Economic expansion weakest since 2011

The U.S. economy barely grew in the fourth quarter although a slightly better performance in exports and fewer imports led the government to scratch an earlier estimate that showed an economic contraction.

Gross domestic product expanded at a 0.1 percent annual rate, the Commerce Department said on Thursday, missing the 0.5 percent gain forecast by analysts in a Reuters poll.

The growth rate was the slowest since the first quarter of 2011 and far from what is needed to fuel a faster drop in the unemployment rate.

However, much of the weakness came from a slowdown in inventory accumulation and a sharp drop in military spending. These factors are expected to reverse in the first quarter.

Consumer spending was more robust by comparison, although it only expanded at a 2.1 percent annual rate.

Because household spending powers about 70 percent of national output, this still-lackluster pace of growth suggests underlying momentum in the economy was quite modest as it entered the first quarter, when significant fiscal tightening began.

Initially, the government had estimated the economy shrank at a 0.1 percent annual rate in the last three months of 2012. That had shocked economists.

Thursday's report showed the reasons for the decline were mostly as initially estimated. Inventories subtracted 1.55 percentage points from the GDP growth rate during the period, a little more of a drag than initially estimated. Defense spending plunged 22 percent, shaving 1.28 points off growth as in the previous estimate.

There were some relatively bright spots, however. Imports fell 4.5 percent during the period, which added to the overall growth rate because it was a larger drop than in the third quarter. Buying goods from foreigners bleeds money from the economy, subtracting from economic growth.

Also helping reverse the initial view of an economic contraction, exports did not fall as much during the period as the government had thought when it released its advance GDP estimate in January. Exports have been hampered by a recession in Europe, a cooling Chinese economy and storm-related port disruptions.

Excluding the volatile inventories component, GDP rose at a revised 1.7 percent rate, in line with expectations. These final sales of goods and services had been previously estimated to have increased at a 1.1 percent pace.

Business spending was revised to show more growth during the period than initially thought, adding about a percentage point to the growth rate.

Growth in home building was revised slightly higher to show a 17.5 percent annual rate. Residential construction is one of the brighter spots in the economy and is benefiting from the Federal Reserve's ultra easy monetary policy stance, which has driven mortgage rates to record lows. (Reporting by Jason Lange; Editing by Andrea Ricci)
 

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Chicago archdiocese to close 5 schools in cost-cutting move

Budget cuts announced Wednesday by the Archdiocese of Chicago signal that the area's Roman Catholics are entering a period of austerity when there will be less money for their parishes and schools.

The cuts, which were officially announced as Cardinal Francis George and other leaders of the church gathered at the Vatican to select a new pope, include closing five schools, eliminating 75 positions at the archdiocese's headquarters and placing a moratorium on loans to parishes from the archdiocese bank for three years. Other changes include creating stricter guidelines for local parishes applying for subsidies and reducing the number of the agencies in the archdiocese.

George, who spoke publicly about the cuts when asked by reporters in Rome, said they are needed to address the archdiocese's chronic financial problems. The archdiocese has run deficits of more than $30 million annually over the last four years, including being $40 million in the red for the fiscal year ending in June 2012.

All told, the measures will save tens of millions of dollars over the next few years, officials said.

“The expenses have gone up, and the income is pretty well flat,” George said after a news conference in Rome about Pope Benedict XVI's last audience Wednesday in St. Peter's Square. “We tried to ride out the recession without making any changes — and we can't do that. We're giving more grants to parishes and schools that need more money. The budget is not balanced. Not just layoffs, but a lot of other things being done, other ways to use the resources we have.”

The archdiocese sold $150 million in bonds in 2012 that helped it get through a cash-flow problem, but ultimately that wasn't enough, George said. He hopes the cuts will enable the archdiocese to balance its budget in two years.

Although the cardinal's announcement made headlines, the archdiocese's financial situation has been no secret to its priests. Several clergymen said they knew the archdiocese had planned to scale back loans to parishes.

“We have already made adjustments,” said the Rev. Dennis Ziomek of St. Barbara Parish in Chicago's Bridgeport neighborhood. “We have to be responsible stewards with the money.”

In a letter posted on the archdiocese website, the cardinal thanked parishioners for their generosity and asked them to pray for the employees now out of a paycheck.

At the archdiocese's Pastoral Center headquarters on Wednesday, people funneled in and out of the building during their lunch breaks but declined comment on the layoffs. Before the announcement, staffers received memos asking them to report to their desks early Wednesday.

Of the 75 positions, 55 were full-time jobs. Sixty people were let go, while the remaining posts had been vacant. Those cuts are expected to save $11 million to $13 million annually by fiscal 2015, George wrote in his letter.

Employees who received pink slips will get job counseling, extended health benefits and generous severance packages.

“We're keeping up counseling for helping people find jobs, looking for places where they might look for jobs,” George said.

Along with the layoffs, the archdiocese will reduce the number of capital loans and grants it gives parishes, while creating “stricter criteria” for them to qualify for the financial assistance.

A Parish Transformation initiative in the works for at least two years will also try to save money by laying out measures to provide more financial stability, though the letter did not give details.

Those cuts are expected to save an additional $13 million to $15 million annually by fiscal 2015, the letter states.

By next year, the archdiocese will reduce its aid to Catholic schools by $10 million. It plans to give scholarships to children affected by the five school closings so they can attend nearby Catholic schools. Officials said low enrollment was a key factor for closing the schools: St. Gregory the Great High, St. Paul-Our Lady of Vilna Elementary and St. Helena of the Cross Elementary in Chicago, plus St. Bernardine in Forest Park and St. Kieran in Chicago Heights.

Now, Catholic schools will start relying on scholarships for student financial aid instead of grants from the archdiocese to make tuition affordable, Superintendent Sister Mary Paul McCaughey said.

She pointed to a new partnership with the Big Shoulders Fund, a charity supporting urban Catholic schools, that will help families pay for school with scholarships.

McCaughey did not expect tuition at other Catholic schools to immediately rise because grants from the archdiocese have been reduced. About two-thirds of schools already have posted their tuition rates for the upcoming school year, she added.

“Although things are challenged, I think (Chicago) is a Catholic community that's always supported its schools,” McCaughey said. “I think the support will be there.”

Outside of St. Bernardine Elementary in west suburban Forest Park, one of the schools that will close this summer, Maria Maxham said she was devastated when she heard last month that she'd have to send her children, one in second grade and the other in fourth grade, to a different school.

Maxham, who lives in Forest Park, said she is not sure the two will attend another local Catholic school because some lack what she thought was St. Bernardine's strength.

“There is so much diversity at St. Bernardine, and that's part of what makes it so fantastic,” Maxham said. “It was a special place and a second family for us.”

The school, which has been open since 1915, has about 100 students currently enrolled in its preschool-through-eighth-grade classrooms.

Administrators, teachers and parents were notified of the closing in January, when McCaughey led a meeting at the school and explained the large amount of money that the archdiocese needed to reduce from the schools budget, Principal Veronica Skelton Cash said.

One family left the school shortly after hearing the news, she added.

Cash, who joined the school in the fall, said there was much frustration among staff members afterward. Many believed they would have at least a few years to turn things around.

“I could see a lot of things changing for the better at this school,” Cash said. “The culture of the community is changing, and we were getting more and more inquiries about the school. There was momentum going forward.”

Current employees were given guidance on severance and benefits by the archdiocese's human resources officials, Cash said. Teachers without jobs will also be placed on a priority list for future employment with the archdiocese, she said.

“I'm incredibly disheartened,” said Daniel Kwarcinski, who hopes to find a job at another private school after teaching art for seven years at St. Bernardine. “There's a need for a school like this where we are at.”

In Rome, George said the decisions to let people go and reduce aid were not easy. But he reiterated that the archdiocese's financial situation drove the decision.

“We have to balance the budget, especially if it's precarious,” he said. “The growth being very slow means we can no longer ignore the kinds of deficit situations that have been imposed on us. We have to take action.”

Tribune reporter Manya A. Brachear reported from Rome, with Tribune reporters Bridget Doyle and Jennifer Delgado in Chicago.

mbrachear@tribune.com

bdoyle@tribune.com

jmdelgado@tribune.com

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Apple CEO says he feels shareholders' pain, urges long view

CUPERTINO, California (Reuters) - Apple Inc CEO Tim Cook on Wednesday acknowledged widespread disappointment in the company's sagging share price but shared few details about its secretive product pipeline and touched only briefly on a raging debate about how best to reward shareholders.

The world's most valuable technology company headed into its annual shareholders' meeting at its headquarters on shakier ground than it has been accustomed to in years, since the iPhone and iPad helped vault the company to premier investment status.

A declining share price has lent weight to Wall Street's demand that it share more of its $137 billion in cash and securities pile - equivalent to Hungary's Gross Domestic Product, and growing - a debate now spearheaded by outspoken hedge fund manager David Einhorn.

Einhorn was not spotted at the meeting at the company's headquarters at 1 Infinite Loop in Cupertino. Cook repeated that the company's board remained in "very very active" discussions about options for cash sharing, and said he shared investors' dissatisfaction over the stock price.

"I don't like it either. The board doesn't like it. The management team doesn't like it," Cook told investors.

"What we are focused on is the long term. This has always been a secret of Apple."

By focusing on the long term, revenue and profit will follow, he said.

Apple had the "mother of all years" last year with growth, in terms of dollars, outpacing that of Microsoft Corp, Google Inc, Nokia and several other major technology companies combined, Cook said.

Cook -- who was re-elected to the board with 99.1 percent of shareholder votes -- added that the company was working on new product categories, but, as usual, would not elaborate.

Speculation is rife on Wall Street and in Silicon Valley that the iPhone maker is working on a project to revolutionize the television and TV content, or a smart "iWatch."

Apple's stock was down 0.25 percent to $447.86 in afternoon trade. It is now down more than 35 percent from its $702.10 September peak.

SHARE AND SHARE ALIKE

Cook presided over Wednesday's staid affair in his typically even-keeled manner. Despite a slipping share price, dissatisfaction on the Street over its cash allocation and uncertainty over its product pipeline, shareholders re-elected the entire board, and Cook won more than 99 percent of the vote in preliminary results.

Cook got the most votes, followed by Walt Disney Co's Bob Iger, who won re-election with 99 percent of shareholder votes. Former Avon Products Inc CEO Andrea Jung, who stepped down after botching several attempts at restructuring the cosmetics company, received the fewest votes of the group, with 84.6 percent of shareholders voting yea.

Carol Shoaff, an Apple shareholder for about the past five years, said after the meeting that she was confident in Apple's leadership and the company was on the right path.

"I think he's good," she said, referring to Cook. "I don't think Steve Jobs would have left him in charge if he didn't believe in him."

Members of the Service Employees International Union protested outside the headquarters to get Apple to reconsider hiring of securities contractor SIS.

Apple's annual shareholder meetings have seemed more like celebrations in recent years. Since the company came out with its first iPhone in 2007, the company multiplied in market value until it peaked in September.

Then Samsung Electronics and Amazon.com Inc began seriously eroding its market share in 2012, powered by arch-rival Google Inc's Android software. On March 14, Samsung will launch the Galaxy SIV smartphone, the latest iteration of a flagship smartphone that helped it dethrone Apple from the top of the industry.

Institutional investors want Apple to share a greater chunk of its cash and securities pile, a demand growing increasingly strident with the company's stock wallowing at levels untested since the start of 2012.

Einhorn is advocating "iPrefs," preferred stock that will carry a perpetual 4 percent dividend to boost returns while not hampering cash flow.

On Friday, Einhorn won an important legal victory that strengthened his hand. His Greenlight Capital secured an injunction that invalidated shareholder voting on a proposal to scrap Apple's power to issue preferred stock at its discretion.

Apple says this would enhance governance. But the hedge fund manager argued it could complicate efforts to issue preferred securities in the future.

Cook said again on Wednesday that Einhorn's lawsuit - regardless of its efficacy - was a "silly sideshow." The underlying principle of cash distribution was something he and the board took seriously, he added.

The proposal was not put forth on Wednesday but Apple shareholders and representatives from the California Public Employees Retirement System and the Nathan Cummings Foundation spoke in favor of it at the meeting.

CalPers, owner of 2.7 million Apple shares, had supported the so-called Proposal 2. Senior Portfolio Manager Anne Simpson said it was unfortunate the measure could not be put forward.

"We know there is hot debate going on with cash," Simpson told the assembled shareholders. "We are willing and happy to wait."

NEW HQ TO BE DELAYED

Cook, who took over from late company co-founder Steve Jobs in 2011, answered a variety of questions from shareholders, including some on Apple's new headquarters, labor conditions in its factories and product plans.

One shareholder also asked why there was no bathroom in an Apple retail store in Santa Monica, Calif. Cook, acknowledging that it was an important point, said he will look into it.

On the new headquarters, Cook said the company plans to break ground later this year and occupy the facilities in 2016, a delay from the original 2015 target date.

The meeting largely followed the script with no distractions. Shareholders voted down two shareholder proposals, both of which were opposed by Apple's board. One wanted Apple leadership to hold more stock, the other was a proposal to create a board committee on human rights.

(Writing by Edwin Chan; Editing by Lisa Von Ahn, Tim Dobbyn and Dan Grebler)

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Americans try to reach WBC title game at last

SCOTTSDALE, Ariz. (AP) — Ryan Vogelsong has a little running joke that he is going to plunk San Francisco teammate Pablo Sandoval in the World Baseball Classic to keep the Panda from a three-homer game like the one he produced in Game 1 of the World Series last fall.

Sandoval plans to play nice once he pulls on the Venezuela uniform.

"He's my teammate, I don't want to fight," Sandoval said with a smile.

Both know the team to beat: Two-time WBC winner Japan.

Joe Torre is returning to the top step of the dugout to manage the Americans, who have yet to even reach the championship game of this hugely popular international event.

Team USA has plenty of motivation to make up for two poor showings in this tournament. The Americans didn't get out of the second round in 2009, then lost in the semifinals to Japan three years later. Now, they are making plans to reach the semifinals and final at San Francisco's AT&T Park.

"We'll probably be disappointed if we don't make it to San Francisco," said Vogelsong, slated to be the No. 2 starter in the U.S. rotation. "First and foremost, we're focused on getting there."

The Japanese topped Cuba in the inaugural Classic in 2006, then South Korea three years later. Japan is known for its rigorous spring trainings, which typically begin a couple of weeks before the major league clubs and feature all-day workouts with just a short break to eat.

"It's such a dedicated group of players. I go back to going over to Japan as a member of the Mets back in '74 and just noticing and at that time I didn't think necessarily that the Japanese could play at our level, maybe stature-wise," Torre recalled. "Even though their game was clean and disciplined, it just didn't look like they were as good as we were. That's certainly has changed."

Rockies slugger Carlos Gonzalez will play alongside Sandoval for Venezuela. The World Series champion Giants have had to plan carefully this spring to get through the Cactus League with much of their roster headed to the WBC — Marco Scutaro on Venezuela, Angel Pagan and Andres Torres on Puerto Rico, Vogelsong and reliever Jeremy Affeldt on the U.S. team, closer Sergio Romo pitching for Mexico.

"It's my first time representing and I'm really looking forward to doing it," Pagan said. "The first two Classics I couldn't do it because I was either trying to make a team or I was trying to be the everyday player. It fills my heart to go out there and play in front of my countrymen and in front of my family. I did it when I played in New York and Puerto Rico but it's not the same when you're wearing the P.R. jersey. It's going to be a little different, and I'm ready."

And CarGo sure is confident in Venezuela's chances.

"I don't think we need practice — Venezuela doesn't need practice," he said. "Japan, they train together for a long time and get prepared for that. We don't really get prepared for that, we all focus on our teams. 'OK, you've got to go play for your country.' We're all going to be blind, put the uniform on, let's play."

Many players are torn between playing for their country or playing for the club that signs their paycheck — especially those who might be on the bubble of making the roster or earning a starting job.

Gonzalez said the Venezuelans feel tremendous pressure to take part in the Classic, yet he understands why Seattle ace Felix Hernandez has passed after signing a $175 million, seven-year contract earlier this month that made him the highest-paid pitcher in baseball.

"You have to represent your team," Gonzalez said. "You see all the news about King Felix not playing for Venezuela and the whole country changes, they get upset that you're not going to play for your country. They think it's all about the money but, you know what, we've been working since we were 16 years old and we came from Venezuela to represent. Especially King Felix, he's been playing since he was 16 with Seattle. He's a franchise player who was about to sign the biggest contract. It's crazy how people feel bad about it. He has to think about his future, he has to think about his family. I think made the right choice."

The inaugural 2006 Classic featured a pool-play format, while 2009 was double-elimination — and this one will be a combination of both. The first round will be pool play, with the top two teams advancing. The second round is double-elimination, and the top two teams will reach the semifinals.

The Americans will play their round-robin games at the Arizona Diamondbacks' Chase Field in Phoenix.

"I'm not sure that our players weren't excited," Torre said of the previous two WBC tournaments. "The guys who have played this before were excited to get back to it. I think it's still something to get a little used to. Let's admit it, you play the USA team, MLB, even though there are a number of MLB players obviously playing for other countries, it's like putting on your Sunday best, you know, 'We're excited because we have a chance to beat them at their own game' so to speak."

Semifinals will be played March 17-18, with the championship March 19 in the Giants' waterfront ballpark.

That's where Sandoval cleared the fences three times in a Game 1 World Series win against the Tigers.

The guy known as Kung Fu Panda hopes to find his groove again for his country.

"I'm trying to get the Triple Crown," Sandoval said of the World Series, Venezuelan championship and World Baseball Classic.

Even if it does mean he gets hit by Vogelsong along the way.

___

AP Sports Writer Bob Baum contributed to this story.

WATCH FOR:

—Animated crowds so different than the regular MLB supporters, complete with instruments, patriotic chants, face paint and flags. More than 1.5 million fans have attended games in first two WBC tournaments.

—This year's field went from 16 in previous two events to 28 countries that had a chance to qualify. The top 12 nations from the last WBC were already in, then the other four determined from 28 teams through qualifying. The WBC winner will be named world champion for the first time.

—It's now a six-game, modified double-elimination format. The inaugural 2006 Classic featured a pool-play format, while 2009 was double-elimination — and this one will be a combination of both. The first round will be pool play, with the top two teams advancing. The second round is double-elimination, and the top two teams will reach the semifinals.

—Americans on a mission: Team USA has yet to reach the championship game of the first two Classics.

—Players will be subject to drug testing by the World Anti-Doping Agency.

—San Juan, Puerto Rico, will host games for the third time at Hiram Bithorn Stadium, to be played March 7-10.

—Sparkling new Salt River Fields at Talking Stick, the shared spring venue of the Arizona Diamondbacks and Colorado Rockies, will be on display for the world to see. The ballpark hosts Pool D games between the U.S., Italy, Mexico and qualifier Canada.

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Cellar victim Kampusch raped, starved in film of ordeal

VIENNA (Reuters) – A new film based on the story of Austrian kidnap victim Natascha Kampusch shows her being repeatedly raped by the captor who beat and starved her during the eight-and-a-half years that he kept her in a cellar beneath his house.

Kampusch was snatched on her way to school at the age of 10 by Wolfgang Priklopil and held in a windowless cell under his garage near Vienna until she escaped in 2006, causing a sensation in Austria and abroad. Priklopil committed suicide.

Kampusch had always refused to respond to claims that she had had sex with Priklopil, but in a German television interview on her 25th birthday last week said she had decided to reveal the truth because it had leaked out from police files.

The film, “3,096 Days” – based on Kampusch’s autobiography of the same name – soberly portrays her captivity in a windowless cellar less than 6 square metres (65 square feet) in area, often deprived of food for days at a time.

The emaciated Kampusch – who weighed just 38 kg (84 pounds) at one point in 2004 – keeps a diary written on toilet paper concealed in a box.

One entry reads: “At least 60 blows in the face. Ten to 15 nausea-inducing fist blows to the head. One strike with the fist with full weight to my right ear.”

The movie shows occasional moments that approach tenderness, such as when Priklopil presents her with a cake for her 18th birthday or buys her a dress as a gift – but then immediately goes on to chide her for not knowing how to waltz with him.

GREY AREAS

Antonia Campbell-Hughes, who plays the teenaged Kampusch, said she had tried to portray “the strength of someone’s soul, the ability of people to survive… but also the grey areas within a relationship that people don’t necessarily understand.”

The British actress said she had not met Kampusch during the making of the film or since. “It was a very isolated time, it was a bubble of time, and I wanted to keep that very focused,” she told journalists as she arrived for the Vienna premiere.

Kampusch herself attended the premiere, looking composed as she posed for pictures but declining to give interviews.

In an interview with Germany’s Bild Zeitung last week, she said: “Yes, I did recognize myself, although the reality was even worse. But one can’t really show that in the cinema, since it wasn’t supposed to be a horror film.”

The movie, made at the Constantin Film studios in Bavaria, Germany, also stars Amy Pidgeon as the 10-year-old Kampusch and Danish actor Thure Lindhardt as Priklopil.

“I focused mainly on playing the human being because… we have to remember it was a human being. Monsters do not exist, they’re only in cartoons,” Lindhart said.

“It became clear to me that it’s a story about survival, and it’s a story about surviving eight years of hell. If that story can be told then I can also play the bad guy.”

The director was German-American Sherry Hormann, who made her English-language debut with the 2009 move “Desert Flower”, an adaptation of the autobiography of Somali-born model and anti-female circumcision activist Waris Dirie.

“I’m a mother and I wonder at the strength of this child, and it was important for me to tell this story from a different perspective, to tell how this child using her own strength could survive this atrocious martyrdom,” Hormann said.

The Kampusch case was followed two years later by that of Josef Fritzl, an Austrian who held his daughter captive in a cellar for 24 years and fathered seven children with her.

The crimes prompted soul-searching about the Austrian psyche, and questions as to how the authorities and neighbors could have let such crimes go undetected for so long.

The film goes on general release on Thursday.

(Reporting by Georgina Prodhan, Editing by Paul Casciato)

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Medicare paid $5.1B for poor nursing home care

SAN FRANCISCO (AP) — Medicare paid billions in taxpayer dollars to nursing homes nationwide that were not meeting basic requirements to look after their residents, government investigators have found.

The report, released Thursday by the Department of Health and Human Services' inspector general, said Medicare paid about $5.1 billion for patients to stay in skilled nursing facilities that failed to meet federal quality of care rules in 2009, in some cases resulting in dangerous and neglectful conditions.

One out of every three times patients wound up in nursing homes that year, they landed in facilities that failed to follow basic care requirements laid out by the federal agency that administers Medicare, investigators estimated.

By law, nursing homes need to write up care plans specially tailored for each resident, so doctors, nurses, therapists and all other caregivers are on the same page about how to help residents reach the highest possible levels of physical, mental and psychological well-being.

Not only are residents often going without the crucial help they need, but the government could be spending taxpayer money on facilities that could endanger people's health, the report concluded. The findings come as concerns about health care quality and cost are garnering heightened attention as the Obama administration implements the nation's sweeping health care overhaul.

"These findings raise concerns about what Medicare is paying for," the report said.

Investigators estimate that in one out of five stays, patients' health problems weren't addressed in the care plans, falling far short of government directives. For example, one home made no plans to monitor a patient's use of two anti-psychotic drugs and one depression medication, even though the drugs could have serious side effects.

In other cases, residents got therapy they didn't need, which the report said was in the nursing homes' financial interest because they would be reimbursed at a higher rate by Medicare.

In one example, a patient kept getting physical and occupational therapy even though the care plan said all the health goals had been met, the report said.

The Office of Inspector General's report was based on medical records from 190 patient visits to nursing homes in 42 states that lasted at least three weeks, which investigators said gave them a statistically valid sample of Medicare beneficiaries' experiences in skilled nursing facilities.

That sample represents about 1.1 million patient visits to nursing homes nationwide in 2009, the most recent year for which data was available, according to the review.

Overall, the review raises questions about whether the system is allowing homes to get paid for poor quality services that may be harming residents, investigators said, and recommended that the Centers for Medicare & Medicaid Services tie payments to homes' abilities to meet basic care requirements. The report also recommended that the agency strengthen its regulations and ramp up its oversight. The review did not name individual homes, nor did it estimate the number of patients who had been mistreated, but instead looked at the overall number of stays in which problems arose.

In response, the agency agreed that it should consider tying Medicare reimbursements to homes' provision of good care. CMS also said in written comments that it is reviewing its own regulations to improve enforcement at the homes.

"Medicare has made significant changes to the way we pay providers thanks to the health care law, to reward better quality care," Medicare spokesman Brian Cook said in a statement to AP. "We are taking steps to make sure these facilities have the resources to improve the quality of their care, and make sure Medicare is paying for the quality of care that beneficiaries are entitled to."

CMS hires state-level agencies to survey the homes and make sure they are complying with federal law, and can require correction plans, deny payment or end a contract with a home if major deficiencies come to light. The agency also said it would follow up on potential enforcement at the homes featured in the report.

Greg Crist, a Washington-based spokeswoman for the American Health Care Association, which represents the largest share of skilled nursing facilities nationwide, said overall nursing home operators are well regulated and follow federal guidelines but added that he could not fully comment on the report's conclusions without having had the chance to read it.

"Our members begin every treatment with the individual's personal health needs at the forefront. This is a hands-on process, involving doctors and even family members in an effort to enhance the health outcome of the patient," Crist said.

Virginia Fichera, who has relatives in two nursing homes in New York, said she would welcome a greater push for accountability at skilled nursing facilities.

"Once you're in a nursing home, if things don't go right, you're really a prisoner," said Fichera, a retired professor in Sterling, NY. "As a concerned relative, you just want to know the care is good, and if there are problems, why they are happening and when they'll be fixed."

Once residents are ready to go back home or transfer to another facility, federal law also requires that the homes write special plans to make sure patients are safely discharged.

Investigators found the homes didn't always do what was needed to ensure a smooth transition.

In nearly one-third of cases, facilities also did not provide enough information when the patient moved to another setting, the report found.

___

On the Web:

The OIG report: http://1.usa.gov/VaztQm

The Medicare nursing home database: http://www.medicare.gov/NursingHomeCompare/search.aspx?bhcp=1&AspxAutoDetectCookieSupport=1

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Follow Garance Burke on Twitter at —http://twitter.com/garanceburke.

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Colleges, theaters to create new Civil War plays

WASHINGTON (AP) — Four major universities are joining theater companies in Boston, Baltimore, Washington and Atlanta in a project to commission new plays, music and dance compositions about the Civil War and its lasting legacy 150 years later.

The National Civil War Project is being announced Thursday in Washington and will involve programming over the next two years to mark the 150th anniversary of the war between the North and the South. Beyond commissioning new works, organizers plan for university faculty to integrate the arts into their academic programs on campus.

Under the program, Harvard University will partner with the American Repertory Theater in Cambridge, Mass.; the University of Maryland's Clarice Smith Performing Arts Center will join CENTERSTAGE in Baltimore; George Washington University is working with Arena Stage in Washington, and Atlanta's Alliance Theatre will join Emory University.

Each collaboration will evoke unique perspectives on the Civil War in each region.

At Harvard, a new piece called "The Boston Abolitionists" about the abolitionist movement and the trial of a fugitive slave will be performed in May. Separately, Matthew Aucoin, an assistant conductor at the Metropolitan Opera, is using Walt Whitman's poetry about being a medic to develop a new opera.

In Atlanta, Alliance Theatre and Emory will develop a new theatrical production of U.S. Poet Laureate Natasha Trethewey's Pulitzer Prize-winning book "Native Guard," with a workshop planned for 2014. It recounts the story of a black Civil War regiment assigned to guard white Confederate soldiers on Ship Island off Mississippi's Gulf Coast.

Arena Stage Artistic Director Molly Smith, who helped guide the project, said this is a chance to reevaluate the Civil War and consider the issues that still resonate in American life.

"This is an anniversary of what is arguably one of the most important times in American history," she said. "And the same questions behind state rights and civil rights continue to infuse who we are as a country."

In September, the University of Maryland will host a national conference on civil rights and health disparities among minority populations to mark the 50th anniversary of the March on Washington.

Choreographer Liz Lerman, a 2002 MacArthur Foundation "genius" fellow, helped in developing the partnerships between theaters and universities during a semester spent at Harvard. She said artists can help professors animate their scholarship as more traditional lectures move online, and the Civil War is a good subject to connect art and academics.

"It's something about the fact that we're still trying to understand it," Lerman said. "There are enough civil wars still going on in the world, I myself am trying to understand what it must be like."

Lerman is developing a new dance theater piece in Washington called "Healing Wars" to explore the role of women and innovations in healing for amputees from the Civil War through the wars in Iraq and Afghanistan. Characters will migrate between past and present. The piece will feature actor Bill Pullman and eight dancers.

Harvard President Drew Gilpin Faust, a Civil War historian, has been leading the university to integrate the arts with academic pursuits, through theater, exhibits or other art forms.

"Engaging students through art and art-making is one of the ways in which universities prepare young women and men for life in a world that is far better connected and far more complex than at any other point in human history," she wrote in an email about the Civil War project.

At this anniversary of the war, she said it's important to remember how the values of freedom and equality were defined in President Abraham Lincoln's Gettysburg address as the war's purpose.

George Washington University President Steven Knapp said the Civil War transformed American history, culture and industry — even the concept of American democracy by redefining equality. Tackling such a subject between academia and theater could provide a new model for learning, he said.

"It's an experiment," Knapp said, "to see how far we can go in bringing together the strengths of the university and the strengths of the theater company."

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Follow Brett Zongker at https://twitter.com/DCArtBeat

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Groupon drops 24% on weak results, forecast

Groupon Inc., the Chicago-based daily deals website, offered up an earnings disappointment Wednesday after the market closed, and its stock price tumbled about 25 percent in after-hours trading.

The company posted a fourth-quarter net loss of $81.1 million, or 12 cents a share, missing consensus analyst estimates, which called for the company to earn 3 cents a share. Revenue for the quarter came in at $638 million, up 30 percent year-over-year and in line with estimates.

Lower margins associated with its Groupon Goods sales and higher marketing costs — taking a smaller cut from merchants to attract new business — were cited as factors contributing to the quarterly loss.

Andrew Mason, co-founder and chief executive of Groupon, pointed a finger overseas as the primary cause.

"It was continued volatility in our international business that drove the weaker-than-expected profitability in the quarter," Mason said during the earnings call Wednesday. "We still have much work to do to bring our international operations to the same level of those in North America."

The company lost $67.4 million for the year, or 10 cents a share, on revenue of $2.33 billion. Projections for first-quarter revenue between $560 million and $610 million fell below consensus estimates of $655 million. The disappointing earnings and tepid forecast sent Groupon's share price plunging from nearly $6 down to about $4.40 in after-hours trading.

Launched in 2008, Chicago-based Groupon created its own e-commerce niche with heavily discounted daily deals blasted out to subscribers via email. While targeting has become more sophisticated, growth has slowed and with it, investor enthusiasm.

The company has set out to reinvent itself, introducing search-driven deals stockpiled with ongoing offerings, and continuing to build out its own store, Groupon Goods, which sells everything from orthopedic pet beds to diamond tennis bracelets at a discount. Those initiatives have yet to make much of a dent on the bottom line.

Groupon shares hit an intraday low of $2.60 in November but rebounded after Tiger Global Management, a New York-based hedge fund, acquired a 10 percent stake in the company.

That same month, Groupon rolled out its local marketplace in Chicago and New York, a bank of thousands of ongoing deals that the company called an "evolutionary step" toward demand shopping. Customers who search online for everything from Mexican restaurants to Brazilian waxes will see relevant active deals offered by Groupon, hopefully pulling them to the site to fulfill their purchases.

While still a small part of Groupon's sales, it represents a big shift from its familiar push model, where daily deal emails fill inboxes with hit-or-miss offerings, to a pull dynamic where customers come to its sites in search of a variety of products and services.

Mason said Wednesday that the shift will ultimately pay dividends for Groupon and its investors.

"We just believe that the potential of a local marketplace business, where you can fulfill demand instead of shocking people into buy(ing) something they had no intention to buy when they woke up in the morning … it's just a much larger business opportunity," Mason said.

Analysts remain mixed about Groupon's prospects to evolve the business model beyond its core daily deals.

Edward Woo, senior research analyst at Ascendiant Capital Markets, has a "sell" rating and a $2.50 price target on the stock. He remains cautious because of slowing growth in the company's daily deals business, and he is not convinced that Groupon Goods, which accounted for $225 million in fourth-quarter revenue, is such a good idea.

"There's only a couple really big, successful e-commerce companies out there, Amazon being the biggest," Woo said Tuesday. "If you were to place your bets, do you really think that Groupon can take on Amazon? Most people would say no."

While not quite bullish, Evercore Partners analyst Ken Sena sees encouraging signs from Groupon's new searchable local marketplace and improving mobile engagement, upgrading the stock two weeks ago from "conviction sell" to "underweight," with a $5 price target, before the earnings report Wednesday.

"There are a couple of things we're encouraged by as we look at the overall story," Sena said Tuesday. "The fact that traction on mobile seems to be really strong, and growth within (their) local marketplace. I think that's an important overall business model evolution as the company moves from a push-based model to a pull-based model."

Arvind Bhatia, senior research analyst at Sterne Agee, recently upgraded Groupon to a "buy" with a $9 price target, citing the local marketplace initiative as a driver for long-term growth.

"Groupon has become synonymous with discounts," Bhatia said Tuesday. "The initial years were all about sending that email and letting you know there's a hot deal and it's going to expire soon. I don't think it's a bad thing to combine the push email with the pull."

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Kelly easily wins Democratic race to replace Jackson Jr.

Former state Rep. Robin Kelly easily won the special Democratic primary Tuesday night in the race to replace the disgraced Jesse Jackson Jr. in Congress, helped by millions of dollars in pro-gun control ads from New York Mayor Michael Bloomberg's political fund.

A snowstorm and lack of voter interest kept turnout low as Kelly had 52 percent to 25 percent for former U.S. Rep. Debbie Halvorson and 11 percent for Chicago 9th Ward Ald. Anthony Beale with 99 percent of precincts counted.

Kelly will formally take on the winner of the Republican primary in an April 9 special general election in the heavily Democratic district. In the GOP contest, less than 25 votes separated convicted felon Paul McKinley and businessman Eric Wallace.

Kelly framed her win as a victory for gun control forces.

"You sent a message that was heard around our state and across the nation," Kelly told supporters in a Matteson hotel ballroom. "A message that tells the NRA that their days of holding our country hostage are coming to an end.

"To every leader in the fight for gun control ready to work with President (Barack) Obama and Mayor (Rahm) Emanuel to stop this senseless violence, thank you for your leadership and thank you for your courage," she said.

Halvorson told supporters to rally around Kelly as the Democratic nominee. But Halvorson also made it clear she believed her biggest opponent was the mayor of New York, whose anti-gun super political action committee spent more than $2.2 million attacking her previous support from the National Rifle Association while backing Kelly.

"We all know how rough it was for me to have to run an election against someone who spent ($2.2) million against me," Halvorson said at Homewood restaurant. "Every 71/2 minutes there was a commercial."

Bloomberg's Independence USA PAC was the largest campaign interest in the race and dominated the Chicago broadcast TV airwaves compared to a marginal buy by one minor candidate.

Beale also called Bloomberg's influence "the biggest disservice in this race."

"If this is the future of the Democratic Party, then we are all in big trouble," Beale said.

Bloomberg, an Emanuel ally in the fight for tougher gun restrictions, called Kelly's win "an important victory for common sense leadership on gun violence" as well as sign that voters "are demanding change" in a Congress that has refused to enact tougher gun restrictions, fearing the influence of the NRA.

But as much as Bloomberg sought to portray the Kelly win as a victory over the influential NRA, the national organization stayed out of the contest completely while the state rifle association sent out one late mailer for Halvorson.

Be it the TV ads or a late consolidation toward Kelly in the campaign, the former Matteson lawmaker made an impressive showing with Democratic voters in suburban Cook County, where the bulk of the district's vote was located, as well as on the South Side.

Despite the size of the field, Kelly got more than half of the votes cast in the two most populated areas of the district. Halvorson won by large percentages over Kelly in Kankakee County and the district's portion of Will County, but those two areas have very few votes.

The special primary election, by its nature, already had been expected to be a low-turnout affair — an expedited contest with little time for contenders to raise money or mount a traditional campaign.

Adding to the lack of interest was the fact that there were no other contests on the ballot in Chicago and most of the suburban Cook County portion of the district. Few contests were being held in Kankakee County and the portion of Will County within the 2nd District.

Turnout was reported to be around 15 percent in the city and suburban Cook. More than 98 percent of the primary votes cast in Chicago were Democratic, as were 97 percent of those cast in suburban Cook.

On the Republican side, the unofficial vote leader was McKinley, 54, who was arrested 11 times from 2003 to 2007, mostly for protesting, with almost all of the charges dropped. In the 1970s and '80s, McKinley was convicted of six felony counts, serving nearly 20 years in prison for burglaries, armed robberies and aggravated battery. He previously declined to discuss the circumstances of those crimes but has dubbed himself the "ex-offender preventing the next offender" in his campaign.

Records show McKinley also owes $14,147 in federal taxes, which might explain his answer at a forum when asked if he would cut any federal programs. "Certainly," he said. "The IRS."

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Pentagon unveils plan to tap potential of mobile devices

WASHINGTON (Reuters) - The Pentagon unveiled a plan on Tuesday to ultimately enable the Defense Department's 600,000 users of smartphones, computer tablets and other mobile devices to rapidly share classified and protected data using the latest commercial technologies.

The system aims to quickly enable the latest technologies to be securely used by the military while remaining "device agnostic," said Major General Robert Wheeler, a Defense Department deputy chief information officer.

That sets the stage for an intensified struggle for Pentagon customers among BlackBerry devices, Apple's iPhones or iPads, and units using Google's Android platform.

The Defense Department currently has more than 600,000 mobile device users, including 470,000 with BlackBerries, 41,000 who have Apple operating systems, and 8,700 who use Android devices.

The new plan will result in the use of a much wider variety of mobile devices across the military. Currently most devices using Apple and Google platforms are in pilot or test programs, officials said.

Few commercial devices are used for classified communications, whereas the new system aims to bolster security of commercially available devices so they can be used for classified information, they said.

Wheeler said the implementation plan aimed to ensure that mobile devices, wireless infrastructure and mobile applications remain "reliable, secure and flexible enough to keep up with the fast-changing technologies of today."

He said the department has a broad range of mobile device users, from the chairman and planners on the Joint Chiefs of Staff to policymakers and soldiers on the battlefield, all of whom would be affected by the implementation plan.

The military services would decide which devices to buy and provide to users based on need. The system would not initially enable an individual service member to purchase their own mobile devices and use them on the Pentagon's networks, but that is a longer-range goal if security can be assured, officials said.

The plan is a step toward implementing the "mobility strategy" the Pentagon released last June. The strategy aims to use smartphone, tablet and other mobile technologies to improve information sharing and collaboration across the department.

The plan aims to "align the various mobile devices, pilots and initiatives across the department under common objectives to ensure the war fighter benefits from these activities," Teri Takai, the Pentagon's chief information officer, said in a statement.

"This is not simply about embracing the newest technology - it is about keeping the department's workforce relevant in an era when information accessibility and cybersecurity play a critical role in missions," she said.

As part of the implementation plan, the department has asked companies to submit proposals for creating a mobile device management platform and an applications store where users can get the programs they need for their devices.

The mobile device management platform would need a number of security features, such detecting malware and enabling officials to remotely delete data from the device, according to documents outlining the plan.

(Reporting by David Alexander; Editing by Eric Beech)

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