Judge to look again at releasing Kemper records

JACKSON, Miss. -- A judge will sort out which records about Mississippi Power Co.'s Kemper County power plant should be released to a group that opposes the plant.

The Mississippi Supreme Court ruled Thursday that Hinds County Chancery Judge Dewayne Thomas should release information sought by the Bigger Pie Forum, while withholding other information about the $5 billion complex that Mississippi Power wants kept secret.

"Bigger Pie is entitled to the January 2009 natural gas price forecasts and (carbon dioxide) price assumptions," Presiding Justice Michael Randolph wrote in a unanimous opinion.

Bigger Pie, which opposes Kemper, has long questioned whether Mississippi Power gave inflated forecasts about the price of natural gas to the Mississippi Public Service Commission. High natural gas forecasts would have made Kemper, which will burn gasified lignite coal, look more economically competitive. Mississippi Power, a unit of the Atlanta-based Southern Co., also plans to sell carbon dioxide, which it will extract from gasified lignite.

"It's been Bigger Pie's contention from early on that the Kemper plant, because of its huge upfront cost, was never going to be economic," Bigger Pie President Ashby Foote said Friday. "If they misled the public service commission in their effort to show Kemper was economic when in fact it wasn't, you have to question the validity of their certificate to go build the plant."

Mississippi Power said it would cooperate with the court, but said the ruling didn't definitively call for the release of any information.

"Thursday's ruling from the Mississippi Supreme Court makes no determination as to whether any confidential Mississippi Power documents submitted to the Mississippi Public Service Commission should be released," spokeswoman Natalie Campen wrote in an email.

In 2012, Thomas ruled Mississippi Power had to release the documents. The company appealed, and during the appeal Bigger Pie discovered that the company had released a natural gas price projection to it and The Wall Street Journal. But Randolph wrote that the projections contained in the documents Mississippi Power wanted kept secret appear to be different. His opinion instructs Thomas to release the natural gas and carbon dioxide price projections, but warns that screening out the information may be so difficult that Thomas may need to appoint an expert to do so.

Bigger Pie hopes to get the information released before the Public Service Commission holds hearings in May that will determine whether Mississippi Power's spending on Kemper has been legally prudent. Bigger Pie lawyer Robert Wise said evidence of inflated projections could help opponents argue that Kemper has been imprudent all along.

Judge approves Detroit swaps deal with 2 banks

DETROIT -- Detroit can move ahead with a plan to settle a ruinous multimillion-dollar debt with two banks for $85 million, a judge said Friday as he also urged the bankrupt city and other creditors to reach more deals.

Bankruptcy Judge Steven Rhodes signed off on the agreement to pay UBS and Bank of America.

The settlement is just a small portion of the city's $18 billion in liabilities, which include $12 billion not secured by taxes or other revenue.

Each bank will get $42.5 million spread out over a number of years — a "reasonable" amount, Rhodes said.

The city said in a release Friday afternoon that it already has paid about $12 million of the $85 million owed the banks.

Rhodes said the plan reduces the amount of principal owed to the banks and extends the time to pay what's left. The agreement also doesn't require a new loan, he said.

Rhodes had denied earlier proposals for $220 million and $165 million as too generous.

Detroit had pledged casino tax revenue in 2009 as collateral to avoid defaulting on pension debt payments. It allowed the city to get fixed interest rates on pension bonds with the banks, but the arrangement became too costly when interest rates plunged.

The city had owed $288 million on the so-called swaps deal, made in 2005 and 2006.

The settlement is important in emergency manager Kevyn Orr's plan to restructure Detroit's debt and get the city out of bankruptcy by mid-October. It gives Orr momentum and could eventually persuade the judge to order a "cram-down" on other creditors, especially retirees, if they don't make their own deals.

"Now is the time to negotiate," Rhodes said. "Litigation should be a last resort."

Under a cram-down, Rhodes can approve a bankruptcy exit plan if, among other things, it's been accepted by certain creditors and is considered fair and equitable to other creditors who are opposed.

Earlier in the week, in a separate deal, banks agreed to accept 74 cents for each dollar of $388 million in bond debt.

Detroit continues to hold mediation sessions with retirees, representatives of the city's two public pension systems and others.

"We're making good progress in reaching consensual resolutions with our creditors and stakeholders," Orr said in a release Friday. "The city's $18 billion debt load is suffocating, and the longer parties wait in hopes of a better deal, the more dire our collective situation becomes.

"We don't have the luxury of time. The offers on the table are grounded in reality and they won't last forever."

Hospital considers staff cuts

LEOMINSTER, Mass. -- A central Massachusetts hospital says it is considering staff cuts as it faces a $7.3 million reduction in Medicare and Medicaid payments and $2.5 million decline in revenues because of reduced patient volume.

HealthAlliance Hospital, with campuses in Leominster and Fitchburg, has hired a consultant to gauge how its staffing matches with similarly sized hospitals.

The hospital is part of Worcester-based UMass Memorial Health Care.

Revenue from the first five months of the current fiscal year is down $2.5 million from last year, and the hospital expects those volume declines to continue for the "foreseeable future."

Interim President Mike Cofone said Thursday that while the hospital is not ruling out potential layoffs, it is looking at other options, including supply arrangements and purchasing agreements.

'Divergent' film finale to be released in 2 parts

LOS ANGELES -- Lions Gate Entertainment Corp. says the final book of its "Divergent" trilogy will be made into two parts, following the lucrative formula it has used for "Twilight" and is repeating for "The Hunger Games."

The first film in the series based on Veronica Roth's novels has grossed $117 million in its first three weeks of release.

Part I of the finale, called "Allegiant," will be released on March 18, 2016, followed by Part II on March 24, 2017.

"Insurgent," the second film in the series, begins production next month. It is set for release on March 20 next year.

If Aide-Kissing Congressman Doesn't Quit, Voters Will Decide Fate

i i

hide captionRep. Vance McAllister, R-La., being sworn in by Speaker John Boehner as wife Kelly holds the Bible.

J. Scott Applewhite/AP

Rep. Vance McAllister, R-La., being sworn in by Speaker John Boehner as wife Kelly holds the Bible.

J. Scott Applewhite/AP

As of this writing, Rep. Vance McAllister is still a Republican congressman representing his northeastern Louisiana district.

And that's part of the problem, according to the Louisiana Republican Party establishment. Gov. Bobby Jindal and state party chair Roger Villere both recommended publicly and strongly that McAllister immediately resign in the wake of widely seen security video showing the married congressman canoodling a married now ex-staffer.

As the week ended, with Congress entering its two-week spring break, McAllister was keeping a low public profile, though he did tell the News-Star newspaper of Monroe, La., earlier in the week he didn't plan to resign.

And that's the other part of the problem for the national and state Republican establishment. If McAllister, who won a November special election to get to Congress, doesn't decide to resign, his party is stuck with him. That is at least until the fall election, when voters will have their opportunity to turn him out of office.

While it's certainly a scandal for a married congressman to be captured kissing a married aide on a viral video, it certainly doesn't rise to the level of the kind of behavior that has historically caused the House to expel its members.

In fact, only five House members have gotten expelled in the nation's history, and three of those expulsions happened during the Civil War for reasons of disloyalty to the United States, according to the a 2012 Congressional Research Service report. Two others, in 1980 and 2002, came after corruption convictions. So there's no expulsion, and members of Congress aren't impeached.

McAllister will likely face rising pressure, however, to resign. Fundraising should be much harder for him now with the state party establishment firmly against him. State party officials already had reasons to feel tepid about him since he had shown an independent streak. For instance, he opposed Jindal's decision to not expand Medicaid under the Affordable Care Act. McAllister represents a district high in poverty.

Meanwhile, his new found political weakness invites challengers who might have otherwise stayed out of the race.

Congressional Republicans like Speaker John Boehner have been more circumspect. They haven't openly called for his resignation, but they also have indicated that they expect much better behavior from members of Congress. They certainly don't appreciate the distraction caused by McAllister's case.

Just because they can't expel him doesn't mean House Republicans can't try to make life more miserable for him in the hope that he resigns or to signal voters in his district that they might want to have someone else represent them.

For instance, they could strip him of his agriculture and natural resources committee assignments. That could truly sting since his district is mostly rural.

Key questions unanswered in wage hike bill

BEIRUT: Parliament’s Joint Committees referred late Friday a controversial draft law to raise the salaries of public sector employees to the general assembly after a seven-hour marathon session that failed to resolve key contentious issues in the bill.

MP Ibrahim Kanaan, who chaired the committees’ session, said the proposal would be ready by the beginning of the week in anticipation of a parliamentary vote that would be called by Speaker Nabih Berri, possibly as early as next week.

MPs failed to reach an agreement on when the wage hikes would come into effect, whether they would be retroactive and if they would be paid in installments, as well as on the increase in value-added tax and on details of the raises for teachers.

Unions have already opposed proposals to pay the hike in installments.

MPs expect the Parliament session debating the bill to witness heated debates between those who want to pass the wage hike at any cost and those who worry that it could deplete state coffers, already reeling under tough economic conditions.

The wage hike is expected to cost the treasury some $1.6 billion annually amid a widening budget deficit that has reached 11 percent of GDP in 2013 and prompted several rating agencies to downgrade the outlook for Lebanese banks that hold the bulk of the sovereign bonds.

The announcement came as the country’s top banks softened their opposition to the plan, set to feature tax hikes on bank profits and interest from deposits.

Earlier Friday, Finance Minister Ali Hassan Khalil and the Association of Banks in Lebanon began discussions to reach a compromise agreement over the proposed taxes.

“The meeting was positive and we hope to reach an agreement over the next few days,” Head of ABL Francois Bassil told a news conference following a meeting between Khalil and a delegation of bankers.

Before holding talks with Khalil, the ABL delegation had requested an appointment with Berri, but the latter refused to meet with bankers and lashed out at the ABL for observing a one-day strike in protest against the proposed taxes, saying local banks make “obscene” profits from clients.

Banks remained closed as the association pleaded with the speaker to help reach a solution suitable for both the private and the public sector.

In remarks carried by the National News Agency, Berri insisted that the ABL’s president, “Francois Bassil, publicly apologize for verbally attacking lawmakers and Parliament.”

The ABL had criticized lawmakers for making “random decisions” for political purposes, warning that such a step would have negative effects on inflation rates in the country, the stability of the national currency and the purchasing power of the Lebanese.

Amal MP Hani Qobeissi filed a lawsuit against Bassil for defamation and slander against lawmakers and politicians, but later retracted the lawsuit following Khalil’s meeting with bankers.

In his news conference, Bassil made a veiled apology to Berri following his criticism of lawmakers Thursday after Parliament’s Joint Committees proposed to introduce a 7 percent tax on the interest income earned by commercial banks on assets deposited at the central bank.

Lawmakers had also proposed to increase the tax on banks’ net profits from 15 to 17 percent and raise the tax on interest earned on deposits from 5 to 7 percent.

Bassil warned that the proposed taxes would lead to a hike in interest rates that would affect low to middle income families.

Increasing the tax on interest earned on deposits will generate $186 million for the treasury, while taxing the interest earned on bank assets deposited at the central banks would generate around $146 million.

Adopting softer rhetoric Friday, Bassil said banks were willing to accept a tax hike on net profits as long as it is “reasonable.”

A banker told The Daily Star that if the proposed tax increases on banks were enacted without amendment, they would very likely lead to an increase in the lending rate.

Banks also fear that international rating agencies, such as Moody’s, would downgrade Lebanon’s sovereign rating even further if the tax measures and the wage hike were to be adopted.

Some bankers have hinted that they could decide to stop financing the public debt in protest of current economic and financial policies.

Among other proposals to finance the pay raise, the Joint Committees approved fines for property violations; the annual fine amounts to 2.5 percent of the value of any illegally obtained land and 7.5 percent of the value of any illegally constructed building on seafront properties.

Voicing fears of repercussions that could ensue following the approval of the draft law, Bassil appealed to the speaker to bridge the gap between lawmakers and banks.

“I urge Speaker Berri to use his wisdom and his patriotism to narrow the divide and resolve the problem,” he said.

Sources with knowledge of the meeting with bankers told The Daily Star that the bankers had agreed that they could afford to pay for the tax hikes.

Khalil pointed out in the meeting that Lebanese banks earn about $1.8 billion of profits from their treasury bonds, and that the tax hike on deposit interest will mean that the banks pay about $400 million annually to the state.

Khalil also told the bankers that depositors would not flee from Lebanese banks since interest rates on deposits are already higher than in the rest of the world.

Meanwhile, tenants held a protest in front of Prime Minister Tammam Salam’s Beirut residence against a new rental law.

Rai: President with majority vote will have my backing

BEIRUT: Maronite Patriarch Beshara Rai Friday denied media reports that he supported an independent presidential candidate over one picked by the March 8 or March 14 groups, saying he supported any properly elected president.

“Any president – whether from March 8, March 14 or from outside these groups – who is elected by the absolute majority in Parliament is our president,” Rai told reporters at Rafik Hariri International Airport after returning from Geneva.

The head of the Maronite Church clarified the remarks he made to foreign media outlets while in Geneva.

“We said what everybody says, which is that if no agreement [among rival groups] is reached over one candidate from the March 14 or March 8 coalitions ... then it will be possible that no one from either the March 14 or March 8 coalitions would assume the presidency,” Rai said, adding that he neither backed nor excluded any particular candidate.

However, sources at the Patriarchate told The Daily Star that Rai had information that local and regional signs indicated that a consensus president unaffiliated with either coalition stood the best chance.

The sources said that a consensus president would prioritize national interest and would believe in a moderate political stance.

Meanwhile, Future Movement MP Ahmad Fatfat told the National News Agency that a meeting between former Prime Minister Fouad Siniora and Future Movement leader Saad Hariri in Riyadh Friday primarily focused on the presidential election.

Former Minister Jean Obeid, a possible presidential candidate, explained Friday why he had not announced his candidacy.

“He considers that rules and customs do not require the announcement of candidacy or a platform for presidential elections,” said a statement issued from Obeid’s office.

“Without false pretenses, he considers himself not to be a candidate so far due to the lack of high chances [for his victory] amid the current circumstances surrounding the competition,” the statement added.

A moderate figure, Obeid maintains good ties with Speaker Nabih Berri, Progressive Socialist Party leader Walid Jumblatt and other politicians from the rival March 8 and March 14 coalitions. Many view him as a possible consensus candidate for presidential elections.

The constitutional period for the election of the new president began on March 25, two months ahead of the expiry of President Michel Sleiman’s term.

Lebanese Forces leader Samir Geagea, who announced his candidacy last month, said that Lebanon’s salvation lay in having a strong republic that required a strong president with clear stances.

Addressing visitors at his Maarab residence, Geagea said a strong president should be honest, stick to his position, support the state alone and not back down in fear of Hezbollah.

“The strong president is the one who says frankly what he wants and who launches his campaigns in front of the people and not in embassies and behind closed doors, ... who has never sought a post or gains but only wants to be a strong president in a strong republic,” Geagea added.

Telecommunications Minister Butros Harb, also a potential candidate, said on Twitter that he would not announce his candidacy officially, as the Constitution did not require hopefuls to declare their intention to run in the presidential poll.

Western Bekaa MP Robert Ghanem announced his candidacy.

In an interview by a local television station Thursday evening, Ghanem said he believed in March 8’s values of resistance, but was also dedicated to the values of independence and sovereignty that were emphasized following the 2005 assassination of former Prime Minister Rafik Hariri.

Frederic Hof, a former adviser of the U.S. secretary of state, told a radio station that a dangerous vacuum in the presidency was possible, given the domestic repercussions of Syria’s war resulting from Hezbollah’s military involvement. – With additional reporting by Antoine Ghattas Saab