Click. Judge Vaughn Walker favors free-market cannibalism over public interest.

Click. Judge rules Wen Ho Lee entitled to secrets.  The government might have to decide what's more important -- pursuing the case against the former scientist or protecting America's nuclear "crown jewels."

Click. Police Study Atlanta Case With JonBenet Similarities.


Police Study Atlanta Case With JonBenet Similarities.
Digital City, Atlanta © 8/3/00

New developments in the JonBenet Ramsey murder case have John Ramsey talking. Boulder investigators confirm that nine months after JonBenet was sexually molested and murdered in her Boulder home, another child was attacked in a hauntingly similar fashion less than two miles away. According to a police report, the 14-year-old girl's parents suspect the intruder entered their home from a rear door, and waited until the family was asleep to attack her. It turns out the teenager also attended the same dance academy JonBenet attended before her death. John Ramsey now resides in the Atlanta area with wife, Patsy, and son, John. He says Boulder investigators never informed him about the case. As for Boulder Police, they are trying to match DNA evidence and palm prints. But investigators say the two girls were not likely attacked by the same person.

Judge rules Wen Ho Lee entitled to secrets

The government might have to decide what's more important -- pursuing the case against the former scientist or protecting America's nuclear "crown jewels."

By Albuquerque Tribune reporter

     A federal judge has set the stage for a legal battle that could stop the criminal case against Wen Ho Lee dead in its tracks before it ever reaches an Albuquerque jury.
     U.S. District Judge James A. Parker issued a ruling late Tuesday finding that the former Los Alamos National Laboratory computer scientist is entitled to use the nuclear weapons design codes and software in open court because it is relevant to his defense.
     The defense victory is significant, foreshadowing an important showdown. "The next step will be for the government to propose substitutions, and we'll have a chance to state any objections," defense attorney John Cline said Tuesday. "And then the court will rule."
     That ruling will be pivotal.
     If Parker rejects the government's summaries of the information, it could force federal prosecutors into a tough corner. They would have to decide which is more important -- protecting information their own witnesses have called the "crown jewels" of America's nuclear weapons arsenal, or pursuing the case against Lee and releasing the "crown jewels" in a public court.
     The Classified Information Procedures Act -- a rarely used law -- governs the use of classified information in criminal cases and has become part of the vernacular in the Lee case.
     Lee, 60, is being held without bond in the Santa Fe County Detention Center, charged with 59 counts that accuse him of hoarding and then downloading onto portable computer tapes a cache of sensitive nuclear weapons design codes and the software to simulate their detonations while he worked at Los Alamos. Seven of the tapes are still missing. Lee and his attorneys have said repeatedly that he destroyed them all.
     In his order Tuesday, Parker set several important deadlines regarding CIPA, dates around which the case will largely revolve for the next month. The U.S. Attorney's Office must submit by Aug. 14 proposed substitutions for the 19 files and tape -- dubbed "N" -- which Parker has ruled as relevant and admissible. And that will be no small task for prosecutors.
     Parker ruled the mountains of computer evidence admissible under six different theories of relevance. In practical terms, it means federal prosecutors will have to draw up a separate version of proposed summaries for each of the six elements of Lee's defense under which his attorneys have won the right to use the information.
     The summaries must also pass CIPA muster, meaning they must provide Lee with enough specificity so as not to unfairly or unconstitutionally prejudice him at trial. CIPA is meant to prevent either side from using classified information as a legal weapon of intimidation in a criminal case.
     Lee's attorneys have argued in court filings that they cannot envision a single substitution which would meet that standard. They will attempt to punch holes in the government accusations that Lee's downloaded the information with criminal intent. The defense's ability to counter that argument will hinge on their ability to use specific evidentiary examples and let jurors decide for themselves.
     Defense attorneys, for instance, have indicated they intend to prove that much of the data Lee is accused of mishandling at Los Alamos was either available in "open literature" or of significantly less value than government witnesses have said it is, due to flaws or lack of proper operating instructions.
     But federal prosecutors have said repeatedly that expert testimony and thorough summaries can accomplish that same end -- giving jurors enough information to make an informed decision -- while preserving national security interests.
     Both sides will duke it out over the government's proposed substitutions at a closed hearing Parker set for Aug. 31. In the meantime, defense attorneys will try to convince Parker at a public hearing Aug. 15 that the government should hand over a blueprint of a nuclear weapon as part of their on-going effort to get information that they say will suggest Lee was selectively prosecuted because he is a Taiwanese-born naturalized U.S. citizen.
     Parker has already granted the defense access to stacks of security audits and reports from the Energy Department's Office of Oversight, all over the objections of federal prosecutors. He has also granted access to investigative material that reportedly shows Lee's wife, Sylvia Lee, cooperated with the CIA in the course of her job at the Los Alamos Lab.
     Although he reserved ruling on the request for a weapon blueprint last month, Parker indicated in Tuesday's order that evidence making a comparison between some of the data Lee is accused of mishandling and an actual blueprint is indeed relevant to Lee's defense. But whether he will grant defense attorneys access to the blueprint remains to be seen.

Enemy of the state
New senate committee to deal with WTO's impact on California.By Daniel Zoll, 8/2/00 San Francisco Bay Guardian
  Selected California protections at risk under the WTO and NAFTA

MTBE phaseout

California Export Finance Program

Disabled veteran-owned small-business preferences

Tax incentives for economic development

California Organic Foods Act of 1990

Safe Drinking Water and Toxic Enforcement Act of 1986

Source: Harrison Institute for Public Law, Georgetown University Law Center


WHEN CALIFORNIA GOVERNOR Gray Davis ordered the phase out of the hazardous gasoline additive MTBE last year, Methanex, the Canadian company that manufactures an ingredient in MTBE, promptly sued the U.S. government under NAFTA – claiming that Davis's order jeopardizes its future profits.

If the lawsuit is successful, the United States must either sue to overturn California's law or pay as much as $970 million in damages.

Like all NAFTA challenges, Methanex's case will be heard in a secret tribunal and decided by an unelected, unaccountable panel of trade arbitrators. Documents will be kept confidential. Neither Davis nor any other state official has the right to participate in the proceedings.

Until recently, state lawmakers have done little to counter this assault on their legislative power. Now state senator Tom Hayden (D-Santa Monica) has created a special committee on the World Trade Organization – the first of its kind in the United States – to navigate the minefield of potential conflicts between global trade agreements and California law.

California has long been a leader in food safety, labor standards, human rights, and environmental protection, and Hayden says the WTO and NAFTA are undermining the state's ability to raise the bar in those areas.

"Everything that the protesters said in Seattle continues to come true," Hayden said. "This is a fundamental diminishing of the democratic process."

Although the bipartisan committee cannot write or pass legislation, Hayden hopes its hearings, starting Aug. 7, will at least get WTO issues "out of the closet and into the open-air" – and on the minds of legislators, whose lawmaking can now be effectively erased by foreign governments and corporations.

"Our world-class protections for environment and public health are being silently smothered by compliance to the WTO," said Victor Menotti, program coordinator for the Bay Area-based International Forum on Globalization. "I think the most important thing is to call the attention of our elected officials who fought for these protections to the threats that the WTO poses to them."

At risk are some of California's most progressive regulations on such areas as toxics, food labeling, timber conservation, and economic development, according to a March 2000 report by Robert Stumberg of Georgetown University's Harrison Institute for Public Law. With the eighth largest economy in the world, California must assert its role in shaping the international trade agenda, Stumberg told the Bay Guardian. "This is not a marginal issue. It's going to be a central concern of the state's capacity to govern."

WTO rules threaten more than just existing laws. They also have a chilling effect on the legislative process. Last year the state legislature approved a bill requiring state government contractors to use U.S.-made materials; they hoped to give a boost to domestic industry. But Davis vetoed the law Jan. 3, citing conflicts with the WTO's rules on government procurement.

Among the major protections ripe for a WTO challenge is California's groundbreaking Proposition 65, the Safe Drinking Water and Toxic Enforcement Act, which requires labels on potentially harmful chemicals. Prop. 65 is based on the "better safe than sorry" principle: a chemical producer must label a product unless it can show that exposure would result in "no significant risk" to the consumer. But WTO rulings have reversed the burden of proof, stating that a government cannot regulate a substance unless it can prove that it is harmful.

California is also a leader in food safety, developing standards to promote public health and to maintain market quality of the state's products. Since not all foreign goods are subject to such rigorous regulations, Stumberg says, a country could challenge California's food rules as trade barriers.

For instance, the California Organic Foods Act of 1990 requires that food labeled as organic undergo a rigorous certification process that exceeds federal standards. This labeling program might be deemed a violation of WTO rules that forbid governments from regulating products based on the way they are produced, according to Martin Wagner, a San Francisco-based lawyer with Earthjustice Legal Defense Fund. Already, the European Union has threatened to challenge organic labeling laws in the United States.

Both NAFTA and the WTO rely on international standards such as those set by the Rome-based Codex Alimentarius, an international body in charge of global food standards. The little-known agency is dominated by industry: according to Washington, D.C.-based watchdog group Public Citizen, food industry giants such as Hershey Foods, Nestle U.S.A., General Foods, and Coca-Cola, as well as trade groups such as the Grocery Manufacturers of America and the National Food Processors Association, regularly attend international Codex meetings as part of the official U.S. delegation.

Not surprisingly, Codex standards are typically lower than those maintained in the United States. In some cases Codex standards allow pesticide residue levels that are five times higher than those acceptable in the United States, according to a report by Public Citizen. Although the WTO does not require countries to adopt Codex standards as their own national standards, a country must have a scientific justification to establish a stricter standard. If those standards are challenged as a barrier to trade, a WTO panel of trade bureaucrats then decides whether the standards are justified or not.

Many California programs and tax incentives aiding local, small, or disadvantaged businesses – such as the Disabled Veteran Business Enterprise Certification Program – are also vulnerable, according to the Georgetown study. The European Union, Japan, and Canada have all voiced great concern over California's affirmative action schemes that favor small and minority businesses, leaving open the possibility of a challenge.

Even state programs often criticized as corporate welfare, such as export subsidies, could be struck down by the WTO. The California Trade and Commerce Agency has identified several at-risk subsidies, including the Technology Investment Program and Export Finance Program.

Wagner says it's no longer enough for California to be a leader in high regulatory standards.

"We have to now become a leader in democracy," he said. "We have to become a leader in changing international policy so that international rules – instead of promoting corporate profit – will be shaped so as to protect health, the environment, and human rights."

Sen. Tom Hayden's Select Committee on California and the WTO meets Aug. 7. Call (916) 445-1353 for meeting time and location.

Cybercops Need Better Tools
Law enforcement agencies are falling behind hackers, says exec of CIA tech incubator.
by Matthew Schwartz © Computerworld
July 31, 2000

Computer crimes are escalating at a rate consistent with the growth of the Internet, says Dominique Brezinski, technical guru at In-Q-Tel, a nonprofit technology incubator formed by the CIA.

"The ability to steal small items such as digital assets is extremely attractive," Brezinski says.

But the complexity of such crimes is exceeding the ability of law enforcement agencies to prosecute them, he says. Brezinski notes, for example, that there are only 12 computer crime agents among federal, state, and local agencies in his native state of Washington. Yet these crimes can be among the most lengthy to investigate because of the difficulty in amassing evidence.

It often can be difficult to tell when a system has been hacked. And investigators have little forensics software at their disposal.

New Methods Warrant New Tools

Historically, law enforcement officials have used disk analysis tools to search suspect computers for illegal material. Such tools might work well for laptops and desktops but don't scale to analyze, say, an Internet service provider's terabyte storage farm.

Just using disk space analysis on that storage, "we'd be analyzing it for the rest of our lives," says Brezinski. "There are almost no tools for doing forensics analysis on Unix, and I've never even heard of such tools for mainframes."

Defend Your Turf

Brezinski argues that many companies should adopt a "homestead" metaphor and defend their own turf. He suggested that suing hackers might ultimately be a more expeditious way to curtail individual hackers' behavior, since a malicious hacker "would probably spend more time encumbered by [being sued] than for any time served."

But for now, without good forensics tools, it's hard to gather information of sufficient quality to hold up in court.

And when those tools do exist, response time is critical, Brezinski notes. "Many sources of computer evidence are highly volatile," he says. An Internet service provider can't just mirror a terabyte system it thinks might have been compromised and wait until law enforcement agencies show up to analyze it. But for now, they may have to.

For more enterprise computing news, visit Computerworld Online. Story copyright 2000 Computerworld Inc. All rights reserved.

EU Raids Book Publishers In Internet Sales Dispute
By Barry James © International Herald Tribune 8/3/00

The European Union raided several German publishers and wholesalers Wednesday to try to discover whether they had colluded to keep cut-price Internet booksellers out of their market.

Despite its opposition to price maintenance agreements in the book trade, the EU antitrust department this year allowed German publishers to continue a century-old price-fixing agreement on the condition that they did not try to interfere with imports of books into Germany - specifically including those bought over the Internet.

The raids were prompted by the suspicion that publishers and wholesalers had nevertheless acted to prevent such trade, said Michael Tscherny, a spokesman for the European Commission, the EU's executive body.

''The purpose of the surprise inspections,'' he said, ''was to collect evidence on the possible collusion between the publishers and wholesalers to boycott Internet booksellers that do not respect the fixed prices in direct cross-border sales to end consumers in Germany.''

The expectation in June, when the commission accepted the German price-fixing deal, was that allowing Internet sales to flourish would probably undermine the system eventually anyway.

The European Commission also insisted on abolishing a cross-border price-fixing agreement among Germany, Austria and Switzerland under the compromise, which took effect July 1.

Mr. Tscherny, the commission spokesman, said the investigators had also raided the headquarters of Libro AG, an Austrian chain of booksellers that had used the agreement to start supplying the German market via the Internet from a wholesale base in Austria, cutting prices by 20 percent.

Libro complained to the commission July 3, saying 30 German publishers and wholesalers were refusing to deliver books it had ordered on behalf of customers. But Libro later reached an understanding with the German publishers and last week announced that it was halting Internet sales of books at discounted prices.

Mr. Tscherny said the commission wanted to ensure that the understanding ''does not in itself represent an illegal restriction to competition.''

The commission said the inspectors had raided Verlagsgruppe Bertelsmann, a unit of Bertelsmann AG in Munich and the biggest German publishing group; Aufbau-Verlag in Berlin; the book wholesalers KNO and K&V in Stuttgart, as well as the German book trade association in Frankfurt. Officials from the German cartel office also took part in the searches, the European Commission said.

Legal specialists said the publishers and wholesalers would have an effective defense if they could show that they had acted to prevent books being exported from Germany for the sole purpose of being reimported at a discounted price - a condition to which the commission agreed as part of the compromise.

The publishers' argument in favor of price maintenance is familiar in several European countries. Without price support, they say, large retail stores offer best-sellers at a big discount, depriving bookstores of much of their income while leaving them with the cost of providing a wide range of books for all tastes.

While it has been unable to prevent strictly national price-maintenance agreements, the European Union competition department has long expressed its distaste for such deals. The department argues that there is nothing to show that profits are used to finance the production of books with a higher cultural value, that fixed-price deals restrict the development of new distribution channels such as the Internet or that they harm students or others.

Commission officials say the evidence from countries where fixed prices have been abolished shows that the production and distribution of books has not been harmed. The countries include Sweden, Belgium, Finland and Britain.

Chuck Mawhinney was the Vietnam War's top sniper. Thirty years on his skills are now sought by police forces around the world. Barry Wigmore, London Times, 8/3/00 reports.

The one-man killing machine

Some might view this as an ugly story. It is a tale of death and destruction - cold-blooded mass-murder, even.

Chuck Mawhinney does not look like a serial killer with 319 victims to his name. He is a tall, rangy man of 51 with a goatee beard and a quick smile, who lives happily with his cheerful wife, Robin, three sons, and numerous pets in a little detached house with a shady back porch.

But once, before this cosy domestic scene took shape, Chuck Mawhinney was a sniper. Perhaps the best sniper in the world, and certainly the best in that sad, sorry mess; the Vietnam War. Nearly 33 years ago he was the most efficient one-man killing machine in the killing fields of Asia. Then he went home, took up his life again, became a forest ranger.

For 30 years he kept quiet, not because he was ashamed, but because he did not think anyone would be interested.

Now the news is out and Mawhinney has found an unexpected bonus in his notoriety. His war slipped into the public domain as an aside in a book by another Vietnam veteran. Even then, the author Joseph T. Ward got it wrong. In Dear Mom: A Sniper's Story, he underestimated the number his friend had killed, though his kill-rate still outnumbered that of Gunnery Sgt Carlos Hathcock, a legend in the world of sniping. Hathcock's champions were horrified that his record had been challenged. Checks were made in Army records, and Chuck Mawhinney's quiet life was suddenly turned upside down.

Police forces and elite sniper units around the world want to know how Mawhinney did it and how he stayed alive. He teaches techniques of marksmanship, camouflage, stalking, and that vital imponderable, the feel and smell and giveaway noises of what he terms "the ultimate hunt". He has lectured Americans, British, Russians, Czechs, Slovaks, Austrians and Germans. He helps police forces to set up sniper teams. He tells law enforcement agencies, such as the FBI, DEA and ATF what it's all about. He is range master, safety officer and referee at international police sniper shooting competitions.

Mawhinney's home is a little backwoods town in America's wild northwest. This is hunting, shooting and fishing country, and has changed little since the pioneers flocked here in the Gold Rush. Today men carry rifles in pickup trucks instead of on horseback, but they still take off into the wilderness on hunting expeditions. Families skin and butcher their own meat.

Out here, killing is a way of life. Mawhinney the sniper was something different, though. Even in Vietnam, some soldiers did not like to be anywhere near the scout-snipers, he recalls. They said they had the smell of death on them, and for a couple of months after news of his war record came out, Mawhinney felt that everywhere he went, in an area where he had spent most of his life, he was getting the cold shoulder.

"I don't know how to explain what was happening," he says. "I went out one night and people didn't want to talk to me. There was a real uncomfortable feeling."

The moment soon passed. "I think Robin told some of my good friends and they put the word around." Close friends, he is sure, were not bothered by what he had done. "I think they were hurt because I never told them. It wasn't 'We can't imagine you doing this stuff'. It was more, 'Why didn't you tell us? Didn't you trust us?' But it was honestly not that big a deal to me. I was asked to do a job and I did it. I mean who really wants to go round telling friends they've killed over 300 people?"

But the upside of this sudden glare of publicity is that Chuck Mawhinney is now in huge demand. The world needs his expertise. Sieges, hostages and local insurrections require more snipers than ever. With their high-powered optics and training to spot what others might miss, no police or army can do without its special sniper unit.

This applies in Britain as much as anywhere else. Think of any crisis from the Iranian Embassy siege in London 20 years ago to the tragic massacres in Hungerford and Dunblane, and every hijacked plane that has ever landed at Stansted. It is a certain bet that snipers were either on the scene or on their way. Then, of course, there has been Bosnia, Kosovo, Somalia, the Gulf War . . . Sniping is as old as conflict itself. It is said that 500 years ago Leonardo da Vinci, using a gun of his own design, was a sniper for the Florentines as they resisted the forces of the Holy Roman Empire.

Charles B. Mawhinney seems to have been born to join this deadly world. His father was a US Marine marksman in the Second World War. By the time young Chuck was six, he was a sure shot with his airgun, zapping flies on the garden fence at 30 paces. You try even seeing flies on a fence ten metres away. He soon moved up to hunting rifles, and spent his teens camping out in the mountains. He had planned to join the Navy after high school, but the marine recruiting sergeant made him an offer he could not resist. His shooting expertise was obvious at training camp and he was sent to the Marines' famed Scout-Sniper School at Camp Pendleton, California. On the wall, Pendleton has a Chinese proverb: "Kill one man, terrorise a thousand." All graduates are given a little red book, the complete sniper's manual. It has one sentence printed inside: "Thou Shalt Kill."

Vietnam was in one of its bloodiest phases when Mawhinney arrived in early 1968 as an 18-year-old private. He left two years and one month later as a sergeant, having picked up a slew of medals and commendations along the way including the Bronze Star, the Republic of Vietnam Gallantry Cross with Palm and the Purple Heart. He did not want to go, but a chaplain decided he was suffering from combat fatigue...

He teaches the feel, the smell and noises of 'the ultimate hunt'

For 16 straight months he had patrolled with the 5th Marine Scout-Sniper Platoon in one of the most deadly firefight areas, paddy fields nicknamed Arizona Territory on the Laos-Cambodia border near An Hoa. Army records are extremely accurate because every kill had to be checked by an officer on the scene and logged for scrutiny by intelligence officers plotting the course of the enemy. In that time Mawhinney had 103 confirmed kills and another 216 listed as probables because it was too risky to crawl out and see if his victims were really dead.

It is amazing what a close-quarters war this was. Mawhinney never went more than 1,000 yards from his camp. The two-man teams - a sniper and a spotter - carried no radio, and communicated with base by signal flares in case of emergencies.

Marksmanship in Vietnam's torpid heat - 100 per cent humidity and the temperature hitting 45C - was like firing a bullet through treacle. Many of Mawhinney's shots were longer than 1,000 yards, without using modern computers or laser rangefinders. He had an uncanny ability to gauge distance, moisture, wind-strength and terrain - all infinitely variable drag-factors that determine a bullet's flight. He also had the patience to wait hours for the right shot.

Retired Master Gunnery Sgt Mark Limpic, Mawhinney's Vietnam squad leader, says: "He could run half a mile, stand up and shoot offhand and drop somebody at 700 yards. It was uncanny." One day he took out 16 soldiers crossing a river.

Mawhinney draws on a cigarette and smiles ruefully. "I was in extremely good shape in those days," he says. He had to be. He was 6ft 1in, weighed little more than nine stone and he carried a heavy pack. His resting pulse was around 50 beats a minute. He says: "I would count my pulse as I let my breath out. After a pulse I squeeze the trigger. It's a technique high-precision shooters still use today. It takes a lot of practice, but then it becomes second nature. When you fire, your senses go into overtime," he says. "Your vision widens, and you can smell things like you can't at other times." Even today he shoots with both eyes wide open. "It's a good habit to get into if someone is likely to be sneaking up on you."

Mawhinney says his rules of engagement were simple: "If they had a weapon, they were going down. Except for an NVA paymaster I hit at 900 yards, everyone I killed had a weapon. Some ask, 'How could you shoot people down like that?' I reply, 'I knew what I was hitting. Every target I hit was a military target. It wasn't like going in and hosing down a village, hitting women and kids. I was frightened of doing that."

Another cigarette. Another mouthful of beer. "You get to the point where you start living like an animal," he says. "You act like an animal, you work like an animal. All you think about is killing. But I never, ever thought I was shooting a person; I never thought of the person. I thought of the enemy." In Vietnam, he trained half a dozen snipers and tried to make sure their first kill was a "confidence shot", an easy target over about 300 yards. He says he gave all of them the same lecture he had received after his first: "That wasn't a man you just killed; it was an enemy. This is our job. This is what war is all about. You screw up, you die."

Mawhinney pauses. "There are people who will never understand Vietnam and what we did because they weren't there," he says. "In the same way there are people who would never understand why police have to have snipers. But if they had a ten-year-old kid and a bad guy holding a pistol to his head and a police sniper resolved the situation with one shot, then they would appreciate what the sniper's training is all about."

He is religious in his own way, he says. "I believe in God, but I don't have any denomination. I am not a churchgoer. I prayed a lot in Vietnam." He laughs. "Sometimes I prayed a lot harder and faster than other times. My grandmother was a Roman Catholic, I'm not. I wore this St Christopher medal she gave me for the entire two years I was there. She said, 'As long as you wear that medal, St Christopher will take care of you'." His wife, Robin, 45, a school secretary, is hewn from the same tough world. She, too, is a good shot and a keen hunter. "I knew about his Vietnam life from early on," she says. "I saw photos of him with a sniper scope on his rifle and you don't need to be a genius to understand what that's for. I came from a small community where in 1965 just about everybody was drafted to Vietnam. So everybody felt really proud that they went and served. My father was a Second World War veteran. I was raised on a farm and we hunted. On a farm cows don't just drop dead for you to have meat. People don't just fall flat and die in war. Because of my upbringing Chuck's war service didn't bother me."

At the moment, Chuck is advising four police forces on setting up sniper teams. He is also writing a book with a journalist friend entitled 30 Years of Silence, and lecturing at Camp Pendleton Scout-Sniper School.He enjoys his work. "I believe in our military and what they are doing," he says. "Snipers' work is now more important than ever. When you have entry teams going into siege buildings, their only protection is the sniper.

He has no desire to return to Vietnam, as so many veterans have. "I didn't leave anything I want to go back for. I don't need to go back for peace of mind. I have that. I was never ashamed of what I did. I was proud of it. I didn't go over there to kill people. I went to save lives - my guys' lives."

One thing has changed over the years and that is his attitude to hunting. "I really don't have a desire to kill animals any more. I enjoy going out with my boys and they usually kill enough for what we want to eat. Maybe years back I really enjoyed it. But it's got to a point now when I like watching animals instead of killing them."

Profit preservation.
Judge Vaughn Walker favors free-market cannibalism over public interest. By Gabriel Roth © 2000, San Francisco Bay Guardian 8/2/00

WHILE CHRONICLE- Examiner executives celebrated last week's merger approval, and editors who might not even survive the merger predicted a "world-class newspaper," the real significance of Judge Vaughn Walker's decision was almost entirely lost: the ruling – perhaps the most important legal decision involving the newspaper business in years – paves the way for the elimination of daily competition across the nation.

Beyond his talk of "malodorous" politics and unbelievable witnesses, Walker's fundamental point was that Hearst Corporation has every right to buy the San Francisco Chronicle and shut down the San Francisco Examiner. The implication: every one of the 13 cities in which two papers are published under a joint operating agreement could become a one-paper town at a moment's notice.

"If continued publication of the Examiner does not make a net contribution to the joint profits of the enterprise ... principles of allocative efficiency dictate that the Examiner should be closed," Walker's ruling states.

By that argument, the Newspaper Preservation Act (NPA), passed in 1970 to legalize JOAs, does nothing to preserve newspapers. JOAs typically require one paper to publish in the afternoon; with few exceptions, the afternoon papers in JOAs lose money and survive only thanks to the revenue of their morning partners. (If both papers are independently profitable, there's little reason for them to form a JOA in the first place.)

So, according to Walker, one of the partners in almost every JOA qualifies as a failing newspaper – and thus can legally be eliminated.

According to Jack Blum, a lawyer who worked on the U.S. Senate's antitrust subcommittee during the hearings on the NPA, the ruling demonstrates the act's inherent problems. "That was the trouble with the agreement to begin with: there was no way to keep anybody publishing," Blum told us. "It wasn't set up to help newspapers survive; it was set up to let those already in [JOAs] keep making obscene amounts of money. Once you've had the payoff for the weaker paper, you get more money by folding it, and that's exactly what these people do."

Judging from the ruling, Walker "believes very strongly in the free market," said Ben Bagdikian, former Dean of UC Berkeley's graduate school of journalism and the author of The Media Monopoly. "He says, 'Let businesses decide what they want to do, let 'em alone, and let nature take its course. That's best for the public.' He wasn't asked that question, but he chose to address it in a very sweeping way."

Bagdikian believes Walker's free-market approach disregards important factors that make the newspaper business different from other industries.

"Monopoly papers behave very differently than competitive papers, and it is nearly always to the benefit of readers to have competitive papers," he said. "News is a political product. It is influential in setting the public agenda. So it's important that there be great diversity in [available sources of news] – more so than in the case of people who make shoelaces."

In order to reach his conclusion – that Hearst has every right to buy its JOA partner – Walker disregarded some of the specifics about the deal.

"He says folding the [Examiner] would be permissible because the Examiner constitutes a failing firm," Jesse Markham, a San Francisco lawyer who teaches antitrust law at USF Law School, told us. But "the Examiner was regarded by potential buyers as more than just the masthead. And one of the assets that most people regarded as a key asset was the JOA, which guaranteed the Examiner enough time with its head above water to allow an aggressive new competitor to come in and beef up the paper before moving it to the morning [after the JOA expires] and competing head to head. You can't call it a failing firm if you're taking [the Examiner's position in the JOA] into account."

But the paper's share in the JOA wasn't included in the sale – essentially making Hearst the only possible buyer. That's an issue Walker refused to consider.

"Although Hearst never offered a position in the JOA [in the sale], nothing ... required Hearst to do so," the judge wrote. "Common sense and antitrust policy strongly support this approach."

Another strange consequence of Walker's ruling: He implies quite clearly that it would have been legally preferable for Hearst simply to fold the Examiner rather than sell the paper to the Fangs.

"His view is that the Justice Department should have allowed the failing-firm defense and therefore not required divestiture," Markham said.

But why isn't selling the paper – even in a politicized deal involving a heavy subsidy – better than killing it?

"I'm baffled by that," Markham said.

The $66 million that Hearst agreed to pay the Fangs to take the Examiner off their hands, Walker wrote, "would appear to create a barrier to entry by non-subsidized competitors of the contemplated Examiner by infusing that paper with cash untethered to performance."

Markham is skeptical. "I'm not sure how a bankroll constitutes a barrier to entry," he said. "I think he's looking for reasons to dislike the transaction."