Emanuel explores Midway privatization

Mayor Rahm Emanuel's administration will explore the possibility of privatizing Midway Airport but will take a shorter-term, more tightly controlled approach than was employed by former Mayor Richard Daley's team on the city's first go-round.

Chicago's last try, a 99-year lease that would have brought in $2.5 billion, died in 2009 when the financial markets froze up.

The city's latest intentions are expected to be formally announced Friday, ahead of a Dec. 31 deadline for deciding whether to retain a slot for Midway in the Federal Aviation Administration's airport privatization pilot program. The city put off this decision several times previously.

The move, preliminary as it is, is sure to be politically charged, given the anger over the way Daley's 75-year parking meter privatization deal has played out, with proceeds used to plug operating deficits and meter rates rising sharply.

With that historical backdrop, Emanuel is suggesting a more conservative approach. It includes a shorter-term lease of less than 40 years; a "travelers' bill of rights" aimed at ensuring any changes will benefit passengers; and a continuing stream of revenue for the city, giving it a shot to capture some growth.

And unlike the parking meter and Chicago Skyway lease deals, a new Midway transaction would not allow proceeds to be used to plug operating deficits or to pay for operations in any way, Emanuel said in an interview Thursday.

"I will not let the city use it as a crutch to not make the tough decisions on the budget," he said.

But while a shorter lease and greater city control may play well locally, those sorts of terms may not appeal to investors, experts said in interviews this month.

"The shorter the lease term, the lower the bid prices are going to be — that's just the math," said Steve Steckler, chairman of the Infrastructure Management Group, a Bethesda, Md.-based company that advises infrastructure owners and operators. "I'd be shocked if investors offered more than $2 billion for a 40-year lease," Steckler said.

Emanuel said: "Nobody knows until you talk to people. … I'm the mayor and I'm not agreeing to … 99 years. I'm saying it's either 40 years or less." His office has not offered an estimate of what such a deal could bring in, saying it would be premature.

"No final decisions have been made, but we can't make a decision until we evaluate fully if this could be a win for Chicagoans," Emanuel said.

A private operator would take over management of such revenue-producing activities as food, beverage and car rental concessions and parking lots. The FAA would continue to provide air traffic control, while the Transportation Security Administration would continue to provide security operations. The city would retain ownership.

Few details were provided about how privatization would affect travelers and Midway employees. Emanuel said specifics will emerge over time.

By year's end, the city will send the FAA a preliminary application, a timetable and a draft "request for qualification," a document the city will put out early next year to identify qualified bidders for the project. A review of the potential bidders will be conducted in the spring.

Last year, Emanuel expressed hesitation in pursuing a private lease for Midway unless a careful vetting process was in place, saying taxpayers were correct to be wary, given the city's history.

The evaluation process will be deliberate and open to public view, he said Thursday.

He pledged to create a committee of business, labor and civic leaders that will provide updates to the public on a regular basis and that will select an independent adviser to vet the transaction. The committee will deliver a report to the City Council, and there will be a 30-day review period before any vote.

"I set up a different process and a different set of principles that stand in stark contrast to what was discussed or done in the past," Emanuel said.

The FAA pilot program frees cities from regulations that require airport revenue to be used for airport purposes. It allows money to be withdrawn for other uses.

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Meteorologist: 'Stronger winds trumps the snow'

The first winter storm of the season is moving in fast and has hit the north and western suburbs with a fury as downed power lines were reported in McHenry County. 

Around 5 p.m., ComEd officials said more than 24,000 people were without power, most of those in the western Illinois region, like Rockford , Freeport and Dixon. At 5:35 p.m., less than an inch of snow was on the ground in Elburn.

A spokeswoman with ComEd said a few customers from Woodstock were powerless, but there weren’t any “significant” outages in that area.

Snow first hit Chicago around 5:30 p.m., when O’Hare airport reported seeing flurries, according to the National Weather Service. The snow will continue on throughout the evening, with a possible uptick around 9 p.m. or 10 p.m., meteorologists said.

Also, 30 to 40 mph winds have been reported with gusts as high as nearly 60 mph, said Ed Fenelon, a meteorologist with the National Weather Service.

“That trend is going to be continuing and some of the stronger winds will work their way“ to Chicago, Fenelon said. “That probably really trumps the snow as far as what kind of impact you can have.”

Hundreds of flights were canceled at O'Hare and Midway airports on the eve of the busiest travel day of the holiday season. Southwest Airlines scratched all of its flights scheduled after 4:30 p.m. today at Midway. People are being warned to stay off highways because high winds could whip up near blizzard conditions.

Delays at O’Hare were averaging 30 to 90 minutes, according to the FAA. Midway-bound flight delays were about 15 minutes or less.

At 6 p.m., a few crashes had been reported on roadways including I-290 at St. Charles Road and the inbound Edens Expressway at Tower Road.

The heaviest snow is expected to fall from 5 p.m. to 9 p.m. Three to 7 inches is expected in the far northwest suburbs, 2 to 4 inches in Chicago and 1 to 3 inches in the south and southwest suburbs.

The weather service says the winds will be the real problem. "We may not get a whole lot of snow but the potential for snowing, drifting and poor visibility is very high," weather service meteorologist Mark Ratzer said.

In its storm warning, the weather service said the greatest chance of near white-out conditions is near the shoreline in Lake and Porter counties in Indiana. The storm warning is in effect for those areas until 3 a.m. Friday.

In western Illinois and Wisconsin, a blizzard warning is in effect with as much as a foot of snow forecast. Snow could fall 1 to 2 inches an hour around Rockford, the weather service said.

To the south, a high wind advisory has been issued for Kankakee County.

The storm ends a record stretch of 290 days without snow in the Chicago area. This will also be the latest the city has seen its first measurable snowfall.

"It's going to be a shock to the system," said weather service meteorologist Ed Fenelon. "It's coming in with a bang."

ComEd said it was bracing for power outages due to the weather. The company said it was preparing additional crews and equipment and asking for help from other utilities to respond quickly to outages.

ComEd Vice President Terence Donnelly said the storm was “expected to be especially damaging” to the company's power system because of the combination of wind, snow and ice.

The Illinois Toll Highway Authority urged motorists to stay off the highways.

"This weather event is expected to impact most of the tollway system – from Rockford to Chicago – resulting in rapidly deteriorating driving conditions across the entire region,” tollway executive director Kristi Lafleur.  “We urge everyone to stay off the roads this afternoon and evening, if possible, but if you must drive, slow down and allow plenty of extra time for the commute home.”

Illinois Transportation Secretary Ann Schneider also said that “motorists should think twice before venturing onto roadways” Thursday night and urged drivers and their passengers “to buckle up, slow down and allow plenty of extra time to reach your destination. And, please don’t crowd the snow plows.”

IDOT was mobilizing more than 550 snow plows responsible for roads in northern Illinois while the Illinois Tollway was preparing its full fleet of 182 snow plows to try and clear the 286-mile network of toll roads in 12 counties in northern Illinois.

If conditions become extreme, the Illinois State Police is urging drivers involved in minor accidents where no one is injured to exchange insurance and driver information.

The agencies also provide multiple ways to receive updates electronically. Non-tollroad information can be found at www.gettingaroundillinois.com. Real time conditions on tollroads are available at www.illinoistollway.com. Drivers also can sign up for Tollway Tweets at the website or at www.twitter.com.

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RIM loses BlackBerry subscribers for first time

TORONTO (AP) — Research In Motion‘s stock plunged in after-hours trading Thursday after the BlackBerry maker said it plans to change the way it charges fees.

RIM also announced that it lost subscribers for the first time in the latest quarter, as the global number of BlackBerry users dipped to 79 million.

In a rare positive sign, the Canadian company added to its cash position during the quarter as it prepared to launch new smartphones on Jan. 30. The new devices are deemed critical to the company’s survival.

RIM’s stock initially jumped more than 8 percent in after-hours trading on that news, but then fell $ 1.48, or 10.4 percent, to $ 12.65 after RIM said on a conference call that it won’t generate as much revenue from telecommunications carriers once it releases the new BlackBerry 10 platform.

RIM is changing the way it charges service fees, putting an important source of revenue at risk. RIM CEO Thorsten Heins said only subscribers who want enhanced security will pay fees under the new system.

“Other subscribers who do not utilize such services are expected to generate less or no service revenue,” Heins said. “The mix in level of service fees revenue will change going forward and will be under pressure over the next year during this transition.”

RIM’s stock had been on a three-month rally that has seen the stock more than double from its lowest level since 2003.

But Mike Walkley, an analyst with Canaccord Genuity, said BlackBerry 10 will change RIM’s services revenue model dramatically. He said that instead of getting about $ 6 per device each month from carriers and users RIM could get as little as zero.

“That’s what turned the stock from being up 10 percent to being down 10 percent,” Walkley said. “That’s been part of our worry. How do they come back with a new platform and get carriers to continue to share the higher revenue —which sounds like they are not going to— and then subsidize the phone to make it affordable for consumers and enterprises.”

“People are seeing that the services revenue has a lot of risk to it now with the BlackBerry 10 migration.”

Three months ago, RIM had 80 million subscribers. Analysts said the loss of 1 million subscribers was expected. Once coveted symbols of an always-connected lifestyle, BlackBerry phones have lost their luster to Apple’s iPhone and phones that run on Google’s Android software.

RIM is banking its future on its much-delayed BlackBerry 10 platform, which is meant to offer the multimedia, Internet browsing and apps experience that customers now demand.

“We believe the company has stabilized and will turn the corner in the next year,” Heins said. He noted that the company’s cash holdings grew by $ 600 million in the quarter to $ 2.9 billion, even after the funding of all its restructuring costs. RIM previously announced 5,000 layoffs this year.

Heins said subscribers in North America showed the largest decline, but said there is growth overseas.

Colin Gillis, an analyst with BGC Financial, said before the conference call that the company bought itself more time.

“It doesn’t mean (BlackBerry) 10 will gain traction. A lot of people said 10 would be DOA, but I don’t think that’s going to be the case,” he said.

Jefferies analyst Peter Misek also earlier called the results better than expected, noting that RIM added a significant amount of cash. RIM will need the money to advertise the new BlackBerrys and operating system.

Misek also called it a positive development that RIM said there would not be another delay to BlackBerry 10.

“The success or failure of this company will be on BlackBerry 10,” Misek said.

RIM posted net income of $ 14 million, or 3 cents per share for its fiscal third quarter, which ended Dec. 1. That compares with a profit of $ 265 million, or 51 cents per share, in the same quarter a year ago.

The latest figure includes a favorable tax settlement. Excluding that adjustment, RIM lost 22 cents per share. Analysts polled by FactSet were expecting a wider loss of 27 cents.

RIM reported revenue of $ 2.7 billion, down 47 percent from a year ago.

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Twitter post offers clue to The Civil Wars’ future

NASHVILLE, Tenn. (AP) — While there still remain questions about the future of The Civil Wars, there’s new music on the way.

Joy Williams, one half of the Grammy Award-winning duo with John Paul White, said Thursday during a Twitter chat that she was in the studio listening to new Civil Wars songs.

It’s a tantalizing clue to the future of the group, which appeared in doubt when a European tour unraveled last month due to “irreconcilable differences.”

At the time, the duo said it hoped to release an album in 2013. It’s not clear if Williams was referring Thursday to music for a new album or for a documentary score they have composed with T Bone Burnett. They’re also set to release an “Unplugged” session on iTunes on Jan. 15.

Nate Yetton, the group’s manager and Williams’ husband, had no comment — though he has supplied a few hints of his own by posting pictures of recording sessions on his Instagram account recently. The duo announced last summer it would be working with Charlie Peacock, who produced its gold-selling debut “Barton Hollow.” The photos do not show Williams or White, but one includes violin player Odessa Rose.

Rose says in an Instagram post: “Playing on the new Civil Wars record… Beautiful sounds.”

Even with its future in doubt, the duo continues to gather accolades. Williams and White are up for a Golden Globe on Jan. 13, and two Grammy Awards on Feb. 10, for their “The Hunger Games” soundtrack collaboration “Safe & Sound” with Taylor Swift.

Williams’ comments came during an installment of an artist interview series with Alison Sudol of A Fine Frenzy sponsored by The Recording Academy.

___

Online:

http://thecivilwars.com

___

Follow AP Music Writer Chris Talbott: http://twitter.com/Chris_Talbott.

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Op-Ed Contributor: Labs, Washed Away

BEDPAN ALLEY is the affectionate name given to a stretch of First Avenue in Manhattan that is packed with more hospitals than many cities possess. This stretch also happened to be right in the flood zone during Hurricane Sandy. Water damage and power failures closed down all three of the New York University teaching hospitals — Bellevue Hospital, Tisch Hospital and the Manhattan V.A. Two months later, they are still not admitting patients, though two are on schedule to begin doing so shortly.

The harrowing evacuation of hundreds of patients made headlines nationwide. The disruption of regular medical care for tens of thousands of outpatients was a clinical nightmare that is finally easing. And the education of hundreds of medical students and residents is being patched back together.

All academic medical centers, however, rest on a tripod — patient care, education and research. The effect of the hurricane on the third leg of that tripod — research — has gotten the least attention, partly because rescuing cell cultures just isn’t as dramatic as carrying an I.C.U. patient on a ventilator down flights of stairs in the dark.

But, of course, there is an incontrovertible link between those cell cultures and that patient. For every medication that a patient takes, someone researched the basic chemistry of the drug, someone designed the clinical trial to test its efficacy, and of course a volunteer stepped forward to be the first to take the pill. Scientific research has engineered the impressive advancements of medical treatment, and every patient is a beneficiary.

When the hospitals were hit by Hurricane Sandy, hundreds of experiments were obliterated by the loss of power. Precious biological samples carefully frozen over years were destroyed. Temperature-sensitive reagents and equipment were ruined. Medications and records for patients in clinical trials were rendered inaccessible. And sadly, many laboratory mice and rats perished (though 600 cages of animals were rescued during the night by staff members who used crowbars on inaccessible doors and carried the cages out through holes cut in the ceiling).

On a slushy, rainy day earlier this month, I sat in on a meeting of N.Y.U.’s research community. Hundreds of scientists packed the chilly lecture hall to discuss what the future might hold. It was clear that the damage to laboratories and samples would not be amenable to easy repair. Some 400 researchers were being relocated to a patchwork of temporary sites so that they could restart their work.

But scientists can’t just walk in to a new space with a lab coat and a notebook; they need centrifuges, deep-freezes, lab animals, electron microscopes, incubators, autoclaves, gamma counters, PET scanners. They come with graduate students, lab techs, post-docs and collaborating investigators. For clinical researchers, there are also the patients enrolled in their clinical trials, with their medications and voluminous records.

Even beyond their eagerness to get back to work, researchers felt a sense of loss, not just in time, money, momentum, samples and grants, but of a part of their lives. Some senior scientists lost decades of archived samples. Others lost irreplaceable mice with genetic mutations for studying how coronary plaques resolve, the role of inflammation in lymphoma and the development of neural networks. At the other end of the spectrum were post-docs whose nascent careers were suddenly up in the air. Some were in tears.

Walking down First Avenue after the meeting, I passed a young researcher pushing a cart laden with cages, transporting lab rats to their new home. There was a blanket over the cages to protect them from the rain, but it kept slipping. She slogged up the wet avenue, one hand pushing the cart, the other struggling to keep the cover over her charges.

The logistical efforts to relocate and reignite such a vast research enterprise are staggeringly complicated. But the administration has cataloged each person’s research needs to match them with available space elsewhere, and hundreds of researchers have successfully rekindled their investigations despite the prodigious challenges.

Bellevue and Tisch are returning to their clinical operations and will be able to admit patients shortly. But even after the hospital wards and clinics are bustling at full capacity, the ribbon won’t feel ready to snip until the researchers are restored to their homes as well. For many patients, the thrum of research within a medical center is invisible. But it is an integral — and very human — part of a hospital. When a hurricane disrupts research, it is a loss that resonates well beyond the laboratories.

Danielle Ofri, an associate professor at New York University School of Medicine, is the editor of the Bellevue Literary Review and the author, most recently, of “Medicine in Translation: Journeys With My Patients.”

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Feds call for new safety review of airport scanners

Responding to critics, the Department of Homeland Security is launching another safety study of full-body scanners used to screen passengers at the nation's airports.

The Department of Homeland Security, which oversees the Transportation Security Administration, plans to award a contract to the National Academy of Sciences to perform the review.

But the nonprofit group of scientists will only be asked to review previous studies on the safety of a particular type of scanner used by the TSA.

The study comes in response to pressure from TSA critics, including Sen. Susan Collins (R-Maine), who introduced a bill this year to test the safety of the scanners.

[Updated, 3:35 p.m. Dec. 20: In a statement, Collins said she welcomes the new review.

"While TSA has told the public that the amount of radiation emitted from these machines is small, passengers and some scientific experts have raised questions about the impact of repeated exposure to this radiation," she said.] 

In an interview, TSA Administrator John Pistole said several previous studies have already shown the scanners do not expose passengers to dangerous levels of radiation, even for frequent travelers.

But he said he welcomes another study to address the concerns of members of Congress. "After all, they fund us," he said of the Senate and House.

The TSA uses two types of full-body scanners, both of which help the agency look for objects hidden under the clothes of passengers. About half of those scanners expose passengers to X-rays to see through their clothes, with the rest using non-ionizing radio frequency energy, known as millimeter waves.

The scanners that use X-rays, or backscatter technology, have received the most criticism from passenger advocates and scientists, including professors from UC San Francisco. The European Union last year banned the use of backscatter scanners at European airports over health concerns.

The Department of Homeland Security posted an advisory last week, saying it was awarding the National Academy of Science a contract to convene a committee to review whether exposure to backscatter scanners complies with health standards. The academy also is asked to determine whether the design of the machines and the procedures used by TSA staff prevent overexposure of radiation to travelers and the workers.

The proposal does not say when the academy should complete its review.

ALSO:

How new TSA body scans will work

TSA scanners pose negligible risk to passengers, new test shows

LAX's controversial full-body scanners out; new, faster scanners in

Follow Hugo Martin on Twitter at @hugomartin

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Unions offer to pay more on pensions if state adds new taxes

A coalition of public employee unions Wednesday blasted legislation to address the state's underfunded worker pension systems and offered instead to make increased contributions — if the state guarantees its share of retirement payments and raises $2 billion by ending corporate tax benefits and imposing new taxes.

Appearing at the James R. Thompson Center, members of the We Are One Illinois coalition said plans backed by Gov. Pat Quinn and another proposal supported by a bipartisan group of lawmakers would violate the state constitution by reducing pension benefits guaranteed to workers. They predicted such a change would be overturned by the courts.

The unions said the primary problem is the state's failure to regularly fund its annual required contribution. The offer to require state workers and teachers to pay 2 percent more toward their retirement was conditional upon getting an "ironclad guarantee" in state law that government would fund its share of pension obligations as workers have done over the years.

To help fund those obligations, the unions proposed eliminating several corporate tax benefits as well as imposing new taxes on auto trade-ins, satellite TV service and downloaded digital entertainment. The new money also could be used to help offset cuts in other public social services, the group said.

But even with a new General Assembly soon to be sworn in, the prospect of closing so-called corporate tax loopholes — many of which have been on the books for decades — as well as imposing new taxes remains politically unpopular.

The proposal was the first comprehensive offer on the pension crisis from the union coalition, which includes the state's two major teacher organizations and the American Federation of State, County and Municipal Employees. The unions also called for a summit with Quinn and legislative leaders when the new General Assembly convenes Jan. 9. Quinn has asked that lame-duck lawmakers consider pension legislation in the days before new lawmakers are sworn in.

Kathy Griffin, vice president of the Illinois Education Association, said teachers and the vast majority of workers covered by the state's pension plans are not eligible for and do not receive Social Security, meaning their state pensions represent their retirement income.

"Illinois' pension problem is a revenue problem, and it is crucial that we have a revenue solution," she said.

At an appearance in Cicero, Quinn said he has made the state's full share of pension payments as chief executive, unlike previous governors. But the Democratic governor, who has received sharp criticism from traditional Democratic allies in organized labor, stopped short of backing a guaranteed pension payment.

"We want to work with the labor unions and the employee groups as far as we can, but ultimately the taxpayers come first, and that's what we have to do," Quinn said.

Illinois has the nation's most troubled state public employee pension system, with an unfunded liability of $95 billion.

Quinn has tried to bring public attention to the problem, notably through an online video featuring Squeezy the Pension Python, to demonstrate how the growing amount of tax dollars devoted to pensions threatens to overwhelm funding for education and other services.

The governor has backed a Senate-passed proposal that would require state workers to forgo an automatic compounded 3 percent cost of living increase in their pensions in exchange for accessing state-subsidized health care. Those keeping the cost-of-living increase would lose access to state health care in retirement. In addition, their pension benefits would be capped at their current salary level even if their paychecks went up.

Union officials said Quinn's plan was a "no-win" choice for workers who would see a significant loss of purchasing power as they grew older in their retirement years.

A more recent plan offered by a bipartisan group of lawmakers is also problematic, the unions said, including its cuts in cost-of-living increases and increased retirement ages.

Both bills would be subject to lengthy and costly lawsuits "and we think ultimately the courts will find it unconstitutional, which means all the work that they're putting into those bills will have been for naught," said Henry Bayer, executive director of AFSCME Council 31.

The unions said their offer of increased employee contributions of 2 percent of income would generate about $350 million a year toward pensions, or about $10 billion if amortized over 30 years.

At the same time, the unions proposed the end to more than $1.5 billion worth of tax exemptions. They include repealing recent tax breaks for CME Group Inc. and the Chicago Board Options Exchange, a tax break for for-profit hospitals, lowering the size of estates subject to taxes and curbing spending on economic development incentives for business.

The group also proposed a 5 percent tax on satellite TV service; requiring sales tax to be paid on the entire price of a new car rather than just the remaining balance after trade-in; and imposing the sales tax on e-books, movies, music and games digitally downloaded to smartphones and other electronic devices.

The new-car sales tax would raise an estimated $300 million, the group said; it pegged revenue estimates for the satellite tax at $75 million and the digital tax at $10 million. Quinn already has suggested the new-car sales tax as a way to plug a $300 million hole in repaying bonds used to fund public works projects.

rap30@aol.com mcgarcia@tribune.com

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Leah Remini sued by former managers over “Family Tools” commissions

LOS ANGELES (TheWrap.com) – Leah Remini‘s new TV gig is already giving her a headache, months before it even starts. Former “King of Queens” star Remini is being sued by her former managers, the Collective Management Group, which claims that it’s owed $ 67,000 in commissions relating to her upcoming ABC comedy “Family Tools,” which debuts May 1.

In a complaint filed with Los Angeles Superior Court on Tuesday, the Collective says that it entered into an agreement with the actress in November 2011 that guaranteed the company 10 percent of the earnings that emerged from projects that Remini “discussed, negotiated, contemplated, or procured/booked during Plaintiff’s representation of Remini,” regardless of whether the income was earned after she and the Collective parted ways.

According to the lawsuit, that would include the $ 1 million that it says Remini will earn for the first season of “Family Tools.” (The suit allows that it isn’t owed commission on a $ 330,000 talent holding fee that Remini received from ABC prior to officially being booked on the show.)

Remini, pictured above wearing the self-satisfied smirk of someone who just might stiff her former managers out of their commission, terminated her agreement with the Collective “without warning or justification” in October, the suit says.

Alleging breach of oral contract among other charges, the suit is asking for an order stipulating that it’s owed the $ 67,000, plus unspecified damages, interest and court costs.

Remini’s agent has not yet responded to TheWrap’s request for comment.

(Pamela Chelin contributed to this report)

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Amgen Workers Helped U.S. in Aranesp Marketing Inquiry

“I hope no one is taping this,” the Amgen manager remarked at a company sales meeting in 2005.

The manager then boasted of how she had given a $10,000 unrestricted grant to a pet project of a doctor who was an adviser to the local Medicare contractor. In turn, she said, the doctor would help persuade the contractor to provide reimbursement for an unapproved use of Amgen’s anemia drug, Aranesp.

Someone, it turned out, was taping it. Jill Osiecki, a longtime sales representative at Amgen, was wearing a recording device under her clothes, transmitting the proceedings to agents of the Department of Health and Human Services.

The result of Ms. Osiecki’s undercover work, and information provided by other whistle-blowers, led to Amgen’s agreement this week to pay $762 million to settle federal investigations regarding the marketing of some of its top-selling drugs.

Judge Sterling Johnson Jr. of Federal District Court in Brooklyn accepted the settlement on Wednesday, clearing the way for 10 whistle-blower lawsuits to be unsealed.

Amgen, the world’s largest biotechnology company, will pay $150 million in criminal penalties after pleading guilty to one misdemeanor count of marketing Aranesp for unapproved uses and in unapproved doses.

The rest of the money — $612 million — will go to settle civil false claims lawsuits filed by the federal government, states and whistle-blowers. These contain accusations that go well beyond the off-label marketing of Aranesp.

They include off-label marketing of other drugs like Enbrel for psoriasis and Neulasta, which increases the levels of white blood cells. Amgen is also accused of offering kickbacks to doctors and clinics to induce them to use its drugs. These reportedly came as cash, rebates, free samples, educational and research grants, dinners and travel, and other inducements. The government also accused the company of knowingly misreporting the prices of some of its drugs.

Except for those in the criminal count, Amgen denied the other accusations, though it did issue a statement on Wednesday acknowledging the settlement.

“The government raised important concerns in the criminal prosecution,” Cynthia M. Patton, chief compliance officer at Amgen, said in the statement. “Amgen acknowledges that mistakes were made, and we did not live up to our standards.”

Ms. Osiecki, 52, was one of the main whistle-blowers and will be entitled to a share of the settlement. The amount each whistle-blower will receive has not been determined or is being kept confidential, their lawyers said.

Ms. Osiecki worked as a sales representative for Merck for nine years before joining Amgen in 1990, soon after the biotechnology company won regulatory approval for its first product. The company, based outside Los Angeles, had “good science, good products, strong ethics,” Ms. Osiecki said in an interview.

But, she said, the corporate culture changed starting around 2000. That was when new management came in and Aranesp was approved, setting up a fierce marketing battle with Johnson & Johnson and its rival anemia drug, Procrit.

“It was more important to make your numbers than to follow the rules,” said Ms. Osiecki, who was based in Milwaukee and sold Aranesp.

In August 2004, with her concerns mounting, Ms. Osiecki called the Office of Inspector General of the Department of Health and Human Services and left a message. Within days, she was called back, and she went to see an agent, who persuaded her to secretly record meetings. She did that 13 times over about 15 months, mainly sales meetings.

Aranesp is used mainly in a hospital, clinic or physician’s office. It is bought by the medical practice, which can make a profit if the patient and insurers pay more for the use of the drug than the practice paid.

Ms. Osiecki said Amgen “marketed the spread,” trying to make it more profitable for doctors to use Aranesp rather than Procrit.

Such financial inducements could also spur greater overall use of a drug and can violate anti-kickback laws, said Ms. Osiecki’s lawyer, Brian P. Kenney of Kenney & McCafferty in Blue Bell, Pa.

Ms. Osiecki said the first sales meeting at which she wore the recording device, wrapped around her midriff under baggy clothes, was in October 2004 in a Milwaukee hotel. She could look down from the meeting room and see the car parked across the street containing the agent with the receiving device. She said she was not particularly nervous.

The speaker was a pharmacist from an oncology practice going through the numbers on how his practice could make a million dollars more a year using Aranesp rather than Procrit.

Ms. Osiecki said Amgen was careful to cover up such marketing. Spreadsheets showing doctors how much more money they could make using Aranesp were “homemade bread,” meaning they were created by each sales representative, not by the company. And representatives were told not to leave the presentations behind after showing them to doctors.

Her 107-page complaint, filed in late 2004, contains many other accusations.

Other whistle-blowers made other accusations. Kassie Westmoreland, a former sales representative, said Amgen overfilled vials of Aranesp, essentially providing free drugs to doctors. They could then bill Medicare or private insurers for the use of that drug, making an extra profit.

“Amgen was offering a kickback in the form of extra product subsidized by the taxpayers,” said Robert M. Thomas Jr., one of Ms. Westmoreland’s lawyers.

Elena Ferrante and Marc Engelman, both former sales representatives, contended that Amgen promoted Enbrel’s off-label use for mild psoriasis when the drug was approved only for moderate or severe cases of the disease.

Lydia Cotz, one of their lawyers, said the two refused to go along with the off-label marketing. They are now pursuing wrongful termination claims against Amgen in arbitration proceedings that Amgen requires be kept confidential, she said.

“It’s been a very long heroic journey for my clients,” she said.

Ms. Osiecki is now also a former Amgen sales representative. She said that she was fired in December 2005 after she let slip that she had retained a company voice mail message that she thought provided evidence of illegal activity. Leaving the pharmaceutical industry, she moved to Amelia Island, Fla. She now works for a small business.

Mosi Secret and Barry Meier contributed reporting.

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Boehner: Blame tax hikes on Obama

US Speaker of the House John Boehner speaks on the "fiscal cliff" during press conference Wednesday. (Reuters / December 19, 2012)

Reuters

1:37 p.m. CST, December 19, 2012

President Barack Obama will be responsible for taxes rising on Americans if he does not "get serious" about a balanced deficit reduction plan or demand Senate passage of a Republican bill to prevent tax increases on all income below $1 million, House Speaker John Boehner charged on Wednesday.

"Tomorrow the House will pass legislation to make permanent tax relief for nearly every American," Boehner said in a short on-camera statement.

"Then the president will have a decision to make. He can call on the Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in American history."

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