Deputy National Security Adviser John Brennan testifies before a Senate Intelligence Committee hearing on his nomination to be the Director of the CIA, on Capitol Hill in Washington, February 7, 2013.

WASHINGTON | Fri Feb 15, 2013 6:59pm EST

WASHINGTON (Reuters) - President Barack Obama's pick for CIA director, John Brennan, promised senators who will vote on his nomination more openness about U.S. counter-terrorism programs, saying the closely guarded number of civilian casualties from drone strikes should be made public, according to his written responses to questions released on Friday.

Brennan was questioned sharply by Democrats and Republicans alike during a Senate Intelligence Committee hearing on his nomination last week.

Along with harsh interrogation techniques, Brennan was questioned about drone strikes against terrorism suspects in Pakistan, Afghanistan, Yemen and elsewhere. These strikes have increased under Obama and included the killing in Yemen of a U.S.-born cleric suspected of ties to al Qaeda and his U.S.-born son.

The U.S. government, without releasing numbers, has sought to portray civilian deaths from these strikes as minimal. But other organizations which collect data on these attacks put the number of civilians killed in the hundreds.

"I believe that, to the extent that U.S. national security interests can be protected, the U.S. government should make public the overall numbers of civilian deaths resulting from U.S. strikes targeting al Qaeda," Brennan wrote in response to a question from Senator Dianne Feinstein, the committee chairwoman.

"In those rare instances in which civilians have been killed" reviews are conducted and, if appropriate, condolence payments are provided to the families, he wrote.

Such casualties from drone strikes have created profound anger among civilian populations overseas and severe tension between the United States and Pakistan and Afghanistan.

During last week's hearing, Feinstein said she had been trying to speak publicly about the "very low number of civilian casualties" and to verify that number each year has "typically been in the single digits." However, she said she was told she could not divulge the actual numbers because they were classified.

The New America Foundation said the number of civilians killed by U.S. drone strikes in Pakistan was 261-305 from 2004 to 2013. (here).

A former intelligence official said the reason for the discrepancy between the U.S. government's apparently lower figures on civilian deaths and those collected by other organizations may be due to what is counted as a civilian death.

The government assumes "military-aged" males in the proximity of a drone strike are combatants unless it finds out otherwise, the former official said.

Asked whether the government could carry out drone strikes inside the United States, Brennan replied: "This administration has not carried out drone strikes inside the United States and has no intention of doing so."

U.S. legal authorities have not limited the geographic scope to a war zone for using force against al Qaeda and its affiliates, he noted, adding: "This does not mean, however, that we use military force whenever or wherever we want."

YEMEN LEAK PROBE

On another topic, Brennan said he had been advised by the Justice Department that he is a witness in, and not a target of, a criminal investigation into media leaks last year about the disruption of an underwear bomb plot by al Qaeda's affiliate in Yemen. He said he had spoken to investigators, but been advised they have no plans to speak with him again.

Brennan said the Justice Department had provided his lawyer with a transcript of a conference call about the plot which he held last May 7 with former counter-terrorism officials who serve as TV news analysts.

At his confirmation hearing, Brennan confirmed the accuracy of a report by Reuters that during the conference call, he told the pundits that the alleged plot was never a real threat because the U.S. had "inside control" over it. But he vigorously disputed that he had leaked classified information.

Within hours, one of the analysts on the call appeared on TV saying that the U.S. government was implying that it had "somebody on the inside" of the alleged plot "who wasn't going to let it happen." News reports then proliferated saying the U.S. or its allies had succeeded in planting an informant inside al Qaeda's Yemen branch.

Brennan said in his written responses that he had given a transcript of his conference call with the pundits to the committee. Congressional officials said the Obama administration had requested that it be kept confidential, even though Brennan testified that nothing he told the pundits was classified.

The White House did not immediately respond to a request for a copy of the transcript.

The committee's vote on Brennan's nomination has been delayed until after a congressional recess next week.

(Additional reporting by Mark Hosenball. Editing by Warren Strobel and Christopher Wilson)

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1 of 3. Christie's auction house CEO Steven Murphy is interviewed at his office in central London January 16, 2013.

LONDON | Wed Jan 16, 2013 8:02pm EST

LONDON (Reuters) - When the public sits up and notices the art market, it is usually when an anonymous buyer pays a mind-boggling sum to acquire a prized painting or sculpture.

In 2012, Edvard Munch's "The Scream" fetched a record $120 million, a Mark Rothko abstract soared to $87 million and a Renaissance drawing by Raphael sold for $48 million - all in a year when making ends meet was most people's priority.

Yet Steven Murphy, the first American to head the auctioneer Christie's since its creation in 1766, is convinced the key to future success after another bumper year of sales lies not with the "one percent", but a much broader pool of art lovers.

The 58-year-old, who worked in publishing and music before his surprise appointment to the head of the world's largest auction house two years ago, wants to rid the art world of its stuffy image as a club exclusively for the rich.

"It's sexy and it's cool and it's news to talk about the most important work in a single sale on a single evening, but one has to be careful of the myopia as a business of focusing only on that very important activity," Murphy told Reuters.

"Twenty percent of our buyers this past year were brand new to Christie's, never bought here before," he said in an interview at the company's headquarters in central London, sitting beneath a small Picasso being sold next month.

He was referring to one of the encouraging statistics in the company's annual sales report, which on Thursday showed record revenues of 3.9 billion pounds ($6.3 billion) in 2012, a rise of 10 percent on 2011.

In 2009, when the art market contracted sharply due to the global financial crisis, sales were just 2.1 billion pounds.

ASIA DOWN BUT NOT OUT

The overall increase in 2012 came despite a slump in Christie's auction sales of Asian art, which fell by a quarter to 415 million pounds after providing the engine for growth in recent years.

Competition from Chinese auctioneers and the end to a speculative bubble in some Asian art contributed to the decline, but Murphy said the region had the potential to grow again longer term.

"I think the opportunity in Asia is far bigger than any of us in the art business have truly tapped into," he said.

In contrast, Christie's saw private sales surge 26 percent to 631 million pounds, and Murphy expected deals behind closed doors to be key in maintaining growth in 2013 and beyond.

"Look for a big increase in our private sales activity," he said. "Our current clients want to do more of that."

Murphy, whose laid-back manner stands out in the London art scene, said he was convinced more private sales did not mean less business in the auction room, still the mainstay of Christie's income.

A key part of Murphy's strategy since arriving has been to build its online presence, both by attracting visitors to the website and encouraging them to bid over the internet.

From six online-only auctions in 2012, the company will hold more than 30 in 2013, and while digital sales tend to be for more modestly priced items, Edward Hopper's "October on Cape Cod" sold for $9.6 million to an internet bidder in November.

EXPLOSION IN INTEREST IN ART

"One of the things that is driving the opportunity for a company like Christie's is cultural," he said.

"There is a huge cultural surge around the world toward the experience of art. Museum attendance is way up on the previous year and the year before that ...People are accessing art on their iPads, on their laptops, on their iPhones."

By expanding its online presence, Christie's aims to capture more business in the mid- to lower-tier markets, away from the multi-million-dollar deals that grab the headlines.

Murphy pointed to a 20 percent rise in sales at Christie's South Kensington offices, which specialize in lower-end art and antiques.

For Christie's, that sector is key in terms of the bottom line because profits from it outstrip those from more high-profile post-war, contemporary, impressionist and old master art, Murphy said.

He believes that only a "tiny percentage" of clients are buying art purely as a "commodity", or alternative investment at a time when stocks and bonds have delivered modest returns while some artists' values soar.

"From the top end, no-one has bought a Rothko for more than $30 million who doesn't want the Rothko and at the middle and lower end the purchaser of the 20,000-pound Jasper Johns lithograph ... really wants that work," he argued.

"What is happening is that people of wealth are choosing not to invest in other areas, and therefore they have more available for the activity they already love, so it's not money management as much as personal choice."

And if equities start to pick up again?

"I am here to say that when the markets go up there is more money to spend so actually our sales go up, so we don't want to see the stock market do anything but go up."

Christie's, a private company owned by French billionaire Francois Pinault, does not report profit or loss, only sales.

Its main rival is Sotheby's, slightly smaller in terms of sales. Sotheby's, listed in New York, posted auction sales of $4.4 billion last year versus $5.3 billion at Christie's.

Murphy confirmed the company was in the black. When asked whether it was more profitable now than when he joined in late 2010, he replied: "I can say that we're very happy. There's wind in our sails."

(Reporting by Mike Collett-White; Editing by Andrew Heavens)

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1 of 11. Pakistani journalists chant slogans during a protest against bomb blasts in Quetta and condemn killings of members of the media, outside the press club in Karachi January 11, 2013. The banner reads in Urdu ''we wholeheartedly salute our martyr brothers''.

QUETTA, Pakistan | Fri Jan 11, 2013 9:07am EST

QUETTA, Pakistan (Reuters) - In a rare challenge, a Shi'ite Muslim leader publicly criticized Pakistani military chief General Ashfaq Kayani over security in the country on Friday after bombings targeting the minority sect killed 118 people.

The criticism of Kayani, arguably the most powerful man in the South Asian state, highlighted Shi'ite frustrations with Pakistan's failure to contain Sunni Muslim militant groups who have vowed to wipe out Shi'ites.

"I ask the army chief: What have you done with these extra three years you got (in office)? What did you give us except more death?" Maulana Amin Shaheedi, who heads a national council of Shi'ite organizations, told a news conference.

Most of Thursday's deaths were caused by twin attacks aimed Shi'ites in the southwestern city of Quetta, near the Afghan border, where members of the minority have long accused the state of turning a blind eye to Sunni death squads.

Shi'ite leaders were so outraged at the latest bloodshed that they called for the military to take control of Quetta to shield them and said they would not allow the 85 victims of twin bomb attacks to be buried until their demands were met.

The burials had been scheduled to take place after Friday prayers but the bodies would remain in place until Shi'ites had received promises of protection.

Shaheedi said scores of bodies were still lying on a road. "They will not be buried until the army comes into Quetta."

Violence against Pakistani Shi'ite is rising and some communities are living in a state of siege, a human rights group said on Friday.

"Last year was the bloodiest year for Shias in living memory," said Ali Dayan Hasan of Human Rights Watch. "More than 400 were killed and if yesterday's attack is any indication, it's just going to get worse."

A suicide bomber first targeted a snooker club in Quetta. A car bomb blew up nearby 10 minutes later after police and rescuers had arrived.

In all, 85 people were killed and 121 wounded. Nine police and 20 rescue workers were among the dead.

"It was like doomsday. Bodies were lying everywhere," said police officer Mir Zubair Mehmood.

The banned Sunni group Lashkar-e-Jangvi (LeJ) claimed responsibility for the attack in what is a predominantly Shi'ite neighborhood where the residents are ethnic Hazaras, Shi'ites who first migrated from Afghanistan in the 19th century.

While U.S. intelligence agencies have focused on al Qaeda and the Taliban, Pakistani intelligence officials say LeJ is emerging as a graver threat to Pakistan, a nuclear-armed, strategic ally of the United States.

It has stepped up attacks against Shi'ites across the country but has zeroed in on members of the sect who live in resource-rich Baluchistan province, of which Quetta is capital.

The paramilitary Frontier Corps is largely responsible for security in Baluchistan province but Shi'ites say it is unable or unwilling to protect them from the LeJ.

"STATE OF SIEGE"

The LeJ wants to impose a Sunni theocracy by stoking Sunni-Shi'ite violence. It bombs religious processions and shoots civilians in the type of attacks that pushed countries like Iraq towards civil war.

The latest attacks prompted an outpouring of grief, rage and fear among Shi'ites, many of whom have concluded that the state has left them at the mercy of the LeJ and other extremist groups who believe they are non-Muslims.

"The LeJ operates under one front or the other, and its activists go around openly shouting 'infidel, infidel, Shi'ite infidel' and 'death to Shi'ites' in the streets of Quetta and outside our mosques," said Syed Dawwod Agha, a top official with the Baluchistan Shi'ite Conference.

"We have become a community of grave diggers. We are so used to death now that we always have shrouds ready."

The roughly 500,000-strong Hazara people in Quetta, who speak a Persian dialect, have distinct features and are an easy target, said Dayan of Human Rights Watch.

"They live in a state of siege. Stepping out of the ghetto means risking death," said Dayan. "Everyone has failed them - the security services, the government, the judiciary."

Earlier on Thursday, a separate bomb killed 11 people in Quetta's main market.

The United Baloch Army claimed responsibility for that blast. The group is one of several fighting for independence for Baluchistan, an arid, impoverished region with substantial gas, copper and gold reserves.

Baluchistan constitutes just less than half of Pakistan's territory and is home to about 8 million of the total population of 180 million.

In another attack on Thursday, in Mingora, the largest city in the Swat valley in the northwest, at least 22 people were killed when an explosion targeted a public gathering of residents who had come to listen to a religious leader.

No one claimed responsibility for that bombing. Swat has been under army rule since a military offensive ejected Pakistani Taliban militants in 2009.

The LeJ has had historically close ties to elements in the security forces, who see the group as an ally in any potential war with neighboring India. Security forces deny such links.

In a measure of the outrage, several Pakistani social media users posted Facebook comments urging the U.S. to expand its covert programme of drone warfare beyond Taliban strongholds on the Afghan border to target LeJ leaders in Baluchistan.

Among the dead in Quetta was Khudi Ali, a young activist who often wore a T-shirt with fake bloodstains during protests against the rising violence against Shi'ites.

Ali's Twitter profile said: "I am born to fight for human rights and peace."

(Additional reporting by Mehreen Zahra-Malik and Katharine Houreld in Islamabad and Matthew Green in Lahore.; Writing by Katharine Houreld; Editing by Mark Heinrich)

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U.S. President Barack Obama delivers remarks at the White House in Washington November 28, 2012.

WASHINGTON | Thu Jan 31, 2013 6:19pm EST

WASHINGTON (Reuters) - The chief of a group of more than 200 CEOs said on Thursday that President Barack Obama had told the business community last month he might back a territorial tax system, a regime that would exempt offshore corporate profits from U.S. taxation.

Corporate America is pushing for the United States to move to such a regime to make businesses more competitive against foreign rivals that pay no taxes on overseas earnings. The United States currently taxes corporate profits earned abroad only when they are brought into the country.

In 2011, then Treasury Secretary Timothy Geithner privately agreed to move to such a regime in failed talks with Republicans to secure a major budget deal, according to aides present.

During last year's presidential election campaign, Vice President Joe Biden criticized a territorial tax system, employing populist rhetoric to blast companies that shift their business and jobs abroad.

John Engler, president of the Business Roundtable, a CEO lobbying group, said that in meetings during last month's budget standoff between the White House and Congress, Obama was moving back in the business community's direction on the issue.

"He reaffirmed his support for corporate tax reform and he was acknowledging the importance of ... a territorial system, which I think had been a little bit of a question," Engler said.

A White House official on Thursday said Obama is eager to "pursue corporate tax reform that lowers the rate ... but does not believe that a pure territorial system is the best way to achieve this goal."

A territorial system is seen as having a chance of winning approval in Congress only if it were to be coupled with a major budget deal, where Obama could win some of his priorities.

The Business Roundtable is composed of chief executives from marquee companies ranging from mega-retailer Wal-Mart Stores Inc to Wall Street's JPMorgan Chase & Co.

TAX REVAMP UNCERTAIN

Lawmakers in Congress have been working on a tax code overhaul for more than a year, though its prospects are unclear given a crowded legislative agenda and disputes over revenue.

Obama last year pitched a corporate tax revamp that included cutting the top corporate tax rate to 28 percent from 35 percent and closing a number of business tax breaks to pay for the cut.

Pam Olson, assistant treasury for tax policy under Republican President George W. Bush and now chief of PricewaterhouseCooper's Washington tax practice, said Obama's plan carefully opposed a "pure" territorial tax system, but left the door open for hybrid systems that might, for instance, exempt some but not all offshore profits from U.S. taxation.

"The use of the term 'pure' I think, was a signal that they were willing to consider it," Olson said.

Critics of moving to a territorial system say it will cause further U.S. jobs and business to move offshore.

A report by the Congressional Research Service, a nonpartisan think tank for lawmakers, this month said U.S.-based global companies are increasingly shifting profits into tax havens like Bermuda and Switzerland.

Critics say this proves companies are aggressively skirting the law to avoid U.S. tax. Business groups say the trend is the result of the relatively high U.S. tax rate.

TOUGH CHOICES

The notion of trimming the top corporate tax rate is a rare area of agreement between Democrats and Republicans on tax policy, though Republicans want to lower the rate more.

A major hurdle in any tax code revamp would be how to "broaden the base" of taxpayers, which both sides say is needed to help fund a tax rate cut. That would mean making hard choices about scrapping tax deductions, credit and loopholes that some companies hold dear.

Engler said his CEOs would be willing to give up some perks if it meant the corporate tax rate could be cut to 25 percent.

"There are credits for the way you handle depreciation, there are credits on R&D (research and development), there are credits on this type of manufacturing or this type of manufacturing product," he said. "They have to be on the table."

(Editing by Kevin Drawbaugh, Howard Golle, M.D. Golan and Andrew Hay)

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SAN FRANCISCO | Wed Jan 2, 2013 5:01pm EST

SAN FRANCISCO (Reuters) - Advanced Micro Devices said on Wednesday it promoted senior executive Devinder Kumar to chief financial officer after the struggling PC chipmaker announced in September its previous CFO was leaving.

Kumar, a 28-year AMD veteran, had been standing in as CFO since AMD announced the departure of Thomas Siefert, who was liked by many on Wall Street.

Since 2001, Kumar was corporate controller at AMD, which like other PC-related companies has been hit by a slump in demand as smartphones and tablets grow in popularity.

AMD, one of Silicon Valley's oldest chipmakers, has been laying off engineers while looking for new markets for its chips as it faces dwindling cash reserves.

(Reporting By Noel Randewich; Editing by Tim Dobbyn)

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WASHINGTON | Sun Dec 30, 2012 5:02pm EST

WASHINGTON (Reuters) - The Senate on Sunday confirmed the head of the Federal Housing Administration in her position despite mounting losses the mortgage funding agency that some fear could eventually lead to a taxpayer bailout.

In a 69-24 vote, the Senate confirmed Carol Galante as an assistant secretary of the Department of Housing and Urban Development. Galante, a former affordable housing developer in San Francisco, had been running the FHA in an acting capacity since July 2011.

The FHA, a key source of mortgage funding for first-time home buyers and those with modest incomes, backs $1.1 trillion in U.S. home mortgages. Last month it reported a projected shortfall of $16.3 billion due to souring loans that it insured during the housing market downturn during the past several years.

An independent audit suggested that the FHA would require taxpayer funding for the first time in its 78 years, though that won't be decided until February when the Obama administration releases its next budget proposal.

In response to the shortfall, the agency raised the premiums it charges on guaranteed loans by one-tenth of a percentage point, adding, on average, about $13 to a borrower's monthly mortgage payment.

Senator Tim Johnson, the Democrat who heads the Senate Banking Committee, said Galante was "highly qualified" and attributed the FHA's problems to legacy loans that were still threatening the agency's finances.

"It is important that the FHA have a confirmed management team in place to continue oversight of these legacy loans," Johnson said prior to the vote.

Following the collapse of the private subprime mortgage market during the 2007-2009 financial crisis, FHA-backed loans took over as the sole financing source for nearly all of the lower end of the U.S. housing market, which has continued to struggle.

The deteriorated finances had caused some Senate Republicans not to support Galante, who prior to her current position ran multifamily housing programs for HUD.

She joined the agency in 2009 after serving as president of Bridge Housing Corp, the largest non-profit developer of affordable housing in California.

But Republican Senator Bob Corker, who had been one of her biggest critics, publicly dropped his opposition to her confirmation after she sent him a letter pledging to take certain steps to improve the agency's finances, including tightening lending standards for buyers with lower credit scores and limiting the amount of money that could be borrowed in the FHA's reverse-mortgage program.

(Additional reporting by Margaret Chadbourn; Editing by Eric Walsh)

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U.S. Environmental Protection Agency Administrator Lisa Jackson, speaks during a news conference in Rio de Janeiro June 20, 2012.

WASHINGTON | Thu Dec 27, 2012 6:54pm EST

WASHINGTON (Reuters) - U.S. Environmental Protection Agency chief Lisa Jackson, who spearheaded the Obama administration's crackdown on carbon emissions, said on Thursday she will step down after almost four years of battles with Republican lawmakers and industry over proposed regulations.

Under her leadership, the agency declared for the first time that carbon dioxide was a danger to human health and could be regulated under the Clean Air Act, leading the EPA to develop a new regulatory regime to limit carbon emissions.

Industry groups and Republican lawmakers opposed Jackson's efforts to fight climate change, hauling her in for numerous hearings in Congress, and she faced some pushback from within the administration too.

She won praise from many environmental groups, while others complained her EPA was too timid. It was unclear what direction the administration will take on climate change during President Barack Obama's second term.

Obama thanked Jackson for her service, praising her work on mercury pollution limits, fighting climate change and helping set new fuel economy standards for vehicles.

"Under her leadership, the EPA has taken sensible and important steps to protect the air we breathe and the water we drink," Obama said in a statement.

Jackson, the first black administrator of the 17,000-strong EPA, said in a statement she was "confident the (EPA) ship is sailing in the right direction."

Jackson, 50, is expected to leave her cabinet position after Obama's State of the Union address in early 2013. Leading the list of potential replacements are Bob Perciasepe, deputy EPA administrator, who will take over the agency on an interim basis; and Kathleen McGinty, a former head of Pennsylvania's Department of Environmental Protection and a protégé of former U.S. Vice President Al Gore.

Also said to be in the mix are Gina McCarthy, the EPA's assistant administrator for the Office of Air and Radiation; and Mary Nichols, chair of the California Air Resources Board.

Jackson's departure was not a surprise. Analysts had not expected her to stay for Obama's second term.

The administration is expected to face a tough fight to get any potential nominee confirmed by the Senate -- especially any candidate seen as being in the mold of Jackson.

"Secretary Jackson played the environmental ‘bad cop' to President Obama's more moderate ‘good cop,' but the result of their tag-team effort has been a huge expansion of the EPA's power. That's the exact opposite of what is needed," said S. T. Karnick, research director at the Heartland Institute, a Chicago group that is skeptical of man-made climate change.

Jackson is the first major energy policy official to step aside since Obama's re-election last month. Some have speculated that Energy Secretary Steven Chu, a Nobel prize-winning physicist who has also clashed with industry, will also depart, as may Interior Secretary Ken Salazar.

BRUISING ENCOUNTERS

Republican lawmakers accused Jackson's EPA of massive government overreach that choked economic growth, and passed numerous bills aimed at undoing the regulations. Obama did not sign their bills into law, but the White House did begin to pull back or delay rules in the face of the relentless onslaught.

Some speculated Jackson would step down in 2011, when Obama decided to delay rules to restrict emissions of smog-forming chemicals from power plants.

"From an energy and consumer perspective, it has to be said that the Jackson EPA presided over some of the most expensive and controversial rules in agency history," said Scott Segal, director of the Electric Reliability Coordinating Council, which lobbied against many of the EPA's proposed regulations.

States and governors fought Jackson's rules in the courts, scoring a win in August when a U.S. appeals court overturned the EPA's Cross-State Air Pollution Rule, aimed at reducing harmful emissions from coal-burning power plants.

On Thursday, many environmentalists and public health advocates hailed Jackson, saying she leaves a legacy of cleaner air.

"Administrator Jackson has been one of the most effective leaders in the history of the Environmental Protection Agency," Larry Schweiger, president of the National Wildlife Federation.

Jackson is a chemical engineer by training, and reports in recent weeks suggested she might be under consideration for the post of president of Princeton University. She is also a one-time chief of staff of New Jersey Governor John Corzine, and other media reports say she may be mulling a run for governor of that state.

Despite contentious dealings with Congress, Jackson maintained a cordial relationship with one of her biggest critics, Senator Jim Inhofe. She even kept a photo of the Oklahoma Republican and his grandchildren in her office.

"Lisa Jackson and I disagreed on many issues and regulations while she headed the EPA, however, I have always appreciated her receptivity to my concerns, her accessibility and her honesty," said Inhofe, who has called climate change a hoax, chided the Obama administration for a "far left green agenda" and vigorously opposed carbon regulations.

Inhofe said Jackson's departure offers the White House the chance to appoint someone "who appreciates the needs of our economy."

UNFINISHED AGENDA INCLUDES FRACKING

A self-described pragmatist, Jackson passionately fought to limit air pollution. She often described her two sons' struggles with asthma when discussing the importance of clean air.

Jackson also rejected her critics' complaints that stronger environmental rules were incompatible with a robust economy.

When broad climate change legislation sputtered in Congress in 2010, the EPA became the White House's main vehicle for addressing carbon emissions.

Since then, the agency has finalized rules outlining restrictions on carbon emissions for new power plants, effectively prohibiting the construction of new coal-fired plants without carbon-capture and storage technology.

Natural Resources Defense Council President Frances Beinecke said Jackson's successor "will inherit an unfinished agenda that begins with the issuance of new health protections against carbon pollution from existing power plants - the largest remaining driver of climate change that needs to be controlled."

The EPA also will help decide whether the federal government will regulate hydraulic fracturing, or fracking. The drilling technique has sparked a boom in U.S. energy production but opponents have linked it to water pollution and other problems.

Most regulation of fracking has fallen to the states, but the EPA has said it plans to propose standards on wastewater from gas wells by 2014 and is considering rules that would require more disclosure about the chemicals used in fracking.

U.S. oil and gas production has reached record levels in recent years. Even so, drillers have complained that EPA has taken too heavy a hand in regulating energy production and warn that onerous rules could crimp oil and gas output.

"In the past four years, EPA has hindered development of our nation's oil and natural gas resources by making it difficult for America's independent producers to overcome the enormous regulatory obstacles to operate," said Julia Bell, spokeswoman for the Independent Petroleum Association of America.

(Additional reporting by Valerie Volcovici and Roberta Rampton; Editing by Ros Krasny, Will Dunham, Mohammad Zargham and David Gregorio)

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1 of 3. File picture shows designated new finance chief Timotheus Hoettges (L) and Rene Obermann, CEO of Deutsche Telekom AG before the annual news conference in Bonn February 27, 2009.

FRANKFURT | Thu Dec 20, 2012 1:14pm EST

FRANKFURT (Reuters) - Deutsche Telekom chief executive Rene Obermann has unexpectedly announced he will step down at the end of 2013 and be succeeded by finance director Timotheus Hoettges.

Hoettges, 50, said on Thursday he was not planning major changes to strategy and would continue Obermann's drive of investing in the United States and Germany as the firm battles to return to revenue growth against a tough economic backdrop.

"I have worked with Obermann for 12 years, and I don't expect to change a lot in the way that we do things," he told journalists during a conference call.

He is, however, expected to bring a fresh spark to Germany's former state telecoms monopoly, as he is considered by analysts to have the energy to take on challenges and an ability to absorb knowledge. But he has a big job ahead of him.

The European telecoms industry is struggling with sluggish economic growth, costly investments and cut-throat competition, and on top of that Deutsche Telekom has had its hands full with trying to fix its troubled T-Mobile USA business.

The German government, Deutsche Telekom's biggest shareholder with a 32 percent stake, said it welcomed the choice of Hoettges as new CEO because it promised continuity.

"The chief strategist so far becoming the new captain indicates that the course will be held," a spokesperson for the finance ministry told Reuters.

Hoettges joined the group in 2000 after playing a central role in the merger of VIAG AG and VEBA AG to form E.ON, now Germany's biggest utility.

In 2009, he was promoted to finance chief at Deutsche Telekom and, among other things, oversaw the move to put its British mobile business in a joint venture with France Telecom,.

"Hoettges is extremely good as a CFO, he's well respected by investors, but it remains to be seen whether he has the vision and political clout to succeed as CEO," Espirito Santo analyst Will Draper said.

Hoettges said the company had not yet decided on a new finance director to replace him.

THE ENGINE ROOM

Obermann was the youngest-ever chief executive of a German blue-chip firm at the time when he took over in 2006, aged only 43. He gained a reputation for being eager to keep unions and politicians happy and wary of making big strategic decisions.

One of his boldest moves was a deal to sell T-Mobile USA, to AT&T, but it collapsed last year amid concerns from competition regulators, dealing a blow to Obermann's reputation.

T-Mobile USA was a growth engine for Deutsche Telekom in its early days but is a rundown asset now that has been haemorrhaging customers. Deutsche Telekom is now trying to merge the business with smaller rival MetroPCS.

Obermann said he was leaving to work for a smaller company where he was "closer to the engine room" than he could be at an international corporation, without providing details.

Analysts were split over whether to believe Obermann's assurances that he was leaving of his own volition.

"If the board or the main shareholders were unhappy about the CEO's performance, they probably would have appointed an outsider, not the CFO, who also has been responsible for what has happened at the company over the last few years," Exane BNP analyst Mathieu Robilliard said.

Espirito Santo's Draper meanwhile said: "Obermann has had a lot of opportunity to fix the U.S. and yet it still remains Deutsche Telekom's biggest problem."

Obermann also disappointed investors with a bigger than expected dividend cut announced earlier this month as the company's investment drive eats away cash.

European peers Telefonica, the Netherlands' KPN, Telekom Austria, and France Telecom had already cut their dividends earlier this year, hurt by a weak economy and fierce competition that has driven down prices.

Deutsche Telekom shares closed 0.5 percent higher at 8.63 euros, outperforming a 0.2 percent fall in the STOXX Europe 600 European telecoms index.

(Additional reporting by Paul Sandle and Rene Wagner; Editing by Mark Potter and Helen Massy-Beresford)

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The logo of the UNESCO is seen inside at the headquarters in Paris on September 22,2009.

PARIS | Thu Oct 11, 2012 9:50am EDT

PARIS (Reuters) - UNESCO is in its "worst ever financial situation" after its biggest contributor the United States froze funding last year, the director general of the United Nations' cultural agency said on Thursday.

The United Nations Educational Scientific and Cultural Organization was plunged into crisis in October 2011 when Washington, an ally of Israel, cancelled its grant in protest at the body's decision to grant the Palestinians full membership.

The U.N. body had been forced to slash spending, freeze job hires and cut programs after losing the U.S. funding, which had made up 22 percent of its budget, UNESCO's Irina Bokova told reporters.

The organization, which designates World Heritage sites, promotes global education and supports press freedom among other tasks, had started the year with a deficit of $150 million out of $653 million for its budget over 2012 and 2013, Bokova said.

"It's crippling our capacity to deliver," she added.

"We are coping in very difficult circumstances. We're fundraising this year, but it's not sustainable on a long-term basis. We're not closing UNESCO, but member states will have to rethink the way forward. UNESCO will be crippled."

U.S. legislation prohibits funding to any UN agency that grants full membership to any group that does not have "internationally recognized attributes" of statehood.

As a result of the vote on the Palestinians, the U.S. administration, which pays its dues at the end of the year, immediately withdrew its funding to the Paris-based agency.

Among projects to be hit by the change in U.S. policy were a Holocaust education program that is linked to wider campaigns on human rights and genocide and a Tsunami research project, both of which had been directly financed by Washington.

Bokova said it was in U.S. interests to be part of UNESCO and hoped Washington would review its position before next year when it would be stripped of voting rights for not paying its dues.

"There is money in the world, but it's not just about money," Bokova said. "We need the United States to formulate common policies and to debate common values."

Bokova, who took her post three years ago, said the deep cuts UNESCO had been obliged to make were affecting the way it did business. It did not replace 336 jobs amounting to about 15 percent of its total workforce, cancelled projects and slashed expenses.

To compensate for the shortfall, UNESCO created an emergency fund to obtain cash, primarily from other members, that is allocated to projects as it wishes.

The 60-year old former Bulgarian foreign minister said she had managed to raise $69 million, including $20 million each from Saudi Arabia and Qatar, as well as smaller donations from countries including Turkey, Indonesia and Algeria.

It has also received specific project funding from countries that have particular interests in certain fields. On Thursday it is due to sign a $20 million agreement with Norway for education and sustainable development programs.

"It fills gaps, but not in the long-run. We need a predictable budget," she said. "I think UNESCO was caught in between the political turmoil of the Middle Eastern conflict. I think it's unfair."

(Reporting by John Irish; Editing by Anthony Barker)

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NEW YORK | Fri Sep 28, 2012 5:45pm EDT

NEW YORK (Reuters) - Tim Buckley, who takes over as chief investment officer at The Vanguard Group in January, has never managed money in his 20 years at the firm. He has no plans to make big market calls and he won't micro-manage his team's thinking or strategies.

There isn't any of the swagger you might expect from a guy charged with running the money at the No.1 U.S. fund company. Instead, the 43-year-old father of three says his top priority is to focus the firm's 300-strong group of portfolio managers, analysts and traders to be more efficient.

That's something Buckley says is crucial to help Vanguard maintain its place as the lowest-cost provider of mutual funds and exchange-traded funds. "There is only one firm that is lowest cost," Buckley said.

Vanguard's approach, whether seen as cheapskate or value for money, has helped the firm surpass rival Fidelity Investments to become the largest U.S. provider of open-end and closed-end mutual funds and ETFs. Vanguard, based in suburban Philadelphia, has $1.9 trillion in mutual fund, closed-end and variable annuity assets, up from $1.33 trillion five years ago, according to Lipper, a unit of Thomson Reuters.

Vanguard offers actively-managed equity funds - most are managed by outside firms like Wellington Investments and PRIMECAP Management Company. But its bread and butter has been in passive management, which has been popular in recent years after many active managers failed to deliver returns.

"Vanguard owns the low-cost attribute in the public's minds," said Don Phillips, president of Morningstar's investment research division. "Whereas Fidelity wanted to own equity performance, Vanguard wanted low cost, and that gave it a leg up."

Much of Vanguard's recent growth has come from its exchange-traded fund business. The firm's U.S. market share in ETFs has increased 29 percent in the past two years. It now holds 17.9 percent of the market, whittling away at the dominance of competitor BlackRock Inc, which has seen its market share fall to 40.6 percent from 46.6 over the same period.

BlackRock and others are slashing costs on ETFs to match or undercut Vanguard. Early in September, BlackRock's Chairman and CEO Laurence Fink announced that the firm will lower expenses on a number of its ETFs to better compete with Vanguard. And on September 20, Charles Schwab Corp. chopped fees by as much as 59 percent on its ETFs - with some being offered at a mere 7 cents for each $100 invested.

On average, Vanguard's ETFs cost 17 cents for every $100 invested, with the cheapest ETF costing 5 cents for $100 invested.

Buckley, who was on Harvard University's premier rowing team all four years, welcomes the competition and has no intention of giving up ground over prices.

"If you undercut us today, be prepared to do it again tomorrow," he said. "We won't just lower costs on one or two funds, we will do it across the board."

Since most of Vanguard's funds track indexes, having an investing expert as chief investment officer may not be necessary. What's more, Buckley's razor sharp focus on the bottom line may be exactly what Vanguard needs right now, Phillips said.

HOMEGROWN CIO

Buckley, who has held a variety of roles at Vanguard - including chief information officer and head of the retail group - will be fighting the market share battle while also trying to maintain Vanguard's no-frills culture. It's something firm founder Jack Bogle worries could be impeded by Vanguard's growth and size.

"With bigness you can get bureaucracy and complacency," said Bogle, emphasizing the importance of Vanguard remaining "a place where judgment has a fighting chance against process." Bogle, who retired from Vanguard in 1996, continues to give speeches and write books emphasizing the importance of long-term investing and sharing his views about the state of the mutual fund industry.

During his senior year at Harvard, Buckley, who majored in economics, considered pursuing a career in medicine like his mother, a nurse, and his father, who headed the cardiac surgical unit at Massachusetts General Hospital.

But then he met Bogle, and he realized he could go into finance and serve a purpose. As CEO Bogle's assistant, Buckley handled a number of projects, including helping Bogle research his first book. Buckley returned to Harvard for an M.B.A., but came back to Vanguard after graduation.

His next job was to help create a competitive analysis for Vanguard, detailing - and tracking - the firm's main rivals. That project gave Buckley perspective on how industry players compete and what gave Vanguard's model as a mutual company an advantage, he said.

Vanguard is owned by its customers, with profits invested back into the business. That makes it nearly impossible for publicly-traded competitors who answer to shareholders to compete on cost, experts said.

Vanguard is trying to maintain its pricing edge while also growing around the world. Over the past five years, the firm has gone from 12,000 employees in just six offices to 13,500 employees in 15 offices worldwide.

Since June, Buckley, who gets up every morning at 5 a.m. to ride a few miles on his bike before work, has been traveling to Vanguard's offices around the world to observe traders and managers at work so that he could find ways to increase efficiency.

He has identified that in certain regions the real-time systems Vanguard used to get cash flow into the funds are not necessarily being used in all of Vanguard's international locations.

Vanguard is in the middle of an effort to standardize its investment management IT across the globe.

Buckley's other priorities center around developing the firm's managers and establishing global best practices around that process.

Buckley's previous experience as chief information officer and head of Vanguard's information and technology division will help a lot in combating inefficiencies that crop up in global organization, said Gus Sauter, who Buckley is replacing as chief investment officer.

"My strength was more on growing the business and his strengths are more on managing a business," said Sauter, who is retiring after 25 years.

In some ways, Buckley's biggest challenge is to make sure he doesn't mess up a good thing, said Dan Wiener, who runs a newsletter for Vanguard investors.

"The biggest mistake they could make is to try to change anything," he said.

(Reporting By Jessica Toonkel; Editing by Jennifer Merritt, Lauren Young, Martin Howell, Bernard Orr)

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(Company corrects comments on Olympic corporate ticket packages in final paragraphs having originally said that it had a third of the packages left unsold and that about 95 percent of the tickets repackaged for sale to the public had now been sold.)

* Harriet Green says will tap on technology expertise

* Q3 operating loss 26.5 mln stg vs 20.1 mln stg profit yoy

* Says rainy weather boosted foreign holiday bookings

* Sees full-year results broadly in line with expectations

By Brenda Goh

LONDON, Aug 2 (Reuters) - Thomas Cook's new chief executive said technology would be the salvation of the struggling British tour operator and gave herself nine months to deliver a turnaround plan to end over a year of poor performance.

The company posted an underlying operating loss of 26.5 million pounds ($41.3 million) in the three months ended June, versus a profit of 20.1 million pounds in the same period last year despite a lift in foreign bookings from Britons exasperated with rainy weather at home.

Harriet Green, who joined the 171-year-old company from electronic parts distributor Premier Farrell in July, told reporters on Thursday she would be able to "bring a fresh pair of eyes" to existing industry problems.

"I don't think moving from one industry (to another) is so much of a challenge ... There are many things that are actually very similar and in my view of business, all roads ultimately lead to technology," she said.

Thomas Cook has been hit hard by tough trading conditions, particularly in Britain where its core customer base of families with young children is suffering in the economic downturn. It has also been affected by unrest in popular destinations such as Egypt, Tunisia and Morocco.

In May it reported half-year pretax loss of 328.3 million pounds and completed the sale and leaseback of 19 of its planes as it struggled to find cash.

"In our view they (new management) face a very difficult turnaround task. We expect early views from the new team in November and a detailed plan to be announced in the Spring," Numis analysts said.

Thomas Cook said foreign holiday bookings had picked up in recent weeks after subdued demand in April and May, as the sodden European summer drove rain-weary Britons, Germans and Russians to seek the sun in Greece and Tunisia.

UK bookings as of July 29 were flat versus the same time last year, while bookings in central Europe were 1 percent higher, boosted by demand from Germany.

In comparison, bookings in west Europe were down 9 percent compared with the same time last year, as trading, particularly in France, stayed tough.

Net debt at June 30 was 1.01 billion pounds, versus 902.5 million pounds at the same time last year. It has striven to pay down its debt through selling its Spanish hotel chain Hotels Y Clubs De Vacaciones and expects to complete the 87 million pound sale of its Indian unit by Aug. 22.

While the outlook remained challenging, the company said its quarterly financial trend was improving and it expects to post a full-year result broadly in line with expectations.

At 0943 GMT shares in Thomas Cook, which have fallen more than 70 percent over the past year, were down 1.5 percent to 16.32 pence, valuing the company at around 148 million pounds.

It also said plans to cash in on the Olympics by selling packages to corporate clients had not gone as well as expected after the implementation of the UK bribery act made corporates nervous about offering or accepting corporate hospitality.

It had originally allocated 25 percent of its tickets to corporate packages but has since repackaged more than half of these to sell to the public a nd said it has now so ld 99 percent of its Olympic tickets. ($1=0.6415 British pounds) (Reporting by Brenda Goh; Editing by Mark Potter and David Cowell)

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