Monday, January 24, 2011

China Bank Moves to Buy U.S. Branches


China's biggest bank signed an agreement that would make it the first Beijing-controlled financial institution to acquire retail bank branches in the U.S., though regulators could still block the deal.

Under the deal, Industrial & Commercial Bank of China Ltd., by some measures the world's largest bank, agreed to acquire a majority stake in Bank of East Asia Ltd.'s U.S. subsidiary. ICBC will pay $140 million for an 80% stake. Bank of East Asia, which is a publicly traded company based in Hong Kong, has a total of 13 branches in New York and California. ICBC and Bank of East Asia have talked to U.S. regulators about the deal, these people said.

The move represents what could be the start of big expansions by Chinese financial institutions in the U.S.

Signed in Chicago on the last day of Chinese President Hu Jintao's state visit to the U.S., the move, comes as both Beijing and Washington are calling for greater commercial ties between the two countries.

Both Beijing and Washington are eager to showcase their willingness to strengthen the business ties between the two countries, despite the many issues that will continue to hinder the relations. China is prodding the U.S. to ease its export controls, especially those involving high-technology products, aimed at its biggest economic rival. The U.S. is asking for more Chinese purchases of made-in-America goods and services.

The transaction is expected to be carefully scrutinized by U.S. regulators, including the Committee on Foreign Investment in the U.S., known as CFIUS, because of the state-controlled nature of the Chinese bank. A previous deal by a Chinese bank to acquire a bank in the U.S. was rejected by regulators. "It is going to be a long process," a person familiar with the matter said.

If ICBC's deal to acquire Bank of East Asia's U.S. subsidiary goes through, Americans could walk into the retail branches, open check and savings accounts and, most significantly for many investors, open yuan accounts to trade the currency.

ICBC, as the bank is known, is based in Beijing and is 70% owned by the Chinese government. It has become increasingly comfortable venturing outside its home markets, which still account for the bulk of its profit. Last year, ICBC got into the broker-dealer business in the U.S. with a symbolic $1 purchase of the U.S. brokerage unit of Fortis Securities, controlled by France's BNP Paribas SA. That deal didn't subject ICBC to tight U.S. regulatory restrictions on foreign purchases of retail-banking operations.

U.S. regulators often demand that foreign banks prove they are adequately supervised in their home markets and have proper antimoney-laundering procedures in place before allowing them to set up retail operations, legal experts say.

The agreement was signed at the Hilton Chicago as part of a slew of pacts announced by roughly 60 U.S. and Chinese companies at a giant "signing ceremony" organized on Friday by China's Commerce Ministry and its U.S. counterpart.

Both Beijing and Washington are eager to showcase their willingness to strengthen the business ties between the two countries, despite the many issues that will continue to hinder the relations. China is prodding the U.S. to ease its export controls, especially those involving high-technology products, aimed at its biggest economic rival while the U.S. is asking for more Chinese purchases of made-in-America goods and services. The contract-signing event in Chicago was hailed as "the most important event" in conjunction with President Hu's visit, according to officials in the Chinese delegation.

The move by ICBC underscores the desire by Chinese banking executives to transform their strength into a greater presence globally, as Chinese banks have emerged from the global financial crisis largely unscathed. Their hope is to better support Chinese companies and guard against losing customers to U.S. and European banks that already have networks world-wide. Meantime, Beijing has encouraged Chinese companies to expand overseas in recent years. In light of the huge foreign-exchange reserves China has, Beijing has encouraged its banks to invest more overseas.

In a speech at the event Friday, Chen Deming, China's Commerce Minister, said one of the priorities for the Commerce Ministry is to "encourage our companies to go out." He pointed to the vast foreign-exchange reserves held by China, saying that "we should turn those reserves into capital and assets." Otherwise, the reserves could decline in value because of inflation, Mr. Chen said.

While China's resource and construction companies have moved aggressively into new markets, its financial institutions generally have been slow to follow.

Bank of East Asia is led by prominent Asian banker Sir David Li. Mr. Li drew unwanted attention to himself in the U.S. and Hong Kong in 2007 when the former board member of Dow Jones became the target of an insider-trading case involving News Corp.'s buyout bid for Dow Jones. Mr. Li later agreed to pay $8.1 million to settle the civil charges. Mr. Li couldn't be reached for comment.

So far, most Chinese investments in the U.S. financial sector have involved the Chinese taking passive, minority stakes in firms such as Blackstone Group LP and Morgan Stanley. Taking a majority stake in Bank of East Asia is a change of tactic for ICBC

At the same time, Bank of East Asia is no stranger to ICBC. It sold a 70% stake in its Canadian operations to ICBC last year and all of its six branches in Canada have since been rebranded ICBC Canada. Bank of East Asia has 13 branches in the U.S., concentrating in New York and California—two states that boast the largest numbers of Chinese immigrants. The bank formed its U.S. banking subsidiary in 2001 through the acquisition of Grand National Bank, of Alhambra, Calif.

The deal, if approved by U.S. regulators, would allow ICBC to gain relatively quick access to American depositors. Right now, ICBC has one branch in New York, but it isn't involved in the retail-banking business. Bank of China Ltd. is the only mainland Chinese bank that has a retail license in the U.S. market. The bank, also state owned, has two branches in New York and one in Los Angeles. It recently has started allowing American customers to buy and sell the Chinese currency through its U.S. branches.

The decision by Bank of China is the latest move by China to allow the yuan, whose value is still tightly controlled by the government, to become an international currency that can be used for trade and investment.

Chinese banks have encountered uphill battles to gain access to the U.S. market in the past. For instance, it took almost two years for ICBC to get the approval from the Federal Reserve to open its New York branch, which has so far focused on commercial lending. That green light was given shortly before President George W. Bush's trip to Beijing for the Summer Olympics in 2008.

Some Chinese banks' bids to acquire U.S. counterparts have been rejected. A case in point is China Minsheng Banking Corp. In 2008, Minsheng, China's first private bank and a midsize lender, agreed to take a 9.9% stake in San Francisco lender UCBH Holdings Inc., the holding company for United Commercial Bank. When the bank ran into trouble during the financial crisis over bad loans and accounting errors, Minsheng tried to buy it. U.S. regulators rejected the move because of restrictions on foreign investment in U.S. banks, according to people familiar with the matter. Regulators in late 2009 shut down United Commercial Bank and Minsheng had to write off its $130 million investment.(source)

Barry As President: CHINA'S MILITARY RISE MEANS Appeasement Is The Proper Policy Towards Confucian China


We all learned at school how the status quo powers mismanaged the spectacular rise of Germany before World War I, a strategic revolution so like the rise of China today.

And we all learned how the Kaiser overplayed his hand. That much was obvious.

Yet it is difficult to pin-point exactly when the normal pattern of great power jostling began to metamorphose into something more dangerous, leading to two rival, entrenched, and heavily armed alliance structures unable or unwilling to avert the drift towards conflict. The Long Peace died by a thousand cuts, a snub here, a Dreadnought there, the race for oil.

The German historian Fritz Fischer has in a sense muddied the waters with his seminal work, Griff nach der Weltmacht (Bid for World Power). He draws on imperial archives in Potsdam to claim that Germany’s general staff was angling for a pre-emptive war to smash France and dismember the Russian Empire before it emerged as an industrial colossus. Sarajevo provided the “propitious moment”.

Kaiser Wilhelm’s court allegedly made up its mind after the Social Democrats (then Marxists) won a Reichstag majority in 1912, seeing war as a way to contain radical dissent. This assessment was tragically correct. War split the Social Democrats irrevocably, allowing the Nazis to exploit a divided Left under Weimar.

The Fischer version of events is a little too reassuring, and not just because the Entente allies had already fed Germany’s self-fulfilling fears of encirclement and emboldened Tsarist Russia to push its luck in the Balkans. A deeper cause was at work.

"The only condition which could lead to improvement of German-English relations would be if we bridled our economic development, and this is not possible," said Deutsche Bank chief Karl Helfferich as early as 1897. German steel output jumped tenfold from 1880 to 1900, leaping past British production. Sound familiar?

Is China now where Germany was in 1900? Possibly. There are certainly hints of menace from some quarters in Beijing. Defence minister Liang Guanglie said over New Year that China’s armed forces are “pushing forward preparations for military conflict in every strategic direction”.

Professor Huang Jing from Singapore’s Lee Kwan Yew School and a former adviser to China’s Army, said Beijing is losing its grip on the colonels.

“The young officers are taking control of strategy and it is like young officers in Japan in the 1930s. This is very dangerous. They are on a collision course with a US-dominated system,” he said.

Yet nothing is foreordained. Which is why it was so unsettling to learn that most of the leadership of the US Congress declined to attend the state banquet at the White House for Chinese President Hu Jintao, including the Speaker of House.

Senate Majority Leader Harry Reid called Mr Hu a “dictator”. Is this a remotely apposite term for a self-effacing man of Confucian leanings, whose father was a victim of the Cultural Revolution, who fights a daily struggle against his own hotheads at home, and who will hand over power in an orderly transition next year?

Or for premier Wen Jiabao, who visited students in the Tiananmen Square protests of 1989, narrowly surviving the “insubordination purge” that followed? These leaders may be wrong in their assessment of how much democracy China can handle without flying out of control, but despots they are not.

President Barack Obama has bent over backwards to draw China into the international system through the G20, the World Bank and the IMF, in practical terms recognizing Beijing as co-equal in global condominium.

You could say Mr Obaba has won little in return for reaching out, but as Napoleon put it, “a leader is a dealer in hope”. What, pray, would a policy of crude containment do to China’s psyche?

Heaven protect us from unreconstructed Neo-cons such as ex-UN ambassador John Bolton, who wants to send aircraft carrier battle groups into the Straits of Taiwan, as if we were still living in that lost world of American pre-eminence in 1996, when China was still too weak to respond, and did not have operational missiles able to sink US carriers far at sea. Yet variants of the Bolton view are gaining ground on Capitol Hill.

Yes, China’s leaders should be careful not to succumb to the Wilhelmine illusion that economic and strategic momentum is the same as actual power.

There is a new edge to Chinese naval policy in the South China Sea, causing Japan, Vietnam, Indonesia, and the Philippines to cleave closer to the US alliance. Has Beijing studied how German naval ambitions upset the careful diplomatic legacy of Bismarck and pushed an ambivalent Britain towards the Entente, even to the point of accepting alliance with Tsarist autocracy?

Factions in Beijing appear to think that China will win a trade war if Washington ever imposes sanctions to counter Chinese mercantilism. That is a fatal misjudgement. The lesson of Smoot-Hawley and the 1930s is that surplus states suffer crippling depressions when the guillotine comes down on free trade; while deficit states can muddle through, reviving their industries behind barriers. Demand is the most precious commodity of all in a world of excess supply.

The political reality is that China’s export of manufacturing over-capacity is hollowing out the US industrial core, and a plethora of tricks to stop Western firms competing in the Chinese market rubs salt in the wound. It is preventing full recovery in the US, where half the population is falling out of the bottom of the Affluent Society. Some 43.2m people are now on food stamps. The US labour force participation rate has fallen to 64.3pc, worse than a year ago. Only the richer half is recovering.

The roots of this imbalance lie in the structure of globalisation and East-West capital flows – and no doubt the deficiencies of US school education – but China plays a central role, and this will not tolerated for much longer if Beijing is also perceived to be a strategic enemy. China’s economic and military goals are in conflict. One defeats the other.

The undervalued yuan is merely the visible tip of the mercantilist iceberg, and is a diminishing factor in any case as leaked dollar stimulus from the Fed’s QE drives up Chinese wage inflation. What matters is that China’s entire credit, tax, and regulatory system is geared towards subsidised capital for exporters.

Professor Michael Pettis from Beijing University argues that a key reason why Chinese consumption has collapsed from 48pc to 36pc of GDP over 12 years – and therefore why China cannot eliminate the trade surplus with the US – is that the banking system has been bailed out with an interest rate subsidy extracted from depositors, shifting income from the people to corporate debtors. Unfortunately, this is about to happen again.

A cocky China needs to watch its step, as does a rancorous America, before resentments feed on each other in a Wilhelmine spiral.

The Chinese have no recent history of sweeping territorial expansion (except Tibet). The one-child policy has left a dearth of young men, and implies a chronic aging crisis within a decade. This is not the demographic profile of a fundamentally bellicose nation.

The correct statecraft for the West is to treat Beijing politely but firmly as a member of global club, gambling that the Confucian ethic will over time incline China to a quest for global as well as national concord. Until we face irrefutable evidence that this Confucian bet has failed, 'Boltonism’ must be crushed.

Appeasement, your hour has come.(source)

CHINESE MILITARY MACHINE: On The Rise

Lift-off: China's J-20 stealth plane has made a successful test flight. Military officials say it is likely the Chinese were able to develop the stealth technology from parts of an American F-117 Nighthawk that was shot down over Serbia in 1999

China was able to build its first stealth bomber using technology gleaned from a downed U.S. fighter, it has been claimed.

Beijing unveiled its state-of-the-art jet – the Chengdu J-20 – earlier this month.

Military officials say it is likely the Chinese were able to develop the stealth technology from parts of an American F-117 Nighthawk that was shot down over Serbia in 1999.

During Nato’s aerial bombing of the country during the Kosovo war, a Serbian anti-aircraft missile shot the Nighthawk. It was the first time one of the ‘invisible’ fighters had ever been hit.

The Pentagon believed a combination of clever tactics and luck had allowed a Soviet-built SA-3 missile to bring down the jet.

The pilot ejected and was rescued but the wreckage was strewn over a wide area of farmland.

Civilians collected the parts – some the size of small cars – as souvenirs.

‘At the time, our intelligence reports told of Chinese agents crisscrossing the region where the F-117 disintegrated, buying up parts of the plane from local farmers,’ says Admiral Davor Domazet-Loso, Croatia’s military chief of staff during the Kosovo war.

‘We believe the Chinese used those materials to gain an insight into secret stealth technologies... and to reverse-engineer them.’

A senior Serbian military official confirmed that pieces of the wreckage were removed by souvenir collectors, and that some ended up ‘in the hands of foreign military attaches’.

In what appears to be a clear message of its military might, China staged the first test flight of the new stealth jet earlier this month - at the same time that U.S. defence chief Robert Gates was in Beijing on the second day of an official visit.

The fighter jet's successful test follows reports that China is planning to launch its first aircraft carrier and has tested a ballistic missile capable of sinking U.S. vessels in the Pacific.

The prototype jet was shown in flight, with civilians and air force personnel watching on, in pictures on several unofficial Chinese military websites, after local media outlets had claimed a successful test flight had taken place.

While the Chinese government is renowned for its stringent approach to state secrets, photos and reports of the J-20's test have remained online.

According to international agencies, the scheduling of the test flight to coincide with Mr Gates' visit to China, coupled with the seemingly relaxed approach to reports about the flight, indicated Beijing's willingness to be more open about its military intentions.

Nonetheless, reports of the stealth's successful test will do little to quell anxieties about the speed of China's military progress.

The U.S. F-22 Raptor is currently the only operational stealth fighter in the world, while Russia's Sukhoi T-50 jet is expected to enter active service in the next four years.

But pictures of China's J-20, which looks larger than the F-22 or T-50, will be of concern to the Taiwanese government, whose antiquated aircraft and radar systems would provide little resistance to radar-evading Chinese jets.

The U.S. has claimed China would not be capable of developing a stealth jet for years and production of the F-22 was recently capped.

But the J-20's successful test, coupled with reports of the development of an aircraft carrier and missile system, confirms China's growing military might.(source)

Islamofile 012411: Suicide Bomber Kills 35 At Russia's Biggest Airport


A suicide bomber killed at least 35 people at Russia's busiest airport on Monday, state TV said, in an attack on the capital that bore the hallmarks of militants fighting for an Islamist state in the North Caucasus region.



President Dmitry Medvedev vowed to track down and punish those behind the bombing, which also injured over 150 people, including foreigners, during the busy late afternoon at Moscow's Domodedovo airport.

Islamist rebels have vowed to take their bombing campaign from the North Caucasus to the Russian heartland in the year before presidential elections, hitting transport and economic targets. They have also leveled threats at the 2014 Winter Olympics, scheduled for the Black Sea resort town of Sochi, a region some militants consider "occupied."

Dense smoke filled Domodedovo's international arrivals hall and a fire burned along one wall.

"Taxi drivers lined up in the arrivals hall were blown up. Pieces of their bodies covered us and my left ear doesn't hear very well at all," Artyom Zhilenkov, 30, told Reuters as he pointed to pieces of human flesh on his coat.

Thick drops of blood were scattered across the snow-covered tarmac outside the arrivals hall, where Interfax news agency said traces of shrapnel were found.

"I heard a loud boom... we thought someone had just dropped something. But then I saw casualties being carried away," a check-in attendant who gave her name as Elena told Reuters at Domodedovo, which is some 22 km (14 miles) southeast of Moscow.

The prosecutor's office said the bomb had been classified as a terrorist attack -- the largest since twin suicide bombings on the Moscow metro rocked the Russian heartland in March.

"The blast was most likely carried out by a suicide bomber"

State television said the blast was the work of a "smertnik," or suicide bomber.

U.S. President Barack Obama condemned the "outrageous act of terrorism" and offered Moscow help. NATO Secretary General Anders Fogh Rasmussen said he was shocked, state TV said.

A decade after federal forces drove separatists from power in Chechnya in the second of two wars, the mainly Muslim North Caucasus is wracked by violence.

Medvedev, who has called the Islamist insurgency in the North Caucasus the biggest threat to Russian security, wrote on Twitter: "Security will be strengthened at large transport hubs."

"We mourn the victims of the terrorist attack at Domodedovo airport. The organizers will be tracked down and punished."

Medvedev, due to open the World Economic Forum on Wednesday, delayed his Tuesday departure to the Swiss city of Davos.

No group has yet taken responsibility for the attack, but dozens of Internet surfers, writing in Russian, praised the suicide bomber on unofficial Islamist site kavkazcenter.com.

Russia's ruble-denominated stock market MICEX fell by nearly two percent following the blast, but traders said they expected little long-term impact.

"It (the blast) is moving the market in the short term, but there is no fundamental reason for the market to fall. If you remember, the market didn't react strongly to (previous blasts)," said trader Alexei Bachurin from Renaissance Capital.

The attack raised questions over Russian security -- one month after it won the right to host the 2018 World Cup.

SPREADING INSURRECTION

Twitter users posted mobile video phone footage of dozens of people lying on the floor amongst severed limbs and pools of blood as thick smoke filled the hall and a fire burned along one wall.

Airport staff were shown using flash lights to pick their way through the chaotic scene taped off immediately after the blast. Later videos showed emergency workers wheeling injured people out of the terminal on stretchers.

Prime Minister Vladimir Putin, who shares power in a 'tandem' arrangement with the less influential Medvedev, has staked his political reputation on quelling rebellion in the North Caucasus.

He launched a war in late 1999 in Chechnya to topple a secessionist government. That campaign achieved its immediate aim and helped him to the presidency months later; but since then insurgency has spread to neighboring Ingushetia and Dagestan.

"It does not ... bode well for Russian ties to the North Caucasus and is yet another sign that what Putin started in 1999 by invading the rebellious republic of Chechnya has come home to roost again in the Russian capital," said Glen Howard, president of the U.S. Jamestown Foundation research institution.

Tensions between ethnic Russians and Muslims -- at 20 million they make up one seventh of Russia's population -- flared dramatically last month in a string of clashes, which involved thousands of Russian nationalists who attacked passersby of non-Slavic appearance, many of whom were from the North Caucasus.

Analysts say rebels are planning to increase violence in the run up to 2012 presidential elections, that may well see Putin returning to the presidency.

"It is a clear jab at the FSB (Federal Security Services) and at the elections," said Adil Mukashev, an independent expert on terrorism issues.

Security has been tightened at Moscow's other two airports, which will also receive diverted passengers who were flying toward Domodedovo, media reported.

Moscow suffered its worst attack in six years in March 2010 when two female suicide bombers from Dagestan set off explosives in the metro, killing 40 people.

The worst incident involving North Caucasus rebels took place in 2004 when militants seized control of a school in Beslan. When Russian troops stormed the building in an attempt to end a siege, 331 hostages, half of them children, were killed.(source)

Friday, January 21, 2011

Islamofile 012111: More Examples From The Religion Of Peace (The Harry Potter Star Case)

She was punched, dragged by her hair and threatened with death by her big brother, but Harry Potter star Afshan Azad begged the court not to jail him.

Azad, 21, who stars as Harry's classmate Padma Patil in the J.K. Rowling movie franchise, had her original police statement read in the U.K.'s Manchester Crown Court, which revealed how her 28-year-old brother, Ashraf Azad, put her through a three-hour nightmare when he discovered she was dating a non-Muslim man.

So why did she ask the judge for leniency?

According to a letter Ashraf had written to the judge, the actress had "forgiven" her brother for the incident.

Back in May 2010, after he overheard her speaking to her Hindu boyfriend, Ashraf grabbed her hair, threw her across the room and punched her repeatedly. She suffered bruising and swelling and fled the house through her bedroom window.

But the judge had no sympathy for him, sentencing him to six months in prison after he pled guilty to beating his sister.

"This is a sentence that is designed to punish you for what you did and also to send out a clear message to others that domestic violence involving circumstances such as have arisen here cannot be tolerated," he explained as he handed down the sentence.

Afshan's father, Abdul Azad, was recently cleared for making death threats against her.(source)

Thursday, January 20, 2011

Welfare Tab for Children of Illegal Immigrants Estimated at $600M in L.A. County

July 29: Los Angeles workers from 32 different unions joined local faith and community leaders at Dodger Stadium boarding 11 buses bound for Arizona to protest Arizona immigration law SB 1070.

Welfare benefits for the children of illegal immigrants cost America's largest county more than $600 million last year, according to a local official keeping tabs on the cost.

Los Angeles County Supervisor Michael Antonovich released new statistics this week showing social spending for those families in his county rose to $53 million in November, putting the county government on track to spend more than $600 million on related costs for the year -- up from $570 million in 2009.

Antonovich arrived at the estimate by factoring in the cost of food stamps and welfare-style benefits through a state program known as CalWORKS. Combined with public safety costs and health care costs, the official claimed the "total cost for illegal immigrants to county taxpayers" was more than $1.6 billion in 2010.

"Not including the hundreds of millions of dollars for education," he said in a statement.

Antonovich's figures, though, center on costs generated by American-born children of illegal immigrants. Isabel Alegria, communications director at the California Immigrant Policy Center, said it's "unfair" to roll together costs associated with both illegal immigrants and U.S.-born citizens.

"Those children are U.S. citizens, children eligible for those programs," Alegria said.

She also questioned the authenticity of Antonovich's numbers regarding health care and public safety -- though for the welfare program statistics, Antonovich cited numbers from the county's Department of Public Social Services.

Antonovich acknowledges that the children whose benefits he's focusing on are U.S.-born. But he argues that the money is collected by the illegal immigrant parents, putting a painful burden on taxpayers, including those who are legal immigrants.

"The problem is illegal immigration. ... Their parents evidently immigrated here in order to get on social services," Antonovich spokesman Tony Bell said. "We can no longer afford to be HMO to the world."

He said the state should cut back on these social benefits. According to the November statistics, that cost accounted for 22 percent of all food stamp and CalWORKS spending in the county.

Over the summer, the Federation for American Immigration Reform also looked at these kinds of costs nationwide to get an idea of the burden to local governments at a time when many are grappling with budget deficits.

The organization reported that the cost of illegal immigration stands at about $113 billion a year. Nearly half of that amount went toward education costs, according to the study. Costs were naturally higher in states with large illegal immigrant populations -- in California, the total annual cost was pegged at $21.8 billion.(source)

Philadelphia Abortion Doctor Charged With 8 Counts Of Murder


A West Philadelphia abortion doctor, his wife and eight other suspects are now under arrest following a grand jury investigation.

Dr. Kermit Gosnell, 69, faces eight counts of murder in the deaths of a woman following a botched abortion at his office, along with the deaths of seven other babies who, prosecutors allege, were born alive following illegal late-term abortions and then were killed by severing their spinal cords with a pair of scissors.

“I am aware that abortion is a hot-button topic,” said District Attorney Seth Williams. “But as district attorney, my job is to carry out the law. A doctor who knowingly and systematically mistreats female patients, to the point that one of them dies in his so-called care, commits murder under the law. A doctor who cuts into the necks severing the spinal cords of living, breathing babies, who would survive with proper medical attention, is committing murder under the law.”

Gosnell is facing charges of murder in the third degree for the death of 41-year-old Karnamaya Mongar. Mrs. Mongar died on November 20, 2009, when she was overdosed with anesthetics prescribed by Gosnell. He is also facing seven murder charges for the deaths of infants who were killed after being born viable and alive during the sixth, seventh, or eighth month of pregnancy. Gosnell is also facing numerous other charges.

Gosnell is suspected of killing hundreds of living babies over the course of his 30-year practice. However, he is not charged because the records do not exist.

DA Williams said Gosnell made approximately $1.8 million in one year alone performing the procedures.

Four of the suspects, some improperly licensed according to officials, also face multiple counts of murder for allegedly killing the newborns. All of the suspects are now behind bars after warrants were served overnight.

A search of Gosnell’s office, called the Women’s Medical Society, revealed that bags and bottles holding aborted fetuses were scattered throughout the building. Jars containing the severed feet of babies lined a shelf.

Gosnell, a family practioner, was never certified as an OB/GYN. He is accused of re-using unsanitary instruments and performing procedures in filthy rooms. Some of the rooms had litter boxes and animals present at the time of the operations.

Investigators also said Gosnell allowed unlicensed employees, including a 15-year-old high school student, to perform operations and administer anesthesia.

The grand jury investigation revealed that, for over two decades, government health and licensing officials had received repeated reports about Gosnell’s dangerous practices. However, no action was ever taken, even after the agencies learned that Mrs. Mongar had died during routine abortions under Gosnell’s care (see related story).

Dr. Gosnell, who has practiced in the West Philadelphia neighborhood for decades, is also the target of a federal grand jury investigation into illegally prescribing prescription drugs. Investigators say during a search of his home, they found $240,000 in cash.

Defense attorney William J. Brennan, who was out of town when the arrest happened this morning, said he had not yet talked to Dr. Gosnell, but says the charges are extremely serious and emotionally charged, and it is extremely important not to have a rush to judgement. Brennan says Gosnell is “cloaked with the presumption of innocence.”

Meanwhile, a civil suit has also been filed against Gosnell on behalf of the husband and children of the woman who died after an abortion. The suit seeks unspecified damages for the family of Karna Mongar, an immigrant from Bhutan who spent many years as a refugee. The suit claims she died after just five months here because of treatment by unlicenced personnel in a facility that lacked proper medical equipment.

The doctor, in past interviews with Eyewitness News, has proclaimed his innocence, predicting if charged, he will be acquitted.(source)

26 States Join Suit Against Obama Health Law

Jan. 18: Rep. Steve King, R-Iowa, speaks after accepting delivery of signed petitions demanding the repeal of 'ObamaCare' in Washington.

PENSACOLA, Fla. -- Six more states joined a lawsuit in Florida against President Obama's health care overhaul on Tuesday, meaning more than half of the country is challenging the law.

The announcement was made as House members in Washington, led by Republicans, debated whether to repeal the law.

The six additional states joined Florida and 19 others in the legal action, Florida Attorney General Pam Bondi said.

"It sends a strong message that more than half of the states consider the health care law unconstitutional and are willing to fight it in court," she said in a statement.

The states claim the health care law is unconstitutional and violates people's rights by forcing them to buy health insurance by 2014 or face penalties.

Government attorneys have said the states do not have standing to challenge the law and want the case dismissed.

Lawsuits have been filed elsewhere. A federal judge in Virginia ruled in December that the insurance-purchase mandate was unconstitutional, though two other federal judges have upheld the requirement. It's expected the Supreme Court will ultimately have to resolve the issue.

"It is important to note that two of the three courts that have reviewed this law on the merits have found it constitutional, and those decisions --as well as two others the government prevailed on -- are pending in courts of appeal. At the same time, trial courts in additional cases have dismissed numerous challenges on jurisdictional and other grounds that have not been appealed," Justice Department spokeswoman Tracy Schmaler said.

Meanwhile, the White House dismissed an expected vote on repealing the law, saying the Republicans' push was not a serious legislative effort. Democrats have a majority in the Senate and they have said they will block repeal in that chamber.

In the Florida case, the states also argue the federal government is violating the Constitution by forcing a mandate on the states without providing money to pay for it. They say the new law gives the state's the impossible choice of accepting the new costs or forfeiting federal Medicaid funding.

Florida U.S. District Judge Roger Vinson could rule later this month whether he will grant a summary judgment in favor of the states or the Obama administration without a trial.

Florida's former Republican Attorney General Bill McCollum filed the lawsuit just minutes after President Obama signed the 10-year, $938 billion health care bill into law in March. He chose a court in Pensacola, one of Florida's most conservative cities. The nation's most influential small business lobby, the National Federation of Independent Business, also joined the suit.

Joining the coalition in the Florida case were: Iowa, Kansas, Maine, Ohio, Wisconsin and Wyoming.

The other states that are suing are Alabama, Alaska, Arizona, Colorado, Georgia, Indiana, Idaho, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington.(source)