Fed adds another $45B per month in stimulus









The Federal Reserve ramped up its stimulus to the economy on Wednesday, expressing disappointment with the pace of recovery in employment as contentious U.S. budget talks heighten uncertainty about the outlook.

The central bank replaced a more modest stimulus program due to expire at year-end with a fresh round of Treasury purchases that will increase its balance sheet. It committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September.

In a surprise move, the Fed also adopted numerical thresholds for policy, a step that had not been expected until early next year. In particular, the Fed said it will likely keep official rates near zero for as long as unemployment remains above 6.5 percent, inflation between one and two years ahead is projected to be no more than 2.5 percent, and long-term inflation expectations remain contained.

The Fed noted unemployment remains elevated and that inflation is running somewhat below policymakers' 2 percent objective.

"The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Fed said in a statement.

Policymakers also repeated a pledge to keep buying bonds until the labor market outlook improves substantially. A drop in the jobless rate to 7.7 percent in November from 7.9 percent in October was driven by workers exiting the labor force, and therefore did not come close to satisfying that condition.

Under the "Operation Twist" program that will expire at the end of the month, the Fed was buying $45 billion in longer-term Treasuries with proceeds from the sale of short-term debt. The new round of government bond-buying it announced on Wednesday will be funded by essentially creating new money, further expanding the Fed's $2.8 trillion balance sheet.

Fed Chairman Ben Bernanke will discuss the central bank's latest decision at a news conference at 2:15 p.m. (1915 GMT).

SWEATING A WEAK RECOVERY

The Fed cut overnight interest rates to near zero in December 2008 and has bought about $2.4 trillion in bonds in a further effort to push borrowing costs lower and spur a stronger recovery.

Despite the unconventional and aggressive efforts, U.S. economic growth remains tepid. GDP grew at a 2.7 percent annual rate in the third quarter, but it now appears to be slowing sharply. According to a Reuters poll published on Wednesday, economists expect the economy to expand at just a 1.2 percent pace in the current quarter.

Businesses have hunkered down, fearful of a tightening of fiscal policy as politicians in Washington wrangle over ways to avoid a $600 billion mix of spending reductions and expiring tax cuts set to take hold at the start of 2013.

Bernanke has warned that running over this "fiscal cliff" would lead the economy into a new recession.

Fed officials will release a new set of quarterly economic and interest rate projections at 2 p.m. (1900 GMT) that could show yet another round of downward revisions to future growth prospects.

Back in September, the Fed predicted the U.S. economy would expand 2.5 percent to 3 percent in 2013, but even that modest rate is looking potentially rosy. The Reuters poll showed a median U.S. growth estimate of 2.1 percent for next year on the same fourth quarter over fourth quarter basis.

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Court strikes down Illinois' concealed-carry weapons ban

Chicago Tribune reporter Ray Long provides details on the U.S. appeals court ruling regarding concealed weapons in Illinois.









The state of Illinois would have to allow ordinary citizens to carry weapons under a federal appeals court ruling issued today, but the judges also gave lawmakers 180 days to put their own version of the law in place.

In a 2-1 decision that is a major victory for the National Rifle Association, the U.S. Seventh Circuit Court of Appeals said the state's ban on carrying a weapon in public is unconstitutional.

"We are disinclined to engage in another round of historical analysis to determine whether eighteenth-century America understood the Second Amendment to include a right to bear guns outside the home. The Supreme Court has decided that the amendment confers a right to bear arms for self-defense, which is as important outside the home as inside," the judges ruled.

"The theoretical and empirical evidence (which overall is inconclusive) is consistent with concluding that a right to carry firearms in public may promote self-defense. Illinois had to provide us with more than merely a rational basis for believing that its uniquely sweeping ban is justified by an increase in public safety. It has failed to meet this burden.

"The Supreme Court’s interpretation of the Second Amendment compelled the appeals court to rule the ban unconstitutional, the judges said. But the court gave 180 days to "allow the Illinois legislature to craft a new gun law that will impose reasonable limitations, consistent with the public safety and the Second Amendment as interpreted in this opinion, on the carrying of guns in public."


David Sigale, an attorney who represented the Second Amendment Foundation in the lawsuit, called the decision by the appeals court in Chicago “historic.”


“What we are most pleased about is how the court has recognized that the Second Amendment is just as, if not at times more, important in public as it is in the home,” he said. “The right of self-defense doesn’t end at your front door.”








In the opinion, Posner wrote that “Twenty-first century Illinois has no hostile Indians. But a Chicagoan is a good deal more likely to be attacked on a sidewalk in a rough neighborhood than in his apartment on the 35th floor of the Park Tower.”


Illinois is the only state in the nation not to have some form of conceal carry after Wisconsin recently approved law.

"The (Illinois) legislature, in the new session, will be forced to take up a statewide carry law," said NRA lobbyist Todd Vandermyde.

The lobbyist said prior attempts to reach a middle ground with opponents will no longer be necessary because "those compromises are going out the window."


House Majority Leader Barbara Flynn Currie, a longtime gun control advocate, said she hoped the state would appeal the ruling. But Currie also said lawmakers must “get cracking” on how to respond to the ruling and begin parsing its key points.


Currie, D-Chicago, said that “justices surely do not mean that we would have to have wide-open” laws in Illinois. She said Illinois must now look at what other states are doing, such as disallowing guns in day-care centers and other locations.


“If we need to change the law, let us at least craft a law that is very severely constrained and narrowly tailored so that we don’t invite guns out of control on each of our city’s streets,” Currie said. “I don’t want people out of control wandering the streets with guns that are out of control.”


Illinois Attorney General Lisa Madigan's office is reading the just-issued opinion and is unable at this point to comment about the prospects of filing an appeal, a spokeswoman said.


A spokeswoman for Gov. Pat Quinn said the administration is reviewing the decision. The governor has previously said he was firmly opposed to any law allowing citizens to carry loaded guns in public. He threatened to veto previous attempts by lawmakers to pass legislation allowing concealed carry in Illinois.


A spokeswoman for Mayor Rahm Emanuel said city lawyers were reading the court ruling and would issue a comment this afternoon.


Last March, the mayor introduced a resolution passed by the City Council in opposition to state legislation that would have allowed people to carry firearms in public. Like former Mayor Richard Daley before him, Emanuel has long been a proponent of gun control.


Under Daley, the U.S. Supreme Court overturned Chicago’s handgun ban. In mid-2010, the council enacted new gun-control measures, even as many aldermen conceded it would do little to quell crime. Those regulations require that Chicago handgun owners obtain a permit after undergoing mandatory firearms training and register their weapons.


Reaction to the decision is rolling in from City Hall to the Capitol.


Ald. Howard Brookins, 21st, chairman of the City Council black caucus, welcomed the decision, saying allowing Chicagoans to carry concealed weapons would help level the playing field in neighborhoods where law-abiding citizens feel like they need firearms to protect themselves.


"Certain people will have a sense of safety and peace of mind in the ability to do it," Brookins said of conceal-carry. "I know that even people, for example, just trying to see that their loved ones get homes safely are in technical violation of all sorts of weapons violations. If you just walk out to your garage and see that your wife is coming in the house safely, and you happen to have your gun on you, you're in technical violation of our ordinance. So I would hope all these ordinances would be consolidated so there's one set of rules and people would know where the bright line is to what they can and cannot do with respect to carrying a weapon."


Brookins said he's not worried doing away with the state ban would lead to an increase in gun violence as more people walk the streets with weapons. "I think those people have a gun now, they've just been made criminals because they can't legally have it," Brookins said. "And I think the gangbangers and thugs are going to have a gun regardless."


Tribune reporters John Byrne and Hal Dardick contributed.

rlong@tribune.com
Twitter @RayLong


asweeney@tribune.com


mcgarcia@tribune.com





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Notorious patent troll hits RIM with new lawsuit, seeks BlackBerry sales ban






Well-known patent troll Wi-LAN has filed a new lawsuit against BlackBerry maker Research In Motion (RIMM) in the U.S. District Court for the Southern District of Florida. Wi-LAN, which describes itself as “a leading intellectual property licensing company,” claims RIM’s BlackBerry smartphones infringe U.S. Patent No. 6,260,168, owned by Wi-LAN, which relates to Bluetooth implementation. The lawsuit covers multiple BlackBerry handsets including Bold, Torch, Pearl and Storm models, Reuters reports. Wi-LAN is reportedly seeking unspecified damages and is looking to ban sales of RIM’s infringing BlackBerry phones in the United States.


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‘Lincoln’ leads Critics’ Choice Awards nominees






LOS ANGELES (AP) — Film critics love “Lincoln.” The historical drama earned a record-breaking 13 nominations for the Critics’ Choice Movie Awards.


The Broadcast Film Critics Association announced the nominees for its 18th annual awards ceremony Tuesday in Los Angeles.






“Lincoln” beat the 12 nods earned by 2010′s “Black Swan” with bids for director Steven Spielberg, star Daniel Day-Lewis and supporting actors Sally Field and Tommy Lee Jones, as well as cinematography, adapted screenplay, costume design, makeup, editing, art direction, score and acting ensemble.


“Les Miserables” follows with 11 nominations and “Silver Linings Playbook” has 10. “Life of Pi” earned nine nods. “Argo,” ”Skyfall” and “The Master” each have seven.


Winners will be announced Jan. 10, 2013, at a ceremony set to be broadcast live on the CW network.


___


Online:


www.criticschoice.com


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Global Update: Hand-Held Device Locates Hot Spots of Lead Contamination





Using a hand-held scanner to map hot spots where the soil is full of lead could protect children in mining towns against brain damage, scientists at Columbia University concluded in a new study.


Touched to the ground, the device, an X-ray fluorescence scanner,can measure the soil’s lead content in less than a minute, said Alexander van Geen, a geochemist at Columbia’s Lamont-Doherty Earth Observatory and an author of the study, which is in the current issue of the Bulletin of the World Health Organization. The “XRF guns,” which are often used by scrap-metal sorters, cost between $15,000 and $40,000.


His team tested the scanners in Cerro de Pasco, Peru, a town in the high Andes with mines dating back 1,400 years. Samples as close as 100 yards apart showed widely variable lead levels, so it is possible to find and mark off the areas most dangerous to young children, who get fine lead dust on their hands while playing and then put their fingers in their mouths.


“People assume the contamination is everywhere, and it’s not,” Dr. van Geen said. “It could be in one backyard and not in another.” Or, he said, in an untested playground, schoolyard, or any place where children gather.


The technology could be useful anywhere families live close to mines or smelters, which is common in Latin America and Africa, he said. Lead is a byproduct not just of lead mines, but of mining for gold, silver, copper and other metals.


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HSBC to pay record $1.9B fine

British-owned bank HSBC is paying $1.9B to settle a US money-laundering probe. The bank was investigated for involvement in the transfer of funds from Mexican drug cartels and sanctioned nations like Iran. (Dec. 11)









HSBC has agreed to pay a record $1.92 billion fine to settle a multi-year probe by U.S. prosecutors, who accused Europe's biggest bank of failing to enforce rules designed to prevent the laundering of criminal cash.

The U.S. Justice Department on Tuesday charged the bank with failing to maintain an effective program against money laundering and conduct due diligence on certain accounts.






In documents filed in federal court in Brooklyn, it also charged the bank with violating sanctions laws by doing business with Iran, Libya, Sudan, Burma and Cuba.

HSBC Holdings Plc admitted to a breakdown of controls and apologised for its conduct.

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes," said Chief Executive Stuart Gulliver.

"Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters."

The bank agreed to forfeit $1.256 billion and retain a compliance monitor to resolve the charges through a deferred-prosecution agreement.

The settlement offers new information about failures at HSBC to police transactions linked to Mexico, details of which were reported this summer in a sweeping U.S. Senate probe.

The Senate panel alleged that HSBC failed to maintain controls designed to prevent money laundering by drug cartels, terrorists and tax cheats, when acting as a financier to clients routing funds from places including Mexico, Iran and Syria.

The bank was unable to properly monitor $15 billion in bulk cash transactions between mid-2006 and mid-2009, and had inadequate staffing and high turnover in its compliance units, the Senate panel's July report said.

HSBC on Tuesday said it expected to also reach a settlement with British watchdog the Financial Services Authority. The FSA declined to comment.

U.S. and European banks have now agreed to settlements with U.S. regulators totalling some $5 billion in recent years on charges they violated U.S. sanctions and failed to police potentially illicit transactions.

No bank or bank executives, however, have been indicted, as prosecutors have instead used deferred prosecutions - under which criminal charges against a firm are set aside if it agrees to conditions such as paying fines and changing behaviour.

HSBC's settlement also includes agreements or consent orders with the Manhattan district attorney, the Federal Reserve and three U.S. Treasury Department units: the Office of Foreign Assets Control, the Comptroller of the Currency and the Financial Crimes Enforcement Network.

HSBC said it would pay $1.921 billion, continue to cooperate fully with regulatory and law enforcement authorities, and take further action to strengthen its compliance policies and procedures. U.S. prosecutors have agreed to defer or forego prosecution.

The settlement is the third time in a decade that HSBC has been penalized for lax controls and ordered by U.S. authorities to better monitor suspicious transactions. Directives by regulators to improve oversight came in 2003 and again in 2010.

Last month, HSBC told investors it had set aside $1.5 billion to cover fines or penalties stemming from the inquiry and warned that costs could be significantly higher.

Analyst Jim Antos of Mizuho Securities said the settlement costs were "trivial" in terms of the company's book value.

"But in terms of real cash terms, that's a huge fine to pay," said Antos, who rates HSBC a "buy".

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Daley nephew pleads not guilty in Koschman death









Richard Vanecko, the nephew of former Mayor Richard Daley, pleaded not guilty this morning to a charge of involuntary manslaughter in connection with the 2004 death of David Koschman.


The case was randomly assigned today to Judge Arthur Hill, a former prosecutor when Daley was state’s attorney.


When Vanecko appeared before the judge this morning, Hill noted he had also been appointed to the board of the Chicago Transit Authority by Daley when he was mayor. He also held the No. 2 post under State’s Attorney Dick Devine, who has strong ties to Daley.





Hill told lawyers in the case that he won’t voluntarily remove himself from presiding over the case but would understood if special prosecutor Dan Webb, who charged Vanecko, asked for another judge.


“This court believes I can be fair and impartial in this case,” Hill said.


The case will be back in court next Monday to give to give time to Webb’s team to weigh whether they will seek another judge other than Hill.


As Vanecko walked out of the courthouse flanked by his attorneys, they made no comment.


Earlier, Vanecko strode into the Leighton Criminal Court Building at 26th Street and California just after 9 a.m. dressed in a gray suit and tie and charcoal overcoat accompanied by three of his attorneys.


A crowd of TV cameramen, photographers and reporters followed him inside, shouting questions that Vanecko did not answer.


Vanecko went through the security line and into presiding Judge Paul Biebel's first-floor courtroom.


Both sides have the option to ask for a different judge if there are conflicts of interest, something that could arise since Vanecko is such a high-profile defendant and there have been allegations of police and prosecutorial misconduct surrounding the case.


Vanecko, who currently resides in Costa Mesa, Calif., turned himself in to authorities in Chicago on Friday afternoon and later posed for a mug shot in a jacket and tie.


Last week, a special grand jury found that Vanecko, who is the son of former Mayor Richard M. Daley’s sister, Mary, “recklessly performed acts which were likely to cause great bodily harm to another.”


Koschman, 21, of Mount Prospect, had been drinking in the Rush Street nightlife district early on April 24, 2004, when he and his friends quarreled with a group that included Vanecko. During the altercation, Koschman was knocked to the street, hitting the back of his head on the pavement. He died 11 days later.


Police at the time said Koschman was the aggressor and closed the case without charges. In announcing the indictment, Webb, a former U.S. attorney, noted that at 6-foot-3 and 230 pounds, Vanecko towered over Koschman, who was 5-foot-5 and 125 pounds.


Webb also said the grand jury is still probing how the original investigation was conducted.


Vanecko’s attorneys issued a statement last week saying they were disappointed by the indictment and noted that at the time of the confrontation, Koschman’s blood-alcohol content was three times the legal limit for a motorist.


Koschman “was clearly acting in an unprovoked, physically aggressive manner,” Vanecko’s legal team said. “We are confident that when all the facts are aired in a court of law, the trier of fact will find Mr. Vanecko not guilty.”


If convicted of involuntary manslaughter, Vanecko faces from probation up to 5 years in prison. 


jmeisner@tribune.com


gknue@tribune.com



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RIM teases BlackBerry 10 launch with image of first BB10 smartphone






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Black women battle obesity with dialogue, action






WASHINGTON (AP) — Nicole Ari Parker was motivated by frustration. For Star Jones, it was a matter of life or death. Toni Carey wanted a fresh start after a bad breakup.


All three have launched individual campaigns that reflect an emerging priority for African-American women: finding creative ways to combat the obesity epidemic that threatens their longevity.






African-American women have the highest obesity rate of any group of Americans. Four out of five black women have a body mass index above 25 percent, the threshold for being overweight or obese, according to the Centers for Disease Control and Prevention. By comparison, nearly two-thirds of Americans overall are in this category, the CDC said.


Many black women seem to not be be bothered that they are generally heavier than other Americans.


Calorie-rich, traditional soul food is a staple in the diets of many African-Americans, and curvy black women are embraced positively through slang praising them as “thick” with a “little meat on their bones,” or through songs like the Commodore’s “Brick House” or “Bootylicious” by Destiny’s Child. A study by the Kaiser Family Foundation and The Washington Post earlier this year found that 66 percent of overweight black women had high self-esteem, while 41 percent of average-sized or thin white women had high self-esteem.


Still, that doesn’t mean black women reject the need to become healthier.


Historically black, all-female Spelman College in Atlanta is disbanding its NCAA teams and devoting those resources to a campus-wide wellness program. In an open letter announcing Spelman’s “wellness revolution,” president Beverly Daniel Tatum cited a campus analysis that found many of Spelman’s 2,100 students already have high blood pressure, Type 2 diabetes or other chronic ailments.


“Spelman has an opportunity to change the health trajectory of our students and, through their influence, the communities from which they come,” Tatum’s letter said.


Jones, who underwent open heart surgery in 2010 at age 47 and now urges awareness about heart disease among black women, was met by an overflow crowd earlier this year when she convened a Congressional Black Caucus Foundation panel on black women and obesity.


“We have to get ourselves out of being conditioned to think that using soft words so we don’t hurt peoples’ feelings is doing them any favor,” Jones said. “Curvy, big-boned, hefty, full-figured, fluffy, chubby. Those are all words designed to make people feel better about themselves. That wasn’t helpful to me.”


Jones once embraced being large and fabulous, at 5 feet 5 inches tall and 300 pounds. But under that exterior, she said, she was morbidly obese, suffering from extreme fatigue, nausea, lightheadedness, heart palpitations and blurred vision. The attorney and TV personality also had gastric bypass surgery in 2003.


Now, she advises women to make simple changes such as reducing salt intake, exercising 30 minutes a day, quitting smoking, controlling portion sizes and making nutritious dietary choices.


Nutritionist and author Rovenia M. Brock, known professionally as Dr. Ro, agrees with Jones. She said getting active is only about 20 percent of the fight against obesity. The rest revolves around how much people eat.


“Our plates are killing us,” she said.


Brock said “food deserts,” or urban areas that lack quality supermarkets, are a real obstacle. She suggested getting around that by carpooling with neighbors to stores in areas with higher-quality grocery options or buying food in bulk. She also suggested growing herbs and vegetables in window-box gardens.


“Stop focusing on what’s not there, or what you think is not there,” Brock said. “We have to get out of this wimpy, ‘woe is me’ mentality.”


While first lady Michelle Obama has encouraged exercise through her “Let’s Move” campaign targeting childhood obesity, the spark for this current interest among black women may have been comments last year by Surgeon General Regina Benjamin, who observed publicly that women must stop allowing concern about their hair to prevent them from exercising.


Some black women visit salons as often as every two weeks, investing several hours and anywhere from $ 50 to hundreds of dollars each visit — activity that, according to the Black Owned Beauty Supply Association, helps fuel a $ 9 billion black hair care and cosmetics industry.


In an interview during a health conference in Washington last week, Benjamin said the damage sweat can inflict on costly hairstyles can affect women’s willingness to work out, and she hopes to change that. She goes to beauty industry conferences to encourage stylists to create exercise-friendly hairdos.


“I wouldn’t say we use it as an excuse, we use it as a barrier,” Benjamin said. “And that’s not one of the barriers anymore. We’re always going to have problems with balancing our lives, but we could take that one out.”


Parker, an actress who starred in “A Streetcar Named Desire” on Broadway earlier this year, understands this dilemma well. Out of personal frustration over maintaining both her workout and her hair, she created “Save Your Do” Gymwrap — a headband that can be wrapped around the hair in a way that minimizes sweat and preserves hairstyles.


“Not just as a black woman, but as a woman, since the beginning of time, beauty has been our responsibility,” Parker said in an interview. Because of that, she said, exercise has become linked with vanity instead of health.


“We’ve turned exercise into a weight-loss regimen,” Parker said. “No. Exercise is about being grateful for the body you have and sustaining the life you have. … Take all the hype out of the exercise and think of it as brushing your teeth.”


With their mutual family histories of diabetes and high blood pressure in mind, Carey, 28, and her sorority sister Ashley Hicks, 29, co-founded the running club Black Girls Run. Carey also considered it a new beginning after a bad breakup and a move across country. Since 2009, Black Girls Run has amassed 52,000 members who serve as a support system for runners.


Black Girls Run has about 60 groups nationwide that coordinate local races in Atlanta, New York, San Francisco, Washington, D.C, Houston and Greensboro, N.C. Most groups run at least five times a week. Next month, the national running club will take its first “Black Girls Run — Preserve the Sexy” tour to cities with high obesity rates. The tour includes health and fitness clinics with information on nutrition, hair maintenance and running gear.


“We found that when you want to get healthy and when you want to be active, it’s intimidating,” Carey said. “You don’t know where to start. There’s a little coaxing that has to go along with that.”


Parker said once African-American women place value on their bodies and longevity, everything else will follow. It costs her nothing, she said, to walk around an outdoor track with her husband, actor Boris Kodjoe, or run up and down stairs at home with her headphones.


“One good step breeds another one,” Parker said. “You’re going to have one less margarita, one less scoop of Thanksgiving macaroni … and yet you’re not doing anything fanatical or dramatic.”


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Doping at U.S. Tracks Affects Europe’s Taste for Horse Meat





PARIS — For decades, American horses, many of them retired or damaged racehorses, have been shipped to Canada and Mexico, where it is legal to slaughter horses, and then processed and sold for consumption in Europe and beyond.







Christinne Muschi for The New York Times

A slaughterhouse in Saint-André-Avellin, Quebec, where meat is processed for sale in Europe.






Lately, however, European food safety officials have notified Mexican and Canadian slaughterhouses of a growing concern: The meat of American racehorses may be too toxic to eat safely because the horses have been injected repeatedly with drugs.


Despite the fact that racehorses make up only a fraction of the trade in horse meat, the European officials have indicated that they may nonetheless require lifetime medication records for slaughter-bound horses from Canada and Mexico, and perhaps require them to be held on feedlots or some other holding area for six months before they are slaughtered.


In October, Stephan Giguere, the general manager of a major slaughterhouse in Quebec, said he turned away truckloads of horses coming from the United States because his clients were worried about potential drug issues. Mr. Giguere said he told his buyers to stay away from horses coming from American racetracks.


“We don’t want them,” he said. “It’s too risky.”


The action is just the latest indication of the troubled state of American racing and its problems with the doping of horses. Some prominent trainers have been disciplined for using legal and illegal drugs, and horses loaded with painkillers have been breaking down in arresting numbers. Congress has called for reform, and state regulators have begun imposing stricter rules.


But for pure emotional effect, the alarm raised in the international horse-meat marketplace packs a distinctive punch.


Some 138,000 horses were sent to Canada or Mexico in 2010 alone to be turned into meat for Europe and other parts of the world, according to a Government Accountability Office report. Organizations concerned about the welfare of retired racehorses have estimated that anywhere from 10 to 15 percent of the population sent for slaughter may have performed on racetracks in the United States.


“Racehorses are walking pharmacies,” said Dr. Nicholas Dodman, a veterinarian on the faculty of Tufts University and a co-author of a 2010 article that sought to raise concerns about the health risks posed by American racehorses. He said it was reckless to want any of the drugs routinely administered to horses “in your food chain.”


Horses being shipped to Mexico and Canada are by law required to have been free of certain drugs for six months before being slaughtered, and those involved in their shipping must have affidavits proving that. But European Commission officials say the affidavits are easily falsified. As a result, American racehorses often show up in Canada within weeks — sometimes days — of their leaving the racetrack and their steady diets of drugs.


In October, the European Commission’s Directorate General for Health and Consumers found serious problems while auditing the operations of equine slaughter facilities in Mexico, where 80 percent of the horses arrive from the United States. The commission’s report said Mexican officials were not allowed to question the “authenticity or reliability of the sworn statements” about the ostensibly drug-free horses, and thus had no way of verifying whether the horses were tainted by drugs.


“The systems in place for identification, the food-chain information and in particular the affidavits concerning the nontreatment for six months with certain medical substances, both for the horses imported from the U.S. as well as for the Mexican horses, are insufficient to guarantee that standards equivalent to those provided for by E.U. legislation are applied,” the report said.


The authorities in the United States and Canada acknowledge that oversight of the slaughter business is lax. On July 9, the United States Food and Drug Administration sent a warning letter to an Ohio feedlot operator who sells horses for slaughter. The operator, Ronald Andio, was reprimanded for selling a drug-tainted thoroughbred horse to a Canadian slaughterhouse.


The Canadian Food Inspection Agency had tested the carcass of the horse the previous August and found the anti-inflammatory drug phenylbutazone in the muscle and kidney tissues. It also discovered clenbuterol, a widely abused medication for breathing problems that can build muscle by mimicking anabolic steroids.


Because horses are not a traditional food source in the United States, the Food and Drug Administration does not require human food safety information as it considers what drugs can be used legally on horses. Patricia El-Hinnawy, a spokeswoman for the agency, said agency-approved drugs intended for use in horses carried the warning “Do not use in horses intended for human consumption.”


She also said the case against Mr. Andio remained open.


“On the warning letter, the case remains open and no further information can be provided at this time,” Ms. El-Hinnawy said.


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