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Mar20
Scandal puts focus on how CIA polices itself
Filed under: Obama, Politics, U.S.; Tagged as: barack obama, breaking news, central intelligence agency, cia, congress, government, Politics, president barack obama, prostitute, sex, terrorist, washington, whitehouseAllegations of officers’ sex misdeeds leads to scrutiny from Congress 
WASHINGTON – As a novice CIA case officer in the Middle East, Andrew Warren quickly learned the value of sex in recruiting spies. Colleagues say that he made an early habit of taking informants to strip clubs, and that he later began arranging out-of-town visits to brothels for his best recruits. Often Warren would travel with them, according to two colleagues who worked with him for years.
His methods earned him promotions and notoriety over a lengthy career, until Warren, 41, became ensnared in a sex scandal. Two Algerian women have accused the Virginia native of drugging and sexually assaulting them, and, in one instance, videotaping the encounter.
Six weeks after the allegations came to light, Warren has been formally notified by CIA Director Leon E. Panetta of his impending dismissal, according to U.S. government officials familiar with the case. But the episode — one of three sex-related scandals to shake the CIA this year — has drawn harsh questions from Congress about whether the agency adequately polices its far-flung workforce or takes sufficient steps to root out corrupt behavior.
‘An organization of professional liars’
The CIA says that these problems involve a tiny fraction of its workforce, and that those found to have breached rules are punished or fired. But former officers say the cases underscore a perennial challenge: guarding against scandal in a workforce — the size of which is classified but is generally estimated to be 20,000 — that prides itself on secrecy and deception.“You have an organization of professional liars,” said Tyler Drumheller, who oversaw hundreds of officers as chief of the agency’s European division. Experienced field managers are needed, he said, because inevitably “some people will try to take advantage of the system . . . and it’s a system that can be taken advantage of.”
The allegations against Warren drew an angry blast from the Senate panel that oversees the CIA. “The alleged activities are completely unacceptable,” committee leaders Dianne Feinstein (D-Calif.) and Christopher S. Bond (R-Mo.) said in a joint statement last month. Feinstein also criticized the CIA for what she said was not promptly informing Congress about the case, given its potential to damage U.S. relations with Algeria.
Repeated attempts in recent weeks to contact Warren through relatives were unsuccessful.
Misuses of money
The recent string of embarrassing revelations started with the CIA’s former No. 3 officer, Kyle “Dusty” Foggo, who was indicted on corruption charges two years ago. Court documents released in recent weeks depict Foggo as bullying the office of the agency’s general counsel into giving a job to his mistress, whose subsequent performance reviews were subpar.Last month, agency officials confirmed the firing of Steve Levan, a 16-year veteran who pleaded guilty to misusing CIA credit cards. Levan, an analyst, worked at the agency’s headquarters for the No. 2 official, Stephen R. Kappes. As part of his plea agreement, Levan acknowledged obtaining credit card numbers assigned to undercover operatives and using them to run up bills surpassing $115,000. Much of the money was spent on hotel rooms and gifts for a mistress, according to two agency officials familiar with the case. He is awaiting sentencing this spring.
Michael S. Nachmanoff, Levan’s attorney, declined to comment on the case. In a pre-sentencing motion filed last week, Nachmanoff said the judge should consider his client’s strong record of service for the CIA — a record the agency had declined to release, he said.
Rapid ascent halted
But the most damaging revelations involved Warren, an Arabic speaker and Middle East specialist who was on a rapid ascent after CIA postings in Kuwait, Iraq, Egypt and Algeria. He most recently served as Algiers station chief. But the State Department ordered him home in October after two Algerian nationals alleged that he assaulted them in separate incidents at his apartment.The women told State Department investigators that Warren assaulted them after giving them drug-laced drinks that made them pass out. State referred the matter to the Justice Department, where an investigation is ongoing. Warren has not been charged.
While looking into the allegations, U.S. officials discovered in Warren’s apartment more than two dozen video recordings that he apparently made of his sexual encounters, according to news accounts and two U.S. officials familiar with the investigation. One of the women behind the rape allegations appears in one of the videos, the officials said.
Current and former agency officials say that Warren and Levan were considered competent professionals with stellar work records, qualities that perhaps explain why their alleged misdeeds would have gone undetected.
“The fact of the matter is that the thousands of people who work at CIA are exceptionally dedicated, and cases of impropriety are extremely rare,” agency spokesman Mark Mansfield said. When there are such cases, he said, the CIA “looks into the allegations, follows up on them and cooperates fully with law enforcement authorities.”
Warning signs?
Several colleagues of Warren’s, though, spoke of warning signs that might have alerted the CIA sooner. Some who worked with him over several years said they were particularly concerned about the frequency of Warren’s use of strip clubs and other sex-related establishments for recruiting. The former officers, who spoke on the condition of anonymity because the agency does not allow them to discuss their CIA work publicly, said they were not surprised by the assault allegations.As CIA case officers attempt to recruit a foreign spy, they often offer personal inducements, ranging from cash to medical care. In some cases, a potential recruit may be taken to a strip club or even to a prostitute if it is deemed critical to cementing the relationship, longtime officers say. But for Warren, “it was a lifestyle thing,” costing the agency thousands of dollars, said one former co-worker who describes himself as a friend. The bills were routinely paid, he said.
“As long as you were doing good work, it was okay,” he said.
Mostly a ‘self-regulating system’
A. John Radsan, a former CIA assistant general counsel, said there are internal guidelines and structures — including the CIA inspector general’s office and a separate review board that oversees clandestine operations — that are intended to guard against scandal. In reality, he said, it is a self-regulating system with few incentives for reporting bad behavior.“You want a culture that values innovation and creativity and doesn’t mind violating the laws of other countries, but at the same time, you want a culture of compliance and honesty,” Radsan said. “It is a built-in contradiction.”
The agency’s internal management practices were also called into question last month during court proceedings for Foggo, who served as the top CIA administrator from November 2004 to May 2006.
A lengthy prosecution memo, made public over the objections of Foggo’s attorneys, listed a series of ethical alarms that did not prevent his reaching the agency’s highest ranks. Two personnel reports in 1989, for example, noted that Foggo “takes a very liberal and self-serving position regarding the interpretation of Agency rules and regulations” and warned that “he is likely to remain a potential threat to security through his poor judgment.”
In a court filing last month, Foggo’s attorneys said that their client has “committed his life to public service” and that his dedication and skills justified his promotions. They declined to comment further yesterday.
“Foggo was never a truly honest public servant” during his 24 years in the CIA, three prosecutors wrote in their memo to a federal judge in Alexandria shortly before Foggo was sentenced to 37 months in prison for corrupting the agency’s contracts. “He spent years defrauding the country.”
When Foggo manipulated agency contracts in 2003 and 2005, his colleagues and subordinates did not act on their suspicions of wrongdoing, the prosecutors said. Instead, they demonstrated a persistent reluctance to challenge authority that seems at odds with the climate of dissent and debate that the agency says it encourages.
After a former colleague of Foggo’s who had become his mistress was turned down for a job in the general counsel’s office, Foggo, who was the CIA’s executive director, called an associate general counsel into his office and “grew increasingly loud in tone and condescending,” according to a memo the counsel placed in her files. “[S]peaking in the third person, [Foggo] said, among other things, that when the EXDIR has an interest in a candidate for employment that I had better respect the EXDIR’s interest.”
The mistress was subsequently hired after an accelerated security check, because her paperwork was tagged “ExDir interest.” When her failure to perform required duties provoked her supervisor’s complaints, Foggo arranged for the supervisor — a 20-year veteran who had won many performance awards — to be ousted and moved to the Defense Department. The supervisor alleged in a court affidavit that her ouster was retaliatory.
No CommentsMar16White House bracing for a bailout backlash
Filed under: Obama, Politics; Tagged as: bailout, bank of america, barack obama, breaking news, finance, financial, government, Politics, president barack obama, Wall Street, washington, wells fargo, whitehouseObama administration worried populist anger could complicate agenda 
WASHINGTON – The Obama administration is increasingly concerned about a populist backlash against banks and Wall Street, worried that anger at financial institutions could also end up being directed at Congress and the White House and could complicate President Obama’s agenda.
The administration’s sharp rebuke of the American International Group on Sunday for handing out $165 million in executive bonuses — Lawrence H. Summers, director of the president’s National Economic Council, described it as “outrageous” on “This Week” on ABC — marks the latest effort by the White House to distance itself from abuses that could feed potentially disruptive public anger.
“We’ve got enormous problems that need to be addressed,” David Axelrod, Mr. Obama’s senior adviser, said in an interview. “And it’s hard to address because there’s a lot of anger about the irresponsibility that led us to this point.”
“This has been welling up for a long time,” he said.
Mr. Obama’s aides said any surge of such a sentiment could complicate efforts to win Congressional approval for the additional bailout packages that Mr. Obama has signaled will be necessary to stabilize the banking system.
As it is, there have already been moves in Congress to limit compensation to executives at banks and Wall Street firms that are receiving government help to survive.
Beyond that, a shifting political mood challenges Mr. Obama’s political skills, as he seeks to acknowledge the anger without becoming a target of it. A central question for Mr. Obama is whether his cool style — “in a time of crisis, we cannot afford to govern out of anger,” he said in his address to Congress last month — will prove effective when the country may be feeling more emotional.
Even as Mr. Summers was denouncing A.I.G. for the bonuses, he suggested that there was little if anything the government could do to stop them, seconding the conclusion of Treasury Secretary Timothy F. Geithner. But even if their reasoning was legally sound, they also risked having the administration look ineffectual in the face of what Mr. Summers said was the worst financial abuse of the last 18 months, since the economy began turning down in earnest.
“Never underestimate the capacity of angry populism in times of economic stress,” said Robert Reich, a professor of public policy at the University of California, Berkeley, and labor secretary under President Bill Clinton. “A big challenge for President Obama will be to maintain a rational and tactical public discussion in the midst of this severe downturn. The desire for culprits at times like this is strong.”
In a further development, A.I.G. on Sunday named dozens of financial institutions that benefited from its huge rescue loan from the Federal Reserve last fall. The list included Goldman Sachs, Merrill Lynch and Wachovia.
On Monday, the White House is expected to unveil proposals to help small businesses, an effort to make clear that the administration is not only focusing its attentions on Wall Street and big corporations like the automakers.
But the financial crisis is the most acute problem facing the administration, one it will not be able to play down. Christina D. Romer, the White House’s chief economist, said Sunday on “Meet the Press” on NBC that the administration was close to unveiling details of its plan to remove the worst of the bad assets from the books of banks, a move sure to refocus attention on winners and losers from bailouts.
Unquestionably a strong populist surge
The disclosure that A.I.G., which has received $170 billion in government assistance to remain afloat and avert a cascade of failures in the financial system, is paying bonuses to its executives is the latest in a series of episodes that Mr. Obama’s aides said seemed to be feeding a resurgence of public anger.
The public responded angrily to previous disclosures of large bonuses on Wall Street, to auto executives who flew on corporate jets to Washington for Congressional bailout hearings, and to last week’s face-off between Jon Stewart of “The Daily Show” and Jim Cramer, the CNBC financial commentator, over the network’s reporting on the crisis.
“There’s unquestionably a strong populist surge out there,” said Joel Benenson, Mr. Obama’s pollster, citing his own polls and focus groups. “It’s been brewing for close to four years. For the last two years, Americans were clearly indicating that they believe that one of the biggest obstacles to progress on America’s toughest challenges — notably health care and energy independence — was the influence of special interests and corporate interests on the agenda in Washington.”
A New York Times/CBS News Poll in February found that 83 percent of respondents said the government should cap the amount of compensation earned by executives of companies that are getting federal assistance.
Mr. Obama’s advisers argued that to at least some extent, this was a sentiment they could tap to push through his measures in Congress, including raising taxes on the wealthy. They pointed out that in his speech to Congress, Mr. Obama denounced corporations that “use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet.”
“The president has been very clear about this,” Mr. Axelrod said. “There is reason for anger, but we also have to solve the problem. We need a functioning credit system. That’s our responsibility, and he intends to meet it.”
Still, aides acknowledged the risks of a backlash as Mr. Obama tries to signal that he shares American anger but pushes for more bail-out money for banks and Wall Street.
For all his political skills and his capturing of the nation’s desire for change in the 2008 election, Mr. Obama, a product of Harvard Law School who calls upscale Hyde Park in Chicago home, has shown little inclination to strike a more populist tone. The danger, aides said, is that if he were to become identified as an advocate for the banks and Wall Street, people could take out their anger on him.
“The change now is you have a free-floating economic anxiety that has expressed itself in a kind of lashing out at those being bailed out and people who are bailing out,” Michael Kazin, a professor at Georgetown University who has written extensively on populism. “There’s not really a sense of what the solution is.”
“I do think there’s a potential for a ‘damn everybody in power’ kind of sentiment,” Mr. Kazin said.
No CommentsMar7Limbaugh dominates headlines, leaving the republicans with mixed feelings
Filed under: Obama, Politics; Tagged as: barack obama, breaking news, democrats, government, Politics, president barack obama, republicans, rush limbaugh, washington, whitehouseNo CommentsRadio Host’s Prominence Underscores Party’s Challenge to Forge New Identity 
Rush Limbaugh addresses a conservative conference in February
Rush Limbaugh is right where he wants to be and right where the White House wants him: in the news. But Republicans have more mixed feelings about the controversial talk radio host’s recent elevation.
Mr. Limbaugh dominated headlines this week, as a drive by the White House and other top Democrats to paint him as the leader of the Republican Party left the GOP flummoxed. Michael Steele, the new chairman of the Republican National Committee, illustrated his party’s dilemma, first calling Mr. Limbaugh’s style “ugly,” then phoning him to apologize. One committee member labeled Mr. Steele’s handling of the matter a “Republican Horror Show” and called on him to step down just weeks after taking on the job.
Behind the political theater lay a fundamental challenge for a party seeking a way out of the wilderness after last November’s drubbing. Republican leaders and activists are grappling with how to joust with a popular new president, particularly after years of being accused of embracing a cutthroat style of politics.
Yet some Republicans also sense openings in the early days of the Obama presidency. They argue that Democrats may be overreaching with an ambitious big-government agenda and that voters will turn to Republicans once they absorb the impact of spending bills that greatly expand the deficit without, they contend, doing much to stimulate the economy.
“There are clear opportunities for Republicans,” says party strategist Dave Winston, who suggests party leaders are starting to find their voice on targeted issues. Republicans are painting newly Democratic Washington as a hotbed of higher taxes and spending.
By week’s end, Republicans broke through the Limbaugh-dominated political news with their own story line: repeated attacks on “earmarks” in a spending bill passing through Congress. They even forced a delay in a Senate vote until next week.
Still, Mr. Winston said, Mr. Obama continues to benefit from the goodwill created in 2008. “The question is when do we get to the point where the afterglow of the election dissipates,” he said. “That’ll be an important inflection point.”
Many party activists hunger for direct confrontation. This past week, Tony Perkins, who heads the Family Research Council, excoriated Republicans for not resisting Kathleen Sebelius, the nominee for Health and Human Services secretary, who supports abortion rights. “If Republicans won’t take a stand now, when will they?” Mr. Perkins demanded in an online newsletter.
Some Republicans argue that Democratic attacks on Mr. Limbaugh will backfire by rallying disenchanted conservatives who lost enthusiasm for the party in 2006 and 2008. “They’ve miscalculated big time,” said Greg Mueller, a conservative strategist and veteran of the Pat Buchanan and Steve Forbes presidential campaigns. “The best thing they can do for the Republican Party is energizing the base, by attacking Rush. He communicates more effectively to the Reagan coalition that most elected Republicans.”
But others say the party risks alienating voters by attacking the president at a time of financial crisis. In Florida, Jim Greer, the party’s state chairman, is urging Republicans to “move on to the issues that are important to American voters in addition to [social] issues — education, the economy, things that affect people every day.” Mr. Greer kicked off a youth-outreach program this past week emphasizing young people’s financial concerns.
Republicans clearly are on the defensive. A Wall Street Journal/NBC News Poll this week found nearly half of respondents viewed the Democrats positively and 31% negatively, while 26% viewed the GOP positively and 47% negatively.
Still, the poll also showed an opening for the emerging Republican line of attack against Mr. Obama’s early policies. By 61% to 29%, those surveyed said they were more worried the government would “spend too much money trying to boost the economy” than too little.
Republican guru Ed Gillespie, who held Mr. Steele’s job during the George W. Bush years, says the floundering and internal debate is to be expected for a party out of power. “The fact is there is a natural process that goes on when you don’t have the House, the Senate or the White House, where a lot of voices start to emerge,” he said. “Let a thousand flowers bloom.”
Mar6Job loss stats looking grim into 2010
Filed under: Economy, Obama, Politics; Tagged as: banks, barack obama, breaking news, Economy, government, job loss, jobs, layoffs, Politics, president barack obama, unemployment insurance, washington, white houseNo CommentsSome forecasters say jobless rate may rise through 2010 to 10 percent 
People crowd a job fair sponsored by employment website Monster.com as part of their "Keep America Working" tour at a hotel in New York's Times Square on March 5.
Bad as Friday’s grim jobs report was — 8.1 percent unemployment rate, 651,000 jobs lost in February, 4.4 million shed since the recession began — the labor market’s pain is likely to continue until well into 2010.
Wall Street economists, who are not typically paid to see the glass half-empty, warn that more bad news is coming in the months ahead.
“The economy is in a tailspin. Businesses are jettisoning jobs at an unprecedented pace,” said Richard Yamarone, economist at Argus Research. “The labor market remains in free-fall,” said Nigel Gault Chief US Economist IHS Global Insight. “The recession is deepening; there is no sign yet even that the rate of contraction is slowing.”
“Horrendous! There can be no other word to describe this employment report,” said Ryding. “Unfortunately, the weekly jobless claims data suggest more of the same is coming for March.
Since the recession began in December 2007, the economy has lost 4.4 million jobs, more than half of which occurred in the past four months. That brings the total to 12.5 million full-time jobs and the official unemployment rate to 8.1 percent.
Another 8.6 million have been forced to work part time for “economic reasons” as employer cut back hours to cut costs. The number of so-called “discouraged workers” – those who are out of work and have given up looking for a job – has more than doubled since last year. When those two groups are included, the jobless rate jumped by almost a full percentage point this month to 14.8 percent.
On Monday, economists at Goldman Sachs said they expect the headline unemployment rate to continue to rise to 9.5 percent by the end of this year and then go to 10 percent by the end of 2010.
Coming on top of trillions of dollars in lost home values and trillions more in stock market losses, the collapse of the job market is now fueling a downward economic spiral. With less spending power and fearful of further job losses, consumers have sharply cut spending that had made up some 70 percent of Gross Domestic Product.
The contraction appears to be accelerating. The latest government figures show GDP falling at an annual rate of 6.2 percent in the last three months of 2008. Some economists now believe that if the pace of jobs losses continues — they currently average more than 600,000 a month — the economic contraction could be more severe in the first quarter of this year.
Earlier this week, Federal Reserve Chairman Ben Bernanke told Congress that the economic data “show little sign of improvement” and that “labor market conditions may have worsened further in recent weeks.”
The Obama administration is counting on a package of measure to get the economy moving again and employers back in a hiring mood. The list includes an almost $800 billion package of spending and tax cuts; a $70 billion bailout program for the nation’s troubled banks; and a $75 billion effort to head off an estimated nine million home foreclosures.
“We have a responsibility to act and that’s what I intend to do as the president of the United States of America,” Obama told a graduating class of new police officers in Ohio Friday.
But it will be at least several months before the stimulus spending begins to flow through the economy. In the meantime, layoffs will likely continue.
“I think businesses have already made up their minds,” said Mark Zandi, chief economist at Moody’s Eonomy.com. “They did their forecast for revenues for 2009 in late 2008. They marked them down, and now they’re trying to get their cost structure down. And that means cutting payroll. No matter what the stimulus number was, I think we would see these job losses anyway.”
Zandi said there may also be a lag effect in the jobless numbers because laid off workers given severance packages are counted as employed until those payments run out.
But the impact of the stimulus spending will be muted as long as the banking system and credit markets remain crippled.
Despite some signs of life in corners of the credit markets, which shut down last fall, banks are still burdened with massive losses from bad loans. Much of the investor-funded market for consumer lending like credit cards and car loans remains frozen.
While some large companies have had success selling fresh debt, the cost for others remains high. One measure of that is the price of so-called credit default swaps, a kind of insurance policy against a large corporate borrower defaulting on its debt.
The cost of credit defaults swaps for Berkshire Hathaway, for example, show that investors think the company run by legendary investor Warren Buffett is a riskier bet than bonds issued by Vietnam, according to Michael Hartnett, co-head of International Investment Strategy at Merrill Lynch. General Electric, once considered the bluest of blue chip companies, is now seen as riskier than Russian debt, based on the the price of those swaps, said Hartnett.
“In that kind of environment you are still trying to pursue cash if you’re running the company,” said Robert Barbera, chief econmist at the investment firm ITG. “And that means cutting hours or cutting workers.”
Amid disarray in the credit markets and the free fall in the job market, the stock market has suffered the worst collapse since the Crash of 1929. Based on the broadest measure, stock prices have fallen 56 percent since the Oct., 2007 peak, wiping out some $11.1 trillion of wealth.
As investors look for a bottom in the economy as a sign of recovery in stocks, Barbera thinks they may have it backwards. As long as the markets remain crippled, layoffs will likely continue, he said.
“The employment data isn’t going to get better and drive stocks up,” he said. “The markets are going to get better and then we’re going to see better news on Main Street.”
That’s why many investors and companies are watching closely the government’s efforts to shore up battered banks and get lending flowing again to consumers. After a series of missteps, the government is now subjecting banks to a “stress test” to see if they can withstand a bigger downturn in the economy. Some $700 billion has been spent or committed to provide more capital to the most troubled banks.
But critics say lending will remain frozen until the government moves more aggressively to buy hundreds of billions of dollars in bad loans that are clogging up the credit system. The Treasury has said it is working on a joint public-private entity to buy those wasting assets, but the announcement is said to be several weeks away.
One reason for the delay may be the Obama administration’s sluggish pace of filling senior positions at the Treasury. This week, Treasury Secretary Tim Geithner’s staffing plans suffered more setbacks, after candidates for two senior jobs withdrew their names from consideration.
Five weeks into his tenure, Geithner has yet to name a single top deputy or assistant secretary, leaving Treasury without enough people authorized to make decisions or represent the department in meetings with stakeholders. At the department’s office of public affairs, for example, all eleven of the most senior positions listed on the Treasury’s web site are vacant.
“The crucial thing is we are moving forward,” said Christine Romer, the Chair of the White House’s Council of Economic Advisers on Friday. “Treasury has a very large, very important and talented career staff that is there. Secretary Geithner is putting together a team as fast as he can, but believe me, work is going on night and day. And I think they are going to be able to do what they need to do.”
Geithner told a Senate panel Wednesday that he hoped “to come up for the committee soon with a full slate of very strong people.”
But some Wall Street veterans say the financial markets are losing confidence that the Obama adminstration is moving quickly enough to address the biggest crisis it faces.
“Geithner is stuck there all by himself trying to do everything,” said David Wyss, chief economist at Standard & Poor’s in New York. “They don’t have anybody confirmed, and Treasury is a big shop to try to run with one person, especially right now.”
Mar5Digital TV transitio slated for June 12 09
Filed under: Entertainment; Tagged as: breaking news, digital satellite tv, digital tv, digital tv reception, government, Politics, technology, television, tvNo Comments
WASHINGTON (Reuters) – With about three months to go, U.S. regulators say some consumers are still unprepared for the television industry switch to digital broadcasting, which will affect Americans who do not receive their signals through cable or satellite.
The federally mandated transition was originally set for February 17, but lawmakers postponed it to June 12 on the theory that people need more time to get ready.
The switch from analog to digital allows broadcasters to send more data efficiently, and also frees up the existing analog spectrum for such uses as cellphone and public-safety radio transmissions.
About a third of the nation’s 1,800 full-power broadcasters switched from analog to digital TV signals on the original February 17 date, though only about 15 percent of the nation’s households were affected.
“We must be mindful that this is just the beginning and that the large impacts lie ahead of us,” Eloise Gore, associate chief in the media bureau at the Federal Communications Commission, told a public meeting on the switch on Thursday.
President Barack Obama and most congressional Democrats won a delay of the full digital transition to June 12, after a government coupon program for converter boxes needed for older TVs could not provide coupons due to budget issues. That put millions of households on a coupon waiting list.
Backers of a delay feared vulnerable groups, like the elderly and needy, would lose access to emergency information if they lost television signals for days.
“For many, television is not simply a source of entertainment but a vital source of news that can be a lifeline in an emergency situation,” acting FCC chairman Michael Copps said.
For the most part, the transition in February went smoothly. Significantly fewer calls came into call centers than estimated, for example. Still, the government expects up to 3 million telephone calls for help between now and June 12.
5 MILLION STILL UNREADY
Still, about 5 million U.S. households are still “totally unready” and 2.3 million households are waiting for the $40 government coupons, the government said.
“We are … struggling with the procrastination of seniors who now see the June 12 date and see they have more time to act,” said Sandy Markwood, chief of the National Association of Area Agencies on Aging.
But that coupon waiting list should be cleared within three weeks now that the government has millions in new stimulus money assigned to re-fund the program and allow it to use first-class mail, among other changes.
The government is now sending out 2 million coupons a week with a turnaround time of 9 days, compared with 21 days, thanks to new funding, an official said.
Among the most common problems for consumers have been reception issues because of antennas that need to be repositioned or replaced. Viewers must also perform a scan to pick up channels once they receive a converter box, according to the FCC.
ELUSIVE $40 BOX
The converter boxes typically cost between $60 and $80. Originally, the coupon program was intended to cover the full cost.
But a $40 box is “elusive,” conceded Christopher McLean, executive director of the Consumer Electronics Retailers Coalition, which represents many of the companies selling the boxes like Wal-Mart Stores and Best Buy.
Consumers Union said it believes some retailers will not carry the cheaper boxes because they will make slimmer profit margins on them.
That retailers are making the boxes available is “largely a public service,” McLean said. “Consumers need to shop around a little bit” to find cheaper boxes.
The postponement could benefit cable and satellite companies, which could attract more customers during the extension, according to Stanford Washington Research analyst Paul Gallant.
Beneficiaries are likely to include Comcast Corp, Time Warner Cable, DirecTV Group, EchoStar Corp, Mediacom Communications, and Charter Communications, he said.
Major U.S. television networks, including CBS Corp’s CBS, General Electric Co’s NBC and Walt Disney Co’s ABC, vowed last week to continue to transmit TV signals in analog.