plus 4, Costco to accept food stamps - Nashville Tennessean

Costco to accept food stamps - Nashville Tennessean
German Adviser Held in US, Reports Link to K1 Probe - CNBC
Gov. Rendell: Bethlehem Making Great Strides in Ongoing Revitalization ... - CNBC
Obama "too big to fail" plan blasted in Congress - YAHOO!
Conglomerate feud tarnishes Saudi image - Beaver County Times

Costco to accept food stamps - Nashville Tennessean

Posted: 29 Oct 2009 08:03 AM PDT

Call it another sign of hard times and retailers adjusting to a rising tide of shoppers strapped for cash.

Costco Wholesale Corp. said Wednesday that it will start accepting food stamps at its warehouse clubs nationwide, including in the Nashville area. The move comes after the company tested the idea at a handful of stores in New York and found that it won new customers.

It amounts to an about-face for a retailer that had long considered its bread and butter to be bargain-hunting but affluent shoppers who paid a membership fee to shop.

Costco has two stores in the Nashville area, one in West Nashville and another in Brentwood. There were 1.17 million Tennesseans receiving food stamps in September, a 22 percent increase over a year ago, according to data from the state Department of Human Services.

Nearly $160 million in food stamp benefits were issued last month in Tennessee. The $50 membership fee to join the warehouse club cannot be covered by food stamps.

Nationwide, the number of Americans relying on government food subsidies to eat recently hit a record 36 million.

Costco, based in Issaquah, Wash., began accepting food stamps at two stores in Brooklyn and Queens in May under political pressure from officials there. The company quickly expanded it to all six of its stores in New York State.

Company officials said they had doubted many shoppers would use food stamps, but it turned out new members said they joined precisely because of the assistance program,

"We recognize these are tough times and more people are food-stamp-eligible," Costco Chief Financial Officer Richard Galanti said. "Certainly, this economy was a wake-up call."

Cards speed checkout

Costco said it hopes to accept food stamps at half of its 407 stores in the U.S. and Puerto Rico by Thanksgiving and at the remainder as soon as it wins regulatory approval in each state.

While most major supermarket chains have accepted the federal food subsidy for years, more retailers have agreed to take part as the number of people using them soars. Most users no longer receive actual stamps, but instead carry the value on a card that can be swiped at checkout, much like a bank debit card.

That makes it easier and more discrete for shoppers and speeds checkout, as well as the reimbursement process for the stores.

Food retailing consultant Bill Bishop, of Willard Bishop Consulting, said the decision shows how pervasive the pressure on consumers has become. He said more grocers are seeing their sales rise and fall based on the dates that the government distributes assistance benefits to people.

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German Adviser Held in US, Reports Link to K1 Probe - CNBC

Posted: 29 Oct 2009 08:10 AM PDT

A German wealth consultant living in Florida has been arrested on money-laundering conspiracy charges, U.S. prosecutors said Thursday.

The Miami Herald newspaper, quoting unidentified sources familiar with the case, said the arrest of Stefan R. Seuss at his Coconut Grove home by FBI agents Wednesday was part of a global criminal investigation into a German-managed international hedge fund, the K1 Group.

Media reports have said that European and U.S. authorities were examining whether K1 Group had misled creditor banks when borrowing money.

Banks named include Barclays, [BARC-LN Loading... ()]JP Morgan Chase [JPM Loading... () ] and BNP Paribas.

A representative of the U.S. Attorney's Office in Philadelphia, where the grand jury indictment against Seuss was unsealed, confirmed to Reuters that Seuss had been arrested but declined to comment when asked about the reported link to the K1 Group investigation.

Another German national, financial adviser Thomas Meyer, who had U.S. citizenship and resided in Omaha, Nebraska, was also arrested under the same money-laundering indictment against Seuss.

According to the indictment, Seuss and Meyer conspired to move large sums of cash for an undercover federal agent, posing as a businessman involved in software and CD/DVD piracy, by offering to set up an off-shore company and foreign bank account to conceal the source and the ownership of the cash from U.S. authorities.

It said the investigation arose from a "sting" operation conducted by the FBI and the Internal Revenue Service (IRS).

The Miami Herald, quoting sources familiar with the case, said the charges were connected with the K1 investigation.

U.S. prosecutors say Seuss offered the undercover agent services to conceal funds like setting offshore companies in the British Virgin Islands and elsewhere, as well as foreign bank accounts and international trusts.

The arrest of the two Germans comes at a time when U.S. authorities are cracking down against U.S. citizens who use offshore tax havens or undisclosed overseas bank accounts to try to commit tax fraud or conceal illicit funds.

If convicted, each defendant faces a maximum possible sentence of 20 years imprisonment.

The U.S. arrests came as German authorities announced they had taken into custody a suspect who was in charge of managing the K1 Global Sub Trust hedge fund. They did not name the suspect.

German prosecutors had said previously Wednesday they were investigating the founder of K1 hedge fund company, Helmut Kiener, on suspicion of fraud and fiduciary breach of trust.

Neither Kiener nor his lawyer could be reached immediately for comment on Thursday's developments and K1 was also unavailable for comment.

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Gov. Rendell: Bethlehem Making Great Strides in Ongoing Revitalization ... - CNBC

Posted: 29 Oct 2009 07:56 AM PDT

BETHLEHEM, Pa., Oct 29, 2009 /PRNewswire-USNewswire via COMTEX/ -- Announces $17.6 million for St. Luke's Expansion Project; Helps Break Ground at Center for Performing Arts Governor Edward G. Rendell today said Lehigh Valley residents will have greater access to world-class health care and entertainment with two new, major economic development projects that will create approximately 1,700 new jobs and enhance the area's continuing revitalization.

During the first of his two stops in Bethlehem, the Governor announced that St.

Luke's Hospital & Health Network will build a heath center and inpatient hospital that will be named St. Luke's Riverside. Within four years, St. Luke's will create 1,385 jobs without impacting the 5,893 existing positions and invest $212 million into the project.

"This is tremendous news for the region that marks another major milestone in Bethlehem's ongoing revitalization," Governor Rendell said. "Not only will St.

Luke's Riverside provide a wide range of high-quality health care services, but it will also create nearly 1,400 new jobs for the hardworking residents of the Lehigh Valley." The new health complex and inpatient hospital will be constructed on the hospital's Riverside campus, which consists of 500 acres in Bethlehem Township near the intersection of Route 33 and Interstate 78.

The project is the first phase of a long-term development plan for the St.

Luke's Riverside Campus. Other projects will feature the region's only free-standing cancer center and is expected to be the largest contiguous health care campus in Pennsylvania. The first phase is expected to be finished in late 2011.

"Today, we celebrate the outstanding community benefit that occurs when government and an organization such as St. Luke's work together," said Richard A. Anderson, president and CEO, St. Luke's Hospital & Health Network. "At St.

Luke's, we dream big and we invent our future with the help of outstanding partners such as the Governor and his staff, our state representatives and senators, and our friends and partners who govern Bethlehem Township. Nothing is impossible to accomplish when well-intentioned people work together." The project was coordinated through the Governor's Action Team, economic development professionals who assist businesses that are considering locating or expanding in the state.

Pennsylvania will invest $17.6 million in the project, including a $5 million grant from the Infrastructure and Facilities Improvement Program, $4.25 million in Redevelopment Assistance Capital Program grants, a $3.8 million Pennsylvania Infrastructure Bank loan, a $2.06 million grant from PennWorks, $969,500 in job training assistance, $255,000 in job creation tax credits and $1.3 million in highway improvements along Freemason Avenue.

After announcing the St. Luke's Riverside project, Governor Rendell helped to break ground for the $25 million ArtsQuest Center for Performing Arts at SteelStacks in Bethlehem. The performing arts center, which will be the anchor of the transformed 4.5-acre facility, is one of four major projects that will eventually entertain and delight those who visit the Lehigh Valley.

The commonwealth has invested $12.25 million for the SteelStacks campus project, of which $7.625 million will help build the ArtsQuest Center. The balance of the money will help the other three phases of the project.

"The ArtsQuest Center will be a great addition to the Lehigh Valley," said Governor Rendell. "Not only will the center have a positive $40 million impact on the region's economy, it will also greatly improve the quality of life by bringing entertainment to the community and exposing local residents to the arts. Facilities like this add to the quality of life in the region and can help to attract other job-creating businesses to the community." The project will require the work of 100 construction workers. After its completion, some 200 full-time employees are expected to work in the new facility, which will provide a showcase for musicians and the community.

The performing arts center will include a two-screen, state-of-the art theatre called the ArtsQuest Cinema at SteelStacks; a 450-seat, cabaret-style Musikfest Cafe, which will feature a wide variety of live music; and the 4,000-square-foot Blast Furnace Room, which will host a variety of community and educational functions.

The SteelStacks campus is being developed by ArtsQuest, a non-profit organization dedicated to celebrating the arts and culture in and around the Lehigh Valley area.

For more information about St. Luke's Hospital & Health Network, visit www.slhn.org. For more information about SteelStacks and the ArtsQuest Center for Performing Arts, visit www.steelstacks.org/. For information on the Governor's Action Team, visit www.NewPA.com or call 1-866-466-3972.

Media contacts: Mark Shade, DCED; 717-783-1132; Michael Smith, Governor's Office; 717-783-1116 SOURCE Pennsylvania Office of the Governor URL: http://www.governor.state.pa.us www.prnewswire.com Copyright (C) 2009 PR Newswire. All rights reserved -0- KEYWORD: Pennsylvania INDUSTRY KEYWORD: ART

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HEA SUBJECT CODE: POL

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Obama "too big to fail" plan blasted in Congress - YAHOO!

Posted: 29 Oct 2009 08:32 AM PDT

WASHINGTON (Reuters) – Treasury Secretary Timothy Geithner on Thursday scrambled to fight off attacks from all sides on a new Obama administration plan for tackling financial risk in the economy unveiled just two days ago.

After weeks of negotiations, the administration and Democratic Representative Barney Frank released a sweeping proposal on Tuesday to give regulators new powers to regulate, and even shut down, big financial firms threatening economic stability.

The financial services industry, not taxpayers, would bear the costs of government interventions to prevent the collapse of undercapitalized firms under the 253-page proposal, which tries to walk a middle line between bailouts and bankruptcy.

Both Democrats and Republicans broadly criticized the strategy at a public hearing convened by the U.S. House of Representatives Financial Services Committee chaired by Frank.

"The bill we're considering today would merely institutionalize 'too big to fail'," said Republican Representative Jeb Hensarling, referring to a perception that financial giants could count on government bailouts after the large-scale taxpayer help doled out in the last year.

Democratic Representative Brad Sherman said the Obama plan would provide "permanent, unlimited bailout authority."

He said it would give "unprecedented powers for the executive to decide spending and taxes, without congressional approval; and, depending on the desires of the executive branch from time to time, the greatest transfer of money from the Treasury to Wall Street in U.S. history."

From a long table facing lawmakers, Geithner pleaded for more time to explain his case.

"Without the ability for the government to step in and manage the failure of a large firm and contain the risk of the fire spreading, we will be consigned to repeat the experience of last fall. It's a really stark, simple thing," he said.

Geithner said the government would be able to prop up a failing firm only if the firm were in the process of "unwound, sold or liquidated," and he said bankruptcy would be remain the dominant tool for handling non-bank financial firm failures.

"But as the collapse of Lehman Brothers showed, the bankruptcy code is not an effective tool for resolving the failure of a global financial services firm in times of severe economic stress," he said.

FDIC ALSO LEVELS COMPLAINT

Obama, Geithner and Democrats on Capitol Hill have been working for months on proposals to tighten bank and capital market oversight, seeking to prevent a repeat of last year's confused Bush administration handling of the financial crisis.

Billions of taxpayer dollars were committed last year to rescuing firms such as AIG and Citigroup, while Lehman Brothers was allowed to collapse, and other firms were merged in emergency government-engineered deals.

Seeking a new way for government to deal with such crises, the bill unveiled on Tuesday would let the Federal Reserve limit credit exposures, block acquisitions, restrict pay and bonuses and, in extreme cases, order bankruptcy at financial holding companies that it finds are severely undercapitalized.

The Federal Deposit Insurance Corp -- already able to seize and dismantle failing banks -- could extend Treasury Department credit to solvent banks and non-bank financial firms alike to prevent financial instability, under the plan.

Losses from FDIC actions would be repaid later by other large financial companies under the plan. FDIC Chairman Sheila Bair, in testimony prepared for delivery to Frank's panel, argued instead for an assessment on big firms to pre-fund a resolution kitty.

Geithner would head a Financial Services Oversight Council, under the plan, in the latest iteration of a proposed systemic risk regulator that has been under development for months.

(Additional reporting by Karey Wutkowski, Rachelle Younglai and David Lawder; Editing by Tim Ahmann)

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Conglomerate feud tarnishes Saudi image - Beaver County Times

Posted: 29 Oct 2009 07:56 AM PDT

It goes well beyond the average family squabble.

For months, two billionaire families in Saudi Arabia, linked by marriage, have been locked in a bitter legal battle centered on an estimated $22 billion debt implosion and allegations of billions of dollars in fraud.

Bank accounts have been frozen. International banks, facing billions in outstanding debt, have filed suit. Claims of scapegoating and family jealousies have splashed across Mideast newspapers.

The dispute between Maan al-Sanea and his Saad Group and Ahmad Hamad al-Gosaibi and Bros., or AHAB _ two of Saudi Arabia's most prominent private conglomerates _ threatens to cast a pall over Saudi Arabia's image at a time when the global meltdown and credit crisis already have squeezed the kingdom's companies.

It also has raised new questions whether Saudi's financial and corporate systems _ still dominated by family firms and personal relationships _ are transparent enough to allow outside lenders to make sound decisions. That worry has the potential to impact investment in the kingdom long term.

"During the crisis, if anything at all, transparency has deteriorated, and that is one of the key cultural changes that has to take place, particularly among family owned companies _ where the tendency to be opaque is far greater," said Philipp Lotter, the Dubai-based senior vice president of Moody's Investor's Service.

Added Rahul Shah, a Dubai-based analyst with Deutsche Bank: "The feeling at the moment is that without greater disclosure, it's difficult to commit capital."

The details of the case have trickled out slowly, mostly in court cases filed in the United States and London.

Little has come from either company or, for that matter, from authorities in Saudi Arabia. Such family run businesses have traditionally been treated with deference.

The fight has so far remained a civil matter, with no known criminal charges.

The saga hinges on claims by the al-Gosaibi family that al-Sanea _ Saad's chairman and a major HSBC stakeholder who is also married to a daughter of the al-Gosaibi patriarch _ defrauded them of over $9 billion. Al-Sanea was listed in March by Forbes as the world's 62nd richest person.

According to a claim outlined in a New York lawsuit, al-Sanea's actions eventually caused the company to default on billions in debt to international banks.

The Saudi Arabian Monetary Agency, the country's central bank, offered the first hint that trouble was brewing. A letter sent to the country's lenders in May ordered a freeze on the accounts of al-Sanea, as well as those of several family members, including his wife.

The central bank offered no details, which prompted several international ratings agencies to first downgrade, then withdraw, their ratings for Saad Group and then for AHAB.

The central bank has since largely remained silent, and calls and e-mails to both Saad and AHAB were not answered.

Saad Group _ whose holdings include hospitals, travel firms, banks and financial services companies _ explained at the time that it was facing a "short-term liquidity squeeze" linked to the global credit crunch. It attributed that to factors including the "failure of companies owned by a prominent Saudi family business and the unexpected and unprecedented regional reaction to that failure."

The company said debt restructuring was under way.

It soon became clear that the prominent Saudi family business was AHAB, and the failing companies included The International Banking Co., a Bahrain-based bank owned by AHAB that had defaulted on some debts.

Media reports indicated that al-Sanea had served as TIBC's chairman.

Saad officials, however, said that although al-Sanea had once served as TIBC's managing director, he was no longer with the company. A later statement contended that al-Sanea had only arms-length commercial dealings with AHAB, whose holdings range from construction to bottling Pepsi.

Regardless, Mideast and Western banks soon were forced to take stock of their exposure to the two companies' bad debts, resulting in the litigation.

Mideast newspapers have since splashed details of fierce accusations and estranged ties among the two family camps inside Saudi Arabia.

The bad debts, estimated at around $22 billion in total, are widely believed to be one of the biggest hits the region has endured during the global meltdown.

"The idea that the global financial crisis had a minimal impact on the Saudis besides that of the low oil prices is not the case," said John Sfakianakis, chief economist with Banque Saudi Fransi-Credit Agricole Group in Riyadh. "Obviously the crisis impacted the corporate side, and at least tainted the image of the corporate sector which in its majority remains sound.

Yet the dispute is by no means the death knell for the Saudi economy _ the Arab world's largest. Analysts believe, instead, that the bulk of the losses are being shouldered by Western and non-Saudi Mideast banks, raising questions about the risk of future investments.

"It would be wrong to make blanket assumptions," said Moody's Lotter. "But it has highlighted the risks. ... I think that is something that lenders, and ourselves as a ratings agency, will have to factor into our assessments going forward."

(This version CORRECTS the name of the bank to Banque Saudi Fransi-Credit Agricole Group.)

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