Japan Strains to Fix a Reactor Damaged Before Quake

The Monju prototype fast-breeder reactor — a long-troubled national project — has been in a precarious state of shutdown since a 3.3-ton device crashed into the reactor’s inner vessel, cutting off access to the plutonium and uranium fuel rods at its core.

Engineers have tried repeatedly since the accident last August to recover the device, which appears to have gotten stuck. They will make another attempt as early as next week.

But critics warn that the recovery process is fraught with dangers because the plant uses large quantities of liquid sodium, a highly flammable substance, to cool the nuclear fuel.

The Monju reactor, which forms the cornerstone of a national project by resource-poor Japan to reuse and eventually produce nuclear fuel, shows the tensions between the scale of Japan’s nuclear ambitions and the risks.

The plant, a $12 billion project, has a history of safety lapses. It was shuttered for 14 years after a devastating fire in 1995, one of Japan’s most serious nuclear accidents before this year’s crisis at the Fukushima Daiichi Nuclear Power Station. Prefecture and city officials found that the operator had tampered with video images of the fire to hide the scale of the disaster. A top manager at the plant recently committed suicide, on the day that Japan’s atomic energy agency announced that efforts to recover the device would cost almost $21.9 million. And, like several other reactors, Monju lies on an active fault.

Even if the device can be removed, restarting the reactor will be risky, given its safety record and its use of highly toxic plutonium as fuel, said Hideyuki Ban, co-director of the Citizens’ Nuclear Information Center, a watchdog group, and a member of an advisory government committee on Japan’s long-term nuclear energy policy. The plant is 60 miles from Kyoto, a city of 1.5 million people, and the fast-breeder design of the reactor makes it more prone to Chernobyl-type runaway reactions in the case of a severe accident, critics say.

“Let’s say they make this fix, which is very complicated,” Mr. Ban said. “The rest of the reactor remains highly dangerous. And an accident at Monju would have catastrophic consequences beyond what we are seeing at Fukushima.”

Japan badly needs sources of energy. By closing the loop on its nuclear fuel cycle, Japan aims to reuse, recycle and produce fresh fuel for its 54 reactors.

“Monju is a vital national asset,” said Noritomo Narita, a spokesman here in Tsuruga for the reactor’s operator, the government-backed Japan Atomic Energy Agency. “In a country so poor in resources, such as Japan, the efficient use of nuclear fuel is our national policy, and our mission.”

Critics have been fighting the project since its inception in the 1970s. “It’s Japan’s most dangerous reactor,” said Miwako Ogiso, secretary general of the Council of the People of Fukui Prefecture Against Nuclear Power. “It’s Japan’s most nonsensical reactor.”

After promises of safety upgrades, as well as lavish subsidies and public works, the government has wooed local officials into allowing a restart of the reactor. In Fukui, the government had ready allies: with 14 nuclear reactors, it is Japan’s most nuclear-friendly prefecture. (Fukushima, in second place, has 10 reactors.)

Monju was reopened in May 2010, and just three months later, the 3.3-ton fuel relay device fell into the pressure vessel when a loose clutch gave way. In the two decades since the reactor started tests in 1991, the atomic energy agency has managed to generate electricity at the reactor only for one full hour.

In Monju, Japan is pursuing a technology that most countries have long abandoned. Decades ago, a handful of countries, including the United States, started exploring similar programs. But severe technical difficulties, as well as fears about the weapons-grade plutonium that the cycle eventually produces, have led most countries to scrap their programs.

But Japan has remained staunchly committed to the Monju project. The government of Prime Minister Naoto Kan has shielded it from the deep cuts in spending that it has required of other national projects since it came to power in September 2009.

Under a government plan, Japan would use technology developed at Monju to commercialize fast-breeder reactors by 2050.

Mr. Kan has recently hinted at an overhaul of Japan’s nuclear policy, though he has not commented specifically on the fate of the Monju reactor.

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The Choice: A Class Gets Acquainted Months Before Freshman Fall

Occasional reflections on the admissions process by Caren Osten Gerszberg, the mother of a high school senior.

I just returned from my 25th college reunion. The highlight of the weekend was not skimming the surface of life, love, work and kids in three minutes or less, but rather the quality time and deep conversations shared among six of my closest college friends. It’s hard to believe I knew no one when I got there.

The summer before my freshman year, I worked as a cashier at a local supermarket. Arriving home one afternoon, I found a letter on university letterhead waiting and ripped it open. There it was — the name, address and telephone number of my roommate, Lisa, from South Orange, N.J.

“Should I bring my boombox?” I nervously asked her as I twirled the wall phone’s extra-long cord and paced around my mom’s blue-tiled kitchen.

“Yes,” Lisa answered. “And I can bring a popcorn maker.”

The important decisions now sorted out, we met face-to-face for the first time in our dorm room on freshman move-in day in late August.

Fast-forward 25 years, and it’s a whole new pre-frosh universe.

Since the day of her acceptance to Wesleyan University last fall, my daughter Nicole has been communicating with her future classmates. She joined a university-run Facebook group — open exclusively to admitted students — which currently has 770 members (the incoming class has 745 students), as well as another “Class of 2015” Facebook group (unaffiliated with the university, and described as a “place for potential students to meet and discuss!”).

Now that college “friends” are virtually in abundance, the days of stepping onto a campus having never met or seen a classmate’s photo are indeed over — no matter from which continent you hail.

Over the last several months, these students have been asking questions (Any classics majors? Do we pay for laundry?), getting acquainted (I love naps and Madrid Real), divulging hometowns (I’m from Miami and might die in the cold; accepted from Mexico City!), and discussing dorms (I’m between Fauver and Westco; looking for a roomie in Clark).

Eventually, and inevitably, Nicole came across a girl with whom she had a mutual Facebook friend. They started a dialogue online and it turned out the girl lives in a nearby town. They met for ice cream one Sunday afternoon, and there it was — a new friend with whom she could text and meet while visiting their future school in April for WesFest, a long weekend of classes, seminars, performances and parties for parents and students, both current and future.

As Nicole packed her bag preparing to catch the train to Connecticut, I sat on the floor of her room to keep her company.

“You know,” I said, “this is kind of like your first day of college.” She didn’t turn around, but just grumbled, “Uh-huh,” probably hoping I’d stop talking and let her get ready in peace.

“When I went to college, the only person I spoke with in advance was my assigned roommate,” I continued. “But you’ve already communicated with so many kids, and now you’ll be meeting some of them for the first time. So when you move in on Aug. 31, it won’t be as awkward and scary.”

“O.K., whatever,” she said.

Nicole did see familiar faces during the WesFest weekend, and came back as excited as ever.

She didn’t agree that it felt like her first day of college, and I suppose she’s right — nor does it make sense to compare her experience to mine, since technology has rendered the unknown nearly unimaginable for her generation. And who knows what’s better, the comfort obtainable nowadays via e-mail and the Internet, or the feeling of walking onto a campus not knowing a soul?

Twenty-five years later, one thing I do know is that college has brought me lifelong friends. During my reunion weekend, over meals, walks, cocktails, coffee breaks and the occasional cheese steak—with friends who came from as close as Boston and New Jersey and as far as Cleveland and Colorado — we didn’t skim over anything.

Of course we reminisced about the good ole college days, sometimes laughing until we cried. But it took little time before we delved deep, covering parenting issues, career ups, downs and hiatuses, aging parents and recent ailments; diminishing eyesight, hot flashes, and dental implants were new, and fairly common, among us.

The beginning of college can be daunting. In these times of instant knowledge and information, I hope Nicole’s new acquaintances — both virtual and real — will make her first few days at college feel less so.

And then, maybe at her 25th reunion, she and some of her classmates will reminisce about those early days when they “met” on Facebook, and how nice it was to arrive with instant friends.

To offer your thoughts on what Ms. Gerszberg has written, or to share similar observations, please use the comment box below. To read more by her, click here.

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Despite Ban, Protests Continue Before Spanish Vote

MADRID — Tens of thousands of demonstrators across Spain continued sit-ins and other protests against the established political parties on Saturday. They did so in defiance of a ban against such protests and ahead of regional and municipal elections on Sunday.

About 28,000 people, most of them young, spent Friday night in Puerta del Sol, a main square in downtown Madrid, the police said. They stayed even as the protest ban went into effect at midnight under rules that bring an official end to campaigning before the election in 13 of Spain’s 17 regions and in more than 8,000 municipalities.

Fueling the demonstrators’ anger is the perceived failure by politicians to alleviate the hardships imposed on a struggling population. The unemployment rate in Spain is 21 percent.

Beyond economic complaints, the protesters’ demands include improving the judiciary, ending political corruption and overhauling Spain’s electoral structure, notably by ending the system in which candidates are selected internally by the parties before an election rather than chosen directly by voters.

The protests, which started May 15, have spread gradually across Spain. Spaniards overseas have also held some protests in front of their embassies to show their support for an alternative campaign that has almost eclipsed that of the established parties.

Although some of the protest groups have called for people to vote for smaller and alternative parties, or to cast a blank ballot, the movement could lead to a decline in voter turnout on Sunday. In the elections four years ago, 63 percent of eligible voters cast ballots.

Sunday’s election is expected to result in a countrywide sweep by the Popular Party, the main center-right opposition, at the expense of the governing Socialists, whose popularity has plummeted because of the economic crisis. The most recent opinion polls suggest that the Socialist Party may lose in regions and municipalities where it has been in power since Spain’s return to democracy in the late 1970s, notably Castilla-La Mancha.

Whatever the outcome, Prime Minister José Luis Rodríguez Zapatero announced in April that he would not seek a third term, paving the way for the selection of a new Socialist leader before the general election, which is expected in March 2012.

As the campaign ban came into force at midnight, many of the Madrid protesters stuck tape across their mouths to signal that they would continue the demonstration, even if ordered to be silent. “The voice of the people can never be illegal,” read some of the banners, while others argued, “We are not against the system but the system is against us.”

Still, the government suggested that it would not order the police to use force to break up any protests and sit-ins in Madrid and elsewhere over the weekend, especially given that protests this week have not generated any violence. Interior Minister Alfredo Pérez Rubalcaba, speaking during a visit to the Murcia region, said that “the police are there to solve problems and not create new ones.”

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Bomb Found in Ireland Hours Before Queen Arrives

The bus was traveling from Ballina in the west of Ireland toward Dublin and the device was found in Maynooth, 40 miles from Dublin. About 30 passengers had left the bus when it was stopped and searched, apparently after a tip by an informant, the police said.

News agencies reported that the Irish police also found a sham device, harmless but meant to appear to be a bomb, at a tram station in North Dublin. And a bomb threat that was received in London was regarded as credible by the police.

Despite the alarms, the queen and her husband, Prince Philip, flew into a military airfield outside Dublin, shrouded by one of the biggest security operations in recent years, both for the monarch and for President Obama, who is scheduled to visit the country early next week. The combined security effort is estimated to cost as much as $42.4 million, a large sum for a country in a deep economic slump.

The queen’s four-day visit, heavy with symbolism, is meant to finally signal reconciliation between Britain and a country that fought a bitter independence war against the British throne early in the 20th century. No reigning monarch had visited the island since the founding of the Irish Free State in 1922; the queen’s grandfather, King George V, was the last British monarch to visit, in 1911, when Ireland was still part of the United Kingdom.

The queen is to lay a wreath later Tuesday at a garden of remembrance, honoring those who fought against her forebears. She is also to visit the Croke Park stadium where British forces fired into a crowd during Ireland’s independence war and killed 14 people.

The Irish President, Mary McAleese, told the state broadcaster that the queen’s visit was “an extraordinary moment in Irish history,” while David Cameron, the British Prime Minister, said there was “a great sense of history and occasion” to the visit. But the symbolism was also offset by questions of security.

Planned routes for the queen to travel while in Dublin have been cleared for days of parked cars, and access to some areas has been blocked. More than 5,000 manholes, culverts and drains have been checked and sealed. Even the Dublin Zoo, which is close to where the queen will be staying, will be closed for two days.

Police north and south of the Irish border have arrested dissident republicans, detaining some of them, and surveillance is high. Citizens are being subjected to random searches around Dublin and elsewhere.

The measures reflect worries that dissident republicans who are opposed to both the Good Friday agreement in Northern Ireland and to the very presence of a British monarch on the island will mount some kind of attack. Weeks before the monarch’s visit, dissident republicans in Northern Ireland appeared armed and with their faces masked in a cemetery in Northern Ireland to warn Elizabeth that she was not welcome.

On Monday, the British police said that they had received a credible bomb threat in central London on the eve of the queen’s journey.

In a statement, a spokesman for Scotland Yard said on Monday that “a bomb threat warning has been received” but that it was “not specific in relation to location or time.”

Some areas of London were cordoned off, but no device was found, leading police to assume that the coded message was a hoax meant to complicate Elizabeth’s plans.

Central points around Trafalgar Square and Buckingham Palace were cordoned off as the police investigated the threat, and a suitcase left outside a hotel was destroyed by the police on Monday morning. Parts of the Mall were also shut down.

Police officials urged Londoners to be vigilant, but the threat designation for Irish-related terrorism had not been increased.

While the source of the threat remained unclear, suspicion immediately fell on dissident Irish republicans who have opposed the power-sharing government in Northern Ireland. The government includes the mainly Protestant unionists, who seek to keep the province a permanent part of Britain, and the mainly Catholic republicans, who want a united Ireland.

Opinion surveys suggest that many Irish people do not object to the monarch’s visit, but a minority remains opposed, accusing Britain of occupying Northern Ireland to thwart aspirations for a single Ireland.

Douglas Dalby contributed reporting from Dublin.

 

Israel Leader Outlines Points Before U.S. Trip

He also made clear that if the recent reconciliation accord between Hamas and Fatah, the two main Palestinian parties, led to Hamas becoming part of a Palestinian government, no peace would be negotiated.

“A government, half of whose members declare daily their intention to destroy the State of Israel, is not a partner for peace,” he said, speaking at the opening session of Parliament.

Mr. Netanyahu spoke a day after an unprecedented wave of Palestinian protesters marched toward Israel’s borders from four directions and Israeli troops responded with gunfire, killing more than a dozen people. The occasion was Nakba Day, when Palestinians mark Israel’s creation and mourn the expulsion and flight of hundreds of thousands of Palestinians in 1948.

Commentary in newspapers and on airwaves in both Israel and the Palestinian areas suggested that what took place Sunday might serve as a dress rehearsal for the coming year, posing a serious challenge to Israel. While Palestinians and critics abroad questioned the killing of protesters, many Israelis focused on why the military was not prepared for the breaching of the border fence in the Golan Heights.

Mr. Netanyahu said in Parliament that those who sought to enter Israel on Sunday were not clamoring for a Palestinian state but for Israel’s destruction.

“We must stop beating ourselves up and blaming ourselves,” he said. “The reason there is no peace is that the Palestinians refuse to recognize the State of Israel as the Jewish people’s nation-state.”

He added: “As for those who orchestrated these riots, 63 years of our independence has not changed a thing. They yelled that they want to return to Jaffa, to the Galilee. And the head of Hamas in Gaza yelled that they want to see the end of the Zionist enterprise, repeating the words voiced by his Iranian patron.”

At the same time, Mr. Netanyahu showed more willingness to yield territory than he had before, strongly implying that he would give up the vast majority of the West Bank for a demilitarized Palestinian state. He said Israel needed to hold onto all of Jerusalem and the large settlement blocs in the West Bank, thereby suggesting that he would yield the rest.

The other principles he enumerated included Palestinian recognition of Israel as the home of the Jewish people, an agreement to end the conflict, resolving the refugee problem only within the new state of Palestine and an Israeli military presence in the Jordan Valley.

Palestinian leaders have repeatedly rejected every one of those. As a result of the impasse, they have been pursuing other approaches to statehood, including political unity with Hamas and a plan to ask the United Nations in September to recognize a state of Palestine within the 1967 boundaries. That would include East Jerusalem and all of the West Bank and Gaza.

After the unity deal between Fatah and Hamas was announced, Israel said it was suspending its monthly transfer of nearly $100 million in Palestinian tax revenue to the Palestinian Authority. But on Monday it announced that it would most likely hand the money over, after assurances that it would not fall into Hamas hands.

Sunday’s protests, involving thousands of Palestinians who live in Syria, Lebanon, Gaza and the West Bank, showed how the populist spirit spreading across North Africa and the Middle East has reached the Palestinians and the edges of Israel.

Defense Minister Ehud Barak said that the country was facing a whole new approach to anti-Israel activism.

“We are just at the start of this matter, and it could be that we’ll face far more complex challenges,” he said on television.

Some Palestinian analysts also suggested that Sunday’s events marked a new phase of their struggle.

“This is a new era for the Palestinian people and the Arab nations,” wrote Talal Okal, a commentator in Al Ayyam, a Palestinian newspaper. “This new Arab age shows how to conduct the struggle in a totally different way.”

Mr. Netanyahu is scheduled to meet Mr. Obama at the White House on Friday, address a large gathering of American supporters on Monday and then a joint meeting of Congress next Tuesday. His aides have indicated that since the Hamas-Fatah accord, he believes the likelihood of negotiated peace has declined and he is less obliged to make a strong offer to the Palestinians.

After he spoke in Parliament, the head of the opposition, Tzipi Livni of the center-left Kadima party, accused Mr. Netanyahu of having failed.

“If you do not initiate, decisions will be made for Israel,” Ms. Livni said. “You have missed your opportunity to provide Israel with a vision. You are going to the United States without initiatives for peace.”

 

Denying Links to Militants, Pakistan’s Spy Chief Denounces U.S. Before Parliament

Rather, the spy chief, Lt. Gen. Ahmed Shuja Pasha, blamed an intelligence failure for the presence of Bin Laden in the city of Abbottabad, where a top military academy is located and where the leader of Al Qaeda was killed in an American raid on May 2.

General Pasha said he had offered his resignation twice to the leader of the army, Gen. Ashfaq Parvez Kayani. As his presence before Parliament made clear, it was not accepted.

The two generals were called before the extraordinary 11-hour session to answer to the failures of the military and the intelligence agency that allowed a team of American commandos to enter and leave Pakistan in a stealth helicopter operation undetected.

Unusually vibrant criticism by some politicians and the Pakistani press after the raid compelled them to try to repair the reputation of the military and the intelligence agency, which the army controls.

But after recognizing the lapse, General Pasha rallied Parliament behind him, several legislators said, with strong criticisms of the United States that elicited thumps of approval from the chamber, including leading members of the Pakistan Peoples Party, the major partner in the coalition that the Obama administration supports.

At the end of the session, the leader of the opposition party, Pakistan Muslim League-N, Chaudhry Nisar Ali Khan, who has been one of the most severe critics of the military since the raid, closed ranks behind the military. The session was organized so that “a positive message should go out to the masses,” Mr. Khan said.

A resolution that was passed at the session said Pakistan would revisit its relationship with the United States “with the view to ensuring Pakistan’s national interests were fully respected.”

In that vein, Pakistan’s chief spy agency, the Inter-Services Intelligence Directorate, or ISI, will not allow the Central Intelligence Agency to conduct operations in Pakistan without the full knowledge of the ISI, General Pasha said.

The spy chief did the talking. General Kayani attended the session, along with the heads of the air force and the navy, but did not speak, apparently to be spared the humiliation. Senior military officials, considered to be above civilian law and a power unto themselves, rarely appear before Parliament, or even its defense committees.

General Pasha told Parliament he had a “shouting match” with the C.I.A. director, Leon E. Panetta, over C.I.A. activities in Pakistan when they met recently in Washington, several lawmakers who attended the session said.

Reviewing the history of American relations with Pakistan, General Pasha declared that the United States, which has provided Pakistan with about $20 billion in aid over the last decade, had let Pakistan down at every turn since the 1960s, including imposing sanctions on the country in the 1990s.

“And now they have conducted a sting operation on us,” General Pasha said, according to one lawmaker. The intelligence chief was referring to the fact that the Obama administration had decided not to inform Pakistan in advance of the raid because of fears that the Pakistanis could not be trusted.

Before answering questions from the more than 400 members of Parliament from both chambers, the military gave a PowerPoint presentation that included photographs of Qaeda militants captured or killed by the ISI since the attacks of Sept. 11, 2001.

General Pasha then explained that Pakistan should be given credit for dismantling Al Qaeda even before the United States killed Bin Laden, according to the accounts from lawmakers after the session.

In a direct assault on statements by American officials that the ISI supports jihadist militant groups, including the Haqqani network in North Waziristan, General Pasha said there was no such policy. “We have nothing to do with the Haqqani network,” he was quoted as saying.

American officials have long maintained suspicion that the Haqqani group, along with the Taliban, has been sheltered and sponsored by Pakistan, which uses them to push Pakistani interests in Afghanistan, where the insurgents attack NATO forces.

Some of the legislators asked for explanations of why the Pakistani Air Force did not detect the American helicopters that ferried the team of Navy Seal commandos into Abbottabad and out again.

The deputy chief of Air Staff Operations, Air Marshal Muhammad Hassan, said the American helicopters were equipped with stealth technology that enabled them to evade radar.

By the time the air force learned about the raid from ground reports at Abbottabad and launched fighter jets, the helicopters had completed their mission and flown out of Pakistan, he said.

But the air marshal, in answer to a question, said that the F-16 jet fighters provided by the United States to Pakistan were capable of shooting down the drones that the C.I.A. flies over the tribal areas to attack militants. The drone campaign has become increasingly unpopular among Pakistan’s politicians even as the Obama administration insists that it has no intention of halting the flights.

For the first time, according to one lawmaker, Air Marshal Hassan acknowledged that Pakistan allowed the United States to fly the drones out of Shamsi Air Base in Baluchistan.

The Pakistani government has always maintained in public that it does not condone the drone campaign, while in private it has given permission for the flights.

Salman Masood contributed reporting.

 

Contrite Cisco Regroups Before Skeptical Wall St.

Cisco Systems, where he is chief executive, is in a slump. The management system he put in place slowed decision-making and innovation. The company’s growth has slowed and its profits are falling.

His latest sales pitch is that he can revive Cisco — a technology colossus that makes computer networking equipment — by pruning its sprawling business and refocusing on its strengths.

But investors, Wall Street analysts and customers are a little bit skeptical of Mr. Chambers’s promises. No major improvement in Cisco’s finances is expected when it reports third quarter earnings on Wednesday.? Given Cisco’s size, the scope of the overhaul and the increasing competition that is eroding the company’s market share, a turnaround could take time.

Last week, Cisco said it would reduce bureaucracy by eliminating a crazy-quilt management structure that had executives responsible for geographic regions as well as serving on “councils” that were supposed to encourage cooperation between the different groups. Instead, it slowed decision-making. ?

Last month, Mr. Chambers, who declined to be interviewed for this article, took his first step to fix Cisco by suddenly shutting down its Flip video camera business. Only two years earlier, Cisco had acquired Flip’s parent company for $590 million to expand its nascent consumer products division. The camera was popular and, indeed, the company was days away from release of the latest version of the video camera.

“This isn’t simply a midcourse correction,” said Jeffrey Kvaal, an analyst with Barclays Capital. “They’re facing challenges that are multi-year.”

The doubt in Mr. Chambers’s sales pitch began last year when Cisco’s sales started to show weakness that Mr. Chambers initially attributed to the sour economy. When profits continued to wither quarter after quarter, Mr. Chambers alternately blamed a decline in government spending and a “transition” after the introduction of new switches for computer networks.

In the last 12 months, its shares have fallen 31 percent as the Nasdaq index gained 22 percent. While Cisco’s shares fell, those of its rivals like Juniper Networks rose 35 percent. Alcatel-Lucent’s shares doubled.

In April, in a memo to employees, Mr. Chambers acknowledged systematic problems at Cisco. He blamed slow decision-making and a lack of accountability. “We have disappointed our investors and we have confused our employees,” Mr. Chambers wrote. “Bottom line, we have lost some of the credibility that is foundational to Cisco’s success — and we must earn it back.”

The contrition is unusual for Mr. Chambers, who is known for his unwavering optimism during his 16 years leading Cisco. He has paused his cheerleading only once before — during the dot-com crash more than a decade ago, when Cisco was unprepared for customers sharply cutting back orders. Cisco had been one of the hottest companies of the Internet boom of the 1990s with a high-flying stock to match. Much of the blame for its shortcomings fell on Mr. Chambers, much as it does today.

The last few years should have been golden for Cisco. Telecommunications companies worldwide were rapidly expanding their infrastructure to accommodate growing traffic from online streaming and mobile phones.

But Cisco failed to keep pace with changes in the network switching and routing equipment, which accounts for nearly half its revenue. The industry has shifted from more standardized technology — a landscape in which Cisco thrived — to specialized equipment for various niche markets.

For example, Cisco’s market share in edge routers, used by Internet providers to route traffic near the edges of their networks, dropped 11 percentage points over three years to 42.2 percent in 2010, according to the Dell’Oro Group, a market research firm.

“They’ve been lagging,” said Shin Umeda, an analyst with the Dell’Oro Group. “As a result, the competitors have been able to move in.”

 

County Was Struggling Even Before the Storm

  Glenda Dillshaw sorted through debris in Pleasant Grove, Ala., in Jefferson County.? The county is also dealing with a huge debt. More Photos ?

There are few places in America with more precarious finances than Jefferson County, Ala., the scene of some of the worst devastation from this week’s deadly tornadoes.

Even before the dark funnel clouds touched down, the heavily indebted county, which includes the city of Birmingham, was teetering on the edge of what could be the biggest municipal bankruptcy in American history. It is drowning under $3.2 billion in debt, the legacy of a giant sewer project and corrupt, risky bond deals that sent a former top official to prison. And it recently lost one of its main sources of revenue when the State Supreme Court struck down its tax on workers. County officials are worried that they could run out of money in late July or early August.

Now the strained county must struggle to perform a central role of government: protecting the lives and safety of its residents. So as county search and rescue workers sought the living and the dead, triage centers treated the injured and work crews struggled to clear the debris, the Jefferson County Commission met Thursday to make sure that some of the money-saving measures it had instituted would not impede the response to the disaster.

“The needs of the citizens will come first,” said Commissioner James A. Stephens, who oversees the county’s finances and whose district saw some of the worst destruction. “If we have to burn through this cash we’re attempting to preserve, in order to get us through this disaster, the County Commission most certainly will do so.”

People in Jefferson County have spoken about the sky falling, in a figurative sense, long before the clouds lowered this week and swirling winds leveled whole neighborhoods. For many residents, the tornadoes seemed like the latest in a long litany of woes.

“This is not a county that needed this,” said Lexis Bennett, 36, a paramedic who lives in Pleasant Grove, a Birmingham suburb among the hardest-hit places.

His house was destroyed. His dogs were killed. He barely survived by huddling in a closet with three other people and then crawling out of the rubble.

Asked about Jefferson County’s troubles, he shook his head and laughed. “Money?” he asked. “They ain’t got none. And now this tornado.”

County officials expect the federal government to cover much of the cost of the disaster, said Mark Kelly, a spokesman for the county’s Emergency Management Agency. He said the county’s response had not been constrained by its fiscal woes.

But a natural disaster was the last thing the county wanted to face as it sought to untangle itself from a series of man-made ones.

The county’s trouble began more than a decade ago. Its sewers were discharging raw sewage into local rivers during heavy rains, and a federal court ordered the county to refurbish the system. The county began borrowing money to pay for the upgrade. Then things went badly awry.

Local officials signed off on risky, and ultimately very expensive, exotic bond deals that they barely understood — some after they had been bribed.

Larry P. Langford, the former president of the county commission, was sentenced last year to 15 years in prison after he was found guilty of accepting more than $230,000 in cash, expensive clothing and jewelry in exchange for steering millions of dollars in bond business to a prominent investment banker. The Securities and Exchange Commission filed a lawsuit in 2009 charging that J. P. Morgan Securities had made unlawful payments to friends of the county commissioners to help it win bond business; J. P. Morgan settled the suit, agreeing to drop its claims for $647 million in fees it had been seeking, and to pay a $25 million penalty to the commission and $50 million to the county.

Those exotic deals backfired when the economy collapsed, and they sharply drove up the county’s costs instead of reducing them. The county defaulted on its bond payments; a court-appointed receiver is preparing a plan to help pay down the debt.

The Alabama Supreme Court dealt the county another blow in March, when it upheld a ruling striking down the county’s occupational tax — basically an income tax on people who work in the county — on the grounds that it was not properly advertised before the Legislature approved it in 2009. The tax netted the county $74 million a year, but the new Legislature — which, after November’s elections, is now in Republican hands — has been reluctant to approve a new tax.

The new sewer system suffered minor damage in the tornado, said John Young, the receiver who oversees it. But he said it should be quickly repaired.

 

Editorial: RIM, we've been here before

 By Donald Melanson posted Apr 14th 2011 11:12AM
By now you've no doubt read or at least heard about the New York Times interview where RIM's co-CEOs wound up asking most of the questions and challenged conventional wisdom about the company, or seen the BBC interview that Mike Lazaridis put an abrupt end to (see below, if you haven't). Those both offer plenty of juicy morsels for folks like us to chew on, but they're also indicative of a broader sense of frustration from the company that's getting difficult to ignore. One that is strikingly similar to what we've recently seen from another company that grew to dominate on the world stage, became a figure of national pride in its home country, and is now struggling to reinvent itself in the face of stiff competition: Nokia.

To get an idea of how similar the two situations are, we only need to look back to 2009 -- admittedly an eternity in the smartphone business, but not really that long ago. While Nokia still dominated the worldwide smartphone market with Symbian by year's end, there were clear signs that was about to change, with Nokia's share slipping a full ten percent in the fourth quarter of 2009 alone -- largely due to rapid gains from Apple and, yes, RIM. After that, it wasn't long before the company's CEO found himself in the hot seat, while Gartner and countless others began tossing around phrases like "re-arranging the deck chairs." We all know what happened next.

Now the numbers are painting a similarly difficult position for RIM. According to a recent Gartner report, RIM's market share is expected to continue a slow decline to just eleven percent by 2015 (long after its switch to QNX), while Android, iOS, and Windows Phone 7 (boosted in part by Nokia's acceptance) are all projected to continue to grow or hold their own, and leave RIM in a relatively distant fourth place by 2015.

Of course, those projections are just that... projections, and RIM could well still swing things in its favor if it makes the right moves -- even if the PlayBook isn't quite the magic bullet it was hoping for. It won't, however, if it continues with a headstrong approach and ignores any criticism -- or worse, continues to vent its frustrations in public. I'm not pretending to know what all those right moves might be, but RIM could learn a few things from the hard questions Nokia posed to itself when it finally came to the realization that it was a fading giant.

In his now famous "burning platform" memo, Nokia CEO Stephen Elop said the company had to choose whether to "build, catalyze or join an ecosystem." With its slow shift to QNX as its primary operating system, continued promises about the current BlackBerry OS, and half-hearted embrace of Android apps, it's increasingly starting to look like RIM is trying to do all three, but only succeeding in tying itself to a sinking ship.