Promise, peril seen for crowd-funding investors









Crowd funding is widely seen as a revolutionary idea.


A 2012 federal law known as the JOBS Act opens the door to allowing small, privately owned businesses to market ownership stakes in their ventures to people over the Internet.


Companies will be able to sell up to $1 million in equity a year to ordinary investors without having to register the offering with the Securities and Exchange Commission or state regulators.





Before the average person can use crowd funding to stake a claim in a startup, the SEC still must draft rules that the Obama administration hopes will result in U.S. businesses growing and adding jobs. At the same time, the securities cop needs to include safeguards that protect less sophisticated individual investors drawn to inherently risky startups.


That's why equity crowd funding under JOBS, or Jumpstart our Business Startups, has some longtime regulators and securities lawyers squirming.


"It can be an invitation for fraudsters to steal money," Matthew Brown, a Katten Muchin Rosenman lawyer, said last month at a CFA Society of Chicago event at 1871, a center for digital startups in Chicago.


But Brown also noted that equity crowd funding also democratizes small-business financing, a process that historically has given access mostly to wealthier — or, as they're known in high-finance circles, "accredited" — investors.


"The world has changed dramatically, and who's to say who is smarter than anyone else?" Brown added.


Many existing crowd-funding platforms such as Kickstarter don't sell equity stakes in businesses to average investors. Rather, they give consumers the chance to donate money to an enterprise or to get an early or discounted crack at a new product. Since Kickstarter's launch in April 2009, more than $450 million has been pledged by more than 3 million people funding more than 35,000 projects, the New York-based company's website says.


Their acceptance suggests that consumers are willing to engage with companies on a deeper level. As such, enabling unaccredited consumers to invest in companies in small increments online has promise and could become part of the fundraising "ecosystem," says one Chicago entrepreneur.


Abe's Market, a Chicago-based e-commerce site selling natural and organic products from more than 1,000 suppliers, said it would consider crowd funding under the JOBS Act, saying it and its vendors have "die-hard fans" and "a core group of customers" who might like to invest in their vision.


Last month, Abe's raised $5 million from Carmel Ventures, Index Ventures, Beringea and Accel Partners, a Groupon backer. New backers include OurCrowd, a crowd-funding site for accredited investors.


"If you can get passionate people to invest in your business, you're not just gaining investors, you're gaining evangelists," Abe's Chief Executive Richard Demb said. "The challenge for any consumer brand is: How do you find not just customers, but the right customers who are going to tell their friends?"


But there would also be potential headaches for companies raising equity financing through crowd funding, he said.


"You have to make sure that expectations would be set fairly, that no one is putting their life savings into the investment, and that they don't also come back and become a challenge to manage as the business grows," Demb said. "You don't want someone who invested $250 to come back and say, 'I don't think we should expand to the West Coast.'"


Safeguards for average investors exist in the JOBS Act. They include capping nonaccredited individuals' crowd-funding investments at $2,000, or 5 percent of annual income or net worth of less than $100,000, whichever is greater.


Snapclass, launched a few weeks ago at 1871, provides software enabling businesses to provide training online. Co-founder Scott Mandel, who has financed the company himself, doesn't expect to take advantage of equity crowd funding in the future and instead would seek, say, venture capital funding.


"Not all checks are the same," said Mandel, previously a trader and professional poker player. "I'd want someone who could add more than just the cash, such as connections and experience and help with things that I'm not an expert in."


One of 1871's fastest-growing startups is MarkITx. It recently raised $1.2 million from wealthy individuals in its first fundraising round, has seven employees and is looking to add sales jobs. It's an online exchange for businesses wanting to buy and sell used information technology equipment, from iPads to Oracle servers.


"For us, it wouldn't be the sole way to raise money, but it definitely is a viable vehicle to look at raising money," MarkITx partner Marc Brooks said of equity crowd funding under the JOBS Act.





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Hawks make NHL history









The shot was low and hard and cemented the Blackhawks' spot in the history books.


When Brandon Saad rifled the puck past goaltender Antti Niemi early in the third period Friday night at the United Center, the rookie propelled the Hawks to a 2-1 victory over the Sharks.


Viktor Stalberg also scored and Ray Emery earned another impressive triumph goal as the Hawks recorded their 17th consecutive game to start the season without a regulation loss, the longest such streak in NHL history.








Blackhawks winger Brandon Saad:


"It was a huge goal for us," Saad said. "I just took him wide and tried to get a shot off and luckily I beat him to the glove side.


"It's nice to make history. Our group has a great year so far so we don't expect anything less."


The Hawks also pulled into a tie for third in league annals for longest overall points streak at 23 games over parts of two seasons — matching the 1975-76 Flyers and '40-41 Bruins.


"It's a great feeling," Stalberg said. "We've had a great run here. We don't want to stop now. Tonight maybe wasn't our best game but we're finding a way to win.


"It's kind of crazy to think you're not going to lose a game in regulation for the first 17 games. It's a cool thing to be a part of and we're excited about it but the focus has been more on us to play each and every game."


Emery made 26 saves, allowing only a late first-period goal to Patrick Marleau as he out-dueled Niemi. The Hawks moved to 14-0-3 overall and 6-0-1 at home this season as they continued their assault on the Western Conference standings with their 31st point of a possible 34.


Emery was tested early and dodged a bullet when Ryane Clowe couldn't get a stick on puck in front with an open goal and seconds later watched as Logan Couture fired wide at a gaping net.


After scrambling in their own zone at the outset, the Hawks found their footing and started putting pressure on Niemi. The former Hawks goalie's biggest save early was when he stoned Marian Hossa from just inside the left circle off a rebound.


With the clock winding down in the opening period, Marleau put the Sharks ahead with his 11th goal of the season. After a Joe Thornton shot, Marleau batted at the rebound and the puck trickled under Emery's pad and across the line.


Late in the second, Stalberg awakened a subdued crowd with his fourth goal of the season. The winger had been without a point in five consecutive games but found the scoresheet when he banked a shot from behind the goal line off Niemi and into the net.


The Sharks entered the third period on the power play but it was the Hawks who cashed in when Saad notched this third goal of the season. The rookie winger rifled a shot from the left circle that sailed past Niemi to the glove side. It was the Hawks' first short-handed score of the season and gave them life as they marched toward history.


After that, Emery and the defense tightened and it was a piece of history for the Hawks.


ckuc@tribune.com


Twitter @ChrisKuc





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Well: Savory Pie Recipes for Health

Pie is an indulgence often saved for holiday time. But this week Martha Rose Shulman shows us how to bake a pie and eat it too, without the guilt. She offers savory vegetable pies, showcased in whole grain crusts. She writes:

This week I slowed down and made pies: savory ones filled with vegetables … I used a number of different crusts for my winter pies. My favorite remains the whole wheat yeasted olive oil crust that I have used before in this column, but I also worked with a simple Mediterranean crust made with a mix of whole wheat flour, all-purpose flour and olive oil. And for those of you who are gluten-free, I made another foray into gluten-free pastry and produced one I liked a lot, which was a mix of buckwheat flour, millet flour and potato starch. It had a strong nutty flavor that worked well with a very savory, very vegan, tofu and mushroom “quiche.” They are all simple to mix together and easy to roll or press out. And if you don’t feel like dealing with a crust, just use Greek phyllo. The important things, after all, are the savory vegetables inside.

Here are recipes for a pie crust and four savory winter vegetable pies.

Whole Wheat Mediterranean Pie Crust: A simple Mediterranean crust made with a mix of whole wheat flour, all-purpose flour and olive oil.


Mixed Greens Galette With Onions and Chickpeas: A tasty way to use bagged greens in a dish with Middle Eastern overtones.


Goat Cheese, Chard and Herb Pie in a Phyllo Crust: A garlicky mix of greens and your choice of herbs inside a crispy phyllo crust.


Tofu Mushroom ‘Quiche’: A vegan dish with a deep, rich flavor.


Winter Tomato Quiche: Canned tomatoes can be used in the off season for a delicious dinner.


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16 airport investors show interest in Midway








An international array of airport investors and operators have shown interest in developing bids to privatize Midway Airport, the city announced Friday evening.

Sixteen parties responded to the city's "request for qualifications" by a 4 p.m. deadline, indicating they had interest in leasing, operating and improving the Southwest Side airport, the nation's 26th busiest, with about 9 million passengers passing through annually.

"The response generated from the  ... process is encouraging and provides the city with a sense of the strong level of interest in a potential lease," said Lois Scott, the city's chief financial officer. "We must evaluate fully if this could be a win for Chicagoans."

The city and its advisers will review the responses to identify qualified potential bidders.

Of the 16, seven had both the operational and financial capabilities sought in the RFQ. The city identified them as:



-- ACO Investment Group, an investor and operator with global airport experience.

-- AMP Capital Investors Limited, a manager and investor in airports, including Melbourne Airport in Australia and Newcastle Airport, in Britain.

--  Corporacion America Group, an Argentina-based airport operator with 49 airports in seven countries.

-- Global Infrastructure Partners (GIP), which is the controlling investor and active manager of London City Airport, London Gatwick Airport and Edinburgh Airport.

--Great Lakes Airport Alliance, which is a partnership of Macquarie Infrastructure and Real Assets and Ferrovial. Its airport operations include London's Heathrow, Brussels Airport and Copenhagen Airport.

-- Incheon International Airport and Hastings Funds Management, which is the sole owner and operator of Incheon International Airport in South Korea and an investor with 16 airport-related investments.

--  Industry Funds Management and Manchester Airport Group, an investor with interests in 13 airports, including Melbourne Airport and Brisbane Airport, both in Australia, and operator of Manchester Airport and East Midlands Airport, in Britain.

If the city moves forward and seeks proposals, a privatization plan could be submitted to the City Council this summer.

This is the second time Chicago has looked at privatizing Midway. A 99-year lease that would have brought in $2.5 billion died in 2009 when the financial markets froze. That deal had drawn six serious bidders.

Mayor Rahm Emanuel has said any second attempt would have to provide city taxpayers with a better deal than the widely criticized 75-year agreement to privatize parking meter operations, carried out during former Mayor Richard Daley's administration. Proceeds from the earlier deal were used to plug operating deficits, and meter rates rose sharply.

This time, proposed leases must be less than 40 years, which locks in the city for a shorter period.

Rather than making only an upfront payment, the private operator also must share revenue with the city on an ongoing basis. Initial proceeds would be used to pay down debt issued since 1996 to rebuild the airport, the mayor's office said. There is about $1.4 billion in outstanding debt.

Longer term, cash flow would be directed to city infrastructure needs. The mayor has pledged proceeds would not be used to pay for city operations.

kbergen@tribune.com






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Drew Peterson: 'I'm an obnoxious man by nature, truly'









Moments after screaming in court, "I did not kill Kathleen," Drew Peterson was sentenced to 38 years in prison for the 2004 murder of his third wife Kathleen Savio.

Peterson had faced as much as 60 years, but Judge Edward Burmila said he gave Peterson some consideration for his years as a police officer and his service in the military. Peterson is 59.


The sentence was handed down after Peterson, who did not testify at his trial, made an emotional appeal to the judge, at times appearing to choke up as he argued that he was convicted by "rumors, gossip, outrageous lies and, most importantly, unreliable hearsay."


"I don't deserve this," he told Burmila. "I don't deserve this."








Peterson, a former Bolingbrook police sergeant, was convicted last fall of drowning Savio in her bathtub. Prosecutors have said they believe Peterson also killed his missing fourth wife Stacy and could seek charges in that case.


Peterson began his appeal to the judge today by telling him, "Good day, my name is Drew Peterson. I hope I don't aggravate the situation here, but I have a lot of things to be said." Then he screamed, "I did not kill Kathleen!"

"Yes, you did," a woman said.

"Ma'am, I'd like you to leave the courtroom," Burmila said. "And Mr. Peterson, don't make any outbursts that are designed to aggravate people."

"I'm sorry, your honor. I must have been woozy," Peterson said.


After the sentencing, State's Atty. James Glasgow dismissed the outburst as a "shrill, kind of feminine screech."


Peterson insisted to the judge he is the victim of an unjust and invasive police investigation that ignored or lost evidence that could have shown his innocence. He accused the state police of falsifying reports.

"What they did uncover was rumors, gossip, outrageous lies, and most importantly, unreliable hearsay. Hearsay that pierced three privileges that have stood for centuries," Peterson said.

Peterson bitterly complained that the Rev. Neil Schori betrayed his promise never to repeat anything that was said by Peterson or Stacy. Schori testified at trial that Stacy confided to him that she lied to state police about Peterson's alleged slaying of Savio.

"Out of the privileged information from Neil Schori, the state police was able to create" a case, he said. "I find it hard to believe that the state was able to take information that they obtained illegally and turn it to their benefit."

Kathleen Savio’s divorce attorney Harry Smith, who also testified at trial about a conversation he had with Stacy before she disappeared, "gave up privileged information from both Kathy and Stacy, like it was yesterday's garbage," Peterson said. "Ultimately, it led to my conviction.

"Hearsay is a scary thing. There's no proof. Anything can be said and nobody's accountable for the truth.

"In my experience, in divorce situations everybody lies, and everybody lies under the instruction of their attorneys.

"There was an incident where Kathleen exited the house ... and punched Stacy in the face. They went to trial, my 9- and 10-year-old sons were called to testify, and under oath they lied," Peterson said.

"On their next visit, I questioned them, 'Why’d you guys lie?' They said Harry Smith told them to. They didn’t want their mom to go to jail,” Peterson said, growing emotional as he spoke. “I couldn't be mad at them.”

"Stacy provided me an alibi for Kathleen's death. Then she later said she was lying about that. Seems like Stacy was lying all the time about everything. But the state's attorney picked and chose what they wanted to believe.

"Stacy clearly had a crush on the Rev. Schori, which I think was a factor in this.

"There was a constant and consistently illegal activity by the state’s attorneys, including the state’s attorney himself.

"So what did the state’s attorney do? They hire a skinny ... spokesperson (Stacy Peterson family spokeswoman Pam Bosco) to go out and say anything she wants. It buffered the state’s attorney’s office from anything the court might bring.

"And when it came time for a vote from the grand jury, only a handful of people were selected. Not the entire grand jury was brought in to do the vote. Pretty much guaranteed ... that I was indicted, which I was.

"There was a first investigation on this case, in which probably one of the most experienced investigators was the first one on the scene in this case, and he determined Kathleen's death was an accident.

"Dr. (Bryan) Mitchell looked at Kathy's body when it was in its freshest state. He determined her death was an accident."

So did the coroner's jury, Peterson said. "All this was done when the evidence was freshest."

Peterson then paused and asked for some water. He resumed by talking about his service in the military and lengthy law enforcement career.

"I was probably one of the highest-decorated officers in the Bolingbrook Police Department," he said.


"I always took my job seriously, I never violated the public trust," he said, his voice husky with emotions. "And I never beared false witness against anyone.

"I loved having a job that helped people," he said. "In my private life, I ran up to six companies at one time. I employed nearly 100 people.

"Until this happened, I thought I was a great guy," he said. "And in moments, the media turned me into a monster.

"As soon as I get a chance, I'm going to get a tattoo on my back, from shoulder to shoulder, that says, 'No good deed goes unpunished.' "

He said he loved Savio and called her a good wife and mother who did not deserve to die, but insited it was an accident. He then talked about Savio’s upbringing, calling it difficult and abusive.

"The most pathetic thing I’ve ever seen in my life was the night after our wedding, when I held Kathy and she cried because her father failed to show up and give her away on her wedding.

"At Kathy's wake, friends and family put money in cards and envelopes to help cover the cost of the funeral.

“I paid for the funeral."

"That's a lie right there," a man in court shouted.

"I paid for Kathy’s funeral at the request of her sister, who's sitting right there," Peterson said.

He then attacked State's Atty. James Glasgow.

"Mr. Glasgow, all aspects of my life have been destroyed. Everything from my personal life to my professional life to my social life -- all aspects have been destroyed. And I tell you this to give you greater cause for celebration, when you celebrate the fact that you perpetrated the largest railroad job in the history of this country.

"Since I've been incarcerated, I've had nine family members who have died, six of which were cousins," Peterson said. None of them made it past the age of 60, he said.

“And in telling you this, I'm not looking for any sympathy, but anything you sentence me to, you're sentencing me to the Department of Corrections to die!" Peterson said.

Peterson said he believes his constitutional rights have been violated.

"And I think the only thing left to make this case run true to form would be a cruel and unusual punishment. And I don't think anybody would care because nobody cares. I can't believe I spent 32 years defending a constitution that allowed this to happen to me. I can't believe people fought and died in wars protecting a constitution that allowed this to happen to me.”

America should be outraged, but nobody cares, he said.

"I take full responsibility for my relationship with the media," Peterson continued. "I just wanted them away from my home because they were scaring my kids. They hounded me. I agreed to go on TV and tell my story and ask for legal help.

"Everybody from busy bodies like Nancy Grace ... to that ridiculous movie that played repeatedly before and during my trial.

"It pretty much guaranteed that I would not get a fair trial. It's pretty clear that the state took part in that movie because things I remember saying only to the state police appeared in that movie," Peterson said, apparently referring to a Lifetime TV movie starring Rob Lowe as Peterson.

"I'm an obnoxious man by nature, truly. And after 30 years as a police officer, as is normal with a police officer, my defense mechanism is comedy. The media took that and capitalized on that, and my obnoxious nature showed through. But I want to ensure the court that at no time did I want to portray any insensitivity about Kathy's death. That was not my intention.

“I hope Mr. Glasgow looks me in the eye right now. Never forget my face! Never forget what you’ve done. 

“Originally I had some cute and funny things to say. But now in closing, it's time to be sentenced to a life of hardship and abuse in prison. I don't deserve this, I don't deserve this.

“Thank you.”


Earlier in the afternoon, Savio’s sister Anna Marie Savio-Doman told the judge that "my loss of my baby sister is beyond words. There will be no more birthday parties, backyard gatherings, holiday celebrations or other family activities to share. The laughter, hugs, guidance, advice, sense of security and those opportunities to say ‘I love you’ are forever gone.

“One of the hardest things for me is knowing the pain and fear that Kathleen must have suffered at the time of her murder. The horror and betrayal she must have felt when she realized that someone she had trusted and loved more than anything was actually killing her. I wonder if she could feel her heart breaking when she thought about leaving her two boys forever. The helplessness she must have felt knowing she was going to die.

“I have to say it hurts a lot. I hope it gets better, but I am not confident it will get better. I still talk to her. I hope she can hear me.”

Susan Doman described her sister as a “rock” and told the court she looked up to Savio, even though Savio was younger. She also expressed her anger toward Peterson.

“He showed no remorse,” she said. “For years I watched Peterson parade on TV, radio, photo shoots, and (that) radio promotion to win a date with him. That was a big joke to him. And he loved all the attention.

“Your honor, the defendant shows no remorse to this day for the horrible crime that he did to my sister Kathleen. This senseless action is inexcusable. I am placing my trust that you will give Kathleen justice once and for all.”

The judge also read a statement from Savio’s father, but not aloud.

In arguing for a maximum sentence, Glasgow reminded the judge about the damage done to his young children with Stacy. Prosecutors have said they believe Peterson killed Stacy and could seek charges in that case.

"Not only is their mother gone, but also their father is gone, as he sits before you," Glasgow said.

Glasgow said Peterson also should not get a break for living a law- abiding life because of his attacks on his second wife, when he threatened to kill her.

"There's a recurring them here with Mr. Peterson. He’s a police officer, and there's a number of occurrences with the victims here being afraid to call the police department.

"These are obviously very dangerous situation, and in this case, led to the demise of two young women."

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Living With Cancer: Arrivals and Departures

After being nursed and handed over, the baby’s wails rise to a tremolo, but I am determined to give my exhausted daughter and son-in-law a respite on this wintry evening. Commiserating with the little guy’s discomfort — gas, indigestion, colic, ontological insecurity — I swaddle, burp, bink, then cradle him in my arms. I begin walking around the house, swinging and swaying while cooing in soothing cadences: “Yes, darling boy, another one bites the dust, another one bites the dust.”

I kid you not! How could such grim phrases spring from my lips into the newborn’s ears? Where did they come from?

I blame his mother and her best friend. They sang along as this song was played repeatedly at the skating rink to which I took them every other Saturday in their tweens. Why would an infatuated grandma croon a mordant lullaby, even if the adorable one happily can’t understand a single word? He’s still whimpering, twisting away from me, and understandably so.

Previously that day, I had called a woman in my cancer support group. I believe that she is dying. I do not know her very well. She has attended only two or three of our get-togethers where she described herself as a widow and a Christian.

On the phone, I did not want to violate the sanctity of her end time, but I did want her to know that she need not be alone, that I and other members of our group can “be there” for her. Her dying seems a rehearsal of my own. We have the same disease.

“How are you doing, Kim?” I asked.

“I’m tired. I sleep all the time,” she sighed, “and I can’t keep anything down.”

“Can you drink … water?” I asked.

“A little, but I tried a smoothie and it wouldn’t set right,” she said.

“I hope you are not in pain.”

“Oh no, but I’m sleeping all the time. And I can’t keep anything down.”

“Would you like a visit? Is there something I can do or bring?” I asked.

“Oh, I don’t think so, no thanks.”

“Well,” I paused before saying goodbye, “be well.”

Be well? I didn’t even add something like, “Be as well as you can be.” I was tongue-tied. This was the failure that troubles me tonight.

Why couldn’t I say that we will miss her, that I am sorry she is dying, that she has coped so well for so long, and that I hope she will now find peace? I could inform an infant in my arms of our inexorable mortality, but I could not speak or even intimate the “D” word to someone on her deathbed.

Although I have tried to communicate to my family how I feel about end-of-life care, can we always know what we will want? Perhaps at the end of my life I will not welcome visitors, either. For departing may require as much concentration as arriving. As I look down at the vulnerable bundle I am holding, I marvel that each and every one of us has managed to come in and will also have to manage to go out. The baby nestles, pursing his mouth around the pacifier. He gazes intently at my face with a sly gaze that drifts toward a lamp, turning speculative before lids lower in tremulous increments.

Slowing my jiggling to his faint sucking, I think that the philosopher Jacques Derrida’s meditation on death pertains to birth as well. Each of these events “names the very irreplaceability of absolute singularity.” Just as “no one can die in my place or in the place of the other,” no one can be born in this particular infant’s place. He embodies his irreplaceable and absolute singularity.

Perhaps we should gestate during endings, as we do during beginnings. Like hatchings, the dispatchings caused by cancer give people like Kim and me a final trimester, more or less, in which we can labor to forgive and be forgiven, to speak and hear vows of devotion from our intimates, to visit or not be visited by acquaintances.

Maybe we need a doula for dying, I reflect as melodious words surface, telling me what I have to do with the life left to be lived: “To love that well, which thou must leave ere long.”

“Oh little baby,” I then whisper: “Though I cannot tell who you will become and where I will be — you, dear heart, deliver me.”


Susan Gubar is a distinguished emerita professor of English at Indiana University and the author of “Memoir of a Debulked Woman,” which explores her experience with ovarian cancer.

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United takes Dreamliner off schedule until June
















All Nippon Dreamliner 787


The All Nippon Airways Dreamliner 787 arrives at Mineta San Jose International Airport.
(Gary Reyes/San Jose Mercury News/MCT / January 22, 2013)



























































The parent company of United Airlines says it is taking the Boeing 787 off its schedule through June 5 for all but one of its routes.


United Continental Holdings Inc. said it still plans to use the 787 on its flights between Denver and Tokyo's Narita airport starting May 12. It had aimed to start that route on March 31.


United, currently world's largest airline and the only U.S. customer for the 787, said the timing of that reinstatement will depend on resolution of the Dreamliner's current issues.





The 50 Dreamliners in commercial service were grounded worldwide last month after a series of battery-related incidents including a fire on board a parked plane in the United States and an in-flight problem on another jet in Japan. United had only been flying the plance since November.


Sources told Reuters earlier this week that Boeing Co. has found a way to fix the battery problems that involves increasing the space between the lithium ion battery cells.









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Jackson Jr.: 'Tell everybody back home I'm sorry I let 'em down'









WASHINGTON—





— It was the kind of runaway spending usually reserved for someone with newfound riches — a holistic retreat, a cruise, pricey restaurant tabs, flat-screen televisions and even a pair of stuffed elk heads —and former Congressman Jesse Jackson Jr. admitted Wednesday that he conspired with his then-Chicago alderman wife to pay for it all with campaign money and cover it up.


In two quiet federal court appearances just hours apart, the power couple who once sought to write a new chapter in Chicago political history instead became the latest entry in an infamous culture of public corruption. Jackson pleaded guilty to conspiring with his wife, Sandi, to siphon campaign funds for personal use, and she pleaded guilty to not reporting most of the take as income on the couple's tax returns.








A sullen Jackson gave his wife a peck on the cheek at his own hearing and at times appeared to wipe tears from his eyes as he told a judge he was guilty of misusing about $750,000 in campaign money. And with that, a political star once seemingly destined for the U.S. Senate or the Chicago mayor's office dissolved once and for all.


"Tell everybody back home I'm sorry I let 'em down, OK?" Jackson told a reporter as he left the courtroom.


As part of Jackson's plea agreement, prosecutors filed a 22-page statement filled with stunning details of how the Jacksons used his congressional campaign fund to fuel a lavish lifestyle. Jackson admitted that together the couple used campaign credit cards to buy personal items, tapped campaign funds to pay those bills, sometimes arranged for their campaign treasurer to make purchases for them, filed falsified campaign-disclosure forms to hide their actions and ultimately understated their personal income for tax purposes.


Both Jacksons face the prospect of time in federal prison.


As part of the plea deal, prosecutors and Jesse Jackson's defense agreed that sentencing guidelines in the case call for a term of between 46 and 57 months, but the sides reserved the right to argue for a sentence above or below that range when he is sentenced June 28.


Sandi Jackson is to be sentenced days later on July 1 and may face from one to two years. Among the conduct in her case, prosecutors said, was failing to report that money in her aldermanic campaign fund was used for personal expenses.


Experts said the agreement for Jesse Jackson leaves room for the defense to argue for probation and use his mental health as a mitigating factor.


Jackson removed himself from the public spotlight last June after winning a primary election in March. His medical leave was initially attributed to "exhaustion." It was later revealed that he had been treated in the Sierra Tucson facility in Arizona and the Mayo Clinic in Minnesota and was diagnosed with bipolar disorder.


He resigned in November amid the swirling probe, ending a 17-year congressional career just two weeks after winning re-election.


U.S. District Court Judge Robert Wilkins asked Jackson during the hearing whether he understood what was happening.


"Sir, I've never been more clear in my life," Jackson answered.


At a news conference after the hearing, Jackson Jr.'s attorney, Reid Weingarten, said Jackson's health problems contributed to his crimes, hinting it may be an issue raised in a sentencing hearing.


"It turns out that Jesse has serious health issues. ... Those health issues are directly related to his present predicament," Weingarten said. "That's not an excuse, that's just a fact."


Documents filed with the plea agreement lay out a steady pilfering of Jackson's campaign fund during a period of nearly seven years dating to August 2005.


Six people identified by letters of the alphabet — Persons A through F —- were involved in various aspects of the crimes, prosecutors said, and have not been granted immunity in the case. They include two former campaign treasurers, an Alabama businessman who issued a check to pay down a Jackson credit card balance and a Chicago consultant.


In January 2006, Jackson personally opened a bank account under the name "Jesse Jackson Jr. for Congress," and the following year withdrew $43,350 he used to buy a gold Rolex watch, prosecutors said. In 2007, he was also withdrawing funds to pay down personal credit cards, according to case documents.


After that year, the spending went into high gear.


"These expenditures included high-end electronic items, collector's items, clothing, food and supplies for daily consumption, movie tickets, health club dues, personal travel, and personal dining expenses," prosecutors said. When he was charged last week, Jackson was accused of buying, among other items, a fedora that belonged to pop superstar Michael Jackson, an Eddie Van Halen guitar and a football signed by U.S. presidents.





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Well: Caffeine Linked to Lower Birth Weight Babies

New research suggests that drinking caffeinated drinks during pregnancy raises the risk of having a low birth weight baby.

Caffeine has long been linked to adverse effects in pregnant women, prompting many expectant mothers to give up coffee and tea. But for those who cannot do without their morning coffee, health officials over the years have offered conflicting guidelines on safe amounts during pregnancy.

The World Health Organization recommends a limit of 300 milligrams of caffeine a day, equivalent to about three eight-ounce cups of regular brewed coffee. The American College of Obstetricians and Gynecologists stated in 2010 that pregnant women could consume up to 200 milligrams a day without increasing their risk of miscarriage or preterm birth.

In the latest study, published in the journal BMC Medicine, researchers collected data on almost 60,000 pregnancies over a 10-year period. After excluding women with potentially problematic medical conditions, they found no link between caffeine consumption – from food or drinks – and the risk of preterm birth. But there was an association with low birth weight.

For a child expected to weigh about eight pounds at birth, the child lost between three-quarters of an ounce to an ounce in birth weight for each 100 milligrams of average daily caffeine intake from all sources by the mother. Even after the researchers excluded from their analysis smokers, a group that is at higher risk for complications and also includes many coffee drinkers, the link remained.

One study author, Dr. Verena Sengpiel of the Sahlgrenska University Hospital in Sweden, said the findings were not definitive because the study was observational, and correlation does not equal causation. But they do suggest that women might put their caffeine consumption “on pause” while pregnant, she said, or at least stay below two cups of coffee per day.


This post has been revised to reflect the following correction:

Correction: February 20, 2013

An earlier version of this article described incorrectly the relationship between the amount of caffeine a pregnant woman drank and birth weight. For a child expected to weigh about eight pounds at birth, the child lost between three-quarters of an ounce to an ounce in birth weight for each 100 milligrams of average daily caffeine intake by the mother, not for each day that she consumed 100 milligrams of caffeine.

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OfficeMax, Office Depot agree to merger

Office Depot to buy Office Max as an attempt to compete with Staples.









Office Depot Inc. and Naperville-based OfficeMax Inc. confirmed Wednesday that they're planning to merge but left some key questions about the deal unanswered.


The all-stock deal calls for Office Depot to issue 2.69 new shares of common stock for each outstanding common share of OfficeMax. But officials declined to say where the newly merged company would be headquartered, who would sit in the CEO seat or even what it would be called.


OfficeMax CEO Ravi Saligram and Office Depot CEO Neil Austrian presented a united front during a Wednesday conference call with analysts, taking turns to explain the specifics of the deal.








"It takes two to tango," Saligram said. "Lo and behold, Neil and I have decided to tango."


The announcement of a merger, which Saligram said would "create a stronger, more global, more efficient competitor," put to rest years of speculation about a deal. The merger would unite the No. 2 company in the stationery and office supplies industry, Boca Raton, Fla.-based Office Depot, with the No. 3 company, OfficeMax, headquartered off Interstate 88.


A merger between the two chains "has made sense for years," Credit Suisse analyst Gary Balter wrote in a note this week.


Market leader Staples also would benefit from a merger, BB&T Capital Markets analyst Anthony Chukumba said.


"Clearly, you can't make this deal work unless you close a bunch of stores," he said. "Store rationalization is long overdue, and Staples will clearly benefit from just having fewer stores to compete with."


OfficeMax, with about 29,000 employees, operates 978 stores, including 10 in the Chicago area. Office Depot has about 39,000 employees and operates 1,675 stores, including seven in the Chicago area.


The two CEOs wouldn't say how many stores would be closed, but Balter has predicted about 600.


If the merger is completed, the company's board would have an equal number of directors chosen by Office Depot and OfficeMax. Based on Wednesday's stock closing price, the deal's value is about $976 million.


The combined company would have $18 billion in sales and achieve $400 million to $600 million in savings over three years, according to company officials.


Office Depot shareholders would own about 54 percent of the company and OfficeMax shareholders 46 percent.


It was not clear, though, whether those stockholders would be satisfied with the deal. One of OfficeMax's largest shareholders, Neuberger Berman, said this week that it would support a deal, depending on the terms.


The deal also is subject to approval by regulatory agencies, including the Federal Trade Commission.


Officials declined to say who would lead the combined business or where it would be located once the "merger of equals" is completed, likely by the end of the year.


"During the appropriate times ... our board will make the right decision," OfficeMax's Saligram said. "Now, we're independent companies, and we've got to go through lots of processes."


Saligram and Austrian will be considered to lead the company, but until a leader is chosen, they will remain in their positions.


"From the time we started talking, Ravi and I have grown very fond of each other. It's very clear we can work well together," Austrian said.


Their proposed partnership didn't begin well. The announcement of the planned merger was buried in an earnings release posted prematurely on the Office Depot website early in the morning, then quickly removed. The companies recovered, and about 8:30 a.m., they issued a joint statement announcing the proposed merger.


The mishap will likely be investigated by stock exchanges and regulatory organizations, according to a Chicago financial attorney.


"I am highly confident that the New York Stock Exchange, the Nasdaq and the Securities and Exchange Commission will be looking very closely at who pulled the trigger, who knew about this, and was this in good faith?" James McGurk said.


McGurk said he was not suggesting wrongdoing.


"When you think about it, you have two boards, lots of investment advisers, lawyers, and deals break down at the last minute. Are there lots of ways it could happen? Sure," he said.


OfficeMax shares closed Wednesday down 91 cents, or 7 percent, at $12.09. Shares of Office Depot closed down 84 cents, or nearly 17 percent, at $4.18.


Reuters contributed.


crshropshire@tribune.com


Twitter @corilyns





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