In Reversal, Florida to Take Health Law’s Medicaid Expansion

MIAMI — Gov. Rick Scott of Florida reversed himself on Wednesday and announced that he would expand his state’s Medicaid program to cover the poor, becoming the latest — and, perhaps, most prominent — Republican critic of President Obama’s health care law to decide to put it into effect.

It was an about-face for Mr. Scott, a former businessman who entered politics as a critic of Mr. Obama’s health care proposals. Florida was one of the states that sued to try to block the law. After the Supreme Court ruled last year that though the law was constitutional, states could choose not to expand their Medicaid programs to cover the poor, Mr. Scott said that Florida would not expand its programs.

Mr. Scott said Wednesday that he now supported a three-year expansion of Medicaid, through the period that the federal government has agreed to pay the full cost of the expansion, and before some of the costs are shifted to the states.

“While the federal government is committed to paying 100 percent of the cost, I cannot in good conscience deny Floridians that needed access to health care,” Mr. Scott said at a news conference. “We will support a three-year expansion of the Medicaid program under the new health care law as long as the federal government meets their commitment to pay 100 percent of the cost during that time.”

He said there were “no perfect options” when it came to the Medicaid expansion. “To be clear: our options are either having Floridians pay to fund this program in other states while denying health care to our citizens,” he said, “or using federal funding to help some of the poorest in our state with the Medicaid program as we explore other health care reforms.”

Mr. Scott said the state would not create its own insurance exchange to comply with another provision of the law.

His reversal sent ripples through the nation, especially given the change in tone and substance since the summer, when he said he would not create an exchange or expand Medicaid.

“Floridians are interested in jobs and economic growth, a quality education for their children, and keeping the cost of living low,” Mr. Scott said in a statement at the time. “Neither of these major provisions in Obamacare will achieve those goals, and since Florida is legally allowed to opt out, that’s the right decision for our citizens.”

Mr. Scott now joins the Republican governors of Arizona, Michigan, Nevada, New Mexico, North Dakota and Ohio, who have decided to join the Medicaid expansion. Some, like Gov. Jan Brewer of Arizona, were also staunch opponents of Mr. Obama’s overall health care law.

Shortly before his announcement, the governor received word from the federal government that it planned to grant Florida the final waiver needed to privatize Medicaid, a process the state initially undertook as a pilot project. Mr. Scott, who is running for re-election next year, has heavily lobbied for the waiver, arguing that Florida could not expand Medicaid without it.

Mr. Scott’s support of Medicaid expansion is significant, but is far from the last word. The program requires approval from Florida’s Republican-dominated Legislature, which has been averse to expanding Medicaid under the health care law. The Legislature’s two top Republican leaders said that before making a decision they would consider recommendations from a select committee, which has been asked to review the state’s options.

“The Florida Legislature will make the ultimate decision,” Will Weatherford, the state House speaker, said. “I am personally skeptical that this inflexible law will improve the quality of health care in our state and ensure our long-term financial stability.”

Medicaid, which covers three million people in Florida, costs the state $21 billion a year. The expansion would extend coverage to one million more people.

Mr. Scott’s reversal is sure to anger his original conservative supporters.

The governor “was elected because of his principled conservative leadership against Obamacare’s overreach,” said Slade O’Brien, state director for Americans for Prosperity, an influential conservative advocacy organization. “Hopefully our legislative leaders will not follow in Governor Scott’s footsteps, and will reject expansion.”

During his announcement on Wednesday, Mr. Scott said his mother’s recent death and her lifetime struggle to raise five children “with very little money” played a role in his decision.

“Losing someone so close to you puts everything in a new perspective, especially the big decisions,” he said.

Michael Cooper contributed reporting from New York.

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Rebates for California electricity ratepayers clear hurdle

SACRAMENTO — California electricity ratepayers could get rebates of as much as $1.6 billion from more than a dozen power wholesalers that allegedly manipulated the market during the energy crisis of 2000, the state Public Utilities Commission announced.

The commission in a statement released late Tuesday praised an "initial decision" issued Friday by a federal administrative law judge who ruled in favor of the state in a complaint filed with the Federal Energy Regulatory Commission.

The judge's ruling, which still must be endorsed by the full federal commission, found the power wholesalers guilty of overcharging California utilities and limiting electricity supplies in the summer of 2000. That resulted in high prices and rolling brownouts and blackouts throughout the state that drove one utility, Pacific Gas & Electric Co., into bankruptcy.

The alleged manipulators, the PUC said, citing the judge's ruling, included Powerex, a wholly owned subsidiary of Canadian firm BC Hydro; Shell Energy North America, a subsidiary of Shell Oil Co.; TransAlta Corp. of Alberta, Canada; and the Bonneville Power Administration, part of the U.S. Department of Energy.

A Bonneville spokesman said the government-owned power agency is "disappointed with the outcome" of the judge's initial ruling but needs more time to analyze the decision.

PUC President Michael Peevey called the initial ruling by the judge a vindication for complaints brought by California officials on behalf of electricity ratepayers.

"We've been relentless in our pursuit of economic justice for Californians who were grievously overcharged for electricity during and after the energy crisis of 2000-2001," Peevey said. "We look forward to the day when all of these cases can come to a close and consumers can see the benefit of refunds of the overcharges."

marc.lifsher@latimes.com

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At least 16 hurt in blast and fire at Kansas City restaurant

At least 16 people were hurt and a popular wine bar was destroyed by an apparent natural gas explosion and ensuing fire at an upscale shopping district in Kansas City, Mo., Tuesday evening.

Residents reported smelling natural gas and seeing utility crews in the area before the conflagration. A strong scent of gas hung in the air afterward.

“Early indications are that a contractor doing underground work struck a natural gas line, but the investigation continues,” Missouri Gas Energy, a natural-gas provider, said in a statement.

The Kansas City Fire Department said the incident was under investigation. “It does seem to be an accident,” Fire Chief Paul Berardi said during a late-night news briefing.

JJ's Restaurant and wine bar, just off Country Club Plaza, had apparently been partially evacuated before the blast occurred about 6 p.m.

"This was happy hour at the restaurant. There were patrons in the restaurant," Berardi said.

No fatalities were reported, but officials brought in cadaver dogs to check the rubble. The Kansas City Star reported that one JJ's employee was missing.

The fire raged for two hours, with thick smoke visible for miles. Victims streamed to hospitals; at least four people were in critical condition.

Initially, police said a car had hit a gas main, but officials later discounted that explanation.

Witnesses described a chaotic scene. 

"I was sitting in my living room folding laundry, and felt in my chest -- and heard -- an explosion," said Jamie Lawless, who lives about two blocks from JJ's. "I started freaking out, and I was looking around, and then I saw other people walking outside. You could see giant black smoke billowing up from the plaza area, and nobody really knew what it was."

Sally McVey, who lives across the street from JJ's, said the fire "was growing exponentially, incredibly quickly. It was not like a fire I’ve seen before, where it takes a long time to spread.”

A crowd gathered to watch firefighters battle the blaze. At an apartment building on JJ's block, a woman on a top-floor balcony called down to onlookers.  "'Is my building on fire?' and everybody says, 'Yes, come down!' " McVey said. "She’s like, 'Oh my gosh,' and a lot of people come out of that building with their computers and dogs. She did too.”

JJ's owner, Jimmy Frantze, was out of town, said Kansas City Mayor Sly James, who used to be a fixture at the restaurant. The business, which boasted a selection of 1,800 bottles, had been on the site for 28 years.

“It was 28 years of a great restaurant, and then it has to end like this,” Frantze told the Kansas City Star while driving back from Oklahoma. “I want to make sure to check on my employees to make sure they are all right.”

Kansas City Police Department's bomb squad and officials with the Bureau of Alcohol, Tobacco, Firearms and Explosives were expected to investigate the accident after the search dogs finished looking for victims, Berardi said.

 matt.pearce@latimes.com

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Police say NY TV anchor threatened wife with death

A New York City TV anchorman issued a death threat against his wife as he was being arrested on charges of attacking her at their Connecticut home, according to a court document released Tuesday.

New York City police, meanwhile, disclosed that they were called 11 times to the couple's home when they lived in Manhattan. One call resulted in an arrest, but the case was sealed, they said.

In the Connecticut case, a Darien police officer wrote that Rob Morrison, who works for WCBS-TV, "threatened that if he was released from police custody, he would kill his wife."

The document was offered in Superior Court in Stamford, in support of an order of protection against Morrison. Judge Kenneth Povadator ordered Morrison to stay 100 yards away from Ashley Morrison except when they're both at work.

She works for "CBS Moneywatch."

Rob Morrison, 44, was charged Sunday with strangulation, threatening and disorderly conduct. Officers had been called by his mother-in-law to the couple's home in Darien. They said Morrison had been belligerent toward his wife throughout the night and had wrapped his hands around her neck, leaving red marks.

Morrison's lawyer, Robert Skovgaard, did not enter a plea at the arraignment. He said afterward a plea would come "at the appropriate time."

Skovgaard said Monday that the allegations had been exaggerated and on Tuesday he referred to his previous statement.

Outside the courthouse, Morrison said: "I did not choke my wife. I've never raised my hands to my wife."

The NYPD said it was called 11 times between 2004 and 2009 to the couple's home on West 90th Street. In the 10 cases that did not result in an arrest, the calls involved verbal disputes and harassment, with no allegations of physical violence, the police said.

It was not clear if violence was alleged in the case that was sealed. Skovgaard did not immediately return a call about the New York incidents.

Morrison was released Tuesday on the $100,000 bond he posted Sunday. He is due back in court in Stamford on March 26.

Morrison, who has been a combat correspondent and was a reporter and anchor for WNBC-TV, anchors WCBS-TV's news programs "This Morning" and "News at Noon." Ashley Morrison worked for Bloomberg Television before joining "CBS MoneyWatch."

The couple has a young son.

Skovgaard said that because of the order of protection, Morrison "will not be going home tonight."

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Associated Press writer Colleen Long in New York contributed to this report.

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Well: No Consensus on Plantar Fasciitis

Phys Ed

Gretchen Reynolds on the science of fitness.

There are more charismatic-sounding sports injuries than plantar fasciitis, like tennis elbow, runner’s knee and turf toe. But there aren’t many that are more common. The condition, characterized by stabbing pain in the heel or arch, sidelines up to 10 percent of all runners, as well as countless soccer, baseball, football and basketball players, golfers, walkers and others from both the recreational and professional ranks. The Lakers star Kobe Bryant, the quarterback Eli Manning, the Olympic marathon runner Ryan Hall and the presidential candidate Mitt Romney all have been stricken.

But while plantar fasciitis is democratic in its epidemiology, its underlying cause remains surprisingly enigmatic. In fact, the mysteries of plantar fasciitis underscore how little is understood, medically, about overuse sports injuries in general and why, as a result, they remain so insidiously difficult to treat.

Experts do agree that plantar fasciitis is, essentially, an irritation of the plantar fascia, a long, skinny rope of tissue that runs along the bottom of the foot, attaching the heel bone to the toes and forming your foot’s arch. When that tissue becomes irritated, you develop pain deep within the heel. The pain is usually most pronounced first thing in the morning, since the fascia tightens while you sleep.

But scientific agreement about the condition and its causes ends about there.

For many years, “most of us who treat plantar fasciitis believed that it involved chronic inflammation” of the fascia, said Dr. Terrence M. Philbin, a board-certified orthopedic surgeon at the Orthopedic Foot and Ankle Center in Westerville, Ohio, who specializes in plantar fasciitis.

It was thought that by running or otherwise repetitively pounding their heels against the ground, people strained the plantar fascia, and the body responded with a complex cascade of inflammatory biochemical processes that resulted in extra blood and fluids flowing to the injury site, as well as enhanced pain sensitivity.

But instead of lasting only a few days and then fading, as acute inflammation usually does, the process can become chronic and create its own problems, causing tissue damage and continuing pain.

This progression is also what experts believed was happening when people developed chronic Achilles tendon pain, tennis elbow or other lingering, overuse injuries.

But when scientists actually biopsied fascia tissue from people with chronic plantar fasciitis, “they did not find much if any inflammation,” Dr. Philbin said. There were virtually none of the cellular markers that characterize that condition.

“Plantar fasciitis does not involve inflammatory cells,” said Dr. Karim Khan, a professor of family practice medicine at the University of British Columbia and editor of The British Journal of Sports Medicine, who has written extensively about overuse sports injuries.

Instead, plantar fasciitis more likely is caused by degeneration or weakening of the tissue. This process probably begins with small tears that occur during activity and that, in normal circumstances, the body simply repairs, strengthening the tissue as it does. That is the point of exercise training.

But sometimes, for unknown reasons, this ongoing tissue damage overwhelms the body’s capacity to respond. The small tears don’t heal. They accumulate. The tissue begins subtly to degenerate, even to shred. It hurts.

By and large, most sports medicine experts now believe that this is how we develop other overuse injuries, like tennis elbow or Achilles tendinopathy, which used to be called tendinitis. The suffix “itis” means inflammation. But since the injury isn’t thought to involve chronic inflammation, its name has changed.

This has not yet happened with plantar fasciitis, and may not, given what a mouthful fasciopathy would be.

The evolving medical opinions about plantar fasciitis matter, beyond nomenclature, though, because treatments depend on causes. At the moment, many physicians rely on injections of cortisone, a steroid that is both a pain reliever and anti-inflammatory, to treat plantar fasciitis. And cortisone shots do reduce the soreness. In a study published last year in BMJ, patients who received cortisone injections reported less heel pain after four months than those whose shots had contained a placebo saline solution.

But whether those benefits will last is unknown, especially if plantar fasciitis is, indeed, degenerative. In studies with people suffering from tennis elbow, another injury that is now considered degenerative, cortisone shots actually slowed tissue healing.

We need similar studies in people with plantar fasciitis, Dr. Khan said. “They have not been done.”

Thankfully, most people who develop plantar fasciitis will recover within a few months without injections or other invasive treatments, Dr. Philbin said, if they simply back off their running mileage somewhat or otherwise rest the foot and stretch the affected tissues. Stretching the plantar fascia, as well as the Achilles tendon, which also attaches to the heel bone, and the hamstring muscles seems to result in less strain on the fascia during activity, meaning less ongoing trauma and, eventually, time for the body to catch up with repairs.

To ensure that you are stretching correctly, Dr. Philbin suggests consulting a physical therapist, after, of course, visiting a sports medicine doctor for a diagnosis. Not all heel or arch pain is plantar fasciitis. And comfort yourself if you do have the condition with the knowledge that Kobe Bryant, Eli Manning and Ryan Hall have all returned to competition and Mr. Romney still runs.

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Macy's seeks to block Martha Stewart Living's pact with Penney

Macy's Inc., the second-largest U.S. department store chain, will go to court in New York on Wednesday to try to persuade a judge to permanently block Martha Stewart Living Omnimedia Inc.'s pact with J.C. Penney Co.

Macy's sued Martha Stewart Living in New York State Supreme Court in Manhattan in January 2012 to stop it from proceeding with an agreement announced with J.C. Penney the previous month. Macy's claims that it has an exclusive right to sell Martha Stewart-branded products in categories such as bedding and cookware.

Opening statements in the nonjury trial will be before state Supreme Court Justice Jeffrey K. Oing.

J.C. Penney Chief Executive Ron Johnson and Macy's CEO Terry Lundgren probably will testify next week, as will Martha Stewart, her company's nonexecutive chairwoman, Macy's spokesman Jim Sluzewski said Tuesday.

In July, Oing granted Cincinnati-based Macy's a preliminary injunction blocking Martha Stewart Living from taking any steps with J.C. Penney on products in the exclusive categories.

In August, Macy's sued J.C. Penney in the same court, seeking to block it from proceeding with the Martha Stewart Living agreement. Oing denied Macy's request in that case.

Macy's said J.C. Penney and Martha Stewart Living "made a conscious business decision" not to disclose their talks to Macy's until the contract was signed to avoid the risk of a restraining order that would bar the agreement.

"Macy's contracted with [Martha Stewart Living Omnimedia] at a time when the MSLO brand was associated with the significantly downscale Kmart and Ms. Stewart was just being released from prison," lawyers for Macy's said in a pretrial memorandum. "Taking losses at first, Macy's moved the brand in soft home goods upscale, a herculean task under the circumstances.

"Now defendants, in complete disregard of the Macy's agreement, seek to reap the rewards of Macy's work and to usurp the benefits of Macy's contract."

Martha Stewart Living has defended its agreement with J.C. Penney, accusing Macy's of breach of contract and saying the retailer stocked and priced Martha Stewart products in a manner that favors private-label brands. Martha Stewart Living also said Macy's couldn't have exercised a five-year renewal option on the agreement because of the breach.

Martha Stewart Living has argued that its original 2006 contract with Macy's allows Martha Stewart Living to design and sell products within the exclusive categories as long as they are sold through the Internet, television or at any retail store branded with the Martha Stewart name that's operated by the company or its affiliates or "prominently" features the brand, according to court filings in the case.

The agreement "gives Macy's the exclusive right, with important exceptions, to sell Martha Stewart-branded products in certain exclusive product categories," Martha Stewart Living said in a pretrial memorandum. "The agreement does not, however, give Macy's any exclusivity — as to design, promotion, sale or anything else — with respect to products that are not Martha Stewart-branded."

J.C. Penney acquired a 17% stake in Martha Stewart Living for $38.5 million in December 2011. The Plano, Texas, department store chain is seeking to revive sales with new mini-stores dedicated to Martha Stewart and other brands.

Martha Stewart Living said in July that J.C. Penney agreed to pay at least $282.9 million in sales commissions over a 10-year period under an amended agreement, a $110.5-million increase from the terms disclosed in December. The amended pact also adds new products.

For Martha Stewart Living, selling its goods to multiple retailers is important to reversing declining sales. The company, which also publishes magazines, has posted losses and decreasing revenue for four straight years, hurt by a drop in advertising demand, and analysts estimate the same for 2012. Its stock lost 44% of its value last year. The New York company announced in November that it was cutting publishing jobs as it focuses on the Web.

Macy's Lundgren has revived the department store partly by adding more exclusive merchandise including Martha Stewart's cookware, kitchen utensils and bed and bath items.

The judge said he has scheduled the trial to run through March 8.

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Civilian deaths in war in Afghanistan drop for first time in 6 years

KABUL, Afghanistan -- Civilian deaths in the war in Afghanistan dropped in 2012 for the first time in six years, a sign of lessening hostilities, but insurgents dramatically expanded their campaign of assassinating government supporters, the United Nations said Tuesday.

The annual U.N. report on civilian casualties in Afghanistan documented a 12% decline in civilian deaths, largely due to fewer ground operations, new limits on airstrikes by U.S.-led coalition forces and fewer suicide bombings by insurgents. Coalition operations resulted in 39% fewer civilian deaths, the report said.

A harsh winter that limited combat operations and insurgent movements also contributed to the drop in casualties as the 11-year conflict shifts to a new phase in which foreign forces step back and Afghan soldiers and police, who possess less deadly weapons, are almost entirely in the lead.

In all, 2,754 civilians died in the war last year, bringing the death toll to 14,728 since 2007, when the U.N. began tracking civilian casualties.

But the report said that targeted killings -- attacks against government employees, tribal and religious leaders and Afghans involved in peace efforts -- resulted in more than twice as many deaths and injuries in 2012, in part because Taliban-led insurgents increased their use of homemade bombs that spread damage over a wider area.

U.N. officials said they were particularly disturbed by a seven-fold increase in casualties among government workers, including the murders of the two top officials in the women’s affairs department in Laghman province, east of Kabul.

"Steep increases in the deliberate targeting of civilians perceived to be supporting the government demonstrates another grave violation of international humanitarian law," Jan Kubis, the U.N. special envoy to Afghanistan, said in a statement. He said the Taliban leaders’ promises to protect civilians so far amounted to "only words."

Insurgents were responsible for 81% of civilian casualties last year, compared to 72% in 2011, the report said, with improvised bombs being the single deadliest weapon.

Civilian deaths and injuries from operations by U.S.-led international forces and Afghan soldiers and police fell by 46%, the U.N. said, due largely to new restrictions by coalition commanders on airstrikes on residential dwellings.

Still, a NATO airstrike last week in eastern Kunar province reportedly killed 10 civilians in addition to four Taliban commanders, provoking fresh ire from President Hamid Karzai. The Afghan leader on Monday ordered his country’s security forces "not to request foreign airstrikes on residential areas" – a move that could further reduce civilian deaths but also hinder Afghan forces that have no air power of their own.

Marine Gen. Joseph F. Dunford, the coalition commander, said this week that his forces would comply with Karzai's order and could continue to operate effectively. The order does not apply to unilateral NATO operations, but experts say that in practice it could give U.S. forces cover for stepping back even further from combat operations as the Obama administration seeks to withdraw half of the remaining 66,000 American troops from Afghanistan by next February.

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TV special shows glory, trauma of military dogs

LOS ANGELES (AP) — It's been almost seven months since a bomb exploded on a strip of dirt in Kandahar Province, Afghanistan. Air Force Tech. Sgt. Leonard Anderson can only remember a reassuring voice.

He has seen the ambush and its aftermath on film, though: The man behind the voice putting a tourniquet on Anderson's leg as a medic tended to the other, listening to his own cries for help and his dog's whines of worry.

The blast that severely wounded the military dog handler was captured on film by one of four camera crews that were embedded with front line troops last year. The voice that reassured him belonged to Craig Constant, a cameraman for Animal Planet's "Glory Hounds" TV special, which airs Thursday.

It took the network a year to get permission to film the two-hour special, which followed the animals into combat zones where insurgents and buried explosives could be around any bend or under any pile of dirt.

Military dogs are prized targets for Taliban insurgents, Anderson said. They sniff out bombs, making safe passage for troops to follow and saving countless lives. The U.S. Department of Defense calls each dog a piece of equipment, but Constant says they're much more than that.

"They call them tools, and they are not. They are soldiers. They just have four paws instead of two feet. They walk in front of the platoons. It's a deadly game, and they die all the time. But they save lives by finding IEDs that technology can't find," said Constant, referring to the military terminology for improvised explosive devices.

Anderson became the handler for an 8-year-old Belgian Malinois named Azza when he asked for the job as kennel master at the base in Sperwan Ghar, said the 29-year-old who loves animals.

The breed is among four — including Dutch shepherd, German shepherd and Labrador retriever — that is commonly used by the military because they are of similar size and temperament, easy to train and enjoy working, said Ron Aiello, president of the U.S. War Dogs Association.

Azza became a military dog when she was 3 and detecting explosives was her specialty, said Anderson.

On the day of the blast, early morning on July 28, Azza and Anderson were about a mile from the base camp. They didn't need to go into the field — Anderson's job was to assess daily needs, plot routes and assign teams. But the self-described adrenaline junkie said he couldn't do his job if he didn't know where his men and dogs were headed and what they were facing.

Constant and his sound technician were about 10 feet behind them when the bomb went off. Military experts who examined the blast site said it was activated by remote control, not set off by touch.

But the dog bore the guilt: Constant remembers most vividly the anguished look on her face and her whines.

"Azza just looked at him. She had a human face. She was helpless. She was concerned. She was fixated on him," Constant said.

The explosion knocked the camera out of Constant's hands. He picked it up, planning to film, but dropped it when he saw Anderson.

"I don't know how he survived. There was a 6-foot-by-5-foot crater, and he was right on top of it," said Constant, who suffered ear drum damage and shrapnel wounds. The sound technician was wounded in the leg.

Anderson slipped in and out of consciousness while a medic and Constant, who is a former Marine, worked on his legs. Azza watched and whined.

"The only thing I remember from that day is Craig's voice talking to me telling me to 'calm down,' 'be easy,' 'it's going to be all right,'" Anderson said. "I woke up in Texas and that's when I asked, 'Where is my dog?' and 'What's going on?'"

Anderson doesn't know how many surgeries he had in Afghanistan, Germany and San Antonio, Texas, but he estimates around 20 based on what doctors and relatives have told him. He lost his left forearm and four fingers on his right hand, suffered upper body injuries and lost the skin on both legs.

Azza has been retired and was adopted by Anderson, his wife and their sons, ages 1 and 2. Memories of combat still haunt her, he said.

"She has some pretty bad nightmares, moving, breathing real heavy. I will slowly wake her up. She will get up and pace the house," he said.

Constant believes "Glory Hounds" shows the importance of dogs and their combat work.

"They really showed the truth and consequences of what these guys do. It's sad to watch because the story is told as much as you can tell it in two hours," he said.

His only regret from filming the show was that he didn't have his camera trained on Azza while they were helping Anderson.

"I wish to God I could have shot that. I wish I could have gotten that on film," Constant said. "It would have changed people's ideas about dogs" being viewed as merely equipment or property, he added.

___

"Glory Hounds" airs Thursday at 8 p.m. ET/PT and repeats on Feb. 24 at 9 a.m. ET/PT.

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Online:

http://www.animalplanet.com

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National Briefing | South: Abortion Curbs Clear Senate in Arkansas

The State Senate voted 25 to 7 on Monday to ban most abortions 20 weeks into a pregnancy. The measure goes back to the House to consider an amendment that added exceptions for rape and incest. The legislation is based on the belief that fetuses can feel pain 20 weeks into a pregnancy, and is similar to bans in several other states. Opponents say it would require mothers to deliver babies with fatal conditions. Gov. Mike Beebe has said he has constitutional concerns about the proposal but has not said whether he will veto it.

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Audit of Fed's gold finds it's safe, more pure than expected

NEW YORK — Turns out the Federal Reserve's gold is secure and a bit more pure than previously thought — or so the government says.

Auditors spent weeks last year in a vault five stories beneath Manhattan counting, weighing and drilling small holes into gold bars owned by the U.S. Treasury.

It was the first time the Treasury's inspector general had audited the department's gold held by the Federal Reserve Bank of New York, which has captured the imagination of Hollywood as well as government skeptics.

The audit's results are in: The New York Fed's operations and controls are up to snuff, and the U.S. gold on deposit is a bit finer than Treasury records had indicated.

Still, the audit probably will not lay to rest questions over whether the New York Fed has secretly lent the gold or otherwise encumbered it in a swap transaction with another government or bank.

"There's no way to prove there's not a secret agreement," said Ted Truman, a former assistant Treasury secretary and top Fed official.

The audit of the Fed gold came after 2012 presidential contender and former Rep. Ron Paul (R-Texas) questioned the central bank's gold holdings.

While he was in Congress, Paul questioned whether the Fed had lent or otherwise encumbered U.S. gold in financial arrangements. At a congressional hearing in 2011, the Treasury Department's inspector general, Eric Thorson, assured Paul that "not one troy ounce is encumbered."

Paul has called for a full, independent audit and assay of the country's gold reserves. But as part of its audit, the Treasury tested a sample — not all — of the government's 34,021 gold bars in the New York Fed's vault.

In three of the 367 tests, the gold was more pure than Treasury records indicated, according to the inspector general. As a result, the government notched up the value of its gold holdings by approximately 27 fine troy ounces — or about $43,500, based on gold's market price Monday.

The assaying process consumed 10 ounces of gold, and the remaining 69 ounces removed for sampling were returned to the Treasury, according to the inspector general's office.

The U.S. gold at the New York Fed has been placed under so-called Official Joint Seals, attesting to the results of the audit.

"At this point, we do plan to conduct this audit annually," the inspector general's office said in emailed responses to questions. "However, since the gold is now under Official Joint Seal, we would not anticipate weighing, counting and assaying unless the seal shows signs of tampering."

The audit also examined internal controls, security and operations at the New York Fed. "Our audit disclosed no material weaknesses and no instances of reportable noncompliance with laws and regulations," the Treasury's audit report said.

The New York Fed holds 99.98% of the U.S.-owned gold bars and coins in the custody of the Federal Reserve. The rest of the gold is on display at Fed banks in cities such as Richmond, Va.; Kansas City, Mo.; and San Francisco.

As of Sept. 30, when the market price of gold was $1,776 an ounce, the Fed banks held $23.9 billion in U.S. gold. (Gold has since declined in value, and on Monday the precious metal was hovering around $1,610 an ounce.) The vast majority — about 95% — of the country's gold reserves is held elsewhere, in Ft. Knox, Ky.; West Point, N.Y.; and Denver.

Truman, the former Treasury and Fed official, was not surprised by the audit's findings.

"I would be flabbergasted if they found some huge discrepancy or even a substantial discrepancy between what they said they had and what they found," Truman said.

Still, the audit won't end conspiracy theories that involve the government's gold held by the Fed, he said.

"I would surprised if anyone's convinced of anything," he said. "They'll conspire now about whether the audit was aboveboard."

andrew.tangel@latimes.com

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