Pitfalls seen in growth of part-time work

Although the state's unemployment rate is at its lowest level in almost four years and the number of employed Californians is growing, labor experts see a different reality: Full-time work has faded in many industries.

Nubia Calderón Barillas, 32, left a job in retail in May for a housekeeping job at the Holiday Inn LAX that promised better pay and steady work.

But nearly nine months later, the mother of three said, she rarely works more than two days a week. She has asked for more hours, she said, but to no avail, even in an industry that set a new peak employment level last year.

"It's been difficult lately," she said. "I practically didn't work all of December except for the holidays."

California employers picked up the rate of hiring during 2012 — at times at nearly twice the rate of the country as a whole. But a significant portion of those jobs are less than full time, according to federal data released last week.

The number of people involuntarily working part time nationwide has grown to 7.9 million, an 80% increase from 2006, data from the Bureau of Labor Statistics show.

That trend is particularly pronounced in the Golden State, which saw the number of involuntary part-time workers swell to 1.3 million, up 126% from 585,100 in 2006. Only four other states, Nevada and Florida among them, had higher rates of involuntary part-time workers.

Various industries are increasingly relying on part-time workers and other contingent employees, such as temporary workers, to save money, said Michael Bernick, a Milken Institute fellow who studies labor markets.

"As you have more and more costs associated with full-time workers in terms of healthcare or other costs, employers look for alternative ways to reduce costs," Bernick said. "One way is on-demand and part-time work."

The increase isn't limited to industries that typically employ part-time workers, such as leisure and hospitality. Other sectors with strong job growth, such as professional and business services, have also seen a rise in part-time workers as employers aim to keep payroll costs down, Bernick said.

Nationwide, the number of involuntary part-time workers in professional and business services, which includes white-collar occupations such as accountants and lawyers, nearly doubled to 711,000 last year from 367,000 in 2007. A sector-by-sector breakdown is unavailable for California because the sample size of the household survey that the federal data rely on is too small.

Part-time work is common in California's leisure and hospitality sector, which added almost 61,000 jobs since December 2011, accounting for more than a quarter of the state's net jobs created in that time period.

Growth of low-wage industries such as hospitality provides work opportunities for people with limited education, even if the work is only part time, said Jerry Nickelsburg, senior economist at the UCLA Anderson Forecast.

"We shouldn't look with dismay" on the rapid growth of a sector that is so dependent on part-time work, he said. "If that were the only sector we were growing, then that would be worrisome."

Tom Walsh, president of Unite Here Local 11, a union representing hospitality workers in Los Angeles and Orange counties, said in negotiations with employers, his group has pushed for workers' hours to be maximized.

Although full-time work sometimes isn't ensured, Walsh said, employers are urged to give part-time workers as many hours as possible.

"I think it's an example of certain employers being penny wise but pound foolish," he said. "They figure they can save money by having more part-time workers and having low pay. If they don't change that, folks are going to take jobs somewhere else the first chance they get."

The long-term implication of part-time work, economists said, is growing wage disparities and the risk of dampening consumer spending, a major driver of the economy. Part-time workers also are more likely to rely on state aid, such as food stamps, to make ends meet.

Kellie Flowers moved to Los Angeles late last year hoping to find work as an event coordinator or wardrobe stylist.

But full-time work has been elusive, even with a college degree.

The 30-year-old Virginia native managed to land two part-time jobs when she first relocated, one at a Manhattan Beach boutique and the other at a running store.

She earned $10 per hour at both jobs but didn't have benefits or health insurance.

"It was very hard working two jobs," she said. "You definitely don't have any spending money."

Flowers recently started a new job, selling spa packages, on commission. She sells between six to 10 a day, earning $15 for each.

"I'm going to look for other jobs that make me happier. Until then I just need to make money," she said.

Meanwhile, Barillas, the Holiday Inn housekeeper, said she hopes she'll eventually work more hours.

She and her husband are falling behind on utility bills at the one-bedroom Koreatown apartment they share with their three children. She recently applied for food stamps, a decision she said was embarrassing.

"I've always had work," she said. "I used to think people on food stamps just didn't want to work, but now I find myself with the need to ask for help."

ricardo.lopez2@latimes.com

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Child porn suspect indicted by federal grand jury

A North Hills woman whom authorities allege plied a young girl with crack cocaine and photographed her being sexually abused by an older man was indicted Tuesday on federal charges of producing child pornography and sex trafficking.

Letha Montemayor Tucker was named Tuesday in a four-count indictment returned by a federal grand jury. If convicted of all the charges, Tucker would face a mandatory minimum federal sentence of 10 years and could get up to life in prison, authorities said.

The charges come a month after authorities sought the public's help in the investigation by releasing photographs of a man and woman depicted in a set of widely circulated child pornography photos.

Tips started pouring in immediately after the photos were released, investigators said.

Tucker, who goes by the name Butterfly, was located about 10 hours after the release of the photos and taken into custody, said Claude Arnold, special agent in charge for Homeland Security Investigations in Los Angeles, a division of U.S. Immigration and Customs Enforcement.

The alleged victim, who was about 12 when the photos were taken, was found within a week of the case going public, Arnold said. She is an adult now and is cooperating with authorities, he said.

In addition to photographing the girl being sexually abused by the man, authorities said, Tucker also committed sex acts with the alleged victim.

The photos were part of a child pornography collection known as the "Jen Series."

The 40-plus photos were first discovered by investigators in the Chicago area in 2007. Investigators said images in the series have been reported about 300 times and have been found on computers across the country.

The victim "didn't even know these images were out there," Arnold said.

"The horror of child pornography is it's for life, the victimization," Arnold said. "Once the photos are there in cyberspace, they're there forever."

The girl, identified in court records only by the initials J.M.M., lived in the same Los Angeles County residential hotel as Tucker, who worked as a prostitute, authorities said.

Around 2000 or 2001, the girl stopped attending school regularly and spent more and more time in Tucker's room, smoking crack cocaine Tucker provided, according to the indictment.

The girl was present when Tucker engaged in prostitution with clients and was usually high when this happened, authorities allege. Tucker instructed the child to take off her clothes in front of the clients, prosecutors alleged in court papers.

The faces of Tucker and the girl are "clearly visible" in the photos, according to the indictment. Tucker had an eyebrow piercing and a tattoo of a sleeping cat behind her shoulder, which made her easier to identify, authorities said.

The face of the man, however, is blacked out in the photographs. Authorities are still trying to identify the man, Arnold said.

"Obviously, we want him also to answer for his crimes," Arnold said.

Arnold said the alleged victim is "going to be dealing with this for a long time."

Now that she has been identified, she will receive a victim notification every time one of the images turns up in an investigation, he said.

Tucker is being held without bond and is scheduled to be arraigned in federal court on Feb. 13. Her attorney could not be reached for comment.

hailey.branson@latimes.com

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Disney working on stand-alone 'Star Wars' films

LOS ANGELES (AP) — Disney is mining The Force for even more new films.

Walt Disney Co. CEO Bob Iger said Tuesday that screenwriters Larry Kasdan and Simon Kinberg are working on stand-alone "Star Wars" movies that aren't part of the new trilogy that's in the works.

"There has been speculation about some standalone films that have been in development, and I can confirm to you today that in fact we are working on a few stand-alone films," Iger told CNBC.

Iger said the movies would be based on "great 'Star Wars' characters that are not part of the overall saga." The films would be released during the six-year period of the new trilogy, which starts in 2015 with "Star Wars: Episode VII."

Disney confirmed last month that "Star Trek" director J.J. Abrams will direct the seventh installment of the "Star Wars" saga.

Disney bought "Star Wars" maker Lucasfilm last year for more than $4 billion.

The last "Star Wars" trilogy, a prequel to the original films, was released from 1999 to 2005.

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Online:

http://www.starwars.com/

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Ipswich Journal: Paul Mason Is One-Third the Man He Used to Be

Paul Nixon Photography

Paul Mason in 2012, two years after gastric bypass surgery stripped him of the unofficial title of “the world’s fattest man.”

IPSWICH, England — Who knows what the worst moment was for Paul Mason — there were so many awful milestones, as he grew fatter and fatter — but a good bet might be when he became too vast to leave his room. To get him to the hospital for a hernia operation, the local fire department had to knock down a wall and extricate him with a forklift.

That was nearly a decade ago, when Mr. Mason weighed about 980 pounds, and the spectacle made him the object of fascinated horror, a freak-show exhibit. The British news media, which likes a superlative, appointed him “the world’s fattest man.”

Now the narrative has shifted to one of redemption and second chances. Since a gastric bypass operation in 2010, Mr. Mason, 52 years old and 6-foot-4, has lost nearly two-thirds of his body weight, putting him at about 336 pounds — still obese, but within the realm of plausibility. He is talking about starting a jewelry business.

“My meals are a lot different now than they used to be,” Mr. Mason said during a recent interview in his one-story apartment in a cheerful public housing complex here. For one thing, he no longer eats around the clock. “Food is a necessity, but now I don’t let it control my life anymore,” he said.

But the road to a new life is uphill and paved with sharp objects. When he answered the door, Mr. Mason did not walk; he glided in an electric wheelchair.

And though Mr. Mason looks perfectly normal from the chest up, horrible vestiges of his past stick to him, literally, in the form of a huge mass of loose skin choking him like a straitjacket. Folds and folds of it encircle his torso and sit on his lap, like an unwanted package someone has set there; more folds encase his legs. All told, he reckons, the excess weighs more than 100 pounds.

As he waits to see if anyone will agree to perform the complex operation to remove the skin, Mr. Mason has plenty of time to ponder how he got to where he is. He was born in Ipswich and had a childhood marked by two things, he says: the verbal and physical abuse of his father, a military policeman turned security guard; and three years of sexual abuse, starting when he was 6, by a relative in her 20s who lived in the house and shared his bed. He told no one until decades later.

After he left school, Mr. Mason took a job as a postal worker and became engaged to a woman more than 20 years older than him. “I thought it would be for life, but she just turned around one day and said, ‘No, I don’t want to see you anymore — goodbye,’ ” he said.

His father died, and he returned home to care for his arthritic mother, who was in a wheelchair. “I still had all these things going around in my head from my childhood,” he said. “Food replaced the love I didn’t get from my parents.” When he left the Royal Mail in 1986, he said, he weighed 364 pounds.

Then things spun out of control. Mr. Mason tried to eat himself into oblivion. He spent every available penny of his and his mother’s social security checks on food. He stopped paying the mortgage. The bank repossessed their house, and the council found them a smaller place to live. All the while, he ate the way a locust eats — indiscriminately, voraciously, ingesting perhaps 20,000 calories a day. First he could no longer manage the stairs; then he could no longer get out of his room. He stayed in bed, on and off, for most of the last decade.

Social service workers did everything for him, including changing his incontinence pads. A network of local convenience stores and fast-food restaurants kept the food coming nonstop — burgers, french fries, fish and chips, even about $22 worth of chocolate bars a day.

“They didn’t deliver bags of crisps,” he said of potato chips. “They delivered cartons.”

His life became a cycle: eat, doze, eat, eat, eat. “You didn’t sleep a normal sleep,” he said. “You’d be awake most of the night eating and snacking. You totally forgot about everything else. You lose all your dignity, all your self-respect. It all goes, and all you focus on is getting your next fix.”

He added, “It was quite a lonely time, really.”

He got infections a lot and was transported to the hospital — first in a laundry van, then on the back of a truck and finally on the forklift. For 18 months after a hernia operation in 2003, he lived in the hospital and in an old people’s home — where he was not allowed to leave his room — while the local government found him a house that could accommodate all the special equipment he needed.

This article has been revised to reflect the following correction:

Correction: February 6, 2013

The headline on an earlier version of this article misstated Paul Mason’s current weight relative to what he weighed nearly a decade ago. He is now about one-third, not two-thirds, the weight he was then.

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Congress' horse-and-buggy computer laws

As martyrs go, Aaron Swartz was an extraordinary example of the breed. A computer programming genius, he had helped develop the social networking site Reddit and became known as a leading advocate for easy and free information sharing on the Web.

When Swartz committed suicide in January, while awaiting trial on federal computer hacking charges that could have landed him in prison for 35 years and cost him fines of $1 million, his death was seen as a reproach to overzealous federal prosecutors in Boston. But the case raises a broader issue: Why is Congress so awful at writing computer and Internet laws?

Swartz was indicted in 2011 under the Computer Fraud and Abuse Act, a 1984 law that has struggled to keep up with the times. It's been amended seven times and is more outdated than ever. The charges stemmed from his efforts to allegedly break into MIT's computer network and use it to download millions of academic articles kept by JSTOR, a nonprofit, fee-based service. Legitimate MIT users could access JSTOR articles for free. (JSTOR advocated dropping the case, but MIT did not.)

The Computer Fraud and Abuse Act, or CFAA, may be the worst of the statutes Congress has passed or debated as ways to address what is vaguely shoveled into a bin labeled "computer crime." But others are nearly as frightful. The Digital Millennium Copyright Act, or DMCA, of 1998 imposes excessive civil and criminal penalties for activities engaged in by many users of digital books, movies and music in the real world.

In 2011, Congress contemplated a bill called the Stop Online Piracy Act, or SOPA, which would have given the owners of supposedly pirated or counterfeited property nuclear-scale weapons to use against websites they didn't like, by allowing them to simply assert rights infringement to shut down a site. SOPA was derailed by an online campaign spearheaded by, among others, Aaron Swartz.

The three laws had much in common. They were written broadly, in a fruitless effort to "future-proof" them against new technologies. They imposed excessive penalties, on the reasoning that if a crime is bad, it's much worse when committed with these mysterious devices called computers. And they offered special interests such as copyright claimants, corporations facing trade competition, and media conglomerates opportunities to assert new legal rights they were denied in the world of old technologies.

"Congress tries to write technology-neutral laws," says Jennifer Granick, an Internet law expert at Stanford, "but there's been a wholesale change in how we interact with computers" that renders these laws quickly anachronistic.

Clever lawyers and aggressive prosecutors often rush in to fill the gaps. The DMCA was originally aimed to discourage hackers from copying code-protected DVDs; but it's been cited by a garage door-opener company against a rival making universal clickers, and by desktop printer makers against knock-off toner cartridges. (Both those efforts failed in court, but the potential for expansive interpretation remains.) The recording industry threatened to prosecute Princeton computer expert Edward Felten under the DMCA if he reported publicly on how he had broken the industry's digital protection technology — an effort he undertook at the industry's invitation. The threat prompted Felten to withdraw a planned public presentation.

By imposing extra penalties for using a computer to do things that have traditionally been handled in civil court, "these broader laws have criminalized things that are of dubious criminality," Granick told me.

The CFAA is a perfect example. The measure was written as a cyberspace analogue to trespass laws. Its broadest provision says that anyone who intentionally "exceeds authorized access and thereby obtains information from any protected computer" has committed a federal crime.

This is a wide-open definition that prosecutors have used very aggressively. A "protected computer," by Justice Department definition, can be almost anything with a microchip, including your Internet-savvy refrigerator or your car. "Unauthorized access" could mean viewing a website in violation of its terms of use, that mass of impenetrable legalese that most of us click on blithely without reading, just to use the site. Do that to obtain or read any "information," and you've committed a federal crime.

If you think this is an alarmist interpretation, consider the Lori Drew case — the "poster child" for CFAA overreaching, in the words of Orin Kerr, a Georgetown University cyber-law expert who argued Drew's side. She was the Missouri mother who was accused of helping set up a fake Myspace page to bully a classmate of her daughter. The classmate later committed suicide. Since there is no federal cyber-bullying statute, prosecutors charged Drew under the CFAA for violating the Myspace terms of use, which requires users to provide only accurate information about themselves. A Los Angeles jury found her guilty.

Los Angeles District Judge George Wu overturned the verdict, observing that a website's term of use, which can be altered without notice, are too flimsy to carry the weight of criminal liability, and almost never enforced by the website. But as Kerr notes, federal prosecutors have not abandoned their expansive interpretation despite its obvious absurdities: Until they were changed in March 2012, Google's terms of service required users to be of "legal age," meaning that a middle school child conducting a Google search was theoretically committing a federal crime. So are users of dating websites who exaggerate their good points, in violation of terms of use requiring rigorous accuracy about their height, weight, physical condition and charm.

The law places a powerful weapon in the hands of employers, who routinely forbid workers from using their computers for personal business. "The computer gives employees new ways to procrastinate by chatting with friends, playing games, shopping or watching sports highlights," wrote Appellate Judge Alex Kosinski in a ringing denunciation of the CFAA last year. "Under the broad interpretation of the CFAA, such minor dalliances would become federal crimes." Kosinski's ruling upheld the dismissal of CFAA charges against a corporate headhunter who used information from his old employer's computer system to start a competing company.

Efforts are underway in Congress to pare back the CFAA. Rep. Zoe Lofgren (D-San Jose) has proposed a draft "Aaron's Law," which would ban prosecutions based strictly on violations of a website's terms of service or an employer's policies. She would also make clear that tweaking a computer's digital signature — as Swartz did to conceal his identity in a weeks-long cat-and-mouse game with MIT network overseers — is not in itself a crime.

Yet nothing in Lofgren's bill would address the fundamental problem of Congress writing nonsensically broad laws to govern cyberspace and letting the Justice Department work out the kinks. But prosecutors always agitate for more discretion and stiffer penalties, Kerr says; that's how we end up with criminal penalties for lying about one's age on a dating site.

It's also how Swartz gets threatened with 35 years in jail for downloading academic papers that MIT students could access for free. The prosecutors' goal was to pressure him to take a plea, but the instrument was put in their hands by a Congress that couldn't be bothered to educate itself about the real world of computers and networks before legislating about it. That's the type of legislating that has to change to avoid more cases like Swartz's.

Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.

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GOP lawmakers want probe of Cal Fire over off-budget account

State Republican legislators want federal prosecutors to investigate the California Department of Forestry and Fire Protection for putting $3.6 million from legal settlements into an off-budget account.

"This subterfuge money has been spent on a wide array of questionable expenditures that has nothing to do with reimbursing the state for firefighting costs," the legislators wrote in a Friday letter to Gov. Jerry Brown, asking him to request an investigation by the U.S. attorney.

The letter follows a story in The Times that found that from 2005 to 2012, Cal Fire, as the department is commonly known, placed funds with the California District Attorneys Assn. to use for training and equipment. Cal Fire regulations say the money is supposed to be sent to the state general fund.

The legislators said the state attorney general had authorized sending the money to the California District Attorneys Assn. Brown served as attorney general from 2007 to 2011.

Lynda Gledhill, a spokeswoman for the current attorney general, denied that claim.

"The California Department of Justice did not endorse placement of settlement money into an account outside of the budget process," Gledhill said. "Atty. Gen. [Kamala] Harris has directed her office to examine the state's settlement practices to ensure all settlements are not only lawful, but fully transparent to the public."

The state Department of Finance has begun an audit of the fund, which is expected to take about two months, spokesman H.D. Palmer said.

In addition, a joint Assembly and state Senate committee announced last week that it will conduct a hearing to determine the extent California agencies are using off-budget accounts to hold money outside the state system.

The GOP letter was signed by 25 members of the Senate and Assembly. They also are using the issue to call for an end to a law the Legislature passed last year requiring rural homeowners who rely on state firefighters to pay $150 a year for fire prevention services.

"It is clear that the state has not been judicious in its use of taxpayer dollars," the lawmakers' letter said. "The state must stop these outrageous duplicitous tactics."

Senate Republican leader Robert Huff of Diamond Bar and Assembly GOP leader Connie Conway of Tulare sent a letter last week asking the attorney general to refer the matter to the U.S. attorney. A spokeswoman for the U.S. attorney in Sacramento said no information about the fund had been brought to her office.

Janet Upton, a Cal Fire spokeswoman, said the agency would welcome an investigation.

"We stand by the intent of this fund and have many examples of good things it's done that benefit the taxpayers of this state," she said.

Cal Fire's own audit, released in 2009, raised questions about whether the fund was allowed. But many of the critical comments were dropped from the audit's final version.

The scrutiny follows similar revelations that the state Department of Parks and Recreation hid $20 million as budget cuts were forcing the closure of parks. Although the Department of Finance looked for other secret funds, it did not find Cal Fire's account with the prosecutors' association.

jeff.gottlieb@latimes.com

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NJ Gov. Christie, Letterman laugh about fat jokes

TRENTON, N.J. (AP) — New Jersey Gov. Chris Christie and David Letterman have shared some laughs about the many fat jokes the comedian has made about the lawmaker's ample girth.

Christie has termed his plumpness "fair game" for comedians. And during his first appearance on "Late Show with David Letterman" on Monday, the outspoken Republican and potential 2016 presidential contender read two of Letterman's jokes that he said were "some of my personal favorites."

The governor also drew loud laughs when he pulled out a doughnut and started eating it while Letterman asked him if he was bothered by the digs that have been made about his weight. Christie said he wasn't, noting that he laughs at the jokes if he finds them funny.

"Late Show" airs on CBS at 11:35 p.m. Eastern time.

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Well: Expressing the Inexpressible

When Kyle Potvin learned she had breast cancer at the age of 41, she tracked the details of her illness and treatment in a journal. But when it came to grappling with issues of mortality, fear and hope, she found that her best outlet was poetry.

How I feared chemo, afraid
It would change me.
It did.
Something dissolved inside me.
Tears began a slow drip;
I cried at the news story
Of a lost boy found in the woods …
At the surprising beauty
Of a bright leaf falling
Like the last strand of hair from my head

Ms. Potvin, now 47 and living in Derry, N.H., recently published “Sound Travels on Water” (Finishing Line Press), a collection of poems about her experience with cancer. And she has organized the Prickly Pear Poetry Project, a series of workshops for cancer patients.

“The creative process can be really healing,” Ms. Potvin said in an interview. “Loss, mortality and even hopefulness were on my mind, and I found that through writing poetry I was able to express some of those concepts in a way that helped me process what I was thinking.”

In April, the National Association for Poetry Therapy, whose members include both medical doctors and therapists, is to hold a conference in Chicago with sessions on using poetry to manage pain and to help adolescents cope with bullying. And this spring, Tasora Books will publish “The Cancer Poetry Project 2,” an anthology of poems written by patients and their loved ones.

Dr. Rafael Campo, an associate professor of medicine at Harvard, says he uses poetry in his practice, offering therapy groups and including poems with the medical forms and educational materials he gives his patients.

“It’s always striking to me how they want to talk about the poems the next time we meet and not the other stuff I give them,” he said. “It’s such a visceral mode of expression. When our bodies betray us in such a profound way, it can be all the more powerful for patients to really use the rhythms of poetry to make sense of what is happening in their bodies.”

On return visits, Dr. Campo’s patients often begin by discussing a poem he gave them — for example, “At the Cancer Clinic,” by Ted Kooser, from his collection “Delights & Shadows” (Copper Canyon Press, 2004), about a nurse holding the door for a slow-moving patient.

How patient she is in the crisp white sails
of her clothes. The sick woman
peers from under her funny knit cap
to watch each foot swing scuffing forward
and take its turn under her weight.
There is no restlessness or impatience
or anger anywhere in sight. Grace
fills the clean mold of this moment
and all the shuffling magazines grow still.

In Ms. Potvin’s case, poems related to her illness were often spurred by mundane moments, like seeing a neighbor out for a nightly walk. Here is “Tumor”:

My neighbor walks
For miles each night.
A mantra drives her, I imagine
As my boys’ chant did
The summer of my own illness:
“Push, Mommy, push.”
Urging me to wind my sore feet
Winch-like on a rented bike
To inch us home.
I couldn’t stop;
Couldn’t leave us
Miles from the end.

Karin Miller, 48, of Minneapolis, turned to poetry 15 years ago when her husband developed testicular cancer at the same time she was pregnant with their first child.

Her husband has since recovered, and Ms. Miller has reviewed thousands of poems by cancer patients and their loved ones to create the “Cancer Poetry Project” anthologies. One poem is “Hymn to a Lost Breast,” by Bonnie Maurer.

Oh let it fly
let it fling
let it flip like a pancake in the air
let it sing: what is the song
of one breast flapping?

Another is “Barn Wish” by Kim Knedler Hewett.

I sit where you can’t see me
Listening to the rustle of papers and pills in the other room,
Wondering if you can hear them.
Let’s go back to the barn, I whisper.
Let’s turn on the TV and watch the Bengals lose.
Let’s eat Bill’s Doughnuts and drink Pepsi.
Anything but this.

Ms. Miller has asked many of her poets to explain why they find poetry healing. “They say it’s the thing that lets them get to the core of how they are feeling,” she said. “It’s the simplicity of poetry, the bare bones of it, that helps them deal with their fears.”

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Have you written a poem about cancer? Please share them with us in the comments section below.

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Justice Department sues S&P over mortgage bond ratings

The federal government is embarking on one of its most ambitious efforts to assign blame for the financial crisis, going after Wall Street's biggest credit rating firm for its role in pumping up the housing bubble.

The Justice Department filed a lawsuit late Monday in Los Angeles federal court against Standard & Poor's Corp. The suit accuses the company's analysts of issuing glowing reviews on troubled mortgage securities whose subsequent failure helped cause the worst financial crisis since the Great Depression.

The action marks the first federal crackdown against a major credit rater, and it signals an untested legal tack after limited success in holding the nation's banks accountable for the part they played in the crisis.

The government selected Los Angeles as the venue to file the lawsuit in part because it was one of the regions hardest hit when the bottom fell out of the housing market. Hundreds of thousands of California residents lost their homes to foreclosure, and others saw their wealth evaporate as properties plummeted in value.

"The DOJ is playing hardball and they're coming at the ratings agency in a very different direction with a potentially very powerful weapon to push S&P to the settlement table," said Jeffrey Manns, a law professor at George Washington University.

In addition to the Justice Department, several state attorneys general are investigating the ratings agency. States such as California and New York are expected to pursue their own investigations and legal action, people familiar with the matter said.

S&P has faced other lawsuits from investors and the states of Illinois and Connecticut.

California is expected to sue S&P under the state's False Claims Act, one person familiar with the matter said. The law makes it a crime to defraud the state, and damages of up to three times the amount of the claim can be awarded if the victim was an institutional investor, such as one of the state's pension funds.

The federal action does not involve any criminal allegations. Critics have complained that the government has yet to send any senior bankers or Wall Street executives to jail for potential illegal behavior that led to the crisis.

But civil actions typically require a much lower burden of proof.

Investors rely in part on rating agencies to decide what stocks, bonds or other securities to buy based on the agencies' recommendations about their safety. The three major raters – S&P, Moody's Investors Service and Fitch Ratings — have all been criticized for giving perfect AAA ratings to complex bonds in 2007 that later turned out to be nearly worthless.

It was not known why Standard & Poor's was singled out in the federal lawsuit.

The government and S&P have tangled before. The rating agency in August 2011 issued a historic downgrade of U.S. creditworthiness and threatened to lower it even further.

The two sides were reportedly in settlement talks that broke down during the past week. The ratings firm could face hundreds of millions of dollars in fines and new restrictions on its business model if found liable of civil violations.

S&P, which is a unit of publisher McGraw Hill, denounced the lawsuit in a detailed and strongly worded response. The company said the claims were unjustified, adding that it acted in "good faith" to warn the world about some of the securities that went belly up.

"A DOJ lawsuit would be entirely without factual or legal merit," the company said, adding that even the U.S. government "publicly stated that problems in the subprime market appeared to be contained."

The rating firm has steadfastly maintained that it was protected under the 1st Amendment to state an opinion about certain financial products. That argument may not hold up if federal or state investigators are able to prove that the ratings agency knowingly gave improper evaluations.

The lawsuit zeros in on a series of collateralized debt obligations that were created at the height of the housing boom in 2007, according to S&P. The value of these exotic mortgage securities was nearly wiped out when the subprime mortgages they were tied to imploded.

Lawrence J. White, an economics professor at New York University's business school, believes that the housing crisis could have been more contained if ratings agencies had been more careful.

"If they had been more conservative in their ratings, fewer bonds would have been sold, the interest rates would have been higher, fewer mortgages would have been granted," White said. "There would still have been a housing bubble, but it might not have been quite so severe."

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Slaying casts light on Hollywood's transgender prostitutes

The last that Cassidy Vickers' street friends saw of him was about 10 p.m. on Nov. 17, 2011, outside the Donut Time shop on Santa Monica Boulevard in Hollywood.

He was waving and saying he'd be back in a bit.

A transgender prostitute whose legal name was Nathan, Cassidy had come down from the San Francisco Bay Area to work the Hollywood streets.

That night, on Lexington Avenue, 10 blocks from the doughnut shop, Vickers was shot to death by a man on a bike.

Vickers' death was part of a series of crimes by a man police are now calling the Western Bandit for his armed robberies late at night in the vicinity of Western Avenue from Hollywood to South Los Angeles. Detectives believe he has recently resurfaced, committing six more street robberies from June to October, and then two more last month.

"This is a huge concern for us, and for the safety of the public," said Lt. John Radtke of the Los Angeles Police Department. Radtke, supervisor of West Bureau homicide detectives, said a "signature aspect" of the crimes, which he declined to specify, has led investigators to believe the same man has appeared three times to commit crimes.

His victims, Radtke said, range from transgender prostitutes to people coming home from work late at night. Besides Vickers, two other victims have been transgender women, neither of whom was hurt. Detectives don't believe he's specifically targeting transgender prostitutes.

"My feeling is he's out there robbing and desperate to get his money and he takes whoever he encounters," Radtke said.

Still, the case of the Western Bandit casts light on the world of transgender streetwalkers, which has changed radically in recent years, leaving only the most vulnerable on the street at night — people like Nathan "Cassidy" Vickers.

Vickers grew up in a tidy, four-bedroom house in East Palo Alto, a working-class black and Latino town south of San Francisco.

In the years after high school, he came out as a gay man, said his mother, Mitzy Thompson, though "he had some of the 'hood in him," dressing in baggy pants, with braided hair and two fake gold front teeth.

His friends remember a funny, talkative and loyal gay man attempting to find his way in a tough town like East Palo Alto.

He left, eventually living in Las Vegas and, briefly, New York. He then returned to the Bay Area, where he worked for years cleaning rooms in hotels.

Sometime in 2010 he began going to Oakland parties in drag and from there, desperate for cash, working as a prostitute.

Cross-dressing, for Vickers, "was 90% economic; 10% because he liked the attention," said Nelee Webb, a friend and former roommate. Unemployment "took his self-esteem. He felt 'This is my last resort.' "

By early 2011, Vickers was traveling the Hollywood-Bay Area circuit that has for years been followed by many transgender prostitutes.

He remained Nathan in East Palo Alto, but became Cassidy while working Hollywood's transgender prostitute strip: Santa Monica Boulevard.

According to a report by the city attorney's office, Cassidy Vickers was arrested for soliciting prostitution, a month before he died, on nearby Lexington Avenue, which is where many transgender prostitutes hang out.

Several blocks of Lexington, just north of Santa Monica Boulevard and lined with small bungalows and crowded apartments, have been a strip for male hookers dressed as women for at least two decades. The scene reached its zenith in the mid-1990s. But it has declined in the era of Internet sites that match johns with prostitutes.

"It's a street of no return," said Elena Pupo, a Venezuelan transgender woman and advocate for the community.

Vickers had no home, no cosmetic surgery. He was, said a friend who asked not to be identified, a handsome man, "but wasn't really an attractive looking female."

He was the kind of vulnerable night denizen that the Western Bandit appears to target. Working late at night, he slept in bushes on a street between Donut Time and Lexington, or in a booth at the X-Spot adult bookstore in the strip mall behind the doughnut shop, Amber said.

The last time Amber saw Vickers, he seemed happier and more exuberant — the kind of outgoing person that Bay Area friends describe. "She felt good about herself that day," Amber said.

An hour later, Amber said, police cars descended on the Donut Time strip mall. Officers circulated a picture of Vickers asking the streetwalkers who heshe was.

More than a hundred people attended Vickers' funeral in East Palo Alto. Thompson didn't know many of them. She was startled to see a few were men with women's breasts and clothes.

Nevertheless, Thompson dressed her son's body in a man's suit — burgundy, his favorite color. His face, bewhiskered for years, was clean-shaven — the way he kept it as a woman when he died. Thompson said she learned of her son's cross-dressing only after his death, from a Facebook video he'd posted.

For police, Vickers' story is one they've seen all too often.

"It's the age-old Hollywood story," said Brett Goodkin, the Los Angeles police homicide detective called to Lexington that night. "People come to Hollywood … so they can be somebody else. In Nathan's case, he could be himself in Hollywood. That was his Hollywood dream. It ended like so many others."

sam.quinones@latimes.com

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