Today's Papers

The Price Is Wrong

The New York Timesleads with word that JPMorgan may end up paying five times more than originally planned for Bear Stearns. In order to avoid problems with the many shareholders who have complained that the initial offer of $2 a share was ridiculously low, JPMorgan is currently considering offering $10 a share. But the Federal Reserve, which would have to approve a new deal, doesn’t seem eager to accept a higher price because it would raise more questions about whether the federal government is rescuing Bear shareholders. The Los Angeles Timesleads with a look at how the Bush administration has failed in its efforts to cut off financing to al-Qaida and other terrorist groups.

The Washington Postleads with news that it took the National Institutes of Health almost a month to notify patients that a laptop containing sensitive medical data was stolen. The information about the 2,500 patients enrolled in a clinical trial was not encrypted, which is a violation of government policy. Although the theft appears to have been random, the Post says it amounts to the latest example of how government employees have often failed to properly safeguard personal information. USA Todayleads with police agencies across the country reporting that witnesses of violent crimes are often refusing to cooperate with investigations, which is decreasing the number of solved murders. An FBI spokesman says criminals have been successful in creating “a climate of fear” that leads witnesses to prefer silence in order to prevent retaliation. The Wall Street Journal leads its world-wide newsbox with the latest from China, where heavily armed police are patrolling the city of Chengdu, the main travelers’ gateway to Tibet. The move shows how nervous the Chinese government is about the possibility that the protests in Tibet will spread and further embarrass the country in the run-up to the Summer Olympics. In a Page One story, the NYT says this fear of creating a public relations disaster may have been the reason why Chinese police seemed unwilling to act when violence first broke out in Tibet.

Bear Stearns employees, who own more than one-third of the company’s stock, didn’t hide their anger at the low price of $2 a share offered by JPMorgan, and there has been much talk of the possibility that shareholders would file a lawsuit to block the deal. In offering to pay a higher price, JPMorgan doesn’t only seek to pacify these shareholders but also to assure investors that Bear won’t close its doors anytime soon. The Fed is not eager to accept the new proposal because government officials have been quick to point to the low price whenever there were complaints that the deal amounted to a bailout. But if the Fed stands in the way of an agreement, shareholders from both firms are likely to complain that the government is preventing them from closing a fair deal. Meanwhile, the NYT also reports that Bear’s board is attempting to speed majority shareholder approval by trying to authorize the sale of 39.5 percent of the company to JPMorgan since Delaware allows companies to sell up to 40 percent without approval from shareholders.

Part of the reason why it’s been so difficult to cut off funding to al-Qaida and other extremists has to do with the fact that these terrorist networks have largely moved away from the formal banking system and are using a variety of techniques to move money around that are practically impossible to track. Officials also say the effort has been hampered by a lack of cooperation between different agencies, and some have suggested there should be a czar or agency to coordinate the different efforts. But officials are mostly eager to point the finger at other countries for the overall failure, saying there has been a lack of international cooperation as many lack resources and some key allies, including Saudi Arabia and Pakistan, have refused to implement the necessary mechanisms to target terrorist financing.

The LAT goes above the fold with a large picture that reefers a package of stories inside the paper marking the grim milestone that was reached in Iraq yesterday when a roadside bomb pushed the American death toll in the five-year-old war to at least 4,000. Four U.S. soldiers died in that attack on a deadly day when more than 60 Iraqis were killed and the highly guarded Green Zone in Baghdad came under heavy attack. The NYT, which also fronts the story, says that the “intensity of the violence added to the sense that insurgent and sectarian attacks had been on the rise in recent weeks,” while the WP is more direct and says yesterday’s events “marked an escalation of violence.”

In election news, the WP fronts a story that won’t make either Democratic contender happy as it states that both Sen. Barack Obama and Sen. Hillary Clinton are guilty of overstating their roles in key legislation. Obama has claimed he was an important player in Senate negotiations over a comprehensive immigration bill, a contention that appears to be a clear exaggeration. And last week, he claimed credit for putting forward a proposal to address the housing crisis, but Sen. Chris Dodd, an Obama supporter, said that wasn’t exactly accurate. Meanwhile, Clinton has claimed she was behind the State Children’s Health Insurance Program, but lawmakers don’t exactly remember it that way. “If she was involved, I didn’t know about it,” said Sen. Orrin Hatch, the lead Republican negotiator of the bill.

The NYT goes inside with a look at two events in Sen. John McCain’s past that he rarely talks about in public. In 2001, when McCain was still angry over rumors that were spread about him during the 2000 primaries, he discussed the possibility of leaving the Republican Party with some key Democratic leaders. Three years later, he discussed the possibility of being Sen. John Kerry’s running mate. But the devil is in the details, and that’s where the two sides disagree. Democrats say it was McCain who made the approach in both instances and began the discussions. For his part, McCain insists he was merely being courted by Democrats and he never took the proposals seriously.

Real-estate values may be plunging across the country, but those hoping to hobnob with the rich and famous this summer will still need to put down lots of cash for a prime location. The LAT reports that a  $150,000-a-month price tag for a four-bedroom house in Malibu, Calif., marks a local record high but hardly seems out of place in an area where “even mundane beachfront houses are renting for as much as $70,000.” And just because it’s expensive doesn’t mean those hoping for great locations can afford to wait. “By May all the good listings may very well be gone,” a Malibu agent said. “Recession? What recession?”