General investigated for emails to Petraeus friend

PERTH, Australia (AP) — In a new twist to the Gen. David Petraeus sex scandal, the Pentagon said Tuesday that the top American commander in Afghanistan, Gen. John Allen, is under investigation for alleged “inappropriate communications” with a woman who is said to have received threatening emails from Paula Broadwell, the woman with whom Petraeus had an extramarital affair.

Defense Secretary Leon Panetta said in a written statement issued to reporters aboard his aircraft, en route from Honolulu to Perth, Australia, that the FBI referred the matter to the Pentagon on Sunday.

Panetta said that he ordered a Pentagon investigation of Allen on Monday.

A senior defense official traveling with Panetta said Allen’s communications were with Jill Kelley, who has been described as an unpaid social liaison at MacDill Air Force Base, Fla., which is headquarters to the U.S. Central Command. She is not a U.S. government employee.

Kelley is said to have received threatening emails from Broadwell, who is Petraeus’ biographer and who had an extramarital affair with Petraeus that reportedly began after he became CIA director in September 2011.

Petraeus resigned as CIA director on Friday.

Allen, a four-star Marine general, succeeded Petraeus as the top American commander in Afghanistan in July 2011.

The senior official, who discussed the matter only on condition of anonymity because it is under investigation, said Panetta believed it was prudent to launch a Pentagon investigation, although the official would not explain the nature of Allen’s problematic communications.

The official said 20,000 to 30,000 pages of emails and other documents from Allen’s communications with Kelley between 2010 and 2012 are under review. He would not say whether they involved sexual matters or whether they are thought to include unauthorized disclosures of classified information. He said he did not know whether Petraeus is mentioned in the emails.

“Gen. Allen disputes that he has engaged in any wrongdoing in this matter,” the official said. He said Allen currently is in Washington.

Panetta said that while the matter is being investigated by the Defense Department Inspector General, Allen will remain in his post as commander of the International Security Assistance Force, based in Kabul. He praised Allen as having been instrumental in making progress in the war.

The FBI’s decision to refer the Allen matter to the Pentagon rather than keep it itself, combined with Panetta’s decision to allow Allen to continue as Afghanistan commander without a suspension, suggested strongly that officials viewed whatever happened as a possible infraction of military rules rather than a violation of federal criminal law.

Allen was Deputy Commander of Central Command, based in Tampa, prior to taking over in Afghanistan. He also is a veteran of the Iraq war.

In the meantime, Panetta said, Allen’s nomination to be the next commander of U.S. European Command and the commander of NATO forces in Europe has been put on hold “until the relevant facts are determined.” He had been expected to take that new post in early 2013, if confirmed by the Senate, as had been widely expected.

Panetta said President Barack Obama was consulted and agreed that Allen’s nomination should be put on hold. Allen was to testify at his confirmation hearing before the Senate Armed Services Committee on Thursday. Panetta said he asked committee leaders to delay that hearing.

NATO officials had no comment about the delay in Allen’s appointment.

“We have seen Secretary Panetta‘s statement,” NATO spokeswoman Carmen Romero said in Brussels. “It is a U.S. investigation.”

Panetta also said he wants the Senate Armed Services Committee to act promptly on Obama’s nomination of Gen. Joseph Dunford to succeed Allen as commander in Afghanistan. That nomination was made several weeks ago. Dunford’s hearing is also scheduled for Thursday.

___

Associated Press writer Slobodan Lekic in Kabul, Afghanistan, contributed to this report.

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Petraeus enlisted for cameo in ‘Call of Duty’ game

LOS ANGELES (AP) — David Petraeus has landed on his feet with a new gig in “Call of Duty: Black Ops II.”

The retired Army general who stepped down as CIA director last week amid a scandal surrounding his extramarital affair pops up in the highly anticipated Activision Blizzard Inc. first-person shooter game released Tuesday.

A character with Petraeus’ name and likeness voiced by Jim Meskimen briefly appears as the Secretary of Defense in the year 2025.

The cameo was first reported by the gaming site Kotaku.com.

“Call of Duty” games have often employed virtual renditions of political figures.

“Black Ops II” also features an encounter with Manuel Noriega, a female president resembling current Secretary of State Hillary Rodham Clinton, an aircraft carrier named the USS Barack Obama and an appearance by retired Lt. Col. Oliver North.

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Congress, Obama playing with dynamite, CEOs say of “fiscal cliff”

BOSTON (Reuters) – Corporate America is raising the volume of its plea that the U.S. government avert a year-end “fiscal cliff” that could send the nation back into recession, but chief executives aren’t pushing the panic button just yet.

With a heated election season in the rear-view mirror, executives are calling on the White House and congressional leaders to head off a self-imposed deadline that could bring $ 600 billion in spending cuts and higher taxes early in 2013 if they are unable to reach a deal on cutting the federal budget deficit.

The Business Roundtable on Tuesday kicked off a print, radio and online ad campaign on which it plans to spend hundreds of thousands of dollars featuring the chiefs of Honeywell International Inc , Xerox Corp and United Parcel Service Inc calling on lawmakers to resolve the issue.

In an opinion piece published on Tuesday evening on the Wall Street Journal’s website, Goldman Sachs Chief Executive Officer Lloyd Blankfein urged the business community and the Obama administration to compromise and reconcile so as not to derail the fragile recovery.

One of the more dramatic warnings of the consequences of allowing the U.S. economy to go over the fiscal cliff came from Honeywell CEO David Cote.

“If the last debt ceiling discussion was playing with fire, this time they’re playing with nitroglycerin,” Cote said in an interview. “If they go off the cliff, I think it would spark a recession that’s a lot bigger than economists think. Some think it would just be a small fire. I think it could turn into a conflagration.”

The nonpartisan Congressional Budget Office (CBO) estimates that the U.S. economy would contract 0.5 percent in 2013 if the government fails to stop the budget cuts and tax increases – far below the 2 percent growth economists currently forecast.

A failure in Washington to solve the crisis by the year’s end could prompt major companies to curtail investment plans, said Duncan Niederauer, CEO of NYSE Euronext , operator of the New York Stock Exchange.

“We simply won’t be investing in the United States. We will be investing elsewhere where we have more certainty of the outcome,” Niederauer said in an interview.

About a dozen top U.S. CEOs, including General Electric Co’s Jeff Immelt, Aetna Inc’s Mark Bertolini, American Express Co’s Ken Chenault and Dow Chemical Co’s Andrew Liveris are scheduled to meet with President Barack Obama on Wednesday to discuss the issue.

The four are members of “Fix the Debt,” an ad-hoc lobbying organization that this week launched an advertising campaign that advocates long-term debt reduction.

UNCERTAINTY FACTOR

Bank of America Corp CEO Brian Moynihan said on Tuesday that worries about the cliff have companies holding off on spending.

“That uncertainty continues to hold back the recovery,” Moynihan said, speaking at an investor conference in New York.

Sandy Cutler, CEO of manufacturer Eaton Corp , shared his concern.

“Until we solve the fiscal issues (in the United States and Europe), you’re not going to get back to normal GDP growth,” Cutler told investors on Tuesday.

CEOs are not alone in this worry. The CBO report warned that failure to reach a deal could push the U.S. unemployment rate up to 9.1 percent, the highest since July 1991. It is currently 7.9 percent.

Obama and the Republican leadership of the House of Representatives have signaled a more conciliatory tone since last week’s election, when Obama soundly defeated Republican challenger Mitt Romney, whose party retained a majority in the House.

Wilbur Ross, an investor known for taking stakes in distressed companies, is bracing for higher tax rates in 2013.

“We, like many people, have been trying to utilize gains this year. It does seem that the probability is that rates will go up,” Ross said in an interview with Reuters Insider. “We don’t have a “for sale” sign on anything. But we are mindful that there is a benefit to concluding things this year rather than next.

NO SIGNS OF PANIC

Concerns about the cliff have not prompted customers to cancel orders, though they have added to an overall level of uneasiness that has companies wary of making large capital purchases or hiring significant numbers of new workers.

“We haven’t seen the panicking, like, ‘I’m not going to order something because of the fiscal cliff,’” said Steve Shawley, chief financial officer of heating and cooling systems maker Ingersoll Rand Plc . “Customers are being very judicious with their orders.”

Likewise, JPMorgan Chase & Co CEO Jamie Dimon last month told investors he did not expect the negotiations to hurt lending in the fourth quarter.

“The fiscal cliff isn’t going to change us,” Dimon said, referring to JPMorgan’s commercial bank, which loans money to businesses. The bank’s investment banking side could be more vulnerable if the debate makes investors jittery, he allowed.

WEAPONS, MEDICINES IN THE CROSS-HAIRS

The defense and healthcare sectors are the most vulnerable to the fiscal cliff, as they face the threat of sequestration — automatic, across-the-board cuts to their funding.

Makers of weapons systems note that they have long been preparing for declining sales as the United States winds down two long wars in Iraq and Afghanistan. The industry has already shed tens of thousands of jobs and closed facilities.

Lockheed Martin Corp’s new president and chief operating officer, Marillyn Hewson, told analysts on Monday her company had been preparing for tighter defense budgets for years, even before the sequestration deal.

“We aren’t going to see a major change,” said Hewson. “We’ve been very proactive as a leadership team in taking actions in recent years to address our cost structure, to look at how we can make our product more affordable.”

Automatic cuts to the federal budget could reduce federal health spending by $ 21.5 billion in 2013, potentially affecting everything from Medicare to the Food and Drug Administration, according to an analysis by PwC’s Health Research Institute.

Vincent Forlenza, the CEO of Beckton Dickinson & Co , said the labs he supplies have held off on buying new instruments because of the threat of spending cuts.

“If we don’t get to a deal we will have another year of paralysis and putting off research,” Forlenza said. “The impact of uncertainty on the (National Institutes of Health) budget is causing our research customers to put off research.”

(Additional reporting by John McCrank, Nick Zieminski, Caroline Humer, Jed Horowitz, Sharon Begley and Daniel Wilchins in New York, Rick Rothacker in Charlotte, North Carolina, Nichola Groom in Los Angeles, Andrea Shalal-Esa in Washington, Debra Sherman in Chicago and Anna Driver in Houston; Editing by Patricia Kranz and Steve Orlofsky and Carol Bishopric)

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Who's who in the Petraeus scandal

What started out as a leisurely stroll through the Philadelphia Museum of Art on Nov. 11 with his girlfriend, quickly turned into quite a surreal experience for Max Galuppo, 20, of Bloomsbury, N.J. Galuppo, a Temple University student, found his doppelganger in a 16th century...

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Canada seen needing to spell out rules for natural gas projects

CALGARY, Alberta (Reuters) – The fate of a handful of liquefied natural gas projects planned for Canada’s Pacific coast may depend on the Canadian government‘s willingness to spell out rules for foreign investment in the country’s energy sector, according to a study released on Thursday.

Apache Corp, Royal Dutch Shell Plc, Petronas, BG Group Plc and others are in the planning stages for LNG projects that would take gas from the rich shale fields of northeastern British Columbia and ship it to Asian buyers.

But the federal government’s decision last month to stall the C$ 5.2 billion ($ 5.2 billion) bid by Malaysia’s state-owned Petronas C$ 5.2 billion for Canada‘s Progress Energy Resources Corp could lessen the appetite of Asian buyers for Canadian LNG, energy consultants Wood Mackenzie said.

“Some potential off-takers of Canadian LNG like the idea … because it’s perceived as having low political risk, and another reason is because they see the potential for investment opportunities,” said Noel Tomnay, head of global gas at the consultancy.

“If there are going to be restrictions on how they access those opportunities, if acquisitions are closed to them, then clearly that would restrict the attractiveness of those opportunities. If would-be Asian investors thought that corporate acquisitions were an avenue that was not open to them then Canadian LNG would become less attractive.”

The Canadian government is looking to come up with rules governing corporate acquisitions by state-owned companies and has pushed off a decision on the Petronas bid as it considers whether to approve the $ 15.1 billion offer for Nexen Inc from China’s CNOOC Ltd.

Exporting LNG to Asia is seen as a way to boost returns for natural-gas producers tapping the Montney, Horn River and Liard Basin shale regions of northeastern British Columbia.

Though Wood Mackenzie estimates the fields contain as much as 280 trillion cubic feet of gas, they are far from Canada’s traditional U.S. export market, while growing supplies from American shale regions have cut into Canadian shipments.

Because the region lacks infrastructure, developing the resource will be expensive, requiring new pipelines and multibillion-dollar liquefaction.

Still Wood Mackenzie estimates that the cost of delivery into Asian markets for Canadian LNG would be in the range of $ 10 million to $ 12 per million British thermal units, similar to competing projects in the United States and East Africa.

($ 1 = $ 1.00 Canadian)

(Reporting by Scott Haggett; Editing by Leslie Adler)

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U2′s Bono to urge U.S. politicians not to cut aid programs

WASHINGTON (Reuters) – Irish rocker and anti-poverty campaigner Bono will appeal to Democrats and Republicans during a visit to Washington this week to spare U.S. development assistance programs from cuts as Congress tries to avert the looming “fiscal cliff” of tax hikes and spending reductions early next year.

The U2 lead singer’s visit comes as the Obama administration and congressional leaders try to forge a deal in coming weeks to avoid the economy hitting the “fiscal cliff” – tax increases and spending cuts worth $ 600 billion starting in January if Congress does not act.

Analysts say the absence of a deal could shock the United States, the world’s biggest economy, back into recession.

Kathy McKiernan, spokeswoman for the ONE Campaign, said Bono will hold talks with congressional lawmakers and senior Obama administration officials during the November 12-14 visit.

During meetings he will stress the effectiveness of U.S. foreign assistance programs and the need to preserve them to avoid putting at risk progress made in fighting HIV/AIDS, tuberculosis and malaria, she said.

Bono, a long-time advocate for the poor, will argue that U.S. government-funded schemes that support life-saving treatments for HIV/AIDS sufferers, nutrition programs for malnourished children, and emergency food aid make up just 1 percent of the U.S. government budget but are helping to save tens of millions of lives in impoverished nations.

The One Campaign would not elaborate which lawmakers and senior Obama administration officials Bono will meet.

On Monday, Bono will discuss the power of social movements with students at Georgetown University. He will also meet new World Bank President Jim Yong Kim for a web cast discussion on Wednesday on the challenges of eradicating poverty.

(Editing by W Simon)

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Spinal steroid shots may have little effect on sciatica

NEW YORK (Reuters Health) – Despite the growing popularity of steroid injections to treat various kinds of back pain in recent years, a new review of past research finds the shots do little to alleviate sciatica, a common condition that causes leg and back pain.

Analyzing results from nearly two dozen clinical trials on thousands of patients, Australian researchers found that epidural injections (into the spine) of corticosteroids had no long- or short-term effect on sciatica back pain, and such a small short-term effect on leg pain it would make no difference to the patient.

“I think it’s pretty clear that this treatment is not good to do,” said Chris Maher, of The George Institute for Global Health in Sydney, Australia, who worked on the study.

Nonetheless, the use of epidural steroid injections to treat back pain of all sorts among Medicare patients nearly doubled from 741,000 in 2000 to about 1,438,000 in 2004, according to the researchers.

In the U.S., the cost of one shot can be several hundred dollars.

And a tainted supply of one of the steroids included in the trials under analysis – methylprednisolone – recently caused a nationwide outbreak of fungal meningitis that infected 400 people and led to 31 deaths, according to the Centers for Disease Control and Prevention.

For sciatica, which is thought to be caused by nerve damage, past studies have already questioned the effectiveness of spinal steroid shots.

In April, for instance, a study of 81 people found that whether they received steroids or a placebo for sciatica, their condition ended up improving about the same amount. (see Reuters Health article of April 16, 2012.)

Maher and his colleagues set out to see whether past studies supported the use of epidural corticosteroid injections to help manage sciatica, and collected results from “gold standard” randomized controlled trials.

Overall, 23 trials were included in the final analysis, which represented about 2,300 patients, whose pain was ranked on a scale from zero to 100 – with higher scores representing worse pain.

For the back pain component of sciatica, the researchers found that the injections didn’t seem to make a difference over short or long periods of time.

When it came to leg pain, there was no difference a year or so after the injection, but there was a statistically significant six-point drop in pain scores over the short term – about 2 weeks to 3 months.

But that, according to Maher, is not enough to mean anything to a doctor or patient.

“You can appreciate that six points on a hundred-point scale is a tiny difference, and in our view that is probably not clinically important,” he said.

‘QUESTION IS CLOSED’

“We really think the question is closed,” said Maher. “So in terms of our research agenda, we’re moving on to other treatments for sciatica.”

Maher told Reuters Health that, instead of steroid injections, people suffering with sciatica should consult their doctor, but other options include simple pain relievers, such as acetaminophen, drugs that treat pain by working throughout a person’s nervous system and, as a last resort, surgery.

Not everyone agrees that steroid injections should be excluded from the hierarchy of treatments for sciatica.

“In general, I think we’ve learned over the years that the epidural injections are turning out to be less and less successful… but there are times when they should be considered,” said Dr. Kirkham B. Wood, chief of the orthopedic spine service at Boston’s Massachusetts General Hospital.

He told Reuters Health that he believes an injection should be considered, for example, in someone with sciatica resulting from a relatively recent herniated disc, “who time and medication has not helped.”

Wood does believe, however, that the injections are overused, and said there was a time when the injections were the go-to treatment for simple back pain.

“I think the pendulum is certainly swinging away from their broad use,” he said.

The meningitis outbreak in the U.S. will also likely dampen enthusiasm for the shots, researchers acknowledged.

“If this was a treatment that worked, then you’d have to weigh the benefits and the harm,” Maher said, but it doesn’t work (for sciatica), he emphasized.

Maher and his team, who published their results in the Annals of Internal Medicine on Monday, hope doctors will pick up on their findings.

But Maher told Reuters Health that it may take some time to change how doctors see the injections.

“It’s been around for decades and it will take a while to stop,” he said.

SOURCE: Annals of Internal Medicine, online November 12, 2012.

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Probe shows federal power to access email

WASHINGTON (AP) — Your emails are not nearly as private as you think.

The downfall of CIA Director David Petraeus demonstrates how easy it is for federal law enforcement agents to examine emails and computer records if they believe a crime was committed. With subpoenas and warrants, the FBI and other investigating agencies routinely gain access to electronic inboxes and information about email accounts offered by Google, Yahoo and other Internet providers.

"The government can't just wander through your emails just because they'd like to know what you're thinking or doing," said Stewart Baker, a former assistant secretary at the Department of Homeland Security and now in private law practice. "But if the government is investigating a crime, it has a lot of authority to review people's emails."

Under the 1986 Electronic Communications Privacy Act, federal authorities need only a subpoena approved by a federal prosecutor — not a judge — to obtain electronic messages that are six months old or older. To get more recent communications, a warrant from a judge is required. This is a higher standard that requires proof of probable cause that a crime is being committed.

Public interest groups are pressing Congress for the law to be updated because it was written a quarter-century ago when most emails were deleted after a few months because the cost of storing them indefinitely was prohibitive. Now, "cloud computing" services provide huge amounts of inexpensive storage capacity. Other technological advances, such as mobile phones, have dramatically increased the amount of communications that are kept in electronic warehouses and can be reviewed by law enforcement authorities carrying a subpoena.

"Technology has evolved in a way that makes the content of more communications available to law enforcement without judicial authorization, and at a very low level of suspicion," said Greg Nojeim, a senior counsel at the Center for Democracy & Technology.

The chairman of the Senate Judiciary Committee, Patrick Leahy, has proposed changing the law to require a warrant for all Internet communications regardless of their age. But law enforcement officials have resisted because they said it would undercut their ability to catch criminals.

A subpoena is usually sufficient to require Internet companies to reveal names and any other information that they have that would identify the owner of a particular email account. Google, which operates the widely used Gmail service, complied with more than 90 percent of the nearly 12,300 requests it received in 2011 from the U.S. government for data about its users, according to figures from the company.

Even if a Gmail account is created with a fictitious name, there are other ways to track down the user. Logs of when messages are sent reveal the Internet address the user used to log onto the account. Matching times and dates with locations allow investigators to piece together the chain.

A Gmail account figured prominently in the FBI investigation that led to Petraeus' stunning resignation last week as the nation's spy chief. Petraeus, a retired Army general, stepped down after he confessed to an extramarital affair with Paula Broadwell, an Army Reserve officer and his biographer.

The inquiry began earlier this year after Jill Kelley, a Florida woman who was friends with Petraeus and his wife, Holly, began receiving harassing emails. Kelley is a Tampa socialite. That is where the military's Central Command and Special Operations Command are located.

Petraeus served as commander at Central Command from 2008 to 2010.

FBI agents eventually determined that the email trail led to Broadwell, according to two federal law enforcement officials, who spoke on condition of anonymity because the sources were not authorized to speak about the matter on the record. As they looked further, the FBI agents came across a private Gmail account that used an alias name. On further investigation, the account turned out to be Petraeus's.

The contents of several of the exchanges between Petraeus and Broadwell suggested they were having an affair, according to the officials. Investigators determined that no security breach had occurred, but continued their investigation into whether Petraeus had any role in the harassing emails that Broadwell had sent to Kelley, which was a criminal investigation.

Petraeus and Broadwell apparently used a trick, known to terrorists and teen-agers alike, to conceal their email traffic.

One of the law enforcement officials said they did not transmit all of their communications as emails from one's inbox to the other's inbox. Rather, they composed some emails in a Gmail account and instead of transmitting them, left them in a draft folder or in an electronic "dropbox." Then the other person could log onto the same account and read the draft emails there. This avoids creating an email trail which is easier to trace. It's a technique that al-Qaida terrorists began using several years ago and teen-agers in many countries have since adopted.

___

Associated Press writer Pete Yost contributed to this report.

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BBC must reform or die, says Trust chairman

LONDON (Reuters) – The BBC could be doomed unless it makes radical changes, the head of its governing trust said on Sunday, after its director general quit to take the blame for the airing of false child sex abuse allegations against a former politician.

Chris Patten, chairman of the BBC Trust, said confidence had to be restored if the publicly funded corporation was to withstand pressure from rivals, especially Rupert Murdoch‘s media empire, which would try to take advantage of the turmoil.

“If you’re saying, ‘Does the BBC need a thorough structural radical overhaul?’, then absolutely it does, and that is what we will have to do,” Patten, a one-time senior figure in Prime Minister David Cameron‘s Conservative Party and the last British governor of Hong Kong, told BBC television.

“The basis for the BBC’s position in this country is the trust that people have in it,” Patten said. “If the BBC loses that, it’s over.”

George Entwistle resigned as director general on Saturday, just two months into the job, to take responsibility for the child sex allegation on the flagship news programme Newsnight.

The witness in the report, who says he suffered sexual abuse at a care home in the late 1970s, said on Friday he had misidentified the politician, Alistair McAlpine. Newsnight admitted it had not shown the witness a picture of McAlpine, or approached McAlpine for comment before going to air.

Already under pressure after revelations that a long-time star presenter, the late Jimmy Savile, was a paedophile, Entwistle conceded on the BBC morning news that he had not known – or asked – who the alleged abuser was until the name appeared in social media.

The BBC, celebrating its 90th anniversary, is affectionately known in Britain as “Auntie”, and respected around much of the world.

But with 22,000 staff working at eight national TV channels, 50 radio stations and an extensive Internet operation, critics say it is hampered by a complex and overly bureaucratic and hierarchical management structure.

THOMPSON’S LEGACY

Journalists said this had become worse under Entwistle’s predecessor Mark Thompson, who took over in the wake of the last major crisis to hit the corporation and is set to become chief executive of the New York Times Co on Monday.

In that instance, both director general and chairman were forced out after the BBC was castigated by a public inquiry over a report alleging government impropriety in the fevered build up to war in Iraq, leading to major organisational changes.

One of the BBC’s most prominent figures, Newsnight presenter Jeremy Paxman, said since the Iraq report furore, management had become bloated while cash had been cut from programme budgets.

“He (Entwistle) has been brought low by cowards and incompetents,” Paxman said in a statement, echoing a widely-held view that Entwistle was a good man who had been let down by his senior staff.

Prime Minister Cameron appeared ready to give the BBC the benefit of the doubt, believing that “one of the great institutions of this country” could reform and deal with its failings, according to sources in his office.

Patten, who must find a new director general to sort out the mess, agreed that management structures had proved inadequate.

“Apparently decisions about the programme went up through every damned layer of BBC management, bureaucracy, legal checks – and still emerged,” he said.

“One of the jokes I made, and actually it wasn’t all that funny, when I came to the BBC … was that there were more senior leaders in the BBC then there were in the Chinese Communist Party.”

Patten ruled out resigning himself but other senior jobs are expected to be on the line, while BBC supporters fear investigative journalism will be scaled back. He said he expected to name Entwistle’s successor in weeks, not months.

Among the immediate challenges are threats of litigation.

McAlpine, a close ally of former prime minister Margaret Thatcher, has indicated he will sue for damages.

Claims for compensation are also likely from victims who say Savile, one of the most recognisable personalities on British television in the 1960s, 70s and 80s, sexually abused them as children, sometimes on BBC premises.

INQUIRIES

Two inquiries are already under way, looking at failures at Newsnight and allegations relating to Savile, both of which could make uncomfortable reading for senior figures.

Police have also launched a major inquiry into Savile’s crimes and victims’ allegations of a high-profile paedophile ring. Detectives said they had arrested their third suspect on Sunday, a man in his 70s from Cambridgeshire in central England.

Funded by an annual licence fee levied on all TV viewers, the BBC has long been resented by its commercial rivals, who argue it has an unfair advantage and distorts the market.

Murdoch’s Sun tabloid gleefully reported Entwistle’s departure with the headline “Bye Bye Chump” and Patten said News Corp and others would put the boot in, happy to deflect attention after a phone-hacking scandal put the newspaper industry under intense and painful scrutiny.

He said that “one or two newspapers, Mr. Murdoch’s papers” would love to see the BBC lose its national status, “but I think the great British public doesn’t want to see that happen”.

Murdoch himself was watching from afar.

“BBC getting into deeper mess. After Savile scandal, now prominent news program falsely names senior pol as paedophile,” he wrote on his Twitter website on Saturday.

It is not just the BBC and the likes of Entwistle and Patten who are in the spotlight.

Thompson, whom Entwistle succeeded in mid-September, has also faced questions from staff at the New York Times over whether he is still the right person to take one of the biggest jobs in American newspaper publishing.

Britain’s Murdoch-owned Sunday Times queried how Thompson could have been unaware of claims about Savile during his tenure at the BBC as he had told British lawmakers, saying his lawyers had written to the paper addressing the allegations in early September, while he was still director general.

(Editing by Kevin Liffey and Sophie Hares)

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HTC shares jump after settles patent issues with Apple

TAIPEI (Reuters) – Shares of HTC Corp jumped by their permitted daily limit on Monday after the Taiwanese smartphone maker announced a global patent settlement and 10-year licensing agreement with Apple Inc, allowing the struggling company to focus on product development.

The settlement would give HTC a short-term boost, analysts suggested, but long-term performance would still depend on the company’s ability to deliver competitive products to grab back some of the market share it has lost to Apple and South Korea’s Samsung Electronics Co.

HTC’s shares opened up by the maximum allowed 6.86 percent at T$ 241.50, and remained at that level in morning trade in a broader market that slipped 0.15 percent.

The shares have bounced 24.5 percent from a closing low of T$ 194 two weeks ago, which was the lowest since 2005 before the company transformed into a top brand from an obscure contract maker. But the shares remain some 80 percent below their record high last April.

HTC and Apple’s settlement and licensing agreement on Saturday ended one of the first major conflagrations of the smartphone patent wars. The California giant sued HTC in 2010, its first major legal salvo against a manufacturer that used Google’s Android operating system.

“The licensing agreement is beneficial to HTC’s future product development, especially in the U.S. market,” said Gartner analyst C.K. Lu.

“The settlement is positive to the consumer image of both camps (Apple and Google) as they are now unlocked from a constant patent war.”

The two companies did not disclose details of the settlement or the licensing agreement, but HTC said the agreement will not impact its financials and it will not change its fourth-quarter guidance.

HTC said last month it expected its fourth-quarter revenue to be about T$ 60 billion ($ 2.05 billion), down from T$ 70.2 billion in the third quarter and below expectations of T$ 74.0 billion in a poll of 23 analysts by Reuters.

It expected a gross margin and an operating margin of around 23 percent and 1 percent, respectively, falling from 25 percent and 7 percent in the previous quarter.

The company said the operating margin would be hit by higher spending on marketing.

Analysts’ forecasts on how much HTC needs to pay Apple range from “not a very high price” to as much as over $ 10 per phone, though they remain best guesses, based partly on the assumed $ 10 royalty that phone makers pay Microsoft per Windows 7 phone, and on the $ 5-6 dollar that Android phone makers are believed to pay Microsoft after a separate lawsuit last year.

However, some analysts warn that HTC’s other challenges outweigh the settlement.

Its phones have lost a lot of their appeal among consumers as Apple’s iPhones and Samsung’s Galaxy series dominate shopping lists, drawing parallels with the decline of Finland’s Nokia, once one of the dominant mobile phone players.

“Nokia settled with Apple in 2011 by winning royalties from Apple, but it did not change the landscape at all for smartphone competition. Samsung continued to win market share despite the losses to Apple,” wrote Barclays analyst Dale Gai in a research note.

“We believe the lawsuits remain non-events in terms of HTC’s fundamentals. HTC’s challenges remain and could get worse into 2013 from more competition.”

(Editing by Jonathan Standing)

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