DealBook: Goldman Sachs to Sell $1 Billion Stake in Chinese Bank

Goldman Sachs is selling a $1 billion stake in Industrial and Commercial Bank of China, the largest Chinese bank.

The share sale, which was begun on Monday, is the second time in less than a year that Goldman has reduced its holdings in the lender after acquiring its stake before the Chinese bank’s initial public offering in 2006.

Goldman has been selling off its shares as part of a broader effort to reduce its exposure to Industrial and Commercial Bank of China, which has benefited from an almost 50 percent rise in its share price over the six months.

Under the terms of the deal, Goldman will sell Hong Kong-listed shares in the Chinese bank at 5.77 Hong Kong dollars (74 cents) each, according to a person with direct knowledge of the deal who spoke on the condition of anonymity because he was not authorized to speak publicly. The exact number of shares has yet to be confirmed, the person added.

The share sale represents around a 3 percent discount to the bank’s closing share price on Monday.

In April, Goldman also sold $2.5 billion of shares in the bank to the Singaporean sovereign wealth fund Temasek Holdings and other institutional shareholders.

Its investment in the world’s largest bank by market value has proved successful for Goldman. After initially investing around $2.6 billion, Goldman Sachs has raised more than $4.5 billion by progressively selling down its stake in the Chinese bank.

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Brain Aging Linked to Sleep-Related Memory Decline


For decades scientists have known that the ability to remember newly learned information declines with age, but it was not clear why. A new study may provide part of the answer.


The report, posted online on Sunday by the journal Nature Neuroscience, suggests that structural brain changes occurring naturally over time interfere with sleep quality, which in turn blunts the ability to store memories for the long term.


Previous research had found that the prefrontal cortex, the brain region behind the forehead, tends to lose volume with age, and that part of this region helps sustain quality sleep, which is critical to consolidating new memories. But the new experiment is the first to link structural changes directly with sleep-related memory problems.


The findings suggest that one way to slow memory decline in aging adults is to improve sleep, specifically the so-called slow-wave phase, which constitutes about a quarter of a normal night’s slumber.


Doctors cannot reverse structural changes that occur with age any more than they can turn back time. But at least two groups are experimenting with electrical stimulation as a way to improve deep sleep in older people. By placing electrodes on the scalp, scientists can run a low current across the prefrontal area, essentially mimicking the shape of clean, high-quality slow waves.


The result: improved memory, at least in some studies. “There are also a number of other ways you can improve sleep, including exercise,” said Ken Paller, a professor of psychology and director of the cognitive neuroscience program at Northwestern.


Dr. Paller said that a whole array of changes occurred across the brain during aging and that sleep was only one factor affecting memory function.


But Dr. Paller said that the study told “a convincing story, I think: that atrophy is related to slow-wave sleep, which we know is related to memory performance. So it’s a contributing factor.”


In the study, a research team in California took brain images from 19 people of retirement age and 18 in their early 20s. It found that a brain area called the medial prefrontal cortex, roughly behind the middle of the forehead, was about a third smaller on average in the older group than in the younger one — a difference due to natural atrophy over time, previous research suggests.


Before bedtime, the team had the two groups study a long list of words paired with nonsense syllables, like “action-siblis” and “arm-reconver.” The team used such nonwords because one type of memory that declines with age is for new, previously unseen information.


After training on the pairs for half an hour or so, the participants took a test on some of them. The young group outscored the older group by about 25 percent.


Then everyone went to bed — and bigger differences emerged. For one, the older group got only about a quarter of the amount of high-quality slow-wave sleep that the younger group did, as measured by the shape and consistency of electrical waves on an electroencephalogram machine, or EEG. It is thought that the brain moves memories from temporary to longer-term storage during this deep sleep.


On a second test, given in the morning, the younger group outscored the older group by about 55 percent. The estimated amount of atrophy in each person roughly predicted the difference between his or her morning and evening scores, the study found. Even seniors who were very sharp at night showed declines after sleeping.


“The analysis showed that the differences were due not to changes in capacity for memories, but to differences in sleep quality,” said Bryce A. Mander, a postdoctoral fellow at the University of California, Berkeley, and the lead author of the study. His co-authors included researchers from the California Pacific Medical Center in San Francisco; the University of California, San Diego; and the Lawrence Berkeley National Laboratory.


The findings do not imply that medial prefrontal atrophy is the only age-related change causing memory problems, said Matthew P. Walker, a professor of psychology and neuroscience at the University of California, Berkeley, and a co-author of the study.


“But these things are interrelated,” Dr. Walker said. “Essentially, with time, the less and less tissue you have in this prefrontal area, the less and less quality deep wave sleep you get, the less and less you remember of content that you just learned.”


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Guild gold: Actors gather for SAG's big night


LOS ANGELES (AP) — A puzzling Academy Awards season will sort itself out a bit more on Sunday with the Screen Actors Guild Awards, where top performers gather to honor their own in what often is a prelude for who'll go home with an Oscar.


Among nominees for the 19th annual guild awards are Oscar winners Daniel Day-Lewis, Sally Field and Tommy Lee Jones for the Civil War epic "Lincoln"; Hugh Jackman and Anne Hathaway for the Victor Hugo musical adaptation "Les Miserables"; and Jennifer Lawrence, Bradley Cooper and Oscar recipient Robert De Niro for the oddball romance "Silver Linings Playbook."


De Niro and Jones are in an exclusive supporting-actors group where all five nominees are past Oscar winners. The others are Alan Arkin for the Iran hostage-crisis thriller "Argo," Javier Bardem for the James Bond adventure "Skyfall" and Philip Seymour Hoffman for the cult drama "The Master."


Honors from the actors union, next weekend's Directors Guild of America Awards and Saturday night's Producers Guild of America Awards — whose top honor went to "Argo" — typically help to establish clear favorites for the Oscars.


But Oscar night on Feb. 24 looks more uncertain this time after some top directing prospects, including Ben Affleck for "Argo" and Kathryn Bigelow for "Zero Dark Thirty," missed out on nominations. Both films were nominated for best picture, but a movie rarely wins the top Oscar if its director is not also in the running.


Steven Spielberg's "Lincoln" would seem the Oscar favorite with 12 nominations. Yet "Argo" and Affleck were surprise best-drama and director winners at the Golden Globes, and then there's Saturday's Producers Guild win for "Argo," leaving the Oscar race looking like anybody's guess.


The Screen Actors Guild honors at least should help to establish solid front-runners for the stars. All four of the guild's individual acting winners often go on to receive the same prizes at the Academy Awards.


Last year, the guild went just three-for-four — with lead actor Jean Dujardin of "The Artist" and supporting players Octavia Spencer of "The Help" and Christopher Plummer of "Beginners" also taking home Oscars. The guild's lead-actress winner, Viola Davis of "The Help," missed out on the Oscar, which went to Meryl Streep for "The Iron Lady."


The guild also presents an award for overall cast performance, its equivalent of a best-picture honor. The nominees are "Argo," ''The Best Exotic Marigold Hotel," ''Les Miserables," ''Lincoln" and "Silver Linings Playbook."


Yet the cast prize has a spotty record at predicting the eventual best-picture recipient at the Oscars. Only eight of 17 times since the guild added the category has the cast winner gone on to take the best-picture Oscar. "The Help" won the guild's cast prize last year, while Oscar voters named "The Artist" as best picture.


Such past guild cast winners as "The Birdcage," ''Gosford Park" and "Inglourious Basterds" also failed to take the top Oscar.


Airing live on TNT and TBS, the show features nine television categories, as well.


The SAG ceremony also includes awards for film and TV stunt ensemble. The film stunt nominees are "The Amazing Spider-Man," ''The Bourne Legacy," ''The Dark Knight Rises," ''Les Miserables" and "Skyfall."


Receiving the guild's life-achievement award is Dick Van Dyke, who presented the same prize last year to his "The Dick Van Dyke Show" co-star, Mary Tyler Moore. Van Dyke's award will be presented by his 1960s sitcom's creator and co-star, Carl Reiner, and Alec Baldwin.


___


Online:


http://www.sagawards.com


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Well: Ask Well: Squats for Aging Knees

You are already doing many things right, in terms of taking care of your aging knees. In particular, it sounds as if you are keeping your weight under control. Carrying extra pounds undoubtedly strains knees and contributes to pain and eventually arthritis.

You mention weight training, too, which is also valuable. Sturdy leg muscles, particularly those at the front and back of the thighs, stabilize the knee, says Joseph Hart, an assistant professor of kinesiology and certified athletic trainer at the University of Virginia, who often works with patients with knee pain.

An easy exercise to target those muscles is the squat. Although many of us have heard that squats harm knees, the exercise is actually “quite good for the knees, if you do the squats correctly,” Dr. Hart says. Simply stand with your legs shoulder-width apart and bend your legs until your thighs are almost, but not completely, parallel to the ground. Keep your upper body straight. Don’t bend forward, he says, since that movement can strain the knees. Try to complete 20 squats, using no weight at first. When that becomes easy, Dr. Hart suggests, hold a barbell with weights attached. Or simply clutch a full milk carton, which is my cheapskate’s squats routine.

Straight leg lifts are also useful for knee health. Sit on the floor with your back straight and one leg extended and the other bent toward your chest. In this position, lift the straight leg slightly off the ground and hold for 10 seconds. Repeat 10 to 20 times and then switch legs.

You can also find other exercises that target the knees in this video, “Increasing Knee Stability.”

Of course, before starting any exercise program, consult a physician, especially, Dr. Hart says, if your knees often ache, feel stiff or emit a strange, clicking noise, which could be symptoms of arthritis.

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Defense Official Hints That Israel Is Stepping Back From Plans to Unilaterally Attack Iran





JERUSALEM — Israel’s departing defense minister, Ehud Barak, said that the Pentagon had prepared sophisticated blueprints for a surgical operation to set back Iran’s nuclear program should the United States decide to attack, a statement that was a possible indication that Israel has shelved plans of any unilateral strike.







Johannes Eisele/Agence France-Presse — Getty Images

Ehud Barak, Israel’s defense minister, at the World Economic Forum in Switzerland.








In an interview conducted at the World Economic Forum in Davos, Switzerland, and published by The Daily Beast on Friday, Mr. Barak was asked if there was any way Israel could go to war with Iran over what the West believes is a nuclear weapons program without dragging in the war-weary United States.


Mr. Barak replied that there were more than just the two options — of full-scale war or allowing Iran to obtain nuclear weapons capability — in the event that sanctions and diplomacy failed.


“What we basically say is that if worse comes to worst, there should be a readiness and an ability to launch a surgical operation that will delay them by a significant time frame and probably convince them that it won’t work because the world is determined to block them,” he said.


Under orders from the White House, Mr. Barak added, “the Pentagon prepared quite sophisticated, fine, extremely fine, scalpels,” referring to the ability to carry out pinpoint strikes.


Mr. Barak did not specify what those “scalpels” were. But there has been a broad effort at the White House, the Pentagon and the intelligence agencies to develop an overlapping series of options that could set back, though probably not halt, Iran’s nuclear progress.


Iran insists that its nuclear program is solely for peaceful purposes.


The Pentagon declined to comment on the report, but a senior defense official said: “The U.S. military constantly plans for a range of contingencies we might face around the world, and our planning is often quite detailed.” The official added, “That shouldn’t come as a surprise to anyone.”


Mr. Barak and the prime minister of Israel, Benjamin Netanyahu, led a hawkish line against Iran’s nuclear drive over the past few years, emphasizing Israel’s doctrine of self-reliance for such existential issues and warning that the time to stop Iran from going nuclear was running out.


But in recent months, faced with tough opposition from Washington, particularly ahead of the November presidential elections, and public criticism from a string of Israeli former security chiefs, the prospect of an imminent unilateral Israeli strike receded. Israel suggested that its own deadline had been put off until this spring or summer.


In the past few weeks Mr. Netanyahu campaigned for re-election in Israel as a strong leader who, among other things, had managed to persuade the world to deal with the Iranian threat.


Late Tuesday, Mr. Netanyahu said “the first challenge was and still is to prevent Iran from acquiring nuclear weapons.”


But Mr. Netanyahu and his conservative Likud Party emerged weakened from the elections, with much of the Israeli electorate more focused on domestic issues.


Mr. Barak chose not to run for re-election after polls showed that his tiny Independence faction was unlikely to pass the electoral threshold.


Elisabeth Bumiller and David E. Sanger contributed reporting from Washington.



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New purported Galaxy Note 8.0 images confirm S-Pen support







Earlier this week, images that were purportedly of Samsung’s (005930) upcoming Galaxy Note 8.0 tablet leaked onto the Web. The slate looked like an oversized Galaxy S III smartphone and included the company’s physical home button, which had perviously been omitted from earlier Galaxy tablets. French blog Frandroid posted additional images of the tablet on Friday that confirmed it will include an S-Pen stylus, similar to the Galaxy Note II and Galaxy Note 10.1.


[More from BGR: Sony’s PS Vita: Dead again]






[More from BGR: The Boy Genius Report: Apple’s iMac takes desktop crown]


The Galaxy Note 8.0 is rumored to be equipped with a 1280 x 800 pixel resolution display, 1.6GHz quad-core processor and a 5-megapixel rear camera. The slate is also believed to include 2GB of RAM, 16GB of internal storage, a microSD slot and Android 4.2.


Samsung is expected to announce the Galaxy Note 8.0 tablet next month at Mobile World Congress in Barcelona.


This article was originally published on BGR.com


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Kutcher takes on tech idol Steve Jobs in 'jOBS'


PARK CITY, Utah (AP) — Ashton Kutcher says playing Steve Jobs on screen "was honestly one of the most terrifying things I've ever tried to do in my life."


The 34-year-old actor helped premiere the biopic "jOBS" Friday, which was the closing-night film at the Sundance Film Festival.


Kutcher plays the Apple Inc. founder from the company's humble origins in the 1970s until the launch of the first iPod in 2001. A digital entrepreneur himself, Kutcher said he considers Jobs a personal hero.


"He's a guy who failed and got back on the horse," Kutcher said. "I think we can all sort of relate to that at some point in life."


Kutcher even embodied the Jobs character as he pursued his own high-tech interests off-screen.


"What was nice was when I was preparing for the character, I could still work on product development for technology companies, and I would sort of stay in character, in the mode of the character," he said. "But I didn't feel like I was compromising the work on the film by working on technology stuff because it was pretty much in the same field."


But playing the real-life tech icon who died in 2011 still felt risky, he said, because "he's fresh in our minds."


"It was kind of like throwing myself into this gauntlet of, I know, massive amounts of criticism because somebody's going to go 'well, it wasn't exactly...,'" Kutcher said.


While the filmmakers say they tried to be as historically accurate as possible, there was also a disclaimer at the very end of the credits that said portions of the film might not be completely accurate.


Still, realism was always the focus for Kutcher, who watched "hundreds of hours of footage," listened to Jobs' past speeches and interviewed several of his friends to prepare for the role.


The actor even adopted the entrepreneur's "fruitarian diet," which he said "can lead to some serious issues."


"I ended up in the hospital two days before we started shooting the movie," he said. "I was like doubled over in pain, and my pancreas levels were completely out of whack, which was completely terrifying, considering everything."


Jobs died of complications from pancreatic cancer.


Still, Kutcher was up to the challenge of playing Jobs, in part because of his admiration for the man who created the Macintosh computer and the iPod.


"I admire this man so much and what he's done. I admire the way he built things," Kutcher said. "This guy created a tool that we use every day in our life, and he believed in it when nobody else did."


The film also shows Jobs' less appealing side, withholding stock options from some of the company's original employees and denying child support to the mother of his eldest child.


Kutcher still found the man inspiring. Jobs had a singular focus, Kutcher said, and felt like anyone could change the world.


"I don't know if there's ever been an entrepreneur who's had more compassion and care for his consumer than Steve Jobs," Kutcher said. "He wanted to put something in your hand that you could use and you could use it easily... and he really cared about that."


___


AP Entertainment Writer Sandy Cohen is on Twitter: www.twitter.com/APSandy.


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Religious Groups and Employers Battle Contraception Mandate


Shawn Thew/European Pressphoto Agency


President Obama, with his health secretary, Kathleen Sebelius, offering a compromise on the contraception mandate last year.







In a flood of lawsuits, Roman Catholics, evangelicals and Mennonites are challenging a provision in the new health care law that requires employers to cover birth control in employee health plans — a high-stakes clash between religious freedom and health care access that appears headed to the Supreme Court.




In recent months, federal courts have seen dozens of lawsuits brought not only by religious institutions like Catholic dioceses but also by private employers ranging from a pizza mogul to produce transporters who say the government is forcing them to violate core tenets of their faith. Some have been turned away by judges convinced that access to contraception is a vital health need and a compelling state interest. Others have been told that their beliefs appear to outweigh any state interest and that they may hold off complying with the law until their cases have been judged. New suits are filed nearly weekly.


“This is highly likely to end up at the Supreme Court,” said Douglas Laycock, a law professor at the University of Virginia and one of the country’s top scholars on church-state conflicts. “There are so many cases, and we are already getting strong disagreements among the circuit courts.”


President Obama’s health care law, known as the Affordable Care Act, was the most fought-over piece of legislation in his first term and was the focus of a highly contentious Supreme Court decision last year that found it to be constitutional.


But a provision requiring the full coverage of contraception remains a matter of fierce controversy. The law says that companies must fully cover all “contraceptive methods and sterilization procedures” approved by the Food and Drug Administration, including “morning-after pills” and intrauterine devices whose effects some contend are akin to abortion.


As applied by the Health and Human Services Department, the law offers an exemption for “religious employers,” meaning those who meet a four-part test: that their purpose is to inculcate religious values, that they primarily employ and serve people who share their religious tenets, and that they are nonprofit groups under federal tax law.


But many institutions, including religious schools and colleges, do not meet those criteria because they employ and teach members of other religions and have a broader purpose than inculcating religious values.


“We represent a Catholic college founded by Benedictine monks,” said Kyle Duncan, general counsel of the Becket Fund for Religious Liberty, which has brought a number of the cases to court. “They don’t qualify as a house of worship and don’t turn away people in hiring or as students because they are not Catholic.”


In that case, involving Belmont Abbey College in North Carolina, a federal appeals court panel in Washington told the college last month that it could hold off on complying with the law while the federal government works on a promised exemption for religiously-affiliated institutions. The court told the government that it wanted an update by mid-February.


Defenders of the provision say employers may not be permitted to impose their views on employees, especially when something so central as health care is concerned.


“Ninety-nine percent of women use contraceptives at some time in their lives,” said Judy Waxman, a vice president of the National Women’s Law Center, which filed a brief supporting the government in one of the cases. “There is a strong and legitimate government interest because it affects the health of women and babies.”


She added, referring to the Centers for Disease Control and Prevention, “Contraception was declared by the C.D.C. to be one of the 10 greatest public health achievements of the 20th century.”


Officials at the Justice Department and the Health and Human Services Department declined to comment, saying the cases were pending.


A compromise for religious institutions may be worked out. The government hopes that by placing the burden on insurance companies rather than on the organizations, the objections will be overcome. Even more challenging cases involve private companies run by people who reject all or many forms of contraception.


The Alliance Defending Freedom — like Becket, a conservative group — has brought a case on behalf of Hercules Industries, a company based in Denver that makes sheet metal products. It was granted an injunction by a judge in Colorado who said the religious values of the family owners were infringed by the law.


“Two-thirds of the cases have had injunctions against Obamacare, and most are headed to courts of appeals,” said Matt Bowman, senior legal counsel for the alliance. “It is clear that a substantial number of these cases will vindicate religious freedom over Obamacare. But it seems likely that the Supreme Court will ultimately resolve the dispute.”


The timing of these cases remains in flux. Half a dozen will probably be argued by this summer, perhaps in time for inclusion on the Supreme Court’s docket next term. So far, two- and three-judge panels on four federal appeals courts have weighed in, granting some injunctions while denying others.


One of the biggest cases involves Hobby Lobby, which started as a picture framing shop in an Oklahoma City garage with $600 and is now one of the country’s largest arts and crafts retailers, with more than 500 stores in 41 states.


David Green, the company’s founder, is an evangelical Christian who says he runs his company on biblical principles, including closing on Sunday so employees can be with their families, paying nearly double the minimum wage and providing employees with comprehensive health insurance.


Mr. Green does not object to covering contraception but considers morning-after pills to be abortion-inducing and therefore wrong.


“Our family is now being forced to choose between following the laws of the land that we love or maintaining the religious beliefs that have made our business successful and have supported our family and thousands of our employees and their families,” Mr. Green said in a statement. “We simply cannot abandon our religious beliefs to comply with this mandate.”


The United States Court of Appeals for the 10th Circuit last month turned down his family’s request for a preliminary injunction, but the company has found a legal way to delay compliance for some months.


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Diner’s Journal Blog: PepsiCo Will Halt Use of Additive in Gatorade

PepsiCo announced on Friday that it would no longer use an ingredient in Gatorade after consumers complained.

The ingredient, brominated vegetable oil, which was used in citrus versions of the sports drink to prevent the flavorings from separating, was the object of a petition started on Change.org by Sarah Kavanagh, a 15-year-old from Hattiesburg, Miss., who became concerned about the ingredient after reading about it online. Studies have suggested there are possible side effects, including neurological disorders and altered thyroid hormones.

The petition attracted more than 200,000 signatures, and this week, Ms. Kavanagh was in New York City to tape a segment for “The Dr. Oz Show.” She visited The New York Times on Wednesday and while there said, “I just don’t understand why they can’t use something else instead of B.V.O.”

“I was in algebra class and one of my friends kicked me and said, ‘Have you seen this on Twitter?’ ” Ms. Kavanagh said in a phone interview on Friday evening. “I asked the teacher if I could slip out to the bathroom, and I called my mom and said, ‘Mom, we won.’ ”

Molly Carter, a spokeswoman for Gatorade, said the company had been testing alternatives to the chemical for roughly a year “due to customer feedback.” She said Gatorade initially was not going to make an announcement, “since we don’t find a health and safety risk with B.V.O.”

Because of the petition, though, Ms. Carter said the company had changed its mind, and an unidentified executive there gave Beverage Digest, a trade publication, the news for its Jan. 25 issue.

Previously, a spokesman for PepsiCo had said in an e-mail, “We appreciate Sarah as a fan of Gatorade, and her concern has been heard.”

Brominated vegetable oil will be replaced by sucrose acetate isobutyrate, an emulsifier that is “generally recognized as safe” as a food additive by the Food and Drug Administration. The new ingredient will be added to orange, citrus cooler and lemonade Gatorade, as well Gatorade X-Factor orange, Gatorade Xtremo citrus cooler and a powdered form of the drink called “glacier freeze.”

Ms. Carter said consumers would start seeing the new ingredient over the next few months as existing supplies of Gatorade sell out and are replaced.

Health advocates applauded the company’s move. “Kudos to PepsiCo for doing the responsible thing on its own and not waiting for the F.D.A. to force it to,” said Michael Jacobson, executive director of the Center for Science in the Public Interest.

Mr. Jacobson has championed the removal of brominated vegetable oil from foods and beverages for the last several decades, but the F.D.A. has left it in a sort of limbo, citing budgetary constraints that it says keep it from going through the process needed to formally ban the chemical or declare it safe once and for all.

Brominated vegetable oil is banned as a food ingredient in Japan and the European Union. About 10 percent of drinks sold in the United States contain it, including Mountain Dew, which is also made by PepsiCo; some flavors of Powerade and Fresca from Coca-Cola; and Squirt and Sunkist Peach Soda, made by the Dr Pepper Snapple Group.

PepsiCo said it had no plans to remove the ingredient from Mountain Dew and Diet Mountain Dew, both of which generate more than $1 billion in annual sales.

Heather White, executive director at the Environmental Working Group, said of PepsiCo’s decision, “We can only hope that other companies will follow suit.” She added, “We need to overhaul how F.D.A. keeps up with the latest science on food additives to better protect public health.”

Ms. Kavanagh agreed. “I’ve been thinking about ways to take this to the next level, and I’m thinking about taking it to the F.D.A. and asking them why they aren’t doing something about it,” she said. “I’m not sure yet, but I think that’s where I’d like to go with this.”


This post has been revised to reflect the following correction:

Correction: January 26, 2013

An earlier version of this article misspelled the surname of the 15-year-old who started a petition on Change.org to end the use of brominated vegetable oil in Gatorade. She is Sarah Kavanagh, not Kavanaugh.

A version of this article appeared in print on 01/26/2013, on page B1 of the NewYork edition with the headline: PepsiCo Will Halt Additive Use In Gatorade.
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Chinese Officials Fired Over Chongqing Sex Scandal





BEIJING — The young women met the officials for illicit trysts with video cameras hidden in their purses. Every detail of the encounters was recorded. Then a group of men confronted the officials with the video recordings and made demands.




China’s state news media reported on Friday details of a sex extortion ring that brazenly operated “honey traps” in the southwest metropolis of Chongqing for several years. The widening scandal, which first emerged late last year, has led to the dismissals of at least 11 officials of the Communist Party, government or state-owned companies for having sex with women in the ring and then being blackmailed by the men who had set up the snares.


Xi Jinping, China’s new top leader, has vowed to root out official corruption and said this week that “flies,” or relatively low-level bureaucrats, as well as top officials he referred to as “tigers,” must be brought down.


The most famous victim of the sex ring scandal has been Lei Zhengfu, a frog-eyed, middle-aged district party chief who was secretly filmed having sex in a hotel room in 2008 with a young woman. In late November, the leaked video of Mr. Lei began circulating on the Internet and he became the poster boy for a series of low-level or midlevel officials who have been brought down by scandals, often sexual in nature, across the nation. Mr. Lei was removed from his job and placed under investigation soon after the video appeared online. Now, according to Xinhua, the state news agency, 10 other officials have been removed as well for falling prey to the sex ring. Five of them were executives in state-owned companies.


The sex scandal might have come out earlier but Bo Xilai, the Chongqing party chief at the time, and Wang Lijun, his police chief, buried the results of an investigation into the ring. Mr. Bo and Mr. Wang were both felled last year by the fallout from the murder of a British business executive arranged by Mr. Bo’s wife; Mr. Bo is expected to be tried soon on a wide range of criminal charges. While the two scandals are unrelated, the airing of the blackmail ring at this time could reflect a decision by the Chinese leadership to highlight other problems in Chongqing under Mr. Bo’s rule.


The ring’s mastermind was a man named Xiao Ye, according to a report by Southern Metropolis Daily on Wednesday that was cited by Xinhua in its Friday article. Three women were used as bait. The state media reports did not say exactly what the officials gave the men in return for keeping their involvement secret, but one report said that a company run by Mr. Xiao was involved in a real estate development project in the district governed by Mr. Lei.


Mr. Xiao gave the women a list of Chongqing officials whom the women were to contact, Xinhua reported. The women sent text messages to the officials. They would tell the officials they worked for a local real estate company and had met the official at a banquet.


“Hope we can stay in touch a lot,” they wrote. If the officials said they had no memory of the meeting, the women would invoke the name of a chief executive and pretend to be angry that the official had forgotten the woman already. If the official bit, the woman would continue flirting by text or transmit seductive photos of themselves, Xinhua said.


A woman would then meet with the official in an upscale hotel to have tea, coffee or a snack. The official would hand her gifts, such as jewelry. Eventually, when the two were ready to have sex, the woman would make sure to show up at the hotel room with a hidden camera. The official would rarely stay the entire night, but the video caught all the action.


This happened over and over until the video was clear enough, Xinhua reported. Then at a later tryst, several men in the ring would show up while the official and the woman were in the middle of having sex. One of the men would pretend to be the woman’s boyfriend and throw a fit. Behind him would be another man pretending to be a private detective. A third man would then show up and say he was a member of a gang.


They would beat up the official and show him the video. Mr. Xiao entered the scene afterward to work out an agreement with the official and assure him that the video would remain buried, as long as the demands were met.


Of the victims, Mr. Lei was the one who tried to fight back most vigorously, one report said. He assumed the video would eventually come out, and so he went to senior Chongqing officials to explain his plight. Wang Lijun, who was then the police chief of Chongqing, took charge of the case. By 2009, the investigation was done and Mr. Wang and Mr. Bo had the results. But they decided to quash the case or ignored it, and the officials who were found to have been victims of the ring were eventually promoted.


The Xinhua article on Friday said people have been especially surprised that one district party chief in particular, Peng Zhiyong, who holds a doctorate, fell victim to the honey trap.


“He was spoken highly of by the people and enjoyed a reputation for being talented, smart, eloquent and outstanding in all ways,” Xinhua said. In addition, the report said, he “was widely regarded as having enormous political potential.”


Amy Qin contributed research.



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