An alleged maternity hotel operating out of a hilltop mansion in Chino Hills has apparently shut down after city officials obtained a temporary restraining order against its owners.
The mansion allegedly housed women from China who traveled to California to give birth to American citizen babies.
In a Dec. 7 court filing, Chino Hills officials describe a seven-bedroom house divided into 17 bedrooms and 17 bathrooms, with mothers and their babies staying in 10 of the rooms. The owners did not obtain permits to remodel the property, nor were they allowed to operate a business in a residential zone, the complaint stated.
Neighbors on Woodglen Drive complained of cars speeding in and out of the mansion's driveway. In September, about 2,000 gallons of raw sewage spilled down the hill because of an overloaded septic system.
Last month, a group called Not in Chino Hills staged a protest against the facility.
City officials who inspected the alleged hotel said conditions inside were dangerous, with exposed wiring, missing smoke alarms and holes in the bedroom floors. They found brochures titled "USA Los Angeles Hermas International Club Guidance on How to Have an American Baby," according to the Dec. 7 complaint. One woman said she paid $150 a day for her room. A receipt from another guest totaled $27,000 for a stay of several months, the complaint said.
So-called birth tourism is widespread in the San Gabriel Valley, with Chinese-language websites advertising rooms in single-family homes or luxury apartment complexes. The women typically enter the country on tourist visas and stay for about a month after giving birth. The child has the option of returning to the U.S. for schooling, and the parents may petition for a green card when the child turns 21.
The practice does not violate federal immigration laws, but some maternity hotels have run afoul of local ordinances.
On Dec. 27, San Bernardino County Superior Court Judge Ben Kayashima granted Chino Hills' request for a temporary restraining order. A hearing is scheduled for Jan. 17 to determine whether the order should be extended.
The Woodglen Drive house now appears to be unoccupied, city spokeswoman Denise Cattern said Thursday.
Hai Yong Wu, one of the owners, could not be reached for comment.
"It's about time. This thing should have shut down a long time ago," said Rossana Mitchell, a founder of Not in Chino Hills. "I'm glad to hear it."
Author’s note: Most people don’t realize that we knew in the 1920s that leaded gasoline was extremely dangerous. And in light of a Mother Jones story this week that looks at the connection between leaded gasoline and crime rates in the United States, I thought it might be worth reviewing that history. The following is an updated version of an earlier post based on information from my book about early 10th century toxicology, The Poisoner’s Handbook.
In the fall of 1924, five bodies from New Jersey were delivered to the New York City Medical Examiner’s Office. You might not expect those out-of-state corpses to cause the chief medical examiner to worry about the dirt blowing in Manhattan streets. But they did.
To understand why you need to know the story of those five dead men, or at least the story of their exposure to a then mysterious industrial poison.
The five men worked at the Standard Oil Refinery in Bayway, New Jersey. All of them spent their days in what plant employees nicknamed “the loony gas building”, a tidy brick structure where workers seemed to sicken as they handled a new gasoline additive. The additive’s technical name was tetraethyl lead or, in industrial shorthand, TEL. It was developed by researchers at General Motors as an anti-knock formula, with the assurance that it was entirely safe to handle.
But, as I wrote in a previous post, men working at the plant quickly gave it the “loony gas” tag because anyone who spent much time handling the additive showed stunning signs of mental deterioration, from memory loss to a stumbling loss of coordination to sudden twitchy bursts of rage. And then in October of 1924, workers in the TEL building began collapsing, going into convulsions, babbling deliriously. By the end of September, 32 of the 49 TEL workers were in the hospital; five of them were dead.
The problem, at that point, was that no one knew exactly why. Oh, they knew – or should have known – that tetraethyl lead was dangerous. As Charles Norris, chief medical examiner for New York City pointed out, the compound had been banned in Europe for years due to its toxic nature. But while U.S. corporations hurried TEL into production in the 1920s, they did not hurry to understand its medical or environmental effects.
In 1922, the U.S. Public Health Service had asked Thomas Midgley, Jr. – the developer of the leaded gasoline process – for copies of all his research into the health consequences of tetraethyl lead (TEL).
Midgley, a scientist at General Motors, replied that no such research existed. And two years later, even with bodies starting to pile up, he had still not looked into the question. Although GM and Standard Oil had formed a joint company to manufacture leaded gasoline – the Ethyl Gasoline Corporation - its research had focused solely on improving the TEL formulas. The companies disliked and frankly avoided the lead issue. They’d deliberately left the word out of their new company name to avoid its negative image.
In response to the worker health crisis at the Bayway plant, Standard Oil suggested that the problem might simply be overwork. Unimpressed, the state of New Jersey ordered a halt to TEL production. And because the compound was so poorly understood, state health officials asked the New York City Medical Examiner’s Office to find out what had happened.
In 1924, New York had the best forensic toxicology department in the country; in fact,, it had one of the few such programs period. The chief chemist was a dark, cigar-smoking, perfectionist named Alexander Gettler, a famously dogged researcher who would sit up late at night designing both experiments and apparatus as needed.
It took Gettler three obsessively focused weeks to figure out how much tetraethyl lead the Standard Oil workers had absorbed before they became ill, went crazy, or died. “This is one of the most difficult of many difficult investigations of the kind which have been carried on at this laboratory,” Norris said, when releasing the results. “This was the first work of its kind, as far as I know. Dr. Gettler had not only to do the work but to invent a considerable part of the method of doing it.”
Working with the first four bodies, then checking his results against the body of the last worker killed, who had died screaming in a straitjacket, Gettler discovered that TEL and its lead byproducts formed a recognizable distribution, concentrated in the lungs, the brain, and the bones. The highest levels were in the lungs suggesting that most of the poison had been inhaled; later tests showed that the types of masks used by Standard Oil did not filter out the lead in TEL vapors.
Rubber gloves did protect the hands but if TEL splattered onto unprotected skin, it absorbed alarmingly quickly. The result was intense poisoning with lead, a potent neurotoxin. The loony gas symptoms were, in fact, classic indicators of heavy lead toxicity.
After Norris released his office’s report on tetraethyl lead, New York City banned its sale, and the sale of “any preparation containing lead or other deleterious substances” as an additive to gasoline. So did New Jersey. So did the city of Philadelphia. It was a moment in which health officials in large urban areas were realizing that with increased use of automobiles, it was likely that residents would be increasingly exposed to dangerous lead residues and they moved quickly to protect them.
But fearing that such measures would spread, that they would be forced to find another anti-knock compound, as well as losing considerable money, the manufacturing companies demanded that the federal government take over the investigation and develop its own regulations. U.S. President Calvin Coolidge, a Republican and small-government conservative, moved rapidly in favor of the business interests.
The manufacturers agreed to suspend TEL production and distribution until a federal investigation was completed. In May 1925, the U.S. Surgeon General called a national tetraethyl lead conference, to be followed by the formation of an investigative task force to study the problem. That same year, Midgley published his first health analysis of TEL, which acknowledged a minor health risk at most, insisting that the use of lead compounds,”compared with other chemical industries it is neither grave nor inescapable.”
It was obvious in advance that he’d basically written the conclusion of the federal task force. That panel only included selected industry scientists like Midgely. It had no place for Alexander Gettler or Charles Norris or, in fact, anyone from any city where sales of the gas had been banned, or any agency involved in the producing that first critical analysis of tetraethyl lead.
In January 1926, the public health service released its report which concluded that there was “no danger” posed by adding TEL to gasoline…”no reason to prohibit the sale of leaded gasoline” as long as workers were well protected during the manufacturing process.
The task force did look briefly at risks associated with every day exposure by drivers, automobile attendants, gas station operators, and found that it was minimal. The researchers had indeed found lead residues in dusty corners of garages. In addition, all the drivers tested showed trace amounts of lead in their blood. But a low level of lead could be tolerated, the scientists announced. After all, none of the test subjects showed the extreme behaviors and breakdowns associated with places like the looney gas building. And the worker problem could be handled with some protective gear.
There was one cautionary note, though. The federal panel warned that exposure levels would probably rise as more people took to the roads. Perhaps, at a later point, the scientists suggested, the research should be taken up again. It was always possible that leaded gasoline might “constitute a menace to the general public after prolonged use or other conditions not foreseen at this time.”
But, of course, that would be another generation’s problem. In 1926, citing evidence from the TEL report, the federal government revoked all bans on production and sale of leaded gasoline. The reaction of industry was jubilant; one Standard Oil spokesman likened the compound to a “gift of God,” so great was its potential to improve automobile performance.
In New York City, at least, Charles Norris decided to prepare for the health and environmental problems to come. He suggested that the department scientists do a base-line measurement of lead levels in the dirt and debris blowing across city streets. People died, he pointed out to his staff; and everyone knew that heavy metals like lead tended to accumulate. The resulting comparison of street dirt in 1924 and 1934 found a 50 percent increase in lead levels – a warning, an indicator of damage to come, if anyone had been paying attention.
It was some fifty years later – in 1986 – that the United States formally banned lead as a gasoline additive. By that time, according to some estimates, so much lead had been deposited into soils, streets, building surfaces, that an estimated 68 million children would register toxic levels of lead absorption and some 5,000 American adults would die annually of lead-induced heart disease. As lead affects cognitive function, some neuroscientists also suggested that chronic lead exposure resulted in a measurable drop in IQ scores during the leaded gas era. And more recently, of course, researchers had suggested that TEL exposure and resulting nervous system damage may have contributed to violent crime rates in the 20th century.
Images: 1) Manhattan, 34th Street, 1931/NYC Municipal Archives 2) 1940s gas station, US Route 66, Illinois/Deborah Blum
NEW YORK (TheWrap.com) – Erik Jendresen, writer and executive producer of the upcoming Nat Geo film “Killing Lincoln,” says presidential assassin John Wilkes Booth could have been a modern-day “poster child for the Tea Party.”
Jendresen spoke about the film, which stars Billy Campbell as Lincoln, at the Television Critics Association winter press tour. The film is based on the book co-written by “O’Reilly Factor” host Bill O’Reilly, a noted supporter of many Tea Party ideals.
Jendresen stressed that Booth wasn’t a madman, but held views that were fairly common at the time of the assassination.
“This is not the act of somebody who can be easily dismissed as a psychopath so that it’s easy to understand: ‘Oh, well, he was crazy.’ No. It’s more disturbing to find out who Booth was,” Jendresen said. “This is a man who believed what still probably 20 percent of this country still believes. He could be a poster child for the Tea Party.”
Asked if he thought Bill O’Reilly would agree with that assessment, he passed.
“I can’t speak for Mr. O’Reilly,” he told TheWrap. “I think that if you look at the sort of politics of the time, and a lot of the epithets that were being hurled at Lincoln, there was a feeling in the nation that’s not dissimilar from what we’ve experienced in the past four years in response to Barack Obama – the sense of an imperial presidency or soundbytes about somebody who’s going to proclaim himself king and take over.”
“It’s stunning to me to read some of the newspaper articles and some of the interviews of the time, some of the contents of the letters and memoirs from the time and some of the things that were thought about Lincoln in the South are so similar to … the dialogue today,” he added.
Nat Geo was previously criticized by conservatives who felt that its film “Seal Team Six,” about the killing of Osama bin Laden, amounted to a campaign ad for President Obama.
Contacted through Fox News, O’Reilly did not immediately respond to a request for comment.
Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.
Bob Chamberlin/Los Angeles Times
Dave Jones, the California insurance commissioner, said some insurance companies could raise rates as much as they did before the law was enacted.
Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.
In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.
In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.
The proposed increases compare with about 4 percent for families with employer-based policies.
Under the health care law, regulators are now required to review any request for a rate increase of 10 percent or more; the requests are posted on a federal Web site, healthcare.gov, along with regulators’ evaluations.
The review process not only reveals the sharp disparity in the rates themselves, it also demonstrates the striking difference between places like New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.
New York, for example, recently used its sweeping powers to hold rate increases for 2013 in the individual and small group markets to under 10 percent. California can review rate requests for technical errors but cannot deny rate increases.
The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy. PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.
Critics, like Dave Jones, the California insurance commissioner and one of two health plan regulators in that state, said that without a federal provision giving all regulators the ability to deny excessive rate increases, some insurance companies can raise rates as much as they did before the law was enacted.
“This is business as usual,” Mr. Jones said. “It’s a huge loophole in the Affordable Care Act,” he said.
While Mr. Jones has not yet weighed in on the insurers’ most recent requests, he is pushing for a state law that will give him that authority. Without legislative action, the state can only question the basis for the high rates, sometimes resulting in the insurer withdrawing or modifying the proposed rate increase.
The California insurers say they have no choice but to raise premiums if their underlying medical costs have increased. “We need these rates to even come reasonably close to covering the expenses of this population,” said Tom Epstein, a spokesman for Blue Shield of California. The insurer is requesting a range of increases, which average about 12 percent for 2013.
Although rates paid by employers are more closely tracked than rates for individuals and small businesses, policy experts say the law has probably kept at least some rates lower than they otherwise would have been.
“There’s no question that review of rates makes a difference, that it results in lower rates paid by consumers and small businesses,” said Larry Levitt, an executive at the Kaiser Family Foundation, which estimated in an October report that rate review was responsible for lowering premiums for one out of every five filings.
Federal officials say the law has resulted in significant savings. “The health care law includes new tools to hold insurers accountable for premium hikes and give rebates to consumers,” said Brian Cook, a spokesman for Medicare, which is helping to oversee the insurance reforms.
“Insurers have already paid $1.1 billion in rebates, and rate review programs have helped save consumers an additional $1 billion in lower premiums,” he said. If insurers collect premiums and do not spend at least 80 cents out of every dollar on care for their customers, the law requires them to refund the excess.
As a result of the review process, federal officials say, rates were reduced, on average, by nearly three percentage points, according to a report issued last September.
Michael Cronan, a San Francisco-based graphic designer and marketing executive who placed his stamp on popular culture when he created the brand names TiVo and Kindle, died on Tuesday in Berkeley, Calif. He was 61.
The cause was colon cancer, said his wife, Karin Hibma, with whom he founded the marketing firm Cronan in the early 1980s.
Mr. Cronan, who studied art in college, had many corporations and cultural institutions as clients, but he was most remembered for the pair of brand names he came up with a decade apart.
In the spring of 1997, he was asked to forge a name and an identity for a new device, a digital video recorder developed by a company called Teleworld that offered more sophisticated television recording choices than the videocassette recorder.
“We reviewed probably 1,600-plus name alternatives, seriously considered over 800 names and presented over 100 strong candidates to the team,” Mr. Cronan told Matt Haughey for his blog PVR (the letters stand for personal video recorder) in 2005.
“We spent the early meetings trying to place a cultural context on the product,” he said. Among the possibilities were Bongo and Lasso, which never got far.
Believing that “we were naming the next TV,” Mr. Cronan recalled, “I thought it should be as close as possible to what people would find familiar, so it must contain T and V.”
“I started looking at letter combinations,” he added, “and pretty quickly settled on TiVo.” (The “Vo” portion, he said, had a connection to the Latin and Italian words for vocal sound and voice.) Then came the search for a mascot that Mr. Cronan hoped “would become as recognizable as the mouse ears are to Disney.” He created a TV-shaped smiley character with the name TiVo inscribed on its face, rabbit ears suggesting an early TV set and large, splayed feet. Teleworld changed its name to TiVo Inc.
When Amazon prepared to introduce its first electronic reader in 2007, it turned to Mr. Cronan, who envisioned imagery reflecting the reading experience as an embryonic but rising technology.
Ms. Hibma said in an interview on Friday that in pondering a brand name, Mr. Cronan “wanted to create something small, humble, with no braggadocio,” while choosing an image that “was about starting something, giving birth to something.” He found the name, she said, by likening use of the new e-reader to “starting a fire.”
Michael Patrick Cronan was born on June 9, 1951, in San Francisco. He studied painting at the California College of Arts and Crafts (now California College of the Arts), where he later taught, and received a degree in art from California State University, Sacramento. He was a founder and past president of the San Francisco branch of AIGA, the professional association for design.
Mr. Cronan and his wife expanded their focus in 1992 to create the Walking Man clothing collection, featuring loose-knit tops and pants. Mr. Cronan also designed a pair of 1999 postage stamps, one commemorating the 50th anniversary of NATO and the other promoting prostate cancer awareness, and painted portraits and watercolors.
In addition to his wife, Mr. Cronan is survived by his sons, Shawn HibmaCronan and Nick Cronan; a brother, Christopher; a sister, Patricia Cronan; and a granddaughter.
For all his devotion to marketing and branding, Mr. Cronan felt that sometimes the demands of commerce went too far, as in the often-changing corporate names attached to sports stadiums and concert halls.
“There was a time in American life where going to a sporting event or a concert was sort of magical, because a lot of these places had these fun names,” he told The Denver Post in 2010. “But these days, with the amount of people craving advertising exposure, the sponsors have found a way to sell everything. They’re selling our nostalgia, and it’s sad.”
SACRAMENTO — Fear of embarrassment and budget cuts led high officials at the California parks department to conceal millions of dollars, according a new investigation by the state attorney general's office.
The money remained hidden for years until it was exposed by a new staff member who described a culture of secrecy and fear at the department.
The attorney general's report, released Friday, is the most detailed official account so far of the financial scandal at the parks department. The controversy broke last summer with the revelation that parks officials had a hidden surplus of nearly $54 million at a time when the administration was threatening to close dozens of the facilities.
Although much of the accounting issues appeared to stem from innocent mistakes and discrepancies, the report said, about $20 million had been deliberately stashed away.
The report said the problem seemed to begin with calculation errors more than a decade ago. But when those mistakes were discovered in 2002, officials made a "conscious and deliberate" decision not to reveal the existence of the extra money, the report said.
Parks officials concealed the funds partly because they were embarrassed, the report said. But they were also worried that their funding would be cut further if state number-crunchers knew they had a larger reserve, according to interviews conducted by a deputy attorney general.
Parks officials underreported the amount of money they had to the Department of Finance, preventing lawmakers from including the extra funds in state spending plans.
The money "was intended to be a safety net," said Manuel Lopez, a former deputy director at the department, who was interviewed in the probe. Lopez resigned in May while being investigated for a separate scheme allowing employees to be improperly paid for unused vacation days.
Multiple high-ranking officials were involved in concealing the parks money, including Lopez and Michael Harris, the chief deputy director who was fired after the scandal broke. Evidence suggests that the initial decision to keep the money secret was made by Tom Domich, an assistant deputy director who left the department in 2004, the report said.
Domich "unpersuasively denies … his role in the deception," according to the report. The Times was unable to reach Domich on Friday.
Staff members who pointed out financial problems were ignored by their bosses.
"Throughout this period of intentional non-disclosure, some parks employees consistently requested, without success, that their superiors address the issue," the report said.
It is unclear whether ousted director Ruth Coleman knew about the accounting problems, the report said. She declined to be interviewed for the investigation; participation was voluntary for former parks personnel.
Officials have not yet determined whether criminal charges will be filed. There's no evidence that any money was stolen or used improperly, the report said.
The accounting problems were eventually exposed by Aaron Robertson, who started an administrative job at the parks department in January 2012. He told a deputy attorney general that people felt uncomfortable raising concerns at the department.
"There was a great deal of distrust," he said. "People felt somewhat fearful of coming forward with information."
John Laird, the California natural resources secretary who oversees the parks department, said new policies and staff are in place to prevent similar problems in the future.
"It is now clear that this is a problem that could have been fixed by a simple correction years ago, instead of being unaddressed for so long that it turned into a significant blow to public trust in government," Laird said in a statement.
A new parks director, retired Marine Maj. Gen. Anthony Jackson, was appointed by Gov. Jerry Brown to replace Coleman in November. Robertson was promoted to become his deputy.
The attorney general's investigation is the third report on the parks department in the last month. One more report, from the state auditor, is due this month.
Our good friends at Google run a daily puzzle challenge and asked us to help get them out to the geeky masses. Each day’s puzzle will task your googling skills a little more, leading you to Google mastery. Each morning at 12:01 a.m. Eastern time you’ll see a new puzzle posted here.
SPOILER WARNING: We leave the comments on so people can work together to find the answer. As such, if you want to figure it out all by yourself, DON’T READ THE COMMENTS!
Also, with the knowledge that because others may publish their answers before you do, if you want to be able to search for information without accidentally seeing the answer somewhere, you can use the Google-a-Day site’s search tool, which will automatically filter out published answers, to give you a spoiler-free experience.
And now, without further ado, we give you…
TODAY’S PUZZLE:
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Ken is a husband and father from the San Francisco Bay Area, where he works as a civil engineer. He also wrote the NYT bestselling book "Geek Dad: Awesomely Geeky Projects for Dads and Kids to Share."
LOS ANGELES (Reuters) – Pop and rock music legends bested their younger chart-topping competition on the concert trail in 2012, according to data released on Friday by trade publication Pollstar.
Pop matriarch Madonna, 54, led all competition, grossing some $ 296.1 million in ticket sales in her 88-show world tour. She topped Bruce Springsteen and the E Street Band ($ 210.2 million) and Pink Floyd founder Roger Waters ($ 186.4 million).
The elder statesmen of the music world, while no longer topping the charts or scoring radio hits, are doing well because their older audiences can afford to pay higher ticket prices, Gary Bongiovanni, Pollstar editor, told Reuters.
“Certainly the older acts charge more because they can get away with it,” he said.
The Rolling Stones were able to command an eye-popping $ 529.51 average ticket price. Their five-show tour in November and December grossed $ 35.5 million, good enough for No. 33 on the list.
British rockers Coldplay were No. 4 on the list, taking in $ 171.3 million. Lady Gaga placed fifth grossing $ 161.4 million while at No. 6 Cirque Du Soleil‘s tribute to late King of Pop Michael Jackson grossed $ 140.2 million during a 172-show tour.
Teen sensation Justin Bieber, who played a 35-show tour, failed to crack the top 20, taking in $ 40.2 million, at No. 23.
Acts that cemented their reputations decades ago dominated the top-grossing tours even while playing fewer shows.
Country stars Kenny Chesney and Tim McGraw placed seventh grossing $ 96.5 million in 23 shows, while heavy metal pioneers Metallica were one spot lower at $ 86.1 million over 30 shows.
Some artists have been enticed to jack-up their own ticket prices after seeing how much more re-sellers were able to command, Bongiovanni explained.
“Now it’s a matter of how much money can I make,” he said. “Some artists like Springsteen are very popular but if you look at their average ticket price it’s nowhere near Roger Waters, Madonna and Lady Gaga.”
The average face-value ticket price for a Springsteen concert was $ 91.95, which was well below the $ 140.38 average for Madonna and $ 110.96 for Roger Waters.
Eight separate Cirque Du Soleil shows appeared in the top 50, which did not include the circus company’s non-traveling shows in Las Vegas and elsewhere. All told, the Canadian company may have earned close to $ 1 billion in gross ticket sales, Bongiovanni said.
Elton John ($ 69.9 million) and Red Hot Chili Peppers ($ 57.8 million) rounded out the top 10.
(Reporting by Eric Kelsey, editing by Jill Serjeant)
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BOSTON — New laws to strengthen state control of compounding pharmacies were proposed on Friday by Gov. Deval Patrick, in hopes of preventing another public health disaster like the current outbreak of meningitis caused by a contaminated drug made in Massachusetts.
The laws will be among the strongest in the country, said Kevin Outterson, a law professor at Boston University and a member of the expert panel that advised the state on how to curb abuses by companies like the New England Compounding Center, the Framingham pharmacy that made the tainted drug responsible for the nationwide meningitis outbreak.
The legislation would establish strict licensing requirements for compounding sterile drugs; let the state assess fines against pharmacies that break its rules; protect whistle-blowers who work in compounding pharmacies; and reorganize the state pharmacy board to include more members who are independent of the industry and fewer who are part of it.
Alec Loftus, a spokesman for the state’s Office of Health and Human Services, said that Mr. Patrick expected the new legislation to be passed quickly.
Daniel Carpenter, a professor of government at Harvard, said the proposed laws seemed sound and comprehensive. But he warned that if other states did not take similar steps, compounding pharmacies engaging in shoddy practices would just move to places with the weakest laws and the least oversight.
“The remaining question is not what Massachusetts is doing or will do, but will there be a minimum level of regulation like this in the rest of the states?” Professor Carpenter said.
The meningitis outbreak, first detected in September, was caused by contaminated batches of a steroid, methylprednisolone acetate, made by the New England Compounding Center. The drug was injected into about 14,000 people’s spinal area to treat back and neck pain.
As of Dec. 28, 656 people in 19 states had become ill with meningitis or other infections, like severe internal abscesses in the area where the drug was injected. Some have had both meningitis and spinal infections. The case count is expected to keep rising. Thirty-nine have died.
The New England Compounding Center was shut down, and inspections found extensive contamination. Investigations uncovered a long history of questionable practices that had drawn warnings from the state and the Food and Drug Administration.
On Dec. 21, the company announced that it had filed for bankruptcy. Numerous lawsuits have been filed against it.
At the heart of the problem have been gaps in regulation that have allowed such companies to avoid both state and federal controls. The company called itself a pharmacy, and pharmacies are generally regulated by states, while large drug companies are regulated federally, by the Food and Drug Administration.
Compounding pharmacies mix their own drug preparations, like skin creams and cough syrups, supposedly for individual patients with special needs. But the New England Compounding Center began to act like a manufacturer, making and shipping large amounts of injectable drugs, for which sterility is essential. No state law required it to obtain a license for this type of large-scale compounding, to follow good manufacturing processes or to let the state know it was shipping all over the country.
Dr. Lauren Smith, interim commissioner of the Massachusetts Department of Public Health, said the company “was a manufacturer in pharmacy clothing.”
Governor Patrick said, “The tragic meningitis outbreak has shown us all that the board’s governing authority has not kept up with an industry that has evolved from corner drugstores to the types of large manufacturers that have been at the center of so much harm.”
Dr. Smith said she thought the most important part of the new legislation was the requirement of a license for sterile compounding. “Now we are going to have the ability to develop specialty licenses that will allow us to track and identify those pharmacies that are engaged in different practices that could potentially put higher numbers of individuals at risk, such as those who engage in sterile compounding,” she said.
Professor Carpenter said a particularly powerful part of the proposal is that it requires licensure for out-of-state pharmacies that ship medication to Massachusetts. The state, he said, is a huge market for injectable drugs.
“Basically, if you think about the large hospitals, the amount of medical care that goes on in the state, it’s in a sense using the purchasing power of the state of Massachusetts to induce changes elsewhere,” he said.
The state has also taken other steps recently to rein in compounding, apart from the new legislation. It began conducting surprise inspections, and has required compounding pharmacies to report how much medication they are shipping and where, so that it can keep tabs on those that begin acting like manufacturers. It also requires the pharmacies to report when they become subjects of regulatory actions by other states or the federal government.
Abby Goodnough reported from Boston, and Denise Grady from New York.
Reports on Friday on the nation’s job market, factory activity and the service sector painted a picture of a national economy that was growing late last year. This was despite the concern that the economy might be tipped back into recession by a federal budget dispute that was settled on Tuesday.
Barton Silverman/The New York Times
More than 90 percent of jobs created since January were in the service sector, like restaurants.
Employers added 155,000 jobs in December, approximately matching the solid but unspectacular monthly rate of the last two years.
Companies increased their orders in November for manufactured goods, reflecting investment plans, even though total orders were unchanged for the month, the Commerce Department said in a second report.
Back-to-back increases in core capital goods followed a period of weakness that raised concerns about business investment, which has been a driving force in the economic rebound.
Analysts say they think that companies will increase spending on computers and other equipment to expand and modernize now that Congress and President Obama have reached a deal on taxes, removing uncertainty that had been weighing on business investment.
In a third report, a gauge of service companies’ activity expanded in December by the most in nearly a year, driven by an increase in new orders and hiring, a trade group said.
The industry group, the Institute for Supply Management, said its index of nonmanufacturing activity rose to 56.1 in December from 54.7 in November. It was the highest level since February and above the 12-month average of 54.7. Any reading above 50 indicates expansion.
Companies had a “year-end surge” in orders, in the words of one executive surveyed by the institute.
Services have been a crucial source of job growth, creating about 90 percent of the net jobs added since January. For all of 2012, the economy added 1.69 million service jobs, about the same as in 2011. Many of the new jobs are in low-paying retail and restaurant industries. The increase conflicted with a Labor Department report Friday that said the economy added just 109,000 service jobs last month, the fewest since June. One important difference between the two reports is the inclusion of construction jobs in the institute’s index. The government index excludes that category, which would have raised the December total by 30,000.
The institute’s report measures service growth in industries that cover 90 percent of the work force, including retail, construction, health care and financial services.
She was an orphan, a 14-year-old Jewish girl, when she went to the Berlin train station on a summer day in 1939, leaving behind all that she had ever known.
She had already experienced loss: her parents claimed by illness, her brother taken by the Nazis. Now Dora Gostynski was about to get on a train that would take her and hundreds of other Jewish children to safety — but they had to go without the comfort of their parents.
She remembered the other children's sobs as they embraced their parents, who had made the agonizing decision to give their children a chance at life, even if meant never seeing them again. And she remembered the parents who relented when their child didn't want to leave them. They walked away from the train station, and back into a world of danger.
"There was like an ocean of people and an ocean of tears," she said.
She was escaping Nazi Germany through the rescue mission Kindertransport, which carried about 10,000 youths to Britain and elsewhere for shelter during the Holocaust. Many — more than 60%, according to various estimates — never saw their parents again.
As they grew older, they sought out one another, drawn by a wrenching, shared experience. They founded the Kindertransport Assn., and kinder from around the world have gathered every other year for the last two decades.
The kinder are among the youngest Holocaust survivors, yet even they are now mostly in their 80s, a group thinned by the passing years. With each gathering, there are whispers that it could be the last.
At the most recent gathering, in an Irvine hotel, a much older Dora recalled the train station on that day more than 73 years ago. She recognized one of her classmates, a girl named Fritzy Hacker. Fritzy's mother hugged each of the girls tightly before they boarded the train together. "She said goodbye to the two of us like she was my mother too," she said.
But Dora couldn't stop thinking about her sister, Ida. They had applied for the Kindertransport mission together. But as they waited for word to arrive, her sister had turned 17. She missed being able to qualify by two months.
As the train chugged toward the Dutch border, she and Fritzy told themselves they were going on a field trip. The other passengers wept. She thought of her sister. She didn't know if she would ever see her again.
::
Dora — now Doris Small — is 89, and a mother, grandmother and great-grandmother. She was one of the remaining kinder who had come to share their stories of survival with one another and their children in the hopes that their history isn't forgotten after they are gone.
"My generation is dying off," said Michael Wolff, who at 76 is one of the youngest. He was 2 when his mother handed him over to a teenage girl to carry him to Scotland. When his father visited him months later, he did not recognize him.
The conference in Irvine represented a passing of a torch to the survivors' children and grandchildren to maintain the Kindertransport story. The gathering drew three dozen survivors, and for the first time, the gathering was organized by the second generation — "KT2," as they are called. More than half of those attending were the survivors' children, grandchildren and even great-grandchildren.
The conference reflected the push to connect generations, with sessions on writing memoirs and ethical wills and conversations in which moderators prompted open dialogue after years of silence. It was time for their children — and the world — to know their legacy.
"This is a story of survivors," said Wolff's son, Jeffrey, who was the conference chairman. He said they are "strong characters because they had to adjust, they had to adapt, they had to survive."
They were linked by traumatic experience, but the gathering, in some ways, had the feel of a high school reunion.
They reconnected with people they hadn't seen since they were children. The kinder and their children walked around with scrapbooks, flipping through pages of black and white photos hoping to identify the other children on their ship.
There was also a message board, where the kinder and their descendants left notes in hopes of finding others on the same voyage or track down those they haven't heard from since the war.
Did anyone stay in Cornwall during war and after in orphanage/hostel? Pls contact Linda
Our good friends at Google run a daily puzzle challenge and asked us to help get them out to the geeky masses. Each day’s puzzle will task your googling skills a little more, leading you to Google mastery. Each morning at 12:01 a.m. Eastern time you’ll see a new puzzle posted here.
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BRIDGEPORT, Calif. (AP) — Grammy-nominated R&B singer Frank Ocean is facing a marijuana possession charge after police say he was pulled over on New Year’s Eve in California’s Eastern Sierra Nevada for driving more than 90 mph in a 65 mph zone.
The Mono County Sheriff’s Department says officers stopped Ocean’s black BMW at about 4:30 p.m. Dec. 31 as he was heading southbound on U.S. 395.
Sheriff’s spokeswoman Jennifer Hansen says a strong odor of marijuana wafted out as a deputy approached the vehicle.
Hansen says the deputy found a small bag of marijuana on the 25-year-old Ocean, whose legal name is Christopher Breaux (broh).
She says the Beverly Hills resident was cited for marijuana possession and released.
Calls and an email message sent to Ocean’s representatives Thursday were not immediately returned.
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Energy drinks are the fastest-growing part of the beverage industry, with sales in the United States reaching more than $10 billion in 2012 — more than Americans spent on iced tea or sports beverages like Gatorade.
Their rising popularity represents a generational shift in what people drink, and reflects a successful campaign to convince consumers, particularly teenagers, that the drinks provide a mental and physical edge.
The drinks are now under scrutiny by the Food and Drug Administration after reports of deaths and serious injuries that may be linked to their high caffeine levels. But however that review ends, one thing is clear, interviews with researchers and a review of scientific studies show: the energy drink industry is based on a brew of ingredients that, apart from caffeine, have little, if any benefit for consumers.
“If you had a cup of coffee you are going to affect metabolism in the same way,” said Dr. Robert W. Pettitt, an associate professor at Minnesota State University in Mankato, who has studied the drinks.
Energy drink companies have promoted their products not as caffeine-fueled concoctions but as specially engineered blends that provide something more. For example, producers claim that “Red Bull gives you wings,” that Rockstar Energy is “scientifically formulated” and Monster Energy is a “killer energy brew.” Representative Edward J. Markey of Massachusetts, a Democrat, has asked the government to investigate the industry’s marketing claims.
Promoting a message beyond caffeine has enabled the beverage makers to charge premium prices. A 16-ounce energy drink that sells for $2.99 a can contains about the same amount of caffeine as a tablet of NoDoz that costs 30 cents. Even Starbucks coffee is cheap by comparison; a 12-ounce cup that costs $1.85 has even more caffeine.
As with earlier elixirs, a dearth of evidence underlies such claims. Only a few human studies of energy drinks or the ingredients in them have been performed and they point to a similar conclusion, researchers say — that the beverages are mainly about caffeine.
Caffeine is called the world’s most widely used drug. A stimulant, it increases alertness, awareness and, if taken at the right time, improves athletic performance, studies show. Energy drink users feel its kick faster because the beverages are typically swallowed quickly or are sold as concentrates.
“These are caffeine delivery systems,” said Dr. Roland Griffiths, a researcher at Johns Hopkins University who has studied energy drinks. “They don’t want to say this is equivalent to a NoDoz because that is not a very sexy sales message.”
A scientist at the University of Wisconsin became puzzled as he researched an ingredient used in energy drinks like Red Bull, 5-Hour Energy and Monster Energy. The researcher, Dr. Craig A. Goodman, could not find any trials in humans of the additive, a substance with the tongue-twisting name of glucuronolactone that is related to glucose, a sugar. But Dr. Goodman, who had studied other energy drink ingredients, eventually found two 40-year-old studies from Japan that had examined it.
In the experiments, scientists injected large doses of the substance into laboratory rats. Afterward, the rats swam better. “I have no idea what it does in energy drinks,” Dr. Goodman said.
Energy drink manufacturers say it is their proprietary formulas, rather than specific ingredients, that provide users with physical and mental benefits. But that has not prevented them from implying otherwise.
Consider the case of taurine, an additive used in most energy products.
On its Web site, the producer of Red Bull, for example, states that “more than 2,500 reports have been published about taurine and its physiological effects,” including acting as a “detoxifying agent.” In addition, that company, Red Bull of Austria, points to a 2009 safety study by a European regulatory group that gave it a clean bill of health.
But Red Bull’s Web site does not mention reports by that same group, the European Food Safety Authority, which concluded that claims about the benefits in energy drinks lacked scientific support. Based on those findings, the European Commission has refused to approve claims that taurine helps maintain mental function and heart health and reduces muscle fatigue.
Taurine, an amino acidlike substance that got its name because it was first found in the bile of bulls, does play a role in bodily functions, and recent research suggests it might help prevent heart attacks in women with high cholesterol. However, most people get more than adequate amounts from foods like meat, experts said. And researchers added that those with heart problems who may need supplements would find far better sources than energy drinks.
Hiroko Tabuchi contributed reporting from Tokyo and Poypiti Amatatham from Bangkok.
Congressional investigators are wrapping up an inquiry into the accounting practices of Apple and other technology companies that allocate revenue and intellectual property offshore to lower the taxes they pay in the United States.
The Senate Permanent Subcommittee on Investigations inquiry now drawing to a close began more than a year ago and involves at least a half dozen technology companies, according to people with firsthand knowledge of it, who declined to be identified.
Those people said the subcommittee had subpoenaed or otherwise asked the companies to explain methods they used to avoid domestic taxes. They said Apple had become a focus of the inquiry and was cooperating with the subcommittee, which is expected to issue wide-ranging recommendations that are likely to play a significant role in Congressional tax code negotiations.
Apple’s domestic tax bill has drawn the interest of corporate tax experts and policy makers because although the majority of Apple’s executives, product designers, marketers, employees, research and development operations and retail stores are in the United States, in the past Apple’s accountants have found legal ways to allocate about 70 percent of the company’s profits overseas, where tax rates are often much lower, according to corporate filings.
Apple, in a statement on Thursday, said the company was “one of the top corporate income taxpayers in the country, if not the largest.” The statement said the company “conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules.”
It is unclear how broadly Senate investigators are looking into the technology industry, if any laws are thought to have been broken and how many companies are involved. The subcommittee is also known to be looking at Google, Hewlett-Packard, Microsoft and firms in such fields as biotechnology.
The subcommittee, which is overseen by Senator Carl Levin, a Michigan Democrat, has been interested in the impact on the budget deficit of offshore tax strategies. Representatives from Microsoft and Hewlett-Packard testified at a subcommittee hearing on the subject in September. Both companies were criticized sharply by Senator Levin for using accounting rules to allocate revenue to other nations to avoid paying taxes in the United States.
“This subcommittee has demonstrated in hearings and comprehensive reports how various schemes have helped shift income to offshore tax havens and avoid U.S. taxes,” Senator Levin said at that hearing. “The resulting loss of revenue is one significant cause of the budget deficit, and adds to the tax burden that ordinary Americans bear.”Apple has long been a pioneer in developing innovative tax strategies that lessen its domestic taxes. At the September hearing, Senator Levin said the investigation indicated that Apple had deferred taxes on over $35.4 billion in offshore income between 2009 and 2011.
Tech companies are able to easily shift “intellectual property, and the profit that goes along with it, to tax havens,” said a former Treasury Department economist, Martin A. Sullivan. “Apple went out of its way to try and ensure that its tax savings didn’t attract too much public attention, because tax avoidance of that magnitude — even though it’s legal and permissible — isn’t in keeping with the image of a socially progressive company.”
In its statement, Apple said it paid “an enormous amount of taxes” to local, state and federal governments. “In fiscal 2012 we paid $6 billion in federal corporate incomes taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government,” it said. In the 1980s, Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies. More recently, Apple has moved revenue to states like Nevada and overseas nations where the company pays less, or in some cases no, taxes.
Almost every major corporation tries to minimize its taxes. However, technology companies are particularly well positioned to take advantage of tax codes written for an industrial age and ill-suited to today’s digital economy.
Some profits at companies like Apple, Google, Amazon, Hewlett-Packard and Microsoft emerge from royalties on intellectual property, like the patents on software. At other times, products are digital, such as downloaded songs or movies. It is much easier for businesses with royalties and digital products to move profits to low-tax countries than it is, say, for grocery stores or automakers.
Although technology is now one of the nation’s largest and most highly valued industries, many tech companies are among the least taxed, according to government and corporate data. Over the last two years, the 71 technology companies in the Standard & Poor’s 500-stock index — including Apple, Google, Yahoo and Dell — reported paying worldwide cash taxes at a rate that, on average, was a third less than other S.& P. companies’, according to a New York Times analysis. (Cash taxes may include payments for multiple years.)
Companies report their cash outlays for income taxes in their annual Form 10-K, but it is impossible from those numbers to determine precisely how much, in total, corporations pay to governments.
This article has been revised to reflect the following correction:
Correction: January 3, 2013
An earlier version of this article included outdated information on Apple’s tax payments. The company paid $6 billion in federal corporate income taxes in fiscal year 2012, according to a company statement on Thursday; it did not pay $3.3 billion “last year.” (That was the amount of cash taxes the company paid in fiscal year 2011.)
Justin Bieber and his collection of exotic cars have been tantalizing targets for celebrity photographers ever since the young singer got his driver's license.
A video captured the paparazzi chasing Bieber through Westside traffic in November. When Bieber's white Ferrari stops at an intersection, the video shows the singer turning to one of the photographers and asking: "How do your parents feel about what you do?"
A few months earlier, he was at the wheel of his Fisker sports car when a California Highway Patrol officer pulled him over for driving at high speeds while trying to outrun a paparazzo.
This pursuit for the perfect shot took a fatal turn Tuesday when a photographer was hit by an SUV on Sepulveda Boulevard after taking photos of Bieber's Ferrari. And the singer now finds himself at the center of the familiar debate about free speech and the aggressive tactics of the paparazzi.
Since Princess Diana's fatal accident in Paris in 1997 while being pursued by photographers, California politicians have tried crafting laws that curb paparazzi behavior. But some of those laws are rarely used, and attorneys have challenged the constitutionality of others.
On Wednesday, Bieber went on the offensive, calling on lawmakers to crack down.
"Hopefully this tragedy will finally inspire meaningful legislation and whatever other necessary steps to protect the lives and safety of celebrities, police officers, innocent public bystanders and the photographers themselves," he said in a statement.
It remained unclear if any legislators would take up his call. But Bieber did get some support from another paparazzi target, singer Miley Cyrus.
She wrote on Twitter that she hoped the accident "brings on some changes in '13 Paparazzi are dangerous!"
Last year, a Los Angeles County Superior Court judge threw out charges related to a first-of-its-kind anti-paparazzi law in a case involving Bieber being chased on the 101 Freeway by photographer Paul Raef. Passed in 2010, the law created punishments for paparazzi who drove dangerously to obtain images.
But the judge said the law violated 1st Amendment protections by overreaching and potentially affecting such people as wedding photographers or photographers speeding to a location where a celebrity was present.
The L.A. city attorney's office is now appealing that decision.
Raef's attorney, Dmitry Gorin, said new anti-paparazzi laws are unnecessary.
"There are plenty of other laws on the books to deal with these issues. There is always a rush to create a new paparazzi law every time something happens," he said. "Any new law on the paparazzi is going to run smack into the 1st Amendment. Truth is, most conduct is covered by existing laws. A lot of this is done for publicity."
Coroner's officials have not identified the photographer because they have not reached the next of kin. However, his girlfriend, Frances Merto, and another photographer identified him as Chris Guerra.
The incident took place on Sepulveda Boulevard near Getty Center Drive shortly before 6 p.m. Tuesday. A friend of Bieber was driving the sports car when it was pulled over on the 405 Freeway by the California Highway Patrol. The photographer arrived near the scene on Sepulveda, left his car and crossed the street to take photos. Sources familiar with the investigation said the CHP told him to leave the area. As he was returning to his vehicle, he was hit by the SUV.
Law enforcement sources said Wednesday that it was unlikely charges would be filed against the driver of the SUV that hit the photographer.
Veteran paparazzo Frank Griffin took issue with the criticism being directed at the photographer as well as other paparazzi.
"What's the difference between our guy who got killed under those circumstances and the war photographer who steps on a land mine in Afghanistan and blows himself to pieces because he wanted the photograph on the other side of road?" said Griffin, who co-owns the photo agency Griffin-Bauer.
"The only difference is the subject matter. One is a celebrity and the other is a battle. Both young men have left behind mothers and fathers grieving and there's no greater sadness in this world than parents who have to bury their children."
Others, however, said the death focuses attention on the safety issues involving paparazzi
"The paparazzi are increasingly reckless and dangerous. The greater the demand, the greater the incentive to do whatever it takes to get the image," said Blair Berk, a Los Angeles attorney who has represented numerous celebrities. "The issue here isn't vanity and nuisance, it's safety."
Our good friends at Google run a daily puzzle challenge and asked us to help get them out to the geeky masses. Each day’s puzzle will task your googling skills a little more, leading you to Google mastery. Each morning at 12:01 a.m. Eastern time you’ll see a new puzzle posted here.
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LOS ANGELES (AP) — The Civil War saga “Lincoln,” the musical “Les Miserables” and the Osama bin Laden thriller “Zero Dark Thirty” are among the nominees announced Wednesday for the top honor from the Producers Guild of America.
Other best-picture contenders are the Iran hostage-crisis thriller “Argo”; the low-budget critical favorite “Beasts of the Southern Wild”; the slave-turned-bounty-hunter saga “Django Unchained”; the shipwreck story “Life of Pi”; the first-love tale “Moonrise Kingdom“; the lost-souls romance “Silver Linings Playbook”; and the James Bond adventure “Skyfall.”
Walt Disney dominated the guild’s animation category with three of the five nominees: “Brave,” ”Frankenweenie” and “Wreck-It Ralph.” The other nominees are Focus Features’ “ParaNorman” and Paramount’s “Rise of the Guardians.”
Along with honors from other Hollywood professional groups such as actors, directors and writers guilds, the producer prizes help sort out contenders for the Academy Awards. Those nominations come out Jan. 10.
The guild, an association of Hollywood producers, hands out its 24th annual prizes Jan. 26. The big winner often goes on to claim the best-picture honor at the Oscars, which follow on Feb. 24.
Previously announced nominees by the Producers Guild for best documentary are “A People Uncounted,” ”The Gatekeepers,” ”The Island President,” ”The Other Dream Team” and “Searching for Sugar Man.”
Other nominees:
— TV drama series: “Breaking Bad,” ”Downton Abbey,” ”Game of Thrones,” ”Homeland,” ”Mad Men.”
— TV comedy series: “30 Rock,” ”The Big Bang Theory,” ”Curb Your Enthusiasm,” ”Louie,” ”Modern Family.”
— Non-fiction television: “American Masters,” ”Anthony Bourdain: No Reservations,” ”Deadliest Catch,” ”Inside the Actors Studio,” ”Shark Tank.”
— Live entertainment and talk television: “The Colbert Report,” ”Jimmy Kimmel Live,” ”Late Night with Jimmy Fallon,” ”Real Time with Bill Maher,” ”Saturday Night Live.”
— Competition television: “The Amazing Race,” ”Dancing with the Stars,” ”Project Runway,” ”Top Chef,” ”The Voice.”
— Sports program: “24/7,” ”Catching Hell,” ”The Fight with Jim Lampley,” ”On Freddie Roach,” ”Real Sports with Bryant Gumbel.”
— Children’s program: “Good Luck Charlie,” ”iCarly,” ”Phineas and Ferb,” ”Sesame Street,” ”The Weight of the Nation for Kids: The Great Cafeteria Takeover.”
___
Online:
http://www.producersguild.org
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The distributor of the top-selling energy “shot,” 5-Hour Energy, has long claimed on product labels, in promotions and in television advertisements that the concentrated caffeine drink produced “no crash later” — the type of letdown that consumers of energy drinks often feel when the beverages’ effects wear off.
But an advertising watchdog group said on Wednesday that it had told the company five years ago that the claim was unfounded and had urged it then to stop making it.
An executive of the group, the National Advertising Division, also said that 5-Hour Energy’s distributor, Living Essentials, had publicly misrepresented the organization’s position about the claim and that it planned to start a review that could lead to action against the company by the Federal Trade Commission.
“We recommended that the ‘no crash’ claim be discontinued because their own evidence showed there was a crash from the product,” said Andrea C. Levine, director the National Advertising Division. The organization, which is affiliated with the Council of Better Business Bureaus, reviews ad claims for accuracy.
The emerging dispute between Living Essentials and the National Advertising Division is unusual because the $10 billion energy drink industry is rife with questionable marketing. And Living Essentials, which recently cited the advertising group’s support in seeking to defend the “no crash” claim, may have opened the door to greater scrutiny.
Major producers like 5-Hour Energy, Red Bull, Monster Energy and Rockstar Energy all say their products contain proprietary blends of ingredients that provide a range of mental and physical benefits. But the companies have conducted few studies to show that the costly products provide anything more than a blast of caffeine, a stimulant found in beverages like coffee, tea or cola-flavored sodas.
The dispute over 5-Hour Energy’s claim also comes as regulatory review of the high-caffeine drinks is increasing. The Food and Drug Administration recently disclosed that it had received reports over the last four years citing the possible role of 5-Hour Energy in 13 deaths. The mention of a product in an F.D.A. report does not mean it caused a death or injury. Living Essentials says it knows of no problems related to its products.
The issue surrounding the company’s “no crash” claim dates to 2007, when National Advertising Division began reviewing all of 5-Hour Energy’s marketing claims. That same year, the company conducted a clinical trial of the energy shot that compared it to Red Bull and Monster Energy.
At the time, Living Essentials was already using the “No crash later” claim. An article on Wednesday in The New York Times reported that the study had shown that 24 percent of those who used 5-Hour Energy suffered a “moderately severe” crash hours after consuming it. The study reported higher crash rates for Red Bull and Monster Energy.
When asked how those findings squared with the company’s “no crash” claim, Elaine Lutz, a spokeswoman for Living Essentials, said the company had amended the claim after the 2007 review by the National Advertising Division. In doing so, it added an asterisklike mark after the claim on product labels and in promotions. The mark referred to additional labeling language stating that “no crash means no sugar crash.” Unlike Red Bull and Monster Energy, 5-Hour Energy does not contain sugar.
Ms. Lutz said that based on the modification, the advertising accuracy group “found all of our claims to be substantiated.”
However, Ms. Levine, the advertising group’s director, took sharp exception to that assertion, saying it mischaracterized the group’s decision. And a review of the reports suggested that Living Essentials had simply added language of its choosing to its label rather than doing what the group had recommended — drop the “no crash” claim altogether.
That review concluded that the company’s 2007 study had shown there was evidence to support a “qualified claim that 5-Hour Energy results in less of a crash than Red Bull and Monster” Energy. But it added the study, which showed that 5-Hour Energy users experienced caffeine-related crashes, was inadequate to support a “no crash” claim.
Ms. Levine said Living Essentials had apparently decided to use the parts of the group’s report that it liked and ignore others.
Companies “are not permitted to mischaracterize our decisions or misuse them for commercial purposes,” she said.
She said the group planned to notify Living Essentials that it was reopening its review of the “no crash later” claim. If the company fails to respond or provides an inadequate response, the National Advertising Division will probably refer the matter to the F.T.C., she said.
A Democratic lawmaker, Representative Edward Markey of Massachusetts, has asked that the agency review energy drink marketing claims.
Asked about the position of the National Advertising Division, Ms. Lutz, the 5-Hour Energy spokeswoman, stated in an e-mail that the “no sugar crash” language had been added to address the group’s concern.
This article has been revised to reflect the following correction:
Correction: January 2, 2013
An earlier version of this article misstated the number of deaths in which the Food and Drug Administration said 5-Hour Energy possibly played a role. The number was 13, not 15.
It is tempting for people who earn less than $400,000 to think that they got off easy this week under the tax deal to end the fiscal impasse, given that only those with incomes above that level will be in a higher income tax bracket in 2013.
But the legislation that both houses of Congress have now approved could increase taxes on people with incomes that are not quite that high as well. That’s because the bill includes language that begins to do what both President Obama and Mitt Romney proposed at various points in the past: Limit certain tax breaks available to people who are affluent.
The new rules target two tax breaks: personal exemptions and many popular deductions like those for state and local taxes, mortgage interest and charitable contributions. For both breaks, single people with at least $250,000 in adjusted gross income and married people filing jointly with at least $300,000 in income are vulnerable. A hypothetical Texas couple could end up paying about $2,500 more in taxes, for instance.
The mechanics of how the new limits will work are now clear, though it takes a fair bit of explaining to lay them out in plain English. What we don’t know yet is how many people will end up paying more in 2013 than they did in 2012.
The uncertainty is tied to the fact that many of the targets of the legislation often end up ensnared by the alternative minimum tax. The A.M.T., and its high tax bill, may continue to catch most of them.
But let’s start with the basics. Most of the discussion here begins with that adjusted gross income figure. That’s the number you get when you subtract items from your salary or take-home pay that are often referred to as above-the-line deductions.
For the income range we’re talking about, these deductions tend to include things like health savings account contributions and alimony. People who work for themselves also get deductions for health insurance premiums, certain retirement contributions and self-employment taxes that an employer would otherwise pay.
Mark Luscombe, principal analyst with CCH, a tax information provider, points out just how confusing the use of adjustable gross income is, given that the new tax limits, the new tax bracket and the new Medicare tax are all based on different definitions of income.
Under normal circumstances, a personal exemption, for a specific dollar amount, is available for each member of your household. You then add all of the exemptions and subtract the total from your adjusted gross income, which has the effect of lowering your taxable income. CCH predicts that the personal exemption amount for 2013 will be $3,900 per person.
The new law requires taxpayers in the targeted income range to reduce the amount of their exemptions by 2 percent for every $2,500 by which their income exceeds the $250,000 or $300,000 limit. So a married, childless couple with $400,000 in adjusted gross income and $7,800 in potential exemptions could lose $6,240 of that $7,800.
The math for the limit on deductions is different. There, the rules call for you to add up the applicable deductions. Let’s say that equals $50,000. Then, you subtract from that 3 percent of the amount by which your adjusted gross income exceeds those $250,000 or $300,000 thresholds.
So if you’re a married couple with $400,000 in income, you’re $100,000 over the threshold. Three percent of that is $3,000. So you’d subtract that from $50,000. The rule, which existed for years but had been phased out more recently, is known as the Pease limitation, for Representative Donald J. Pease, the Ohio newspaper editor-turned-legislator who got it passed. As before, you can’t lose more than 80 percent of your deductions, no matter how high your income gets.
If you’re trying to figure out whether and how this may affect you, well, join the club. So much depends on your income, your state and your various deductions. All of that will affect whether the A.M.T. hits you as well.
For people who are already in the A.M.T. but will not end up with the $400,000 (for individuals) or $450,000 (for married couples filing jointly) in income necessary to be in the new 39.6 percent tax bracket in 2013, the new exemption and deduction rules may not hurt you. “I don’t think there’s enough there that you would no longer be in the A.M.T.,” said Jude Coard, a tax partner at Berdon L.L.P., of people with income in the $300,000 to $400,000 range.
Much will depend on your own situation. CCH ran two hypothetical cases for me, which you can see in the accompanying graphic. The first examined a family of four in New York with $400,000 in adjusted gross income and $79,000 in total itemized deductions. The household pays the A.M.T. in both 2012 and under the new tax rules in 2013. They pay just $790 more in 2013, but that includes $1,350 in new Medicare taxes. (The total does not include the Social Security payroll tax that has been restored to its prerecession level.)
A family in Texas, however, might have the same income but lower property taxes and no income tax and thus lower deductions for its federal tax return. Their deductions are just $43,700, but they end up being hurt more by the new rules. They would have no A.M.T. liability in 2013 and would end up paying $3,852 more, or about $2,500 if you don’t count the $1,350 from the new Medicare tax.
This is a lot to digest, so much so that even the experts at the Tax Policy Center have not yet finished updating their online calculator. Once they do, if you have the stomach to gather (or try to predict) all of the data, you can take your shot at projecting what these new rules may cost you.
