Chinese Banker Convicted

The conviction of Liu Jinbao, the former chief executive of the Bank of China's publicly traded subsidiary in Hong Kong and a vice chairman of the entire bank, comes at an embarrassing time for the bank. It has been in talks to conduct an initial public offering and sell stakes to four foreign investors: the Royal Bank of Scotland Group, Temasek Holdings of Singapore, UBS and the Asian Development Bank. The Chinese government has used $60 billion of the nation's foreign currency reserves in the last two years to shore up the capital bases of the Bank of China and two of its big rivals, the China Construction Bank and the Industrial and Commercial Bank of China. This spending has been unpopular among urban residents aware of the issue, and a series of bank corruption cases have made the use of foreign currency reserves even more controversial. "They're pouring the money in, but it's going out the other side," said Nicholas R. Lardy, an expert on Chinese banking at the Institute for International Economics in Washington. The official New China News Agency reported that Mr. Liu had been sentenced to death with a two-year suspension, and his personal assets were confiscated. Suspended death sentences are typically commuted to life imprisonment in China. The severity of the sentence given to Mr. Liu, who was convicted of taking $173,000 in bribes and embezzling $2.7 million on his own and with others, highlights the stringency of China's penal code and the efforts of Beijing's leaders to contain corruption. Mr. Liu was recalled to Beijing and dismissed in May 2003, after the bankruptcy of one of the biggest borrowers from the Hong Kong subsidiary of the Bank of China. The bank forced the borrower, New Nongkai Global Investments Ltd., into bankruptcy for nonpayment of $95 million of a $270 million loan that had been extended less than a year earlier. The government news agency did not mention that case Friday, or explain when the embezzlement or bribes took place. The Changchun Municipal Intermediate People's Court in Jilin Province in northeast China convicted Mr. Liu along with two former vice presidents of the Bank of China's Hong Kong subsidiary and the general manager of Mr. Liu's office. The vice presidents, Zhu Chi and Ding Yansheng, were each sentenced to 13 years in prison and a $247,000 fine, the news agency said, while the general manager, Zhang Debao, was sentenced to eight years and a $185,000 fine. The conviction and sentencing nearly coincide with the sentencing of top WorldCom executives involved in that company's $11 billion accounting fraud. Bernard J. Ebbers, the founder and chief executive of WorldCom, was sentenced last month to 25 years in prison while Scott D. Sullivan, the former chief financial officer of WorldCom who testified against his former boss, was sentenced Thursday to five years in prison. Mr. Ebbers is appealing his conviction. As the top banker at the most important Chinese-owned bank in Hong Kong, Mr. Liu was the face of Chinese banking in China's most important center of international finance and served as chairman of the Hong Kong Association of Banks. Mr. Liu had the good fortune to graduate in 1976 from the University of International Business and Economics in Beijing, long a training ground for top civil servants. The Cultural Revolution was ending after a decade in which many students had been unable to complete their studies, and the country was about to embark on a quarter century of rapid economic growth in which any expertise in economics and business was frequently a ticket to personal success. Mr. Liu joined the Bank of China immediately upon graduation and went to London the following year to work for the bank as a foreign exchange and gold bullion trader. He was transferred to Shanghai in 1981 and worked his way up to general manager of the Shanghai branch in 1994 before being transferred in 1997 to run the Hong Kong operation. Dow Jones reported from Kuala Lumpur, Malaysia, that Zhang Yanling, the executive vice president of the Bank of China, told reporters at a conference there on Friday that the bank was still on track for an initial public offering "maybe at the end of this year or early next year."

Johnny of Pot Tv wanted by the law - Another Bad Weed

VANCOUVER, British Columbia FRESHLY released on bail, Marc Emery faced the camera of his Pot-TV.net Web site the other day to make an urgent appeal for money to finance his legal struggle to avert extradition to the United States for trafficking marijuana seeds south of the border. "Let me be the light that shines on the American gulag," he said, stern-eyed, pointing into the camera. Without notes, Mr. Emery sermonized for a half-hour about everything from the marvelous medicinal and spiritual qualities of pot to the greatness of Thomas Jefferson, "who gave America on hemp paper the Declaration of Independence." "Marijuana made me a better parent, a better lover, a better businessman," he solemnly told his supporters. Immediately after the broadcast, he was quick to add, "a better driver, too." At 47, Mr. Emery is known as the Prince of Pot, even in his recent federal indictment in Seattle for charges of conspiring to manufacture marijuana, launder money and traffic millions of marijuana seeds into the United States. At the time of his arrest, on July 29, he and his business were on a United States attorney general list of the 46 most wanted international drug traffickers, and the only one in Canada. But his clownish nickname provides a clue that Mr. Emery is not your typical drug kingpin from the movies who deals in the shadows. A lanky Canadian with a taste for bland T-shirts and chinos, he proudly promotes himself as the leader of the sizable Vancouver marijuana counterculture that is condoned by the municipal government and much of the city's population. He postures as just a regular guy who loves the Vancouver Canucks, and rarely smokes more than a joint or two a day. But he also freely says that, outside the Netherlands, he has sold more marijuana seeds and offered the largest selection of any seed bank in the world. He adds that the amount of seeds he has sold south of the border "qualifies me for the death penalty in the United States." (The first claim, of ubiquity, is accepted by American prosecutors, while the second, of a looming death sentence, is met with guffaws.) "I have a master plan," Mr. Emery said in an interview in the offices of his magazine, Cannabis Culture. "I've wanted to be the Johnny Appleseed of marijuana, so if we produced millions and millions of marijuana plants all over the world, it would be impossible for governments to eradicate or control all of it." In other words, he added, he wants "to overgrow the governments" that punish marijuana users. In his crusade to make marijuana completely legal everywhere, not just in Canada, where anti-pot laws are already more lenient than in the United States, Mr. Emery has marketed his seeds and anti-prohibition message on his Web site and magazine and traveled around the country smoking marijuana in front of police stations. As leader of the British Columbia Marijuana Party, he has run candidates across the province and has himself run for mayor twice in Vancouver on the platform of disbanding the police force and remaking it from scratch. Armed with a speaking style that resembles a tommy gun firing off sound bites, he came in a respectable fifth out of 16 candidates in the last mayoral election, in 2002. To the growing annoyance of American law enforcement, he has been openly selling seeds to American growers and counseling them how best to cultivate his product and avoid the attention of the police - all with only minor harassment, until now, from Canadian law enforcement. According to the United States Drug Enforcement Administration, Mr. Emery has sold millions of dollars worth of seeds to growers in California, Florida, Indiana, Michigan, Montana, New Jersey, North Dakota, Tennessee and Virginia. "He operated his business very efficiently, making a lot of money at the expense of our kids and the American public," Rodney Benson, special agent in charge of the D.E.A. field division in Seattle, said in an interview. Now, his master plan is in serious jeopardy. In July, the Canadian police, working with D.E.A. agents, arrested Mr. Emery and raided his headquarters at the request of the American government, so that he might be extradited for trial in Seattle. Last week, he was freed on bail; the extradition process could take years. It is bound to stir a debate in Canada about whether it should permit a Canadian to stand trial in the United States for an offense that is essentially tolerated here. But for the time being, Mr. Emery's empire is in tatters. He has been forced to lay off workers at his magazine and Web site, and because he can no longer sell seeds, his ability to finance marijuana-legalization causes has dried up. He says he must move to a smaller apartment, give up his car lease and live on the equivalent of $32 a day from donations. "Lets face it," Mr. Emery said in an interview. "I've sold millions of seeds and I've been doing it every day of my life the last 11 years. I'm so transparent that everyone from the prime minister to the guy on the street knows it." He says he has made $4 million in profit since 1996 selling seeds in his Vancouver store, by mail and on the Internet. But he says he has not saved a dime, does not own a share of stock or bonds, does not even own a piece of property. ALL the money he has made, he says, has gone into his magazine, his Internet Pot-TV news channel, his British Columbia Marijuana Party, various referendum initiatives for marijuana legalization in the United States, legal fees for marijuana growers in several countries and support for his wife, various ex-lovers and four adopted children. He also claims to have paid nearly $600,000 in taxes from the proceeds of his seeds, noting openly on his tax returns that he worked as a vendor of marijuana seeds. Mr. Emery describes himself as "a responsible libertarian, not a hedonist," who extols the virtues of capitalism, low taxes, small government and the right of citizens to bear arms. He said he grew up a social democrat, influenced by his father, who was active in trade union work. But he said his life changed in 1979 when he began reading the works of Ayn Rand, who championed individual freedom and capitalism. "The right to be free, the right to own the fruits of your mind and effort now all made sense," he recalled. Only a few months after discovering Rand, his girlfriend at the time offered him a joint and he smoked marijuana for the first time. IT was an epiphany," he said. "I had a sixth sense added to my five senses. The silence sounded different, smells were more nuanced and the brightness of the moon made it look bigger and more substantial in the sky." The combination of Rand's philosophy and the marijuana set him on a course of advocacy in which, he said, "I decided to dedicate my whole life to repudiate the state." Then living in London, Ontario, he sold banned marijuana and pornography books and magazines, contested laws limiting the right of stores to open on Sundays and led a municipal tax revolt. He even resisted a municipal garbage strike, by renting a truck and picking up the garbage himself. After traveling for a while in Asia, however, he has dedicated his efforts to promoting marijuana and its culture. "Now the Goliath, now the evil empire has made its move on me," Mr. Emery told his Web site audience. But he promised that his crusade would continue "till liberty or till death."

Strike in British Skys Forces hundreds to be stranded

"We are just waiting to see what's coming next, and no one seems to really know anything," Chuck Weinstein, 77, from Boston told the BBC. He was trying to return to the United States with his partner, Janet Gorham, after a trip to Prague. Nor are international airline passengers the only ones facing the potential of disruptions. Northwest Airlines is facing a deadline of one week from today in its dispute with its mechanics union. If no deal is reached by 12:01 a.m. next Saturday, the Aircraft Mechanics Fraternal Association could strike the airline. Should that happen, Northwest is vowing to operate its schedule using replacement workers; it has spent $10 million to hire and train substitutes. In turn, the union said yesterday that mechanics it represents at other airlines would support their Northwest counterparts in any way necessary, although sympathy strikes are illegal in the United States when contracts are in place. This week's strike by British Airways ground workers at Heathrow was in sympathy with workers striking a caterer at the London airport. Delta Air Lines, meanwhile, could be the next major airline company to seek bankruptcy protection. It is taking steps to find financing in case it has to file for Chapter 11, officials with direct knowledge of the airline's plans said yesterday. Many people in the industry, from analysts to executives at competing companies, are predicting that could happen as soon as next month, because the airline may not have enough cash to cover its obligations. And while a possible bankruptcy filing would not disrupt Delta's operations, at least in the short term, it is one more worry for passengers who have seen bankruptcies, cutbacks in routes and flights and layoffs among airline employees in the last few years. "It is a mess in the offing," said Tim Winship, editor of Frequentflier.com, an industry Web site that tracks frequent-flier programs at the major airlines. "The whole situation is coming apart at the seams. From a consumer standpoint, it has to be very, very troubling. " Passengers, he said, must be ultra-aware of potential problems, especially those flying on tickets obtained with frequent-flier miles. In the event of cancellations, he said, airlines accommodate paying passengers first. Holders of other tickets "are absolutely going to be at the bottom of the list," he said. The combination of bad news for the industry is an unhappy note in a summer travel season that until now had been relatively sunny for airlines overseas and in the United States. Airlines have been enjoying strong traffic during the last few months, especially on routes across the Atlantic Ocean, allowing them to raise ticket prices and help offset the escalating price of oil. The airlines were counting on the summer business to help lift them back to profitability, after five years of losses topping $30 billion. In fact, American, Continental and several low-fare airlines including Southwest, AirTran and JetBlue made money during the second quarter. "I thought a month ago that the industry had reached a plateau, and we would finally see what the direction would be," said Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass. "Instead, it's just gone from bad to worse." The International Air Transport Association, a trade group that represents nearly all of the world's airlines, is predicting industry losses of $6 billion this year, most of it coming from carriers in the United States, where low-fare competition and record jet fuel prices are hampering the industry's recovery. By contrast, until this week, British Airways was seen as an industry success story, having turned itself around by cutting both its costs and thousands of jobs. This month, it said it had doubled its second-quarter profit, to $160.8 million, and it managed to raise ticket revenue for the first time since the terrorist attacks of Sept. 11, 2001. But that success was damaged by this week's events, which began when workers at British Airways walked out in support of catering employees at Gate Gourmet, which handles the airline's food service. The unofficial strike followed labor disruptions over the last two summers at Heathrow, which handles about half of British Airways' worldwide passengers each day. Flights bound for Heathrow on Thursday were diverted to other airports across Britain and Europe, leaving more than 100 British Airways planes in cities where they were not supposed to be, and 1,000 crew members stranded. In a statement late yesterday, British Airways said that its ground workers had returned to their jobs and about 72 flights were scheduled to resume, but it warned that a huge backlog of flights remained. The union representing the caterers and Gate Gourmet continued talks last night in hopes of finding a solution to the dispute. About 70,000 passengers across the world were affected by the labor dispute, on top of an estimated 40,000 stranded on Thursday. Thousands of passengers slept in the seats and on the floors of Heathrow's terminals during one of the busiest periods for the airlines. Passengers stared at airport arrival and departure screens and sprawled near check-in desks, some under blankets. British Airways was rebooking some passengers on alternative flights, and offering to reimburse others for hotel rooms, up to about $160 a night, "This is an unprecedented situation," the airline said in a statement on its Web site yesterday. Its chief executive, Roderick I. Eddington, who is scheduled to retire this year, said Thursday that the chaos was "a huge disappointment." The dispute escalated on Thursday after Gate Gourmet, the world's second-largest airline caterer, fired more than 650 of its 2,000 catering staff at Heathrow in a long-simmering battle over restructuring, pay and work rules. Some of the those workers used to work for British Airways, which stopped doing its own catering in the 1990's and farmed it out to Gate Gourmet. That helped explain why British Airways baggage handlers, shuttle bus drivers and other employees staged the sympathy strike. Across the Atlantic, the airlines' mechanics union is threatening to take similar actions if Northwest's mechanics walk out. The union represents workers at Southwest, ATA and United, where the union has its largest group of members. A United spokeswoman, Jean Medina, said last night that any sympathy strike would be illegal. The disruptions at Heathrow and the threat of walkouts in the United States reflect the frustration felt by union workers in the airline industry, who have had to accept billions of dollars in wage and benefit cuts since the 2001 attacks, Professor Chaison said. "They're being asked to bankroll the companies through bad times without any feeling for when it might end," he said. Yesterday, pilots at Spirit Airlines, a low-fare carrier, expressed a lack of confidence in the airline's management. And flight attendants at United, where workers have granted two rounds of wage and benefit cuts since it sought bankruptcy protection in 2002, have threatened unannounced strikes in a protest over the airline's plan to terminate their pension plan. But airlines cannot guarantee the cuts will end while oil prices remain at record levels. That is particularly true at Delta, which last year announced plans to cut 7,000 jobs, and where workers have seen wages and benefits cut by $1.4 billion. Unable to purchase fuel contracts in advance because of its sagging financial situation, Delta's cost for jet fuel have risen by 35 cents a gallon this year. Every penny increase costs the airline $25 million - or $875 million more this year than it paid in 2004. Healthy carriers like Southwest have locked in the price of fuel through 2009, for at least some of their needs. Referring to big airlines like Delta, Jan K. Brueckner, professor of economics at the University of California, Irvine, said, "How are these guys supposed to operate when the price keeps going up? They're just in the jaws of this vise."

Americas World Briefings Continue...

CUBA: DISSIDENTS' HOMES MOBBED Shouting slogans in support of Fidel Castro, scores of pro-government demonstrators surrounded the Havana homes of at least three dissidents, preventing them from attending meetings they had planned. Less aggressive than the so-called acts of repudiation of the past in which pro-government neighbors spray-painted, threw eggs and rocks at and caused other damage to dissidents' homes, the latest demonstrations seem aimed at stopping opponents from holding protests or meetings. They came on the eve of Mr. Castro's 79th birthday, today. No official birthday celebrations were announced. (AP) ASIA TWO KOREAS TO OFFER PARDONS North Korea will have "a great amnesty" to commemorate the 60th anniversary of the end of Japanese rule over the Korean Peninsula, which falls on Monday, the official media reported. The rare amnesty is to be granted on Sept. 1, but it was not known how many or what type of criminals would be pardoned. To commemorate the anniversary in South Korea, President Roh Moo Hyun's office said he would grant an amnesty to 4.2 million people, nearly 99 percent of whom have convictions for traffic violations. (Reuters) AFGHANISTAN: ONE DEAD IN BLAST AT MARKET An explosion in the central bazaar of Kandahar killed a teenage boy and wounded three other people, the police chief said. The police were still investigating whether the explosion was from a bomb placed in a pressure cooker - a favorite tactic of terrorists last year - or whether it was a cooking accident. Carlotta Gall (NYT) MALAYSIA SENDING FIREFIGHTERS TO INDONESIA Malaysia prepared to send a team of firefighters, equipment and disaster experts to Indonesia to help fight the forest fires on Sumatra and Borneo that have blanketed Malaysia's capital, Kuala Lumpur, and surrounding areas in debilitating haze. Malam Sambat Kaban, the forestry minister of Indonesia, where fires are lit to clear land, said he expected the blazes to be extinguished by the end of the month. A day after it forced Malaysia to declare a state of emergency in two coastal cities, the haze eased a bit, enabling the country's biggest seaport, Port Klang, to reopen. But pollution levels remained hazardous and many schools and offices stayed closed. Prime Minister Abdullah Badawi called on citizens to pray for rain. Wayne Arnold (NYT) UZBEKISTAN: JOURNALIST DETAINED The government, still stinging from criticism of its crackdown on a popular uprising in May, detained a foreign journalist who had covered the crackdown as he entered the country on Thursday. The journalist, Igor Rotar, a Russian citizen, was held as he arrived at the airport in Tashkent. He contributes to Eurasia Daily Monitor, a newsletter sponsored by the Jamestown Foundation, a Washington-based organization that follows affairs in the former Soviet Union, and Forum 18, a Norwegian organization that promotes religious freedom. He remained in the airport yesterday in what Forum 18 and human rights organizations called a part of Uzbekistan's pattern of harassing and intimidating journalists and perceived opponents. C. J. Chivers (NYT) EUROPE RUSSIA: MOVES ON '2008 PROBLEM' President Vladimir V. Putin has said he does not want it. Parliament has rejected the idea twice. But still there are those who hope that Mr. Putin can - and will - run again when his second term ends in 2008. This week, lawmakers in two regions - Primorye in the Far East and St. Petersburg - proposed amendments to the Constitution that would abolish presidential term limits. In Moscow, senior officials played down the prospect, but the moves fueled debate over what is becoming known as the "2008 problem." A leader of the upper house, Yuri A. Sharandin, called the lifting of term limits "ill considered" but told Interfax that "if this sentiment begins to dominate, it may lead to amending the laws and Constitution of the Russian Federation." Steven Lee Myers (NYT) GERMANY: JAIL FOR EX-DEFENSE OFFICIAL A court sentenced Ludwig-Holger Pfahls, who was the second-ranking defense official in the government of former Chancellor Helmut Kohl, to 27 months in prison for taking bribes and evading taxes in connection with an arms deal with Saudi Arabia in 1991. He had admitted accepting $2.4 million from an arms dealer. Last week, prosecutors dropped a more serious corruption charge after Mr. Kohl testified that he alone made the decision on the sale. Victor Homola (NYT) GERMANY: U.S. SOLDIERS HELD IN TOWN HALL FIRE The German police have detained two American soldiers in connection with a fire at the town hall in western Baumholder that investigators believe was arson, a United States Army spokesman said. The soldiers, both assigned to the First Armored Division but whose names and ranks were not disclosed, are suspected of being "involved in breaking and entering and simple arson in connection with the fire," the spokesman said. The fire caused millions of dollars in damage. About 13,000 American troops and their families are stationed in Baumholder, a town of 4,800 residents. (AP)

Man Arrested with Weapons Charge by UN

NEW YORK (AP) -- A man was arrested after attempting to enter a parking garage across the street from the United Nations with two loaded firearms in his vehicle, police said. Vernon Welker, 59, was arrested Thursday on charges of criminal weapons possession after officers discovered he had a rifle, a revolver, ammunition and a knife in his car, New York Police Sgt. Mary Christine Doherty said. Police were investigating Welker's plans, but there was no indication that he was headed for the U.N., she said. Welker was denied entrance to the hotel parking garage after he refused to let security guards search his car, Doherty said. When he returned minutes later, police said he admitted to the guards that he had a gun in his car. He was then detained by secret service officers who were nearby until the NYPD arrived, Doherty said. Calls to Welker's Salton City, Calif., home went unanswered early Friday.