Mexico arrests alleged major heroin trafficker

Jose Antonio Medina, called 'the king of heroin,' was arrested in the state of Michoacan. He is suspected of heading a smuggling network that brought the drug to Southern California.

By Ken Ellingwood

March 26, 2010

Reporting from Mexico City

Mexican authorities Thursday announced the arrest of a man dubbed "the king of heroin," who allegedly was one of the biggest smugglers of the drug into the United States.

Jose Antonio Medina was captured by Mexican police a day earlier in the western state of Michoacan, where he allegedly operated a trafficking network that smuggled 440 pounds of heroin a month across the border into Southern California, federal police said.

Medina, 36, was sought on a warrant issued last year for extradition to the U.S. on charges of drug trafficking and sales north of the border. Mexican officials said his smugglers hid small loads of heroin in secret compartments of vehicles that were sent across the border at Tijuana and then to Los Angeles.

Mexican police said that since 2007, the Medina group has sold about $12 million worth of heroin a month.

Medina allegedly bought from poppy growers in the southern state of Guerrero and stockpiled the heroin in Michoacan for shipment north.

Officials said Medina also shared his group's resources and smuggling routes for shipping methamphetamine produced by La Familia, a violent Michoacan-based organization. Medina appeared to operate independently but was "respected" by La Familia, police said.

Most heroin smuggled across the U.S. border is believed to pass through official ports of entry. Seizures of heroin by U.S. authorities along the Southwest border rose last year to about 1,200 pounds, from 926 pounds during 2008.

Medina's arrest is a bit of good news for Mexican President Felipe Calderon, whose offensive against drug gangs is increasingly criticized as ineffective.

Runaway violence in places such as the border city of Ciudad Juarez crashed into view again this month when gunmen killed three people with ties to the U.S. Consulate there. Two were U.S. citizens.

Calderon has pledged to carry on the army-led campaign against organized crime, which he has called "a ridiculous minority."

"We won't let ourselves be dominated by a bunch of thugs," the president said.

U.S. Secretary of State Hillary Rodham Clinton, leading a visiting delegation of top-ranking Obama administration officials this week, promised greater help for Calderon's drug war. Some of the American aid will be aimed at helping build stronger Mexican institutions and better living conditions in violence-plagued cities.

http://www.latimes.com/news/nation-and-world/la-fg-mexico-heroin26-2010mar26,0,3942644,print.story

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EDITORIAL

A compromise on crack sentencing

A Senate bill on sentencing for drug offenses isn't perfect, but it's probably the best we can get this year.

Editorial: 18 to 1 crack sentencing disparity beats 100 to 1

March 25, 2010

There was never any scientific basis for the disparity in sentencing for federal crack and powder cocaine offenses. Yet for decades, those convicted of possessing crack have received the same mandatory prison time as offenders possessing 100 times the amount of powder cocaine. Today we know that crack is not 100 times more powerful, addictive or deadly than powder cocaine. They have identical effects on the brain, although crack delivers a high more rapidly because it is smoked rather than snorted. The main difference between the two is that powder cocaine is used primarily by young whites, and crack, which is less expensive, is used primarily by impoverished blacks.

Panic over a crack epidemic in the nation's cities in the 1980s led to draconian laws that ultimately would be as devastating to entire communities as the drug itself. According to a 2006 report by the American Civil Liberties Union, 1 in 14 black children has a parent in prison because of felony drug convictions. That's why a bipartisan bill to reduce the 100-1 sentencing disparity, approved unanimously by the Senate Judiciary Committee, is at once welcome and disheartening. The committee voted to reduce the disparity to 18 to 1, but the ratio should be 1 to 1, as proposed by Sen. Richard J. Durbin (D-Ill.). Under the bill, possession of 28 grams of crack, instead of 5 grams, would trigger the five-year mandatory minimum sentence. The bill also would stiffen penalties for bribing a peace officer and violence attendant to a crack-related offense.

It has taken more than a decade of determined advocacy to reach this point, and although it's not perfect, the Senate's reform measure, which is not retroactive, would mitigate the sentences of an estimated 3,000 people a year. So we reluctantly urge the House to forgo its rational, reasonable and more just approach -- because insisting on a 1-1 ratio, as approved by the House Judiciary Committee in the Fairness in Cocaine Sentencing Act of 2009, would by most accounts destroy any chance of passage. This is one issue on which there is cross-aisle cowardice: Few members of either party are willing to appear "soft on crime."

So 18 to 1 appears to be the best we can get. Republicans are insisting that bipartisanship is over and that there will be little, if any, cooperation for the rest of this year. But this agreement has already been struck. Before year's end, we hope to see the biased sentencing disparity on its way out.

http://www.latimes.com/news/opinion/editorials/la-ed-cocaine26-2010mar26,0,7669106,print.story

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From the Wall Street Journal

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Bin Laden Message Threatens U.S.

CAIRO--Al Qaeda leader Osama bin Laden threatened in a new message released Thursday to kill any captured Americans if the U.S. executes the self-professed mastermind of the Sept.11 attacks or any other al Qaeda suspects.

In the 74-second audiotape aired on Al-Jazeera television, the al Qaeda leader explicitly mentions Khalid Sheik Mohammed, who was captured in Pakistan in 2003. Mr. Mohammed is the most senior al Qaeda operative in U.S. custody and is currently detained at the U.S. naval base at Guantanamo Bay, Cuba.

In 2008, the U.S. charged Mr. Mohammed with murder and war crimes in connection with the Sept. 11, 2001 attacks on the U.S. Pentagon officials have said they will seek the death penalty for him. Four of his alleged fellow plotters are also in custody.

"The White House has expressed its desire to execute them. The day America makes that decision will be the day it has issued a death sentence for any one of you that is taken captive," Mr. bin Laden said, addressing Americans.

A U.S. counterterrorism official said it is absurd for al Qaeda to suggest it is going to start treating captives badly. "They may have forgotten Danny Pearl and all the others they've slaughtered, but we haven't," said the official, who spoke on condition of anonymity in order to discuss classified information. The official didn't say whether the tape was authentic.

After his March 2003 capture in Pakistan, Mr. Mohammed described himself as the architect of numerous terrorism plots and even claimed that "with my blessed right hand," he had decapitated Wall Street Journal reporter Daniel Pearl. Mr. Pearl was found beheaded in Pakistan in 2002.

The U.S. is still considering whether to put Mr. Mohammed and the four alleged fellow plotters on military tribunal. The Obama administration is also looking into recommendations for civilian trials, and is expected to announce a decision soon.

Al Qaeda isn't known to be holding any Americans captive at the moment. But the Haqqani group--the Pakistan-based Taliban faction closest to al Qaeda--is holding American soldier Pfc. Bowe Bergdahl who was captured in eastern Afghanistan in June 2009. The group released a video of him in December.

Mr. bin Laden also said President Barack Obama is following in the footsteps of his predecessor George W. Bush by escalating the war in Afghanistan, being "unjust" to al Qaeda prisoners and supporting Israel in its occupation of Palestinian land.

"The politicians of the White House were and still are wronging us, especially by supporting Israel and occupying our land in Palestine. They think that America, behind oceans, is safe from the wrath of the oppressed, until the reaction was loud and strong in your homeland," he said of the Sept. 11 attacks. "Equal treatment is only fair. War is a back-and-forth."

Mr. bin Laden is believed to be hiding somewhere in the rugged, lawless border region between Afghanistan and Pakistan.

The prospect of giving Mr. Mohammed and the four alleged fellow plotters a civilian trial in New York City has led to protests by residents and relatives of Sept. 11 victims who fear that such a move could make the city a terrorism target and that they should instead face a military trial.

http://online.wsj.com/article/SB10001424052748704094104575143544005716842.html?mod=WSJ_World_LEFTSecondNews#printMode

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From the New York Times

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U.S. Plans Big Expansion in Effort to Aid Homeowners

By DAVID STREITFELD

The Obama administration on Friday will announce broad new initiatives to help troubled homeowners, potentially refinancing several million of them into fresh government-backed mortgages with lower payments.

Another element of the new program is meant to temporarily reduce the payments of borrowers who are unemployed and seeking a job. Additionally, the government will encourage lenders to write down the value of loans held by borrowers in modification programs.

The escalation in aid comes as the administration is under rising pressure from Congress to resolve the foreclosure crisis, which is straining the economy and putting millions of Americans at risk of losing their homes. But the new initiatives could well spur protests among those who have kept up their payments and are not in trouble.

The administration's earlier efforts to stem foreclosures have largely been directed at borrowers who were experiencing financial hardship. But the biggest new initiative, which is also likely to be the most controversial, will involve the government, through the Federal Housing Administration , refinancing loans for borrowers who simply owe more than their houses are worth.

About 11 million households, or a fifth of those with mortgages, are in this position, known as being underwater. Some of these borrowers refinanced their houses during the boom and took cash out, leaving them vulnerable when prices declined. Others simply had the misfortune to buy at the peak.

Many of these loans have been bundled together and sold to investors. Under the new program, the investors would have to swallow losses, but would probably be assured of getting more in the long run than if the borrowers went into foreclosure. The F.H.A. would insure the new loans against the risk of default. The borrower would once again have a reason to make payments instead of walking away from a property.

Many details of the administration's plan remained unclear Thursday night, including the precise scope of the new program and the number of homeowners who might be likely to qualify.

One administration official cautioned that the investors might not be willing to volunteer any loans from borrowers that seemed solvent. That could set up a battle between borrowers and investors.

This much was clear, however: the plan, if successful, could put taxpayers at increased risk. If many additional borrowers move into F.H.A. loans, a renewed downturn in the housing market could send that government agency into the red.

The F.H.A. has already expanded its mortgage-guarantee program substantially in the last three years as the housing crisis deepened. It now insures more than six million borrowers, many of whom made minimal down payments and are now underwater.

Sources said the agency would use $14 billion in funds from the Troubled Asset Relief Program , some of which it could dangle in front of financial institutions as incentives to participate.

Another major element of the program, according to several people who described it, will be to encourage lenders to write down the value of loans for borrowers in modification programs. Until now, the government's modification efforts have focused on lowering interest rates.

Lenders began offering principal forgiveness last year on loans they held in their own portfolios. In the fourth quarter, however, this process abruptly reversed itself, for reasons that are unclear. The number of modifications that included principal reduction fell by half.

Bank of America , the country's biggest bank, announced this week that it would forgive principal balances over a period of years on an initial 45,000 troubled loans.

Another element of the White House's housing program will require lenders to offer unemployed borrowers a reduction in their payments for a minimum of three months.

An administration official declined to speak on the record about the new programs but said they would “better assist responsible homeowners who have been affected by the economic crisis through no fault of their own.”

The new initiatives would expand the government's current mortgage modification plan, announced a year ago with great fanfare. It has resulted in fewer than 200,000 people getting permanent new loans. As many as seven million borrowers are seriously delinquent on their loans and at risk of foreclosure.

While fewer people are beginning default, the number of borrowers who are seriously distressed is rising. In the fourth quarter, the number of households at least 90 days past due on their mortgages swelled by 270,000, according to a report issued Thursday by the comptroller of the currency and the Office of Thrift Supervision.

“The government is seeking to persuade people to stay in their homes by aligning the mortgage debt with the asset value, which is the only viable path to real housing stability,” said one person who was briefed on the government's plans.

The number of foreclosures in the fourth quarter rose 9 percent, to 128,859. An additional 38,000 owners disposed of their homes in short sales, where the lender agreed to accept less than it was owed.

A person briefed on the new plan said the number of underwater borrowers who qualified for the plan could be in the millions. The government is not planning to solicit loans for the program, stressing that it is voluntary.

The administration recognizes that some people's finances have deteriorated so far that they are beyond help, the person said. People in that situation simply cannot afford the houses they are living in, the person said, even if the mortgages were reduced.

“All these programs are geared toward people for whom it makes sense, for whom it's workable when all is said and done,” the person said. “Some people are too far gone.”

http://www.nytimes.com/2010/03/26/business/26housing.html?ref=us&pagewanted=print

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More Doctors Giving Up Private Practices

By GARDINER HARRIS

WASHINGTON — A quiet revolution is transforming how medical care is delivered in this country, and it has very little to do with the sweeping health care legislation that President Obama just signed into law.

But it could have a big impact on that law's chances for success.

Traditionally, American medicine has been largely a cottage industry. Most doctors cared for patients in small, privately owned clinics — sometimes in rooms adjoining their homes.

But an increasing share of young physicians, burdened by medical school debts and seeking regular hours, are deciding against opening private practices. Instead, they are accepting salaries at hospitals and health systems. And a growing number of older doctors — facing rising costs and fearing they will not be able to recruit junior partners — are selling their practices and moving into salaried jobs, too.

As recently as 2005, more than two-thirds of medical practices were physician-owned — a share that had been relatively constant for many years, the Medical Group Management Association says. But within three years, that share dropped below 50 percent, and analysts say the slide has continued.

For patients, the transformation in medicine is a mixed blessing. Ideally, bigger health care organizations can provide better, more coordinated care. But the intimacy of longstanding doctor-patient relationships may be going the way of the house call.

And for all the vaunted efficiencies of health care organizations, there are signs that the trend toward them is actually a big factor in the rising cost of private health insurance . In much of the country, health systems are known by another name: monopolies.

With these systems, private insurers often have little negotiating power in setting rates — and the Congressional health care legislation makes little provision for altering this dynamic. If anything, the legislation contains provisions — including efforts to combine payments for certain kinds of medical care — that may further speed the decline of the private-practice doctor and the growth of Big Medicine.

The trend away from small private practices is driven by growing concerns over medical errors and changes in government payments to doctors. But an even bigger push may be coming from electronic health records. The computerized systems are expensive and time-consuming for doctors, and their substantial benefits to patient safety, quality of care and system efficiency accrue almost entirely to large organizations, not small ones. The economic stimulus plan Congress passed early last year included $20 billion to spur the introduction of electronic health records.

For older doctors, the change away from private practice can be wrenching, and they are often puzzled by younger doctors' embrace of salaried positions.

“When I was young, you didn't blink an eye at being on call all the time, going to the hospital, being up all night,” said Dr. Gordon Hughes, chairman of the board of trustees for the Indiana State Medical Association. “But the young people coming out of training now don't want to do much call and don't want the risk of buying into a practice, but they still want a good lifestyle and a big salary. You can't have it both ways.”

In many ways, patients benefit from higher quality and better coordinated care, as doctors from various fields join a single organization. In such systems, patient records can pass seamlessly from doctor to specialist to hospital, helping avoid the kind of dangerous slip-ups that cost the lives of an estimated 100,000 people in this country each year.

And yet, the decline of private practices may put an end to the kind of enduring and intimate relationships between patients and doctors that have long defined medicine. A patient who chooses a doctor in private practice is more likely to see that same doctor during each office visit than a patient who chooses a doctor employed by a health system.

The changes have increasingly put the public and private provision of health care at odds. In the Medicare and Medicaid program, the government sets most prices related to hospitalization and doctor visits. And so organized health systems are seen as a way to increase quality and lower costs, in part because salaried doctors may order fewer procedures than those in private practice.

But in the private-insurance setting, where big hospitals and health care chains have more clout in setting rates, the push for quality may put health insurance out of reach for much of the middle class.

There are political consequences, too. As doctors move from being employers to employees, their politics often take a leftward turn. This helps explain why the American Medical Association — long opposed to health care reforms — gave at least a tepid endorsement to Mr. Obama's overhaul effort.

Gordon H. Smith , executive vice president of the Maine Medical Association, said that his organization had changed from being like a chamber of commerce to being like a union.

Dr. Michael Mirro of Fort Wayne, Ind., is among those caught in the tide. A 61-year-old cardiologist, he began his career like so many of his peers in a small private practice with two other cardiologists. They gradually added doctors until, by last year, they had 22 cardiologists, making theirs one of the largest private heart clinics in Indiana.

But in December, Dr. Mirro and his partners sold everything to Parkview Health, a growing health system that owns the hospital across the street from their building. “We had to hire more and more people to contact insurers and advocate for people to get the care they needed,” Dr. Mirro said. “That's expensive.” As insurance rates rose and coverage weakened, patients were forced to pay out of their own pockets an increasing portion of Dr. Mirro's bills. When the economy soured, many stopped trying.

“In the last year, the share of our patients from whom we could not hope to collect any money rose to about 30 percent,” Dr. Mirro said. Dr. Mirro and his partners had been thinking of selling for years. But they made the decision after the Centers for Medicare and Medicaid Services decided last year to cut reimbursements to cardiologists by 27 to 40 percent, depending on the type of practice. The Medicare savings in cardiology are to be used to pay more to primary care doctors, widely seen as under great financial strain.

In the wake of the government decision, cardiology practices across the country began selling out to health systems or hospitals. Dr. Jack Lewin, chief executive of the American College of Cardiology, estimated that the share of cardiologists working in private practice had dropped by half in the past year.

“And the remainder of those left are looking to move in that direction,” Dr. Lewin said. “This is all happening with or without reform passing.”

The process feeds on itself because doctors who remain in private practice worry that as their peers sell out, their own options become more limited and the prices for their own practices fall.

Although Dr. Mirro saw his decision as life-changing, many of his patients noticed little difference. Parkview let the doctors remain in their building and allowed them to continue to hire their own staff.

Mimi Strong, an 89-year-old heart failure patient, said everything was the same when she visited recently. Told in an interview that her care may now be more coordinated, Mrs. Strong expressed little interest.

But it matters to Dr. Mirro. “We wouldn't go back,” he said, “now that we've seen the value of improved patient care and improved communication with primary care physicians.”

Michael Packnett, the president of Parkview and Dr. Mirro's new boss, said that his organization was growing rapidly, while the number of independent hospital and doctor practices in northeast Indiana shrank. A key reason, Mr. Packnett said, is that many doctors have decided that the challenges of running their own businesses are simply too great.

http://www.nytimes.com/2010/03/26/health/policy/26docs.html?ref=us&pagewanted=print

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From the White House

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Health Reform and America's Businesses: The Bottom Line

Throughout the course of the health reform debate, amongst the President's top concerns has been how the sky-rocketing costs of health care affect America's businesses and the economy.  The final health reform legislation is a reflection of that, and will help contain the costs that threatened to swallow up the budgets of businesses across the country. That is why the independent Congressional Budget Office confirmed that the bill would lower health insurance premiums and why the Business Roundtable estimated that provisions to help bend the health care cost curve like those in the bill could save $3,000 per person in health costs.    

In the last few days, though, we have seen a couple of companies imply that reform will raise costs for them. Let's look more closely at what they're referring to:

• The concern stems from a corporate loophole that was created as part of the Medicare Part D prescription drug bill that passed in 2004. Under that bill, businesses were provided a 28% subsidy to help cover the cost of providing prescription drug coverage to their retirees.
  
  
• But a loophole in the law allowed businesses to deduct the value of that subsidy twice – they can exclude the 28% from their income and at the same time deduct the 28% from their income for tax purposes. 
  
  
• The health reform legislation closes this loophole by allowing businesses to deduct this money once rather than getting a double deduction on taxpayer dollars. These businesses will still get a generous subsidy to help them cover retiree prescription drug costs and they still get to exclude that benefit from their income – they just don't get a double deduction on taxpayer dollars.
  
  
• The President supports this subsidy to help seniors and believes that a change in its tax treatment won't negatively affect seniors.  But to be clear, this change doesn't even go into effect until 2013, and while some companies may make accounting changes to book these changes now, the provision was delayed two years from the original Senate bill specifically to give companies time to adapt.
  

Perhaps most importantly, though, is that this change is part of an overall reform package that will provide substantial benefits to employers and their employees. Consider just a few of the provisions that will directly benefit firms:

• Reinsurance for early retirees starting in 90 days : The bill invests $5 billion in a new reinsurance program for early retirees starting this year that will directly reduce health premiums for large employers who offer coverage to retirees between the ages of 55-64. This provision is estimated to reduce retiree premiums by as much as $1,200, helping to ensure these plans remain affordable for businesses and their retirees.
  
  
• Reducing the hidden tax : By reducing the number of uninsured, the bill will reduce the hidden tax of about $1,000 per person that those with insurance pay to cover the cost of the uninsured who rely on emergency rooms to get their care.
  
  
• “Gamechangers” that will bend the health care cost curve : The bill includes several reforms that independent health experts agree will help slow the long-term growth rate of health costs. These provisions that create market forces that lead to more efficient care, like a fee on insurance companies' most expensive plans, research into what works and what doesn't, an independent commission to make sure Medicare costs grow more slowly, and other measures to reward quality of care.
  
  
• Tax credits to make health care affordable : the bill includes $40 billion in new tax credits for small businesses to help cover the cost of health coverage for their employees. According to the council of economic advisers, about 4 million small businesses will be eligible for these new tax credits, which will help not only reduce the cost of coverage but increase the competitiveness of America's small firms.
  

When taken as a whole, the bill will reduce premiums and increase business competitiveness in the U.S. That is why the Congressional Budget Office projects that it will lower premiums for employer-sponsored insurance by zero to three percent, which using the midpoint of this range works out to about $10 billion per year in savings for large firms and their employees. That's the bottom line.

Gary Locke is Secretary of Commerce

http://www.whitehouse.gov/blog/2010/03/25/health-reform-and-america-s-businesses-bottom-line

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