Report: Criminal probe targets huge pension fund

Federal prosecutors have started a criminal investigation into the investment activities of the California Public Employees Retirement System, a newspaper reported Friday.

The Wall Street Journal, citing unnamed people familiar with the matter, said Justice Department officials in Los Angeles are examining potential influence-peddling within CalPERS, the nation’s largest public pension fund.

At issue is whether the investment decisions of fund managers were influenced by bribes rather than pensioners’ long-term best interests.

Thom Mrozek, a spokesman for the U.S. attorney’s office in Los Angeles, declined to comment to The Associated Press. Brad Pacheco, CalPERS’ chief spokesman, told the AP that his office was not aware of any criminal investigation.

CalPERS serves 1.6 million active and retired public employees and holds about $200 billion in investments. The fund lost more than a quarter of its value during 2008.


Closure of four banks brings total so far this year to 41

Regulators on Friday shut down two Georgia banks and one each in Florida and Arizona, bringing to 41 the number of bank failures in the U.S. so far this year, following the 140 that fell in 2009 to mounting loan defaults and the recession.

The Federal Deposit Insurance Corp. on Friday took over the banks: McIntosh Commercial Bank, based in Carrollton, Ga.; Unity National Bank of Cartersville, Ga.; Key West Bank of Key West, Fla., and Desert Hills Bank, based in Phoenix.

The four failures are expected to cost the federal deposit insurance fund a total of around $320.3 million.

The two shuttered banks in Georgia followed three bank failures in that state last week and 25 last year, more than in any other state.


New rule cuts ship pollution around United States, Canada

A United Nations agency that regulates the global shipping industry adopted a plan Friday to dramatically reduce air pollution from ships that sail within 200 nautical miles of the U.S. and Canadian coasts.

The decision by the London-based International Maritime Organization establishes an emissions control area and requires all oceangoing ships, including oil tankers, cargo vessels and cruise ships, to use cleaner fuel within the zone.

The rule, which was proposed by the two nations a year ago, will become enforceable in August 2012. The designation extends to eight major Hawaiian islands and some French island territories.

Up to now, ships that fall outside the U.S. government’s jurisdiction often use fuels with high levels of sulfur. The U.S. Environmental Protection Agency said the regulation will force ships to use pricier, more-refined fuel that cuts sulfur levels by 98 percent, thereby slashing by up to 85 percent nitrogen oxide emissions and soot pollution that are linked to asthma and cancer.

The EPA estimates that it will cost about $3.2 billion to fully bring ships up to compliance by 2015.


No more mulligans for debt-struck Anglo Irish Bank

Anglo Irish Bank, Ireland’s most debt-crippled financial institution, lived large during the boom years. Just how large is suggested by the bank’s spending on golf outings.

The Dublin-based bank – which was nationalized last year to prevent its collapse and warns that next week, it will report the worst losses in Irish corporate history – said Friday its investigation into past transgressions has revealed a lavish bill for golfing with the bank’s most prized Irish and American customers.

Anglo’s new state-appointed management has found the bank spent euro1.38 million ($1.86 million) from 2006 to 2008 on golf outings and head-to-toe gifts for the fairway.

Most of the money was spent before 2008, when Ireland’s construction-dependent economy went into a tailspin amid the global credit crunch – followed by allegations of massive fraud inside Anglo.

U.S. reluctant to step into trade disputes with China

U.S. trade representative Ron Kirk said Friday in Brussels that he is reluctant to wade into long-running trade disputes with China as the United States tries to double its exports to emerging markets over the next five years.

U.S. politicians and businesses have complained about the Chinese government’s actions in keeping its currency at a low value against the U.S. dollar which makes Chinese goods cheaper for American buyers – and hikes the cost of American goods for Chinese shoppers.

U.S. firms also complain about barriers to doing business in China.

Search engine Google Inc. started this week to withdraw partially from China after a dispute with the Chinese government over censorship policy.


Student loan data theft affects 3.3 million people

Educational Credit Management Corp., which guarantees federal student loans, says personal data on about 3.3 million people has been stolen from its headquarters.

ECMC said Friday the data included names, addresses, Social Security numbers and dates of birth of borrowers – but no financial or bank account information.

The St. Paul, Minn.-based nonprofit said the data was on “portable media” stolen last weekend..

ECMC said credit protection agency Experian will provide affected borrowers with free credit monitoring and protection services. Those who believe they may be affected are encouraged to visit or call 1-877-449-3568.


21 workers arrested in raid of Phoenix-area McDonald’s

A raid targeting illegal immigration led to the arrests of 21 Phoenix-area McDonald’s workers Friday, and authorities were seeking 30 other employees as part of their inquiry.

Those arrested during the raid of four McDonald’s in Scottsdale, Tempe and Mesa were being held on suspicion of identity theft. It will take more time to determine whether any of them are illegal immigrants, as officials suspect, said Maricopa County Sheriff Joe Arpaio.

Deputies also searched a mansion in the tony suburb of Paradise Valley owned by Richard Coulston, who owns the restaurants, Arpaio said. Coulston was not arrested.

McDonald’s Corp. referred comment to Coulston’s company, R&L Management.

In a statement, attorney Julie Pace – acting as a company spokeswoman – said people shouldn’t jump to conclusions without all the facts.

Pace said the company was cooperating with the sheriff’s office.


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