Tuesday, November 27, 2012

Soccer Leader Wins Vote, Immune to Scandal

The scandals of the past weeks and months were silenced by triumphal music and a thunderous standing ovation. Mr. Blatter carried a bouquet of yellow flowers, and the coronation was complete. “Together we will have four years, providing the Lord gives me life, the energy and the force to continue on our path,” Mr. Blatter, a 75-year-old Swiss, told the delegates at FIFA’s annual congress.

With that, it was settled. FIFA would counter the controversies swirling around it by putting its future in the hands of the man who has led the organization since 1998. It may be a dysfunctional family — or even a corrupt one, according to some members — but it is Mr. Blatter’s family.

Whatever the outside world thinks of Mr. Blatter and his organization these days, there was little but warmth for him inside the Hallenstadion convention center Wednesday. Perhaps Mr. Blatter’s primary skill has been his endurance as one of the world’s most powerful sports administrators in the face of relentless charges of corruption that have come from inside and outside FIFA.

The string of bribery accusations — at least one leveled at Blatter — are related to the votes for future World Cups and the election campaign that concluded on Wednesday, calling into question the integrity of the world’s most popular sport. FIFA took in $4 billion from television rights fees and corporate sponsorship fees in the four years leading to the 2010 World Cup. Some fans and corporate partners have grown uneasy with reports that their money is being diverted into the pockets of unscrupulous officials who seek to enrich themselves instead of the game.

Mr. Blatter insists that he is just the person to fix the problems. With the world watching, FIFA’s members resoundingly stood behind him, voting for Mr. Blatter on 186 of 203 ballots cast. England soccer officials, the most publicly critical of FIFA in recent days, tried to postpone the vote, but that idea was quashed, 172 to 17.

Under Mr. Blatter’s leadership, FIFA’s financial reserves have grown to more than $1 billion, and he is credited with democratizing soccer, taking the world’s largest sporting event to Africa for the first time last summer. The World Cup is scheduled to make its debut in Eastern Europe (Russia) in 2018 and in the Middle East (Qatar) in 2022.

“With everything going on, it’s hard to step back,” said Alan I. Rothenberg, a former president of the United States Soccer Federation who began working with Blatter in 1984. “But if the measure of FIFA is the progress of the sport, as president Sepp has been nothing short of extraordinary.”

But those votes for Russia and Qatar, last December, sparked the latest scandal that has spread, fire-like, since.

Two of FIFA’s 24 executive committee members were barred after they were recorded soliciting money for their votes. Similar accusations, voiced in the news media and the British parliament, have been made against others, but FIFA has cleared those involved. A recently revealed e-mail shows the secretary general Jérôme Valcke saying that Qatar “bought” the 2022 World Cup. Mr. Valcke said this week that he merely meant that Qatar was aided by its well-financed campaign.

Theo Zwanziger, president of the German soccer federation, called for an investigation of the awarding of the World Cup to Qatar over the United States, saying in a German television interview that “there is a considerable degree of suspicion that one cannot simply sweep aside.”

Last month, two high-level FIFA executives were accused of offering $40,000 each to a couple of dozen officials of Caribbean soccer federations in order to secure votes for the presidential election. One of the men, Mohamed bin Hammam of Qatar, was Mr. Blatter’s only competition for FIFA’s top position. Mr. Bin Hammam dropped out of the race late Saturday. On Sunday, he and Jack Warner, an executive board member from Trinidad and Tobago, were suspended from FIFA indefinitely.

John Branch reported from Zurich.


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Monday, November 26, 2012

U.K. Company Suspends Controversial Drilling Procedure

PARIS — A British company said Wednesday that it would temporarily halt the use of a controversial gas exploration technology after indications that it might have set off two small earthquakes near a test well in Lancashire, England.

The company, Cuadrilla Resources, which is exploring for gas in shale formations deep underground, said it would postpone hydraulic fracturing, or fracking, operations at the Preese Hall site near Weeton.

“We take our responsibilities very seriously,” Mark Miller, the chief executive of Cuadrilla, said in a statement, “and that is why we have stopped fracking operations, to share information and consult with the relevant authorities and other experts.”

Fracking is a procedure in which water, chemicals and sand are injected deep underground to free oil or gas trapped in dense shale formations.

The technology is widely used in the United States, where it has contributed to a boom in natural gas production. It has been criticized because the fracking chemicals are believed to have the potential to contaminate groundwater.

“We have discussed this with Cuadrilla and agreed that a pause in operations is appropriate so that a better understanding can be gained of the cause of the seismic events,” the British Department of Energy and Climate Change said in a statement.

Experts from the British Geological Survey, the government and Keele University are examining the data, “and we will need to consider the findings into the cause of the event,” the department said.

The halt was called after the British Geological Survey recorded an earthquake early on May 27 at a depth of about 1.25 miles, with a magnitude of 1.5.

“Any process that injects pressurized water into rocks at depth will cause the rock to fracture and possibly produce earthquakes,” the survey said on its Web site.

Brian Baptie, the top seismology official for the organization, said in a statement that measuring instruments had been installed close to the drill site after a magnitude 2.3 earthquake occurred on April 1.

“The recorded waveforms are very similar to those from the magnitude 2.3 event,” Mr. Baptie said, “which suggests that the two events share a similar location and mechanism.”

The two quakes were barely perceptible to humans.

Industry officials say Europe is a decade or more behind the United States in its effort to recover “unconventional” hydrocarbons like the oil and gas in shale. Governments and energy companies have viewed technologies like fracking as a means to reduce European Union dependence on imported oil and gas, but there can be no certainty that exploitable deposits exist without further testing.

Cuadrilla’s announcement came as the French Senate on Wednesday began a debate on a proposed fracking ban.

The lower house of Parliament on May 11 passed its own bill, which would prohibit fracking in the exploration and recovery of oil and gas, and would revoke existing exploration contracts that relied on the procedure. The Senate, though, is considering a measure that would leave open the door to fracking for research.


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Sunday, November 11, 2012

Advocates and Bankers Join to Fight Loan Rules

That left consumer advocates and civil rights groups frequently at odds with bankers, mortgage lenders and their lobbyists during the debate over the financial regulation act last year, which aims to rein in the subprime mortgage excesses that inflated the housing bubble.

Now, as banking regulators are rewriting the rules for the mortgage market, unusual alliances have sprung up in opposition to tighter lending standards. Advocacy groups like the N.A.A.C.P. and the National Council of La Raza, a Latino civil rights organization, on the one hand, and the American Bankers Association on the other, are joining together to fight rules they say could make home loans less affordable for minority and working-class Americans.

The growing alliance between civil-rights organizations and banking lobbyists could extend beyond the current round of financial rule-making. If Congress turns its focus to restructuring Fannie Mae and Freddie Mac, for example, the same groups could voice similar concerns over anything that restricts the availability of credit for first-time home buyers.

“I think everybody agrees that the enthusiasm for promoting home ownership went way too far,” said David Stevens, chief executive of the Mortgage Bankers Association. “But now the risk is that we go too far the other way. We still need to be able to make affordable mortgages that don’t just go to the wealthy, who can afford the biggest down payments and who have the most positive credit ratings.”

For the uncommon alliance, the first point of attack is on a proposal that would require sellers of mortgage-backed securities to retain part of the risk should a package of loans go sour. The sellers would have to keep on their books at least 5 percent of the value of any baskets of loans they purchase from lenders and then resell to investors. One of the few exceptions to the requirement would be for mortgages on which the home buyer has made a down payment equal to 20 percent of the purchase price.

“Most people don’t have 20 percent to put down,” said Janis Bowdler, a project director in La Raza’s office of research, advocacy and legislation. “These rules will so significantly deter the ability of first-time buyers to break into the market that we will see a real decline in home ownership.”

The initial proposals on “risk retention” by sellers of mortgage-backed securities are likely to have limited effect, largely because Congress provided an exemption for loans that are sold to the Federal Housing Administration and Ginnie Mae, the Government National Mortgage Association. Regulators want to extend that exemption to Fannie Mae and Freddie Mac. Those and other government-sponsored housing finance enterprises currently purchase about 90 percent of new mortgage loans made today.

Republicans in Congress and the Obama administration have vowed to get the government out of the mortgage business, letting the private market take over Fannie and Freddie’s functions of supporting the market for home loans. But lenders and consumer advocates say any privatizations could disrupt lending, making matters worse and outweighing the protections they were designed to offer.

Any standards that apply to the private mortgage market will have to be reflected in government housing finance entities that help low-income and minority borrowers, said Barry Zigas, director of housing policy for the Consumer Federation of America. “Are you going to tell taxpayers that the F.H.A. should have lower standards and take more risk than you expect private investors to take?,” he said.

Even the legislators who wrote the law on risk retention say that the proposal misses the mark. A bipartisan group of three United States senators — Mary L. Landrieu, a Louisiana Democrat, Kay R. Hagen, a Democrat from North Carolina, and Johnny Isakson, a Georgia Republican — wrote to regulators last month that a required 20 percent down payment “goes beyond the intent and language of the statute.”

Edward Wyatt reported from Washington and Ben Protess from New York.


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