DealBook: Southeastern Asset Management to Fight Dell's Takeover

7:44 p.m. | Updated One of the biggest investors in Dell said on Friday that it would oppose the company’s plans to go private, setting up a major potential roadblock for the biggest buyout since the financial crisis.

Southeastern Asset Management, Dell’s largest outside shareholder, argued in a letter to the board that the $24.4 billion takeover bid was too low.

The company’s founder, Michael S. Dell, and the investment firm Silver Lake, are offering $13.65 a share. Southeastern, which has an 8.5 percent stake in Dell, contends that the company is worth closer to $24 a share.

To block the “ill-advised transaction,” Southeastern laid out a range of possible tactics, including a proxy fight and lawsuits. The firm also pushed the board to “aggressively” look for alternative proposals. Dell has 45 days to solicit other bids as part of the so-called go-shop process.

A Dell spokesman said in a statement on Friday that a special committee of the company’s board had considered various options with the help of advisers before accepting the management buyout.

“Based on that work, the board concluded that the proposed all-cash transaction is in the best interests of stockholders,” said the spokesman, David Frink. “The transaction offers an attractive and immediate premium for stockholders and shifts the risks facing the business to the buyer group.”

The opposition highlights the conflict facing Dell and its investors.

Many shareholders bought the company at lofty prices, watching the value of their shares erode. Analysts estimated that Southeastern paid more than $20 a share on average, meaning that the asset management firm would lose over $800 million if the current deal was completed.

Still, the takeover values Dell at price that the company has not touched for months. Its stock has not reached $14 since late May, and it lingered below $10 for two months late last year.

The company also faces continued pressure in its operations. Its core PC business is ceding ground to lower-cost rivals, as well as new entrants like tablets and smartphones.

Additionally, its effort to sell servers to big companies has been hurt by the changing industry dynamics, including the move to cloud computing.

Management buyouts have long been regarded skeptically by investors. The concern is that they enrich executives at the expense of other shareholders. The takeovers of companies like J. Crew and Affiliated Computer Services spurred a number of lawsuits by irate investors.

Southeastern and its founder, O. Mason Hawkins, generally keep a low profile and shun the press. But the money manager, based in Memphis, has been more outspoken of late.

The firm stepped into the spotlight last year when it called on Chesapeake Energy to entertain takeover offers, after the company ran into financial difficulties and faced criticism for the compensation plan of its co-founder, Aubrey McClendon. Southeastern and another activist investor, Carl C. Icahn, eventually won seats on Chesapeake’s board. Last month, Mr. McClendon was forced to retire under pressure from the board.

In its letter to Dell’s board, Southeastern said that it would support a number of alternatives. The investor, for example, outlined a plan to pay out a special dividend to shareholders or a buyout that would allow existing investors to keep a piece of the company.

But Southeastern said the current deal, hashed out over six months, “falls significantly short,” adding that it “appears to be an effort to acquire Dell at a substantial discount to intrinsic value at the expense of public shareholders.”

Dell’s board was mindful of potential conflicts — legal and otherwise — that its founder faced in trying to buy back the company he founded nearly three decades ago. To assess the deal, it formed a special committee of its board, led by Alex J. Mandl, which was advised by two sets of financial advisers.

JPMorgan Chase served as the principal investment bank for the committee, negotiating with Silver Lake.

Evercore Partners is overseeing a 45-day go-shop period intended to flush out rival suitors for the company. The company itself was advised by Goldman Sachs.

To help further minimize conflicts, JPMorgan refrained from providing financing for the deal. And Evercore’s advisory fee is set up in a way that encourages the bank to find a higher bid.

“The go-shop process provides stockholders an opportunity to determine if there are alternatives that are superior to the present offer,” the Dell spokesman said in a statement.

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Russian Performers Support U.S. Adoptions

MOSCOW — A panel of respected figures from Russia’s art world issued an emotional appeal to President Vladimir V. Putin on Thursday to make an exception to a recent ban on adoptions by Americans, and allow children to join American parents they have already come to know.

Chulpan Khamatova, revered here for her charity work as well as her acting, spoke in front of a screen showing blown-up photographs of families whose adoptions have been halted. Beside her sat Beth Hettinger of Westfield, N.J., who flew to Russia to bring back Aleksei, who is 18 months old. Ms. Hettinger was scheduled to leave Russia without Aleksei on Friday.

“A child, even if he is very small, is already waiting for his mama to come and get him, and she does not come,” Ms. Khamatova said. “When he grows up he is told, ‘When you were small, this thing took place.’ This will happen, anyway. I think he will hate his country, and hate his motherland.”

She said she had visited children’s homes in Russia “where children lie in heaps, in huge wards,” and added: “Dear, respected president, dear, respected society, let’s make an exception. Our country is so big, and we always ignore the specific fates of people. Just once, let’s not ignore them.”

Ms. Khamatova, who has a husky voice and an unguarded manner, commands unusual moral authority in Russia, and shocked many in creative circles by agreeing to star in a campaign advertisement for Mr. Putin last year.

Her appeal on Thursday pointed to the passionate social divide over Mr. Putin’s decision to ban American adoptions, a response to American legislation aiming to punish Russian officials accused of corruption. While polling shows that the move met with approval in Russia’s heartland, people in Moscow were far more critical, and tens of thousands joined a protest march in January.

A few dozen children whose adoptive parents had already received a court order have been allowed to leave. Approximately 100 families have petitioned Russia’s government to allow adoptions that were near that stage when Mr. Putin signed the law. At a news conference on Thursday, Lesley Philips, of Croton-on-Hudson, N.Y., described a three-year process to retrieve a girl from a facility for children with special needs in Kaliningrad.

“Imagine that you have been pregnant for three years, and then you see your child, but you only spend a week with him, because someone takes her away,” she said. In an interview, she said she had raced to Russia at the end of the year — delayed because Hurricane Sandy held up a document — and was waiting for a court date when Mr. Putin signed the ban.

Ms. Philips is raising Misha, a child adopted from St. Petersburg, and said she wanted him to have a Russian sibling “so that they would have a bond.”

“When we met her, it just felt like our family was complete,” she said.

Among the Russian cultural figures who joined Ms. Khamatova in her appeal were Andrei Makarevich, lead singer of the rock band Time Machine, and the actors Yevgeny Mironov and Sergei Yursky.

Andrew Roth contributed reporting.

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NCAA wants Pa. gov's Penn State lawsuit dismissed

HARRISBURG, Pa. (AP) — The NCAA said Thursday a judge should throw out the federal antitrust lawsuit the governor filed against it over Penn State's $60 million fine and other penalties resulting from the Jerry Sandusky child molestation scandal.

College sports' governing body said in a filing that it disagrees with just about every allegation in the complaint against it initiated by Gov. Tom Corbett last month.

The NCAA said the penalties imposed under a July consent decree with the university are unrelated to regulation of economic activity, so antitrust law does not apply. It also argued Corbett lacks standing to sue and called his lawsuit "an inappropriate attempt to drag the federal courts into an intra-state political dispute."

"The remedial measures that Penn State agreed to were controversial, and have elicited strong feelings on all sides," the NCAA's lawyers wrote. "Some think they are too harsh, and some think they are too lenient. But none of those feelings have anything to do with the antitrust laws."

Corbett, a Republican, has said the NCAA overstepped its authority in punishing Penn State. His spokesman Nils Frederiksen said Thursday his lawyers will review the NCAA's filing "and respond as appropriate."

Corbett claimed in his lawsuit the NCAA "piled on" when it penalized Penn State over the Sandusky scandal. He asked that a federal judge throw out the sanctions, which include a four-year ban on bowl games, arguing that the measures have harmed students, business owners and others who had nothing to do with Sandusky's crimes.

The NCAA, in its federal court filing, disagreed.

"It is exceptionally unlikely that sanctions temporarily impairing one school's prowess on the football field would render any of these robust nationwide economic markets less competitive, such that Stanford suddenly could raise tuition, Michigan could offer fewer or less valuable football scholarships, or Notre Dame could charge more for branded football jerseys," the NCAA said in the new filing.

The case could define just how far the NCAA's authority extends. Up to now, the federal courts have allowed the organization broad powers to protect the integrity of college athletics.

Even if the factual claims in Corbett's lawsuit are true, the NCAA said, the matter involves Penn State, not the Pennsylvania residents on whose behalf the antitrust action was made.

Penn State said it had no role in the lawsuit. In fact, it agreed not to sue as part of the deal with the NCAA accepting the sanctions, which were imposed in July after an investigation found that football coach Joe Paterno and other top officials hushed up sexual-abuse allegations against Sandusky, a former member of Paterno's staff, for more than a decade for fear of bad publicity.

Sandusky, who's in his late 60s, was convicted in June of sexually abusing 10 boys, some of them on Penn State's campus. He is serving a 30- to 60-year prison sentence but insists he's innocent.

The penalties against Penn State include a cut in the number of football scholarships the university can award and a rewriting of the record books to erase 14 years of victories under Paterno, who was fired when the scandal broke in late 2011 and died of lung cancer shortly after.

The lawsuit represents a reversal by the governor. When Penn State's president consented to the sanctions last summer, Corbett, a member of the Board of Trustees, embraced them as part of the university's effort to repair the damage from the Sandusky scandal.

Corbett said he waited to sue over the penalties because he wanted to thoroughly research the legal issues and did not want to interfere with the football season.

Two Pennsylvania congressmen, Charlie Dent and Glenn Thompson, called for the NCAA to restore football scholarships taken away from Penn State, saying in a letter last month the sanctions unfairly punish innocent student-athletes for the child sex abuse scandal.

Penn State officials and Paterno's family deny there was a cover-up of allegations against Sandusky.

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Well: The 'Monday Morning' Medical Screaming Match

I did not think I would ever see another “morbidity and mortality” conference in which senior doctors publicly attacked their younger colleagues for making medical errors. These types of heated meetings were commonplace when I was a medical student but have largely been abandoned.

Yet here they were again on “Monday Mornings,” a new medical drama on the TNT network, based on a novel by Dr. Sanjay Gupta, CNN’s chief medical correspondent and one of the executive producers of the show. Such screaming matches may make for good television, but it is useful to review why new strategies have emerged for dealing with medical mistakes.

So-called M&M conferences emerged in the early 20th century as a way for physicians to review cases that had either surprising outcomes or had somehow gone wrong. Although the format varied among institutions and departments, surgery M&Ms were especially known for their confrontations, as more experienced surgeons often browbeat younger doctors into admitting their errors and promising to never make them again.

Such conferences were generally closed door — that is, attended only by physicians. Errors were a private matter not to be shared with other hospital staff, let alone patients and families.

But in the late 1970s, a sociology graduate student named Charles L. Bosk gained access to the surgery department at the University of Chicago. His resultant 1979 book, “Forgive and Remember,” was one of the earliest public discussions of how the medical profession addressed its mistakes.

Dr. Bosk developed a helpful terminology. Technical and judgment errors by surgeons could be forgiven, but only if they were remembered and subsequently prevented by those who committed them. Normative errors, which called into question the moral character of the culprit, were unacceptable and potentially jeopardized careers.

Although Dr. Bosk’s book was more observational than proscriptive, his depiction of M&M conferences was disturbing. I remember attending a urology M&M as a medical student in which several senior physicians berated a very well-meaning and competent intern for a perceived mistake. The intern seemed to take it very well, but my fellow students and I were shaken by the event, asking how such hostility could be conducive to learning.

There were lots of angry accusations in the surgical M&Ms in the pilot episode of “Monday Mornings.” In one case, a senior doctor excoriated a colleague who had given Tylenol to a woman with hip pain who turned out to have cancer. “You allowed metastatic cancer to run amok for four months!” he screamed.

If this was what Dr. Bosk would have called a judgment error, the next case raised moral issues. A neurosurgeon had operated on a boy’s brain tumor without doing a complete family history, which would have revealed a disorder of blood clotting. The boy bled to death on the operating table. “The boy died,” announced the head surgeon, “because of a doctor’s arrogance.”

In one respect, it is good to see that the doctors in charge were so concerned. But as the study of medical errors expanded in the 1990s, researchers found that the likelihood of being blamed led physicians to conceal their errors. Meanwhile, although doctors who attended such conferences might indeed not make the exact same mistakes that had been discussed, it was far from clear that M&Ms were the best way to address the larger problem of medical errors, which, according to a 1999 study, killed close to 100,000 Americans annually.

Eventually, experts recommended a “systems approach” to medical errors, similar to what had been developed by the airline industry. The idea was to look at the root causes of errors and to devise systems to prevent them. Was there a way, for example, to ensure that the woman with the hip problem would return to medical care when the Tylenol did not help? Or could operations not be allowed to occur until a complete family history was in the chart? Increasingly, hospitals have put in systems, such as preoperative checklists and computer warnings, that successfully prevent medical errors.

Another key component of the systems approach is to reduce the emphasis on blame. Even the best doctors make mistakes. Impugning them publicly — or even privately — can make them clam up. But if errors are seen as resulting from inadequate systems, physicians and other health professionals should be more willing to speak up.

Of course, the systems approach is not perfect. Studies continue to show that physicians conceal their mistakes. And elaborate systems for preventing errors can at times interfere with getting things done in the hospital.

Finally, it is important not to entirely remove the issue of responsibility. Sad to say, there still are physicians who are careless and others who are arrogant. Even if today’s M&M conferences rarely involve screaming, supervising physicians need to let such colleagues know that these types of behaviors are unacceptable.

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Barron H. Lerner, M.D., professor of medicine at New York University Langone Medical Center, is the author, most recently, of “One for the Road: Drunk Driving Since 1900.”

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DealBook: Helping Start-Ups With Local Support and National Networks

When Will Fuentes planned an extended business trip to Seattle last year, he tapped into the local chapter of a national networking group there. Within hours, Mr. Fuentes, who founded the Arlington, Va., software company Lemur Retail, had secured a work space, introductions and even restaurant recommendations via the group, the Startup America Partnership.“Before I flew out there, I already had five or six meetings set up with potential clients and other key contacts, as well as one potential acquirer,” Mr. Fuentes said.

A couple of years ago, entrepreneurs would have needed several trips to make similar connections outside their own cities. Even in this era of social networks and venture conferences, start-ups are still surprisingly disconnected on a national level.

“Each region has its ties, but in many cases, entrepreneurs are operating in silos,” said Carolynn Duncan, the chief executive of Portland Ten, a mentoring program for early-stage companies, mainly in Oregon. “An entrepreneur in Oregon doesn’t have an easy way to network with entrepreneurs in Washington D.C.”

Startup America, a nonprofit organization with an all-star cast of deep-pocketed backers, is trying to bridge the gap. The organization, which was started in January 2011 as the brainchild of AOL’s co-founder, Steve Case, and the Ewing Marion Kauffman Foundation, wanted to bring a private-sector support to start-ups — without financial strings attached.

“Supporting start-ups throughout the country is the only way to make sure the American economy is firing on all cylinders,” said Mr. Case, who is the chairman of the partnership.

Start-ups are a crucial driver for job creation in the United States. From March 1994 to March 2010, businesses less than one year old created 3.9 million jobs a year on average, according to the Bureau of Labor Statistics, though that number has declined during the recent economic weakness.

The Small Business Administration and United States Chamber of Commerce have long been a resource for start-ups, but these government agencies have a broad mandate. There is a “growing recognition,” said Mr. Case, that high-growth start-ups — those with the potential to be national or international companies — have different needs and requirements than traditional small businesses.

Startup America’s initial focus was to provide support to start-ups through deals on goods and services, like 40 percent off FedEx shipping and free flights on American Airlines. But the group quickly realized that start-ups needed more practical help, like sharing best practices and networking.

Soon after the partnership’s start, entrepreneurs around the country starting contacting Startup America, asking how they could create their own networks and reach out to counterparts in other states. “Most of these regions were already coming up with their own initiatives or thinking about them,” said the organization’s chief executive, Scott Case, a founder and former chief technology officer of Priceline.com (and no relation to Steve Case). “We’re helping to stitch together all these parts.”

Taking cues from the entrepreneurs, Startup America has turned its attention to building such a network. Nearly 12,000 members are now affiliated with local Startup America initiatives in 30 states. The partnership expects to add another 10 states this year.

Each Startup America region is spearheaded by local “champions” who come together several times a year at national conferences, communicate via Google groups and have access to an online “idea center” where they can brainstorm about, say, bringing in outside capital or hosting a start-up conference. These envoys are all “founder types” at different stages of their careers, Scott Case said. “Some have exited companies and are looking to continue to feed that creative drive. Others understand that if they can strengthen their community, they can strengthen their own company.”

Brooks Bell, founder of an eponymous 22-employee digital consulting business based in Raleigh, N.C., became involved with the partnership in 2011 after realizing that many potential clients considered her area a backwater. “I realized that was impacting my company’s brand, too,” she said.

Mrs. Bell pointed out that other national groups, like Entrepreneurs’ Organizations, offer resources for high-growth companies. Yet, their emphasis is typically on supporting individuals rather than elevating the region and networking nationally. “They also tend to focus on early-stage companies,” she said. Until Startup America, she added, “there weren’t a lot of opportunities for early-stage companies to interact with funded companies.”

Though Startup America regions work off the same blueprint, each takes a slightly different approach. In Maryland, the staff and champions volunteer virtually. Startup Tennessee partnered with the Entrepreneur Center in Nashville, which runs a nonprofit incubator program. Startup Colorado works out of Silicon Flatirons, a center for law, technology and entrepreneurship at the University of Colorado Law School, and finds partners to finance specific projects.

Although the regional chapters operate independently, they benefit from the credibility of a national organization. “It’s helping elevate our start-ups nationally and get them in front of audiences we never would have,” said Andy Stoll, an entrepreneur in the Iowa City, Iowa, area, where rebuilding from the floods in 2008 has helped generate a boom in start-up activity.

“To have the opportunity to sit in a room with their board and have Steve Case ask me, ‘What are the three things that those of us at this table can do to really help support the Indiana community?’ is amazing and a humbling experience,” said Michael Coffey, a partner at DeveloperTown, an Indianapolis design and development firm that works with companies of all sizes.

In the end, it’s all about business.

Aaron Schwartz, a co-founder of the San Francisco-based Modify Watches, initially joined Startup America for the discounts. Now, he’s also tapping into the partnership to network, including finding corporate clients who order custom watches and vendors. “I now have a contact in Tennessee who has offered to look into manufacturing our watches there,” he said

Mr. Fuentes of Lemur Retail found two potential clients, both national chains, through his connections in Seattle last year; he’s currently in talks with those companies. He’s also helping his Northwest counterparts make inroads in the Washington area. He likens the experience to a fraternity or alumni organization of entrepreneurs.

“When people contact me from my high school or college, I pick up the phone,” he said. “This is no different.”

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At War Blog: Interview With Gen. John R. Allen on Leaving Afghanistan

The New York Times interviewed Gen. John. R. Allen on Sunday, a week before his scheduled departure from Afghanistan after 19 months as the commander of the American and allied forces.

Following are some of General Allen’s comments. Brief explanations have been provided in brackets.

On his relationship with President Hamid Karzai:

“I wanted him to understand that he was always going to have my loyalty and I was always going to work with him. In fact, I said a number of times, ‘I’m proud to have served you at the same time I served my own leadership, whether it’s a NATO leadership or U.S. leadership.’ Now, I wanted him to believe it because it happened to be true. I think our personalities matched in that regard.”

“Now, we’ve had some tough times. This has been a time of really dramatic change for the campaign. When I got here, I measured success in how well we and how often we were fighting. Today, it’s a very different environment. The Afghans are virtually entirely in the lead across Afghanistan.”

“This is what I’ve learned about the president. If you listen to him, he’s got some pretty good ideas, and often the controversy that has arisen in the relationships hasn’t been because necessarily you disagree with the ideas. It’s because you haven’t listened to them early enough.”

“And sometimes it’s been strained. I don’t think he ever believes that actions that I have taken were ever intended to disadvantage him as the president, or not do everything I possibly could for the Afghan people. I told him, I’m prepared to die in this country on behalf of his people. I take that very seriously.”

On civilian casualties:

“I’ve met with the families of the casualties that we’ve inflicted. I’ve flown to the villages to personally apologize for the casualties, and do what I can to do the right thing for those families. I’ve taken measures with respect to the employment of certain kinds of fires.” ["Fires” is common military shorthand for a variety of munitions, from bullets to missiles to mortar shells.]

“We had a couple of pretty rough incidents where Afghans were killed by the delivery of aviation fires. I eventually said to President Karzai that civilian structures, tents, potential areas where civilians might be either taking refuge or hiding or living, I’m not going to deliver any more fires on those structures unless my troops are pinned down, can’t move, and the only option they have is to deliver fires on these structures, or I decide, the senior leader out here, I decide to deliver fires on these structures.”

“The civilian causalities as a result of air fires plummeted immediately. It was probably the decision I could have made long before that and none of our forces were put at risk, or a greater risk because of this.”

On the aftermath of the burning of Korans at Bagram Air Base:

“I have to tell you, I thought this could be it for the relationship.

“I immediately got on the phone to a number of Afghan media outlets, immediately cut a video apologizing for this as sincerely as I could possibly appear and sound because this was going to be bad, it could be really bad. I called the president, I went to see him, apologized to him for this. It was completely inadvertent but this culture deserved that apology. We were in their home, so to speak. We are guests in their home and even though it was an accident, even though it was not intentional, we had made a bad mistake, a real error and the people deserved my apology, the president deserved my apology.

“He accepted it and I think in many respects, the personal nature of our relationship was what tempered the language coming out of the palace, the relief, his own engagement with the media and so on. Because of both of our actions, both of them supporting each other, we were able to keep this from being the result of a bad mistake from being something that could have really fractured the relationship.”

On the fallout in March after an American soldier killed 16 villagers in the southern Afghan district of Panjwai, which he first heard about when he was in the United States to testify before Congress:

“The first phone call was something of the effect of — we’ve got mixed reporting from Panjwai. We think an American soldier maybe shot some people and my response was, ‘All right. Let’s develop the situation quickly. Tell me what we got in front of us because we’ve got to make the Afghans were included on this.’ ”

“Then the phone calls started coming in and the numbers started going up and pretty quick and this is as bad a circumstance as you might have imagined.”

“I called President Karzai from home and we had a long conversation about it. I promised him once again that we would take all steps, measures, take all actions necessary to get to the bottom of this and we would do a full and complete investigation and those people necessary would be held accountable.”

“This was still unfolding. It was one shooter. It was multiple shooters. There were wild rumors associated with things that he had done in addition to shooting. So the information environment was wide open at this point. And both for the purposes of internal stability in Afghanistan for the purposes of preserving our relationship we were working very, very hard to confirm what we knew to be the facts and try very hard to get after the rumors that were just flying.”

“Once again, when he could have been angry, when it could have been a very negative conversation, I mean, he was tutorial. He explained to me why this is bad for the relationship, why this is bad for the campaign, and why this will shake the confidence of the Afghan people, his personal gesture of measured conversation with me. He wasn’t angry.”

On why the United States should stay engaged in Afghanistan:

“I put it in the context of this has been worth it. This is bigger than anyone of us. It’s bigger than the president. It’s bigger than the president of Afghanistan, because this isn’t about today. This is about tomorrow. This is about doing all we can to facilitate President Karzai with his desire to be successful. But it’ll be about doing all we can do to set up his successor for success.”

On overcoming the skepticism of officials in Washington, who often express frustration with Mr. Karzai:

“For this president, at this moment of its history, the Afghanistan history, to be able to hold together these tribes and these ethnic groups with these kinds of challenges has got to be one of the hardest jobs going. And so I try to paint the context of the challenges that he faces, the history from which he originates and help conceivably, he will interpret our actions. He may not understand what we are trying to do, or may misinterpret what we’re trying to do or say. And frankly, one of the great things about our democracy is also one of the hardest things about our democracy: That is, we don’t always speak with the same voice.

“So he’ll hear a voice from one part of the government, it will be different for another part of the government and he’ll see to square the differences. It’s not a criticism, it just is who we are. The farther you are away from Kabul, the farther you are away from the palace, the farther you are away from the history of this country in the complexities of society, the easier it is to generalize, frankly.”

On the need for the Afghan government to better serve its people and stamp out corruption within its ranks:

“We’ve worked very hard, obviously, to build a capacity in those. But when your ability to survive the night, or put food on the table was — well, for many years are functionally, what tribe you were part of, or what group you were part of. And those patronage networks undertook economic opportunities which made them some respect, criminal patronage networks.

“They can only survive because institutions of governance are weak. And so now, we find ourselves in this — at this very moment when the future of the country relies on the strength of institutions. The criminal patronage networks recognized that their future, their survival can only be sustained by keeping these institutions weak. That’s the moment we find ourselves in, and the presidential directive on any corruption and government reform and the Mutual Accountability Framework came out of Tokyo.

“These created very helpful, very useful, both domestic and international expectations for reform. So we need to see how smoothing past the written word and the spoken word and start moving towards action. I think the president, if he were sitting here would tell you that they have achieved some good action, good results in his presidential decree. The Mutual Accountability Framework is constantly being audited to see that there’s progress on reform. But again, we’re still pretty fresh in the process and we’ve got to let this play out some more.”

On the future of the war and Afghanistan:

“Let me make sure I’m clear on this. Nothing is sure in a post-conflict society. But I think the indicators, as far as I’m concerned, are that we’re on the right trajectory. What you have to understand, what people have to understand is some of these reforms take a very long time. In an environment where human rights were crashed under multiple different invasions or civil wars or the Taliban, creating once again the kind of bias for human rights that we would all expect in the Western society, just doesn’t come easily to this country.

“Nothing will happen in this country without security. And that security is being purchased every single day by the Afghan National Security Forces. And then, on the platform of that security, this president has announced a program or platform that he intends to follow. Now, he’s moving forward in some areas, he’s having resistance in others, but we just have to expect this is going to take time. That’s where huge patience has to come in. That’s where the decade of transformation comes in.”

On the surge of “insider attacks” against Westerners that took place in 2012:

“The losses became to this particular means of attack became very troubling, very significant, and tragic. And while on the tactical level and on the operational level, we were able to deal with the problem. This was becoming a strategic crisis — a strategic crisis in capitals, a strategic crisis for the alliance — and the Taliban saw this. They knew this. They saw that. They saw that the future of the A.N.S.F. relied on our being close, partner or adviser inside the Afghan formations.

“We were very careful in our reaction to insider attacks. Not to wall ourselves off from the Afghans and create distance. I used to tell them, you may not be able to do anything about the linear distance that you have to deal with but there’s a lot you can do about your proximity and the closer you all feel to each other, the more secure you will be. And that’s in an environment where we’re transitioning to being advisers almost entirely across Afghanistan. That has to be one of the operative principles for philosophically how we’re going to live with the Afghans. You treat them like brothers. You live with them like they’re family. That reduces the unknowns, it reduces the potential for cultural affront, and it makes you more secure.”

“That doesn’t mean we’re not going to keep a close eye on the environment. We still have these people called Guardian Angels because there are enemies in the ranks and they’re waiting to take that shot.”

“We took a lot of measures and the numbers are down. But I don’t in any way want anybody to become complacent about the number being down. I don’t want anyone to lift up on the security measures that they’re taking or reduce the attentiveness that they have to the environment around. So, I want everybody to be attentive and we’re going to periodically refresh our training both at the very lowest levels and for the units coming in. So, we’re not going to give up on this.”

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Signing Day: Ole Miss muscles in on power programs

Alabama. Ohio State. Michigan. Florida. Notre Dame. Mississippi?

Ole Miss muscled in on the powerhouses that usually dominate national signing day, landing some of the most sought-after prospects in the country on college football's annual first-Wednesday-in-February frenzy.

The Rebels, coming off a promising 7-6 season in their first season under coach Hugh Freeze, had the experts swooning by signing three of the bluest chips still on the board and building a well-rounded class otherwise.

The day started with defensive end Robert Nkemdiche from Loganville, Ga., rated the No. 1 recruit in the country by just about everyone who ranks them, deciding to join his brother, Denzel, in Oxford, Miss.

"I feel like it's the right place for me," Nkemdiche said after slipping on a red Ole Miss cap. "I feel like they can do special things and they're on the rise. I feel like going to play with my brother, we can do something special."

Nkemdiche originally committed to Clemson last year, then backed off that and narrowed his picks down to LSU, Florida and Mississippi — and the Rebels beat the big boys.

They weren't done. Coaches in the Ole Miss war room were exchanging hugs and high-fives again a couple hours later when Laremy Tunsil, a top-rated offensive tackle from Lake City, Fla., picked the Rebels over Florida State and Georgia.

"Tunsil to Ole Miss I think was the biggest surprise of the whole (recruiting season)," said JC Shurburtt, national recruiting director for 247Sports.com.

And, as if the Ole Miss needed more good news, highly touted defensive back Antonio Conner from nearby Batesville, Miss., chose the Rebels over national champion Alabama.

The end result was a class good enough to even catch the attention of LeBron James.

"Ole Miss ain't messing around today! Big time recruits coming in. SEC is crazy," the NBA's MVP posted on his Twitter account.

Crazy good. While the Rebels racked up, it's important to remember they still have plenty of ground to gain on the rest of their conference competition.

Nick Saban reloaded the Crimson Tide with a class that Rivals.com ranked No. 1 in the country.

SEC powers Florida, LSU and Georgia pulled in typically impressive classes. SEC newcomer Texas A&M cracked the top 10 of several rankings. Even Vanderbilt, coming off a nine-win season, broke into the top 25.

It's the cycle of life in the SEC, which has won seven straight BCS championships. Stock up on signing day and scoop up those crystal footballs at season's end.

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SLIPPING AWAY FROM USC

Signing day didn't do much to soothe the scars left from a difficult season for Southern California.

NCAA sanctions limited the number of scholarships coach Lane Kiffin and the Trojans could hand out this year, and then as signing day approached USC had several players who had given verbal commitments change their minds.

The most notable defection on signing day was five-star defensive back Jalen Ramsey of Brentwood, Tenn., who flipped to Florida State. Defensive end Jason Hatcher from Louisville, Ky., bailed on USC and signed with Kentucky, and defensive end Torrodney Prevot from Houston not only reneged on his USC commitment, but he landed at Pac-12 rival Oregon.

"People expected (Prevot) to flip from USC, but they thought it would be to Texas A&M," Shurburtt said.

USC's class won't be lacking blue chippers. Quarterback Max Browne from Washington is considered the next in a long line of topflight Trojans quarterbacks, and Kenny Bigelow from Maryland is rated among the best defensive linemen in the nation.

Kiffin will be banking on quality to make up for the lack of quantity, but that's a precarious way to play a game as uncertain as recruiting.

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IF MOMMA'S NOT HAPPY ...

Alex Collins, a top running back prospect out of Plantation, Fla., announced on Monday night that he was going to Arkansas instead of Miami.

It was considered a huge victory for new Razorbacks coach Bret Bielema.

But on Wednesday morning, when it was time to make it official, Collins' letter of intent didn't come spinning through the fax machine in Fayettville, Ark.

There were some odd reports about Collins' mother not being happy with her son's decision to go so far from home.

College coaches aren't allowed to talk about specific players before they sign, but Bielema did acknowledge during his signing day news conference that Arkansas' class of 22 players could "grow by one."

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THE BIG TWO

Ohio State and Michigan received two thumbs up from experts on their signing day classes. They all had the Buckeyes and Wolverines around top five in the country.

After that, there was a drop off. Nebraska received solid grades and Penn State, despite NCAA sanctions that limited its class to 17 signees, held up pretty well.

"That's a tribute to the job (Penn State coach) Bill O'Brien and the staff did," Shurburtt said.

But signing day 2013 signaled that Urban Meyer's Buckeyes and Brady Hokes' Wolverines are primed to pull away from most of the Big Ten, and maybe — just maybe — give the league a team or two that can challenge those SEC teams for a national title.

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BUILT TO LAST

Notre Dame followed up its best season in more than two decades with recruiting class that coach Brian Kelly hopes can keep the Fighting Irish contending for more national titles.

The class includes a famous name in Torii Hunter Jr., the son of the All-Star outfielder. Hunter Jr. is a top-notch receiver prospect, though he broke his leg during an All-Star game and it could be a while before he's back on the football field.

Linebacker Jaylon Smith from Fort Wayne, Ind., is generally regarded as the jewel of a class that experts have ranked among the best in the country.

"I love agreeing with experts," Kelly said.

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BASEBALL OR FOOTBALL?

Oklahoma hopes it has found the next Sam Bradford in Cody Thomas, a pocket passer from Colleyville, Texas.

One small problem. Thomas is also a big-time baseball player who could draw interest in the major league draft this summer.

"We wouldn't have pursued him if we didn't feel there was a great chance he'd be playing football," Oklahoma coach Bob Stoops said.

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QUOTABLE

South Carolina coach Steve Spurrier said recruiting classes "don't always pan out. Of course, they always seem to pan out at Alabama."

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AP Sports Writer David Brandt in Oxford, Miss., and Associated Press Writer Tom Coyne in South Bend, Ind., contributed.

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Follow Ralph D. Russo at www.Twitter.com/ralphdrussoap

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Personal Health: Effective Addiction Treatment

Countless people addicted to drugs, alcohol or both have managed to get clean and stay clean with the help of organizations like Alcoholics Anonymous or the thousands of residential and outpatient clinics devoted to treating addiction.

But if you have failed one or more times to achieve lasting sobriety after rehab, perhaps after spending tens of thousands of dollars, you’re not alone. And chances are, it’s not your fault.

Of the 23.5 million teenagers and adults addicted to alcohol or drugs, only about 1 in 10 gets treatment, which too often fails to keep them drug-free. Many of these programs fail to use proven methods to deal with the factors that underlie addiction and set off relapse.

According to recent examinations of treatment programs, most are rooted in outdated methods rather than newer approaches shown in scientific studies to be more effective in helping people achieve and maintain addiction-free lives. People typically do more research when shopping for a new car than when seeking treatment for addiction.

A groundbreaking report published last year by the National Center on Addiction and Substance Abuse at Columbia University concluded that “the vast majority of people in need of addiction treatment do not receive anything that approximates evidence-based care.” The report added, “Only a small fraction of individuals receive interventions or treatment consistent with scientific knowledge about what works.”

The Columbia report found that most addiction treatment providers are not medical professionals and are not equipped with the knowledge, skills or credentials needed to provide the full range of evidence-based services, including medication and psychosocial therapy. The authors suggested that such insufficient care could be considered “a form of medical malpractice.”

The failings of many treatment programs — and the comprehensive therapies that have been scientifically validated but remain vastly underused — are described in an eye-opening new book, “Inside Rehab,” by Anne M. Fletcher, a science writer whose previous books include the highly acclaimed “Sober for Good.”

“There are exceptions, but of the many thousands of treatment programs out there, most use exactly the same kind of treatment you would have received in 1950, not modern scientific approaches,” A. Thomas McLellan, co-founder of the Treatment Research Institute in Philadelphia, told Ms. Fletcher.

Ms. Fletcher’s book, replete with the experiences of treated addicts, offers myriad suggestions to help patients find addiction treatments with the highest probability of success.

Often, Ms. Fletcher found, low-cost, publicly funded clinics have better-qualified therapists and better outcomes than the high-end residential centers typically used by celebrities like Britney Spears and Lindsay Lohan. Indeed, their revolving-door experiences with treatment helped prompt Ms. Fletcher’s exhaustive exploration in the first place.

In an interview, Ms. Fletcher said she wanted to inform consumers “about science-based practices that should form the basis of addiction treatment” and explode some of the myths surrounding it.

One such myth is the belief that most addicts need to go to a rehab center.

“The truth is that most people recover (1) completely on their own, (2) by attending self-help groups, and/or (3) by seeing a counselor or therapist individually,” she wrote.

Contrary to the 30-day stint typical of inpatient rehab, “people with serious substance abuse disorders commonly require care for months or even years,” she wrote. “The short-term fix mentality partially explains why so many people go back to their old habits.”

Dr. Mark Willenbring, a former director of treatment and recovery research at the National Institute for Alcohol Abuse and Alcoholism, said in an interview, “You don’t treat a chronic illness for four weeks and then send the patient to a support group. People with a chronic form of addiction need multimodal treatment that is individualized and offered continuously or intermittently for as long as they need it.”

Dr. Willenbring now practices in St. Paul, where he is creating a clinic called Alltyr “to serve as a model to demonstrate what comprehensive 21st century treatment should look like.”

“While some people are helped by one intensive round of treatment, the majority of addicts continue to need services,” Dr. Willenbring said. He cited the case of a 43-year-old woman “who has been in and out of rehab 42 times” because she never got the full range of medical and support services she needed.

Dr. Willenbring is especially distressed about patients who are treated for opioid addiction, then relapse in part because they are not given maintenance therapy with the drug Suboxone.

“We have some pretty good drugs to help people with addiction problems, but doctors don’t know how to use them,” he said. “The 12-step community doesn’t want to use relapse-prevention medication because they view it as a crutch.”

Before committing to a treatment program, Ms. Fletcher urges prospective clients or their families to do their homework. The first step, she said, is to get an independent assessment of the need for treatment, as well as the kind of treatment needed, by an expert who is not affiliated with the program you are considering.

Check on the credentials of the program’s personnel, who should have “at least a master’s degree,” Ms. Fletcher said. If the therapist is a physician, he or she should be certified by the American Board of Addiction Medicine.

Does the facility’s approach to treatment fit with your beliefs and values? If a 12-step program like A.A. is not right for you, don’t choose it just because it’s the best known approach.

Meet with the therapist who will treat you and ask what your treatment plan will be. “It should be more than movies, lectures or three-hour classes three times a week,” Ms. Fletcher said. “You should be treated by a licensed addiction counselor who will see you one-on-one. Treatment should be individualized. One size does not fit all.”

Find out if you will receive therapy for any underlying condition, like depression, or a social problem that could sabotage recovery. The National Institute on Drug Abuse states in its Principles of Drug Addiction Treatment, “To be effective, treatment must address the individual’s drug abuse and any associated medical, psychological, social, vocational, and legal problems.”

Look for programs using research-validated techniques, like cognitive behavioral therapy, which helps addicts recognize what prompts them to use drugs or alcohol, and learn to redirect their thoughts and reactions away from the abused substance.

Other validated treatment methods include Community Reinforcement and Family Training, or Craft, an approach developed by Robert J. Meyers and described in his book, “Get Your Loved One Sober,” with co-author Brenda L. Wolfe. It helps addicts adopt a lifestyle more rewarding than one filled with drugs and alcohol.

This is the first of two articles on addiction treatment.

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DealBook: The Politics of the R.B.S. Settlement

LONDON — The British government is taking aim at an unlikely target in the latest rate-rigging case: the British government.

The $612 million settlement that the Royal Bank of Scotland reached with authorities on Wednesday over rate manipulation will leave British taxpayers liable for part of the fine.

The government still owns a 82 percent stake in the bank, which was bailed out in 2008 during the height of the financial crisis.

The British government finds itself on the other side of its case as well because the Financial Services Authority, the country’s main financial regulator, has been part of the global investigation into the manipulation of benchmark rates like the London interbank offered rate, or Libor.

The case against the Royal Bank of Scotland has been politically charged after British politicians demanded that bankers’ bonuses should be used to pay for the settlement.

“There is a legitimate concern that British taxpayers, who already have bailed out the bank, will be asked to pay for past mistakes at R.B.S.,” said Pat McFadden, a British politician who is a member of the opposition party and part of the Parliament’s Treasury select committee that oversees the country’s finance industry. On Monday, George Osborne, the chancellor of the Exchequer, also called on the bank to use bonuses to pay the Libor fine.

To help pay for the global settlement, the British bank said it would claw back past and present bonuses totaling $471 million from both the traders implicated in the rate-rigging scandal as well as from employees in the bank’s operations, particularly its investment banking unit, which have not been part of the wrongdoing.

Bank officials said the clawbacks were related to the reputational damage caused to the bank, and would also cover potential future legal liabilities. But that money will be used primarily to pay the fines levied against the bank by the United States authorities.

The Financial Services Authority’s share of the fine is expected not to come from the bonuses. The money will, in a sense, be recycled since it will go to the British government’s coffers.

One of the casualties of the Libor scandal was John Hourican, head of the firm’s investment banking division, who resigned on Wednesday. He will forgo past and present compensation worth a combined $14.1 million. Mr. Hourican, who took over the investment banking unit in 2008 and has not been implicated in the wrongdoing, will receive a one-time payout from the bank of around $1 million.

Libor Explained

“This has been a soap opera for the last four years because of the ups and downs of this job,” the bank’s chairman, Philip Hampton, told reporters on Wednesday. “The bank was in a hell of a mess.”

The taxpayer stake in the bank sets the latest deal apart from the other two big Libor settlements. Last summer, the British bank Barclays agreed to pay $450 million to settle accusations that it reported false rates. In December, the Swiss giant UBS struck a sweeping $1.5 billion deal with authorities in which its Japanese subsidiary pleaded guilty to felony wire fraud.

But despite the vested interest of taxpayers, the Financial Services Authority did not take the government’s ownership stake into consideration when reaching the settlement, according to a person with direct knowledge of the matter who spoke on the condition of anonymity.

The renewed scrutiny on the bank, however, could hinder the government’s ability to sell its stake for a profit, as private investors remain wary of the bank’s future liabilities. Since the bailout in 2008, the bank’s shares have plummeted, and are currently trading around 32 percent below the initial purchase price.

As part of plans to sell the government’s stake in the bank, Vince Cable, the British business secretary, said Royal Bank of Scotland should have been fully nationalized when it was bailed out in 2008. In a speech on Wednesday, he added that one option could be to return shares in the bank to British taxpayers.

“The early hope of reprivatization now looks a very long way off, unless at an unacceptable loss,” Mr. Cable said.

Government officials have held preliminary discussions with a number of investors about selling stakes in the Royal Bank of Scotland, according to a person with direct knowledge of the matter who spoke on the condition of anonymity.

The potential losses facing British taxpayers contrast with the $182 billion bailout of the American International Group in 2008. Over the last two years, A.I.G. issued a series of stock offerings to reduce the United States government’s ownership, generating profit of around $22 billion for American taxpayers.

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IHT Rendezvous: Worse Than Poisoned Water: Dwindling Water, in China's North

BEIJING — When 39 tons of the toxic chemical aniline spilled from a factory in Changzhi in China’s Shanxi province at the end of December, polluting drinking water for hundreds of thousands of people downstream along the Zhuozhang River and dangerously fouling the environment, it seemed a grave enough disaster. And it was.

So it’s hard to believe, perhaps, but in mid-January, just days after local officials belatedly revealed the spill to the public, a “rapid response team” sent by Greenpeace China to investigate found something even worse than the spill, the blogger Zhou Wei wrote in chinadialogue, an online magazine about China’s environment. Greenpeace found that the fast pace of water consumption by coal and chemical industries in the area is drying up all water resources further downstream. In fact, by 2015, water consumption by coal and chemical industry in China’s dry, western areas is set to use up a whopping quarter of the water flowing annually in the nearby Yellow River, which forms much of the border of Shanxi Province and is popularly known as China’s “Mother River,” wrote chinadialogue.

As chinadialogue wrote, citing Greenpeace, “Even more worrying than the chemical leak is the high water consumption of the coal and chemical industries in the area.”

The blog post, which chinadialogue says hasn’t been translated into English yet, cited Tong Zhongyu of Greenpeace’s East Asia office as saying that the situation was “growing more severe by the day.”

None of this may be news to hardened followers of China’s crumpling environment, but the scale of the water consumption in the water-scarce area is nonetheless shocking: The Tianji Coal Chemical Industry Group, which caused the spill, consumes water equivalent to the consumption of about 300,000 people per year, chinadialogue wrote, citing the Greenpeace investigation.

The coal and chemical industry is simply “a major water-eater,” the post said.

Water is a key challenge for the country as the racing economy guzzles it faster and faster. In the last 40 years, 13 percent of China’s lakes have disappeared, half its coastal wetlands have been lost to reclamation and 50 percent of cities left without drinking water that meets acceptable hygienic standards, the World Wildlife Fund said, according to another article in chinadialogue. The United Nations has singled China out as one of 13 countries with extreme water shortages.

“By any measure, the situation is bleak,” chinadialogue said. For now, the government is split between small-scale, practical solutions to the problem and huge engineering projects, such as the South-North water diversion scheme, which aims to transfer water from the rainy south to the dry north but has been widely criticized by environmentalists as too big, inefficient and ultimately unworkable.

“My heart is really out for the leadership trying to come up with solutions because China’s just so maddeningly complex,” Michael Bennett, an environmental economist, was quoted as saying. As evidence of serious efforts to solve the problem, Mr. Bennett pointed to widespread, small-scale, government-approved water conservation programs taking place around the country.

Will China solve its really serious water problems?

“The trend is in the right direction, the question is whether it’s going to be fast enough,” Mr. Bennett said.

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