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Ex-CIA chief wants energy independence

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OKLAHOMA CITY (AP) – It is in the U.S.’s national security interest to continue developing transportation fuel derived from agricultural products because the country has become dangerously dependent on foreign oil, former CIA Director James Woolsey said.

Woolsey, speaking Wednesday at the Oklahoma Biofuels Conference, said the United States needs to significantly reduce its reliance on foreign oil.

‘The people who produce large amounts (of oil) have a lot of leverage that we don’t want them to have,’ he said.

The two-day biofuels conference has focused on developing alternative transportation fuels by using agricultural products native to the state, such as Oklahoma switchgrass.

Woolsey, a Tulsa native, served as the CIA’s director under President Clinton from February 1993 to January 1995. He is now a vice president and officer for the consulting firm Booz Allen Hamilton.

Woolsey said the fact that so much of the oil used by U.S. consumers comes from the Middle East gives some nations in that volatile region an inordinate amount of power.

He said it is the U.S. consumer that ‘is paying for those little Pakistani boys being taught to be suicide bombers.’ He said a terrorist attack in the right place could cause oil prices to rise as high as $200 a barrel. Light, sweet crude for November delivery settled at $87.40 a barrel Wednesday.

The way to break the stranglehold, he said, is to develop alternative fuels. He predicted the main alternatives would be biofuels, such as ethanol and butanol, and electricity in the form of plug-in hybrid vehicles.

‘Plug-in hybrids, together with alternative liquid fuels like ethanol and butanol — especially if we can make them from prairie grass or switchgrass — that combination would be quite something,’ Woolsey said.

Woolsey said the government should encourage the continued free-market development of alternative forms of energy, including wind and solar power, and not push any one solution over another.
Woolsey said he traces his interest in energy independence to 1973, when he sat in his car in long lines waiting to fill up with gasoline during the oil shortage. He now drives a hybrid car with a bumper sticker reading, ‘Bin Laden hates this car.’

He said cutting back on oil use would not necessarily hurt Oklahoma’s strong energy sector or the state’s economy. Natural gas, also produced in large amounts in the state, is environmentally friendly, he said.

‘What we are talking about in the long run is having rural America and farms be able to supply the raw material for not just some of what we do, but a lot of what we do, in both fuels and chemicals.’

LITTLE ROCK, Ark. (AP) — Trouble is brewing for small beer makers across the country because the prices of hops and barley — two of the essential ingredients in brewing — continue to rise.

Steve Mazylewski, brewmaster at Hog Haus Brewing Co. in Fayetteville, said he was shocked when he called to reorder hops last month and was told they were not available. Yakima, Wash.-based Hopunion CBS LLC, a big international supplier of hops, was not able to fill his order.

The reason for the shortages include storms, increased beer brewing in foreign countries and more interest in domestic craft beers, Mazylewski said. Some farmers also abandoned the hops and barley crops after a glut in the market.

Robert Kort, brewmaster for Little Rock’s Diamond Bear, said the company has bought enough barley and hops in bulk that the brewery does not have to worry yet.

‘We’ll watch the market and we’ll try to move along with the market,’ said Russ Melton, one of the brewery’s owners. ‘We’ll keep ourselves competitive.’

Melton said Diamond Bear’s sales have been growing 25 percent to 30 percent each year since its September 2000 opening. Last year, the brewery produced 2,000 barrels, or about 27,500 cases, of beer. This year, it expects to make 2,100 barrels.

The company says it will be able to wait until next year to start adjusting prices. Mazylewski said prices for a pint of beer at the Hog Haus could rise 25 cents.

He said brewers who do not have hops contracts or who want to start a new business are out of luck.

‘Owners of breweries out in Portland (Ore.), grown men, are almost on the verge of tears,’ Mazylewski said. ‘That’s how dire it really is for us.’

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

China banks allowed to meet reserve requirement with US dollar holdings – report

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BEIJING (XFN-ASIA) – Several commercial banks in China have been allowed to use US dollar holdings to meet the lenders’ required reserve requirement with the central bank, China Business News reported.

The newspaper, citing unidentified sources, said commercial banks have been allowed to use their own foreign exchange reserves or that purchased from the central bank, to meet the statutory reserve requirements with the People’s Bank of China (PBoC).
Exchange rate risks will be borne by the PBoC, the sources were quoted as saying.

The report said that several banks have already used that route since the August 15 reserve requirement hike. China Construction Bank, Agricultural Bank of China, Bank of China, Industrial and Commercial Bank of China, Bank of Communications and three other smaller lenders are said to be among those.

Banks’ reserve ratio will stand at 13 pct from Oct 25, after the latest hike announced last weekend.

jianbo.wu@xfn.com

xfnjbw/xfnrc

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ITER fusion project to set up oversight group this month- China science minister

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BEIJING (XFN-ASIA) – An international group to oversee the international fusion project known as ITER will be formally established on Oct 24, said the Chinese Vice-Minister of Science and Technology, Li Xueyong.

China formally ratified the ITER agreement in September, Li said.

‘We will positively fulfil our obligations under the terms of the agreement, and at the same time, share rights to the project,’ he added.

ITER is an experimental fusion reactor being developed in conjunction with the EU, India, Japan, China, Russia, South Korea, and the US.

Costing a total of 15.5 bln usd, the project will generate power through the fusion of the hydrogen isotopes of deuterium and tritium extracted from sea water.

China will be responsible for 9 pct of the costs.

The practical applications of the technology are unclear, but the partners are hoping to use the research as a way of producing a long-term alternative to fossil fuels.

China has also launched a number of its own experimental fusion projects, including the ‘artificial sun’ reactor built by the China Academy of Sciences in 2005.

david.stanway@xinhuafinance.com

xfndds/xfnjanm

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Ohio: Unbid contract raises questions

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COLUMBUS, Ohio (AP) – A debt collection agency accused of harassing customers and once mishandling sensitive state records has hit a roadblock in its latest effort to land state business.

The Department of Job and Family Services wants the state to grant Houston-based G.C. Services — a firm that has done business for various state agencies for two decades — a one-year, $5 million contract extension without seeking competitive bids from other companies through the state’s formal bidding process.

Job and Family Services has now asked the state Controlling Board, which handles such requests, to postpone its decision because the agency wants more time make its case to board members, said department spokesman Dennis Evans.

Sen. John Carey, the board’s ranking Republican, said members were alarmed to learn that the firm has run into trouble with the Better Business Bureau of Houston and was fired by former Ohio Attorney General Jim Petro in 2004 for throwing state documents containing hundreds of names, addresses and Social Security numbers into a Columbus trash bin.

‘They have the option of talking to us and making their case,’ said Carey, a Wellston Republican. ‘It looks pretty tough at this point.’

In July, Job and Family Services asked the Controlling Board to approve a two-year, $10 million contract with G.C. Services for collection of back child support from delinquent parents. Amid questions about the selection process, the board approved only one year, worth $5 million, and asked that competitive bids be sought from other companies for the remainder of the contract, minutes show.

So when Job and Family Services came back and placed the same contract extension on the agenda for Monday, it raised some eyebrows.

Evans said the contract classified as competitively bid because the agency received proposals from two different companies. But the agency formulated its own criteria that were different from the state’s bidding process, which essentially disqualified the other competitor. When an agency follows the state’s formal bidding process, contracts do not need approval of the Controlling Board.

The firm has a 20-year history of landing unbid contracts with the state and hiring lobbyists that give generous political contributions to the officeholders who hold the pursestrings.

In the 1990s, the company made headlines for receiving $37 million worth of state work during an eight-year period when its lobbyists had given attorneys general Anthony Celebrezze and Lee Fisher, both Democrats, a combined $90,000. Fisher is now the lieutenant governor.

Jerold Katz, patriarch of the Texas family that owns G.C. Services, gave Petro $1,000 in 2002, records show.

State records show that the firm’s current lobbyist, Philip Craig, gave $5,000 to Democratic Gov. Ted Strickland’s campaign fund in June 2006, and another $10,000 that August.

Craig also represents other clients, including the Licensed Beverage Association, with an interest in state politics.

A message was left with G.C. Services seeking comment. When reached for comment, Craig said he was not authorized to speak on behalf of the company.

The longtime contractual relationship with the state persists despite questionable conduct on the part of the company.

On Dec. 1, 2006, the Better Business Bureau in Houston moved to revoke the company’s membership after a litany of complaints G.C. Services made no effort to address.

Bureau spokeswoman Deana Turner said it had 284 complaints on file with the company, with 142 of those coming in the last year. There have been 14 additional complaints in the last 30 days, Turner said.

She said the company received an average number and type of complaints for debt collection agencies its size. But its failure to address the complaints or change practices set it apart from other agencies, she said.
Instead of arguing its case, the company simply resigned its membership with the bureau. A company opting not even to argue its case is ‘not the norm,’ Turner said.

Turner said the company had been a member since 1965, and the number of complaints increased over time.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Polish finance minister sees zloty gaining gradually, food price impact to fade

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WARSAW (Thomson Financial) – Poland’s finance ministry expects the zloty to continue to appreciate steadily on the back of inflows of EU funds and money sent home by Poles working abroad, Finance Minister Zyta Gilowska said today.

‘The ministry for a long time has assumed a gradual appreciation of the zloty,’ she told a briefing in Warsaw.

‘Poland is receiving funds from the European Union and Poles working abroad are also sending money to their families at home. We estimate that this capital reached 5 bln eur last year and most of that money was spent on buying homes here.’

She also moved to play down concerns over a jump in headline annual inflation in September, which bolstered market expectations of a further rise in Polish interest rates this year.

The impact of a rise in food prices in recent months, highlighted by the ministry as behind September’s jump, was likely to prove temporary, she said.

‘We know about the problems that the Baltic Republics had with inflation, Poland doesn’t have such problems,’ she said. ‘Higher food prices in our opinion will have a temporary impact (on inflation).’

piotr.skolimowski@thomson.com *48 22 447 2430

pjg/sal

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Nordex wins 104 mln eur wind farm deal from ERG

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MILAN (Thomson Financial) – Nordex AG has won a 104 mln eur contract to supply to ERG SpA up to 44 wind turbines for its ‘Fossa del Lupo’ 110 megawatt wind farm to be built in the province of Catanzaro, southern Italy, the two companies said in a statement.

Work to build the wind farm, which will have annual output of 250 gigawatts, is due to start in Oct 2008, with the plant to start operating by the end of 2009, they said.

danilo.masoni@thomson.com

dm/ms1

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FDIC shuts down NetBank due to defaults

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WASHINGTON (AP) – NetBank Inc., an online bank with $2.5 billion in assets, was shut down by the government on Friday because of an excessive level of mortgage defaults.

It was the largest savings and loan failure since the tail end of the industry’s crisis more than 14 years ago. Federal regulators appointed the Federal Deposit Insurance Corp. as a receiver for Alpharetta, Ga.-based NetBank.

Customers with less than $100,000 deposited with NetBank will be protected by FDIC insurance.

While dozens of mortgage companies have closed due to soaring defaults of home loans made to borrowers with weak, or subprime, credit, those problems previously had occurred among non-bank lenders such as New Century Financial Corp. NetBank, in contrast, is federally regulated.
Loose mortgage standards in recent years — especially among lenders catering to subprime borrowers — have resulted in a spike in home loan defaults.

Bert Ely, a banking consultant based in Alexandria, Va., said NetBank was in ‘deep trouble’ before the subprime mortgage market’s woes accelerated this year. Regulators, he said, ‘should have closed it a long time ago.’

While some Internet-only banks are successful, he said, operating one without retail branches can be a difficult strategy to maintain.

The FDIC said Friday that $1.5 billion of NetBank’s insured deposits will be assumed by ING Bank, also a major online bank that is part of Dutch financial giant ING Groep NV. ING will pay $14 million for the deposits and receive 104,000 new customers.

NetBank, which had no physical branches, sustained significant losses last year ‘primarily due to early payment defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls, and failed business strategies,’ the Office of Thrift Supervision said in a statement.

The FDIC said NetBank had $2.5 billion in total assets and $2.3 billion in deposits as of June 30.

The OTS oversees about 830 savings and loan institutions, or thrifts, ranging in size from giants like Seattle-based Washington Mutual Inc. to small community banks.

The last major thrift to be closed by regulators was Superior Bank of Hinsdale, Ill. It had total assets of $1.9 billion and was shut down in July 2001. Its failure has so far cost the FDIC’s insurance fund an estimated $273 million.

In June 1993, regulators shut down Western Federal Savings and Loan Association, which had total assets of $3.8 billion. That thrift’s owners included former Treasury Secretary William Simon and former Federal Reserve Board Vice Chairman Preston Martin.

NetBank had reached a deal to sell its deposit accounts and other assets to privately held EverBank of Jacksonville, Fla., but EverBank announced this month that the deal fell through.

EverBank in July completed its acquisition of NetBank’s mortgage servicing business, and the FDIC said Friday that EverBank will purchase about $700 million in mortgage loans.

‘Customers of NetBank should have confidence and security knowing that they will have access to their insured funds in a timely and orderly manner,’ FDIC Chairman Sheila Bair said in a prepared statement.

The FDIC insures bank deposits of up to $100,000.

NetBank had $109 million in deposit accounts that exceeded the FDIC limit. Those customers will become creditors in NetBank’s receivership, the FDIC said.

The FDIC has a toll-free number for customers affected by the failure:1-888-256-6932.

AP Business Writer Marcy Gordon contributed to this report.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Myanmar needs dialogue not threats – UN rapporteur

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LISBON (Thomson Financial) – Protests in Myanmar could lead to a ‘peaceful evolution’ if the international community stresses the need for dialogue rather than threats, the UN special rapporteur to Myanmar said today.

There has to be ‘a position of firmness but of dialogue’ towards the junta, and ‘now is not the time to make threats,’ special rapporteur Paulo Sergio Pinheiro said in New York, quoted by Portuguese news agency Lusa.

‘I would not qualify the protests as a popular uprising and I see no possibility that they will precipitate a change of regime,’ he said.

But they ‘may allow a positive evolution of the regime in the sense of a greater opening up’ if it is well dealt with by the international community, he added.

‘There is no other alternative to dialogue to avoid the danger of a crisis’ and to ‘avoid a brutal crackdown with very negative consequences for the country and for the region.’

He said the visit of the UN special envoy Ibrahim Gambari to Myanmar was ‘a good signal’ of a ‘small opening up by the government for dialogue.’

tf.TFN-Europe_newsdesk@thomson.com

afp/jlw

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Sarkozy asks French businesses to freeze Myanmar investments UPDATE

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PARIS (Thomson Financial) – French President Nicolas Sarkozy called on French businesses including oil giant Total to freeze their investments in Myanmar in response to a crackdown on peaceful protestors.

‘France calls on all its private companies, such as Total, to exercise the greatest restraint concerning investments in Myanmar, and asks that they do not make any new ones,’ Sarkozy told the press after meeting the head of Myanmar’s self-proclaimed government-in-exile, Sein Win.

Sarkozy called for ‘sanctions to be adopted without delay’ against the country’s ruling junta by the United Nations Security Council, set to meet later today to discuss the situation.

‘France will not accept the gagging of Myanmar’s opposition,’ he warned, demanding that the European Union ‘also take sanctions as a consequence of the violations of human rights.’

Myanmar security forces used batons, tear gas and live rounds today in a violent crackdown on the mass protests, killing at least four people including three Buddhist monks, witnesses said.

tf.TFN-Europe_newsdesk@thomson.com

ra

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House condemns MoveOn.org attack

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WASHINGTON (AP) – The House on Wednesday overwhelmingly voted to condemn the liberal advocacy group MoveOn.org for a recent advertisement attacking the top U.S. general in Iraq.

By a 341-79 vote, the House passed a resolution praising the patriotism Gen. David Petraeus, the commander of U.S. forces in Iraq, and condemning a MoveOn.org ad that referred to Petraeus as ‘General Betray Us.’

The liberal group’s full-page ad appeared earlier this month in The New York Times and has served as a rallying point for Republicans. President Bush called the ad ‘disgusting’ and criticized Democrats such as Sen. Hillary Clinton, the front-runner for the party’s nomination, for being afraid of irritating the group.

‘Such unwarranted attacks should be strongly condemned by Republicans and Democrats alike,’ said Rep. Jerry Lewis, R-Calif., during brief debate on the resolution.

The resolution was attached to a stopgap measure funding Cabinet budgets until mid-November.

Wisconsin Rep. David Obey, a veteran Democrat, recounted how he left the Republican Party during the era of Sen. Joseph McCarthy, R-Wis., and said that lawmakers have an obligation to criticize their allies as well as their enemies when they go too far.

‘I have got an obligation to be equally upset when that kind of juvenile debate emanates from the left,’ Obey said.

The Senate passed a companion resolution last week.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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