them, Norman Bloomfield. He recalled that another resident exclaimed, “What about us! Why’s he telling us to stay?”


The commissioners made the recommendation to Mr. Bloomberg and Mr. Cuomo because they said they believed that the inherent risks of transporting the residents outweighed the potential dangers from the storm.


In interviews, senior Bloomberg and Cuomo aides did not express regret for keeping the residents in place.


“I would defend all the decisions and the actions” by the health authorities involving the storm, said Linda I. Gibbs, a deputy mayor. “I feel like I’m describing something that was a remarkable, lifesaving event.”


Dr. Nirav R. Shah, the state health commissioner, who regulates nursing homes, said: “I’m not even thinking of second-guessing the decisions.”


Still, officials in New Jersey and in Nassau County adopted a different policy, evacuating nursing homes in coastal areas well before the storm.


Contradictory Forecasts


The city’s experience with Tropical Storm Irene last year weighed heavily on state and city health officials and contributed to their underestimating the impact of Hurricane Sandy, according to records and interviews.


Before Tropical Storm Irene, the officials ordered nursing homes and adult homes to evacuate. The storm caused relatively minor damage, but the evacuation led to millions of dollars in health care, transportation, housing and other costs, and took a toll on residents.


As a result, when Hurricane Sandy loomed, the officials were acutely aware that they could come under criticism if they ordered another evacuation that proved unnecessary.


Read More..

Who Do Online Advertisers Think You Are?


Illustration by Edward del Rosario







Not long ago, I decided to test how much privacy I have online. I cleared the cookies, the bits of code that Web sites leave on my computer to track what I browse and buy, from my two Internet browsers, Safari and Firefox. Then, with my digital past superficially erased, I set out to create two new identities: Democratic Jeff and Republican Jeff.




Safari became the home of Democratic Jeff. I started by spending time on Barack Obama’s re-election Web site and then visited some travel, car and shopping sites to search for flights to Los Angeles, Volvos and Birkenstocks. On Firefox, as Republican Jeff, I went to Mitt Romney’s site and then searched for Cadillacs, flights to Hawaii and diamond rings.


Having created my new digital identities as heavy-handedly as possible, I returned to my usual Web sites. At first, the ads on my favorite Washington neighborhood blog, the Prince of Petworth, were the same on both browsers. But less than two days later, an ad for Mitt Romney suddenly appeared next to a story I was reading on Firefox about Gore Vidal’s burial. When I opened that page on Safari, the ad in the exact same spot was for Catholic University’s master’s program in human resources management.


How did Republican Jeff and Democratic Jeff end up seeing entirely different ads? The answer is real-time bidding, a technology that’s transforming advertising, politics, news and the way we live online. Advertisers compete in an auction for the opportunity to send ads to individual consumers. Each time a company buys access to me, it can bombard me with an ad that will follow me no matter where I show up on the Web.


To dig deeper into my new identities, I visited the Web site of BlueKai, one of the leading online data aggregators. The company’s software enables its customers to sort consumers into 30,000 market segments like “light spenders” and “safety-net seniors,” and this fine-grained categorization helps make real-time bidding possible. According to BlueKai, Republican Jeff is someone who makes between $60,000 and $74,999 a year, lives in Portland, Me., is interested in luxury cars, celebrities and TV, may have bought a cruise ticket, is an ideal candidate to take out a mortgage and a “midscale thrift spender.” Democratic Jeff is someone who lives in Los Angeles, Long Beach or Santa Ana, runs a large company with more than 5,001 employees and cares about advertising and marketing. Neither of these profiles is accurate. Nevertheless, the pigeonholing of Republican Jeff and Democratic Jeff represents our digital future.


Google and Facebook have each been expanding their use of real-time bidding. In June, Facebook announced that it would introduce a new service called Facebook Exchange, which will enable advertisers to send promotions for Spanish hotels, say, to Facebook users who have searched for trips to Spain.


Should we worry about ads aimed specifically at us everywhere we go on the Web and, increasingly, on our mobile devices too? Yes, and not just because the ads can be invasive and annoying. Real-time bidding also makes the online marketplace less of an even playing field, allowing companies to send loyalty points or discounts — or price increases — to individuals based on their perceived spending power. The travel site Orbitz, after learning that Mac users spend 30 percent more on hotel rooms than P.C. users, has started to send Mac users ads for hotels that are 11 percent more expensive than the ones that P.C. users are seeing, according to a recent Wall Street Journal article.


Of course, many consumer breaks are unfair, and we readily accept that the cost of airline tickets, for example, varies from one passenger to another on the same flight. But our consumer profiles are beginning to define us in all of our online interactions, and a result may be that we get different prices at the mall — or different news articles and campaign ads on our mobile devices — based on a hidden auction system that we’re unable to alter or control.



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Suspected Gaza Collaborators Face a Grisly Fate





RAFAH, Gaza Strip — When Fadel Shalouf’s family went to pick up his body at the morgue the day after he was executed on a busy Gaza street corner, they found his hands still cuffed behind his back. Hamas, the militant faction that rules Gaza, did not provide a van to carry the body to burial, so they laid him on two men’s laps in the back of a sedan.




It was an undignified end to a short, shrouded life. Mr. Shalouf, his family insisted, was an illiterate fisherman with a knack for designing kites when he was arrested at 19 by Gaza’s internal security service. Yet he was convicted in a Hamas court in January 2011 of providing Israel with information that led to the 2006 assassination of Abu Attaya, commander of the Popular Resistance Committees.


During last month’s intense eight-day battle with Israel, the military wing of the Hamas government brutally and publicly put an end to Mr. Shalouf, 24, and six other suspected collaborators. The vigilante-style killings by masked gunmen — with one body dragged through a Gaza City neighborhood by motorcycle and another left for crowds to gawk over in a traffic circle — highlighted the pathetic plight of collaborators, pawns preyed on by both sides in the long-running Israeli-Palestinian conflict.


“Fadel lived poor and died poor,” said his cousin Ahmed Shalouf, 28. “They left the bodies for a few hours in the streets, people spitting on them, throwing stones. They did not execute only Fadel. They executed all of us.”


For Israel, despite its advanced technology for tracking terrorists, human sources remain an essential intelligence tool that allows for pinpoint strikes like the one that felled Ahmed al-Jabari, operations commander of Hamas’s Al Qassam Brigades, at the start of the recent escalation. To Hamas, they are the enemy within, and vigorous prosecution as well as the occasional high-profile lynching are powerful psychological tools to enforce loyalty and squelch dissent.


Former intelligence officials and experts on the phenomenon said many collaborators are struggling souls who are blackmailed into service by an Israeli government with great leverage over their lives. Some are enlisted when they apply for permits to seek medical treatment in Israel, for example, or in exchange for better conditions or early release from Israeli jails. Others are threatened with having behavior shunned in their religious Islamic communities — alcohol use, perhaps, or adultery — exposed.


“There is no substitute to a human source, because a human source goes into their house, sometimes even into their minds,” said Yaakov Peri, a former head of the Shin Bet, Israel’s domestic intelligence agency. “With all the technology — drones, you name it — you need a background, and you need the assistance from a human source.”


Mr. Peri said Palestinian collaborators might be given money for expenses or a small salary, but “you’ll never be a rich guy.”


Hillel Cohen, a research fellow at the Truman Institute for the Advancement of Peace at the Hebrew University in Jerusalem, who has written two books on the subject, said some Gaza collaborators “do it just for some money” and “some to be part of a big story”; few are actually supportive of Israel, he said, but many have problems with Hamas.


“I interviewed a lot of collaborators, and they have a kind of inferiority complex,” Mr. Cohen explained. “They see the West, Israel, as much better than the Arab. I hear expressions like, ‘We’re worth nothing.’ Sometimes it comes from there, and sometimes it’s part of what the Israeli officers put in their minds.”


Collaboration has underpinned Israeli-Palestinian relations since before there was a modern state of Israel, dating back at least to the Jewish underground that operated during the British Mandate era in the 1930s. The Oslo Accords signed by Israeli and Palestinian negotiators in 1994 even made two villages — one in Gaza, one in the West Bank — safe refuges for about 1,500 Bedouins suspected of spying.


The very definition of collaboration has expanded in recent years. Some in Hamas and more militant groups consider the Palestinian Authority to be aiding the enemy when it coordinates security services in the West Bank with Israel. Since Hamas took control of Gaza in 2007 after winning elections, members of the rival Fatah faction who live here have almost universally been under suspicion. Selling land to Jews can be punishable by death.


Fares Akram contributed reporting from Gaza, and Irit Pazner Garshowitz from Jerusalem.



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