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Germany rejects Snowden claim it bowed to NSA

Written By Unknown on Selasa, 11 Maret 2014 | 00.33

BERLIN — Germany on Monday dismissed a claim by NSA leaker Edward Snowden that it had bowed to U.S. demands to water down privacy rights for German citizens.

Snowden told the European Parliament in a statement published Friday that Germany was pressured to modify its legislation on wiretapping and other forms of lawful telecoms surveillance. The former National Security Agency contractor didn't elaborate on how the laws were changed or when, but suggested it was standard practice for the NSA to instruct friendly nations on how to "degrade the legal protections of their countries' communications."

"Laws are made by the German parliament and it doesn't give in to outside pressure, certainly not from foreign spy agencies, and that's true in this case too," government spokesman Steffen Seibert said.

Snowden's claim is particularly sensitive for Germany. While Chancellor Angela Merkel's government has been among the loudest critics of the NSA's reported surveillance of foreign citizens — including Merkel herself — domestic critics say German spy agencies collaborated closely with their American counterparts in ways that may have breached Germany's strict data protection laws.

Snowden claims the NSA took advantage of different legal systems across Europe to eavesdrop on calls and emails across the continent.

Speaking at the opening of the world's biggest technology trade fair in Hannover late Sunday, Merkel called for European Union countries to harmonize their data protection laws, and make the issue a central part of talks with Washington over a free trade agreement.

Her proposal was backed by Neelie Kroes, vice president of the European Commission, who said Europe could gain a competitive advantage by making digital privacy a priority.

"Snowden gave us a wake-up call," she said. "Let's not snooze through it."

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Snowden's statement to the European Parliament: http://bit.ly/1cCa5gl

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Frank Jordans can be reached at http://www.twitter.com/wirereporter


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Senate Democrats aim ire at rich, obscure brothers

WASHINGTON — Democratic Senate candidates are gambling they can turn voters against two obscure billionaire brothers who are funding attacks on them and the president's health care law.

Democrats are denouncing Charles and David Koch (kohk), two of world's richest people. The pair's political network is spending millions on TV ads hitting Democrats in North Carolina and several other states.

Senate Majority Leader Harry Reid says the Kochs are paying huge sums to try to "buy" elections and advance a self-serving agenda of low taxes and less regulation.

Republicans say the Koch-financed ads accurately depict "Obamacare's" faults. They predict the Democrats' strategy won't work.

Republicans need to gain six Senate seats this fall to control the 100-member chamber.


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E-cigarettes: fresh air or smoke and mirrors?

NEW YORK — On the edge of the SoHo neighborhood downtown, The Henley Vaporium is an intimate hipster hangout with overstuffed chairs, exposed brick, friendly counter help — but no booze.

Instead, the proprietors are peddling e-cigarettes, along with bottles of liquid nicotine ready to be plucked from behind a wooden bar and turned into flavorful vapor for a lung hit with a kick that is intended to simulate traditional smoking. A hint of banana nut bread e-juice lingered in the air one recent afternoon as patrons gathered around a low table to chat and vape, or sidled up to the inviting bar for help from a knowledgeable "vapologist."

Places like The Henley are a rarity, even in New York. But "vaping," itself, has had astonishing growth — in just eight years or so, the number of enthusiasts around the world has grown from a few thousand to millions. Believed by some to be the invention of a Chinese pharmacist, vaping now has its own YouTube gurus, trade associations, lobbyists, online forums and vapefests for meet-ups centered on what enthusiasts consider a safer alternative to the "analog," their name for tobacco cigarettes.

The Food and Drug Administration plans to regulate e-cigarettes but has not yet issued proposed rules. Right now, the agency simply states on its website that "e-cigarettes have not been fully studied so consumers currently don't know the potential risks of e-cigarettes," including how much nicotine or other chemicals are inhaled, or if e-cigs "may lead young people to try ... conventional cigarettes."

Whether vaping helps regular smokers quit or leads non-smokers to nicotine addiction isn't known. Vaping may be safer — there are differing opinions — but it isn't necessarily cheap.

Will Hopkins, a 21-year-old dog walker in black leather jacket and skull ring, visits Henley four or five times a week. He smoked a pack of full-strength Marlboros a day for eight years, until he took up vaping. The same goes for his buddy, 20-year-old photographer Will Gallagher, who has been vaping for two years and is fond of his brass mod, a cylindrical device that's larger than a cigarette and decorated with a tiger and Chinese lettering.

"I think both of us have poured in probably a little over a thousand" dollars, Gallagher said of their equipment. "I like the exclusivity of vaping. I like to keep changing up my stuff."

The Wills are into rebuilding tanks and rewiring coils, scouting new e-liquid flavors and adjusting their devices, which can cost up to $300 at Henley, to allow for more vapor, more flavor. But the co-owners of Henley count older smokers among their clientele as well.

E-cigarettes are usually made of metal parts combined with plastic or glass and come in a variety of shapes and sizes. They heat the liquid nicotine solution, creating vapor that quickly dissipates when exhaled. The vapor looks like tobacco smoke and can feel like tobacco smoke when taken into the lungs at varying strengths, from no nicotine up to 24 milligrams or more.

In 2006, sellers of all things vape worked primarily online or via kiosks in shopping malls. Now there are more than 250 brands and devices that can cost mere dollars for a case of "cigalikes," which resemble the real thing, to a gold-and-diamond unit the size of a fountain pen that was reportedly made for a Russian oil tycoon and cost about $900,000.

Whether vaping is cheaper than a cigarette habit is up to how much is spent on equipment and liquids and how often one vapes. A 15-milliliter bottle of liquid at Henley can go for $12 and may be roughly the equivalent of four packs of cigarettes, depending on the strength of both liquid and leaf cigarette, among other factors like how many puffs a smoker takes in. Rechargeable devices require batteries — another expense — and a starter kit for reuse that comes with a device can run around $66.

By comparison, the cost of a 20-cigarette pack of regular cigarettes can range from about $5 to about $15, depending on state tax and the type of location where they're purchased.

Some cities and states have already moved to ban public use the way they do tobacco, and some states forbid the sale of e-cigarettes to minors. Critics believe e-cigs may serve as a tobacco gateway for uninitiated young people. "It may be smoking e-cigarettes, but it's still smoking," said U.S. Sen. Richard Blumenthal, a Connecticut Democrat who was one of four senators to fire off a scathing letter to NBC and the Hollywood Foreign Press Association after a spoof on e-cigs aired during the Golden Globes in January.

Proponents argue that vaping isn't only safe but is helping people quit smoking. The Henley has a white "wall of doom," where it lists in big black letters the numerous tars and chemicals found in tobacco cigarettes, but absent in e-cig use if one is careful about the liquids purchased.

"What's so beautiful about this product is we can take people from a high level of nicotine down to zero, down to nothing, so they're just vaping basically water and flavoring," said Henley co-owner Talia Eisenberg.

She scoffs at the notion that child-friendly flavors of e-liquids — Watermelon Wave and Frozen Lime Drop, for instance — were created to lure teens. And she rejects the idea that e-cig companies should be banned from advertising on TV, as tobacco companies were more than 40 years ago.

While e-liquids and vaping supplies lack oversight and long-term research, they are readily available to all ages online, and at gas stations, bodegas and many drug stores. But Henley doesn't serve those under 18 — a voluntary decision. Would it make more sense to help people give up nicotine — an addictive substance — altogether?

"Sure, but how's that workin' for the country so far? How are they doin' with that? We're talking in terms of serious harm reduction," said Eisenberg's business partner, Peter Denholtz. His mother died of lung cancer two years ago; he himself smoked cigarettes for 36 years, but has been vaping for four years.

Some vapers, like Hopkins and Gallagher, find fun in tinkering with the paraphernalia. Denholtz likens them to older DIY enthusiasts who once whiled away their time on Heathkits, those all-inclusive boxes of parts that could be turned into TV receivers, amateur radios or stereo speakers.

"There's a whole subculture coming up. They're very into all of the different devices. They rewire and rebuild and use different materials for drawing up the juice. It's unbelievable what they've turned it into," he said.

Denholtz and others said vaping, to many, is merely a less harmful activity than tobacco smoking that duplicates the most pleasurable aspects and offers a communal feel like hookah use and cigar bars.

Xavier Armand, 25, has been vaping for a little more than three years and owns an advertising and marketing firm that is helping Henley put together a "liquid of the month club," along the lines of mail-order fruit of the month.

"I always kind of knew smoking was bad for me. My mom was a smoker, but I was never going to look into the patch or the gum or anything," Armand said. "At the end of the day, the best part about smoking is the smoke part. And that oral fixation is kind of a big thing as well. I consider my agency the 2014 version of 'Mad Men.' We all sit around there and instead of smoking cigarettes everyone is smoking e-cigs."

Much as movie stars made tobacco smoking seem glamorous in the 1930s and '40s, celebrities have helped fuel interest in vaping.

At the Golden Globes, Leonardo DiCaprio was shown vaping away in the audience. The actor told The Associated Press recently he vapes to "relieve the stress of life."

Other celebrities have signed on as paid e-cig endorsers, including co-host of "The View," Jenny McCarthy, and actor Stephen Dorff, both of whom push Blu, a big player in e-cigs that was recently bought by Big Tobacco's Lorillard.

Dorff, who took up smoking 20 years ago, stuck to Blu's talking points in a recent interview. He described how vaping offers him the freedom to smoke where regular cigarettes are frowned upon.

But wouldn't his loved ones like to see him quit nicotine for good?

"Ah, probably yeah," laughed Dorff, "but there's a lot of bad things in the world, you know. The one thing that I've always enjoyed is smoking. I consider myself a smoker."

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Follow Leanne on Twitter at http://twitter.com/litalie


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Court rules for landowner in trail dispute

WASHINGTON — The Supreme Court on Monday sided with a Wyoming property owner in a dispute over a bicycle trail that follows the route of an abandoned railroad, a decision that could force the government to pay hundreds of millions of dollars to compensate landowners.

The justices ruled 8-1 that property owner Marvin Brandt remains the owner of a 200-foot-wide trail that crosses his 83-acre parcel in southern Wyoming's Medicine Bow National Forest. The trail once was the path of a railroad and is among thousands of miles of abandoned railroads that have been converted to recreational trails.

Chief Justice John Roberts said the government was wrong to assert that it owns the trail.

The government says it faces compensation claims involving 10,000 properties in 30 states, possibly topping $100 million.

Justice Sonia Sotomayor said in dissent the court's decision "undermines the legality of thousands of miles of former rights of way that the public now enjoys as means of transportation and recreation."

The dispute has its roots in the settlement and development of the western United States in the 1800s. The government gave railroads the right to lay track on public lands to make it easier for people to get to and live in the West. Later, the government gave away millions of acres of public land to settlers and homesteaders, but preserved the railroads' path through these once-public lands.

As Roberts noted Monday, "The settlers and their successors remained, but many of the railroads did not."

Brandt's case involved what happens to the railroad's path, known as a right of way, when the railroad abandons it, under a law dating from 1875.

Roberts, writing for the court, said that the owners of the Laramie, Hahn's Peak and Pacific Railroad — the LHP&P — had "rosy expectations" when they completed a 66-mile run from Laramie, Wyo., to Coalmont, Colo., in 1911.

The owners said it would become "one of the most important railroad systems in this country," Roberts said. He also noted that locals at the time said that the acronym LHP&P stood for "Lord Help Push and Pull" or "Late, Hard Pressed and Panicky." In any event, the railroad didn't make any money.

The line changed hands a couple of times before its last owners tore up the tracks and abandoned it in 2004. The government claimed it two years later and all but one of 31 land owners along the route gave up any claims.

Brandt was the lone holdout and he won his lawsuit Monday.

The case is Marvin M. Brandt Revocable Trust v. U.S., 12-1173.


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Stocks down on discouraging news from Asia

A dash of discouraging economic news from China and Japan put a damper on the U.S. stock market Monday, adding to concerns that global growth could be slowing.

KEEPING SCORE: The Standard & Poor's 500 index fell six points, or 0.4 percent, to 1,871 at 12:13 p.m. Eastern Time. The Dow Jones industrial average fell 84 points, or 0.5 percent, to 16,368. The Nasdaq composite lost 13 points, or 0.3 percent, to 4,323.

CHINA WORRIES: China's exports slumped 18 percent in February, reinforcing fears about the outlook for the world's second-largest economy after the United States. China's official 2014 economic growth target of 7.5 percent, announced last week by Premier Li Keqiang, assumes trade also will grow by 7.5 percent. But customs data show combined imports and exports so far this year have shrunk by 4.8 percent.

THE QUOTE: "The driver this morning has been the economic numbers coming out of China. Their trade numbers were quite disappointing and that's driving the market lower," said David Chalupnik, head of equities for Nuveen Asset Management.

JAPAN TOO: Meanwhile, Japan, the world's third-largest economy, reported a record current account deficit for January and lowered its economic growth estimate for the October-December quarter to 0.7 percent from 1 percent.

IN THE RED: The downbeat economic report from China was hurting several industry sectors heavily reliant on Chinese economic growth, in particular: materials, energy and industrials, which led the decline in nine of the 10 sectors of the S&P 500 index. Mining company Cliffs Natural Resources was the biggest decliner among S&P 500 companies, shedding 89 cents, or 4.8 percent to $17.76.

TOP BANANA: Chiquita agreed to combine with Dublin-based Fyffes to become the world's top banana company. The stock-for-stock transaction announced Monday creates a global banana and fresh produce company with $4.6 billion in annual revenues. Chiquita rose $1.30, or 12 percent, to $12.15.

SEPARATE WAYS: Chemical company FMC plans to separate into two publicly traded companies. The "New FMC" will include the agricultural and health and nutrition businesses, while "FMC Minerals" will include the current minerals segment that houses the alkali chemicals and lithium businesses. FMC rose $4.15, or 5.39 percent, to $82.03.

FROZEN ARCHES: McDonald's was unchanged at $95.50. The company said that a key sales metric dropped 1.4 percent in the U.S. last month, which McDonald's attributed to severe winter weather. The world's largest hamburger chain was also hindered by difficult winter weather conditions in January.

BIG RISER: Alexion Pharmaceuticals paced the gainers in the S&P 500 index, climbing $11.17, or 6.7 percent, to $179.40. The company raised its 2014 earnings forecast, saying the national health agency of France will reimburse it for past sales of its drug Soliris.

EUROPE: The FTSE 100 index of leading British shares was barely changed. Germany's DAX fell 0.3 percent. The CAC-40 in France edged up 0.5 percent.

ASIAN MARKETS: Earlier in Asia, Japan's Nikkei 225 closed down 1 percent and China's Shanghai Composite plunged 2.9 percent. Hong Kong's Hang Seng dropped 1.8 percent. A notable mover was Malaysia Airlines, which fell sharply following the disappearance of one its jets en route to Beijing.

BOND WATCH: The yield on the 10-year Treasury note slipped to 2.78 percent from 2.79 percent as investors moved money into bonds. The yield, which affects rates on mortgages and other consumer loans, has been rising steadily this month from a low of 2.60 percent on March 3.


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EU seeks deal on bank restructuring body

BRUSSELS — European finance ministers tried Monday to agree on how to set up a joint authority that can restructure or shut down failing banks. A deal, they say, would be the final step in their effort to create a banking union that would stabilize the financial system.

Governments of the 28-nation EU are currently in tense negotiations with the European Parliament over the fine print of setting up the so-called single resolution mechanism, which will have the power to shut down or restructure banks across Europe.

To avoid significantly delaying the project, an agreement must be reached by the end of the month to ensure the legislation's passage during Parliament's last plenary voting session in mid-April before elections due in May.

"We all have to make an effort to reach a compromise," French Finance Minister Pierre Moscovici insisted upon his arrival for the ministers' meeting in Brussels.

Voicing cautious optimism, Moscovici added the issues at stake are "substantial but not insuperable."

Without a deal, the project would likely be delayed by at least a year. That would hold up the rest of the banking union, in particular the new centralized banking oversight agency, which is anchored with the European Central Bank.

The finance ministers and European lawmakers are at odds over the bank rescue authority's decision-making structure, on the degree of financial solidarity between the participating nations and on whether the fund should be able to borrow money on markets to ensure it can manage in times of crisis.

The new body will be financed by a bank levy that would raise 55 billion euros ($75 billion) over ten years by 2026. However, before any of its money is used to rescue a bank, the bank's creditors, including holders of large deposits, will be forced to take losses.

Ministers gave themselves two days of discussions in Brussels to reach a new negotiating position before resuming talks with lawmakers Wednesday.


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World has new top banana as Chiquita, Fyffes merge

DUBLIN — Yes, they have more bananas.

Fruit supply companies Chiquita of the United States and Fyffes of Ireland said Monday they had agreed to merge to create the world's biggest banana supplier.

The all-shares agreement means the two companies will become ChiquitaFyffes PLC, be traded on the New York Stock Exchange and be headquartered in Dublin, a more tax-efficient corporate base.

The companies said the deal, which requires shareholder and regulatory approval in Ireland and the United States, would generate $40 million in pre-tax savings through more efficient operations.

Current Fyffes and Chiquita shareholders each would own half of a combined operation expected to generate $4.6 billion in annual sales.

The two companies said the merger would create a banana behemoth that ships more than 160 million crates worldwide, about a quarter more than either of their main rivals, Dole and Del Monte. ChiquitaFyffes also would become the world's No. 3 distributor of pineapples and melons.

Shares in both companies surged, particularly Dublin-based Fyffes, because Monday's deal valued Fyffes shares at 1.22 euros ($1.66).

Fyffes rose 46 percent to 1.30 euros ($1.80) on the Irish Stock Exchange. Chiquita rose nearly 13 percent to $12.20 in New York.

Fyffes, pronounced 'Fifes', is Europe's biggest banana importer and the oldest industry brand, dating to 1929; Irish wits have long cited the company's presence here as proof that Ireland really is a banana republic. The company enjoys exclusive export rights for the Central American country of Belize.

David McCann, Fyffes' chairman, will become chief executive officer of the combined company, while the chief executive of Charlotte, North Carolina-based Chiquita, Ed Lonergan, will become its chairman.

Lonergan said their "natural strategic partnership" would "provide customers with a more diverse product mix and choice."

However, shoppers used to seeing bananas bearing the bold blue stickers of Chiquita or Fyffes aren't expected to notice any difference there. The two brands are staying separate.


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Canada PM in South Korea for expected trade deal

OTTAWA, Ontario — Canada's prime minister has traveled to South Korea, where he is widely expected to announce a free-trade deal.

A South Korean delegation greeted Prime Minister Stephen Harper on Monday in Seoul.

There's no word yet on whether Harper plans to sign the final text of a free-trade deal with South Korea or is simply going to announce an agreement-in-principle in a staged photo-op.

A free-trade agreement with South Korea — which Harper says is a gateway to deals with other Asian countries — has been a decade in the making.

One major sticking point is the auto sector, with Canada having a 6.1 percent tariff on car imports.

Critics fear that if it is removed, the Canadian market would be flooded with Korean-made brands such as Hyundai and Kia.


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McDonald's struggles worsened by snow

NEW YORK — McDonald's is fighting to hold onto customers in the U.S. — and all that snow didn't help.

The world's biggest hamburger chain said Monday that sales fell 1.4 percent at established U.S. locations. It blamed the harsh winter weather, but conceded that "challenging industry dynamics" also played a role.

After years of outperforming its rivals, McDonald's has been struggling to boost sales as people flock to places like Chipotle and Five Guys Burgers and Fries. Those chains have popped up quickly across the country by positioning themselves as a step up from traditional fast food in terms of quality, for a little extra money. They also offer greater customization, meaning diners can dictate exactly what toppings they want.

Executives at McDonald's Corp., based in Oak Brook, Ill., acknowledge Americans' changing demands when it comes to fast food.

"A long time ago, mass appeal had to be mass appeal," Jeff Stratton, the president of McDonald's USA, said in an interview with The Associated Press last month. "That's not necessarily the case anymore today."

So the company's restaurants are adapting to a world where McDonald's traditional strength — consistency — isn't always enough. For example, McDonald's is rolling out new prep tables that can hold more toppings and sauces, a sign that it plans to give customers greater variety.

In Southern California, the company is even testing a "build-your-own-burger" concept that lets people use tablets to tap out the bread, cheese and other toppings they want on their burgers. Executives say results are promising so far, but rolling out the offering across its more than 14,000 U.S. locations would require considerable changes to its kitchens.

It would also need the backing of the independent franchisees that own and operate the majority of its restaurants in the U.S.

In the meantime, McDonald's has made other changes to its menu, including the option to get egg whites in breakfast sandwiches, and the addition of chicken McWraps, which are intended to appeal to people who want fresher, healthier food.

Globally, McDonald's said sales declined 0.3 percent at locations open at least 13 months in February. It warned that its muted performance so far this year could hurt first-quarter profit margins.

In region encompassing the Middle East, Africa and Asia, sales declined 2.6 percent. The company cited weakness in Japan and Australia, as well as a shift in the timing of the Chinese New Year.

Europe was a relative bright spot, with sales up 0.6 percent on a strong performance in the U.K. and growth in France.

McDonald's has more than 35,000 locations in more than 100 countries.

Its stock shed 31 cents to $95.19 in morning trading.

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Follow Candice Choi at www.twitter.com/candicechoi


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Sbarro again files for Ch. 11 reorganization

NEW YORK — Sbarro has filed for Chapter 11 reorganization for the second time in three years.

The bankruptcy filing by the struggling pizza chain Monday comes after the company shuttered 155 of its U.S. locations last month. Sbarro had cited declining traffic in the mall food courts where it does much of its business for the closings.

The company did not immediately provide details on whether any marketing or in-store changes were planned to help update its image and boost sales.

It says it still has more than 800 locations worldwide.

Sbarro also filed for bankruptcy protection in April 2011 and emerged a few months later, saying that it significantly cut its debt and received a capital infusion. A new CEO then led a push to revitalize the chain's image by touting new recipes and ovens. But the efforts apparently didn't take hold.

Sbarro, based in Melville, N.Y., says its strategy of store closings and balance sheet restructuring will improve its profitability and reduce outstanding debt by more than 80 percent. It said its filing is designed to "allow for a quick exit from bankruptcy" as it executes a broader plan developed by the new management team.


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