U.S. Extends Deadline on Health Coverage for States

WASHINGTON — With many states lagging far behind schedule, the Obama administration said Friday that it would extend the deadline for them to submit plans for health insurance exchanges, the online markets where millions of Americans are expected to obtain private coverage subsidized by the federal government.

The original Nov. 16 deadline will be extended to Dec. 14 — and in some cases to Feb. 15, the administration said.

The Congressional Budget Office predicts that 25 million people will obtain coverage through the new online shopping malls known as insurance exchanges. Most of them will receive federal subsidies averaging more than $5,000 a year per person to help them pay premiums.

Every state is supposed to have an exchange by Jan. 1, 2014, when the federal government will require most Americans to have insurance. Many states delayed work on the exchanges to see the outcome of a Supreme Court case challenging the health care law, then waited to see if President Obama would be re-elected.

If a state wants to run its own exchange, its governor still must submit a declaration of intent — generally a brief letter of one or two pages — by Nov. 16. But states will have more time to submit the detailed applications required by federal officials.

The White House has repeatedly said that states were making excellent progress toward creation of the exchanges, even as Republican governors and state legislators expressed ambivalence or outright opposition. In addition, state officials who want to establish exchanges said they were having difficulty because Mr. Obama had yet to issue crucial regulations and guidance.

In a letter to governors on Friday, Kathleen Sebelius, the secretary of health and human services, said that many states had asked for “additional time” to submit applications indicating whether they wanted to run their own exchanges or help the federal government run exchanges in their states.

Under the Affordable Care Act, the federal government will run the exchanges in any states that are unable or unwilling to do so. Fewer than half the states have indicated that they will set up their own exchanges.

If states want to run their own exchanges, Ms. Sebelius said, they will have until Dec. 14 to submit applications, or blueprints. And if states want to run exchanges in partnership with the federal government, she said, they will have until Feb. 15 to file applications.

Ms. Sebelius said the new timetable would not defer the dream of affordable insurance for millions of Americans.

“Consumers in all 50 states and the District of Columbia will have access to insurance through these new marketplaces on Jan. 1, 2014, as scheduled, with no delays,” Ms. Sebelius told governors. “This administration is committed to providing significant flexibility for building a marketplace that best meets your state’s needs.”

Senator Orrin G. Hatch of Utah, the senior Republican on the Senate Finance Committee, said the change in the deadline was “no surprise” because the White House had not given states enough information or guidance to make decisions.

“Frankly,” Mr. Hatch said, “the fact that the exchanges are such a mess is pretty emblematic of how flawed the president’s health law is — with states having to bear the brunt.”

Representative Charles Boustany Jr. of Louisiana, a spokesman for House Republicans on health policy, said he doubted that extending the deadline would make the law any more workable.

Even in states where governors want to establish insurance exchanges, they need legal authority to do so, and Republican legislators have balked in some states.

Federal officials hope that fierce competition among insurers offering health plans in the exchanges will drive down premiums.

Joel S. Ario, a former director of the federal office for insurance exchanges who now advises states as a consultant at Manatt Health Solutions, said: “The administration’s decision is a good move. It increases the chances that more states will opt for a partnership exchange, rather than default to a federal exchange.”

An administration official said that Mr. Obama was on schedule in carrying out the law, and that starting in October, Americans will be able to enroll in health plans for coverage starting in January 2014.

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Hurricane Sandy and the Disaster-Preparedness Economy

Jeffrey Phelps for The New York Times

An assembly line at a Generac Power Systems plant. Generac makes residential generators, coveted items in the wake of Hurricane Sandy.

FOLKS here don’t wish disaster on their fellow Americans. They didn’t pray for Hurricane Sandy to come grinding up the East Coast, tearing lives apart and plunging millions into darkness.

But the fact is, disasters are good business in Waukesha. And, lately, there have been a lot of disasters.

This Milwaukee suburb, once known for its curative spring waters and, more recently, for being a Republican stronghold in a state that President Obama won on Election Day, happens to be the home of one of the largest makers of residential generators in the country. So when the lights go out in New York — or on the storm-savaged Jersey Shore or in tornado-hit Missouri or wherever — the orders come pouring in like a tidal surge.

It’s all part of what you might call the Mad Max Economy, a multibillion-dollar-a-year collection of industries that thrive when things get really, really bad. Weather radios, kerosene heaters, D batteries, candles, industrial fans for drying soggy homes — all are scarce and coveted in the gloomy aftermath of Hurricane Sandy and her ilk.

It didn’t start with the last few hurricanes, either. Modern Mad Max capitalism has been around a while, decades even, growing out of something like old-fashioned self-reliance, political beliefs and post-Apocalyptic visions. The cold war may have been the start, when schoolchildren dove under desks and ordinary citizens dug bomb shelters out back. But economic fears, as well as worries about climate change and an unreliable electronic grid have all fed it.

 Driven of late by freakish storms, this industry is growing fast, well beyond the fringe groups that first embraced it. And by some measures, it’s bigger than ever.

Businesses like Generac Power Systems, one of three companies in Wisconsin turning out generators, are just the start.

The market for gasoline cans, for example, was flat for years. No longer. “Demand for gas cans is phenomenal, to the point where we can’t keep up with demand,” says Phil Monckton, vice president for sales and marketing at Scepter, a manufacturer based in Scarborough, Ontario. “There was inventory built up, but it is long gone.”

Even now, nearly two weeks after the superstorm made landfall in New Jersey, batteries are a hot commodity in the New York area. Win Sakdinan, a spokesman for Duracell, says that when the company gave away D batteries in the Rockaways, a particularly hard-hit area, people “held them in their hands like they were gold.”

Sales of Eton emergency radios and flashlights rose 15 percent in the week before Hurricane Sandy — and 220 percent the week of the storm, says Kiersten Moffatt, a company spokeswoman. “It’s important to note that we not only see lifts in the specific regions affected, we see a lift nationwide,” she wrote in an e-mail. “We’ve seen that mindfulness motivates consumers all over the country to be prepared in the case of a similar event.”

Garo Arabian, director of operations at B-Air, a manufacturer based in Azusa, Calif., says he has sold thousands of industrial fans since the storm. “Our marketing and graphic designer is from Syria, and he says: ‘I don’t understand. In Syria, we open the windows.’ ”

But Mr. Arabian says contractors and many insurers know that mold spores won’t grow if carpeting or drywall can be dried out within 72 hours. “The industry has grown,” he says, “because there is more awareness about this kind of thing.”

Retailers that managed to stay open benefited, too. Steve Rinker, who oversees 11 Lowe’s home improvement stores in New York and New Jersey, says his stores were sometimes among the few open in a sea of retail businesses.

Predictably, emergency supplies like flashlights, lanterns, batteries and sump pumps sold out quickly, even when they were replenished. The one sought-after item that surprised him the most? Holiday candles. “If anyone is looking for holiday candles, they are sold out,” he says. “People bought every holiday candle we have during the storm.”

If the hurricane was a windfall for Lowe’s, its customers didn’t seem to mind. Rather, most appeared exceedingly grateful when Mr. Rinker, working at a store in Paterson, N.J., pointed them toward a space heater, or a gasoline can, that could lessen the misery of another day without power.

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Citing Affair, Petraeus Resigns as C.I.A. Director

WASHINGTON — David H. Petraeus, the director of the Central Intelligence Agency and one of America’s most decorated four-star generals, resigned on Friday after an F.B.I. investigation uncovered evidence that he had been involved in an extramarital affair.

Command Sergeant Major Marvin L. Hill

Administration and Congressional officials identified the woman with whom Gen. David H. Petraeus was having the affair as Paula Broadwell, right, the author of his biography.

Mark Wilson/Getty Images

David H. Petraeus in Washington in 2007.

Mr. Petraeus issued a statement acknowledging the affair after President Obama accepted his resignation and it was announced by the C.I.A. on Friday. The disclosure ended a triumphant re-election week for the president with an unfolding scandal.

Government officials said that the F.B.I. had investigated whether a computer used by Mr. Petraeus had been compromised. In the course of that inquiry, federal investigators discovered the relationship, officials said. It remained unclear Friday when the investigation began, how it evolved into an examination of Mr. Petraeus, and whether it was continuing.

Senior members of Congress were alerted to Mr. Petraeus’s impending resignation by intelligence officials about six hours before the C.I.A. announced his resignation. One Congressional official who was briefed on the matter said that Mr. Petraeus had been encouraged “to get out in front of the issue” and resign, and that he agreed.

As for how the affair came to light, the Congressional official said that “it was portrayed to us that the F.B.I. was investigating something else and came upon him. My impression is that the F.B.I. stumbled across this.”

Administration and Congressional officials identified the woman as Paula Broadwell, the author of a biography of Mr. Petraeus. Her book, “All In: The Education of General David Petraeus,” was published this year. Ms. Broadwell could not be reached for comment.

The Federal Bureau of Investigation did not inform the Senate and House Intelligence Committees about the inquiry until this week, according to Congressional officials, who noted that by law the panels — and especially their chairmen and ranking members — are supposed to be told about significant developments in the intelligence arena. The Senate committee plans to pursue the question of why it was not told, one official said.

The revelation of a secret inquiry into the head of the nation’s premier spy agency raised urgent questions about Mr. Petraeus’s 14-month tenure at the C.I.A. and the decision by Mr. Obama to elevate him to head the agency after leading the country’s war effort in Afghanistan. White House officials said they did not know about the affair until this week, when Mr. Petraeus informed them.

“After being married for over 37 years, I showed extremely poor judgment by engaging in an extramarital affair,” Mr. Petraeus said in his statement, expressing regret for his abrupt departure. “Such behavior is unacceptable, both as a husband and as the leader of an organization such as ours. This afternoon, the president graciously accepted my resignation.”

Mr. Petraeus’s admission and resignation represent a remarkable fall from grace for one of the most prominent figures in America’s modern military and intelligence community, a commander who helped lead the nation’s wartime activities in the decade after the Sept. 11 attacks and was credited with turning around the failing war effort in Iraq.

Mr. Petraeus almost single-handedly forced a profound evolution in the country’s military thinking and doctrine with his philosophy of counterinsurgency, focused more on protecting the civilian population than on killing enemies. More than most of his flag officer peers, he understood how to navigate Washington politics and news media, helping him rise through the ranks and obtain resources he needed, although fellow Army leaders often resented what they saw as a grasping careerism.

“To an important degree, a generation of officers tried to pattern themselves after Petraeus,” said Stephen Biddle, a military scholar at George Washington University who advised Mr. Petraeus at times. “He was controversial; a lot of people didn’t like him. But everybody looked at him as the model of what a modern general was to be.”

This article has been revised to reflect the following correction:

Correction: November 9, 2012

An earlier version of this article incorrectly stated that David H. Petraeus was expected to remain in President Obama’s cabinet. The C.I.A. director is not a cabinet member in the Obama administration.

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The Navy SEALs who shared secrets with video-game makers

After consulting on the new Medal of Honor game, the team of SEALs famous for killing Osama bin Laden finds itself in hot water for divulging military information

The covert operatives who make up Navy SEAL Team 6 may have captured the nation’s imagination when they took down Osama bin Laden, but now a handful of them are getting a pay cut. According to CBS News, seven members of the team, including one directly involved in the mission that killed the al Qaeda mastermind, have been punished for consulting on the new video-game Medal of Honor: Warfighter from Electronic Arts. Four others are still under investigation. What kind of secrets did they divulge, and what kind of blow back are they facing? Here, a brief guide to the controversy:

What is this video game?
Medal of Honor is a long-running, first-person, shooting-game franchise. The first title, released in 1999, featured military narratives set in World War II, but more recent titles have focused on modern warfare. Medal of Honor: Warfighter, released in October, stars a fictional team of Navy SEALS tackling missions inspired by recent news headlines.

What role did the real-life Navy SEALS play?
The seven SEAL Team Six members, all of whom are still on active duty, allegedly worked for Electronic Arts as paid consultants this spring and summer. While Warfighter does not explicitly recreate the bin Laden raid, it realistically depicts similar missions, such as an attack on a pirates’ den in Somalia, says David Martin at CBS News. According to the Associated Press, the implicated SEALS two main offenses were their failure to secure permission to participate in the project and their decision to share specially designed combat equipment with the game’s producers. All of the charges are non-judicial. (Read a full statement from the Department of Defense here.)

How are they being punished?
Each SEAL received a punitive letter barring him from future promotions in the ranks, and will forfeit half his salary for a two-month period. “We do not tolerate deviations from the policies that govern who we are and what we do as sailors in the United States Navy,” said Rear Adm. Garry Bonelli, deputy commoner of the Naval Special Warfare Command. This punishment is intended to “send a clear message throughout our force that we are and will be held to a high standard of accountability.”

Did they get off too easy?
Commentators don’t think so. The punishment shouldn’t come as a surprise, says Jason Lomberg at VentureBeat, even if the military “routinely lends technical assistance to Hollywood productions.” (See: Blackhawk Down, Zero Dark Thirty.) These SEALs’ mistake was failing to follow typical clearance procedures, and now they’re paying the price. Frankly, “it about time the Navy tried to restore some discipline to the SEALs’ ranks,” says Mark Thompson at TIME. SEAL Team 6 members — including Matt Bissonnette, who recounted the bin Laden mission in his book, No Easy Day — have been inappropriately visible in the media ever since the historic raid. “Why should other U.S. military special operators keep their mouths shut if the only thing that accrues to the once-secret SEALs for blabbing are best-selling books and cash to spill the beans… ?”

Sources: Associated Press, CBS News, TIME, VentureBeat, The Verge

 

SEE MORE: The Army’s eight-wheeled laser truck that zaps enemy missiles

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Beljan nearly passes out on his way to the lead

LAKE BUENA VISTA, Fla. (AP) — Charlie Beljan was worried about keeping his PGA Tour card when he showed up at Disney for the final tournament of the year. That changed Friday over five frightening hours when he felt a shortness of breath and his heart racing, and eventually told his caddie that he thought he was going to die.

His chest heaved. He called for paramedics at the turn and was told his blood pressure was not good. He sat in the middle of the fairway to rest and kneeled on the green to try to steady himself.

In one of the most remarkable rounds of the year, the 28-year-old rookie fought through it for an 8-under 64 to take a three-shot lead.

Moments after signing his card, Beljan was loaded onto a stretcher. His eyes were closed, his head tilted back — still wearing his visor — and his arms were folded across his stomach as paramedics loaded him into an ambulance parked beyond the 18th green at the Palm Course.

"I think he was scared," said his caddie, Rick Adcox. "He kept saying he thought he was going to die. He just had that feeling. I don't know why. But it was spooky."

A few hours later, his agent sent a text to PGA Tour officials from Celebration Hospital that Beljan was waiting on tests, feeling better and hopeful of being discharged from the hospital Friday evening, though that was not certain.

Beljan was in the lead for the first time after any round going into the weekend at the Children's Miracle Network Hospitals Classic. It could not have come at a better time because he is No. 139 on the money list, and only the top 125 keep their full cards for next year.

And yet the surreal day ended with Beljan not even sure he would be able to play on the weekend.

The tour said Beljan complained of an elevated heart rate, shortness of breath and heart palpitations. Adcox said Beljan told him of numbness in his arms and he felt like he was going to faint.

"I thought they were going to stop him on 10 when they told him what the blood pressure was," he said. "He just said, 'I'm going to keep going until either I pass out or they take me off.' I kept saying, 'It doesn't matter to me. It's only a golf tournament. You've got many more.'"

The struggle was painfully clear the way Beljan constantly stooped over with his hands on his knees, backed off shots and tried to take deep breaths. That he wound up in the lead at 12-under 132 was simply amazing.

"It was bizarre," said Edward Loar, who played with Beljan. "I don't know if he thought he was going to make it. It sure didn't affect his golf. I heard him call for a paramedic on No. 9. Before the round, he said he was having a hard time breathing. Hopefully, the guy was all right. He was having a hard time breathing in there."

Beljan had a three-shot lead over seven players, including Henrik Stenson, Harris English, Charles Howell III and first-round leader Charlie Wi. He likely would need to finish in about 10th place to move into the top 125 and keep a job for next year — assuming he can even play.

Golf didn't seem to be a big priority across from the Magic Kingdom, and there were concerns Beljan would even finish his round.

"I thought a lot of times he was going to stop," Adcox said. "I didn't even think he was going to start. He asked me to go find a doctor at the beginning, and I did. The paramedics ... were on No. 10 waiting on him. Blood pressure wasn't good then. For him to go on, that was pretty much his decision.

When he did get over a shot, the outcome generally was superb.

"He hit four of the best iron shots I've seen on the par 5s," Loar said. "It was awesome to watch."

Adcox realized something wasn't right when Beljan called for a doctor on the practice range. He drilled his long second shot onto the green at the par-5 first hole, and when the caddie handed him a putter, he said Beljan told him, "I don't feel very good."

"He got up there and made the eagle and still said he didn't feel good," Adcox said. "It's been not good all day. The score was good."

The caddie said they didn't pay attention to the score Beljan was putting together, and because they were playing on the Palm Course that doesn't have many leaderboards, they didn't even know Beljan was in the lead until the round was over.

They simply started a countdown — one more hole, one more shot.

Beljan had two eagles and played the par 5s in 6 under. He struggled to finish, picking up a bogey on the 17th and missing the green to the right on the 18th. Facing a difficult chip, made even tougher that he looked wobbly over the ball, he hit a beautiful shot to 4 feet to save par.

The final two rounds move to the tougher Magnolia Course, which effectively feels like the final stage of Q-school for some of the players. Matt Jones and Mark Anderson, in that group at 9-under 135, can avoid going to the second stage of Q-school. Wi needs a win to have any hope of getting into the Masters. English is going for his first win.

Rod Pampling will have to sweat out his future at home in Dallas for the second straight year. He is No. 124 on the money list, made bogeys on the 16th and 17th holes and missed the cut by one shot. All that helps Pampling is that Billy Mayfair, who is No. 125 on the money list, also missed the cut, as did Gary Christian at No. 127.

Kevin Chappell was at No. 123, but he put together another solid round and suddenly is only four shots out of the lead. His card would appear to be safe.

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Malaria Vaccine Candidate Produces Disappointing Results in Clinical Trial

The latest clinical trial of the world’s leading malaria vaccine candidate produced disappointing results on Friday. The infants it was given to had only about a third fewer infections than a control group.

But researchers said they wanted to press on, assuming they keep getting financial support, because the number of children who die of malaria is so great that even an inefficient vaccine can save thousands of lives.

Three shots of the vaccine, known as RTS, S or Mosquirix and produced by GlaxoSmithKline, gave babies fewer than 12 weeks old 31 percent protection against detectable malaria and 37 percent protection against severe malaria, according to an announcement by the company at a vaccines conference in Cape Town.

Last year, in a trial in children up to 17 months old, the same vaccine gave 55 percent protection against detectable malaria and 47 percent against severe malaria.

The new trial “is less than we’d hoped for,” Moncef Slaoui, chairman of research and development at Glaxo, said in a telephone interview. “But if a million babies were vaccinated, we would prevent 260,000 cases of malaria a year. This is a disease that kills 655,000 babies a year — 31 percent of that is a very large number.”

The company, which has already spent more than $300 million on the vaccine, wants to keep forging ahead, Mr. Slaoui said, “but it is not just our decision.”

It also depends on the PATH Malaria Vaccine Initiative, which has put more than $200 million of its Bill and Melinda Gates Foundation financing into the vaccine, and on the World Health Organization, which has helped talk seven African countries into allowing the vaccine to be tested on their children.

The Gates Foundation declined to say how much money it was ultimately prepared to spend on an imperfect vaccine; this set of trials is set to go into 2014.

“The efficacy came back lower than we had hoped, but developing a vaccine against a parasite is a very hard thing to do,” Bill Gates said in a prepared statement. “The trial is continuing, and we look forward to getting more data to help determine whether and how to deploy this vaccine.”

All the families in the trial were given insecticide-treated mosquito nets and encouraged to use them; 86 percent did, so the vaccine’s results were achieved on top of other anti-malaria measures.

RTS, S contains a protein found on the parasite’s surface that provokes an immune reaction. It was first identified decades ago by two New York University scientists, Ruth and Victor Nussenzweig. The vaccine was developed by Glaxo in Belgium and initially tested on American volunteers by the Walter Reed Army Institute of Research.

When the Gates Foundation began focusing on global health in the early part of this century, it was one of the first projects the foundation adopted. Different ways to make the vaccine more effective, including adding different boosters and giving more shots, are being experimented with. Other vaccines using different ways to provoke an immune reaction exist, but none are as far along in clinical trials.

Like an H.I.V. vaccine, one against malaria has proved an elusive goal. The parasite morphs several times, exhibiting different surface proteins as it goes from mosquito saliva into blood and then into and out of the liver. Also, even the best natural “vaccine” — catching the disease itself — is not very effective. While one bout of measles immunizes a child for life, it usually takes several bouts of malaria to confer even partial immunity. Pregnancy can cause women to stop being immune, and immunity can fade out if someone moves away from a malarial area — presumably because they no longer get “boosters” from repeated mosquito bites.

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Common Sense: At Martha Stewart Living, Martha May Be the Problem

Among America’s corporate leaders, there are surely few whose interests are more closely aligned with their shareholders’ than the homemaking icon Martha Stewart. She owns 26 million shares and controls nearly 90 percent of the voting rights of Martha Stewart Living Omnimedia. She’s the company’s nonexecutive chairwoman and serves on the board. Martha Stewart, the company, is inseparable from Martha Stewart, the person.

Her net worth is inextricably tied to the value of the shares. That would seem obvious to everyone except, perhaps, Ms. Stewart herself. She continues to collect lavish multimillion-dollar compensation and perks while her company teeters under the weight of huge losses, its shares trading for a fraction of their former value. The paradox is that if the stock had risen even $1 a share in recent years, Martha Stewart would be wealthier now than if she had taken only nominal compensation from the company.

“You’d think there’d be very little need for board oversight because of the strong alignment of the company’s interests with her personal wealth,” Paul Hodgson, a compensation expert and senior research associate at GMI Ratings, told me this week. “Everything should be pushing her to make sure the company succeeds. For some reason, that’s not happening.”

Last week, Ms. Stewart’s company reported a $50.7 million quarterly loss, a staggering amount considering it exceeded total revenue, which was just $43.5 million. That was a 17 percent drop from revenue in the same quarter last year. Although the loss included a $44.3 million noncash write-down related to the shrinking value of two of its magazines, the company until recently has been bleeding cash, which dropped from $38.5 million to just $17.4 million in the quarter. The company said it would lay off about 70 employees, 12 percent of its work force, and discontinue its stand-alone print version of the magazine Everyday Food.

None of this bad news has made much of a dent on Ms. Stewart’s own compensation. Her base annual pay rose from $1.7 million in 2009 to $2 million in 2010 and 2011, and she received a $3 million retention bonus when she signed her new contract in 2009. She gets an additional minimum of $2 million a year under an “intangible assets license agreement,” which gives the company the rights to “Martha Stewart’s lifestyle and the public perception of Martha Stewart’s lifestyle,” including such details as how she arranges her outdoor furniture.

Her corporate perks are well known, and she has long blurred the line between business and personal expenses. She submitted as a business expense the $17,000 cost of her now-infamous holiday trip to the Mexican luxury resort Las Ventanas al Paraiso. She arrived at the resort the day she dumped her shares in the biotechnology company ImClone upon learning, en route, that the company’s chief executive was trying to sell his shares ahead of a negative Food and Drug Administration decision on the company’s principal drug. (She settled charges of insider trading brought by the Securities and Exchange Commission after being convicted of making criminal false statements to cover up the reason for the sale.) Then she had her accountant tell her companion on the trip that she’d have to pay her “fair share” of the costs, according to testimony in her 2004 trial.

The company doesn’t break out Ms. Stewart’s reimbursed expenses, but general and administrative expenses amounted to a lofty $11 million in the last quarter. That number, of course, includes many expenses besides Ms. Stewart’s, like other executives’ salaries.

The company does reveal what it calls other compensation for Ms. Stewart, which in 2011 included a personal trainer and other expenses for personal fitness; a weekend driver; security services; fees for on-air appearances; unspecified personnel costs not otherwise reimbursed by the company; insurance premiums; and an unidentified charitable contribution, which added up to over $1 million.

Ms. Stewart also receives stock options, nearly $1.8 million worth in 2009 through 2011, though she has not received any options so far this year. Still, as Mr. Hodgson put it, “Why is she even getting stock options? Her interests are already thoroughly aligned with the company, given her ownership stake.” Moreover, the intangible license agreement “is very unusual,” Mr. Hodgson said.

All told, Ms. Stewart’s compensation was $9.8 million in 2009, $5.9 million in 2010 and $5.5 million in 2011, or $21.2 million over the last three years, even as the company was in a downward spiral. Just before Ms. Stewart got out of prison in 2005, her shares were trading at over $34 and she was a billionaire. After plunging during the financial crisis, they were above $8 a share in September 2009. They traded this week at about $2.80.

Asked about the issues raised in this column, a spokesman for Martha Stewart Living Omnimedia declined to comment and said Ms. Stewart had no comment.

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A Transfer of Power Begins in China

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Exclusive: Google Ventures beefs up fund size to $300 million a year

SAN FRANCISCO (Reuters) - Google will increase the cash it allocates to its venture-capital arm to up to $300 million a year from $200 million, catapulting Google Ventures into the top echelon of corporate venture-capital funds.

Access to that sizeable checkbook means Google Ventures will be able to invest in more later-stage financing rounds, which tend to be in the tens of millions of dollars or more per investor.

It puts the firm on the same footing as more established corporate venture funds such as Intel's Intel Capital, which typically invests $300-$500 million a year.

"It puts a lot more wood behind the arrow if we need it," said Bill Maris, managing partner of Google Ventures.

Part of the rationale behind the increase is that Google Ventures is a relatively young firm, founded in 2009. Some of the companies it backed two or three years ago are now at later stages, potentially requiring larger cash infusions to grow further.

Google Ventures has taken an eclectic approach, investing in a broad spectrum of companies ranging from medicine to clean power to coupon companies.

Every year, it typically funds 40-50 "seed-stage" deals where it invests $250,000 or less in a company, and perhaps around 15 deals where it invests up to $10 million, Maris said. It aims to complete one or two deals annually in the $20-$50 million range, Maris said.

LACKING SUPERSTARS

Some of its investments include Nest, a smart-thermostat company; Foundation Medicine, which applies genomic analysis to cancer care; Relay Rides, a carsharing service; and smart-grid company Silver Spring Networks. Last year, its portfolio company HomeAway raised $216 million in an initial public offering.

Still, Google Ventures lacks superstar companies such as microblogging service Twitter or online bulletin-board company Pinterest. The firm's recent hiring of high-profile entrepreneur Kevin Rose as a partner could help attract higher-profile deals.

Soon it could have even more cash to play around with. "Larry has repeatedly asked me: 'What do you think you could do with a billion a year?'" said Maris, referring to Google chief executive Larry Page.

(Editing by Muralikumar Anantharaman)

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Not just footballs are deflated at USC

LOS ANGELES (AP) — It's not just the game balls that are deflated at Southern California this fall.

An unimpressive season reached a new, weird low late Wednesday night when No. 21 USC announced a student manager had been dismissed for underinflating several game balls before the Trojans' loss to No. 2 Oregon last weekend, earning a fine and a reprimand for the school from the Pac-12.

Coach Lane Kiffin then spent a soggy Thursday morning on campus explaining why the Trojans' latest brush with questionable tactics was an isolated misdeed by an overeager student, not an indication of a somewhat sleazy culture building around a program still attempting to emerge from the clouds of heavy NCAA sanctions in 2010.

"I was just disappointed, because it was just a distraction," Kiffin said. "It was a distraction that nobody knew about here, that had no effect on the game. If anything, it had a negative effect to be throwing two different types of balls for a quarterback. I was just disappointed, because it was a distraction that we didn't need."

Kiffin is telling the truth: With two straight losses, the preseason No. 1 team can't afford to waste much thought for anything other than the salvage of its season. USC (6-3, 4-3 Pac-12) hosts Arizona State (5-4, 3-3) on Saturday before finishing against No. 17 UCLA and No. 4 Notre Dame, hoping to earn a probable rematch with Oregon in the Pac-12 title game.

Kiffin insists his coaching staff and quarterback Matt Barkley knew nothing about the manager's actions on the Oregon sideline, where officials apparently discovered three underinflated balls before the game and two more at halftime. Kiffin offered no thoughts about the possible motivation of the unidentified manager, saying he hadn't spoken to the student.

USC athletic director Pat Haden, who took over the department after Kiffin was hired nearly three years ago, was obviously unhappy about the embarrassment.

"We acknowledge the Pac-12's reprimand and fine," Haden said in a statement released through Twitter. "We regret this incident occurred. It was unacceptable and we apologize for it. I can assure you this will not happen again."

Deflating footballs is an uncommon — but not unfamiliar — bit of gamesmanship on many levels of football. Softer balls are thought to be a bit easier to throw and catch — and that's exactly what the Ducks did while racking up 730 yards during a 62-51 win over USC, which had the worst defensive game ever at a school that began playing football in the 19th century.

Kiffin said he realizes "conspiracy theories ... will think we were behind this," but thinks the lack of an obvious advantage to be gained from the tactic — and the sloppy manner in which it happened — should prove the innocence of his coaches and players.

"I don't think if we were trying to deflate balls, we would be directing a student manager on the Oregon sideline, right in front of them, to be deflating balls, and then playing with some deflated and some non-deflated balls," Kiffin said. "I'm sure if we knew that, our kickers wouldn't have been happy with that, either. No kicker is ever going to happy with a deflated ball."

While Kiffin claimed he didn't hear about the officials' discovery until Sunday, Oregon coach Chip Kelly told SiriusXM's College Sports Nation channel Thursday he heard about it after the game.

"It doesn't affect us," Kelly said. "I mean, we worry every day, or are concerned with every day, of what we can control and what we can't control, and what other teams do doesn't really affect what we're doing."

USC announced the Pac-12's fine and reprimand late Wednesday night, well after every member of the program except Kiffin is done talking to the media for the week. Barkley and his offensive teammates only speak to reporters for a few moments on Tuesday mornings — another part of a strict policy on injury reporting and media access instituted by Kiffin this season, ending USC's tradition of famously open practices and Kiffin's own largely cordial relationship with Los Angeles media before the last few months.

While Kiffin has been fairly successful on the field, particularly given the Trojans' NCAA-mandated scholarship limitations, the underinflated footballs are just the latest minor misstep adding up to a potentially major problem. Kiffin's apparent predilections for cutthroat competition and gamesmanship have followed him from USC to the Oakland Raiders to Tennessee and back again.

Last month, USC backup quarterback Cody Kessler took off his No. 6 jersey and put on No. 35 while playing on special teams against Colorado, even running for a 2-point conversion attempt with the new jersey. Players are allowed to wear different jerseys for many reasons during games, but it's widely considered deceptive, if not unethical, to change numbers during a game specifically to confuse an opponent.

USC also is still the FBS' most penalized team with 85 penalties for 702 yards, even after a relatively clean game against Oregon. The Trojans counter that they were a mostly clean team last season, and that the Pac-12 has seven of FBS' 16 most-penalized teams, perhaps indicating more about the conference's officiating crews than the schools' play.

But after USC's latest brush against propriety, even Kiffin acknowledged it's fair to wonder whether his staff has created a culture of moral relativism, where a student might deflate footballs on his own just to try to gain an advantage.

"I don't believe that at all," he said. "I believe this was a very isolated incident that had nothing to do with the coaches or the players on this team."

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