The Los Angeles Timesdevotes its top nonlocal spot to late-breaking news that after a two-day trial, the two American journalists currently being held in North Korea were convicted of a “grave crime” against the state and sentenced to 12 years of hard labor. Laura Ling * and Euna Lee of Current TV were tried by the nation’s highest court, so there’s no appeal, but most seem to agree the isolationist regime will be using the journalists as bargaining chips with Washington. The New York Timesleads with Secretary of State Hillary Clinton mentioning that the administration is looking into ways that the international community could interdict suspicious North Korean cargo. Officials say the White House is trying to get China to cooperate in the efforts. Clinton also said the administration will consider whether to reinstate North Korea into the list of state sponsors of terrorism. The Washington Postleads with word that the White House is getting ready to announce that some large banks can pay back billions of dollars they received in direct federal aid. That doesn’t mean trouble is over for the banks, since they’re still receiving “multiple layers of less visible government support,” which some are warning could prove even trickier to end.
USA Todayleads with a look at how in almost all of the serious accidents involving regional airlines over the past 10 years, at least one of the pilots had failed numerous skills tests. In major airlines, only one of the pilots involved in the serious accidents over the past 10 years had failed the tests more than once. The Wall Street Journalleads its world-wide newsbox with voters across Europe choosing to punish their ruling parties in European parliamentary and local elections. Left-wing parties once thought they could benefit from the continent’s economic woes and rising unemployment, but voters sent them a chilling message by voting for far-right candidates in record numbers. That is, if they bothered to vote at all. Turnout fell to a record low of 43.4 percent.
Many believe that the North Korean government is using the journalists to force the Obama administration to agree to one-on-one talks. And while North Korean experts didn’t find the verdict surprising, they still said that the length of the sentence was more than most expected. “It was beyond expectations, but no matter what they are doing, they have no choice but to release them in the end,” one expert said. Some speculate North Korea won’t agree to release them until Washington sends a high-profile envoy to Pyongyang to plead their case. Speculation continues that former Vice President Al Gore, a co-founder of Current TV, will be traveling to North Korea soon.
Now that some of the nation’s biggest banks will be allowed to pay back the direct federal aid they received at the height of the financial crisis, the financial industry’s relationship with the government is about to enter “a precarious new phase,” declares the Post. The government won’t be able to benefit monetarily from the banks if they manage a profit but will still be forced to step in to prevent losses. So far, the government has allowed only 20 smaller banks to pay back the money but now will say that a number of larger banks will be able to do so as well. That means the government will be giving up billions in potential revenue from the loans while implicitly guaranteeing that none of the large banks will be allowed to fail. But in a testament to how unpopular the program really is, no prominent officials have spoken up against the repayment plan.
The NYT off-leads new details about the administration’s new compensation czar, who will have to approve any changes in executive pay in companies that have received more than two rounds of federal aid. But even companies that didn’t receive any federal aid, or have paid it back, will still be subjected to stricter oversight on their compensation structures. The Treasury Department would apparently allow regulators to force a bank to change its compensation structure if it is found to encourage too much risk. These rules would apply to pretty much all financial companies, not just those that took federal aid.
The WSJ is alone in fronting preliminary results from Lebanon’s election that show the American-backed coalition managed to maintain its parliamentary majority, a surprising outcome, since many expected that a Hezbollah-led bloc would be victorious. The election “had been billed as a showdown between Tehran and Washington for influence in the Middle East,” notes the NYT. The results might have been affected by the 53 percent turnout rate, which was much higher than anyone was expecting. Perhaps Obama played a part as well: Hezbollah quickly dismissed his Cairo address even though many Muslims responded positively. Whatever the reasons, there is a sigh of relief coming out of Foggy Bottom as the defeat of Hezbollah appears to give Obama more leeway to pursue his Middle East peace initiative. “Lebanon is taken as a window for the advances Iran has made in the region,” one U.S. official said. “If Hezbollah had achieved a majority, it would have added to our concerns significantly.”
Taking advantage of new ethics rules that require lobbyists to report any payment made for an event or to a group that is associated with a lawmaker or top official, USAT crunches the data and reports that in 2008 that number totaled $35.8 million. More than three-quarters of the money went to nonprofit groups. It shows how lobbyists have continued to find ways to gain favor with lawmakers and government officials despite the ban on gifts and limits on campaign contributions.
On the WP’s op-ed page, Max Stier, the head of the Partnership for Public Service, writes that it is typical of Washington leaders to try to deal with a crisis by reorganizing government. The Obama administration is up to it again and wants to overhaul the whole financial regulatory system and create one huge regulator. It’s possible that the system does need to restructured, but such overhauls need to be done carefully and must not distract from the real problems. “When government fails, it typically has little to do with the way an agency is organized and almost everything to do with the performance of senior leadership at federal agencies, their ability to effectively manage the people working under them and the culture of the agencies,” he writes.
The NYT takes a look at how Williamsburg, the perpetually hip Brooklyn neighborhood that has undergone one of the “city’s most radical gentrifications in recent years,” is “showing signs of trouble,” largely because parents can’t afford to subsidize the lives of twentysomething residents as they used to. An owner of a store in the neighborhood said he has seen an increase in applicants who are in their late 20s and have never had paid jobs. Some applicants apparently walk out when they hear the job requirements. “They say, ‘You want me to work eight hours?’ ” he said. “There is a bubble bursting.”
Correction, June 8, 2009: This article original misspelled Ling’s last name as “Link.” (Return to the corrected sentence.)