Africa News Today (AN/Today): W. Mark Felt, Watergate Deep Throat, Dies at 95 By TIM WEINER

Associated Press
W. Mark Felt, left, with reporters in Washington in 1980. Mr. Felt and Edward S. Miller, right, were fined $8,500 for approving illegal break-ins.

W. Mark Felt, who was the No. 2 official at the F.B.I. when he helped bring down President Richard M. Nixon by resisting the Watergate cover-up and becoming Deep Throat, the most famous anonymous source in American history, died Thursday. He was 95 and lived in Santa Rosa, Calif.

His death was confirmed by Rob Jones, his grandson.

In 2005, Mr. Felt revealed that he was the one who had secretly supplied Bob Woodward of The Washington Post with crucial leads in the Watergate affair in the early 1970s. His decision to unmask himself, in an article in Vanity Fair, ended a guessing game that had gone on for more than 30 years.

The disclosure even surprised Mr. Woodward and his partner on the Watergate story, Carl Bernstein. They had kept their promise not to reveal his identity until after his death. Indeed, Mr. Woodward was so scrupulous about shielding Mr. Felt that he did not introduce him to Mr. Bernstein until this year, 36 years after they cracked the scandal. The three met for two hours one afternoon last month in Santa Rosa, where Mr. Felt had retired. The reporters likened it to a family reunion.

Mr. Felt played a dual role in the fall of Nixon. As a secret informant, he kept the story alive in the press. As associate director of the Federal Bureau of Investigation, he fought the president's efforts to obstruct the F.B.I.'s investigation of the Watergate break-in.

Without Mr. Felt, there might not have been a Watergate — shorthand for the revealed abuses of presidential powers in the Nixon White House, including illegal wiretapping, burglaries and money laundering. Americans might never have seen a president as a criminal conspirator, or reporters as cultural heroes, or anonymous sources like Mr. Felt as a necessary if undesired tool in the pursuit of truth.

Like Nixon, Mr. Felt authorized illegal break-ins in the name of national security and then received the absolution of a presidential pardon. Their lives were intertwined in ways only they and a few others knew.

Nixon cursed his name when he learned early on that Mr. Felt was providing aid to the enemy in the wars of Watergate. The conversation was recorded in the Oval Office and later made public.

"We know what's leaked, and we know who leaked it," Nixon's chief of staff, H. R. Haldeman, told the president on Oct. 19, 1972, four months after a team of washed-up Central Intelligence Agency personnel hired by the White House was caught trying to wiretap the Democratic Party's national offices at the Watergate complex.

"Somebody in the F.B.I.?" Nixon asked.

"Yes, sir," Mr. Haldeman replied. Who? the president asked. "Mark Felt," Mr. Haldeman said. "Now why the hell would he do that?" the president asked in a wounded tone.

No one, including Mr. Felt, ever answered that question in full. Mr. Felt later said he believed that the president had been misusing the F.B.I. for political advantage. He knew that Nixon wanted the Watergate affair to vanish. He knew that the White House had ordered the C.I.A. to tell the bureau, on grounds of national security, to stand down in its felony investigation of the June 1972 break-in. He saw that order as an effort to obstruct justice, and he rejected it. That resistance led indirectly to Nixon's resignation.

Mr. Felt had expected to be named to succeed J. Edgar Hoover, who had run the bureau for 48 years and died in May 1972. The president instead chose a politically loyal Justice Department official, L. Patrick Gray III, who later followed orders from the White House to destroy documents in the case.

The choice infuriated Mr. Felt. He later wrote that the president "wanted a politician in J. Edgar Hoover's position who would convert the bureau into an adjunct of the White House machine."

Hoover had sworn off break-ins without warrants — "black bag jobs," he called them — in 1966, after carrying them out at the F.B.I. for four decades. The Nixon White House hired its own operatives to steal information, plant eavesdropping equipment and hunt down the sources of leaks. The Watergate break-in took place six weeks after Hoover died.

While Watergate was seething, Mr. Felt authorized nine illegal break-ins at the homes of friends and relatives of members of the Weather Underground, a violent left-wing splinter group. The people he chose as targets had committed no crimes. The F.B.I. had no search warrants. He later said he ordered the break-ins because national security required it.

In a criminal trial, Mr. Felt was convicted in November 1980 of conspiring to violate the constitutional rights of Americans. Nixon, who had denounced him in private for leaking Watergate secrets, testified on his behalf. Called by the prosecution, he told the jury that presidents and by extension their officers had an inherent right to conduct illegal searches in the name of national security.

"As Deep Throat, Felt helped establish the principle that our highest government officials are subject to the Constitution and the laws of the land," the prosecutor, John W. Nields, wrote in The Washington Post in 2005. "Yet when it came to the Weather Underground bag jobs, he seems not to have been aware that this same principle applied to him."

Seven months after the conviction, President Ronald Reagan pardoned Mr. Felt. Then 67, Mr. Felt celebrated the decision as one of great symbolic value. "This is going to be the biggest shot in the arm for the intelligence community for a long time," he said. After the pardon, Nixon sent him a congratulatory bottle of Champagne.

Mr. Felt then disappeared from public view for a quarter of a century, denying unequivocally, time and again, that he had been Deep Throat. It was a lie he told to serve what he believed to be a higher truth.

William Mark Felt was born in Twin Falls, Idaho, on Aug. 17, 1913. After graduating from the University of Idaho, he was drawn to public service in Washington and went to work for Senator James P. Pope, a Democrat.

In 1938, he married his college sweetheart, Audrey Robinson, in Washington. They were wed by the chaplain of the House of Representatives. She died in 1984. The couple had a daughter, Joan, and a son, Mark. They and four grandsons survive Mr. Felt.

Days before Pearl Harbor, after earning a law degree in night classes at George Washington University, Mr. Felt applied to the F.B.I. and joined it in January 1942. He spent most of World War II hunting German spies.

After stints in Seattle, New Orleans and Los Angeles, Hoover named him special agent in charge of the Salt Lake City and Kansas City offices in the late 1950s. Rising to high positions at the headquarters in the 1960s, he oversaw the training of F.B.I. agents and conducted internal investigations as chief of the inspection division.

In early 1970, while waiting in an anteroom of the West Wing of the White House, Mr. Felt chanced to meet a Navy lieutenant delivering classified messages to the National Security Council staff. The young man in dress blues was Bob Woodward. By his own description fiercely ambitious and in need of adult guidance, Mr. Woodward tried to wring career counseling from his elder. He left the White House with the number to Mr. Felt's direct line at the F.B.I.

On July 1, 1971, Hoover promoted Mr. Felt to deputy associate director, the third in command at the headquarters, beneath Hoover's right-hand man and longtime companion, Clyde A. Tolson. With both of his superiors in poor health, Mr. Felt increasingly took effective command of the daily work of the F.B.I. When Mr. Hoover died and Mr. Tolson retired, he saw his path to power cleared.

But Nixon denied him, and he seethed with frustrated ambition in the summer of 1972.

One evening that summer, a few weeks after the Watergate break-in, Mr. Woodward, then a neophyte newspaperman, knocked on Mr. Felt's door in pursuit of the story. Mr. Felt decided to co-operate with him and set up an elaborate system of espionage techniques for clandestine meetings with Mr. Woodward.

If Mr. Woodward needed to talk, he would move a flowerpot planted with a red flag on the balcony of his apartment on P Street in Washington. If Mr. Felt had a message, Mr. Woodward's home-delivered New York Times would arrive with an inked circle on Page 20. Mr. Woodward would leave his apartment by the back alley that night and take one taxi to a downtown hotel, then a second to an underground parking garage in the Rosslyn section of Arlington, Va.

Within weeks, Mr. Felt steered The Post to a story establishing that the Watergate break-in was part of "a massive campaign of political spying and sabotage" directed by the White House. For the next eight months, he did his best to keep the newspaper on the trail, largely by providing, on "deep background," anonymous confirmation of facts reporters had gathered from others. The Post's managing editor, Howard Simons, gave him his famous pseudonym, taken from the pornographic movie then in vogue.

By June 1973, Mr. Felt was forced out of the F.B.I. Soon he came under investigation by some of the same agents he had supervised, suspected of leaking information not to The Post but to The New York Times. He spent much of the mid-1970s testifying in secret to Congress about abuses of power at the F.B.I. Millions of Americans knew him only as a shadowy figure in the 1976 movie made from the Watergate saga, "All the President's Men," which made "Woodward and Bernstein" legends of American journalism. In the movie, Deep Throat (Hal Holbrook) gives Mr. Woodward (Robert Redford) probably the most famous bit of free advice in the history of investigative journalism. It was a three-word road map to the heart of the matter: "Follow the money."

Mr. Felt never said it. It was part of the myth that surrounded Deep Throat.

Copyright 2008 The New York Times Company

Africa News Today (AN/Today): How Cheap Is Too Cheap? Take the Mourning Test

Last week, I wrote a column about Christmas spending. I had frugal Christmases as a child and expected to continue doing so when I got married. That has sometimes caused friction with my wife, Clarissa, who sees Christmas as a time of joyous generosity and doesn't fret about spending too much.

The column prompted several memorable emails from readers. Some liked the column, saying it conjured up memories of their own frugal childhood Christmases. But one reader in particular took me to task for, basically, being so cheap.

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Neal Templin admits that being cheap isn't always a virtue.

"Do you have a hobby?" she wrote. "Do you ever buy your wife nice jewelry or expensive perfume? Did you ever take the family on a great vacation where the experience played a larger part than the cost? Any one of us could drop dead tomorrow -- please don't have your family be sorry that you never enjoyed life and perhaps breathe a small sigh of relief that they now will."

This may be a tad harsh. But it's a good letter, and the reader raises some valid points.

When I decided to write this column earlier this year, I chose to focus on a single aspect of my personality and its effect on my life. Am I cheap? Yep. Am I capable of acts of generosity?

Well, yeah. I could write about the time I spent $400 to give an amber necklace to Clarissa in the early 1990s when that was big money to us. I also sprang for a trip to London with Clarissa several years ago. We saved money by staying with friends. But we still managed to spend $3,000 on plane tickets, and meals, and a two-day trip to Bath because Clarissa loves Jane Austen.

And I started bird watching three years ago and spent $1,000 on a pair of $1,800 Swarovski binoculars after a friend offered me a deal. But I sometimes feel embarrassed when I hang them around my neck because I'm not a remotely good enough birder to merit such an extravagance.

If the question is whether I ever completely forget about money and just do whatever the heck I feel like -- no matter the cost -- the answer, I'm afraid, is no.

We've raised three kids on one salary, and it seemed wrong to me to spend money we don't have. On top of that, I hate waste. And paying too much for something makes me a little ill.

Being cheap isn't always a virtue. My family can tell you stories of the times I've bought bargain steaks at the supermarket that were so tough they were almost inedible. Or when I cast a pall on some outing by fretting about how to do it on the cheap.

Is it close to the point where they won't mourn my death? I sure hope not.

So I put the question to our 17-year-old, Brendon, as he sat hunched over the breakfast table, shoveling scrambled eggs into this mouth. "A reader thinks I'm so cheap you'll breathe a sigh of relief when I die," I said. "That right?"

Brendon paused for a second. "It depends how much money you have," he said. He resumed shoveling eggs.

OK, he's a wise guy like his father. He didn't really mean it.

But has being tight with a dollar gotten in the way of my enjoying life? Yes, there have been times. But to be perfectly frank, most of the things I enjoy most in life -- reading, writing, hiking, spending time with friends and family -- aren't horribly expensive. I actually get paid to write. So I feel fortunate, not deprived.

I also know that we live in a society that has lived beyond its means. Much of the wealth around us was created by a huge increase in debt. Now, with the economy shrinking and credit tightening, much of that debt is going to disappear. Like it or not, America may once again become a place where people watch every penny.

The trick will be curbing our spending without making life miserable. I draw one line. Readers may draw another.

Write to Neal Templin at neal.templin@wsj.com

http://online.wsj.com/article/SB122955255403315677.html

Africa News Today (AN/Today): Bush-Era Abortion Rules Face Possible Reversal Obama Team Looks at Regulation Set to Be Finalized This Week Letting Medical Staff Refuse to Take Part in Practices They Oppose

By LAURA MECKLER

WASHINGTON -- The outgoing Bush administration this week will finalize a regulation establishing a "right of conscience" allowing medical staff to refuse to participate in any practice they object to on moral grounds, including abortion but possibly birth control and other health care as well.

In transition offices across town, officials in the incoming Obama administration have begun considering how and when to undo it.

The regulation is one of a swath of abortion and other reproductive-health issues under review by the Obama team, which is preparing to reverse a variety of Bush measures, according to officials close to the transition. The review is part of a sweeping scrutiny of Bush-era legislation and regulation on issues across the federal government, from environmental and labor rules to defense spending.

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• Which Bush policies do you expect Obama to target first?

On abortion and related matters, action is expected early on executive, regulatory, budgetary and legislative fronts.

Decisions that the new administration will weigh include: whether to cut funding for sexual abstinence programs; whether to increase funding for comprehensive sex education programs that include discussion of birth control; whether to allow federal health plans to pay for abortions; and whether to overturn regulations such as one that makes fetuses eligible for health-care coverage under the Children's Health Insurance Program.

Women's health advocates are also pushing for a change in rules that would lower the cost of birth control at college health clinics.

Obama aides will have to settle many of these questions in issuing their first budget in February.

"We have a lot of work to do to fix the damage the Bush administration has done," said Nancy Keenan, president of NARAL Pro-Choice America.

As one of his first actions, Mr. Obama is likely to issue an executive order lifting President George W. Bush's restrictions on funding for research using embryonic stem cells, a move with bipartisan support.

Women's health advocates also expect early action on the "global gag rule," which bars foreign organizations from using their own money for abortion services or advocacy if they accept U.S. aid for family planning. This policy was instituted by President Ronald Reagan, immediately overturned by President Bill Clinton and then reinstated by Mr. Bush.

The abortion debate in the next year is likely to focus on the Freedom of Choice Act, a bill that would codify Roe v. Wade into federallaw.

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Mr. Obama is also expected to restore federal funding for family planning to the United Nations Population Fund soon after taking office. This policy also has gone back and forth with control of the White House, with Republicans arguing that the U.N. agency supports coercive abortions because of its work in China with its one-child policy, and Democrats saying that the agency doesn't.

Messrs. Clinton and Bush took action on those two issues in the opening days of their administrations. It isn't clear whether Mr. Obama will follow suit. He has suggested that he wants to find middle ground on abortion-related issues, and some Democrats worry about the politics of making abortion policy one of his opening moves.

As they face Democrat-controlled Washington, antiabortion activists are gearing up to fight the Freedom of Choice Act, or FOCA, which would codify Roe v. Wade into federal law. Mr. Obama said last year that he would sign the bill. Depending on how it is interpreted, the bill could overturn state laws regulating abortion, such as parental notification and mandatory waiting periods.

"Our No. 1 concern would be the FOCA bill," said Connie Mackey, senior vice president of Family Research Council Action, a conservative group that focuses on social issues. "We have to appeal directly to the American public."

The opponents of this legislation appear more eager for a debate over it than the proponents do, perhaps knowing it is a strong way to rally their supporters early in the administration.

While many abortion-rights supporters would like to see Congress pass FOCA, their advocates in Washington have concluded that there aren't enough votes in Congress and that it isn't politically smart to push such a divisive measure. A coalition of nearly 60 liberal and women's groups submitted a list of 15 requests for action in the Obama administration's first 100 days, and FOCA isn't on the list.

"We're going to be smart and strategic about our policy agenda to bring people together to make progress for women's health," said Cecile Richards, president of Planned Parenthood Federation of America. "The Freedom of Choice Act is very important...but we have a long list of things to get done that I think can address problems immediately that women are facing, that are really immediate concerns."

Among them is the "right of conscience" regulation that is expected to be published this week. It will take effect 30 days after being issued. That means that if the Bush administration issues the regulation this week, it will become final before Mr. Obama's inauguration on Jan. 20, and his administration won't be able to undo it easily.

For decades, federal law has said that doctors and nurses can't be compelled to perform abortions. The new regulation broadens that to make clear that all health-care workers may refuse to provide information, such as a referral, to patients looking for an abortion. The Department of Health and Human Services estimates the regulation would affect 584,000 hospitals, doctor's offices, pharmacies and other entities.

Advocates on both sides of the issue have interpreted the rule as also protecting workers who refuse to participate in providing birth control or other care they don't support. The rule could be blocked by Congress, or Health and Human Services could begin the laborious process of issuing a new regulation reversing course. Officials close to the transition have signaled that they intend to begin the regulatory process anew.

Write to Laura Meckler at laura.meckler@wsj.com

Africa News Today (AN/Today): Madoff Exploited the Jews Networks of trust are vulnerable. No law can change that. By RONALD A. CASS

Steven Spielberg. Elie Wiesel. Mort Zuckerman. Frank Lautenberg. Yeshiva University. As I read the list of people and enterprises reportedly bilked to the tune of $50 billion by Bernard Madoff, I recalled a childhood in which my father received bad news by asking first, "Was it a Jew?" My father coupled sensitivity to anti-Semitism with special sympathy for other Jews. In contrast, Mr. Madoff, it seems, targeted other Jews, drawing them in at least in some measure because of a shared faith.

The Madoff tale is striking in part because it is like stealing from family. Yet frauds that prey on people who share bonds of religion or ethnicity, who travel in the same circles, are quite common. Two years ago the Securities and Exchange Commission issued a warning about "affinity fraud." The SEC ticked off a series of examples of schemes that were directed at members of a community: Armenian-Americans, Baptist Church members, Jehovah's Witnesses, African-American church groups, Korean-Americans. In each case, the perpetrator relied on the fact that being from the same community provided a reason to trust the sales pitch, to believe it was plausible that someone from the same background would give you a deal that, if offered by someone without such ties, would sound too good to be true.

The sense of common heritage, of community, also makes it less seemly to ask hard questions. Pressing a fellow parishioner or club member for hard information is like demanding receipts from your aunt -- it just doesn't feel right. Hucksters know that, they play on it, and they count on our trust to make their confidence games work.

The level of affinity and of trust may be especially high among Jews. The Holocaust and generations of anti-Semitic laws and practices around the world made reliance on other Jews, and care for them, a survival instinct. As a result, Jews are often an easy target both for fund-raising appeals and fraud. But affinity plays a role in many groups, making members more trusting of appeals within the group.

On one level, the number of these affinity frauds is testament to the strength of communities in America. Alexis de Tocqueville -- the one Frenchman generally admired by Americans for his good sense and understanding of our nation -- observed that we are a nation of different organizations and clubs, of civic groups and church groups, a web of social and ethnic and religious communities. We define ourselves as American, but also as Jews and Catholics, Mormons and Baptists, as Cuban and Italian, Irish and Japanese, as Rotarians and Masons, Democrats and Republicans.

Predictably, the Madoff story has prompted speculation about potential new regulations that might be imposed to head off future problems. Politicians and pundits have called for the adoption of new rules for securities markets in general and hedge funds in particular, even though Mr. Madoff didn't run a hedge fund and there is no shortage of existing securities rules that were violated by his reported conduct. (Keeping two sets of books suggests his own recognition of that.)

In Today's Opinion Journal

 

REVIEW & OUTLOOK

• To Catch a Thief
• The Fed's Price Controls
• 'Shovel-Ready' on Campus

 

TODAY'S COLUMNISTS

• Wonder Land: The Madoff Inheritance
  – Daniel Henninger
• Organizing the White House Is Obama's First Test
  – Karl Rove

 

COMMENTARY

• Madoff Exploited the Jews
  – Ronald A. Cass
• Deleveraging Can Save Jobs
  – James Barth, Michael Klowden and Glenn Yago
• Obama Should Forget About Energy Independence
  – Arthur B. Laffer

The SEC's failure to pursue complaints about Mr. Madoff over the past decade wasn't the result of inadequate regulations but of disbelief that someone so well entrenched in the industry -- a former Nasdaq chairman and SEC adviser -- was capable of committing such a callous crime.

Although regulatory initiatives routinely are taken off the shelf and offered up as the solution to a newsworthy problem, the conduct Mr. Madoff is accused of was illegal long before Charles Ponzi made pyramid schemes synonymous with his name. With so many aspects of our financial system under scrutiny today, and so many people in the government who regulate and write the rules for that system set to change, it hardly makes sense to go looking for ways to prevent new Madoff-like schemes.

So far as news reports can be trusted, Mr. Madoff appears to be a special case, someone whose whole career made fraud on this scale possible. His contacts and connections, his religion and affiliations, his public and private positions, all worked to make his funds look legitimate and exclusive. And he knew how to play his prospects, when to turn potential clients down, when to give something extra.

In retrospect, the current Madoff story is about someone who was as perfectly suited to swindling as Horowitz was to playing piano. The violation of trust at the heart of that story -- of trust by those with the greatest reason to trust -- cries out for sympathy. It illustrates the limits of law, not the need for more of it.

Mr. Cass is dean emeritus of Boston University School of Law, president of Cass & Associates, and chairman of the Center for the Rule of Law.

http://online.wsj.com/article/SB122956340954216799.html

Africa News Today (AN/Today): How Apple Could Survive Without Steve Jobs By JUSTIN SCHECK and NICK WINGFIELD

By JUSTIN SCHECK and NICK WINGFIELD

Apple Inc. set off shock waves Tuesday by announcing Steve Jobs will not speak at what the company said would be its final appearance at the Macworld trade show. The news sent the company's stock downward, and raised questions about whether Mr. Jobs had new health problems or some new products were not ready.

But another question is likely to persist after the debate dies down: How well could Apple keep up the pace of new products without its iconic chief executive?

Steve Jobs

Speculation about the continued reign of Mr. Jobs -- which has popped up from time to time since his 2004 treatment for cancer -- underscore how closely Apple's fashion-setting products are identified with its co-founder. There is no sign of any change in his status; an Apple spokesman won't address the issue of his health, but said, "If Steve or the board decides that Steve is no longer capable of doing his job as CEO of Apple, I am sure they will let you know."

What if that situation does change? There is reason for optimism, based on the evolution of the team that develops Apple's hardware, software and services, some people familiar with the company's internal workings say. Some of them believe the group is now strong enough that, barring an exodus of top talent, the company could keep churning out innovative products without Mr. Jobs.

Mr. Jobs did not respond to a request for comment.

In one possible sign of confidence in the management team, an unprecedented number of executives presented during the company's press event to unveil its new MacBook lineup in October, though Mr. Jobs still dominated the event.

Mr. Jobs returned to Apple in 1997— he had left in 1985— and has since overseen the introduction of such ground-breaking products as the iMac, iPod and iPhone. He plays an unusually important role for a CEO in the gestation of such gadgets, agonizing over details that could impact users' experience.

 

Tech Stocks Led Lower By Apple

1:00

Apple led technology shares lower on Wednesday after the tech industry icon's decision not to continue appearing at the annual MacWorld meeting raised questions about the company. (Dec. 17)

Not that Mr. Jobs actually designs products himself. He serves more like an "editor in chief" in refining and improving ideas for Apple gadgets, according to former Apple executives.

"He didn't come up with the ideas, he just filtered them," says Bill Bull, a retired Apple engineer who worked for Mr. Jobs at Apple in the 1980s and again after Mr. Jobs returned.

The hands-on work of Apple's innovations depend more directly on subordinates such as Jonathan Ive, an Apple senior vice president who oversees the company's industrial design team. His group is primarily associated with the physical look and feel of products, such as the unusually slender Macbook Air.

Scott Forstall, another senior vice president, leads the team responsible for the iPhone's operating system and other software. In a sign of his growing importance at the company, Mr. Forstall was twice given the chance to speak at media and technical events earlier this year--and has shown some of the same showmanship that is Mr. Jobs' trademark.

Other crucial figures at Apple now include Ron Johnson, senior vice president of Apple retail, who has masterminded the success of Apple's stores, the hip electronics emporiums that have played a crucial role in the growth of the iPod and Macintosh in recent years.

One change to the team was the announcement in early November that Tony Fadell was stepping down as senior vice president of Apple's iPod division, which makes the innards of those popular gadgets carry out their products' slick features. He first conceived of the iPod, and convinced Mr. Jobs to support the idea despite skepticism from others in the company. Mr. Fadell said he will remain an adviser to Mr. Jobs; Mark Papermaster, a former International Business Machines Corp. executive, has been named to assume the iPod post.

For every design project in the pipeline, Mr. Jobs will hold meetings of two or three hours every week or two with key members of the product team. At those meetings, Mr. Jobs will critique the work in progress and also suggest adding or cutting features.

More

• Apple Shares Slump Amid CEO Worries
• Apple Told to End iPhone Deal in France
• BizTech: What Does It Mean for Apple?

Glenn Reid, a software developer during Apple's early years who had another stint at the company that ended in 2003, recalls one such meeting just days before a photo-editing program was to go into production. Mr. Jobs decided at the last minute that an index feature on the software made the system unnecessarily complex, and decided to eliminate it, even though documentation for the product had already been printed. It was frustrating to Mr. Reid and his software team, "but it made the product better," Mr. Reid says.

Mr. Jobs's unwillingness to accept compromises – and the unquestioned authority that lets him issue last-minute edicts – have become a key to Apple's success in developing new products, Mr. Reid says. George Crow, an Apple engineer in the 1980s and again from 1998 to 2005, noted that the company struggled during the years when Mr. Jobs was not running Apple.

On the other hand, certain of Mr. Jobs's uncompromising principles with computers – such as wanting "to make the inside beautiful" – ran counter to more practical impulses. On the original Macintosh PC, Mr. Crow says, Mr. Jobs wanted the internal wiring to be in the colors of Apple's early rainbow logo (Mr. Crow says he eventually convinced Mr. Jobs it was an unnecessary expense). On another machine that Mr. Crow worked on for NeXT – the computer maker Mr. Jobs founded between Apple stints – he says Mr. Jobs insisted that the internal power supply be nickel plated, an expensive ornamentation that was eventually discontinued.

More recently, Mr. Crow says, he lobbied for the power supply on an Apple notebook PC to have a flexible rubber piece at the base of the power cord to keep it from pulling out. But designers working for Mr. Ive were set on a design without the piece of rubber, Mr. Crow says, since it looked sleeker. Eventually, a high rate of returns due to the cord pulling out led Apple to add the rubber piece, he says.

Michael Mace, who worked at Apple during Mr. Jobs's absence, argues that Apple should have a successor on the product side who's given a mandate to singlehandedly make key decisions, like Mr. Jobs does now. When Mr. Jobs was gone, Mr. Mace said, good ideas were often lost when committees of executives would compromise too much. "What they would choose was the safest design," he said, rather than the best one.

But Mr. Crow contends that Mr. Jobs has now hired or elevated enough people whose product vision mirrors his that the company could continue to thrive. Mr. Ive is particularly in tune with Mr. Jobs's thinking, he notes. Mr. Jobs's sensibilities are also so deeply ingrained in lower-ranking designers and engineers that "a lot of people there will say 'gee, what would Steve think about this,' when Steve really isn't thinking about it," Mr. Crow says.

Rick Devine, an executive recruiter in Silicon Valley with Devine Capital Partners, thinks Apple could continue to thrive in a post-Jobs world, predicting that the company will depend more on execution in the coming years than the kind of radical reshaping Mr. Jobs engineered over the past decade. Mr. Devine helped recruit Tim Cook, now Apple's chief operating officer, to the company more than a decade ago.

Mr. Cook, who briefly ran Apple during Mr. Jobs's cancer treatment four years ago, is widely expected to immediately pick up the reins again if that were to become necessary. But the choice of a permanent successor may be another question.

Apple won't discuss details of its succession plan. But Mr. Devine expects Apple to do something like what Walt Disney Co. did a few years ago in picking a CEO; the entertainment giant considered an internal candidate, Robert Iger, as well with outside executives such as eBay Inc.'s former CEO Meg Whitman.

He said corporate boards rarely disclose in advance of a formal CEO search who the most likely internal candidate is for the top job. "That's not healthy for the four or five people who would like to be considered for the role," Mr. Devine says.

Most observers believe that without Mr. Jobs -- whose on-stage product revelations have become major media events -- the "kind of excitement that comes out on a periodic basis would be far less," said Charlie Wolf, an analyst who follows Apple for Needham & Co.

There is little sign that Mr. Jobs is ready to give up the position of public pitchman, despite Apple's announcement Tuesday that said the keynote presentation at this year's Macworld show in early January will be given by Phillip Schiller, its marketing chief. Apple spokesman Steve Dowling traced the switch to its decision to stop using Macworld as a major forum.

Though Mr. Jobs's gaunt appearance at an event last June event set off jitters about his health, subsequent statements Mr. Jobs made to associates suggested little reason for concern, people familiar with the matter say. He told associates that he recovered from an infection that kept him bedridden for several days before the June event, and previously had surgery to correct a digestive problem that caused weight loss, these people say. Mr. Jobs also told people at that time that he was cancer-free.

Write to Justin Scheck at justin.scheck@wsj.com and Nick Wingfield at nick.wingfield@wsj.com

http://online.wsj.com/article/SB122955421965715899.html

More California Towns Face Bankruptcy - RIO VISTA, Calif. -- California may soon have more bankrupt towns on its hands.

By BOBBY WHITE

RIO VISTA, Calif. -- California may soon have more bankrupt towns on its hands.

The city of Vallejo, Calif., gained national attention earlier this year by filing for Chapter 9 bankruptcy protection. Now, two neighbors are fighting to avoid the same fate, as the state's economic crisis spreads.

Isleton and Rio Vista, small towns roughly 50 miles northeast of San Francisco, say they have begun consulting with bankruptcy lawyers as they draw up plans to deal with their mounting budget crises. The towns' leaders say they hope to avoid bankruptcy, but concede the move may eventually be their only option.

"We're strapped for cash and by the end of March or early April we may not have enough money to pay for payroll," says Hector De La Rosa, Rio Vista's city manager.

A Rio Vista, Calif., street is empty after construction was halted at a housing development last month.

California's troubled towns can't expect much help from the state. A state board voted Wednesday to shut off $3.8 billion in financing to hundreds of infrastructure projects to preserve cash, as the nation's most populous state struggles under a budget deficit that officials say could balloon to more than $40 billion over the next two years.

"California's fiscal house is burning down," State Treasurer Bill Lockyer said in a statement.

The plights of Isleton and Rio Vista highlight the difficulties small California municipalities face as revenue falls. Vallejo, just a few miles west of the two towns, filed for bankruptcy in May after its tax revenue sank with the economy, while wages and benefits for police and other services rose. Vallejo instantly became the nightmare scenario for towns across the state facing a similar toxic mix of foreclosures, debts, pension obligations and the inability to raise money on bond markets.

California also makes it hard for municipalities to quickly raise taxes to cover shortfalls: In most instances, state law requires them to place increases in utility rates and taxes before voters for their approval.

Rio Vista began to see the trouble last year, when property-tax revenue began to falter. The city lacks revenue sources such as big-box retailers and depends heavily on two auto dealerships for sales-tax revenue, Mr. De La Rosa says. But the dealerships have hit hard times.

Rio Vista has cut a third of its city workers and slashed its recreation budget to $29,000 from about $250,000. The city is looking into selling more than 100 acres of its land for revenue. Since July 2007, Rio Vista has cut $1 million from its $7 million budget but still faces an $800,000 shortfall. "The fact we are a small town makes it more difficult to handle this slide we are on," says Rio Vista Mayor Jan Vick. "We don't have that much to cut."

In September, Rio Vista contacted law firm Orrick, Herrington & Sutcliffe, which handled the Vallejo bankruptcy, and requested guidance, says former Mayor Eddie Woodruff.

The thought of bankruptcy doesn't sit well with some residents. "When I first heard the council was considering bankruptcy, I was all for it," says Howard Lamothe, owner of Foster's Bighorn restaurant, whose family has lived here for seven generations. "But after I learned about what it means and how it affects business and service, I changed my mind," he says. "I can't support that."

John Knox, a partner at Orrick Herrington, says he expects to see several more municipal bankruptcies in California next year. But "there is no capacity at the state level to write a check to aid our financially burdened local governments," says Marie Ann O'Malley, a policy analyst with the state's Legislative Analysts Office, a nonpartisan financial and policy-advisory agency.

The state's Pooled Money Investment Board Wednesday halted the flow of money to highway, prison and schools projects, among others, until June, so the state can pay for public safety, health care and other crucial services for as long as Sacramento lawmakers remain stalemated over how to close the budget gap.

Ms. O'Malley says that distressed cities could turn to county governments to take over some services. But with many counties also hurting financially, that option is limited. Another option: Cities could dissolve themselves, she says. But dissolution also involves county officials taking over city services and orchestrating a recovery, and lenders would still be left holding the bag for debts.

Isleton's city manager, Bruce Pope, says the town owes $950,000 for an assortment of services including trash pickup and electricity. With Isleton's operating budget of about $1 million, interest on unpaid bills could overpower the city's budget, he says.

Some county leaders are pressuring Mr. Pope to dissolve Isleton. But the town, with about 1,000 residents, doesn't have the money to cover the fees to do so, he says.

—Jim Carlton contributed to this article.

Write to Bobby White at bobby.white@wsj.com

Africa News Today - Car Bankruptcy Cited as Option by White House By DAVID E. SANGER, BILL VLASIC and MICHELINE MAYNARD

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Car Bankruptcy Cited as Option by White House

By DAVID E. SANGER, BILL VLASIC and MICHELINE MAYNARD

This article is by David E. Sanger, Bill Vlasic and Micheline Maynard.

WASHINGTON — The White House raised for the first time on Thursday the prospect of forcing General Motors and Chrysler into a managed bankruptcy as a solution to save the companies from financial collapse.

President Bush's spokeswoman, Dana Perino, confirmed growing speculation within legal circles that the president and Treasury Secretary Henry M. Paulson Jr. were considering the step.

"There's an orderly way to do bankruptcies that provides for more of a soft landing," Ms. Perino said. "I think that's what we would be talking about. That would be one of the options."

A senior administration official, however, later described that option as a last resort, to be used only if an agreement for a voluntary overhaul of the industry could not be reached.

These officials said the preferred solution would be to force a restructuring of the industry outside of bankruptcy court, extracting concessions that would make the companies more cost-competitive with foreign automakers.

In return, the Treasury would tap the financial rescue fund, called the Troubled Asset Relief Program, to make loans to the companies.

After a week of talks between the automakers and the Treasury Department over the terms of a possible bailout, Ms. Perino on Thursday said, "we're very close."

President Bush, speaking at the American Enterprise Institute, an organization dedicated to free market principles, said that he had determined that the economy was too fragile to allow G.M. and Chrysler to fail. The companies have warned that will happen if they do not receive financial aid soon.

In his speech Thursday, Mr. Bush made clear that he wanted to avoid a "disorderly bankruptcy" because of "what it would do to the psychology of the markets." But he also said he was "worried about putting good money after bad," and suggested he would only approve a plan that allowed the auto companies to "become viable in the future."

Mr. Bush's comments, a month before he leaves office, made clear that he was worried by the idea of returning to Texas amid more economic chaos and the surge in unemployment that a collapse of the companies could cause.

"The autos obviously are very fragile," he said. He added that he was concerned about what President-elect Barack Obama would face on Jan. 20. "I believe that good policy is not to dump him a major catastrophe in his first day of office," he said.

What the White House appears to be envisaging is a package deal of concessions — and an injection of money from the TARP, the $700 billion financial bailout fund — to keep credit flowing for G.M. and Chrysler.

Taxpayer loans, the White House has said, would have first priority over all other debt. Ms. Perino said the goal was to "try to come up with something that would protect the taxpayers but not allow a collapse that would hurt everybody in America."

But for Mr. Bush, that could be difficult to negotiate. If the autoworkers' unions conclude they are likely to get a better deal from Mr. Obama, they are likely to stall negotiations and settle for a shorter-term loan.

After the White House raised the possibility of a bankruptcy, G.M.'s shares fell to $3.66.

Investors may have also been reacting to a report in The Wall Street Journal that said G.M. had restarted merger discussions with Chrysler. But a G.M. spokesman, Tony Cervone, said the automaker had not held any talks with Chrysler since late October, when G.M. suspended discussions because of its bleak financial condition. "Nothing has changed," he said.

G.M. declined to comment on the Bush administration's suggestion that an "orderly bankruptcy" was under consideration. But the company was surprised by the White House statements, according to G.M. officials who asked not to be identified because the discussions with the administration were not yet final.

The automaker's senior executives have said repeatedly that bankruptcy was not a viable solution because consumers would be reluctant to buy a vehicle from a bankrupt automaker.

In July, CNW Marketing Research said a survey it conducted showed that 80 percent of prospective car buyers would not consider purchasing a vehicle from a bankrupt company. A more recent survey found that 51 percent of the people it interviewed said they would not buy a car from G.M. even if it received a government bailout.

"G.M. cannot afford to lose half of its prospective customers," said Art Spinella, CNW's president.

Spokesmen for Chrysler and Ford also declined to comment specifically on the inclusion of bankruptcy as an alternative.

Chrysler's chairman, Robert L. Nardelli, has said that getting financing to reorganize in bankruptcy would be difficult given tight credit conditions. Ford is not seeking immediate government help.

There was no immediate comment from the United Automobile Workers union.

In a traditional bankruptcy proceeding, the U.A.W.'s contracts could be voided and the union forced to renegotiate benefits like health care.

The union's president, Ron Gettelfinger, has said the U.A.W. is willing to make concessions if G.M. or Chrysler gets government loans that help them survive.

But Mr. Gettelfinger has said he believes that bankruptcy would cripple either company's ability to sell cars. "There's no question in my mind that people would not buy their vehicles," he said in an interview.

Both companies are cutting production to stretch their available cash. On Friday, Chrysler will begin an unusual monthlong shutdown of all of its North American manufacturing plants in a bid to save money.

Legal experts said Thursday that despite discussion of an out-of-court solution, a revamping of G.M. and Chrysler might be difficult to accomplish outside of bankruptcy court, given the significant steps an overhaul would require.

"It's not going to be easy, it's not going to be pleasant, or palatable, but it's the only solution that makes the least bit of sense," said Hugh M. Ray, head of the bankruptcy practice at the Houston law firm Andrews Kurth, who has participated in major bankruptcy cases.

If the companies were to file for bankruptcy, major banks would provide financing, with federal funds as security for the bank loans for the companies to operate.

Some lawyers have suggested that the two companies could receive $25 billion, using $5 billion in federal funds to guarantee the banks' loans, although auto industry analysts said the companies might need more.

G.M. has retained Harvey R. Miller, a longtime bankruptcy lawyer, as its adviser. It is also being advised by William Repko, an expert in restructuring with Evercore Partners who has worked with companies like United Airlines. G.M. is also working with Arthur B. Newman of the Blackstone Group.

Chrysler has retained the law firm of Jones Day to provide revamping expertise.

Mr. Ray said that a number of airlines went through bankruptcy protection earlier this decade, using federally backed loans awarded by the Air Transportation Stabilization Board, which was set up to aid the industry after the September 2001 attacks.

The board turned down United's request, however, and the airline subsequently restructured under bankruptcy protection without federal money.

"United is still flying, and G.M. is not doing very well," Mr. Ray said. "Their chickens have come home to roost, and now it's inevitable" that G.M. seek bankruptcy protection, he added.

David E. Sanger reported from Washington and Bill Vlasic and Micheline Maynard from Detroit.