The last call for a skid row era at King Eddy Saloon









Wire-thin and slumped like a question mark, James Maley nurses a watered-down whiskey at the battered bar inside the King Eddy Saloon. Around him a boisterous crowd presses in. Maley taps a cracked fingernail nervously on his glass and stares warily at the newcomers.


They've come to see novelist John Fante's son, Dan Fante, read at the bar that inspired his father's 1939 classic "Ask the Dust." They're also here to experience skid row's last dive bar before it shuts down for renovations on Sunday.


"If this happened every day, I would never show up," says Maley, who lives in transitional housing a few blocks away.








Other time-worn regulars, many with leathery skin, bad teeth and watchful eyes, nod in agreement. The bar provides home and family for those who have neither. They come for community and to spend what little money they have on plastic pitchers of beer and $2.50 gin and tonics.


PHOTOS: Last Call at King Eddy Saloon


When the Fante reading ends, the interlopers quickly disperse.


"There go the slummers," says John Tottenham, a poet who has been coming to the King Eddy since the 1980s.


Chances are the crowds will be back when the bar reopens under new management. The owners plan to use old photos to restore the bar's Midcentury look. They hope to renovate the abandoned speak-easy in the basement and open the bar's windows that are covered by stucco, letting natural light into the place for the first time in decades.


They haven't finalized their plans, but one thing is for sure. Drinks won't come cheap at the new King Eddy.


The bar is located on the corner of 5th and Los Angeles streets in the King Edward Hotel, which was built in 1906 and was a tony destination for visitors to what was once a thriving commercial district. The hotel now provides low-income housing for many of King Eddy's regulars.


The pre-Prohibition era King Eddy is painted black. With neon beer signs providing most of its light, the room is dim and gloomy. Its black-and-white checkered floor is grimy. Plastic beer flags hang from the ceiling and the place smells of stale smoke and disinfectant.


The bar itself, shaped in a square, commands the center of the room, with cracked vinyl banquettes lining the perimeter. A glassed-in smoking space is set off to the side. Behind the bar is a tiny fluorescent-lighted kitchen where prepackaged burgers, pizza and sandwiches are heated in a microwave. A beer and burrito would set a person back only $4.


Next week, Maley and the other dislodged drinkers will have to find another bar, but they face a new downtown landscape of high-end mixology bars, restaurants and Brazilian waxing salons.


"I haven't the faintest idea where they'll go," says bar manager Bill Roller, 75, who has worked at the King Eddy for more than 30 years.


King Eddy opened in 1933 and has one of the oldest liquor licenses in the city. It was favored not only by Fante, but also by writers such as Charles Bukowski and James M. Cain for its lack of pretension and colorful clientele.


PHOTOS: Last Call at King Eddy Saloon


"The King Eddy Saloon is the last stand in a world that's completely lost to us — and that's skid row in the 1950s sense, a place where itinerant and semi-skilled laborers could find work seasonally," says downtown historian Richard Schave, who founded the Los Angeles Visionaries Assn., which staged the Fante event.


The bar has been owned by the same family for three generations. Dustin Croick took over in 2008 after his father, Rob, was badly injured in a car accident on his way home from the bar one night. Rob Croick, who has since died, managed the King Eddy for his father, Babe, who bought the bar in the 1960s with money he earned running downtown parking lots.


"This place has been a dive bar since I've been coming here as a kid with my dad, ordering milk and sitting on that stool," says Dustin Croick, 27.


In recent years, Croick has been trying to attract a more mainstream clientele. He started a website that played up the bar's hard-luck roots and featured a catchphrase he coined: "Where nobody gives a … about your name." He tried to lure the producers of the television show "Bar Rescue" to shoot a segment there, but the building's previous owners would not allow the filming.





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Why We Fight to <em>Keep</em> Registered Sex Offenders Online



Believing that human trafficking is worsened by the internet’s anonymity, the sponsors of California’s Proposition 35 thought they had a simple solution to combatting the problem: require convicted traffickers to register as sex offenders. Then require all individuals on California’s sex offender registry to disclose their online identities and service providers.


The measure passed in the November election with 81 percent voter approval. This isn’t surprising, since Prop. 35 also increases criminal penalties for trafficking, uses criminal fines to fund victim services organizations, and mandates more law-enforcement training on human trafficking. But the Electronic Frontier Foundation and the ACLU of Northern California sued, challenging the constitutionality of the reporting requirements – and this Monday, a federal court will hear arguments about whether it should continue to block the measure’s implementation.


Because in its zeal to restrict free speech online for some, Prop. 35 actually restricts free speech for all.


In a way, making the legal arguments is going to be the easy part. The harder battle is convincing the hearts and minds of those who aren’t on the California sex offender registry to understand the implications of passing such laws. Especially if people believe that the EFF and ACLU, in fighting this measure, are defending pedophiles.




Challenging Prop. 35 isn’t about defending “pedophiles” – not everyone on the registry is a pedophile, let alone a sex trafficker. More importantly, challenging Prop. 35 is really about defending free speech online.


The government needs to keep its hands off internet speech, allowing the web to remain a place where ideas and expression can flow freely. Anonymous speech is an important First Amendment right, and has always been a way to promote a robust exchange of ideas – allowing people to speak their minds freely without worry about retaliation or societal isolation.


This includes even unpopular speech by unpopular speakers.


The right to free speech is not determined by balancing the societal costs and benefits of the speech or speaker, as the Supreme Court emphasized recently. That balancing was already done long ago when our country decided the benefit of restricting the government’s ability to silence people or ideas outweighed the costs. That judgment can’t now be changed just because people don’t like some speech or speakers.


Excluding wholesale a group of people from speaking anonymously questions the judgment of having this robust freedom in the first place. No one will ever agree with every speaker or every message, so everyone must have the ability to participate in online speech.


But it’s not just organizations like EFF and ACLU who should worry about this: You should worry, too. When the government starts gathering online profiles for a large class of people, everyone needs to be concerned. As history shows, what starts as small data collection inevitably grows.


Just consider the evolution of the DNA Act: It now authorizes law enforcement to take DNA samples from anyone in the criminal justice system. When Congress first passed the law over a decade ago, it allowed DNA collection only from people convicted of violent federal crimes like murder. But over time, Congress expanded the law, allowing collection of DNA from individuals convicted of any crime – violent or not. And then Congress expanded it again to require DNA collection from any arrested individual not yet convicted of a crime. In other words: DNA collection now includes people who are still presumed innocent. States soon followed the federal government’s lead, helping to create the massive DNA repository that exists today … almost 10 million samples and growing.


It’s not just organizations like EFF and ACLU who should worry: You should, too.


It’s therefore critical to nip these speech restrictions in the bud before they expand.


Eliminating one group’s ability to speak online sets a very dangerous precedent for everyone. It’s also a serious attack on one of the most fundamental rights of our Constitution, which becomes clear when examining the legal issues of Prop. 35 more closely:


It violates the First Amendment. By eviscerating the right to speak anonymously anywhere on the web, the measure allows law enforcement to capture usernames on sites not remotely connected to criminal activity – like Yelp or Amazon.com. It also eliminates the ability to speak anonymously on newspaper comment sections or political websites. And because it applies to all registrants, and California has a lifetime registration requirement that applies retroactively, Prop. 35 even restricts the speech of individuals whose convictions were years ago. It restricts the speech of those who did not even use the internet to commit their crimes.


It is overbroad and unconstitutional. Laws that prohibit speech are required to be narrowly tailored for their policy goals. But Prop. 35 fails this test miserably because the reporting requirement captures too much speech from too many people. According to the California Attorney General’s estimate, it would affect over 74,000 people who would have to turn over all of their online identifiers, aliases, and usernames to law enforcement.


It has vague definitions. The measure doesn’t clearly specify what “internet service providers” and “internet identifiers” are. Is a registrant required to report only the ISPs they currently use, or every one used throughout his or her lifetime? Does a registrant have to turn over the access code they get at Peet’s Coffee to access free Wi-Fi? Is a registrant who operates an at-home Wi-Fi network for family members an “internet service provider?” It’s impossible to know what the reporting requirements are, yet the punishment for failing to report the information is up to three years in prison.


The government needs to keep its hands off internet speech.


Yes, anonymous speech can lead to uncomfortable and offensive comments – this is probably even more true on the web and with online speech. But that’s the cost of maintaining strong speech rights for everyone. Technology doesn’t change those rights.


Online technology might not even be where the problem lies: Studies have demonstrated that technology-facilitated crimes accounted for only 1 percent of all arrests for sex crimes against children. That same study found that only 4 percent of the people arrested for technology-facilitated crimes against minors were registered sex offenders.


Thinking of Prop. 35 in rational, logical and legal terms – not just emotional ones – leads to one inescapable conclusion: Free speech will be the only casualty in this attempt to stop human trafficking.



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Shawn Levy’s 21 Laps signs new first look deal with Fox






NEW YORK (TheWrap.com) – Fox has signed a new three-year first look deal with director/producer Shawn Levy‘s 21 Laps, the production company behind “Night at the Museum” and “The Watch,” the companies announced on Wednesday.


21 Laps is already based at Fox, having supplied the studio with several comedy titles over the past few years. While its most recent, “The Watch,” disappointed at the box office, the company has otherwise provided a steady supply of hits.






The original “Night at the Museum leads the pack with $ 570 million at the global box office, while the sequel surpassed $ 400 million.


“Shawn’s boundless energy, ambition and effortless creativity make him the perfect partner,” Emma Watts, Fox’s president of production, said in a statement. “We are lucky he continues to call Fox his home.”


21 Laps has a couple of projects due for release in 2013 – “The Internship,” starring Vince Vaughn and Owen Wilson, and “The Spectacular Now,” starring Miles Teller and Shailene Woodley.


Levy directed “The Internship,” his first job since “Real Steel,” which Disney released. That film debuts June 7.


21 Laps also has several projects in development, including a third installment of “Night at the Museum” and “Project Aloha,” which Levy plans to direct from a script by Nick Stoller. It is also at work on projects beyond Fox, such as “Story of Your Life,” a sci-fi thriller that Nic Mathieu will direct.


In signing a new deal with Fox, 21 Laps also announced a series of promotions. Billy Rosenberg moves up to the Senior Vice President level from Vice President while Dan Cohen rejoins the company from Mandeville as VP.


TV News Headlines – Yahoo! News


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Life Expectancy Rises Around World, Study Finds





A sharp decline in deaths from malnutrition and infectious diseases like measles and tuberculosis has caused a shift in global mortality patterns over the past 20 years, according to a report published on Thursday, with far more of the world’s population now living into old age and dying from diseases mostly associated with rich countries, like cancer and heart disease.







Tony Karumba/Agence France-Presse — Getty Images

Children in Nairobi, Kenya. Sub-Saharan Africa lagged in mortality gains, compared with Latin America, Asia and North Africa.






The shift reflects improvements in sanitation, medical services and access to food throughout the developing world, as well as the success of broad public health efforts like vaccine programs. The results are striking: infant mortality declined by more than half from 1990 to 2010, and malnutrition, the No. 1 risk factor for death and years of life lost in 1990, has fallen to No. 8.


At the same time, chronic diseases like cancer now account for about two out of every three deaths worldwide, up from just over half in 1990. Eight million people died of cancer in 2010, 38 percent more than in 1990. Diabetes claimed 1.3 million lives in 2010, double the number in 1990.


“The growth of these rich-country diseases, like heart disease, stroke, cancer and diabetes, is in a strange way good news,” said Ezekiel Emanuel, chairman of the department of medical ethics and health policy at the University of Pennsylvania. “It shows that many parts of the globe have largely overcome infectious and communicable diseases as a pervasive threat, and that people on average are living longer.”


In 2010, 43 percent of deaths in the world occurred at age 70 and older, compared with 33 percent of deaths in 1990, the report said. And fewer child deaths have brought up the mean age of death, which in Brazil and Paraguay jumped to 63 in 2010, up from 30 in 1970, the report said. The measure, an average of all deaths in a given year, is different from life expectancy, and is lower when large numbers of children die.


But while developing countries made big strides the United States stagnated. American women registered the smallest gains in life expectancy of all high-income countries’ female populations between 1990 and 2010. American women gained just under two years of life, compared with women in Cyprus, who lived 2.3 years longer and Canadian women who gained 2.4 years. The slow increase caused American women to fall to 36th place in the report’s global ranking of life expectancy, down from 22nd in 1990. Life expectancy for American women was 80.5 in 2010, up from 78.6 in 1990.


“It’s alarming just how little progress there has been for women in the United States,” said Christopher Murray, director of the Institute for Health Metrics and Evaluation, a health research organization financed by the Bill and Melinda Gates Foundation at the University of Washington that coordinated the report. Rising rates of obesity among American women and the legacy of smoking, a habit women formed later than men, are among the factors contributing to the stagnation, he said. American men gained in life expectancy, to 75.9 years from 71.7 in 1990.


Health experts from more than 300 institutions contributed to the report, which provided estimates of disease and mortality for populations in more than 180 countries. It was published in The Lancet, a British medical journal.


The World Health Organization issued a statement on Thursday saying that some of the estimates in the report differed substantially from those done by United Nations agencies, though others were similar. All comprehensive estimates of global mortality rely heavily on statistical modeling because only 34 countries — representing about 15 percent of the world’s population — produce quality cause-of-death data.


Sub-Saharan Africa was an exception to the trend. Infectious diseases, childhood illnesses and maternity-related causes of death still account for about 70 percent of the region’s disease burden, a measure of years of life lost due to premature death and to time lived in less than full health. In contrast, they account for just one-third in South Asia, and less than a fifth in all other regions. Sub-Saharan Africa also lagged in mortality gains, with the average age of death rising by fewer than 10 years from 1970 to 2010, compared with a more than 25-year increase in Latin America, Asia and North Africa.


Globally, AIDS was an exception to the shift of deaths from infectious to noncommunicable diseases. The epidemic is believed to have peaked, but still results in 1.5 million deaths each year.


Over all, the change means people are living longer, but it also raises troubling questions. Behavior affects people’s risks of developing cancer, heart disease and diabetes, and public health experts say it is far harder to get people to change their ways than to administer a vaccine that protects children from an infectious disease like measles.


“Adult mortality is a much harder task for the public health systems in the world,” said Colin Mathers, a senior scientist at the World Health Organization.


Tobacco use is a rising threat, especially in developing countries, and is responsible for almost six million deaths a year globally. Illnesses like diabetes are also spreading fast.


Donald G. McNeil Jr. contributed reporting.



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DealBook: Best Buy Gives Founder More Time to Make a Bid

Best Buy plans to give its founder a reprieve from holiday shopping.

The electronics retailer said on Friday that it would give its founder, Richard Schulze, until Feb. 28 to make a takeover bid for the company. That will give Mr. Schulze and his private equity partners the chance to review holiday sales before making their bid.

Best Buy cautioned that its founder may not make a bid, and that it may turn down any offer that is made.

Shares of the retailer tumbled nearly 17 percent in morning trading on Friday, to $11.75, as investors appeared worried that the chances of a successful takeover were growing remote.

Mr. Schulze remains the single biggest shareholder, with a roughly 20 percent stake, but analysts and investors have questioned whether he can line up the requisite equity and debt financing.

He has reached tentative agreements to partner with a number of leveraged buyout firms — currently including Cerberus Capital Management, Leonard Green & Partners and TPG Capital — to aid him in his campaign, a person briefed on the matter said. But any offer is unlikely to come close to the $8.8 billion that he initially floated.

The announcement comes as shares in Best Buy have fallen steadily in recent months, down 33 percent over the last three months. Even with the holiday shopping season in full swing, the retailer is expected to struggle against online competitors like Amazon.com and bigger rivals like Wal-Mart Stores.

Analysts suspect that consumer will continue to use Best Buy stores as “showrooms” to play around with products, before buying them more cheaply elsewhere. That’s despite efforts by the company’s relatively new chief executive, Hubert Joly, to entice shoppers with redesigned stores and improved customer service.

The company said last month that its same-store sales fell yet again, as it reported a $10 million loss in its third quarter.

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Fed to tie interest rate to job gains









WASHINGTON — The Federal Reserve said it will continue aggressive measures to stimulate the economy and made a major policy shift to focus more directly on boosting the job market.


Fed policymakers said they would keep interest rates at historically low levels until unemployment drops below 6.5%.


It's likely to keep the Fed's short-term interest rates at historically low levels well into 2015.





The move marked the first time that Fed policymakers have tied themselves to an explicit unemployment goal. It appeared to end the long-running debate within the central bank over how aggressively to target the nation's lagging job market.


The jobless figure was 7.7% in November, and the Fed's new forecast doesn't see that dropping below 6.5% for about three years.


The decision was made easier by the slow pace of inflation, which remains below 2% on an annual basis. Critics of the Fed's policies have argued that efforts to stimulate the economy would lead to inflation, but so far, that has not happened, and Fed Chairman Ben S. Bernanke has argued that the risk is much smaller than the dangers posed by high unemployment.


"The conditions now prevailing in the job market represent an enormous waste of human and economic potential," Bernanke said Wednesday during a news conference after the central bank's last policy meeting of the year.


Under its new policy, the Fed would let its inflation outlook rise to 2.5% before taking action to curtail it — giving the nation's employers more time to create jobs.


The move to link interest rate policies directly to the jobless rate is meant to give the public and businesses greater confidence about how long interest rates will remain exceptionally low, and that by itself could act as a kind of stimulus to the economy.


The new push got a warm welcome from both economists and Wall Street.


Economist Bernard Baumohl at the Economic Outlook Group said the previous time frame for action was "self-defeating because it provided no incentive for employers to start spending any time soon to avoid higher interest rates. It just didn't create any sense of urgency to accelerate investments or increase the rate of hiring."


The Fed has kept its federal funds rate, which influences rates for credit cards, mortgages and business and other loans, near zero since December 2008. Unemployment has been near 8% or above since early 2009.


Bernanke and his colleagues also decided Wednesday to continue the controversial large-scale bond-buying programs in the new year. Specifically, the Fed will buy $40 billion of mortgage-backed securities and $45 billion of long-term Treasury bonds a month.


The purchases are intended to drive down long-term interest rates to spur spending, investment and lending, boosting economic activity as well as hiring.


The central bank launched the purchase of mortgage-backed securities in September to give a lift especially to the housing market, which Fed policymakers said Wednesday "has shown further signs of improvement." They said they would continue to buy bonds until the job market "improved substantially."


The Fed, which has a dual mandate to maximize employment and keep inflation in check, also forecast a somewhat stronger growth for next year.


Its policy statement Wednesday noted a slowing in U.S. business investment and "significant downside risks" in the global economy, but made no mention of the so-called fiscal cliff, the automatic federal budget cuts and tax hikes scheduled to take effect beginning Jan. 1.


In a 75-minute news conference, however, Bernanke said it was clearly evident that concerns about the fiscal impasse already had hurt the economy, weakening business investments and consumer confidence.


He said that whatever the Fed did, it was not enough to offset the full effects of a U.S. economy failing to resolve fiscal issues. But he was cautiously optimistic: "I actually believe that Congress will come up with a solution, and I certainly hope they will."


For years, the Fed didn't give any indication of its future interest-rate path and only in recent years signaled what it might do by using somewhat vague language. In June 2011, the Fed said that it would keep rates exceptionally low for an "extended period." In August 2011, policymakers said no change was likely until at least mid-2013. And that date has since been extended twice, to late 2014 and then mid-2015.





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Bright Eyes: Smart Snow Goggles Measure Your Radness











Photos by Ariel Zambelich/Wired






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Britney Spears, Taylor Swift are top-earning women in music






NEW YORK (Reuters) – Pop star Britney Spears edged past Taylor Swift to claim the title of top-earning woman in music after bringing in an estimated $ 58 million from her album, endorsements and a perfume in the past year, Forbes said on Wednesday.


Country-pop singer Swift, 22, was a close second with an estimated $ 57 million paycheck thanks to her tour – which made more than $ 1 million each night – a contract with CoverGirl cosmetics, her own line of fragrances and her new album “Red.”






R&B star Rihanna, 24, earned an estimated $ 53 million to put her at No. 3, two places up from last year, followed by Lady Gaga, 26, who slipped from No. 1 in 2011 to fourth place with $ 52 million.


Katy Perry, 28, the only musician other than Michael Jackson to produce five No. 1 hit singles from one album, rounded out the top five with about $ 45 million in earnings.


“I think people love the comeback story – Britney never really finished her run as a superstar,” Steve Stoute, marketing expert and author of “The Tanning of America” told Forbes.


Spears, 31, who was No. 10 last year, earned most of her money from her latest album “Femme Fatale” and her tour, according to Forbes, which compiled the list with estimated earnings from May 2011 to May 2012.


In September, Spears became a judge on the reality TV singing show “The X Factor,” reportedly for $ 15 million.


Despite their huge incomes, only eight of the top women music earners were among the 25 best-paid musicians, which Forbes attributes in part to career breaks to have children.


Madonna made the list in ninth place with an estimated $ 30 million in earnings, which did not include profits from her latest tour because it was outside the time period considered for the ranking.


Forbes compiled the list after estimating pretax income based on record sales, touring information merchandise sales and interviews with concert promoters, lawyers and managers.


The full list can be found at http://www.forbes.com/sites/zackomalleygreenburg/2012/12/12/the-top-earning-women-in-music-2012/


(Reporting by Patricia Reaney; Editing by Nick Zieminski and Maureen Bavdek)


Music News Headlines – Yahoo! News


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Another Look at a Drink Ingredient, Brominated Vegetable Oil


James Edward Bates for The New York Times


Sarah Kavanagh, 15, of Hattiesburg, Miss., started an online petition asking PepsiCo to change Gatorade’s formula.







Sarah Kavanagh and her little brother were looking forward to the bottles of Gatorade they had put in the refrigerator after playing outdoors one hot, humid afternoon last month in Hattiesburg, Miss.




But before she took a sip, Sarah, a dedicated vegetarian, did what she often does and checked the label to make sure no animal products were in the drink. One ingredient, brominated vegetable oil, caught her eye.


“I knew it probably wasn’t from an animal because it had vegetable in the name, but I still wanted to know what it was, so I Googled it,” Ms. Kavanagh said. “A page popped up with a long list of possible side effects, including neurological disorders and altered thyroid hormones. I didn’t expect that.”


She threw the product away and started a petition on Change.org, a nonprofit Web site, that has almost 200,000 signatures. Ms. Kavanagh, 15, hopes her campaign will persuade PepsiCo, Gatorade’s maker, to consider changing the drink’s formulation.


Jeff Dahncke, a spokesman for PepsiCo, noted that brominated vegetable oil had been deemed safe for consumption by federal regulators. “As standard practice, we constantly evaluate our formulas and ingredients to ensure they comply with federal regulations and meet the high quality standards our consumers and athletes expect — from functionality to great taste,” he said in an e-mail.


In fact, about 10 percent of drinks sold in the United States contain brominated vegetable oil, including Mountain Dew, also made by PepsiCo; Powerade, Fanta Orange and Fresca from Coca-Cola; and Squirt and Sunkist Peach Soda, made by the Dr Pepper Snapple Group.


The ingredient is added often to citrus drinks to help keep the fruit flavoring evenly distributed; without it, the flavoring would separate.


Use of the substance in the United States has been debated for more than three decades, so Ms. Kavanagh’s campaign most likely is quixotic. But the European Union has long banned the substance from foods, requiring use of other ingredients. Japan recently moved to do the same.


“B.V.O. is banned other places in the world, so these companies already have a replacement for it,” Ms. Kavanagh said. “I don’t see why they don’t just make the switch.” To that, companies say the switch would be too costly.


The renewed debate, which has brought attention to the arcane world of additive regulation, comes as consumers show increasing interest in food ingredients and have new tools to learn about them. Walmart’s app, for instance, allows access to lists of ingredients in foods in its stores.


Brominated vegetable oil contains bromine, the element found in brominated flame retardants, used in things like upholstered furniture and children’s products. Research has found brominate flame retardants building up in the body and breast milk, and animal and some human studies have linked them to neurological impairment, reduced fertility, changes in thyroid hormones and puberty at an earlier age.


Limited studies of the effects of brominated vegetable oil in animals and in humans found buildups of bromine in fatty tissues. Rats that ingested large quantities of the substance in their diets developed heart lesions.


Its use in foods dates to the 1930s, well before Congress amended the Food, Drug and Cosmetic Act to add regulation of new food additives to the responsibilities of the Food and Drug Administration. But Congress exempted two groups of additives, those already sanctioned by the F.D.A. or the Department of Agriculture, or those experts deemed “generally recognized as safe.”


The second exemption created what Tom Neltner, director of the Pew Charitable Trusts’ food additives project, a three-year investigation into how food additives are regulated, calls “the loophole that swallowed the law.” A company can create a new additive, publish safety data about it on its Web site and pay a law firm or consulting firm to vet it to establish it as “generally recognized as safe” — without ever notifying the F.D.A., Mr. Neltner said.


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High Cost Leads Canada to Study Plans to Buy F-35s





Canada said Wednesday that it would reconsider plans to buy 65 F-35 fighter jets after an independent audit found that the sophisticated stealth planes would cost substantially more than the government had promised.




The decision was an unusual step back by Stephen Harper, the prime minister, who has been a strident defender of the purchase despite widespread public criticism of the price. Two cabinet ministers said an independent panel would review a variety of options, including a version of Boeing’s Super Hornet fighter as well as sticking with the F-35, made by Lockheed Martin.


“We have hit the reset button and are taking the time to do a complete assessment of all available aircraft,” Rona Ambrose, the public works minister, told reporters in Ottawa.


The announcement came after the auditor, KPMG, estimated that Canada would spend $45.8 billion to buy and operate the planes over 42 years, the expected life span.


When Peter MacKay, the defense minister, first announced Canada’s plan to buy the F-35 in 2010, he said the purchase price was $9 billion, but declined to provide operating cost estimates. The next year during an election campaign, the Conservatives put the total cost over 20 years at $16 billion.


If Canada were to back out of the project, it would be a blow to Lockheed and the Pentagon, which is counting on foreign sales to help reduce the cost of building each of the planes.


The F-35 was conceived as the Chevrolet of the sky, a radar-evading aircraft that could be built relatively cheaply and adapted to the needs of the Air Force, Navy and Marines.


But almost from the start, development of the planes and their sophisticated gear proved far more costly and difficult than anticipated.


The plane is now projected to be the most expensive weapons program in history, with the Pentagon spending $396 billion to buy 2,443 planes by the late 2030s. The United States is counting on 10 allies to buy at least 700 more.


To meet the Pentagon’s targets of $79 million to $106 million a plane, depending on the model, Lockheed needs to increase its economies of scale by spreading the costs across as many planes as possible. Canada’s hesitancy about the project could add to worries among the allies about the plane’s cost.


This year, economically troubled Italy cut its planned F-35 order by 30 percent. Britain and Australia have delayed decisions on how many F-35s to buy. And lawmakers in the Netherlands are also questioning the jet’s cost.


The Pentagon and Lockheed have stepped up their efforts to reassure those countries and persuaded two others, Israel and Japan, to sign on.


“You have to wonder when a slip becomes a slide with this program,” said Richard L. Aboulafia, an analyst with the Teal Group in Fairfax, Va. “This is not a simple question of a fighter from a new generation all by itself in the market. There is price pressure and there’s a growing cost-consciousness among all customers.”


Until recently, the ruling Conservative Party in Canada swiftly rejected any suggestion that the country not buy the F-35s. Two years ago, Mr. Harper said that critics of the acquisition were “playing politics with the lives of our men and women in uniform.”


But after the office of the Auditor General of Canada released a report in March indicating that the planes would cost much more than the $16 billion the government had indicated, Mr. Harper’s aides began edging away from the program and hired KPMG to produce the new cost estimates.


Ms. Ambrose and Mr. MacKay repeatedly used the word “reset” on Wednesday and avoided questions about what that step would mean in evaluating alternatives. The ministers and officials, however, did make it clear that no decision had been made to start a formal competition among aircraft manufacturers and acknowledged that it remained possible that Canada would stick with the F-35.


The review, Mr. MacKay said, would “ensure that a balance is maintained between the military needs and taxpayer interests.”


Canada’s concerns about the costs of the F-35s come as American officials worry that the F-35’s huge price tag could make it a target for budget cutters in Washington as well. The Pentagon has already slowed the program to fix technical problems and reduce the immediate costs.


Pentagon and Lockheed officials sought on Wednesday to play down the developments in Canada.


Lt. Col. Melinda F. Morgan, a Pentagon spokeswoman, said the KPMG cost estimate for Canada was in line with the Pentagon’s current projections for the cost of the planes.


She said that Canada’s decision to review its options seemed similar to a high-level review the Pentagon conducted in 2010 when problems were mounting with the planes. Top Pentagon officials determined then that they had no alternative that could provide the same capability.


Lockheed issued a statement noting it had worked with Canada’s armed forces for 50 years and looked forward to continuing the relationship.


The KPMG study said that if Canada wanted to stick to the original $9 billion price, it would be able to buy only 55 planes.


Possible alternatives to the F-35 include an updated version of Boeing’s F/A-18 Hornet, called the Super Hornet, and several European models. The Royal Canadian Air Force currently flies CF-18s, a version of the Hornet. While some of Canada’s jets date back about 30 years, Mr. MacKay said Wednesday that the fleet could be kept operational for at least another decade.


In the past, Mr. MacKay and others have emphasized the need for Canada’s next generation of fighters to include the radar-evading stealth technology found on the F-35. But several military analysts in Canada have noted that the country’s air force had not been actively involved in first strikes, where stealth would be most crucial. Others have questioned using the single-engine F-35 for patrols in remote Arctic regions, a primary mission for Canada’s military.


Separately on Wednesday, the government also reduced its estimate of business that Canadian companies were likely to win from F-35 contracts to $9.8 billion from $12 billion.


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