IHT Rendezvous: Gallows Humor, and Smog, Engulf China

BEIJING — Here’s a joke circulating among 10-year-olds at my son’s state elementary school in Beijing:
A Chinese man recently arrived in America visits the doctor.
“Doctor, I feel unwell.”
“Where have you come from?”
“Beijing.”
“Breathe this,” the doctor says, holding out a pipe attached to a car exhaust.
“Thanks, I feel much better!” the man says.

Gallows humor is circulating in Beijing these days as a yellowish-gray miasma once again drapes the city and air pollution indices hit hazardous highs or largely unknown, “Beyond Index” territory, for the fourth time this month.

Shockingly, Beijing isn’t even the worst place to be: a quick check of the China Air Pollution Index app showed that at the time of writing it was merely the 21st most polluted city in the country today. No. 1, as nearly always, was the unfortunate town of Shijiazhuang, an industrial base about 280 kilometers southwest of Beijing in Hebei province.

The Hong Kong-based South China Morning Post reports that almost one-seventh of China was shrouded in smog this week.

Hundreds of flights, including some international ones, were canceled or delayed and highways shut due to the “haze,” the state-run China Daily reported, adding that Beijing’s pollution was the highest possible level, “severe.”

And, indicating a source of the problem, a report on Tuesday from the U.S. Energy Information Administration said that China consumed 3.8 billion tons of coal in 2011, or 47% of global consumption, “almost as much as the entire rest of the world combined.” Coal consumption grew more than 9 percent in 2011, the report said. Coal is, of course, a key source of the particulate pollution plaguing the country today and of global warming via greenhouse gases.

How did things get this bad?

In a rare interview published last week, Qu Geping, China’s first environmental protection chief, placed the blame squarely on the country’s “economic growth at all costs” mentality and on the political system.

Developing countries commonly suffer from worse pollution than developed ones, yet Mr. Qu told the South China Morning Post that pollution had run wild over the last 40 years as a result of unchecked economic growth under “rule of men,” a term often used here to refer to decision-making that flouts the law.

“Their rule imposed no checks on power and allowed governments to ignore environmental protection laws and regulations,” the Post wrote in the article.

The article quoted Mr. Qu, 83, China’s first environmental protection administrator between 1987 and 1993, as saying, “I would not call the past 40 years’ efforts of environmental protection a total failure.”

“But I have to admit that governments have done far from enough to rein in the wild pursuit of economic growth,” he said, “and failed to avoid some of the worst pollution scenarios we, as policymakers, had predicted.”

After 1993, Mr. Qu headed the environment and resource committee of China’s Parliament, the National People’s Congress, for 10 years, the Post said.

China early recognized it faced a pollution problem amid high-speed growth and had some forward-looking strategies that emphasized a more balanced approach to development, Mr. Qu said.

“Why was the strategy never properly implemented?” he said. “I think it is because there was no supervision of governments. It is because the power is still above the law.”

“There was an obvious contradiction in the central government’s claim to co-ordinate growth with conservation and its unchecked thirst for economic development rooted in a political system,” the newspaper wrote, in a comment attributed to Mr. Qu.

Since the early 1980s, when economic growth took off, China witnessed at least three waves of pollution, the Post wrote.

The first was caused by the boom in so-called township enterprises – businesses run by farmers in the countryside – that started 1984 and led to the “chaotic spreading of pollution.”

The second was the rush to develop infrastructure and industrial projects after 1992 that resulted in pollution of major rivers and lakes and the degradation of urban air quality.

The third occurred over the last decade under President Hu Jintao, which saw a renewed wave of building of energy-intensive and highly polluting heavy industries, including petrochemical, cement, iron and steel plants, that turned China into the world’s biggest polluter.

“In the face of such mounting pressures, all the administrative orders and technical solutions on pollution control became inadequate,” Mr. Qu said.

Leaving China where it is today, with large areas engulfed in smog.

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DealBook Column: Mary Jo White, Nominee for S.E.C.'s 'New Sherrif,' Has Worn Banks' Hat

“You don’t want to mess with Mary Jo.”

That’s what President Obama said about his pick to run the Securities and Exchange Commission, Mary Jo White. The nomination of Ms. White, a former prosecutor who took on the terrorists behind the bombing of the World Trade Center in 1993 and the Mafia boss John Gotti, was meant to signal that the S.E.C. would be getting tough on Wall Street. CBS called her “Wall Street’s new sheriff.” The Wall Street Journal said she would be “putting a tougher face on an agency still tainted by embarrassing enforcement missteps in the run-up to the financial crisis.” The New York Times said her appointment represented a “renewed resolve to hold Wall Street accountable.”

Hold on.

While Ms. White is a decorated prosecutor, she has spent the last decade vigorously defending — and billing by the hour — Wall Street’s biggest banks, as a rainmaking partner at the white-shoe law firm Debevoise & Plimpton. The average partner at the firm was paid $2.1 million a year, according to American Lawyer; but she was no average partner, very likely being paid at least double that. Her husband, John W. White, is a corporate partner at Cravath, Swaine & Moore. He counts JPMorgan Chase, Credit Suisse and UBS as clients. The average partner at Cravath makes $3.1 million. He, too, was a former official at the S.E.C. — he left Cravath to run the corporate division of the S.E.C. starting in 2006 just in time for the run-up to the financial crisis. He left in November 2008, a month after the bank bailouts, to return to Cravath.

It seems Mr. and Ms. White have made a fine art of the revolving door between government and private practice.

So how conflicted is Ms. White? Let’s count the ways.

They are well documented: she was JPMorgan Chase’s go-to lawyer for many of the cases brought against it relating to the financial crisis. She was arm-in-arm with Kenneth D. Lewis, Bank of America’s former chief executive, keeping him out of trouble when the New York attorney general accused Mr. Lewis of defrauding investors by not disclosing the losses at Merrill Lynch before completing Bank of America’s acquisition of the firm. (And empirically, Mr. Lewis did keep crucial information about the deal from investors.)

This is what she had to say about Mr. Lewis, in a court filing submitted on his behalf: “Some have looked to assign blame for every aspect of the financial crisis, even where there is no evidence of misconduct. This case is a product of that dynamic and does not withstand either legal or factual scrutiny.” It was a refrain she often made about her clients related to the financial crisis.

And then there was Senator Bill Frist, the Republican from Tennessee, whom she successfully represented when the S.E.C. and the Justice Department started an investigation into whether he was involved in insider trading in shares of HCA, the hospital chain. She persuaded them to shut down the investigation.

She also worked with Siemens, the German industrial giant, when it pleaded guilty to charges of bribery, paying a record $1.6 billion penalty.

And then, of course, there was John Mack. She worked for the board of Morgan Stanley during a now well-publicized 2005 investigation into insider trading that ended soon after she made a phone call to the S.E.C. Using her connections at the top of the agency, she dialed up Linda Thomsen, then the commission’s head of enforcement, to find out whether Mr. Mack, who was being considered for Morgan Stanley’s chief executive position, was being implicated. He ultimately wasn’t. As the Huffington Post pointed out in a recent article about Ms. White, Robert Hanson, an S.E.C. supervisor, later testified, “It is a little out of the ordinary for Mary Jo White to contact Linda Thomsen directly, but that White is very prestigious and it isn’t uncommon for someone prominent to have someone intervene on their behalf.”

All of Ms. White’s previous engagements create not only an “optics” problem, but a practical, on-the-job problem. She will most likely need to recuse herself from just about anything related to her previous work.

“I will not for a period of two years from the date of my appointment participate in any particular matter involving specific parties that is directly and substantially related to my former employer or former clients, including regulations and contracts,” is the language in an ethics pledge that she will have to agree to follow.

Some appointees, including Mary L. Schapiro, the former chairwoman of the S.E.C., recused themselves from any involvement in work that was related to a previous employer even after the two-year moratorium. Gary Gensler, the chairman of the Commodity Futures Trading Commission, recused himself from the investigation into MF Global because of his previous employment at Goldman Sachs, where Jon Corzine was the firm’s head, even though it had been years since the two had worked together.

And then there is the issue of Mr. White’s husband, who will have a continuing role at Cravath, one of the most pre-eminent firms in the country, whose clients include some of the nation’s largest corporations.

“This president has adopted the toughest ethics rules of any administration in history,” said Amy Brundage, a White House spokeswoman, “and this nominee is no exception. As S.E.C. chair, Mary Jo White will be in complete compliance with all ethics rules.”

None of these conflicts gets at another potential problem for Ms. White. The job of chairwoman of S.E.C. isn’t simply about enforcement; she has a deputy for that. The biggest challenge anyone who takes the job will have to confront over the next several years will be executing and enforcing provisions of Dodd-Frank and working to regulate electronic trading — something that even the most sophisticated financial professionals, let alone a lawyer, often have a tough time understanding. She has zero experience in this area.

Of course, there can always be a value to inviting a onetime rival onto the team.

“I believe she is one of those people who will understand that her public role will be very, very different than her role as a defense lawyer,” Dennis M. Kelleher of Better Markets, a watchdog group, told me. “I don’t think she’s going to be like so many others who don’t get that they have a very different role when they hold high public office.

“No question, she’s said some things that are controversial and questionable,” Mr. Kelleher said. “Moreover, I hope and expect that she will be asked publicly about them in the confirmation process and that she will have convincing answers.”

Of course, if she is confirmed, we must all hope that she can put her previous client relationships behind her and work for her new client — us.

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Rescuer Appears for New York Downtown Hospital

Manhattan’s only remaining hospital south of 14th Street, New York Downtown, has found a white knight willing to take over its debt and return it to good health, hospital officials said Monday.

NewYork-Presbyterian Hospital, one of New York City’s largest academic medical centers, has proposed to take over New York Downtown in a “certificate of need” filed with the State Health Department. The three-page proposal argues that though New York Downtown is projected to have a significant operating loss in 2013, it is vital to Lower Manhattan, including Wall Street, Chinatown and the Lower East Side, especially since the closing of St. Vincent’s Hospital after it declared bankruptcy in 2010.

The rescue proposal, which would need the Health Department’s approval, comes at a precarious time for hospitals in the city. Long Island College Hospital, just across the river in Cobble Hill, Brooklyn, has been threatened with closing after a failed merger with SUNY Downstate Medical Center, and several other Brooklyn hospitals are considering mergers to stem losses.

New York Downtown has been affiliated with the NewYork-Presbyterian health care system while maintaining separate operations.

“We are looking forward to having them become a sixth campus so the people in that community can continue to have a community hospital that continues to serve them,” Myrna Manners, a spokeswoman for NewYork-Presbyterian, said.

Fred Winters, a spokesman for New York Downtown, declined to comment.

Presbyterian’s proposal emphasized that it would acquire New York Downtown’s debt at no cost to the state, a critical point at a time when the state has shown little interest in bailing out failing hospitals.

The proposal said that if New York Downtown were to close, it would leave more than 300,000 residents of Lower Manhattan, including the financial district, Greenwich Village, SoHo, the Lower East Side and Chinatown, without a community hospital. In addition, it said, 750,000 people work and visit in the area every day, a number that is expected to grow with the construction of 1 World Trade Center and related buildings.

The proposal argues that New York Downtown is essential partly because of its long history of responding to disasters in the city. One of its predecessors was founded as a direct result of the 1920 terrorist bombing outside the J. P. Morgan Building, and the hospital has responded to the 1975 bombing of Fraunces Tavern, the 1993 and 2001 attacks on the World Trade Center, and, this month, the crash of a commuter ferry from New Jersey.

Like other fragile hospitals in the city, New York Downtown has shrunk, going to 180 beds, down from the 254 beds it was certified for in 2006, partly because the more affluent residents of Lower Manhattan often go to bigger hospitals for elective care.

The proposal says that half of the emergency department patients at New York Downtown either are on Medicaid, the program for the poor, or are uninsured.

NewYork-Presbyterian would absorb the cost of the hospital’s maternity and neonatal intensive care units, which have been expanding because of demand, but have been operating at a deficit of more than $1 million a year, the proposal said.

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Rescuer Appears for New York Downtown Hospital

Manhattan’s only remaining hospital south of 14th Street, New York Downtown, has found a white knight willing to take over its debt and return it to good health, hospital officials said Monday.

NewYork-Presbyterian Hospital, one of New York City’s largest academic medical centers, has proposed to take over New York Downtown in a “certificate of need” filed with the State Health Department. The three-page proposal argues that though New York Downtown is projected to have a significant operating loss in 2013, it is vital to Lower Manhattan, including Wall Street, Chinatown and the Lower East Side, especially since the closing of St. Vincent’s Hospital after it declared bankruptcy in 2010.

The rescue proposal, which would need the Health Department’s approval, comes at a precarious time for hospitals in the city. Long Island College Hospital, just across the river in Cobble Hill, Brooklyn, has been threatened with closing after a failed merger with SUNY Downstate Medical Center, and several other Brooklyn hospitals are considering mergers to stem losses.

New York Downtown has been affiliated with the NewYork-Presbyterian health care system while maintaining separate operations.

“We are looking forward to having them become a sixth campus so the people in that community can continue to have a community hospital that continues to serve them,” Myrna Manners, a spokeswoman for NewYork-Presbyterian, said.

Fred Winters, a spokesman for New York Downtown, declined to comment.

Presbyterian’s proposal emphasized that it would acquire New York Downtown’s debt at no cost to the state, a critical point at a time when the state has shown little interest in bailing out failing hospitals.

The proposal said that if New York Downtown were to close, it would leave more than 300,000 residents of Lower Manhattan, including the financial district, Greenwich Village, SoHo, the Lower East Side and Chinatown, without a community hospital. In addition, it said, 750,000 people work and visit in the area every day, a number that is expected to grow with the construction of 1 World Trade Center and related buildings.

The proposal argues that New York Downtown is essential partly because of its long history of responding to disasters in the city. One of its predecessors was founded as a direct result of the 1920 terrorist bombing outside the J. P. Morgan Building, and the hospital has responded to the 1975 bombing of Fraunces Tavern, the 1993 and 2001 attacks on the World Trade Center, and, this month, the crash of a commuter ferry from New Jersey.

Like other fragile hospitals in the city, New York Downtown has shrunk, going to 180 beds, down from the 254 beds it was certified for in 2006, partly because the more affluent residents of Lower Manhattan often go to bigger hospitals for elective care.

The proposal says that half of the emergency department patients at New York Downtown either are on Medicaid, the program for the poor, or are uninsured.

NewYork-Presbyterian would absorb the cost of the hospital’s maternity and neonatal intensive care units, which have been expanding because of demand, but have been operating at a deficit of more than $1 million a year, the proposal said.

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Dispute With Antigua and Barbuda Threatens U.S. Copyrights

WASHINGTON — A long-simmering trade conflict between the United States and Antigua and Barbuda appears to be boiling over.

Antigua and Barbuda, which has a $1 billion economy, is planning on getting legal retribution from the United States’ $15 trillion economy over its refusal to let Americans gamble at online sites based in the Caribbean nation — perhaps by offering downloads of American intellectual property, like Hollywood films, network television shows or hit pop songs. On Monday, the World Trade Organization gave its go-ahead for Antigua and Barbuda’s tentative plan.

“The economy of Antigua and Barbuda has been devastated by the United States government’s long campaign to prevent American consumers from gambling,” Harold Lovell, Antigua’s finance minister, said in a statement. “These aggressive efforts to shut down the remote gaming industry in Antigua have resulted in the loss of thousands of good-paying jobs and seizure by the Americans of billions of dollars belonging to gaming operators and their customers.”

The conflict’s roots are a decade old. The World Trade Organization said that the United States had violated its trade agreements by preventing Americans from betting at sites based in Antigua and Barbuda. Because Washington is unwilling to make the betting legal, the countries have been locked in a dispute over what constitutes fair trade practices and fair compensation.

The online gambling industry was at one point the second-largest employer in the Caribbean country, its government has said, and economists estimated its worth at $3.4 billion. Gambling employment has dropped to fewer than 500 people from more than 4,000 as a result of the United States’ trade policy, it said.

On Monday, a dispute settlement body in Geneva gave Antigua and Barbuda the nod to, in essence, violate American intellectual property rights to make up its losses, calculated at $21 million a year.

It remains murky just how the Antigua and Barbuda government might go about it. But trade watchers suggested it might set up a site where viewers could pay a pittance to watch a film or television show with an American copyright. The United States might not be able to shut the site down under international law.

“We are disappointed with Antigua and Barbuda’s decision to abandon constructive settlement discussions,” Nkenge Harmon, a spokeswoman for the United States trade representative, said in an e-mail. “As recently as Friday, our two countries held high-level discussions on possible settlement options that would have brought real benefits to Antigua’s businesses and people.”

The Obama administration said that the proposed plan might further hurt trade relations between the two countries.

“If Antigua does proceed with the unprecedented plan for its government to authorize the theft of intellectual property, it would only serve to hurt Antigua’s own interests,” Ms. Harmon said. “Government-authorized piracy would undermine chances for a settlement. It also would serve as a major impediment to foreign investment in the Antiguan economy, particularly in high-tech industries.”

Trade experts said that Antigua and Barbuda’s plan for retribution seemed designed to provoke American filmmakers and recording artists into pushing for Congress to allow foreign Internet gambling sites to serve American customers.

They also noted that it was the United States that had pushed for the unusual “cross-retaliation” mechanism at the W.T.O., where trade violations that hurt one industry could be countered with trade actions against a completely different industry.

“The irony is rich, rich, rich,” said Lori Wallach, the director of Global Trade Watch at Public Citizen, a Washington-based consumer advocacy group.

“The practical question is, Is there a majority in the House and Senate to vote to revoke the ban, and would Congress do it because the W.T.O. told them?” she said, saying it was unclear how the two countries would proceed.

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IHT Rendezvous: Regulating the British Press

LONDON — News doesn’t just travel fast here. It happens fast, too. And once it has happened, new news overtakes the old: the dogs bark, as the old Middle Eastern adage has it, but the caravan moves on.

So it has seemed in the almost two months since the publication of the bulky Leveson Report into the culture and behavior of the British press. The land has been swamped by a procession of other front-page stories — British hostages in Algeria! Referendum on Europe! — and the urgency of Lord Justice Sir Brian Leveson’s call for statutory oversight of the rambunctious press here seems to have dissipated.

But a couple of developments in recent days have recalled some of the issues — quite apart from a steady trickle of arrests linked to the phone hacking and allied scandals that prompted the Leveson inquiry in the first place.

Page Two

Posts written by the IHT’s Page Two columnists.

One was the return from duty in Afghanistan of Prince Harry, the third in line to the British throne, who, as I describe in my latest column on Page Two of The International Herald Tribune, stirred a media frenzy by acknowledging that — no real surprise here — as the gunner co-pilot of an Apache attack helicopter, he was expected to fire on Taliban insurgents.

But there was a sub-plot.

Prince Harry’s aversion to the British media — equally unsurprising in light of the tangled relationship between his mother, Princess Diana, and the world’s newspapers, photographers and broadcasters — appears to be growing to the extent that he accused the British press of always writing “rubbish” about him.

A video report from Britain’s Channel 4 News shot during Prince Harry’s recent deployment to Afghanistan.

And yet, for the 20 weeks of Prince Harry’s deployment in Afghanistan, most news outlets in Britain had largely agreed with Buckingham Palace and the Ministry of Defense not to cover closely his role in the war, in return for guaranteed access at the end of his tour — a gesture of what the authorities would doubtless call responsibility on the part of that same press the prince dismissed.

The prince’s comments drew a tart response from Peter Barron, the editor of the regional Northern Echo. “It would have been nice if Prince Harry had resisted getting out his huge tar brush to blacken the entire British press and acknowledged that there are good and bad in every profession — including the armed forces,” he said.

The broader issue of how Britain regulates its media is still the object of closed-door talks among editors and executives and between politicians. But it could well resurface publicly next month.

“This is not about politicians determining what journalists do or do not write. The freedom of the press is essential,” Harriet Harman, the spokeswoman on media affairs for the opposition Labour Party, told a gathering in Oxford, England, last week. “But so is that other freedom: the freedom of a private citizen to go about their business without harassment, intrusion or the gross invasion of their grief and trauma. Those two freedoms are not incompatible.”

She challenged the government directly to set out its own proposals for the future regulation of the press.

“It is now time for the government to have the courage of its convictions,” she said, adding: “The public must be able to scrutinize the proposals. And Parliament — to whom Lord Justice Leveson trusted a key role in setting up the new system — must be able to decide.”

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DealBook: Beneath the Calm, SAC Works to Contain Fallout From an Inquiry

At last month’s Hurricane Sandy benefit concert, Steven A. Cohen sat near the Madison Square Garden stage, grooving to performances by Bon Jovi and Billy Joel.

Last week, he flew a private jet to the World Economic Forum in Davos, Switzerland, rubbing shoulders with world leaders and Fortune 500 chieftains. And on Monday, he will show up at the Breakers Resort in Palm Beach, Fla., for one of the year’s biggest hedge fund conferences and, if he can squeeze it in, a round of golf.

For a man who has emerged as the Justice Department’s great white whale in its insider trading investigation — a Wall Street version of Captain Ahab pursuing Moby-Dick — Mr. Cohen, the billionaire owner of the hedge fund SAC Capital Advisors, does not appear concerned.

But inside the offices of SAC’s Stamford, Conn., headquarters, and at Midtown Manhattan law firms, Mr. Cohen’s employees and lawyers are working hard to contain the fallout from the investigation.

His executives have offered financial incentives to Mr. Cohen’s staff members to stay with SAC. Marketing officers are trying to persuade investors to keep their money at the fund. And defense lawyers are working furiously to persuade federal securities regulators not to file a civil fraud lawsuit against the firm.

“This has always been a stressful place to work,” said an SAC employee who requested anonymity because he was unauthorized to speak publicly about the fund. “Now it’s just more stressful.”

Neither SAC nor Mr. Cohen has been accused of any wrongdoing.

The main question now looming over the firm is whether its clients will stand by the fund, or its legal and regulatory problems will cause investors to head for the exits. Under the firm’s rules, SAC clients have until Feb. 15 to ask for their money back, and then cannot make another so-called redemption request for another three months.

Mr. Cohen’s fund was dealt a blow last week when a Citigroup unit that manages money for wealthy families disclosed that it was withdrawing its $187 million investment. The move by the bank was the most prominent client departure since November, when the multiyear investigation into SAC’s trading practices entered a more serious phase.

Citigroup’s withdrawal represents a tiny percentage of SAC’s $14 billion in assets under management. The fund has said it expects total investor redemptions for the first quarter of up to $1 billion, a number that an SAC spokesman has said will not adversely affect its business.

SAC is largely insulated from the potentially devastating effects that client defections can have on a hedge fund in part because of Mr. Cohen’s extraordinary wealth. Unlike other hedge fund managers who rely almost entirely on outside investors, Mr. Cohen has the comfort of knowing that about $8 billion of SAC’s fund belongs to him and his employees.

Still, the Citigroup decision stung, say people close to SAC’s business, because of the longstanding and lucrative relationship between the bank and the fund. Another concern, said these people, is that the move could influence other large SAC investors currently weighing whether to keep their money at the fund.

For Citigroup, its withdrawal of money from SAC carries substantial business risk. The bank has a vast relationship with SAC, earning revenue by providing the fund with financing and trading services.

SAC could exact retribution on Citigroup by terminating, or at least scaling back, its broader relationship with the bank. An SAC spokesman declined to comment.

Citigroup’s move came two months after federal authorities arrested Mathew Martoma, a former SAC portfolio manager, in what they described as the most lucrative insider trading case ever uncovered. The Martoma indictment represented the first time that the government had brought charges stemming from a trade in which Mr. Cohen had been involved. The Securities and Exchange Commission has warned Mr. Cohen that it might file a civil fraud action against SAC related to the case.

In addition to Mr. Martoma, at least seven former SAC employees have been tied to insider trading while at the fund. Three have pleaded guilty to criminal charges.

Citigroup issued a statement that its decision “should not be construed as a statement on the merits of any outstanding legal proceedings or potential regulatory action.” But the bank specifically cited the Martoma case, explaining that “in the event these legal and regulatory matters are resolved favorably for Mr. Martoma and SAC, Citi Private Bank expects to reconsider admission of SAC’s funds to its hedge fund platform.”

Mr. Martoma has pleaded not guilty and rejected requests by federal agents to cooperate against his former boss. Mr. Cohen has told his employees and clients that he is confident that he has acted appropriately at all times.

Yet the heightened government scrutiny has caused skittishness among SAC’s top ranks, forcing the fund to lavish even richer financial incentives on a group of employees that is already among the most highly compensated in the hedge fund industry.

This month, SAC told its stable of portfolio managers that it would increase year-end bonuses by three percentage points. SAC portfolio managers — the fund’s most senior traders, given the authority to make their own investment decisions and also feed Mr. Cohen their best ideas — are paid, on average, 20 percent of the profits they generate for the fund.

“The program is intended to retain our most valuable resource, our investment professionals,” said Jonathan Gasthalter, the SAC spokesman.

Another valuable resource is SAC’s outside investors, which account for about $6 billion, or 40 percent, of the fund’s assets. That money accounts for hundreds of millions of dollars in fees, which SAC uses to finance one of the world’s largest and most sophisticated hedge fund operations, with more than 1,000 employees and 125 teams of traders and analysts. Its operation is also one of the most successful, posting average annualized returns of about 30 percent since 1992.

Those results have in the past kept SAC’s customers satisfied, but the government scrutiny has made many of them uneasy. The firm’s marketing team has reached out to the fund’s investors to address their concerns and reassure them that the insider trading inquiry will not affect its performance.

Despite those efforts, several investors in addition to Citigroup, including Titan Advisors and a unit of Société Générale, have notified SAC that they are withdrawing money. Other clients, like Chapwood Investments and SkyBridge Capital, have said they will continue to invest with the fund.

SAC executives continued the charm offensive with major clients on Sunday, holding an annual golf outing in Palm Beach on the eve of a hedge fund conference at the Breakers sponsored by Morgan Stanley. The conference — a matchmaking event that connects top managers with the world’s richest investors — is considered an important stop on the hedge fund money-raising circuit.

Since Morgan Stanley does not invite the news media to its conference, there is not expected to be the same paparazzi-like reports on Mr. Cohen that emerged last week from Davos. Bloomberg News filed a dispatch that Mr. Cohen sat in on a panel discussion on data security called “The Digital Infrastructure Context.” And Henry Blodget, the editor of the financial Web site Business Insider, wrote a Twitter post on a sighting of Mr. Cohen.

“Steve Cohen was hanging in Davos lounge yesterday,” he wrote. “Didn’t look worried.”

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Well: Keeping Blood Pressure in Check

Since the start of the 21st century, Americans have made great progress in controlling high blood pressure, though it remains a leading cause of heart attacks, strokes, congestive heart failure and kidney disease.

Now 48 percent of the more than 76 million adults with hypertension have it under control, up from 29 percent in 2000.

But that means more than half, including many receiving treatment, have blood pressure that remains too high to be healthy. (A normal blood pressure is lower than 120 over 80.) With a plethora of drugs available to normalize blood pressure, why are so many people still at increased risk of disease, disability and premature death? Hypertension experts offer a few common, and correctable, reasons:

¶ About 20 percent of affected adults don’t know they have high blood pressure, perhaps because they never or rarely see a doctor who checks their pressure.

¶ Of the 80 percent who are aware of their condition, some don’t appreciate how serious it can be and fail to get treated, even when their doctors say they should.

¶ Some who have been treated develop bothersome side effects, causing them to abandon therapy or to use it haphazardly.

¶ Many others do little to change lifestyle factors, like obesity, lack of exercise and a high-salt diet, that can make hypertension harder to control.

Dr. Samuel J. Mann, a hypertension specialist and professor of clinical medicine at Weill-Cornell Medical College, adds another factor that may be the most important. Of the 71 percent of people with hypertension who are currently being treated, too many are taking the wrong drugs or the wrong dosages of the right ones.

Dr. Mann, author of “Hypertension and You: Old Drugs, New Drugs, and the Right Drugs for Your High Blood Pressure,” says that doctors should take into account the underlying causes of each patient’s blood pressure problem and the side effects that may prompt patients to abandon therapy. He has found that when treatment is tailored to the individual, nearly all cases of high blood pressure can be brought and kept under control with available drugs.

Plus, he said in an interview, it can be done with minimal, if any, side effects and at a reasonable cost.

“For most people, no new drugs need to be developed,” Dr. Mann said. “What we need, in terms of medication, is already out there. We just need to use it better.”

But many doctors who are generalists do not understand the “intricacies and nuances” of the dozens of available medications to determine which is appropriate to a certain patient.

“Prescribing the same medication to patient after patient just does not cut it,” Dr. Mann wrote in his book.

The trick to prescribing the best treatment for each patient is to first determine which of three mechanisms, or combination of mechanisms, is responsible for a patient’s hypertension, he said.

¶ Salt-sensitive hypertension, more common in older people and African-Americans, responds well to diuretics and calcium channel blockers.

¶ Hypertension driven by the kidney hormone renin responds best to ACE inhibitors and angiotensin receptor blockers, as well as direct renin inhibitors and beta-blockers.

¶ Neurogenic hypertension is a product of the sympathetic nervous system and is best treated with beta-blockers, alpha-blockers and drugs like clonidine.

According to Dr. Mann, neurogenic hypertension results from repressed emotions. He has found that many patients with it suffered trauma early in life or abuse. They seem calm and content on the surface but continually suppress their distress, he said.

One of Dr. Mann’s patients had had high blood pressure since her late 20s that remained well-controlled by the three drugs her family doctor prescribed. Then in her 40s, periodic checks showed it was often too high. When taking more of the prescribed medication did not result in lasting control, she sought Dr. Mann’s help.

After a thorough work-up, he said she had a textbook case of neurogenic hypertension, was taking too much medication and needed different drugs. Her condition soon became far better managed, with side effects she could easily tolerate, and she no longer feared she would die young of a heart attack or stroke.

But most patients should not have to consult a specialist. They can be well-treated by an internist or family physician who approaches the condition systematically, Dr. Mann said. Patients should be started on low doses of one or more drugs, including a diuretic; the dosage or number of drugs can be slowly increased as needed to achieve a normal pressure.

Specialists, he said, are most useful for treating the 10 percent to 15 percent of patients with so-called resistant hypertension that remains uncontrolled despite treatment with three drugs, including a diuretic, and for those whose treatment is effective but causing distressing side effects.

Hypertension sometimes fails to respond to routine care, he noted, because it results from an underlying medical problem that needs to be addressed.

“Some patients are on a lot of blood pressure drugs — four or five — who probably don’t need so many, and if they do, the question is why,” Dr. Mann said.

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Well: Keeping Blood Pressure in Check

Since the start of the 21st century, Americans have made great progress in controlling high blood pressure, though it remains a leading cause of heart attacks, strokes, congestive heart failure and kidney disease.

Now 48 percent of the more than 76 million adults with hypertension have it under control, up from 29 percent in 2000.

But that means more than half, including many receiving treatment, have blood pressure that remains too high to be healthy. (A normal blood pressure is lower than 120 over 80.) With a plethora of drugs available to normalize blood pressure, why are so many people still at increased risk of disease, disability and premature death? Hypertension experts offer a few common, and correctable, reasons:

¶ About 20 percent of affected adults don’t know they have high blood pressure, perhaps because they never or rarely see a doctor who checks their pressure.

¶ Of the 80 percent who are aware of their condition, some don’t appreciate how serious it can be and fail to get treated, even when their doctors say they should.

¶ Some who have been treated develop bothersome side effects, causing them to abandon therapy or to use it haphazardly.

¶ Many others do little to change lifestyle factors, like obesity, lack of exercise and a high-salt diet, that can make hypertension harder to control.

Dr. Samuel J. Mann, a hypertension specialist and professor of clinical medicine at Weill-Cornell Medical College, adds another factor that may be the most important. Of the 71 percent of people with hypertension who are currently being treated, too many are taking the wrong drugs or the wrong dosages of the right ones.

Dr. Mann, author of “Hypertension and You: Old Drugs, New Drugs, and the Right Drugs for Your High Blood Pressure,” says that doctors should take into account the underlying causes of each patient’s blood pressure problem and the side effects that may prompt patients to abandon therapy. He has found that when treatment is tailored to the individual, nearly all cases of high blood pressure can be brought and kept under control with available drugs.

Plus, he said in an interview, it can be done with minimal, if any, side effects and at a reasonable cost.

“For most people, no new drugs need to be developed,” Dr. Mann said. “What we need, in terms of medication, is already out there. We just need to use it better.”

But many doctors who are generalists do not understand the “intricacies and nuances” of the dozens of available medications to determine which is appropriate to a certain patient.

“Prescribing the same medication to patient after patient just does not cut it,” Dr. Mann wrote in his book.

The trick to prescribing the best treatment for each patient is to first determine which of three mechanisms, or combination of mechanisms, is responsible for a patient’s hypertension, he said.

¶ Salt-sensitive hypertension, more common in older people and African-Americans, responds well to diuretics and calcium channel blockers.

¶ Hypertension driven by the kidney hormone renin responds best to ACE inhibitors and angiotensin receptor blockers, as well as direct renin inhibitors and beta-blockers.

¶ Neurogenic hypertension is a product of the sympathetic nervous system and is best treated with beta-blockers, alpha-blockers and drugs like clonidine.

According to Dr. Mann, neurogenic hypertension results from repressed emotions. He has found that many patients with it suffered trauma early in life or abuse. They seem calm and content on the surface but continually suppress their distress, he said.

One of Dr. Mann’s patients had had high blood pressure since her late 20s that remained well-controlled by the three drugs her family doctor prescribed. Then in her 40s, periodic checks showed it was often too high. When taking more of the prescribed medication did not result in lasting control, she sought Dr. Mann’s help.

After a thorough work-up, he said she had a textbook case of neurogenic hypertension, was taking too much medication and needed different drugs. Her condition soon became far better managed, with side effects she could easily tolerate, and she no longer feared she would die young of a heart attack or stroke.

But most patients should not have to consult a specialist. They can be well-treated by an internist or family physician who approaches the condition systematically, Dr. Mann said. Patients should be started on low doses of one or more drugs, including a diuretic; the dosage or number of drugs can be slowly increased as needed to achieve a normal pressure.

Specialists, he said, are most useful for treating the 10 percent to 15 percent of patients with so-called resistant hypertension that remains uncontrolled despite treatment with three drugs, including a diuretic, and for those whose treatment is effective but causing distressing side effects.

Hypertension sometimes fails to respond to routine care, he noted, because it results from an underlying medical problem that needs to be addressed.

“Some patients are on a lot of blood pressure drugs — four or five — who probably don’t need so many, and if they do, the question is why,” Dr. Mann said.

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Pentagon to Beef Up Cybersecurity Force to Counter Attacks

WASHINGTON — The Pentagon is moving toward a major expansion of its cybersecurity force to counter increasing attacks on the nation’s computer networks, as well as to expand offensive computer operations on foreign adversaries, defense officials said Sunday.

The expansion would increase the Defense Department’s Cyber Command by more than 4,000 people, up from the current 900, an American official said. Defense officials acknowledged that a formidable challenge in the growth of the command would be finding, training and holding onto such a large number of qualified people.

The Pentagon “is constantly looking to recruit, train and retain world class cyberpersonnel,” a defense official said Sunday.

“The threat is real and we need to react to it,” said William J. Lynn III, a former deputy defense secretary who worked on the Pentagon’s cybersecurity strategy.

As part of the expansion, officials said the Pentagon was planning three different forces under Cyber Command: “national mission forces” to protect computer systems that support the nation’s power grid and critical infrastructure; “combat mission forces” to plan and execute attacks on adversaries; and “cyber protection forces” to secure the Pentagon’s computer systems.

The move, part of a push by Defense Secretary Leon E. Panetta to bolster the Pentagon’s cyberoperations, was first reported on The Washington Post’s Web site.

In October, Mr. Panetta warned in dire terms that the United States was facing the possibility of a “cyber-Pearl Harbor” and was increasingly vulnerable to foreign computer hackers who could dismantle the nation’s power grid, transportation system, financial network and government. He said that “an aggressor nation” or extremist group could cause a national catastrophe, and that he was reacting to increasing assertiveness and technological advances by the nation’s adversaries, which officials identified as China, Russia, Iran and militant groups.

Defense officials said that Mr. Panetta was particularly concerned about a computer attack last August on the state oil company Saudi Aramco, which infected and made useless more than 30,000 computers. In October, American intelligence officials said they were increasingly convinced that the Saudi attacks originated in Iran. They described an emerging shadow war of attacks and counterattacks already under way between the United States and Iran in cyberspace.

Among American officials, suspicion has focused on the “cybercorps” created in 2011 by Iran’s military, partly in response to American and Israeli cyberattacks on the Iranian nuclear enrichment plan at Natanz. There is no hard evidence, however, that the attacks were sanctioned by the Iranian government.

The attacks emanating from Iran have inflicted only modest damage. Iran’s cyberwarfare capabilities are weaker than those of China and Russia, which intelligence officials believe are the sources of a significant number of attacks on American companies and government agencies.

The expansion of Cyber Command comes as the Pentagon is making cuts elsewhere, including in the size of its conventional armed forces.

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