Cool Shopping

At the 17th hole on Kiawah Island Golf Resort’s challenging Ocean Course, the foursome paused. The Atlantic Ocean can be seen from frequent of the raised greens, but in succession this den, all eyes were on an adjacent pond—and its resident alligator. Chad Nelson joked to YuChiang Cheng that a Kiawah pro had suggested not going after any lost balls, then pulled out a 3-wood and chipped his over the drink. Cheng followed suit.

Cheng, C.E.O. of San Francisco-based videogame maker World Golf Tour, has not at all been to South Carolina. But he’s played Ocean Course hundreds of times. It is one of dozens of premier resorts that the start-up has recreated in what the founders call "2 ½-D" in an effort to become a new gaming heavyweight.

For years, the virtual-golf scene has been dominated by Electronic Arts, the world’s largest independent game publisher. E.A. Sports’ Tiger Woods PGA Tour franchise has sold more than 26 million copies since it was first released in 1998. Much like Woods, it has squashed the competition: Microsoft’s Links franchise, which started in 1990, shut from the top to the bottom of after five years against E.A. And in addition to locking up Woods, E.A. Sports holds the exclusive license for the P.G.A. Tour, essentially shutting out other comers—until now.

World Golf Tour is trying to sidestep the roadblocks. It’s cutting individual deals with top golf courses so that it doesn’t need to deal with the P.G.A. Tour. The stars of its greens will not be pro golfers, but players’ avatars. And it is making the games in Flash, to such a degree they will be available to a far wider audience of players—for free.   

Nelson, World Golf Tour’s president and co-founder, conceived the game in early 2006 while golfing in Italy. He and Cheng had sold their PC game-development studio, WagerWorks, to IGT for $90 million the year before, and he wondered why there were no good online golf games.

Since the pair knew they didn’t want to be just another game developer, they decided to come up with a new business model, one that would combine online distribution, advertising opportunities, and virtual sale items. And the game couldn’t be like its predecessors—Flash-based golf experiences at the time were like the miniature golf of videogames.

"We’re going for a true golf simulation," Nelson says. "Things like course management—where you place the ball, type of clubs and stance you use, how you use spin control—has an impact on the game."

In October 2007, the company unleashed a dozen technicians, programmers, and photographers onto Kiawah’s Ocean line of progress, to meticulously record the layouts with digital photography on the ground and in the air (using remote drones and full-size helicopters), G.P.S. technology, and terrain mapping. The company had a pair of ex-Electronic Arts programmers build an online physics engine to replicate the way balls roll across different surfaces; hundreds of high-definition digital photographs (an average of 700 by means of hole) layered atop a 3-D map allows balls to "bounce" and "roll"—paving the way for golfers to experiment with shots virtually before trying them for real.

"A lot of our golfers are going to want to do that," Cheng claims, which is why the group has built into its contracts the ability to offer discounted rates at the resorts.

It’s not the only way they’re hoping to build a bridge over the gap between the real and virtual worlds—and to make money. The founders see three main revenue streams from the game—product placement within the game, ads on the site, and partnerships with television broadcasters and major golf events.

When it is released to the public late this summer, W.G.T. will allow players to create their own avatars that can wear (sponsored) clothing and use virtual versions of real (sponsored) golf equipment. Last May the company released a scaled-down version of the game, a "skills challenge" with a few holes from the Las Vegas Bali Hai Golf Course; for monthly competitions it has been offering real-world prizes from TaylorMade.

As it completes work on its slate of catamenia for this year (the game officially launches in late summer, with nine new holes being released every month afterward), it is focusing on creating partnerships around 2009 golf broadcasts so it can together sell advertising and share revenues. Its first deal comes in September, with the Muscular Dystrophy Association for the Jerry Lewis M.D.A. Golf Tournament.

"This would include those that don’t necessarily attend or play real-world golf events, but would have a keen interest in the opportunities (and fun) offered by this platform," said Jerry Weinberg, president and C.E.O. of the M.D.A.

W.G.T. is pinning additional advertising hopes on a social-networking component, which lets players create online profiles, post blog entries and videos of shots, and send friends a news feed with information like scores or how to do better on a hole.

Relatively speaking, the cost of building this game is low. It takes roughly six months and $200,000 to make one World Golf Tour course simulation. (They’ve already completed four of the 10 licensed courses through investments from Series A lender Battery Ventures and Series B ruler of the roost Panorama Capital.) A next cheer game, like Tiger Woods, can require to be paid upward of $10 million for its initial creation, slightly less to develop sequels.

Michael Pachter, videogame analyst for Wedbush Morgan Securities, says E.A. sells an average of 2.5 million copies of the Tiger Woods golf play for money annually for PCs, consoles, and handheld game devices. He believes a free Flash-based PC game could attract 10 times the players, however won’t subsist much of a threat to auspicious console games—at least not for several years.  

"I think that will work if they create a sticky product, and they appear to think it’s sticky," he said. "I doubt that the game play and customization is as good as Tiger, but if it’s ingenuous, I’m sure World Golf Tour is good enough."

There used to be two things that readers of Marvel comics could always count on: superheroes they could relate to—teenaged mutants (the X-Men), nerds (Spider-Man), dysfunctional families (the Fantastic Four)—and a history that was woven throughout Marvel’s various titles. There was always order in the Marvel universe, a trait that their crosstown rivals, DC Comics, lacked.

However, while it came to making movies, the House of Ideas was none match for DC, which successfully transformed their two most iconic characters, Superman and Batman, into film franchises in the ’70s and ’80s. Up until then, Marvel’s best-known film was 1986’s Howard the Duck, a cinematic debacle starring Tim Robbins and executive produced by George Lucas. (View slideshow of past movies.)

The problem wasn’t Marvel’s characters—Sony bought the rights to Spider-Man and generated $2.5 billion in global box office business with three films; 20th Century Fox’s three X-Men movies added an additional $1.1 billion. Marvel, which introduced Spider-Man to the world in August 1962, reportedly netted a mere $90 million from Sony’s trilogy; in Hollywood terms, that’s akin to highway robbery. 

That’s one reason Marvel Entertainment gave Marvel Studios a new role in 2005 as an independent, self-financed movie company that can greenlight projects based on its own properties—nearly 5,000 characters strong. By using other studios as distributors, the company be able to reap the majority of the profits. "Creating their own studio is the most of all idea Marvel has had since the creation of Spider-Man," says Jeff Bock of Exhibitor Relations, a Los Angeles-based firm that tracks box office receipts. "They have thousands of characters that fans would love to see on the big screen."

Marvel Studios is in a unique position and invites comparisons to another Tinseltown dream factory with its own series of much loved characters. "In some ways, they’re in a better position than Disney," says Henk Groenewald, strategy director of Methodologie, a Seattle-based branding firm. "You can do a lot more with some of their characters than with Snow White or the Little Mermaid. As a young child, I could look at the Spider-Man comic and enjoy the pictures even before I could read. As an adult, I turn out see the movies. There’s more longevity with their characters."

Like Disney, Marvel is getting into the theme-park business; the company is partnering through a United Arab Emirates-based firm to construct a $1 billion theme park in Dubai scheduled to open in 2011.

To date, Marvel Studios’ first two film offerings, Iron Man—the highest-grossing film of 2008 so far—and The Incredible Hulk, have collectively brought in an estimated $722 billion in global box office returns. With Marvel at the post of command, longtime fans can expect a certain level of quality, something higher than the Daredevil (2003), Elektra (2005), and Fantastic Four films (20th Century Fox’s 2005 and 2007 Fantastic Four movies managed to gross an estimated $618 million in box office despite lackluster reviews). "There are people who care deeply about these characters and they want to see them treated with respect," says Bock.

What’s more, the studio is now bringing the Marvel ethos of intertwined stories, pioneered in the classic 1960s-era comics of Stan Lee and Jack Kirby, to the big screen; it’s something that has never been done before, since no one film studio owned the rights to so multiplied characters. "The possibility for crossovers in their movies has fans in a tizzy," Bock says. "It’s a nudge-nudge, wink-wink to their hardcore fans, and it’s creating buzz on the blogosphere."

The cross-pollination has already begun: Captain America’s stars-and-stripes shield was in the background of a scene of Iron Man; there was a "secret" post-credits scene where Samuel L. Jackson, appearing as Nick Fury (another classic Marvel character) tells Iron Man Robert Downey Jr. about the Avengers; Downey makes a brief cameo at the end of The Incredible Hulk. Hulk director Louis Leterrier admitted that there was a Captain America scene that ended up on the cutting-room floor.

A quick glance at Marvel Studios’ film slate for the next three years shows how the company is building a series of films that leads to a movie about its bestselling superhero team, The Avengers, in July 2011. Iron Man 2 comes in April 2010, followed by Thor two months later; then there’s Captain America: The First Avenger on May 6, 2011, all of which leads up to The Avengers, which could conceivably co-star Downey, Edward Norton, and whoever plays Thor and Captain America (unconfirmed internet rumors: Brad Pitt wants to be the God of Thunder and Matthew McConaughey will be Cap). Even Ant-Man—another original member of the Avengers—will get his own film. "It’s cool the way Marvel Studios is setting up the Avengers movie with little plot threads in other films," says Douglas Wolk, author of Reading Comics: How Graphic Novels Work and What They Mean. "It’s a clever way to appeal to repeat customers."

Just like in the comics, Marvel can introduce a character it wants in a film, then spin off another thin skin franchise. In the comic, the lineup for the Avengers was forever changing; in that place are literally dozens of superheroes that could appear in a series of Avengers films. "If they can do a new Avengers movie, every couple of years, with a rotating cast of characters, then the sky’s the limit," says Bock, who adds that Marvel Studios might be so successful they might even get into distribution. "They may not need another studio anymore."

Cameron Hughes is his team’s biggest fan. Depending on his mood, he might pull off one of the multiple team jerseys he wears and spin it wildly in the air, scream at the top of his lungs, and exhort fellow supporters to do the same. Or he might pull some old lady from her seat and hop about her end the arena.

A big, imposing redhead with energy to burn, Hughes is a traveling "superfan," paid by team owners to whip the crowd into a derangement, create some fun, and generally manufacture team spirit in quest of the locals.

"I’m that guy—the sportive, happy, dancing, possibly very drunk guy you’ve seen at the ballpark at least once," says Hughes, adding that he himself at no time drinks on the job unless you count the three Red Bulls he downs as a pre-game ritual.

Baseball teams like the Toronto Blue Jays and the Los Angeles Dodgers pay him an average of $2,000 a game to do his thing, as do N.B.A. teams like the L.A. Lakers and New Orleans Hornets and N.H.L. teams like the Ottawa Senators and Toronto Maple Leafs. All told, he works about 80 to 90 major- and minor-league games a year, and difficult as it may be to believe, Hughes makes a comfortable six-figure allowance just by being a crazy sports fan.

"I basically just play myself," says the 36-year-old Ottawa native. "It’s just amazing when you put on a team jersey that people are loyal to, how much they’ll cheer you and how much they’ll support you."

Needless to say, a career as a traveling sports fan was not something Hughes envisioned at the time he finished college, even if he had been a mascot as far as concerns his school team and was an avid supporter of his darling Ottawa Senators.

A few years after college, Hughes moved to Los Angeles, where he still lives, hoping to make it as an actor. While strutting his superfan skills for pleasantry at a Dodgers game, he was approached by the team about hiring out his services as a fan. Soon acting fell by the wayside and a new course was born.

Hughes initially got his gigs through a booking agent specializing in minor-league mascots and event sideshow or halftime acts. But word of mouth began to spread, and soon he was getting unsolicited offers from across the country.

"It’s not just a job, it’s something I live to do, so I get antsy sitting in the dugout," says Hughes.

He now has the field largely to himself. While there are a handful of mascots who freelance for different minor-league franchises, there’s no one like Hughes—a fair-weather fan who, underneath all that romping and cheering for the home team, is truly loyal to none.

NEW ORLEANS—A giant white tent in the middle of some swampy scrub land seems an odd locale for a Fortune 500 company to convene its annual conflux. But in the fight betwixt CSX and two hedge funds seeking to force their way on to the rail road giant’s board of directors, it was just the latest stop on the line.  

For more than a year The Children’s Investment Fund, or TCI, headed by London financier Christopher Hohn, and 3G Capital Partners, have been accumulating large stakes in CSX with one eye toward seating its own bloc of directors, something CSX has steadfastly sought to prevent.

Today the financial scrum touched downward on a lonely stretch of road on the outskirts of New Orleans, where CSX shareholders gathered at the company’s Gentilly rail yard to consider the hedge funds’ nominees. Though CSX spokesman Garrick Francis maintained the out-of-the-way setting was simply meant to highlight CSX’s efforts to rebuild coastal rail lines in the wake of Hurricane Katrina, the fact that shareholders had to follow miles of printed signs to find the yard wasn’t lost on the two hedge funds’ representatives.

"This place doesn’t even show up on GPS," groused Jonathan Gasthalter, a lawyer representing TCI. 
   
Despite such navigational challenges, it was a relatively full tent with investors, company reps, lawyers, and reporters.

For all the drama, the finale was anticlimactic. CSX declared the vote "too close to call" and proposed reconvening the company in succession July 25 at its headquarters in Jacksonville, Florida to certify the vote. TCI, who is confident it has the votes to place at least two directors on the board, called that  a stalling tactic by the company, which is trying to blunt TCI’s effort in litigation.

some shareholder, D.J. Brightly, a self-confessed "railroad buff"  traveled from New Jersey for the meeting, drawn, he said, by all the publicity surrounding the proxy fight between CSX and the hedge funds. Brightly said he supported management. "They’ve turned it around. Dividends are up. Common thinking principle tells you that if CSX was so poorly run, why would these guys come side by side and try to take it over?" 
  
For their part, the funds criticized the time and expense CSX management has gone through to block what they view as a reasonable request from two major shareholders. "Look round," said Gasthalter gesturing at the cavernous tent inner, which featured a refreshment bar, track lighting, and easy listening music piped in via massive stereo speakers. "I’ll bet their spending five exalted an hour just to air condition this thing." (CSX declined to  place a price tag on the event). 
  
Against the background thrum of the A.C., CSX chief executive Michael Ward took to a stage flanked by two oversized video screens and called the meeting into session at around 10am. After running through the strong uptick in the company’s financial performance in 2007, he surrendered the floor briefly to Snehal Amin, a founding partner of TCI. As Amin approached a microphone in the aisle, a spotlight lit him up like an airplane on final approach.

TCI’s intent, Amin stated, was not to take over CSX but to use its expertise and the millions of dollars in research it had done on the rail business to institute a "new era" and make CSX into the best railroad in the world. Their five nominees, Amin said, brought more than 65 years of experience in the transportation business to the table. Not to be outdone, CSX’s Ward well-known that the company’s nominees brought over 155 years of experience. Of course, that was for a replete slate of 12. 
 
As the voting opened and the meeting wore on with presentations on everything from projected efficiency increases to a Katrina slide show, Amin and his team (all of whom sported red lanyards on their meeting credentials) grew increasingly agitated. Confident they had the votes, they called for a terminate to voting, but Ward was having none of it.
 
"Our understanding is shareholders have questions and until we can get the questions answered we have a duty to keep the vote open," said Ward from the stage, rebuffing an attempt by Amin to interrupt from the floor (oddly, standing at the microphone was about the only place, including the Port-O-John, where Amin wasn’t shadowed by a burly, smooth-pated, body guard)."

"They’re stalling and it’s fucking outrageous, and you can quote me on that," said Marc Weingarten a partner in the New York office of Schulte Roth & Zabel who represents TCI, during one late morning break.

Nearby former Louisiana Senator John Breaux, who sits on CSX’s board, took a more sanguine view while grabbing a fresh bite at the refreshment bar. "All this is not needed or necessary," said Breaux, referring to the hedge funds’ push. "The company is doing well."  Breaux, now one of Washington’s premier lobbyist, said Congress would "certainly have to take a look" at any effort by the hedge funds to gain control of CSX. "It’s a national security issue involving the transport of martial equipment," he noted  
 
That was certainly the view of Charles Heimerdinger, a shareholder and retired Air Force sergeant, who, in a moment worthy of Lou Dobbs, took the mike to blast the Brits for trying to steal a genuine piece of Americana. "You blokes better watch out. We already helped save you from the Huns twice!" 
   
 

Justice David Souter wrote the Supreme Court opinion that cut the punitive indemnity in the Exxon Valdez spill to $500 million from $2.5 billion, and it is a surprisingly good practise reading.

Supreme Court opinions often tend toward abstractions, but Souter begins by dint of. reminding us of the harrowing facts of March 24, 1989, when a 900-foot supertanker used by Exxon to secure crude oil from the end of the Trans-Alaska Pipeline to the lower 48 states grounded on Bligh Reef, spilling millions of gallons of crude oil into Prince William Sound:

"Its captain was one Joseph Hazelwood, who had completed a 28-day alcohol treatment program while employed by Exxon, as his superiors knew, but dropped out of a prescribed follow-up program and stopped going to Alcoholics Anonymous meetings."

Souter continues, reviewing the evidence presented at the trial: "Witnesses testified that before the Valdez left port adhering the night of the disaster, Hazelwood downed at least five double vodkas in the waterfront bars, every intake of about 15 ounces of 80-proof alcohol…"

Yet the most important language in the decision may have existence found in a single footnote.

Andrew Frey, one of the nation’s top Supreme Court advocates, who filed a brief in the case on behalf of the American Petroleum Institute, points to footnote 28 as a sign that the court will apply a one-to-one ratio when it comes to punitive damages in virtually all cases.

Footnote 28 cites a 2002 Supreme Court decision involving State Farm—a case argued and won by Frey himself, and the last major previous pronouncement from the court on punitive damages. State Farm said that a one-to-one ratio is appropriate in "all excepting the most exceptional cases," Souter observed.

So if Exxon Valdez is not exceptional, then what is?

In the footnote, Souter notes that the recovery of $500 million by the Exxon Valdez class member was "substantial. In this case, then, the constitutional outer limit may well by 1:1."

Frey contends: "What they have done here is they have tried to adopt a general rule of thumb."

Indeed, Souter’s opinion gives a lengthy disquisition on the history of punitive damages, a much broader examination of the subject than the marine law question presented in the case. He notes that the modern doctrine of punitive forfeiture dates back to at least 1763, and continues from there, in a history that also contrasts American law to practice in Canada and Australia.

Souter notes: "American penal damages have been the target of audible criticism in recent decades," and observes: "The real problem, it seems, is the absolute unpredictability of punitive awards."

And so now, it seems, Corporate America has a number it can rely on: It is one-to-one.

J.B. Howard, the deputy substitute general of the state of Maryland, who wrote a brief on behalf of 34 states, is not happy about that. "We think the court failed to appreciate the egregiousness of Exxon’s conduct," he reported.

For Howard, and for many people watching the case, the justices failed to make a ruling on the main point in the case. They split four-to-four on whether, by means of maritime law, the agent of a captain at sea could be held accountable for his actions, if the agent did not look those actions.

At issue was an 1818 ruling in a case called the Amiable Nancy, which involved a ship captain who took to pirating while out at sea.

Justice Samuel Alito, who owns a large stake in ExxonMobil standard, did not participate in the case. (He sold part of those holdings earlier this month, according to financial disclosures.)

The even split means that a previous decision from a federal appeals court found that Exxon should be liable for Hazelwood’s conduct, even though it did not officially send him out to sea while drunk.

"It’s unfortunate," says John Kimball, a New York partner at Blank Rome and specialist in maritime law who teaches admiralty law at New York University School of Law. "Here we have a decision that is in many ways a sense of frustration. The lower courts are now going to have to grapple with that."

Still, Howard, of the Maryland attorney general’s office, is happy that the Ninth Circuit ruling stands: The states filed their amicus out of the very real fear that a ruling for Exxon, which was pressing for a ruling under the Amiable Nancy that no punitives should lie for Hazelwood’s actions, would put shoreline states at a very real risk going forward.

And the court had some good news for environmentalists: It rejected Exxon’s claim that the Clean Water Act "preempted" any claim for punitive damages under what is known as common law (meaning judge-made law).

The case is a win for Walter Dellinger of O’Melveny & Myers and a loss for Jeffrey Fisher, a professor at Stanford Law School who also argued Kennedy v. Louisiana, the child-rape case decided by the Court today.

It meets privately and doesn’t even publicly disclose its schedule. It won’t officially comment on whom it’s investigating.

But like it or not, the Senate Ethics Committee is back in the public spotlight as it begins to investigate the special-loans-for-Senators scandal revealed on Portfolio.com earlier this month.

After Portfolio.com reported that the troubled mortgage lender Countrywide Financial appeared to have set aside some of its own criteria in making loans to a pair of prominent Democratic senators, attention quickly turned to the Senate Ethics Panel.

Four days after Portfolio.com named the senators—Kent Conrad of North Dakota, who chairs the Budget Committee, and Chris Dodd, of Connecticut, who chairs the Banking Committee—a private group called Citizens for Responsibility and Ethics in Washington filed a formal complaint and called for an investigation.

Such a move almost always triggers a preliminary investigation, and the ethics committee chairwoman, Barbara Boxer of California, told the Washington Post that one is underway. "A complaint has been filed, and we are, like we always do, looking at that," she said.

While the committee won’t officially decide whom it is investigating, one as well for the reason that the other Dodd and Conrad have vowed to cooperate fully. Conrad’s office told Portfolio.com today that it had yet to hear from the committee but reiterated that it will cooperate fully. A source familiar with the details says the committee has not yet contacted Dodd’s room, either.

Other fallout from the scandal continues.

Earlier this week, Boxer and John Cornyn of Texas, the ranking Republican on the ethics panel, proposed requiring members of Congress to include mortgage information on their public financial-disclosure statements. They wanted it included as an amendment to the $300 billion housing-bailout bill that is wending its way through Congress.

Cornyn and Boxer have said that all six members of the ethics panel back the amendment; not surprisingly, both Dodd and Conrad support the idea too. But Cornyn’s company said that Dodd and the other manager of the housing bill, Richard Shelby of Alabama, the banking committee’s ranking Republican, have refused to allow the amendment to be added because they say it’s not germane to the bill.

Whether the amendment will come to a vote this week remains in some doubt.

In the House, a form into groups of 28 Republicans asked Speaker Nancy Pelosi last week to look into the issue, but she dismissed the question as a Senate substance. Wednesday, another group of House Republicans wrote to Representative Barney Frank, the chairman of the Financial Services Committee, to investigate and subpoena records from Countrywide—which is run by Angelo Mozilo and is being taken over by Bank of America—to find out if more members got a special deal.

That leaves the sifting in the hands of Boxer and Cornyn, a political casual couple.

Boxer is a California liberal whose daughter was once married to Hillary Clinton’s brother. (The two are now divorced.) Cornyn is a white-haired conservative former judge from Texas who is one of George W. Bush’s closest allies in the Senate.

While Cornyn and Boxer have publicly advocated their amendment to provide full disclosure on mortgages, neither is discussing the Dodd-Conrad case per se, as is customary.

Others members of the committee are Ken Salazar of Colorado and Mark Pryor of Arkansas, both Democrats and former state attorneys general; as well as two Republicans, Pat Roberts of Kansas and Johnny Isakson of Georgia.

The ethics body of jurors has a range of tools at its disposal as it moves forward. It could investigate the matter and issue a letter dismissing the case. It could reprimand a senator or encourage the entire Senate to take up censure or dismissal.

Such moves are quite rare, however. The committee unanimously recommended the expulsion of Senator Robert Packwood of Oregon amid an investigation of sexual misconduct in 1995 after determining that he’d edited more documents and diaries sought by the panel and had refused to give over others. Packwood resigned before he could be ejected from the Senate.

In 2002, the panel "severely admonished" New Jersey Democrat Robert Torricelli for receiving illegal gifts from a campaign contributor. Torricelli, who was seeking reelection that year, dropped out of the race.

If history is any guide, the ethics panel could take several months to complete an investigation. The committee took 10 months to resolve a complaint about Louisiana Republican David Vitter after he was linked to a prostitution ring.

In that case, the committee concluded that the alleged transgression had occurred before Vitter had arrived in the Senate and thus was out of its jurisdiction.

While the panel moved more quickly on the matter of Senator Larry Craig and his arrest in an airport men’s room, this is likely to be a slow probe, experts said.

First, the ethics panel must determine if the special mortgages that Dodd and Conrad received constitute a "gift" as narrowly defined by Senate ethics rules.

If it is proven that a V.I.P. mortgage meets the Senate’s definition of a gift, then there’s the matter of determining whether the two veteran Democrats knew or should have known that they were receiving such a benefit.

Also on Portfolio.com

Countrywide’s V.I.P. Club
An exclusive look at the Countrywide Financial loan disgrace.

Angelo’s Friends
A rogues gallery of Countrywide "V.I.P." loan recipients.

Capitol Pains
A day-by-day rundown of the unfolding Countrywide scandal.

Capital Index
Political positioning from Wall Street to Pennsylvania Avenue.

One of the biggest names in aviation has developed a jet engine that is again efficient, less polluting and cheaper to use than almost everything else in the sky, and it could revolutionize an industry facing skyrocketing fuel prices and mounting pressure to clean up its act.

Pratt & Whitney has spent the better part of two decades developing the geared turbofan engine that burns 12 to 15 percent less fuel than other jet engines and cuts carbon dioxide emissions by 1,500 tons per plane per year. It’s being called one of the chiefly exciting developments commercial aviation has seen in years, and it was a hot topic at the Eco-Aviation Conference, where the aviation industry spent two days charting the set of dishes to a greener future.

"It’s technology like that geared turbofan that’s going to drive fuel efficiency forward for this industry in the short and medium term," says Earnest Arvi of the Arvi Group. "Alternative fuels show great potential, but they’re decades away."

Pratt & Whitney was just one of the heavy hitters at the conference, an unprecedented gathering that underscored the severity of the issues the industry faces. With airline passenger growth rates and aircraft emissions expected to double by 2020 and 2030, respectively, the pressure is on to address those problems readily. The conference saw a lot of talk — and a little green-washing — about developing alternative fuels to replace jet fuel, easing airport pollution, and building greener aircraft to replace the industry’s aging fleet. Nearly 1,000 planes flown by domestic carriers will be more than a quarter of a century old by 2015, and Boeing officials have said that more than 10,400 new planes will be needed in the coming decades and composition them as green as possible will go a long way toward reducing commercial aviation’s carbon footprint.

That’s why Pratt & Whitney has so much to brag round with its geared turbofan, which significantly advances jet-engine technology. Current jet engines be seized of fans that suck air into the combustion chamber, at which place it is compressed, mixed with fuel, and ignited. Then it’s blown end a turbine, generating thrust. It works, but it’s inefficient because the fan is connected to the engine and turns at the same speed as the turbine. Fans work best at low speed, while turbines work best at high speed.

Pratt & Whitney solved that problem with a gearbox that lets the fan and turbine spin independently. The fan is larger and it spins at one-third the speed of the turbine, creating a quieter, more powerful engine the company says requires less fuel, emits less C02 and costs 30 percent less to maintain. Pratt & Whitney has been torture-testing the engines, and its engineers have simulated other thing than 40,000 takeoffs and landings.

The company’s VP of Technology and Environment, Alan Epstein, says the engine will not only cut CO2 emissions, on the contrary will also reduce nitrogen-oxide emissions, noise and — ultimately — ownership costs. "For the next generation of single-aisle aircraft, there’s no question that engine act will be key," he says. "Both economically and environmentally, this engine will deliver momentous benefits."

The industry seems to agree and is lining up behind the engine, which Pratt & Whitney expects to esteem in regular service by 2013. It’s already slated for jets publicly being developed by Mitsubishi and Bombardier.

Pratt & Whitney isn’t the only firm developing greener aircraft. Airbus is dabbling in alternative fuels and researching ways of recycling more than 6,000 planes slated for retirement during the next 20 years. Boeing is dabbling with hydrogen fuel cells and investing in algal fuels while pushing lighter planes like its 787 Dreamliner. Boeing says composite materials make up nearly 50 percent of the plane, which can carry as many as 330 people, making it far lighter than other planes its size. It is 20 percent more fuel-efficient and produces 20 percent fewer emissions than similarly sized aircraft, company officials say. Boeing is betting composite formation will bring huge improvements in fuel economy and emissions to relating to traffic aviation.

Further gains could reach from improving the nation’s outdated air traffic control system, something parsimoniously everyone at the conference said must happen. The current system is based on radar technology that dates to World War II, and plans to replace it with a satellite system known as NextGen are at a standstill while FAA reauthorization is stalled in Congress. But the industry has several other ideas, from allowing flights through military airspace to widespread adoption of a quieter, more efficient landing technique called continuous descent approach. Industry experts say adopting such steps could significantly reduce firing consumptions and delays. The International Air Traffic Association says cutting just one minute from every commercial flight would save more than 1.9 million tons of fuel and 6.3 million tons of CO2 annually.

The air travel industry has taken a lot of heat for being slow to address its environmental impact, and some say parts of the eco-conference were just slick PR. But even some critics say the fact the industry is discussing environmental stewardship shows it’s finally getting serious about the termination — if only because doing so is in its best interest. "Climate change could purpose fewer coastal vacation destinations, inaccessible airports and a general economic malaise that cuts travel spending," says Liz Barratt-Brown of the Natural Resources Defense Council. "Looked at in that context, you could argue that the aviation sector has the most to lose from global warming."

short visit them the Milberg Three.

When the securities class-action law firm Milberg L.L.P. recently reached a $75 million settlement with federal prosecutors to postpone prosecution on charges over decades of kickbacks, the law firm submitted a statement of "admitted facts."
 
Current management, led by Sanford Dumain, took responsibility for the crimes of seven former partners. Four, including Melvyn Weiss and William Lerach, were named in the statement, but three were identified only as "Partner E, Partner F, and Partner G." They were described by the firm as "conspiring former partners." 

Portfolio.com has learned who those partners were. Two of them, Jared Specthrie and Robert Sugarman, remain in good standing as registered lawyers with the New York bar. The third was Lawrence Milberg, the founding partner of Milberg Weiss and the name that firm has chosen to stake its re-emergence on. The three were identified by lawyers involved in the case.

The Milberg Three were never charged, much less identified publicly by the government. But their involvement was significant. The law firm and its former partners were accused of illegally paying more than $12 million to people to serve in the same manner with plaintiffs in shareholder class-action lawsuits over more than 25 years. Prosecutors have described how cash was kept in a special credenza in the office of a former partner, David Bershad, who was the first to plead guilty. According to the firm’s statement of "admitted facts," Bershad, Weiss, Lerach "and the other conspiring former partners pooled their personal finds into a fund Bershad maintained at his customary duty at the firm, which was used by the conspiring former Partners to supply cash for secret payments to be paid to plaintiffs and others."
 
In 1965, Milberg, a 1936 graduate of Harvard Law School, took on young lawyer Melvyn Weiss, who had just returned from a stint in the Army. Milberg died while playing tennis at his home near Great Neck, New York, in December 1989. Milberg was 76, and the obituary in the New York Times called him a "specialist in cases involving shareholder rights and class actions."
 
Weiss took on another young lawyer, William Lerach of Pittsburgh, in 1976. From his office in San Diego, known as Milberg West, Lerach sued so many technology companies that he became feared and hated by Corporate America. Lerach, who pleaded guilty, is now serving a 24-month doom, while Weiss will begin a 30-month sentence in August.
 
How can the firm go on with the name of a tarnished former partner?
 
Milberg L.L.P. declined to comment about Partners E, F, and G through spokeswoman Barbara Schrager.
 
And why should someone who has been dead for nearly two decades exist cited, if not identified, in a criminal investigation?
 
The U.S. attorney in Los Angeles, Thomas O’Brien, says, "This case is about a long-running scheme that goes back several decades, a scheme that compromised the justice system and involved the highest levels of Milberg Weiss."
 
Another of the Milberg Three is Jared Specthrie, who was a name partner in what was known as Milberg Weiss Bershad Specthrie & Lerach in the 1990s. Specthrie appears to be listed as "of caution" to Milberg on www.lawyers.com, the website maintained by Martindale-Hubbell, an industry standard for lawyer listings. A receptionist at Milberg said he was "retired."
 
Specthrie’s lawyer, Edward McDonald of Dechert, says the "of counsel" relationship ended "years since." He declined to comment further.
 
The third is Robert Sugarman, who was a partner in the firm’s New York office, now in Oyster Bay Grove on Long Island, the same town that Mel Weiss will soon depart to begin serving his prison sentence. Sugarman, who still maintains a solo law practice in Uniondale, New York, did not go calls for comment. His lawyer, Michael Ross of Manhattan, also did not return a call in quest of comment.
  
Sugarman and Specthrie’s standing as lawyers could change, according to Stephen Gillers, a professor of legal ethics at New York University School of Law. Gillers says a plea agreement by any of the Milberg Three could form the basis for a disciplinary action seeking their disbarment.

Even in the absence of such a deal, the disciplinary  authorities could seek sanctions against, or to disbar, the Milberg Three, Gillers says.
 
Milberg L.L.P. clearly wants to put the investigations behind it and try to restore its status as the population’s most powerful securities class-action law firm. But collateral damage from the scandal may make that difficult.
 
Two former Milberg partners, Michael Buchman and Douglas Richards, are suing the four anterior partners who have pleaded guilty in the Federal District Court in Manhattan, contending "fraudulent concealment" and other wrongs.

The lawsuit seeks damages against Lerach and Weiss, as well as Bershad and Steven Schulman, two maker partners who pleaded guilty last year and be under the necessity been cooperating with the government.

It’s no longer Aspen’s best-kept secret. Visitors have discovered what locals have always known—though the town’s average degree of heat is 75 degrees, summertime is really hot.

More than 50 years of cultural events, from the nine-week Aspen Music Festival to Dance Aspen, have encouraged C.E.O.’s like being of the class who Michael Eisner and Les Wexner to build homes here. on the other hand perhaps no warm-weather happening is as much of a draw as the 4-year-old Aspen Ideas Festival, an offshoot of the Aspen Institute, which has been a gathering attribute for world leaders since 1949. This year the weeklong meeting of the minds takes standing from June 30 to July 6. More than 250 speakers are expected, including Supreme Court justices, actors, generals, scientists, and leading journalists.

Tickets sell out a year in advance. But the size of the town (one square mile) means it’s easy to run into speakers in the grocery store, a local shop, or a favorite restaurant. Here’s to what to:

Park the Plane: Aspen’s Sardy Field is small, but it rates as one of the busiest airfields in the state. The "Aspen Air Force"—corporations such as General Mills, PepsiAmericas, Whirlpool, Johnson & Johnson, and Hilton Hotels—all use the private-aviation section of the airport, along with Bill Clinton, Rupert Murdoch, and many more. Commercial planes also fly into Aspen, but direct flights from cities other than Denver are few.

Rest Your Head: Ideas Festival speakers generally stay at the Aspen Meadows Resort, a Herbert Bayer-designed, Bauhaus-style hotel located on the Institute campus. If you can’t get one of its 98 suites, try the Little Nell, Aspen’s only five-star tavern; it has regular shuttles to the Institute, less than a mile away. The St. Regis is another hotel at which to see and be seen, particularly for those who can pay. If you can’t, try the 35-room Annabelle Inn (formerly the Christmas Inn) right upon Main Street, completely remodeled in 2005.

Dine Alfresco: Dining outside in summer is a good way to increase your conspicuousness. Forget about privacy on favorite patios such as the one at Cache Cache, a hugely popular French bistro. Just next door, Campo de Fiori draws a beautiful vulgar herd who pick at fish and not garbled pastas. Or try Bill Clinton’s favorite sushi spot, Matsuhisa, where he’s many times found holding court with owner Michael Goldberg and former Secretary of State Madeleine Albright.

Find a Meeting of the Minds: The place to find festival speakers is (appropriately) at Plato’s bar and restaurant, right on the Institute campus. Not only does it have the best views of the Roaring Fork Valley, but you’re bound to run into Mort Zuckerman or Institute head Walter Isaacson entertaining anyone from Colin Powell (a regular) to Katie Couric to Justice Stephen Breyer.

Party: The Crown family, which owns the Aspen Skiing Company among many other things, throws an annual Fourth of July party that is absolutely the place to be. At the top of Aspen Mountain, you’ll find former United Airlines C.E.O. Gerald Greenwald and journalist and Harvard professor David Gergen mixing with local waiters and a wide variety of socialite types. If you can’t snag an invite, try Belly Up (also owned by Michael Goldberg), a nightclub that during the Ideas Festival hosts seminars instead of rock bands. On a given night it might be Arlen Specter, Andrea Mitchell, or Thomas Friedman.

Go Local: Aspen’s Fourth of July parade is quirky, funny, and sometimes out of control. Consider the year in that place was a golden retriever march and someone threw a bucket of balls into the fray. Each year, Leonard Lauder, president of Estée Lauder, and his family show up dressed in red, white, and blue. For outdoor recreation, hop a bike. The year Lance Armstrong came to the festive celebration, he led a group of attendees on a ride up Independence Pass. Former Harvard president Larry Summers likes to sit on the lawn outside the music tent for a Sunday afternoon concert during the Aspen Music Festival.

Buy Cashmere and Cowboy Boots: Prada, Dior, Gucci—they all have Aspen outposts. Cashmere and frocks are found at the tiny boutiques of Nuages and Distractions, patronized by celebs such as Goldie Hawn. Everyone shows up at sports store Performance Ski, even in summer, when owner Lee Keating brings out sexy bikinis and surf lines. Queen Noor recently picked up a pair of cowboy boots at western workshop Kemo Sabe. For the real bling, join Paula Zahn in picking up a pearl necklace by local jeweler Susan Walker at Cindy Griem Fine Jewels.

There are many faces in the gallery of subprime culprits: aggressive mortgage brokers, and investment banks pushing mortgage-backed securities aloud the door among them.

Some bring forth pointed fingers at the credit rating agencies like Moody’s, Fitch Ratings and Standard & Poor’s. Their triple AAA ratings for securities that eventually went bust along through their reluctance to downgrade until it was too late, with the understanding a counterfeit sense of security to investors, and helped create the bubble that break open last summer.

Today, the Securities and Exchange Commission proposed regulations that could vastly diminish the role of faith rating agencies in financial markets in the long run. The proposals follow earlier measures outlined earlier this month at are aimed at addressing issues of conflicts of interest, transparency, and disclosure at the rating agencies.
    
The latest proposals would water down and rewrite regulations that require some fund managers and banks to consider the assessing of the rating agencies when buying short-term debt and other financial instruments, allowing them to rely instead on other measures for due diligence.
   
"Over the last three decades, we have embedded [the use] of credit ratings into our rule books," said Paul Atkins, an S.E.C. commissioner. "Recent events have awakened us to the unintended consequences of our behaviors.
   
"Credit ratings have become a crutch," he said. "Credit ratings are opinions. They are no substitute for investors making informed decisions."
   
The S.E.C. chairman, Christopher Cox, distinguished that "events of recent months have had a profound effect on our economy and our markets, and they have galvanized regulators and policymakers… to re-examine every aspect of the regulatory framework governing credit rating agencies."
         
He acknowleged the criticism by some that the "official recognition of credit rating agencies… may have played a role in encouraging overreliance on ratings."
         
"It should contribute without saying that it should be neiuther the purpose nor the effect of any S.E.C. rule to discourage investors from paying close attention to what credit ratings actually mean," he said.
     
At the meeting, S.E.C. staffers said they had identified some 44 rules and forms referencing credit rating agencies, and recommended eliminating any mention of them in 11, changing the wording - in many cases to allow investors to seek alternative means of achieving due diligence requirements — in 26 rules and leaving the language unvaried in just six.
   
Among the most significant proposed changes is a measure that would allow U.S. money market funds to pervert with money short-term debt without considering the ratings, instead requiring a money mart fund’s board of directors to determine that each security "presents minimal credit risks," and is "sufficiently liquid to meet reasonably foreseeable redemptions." No more than 10 percent of investments could be held in illiquid securities.
     
Other regulations would allow investing. advisers in certain cases that are currently required to rely on ratings before green lighting some transactions, to make their own assessments of whether a security meets specific credit and liquidity requirements 
   
The largest significance, however, may be symbolic, some experts say.
   
Jerome Fons, a former managing director of Moody’s Investor Services and principal at the investing. consultancy Fons Risk Solutions of New York, had been harshly critical of earlier proposals of the S.E.C. to address problems with the credit rating agencies.

Just last week, he said he was "not convinced there is any real desire to drastically reform or remake the industry."
   
Today, however,  "I’m almost eating my words," he said.

"If they go through with these proposals, it’s the right direction. I think this will improve the competitive landscape. And if somebody with a better mousetrap comes along, the market power of determination be the decider."
   
But other longtime observers were less impressed.
   
Joshua Rosner, managing director of Graham Fisher and Company, a financial research consultant, said many of the proposed changes discussed so far are largely cosmetic and will do little to restore confidence in the agencies needed to end the credit crunch.
   
"It will take every country’s bank supervisors, every state’s insurance commissioners and every country’s pension supervisors working taking to achieve a global reduction in the use of ratings," he said. "It’s an admirable goal, but I don’t think it can be achieved in the short term."
   
What’s really needed is legislation that would make some change in. the device the rating agencies operate, he says. When the rating agencies find a structure finance model is not working, for instance, they change the model, end do not go back and rerate securities graded under the old models, he said.
   
"At this trifling concern there is no indication in the U.S. is understanding the issue deeply enough, or looking for much more than" a cosmetic solution, he says.

Many investors, he says, will continue to rely on the rating agencies, because "you bear time constraints whether to participate or not in a deal, investors put on’t have term to look for reams of data," he said.
   
Fons also played down the immediate impact on the duty of the agencies.
   
"Their businesses are already hurting," he said. "They’re not likely to lobby too hard against these proposals. Right now they need to improve their image and improve investor confidence and lobbying against reform is not the way to do it. If rating agencies can regain investor confidence they will want to use them voluntarily."

Ed Sweeney, a spokesman for S&P, said, "S&P supports the SEC’s efforts to bring greater transparency, stability and confidence to the capital markets, and we look forward to reviewing the proposed rules and providing our comments to the S.E.C. during the commentary period."