DealBook: Questions Remain Over Hewlett's Big Charge on Autonomy Acquisition

The $5 billion fight over accusations of improper accounting brought by Hewlett-Packard shows no sign of abating.

In November, H.P. took a charge of $8.8 billion as it wrote down its acquisition of Autonomy, a British software company that it acquired in 2011. H.P. said that “more than $5 billion” of the charge was related to accounting and disclosure abuses at Autonomy. H.P. added that a senior executive at Autonomy pointed to the questionable practices after Mike Lynch, Autonomy’s founder and former chief executive, left H.P.

Mr. Lynch denied the charges. In November, he said the accounting moves H.P. highlighted were legitimate under international accounting rules, and he demanded that the company be more specific in how it arrived at the $5 billion number.

H.P. on Thursday released its annual report for its 2012 fiscal year, noting that the United States Justice Department “had opened an investigation relating to Autonomy.”

The report discusses the methodology it employed when making the $8.8 billion charge, but it did not break out exactly how the purported accounting improprieties were behind $5 billion of that charge.

Mr. Lynch seized on that. In a statement on Friday, he said H.P.’s report had “failed to provide any detailed information on the alleged accounting impropriety, or how this could possibly have resulted in such a substantial write-down.”

This accounting rabbit hole has real world consequences.

Hewlett-Packard, led by the company’s chief executive, Meg Whitman, has proceeded with a feisty certainty since the outset of this spat. If the $5 billion figure is not ultimately substantiated, shareholders may doubt H.P. management’s judgment. Also, annual reports are supposed to be exactly the place that investors can go to get their questions answered.

The fact that the $5 billion part of H.P.’s case is not repeated there should give shareholders pause. The report avoids words and phrases that would help a reader understand just how much of an effect the supposed improprieties had. The report says lower financial projections for Autonomy contributed to the write-down. In one part, it said those financial projections “incorporate” H.P.’s analysis of what it believed to be improper accounting. In another section, the report says the changed financial projections were “driven” by the purported abuses.

That sort of language led Mr. Lynch to say in his statement on Friday that “H.P. is backtracking.”

H.P., however, says it is doing nothing of the sort. In a statement released after Mr. Lynch’s on Friday, the company said, “As we have said previously, the majority of this impairment charge, more than $5 billion, is linked to serious accounting improprieties, disclosure failures and outright misrepresentations.”

The statement also appeared to respond to the criticism that more details about the $5 billion should have appeared in the annual report. H.P. said the report “is meant to provide the necessary overview of H.P.’s financial condition, including our audited financial statements, which is what our filing does.” The company added, “We continue to believe that the authorities and the courts are the appropriate venues in which to address the wrongdoing discovered at Autonomy.”

Sifting through the Autonomy weeds could obscure the bigger question: was everything above board at Autonomy? H.P. may have overstated the impact of what it calls improprieties in the charge. But Autonomy may still have had unreliable numbers that overstated its value at the time of its acquisition.

Mr. Lynch says the poor performance of Autonomy once it was part of H.P. was a result of H.P.’s mismanagement. But it could also have been because the new owners were not benefiting from the accounting that they have since questioned.

In some ways, the most intriguing detail in this mystery is the supposed whistle-blower who brought the accounting issues to management’s attention. This person may have been able to show how what he or she believed to be chicanery was hidden from the accounting firms that checked Autonomy’s books.

H.P. has enough performance problems that its executives will probably see the Autonomy issue as a distraction and shareholders may get little extra detail. By the sounds of it, that probably will not satisfy Mr. Lynch.

“It is time for Meg Whitman to stop making allegations and to start offering explanations,” is how he signed off his Friday statement.

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Mexico City Journal: Mobile Factory With Hope for a Better Life – Mexico City Journal

MEXICO CITY — The sound of a surprising opportunity rose above the tumult of traffic. “Factory for electronic textiles offering work,” came the message, shouted from a megaphone that sat in the basket of a white bicycle pedaled by Amor Muñoz, an artist in a black jumpsuit. “One hundred pesos an hour!”

Even on the streets of this busy capital, where sales pitches flow from speakers attached to anything with wheels, the offer stood out. Work? For about $7.50 an hour, a little above the American minimum wage?

The rush was on. By the time Ms. Muñoz parked in her usual spot outside a hospital in one of Mexico City’s peripheral neighborhoods, a line had already formed. Women of all ages squeezed together — one held a baby, another was nearly too old to walk — as Ms. Muñoz opened up a white wooden box revealing thread, needles, cloth, timecards and employment contracts. The work involved creating interactive art pieces that combine the old craft of sewing with 20th-century electronics and 21st-century tags allowing smartphone users to look up who worked on a given piece.

“It’s about community,” Ms. Muñoz said. “I’m interested in sharing the experience of art.”

If that were her only interest, it would be enough to make alpha geeks swoon; a local glossy magazine and the revered Austrian technology festival, Ars Electronica, recently honored Ms. Muñoz with their annual awards. But behind her vintage glasses and dimpled smile, Ms. Muñoz has a sharper message.

Her maquiladora, or factory, she said, is a “fantasy” meant to condemn the harsh reality of a global economy that uses and discards poor workers, especially women, to keep prices low.

In Mexico these days the project amounts to artistic subversion. At a time when the country’s new president, Enrique Peña Nieto, is trying to recast Mexico as an economic marvel, with growth rates surpassing Brazil, Ms. Muñoz’s factory is a countervailing force — a mobile reality check highlighting Mexico’s darker economic truths.

Take wages. The minimum wage in Mexico is about 60 cents an hour, and while the average pay in manufacturing has grown over the past decade, it is still only about $3.50 an hour, according to government statistics. Even according to higher estimates by the Bureau of Labor Statistics in Washington, Mexico’s hourly compensation costs are still only two-thirds of those found in Brazil, where the benefits of economic growth have helped a larger share of workers rise from poverty.

Economists recognize the problem. “We need to increase wages to become a true modern country,” said Luis de la Calle, a former Mexican government official who helped negotiate the North American Free Trade Agreement. But as Mexico tries to improve its image and gloss over its violent drug war, government officials have mostly described Mexico’s low wages in positive terms, as a way to compete with China. The market, it is generally assumed, will eventually drive up wages.

Ms. Muñoz is unwilling to wait. She described Mexican wages as an insult to human dignity, and every time her mobile factory appears, the power of work for reasonable pay goes on display. The crowds that gather are typically large. Sometimes people push and shove for two hours of work and $15, though once the day’s employees are selected (first come first hired), a calm tends to follow.

Earlier this month, the team included nearly a dozen women and one young man, all that Ms. Muñoz could afford. Many, like Sara Peregrino, 50, were homemakers with sewing experience. Others, like David Quiróz, 18, a taxi dispatcher, struggled to thread a needle without drawing blood.

Nearly everyone said the money they earned would go to one of two things — food or Christmas presents. “For women, it’s very hard to find a good job,” said Patricia Zamora, 33, a mother of two who arrived with Ms. Peregrino, one of her neighbors. “There is a lot of work for not much pay.”

Many of the women seemed to appreciate a chance to be involved in an art project. María González, 75, smiled widely when handed a needle and adjusted her purple scarf, excited to be creating something rather than worrying about her husband in the hospital. “This,” she said, sewing without looking down, “is a wonderful distraction.”

Ms. Muñoz seemed to agree. She stood nearby, waiting for her favorite time of day — when she paid the workers and took their photographs, which she would post online, linked to the artwork. It is an effort to make the workers more visible, she said, but also hints at her working-class past.

She grew up playing among the hammers and nails of the hardware store her parents owned in a marginal neighborhood like the one with her factory. She said she always appreciated manual labor and never felt comfortable in an office, even after receiving a law degree.

Textiles had once been a hobby — she used to collect huipiles, the traditional woven tunics of Mexico and Central America — but when she decided to become an artist in 2006, she returned to cloth and sewing. Her work now involves a mixture of textiles and technology. Many of her pieces involve sewn images with circuits that let users push buttons for sounds or displays of light.

Completed works from the mobile maquiladora project, for example, will create the whine of an ambulance siren.

Like many other young artists in the capital, she is trying to push Mexico forward by combining older traditions with the interactivity of social media and open-source software development. She dreams of finding financing for more mobile factories, and her lack of faith in government and industry is matched only by the optimism she expresses when discussing the power of networked youth.

“With technology, everything can be democratized,” she said. “It’s fabulous.”

Still, the human interactions are what she values most, so when Ms. Peregrino suddenly appeared and presented her with a pink plastic bag after being paid, Ms. Muñoz was visibly touched. The two women hugged as Ms. Muñoz put the gift in into the bicycle basket with the megaphone. Only later did she look inside, finding a hand-sewn purple scarf that must have taken days to complete.

This article has been revised to reflect the following correction:

Correction: December 31, 2012

An earlier version of this story misstated an organization that gave an award to Amor Muñoz. It was Ars Electronica, not Ars Technica.

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Senate Leaders Racing to Beat Fiscal Deadline

WASHINGTON — Senate leaders and their aides spent Saturday searching for a formula to extend tax cuts for most Americans that could win bipartisan support in the Senate and final approval in the fractious House by the new year, hoping to prevent large tax increases and budget cuts that could threaten the fragile economy.

As part of the last-minute negotiations, the lawmakers were haggling over unemployment benefits, cuts in Medicare payments to doctors, taxes on large inheritances and how to limit the impact of the alternative minimum tax, a parallel income tax system that is intended to ensure the rich pay a fair share but that is increasingly encroaching on the middle class.

President Obama said that if talks between the Senate leaders broke down, he wanted the Senate to schedule an up-or-down vote on a narrower measure that would extend only the middle-class tax breaks and unemployment benefits. The Senate majority leader, Harry Reid of Nevada, said he would schedule such a vote on Monday absent a deal.

If Congress is unable to act before the new year, Washington will effectively usher in a series of automatic tax increases and a program of drastic spending cuts that economists say could pitch the country back into recession.

The president and lawmakers put those spending cuts in place this year as draconian incentives that would force them to confront the nation’s growing debt. Now, lawmakers are trying to keep them from happening, though it seemed most likely on Saturday that the cuts, known as sequestration, would be left for the next Congress, to be sworn in this week.

“We just can’t afford a politically self-inflicted wound to our economy,” Mr. Obama said Saturday in his weekly address. “The housing market is healing, but that could stall if folks are seeing smaller paychecks. The unemployment rate is the lowest it’s been since 2008, but already families and businesses are starting to hold back because of the dysfunction they see in Washington.”

The fear of another painful economic slowdown appears to have accelerated deal-making on Capitol Hill with just 48 hours left before the so-called fiscal cliff arrives. Weeks of public sniping between Mr. Reid, the Democratic leader, and Senator Mitch McConnell of Kentucky, the Republican leader, ebbed on Friday evening with pledges of cooperation and optimism from both.

On Saturday, though, that sentiment was put to the test as 98 senators waited for word whether their leaders had come up with a proposal that might pass muster with members of both parties. The first votes in the Senate, if needed, are scheduled for Sunday afternoon.

“It’s a little like playing Russian roulette with the economy,” said Senator Mark Warner, Democrat of Virginia. “The consequences could be enormous.”

Members of Congress were mostly absent from the Capitol on Saturday, after two days of Senate votes on other matters and a day before both chambers were to reconvene. However, senior aides were working on proposals in their offices or at their homes.

Speaker John A. Boehner stopped by the Capitol briefly to see his chief of staff on Saturday afternoon. Mr. McConnell spent much of the day in his office.

Aides to Mr. Reid were expecting to receive offers from Mr. McConnell’s staff, but no progress was reported by midday. Even if the talks took a positive turn, Senate aides said, no announcement was expected before the leaders briefed their caucuses on Sunday.

The chief sticking point among lawmakers and the president continued to be how to set tax rates for the next decade and beyond. With the Bush-era tax cuts expiring, Mr. Obama and Democrats have said they want tax rates to rise on income over $250,000 a year, while Republicans want a higher threshold, perhaps at $400,000.

Democrats and Republicans are also divided on the tax on inherited estates, which currently hits inheritances over $5 million at 35 percent. On Jan. 1, it is scheduled to rise to 55 percent beginning with inheritances exceeding $1 million.

The political drama in Washington over the weekend was given greater urgency by the fear that the economic gains of the past two years could be lost if no deal is reached.

Some of the consequences of Congressional inaction would be felt almost at once on Tuesday, in employee paychecks, doctors’ offices and financial markets. Analysts said the effect would be cumulative, building over time.

An early barometer would probably be the financial markets, where skittish investors, as they have during previous Congressional cliffhangers, could send the stock market lower on fears of another prolonged period of economic distress.

In 2011, the political battles over whether to raise the nation’s borrowing limit prompted Standard & Poor’s to downgrade its rating of American debt, suggesting a higher risk of default. The Dow Jones industrial average fell 635 points in a volatile day of trading after the downgrade.

This month, traders have again nervously watched the political maneuvering in Washington, and the markets have jumped or dropped at tidbits of news from the negotiations. Two weeks ago, Ben S. Bernanke, the chairman of the Federal Reserve Board, predicted that if lawmakers failed to reach a deal, “the economy will, I think, go off the cliff.”

Immediately — regardless of whether a deal is reached — every working American’s taxes will go up because neither party is fighting to extend a Social Security payroll tax cut that has been in place for two years.

Robert Pear and Jennifer Steinhauer contributed reporting.

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Elwood V. Jensen, Pioneer in Breast Cancer Treatment, Dies at 92

Tony Jones/Cincinnati Enquirer, via Associated Press

Elwood V. Jensen in 2004.

Elwood V. Jensen, a medical researcher whose studies of steroid hormones led to new treatments for breast cancer that have been credited with saving or extending hundreds of thousands of lives, died on Dec. 16 in Cincinnati. He was 92.

The cause was complications of pneumonia, his son, Thomas Jensen, said.

In 2004 Dr. Jensen received the Albert Lasker Basic Medical Research Award, one of the most respected science prizes in the world.

When Dr. Jensen started his research at the University of Chicago in the 1950s, steroid hormones, which alter the functioning of cells, were thought to interact with cells through a series of chemical reactions involving enzymes.

However, Dr. Jensen used radioactive tracers to show that steroid hormones actually affect cells by binding to a specific receptor protein inside them. He first focused on the steroid hormone estrogen.

By 1968, Dr. Jensen had developed a test for the presence of estrogen receptors in breast cancer cells. He later concluded that such receptors were present in about a third of those cells.

Breast cancers that are estrogen positive, meaning they have receptors for the hormone, can be treated with medications like Tamoxifen or with other methods of inhibiting estrogen in a patient’s system, like removal of the ovaries. Women with receptor-rich breast cancers often go into remission when estrogen is blocked or removed.

By the mid-1980s, a test developed by Dr. Jensen and a colleague at the University of Chicago, Dr. Geoffrey Greene, could be used to determine the extent of estrogen receptors in breast and other cancers. That test became a standard part of care for breast cancer patients.

Scientists like Dr. Pierre Chambon and Dr. Ronald M. Evans, who shared the 2004 Lasker prize with Dr. Jensen, went on to show that many types of receptors exist. The receptors are crucial components of the cell’s control system and transmit signals in an array of vital functions, from the development of organs in the womb to the control of fat cells and the regulation of cholesterol.

Dr. Jensen’s work also led to the development of drugs that can enhance or inhibit the effects of hormones. Such drugs are used to treat prostate and other cancers.

Elwood Vernon Jensen was born in Fargo, N.D., on Jan. 13, 1920, to Eli and Vera Morris Jensen. He majored in chemistry at what was then Wittenberg College in Springfield, Ohio, and had begun graduate training in organic chemistry at the University of Chicago when World War II began.

Dr. Jensen wanted to join the Army Air Forces, but his poor vision kept him from becoming a pilot. During the war he synthesized poison gases at the University of Chicago, exposure to which twice put him in the hospital. His work on toxic chemicals, he said, inspired him to pursue biology and medicine.

Dr. Jensen studied steroid hormone chemistry at the Swiss Federal Institute of Technology on a Guggenheim Fellowship after the war. While there, he climbed the Matterhorn, one of the highest peaks in the Alps, even though he had no mountaineering experience. He often equated his successful research to the novel approach taken by Edward Whymper, the first mountaineer to reach the Matterhorn’s summit. Mr. Whymper went against conventional wisdom and scaled the mountain’s Swiss face, after twice failing to reach the summit on the Italian side.

Dr. Jensen joined the University of Chicago as an assistant professor of surgery in 1947, working closely with the Nobel laureate Charles Huggins. He became an original member of the research team at the Ben May Laboratory for Cancer Research (now the Ben May Department for Cancer Research) in 1951, and became the director after Dr. Huggins stepped down.

He came to work at the University of Cincinnati in 2002, and continued to do research there until last year.

His first wife, the former Mary Collette, died in 1982. In addition to his son, Dr. Jensen is survived by his second wife, the former Hiltrud Herborg; a daughter, Karen C. Jensen; a sister, Margaret Brennan; two grandchildren; and three great-grandchildren.

Dr. Jensen’s wife was found to have breast cancer in 2005. She had the tumor removed, he said in an interview, but tested positive for the estrogen receptor and was successfully treated with a medication that prevents estrogen synthesis.

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Elwood V. Jensen, Pioneer in Breast Cancer Treatment, Dies at 92

Tony Jones/Cincinnati Enquirer, via Associated Press

Elwood V. Jensen in 2004.

Elwood V. Jensen, a medical researcher whose studies of steroid hormones led to new treatments for breast cancer that have been credited with saving or extending hundreds of thousands of lives, died on Dec. 16 in Cincinnati. He was 92.

The cause was complications of pneumonia, his son, Thomas Jensen, said.

In 2004 Dr. Jensen received the Albert Lasker Basic Medical Research Award, one of the most respected science prizes in the world.

When Dr. Jensen started his research at the University of Chicago in the 1950s, steroid hormones, which alter the functioning of cells, were thought to interact with cells through a series of chemical reactions involving enzymes.

However, Dr. Jensen used radioactive tracers to show that steroid hormones actually affect cells by binding to a specific receptor protein inside them. He first focused on the steroid hormone estrogen.

By 1968, Dr. Jensen had developed a test for the presence of estrogen receptors in breast cancer cells. He later concluded that such receptors were present in about a third of those cells.

Breast cancers that are estrogen positive, meaning they have receptors for the hormone, can be treated with medications like Tamoxifen or with other methods of inhibiting estrogen in a patient’s system, like removal of the ovaries. Women with receptor-rich breast cancers often go into remission when estrogen is blocked or removed.

By the mid-1980s, a test developed by Dr. Jensen and a colleague at the University of Chicago, Dr. Geoffrey Greene, could be used to determine the extent of estrogen receptors in breast and other cancers. That test became a standard part of care for breast cancer patients.

Scientists like Dr. Pierre Chambon and Dr. Ronald M. Evans, who shared the 2004 Lasker prize with Dr. Jensen, went on to show that many types of receptors exist. The receptors are crucial components of the cell’s control system and transmit signals in an array of vital functions, from the development of organs in the womb to the control of fat cells and the regulation of cholesterol.

Dr. Jensen’s work also led to the development of drugs that can enhance or inhibit the effects of hormones. Such drugs are used to treat prostate and other cancers.

Elwood Vernon Jensen was born in Fargo, N.D., on Jan. 13, 1920, to Eli and Vera Morris Jensen. He majored in chemistry at what was then Wittenberg College in Springfield, Ohio, and had begun graduate training in organic chemistry at the University of Chicago when World War II began.

Dr. Jensen wanted to join the Army Air Forces, but his poor vision kept him from becoming a pilot. During the war he synthesized poison gases at the University of Chicago, exposure to which twice put him in the hospital. His work on toxic chemicals, he said, inspired him to pursue biology and medicine.

Dr. Jensen studied steroid hormone chemistry at the Swiss Federal Institute of Technology on a Guggenheim Fellowship after the war. While there, he climbed the Matterhorn, one of the highest peaks in the Alps, even though he had no mountaineering experience. He often equated his successful research to the novel approach taken by Edward Whymper, the first mountaineer to reach the Matterhorn’s summit. Mr. Whymper went against conventional wisdom and scaled the mountain’s Swiss face, after twice failing to reach the summit on the Italian side.

Dr. Jensen joined the University of Chicago as an assistant professor of surgery in 1947, working closely with the Nobel laureate Charles Huggins. He became an original member of the research team at the Ben May Laboratory for Cancer Research (now the Ben May Department for Cancer Research) in 1951, and became the director after Dr. Huggins stepped down.

He came to work at the University of Cincinnati in 2002, and continued to do research there until last year.

His first wife, the former Mary Collette, died in 1982. In addition to his son, Dr. Jensen is survived by his second wife, the former Hiltrud Herborg; a daughter, Karen C. Jensen; a sister, Margaret Brennan; two grandchildren; and three great-grandchildren.

Dr. Jensen’s wife was found to have breast cancer in 2005. She had the tumor removed, he said in an interview, but tested positive for the estrogen receptor and was successfully treated with a medication that prevents estrogen synthesis.

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YouTube Ban Lifted in Pakistan, for 3 Minutes

ISLAMABAD, Pakistan — A ban on YouTube, which Pakistan imposed after an anti-Islam video caused riots in much of the Muslim world, was lifted Saturday, only to be reinstated — after three minutes — when it was discovered that blasphemous material was still available on the site.

After months of criticism of the ban, the government decided to allow Pakistanis to have access to YouTube again, saying steps had been taken to ensure that offensive content would not be visible. But those efforts apparently failed, and the authorities quickly backtracked.

The ban was imposed on Sept. 17 following violent protests in response to the video, which was made in the United States and ridiculed the Prophet Muhammad. The government then ordered all telecommunications companies to block Internet material deemed offensive to Muslims and urged people to report such material.

But the ban on YouTube came to be seen as censorship, and a growing number of the estimated 25 million Internet users in the country complained.

“This is purely a naked power play by the government and one that we should resist,” an editorial in The Express Tribune, an English-language daily newspaper in Karachi, Pakistan, said Friday. “This is about controlling our behavior and denying us access to the Internet.”

“We need to make it clear that we do not wish to regress to a dark age when a centralized authority controlled all access to information,” the editorial, observing the 100th day of the ban, went on to say. “Retreating to such an era would essentially mean that we were longer living in a democracy.”

By Friday evening, Rehman Malik, the country’s interior minister, indicated that the ban would be lifted over the weekend. Mr. Malik said firewalls by government technicians were being installed to block pornographic and blasphemous material.

On Saturday, the Pakistan Telecommunication Authority directed local Internet service providers to make YouTube accessible. But by the afternoon, Geo, a private television news network that wields immense influence, reported that anti-Islam and blasphemous material was still available on YouTube. The criticism was led by Ansar Abbasi, a right-leaning journalist who often speaks out on morality and religion.

Yielding to the criticism, Prime Minister Raja Pervez Ashraf then ordered providers to again block access to the video-sharing site.

The flip-flop drew an immediate rebuke from users and led to a flurry of jokes on Twitter about the government’s dithering and backtracking.

“YouTube is a huge convenience for users, who benefit from it for educational as well as entertainment purposes,” Zubair Kasuri, the editor of Flare, a Karachi-based telecommunications magazine, said in a telephone interview. Mr. Kasuri expressed surprise over the government’s failure to install an effective firewall mechanism despite having months to do so.

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To Save Wildlife, and Tourism, Kenyans Take Up Arms

ARCHER’S POST, Kenya — Julius Lokinyi was one of the most notorious poachers in this part of Kenya, accused of single-handedly killing as many as 100 elephants and selling the tusks by the side of the road in the dead of night, pumping vast amounts of ivory into a shadowy global underground trade.

But after being hounded, shamed, browbeaten and finally persuaded by his elders, he recently made a remarkable transformation. Elephants, he has come to believe, are actually worth more alive than dead, because of the tourists they attract. So Mr. Lokinyi stopped poaching and joined a grass-roots squad of rangers — essentially a conservation militia — to protect the wildlife he once slaughtered.

Nowadays he gets up at dawn, slurps down a cup of sugary tea, tightens his combat boots and marches off with other villagers, some who had never picked up a gun before and are little more than volunteers, to fight poachers.

“We got to protect the elephants,” said Mr. Lokinyi, whose hooded eyes now glow with the zeal of a convert.

From Tanzania to Cameroon, tens of thousands of elephants are being poached each year, more than at any time in decades, because of Asia’s soaring demand for ivory. Nothing seems to be stopping it, including deploying national armies, and the bullet-riddled carcasses keep stacking up. Scientists say that at this rate, African elephants could soon go the way of the wild American bison.

But in this stretch of northern Kenya, destitute villagers have seized upon an unconventional solution that, if replicated elsewhere, could be the key to saving thousands of elephants across Africa, conservationists say. In a growing number of communities here, people are so eager, even desperate, to protect their wildlife that civilians with no military experience are banding together, grabbing shotguns and G3 assault rifles and risking their lives to confront heavily armed poaching gangs.

It is essentially a militarized neighborhood watch, with loping, 6-foot-6 former herdsmen acting as the block captains, and the block being miles and miles of zebra-studded bush. These citizen-rangers are not doing this out of altruism or some undying love for pachyderms. They do it because in Kenya, perhaps more than just about anywhere else, wildlife means tourists, and tourists mean dollars — a lot of dollars.

It is not unusual here for a floppy-hatted visitor to drop $700 a night to sleep in a tent and absorb the sights, sounds and musky smells of wondrous game. Much of that money is contractually bound to go directly to impoverished local communities, which use it for everything from pumping water to college scholarships, giving them a clear financial stake in preserving wildlife. The safari business is a pillar of the Kenyan economy, generating more than a billion dollars a year and nearly 500,000 jobs: cooks, cleaners, bead-stringers, safari guides, bush pilots, even accountants to tally the proceeds.

Surprisingly, many jobs in the safari industry can pay as much as poaching. Though the ivory trade may seem lucrative, it is often like the Somali pirate business model, with the entry-level hijacker getting just a minuscule cut of the million-dollar ransoms. While a pound of ivory can fetch $1,000 on the streets of Beijing, Mr. Lokinyi, despite his lengthy poaching résumé, was broke, making it easier to lure him out of the business.

Villagers are also turning against poachers because the illegal wildlife trade fuels crime, corruption, instability and intercommunal fighting. Here in northern Kenya, poachers are diversifying into stealing livestock, printing counterfeit money and sometimes holding up tourists. Some are even buying assault rifles used in ethnic conflicts.

The conservation militias are often the only security forces around, so they have become de facto 911 squads, rushing off to all sorts of emergencies in areas too remote for the police to quickly gain access to and often getting into shootouts with poachers and bandits.

“This isn’t just about animals,” said Paul Elkan, a director at the Wildlife Conservation Society, who is trying to set up community ranger squads in South Sudan modeled on the Kenyan template. “It’s about security, conflict reconciliation, even nation building.”

The rangers tend to be hardened and uneducated, drawn from different ethnic groups and the surplus of unemployed youth. Gabriel Lesoipa was a goat herder; Joseph Lopeiyok, a cattle rustler; John Pameri won his coveted spot because he was fast — at the time he was selected, the first entry requirement was a grueling 11-mile race.

Many are considered warriors in their communities, experts in so-called bushcraft from years of grazing cattle and goats across the thorny savanna — and defending them against armed raiders. They can follow faint footprints across long, thirsty distances and instantly intuit when someone has trespassed on their land.

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Memphis Aims to Be a Friendlier Place for Cyclists

Lance Murphey for The New York Times

The Shelby Farms Greenline, which replaced a Memphis rail line.

MEMPHIS — John Jordan, a 64-year-old condo appraiser here, has been pedaling his cruiser bicycle around town nearly every day, tooling about at lunchtime or zipping to downtown appointments.

“It’s my cholesterol-lowering device,” said Mr. Jordan, clad in a leather vest and wearing a bright white beard. “The problem is, the city needs to educate motorists to not run over” the bicyclists.

Bike-friendly behavior has never come naturally to Memphis, which has long been among the country’s most perilous places for cyclists. In recent years, though, riders have taken to the streets like never before, spurred by a mayor who has worked to change the way residents think about commuting.

Mayor A. C. Wharton Jr., elected in 2009, assumed office a year after Bicycling magazine named Memphis one of the worst cities in America for cyclists, not the first time the city had received such a biking dishonor. But Mr. Wharton spied an opportunity.

In 2008, Memphis had a mile and a half of bike lanes. There are now about 50 miles of dedicated lanes, and about 160 miles when trails and shared roads are included. The bulk of the nearly $1 million investment came from stimulus money and other federal sources, and Shelby County, which includes Memphis, was recently awarded an additional $4.7 million for bike projects.

In June, federal officials awarded Memphis $15 million to turn part of the steel truss Harahan Bridge, which spans the Mississippi River, into a bike and pedestrian crossing. Scheduled to open in about two years, the $30 million project will link downtown Memphis with West Memphis, Ark.

“We need to make biking part of our DNA,” Mr. Wharton said. “I’m trying to build a city for the people who will be running it 5, 10, 15 years from now. And in a region known to some for rigid thinking, the receptivity has been remarkable.”

City planners are using bike lanes as an economic development tool, setting the stage for new stores and enhanced urban vibrancy, said Kyle Wagenschutz, the city’s bike-pedestrian coordinator, a position the mayor created.

“The cycling advocates have been vocal the past 10 years, but nothing ever happened,” Mr. Wagenschutz said. “It took a change of political will to catalyze the movement.”

Memphis, with a population of 650,000, is often cited among the unhealthiest, most crime-ridden and most auto-centric cities in the country. Investments in bicycling are being viewed here as a way to promote healthy habits, community bonds and greater environmental stewardship.

But as city leaders struggle with a sprawling landscape — Memphis covers about the same amount of land as Dallas, yet has half the population — their persistence has run up against another bedeviling factor: merchants and others who are disgruntled about the lanes.

A clash between merchants and bike advocates flared last year after the mayor announced new bike lanes on Madison Avenue, a commercial artery, that would remove two traffic lanes. Many merchants, like Eric Vernon, who runs the Bar-B-Q Shop, feared that removing car lanes would hurt businesses and cause parking confusion. Mr. Vernon said that sales had not fallen significantly since the bike lanes were installed, but that he thought merchants were left out of the process.

On McLean Boulevard, a narrow residential strip where roadside parking was replaced by bike paths, homeowners cried foul. The city reached a compromise with residents in which parking was outlawed during the day but permitted at night, when fewer cyclists were out. Mr. Wagenschutz called the nocturnal arrangement a “Cinderella lane.”

Some residents, however, were not mollified. “I’m not against bike lanes, but we’re isolated because there’s no place to park,” said Carey Potter, 53, a longtime resident who started a petition to reinstate full-time parking.

The changes have been panned by some members of the City Council. Councilman Jim Strickland went as far as to say that the bike signs that dot the streets add “to the blight of our city.”

Tensions aside, the mayor’s office says that the potential economic ripple effect of bike lanes is proof that they are a sound investment.

A study in 2011 by the University of Massachusetts found that building bike lanes created more jobs — about 11 per $1 million spent — than any other type of road project. Several bike shops here have expanded to accommodate new cyclists, including Midtown Bike Company, which recently moved to a location three times the size of its former one. “The new lanes have been great for business,” said the manager, Daniel Duckworth.

Wanda Rushing, a professor at the University of Memphis and an expert on urban change in the South, said bike improvements were of a piece with a development model sweeping the region: bolstering transportation infrastructure and population density in the inner city.

“Memphis is not alone in acknowledging that sprawl is not sustainable,” Dr. Rushing said. “Economic necessity is a pretty good melding substance.”

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IHT Rendezvous: France's 75 Percent Tax Rate Struck Down on Constitutional Grounds

France’s Constitutional Council overturned a 75 percent tax rate on incomes above €1 million euros, or $1.3 million on Saturday.

“The decision, in response to a motion by opposition conservatives, is a huge blow to Socialist President Francois Hollande who had made the 75 percent rate his flagship tax measure as he sought to make the rich be seen to contribute more towards reducing the budget deficit,” Reuters reported.

The government had estimated the 75 percent tax rate could raise around 300 million euros a year as it battles to bring down the public deficit to below a European Union ceiling of 3 percent next year in the face of stalled growth.

The Constitutional Council, which rules on whether laws are constitutional, said in a statement that the way the upper rate was set to be imposed was unfair in the way it would affect different households

“The Constitutional Council announced it was overturning the 75 percent bracket on income over 1 million euros ($1.32million) because it represented a ‘breech of equality of taxes.’ ” France24, the television broadcaster, reported.

Mr. Hollande said the rate would only be temporary, to help reduce France’s deficit. Most surprising to many was that French incomes are so relatively low that the rate would have to be paid by an estimated 1,500 people. (THe government estimated it would have provided an additional €210 million euros per year in revenue.

Rendezvous reported on actor Gerard Depardieu’s run-in with France’s prime minister and translated his cri de coeur into English as he declared his intention to renounce his French citizenship.

We’ve also followed closely other European countries’ efforts to get more revenue from the rich, whether individuals or corporations.

Are you cheering the French Constituional Court’s decision? Or do you think this is one more instance of the rich getting off scot-free?

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China Toughens Its Restrictions on Use of the Internet

HONG KONG — The Chinese government issued new rules on Friday requiring Internet users to provide their real names to service providers, while assigning Internet companies greater responsibility for deleting forbidden postings and reporting them to the authorities.

The decision came as government censors have sharply stepped up restrictions on China’s international Internet traffic in recent weeks. The restrictions are making it harder for businesses to protect commercial secrets and for individuals to view overseas Web sites that the Chinese Communist Party deems politically sensitive.

The new regulations, issued by the Standing Committee of the National People’s Congress, allow Internet users to continue to adopt pseudonyms for their online postings, but only if they first provide their real names to service providers, a measure that could chill some of the vibrant discourse on the country’s Twitter-like microblogs. The authorities periodically detain and even jail Internet users for politically sensitive comments, such as calls for a multiparty democracy or allegations of impropriety by local officials.

Any entity providing Internet access, including over fixed-line or mobile phones, “should when signing agreements with users or confirming provision of services, demand that users provide true information about their identities,” the Standing Committee ordered.

In recent weeks, Internet users in China have exposed a series of sexual and financial scandals that have led to the resignations or dismissals of at least 10 local officials. International news media have also published a series of reports in recent months on the accumulation of wealth by the family members of China’s leaders, and some Web sites carrying such reports, including Bloomberg’s and the English- and Chinese-language sites of The New York Times, have been assiduously blocked, while Internet comments about them have been swiftly deleted.

The regulations issued Friday build on a series of similar administrative guidelines and municipal rules issued over the past year. China’s mostly private Internet service providers have been slow to comply with them, fearing the reactions of their customers. The Standing Committee’s decision has much greater legal force, and puts far more pressure on Chinese Internet providers to comply more quickly and more comprehensively, Internet specialists said.

In what appeared to be an attempt to make the decision more palatable to the Chinese public, the Standing Committee also included a mandate for businesses in China to be more cautious in gathering and protecting electronic data.

“Nowadays on the Internet there are very serious problems with citizens’ personal electronic information being recklessly collected, used without approval, illegally disclosed, and even traded and sold,” Li Fei, a deputy director of the Standing Committee’s legislative affairs panel, said at a news conference in Beijing on Friday. “There are also a large number of cases of invasive attacks on information systems to steal personal electronic information, as well as lawbreaking on the Internet through swindles and through defaming and slandering others.”

Mr. Li denied that the government was seeking to prevent the exposure of corruption.

“When citizens exercise these rights according to the law, no organization or individual can use any reason or excuse to interfere, and cannot suppress them or exact revenge,” he said. “At the same time, when citizens exercise their rights, including through use of the Internet, they should stay within the bounds of the Constitution and the laws, and must not harm the legitimate rights and interests of the state, society, the collective or of other citizens.”

A spokesman for the National People’s Congress said that that 145 members of the Standing Committee voted in favor of the new rules, with 5 abstaining and 1 voting against them.

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