Washed It!

For former insiders at some of the several hundred banks that collapsed during the financial crisis and in its aftermath, a day of reckoning has arrived.

The Federal Deposit Insurance Corp. has told dozens of former bank officers and directors that it has drawn up lawsuits accusing them of misdeeds such as fraud and breach of fiduciary duty. The federal agency is seeking damages to help offset losses in the nation’s deposit insurance fund.

It’s time, the FDIC warns these officials, to sit down and work out settlements — or head to court to decide the matters there.

The letters being sent by the agency are “very detailed,” said Jeffrey A. Tisdale, a Los Angeles lawyer for former officials of five banks targeted by the agency.

“I mean eight to 10 single-spaced pages of purported misdeeds,” he said.

The showdowns follow FDIC probes that typically take well over a year.

“We’re only doing this after careful investigation. We don’t bring suit every time a bank fails,” said Richard Osterman, the FDIC’s acting general counsel.

The FDIC board has authorized suits seeking to recover more than $2 billion from more than 80 former bank officials, up from about 50 a month ago, Osterman said. The number could multiply as the agency works through its investigative backlog.

The agency could end up suing or settling with former insiders of about one-quarter of the more than 300 banks that have failed since the start of 2008, officials say.

“This is only the first wave,” Tisdale said. “I’ve got my next five-year professional plan laid out pretty well.”

Although the FDIC says it will try to settle the cases, officials expect to file a significant number of suits. Criminal charges could result in a few cases.

“We are investigating [criminal] bank fraud and related cases in many different parts of the country, including in California,” said Fred Gibson, deputy inspector general at the agency.

So far only two civil suits have been filed. The first, filed in July, accuses four executives of Pasadena’s defunct IndyMac Bank of negligence in granting construction and development loans that the suit says were unlikely to be repaid. The defendants are contesting the suit, which seeks $300 million in damages.

Last week, the FDIC sued 11 former insiders at defunct Heritage Community Bank in Glenwood, Ill. Calling the case “regrettable and wrong,” defense lawyers said in a statement that their clients, in failing to foresee the economic meltdown, were no different from Wall Street and the FDIC itself.

Tisdale concurs that the FDIC is going after people for failing to accurately predict the future.

“The economy is the real culprit here,” he said. “There was no way to plan for real estate values dropping 30% to 50% throughout California, Nevada and Arizona.”

But Darren Robbins, a San Diego lawyer who specializes in filing investment fraud suits, says the FDIC has plenty to work with just by looking at what banks said about their assets toward the end of the boom.

“It’s our belief that in places like Illinois, Georgia, California and Arizona there was an inordinate amount of game-playing with financial statements in ‘07 and ‘08,” said Robbins, whose firm has fraud suits pending against several casualties of the bust, including PFF Bancorp, the former parent company of Pomona’s PFF Bank & Trust, which failed in November 2008.

In targeting the former officials, the FDIC typically also has its eyes on insurance companies that would be on the hook for damages stemming from alleged misconduct by the bankers. In many cases, the FDIC formally gave notice of possible litigation months ago, just before the expiration of the relevant insurance policies, to ensure that the coverage would apply.

Some policies covering directors and officers don’t apply to actions by the FDIC. In such cases, the agency is going after bank officials only if they have sufficient assets to justify the expense and risk of litigation, Osterman said.

The FDIC’s litigation strategy borrows from a playbook the agency used after the savings and loan meltdown of about two decades ago. From 1986 through 1996 the FDIC recovered $5.1 billion from former insiders at failed banks and savings and loans, Osterman said. That’s a small fraction of the eventual cost of the S&L crisis.

scott.reckard@latimes.com
FDIC prepares to crack down on officials of failed banks

Google Inc.’s decision to give all of its 23,300 employees a 10% pay raise next year — and a $1,000 bonus to boot — is just the latest volley in what has become a full-fledged war for top Silicon Valley talent.

With engineers in short supply, technology companies are competing for employees who can write the software programs needed for new products and services. And they’re increasingly stealing them from one another.

Google is particularly vulnerable. The Internet search giant, long known for aggressively recruiting the smartest in the business, is under siege from Facebook Inc. and other competitors that are trying to lure them away.

A few weeks ago, Lars Rasmussen, the brainy co-founder of Google Maps and a six-year Google veteran, bolted for Facebook, joining more than 200 former Google employees who now work at the world’s most popular social networking service.

Facebook tapped its most persuasive pitchman to close the deal. Founder and Chief Executive Mark Zuckerberg personally wooed Rasmussen to move halfway around the world from his Google office in Sydney, Australia, to Facebook’s headquarters in Palo Alto.

Facebook could be “a once-in-a-decade type of company,” the Danish-born computer science engineer said in explaining his decision.

That kind of talk rankles Google executives, who think they run the hottest company in Silicon Valley.

With 2,000 employees, Facebook is a much smaller operation than Google. Even so, 1 in 5 employees can list “Google” somewhere on their resumes, including Chief Operating Officer Sheryl Sandberg and Executive Chef Josef Desimone, who prepares fresh meals for Facebook employees.

Facebook says its recruiters don’t target Google; they seek out top candidates wherever they work.

“For us, it’s just important to find the best talent,” said Thomas Arnold, Facebook’s director of recruiting, who himself hails from Google. “If it comes from Google, that’s great. If it comes from Hewlett Packard, that’s great. If it comes from a start-up you have never heard of, that’s great. If it’s a kid sitting in a basement in small town somewhere who has created something neat on the Web, that’s even better.”

The flight to Facebook is not a subject Google would discuss, though it did throw out a few counterpunches: Google’s attrition, it said, remains below the industry standard. It hires more people every 10 days than Facebook has recruited in all from Google. And when Google makes a counteroffer to its employees, 70% decide to stay at Google rather than leave for Facebook, the company said.

“Google is an attraction and training ground for incredible talent,” recruiter Paul Daversa said. “The question is: Can Google fill up on talent as fast as it’s losing it?”

The skirmish for talent is driving up compensation and prompting a flood of offers and counteroffers. In one case, Google countered an offer from Facebook to a software developer with a promise of a 15% bump to his $150,000 salary, a quadrupling of stock benefits and a $500,000 cash bonus to stay a year, according to people familiar with the situation. He still took off for Facebook.

Google is hardly alone as it tries to make itself as sticky as flypaper to prospective recruits and employees alike.

Despite California’s unemployment rate of 12.4%, tech job listings are up 62% year over year in Silicon Valley, which has shown 11 straight months of growth, according to technology and engineering career website Dice.com. On any given day, companies are trying to fill 4,600 jobs on Dice.com, up from 2,800 open positions last year.

That reflects the strength of Silicon Valley’s major tech companies, chiefly Google, Apple Inc. and Facebook. Google dominates Internet advertising, Apple rolls out one must-have gadget after another, and Facebook has taken flight with more than 500 million users.

Along with these companies, there are newcomers such as Zynga Gaming Network Inc., a San Francisco company that makes wildly popular social games on Facebook and elsewhere. Zynga added 800 of its 1,200 employees in the last year alone.

With strong demand for their products and services, Silicon Valley companies have plenty of money to shower on signing bonuses and retention incentives.

“We believe this trend will only accelerate in the next 18 months,” Patrick Pichette, Google’s chief financial officer, said on a call to discuss the company’s strong third-quarter results. “We strongly believe that the difference between the winners and the losers in our industry will be to a large extent determined by who can continue to attract and retain the very best people.”

Venture capitalist Marc Andreessen, whose firm helps the companies it invests in recruit engineers and other key employees, says the supercharged recruiting market is the “single hardest challenge in Silicon Valley.”

“A good engineer can easily have 10 job offers,” Andreessen said.

All the top companies are poaching from the same pool: sought-after workers with a prized mix of engineering chops, ingenuity and initiative.

They raid one another’s ranks, mine colleges and universities for promising prospects and jump at unusual opportunities to nab engineers. As soon as news broke this week that Ask.com was laying off 130 people, job offers started popping up on Twitter.

In September, Feross Aboukhadijeh, a computer science major at Stanford University, bet his roommate that in one hour he could create software that would search YouTube in real time. He lost the bet (it took him three hours) but YouTube Instant racked up 1 million users in 10 days, netting Aboukhadijeh a job offer from YouTube co-founder Chad Hurley. Aboukhadijeh, already an intern at Facebook, decided to take the job at YouTube while he continues his studies at Stanford.

As the behemoths duke it out, some fleet-footed start-ups are giving everyone a run for their money in the recruiting department.

Facebook is competing with companies started by its own employees such as Asana, Path and Quora. These spinoffs are snapping up their share of the brightest engineers by appealing to their entrepreneurial instincts.

“There is definitely stepped-up and accelerated pace and urgency around courting the name talent and the high-quality talent,” Daversa said. “He who courts best is going to win. You have to embrace a candidate with a big bear hug. If you blink, he’s gone.”

jessica.guynn@latimes.com
War heats up for top Silicon Valley talent

The first great American autobiographies both appeared in the 19th century, were born of conflict and written by public men — “The Life and Times of Frederick Douglass” and “The Personal Memoirs of Ulysses S. Grant.”

Since then, what we might call the publishing-industrial complex has turned the reminiscences of our public men and women into a never-ending stream. As former President George W. Bush — barely two years out of office — points out in the acknowledgement of his memoir, “Decision Points,” virtually every member of his extended, very political family has published a bestseller, including his parents’ dogs.

Where does Bush’s account of his astonishingly eventful eight years rank in such company? Probably far higher than many of his detractors expected. As Bush writes in “Decision Points,” he enjoys surprising those who underestimate him. As the title suggests, the former chief executive elected to abandon the usual chronological approach to these volumes (except for a brief, obligatory foray into childhood and school years) in favor of his recollection of his presidency’s key choices and the personal decisions that Bush says prepared him to make them.

Foremost among the latter were his conversion to active Christianity, which he attributes to an after-dinner talk that evangelist Billy Graham gave to the extended Bush family at their Maine compound, and to participation in his male friends’ Crawford, Texas Bible study group. According to Bush, he continued to read the Bible every morning of his presidency — like his daily run, a comforting habit. Bush credits his religious awakening, along with a growing sense of obligation to his wife and daughters, with his other foundational personal choice: the decision to quit drinking after a night of boorish overindulgence in celebration of his Laura’s 40th birthday. It’s a change Bush credits with making possible his subsequent public life.

Leaks and an active publicity campaign of television and radio appearances have made many of the substantial points Bush makes rather familiar. Essentially, “Decision Points” confirms many of the better nonfiction accounts of his presidency published while he was in office, particularly Bob Woodward’s four volumes and Robert Draper’s “Dead Certain.” The Bush White House may not have been given to doubts or its chief executive to indecision, but it did have a penchant for ad hoc deliberation, stubborn persistence in the face of failure — as in Iraq up to the surge — excessive personal loyalty and for being “blind-sided” by events beyond the unforeseeable tragedy of 9/11.

Nearly midway through “Decision Points,” Bush writes that, “History can debate the decisions I made, the policies I chose, and the tools I left behind. But there can be no debate about one fact: After the nightmare of September 11, America went seven and a half years without another successful terrorist attack on our soil. If I had to summarize my most meaningful accomplishment as president in one sentence, that would be it.”

For that reason, Bush is singularly unapologetic and clear about the fact that he personally ordered the torture of key Al Qaeda members, who CIA interrogators were convinced held information of other planned terrorist attacks. (Bush also continues to insist that waterboarding is not torture.) When then-CIA Director George Tenet asked whether he had permission to waterboard Khalid Sheikh Mohammed, the 9/11 mastermind, Bush replied, “Damn right.” Bush writes that about 100 “terrorists” were placed in the CIA interrogation program and that about a third “were questioned using enhanced interrogation”; three were waterboarded. All, according to Bush, gave up usable intelligence that thwarted other acts of terrorism. Other reports have contradicted that assertion, but Bush is firm on the point.

Similarly, he writes that his stomach still churns over the fact that he and the rest of the country were misled by faulty intelligence concerning Saddam Hussein’s pursuit of weapons of mass destruction, but that the nation and world still are better off with the Iraqi dictator deposed. His only real regret, in fact, is that he failed to act more rapidly and decisively when Hurricane Katrina devastated New Orleans.

Many readers will be surprised by Bush’s warm account of his cooperative relationship with the late Sen. Edward Kennedy and his disappointment that they were unable to push through comprehensive immigration reform, which both felt was within a vote or two of their grasp. Given the contentious political use Karl Rove and other Bush aides made of abortion, readers also may be interested in the former president’s unfailingly respectful discussion of the abortion-rights advocates with whom he disagrees. (There’s also something amusing about Bush’s account of urging the late Pope John Paul II not to waver in his pro-life convictions.)

Actually, one of the impressions that arises repeatedly in “Decision Points” is how much civility and bi-partisan cooperation matter to Bush. “The death spiral of decency during my time in office, exacerbated by the advent of 24-hour cable news and hyper-partisan political blogs, was deeply disappointing,” he writes.

Looking back on his exit from office, Bush recalls, “I reflected on everything we were facing. Over the past few weeks we had seen the failure of America’s two largest mortgage entities, the bankruptcy of a major investment bank, the sale of another, the nationalization of the world’s largest insurance company, and now the most drastic intervention in the free market since the presidency of Franklin Roosevelt. At the same time, Russia had invaded and occupied Georgia, Hurricane Ike had hit Texas, and America was fighting a two-front war in Iraq and Afghanistan. This was one ugly way to end the presidency.”

There’s a great deal in that statement of what this unexpectedly engrossing memoir suggests is the essential George W. Bush — a disarming candor, for example, combined with almost alarming off-handedness about the implications of what’s being said. The man and the president portrayed in these pages is, at the same time, passive and strong; intelligent but not curious; a public person apparently at his best in private; willing to admit shortcomings, but not particularly self-critical; unfailingly civil himself, but happily surrounded by bare-knuckle partisans. There is a kind of pragmatic courage that makes a leader fearless of contradictions. Bush, for his part, seems oblivious to them.

Immediately after the admission that his presidency was coming to an “ugly” end, Bush adds, “I didn’t feel sorry for myself. Self-pity is a pathetic quality in a leader…. As well, I was comforted by my conviction that the Good Lord wouldn’t give a believer a burden he couldn’t handle.”

One suspects that Bush hopes to have the way in which he bore his unexpected burdens compared to the service of another wartime president, Lincoln. “Decision Points” records that, during his eight years in the Oval Office, Bush read 14 books on the first Republican commander-in-chief.

Somehow, though, it isn’t the Great Emancipator who comes to mind at the end of this memoir, but Shakespeare’s Macbeth:

“To know my deed, ’twere best not know myself.”

timothy.rutten@latimes.com
Book review: ‘Decision Points’ by George W. Bush

They’re called “floating cities,” massive cruise ships that resemble skyscrapers and offer all the amenities of high-end resorts — spas and casinos, Broadway shows and amusement parks, fine dining and luxury shopping.

But the Carnival Splendor also offers a cautionary tale about just how vulnerable these mega-ships can be. Left powerless by an engine fire shortly after embarking on a seven-day cruise to the Mexican Riviera, the Splendor is expected to be towed into port in San Diego late Thursday. If the ship cannot make sufficient speed under tow, it is possible it will be taken to Ensenada, company officials said.

An early morning fire in the generator compartment Monday knocked out several of the ship’s operating systems and left the nearly 4,500 passengers and crew members without air conditioning, hot food and telephone service. Even the flush toilets were down for a while.

With communications largely cut off, it’s unclear what kind of hardship passengers have had to endure. But Carnival Chief Executive Gerry Cahill acknowledged in a statement that passengers were dealing with an “extremely trying situation.”

“Conditions on board the ship are very challenging, and we sincerely apologize for the discomfort and inconvenience our guests are currently enduring,” he said.

The “gourmet delicacies” of the “Manhattan chic” Pinnacle Steakhouse were replaced by 70,000 pounds of bread, canned milk and other emergency supplies, which were flown from the North Island Naval Air Station at Coronado to the U.S. aircraft carrier Ronald Reagan and then helicoptered out to the Splendor, stranded 160 miles southwest of San Diego. The company is paying the military for the food and supplies, officials said.

“There are significant risks as these ships get bigger and bigger,” said Kendall Carver, president of International Cruise Victims. “This one held over 4,000 people. The new ones owned by Royal Caribbean hold over 6,000 passengers and 2,000 crew members, over 8,000 people. A fire on a ship like that would be disastrous.”

The Carnival Splendor experienced its problems relatively close to several major ports, making rescue possible in only a few days.

“If it was hundreds of miles out, and you had a fire that wasn’t suppressed, and you had rough weather, you’d have a complete disaster,” said Jim Walker, a Miami-based attorney who specializes in cruise line litigation.

Although the $40-billion cruise ship industry — and its vessels — has been growing, it has been dogged in the last decade with controversies over passenger health and safety. Carver helped start International Cruise Victims after his daughter, Merrian, disappeared while on an Alaskan cruise in 2004.

The organization has pushed for stiffer laws regulating the cruise ship industry; just four months ago, President Obama signed into law tougher new rules for reporting crimes at sea, improving ship safety and training staff to collect evidence of crimes. The changes will go into effect in 2012.

But the new law makes only passing mention of fire safety issues, even though “the most serious event that can happen on a cruise ship is a main space fire, which is what happened on the Splendor,” said Mark Gaouette, former director of security for Princess Cruises and author of the recently released “Cruising for Trouble.”

On a Navy ship, Gaouette notes, every person has a fire-fighting role, and the crew is trained constantly in how to respond to a fire. On a cruise ship, “two-thirds to three-quarters of the population are passengers. They become problems and liabilities in a major fire. They have to be shepherded to safe areas.”

Statistics are hard to come by for incidents on cruise ships, but Gaouette said the website cruisebruise.com lists eight major fires on cruise ships in the last five years, compared with just three in the previous seven years.

“As cruise ships become larger and their number increases on the high seas,” he said, “the threat of fire and other risks to passengers will increase proportionally.”

On the Splendor at 6:30 a.m. Monday, the 3,299 passengers were evacuated from their cabins and told to go to the ship’s upper deck. They were later allowed to return. By afternoon, the U.S. Coast Guard had dispatched three cutters and an HC-130 Hercules helicopter to the ship’s aid. The Mexican navy sent aircraft and a 140-foot patrol boat.

The Coast Guard has remained in contact with the ship throughout the ordeal, officials said. Whether the ship goes to San Diego or Ensenada, the company has promised to transport passengers back to Long Beach.

Miami-based Carnival Cruise Lines has promised a full refund for passengers and a complimentary future cruise equal to the amount paid for this voyage, which was scheduled to visit Puerto Vallarta, Mazatlan and Cabo San Lucas. The company, which along with its brands has 98 ships worldwide, announced that the Nov. 14 seven-day cruise from Long Beach to the same ports has been canceled.

“The safety of our passengers and crew is our top priority, and we are working to get our guests home as quickly as possible,” said Cahill of Carnival Cruise Lines. Carnival Corp. reported revenues of $13.2 billion in 2009.

A spokeswoman for the Cruise Lines International Assn. did not respond to requests for comment. The organization’s website says the U.S. Coast Guard calls cruising “one of the safest modes of transportation, and the industry is constantly striving to improve its safety procedures. Over the past two decades, an estimated 90 million passengers safely enjoyed a cruise vacation.”

But that is little comfort to Lynnette Hudson, whose father died of smoke inhalation during a fire on the Star Princess, which is operated by Carnival, in 2006. It was his first cruise, she testified to Congress, and he was celebrating his 72nd birthday.

Hudson pushed for the more stringent standards that were signed into law this summer and is still fighting for stiffer laws. “I think if there’s a major fire on a cruise ship, they’re not prepared,” she said in an interview. “They don’t have sufficient training.”

maria.laganga@latimes.com

tony.perry@latimes.com

Times staff writer Richard Marosi contributed to this report.

Stranded cruise ship offers lesson in huge vessels’ vulnerabilities

Military and aviation officials say they don’t know who may have launched a mysterious object spotted in the sky late Monday off the Southern California coast, but said that whatever the projectile was, it did not pose a threat to national security.

A KCBS news helicopter spotted what appeared to be a missile traveling through the sky northwest of Catalina Island, about 35 miles west of Los Angeles.

Video posted online by the television station showed a luminous point hurtling through the sky followed by a long contrail.

Officials with the Defense Department, the Navy and the Air Force said did not have any details on the object or its launch site. Pentagon officials said that initial indications were that the military was not involved.

“We are aware of the unexplained contrail reported off the coast of Southern California yesterday evening,” according to a statement from the North American Aerospace Defense Command and the U.S. Northern Command, which operates the U.S. and Canadian missile warning system. “At this time, we are unable to provide specific details but we are working to determine the exact nature of this event.”

“We can confirm that there is no indication of any threat to our nation and we will provide more information as it becomes available,” the statement said.

The Federal Aviation Administration didn’t approve any commercial space launches in the area Monday, said spokesman Ian Gregor.

“We’re looking into this,” he said.

Updated at 9:55 a.m.: Naval Base Ventura County spokeswoman Teri Reid said the contrail seen off the Southern California coast Monday did not originate at Naval Air Station Point Mugu.

“It didn’t happen here,” she said. “There was no firing on the range yesterday.”

Nor was it Vandenberg Air Force Base, whose last launch was putting a satellite into orbit on Friday.
Mystery ‘missile’ launch near L.A. no threat to national security, government officials say

President Obama said Monday that India should rise to the status of holding a permanent seat on the United Nations Security Council, a dramatic show of respect to the powerful nation he hopes will play a key role in support of U.S. interests around the world.

But the stature would come with a price, Obama told members of parliament, exhorting them to join with the international community in difficult fights ahead.

“Let me suggest that with increased power comes increased responsibility,” Obama said in an evening address here. The U.N. exists to preserve peace and security and advance human rights, he said, which the responsibilities of all nations “but especially those that seek to lead in the 21st century.”

The pledge is only a step in direction of new international stature for India. The nation likely won’t attain permanent council status anytime soon, and the U.S. is backing its addition only as part of a series of council reforms that could be years in the making.

Still, the promise fulfills India’s top priority on the agenda of Obama’s visit, a three-day series of meetings to build what the White House is now calling an “indispensable partnership.”

In his final scheduled day in the country, Obama met with Prime Minister Manmohan Singh to craft the broad outlines of that partnership, agreeing to collaborate anew in the effort to root out terrorists, reform export controls and combat hunger.
The talks touched on sensitive subjects, as Obama unveiled for Singh the findings of a new report on the 2008 Mumbai terrorist attacks and what the U.S. knew in advance about the American collaborator David Headley.

The report, due to be released publicly as early as Monday, shows that American intelligence community had picked up general suspicions about Headley but that the information didn’t point to a specific plot in the works, administration officials said.
Obama supports U.N. Security Council seat for India

On a sticky June night just outside London, the magic finally came to an end for the cast and crew of the “Harry Potter” movies. After a decade together, the small army that has been the busiest in British filmmaking wrapped the final shoot of the last “Potter” production.

The green-screen scene featuring the now world-famous main characters — a trio of young fugitive wizards named Harry, Ron and Hermione — required actors Daniel Radcliffe, Rupert Grint and Emma Watson to hurl themselves onto some off-camera mats to escape danger at the Ministry of Magic. It was an oddly slapstick finish for such a monumental franchise — but that didn’t sap the emotion of the moment.

“I admit it, I did cry like a little girl,” Radcliffe said, recalling the day. “There was a feeling that I had, that we all had, that it was the end of something very special.”

It’s doubtful that pop culture will ever see a phenomenon quite like this sprawling tale that for a decade cast a spell on the page, the screen and beyond. The fantasy epic begins its Hollywood fade-out Nov. 19 with the release of “Harry Potter and the Deathly Hallows — Part 1″ and finishes next summer with the eighth film, “Harry Potter and the Deathly Hallows — Part 2.”

Both movies are poised to be global blockbusters — and may even earn the franchise its first nominations in marquee Academy Award categories — but the numbers posted by their predecessor films are extraordinary already. The six Warner Bros. movies released to date have pulled in $5.7 billion at theaters worldwide; home video adds an additional $1.3 billion. The seven novels from which they sprang, written by J.K. Rowling, account for 400 million books sold in 69 languages.

Then there’s a jaw-dropping $7 billion in retail products, a recently opened amusement attraction in Orlando, touring exhibits of props and costumes and plans for a permanent exhibit outside London.

Still, the true impact of the books and films may not be fully recognized for a decade or two. With ever-rising ticket prices, box-office records don’t stand for long, but no franchise has delivered anything close to eight films in 10 years.

P

roducer David Heyman and his team were able to keep their cast intact — including the young lead stars who started as adolescents and grew into young adults with millions in the bank, and no scandals. The movies arrived even as the audience for Rowling’s books grew, creating a unique synergistic effect. The “Potter” movies have earned Warner Bros. more than $1 billion in profit — and the admiration of industry rivals.

“The books and movies fed each other brilliantly to become these commercial tidal waves,” said veteran literary agent Ron Bernstein, of International Creative Management, who has no connection to the books or films.

Former Walt Disney Studios Chairman Dick Cook, who launched his own mega-franchise with “Pirates of the Caribbean,” agreed that “Harry Potter” has been a breed apart.

“It has unequivocally been the best-managed franchise that we’ve ever seen, top to bottom,” he said. “The movies have been terrific and Warner Bros. managed to position each one as a worldwide event. Each movie has been unique and built on the last one and the anticipation has never been better. They’ve honored the source material and done everything right.”

And, unlike, say, “The Lord of the Rings” trilogy, the “Potter” movies adapted a living, breathing literary sensation whose ending was unknown. Rowling would visit the set and sometimes whisper to actors hints of their characters’ destiny, but screenwriter Steve Kloves, who penned seven of the eight scripts, said no one really knew how everything would conclude.

The entire exercise, he said, was a “10-year tightrope walk … and something that will be never be done again for the simple reason that you won’t see another Jo Rowling come along.”

Lucky break

The rags-to-riches story of Rowling seems as unreal as the world of dragons and goblins she created. Joanne Kathleen Rowling (“J.K.” was manufactured by a publishing executive who thought a gender-neutral author name might sell more books to boys) was a single mom in Edinburgh, getting by with the help of welfare, when she finished “Harry Potter and the Philosopher’s Stone,” her first novel.

In late 1997, a copy of the book found its way to Heyman’s London office but ended up on a shelf for low-priority leads. A curious secretary took it home for the weekend. Her enthusiasm prompted Heyman to get past what he has called “that rubbish title,” and the story captured his imagination.

“The funny thing is with all of the magic, all of the wizardry, what really makes the ‘Harry Potter’ stories work are the characters,” he said. “The fantastical elements and the action are wonderful, but the characters are what people remember.”

Heyman sent the book to his friend and fellow Brit Lionel Wigram, a production executive at Warner Bros., to gauge the studio’s interest. Wigram said some in Burbank questioned the viability of the creaky fantasy-adventure genre and viewed the tale of a magical boarding school called Hogwarts as too British for the American heartland. “Don’t spend too much on it,” was the word from the home office, Wigram recalled.

Warner Bros. secured the rights for four “Harry Potter” novels for about $2 million. At that point, only the first book was on shelves in England and none had reached America. Warner Bros. tried to get a financial partner on the project, reaching out to studios including Steven Spielberg’s DreamWorks, which passed.

The end nears for ‘Harry Potter’ on film

President Obama visited the site of the 2008 terrorist attacks here Saturday, making it the first stop of his two-week trip to Asia in order to convey a message to plotters of that attack and others.

“In our determination to give our people a future of security and prosperity,” he said, “the United States and India stand united.”

Obama spoke with a group of hotel employees and other survivors gathered in a hotel courtyard shortly after checking into the hotel. He is the first foreign head of state to stay at the Taj Mahal Palace and Tower Hotel since the attacks, an event known in India by the shorthand 26/11.

In a scene some local newscasters compare to President Bush’s bullhorn declaration from the rubble of the World Trade Center, Obama then stood in a hotel plaza overlooking the Arabian Sea to issue his own defiant message.

“By striking the places where our countries and people come together,” he said, “those who perpetrated these horrific attacks hoped to drive us apart . . . (but) today the United States and India are working together more closely than ever to keep our people safe.”

Later the president visited a museum devoted to the life of Indian independence leader Mahatma Gandhi. He also plans to meet with some 200 American business leaders who have traveled to India to join Obama at a business roundtable promoting trade between the two nations.

First and foremost, said Obama’s economic point man, the trip is about improving trade relations and creating new opportunities for American jobs.

Nevertheless, as the first event of his four-day stay in India, Obama chose to highlight the terrorist attacks and what he said was a shared commitment to fighting extremists around the world.

During the attacks two years ago, millions watched horrific and vivid images of smoke pouring from the windows of this hotel, in a coordinated attack by a terrorist organization based in Pakistan. More than 170 people died.

Fully renovated since then, the Taj hotel now stands as a symbol of India’s resilience, administration officials say. Obama wanted to recognize India’s rejection of terrorism, according to close advisers.

One of those who met with Obama today was Karambir Singh Kang, the hotel manager. He lost his wife, Niti, and their two sons in the attacks, but then went on to help save others.

“Mumbai is a symbol of the incredible energy and optimism that defines India in the 21st century,” Obama said. “And ever since those horrific days two years ago, the Taj has been the symbol of the strength and the resilience of the Indian people.”
Obama visits site of Mumbai attacks, praises India’s resilience

Iowa’s rejection of three state supreme court justices who ruled in favor of same-sex marriage underscored the growing electoral vulnerability of state judges as more and more are targeted by special interest groups, legal scholars and jurists said Thursday.

“It just illustrated something that has been troubling many of us for many, many years,” California Chief Justice Ronald M. George said. “The election of judges is not necessarily the best way to select them.”

The three Iowa high court justices were ousted in the kind of retention election California uses for appeals court judges: They face no opposing candidates and list no party affiliation, and voters can select “yes” or “no.” Legal scholars have generally said that system is among the most effective ways of avoiding a politicized judiciary.

But a report by the Brennan Center for Justice this year found a “transformation” in state judicial elections during the last decade throughout the country. Big money and a campaign emphasis on how a judge votes on the bench has become “the new normal,” the report said.

“For more than a decade, partisans and special interests of all stripes have been growing more organized in their efforts to use elections to tilt the scales of justice their way,” said the report, which examined 10 years of judicial elections. “Many Americans have come to fear that justice is for sale.”

Although Iowa’s vote will have no immediate effect on marriage rights there, it sends a signal to other judges that voters are watching.

“It will pressure judges, or some judges anyway, perhaps even subconsciously, in their decision-making by what would be popular or what might meet the political preferences of the moment,” George said. “And the judge’s loyalty has to be first and foremost to the rule of law, and not to the political or social or economic pressures or personal preferences.”

Several jurists cited recent U.S. Supreme Court decisions that they believe will further politicize the bench. One ruling permitted judges to take political positions during judicial races, and another overturned campaign contribution limits.

Anti-abortion forces targeted George and California Supreme Court Justice Ming W. Chin for removal in 1998 after they voted to overturn a state parental consent law. Both raised money and mounted campaigns to save their seats.

More dramatically, voters ousted the late California Chief Justice Rose Bird and two colleagues in 1986 after a campaign that charged the court was failing to uphold death sentences.

“The Rose Bird situation is now being replicated throughout the United States,” said Justice J. Anthony Kline of the 1st District Court of Appeal in San Francisco. What happened in Iowa is likely to happen in other states, including California, where the Bird election generally has been seen as an aberration, he said.

“The independence of California courts has never been seriously challenged, ” Kline said. “But those days may be numbered.”

Most states elect judges, whereas federal judges receive lifetime tenure. Judges for Superior Court in California can be challenged.

A group opposed to gay marriage targeted the Iowa justices, who were on the ballot for their regular retention election, after last year’s unanimous Iowa Supreme Court decision to lift a ban on same-sex marriage. Even though a new governor will now appoint their replacements, the recall is not expected to affect same-sex marriage rights in Iowa.

“It was an attempt to intimidate judges,” said Dean Allan W. Vestal of Drake University Law School in Des Moines. “It had no immediate practical effect.”

The justices who were ejected from the bench blamed “an unprecedented attack by out-of-state special interest groups.” They included the Mississippi-based American Family Assn., the Washington-based Family Research Council and the New Jersey-based National Organization for Marriage.

Liberty Counsel, one of the groups that has been fighting gay marriage, praised the results.

“The justices crossed the line when they played the role of a legislator and abandoned judicial restraint,” said Mathew Staver, founder of the group.

George said pressure has come from both the left and the right in California judicial retention elections.

Rejection of Iowa judges over gay marriage raises fears of political influence

In a blow to the state’s civil lawsuit charging eight current and former Bell city leaders with plotting to enrich themselves at taxpayer expense, a Los Angeles County Superior Court judge warned Thursday that Atty. Gen. Jerry Brown’s case is in jeopardy of being dismissed.

Brown appears to have overreached his authority in the lawsuit, which seeks to force the city leaders to pay back hundreds of thousands of dollars in back salaries and slash their future pensions, Judge Ralph W. Dau said.

The judge also questioned whether the suit, filed at the height of Brown’s contentious run for governor, was more about politics than law.

“There is a real question of authority here,” said Dau during a hearing Thursday. “You say they’re looting the city and you can enforce it, but where is the case that says the attorney general can enforce it?”

Dau added, “So I’m wondering, is this just a political lawsuit?”

On Thursday, the attorney general’s office responded, telling the judge the state has the authority to pursue a civil claim on behalf of residents and taxpayers.

The sweeping civil lawsuit was the first legal action taken against the city and its current and past leaders. The suit contends former City Administrator Robert Rizzo and others conspired to drive up their salaries, inflate their future pensions and conceal how much it was costing the city.

“They engaged in a collaboration that amounted to a civil conspiracy to defraud the public, Brown said when he announced the suit at a Los Angeles news conference in mid-September.

Besides Rizzo, the suit named former Assistant City Administrator Angela Spaccia, ex-Police Chief Randy Adams, Mayor Oscar Hernandez and council members Teresa Jacobo and George Mirabal. The suit also named George Cole and Victor Bello — both former council members. Rizzo was being paid nearly $800,000 a year and stands to collect about $1 million annually in retirement.

Dau ruled that some of the claims in the lawsuit, including an allegation that Bell’s leadership conspired to waste public funds, could proceed, but that other allegations would have to be revised. Still, the judge cautioned that the entire case is in doubt.

Dau agreed the lucrative salaries paid to Rizzo and others were outrageous and said he appreciated the depth of anger that Bell residents now feel. But, he said, the place to resolve those concerns should be the “ballot box and criminals courts,” not civil court.

Outside the downtown Los Angeles courtroom, Rizzo’s attorney predicted the state’s widely publicized lawsuit will be dismissed.

“This case is dead, ” James Spertus said.

When the suit was filed, some legal experts called it an unprecedented tactic by a government agency, and Brown himself conceded his office was exploring a “novel” area of the law.

“We’re testing the proposition of what public officials can pay themselves,” he said. “The fact that someone is elected doesn’t mean they get a license to steal.”

Even if Brown’s lawsuit is ultimately dismissed, it would have no bearing on the felony fraud and theft charges filed against Rizzo and others. The U.S. attorney’s office, the Securities and Exchange Commission, the state controller’s office and the state Department of Corporations also are investigating the city’s financial activity.

Dau also rejected an effort by Spertus to prevent the city from obtaining Rizzo’s private e-mails. The city has already received about 4,000 e-mails from Rizzo’s private e-mail provider. The city contended Rizzo used his private e-mail to conduct city business in an effort to conceal his activities.

About 10 of the e-mails involved potential attorney-client privilege issues, defense attorneys told the judge.

City Atty. James Casso agreed to delete one e-mail involving Spertus and Rizzo, but the city will be able to retain e-mails between Rizzo and Tom Brown, a former attorney for the city.

Casso said his office is interested in determining whether the city — in effect — paid for Rizzo’s defense costs in a drunk-driving case. Rizzo was arrested of suspicion of drunken driving after crashing into a neighbor’s mailbox in Huntington Beach.

richard.winton@latimes.com

Attorney general’s lawsuit against Bell officials could be in jeopardy