Apr 15, 2011

Philadelphia Orchestra May Declare Bankruptcy
Steve Legato for The New York Times

The Philadelphia Orchestra at a concert, after having handed out leaflets opposing a bankruptcy filing.
By DANIEL J. WAKIN
Published: April 15, 2011

* Recommend
* Twitter
* Sign In to E-Mail
* Print
*
Reprints
* ShareClose
o Linkedin
o Digg
o Mixx
o MySpace
o Permalink
o

Painting a dire financial picture, leaders of the troubled Philadelphia Orchestra said on Friday that bankruptcy protection was vital to its survival.
Related

*
More Shake-Ups at the Ailing Philadelphia Orchestra (February 19, 2010)
*
Philadelphia Orchestra’s Ticket Sales Add to Woes (February 10, 2010)
*
Times Topic: Philadelphia Orchestra

Blog
ArtsBeat

The latest on the arts, coverage of live events, critical reviews, multimedia extravaganzas and much more. Join the discussion.

* More Arts News

Enlarge This Image
Steve Legato for The New York Times

The violinist Louis Lanza distributing the leaflets.

The orchestra’s board was to vote on Saturday whether to seek protection under Chapter 11 of the bankruptcy code. Officials said concerts would not be affected.

While orchestras have filed for bankruptcy before, either to reorganize or to dissolve, the Philadelphia Orchestra would be the most prominent in recent memory to do so, and such a move would be a striking sign of the difficulties symphonies and opera companies are facing these days. The decision comes as the players and management have been locked in difficult contract negotiations.

“It gives us a better chance of raising the investment funds that are needed to revitalize this orchestra over the next five years,” Richard Worley, the board chairman, said of a Chapter 11 filing. “We need a fresh start. We need to escape contractual entanglements that we cannot possibly afford.”

The largest such entanglement, he said, was the cost of musician pensions, which amount to a total of around $46 million, a figure that the players dispute, saying the amount is only about $8 million.

Orchestra officials said they were basically out of cash. Joseph Bondi, a financial consultant advising the management, said the orchestra could meet its bills for only about two more months. Mr. Bondi and the officials spoke in a joint telephone interview.

A Chapter 11 filing would also presumably buy time with other business partners, including the orchestra’s landlord, the Kimmel Center. “It gives the company the opportunity to review all of its contracts,” Mr. Bondi said.

According to figures provided by the orchestra, ticket sales and other revenue are expected to bring in $14.1 million this season. Annual fund-raising, gala proceeds and endowment income will bring in $18.9 million. The $33 million total compares with what the orchestra said was $46 million needed to run the orchestra. Even with additional, emergency fund-raising, the deficit is expected to be $5 million.

A bankruptcy filing is “protection at a time when our cash is running very low, and it’s a path for us to get to our five-year plan,” said Allison Vulgamore, the orchestra’s president and chief executive. The plan envisions raising another $100 million for the endowment, which now stands at $140 million, and $60 million in operating money to invest in the orchestra’s artistic plans, she said. Deficits would continue but diminish.

John Koen, a cellist in the orchestra and the head of the players’ union, condemned the bankruptcy filing.

“The musicians are extremely opposed to this because it’s unnecessary and it would be damaging to the institution,” Mr. Koen said. “It’s absolutely the wrong decision.”

In a tactic previously used by other musicians in labor disputes, the Philadelphia players briefly left the stage before their concert on Thursday night and passed out leaflets to the audience calling on people to oppose a bankruptcy filing. The leaflets said such a filing would make it hard to attract “the best new players” and hurt the orchestra’s ability to raise money.

The musicians and orchestra executives have been negotiating to reach a new contract with the help of a mediator since the old pact expired last season. Terms — including salaries — have been frozen since 2008. The players gave up raises in an effort to help, and managers have taken pay cuts. The staff has also been reduced.

The orchestra has long been in severe financial difficulties. Mr. Koen blamed high rent at the Kimmel Center and the diversion of revenues from shows at the Academy of Music, its old stage, partly for the problems. Money taken in from presentations there goes to the Kimmel under the orchestra’s arrangement with the hall, Mr. Koen said.

Part of the orchestra’s woes stem from a leadership vacuum several years ago when it lacked a permanent board chairman, chief executive and music director. (The French-Canadian Yannick Nézet-Séguin will become music director in September 2012.) Mr. Koen also faulted what he called two decades of bad management, especially a “failure to market the orchestra appropriately and hire quality people for development.”

The troubled economy has taken its toll on orchestras. The Detroit Symphony just finished a bruising six-month strike that ended with large pay cuts. The Louisville Symphony filed for bankruptcy reorganization last year, and the symphonies of Honolulu and Syracuse went out of business in recent months, although a group of backers is trying to reconstitute the orchestra in Honolulu.
A version of this article appeared in print on April 16, 2011, on page C1 of the New York edition.
Keep Your Thumbs Still When I’m Talking to You
Tony Cenicola/The New York Times
By DAVID CARR
Published: April 15, 2011

* Recommend
* Twitter
* comments (24)
* Sign In to E-Mail
* Print
* Single Page
*
Reprints
* ShareClose
o Linkedin
o Digg
o Mixx
o MySpace
o Permalink
o

YOU are at a party and the person in front of you is not really listening to you. Yes, she is murmuring occasional assent to your remarks, or nodding at appropriate junctures, but for the most part she is looking beyond you, scanning in search of something or someone more compelling.
Related

*
A Guide to Smartphone Manners (April 17, 2011)

Enlarge This Image
Craig Hattori/IRL Productions

Rachel Sklar, an advisor to the social media start-up Hashable, takes her iPad to a hot tub.
Readers' Comments

Share your thoughts.

* Post a Comment »
* Read All Comments (24) »

Here’s the funny part: If she is looking over your shoulder at a room full of potentially more interesting people, she is ill-mannered. If, however, she is not looking over your shoulder, but into a smartphone in her hand, she is not only well within modern social norms, but is also a wired, well-put-together person.

Add one more achievement to the digital revolution: It has made it fashionable to be rude.

I thought about that a lot at South by Southwest Interactive, the annual campfire of the digitally interested held in Austin, Tex., the second week of March; inside, conference rooms brimmed with wireless connections, and the people on the dais competed with a screen in almost every seat: laptops, or even more commonly, tablets. In that context, the live presentation that the people in the audience had ostensibly come many miles to see was merely companion media.

But even more remarkably, once the badge-decorated horde spilled into the halls or went to the hundreds of parties that mark the ritual, almost everyone walked or talked with one eye, or both, on a little screen. We were adjacent but essentially alone, texting and talking our way through what should have been a great chance to engage flesh-and-blood human beings. The wait in line for panels, badges or food became one more chance to check in digitally instead of an opportunity to meet someone you didn’t know.

I moderated a panel there called “I’m So Productive, I Never Get Anything Done,” which was ostensibly about how answering e-mail and looking after various avatars on Facebook, Twitter and Tumblr left little time to do what we actually care about or get paid for. The biggest reaction in the session by far came when Anthony De Rosa, a product manager and programmer at Reuters and a big presence on Twitter and Tumblr, said that mobile connectedness has eroded fundamental human courtesies.

“When people are out and they’re among other people they need to just put everything down,” he said. “It’s fine when you’re at home or at work when you’re distracted by things, but we need to give that respect to each other back.”

His words brought sudden and tumultuous applause. It was sort of a moment, given that we were sitting amid some of the most digitally devoted people in the hemisphere. Perhaps somewhere on the way to the merger of the online and offline world, we had all stepped across a line without knowing it.

In an e-mail later, Mr. De Rosa wrote: “I’m fine with people stepping aside to check something, but when I’m standing in front of someone and in the middle of my conversation they whip out their phone, I’ll just stop talking to them and walk away. If they’re going to be rude, I’ll be rude right back.”

After the panel, one of the younger people in the audience came up to me to talk earnestly about the importance of actual connection, which was nice, except he was casting sidelong glances at his iPhone while we talked. I’m not even sure he knew he was doing it. It’s not just conferences full of inforati where this happens. In places all over America (theaters, sports arenas, apartments), people gather in groups only to disperse into lone pursuits between themselves and their phones.

Every meal out with friends or colleagues represents a negotiation between connectedness to the grid and interaction with those on hand. “Last year, for my friend’s birthday, my gift to her was to stay off my phone at her birthday dinner,” said Molly McAleer, who blogs and sends Twitter messages under the name Molls. “How embarrassing.”

If South by Southwest is, as its attendees claim, an indicator of what is to come, we won’t be seeing a lot of one another even if we happen to be in the same room. Anthony Breznican, a reporter for Entertainment Weekly, said all it takes is for one person at a dinner to excuse himself into his phone, and the race is on among everyone else.
“Instead of continuing with the conversation, we all take out our phones and check them in earnest,” he said. “For a few minutes everybody is typing away. A silence falls over the group and we all engage in a mass thumb-wrestling competition between man and little machine. Then the moment passes, the BlackBerrys and iPhones are reholstered, and we return to being humans again after a brief trance.”
Enlarge This Image
Michael Cummings

David Carr leads a panel at SXSW in Austin, Tex.
Related

*
A Guide to Smartphone Manners (April 17, 2011)

Readers' Comments

Share your thoughts.

* Post a Comment »
* Read All Comments (24) »

In the instance of screen etiquette, sharing is not always caring, and sometimes, the bigger the screen, the larger the faux pas: On an elevator in the Austin Convention Center, some crazed social media promoter jammed his iPad under my nose and started demo-ing his hideously complicated social networking app that was going to change the world. I leaped to safety as soon as the door opened.

Still, many are finished apologizing for what has become a very natural mix of online and offline pursuits. In an essay on TechCrunch entitled “I Will Check My Phone at Dinner and You Will Deal With It,” MG Siegler wrote, “Forgive me, but it’s Dinner 2.0.”

He added: “This is the way the world works now. We’re always connected and always on call. And some of us prefer it that way.”

It scans as progress, but doesn’t always feel that way. There are a number of reasons why people at conferences and out in the world treat their phones like a Tamagotchi, the digital pet invented in Japan that died if it wasn’t constantly looked after and fed.

To begin with, phones glow. It is a very normal impulse to stare at something in your hand that is emitting light.

Beyond the gadget itself, the screen offers a data stream of many people, as opposed to the individual you happen to be near. Your e-mail, Twitter, Facebook and other online social groups all offer a data stream of many individuals, and you can choose the most interesting one, unlike the human rain delay you may be stuck with at a party.

Then there is also a specific kind of narcissism that the social Web engenders. By grooming and updating your various avatars, you are making sure you remain at the popular kid’s table. One of the more seductive data points in real-time media is what people think of you. The metrics of followers and retweets beget a kind of always-on day trading in the unstable currency of the self.

“My personal pet peeve is people who live-tweet every interaction,” said Roxanna Asgarian, a student at the CUNY Graduate School of Journalism who attended South by Southwest this year. “I prefer to experience the thing itself over the experience of telling people I’m doing the thing.”

Still, for those of us who are afraid of missing something, having the grid at our fingertips offers reassurance that we are in the right spot or gives indicators of heat elsewhere.

But all is not vanity. For anybody with children, a job or a significant other, the expectation these days is that certain special people, usually beginning with our bosses, can reach us at any minute of any day. Every once in a while something truly important tumbles into our in-box that requires immediate attention.

Mobile devices do indeed make us more mobile, but that tether is also a leash, letting everyone know that they can get you at any second, most often to tell you they are late, but on their way. (Another bit of bad manners that the always-on world helps facilitate, by the way.)

At the conference, I saw people who waited 90 minutes to get into a party with a very tough door, peering into their phones the whole while, only to breach the door finally and resume staring into the same screen and only occasionally glancing up.

In that sense, the scenery never really changes when you are riding with your digital wingman. I saw people who were sitting on panels surfing or e-mailing during lulls, and then were taken by surprise when it was their turn to talk. (And it’s not just those children. I was hosting a discussion at another conference with Martha Stewart, no slouch when it comes to manners, and she kept us all waiting while she checked “one more thing” on her Twitter.)

I should sheepishly mention I was on highest alert for electronic offense because I switched out my smartphone before South by Southwest and was on a new Droid that I’m pretty sure could guide the next mission to Mars, but it was clunky when it came to sending texts and Twitter messages. Digital natives (read “young people”) will tell you that they can easily toggle between online and offline. My colleague Brian Stelter can almost pull it off, in part because he always seems to be creating media and consuming it.

And in Austin I saw Andy Carvin, NPR’s one-man signal tower of North African revolution on Twitter, sitting in front of a screen while the British band Yuck played a killer outdoor set at Stubb’s. He sent Twitter messages about the show, and about Bahrain as well.

William Powers, the author of “Hamlet’s BlackBerry,” a book about getting control of your digital life, appeared on a panel at South by Southwest and wrote that he came away thinking he had witnessed “a gigantic competition to see who can be more absent from the people and conversations happening right around them. Everyone in Austin was gazing into their little devices — a bit desperately, too, as if their lives depended on not missing the next tweet.”

In a phone conversation a few weeks afterward, Mr. Powers said that he is far from being a Luddite, but that he doesn’t “buy into the idea that digital natives can do both screen and eye contact.”

“They are not fully present because we are not built that way,” he said.

Where other people saw freedom — from the desktop, from social convention, from the boring guy in front of them — Mr. Powers saw “a kind of imprisonment.”

“There is a great deal of conformity under way, actually,” he added.

And therein lies the real problem. When someone you are trying to talk to ends up getting busy on a phone, the most natural response is not to scold, but to emulate. It’s mutually assured distraction.
This Yellow Space for Rent
Matthew Staver for The New York Times

Critics say exposing impressionable young children to ads that appear to be endorsed by their educators is problematic.
By CATHERINE RAMPELL
Published: April 15, 2011

* Recommend
* Twitter
* Sign In to E-Mail
* Print
*
Reprints
* ShareClose
o Linkedin
o Digg
o Mixx
o MySpace
o Permalink
o

Cash-hungry states and municipalities, in pursuit of even the smallest amounts of revenue, have begun to exploit one market that they have exclusive control over: their own property.

With the help of a few eager marketing consultants, many governments are peddling the rights to place advertisements in public school cafeterias, on the sides of yellow school buses, in prison holding areas and in the waiting rooms of welfare offices and the Department of Motor Vehicles.

The revenue generated by these ads is just a drop in the bucket for states and counties with deficits in the millions or billions of dollars. But supporters say every penny helps.

Still, critics question whether the modest sums are worth further exposing citizens — especially children — to even more commercial pitches.

“I have a 5-year-old who doesn’t understand what ads are,” says Megan Keller, 30, of Provo, Utah, who says her son Collin, a kindergartner, sees seductive posters for sugary cereals every day in the lunchroom of his public school. “I don’t like that he thinks, ‘Oh, this is good because it comes from my school,’ and I’m having to explain to him why that’s not true.”

Because Utah will soon start selling ads on the sides of school buses, Ms. Keller has decided to transfer Collin to a nearby charter school that has sworn off commercialism.

Utah became the latest state to allow school bus advertising when its governor signed a law last month authorizing the practice. The strategy began in the 1990s in Colorado, then spread to Texas, Arizona, Tennessee and Massachusetts. In the last year, at least eight other states have considered similar legislation.

One of them, New Jersey, approved school bus advertising in January, and the state’s Board of Education is now writing guidelines for size and sponsorship restrictions. So far, four districts have expressed interest in participating, according to Frank Belluscio, a spokesman for the New Jersey School Boards Association. Idaho’s Legislature rejected a similar proposal earlier this month.

Districts with 250 buses can expect to generate about $1 million over four years by selling some yellow space, according to Michael Beauchamp, president of Alpha Media, a company based in Dallas that manages advertising on 3,000 school buses in Texas and Arizona.

Officials say that the revenue, while small, can still make the difference between having new textbooks — or a music teacher or a volleyball team — and not having them.

“If the alternative is huge classroom sizes and losing teachers and losing qualified personnel, yes, this seems like something we should consider,” said Valery Lynch, 48, a fourth-grade teacher in The Woodlands, Tex., north of Houston. “But I know that it’s a bag of worms, and people are going to ask ‘What’s next? An ad on the classroom clock?’ “

Some schools have been selling advertising space on their school Web sites and in campus parking lots, in addition to the lunchroom and the school buses. An online ad usually generates about $100 a month for a school, according to Jim O’Connell, the president of Media Advertising in Motion, a company in Scottsdale, Ariz., that sells advertising for school districts.

Critics say exposing impressionable young children to ads that appear to be endorsed by their educators is problematic.

“Mandatory education laws are based on the idea that education is good for society, and is good for kids,” said Josh Golin, associate director of Campaign for a Commercial-Free Childhood, a nonprofit organization. “That argument falls apart when you’re talking about mandatory exposure to advertising.”

The companies that help place the ads say that children are exposed to advertising just about everywhere they look anyway, including — for many decades — in their high school yearbooks and sports stadiums. They say that the primary audience for ads on the outside of school buses is adults, not children, and that much of the space is being purchased by dentists, banks and insurance companies.

“School bus advertising is not for the kids in the bus, but for the cars around the bus that see the advertising when they’re at a stop sign or driving down the highway,” said Bryan Nelson, a Republican state representative from Florida’s 38th District, outside of Orlando. Mr. Nelson is sponsoring legislation that would allow school bus ads and direct much of the revenue toward defraying the buses’ fuel costs. “When you think about how many people are going to see those ads, you get a lot of exposure, so we can charge a premium price,” he said.

Some states, including Florida, already allow advertising inside the bus. And while many states have prohibited school bus advertising for alcohol, tobacco and sexual content, none have ruled out displaying ads for junk food, Mr. Golin said.

Pizza parlors and pizza chains are among the businesses that have purchased advertising on school buses.

“When concern about childhood obesity is at an all-time high, and there’s a focus on taking junk foods out of schools, it’s still possible to see ads for those very same products on the sides of school buses,” said Mr. Golin. “It makes no sense.”

In addition to schools and school buses, jails are also getting ads in some states and counties.

Who would want to advertise to criminals? Defense lawyers and bail bondsmen.

Next week, Erie County Holding Center in Buffalo will begin displaying ads on new high-definition television screens that defendants see immediately after arrest. The spots, which run on a loop along with the informational messages from the holding center, sell for $40 a week and have nearly sold out for the rest of the year.

Anthony Diina, president and owner of Metrodata Services, the private company hired to run the new system, said he expected the program to bring the county $8,000 to $15,000 a year. The governments of Alaska, San Francisco and Orlando, Fla., have also contacted his company about setting up advertising programs in their jails. A jail in southwestern Florida started a similar program in 2009.

Last year, Mr. Diina’s company set up television screens for advertising at the Erie County offices of the state Department of Motor Vehicles, a pilot program that he expects to bring the county revenue of “six figures over the course of five years.” He says that the reaction so far has been positive.

“These ads provide distraction and amusement that lessens the perceived waiting time,” Mr. Diina said. “And it doesn’t hurt that they bring in some money, too.”
A version of this article appeared in print on April 16, 2011, on page B1 of the New York edition.
Immigrants Are Subject of Tough Bill in Georgia
By KIM SEVERSON
Published: April 15, 2011

* Recommend
* Twitter
* Sign In to E-Mail
* Print
*
Reprints
* ShareClose
o Linkedin
o Digg
o Mixx
o MySpace
o Permalink
o

ATLANTA — With Gov. Nathan Deal’s acknowledgment that he would sign a tough immigration law, Georgia was thrust on Friday into the center of the national fight over how much control states have in curbing illegal immigration.
Related

*
Times Topics: Illegal Immigrants | Arizona Immigration Law (SB 1070)

The State Legislature this week passed a bill that puts Georgia in a league with Arizona, the first state to empower the local and state police to demand documentation of residency and to detain people they reasonably suspect are in the country illegally.

On Monday, the United States Court of Appeals for the Ninth Circuit upheld a trial judge’s ruling blocking the most contentious parts of Arizona’s law, which raised hope among Georgia residents fighting the bill. But the bill went back and forth between chambers until it was passed in the final hours of Georgia’s legislative session Thursday.

Lawmakers modified the Georgia bill slightly from Arizona’s and softened requirements surrounding use of the federal E-Verify program, which helps employers confirm online whether potential employees can legally work in the United States.

That helped appease at least some of the state’s powerful agricultural and business interests, which had lobbied against the bill, and gave Mr. Deal, a Republican who had been noticeably silent on the issue, enough confidence to throw his support behind the measure. He has 40 days to sign the bill but is expected to do so much sooner.

“At the end of the day, rural legislators voted for this bill,” said Brian Robinson, the governor’s spokesman. “Those legislators most attuned to agriculture and agribusiness came on board.”

The bill helps the governor fulfill a campaign promise and sends a message to Washington, Mr. Robinson said: “States are picking up the tab for the gigantic cost of a problem that Washington won’t fix.”

Groups that fought the bill with more than a dozen public rallies and weeks of lobbying, as well as threats of recall and economic disruption, began discussing a national boycott in anticipation of the governor’s signature.

"We have a whole tourism industry in Atlanta that is just people visiting civil rights sites,” said Xochitl Bervera, a spokeswoman for Somos Georgia, an immigrant rights group that is working on strategy with Turning the Tide, a national group that organized a boycott in Arizona that has cost that state more than $100 million in lost hospitality revenue, according to some estimates.

“This is going to really damage folks who want to do business with the state,” she said of the Georgia bill. “It’s embarrassing, honestly.”

Because much of the debate centered on people from Mexico and Latin American countries, some Hispanics in the state said the bill would open the door to more harassment and discrimination.

“The targeting of people of color is already happening,” said Azadeh Shahshahani of the Georgia chapter of the American Civil Liberties Union.

Georgina Perez, 21, of Marietta, came to Georgia from Mexico City when she was 3 and is not in the country legally. The legislation has prompted her to speak publicly about her status as a way to bring attention to the issue.

"The politicians forget that we are human beings,” she said in a telephone interview. “We have our houses here in Georgia. We went to school here. We have families here. For them to criminalize us was disgusting.”

The Georgia bill also requires the state Agriculture Department to study creating a guest worker program. Utah, the only other state to pass a law aimed at curbing the population of illegal immigrants, designed a guest worker program aimed at helping businesses keep workers. But it does not supersede federal immigration law.

In all, 30 states have considered anti-immigration legislation, most of which are styled after Arizona’s. Many measures died in the legislative sessions. Similar bills have passed at least one chamber of state legislatures in Alabama, Indiana, Oklahoma and South Carolina and remain in committee in several others.
A version of this article appeared in print on April 16, 2011, on page A14 of the New York edition.
U.S. Cracks Down on Online Gambling
By MATT RICHTEL
Published: April 15, 2011

* Recommend
* Twitter
* Sign In to E-Mail
* Print
*
Reprints
* ShareClose
o Linkedin
o Digg
o Mixx
o MySpace
o Permalink
o

In an aggressive attack on Internet gambling, federal prosecutors on Friday unsealed fraud and money laundering charges against operators of three of the most popular online poker sites. The government also seized the Internet addresses of the sites, a new enforcement tactic that effectively shuttered their doors.
Enlarge This Image

The home page of PokerStars.com, which faces fraud and money laundering charges.

Prosecutors charged that the operators of Full Tilt Poker, PokerStars and Absolute Poker tricked banks into processing billions of dollars in payments from customers in the United States. They said the actions violated a federal law passed in 2006 that prohibits illegal Internet gambling operations from accepting payments.

The sites have their headquarters in places where online gambling is legal — Antigua and the Isle of Man — a hurdle that has made it difficult for authorities in the United States to crack down on the industry. The indictment shows the intensifying game of cat-and-mouse between prosecutors and gambling sites that generate billions of dollars in transactions.

The online poker operators sought to avoid detection by banks and legal authorities by funneling payments through fictitious online businesses that purported to sell jewelry, golf balls and other items, according to the indictment. It says that when some banks processed the payments, they were unaware of the real nature of the business, but the site operators also bribed banks into accepting the payments.

Preet Bharara, the United States attorney for the Southern District of New York, said in a statement that the defendants “concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits.”

Representatives for the poker sites could not immediately be reached.

On Friday, authorities arrested two defendants, including John Campos, the vice chairman of a small bank in Saint George, Utah, who they said processed gambling transactions in exchange for a $20,000 fee and a $10 million investment in the bank by poker site operators and their associates. The United States attorney’s office is working with foreign law enforcement in hopes of extraditing defendants located abroad and seizing their assets.

Experts in gambling law said that the forceful action raises tricky questions about gambling laws and the government’s reach. These experts said it was not clear, for example, whether countries that sanctioned and licensed such activity would allow extraditions.

Lawrence Walters, a lawyer who represents online gambling operations, though not those involved in these cases, said the indictment might raise an even more fundamental question: Is online poker actually illegal? Federal law prohibits sports betting, but experts are divided over whether it clearly prohibits online games like poker and blackjack.

In the indictment, prosecutors seemed to skirt the issue. They based parts of their prosecution on state laws in New York and elsewhere that prohibited unlicensed gambling, including poker. Legal experts said the prosecutors needed to rely on such prohibitions as a foundation for going after the claims of money laundering and fraud. But Mr. Walters said this strategy might face challenges. He said it was not clear that the state laws applied to foreign-based gambling operations, given that under federal law, international commerce was regulated at the federal level.

“This appears to be a precedent-setting case,” Mr. Walters said. “It will be the first time the Department of Justice takes on the looming question of whether federal law prohibits online poker.”

Opponents of online gambling have been trying to figure out for years how best to police casinos that can be located abroad but reach easily into American homes. According to statistics provided by the Poker Player’s Alliance, an advocacy organization led by former Senator Alfonse D’Amato of New York, seven million Americans play online for money once a month.

In a statement, Mr. D’Amato criticized the prosecution. “We are shocked at the action,” he said, adding, “Online poker is not a crime and should not be treated as such.”

ComScore, a company that measures Internet traffic, said that in March, Full Tilt Poker had 2.6 million visitors from the United States, PokerStars had 1.9 million and Absolute Poker had 1.3 million. ComScore also reported that 1.4 million people visited Ultimate Bet, a site that the federal indictment says joined forces last year with Absolute Poker. Those were the nation’s four most popular poker sites, ComScore said.

On Friday, visitors to those sites were met with a message that begins: “This domain name has been seized by the F.B.I.” The government used the same controversial tactic of seizing domain names in actions last year against sites accused of copyright violations. Losing a domain name can be costly for a company that has invested in promoting it as the main route to its site. But the tactic can also be of only temporary effectiveness, because the company can switch to a new Web address that is outside the reach of law enforcement in the United States — one that, for example, does not end in .com.

According to the indictment, the fraud and money laundering scheme evolved from deception to bribery. Initially, after the enactment of the 2006 law aimed at limiting payment processing for online gambling, the defendants sought to dupe banks by creating fake companies, according to the indictment.

But the indictment says that as financial institutions got wise to those efforts, several defendants sough to persuade smaller banks to process the transactions by making multimillion-dollar investments in them.
A version of this article appeared in print on April 16, 2011, on page B1 of the New York edition.
A 16 on a Par 4? Hackers Laugh and Cry With a Humbled Pro
By BILL PENNINGTON
Published: April 15, 2011

* Recommend
* Twitter
* comments
* Sign In to E-Mail
* Print
*
Reprints
* ShareClose
o Linkedin
o Digg
o Mixx
o MySpace
o Permalink
o

Kevin Na, a little-known professional golfer, chased his ball into some woods and brambles Thursday during a PGA Tour event in Texas. About five minutes and 16 frenzied, desperate and comical strokes later, he emerged a folk hero.
Enlarge This Image
Eric Gay/Associated Press

Maybe it was an omen: Kevin Na had this lie on No. 8 in the first round of the Texas Open. On the next hole, disaster struck.
Video YouTube: Kevin Na Takes a Shot...and Another...
Related

*
Subpar 4: Tour Pro Needs 16 Strokes to Finish Hole (April 15, 2011)

Enlarge This Image
Eric Gay/Associated Press

Kevin Na after one of his drives on the ninth hole.
Readers' Comments

Share your thoughts.

* Post a Comment »

Na, 27, an American who grew up in South Korea, took his 16 shots without losing his ball, hitting it in a hazard or breaking a club over his knee. He walked off the par-4 ninth hole at the Texas Open in San Antonio plucking thorns and barbs from his arms and legs as his caddie brushed leaves and dirt off his back and shoulders.

On Friday, Everyman golfers rejoiced.

“That’s great; welcome to our world,” Tom Magazeno said as prepared to tee off at Black Bear Golf Course, a public course in Franklin, N.J. “A real golfer never gives up and a real golfer counts every stroke. He is a hero.”

Playing behind Magazeno, Mike White of Verona, N.J., predicted that Na’s golfing calamity would become a YouTube sensation.

“It’s good for golf,” he said. “It’s a pro golfer with integrity. That must have cost him a lot of money and he had to be embarrassed, but he pressed on. Good for him.”

Most amateur golfers would have picked up their ball. Some might have played on. Few would have known to count their penalty strokes. Fewer still would have written “16” on their scorecard: A what? Double quadruple bogey?

“I’ve seen guys shoot a 16 on one hole, but I’ve never seen someone write 16 down,” said Bill Hindon of Ringwood, N.J., sitting in a cart alongside the first hole at Black Bear.

Adam Donlin, the PGA pro at Black Bear, said that in his 12-year career working at courses, which has included supervising hundreds of golf outings and tournaments, he had never seen a 16 on any hole of any scorecard.

“I’m not sure I’ve ever seen more than a 12,” Donlin said. “I mean, a 16? Kevin Na is immortal for that.”

The social-media popularity of Na’s misadventure will be enhanced by the distinctive setting of his escapade. Showing him ducking and tromping through an almost impenetrable thicket of vines, scrub bush and trees, the video — all 16 strokes were captured — looks like a Golf Channel presentation of “Animal Planet.”

All the while, because Na had agreed to wear a wireless microphone during the round, he and his caddie narrate the ruinous set of events as they unfold.

“You’ve got nothing — nothing!” the caddie, Kenny Harms, says early on, weaving through the overgrowth.

“Oh, come on!” Na shouts as his 11th shot caroms off a tree and almost hits him.

The Golf Channel broadcasters watching added to the sense of comedy.

“We could be here awhile,” one said as Na pursued his ball deeper into the forest.

Laughter can be heard in the background at times and fans give Na a hearty round of applause when his 13th shot finally — and barely — flies out of the woods.

Na’s troubles began when he hit his tee shot into the woods well right of the fairway. When he found his ball, he declared it unplayable. But back on the tee, Na hit what counted as his third shot into roughly the same place.

Na tried chipping out from the heavy brush. That shot hit a tree and struck him in the right leg, a one-stroke penalty.

Na declared another unplayable lie and asked a rules official who had burrowed into the woods after him if he could go back to the tee. That was no longer an option. He could drop in the woods.

Na turned to his caddie and said, “Kenny, just give me a ball.”

He took the ball and dropped it, then struck another shot that barely moved.

A lightning-quick series of swings ensued, so quick that officials later had to examine the videotape to ascertain how many times Na hit the ball. One shot went sideways, another went backward. Na, normally right-handed, swung once left-handed and missed, then swung again left-handed and made contact, but the ball did not go far. There were a couple of other off-balance swats until finally he lifted a shot just over a tree branch. The ball settled into the rough.

From there, Na hit a shot to the back fringe of the ninth green. Two putts later, he had played the ninth in 12 over par.

At courses across the New York metropolitan region, it was difficult to find golfers who were not astonished by Na’s travails. But many could recall playing similarly disastrous holes.

“I relived it,” Rodney Stilwell, 53 and a lawyer, said from the clubhouse at Silver Lake Golf Course on Staten Island.

Three years ago, playing in a tournament at Silver Lake, Stilwell hit a shot that landed half-submerged in water on No. 15.

“I tried and tried to hit it out,” Stilwell said. “There was a lot of splashing.”

Stilwell said that one thought kept coming back: He should have gone back to the tee and hit again. He could almost hear those same words inside Na’s head.

“It was the same thing,” Stilwell said. “I was laughing inside, and you could see on TV Kevin was laughing outside.”

On most days, recreational golfers would be encouraged to pick up after a double par, or eight strokes on a par 4.

“Oh, yeah, after seven or eight strokes I’d give up,” Magazeno said at Black Bear.

Tony Candelmo, playing at Byrne Golf Course in West Orange, N.J., agreed.

“Whenever I got a real, real bad hole like that, I just picked up my ball and moved onto the next one,” he said.

David Gutfeld of Suffern, N.Y., laughed when he said that sometimes his friends “might enjoy seeing me suffer.”

“That’s the thing about a pro making a 16,” Gutfeld said. “We’ve all been there. We’ve been there many times, my friend.”

Jim McLean, a teacher to top PGA Tour pros who is frequently ranked among the top five golf instructors in America, said there were lessons for the recreational golfer in Na’s episode.

“There comes a point when you just snap and start whaling away like Bill Murray in ‘Caddyshack’ or something,” McLean said. “But that usually can be avoided if you slow yourself down. Take a walk away from the ball and gather your thoughts.

“I guess this proves even top pros can get disoriented. It’s pretty impressive, though, that he finished the round strong.”

Na went on to make three birdies and no bogeys on the back nine and shoot an 80, which means he was four under par Thursday if the ninth hole was excluded.

When asked to elaborate on his day, he sounded like any other golfer.

“It was really just one bad shot,” he told reporters. “Well, two, actually. But that’s what started the whole thing. It kind of gets out of hand. That’s what happens in this crazy game.”

A legion of empathetic golfers, many of them now Kevin Na fans, were nodding their heads.

Nate Schweber contributed reporting.
A version of this article appeared in print on April 16, 2011, on page A1 of the New York edition.
At Mexico Morgue, Families of Missing Seek Clues
Alfredo Estrella/Agence France-Presse — Getty Images

Forensic workers carry a body found in a mass grave in Matamoros on April 11.
By ELISABETH MALKIN and DAMIEN CAVE
Published: April 15, 2011

* Recommend
* Twitter
* comments (75)
* Sign In to E-Mail
* Print
* Single Page
*
Reprints
* ShareClose
o Linkedin
o Digg
o Mixx
o MySpace
o Permalink
o

MATAMOROS, Mexico — The last time anybody heard from Josué Román García was last August, after he and his older brother stopped for dinner in an isolated town about 90 miles south of the Texas border. His final known words went out via text message, from inside the trunk of a car.
Related

*
16 Officers Arrested in Mexico Deaths (April 15, 2011)

Enlarge This Image
Alexandre Meneghini/Associated Press

Margarita Avellaneda's husband vanished in October.
Readers' Comments

"Yet we continue this charade known as 'The War on Drugs.' It is an utter failure, and it's time to try something else. "

Xanadu, Dallas TX

* Read Full Comment »
* Post a Comment »

“They just kidnapped us in San Fernando,” Mr. Román, a 21-year-old student, wrote to a friend. He warned against calling, and added, “If anything happens, just tell my parents, ‘thanks, I love them.’ ”

On Wednesday, his father, Arturo Román Medina, answering calls on a cellphone that stores that brief note, arrived at the morgue in this border city, hoping and fearing that he would find his sons. For two weeks now, the authorities have been bringing in bodies from mass graves around San Fernando, 145 corpses at last count, and with each new grave discovered, another crowd appears, seeking news of missing loved ones, clutching photographs, holding out their arms to give blood for a DNA sample.

They are looking for closure, but as their gathering has grown into the hundreds, it has hardened a perception that government authorities have fought desperately to dispel: parts of northern Mexico, including most of this state, Tamaulipas, have been lost to criminal gangs, and for quite some time.

Even after government promises of more security following the discovery of a mass grave holding the remains of 72 Central and South American migrants last summer, also in San Fernando, Tamaulipas remains a state that experts describe as ungoverned — or simply failed.

Open war between the Gulf Cartel and its former enforcers, the Zetas, means that the roads here are still filled with gang lookouts on motorcycles, who report back to cartel leaders, residents say.

Gunmen believed to be tied to the Zetas assassinated the lead candidate for governor last year and later forced a mass exodus from a small town near the Texas border. Extortion payments have become more regular than taxes, security analysts say, while many of the authorities are either terrorized or bought off: 16 municipal police officers have been arrested so far in connection with kidnappings and killings.

“It is one of the places where clearly state, federal and local authorities are not in control,” said Eric Olson, a security expert at the Woodrow Wilson International Center. “It’s tragic, it’s unfortunate, but it’s a reality.”

For the Mexican government, few things are as sensitive as an American pointing out lost territory. When Secretary of State Hillary Rodham Clinton likened Mexico’s drug trafficking last year to an insurgency, “where the narco-traffickers control certain parts of the country,” Mexican lawmakers responded with fierce condemnation.

The tensions only worsened after Carlos Pascual, the American ambassador, questioned Mexico’s crime-fighting abilities in diplomatic cables, quoting a former high-ranking Mexican official who “expressed a real concern with ‘losing’ certain regions” of the country to cartels. Mexico’s president, Felipe Calderón, was so infuriated by that cable and others that he insisted on pushing out Mr. Pascual, who resigned last month.

And yet, despite promises of help, the families and residents here say they have seen little progress in Tamaulipas. Instead, they have witnessed squabbling between top officials — Tamaulipas is governed by political rivals to the president’s party — and lackluster enforcement.

Mr. Román, the father of two missing sons, complained that government checkpoints were always in the same place and easy for criminals to avoid. Alfonso Ortega, whose brother Martín disappeared a year ago on his way to Matamoros, described a galling lack of urgency.

“The government is not moving,” Mr. Ortega said. “It’s not doing anything.”

The authorities believe the Zetas are behind the murders in San Fernando, though they have only theories about the motives: kidnappings for ransom, perhaps, or attempts at forced recruitment.

Regardless, experts say the trouble in Tamaulipas stems partly from the gang’s history. Its leaders started out as enforcers, so when they split with their former patrons in the Gulf Cartel a few years ago, the Zetas could not rely on historic ties with drug suppliers or traffickers. To thrive and expand, they branched out to other crimes, including extortion, migrant smuggling and the siphoning of oil and gas from pipelines in the area.

Many of the gang’s early leaders served in the Mexican military, and they have used their experience to create a level of intimidation that outmatches most rivals’. No local newspaper dares to print the photos the government has issued for the 17 suspects in the latest San Fernando killings.
Mr. Román, a burly man in rubber sandals who has driven back and forth countless times from his home in Mexico City to prod the authorities, is just one of many here with once hidden tales of fear, a sullen bureaucracy and overwhelmed investigators.
Enlarge This Image
Alexandre Meneghini/Associated Press

Workers unloaded a body, found in a mass grave, from a refrigerated truck last week at the morgue in Matamoros, Mexico.
Related

*
16 Officers Arrested in Mexico Deaths (April 15, 2011)

The New York Times

The Zetas are said to be behind San Fernando's killings.
Readers' Comments

"Yet we continue this charade known as 'The War on Drugs.' It is an utter failure, and it's time to try something else. "

Xanadu, Dallas TX

* Read Full Comment »
* Post a Comment »

He said that all the official attention now focused on identifying the dead here has made his sons’ loss even more painful. “They don’t help you look for your sons when they are alive,” he said.

Indeed, the morgue and the prosecutor’s office next door are now the area’s main hubs of activity. This week, dozens of people shifted uncomfortably on chairs in tiled hallways, their sadness subdued as they waited to give statements.

Next door, bodies came and went. At one point, a refrigerated truck with dozens of corpses wrapped in black plastic left for Mexico City, where additional investigators would continue the process.

Those waiting here looked exhausted beyond grief or anger. “I just ask God to bring him back, even if he’s dead,” said Ana María López, whose husband disappeared in the border city of Reynosa on March 11.

Nicolasa Carvajal López said she had come from Dallas, where she lives, because she feared the worst for her brother Bolívar Santamaría López. He boarded a bus in his home state, Guerrero, on March 29 along with five friends bound for Reynosa, where they planned to cross into Texas.

The men promised to call when they arrived at the border. When they did not, Mr. Santamaría’s wife and the other relatives forced the news out of the bus company: the bus had been stopped by gunmen in San Fernando and all the men and boys had been forced off.

“We were pooling our money,” said Ms. Carvajal, covering her face with her hand as she explained that all 10 of her brother’s siblings in the United States had paid for his trip. “He was coming to make a living.”

She pointed to several photos of her missing brother. He was 45, strong, with a sandy-colored mustache. “I still have hope that he will call me and say, ‘Hey there, Sis, here I am,’ ” she said.

The authorities have told the families to be patient, that many people are missing. And once again, they have pledged to make the area safe.

On Tuesday, José Francisco Blake Mora, Mexico’s interior minister, promised to secure all the roads around San Fernando and to prosecute the killers.

But few of those who are arrested in Mexico are ever convicted. And Msgr. Faustino Armendáriz, the bishop of Matamoros, doubted that the government was doing enough. “By their fruits, you shall know what is being done,” he responded with biblical flourish. Then, he ticked off the towns of his diocese. “When you pass through,” he said, “there is a great sense of vulnerability.”

He added that drug gangs had sown fear into the people of his diocese for more than a year. Now, he prays for change — and demands that the government keep its promises.

“We have to hope that this time they act on all their declarations,” he said, referring to the state and federal governments. “We have to demand that there are conditions to live in security.”