Day: September 8, 2019

Authorities served search warrants Sunday at the Southern California company that owned the scuba diving boat that caught fire and killed 34 people last week.

Agents with the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives and other agencies searched Truth Aquatics’ offices in Santa Barbara and the company’s two remaining boats, Santa Barbara County sheriff’s Lt. Erik Raney said.

The warrants served shortly after 9 a.m. are part of the ongoing investigation into the tragedy to determine whether any crimes were committed, he said. The office was ringed in red “crime scene” tape as more than a dozen agents took photos and carried out boxes.

Thirty-four people died when the Conception burned and sank before dawn on Sept. 2. They were sleeping in a cramped bunkroom below the main deck and their escape routes were blocked by fire.

The bodies of all but one victim have been recovered. The search for the final body was suspended this weekend because of strong winds and rough seas, Raney said.

“The dive teams are going to get together Monday to develop a plan. We’re hoping they’re back in the water on Tuesday,” he said Sunday.

For a judge to approve warrants, law enforcement must spell out the probability a crime was committed. Raney declined to comment on what evidence was disclosed to obtain the warrants, saying only that they are “a pretty standard” part of the investigation to determine whether crimes occurred.

Coast Guard records show the Conception passed its two most recent inspections with no safety violations. Previous customers said Truth Aquatics and the captains of its three boats were very safety conscious.

Authorities are focused on determining the cause of the fire and are looking at many things, including how batteries and electronics were stored and charged. They will also look into how the crew was trained and what crewmembers were doing at the time of the fire. The boat’s design will also come under scrutiny, particularly whether a bunkroom escape hatch was adequate.

Five crew members jumped overboard after trying to rescue the 33 scuba divers and one crew member whose escape routes were blocked by fire, federal authorities and the boat’s owner said. The crew, including the captain, said they were driven back by flames, smoke and heat.

They jumped from the bridge area to the main deck — one breaking a leg in the effort — and tried to get through the double doors of the galley, which were on fire.

That cut off both escape routes from the sleeping quarters: a stairway and an escape hatch that exited in the galley area. The crew then tried, but failed, to get into windows at the front of the vessel.

Truth Aquatics pre-emptively filed a lawsuit Thursday under a pre-Civil War provision of maritime law that could protect it from potentially costly payouts to families of the dead, a move condemned by some observers as disrespectful and callous.

The company said in a statement posted Friday on Instagram that the lawsuit is an “unfortunate side of these tragedies” and pinned the action on insurance companies and other so-called stakeholders.

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The director of a prestigious research lab at the Massachusetts Institute of Technology resigned Saturday, and the school’s president ordered an independent investigation amid an uproar over the lab’s ties to disgraced financier Jeffrey Epstein.

Joi Ito, director of MIT’s Media Lab, resigned from both the lab and from his position as a professor at the Cambridge school, university President L. Rafael Reif said. The resignation was first reported by The New York Times.

Ito’s resignation comes after The New Yorker reported late Friday that Media Lab had a more extensive fundraising relationship with Epstein than it previously acknowledged and tried to conceal the extent of the relationship.

Epstein suicide

Epstein killed himself in jail Aug. 10 while awaiting trial on sex trafficking charges. Federal prosecutors in New York had charged the 66-year-old with sex trafficking and conspiracy, alleging he sexually abused girls over several years in the early 2000s.

In a letter to the MIT community Saturday, Reif called the allegations in The New Yorker “deeply disturbing.”

“Because the accusations in the story are extremely serious, they demand an immediate, thorough and independent investigation,” Reif wrote. “This morning, I asked MIT’s General Counsel to engage a prominent law firm to design and conduct this process.”

Reif said last month that the university took about $800,000 from Epstein over 20 years. That announcement followed the resignation of two prominent researchers from Media Lab over revelations the lab and Ito took money from Epstein after he served time a decade ago for sex offenses involving underage girls.

The New Yorker reports Epstein arranged at least $7.5 million in donations, including $2 million from Microsoft founder Bill Gates and $5.5 million from investor Leon Black.

Although MIT listed Epstein as “disqualified” in its donor database, the Media Lab did not stop taking gifts from him and labeled his donations as anonymous, The New Yorker reported, citing emails and other documents it obtained.

Last week, Ito said Epstein gave him $525,000 for the Media Lab and another $1.2 million for his own investment funds.

Florida deal

Epstein’s July 6 arrest drew national attention, particularly focusing on a deal that allowed him to plead guilty in 2008 to soliciting a minor for prostitution in Florida and avoid more serious federal charges.

Epstein was a wealth manager who hobnobbed with the rich, famous and influential, including presidents and a prince.

He owned a private island in the Caribbean, homes in Paris and New York City, a New Mexico ranch and a fleet of high-price cars.

Phone and email messages seeking comment were left for Ito and Media Lab representatives Saturday.
 

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OxyContin maker Purdue Pharma is expected to file for bankruptcy after settlement talks over the nation’s deadly overdose crisis hit an impasse, attorneys general involved in the talks said Saturday.

The breakdown puts the first federal trial over the opioid epidemic on track to begin next month, likely without Purdue, and sets the stage for a complex legal drama involving nearly every state and hundreds of local governments.

Purdue, the family that owns the company and a group of state attorneys general had been trying for months to find a way to avoid trial and determine Purdue’s responsibility for a crisis that has cost 400,000 American lives in the past two decades.

Family rejects two offers

An email from the attorneys general of Tennessee and North Carolina, obtained by The Associated Press, said that Purdue and the Sackler family had rejected two offers from the states over how payments under any settlement would be handled and that the family declined to offer counterproposals.

“As a result, the negotiations are at an impasse, and we expect Purdue to file for bankruptcy protection imminently,” Tennessee Attorney General Herbert Slatery and North Carolina Attorney General Josh Stein wrote in their message, which was sent to update attorneys general throughout the country on the status of the talks.

Purdue spokeswoman Josephine Martin said, “Purdue declines to comment on that in its entirety.”

Bankruptcy case

A failure in negotiations sets up one of the most tangled bankruptcy cases in the nation’s history. It would leave virtually every state and some 2,000 local governments that have sued Purdue to battle it out in bankruptcy court for the company’s remaining assets. Purdue threatened to file for bankruptcy earlier this year and was holding off while negotiations continued.

It’s not entirely clear what a breakdown in settlement talks with Purdue means for the Sackler family, which is being sued separately by at least 17 states.

Those lawsuits are likely to continue but face a significant hurdle because it’s believed the family — major donors to museums and other cultural institutions around the world — has transferred most of its multibillion-dollar fortune overseas.

Pennsylvania Attorney General Josh Shapiro, who was one of the four state attorneys general negotiating with Purdue and the Sacklers, said Saturday he intends to sue the Sackler family, as other states have.

“I think they are a group of sanctimonious billionaires who lied and cheated so they could make a handsome profit,” he said. “I truly believe that they have blood on their hands.”

In March, Purdue and members of the Sackler family reached a $270 million settlement with Oklahoma to avoid a trial on the toll of opioids there. The Sacklers could not immediately be reached for comment Saturday.

Under one earlier proposed settlement, Purdue would enter a structured bankruptcy that could be worth $10 billion to $12 billion over time. Included in the total would be $3 billion from the Sackler family, which would give up its control of Purdue and contribute up to $1.5 billion more by selling another company it owns, Cambridge, England-based Mundipharma.

Shapiro said the attorneys general believed what Purdue and the Sacklers were offering would not have been worth the reported $10 billion to $12 billion.

In their latest offers, the states also sought more assurances that the $4.5 billion from the Sacklers would actually be paid, according to the message circulated Saturday: “The Sacklers refused to budge.”

Nearly 2,000 lawsuits

In their message, Tennessee’s Slatery and North Carolina’s Stein said the states have already begun preparations for handling bankruptcy proceedings.

“Like you, we plan to continue our work to ensure that the Sacklers, Purdue and other drug companies pay for drug addiction treatment and other remedies to help clean up the mess we allege they created,” they wrote.

The nearly 2,000 lawsuits filed by city and county governments — as well as unions, hospitals, Native American tribes and lawyers representing babies who were born in opioid withdrawal — have been consolidated under a single federal judge in Cleveland.

Most of those lawsuits also name other opioid makers, distributors and pharmacies in addition to Purdue, some of which have been pursuing their own settlements.

Purdue also faces hundreds of other lawsuits filed in state courts and had sought a wide-ranging deal to settle all cases against it.

Maker of OxyContin

The company has been the most popular target of state and local governments because of its OxyContin, the prescription painkiller many of the government claims point to as the drug that gave rise to the opioid epidemic. The lawsuits claim the company aggressively sold OxyContin and marketed it as a drug with a low risk of addiction despite knowing that wasn’t true.

The impasse in the talks comes about six weeks before the scheduled start of the first federal trial under the Cleveland litigation, overseen by U.S. District Judge Dan Polster. That trial will hear claims about the toll the opioid epidemic has taken on two Ohio counties, Cuyahoga and Summit.

A bankruptcy filing by Purdue would most certainly remove the company from that trial.

The bankruptcy judge would have wide discretion on how to proceed. That could include allowing the claims against other drugmakers, distributors and pharmacies to move ahead while Purdue’s cases are handled separately. Three other manufacturers have settled with the two Ohio counties to avoid the initial trial.

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“Grandpa Wong” holds a cane above his head as he pleads with riot police to stop firing tear gas — an 85-year-old shielding protesters on the front lines of Hong Kong’s fight for democracy.

Despite his age, Wong is a regular sight at Hong Kong’s street battles, hobbling toward police lines, placing himself in between riot officers and hardcore protesters, hoping to de-escalate what have now become near daily clashes.

“I’d rather they kill the elderly than hit the youngsters,” he told AFP during a recent series of skirmishes in the shopping district of Causeway Bay, a gas mask dangling from his chin.

“We’re old now, but the children are the future of Hong Kong,” he added.

Youth lead, but all march

The three months of huge, sometimes violent pro-democracy protests in the semi-autonomous Chinese city are overwhelmingly youth-led.

Research by academics has shown that half of those on the streets are between 20 and 30 years old, while 77 percent have degrees.

But the movement maintains widespread support across the public with lawyers, doctors, nurses, teachers and civil servants all holding recent solidarity rallies, even as the violence escalates.

Groups of elderly people — dubbed “silver hairs” — have also marched.

But Wong and his friend “Grandpa Chan,” a comparatively spry 73-year-old, are among the most pro-active of this older generation.

The two are part of a group called “Protect the Children,” made up of mostly senior citizens and volunteers.

Almost every weekend, they come out to try to mediate between police and demonstrators, as well as buy protesters time when the cops start to charge.

‘Stay peaceful’

As another volley of tear gas bounded down a boulevard in Causeway Bay, a street lined with luxury malls and fashion retailers, Chan gripped Wong’s hand tightly, stopping his old comrade from rushing back into the crossfire.

“If we die, we die together,” yelled Chan, who eschews helmets and instead always wears an eye-catching red hat daubed with slogans.

While “Protect the Children” turn up primarily to defend the youth, Wong said he tries to warn protesters not to provoke police.

“It’s wrong to throw stones, that’s why the police beat them up,” he lamented. “I hope that police won’t hit them and the children won’t throw stuff back.”

“Everyone should stay peaceful to protect the core values of Hong Kong,” he added.

As Hong Kong’s summer of rage has worn on, the violence on both sides has only escalated.

Each weekend has brought increasingly violent bouts, with a minority of black-clad protesters using molotovs, slingshots and bricks.

Police have also upped their violence, deploying water cannons and resorting to tear gas and rubber bullets with renewed ferocity.

More than 1,100 people have been arrested, ranging from children as young as 12 to a man in his mid-70s. Many are facing charges of rioting, which carry 10 years in jail.

Fears have risen for the fate for one veteran protester Alexandra Wong, known as “Grandma Wong,” who attended dozens of protests waving a large British flag.

She lives in Shenzhen, a city across the border on the Chinese mainland but has not been seen at the protests since mid-August when she appeared in videos looking injured after clashes with police inside a subway station.

‘Let the elderly look after you’

Grandpa Wong says he understands why youngsters feel they have no choice but to protest.

He has watched over the decades as mainland China has grown more wealthy and powerful while remaining avowedly authoritarian.

“If the Chinese Communist Party comes to Hong Kong, Hong Kong will become Guangzhou,” Wong sighed, referring to a nearby mainland city.

“The authorities can lock you up whenever they want,” he said.

Hong Kong’s protests were sparked by a controversial bill that would allow extradition to China, raising concerns over unfair trials given the mainland’s record of rights abuses.

But it soon morphed into a wider movement calling for democratic reform and police accountability.

Roy Chan, who organizes the “Protect the Children” group, says he respects what the elderly citizens do but is disappointed they feel they need to come out.

“They should have a good life at home during the last years of their lives,” he said. “But they are in a war and protecting the youth.”

Grandpa Wong’s presence at the Causeway Bay protest came to an end as riot police eventually cleared the usually bustling shopping district.

But the next day he was right back at it, this time at a protest near the city’s airport.

“Go home kiddos,” he hollered, brimming with renewed energy. “Let the elderly look after you.”

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China’s trade with the United States is falling sharply as the two sides prepare for more negotiations with no sign of progress toward ending a worsening tariff war that threatens global economic growth.

Imports of U.S. goods fell 22% in August from a year earlier to $10.3 billion following Chinese tariff hikes and orders to companies to cancel orders, customs data showed Sunday.

Exports to the United States, China’s biggest market, sank 16% to $44.4 billion under pressure from punitive tariffs imposed by President Donald Trump in a fight over Beijing’s trade surplus and technology ambitions.

Beijing is balking at U.S. pressure to roll back plans for government-led creation of global competitors in robotics and other industries. The United States, Europe, Japan and other trading partners say those plans violate China’s market-opening commitments and are based on stealing or pressuring companies to hand over technology.

Tariffs on billions in goods 

U.S. and Chinese tariff hikes on billions of dollars of each other’s imports have disrupted trade in goods from soybeans to medical equipment and battered traders on both sides.

Chinese exporters also face pressure from weakening global consumer demand at a time when Beijing is telling them to find other markets to replace the U.S.

China’s politically sensitive trade surplus with the U.S. narrowed to $31.3 billion in August from $27 billion a year earlier.

China’s global exports fell 3% to $214.8 billion, while imports were up 1.7% at $180 billion. For the first eight months of 2019, exports were off 1% from a year earlier and imports were down 5.6%.

China’s global trade surplus rose 25% from a year earlier to $34.8 billion. Exports to the European Union rose 3% from a year earlier to $38.3 billion.

Trade talks in October

U.S. and Chinese negotiators are preparing for talks in October, later than initially planned, but neither side has given any sign of offering concessions that might break a deadlock over how to enforce a deal.

Beijing says Trump’s punitive tariffs must be lifted once an agreement takes effect. Washington says some must stay to ensure Beijing carries out any promises it makes.

The decision to go ahead with talks despite the latest tit-for-tat tariff hikes on Sept. 1 encouraged global financial markets.

In their latest escalation, Washington imposed 15% tariffs on $112 billion of Chinese imports and plans to hit another $160 billion on Dec. 15. That would extend penalties to almost everything the United States buys from China. 

Beijing responded by imposing duties of 10% and 5% on a range of American imports. More increases are due on Dec. 15 in line with the U.S. penalties.

U.S. tariffs of 25% imposed previously on $250 billion of Chinese goods are set to rise to 30% on Oct. 1.

China has imposed or announced penalties on an estimated $120 billion of U.S. imports. Some have been hit with increases more than once, while about $50 billion of U.S. goods is unaffected, possibly to avoid disrupting Chinese industries.

Beijing also has retaliated by canceling purchases of soybeans, the biggest single U.S. export to China.

Holding tight to tech

The Chinese government has agreed to narrow its trade surplus with the U.S. but is reluctant to give up development strategies it sees as a path to prosperity and global influence.

Some analysts suggest Beijing is holding out in hopes Trump will feel pressure to make a more favorable deal as his campaign for the 2020 presidential election picks up. Trump has warned that if he is re-elected, China will face a tougher U.S. negotiating stance. 

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The center of Beijing was under lockdown early Sunday for a nighttime parade rehearsal by the Chinese military, which is preparing for Oct. 1 ceremonies to mark Communist China’s 70th anniversary.

The enormous Avenue of Eternal Peace, which leads to Tiananmen Square and runs east-west, was closed to traffic for about a dozen kilometers (7 miles) to allow troops to parade around Tiananmen Square, the symbolic heart of Chinese power.

It is where Mao Zedong in 1949 proclaimed the founding of the People’s Republic of China.

Views blocked

Areas around the Avenue of Eternal Peace were gradually closed to traffic from late Saturday afternoon and were expected to stay off limits until Sunday morning, causing traffic jams.

Security forces blocked access to residences with views of the avenue, ordering several foreign media outlets in the area to leave their offices for the weekend.

“We warmly celebrate the 70th anniversary of the founding of the People’s Republic of China,” proclaimed immense signs being transported by trucks heading toward Tiananmen Square.

Other rehearsals are expected each weekend leading up to Oct. 1, leaving residents facing the same restrictions, a guard told AFP.

Republic’s anniversary

Every 10 years Beijing traditionally marks the republic’s anniversary with a giant military parade.

The army said at the end of August that the next parade would be larger than those in 1999 and 2009, and even bigger than one in 2015, which commemorated the end of World War II 70 years earlier.

On that occasion, 12,000 soldiers marched.

The parade is expected to showcase some of the most advanced weaponry of the Chinese army, in an effort to drum up patriotic fervor.

But it will not be targeted “at any countries or districts,” General Cai Zhijun, a member of the Chinese Army General Staff, said last month. Cai said the size of the military parade was not a sign of aggression and the Chinese army was “committed to safeguarding world peace and regional stability.”

This year’s anniversary comes at a sensitive time for Beijing. It is in a trade war with the United States, Hong Kong is rocked by demonstrations, and it faces criticism over the treatment of Muslims in the western Xinjiang region.

China’s 2-million-member armed forces is the world’s largest and its military budget is the second-biggest, though still far behind that of the United States.
 

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