Carl Icahn buys nearly 13% stake in Herbalife as battle heats up

NEW YORK — It's no longer just a war of words.

Corporate raider Carl Icahn has thrown $214 million behind Herbalife Ltd., the Los Angeles-based maker of health foods and nutritional supplements accused of being a pyramid scheme by Icahn's foe, fellow Wall Street tycoon Bill Ackman.

Documents filed with the Securities and Exchange Commission on Thursday reveal that Icahn purchased more than 14 million shares and options in Herbalife, a nearly 13% stake that would make him the company's second-largest investor. Icahn said he would pursue talks with executives about possibly recapitalizing the company or even taking it private.

Icahn and Ackman have been engaged in a rare public battle for the last month, hurling insults at each other about past dealings and their respective positions in Herbalife. The two foes have bad blood stemming from a business dispute.

Ackman launched his assault on the company Dec. 20 by unveiling a $1-billion short position, or bet, against Herbalife. That same day, Icahn began snapping up the company's stock, according to the SEC filing.

"It's pretty obvious Icahn really wants to turn the screws on Ackman," said Chris Stuart, chief executive of Shortzilla, a Boston-area research firm. "He's put his money where his mouth is, for sure."

Investors saw Icahn's disclosure as reassuring that Herbalife was not going to collapse, as Ackman has predicted. Its shares surged more than 24% in after-hours trading after closing up $1.87, or 5.1%, at $38.27 on Thursday.

"I think he is definitely trying to hammer his good buddy Ackman, but he could also make a lot of money in this," said Timothy Ramey, an analyst with D.A. Davidson & Co. "It's an undervalued stock."

Ackman, who heads the hedge fund Pershing Square Capital Management, says that Herbalife defrauds its low-income distributors. His wager against the company pays off if its stock falls.

Herbalife hit back by saying the hedge fund manager was misinformed about the company and made an irresponsible bet with his investors' money. The company pointed to its 32 years in business as evidence that it is not a pyramid scheme.

Icahn sees Herbalife as undervalued and believes that the company has a "legitimate business model, with favorable long-term opportunities for growth," the filing says.

This is just the latest chapter in a long history of Icahn trying to exert influence on companies and their boards of directors in hopes of either motivating a merger or having his stake bought out at a premium.

In the 1980s, he famously took over airline TWA and immediately liquidated most of its assets. Since then, he's taken big stakes or controlling positions in companies including RJR Nabisco, Viacom, Marvel Comics, Blockbuster and Netflix.

Neither Icahn nor Ackman responded to requests for comment. Herbalife also declined to comment.

The battle over Herbalife is becoming a Wall Street spectacle, with money managers supporting either team Ackman or team Icahn.

Robert L. Chapman Jr., managing member of Chapman Capital in Manhattan Beach, who said he has invested in Herbalife, wrote in an email: "Carl Icahn just delivered Bill Ackman a Valentine he'll never forget."

andrew.tangel@latimes.com,

stuart.pfeifer@latimes.com

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Vintage piano given Valentine's Day deadline

HALF MOON BAY, Calif. — The piano was delivered to its bluff-top perch under cover of fog nearly two weeks ago. It is scheduled to leave this coastal enclave in a burst of flames on Sunday.

In between the fog and the fire, musician and sculptor Mauro Ffortissimo has been treating his neighbors to an illicit outdoor concert series grandly dubbed Sunset Piano. Chopin, Debussy, a tango or two. The performances are timed to end the moment the sun sinks below the horizon.

He plays to cyclists and dog walkers, babies in strollers, his landlady in a folding chair, the charmed, the perplexed. Every night the battered baby grand has sounded just a little bit worse as the elements erode the aging, al fresco instrument. Every night, the audience has grown.

Ffortissimo (not his real name, but you probably figured that out already) had hoped to serenade the residents of Half Moon Bay for a month. But it didn't take long for reality to intrude on the 50-year-old artist's well-laid plans.

Two days after Ffortissimo and friends rolled the piano out to a scenic spit of city land, a code enforcement officer sent a warning via email. Someone had complained.

No permit, no piano.

The 90-year-old Estey "appears to be an unauthorized encroachment onto public property," wrote Lamonte Mack. If you can't prove the installation is authorized, he told Ffortissimo, "please remove the piano — and platform — within 10 (ten) days."

That made the deadline Valentine's Day, an occasion to celebrate love, if not misplaced musical instruments.

The artist legally known as Mauro Dinucci has taken the bad news in stride. Asked about the end of the piano during Tuesday night's crowded concert, he crowed: "Woo, hoo! Valentine's Day! Bring chocolate!" and promised that "before we burn this baby, we give it one last boat ride."

Thursday will be the piano's last scheduled bluff-side concert along the Coastside Trail at the end of Kelly Avenue. Friday, Ffortissimo said, he has been invited to play the instrument at the Half Moon Bay Yacht Club.

Saturday he'll give a sunset performance on the water, a nod to the piano's earlier owners who once sent it from California to Panama and back by sea. Sunday he plans to set the piano ablaze in the flower-strewn field behind his studio.

"The idea of the burning," Ffortissimo said, "is a cremation, to liberate the piano from its physical form … I just hope it won't be a 'Spare the Air' day."

Not everyone is as happy as Ffortissimo about the piano's upcoming freedom.

Mayor Rick Kowalczyk, who has yet to hear the Sunset Piano himself, said he was trying to "see if I can't get something done in the short term to allow Mauro to stay." Kicking the Estey off of the bluff, he said, "feels a little bit like a child has a lemonade stand and the city shuts it down."

On Tuesday evening, more than 100 music lovers gathered round as the sun — and the temperature — dropped. Two women danced together on the grass. Wine was sipped and beer chugged. Children ate cold pizza. Shorebirds glided by.

Far away from Half Moon Bay, President Obama was preparing to give his State of the Union address. Christopher Dorner was thought to be shooting it out with police.

But here on a bluff overlooking the Pacific Ocean, Susan Swanson of Redwood City poured white wine from a blue metal flask as Ffortissimo played Albinoni's "Adagio in G Minor." She'd read about the piano performance in the local newspaper, she said, "and it's the kind of news I like to read — good news.

"This to me is everything," said the trying-to-retire office manager. "It's a perfect moment. Once in a lifetime maybe. It's so odd, isn't it?"

maria.laganga@latimes.com

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Epic to pull song with offending Lil Wayne lyric

NASHVILLE, Tenn. (AP) — Epic Records is going to "great efforts" to take down a new Future remix leaked over the weekend with a vulgar Lil Wayne lyric that has offended the family of Emmett Till.

The New Orleans rapper made a sexual reference to the beating death of Till, a 14-year-old Chicago boy tortured and shot in Mississippi in 1955 for whistling at a white woman. Till's family objected and the Rev. Jesse Jackson reached out to his management, The Blueprint Group, on the family's behalf.

The label issued a statement Wednesday night apologizing for the release of the song.

"We regret the unauthorized remix version of Future's 'Karate Chop,' which was leaked online and contained hurtful lyrics," the statement said. "Out of respect for the legacy of Emmett Till and his family and the support of the Reverend Jesse L. Jackson, Sr. ... we are going through great efforts to take down the unauthorized version."

Epic will release an official version of the song that "will not include such references."

Neither Jackson nor members of Till's family could be reached late Wednesday. A publicist says Lil Wayne has had no comment so far.

He appears briefly on the song, alluding to the black teenager's beating in a way too vulgar to print.

Till, a native of Chicago, was in Mississippi visiting family in 1955 when he was killed. He was beaten, had his eyes gouged out and was shot in the head before his assailants tied a cotton gin fan to his body with barbed wire and tossed his body into the Tallahatchie River. Two white men, including the woman's husband, were acquitted of the killing by an all-white jury.

Till's body was recovered and returned to Chicago where his mother, Mamie Till, insisted on having an open casket at his funeral. The pictures of his battered body helped push civil rights into the cultural conversation in the U.S.

Bob Dylan wrote a song about it: "The Death of Emmett Till."

A Facebook posting on the Mamie Till Mobley Memorial Foundation page Wednesday night said Epic Records Chairman and CEO LA Reid had reached out to the family to personally apologize.

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Follow AP Music Writer Chris Talbott: http://twitter.com/Chris_Talbott

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Use of Morning-After Pill Is Rising, Report Says

The use of morning-after pills by American women has more than doubled in recent years, driven largely by rising rates of use among women in their early 20s, according to new federal data released Thursday.

The finding is likely to add to the public debate over rules issued by the Obama administration under the new health care law that require most employers to provide free coverage of birth control, including morning-after pills, to female employees. Some religious institutions and some employers have objected to the requirement and filed lawsuits to block its enforcement.

Morning-after pills, which help prevent pregnancy after sex, were used by 11 percent of sexually active women from 2006 to 2010, the period of the study. That was up from just 4 percent in 2002. Nearly one in four women between the ages of 20 and 24 who had ever had sex have used the pill at some point, the data show.

Morning-after pills are particularly controversial among some conservative groups who contend they can cause abortions by interfering with the implantation of a fertilized egg that the groups regard as a person.

Medical experts say that portrayal is inaccurate, and that studies provide strong evidence that the most commonly used pills do not hinder implantation, but work by delaying or preventing ovulation so that an egg is never fertilized in the first place, or thicken cervical mucus so sperm have trouble moving.

This month, the Obama administration offered a proposal that could expand the number of groups that do not need to provide or pay for birth control coverage. But the proposal did not end the political fight over the issue, which legal experts say may end up in the Supreme Court.

The new data was released by the National Center for Health Statistics and based on interviews with more than 12,000 women from 2006 to 2010. Researchers asked sexually active women if they had ever used emergency contraception, “also known as Plan B, Preven or morning-after pills,” as well as about their use of other forms of birth control.

Over all, 99 percent of sexually active women ages 15 to 44 have used contraception at some point in their lives, or about 53 million women, up slightly from 2002. An earlier report found that 62 percent of all women of reproductive age were currently using some form of birth control.

The new report found that 98.6 percent of sexually active Catholic women had used contraception at some point, but the data did not show how many Catholic women currently use contraception.

Condom use has risen markedly. More than 93 percent of women said they had partners who had used condoms at some point, compared with 82 percent of women in 1995, a likely effect of strong public advocacy for condom use during the AIDS epidemic.

In contrast, women who had used intrauterine devices, or IUDs, at some point in their lives declined to about 8 percent from 10 percent in 1995. The use of birth control pills has remained steady since 1995 at 82 percent.

Eighty-nine percent of white women said they had used birth control pills at some point, compared with 67 percent of Hispanic women, 78 percent of black women and 57 percent of Asian women.

Education played a role in the type of contraception used. Forty percent of women without a high school diploma said they chose sterilization, while just 10 percent of women with a bachelor’s degree said they used that method. Those without a high school diploma were also far more likely to use three-month injectables, like Depo-Provera — 36 percent compared with 13 percent of women with a college degree.

About 12 percent of college graduates said they had used emergency contraception, while 7 percent of women with only a high school degree said they had used it.

Educated women were far more likely to have practiced periodic abstinence based on the menstrual cycle. About 28 percent of women with a master’s degree or higher had practiced this method, while just 13 percent of women without a high school diploma had, the report found.

White women, American-born Hispanic women and black women were most likely to practice withdrawal, with more than half of women in each group saying they have used that method. Just 44 percent of foreign-born Hispanics said they practiced withdrawal.

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European Union and U.S. to pursue transatlantic free-trade deal

WASHINGTON — The European Union and the United States announced that they will pursue talks aimed at achieving an overarching transatlantic free-trade deal.

The 27-country EU said Wednesday that such an agreement, first announced in the State of the Union address by President Obama, would be the biggest bilateral trade deal ever negotiated. Any agreement could boost economic output in the EU by 0.5% and in the U.S. by 0.7%, according to some estimates. That would be a highly desirable outcome when the EU and the U.S. are both struggling with slow growth, high unemployment and high levels of debt.

"Both of us need growth," said Jose Manuel Barroso, president of the European Commission, the EU's executive arm. "And both of us have budgetary problems."

In a joint statement issued simultaneously in Washington and Brussels, Obama, European Council President Herman Van Rompuy and Barroso said they were "committed to making this relationship an even stronger driver of our prosperity".

"Through this negotiation, the United States and the European Union will have the opportunity not only to expand trade and investment across the Atlantic, but also to contribute to the development of global rules that can strengthen the multilateral trading system," they said.

Trade between the U.S. and the EU is already huge, reaching $2.69 billion a day, EU Trade Commissioner Karel De Gucht said.

Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington, estimates that a comprehensive agreement could boost U.S. output by about 0.7 percentage points.

A high-level U.S.-EU working group on jobs and growth said the goals of the agreement would include removing import tariffs, which average 4%, and getting rid of other barriers to trade such as the approval processes that businesses have to go through in order to sell products on both sides of the Atlantic.

Beyond that, De Gucht said, "There seems to be a consensus that the cost of a product contains about 10% of red tape. If you can largely make away with that, you will have the same product for a lower price without anybody paying for it."

One example of where the two economies could benefit from the talks is automaking. If each side recognized the other's car safety standards — or if the standards were harmonized — an auto manufacturer would not have to satisfy two sets of requirements. But there are other areas, such as agriculture, that will prove to be more difficult to negotiate.

U.S. Trade Representative Ron Kirk said Wednesday that the U.S. plans to push the EU to relax its ban on genetically modified crops. That's also a top goal of Sen. Charles E. Grassley (R-Iowa) and Sen. Max Baucus (D-Mont.), two leading members of Congress on trade issues.

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Christopher Dorner shootout: Body found in burned cabin

There were conflicting reports tonight about whether a body was located inside the burned-out cabin Tuesday night where Christopher Jordan Dorner was believed to have kept law enforcement authorities at bay.

Several sources told The Times and many other news organizations that a body was located in the rubble. But LAPD officials just said that the cabin is still too hot to search and no body has been found.

Another update is expected within the next hour from law enforcement officers near the scene, and officials said they might have an update clarifying the confusion.

PHOTOS: Manhunt for ex-LAPD officer

As authorities moved into the cabin earlier Tuesday, they heard a single gunshot.

According to a law enforcement source, police had broken down windows, fired tear gas into the cabin and blasted over a loud speaker, urging Dorner to surrender. When they got no response, police deployed a vehicle to rip down the walls of the cabin "one by one, like peeling an onion," a law enforcement official said.

By the time they got to the last wall, authorities heard a single gunshot, the source said. Then flames began to spread through the structure, and gunshots, probably set off by the fire, were heard. 

PHOTOS: Manhunt for ex-LAPD officer

As darkness descended on the mountainside, Dorner's body had not been found, authorities said. Police were planning to focus their search in the basement area, the source said.

Earlier Tuesday, a tall plume of smoke was rising as flames consumed the wood-paneled cabin. Hundreds of law enforcement personnel had swooped down on the site near Big Bear after the gun battles between Dorner and officers that broke out in the snow-covered mountains where the fugitive had been eluding a massive manhunt since his truck was found burning in the area late last week.

Law enforcement personnel in military-style gear and armed with high-powered weapons took up positions in the heavily forested area as the tense standoff progressed. 

One San Bernardino County sheriff's deputy died after he and another deputy were wounded in an exchange of gunfire outside the cabin in which hundreds of rounds were fired, sources told The Times. The deputy was airlifted to Loma Linda University Medical Center, where he died of his wounds.

The afternoon gun battle was part of a quickly changing situation that began after Dorner allegedly broke into a home, tied up a couple and held them hostage. He then stole a silver pickup truck, sources said.

Then Dorner was allegedly spotted by a state Fish and Wildlife officer in the pickup truck, sources said. A vehicle-to-vehicle shootout ensued. The officer's vehicle was peppered with multiple rounds, according to authorities.

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Beyonce hopes her documentary inspires Blue Ivy

NEW YORK (AP) — Beyonce is hoping that her ultra-revealing documentary will someday provide inspiration for Blue Ivy, the year-old daughter she and husband Jay-Z have.

"I hope that she will see all of the beautiful times (and) all the tough times that led up to her being here," the singer said Tuesday night at the New York premiere of her upcoming HBO documentary, "Life is But a Dream."

She added: "I'm hoping that ... it can comfort her and inspire her in her life when she needs it."

The autobiographical film takes a no-holds-barred look at the entertainer. It stems from personal conversations the 31-year old singer made using the video camera on her computer over the past couple of years. It also includes home movies of the Grammy-winning singer and her two sisters.

In the film, Beyonce candidly discusses personal matters like her miscarriage, reports of faking her pregnancy, and firing her father as her manager.

She claims the process of talking into a camera to get all her thoughts out was therapeutic.

"I really grew so much," she says of the process. "This movie has really been my therapy. I've healed from so many wounds and I've been able to understand why some of the things I've been through, why I went through, so feel really proud, and hopefully I can inspire other people."

The singer has been private about her life in the past. But she felt the time was right to let people know how she felt.

"I felt that after 16 years of being a public singer, people didn't know who I was," she admitted. But then she added: "I will always keep certain things to myself because it's only natural."

Oprah Winfrey made a surprise visit to the premiere, and posed with Beyonce on the red carpet. Before going into the Ziegfeld Theatre, Winfrey, known for her tough, results-driven interview style, was asked if this was the kind of story she would have done on Beyonce.

She said Beyonce did a "much better job" of telling her own story. "I wouldn't have been in the bedroom and in the closet and in the car and on vacation," she said.

Beyonce acted as the film's executive producer and co-directed it with Ed Burke. He previously worked on some of her video projects. "Life is But a Dream" airs Saturday on HBO.

_____

Online:

http://www.hbo.com

___

John Carucci covers entertainment for The Associated Press. Follow him at — http://www.twitter.com/jcarucci_ap

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Well: Getting the Right Dose of Exercise

Phys Ed

Gretchen Reynolds on the science of fitness.

A common concern about exercise is that if you don’t do it almost every day, you won’t achieve much health benefit. But a commendable new study suggests otherwise, showing that a fairly leisurely approach to scheduling workouts may actually be more beneficial than working out almost daily.

For the new study, published this month in Exercise & Science in Sports & Medicine, researchers at the University of Alabama at Birmingham gathered 72 older, sedentary women and randomly assigned them to one of three exercise groups.

One group began lifting weights once a week and performing an endurance-style workout, like jogging or bike riding, on another day.

Another group lifted weights twice a week and jogged or rode an exercise bike twice a week.

The final group, as you may have guessed, completed three weight-lifting and three endurance sessions, or six weekly workouts.

The exercise, which was supervised by researchers, was easy at first and meant to elicit changes in both muscles and endurance. Over the course of four months, the intensity and duration gradually increased, until the women were jogging moderately for 40 minutes and lifting weights for about the same amount of time.

The researchers were hoping to find out which number of weekly workouts would be, Goldilocks-like, just right for increasing the women’s fitness and overall weekly energy expenditure.

Some previous studies had suggested that working out only once or twice a week produced few gains in fitness, while exercising vigorously almost every day sometimes led people to become less physically active, over all, than those formally exercising less. Researchers theorized that the more grueling workout schedule caused the central nervous system to respond as if people were overdoing things, sending out physiological signals that, in an unconscious internal reaction, prompted them to feel tired or lethargic and stop moving so much.

To determine if either of these possibilities held true among their volunteers, the researchers in the current study tracked the women’s blood levels of cytokines, a substance related to stress that is thought to be one of the signals the nervous system uses to determine if someone is overdoing things physically. They also measured the women’s changing aerobic capacities, muscle strength, body fat, moods and, using sophisticated calorimetry techniques, energy expenditure over the course of each week.

By the end of the four-month experiment, all of the women had gained endurance and strength and shed body fat, although weight loss was not the point of the study. The scientists had not asked the women to change their eating habits.

There were, remarkably, almost no differences in fitness gains among the groups. The women working out twice a week had become as powerful and aerobically fit as those who had worked out six times a week. There were no discernible differences in cytokine levels among the groups, either.

However, the women exercising four times per week were now expending far more energy, over all, than the women in either of the other two groups. They were burning about 225 additional calories each day, beyond what they expended while exercising, compared to their calorie burning at the start of the experiment.

The twice-a-week exercisers also were using more energy each day than they had been at first, burning almost 100 calories more daily, in addition to the calories used during workouts.

But the women who had been assigned to exercise six times per week were now expending considerably less daily energy than they had been at the experiment’s start, the equivalent of almost 200 fewer calories each day, even though they were exercising so assiduously.

“We think that the women in the twice-a-week and four-times-a-week groups felt more energized and physically capable” after several months of training than they had at the start of the study, says Gary Hunter, a U.A.B. professor who led the experiment. Based on conversations with the women, he says he thinks they began opting for stairs over escalators and walking for pleasure.

The women working out six times a week, though, reacted very differently. “They complained to us that working out six times a week took too much time,” Dr. Hunter says. They did not report feeling fatigued or physically droopy. Their bodies were not producing excessive levels of cytokines, sending invisible messages to the body to slow down.

Rather, they felt pressed for time and reacted, it seems, by making choices like driving instead of walking and impatiently avoiding the stairs.

Despite the cautionary note, those who insist on working out six times per week need not feel discouraged. As long as you consciously monitor your activity level, the findings suggest, you won’t necessarily and unconsciously wind up moving less over all.

But the more fundamental finding of this study, Dr. Hunter says, is that “less may be more,” a message that most likely resonates with far more of us. The women exercising four times a week “had the greatest overall increase in energy expenditure,” he says. But those working out only twice a week “weren’t far behind.”

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Health insurer WellPoint picks Joseph Swedish as its new CEO

INDIANAPOLIS — Health insurance giant WellPoint Inc., parent of Anthem Blue Cross, is picking a veteran hospital executive who has never run a public company to become its next chief executive.

The Indianapolis insurer says Trinity Health CEO Joseph Swedish will take over March 25, replacing interim CEO John Cannon.

WellPoint, the nation's second-largest health insurance company, has been searching for a new leader since Angela Braly resigned in August amid investor frustration over disappointing financial results.

The company runs Blue Cross Blue Shield plans in 14 states, including Anthem — the largest for-profit insurer in California. It also runs CareMore clinics in California and other states.

Swedish, 61, has been CEO at Trinity Health in Livonia, Mich., since December 2004. Under his leadership, revenue at the nonprofit Catholic healthcare system increased from $5.7 billion in 2005 to $8.9 billion in 2012, and total assets increased from $7.5 billion to $11.7 billion. The organization's community benefit ministry, which includes care for the poor and community heath activity, increased from $265 million in 2005 to $615 million in 2012.

Swedish's resume includes work with HCA, the nation's largest hospital chain. He also has served as a director for another insurer, Coventry Health Care.

In his new job, Swedish's tasks will include helping WellPoint prepare for coverage expansions that start next year under the federal healthcare overhaul.

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Ex-Bell officials defend themselves as honorable public servants

Less than three years ago, they were handcuffed and taken away in a case alleged to be so extensive that the district attorney called it "corruption on steroids."

But on Monday, two of the six former Bell council members accused of misappropriating money from the small, mostly immigrant town took to the witness stand and defended themselves as honorable public servants who earned their near-$100,000 salaries by working long hours behind the scenes.

During her three days on the stand, Teresa Jacobo said she responded to constituents who called her cell and home phone at all hours. She put in time at the city's food bank, organized breast cancer awareness marches, sometimes paid for hotel rooms for the homeless and was a staunch advocate for education.

"I was working very hard to improve the lives of the citizens of Bell," she said. "I was bringing in programs and working with them to build leadership and good families, strong families."

Jacobo, 60, said she didn't question the appropriateness of her salary, which made her one of the highest-paid part-time council members in the state.

Former Councilman George Mirabal said he too worked a long, irregular schedule when it came to city affairs.

"I keep hearing time frames over and over again, but there's no clock when you're working on the council," he said Monday. "You're working on the circumstances that are facing you. If a family calls … you don't say, '4 o'clock, work's over.' "

Mirabal, 65, said he often reached out to low-income residents who didn't make it to council meetings, attended workshops to learn how to improve civic affairs and once even made a trip to a San Diego high school to research opening a similar tech charter school in Bell.

"Do you believe you gave everything you could to the citizens of Bell?" asked his attorney, Alex Kessel.

"I'd give more," Mirabal replied.

Both Mirabal and Jacobo testified that not only did they perceive their salaries to be reasonable, but they believed them to be lawful because they were drawn up by the city manager and voted on in open session with the city attorney present.

Mirabal, who once served as Bell's city clerk, even went so far as to say that he was still a firm supporter of the city charter that passed in 2005, viewing it as Bell's "constitution." In a taped interview with authorities, one of Mirabal's council colleagues — Victor Bello — said the city manager told him the charter cleared the way for higher council salaries.

Prosecutors have depicted the defendants as salary gluttons who put their city on a path toward bankruptcy. Mirabal and Jacobo, along with Bello, Luis Artiga, George Cole and Oscar Hernandez, are accused of drawing those paychecks from boards that seldom met and did little work. All face potential prison terms if convicted.

Prosecutors have cited the city's Solid Waste and Recycling Authority as a phantom committee, created only as a device for increasing the council's pay. But defense attorneys said the authority had a very real function, even in a city that contracted with an outside trash company.

Jacobo testified that she understood the introduction of that authority to be merely a legal process and that its purpose was to discuss how Bell might start its own city-run trash service.

A former contract manager for Consolidated Disposal Service testified that Bell officials had been unhappy with the response time to bulky item pickups, terminating their contract about 2005, but that it took about six years to finalize because of an agreement that automatically renewed every year.

Deputy Dist. Atty. Edward Miller questioned Mirabal about the day shortly after his 2010 arrest that he voluntarily told prosecutors that no work was done on authorities outside of meetings.

Mirabal said that if he had made such a statement, it was incorrect. He said he couldn't remember what was said back then and "might have heed and hawed."

"So it's easy to remember now?" Miller asked.

"Yes, actually."

"More than two years after charges have been filed, it's easier for you to remember now that you did work outside of the meetings for the Public Finance Authority?"

"Yes, sir."

Miller later asked Mirabal to explain a paragraph included on City Council agendas that began with the phrase, "City Council members are like you."

After some clarification of the question, Mirabal answered: "That everybody is equal and that if they look into themselves, they would see us."

corina.knoll@latimes.com

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