LONDON (Reuters) - Stock futures pointed to a fractionally higher open on Wall Street on Wednesday, with futures for the S&P 500, the Dow Jones and the Nasdaq 100 rising by 0.1 to 0.2 percent.
* The U.S. Federal Reserve is expected to announce a fresh round of bond buying on Wednesday as part of its efforts to support a fragile economic recovery threatened by political wrangling over the government's budget.
* Negotiations to avert the "fiscal cliff" ahead of a year-end deadline intensified as President Barack Obama and U.S. House of Representatives Speaker John Boehner spoke by phone on Tuesday after exchanging new proposals.
* India's government announced an inquiry into lobbying practices by Wal-Mart Stores Inc. on Wednesday after a report that the giant retailer had pressed U.S. lawmakers to help gain access to foreign markets.
* Costco Wholesale Corp posted a 30 percent rise in quarterly profit, beating expectations, as the largest U.S. warehouse club chain saw sales rise and got a lift from higher membership fees.
* Chesapeake Energy Corp on Tuesday agreed to sell most of its remaining natural gas processing and gathering assets for $2.16 billion as it continues to sell assets to pay down its heavy debt load.
* Sprint Nextel Corp is in talks with Intel Corp and Comcast Corp to buy out their stakes in the U.S. wireless provider Clearwire Corp, two people familiar with the matter said on Tuesday.
* European shares steadied in early trade on Wednesday, keeping alive their sharp three-week rally as investors bet the Fed would deliver on stimulus.
* The Dow Jones industrial average <.dji> closed up 78.56 points, or 0.60 percent, at 13,248.44 on Tuesday. The Standard & Poor's 500 Index <.spx> was up 9.29 points, or 0.65 percent, at 1,427.84 - its highest since November elections. The Nasdaq Composite Index <.ixic> was up 35.34 points, or 1.18 percent, at 3,022.30.
(Reporting by Atul Prakash; editing by Patrick Graham)
WASHINGTON (Reuters) – A recently announced hacking of the U.N. nuclear agency’s computer servers was not the first time an attempt had been made to break into the organization’s computer system, the head of the agency said on Thursday.
Yukiya Amano, director general of the International Atomic Energy Agency, said that a few months ago a group broke into the agency’s computer system and stole personal information of scientists working on peaceful uses of nuclear energy.
In response to questions at a Council on Foreign Relations event in Washington, Amano repeated what he said last week after the hacking was revealed: no sensitive information about the IAEA‘s nuclear inspections had been stolen.
The IAEA has shut down the server that had been hacked and is continuing an investigation, Amano said. But he also said it wasn’t the first attempt to break into the system.
“If you ask if this is the only case? I would say there have been some other tries but we are doing our best to protect our system,” Amano said.
The hackers – a group using an Iranian-sounding name – have posted scores of email addresses of experts who have been working with the U.N. agency on a website, and have urged the IAEA to investigate Israel’s nuclear activity.
Israel, which has an undeclared nuclear arsenal, and the United States accuse Iran of seeking to develop a nuclear weapons capability. Tehran denies such ambitions.
Amano would not say if he believed Iran was behind the attacks on the IAEA, whose missions include preventing the spread of nuclear weapons and which is investigating Iran’s disputed nuclear activities.
“The group … they have what looks like an Iranian name. But that does not mean that the origin is Iran,” he said.
There has been an increase in suspected Iranian cyber attacks this year, coinciding with a deepening standoff with the West over Tehran’s nuclear program.
(Reporting by Deborah Charles. Editing by Warren Strobel and Doina Chiacu)
ULAN BATOR, Mongolia — The concept of a “blue sky country” has become almost a cliché in presentations about Mongolia, the world’s fastest-growing economy last year. The phrase, which evokes the Montana-like landscape of the steppe, paints a picture of sunny investment horizons in this frontier democracy rich in coal, copper and gold.
But visitors to this city, the capital of Mongolia, seldom find a blue sky today. It is smoggy, and soot rains down from the hills, as the poorest residents burn cheap brown coal to stay alive through the winter.
The investment prospects of Mongolia, a darling of the emerging markets, are similarly shifting.
In May, the Parliament passed a law that restricted foreign investment in the country’s most attractive asset, its mineral deposits. The government is also taking aim at a crucial deal with the multinational mining giant Rio Tinto, a pact that many see as the foundation of the country’s recent economic growth.
Now, the underlying fundamentals of the country look increasingly shaky. Mongolia faces a financing crunch, as investment dollars flowing from abroad have fallen. And revenue from coal, the country’s main export, has dropped along with Chinese demand.
“There are a series of elements that have built up less-than-welcoming attitudes to Mongolia at a time when the macroeconomic situation is deteriorating,” said John P. Finigan, the chief executive of Golomt Bank, the country’s second-biggest bank.
Mongolia’s star rose — and is now falling — with the fortunes of one company: Rio Tinto, the country’s largest investor.
In October 2009, Rio Tinto and Ivanhoe Mines, a Canadian exploration company, negotiated a deal with the Mongolian government about developing Oyu Tolgoi, the crown jewel of the country’s mining sector and the world’s biggest new source of copper. The copper and gold mine would cost more than $10 billion to build, and the potential investors wanted assurances. Under the so-called Oyu Tolgoi Investment Agreement, taxes and royalty payments to the government would be fixed for 30 years. At the time, it was considered “the initiation of a new stage in Mongolia’s history,” said Oliver Belfitt-Nash, an analyst at Monet Capital, a Mongolian investment bank.
The agreement set off a boom.
Rio Tinto spent billions of dollars to buy out Ivanhoe’s stake in the project and build the Oyu Tolgoi mine. Investors followed, encouraged by the cooperation between a multinational corporation and a coalition government. Some investors financed smaller mines. Others imported mining equipment or Hummers to sell to newly minted millionaires. Skyscrapers rose in central Ulan Bator.
The impact of this spending was significant in this country of only three million people. Last year — when capital expenditures on the Oyu Tolgoi mine peaked — Mongolia’s gross domestic product increased by 17.5 percent, according to the International Monetary Fund. It was the fastest-growing economy in the world.
But optimism has fizzled since May. That month, Mongolia passed the Strategic Foreign Investment Law, which states that Parliament must approve foreign takeovers of assets in strategic sectors like mining and banking.
In Ulan Bator, the law was widely seen as a torpedo aimed at one deal, Chalco’s takeover of SouthGobi Resources, a coal mining company. Chalco, China’s largest state-owned mining company, agreed in April to buy a controlling stake in SouthGobi Resources, a Rio Tinto subsidiary, for $926 million. In September, Chalco walked away, citing regulatory uncertainty.
Both foreign investors and local businessmen have complained about the law’s lack of clarity. The rules set up the potential for severe regulatory delays, as politicians from all parties intervene in the deal-making. The government has not yet specified how the law would work in practice, but it has already affected transactions beyond the SouthGobi acquisition.
“We haven’t made any new investments,” said an executive at an financial company with extensive holdings in Mongolia, who spoke on the condition of anonymity. It “is a horrible law. It is very menacing and unclear. At a time when investors are scared of allocating capital anyway, it’s definitely had a negative impact.”
In the months after the law’s passage, foreign direct investment plunged. In September, investment flows from abroad dropped 44 percent compared with the same month in 2011, according to data from the central bank.
The commodity markets are partly to blame for the financing crunch. Prices for coal and copper, the country’s main exports, are lower this year.
But government policies have only worsened the problem. Ovoot Tolgoi, a large coal mine owned by SouthGobi Resources, has suspended its operations for the last six months after the failed deal with Chalco.
Tavan Tolgoi, the state-owned coal mining company, did not export coal for three months this summer. In the run-up to elections in June, the government raided the company’s treasury to pay for cash handouts to the populace.
The ruling party eventually lost the elections. And the policy left Tavan Tolgoi so starved for money that it could not afford to transport its coal to Chinese markets, according to a company official who spoke on the condition of anonymity because of the political nature of the matter.
The combination — the weakness in the mining industry coupled with the government actions — has hurt the country’s finances. The International Monetary Fund expects that Mongolia will face a fiscal deficit of 900 billion tugrik, or $643 million, in 2012, and several policy makers in Ulan Bator expect it to widen next year.
The situation has left the government scrambling to make up the gap, putting the Rio Tinto deal directly in the cross hairs.
Last month, the Parliament approved a budget for 2013 that tries to renegotiate the Oyu Tolgoi Investment Agreement with Rio Tinto. The budget calls for 446 billion tugrik, or $319 million, of extra income from the Oyu Tolgoi mining project next year. This revenue would come from new royalty payments that are up to four times as high as in the original deal. The budget legislation refers to “when the amendment is made,” as if it were already a done deal.
“We believe the recent surge in government support to renegotiate” the deal with Rio Tinto “is to meet the proposed budget deficit,” Dale Choi, an analyst at Origo Partners, a private equity investor in Mongolia, said in a note last month. But revising the deal “would undoubtedly adversely impact both near- and longer-term economic growth and Mongolia’s sovereign risk profile in the global financial markets.”
The changes in the budget could threaten Rio Tinto’s returns. Significantly higher payments to the government could make the project uneconomical, prompting the company to freeze new investment and start international arbitration.
So far, Rio Tinto and its partners have spent more than $6 billion building Oyu Tolgoi, a vast complex that gleams with state-of-the-art equipment in the Gobi Desert. But the investors have not seen a dollar in profit because the mine will not start producing copper until next year. A spokesman for Rio Tinto declined to comment.
The two sides are in a standoff. The mining minister said at a news conference in October, “We have a strong need to renegotiate the investment agreement. If Oyu Tolgoi keep refusing, we will work until they understand and accept the changes.” But the company is unwilling to accept the tax and royalty amendments proposed in the budget, said a person with knowledge of the situation. Low-level discussions between the company and the government are under way, according to people on both sides, who declined to be identified.
Now, Mongolia faces a tough choice.
The country needs the money to plug the hole in the budget. The Rio Tinto deal has also become politically toxic, and the government needs to please many members of its coalition who campaigned and won seats by opposing the agreement.
But foreign investment — the lifeblood of the economy — could dry up if Rio Tinto pulls back.
Even as pessimism about the economy and investment policy deepens in Mongolia, outside investors continue to buy into the country’s “blue sky” future. Last week, Mongolia sold $1.5 billion of sovereign bonds amid strong demand.
In New York, Singapore and Hong Kong, a Mongolia delegation showed a PowerPoint presentation that featured photographs of the wide-open steppe. The first slide reads: “Mongolia: The Country with Unmatched Growth Potential.”
But within Mongolia, some are wondering whether such claims match the reality.
This post has been revised to reflect the following correction:
Correction: December 11, 2012
A previous version of the article said that Chalco walked away from buying a controlling stake in SouthGobi Resources in May. The company walked away in September.
Nashville star Hayden Panettiere has broken up with her boyfriend of more than a year, New York Jets wide receiver Scotty McKnight, a source confirms to PEOPLE.
But the split doesn't appear to be the stuff of a sad country song. The actress, 23, is still friends with McKnight, 24, and one source tells TMZ that their pals wouldn't be surprised if they got back together.
This is Panettiere's second go at a relationship with an athlete. Before dating McKnight she was with Ukrainian boxer Wladimir Klitschko for about two years. – Julie Jordan
WASHINGTON (AP) — It's about to get faster and easier to diagnose food poisoning, but that progress for individual patients comes with a downside: It could hurt the nation's ability to spot and solve dangerous outbreaks.
Next-generation tests that promise to shave a few days off the time needed to tell whether E. coli, salmonella or other foodborne bacteria caused a patient's illness could reach medical laboratories as early as next year. That could allow doctors to treat sometimes deadly diseases much more quickly — an exciting development.
The problem: These new tests can't detect crucial differences between different subtypes of bacteria, as current tests can. And that fingerprint is what states and the federal government use to match sick people to a contaminated food. The older tests might be replaced by the new, more efficient ones.
"It's like a forensics lab. If somebody says a shot was fired, without the bullet you don't know where it came from," explained E. coli expert Dr. Phillip Tarr of Washington University School of Medicine in St. Louis.
The federal Centers for Disease Control and Prevention warns that losing the ability to literally take a germ's fingerprint could hamper efforts to keep food safe, and the agency is searching for solutions. According to CDC estimates, 1 in 6 Americans gets sick from foodborne illnesses each year, and 3,000 die.
"These improved tests for diagnosing patients could have the unintended consequence of reducing our ability to detect and investigate outbreaks, ultimately causing more people to become sick," said Dr. John Besser of the CDC.
That means outbreaks like the salmonella illnesses linked this fall to a variety of Trader Joe's peanut butter might not be identified that quickly — or at all.
It all comes down to what's called a bacterial culture — whether labs grow a sample of a patient's bacteria in an old-fashioned petri dish, or skip that step because the new tests don't require it.
Here's the way it works now: Someone with serious diarrhea visits the doctor, who gets a stool sample and sends it to a private testing laboratory. The lab cultures the sample, growing larger batches of any lurking bacteria to identify what's there. If disease-causing germs such as E. coli O157 or salmonella are found, they may be sent on to a public health laboratory for more sophisticated analysis to uncover their unique DNA patterns — their fingerprints.
Those fingerprints are posted to a national database, called PulseNet, that the CDC and state health officials use to look for food poisoning trends.
There are lots of garden-variety cases of salmonella every year, from runny eggs to a picnic lunch that sat out too long. But if a few people in, say, Baltimore have salmonella with the same molecular signature as some sick people in Cleveland, it's time to investigate, because scientists might be able narrow the outbreak to a particular food or company.
But culture-based testing takes time — as long as two to four days after the sample reaches the lab, which makes for a long wait if you're a sick patient.
What's in the pipeline? Tests that could detect many kinds of germs simultaneously instead of hunting one at a time — and within hours of reaching the lab — without first having to grow a culture. Those tests are expected to be approved as early as next year.
This isn't just a science debate, said Shari Shea, food safety director at the Association of Public Health Laboratories.
If you were the patient, "you'd want to know how you got sick," she said.
PulseNet has greatly improved the ability of regulators and the food industry to solve those mysteries since it was launched in the mid-1990s, helping to spot major outbreaks in ground beef, spinach, eggs and cantaloupe in recent years. Just this fall, PulseNet matched 42 different salmonella illnesses in 20 different states that were eventually traced to a variety of Trader Joe's peanut butter.
Food and Drug Administration officials who visited the plant where the peanut butter was made found salmonella contamination all over the facility, with several of the plant samples matching the fingerprint of the salmonella that made people sick. A New Mexico-based company, Sunland Inc., recalled hundreds of products that were shipped to large retailers all over the country, including Target, Safeway and other large grocery chains.
The source of those illnesses probably would have remained a mystery without the national database, since there weren't very many illnesses in any individual state.
To ensure that kind of crucial detective work isn't lost, the CDC is asking the medical community to send samples to labs to be cultured even when they perform a new, non-culture test.
But it's not clear who would pay for that extra step. Private labs only can perform the tests that a doctor orders, noted Dr. Jay M. Lieberman of Quest Diagnostics, one of the country's largest testing labs.
A few first-generation non-culture tests are already available. When private labs in Wisconsin use them, they frequently ship leftover samples to the state lab, which grows the bacteria itself. But as more private labs switch over after the next-generation rapid tests arrive, the Wisconsin State Laboratory of Hygiene will be hard-pressed to keep up with that extra work before it can do its main job — fingerprinting the bugs, said deputy director Dr. Dave Warshauer.
Stay tuned: Research is beginning to look for solutions that one day might allow rapid and in-depth looks at food poisoning causes in the same test.
"As molecular techniques evolve, you may be able to get the information you want from non-culture techniques," Lieberman said.
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Follow Mary Clare Jalonick on Twitter at http://twitter.com/mcjalonick
PARIS (Reuters) - Stock futures pointed to a higher open on Wall Street on Tuesday, with futures for the S&P 500 up 0.18 percent, Dow Jones futures up 0.18 percent and Nasdaq 100 futures up 0.23 percent at 5:25 a.m. EDT.
* European shares gained ground on Tuesday morning, helped by data showing German investor confidence unexpectedly rose in December after a sharp fall in the previous month, with Italian shares recovering from the previous day's selloff sparked by Italian Prime Minister Mario Monti's announcement that he plans to resign.
* Monti said on Tuesday he still wanted to influence political debate in whatever role he fills after elections next year, leaving his political future open following speculation he may remain in politics.
* Texas Instruments Inc will be in focus after slightly raising its profit target, excluding a massive restructuring charge, as the company is cutting costs due to macro-economic uncertainties.
* Intel presented new manufacturing technology that it said keeps it on track to launch a new generation of chips for smartphones and tablets as it rushes to catch up with Qualcomm and other rivals in the fast-growing mobile market.
* Industrial machinery maker SPX Corp is in exclusive talks to buy rival Gardner Denver Inc and hopes to finalize a deal by the end of the year, four people familiar with the matter said on Monday.
* Contract manufacturer Flextronics International Ltd said it agreed to take over Motorola Mobility's manufacturing operations in Tianjin, China and Jaguariuna, Brazil.
* Morgan Stanley might seek approval from the Federal Reserve to repurchase shares for the first time in four years, the Wall Street Journal reported, citing people familiar with the firm's thinking.
* A group of Chinese companies, including Industrial and Commercial Bank of China (ICBC), is in talks to buy nearly all of American International Group Inc's aircraft leasing unit for about $5.5 billion, AIG said on Friday.
* On the macro front, investors awaited U.S. international trade for October, due at 8:30 a.m. EDT, the consumer confidence index, due at 10 a.m. EDT, as well as wholesale inventories, due at 10 a.m. EDT.
* U.S. stocks edged higher on Monday as technology shares bounced back after recent weakness and McDonald's posted strong monthly sales.
* The Dow Jones industrial average <.dji> rose 14.75 points, or 0.11 percent, to 13,169.88 at the close. The Standard & Poor's 500 Index <.spx> inched up just 0.48 of a point, or 0.03 percent, to 1,418.55. The Nasdaq Composite Index <.ixic> advanced 8.92 points, or 0.30 percent, to close at 2,986.96.
As Syria‘s rebels work to overthrow the tank-equipped Assad regime, they’ve learned that it helps to have tanks of their own. They deserve bonus points for integrating video game technology. This is no exaggeration. Have a look at the opposition forces’ “100 percent made in Syria” armored vehicle, the Sham II.
RELATED: What Dennis Kucinich Really Said in Syria
Named for ancient Syria and assembled out of spare parts over the course of a month, the Sham II sort of rough around the edges, but it’s got impressive guts. It rides on the chassis of an old diesel car and is fully encased in light steel that’s rusted from the elements. Five cameras are mounted around the tanks outside, and there’s a machine gun mounted on a turning turret. Inside, it kind of looks like a man cave. A couple of flat screen TVs are mounted on opposite walls. The driver sits in front of one, controlling the vehicle with a steering wheel, and the gunner sits at the other, aiming the machine gun with a Playstation controller.
RELATED: It’s Never a Good Idea to Put Your Torture Victims on YouTube
Sham II is heading up to the devastated city of Aleppo to join the combat forces there. Meanwhile, rebel forces continue to close in on Damascus and Assad’s shrinking regime. Diplomats have already begun to speculate about what the Syrian president’s next move would be. We do know that Assad has been exploring the option of seeking political asylum in the Middle East or in Latin American. However, it looks more likely that Assad and his cronies will retreat to the Alawite-controlled mountains on Syria’s Mediterranean coast. The only other alternative — chemical weapons attack notwithstanding — would be for Assad to stay in the palace and fight to the end. And can you imagine standing helpless as a fierce machine like Sham II roared up the palace steps? Run, Bashar. Run.
In November, Xi Jinping made his official debut as party chief at the 18th party congress, which military officers attended.
BEIJING — In a strong signal of support for greater market-oriented economic policies, Xi Jinping, the new head of the Communist Party, made a visit over the weekend to the special economic zone of Shenzhen in south China, which has stood as a symbol of the nation’s embrace of a state-led form of capitalism since its growth over the last three decades from a fishing enclave to an industrial metropolis.
The trip was Mr. Xi’s first outside Beijing since becoming party chief on Nov. 15. Mr. Xi visited a private Internet company on Friday and went to Lotus Hill Park on Saturday to lay a wreath at a bronze statue of Deng Xiaoping, the leader who opened the era of economic reforms in 1979, when Shenzhen was designated a special economic zone. Mr. Deng famously later visited the city in 1992 to encourage reviving those economic policies after they had stalled following the violent crackdown on pro-democracy protests in 1989.
“Reform and opening up is a guiding policy that the Communist Party must stick to,” Mr. Xi said, according to Phoenix Television, one of several Hong Kong news organizations that covered the trip. “We must keep to this correct path. We must stay unwavering on the road to a prosperous country and people, and there must be new pioneering.”
In the months before the transition, there were widespread calls, including from people close to Mr. Xi, to adopt more liberal economic policies and even to experiment with greater political openness as a way for the party to maintain its rule. Without much success so far, reformers have long been encouraging the leadership to move toward a more sustainable growth model for China, one that relies more on domestic consumption rather than infrastructure investment and exports, and where state enterprises play less of a role.
Mr. Xi, known as a skillful consensus builder, has kept his ideas carefully veiled throughout his career, but his trip to Shenzhen is the strongest sign yet that he may favor more open policies. In a speech in Beijing on Nov. 29, Mr. Xi spoke of the “Chinese dream” of realizing the nation’s “revival,” which, besides being a call for renewal, also signaled strong nationalist leanings.
Mr. Xi’s father, Xi Zhongxun, was a revered senior official handpicked by Mr. Deng to help shape the new economic policies and oversee the creation of the Shenzhen zone. Mr. Xi’s mother lives in Shenzhen, and he visited her on his trip, according to Hong Kong news reports.
“If he indeed went to Shenzhen, that means he intends to make reform a subject of priority,” said Li Weidong, a liberal political analyst. “That would really be a phenomenon.”
Mr. Li cautioned, though, that the so-called reform policies that followed Mr. Deng’s 1992 southern tour, in his view, “ended up being fake” because China’s boom resulted in widespread corruption and the expansion of state enterprises at the expense of private entrepreneurship.
When Mr. Xi’s predecessor, Hu Jintao, became party chief in 2002, he was seen by many as a potential reformer, but his tenure was marked by conservative policies. For his first trip outside Beijing as party chief, Mr. Hu went in December 2002 to Xibaipo, a hallowed site for the revolution, where he reiterated a speech given by Mao Zedong.
Over the weekend, video footage from Phoenix Television showed a line of minibuses and police cars winding its way through Shenzhen. Mr. Xi and other officials walked outdoors in dark suits. The party’s official news organizations did not immediately report on the trip, but some prominent mainland Chinese news Web sites cited the Hong Kong reports.
Mr. Xi’s early moves as party leader seem aimed at emphasizing national “revival,” a theme he highlighted when he appeared on Nov. 29 with the party’s new seven-man Politburo Standing Committee in a history museum at Tiananmen Square. According to People’s Daily, the party mouthpiece, Mr. Xi stood in front of an exhibition called “The Road to Rejuvenation” and said, “After the 170 or more years of constant struggle since the Opium Wars, the great revival of the Chinese nation enjoys glorious prospects.”
He added: “Now everyone is discussing the Chinese dream, and I believe that realizing the great revival of the Chinese nation is the greatest dream of the Chinese nation in modern times.”
The emphasis on a “Chinese dream” is particular to Mr. Xi, and could prove to be a recurring motif throughout his tenure. The notion of a grand revival — “fu xing” in Mandarin — has been popular with Chinese leaders for at least a century, but Mr. Xi appears to be tapping more deeply into that nationalist vein than his recent predecessors, perhaps recognizing that traditional Communist ideology no longer has popular appeal.
Bradley Cooper and Robert De Niro were on hand to celebrate their film Silver Linings Playbook at the Weinstein Company's special event at the Chateau Marmont in West Hollywood on Friday.
At the candle-lit dinner party, De Niro enjoyed a Purity Vodka martini, while Cooper posed for photos with Zoe Saldana. De Niro spent part of the night talking with Mel Gibson and Jane Fonda, who were also in attendance.
Diane Keaton was also at the event, but upon arriving, entered the room "looking a bit puzzled," an onlooker tells PEOPLE.
When asked if she was looking for someone, she responded, "No, I'm looking for a drink," the source adds.
SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.
Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.
A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.
"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"
Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.
Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.
In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.
The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.
King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.
Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.
Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."
Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.
In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.
Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."
He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"
"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."
Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.
But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.
The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.
"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."
The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.
That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.
Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.
"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.
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Johnson can be reached at https://twitter.com/GeneAPseattle
