In Filing, Casino Operator Admits Likely Violation of an Antibribery Law

 In its annual regulatory report published by the commission on Friday, the Sands reported that its audit committee and independent accountants had determined that “there were likely violations of the books and records and internal controls provisions” of the Foreign Corrupt Practices Act.

 The disclosure comes amid an investigation by the Securities and Exchange Commission as well as the Department of Justice and the Federal Bureau of Investigation into the company’s business activities in China.

 It is the company’s first public acknowledgment of possible wrongdoing. Ron Reese, a spokesman for the Sands, declined to comment further.

The company’s activities in mainland China, including an attempt to set up a trade center in Beijing and create a sponsored basketball team, as well as tens of millions of dollars in payments the Sands made through a Chinese intermediary, had become a focus of the federal investigation, according to reporting by The New York Times and The Wall Street Journal in August.

 In its filing, the Sands said that it did not believe the findings would have material impact on its financial statements, or that they warranted revisions in its past statements. The company said that it was too early to determine whether the investigation would result in any losses. “The company is cooperating with all investigations,” the statement said.

 The Sands’ activities in China came under the scrutiny of federal investigators after 2010, when Steven C. Jacobs, the former president of the company’s operations in Macau, filed a wrongful-termination lawsuit in which he charged that he had been pressured to exercise improper leverage against government officials. He also accused the company of turning a blind eye toward Chinese organized crime figures operating in its casinos.

 Mr. Adelson began his push into China over a decade ago, after the authorities began offering a limited number of gambling licenses in Macau, a semiautonomous archipelago in the Pearl River Delta that is the only place in the country where casino gambling is legal.

 But as with many lucrative business spheres in China, the gambling industry on Macau is laced with corruption. Companies must rely on the good will of Chinese officials to secure licenses and contracts. Officials control even the flow of visitors, many of whom come on government-run junkets from the mainland.

 As he maneuvered to enter Macau’s gambling market, Mr. Adelson, who is well known in the United States for his financial and political clout, became enmeshed in often intertwining political and business dealings. At one point he reportedly intervened on behalf of the Chinese government to help stall a House resolution condemning the country’s bid for the 2008 Summer Olympics on the basis of its human rights record.

 In 2004, he opened his first casino there, the Sands Macau, the enclave’s first foreign owned gambling establishment. This was followed by his $2.4 billion Venetian in 2007.

 Some Sands subsidiaries have also come under investigation by Chinese authorities for violations that included using money for business purposes not reported to the authorities, resulting in fines of over a million dollars.

 Success in Macau has made Mr. Adelson, 78, one of the richest people in the world. He and his wife, Miriam, own 53.2 percent of Las Vegas Sands, the world’s biggest casino company by market value. Last year, Forbes estimated his fortune at $24.9 billion.

 Mr. Adelson became the biggest single donor in political history during the 2012 presidential election, giving more than $60 million to eight Republican candidates, including Newt Gingrich and Mitt Romney, through “super PACs.” He presides over a global empire of casinos, hotels and convention centers.

Michael Luo and Thomas Gaffney contributed reporting.

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Economix Blog: Bernanke Defends Stimulus as Necessary and Effective

The Federal Reserve’s chairman, Ben S. Bernanke, picked an unusual time to offer his most recent defense of the Fed’s campaign to stimulate the economy: 7 p.m. on a Friday night in San Francisco, 10 p.m. back home on the East Coast.

The basic message was the same as Mr. Bernanke delivered to Congress earlier this week: The Fed regards its current efforts as necessary and effective, and the risks, while real, are under control.

“Commentators have raised two broad concerns surrounding the outlook for long-term rates,” Mr. Bernanke told a conference at the Federal Reserve Bank of San Francisco. “To oversimplify, the first risk is that rates will remain low, and the second is that they will not.”

If rates remain low, it may drive investors to take excessive risks. If rates jump, investors could lose money – not least the Fed.

Regarding the first possibility, Mr. Bernanke said that the Fed was keeping a careful eye on financial markets. But he noted that rates were low in large part because the economy was weak, and that keeping rates low was the best way to encourage stronger growth. “Premature rate increases would carry a high risk of short-circuiting the recovery, possibly leading — ironically enough — to an even longer period of low long- term rates,” he said.

At the other extreme, Mr. Bernanke said the Fed could “mitigate” any jump in rates by prolonging its efforts to hold rates down, for example by keeping some of its investments in Treasury and mortgage-backed securities.

Three more highlights from the question-and-answer session after the speech.

1. Mr. Bernanke, asked about the outlook for the Washington Nationals, responded by accurately quoting the “Las Vegas odds” of a World Series appearance: 8/1.

2. Although the decision may be made under a future chairman, Mr. Bernanke said the Fed should continue to offer “forward guidance” — predicting its policies — even after it concludes its long effort to revive the economy.

“Providing information about the future path of policy could be useful, probably would be useful, under even normal circumstances,” he said in response to a question. “I think we need to keep providing information.”

3. Not surprisingly, Mr. Bernanke often is asked to reflect on the financial crisis. He offered something a little different than his normal response on Friday night.

“In many ways, in retrospect, the crisis was a normal crisis,” he said. “It’s just that the intuitional framework in which it occurred was much more complex.”

In other words, there was a panic, and a run, and a collapse – but rather than a run on bank deposits, the run was in the money markets. Improving the stability of those markets is something regulators have yet to accomplish.

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F-35 Jets Returned to Service by Pentagon

The Pentagon lifted its grounding of the new F-35 jet fighter on Thursday after concluding that a turbine blade had cracked on a single plane after it was overused in test operations.

The office that runs the program said no other cracks were found in inspections of the other engines made so far, and no engine redesign was needed.

It said the engine in which the blade cracked was in a plane that “had been operated at extreme parameters in its mission to expand the F-35 flight envelope.”

The program office added that “prolonged exposure to high levels of heat and other operational stressors on this specific engine were determined to be the cause of the crack.”

All flights were suspended last week for the 64 planes built so far once the crack, which stretched for six-tenths of an inch, was found during a routine inspection.

Pratt & Whitney, which makes the engines, investigated the problem with military experts. The company, a unit of United Technologies, said on Wednesday that the crack occurred after that engine was operated more than four times longer in a high-temperature flight environment than the engines would in normal use.

The F-35, a supersonic jet meant to evade enemy radar, is the Pentagon’s most expensive program and has been delayed by various technical problems. The program could cost $396 billion if the Pentagon builds 2,456 jets by the late 2030s.

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European Union Moves Toward Bonus Cap for Bankers

BRUSSELS — The European Union moved a step closer early on Thursday to imposing strict curbs on bonus pay for bankers, which has been blamed by many politicians for inciting the risk-taking behavior that triggered the recent financial crisis.

A provisional agreement struck between the European Parliament, the European Commission and national representatives could mean that the coveted bonuses many bankers receive are capped at the level of their annual salaries starting next year.

The agreement, as it stands, was seen as some as a blow to Britain, which partly relies on generous remuneration packages to ensure that the City of London remains the biggest financial center in Europe and the overseas headquarters of banks from around the globe.

’We need to make sure that regulation put in place in Brussels is flexible enough to allow those banks to continue competing and succeeding while being located in the U.K.,” David Cameron, the British prime minister, said on a visit to Riga, the capital of Latvia. A majority of E.U. states still must give their final approval for the legislation to go into force and there are expected to be more discussions on the rules at the European Parliament and among governments.

The goal of the bonus cap proposal is to balance many different interests, including “the desire to limit bankers pay while maintaining a competitive European banking sector,” Michael Noonan, the finance minister of Ireland, which holds the rotating E.U. presidency, said in a statement after the talked ended.

Under the proposal, the bonus rules would also apply to bankers employed by E.U. banks but working outside the bloc, for example in New York. E.U. authorities are drafting separate rules that could restrict remuneration at private equity firms and hedge funds.

Mr. Noonan said he would present the plan at a meeting of finance ministers next week.

Alex Beidas, a lawyer with Linklaters, a global legal and consulting firm based in London, warned that the legislation represented “a major disadvantage in the global market” for banks and said there was “a real danger that this will result in bankers moving to the U.S. and Asia.” 

The rules were “also likely to lead to an increase in salaries which is undesirable as banks are trying to minimize their fixed costs,” she said.

Amid concerns that capping bonuses could mean bankers begin to migrate to banks in more economically dynamic locations, lawmakers emphasized that the proposal would include provisions for monitoring such side effects and, if necessary, allow leeway for remedies.  

“If the bonus cap is shown to cause bankers to begin relocating outside the E.U., then we will have the ability to swiftly look again at the provisions in place through an early review,” said Vicky Ford, a member of the European Conservatives and Reformists group from Britain.

Political leaders who hailed the preliminary deal included Martin Schulz, the president of the European Parliament and a German member of the Alliance of Socialists and Democrats.

"The cap on bonuses is a groundbreaking measure that in my view will make the economic system fairer and safer," Mr. Schulz said in a statement. "Exuberant bonuses often provided a wrong incentive for financial markets, encouraging risky behavior and short-term, purely speculative investment," he said.

An E.U. diplomat stressed that a significant amount of technical work still needed to be done before the rules were finalized by governments.

The diplomat, who spoke on customary condition of anonymity, said the rules would contain a review clause requiring authorities to assess whether the rules were having damaging effects on the banking sector. The envoy said no date was fixed for the review but that could be finalized during discussions over coming weeks.

The proposal would also allow higher bonuses if a sufficient number of shareholders agreed.

It is part of a set of laws requiring higher capital requirements for banks, called the Basel III rules, which the E.U. officials also approved early Thursday.

Mr. Noonan said the Basel III package would “make sure that banks in the future have enough capital, both in terms of quality and quantity, to withstand shocks” and that “will ensure that taxpayers across Europe are protected into the future.”

David Jolly contributed reporting from Paris.

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Media Decoder Blog: SFX Entertainment Buys Electronic Dance Music Site

SFX Entertainment, the company led by the media executive Robert F. X. Sillerman, has agreed to buy the music download site Beatport, part of the company’s plan to build a $1 billion empire centered on the electronic dance music craze.

Mr. Sillerman declined on Tuesday to reveal the price. But two people with direct knowledge of the transaction, who were not authorized to speak about it, said it was for a little more than $50 million.

Beatport, founded in Denver in 2004, has become the pre-eminent download store for electronic dance music, or E.D.M., with a catalog of more than one million tracks, many of them exclusive to the service. It says it has nearly 40 million users, and while the company does not disclose sales numbers, it is said to be profitable.

The site has also become an all-purpose online destination for dance music, with features like a news feed, remix contests and D.J. profiles. Those features, and its reach, could help in Mr. Sillerman’s plan to unite the disparate dance audience through media.

“Beatport gives us direct contact with the D.J.’s and lets us see what’s popular and what’s not,” Mr. Sillerman said in an interview. “Most important, it gives us a massive platform for everything related to E.D.M.”

Since the company was revived last year, SFX has focused mostly on live events, with the promoters Disco Donnie Presents and Life in Color; recently it also invested in a string of nightclubs in Miami and formed a joint venture with ID&T, the European company behind festivals like Sensation, to put on its events in North America.

In the 1990s, Mr. Sillerman spent $1.2 billion creating a nationwide network of concert promoters under the name SFX, which he sold to Clear Channel Entertainment in 2000 for $4.4 billion; those promoters are now the basis of Live Nation’s concert division.

Matthew Adell, Beatport’s chief executive, said that being part of SFX could help the company extend its business into live events, and also into countries where the dance genre is exploding, like India and Brazil.

“We already are by far the largest online destination of qualified fans and talent in the market,” Mr. Adell said, “and we can continue to grow that.”

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DealBook: Confirmation Hearing for Mary Jo White Said to Be Scheduled for March

Mary Jo White appears poised to face a Senate confirmation hearing next month, a crucial step for the former federal prosecutor on her path to becoming the top Wall Street regulator.

Ms. White, whose nomination to lead the Securities and Exchange Commission has lingered for over a month, plans to testify in March before the Senate Banking Committee, three Congressional officials briefed on the matter said on Monday. The committee has not set a firm date for the confirmation hearing, the officials said, though lawmakers have tentatively scheduled her to appear the week of March 11.

At the hearing, one official said, Ms. White will most likely join Richard Cordray, who is in line to become director of the Consumer Financial Protection Bureau. In January, when the White House nominated Ms. White to the S.E.C. spot, it reappointed Mr. Cordray to a position he has held for the last year under a temporary recess appointment.

The Senate last year declined to confirm him in the face of Republican and Wall Street opposition to the newly created consumer bureau. Republicans are likely to voice similar skepticism at the hearing next month.

While some officials have quietly expressed concerns about Ms. White’s role as a Wall Street defense lawyer, her nomination is not expected to face major complications. An S.E.C. spokesman did not immediately respond to a request for comment.

The timetable laid out on Monday offers Ms. White additional weeks to prepare. Over the last couple of weeks, she has received multiple briefings from agency staff members about new securities rules and the structure of the stock market, an official said. The briefings will in part prepare her for the confirmation hearing, which is expected to cover a broad scope of topics.

While Ms. White is a skilled litigator, she lacks experience in financial rule-writing and regulatory minutiae, a potential stumbling block for her nomination. Lawmakers also expect to raise questions about her movements through the revolving door that bridges government service and private practice. Some Democrats, a person briefed on the matter said, will question whether she is cozy with Wall Street.

In private practice, Ms. White defended some of Wall Street’s biggest names, including Kenneth D. Lewis, a former chief of Bank of America. As the head of litigation at Debevoise & Plimpton, she also represented JPMorgan Chase and the board of Morgan Stanley. Her husband, John W. White, is co-chairman of the corporate governance practice at Cravath, Swaine & Moore, where he represents many of the companies that the S.E.C. regulates.

(Ms. White has agreed to recuse herself from many matters that involve former clients, while her husband has agreed to convert his partnership at Cravath from equity to nonequity status.)

Despite some reservations, she is expected to receive broad support on Capitol Hill. When President Obama nominated her last month, Senator Charles E. Schumer of New York was one of several Democrats to praise her prosecutorial prowess, calling her “tough as nails” during stints as a federal prosecutor in Brooklyn and as the first female United States attorney in Manhattan.

While she handled some white-collar and securities cases, her specialty was terrorism and organized crime. As a federal prosecutor in New York City for more than a decade, she helped oversee the prosecution of the crime figure John Gotti and directed the case against those responsible for the 1993 World Trade Center bombing. She also supervised the original investigation into Osama bin Laden and Al Qaeda.

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Haruhiko Kuroda Expected to Be Named Head of Bank of Japan

TOKYO — A financial policy expert and harsh critic of the Bank of Japan’s efforts to combat deflation is set to be the government’s choice to take over the nation’s central bank.

Toru Hanai/Reuters

Haruhiko Kuroda is a harsh critic of the Bank of Japan’s track record on deflation.

The official, Haruhiko Kuroda, a veteran of global financial circles and current head of the Asian Development Bank, will be nominated as the bank’s governor to take over next month, according to a ruling party lawmaker with knowledge of those plans.

Prime Minister Shinzo Abe has instructed ruling party officials to start negotiating with opposition parties to clear the way for Mr. Kuroda’s appointment, which must be approved by a divided parliament, the lawmaker said.

“This is a critical time for Japan’s economy, and we must avoid, at all costs, a failure to gain parliamentary approval for this appointment,” NHK, the public broadcaster, quoted Mr. Abe as telling ruling party executives Monday morning.

With Mr. Kuroda at its helm, the bank could take much bolder steps to kick-start economic growth. Mr. Kuroda has publicly criticized the Bank of Japan for not going far enough to fight deflation, and has urged the bank to adopt inflation targets and to expand an asset-buying program to pump more cash into the Japanese economy.

Mr. Kuroda’s global experience — as vice minister for international affairs at Japan’s powerful Finance Ministry from 1999 to 2003, and as president of the Manila-based Asian Development Bank starting in 2005 — could also help Tokyo navigate foreign criticism that its monetary policies are intended to weaken the yen to give Japanese exporters a competitive edge.

The yen has weakened by over 10 percent in the last three months as Mr. Abe laid out his monetary agenda, pushing the outgoing central bank governor, Masaaki Shirakawa, to start taking a more aggressive monetary stance. But Mr. Abe had indicated that a change at the bank’s top ranks was needed to break with the bank’s cautious past. On Monday, the yen fell to a 33-month low.

Kikuo Iwata, a professor at Gakushuin University in Tokyo and another vocal critic of the central bank, is set to be tapped for one of its two deputy governor spots, according to the lawmaker. Mr. Iwata is the author of several books, including “Stop Deflation, Now” and “Is the Bank of Japan Really Trustworthy?”

Mr. Kuroda beat out a fellow former senior Finance Ministry official, Toshiro Muto, who had strong backing among both bureaucrats and local politicians but lacks the top-level global contacts. Mr. Muto was also viewed as being more cautious than Mr. Kuroda on monetary policy.

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Major Banks Aid in Payday Loans Banned by States

Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.

While the banks, which include giants like JPMorgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals.

“Without the assistance of the banks in processing and sending electronic funds, these lenders simply couldn’t operate,” said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project, which works with community groups in New York.

The banking industry says it is simply serving customers who have authorized the lenders to withdraw money from their accounts. “The industry is not in a position to monitor customer accounts to see where their payments are going,” said Virginia O’Neill, senior counsel with the American Bankers Association.

But state and federal officials are taking aim at the banks’ role at a time when authorities are increasing their efforts to clamp down on payday lending and its practice of providing quick money to borrowers who need cash.

The Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau are examining banks’ roles in the online loans, according to several people with direct knowledge of the matter. Benjamin M. Lawsky, who heads New York State’s Department of Financial Services, is investigating how banks enable the online lenders to skirt New York law and make loans to residents of the state, where interest rates are capped at 25 percent.

For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percent of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations limiting fees on debit and credit cards have cost banks billions of dollars.

Some state and federal authorities say the banks’ role in enabling the lenders has frustrated government efforts to shield people from predatory loans — an issue that gained urgency after reckless mortgage lending helped precipitate the 2008 financial crisis.

Lawmakers, led by Senator Jeff Merkley, Democrat of Oregon, introduced a bill in July aimed at reining in the lenders, in part, by forcing them to abide by the laws of the state where the borrower lives, rather than where the lender is. The legislation, pending in Congress, would also allow borrowers to cancel automatic withdrawals more easily. “Technology has taken a lot of these scams online, and it’s time to crack down,” Mr. Merkley said in a statement when the bill was introduced.

While the loans are simple to obtain — some online lenders promise approval in minutes with no credit check — they are tough to get rid of. Customers who want to repay their loan in full typically must contact the online lender at least three days before the next withdrawal. Otherwise, the lender automatically renews the loans at least monthly and withdraws only the interest owed. Under federal law, customers are allowed to stop authorized withdrawals from their account. Still, some borrowers say their banks do not heed requests to stop the loans.

Ivy Brodsky, 37, thought she had figured out a way to stop six payday lenders from taking money from her account when she visited her Chase branch in Brighton Beach in Brooklyn in March to close it. But Chase kept the account open and between April and May, the six Internet lenders tried to withdraw money from Ms. Brodsky’s account 55 times, according to bank records reviewed by The New York Times. Chase charged her $1,523 in fees — a combination of 44 insufficient fund fees, extended overdraft fees and service fees.

For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support income. She said she applied for a $400 loan from Loanshoponline.com and a $700 loan from Advancemetoday.com in 2011. The loans, with annual interest rates of 730 percent and 584 percent respectively, skirt New York law.

Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase charged her $812 in fees and deducted over $600 from her child-support payments to cover them.

“I don’t understand why my own bank just wouldn’t listen to me,” Ms. Baptiste said, adding that Chase ultimately closed her account last January, three months after she asked.

A spokeswoman for Bank of America said the bank always honored requests to stop automatic withdrawals. Wells Fargo declined to comment. Kristin Lemkau, a spokeswoman for Chase, said: “We are working with the customers to resolve these cases.” Online lenders say they work to abide by state laws.

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Many States Say Cuts Would Burden Fragile Recovery

States are increasingly alarmed that they could become collateral damage in Washington’s latest fiscal battle, fearing that the impasse could saddle them with across-the-board spending cuts that threaten to slow their fragile recoveries or thrust them back into recession.

Some states, like Maryland and Virginia, are vulnerable because their economies are heavily dependent on federal workers, federal contracts and military spending, which will face steep reductions if Congress allows the automatic cuts, known as sequestration, to begin next Friday. Others, including Illinois and South Dakota, are at risk because of their reliance on the types of federal grants that are scheduled to be cut. And many states simply fear that a heavy dose of federal austerity could weaken their economies, costing them jobs and much-needed tax revenue.

So as state officials begin to draw up their budgets for next year, some say that the biggest risk they see is not the weak housing market or the troubled European economy but the federal government. While the threat of big federal cuts to states has become something of a semiannual occurrence in recent years, state officials said in interviews that they fear that this time the federal government might not be crying wolf — and their hopes are dimming that a deal will be struck in Washington in time to avert the cuts.

The impact would be widespread as the cuts ripple across the nation over the next year.

Texas expects to see its education aid slashed hundreds of millions of dollars, which could force local school districts to fire teachers, if the cuts are not averted. Michigan officials say they are in no position to replace the lost federal dollars with state dollars, but worry about cuts to federal programs like the one that helps people heat their homes. Maryland is bracing not only for a blow to its economy, which depends on federal workers and contractors and the many private businesses that support them, but also for cuts in federal aid for schools, Head Start programs, a nutrition program for pregnant women, mothers and children, and job training programs, among others.

Gov. Bob McDonnell of Virginia, a Republican, warned in a letter to President Obama on Monday that the automatic spending cuts would have a “potentially devastating impact” and could force Virginia and other states into a recession, noting that the planned cuts to military spending would be especially damaging to areas like Hampton Roads that have a big Navy presence. And he noted that the whole idea of the proposed cuts was that they were supposed to be so unpalatable that they would force officials in Washington to come up with a compromise.

“As we all know, the defense, and other, cuts in the sequester were designed to be a hammer, not a real policy,” Mr. McDonnell wrote. “Unfortunately, inaction by you and Congress now leaves states and localities to adjust to the looming threat of this haphazard idea.”

The looming cuts come just as many states feel they are turning the corner after the prolonged slump caused by the recession. Gov. Martin O’Malley of Maryland, a Democrat, said he was moving to increase the state’s cash reserves and rainy day funds as a hedge against federal cuts.

“I’d rather be spending those dollars on things that improve our business climate, that accelerate our recovery, that get more people back to work, or on needed infrastructure — transportation, roads, bridges and the like,” he said, adding that Maryland has eliminated 5,600 positions in recent years and that its government was smaller, on a per capita basis, than it had been in four decades. “But I can’t do that. I can’t responsibly do that as long as I have this hara-kiri Congress threatening to drive a long knife through our recovery.”

Federal spending on salaries, wages and procurement makes up close to 20 percent of the economies of Maryland and Virginia, according to an analysis by the Pew Center on the States.

But states are in a delicate position. While they fear the impact of the automatic cuts, they also fear that any deal to avert them might be even worse for their bottom lines. That is because many of the planned cuts would go to military spending and not just domestic programs, and some of the most important federal programs for states, including Medicaid and federal highway funds, would be exempt from the cuts.

States will see a reduction of $5.8 billion this year in the federal grant programs subject to the automatic cuts, according to an analysis by Federal Funds Information for States, a group created by the National Governors Association and the National Conference of State Legislatures that tracks the impact of federal actions on states. California, New York and Texas stand to lose the most money from the automatic cuts, and Puerto Rico, which is already facing serious fiscal distress, is threatened with the loss of more than $126 million in federal grant money, the analysis found.

Even with the automatic cuts, the analysis found, states are still expected to get more federal aid over all this year than they did last year, because of growth in some of the biggest programs that are exempt from the cuts, including Medicaid.

But the cuts still pose a real risk to states, officials said. State budget officials from around the country held a conference call last week to discuss the threatened cuts. “In almost every case the folks at the state level, the budget offices, are pretty much telling the agencies and departments that they’re not going to backfill — they’re not going to make up for the budget cuts,” said Scott D. Pattison, the executive director of the National Association of State Budget Officers, which arranged the call. “They don’t have enough state funds to make up for federal cuts.”

The cuts would not hit all states equally, the Pew Center on the States found. While the federal grants subject to the cuts make up more than 10 percent of South Dakota’s revenue, it found, they make up less than 5 percent of Delaware’s revenue.

Many state officials find themselves frustrated year after year by the uncertainty of what they can expect from Washington, which provides states with roughly a third of their revenues. There were threats of cuts when Congress balked at raising the debt limit in 2011, when a so-called super-committee tried and failed to reach a budget deal, and late last year when the nation faced the “fiscal cliff.”

John E. Nixon, the director of Michigan’s budget office, said that all the uncertainty made the state’s planning more difficult. “If it’s going to happen,” he said, “at some point we need to rip off the Band-Aid.”

Fernanda Santos contributed reporting.

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Sign of a Comeback: U.S. Carmakers Are Hiring

Tony Dejak/Associated Press

Joseph R. Hinrichs, head of Ford's Americas region, with a two-liter EcoBoost engine at the Cleveland plant.

DETROIT — A few years ago, American automakers cut tens of thousands of jobs and shut dozens of factories simply to survive.

But since the recession ended and General Motors and Chrysler began to recover with the help of hefty government bailouts and bankruptcy filings, all three Detroit car companies including Ford Motor Company have achieved one of the unlikeliest comebacks among industries devastated during the financial crisis.

Now steadily rising auto sales and two-tier wage concessions from labor have spurred a wave of new manufacturing investments and hiring by the three Detroit automakers in the United States. The latest development occurred on Thursday, when Ford said it was adding 450 jobs and expanding what had been a beleaguered engine plant in Ohio to feed the growing demand for more fuel-efficient cars and S.U.V.’s in the American market.

Ford, the nation’s second-largest automaker after G.M., said it would spend $200 million to renovate its Cleveland engine plant to produce small, turbocharged engines used in its top-selling models. Ford plans to centralize production of its two-liter EcoBoost engine — used in popular models like the Fusion sedan and Explorer S.U.V. — at the Cleveland facility by the end of next year.

Its move to expand production in the United States is yet another tangible sign of recovery among the Detroit auto companies. Industrywide sales in the United States are expected to top 15 million vehicles this year after sinking beneath 11 million in 2009.

Last month, G.M. announced plans to invest $600 million in its assembly plant in Kansas City, Kan., one of the company’s oldest factories in the country. And Chrysler, the smallest of the Detroit car companies, is adding a third shift of workers to its Jeep plant in Detroit.

The biggest factor in the market’s revival has been the need by consumers to replace aging, gas-guzzling models. “Pent-up demand and widespread access to credit are keeping up the sales momentum,” said Jessica Caldwell, an analyst with the auto research site Edmunds.com.

And Joseph R. Hinrichs, the head of Ford’s Americas region, explained in an interview that the company’s Ohio revival plan was “all based on increased demand.”

“We’re putting the capacity here because that’s where we need it most,” he said.

Yet even though Ford is enjoying a resurgence in the United States, it is racing to reduce costs in its troubled European division. The workers in Spain who were building the small EcoBoost engines that have been shipped to America will be moved to an assembly plant that is taking on work from a plant to be closed in Belgium.

While Ford survived the industry’s financial crisis without government help, it still cut thousands of jobs and shuttered several factories to reduce costs and bring production more in line with shrinking sales.

But now, the burst of showroom business has prompted automakers to increase output at remaining plants. In Ford’s case, the company added about 8,000 salaried and hourly jobs last year, and has said it plans to hire about 2,200 white-collar workers in 2013. Ford is also moving some vehicle production from Mexico to a Michigan plant, where it will add 1,200 jobs.

The investment in Cleveland is indicative of how Ford and other carmakers have trimmed domestic labor costs and improved productivity since the recession. Just a few years ago, the company was forced to consolidate two engine plants into one in northern Ohio, and close a major component operation. “No question we have been through a lot in northern Ohio,” Mr. Hinrichs said. “But now our North American business is very competitive with the best in the world.”

Mr. Hinrichs said that a new local agreement with the United Automobile Workers union in Cleveland paved the way for the expansion. Currently the plant employs about 1,300 workers.

The Detroit companies are also benefiting from their ability to hire lower-paid, entry-level workers as part of their national contract with the U.A.W. Many of the 450 new workers at the Cleveland plant will start at $16 an hour, compared to about $28 for veteran union members, and some of the new engine plant workers could include employees from other Ohio plants.

“With our competitive labor agreements, we can bring business back to the U.S. from Spain and Mexico,” Mr. Hinrichs said.

Employment still falls far short of levels in the 1990s, when cheap gas and the popularity of S.U.V.’s led to big profits in Detroit.

The auto manufacturing sector employed 1.1 million people in the United States as recently as 1999, according to a recent study by the Center for Automotive Research in Ann Arbor, Mich. About one-third of those jobs were in the final assembly of vehicles, and the balance in the production of auto parts.

Employment dropped as low as 560,000 in 2009. Since then, about 90,000 jobs have been added, the report said.

This article has been revised to reflect the following correction:

Correction: February 21, 2013

Because of an editing error, an earlier version of this article gave a false impression of sales among the Detroit auto companies. Overall auto sales in the United States are expected to top 15 million this year, not sales among the Detroit automakers.

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The Trade: A Revolving Door in Washington With Spin, but Less Visibility

Obsess all you’d like about President Obama’s nomination of Mary Jo White to head the Securities and Exchange Commission. Who heads the agency is vital, but important fights in Washington are happening in quiet rooms, away from the media gaze.

After a widely praised stint as a tough United States attorney, Ms. White spent the last decade serving so many large banks and investment houses that by the time she finishes recusing herself from regulatory matters, she may be down to overseeing First Wauwatosa Securities.

Ms. White maintains she can run the S.E.C. without fear or favor. But the focus shouldn’t be limited to whether she can be effective. For lobbyists, the real targets are regulators and staff members for lawmakers.

Ms. White, at least, will have to sit for Congressional testimony, answer occasional questions from the media and fill out disclosure forms. Staff members, however, work in untroubled anonymity for the most part. So, while everyone knows there’s a revolving door — so naïve to even bring it up! — few realize just how fluidly it spins.

Take what happened late last month as Washington geared up for more fights about the taxing, spending and the deficit. The Senate majority leader, Harry Reid, Democrat of Nevada, decided to bolster his staff’s expertise on taxes.

So on Jan. 25, Mr. Reid’s office announced that he had appointed Cathy Koch as chief adviser to the majority leader for tax and economic policy. The news release lists Ms. Koch’s admirable and formidable experience in the public sector. “Prior to joining Senator Reid’s office,” the release says, “Koch served as tax chief at the Senate Finance Committee.”

It’s funny, though. The notice left something out. Because immediately before joining Mr. Reid’s office, Ms. Koch wasn’t in government. She was working for a large corporation.

Not just any corporation, but quite possibly the most influential company in America, and one that arguably stands to lose the most if there were any serious tax reform that closed corporate loopholes. Ms. Koch arrives at the senator’s office by way of General Electric.

Yes, General Electric, the company that paid almost no taxes in 2010. Just as the tax reform debate is heating up, Mr. Reid has put in place a person who is extraordinarily positioned to torpedo any tax reform that might draw a dollar out of G.E. — and, by extension, any big corporation.

Omitting her last job from the announcement must have merely been an oversight. By the way, no rules prevent Ms. Koch from meeting with G.E. or working on issues that would affect the company.

The senator’s office, which declined to make Ms. Koch available for an interview, says that she will support the majority leader in his efforts to close corporate tax loopholes. His office said in a statement that the senator considered her knowledge of the private sector to be an asset and that she complied with “all relevant Senate ethics rules and disclosures.”

In a statement, the senator’s spokesman said, “The impulse in some quarters to reflexively cast suspicion on private sector experience is part of what makes qualified individuals reluctant to enter public service.”

Over in bank regulatory land, meanwhile, January was playing out like a Beltway remake of “Freaky Friday.”

Julie Williams, chief counsel for the Office of the Comptroller of the Currency and a major friend of the banks for years, had been recently shown the door by Thomas J. Curry, the new head of the regulator. Banking reform advocates took that to be an omen that a new era might be dawning at the agency, which has often been a handmaiden to large banks.

Ms. Williams, of course, landed on her feet. She’s now at the Promontory Financial Group, a classic Washington creature that is a private sector mirror image of a regulatory body. Promontory is the Shadow O.C.C. The firm was founded by a former head of the agency, Eugene A. Ludwig, and if you were to walk down the halls swinging a copy of the Volcker Rule, you would be sure to hit a former O.C.C. official. Promontory says only about 5 percent of its employees come from the O.C.C., but concedes that more than a quarter are former regulators.

Promontory, as the firm explains on its Web site, “excels at helping financial companies grapple with and resolve critical issues, particularly those with a regulatory dimension.” But it plays for the other team, too, by helping the O.C.C. put into effect regulatory reviews. The dreary normality of this is a Washington scandal in the Michael Kinsley sense: a perfectly legal one.

Promontory, which demurred on a request to talk with Ms. Williams, has a different view. The firm doesn’t lobby or help in litigation. It argues that after banks stop fighting regulators and lobbying against rules, then they come to Promontory to figure out how to fix their problems and comply.

“We are known in the industry as the tough-love doctors,” said Mr. Ludwig, the chief executive of Promontory. “I am deeply committed to financial stability, and the only way to have stability is to do the right thing in both the spirit and letter of the law.”

Hmm. Remember the Independent Foreclosure Review, the program that the O.C.C. and other federal bank regulators trumpeted as the largest effort to compensate victims of big banks’ foreclosure abuses? As my colleague at ProPublica, Paul Kiel, detailed last year, that review involved consultants like Promontory essentially letting banks decide who was victimized. How well did that work? So well that the regulators had to scuttle the program because it hadn’t given one red cent to homeowners but somehow, I don’t know how, managed to send more than $1.5 billion to consultants — including Promontory.

Promontory maintains that it complied with the conditions set out by the O.C.C. And the review was replaced by a settlement, which the regulators say will compensate victims — though the average payout is small beer.

Who, exactly, makes the rules at the O.C.C.? I mentioned “Freaky Friday.” That’s because at the agency, Ms. Williams is being replaced by Amy Friend. And where is Ms. Friend coming from? Wait for it … Promontory. In March, maybe they’ll do the switcheroo back.

The O.C.C. didn’t make Ms. Friend available but said that her “talent, integrity and commitment to public service are beyond reproach” and would be subject to the rule requiring her to recuse herself for a year on matters specifically relating to her former employer.

I spoke with people who said she was a smart and dedicated public servant, an expert on the Dodd-Frank Act who can help complete the scandalously long list of unfinished rules and expedite its adoption.

“Amy Friend is absolutely rowing in the right direction,” said a Senate staff member who worked on efforts to push for stronger financial regulation.

Let’s hope so.

But people also described Ms. Friend as pragmatic. In Washington, that’s the ultimate compliment. Sadly, that has come to mean someone who seeks compromise and never pushes for an overhaul when a quarter-measure will do.

Washington today resembles something like the end of “Animal Farm.” People move from one side of the table to the other and up and down the Acela corridor with ease. An outsider looking at a negotiating table would glance from lobbyist to staff member, from colleague to former colleague, from pig to man and from man to pig and find it impossible to say which is which.

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China Says Army Is Not Behind Attacks in Report

SHANGHAI — A day after an American security firm accused a Chinese People’s Liberation Army unit in Shanghai of engaging in cyber warfare against American corporations, organizations and government agencies, China’s defense ministry issued a strong denial and insisted that the report was flawed.

At a press conference in Beijing Wednesday, the ministry suggested the allegations were destructive and challenged a study by Mandiant, an American computer security firm that identified P.L.A. Unit 61398 in Shanghai as one of the most aggressive computer hacking operations in the world.

Geng Yansheng, a spokesman for China’s Ministry of National Defense, said that China had been the victim of cyber attacks that have originated in the U.S., and that Mandiant mischaracterized China’s activities.

“Chinese military forces have never supported any hacking activities,”

Mr. Geng said at the press briefing. “The claim by the Mandiant company that the Chinese military engages in Internet espionage has no foundation in fact.”

On Tuesday, a spokesman for China’s Foreign Ministry, Hong Lei, had made similar remarks, arguing that cyber attacks are difficult to trace because they are “often carried out internationally and are typically done so anonymously.”

The New York Times reported on Tuesday that a growing body of digital forensic evidence pointed to the involvement of the P.L.A. Shanghai unit and that U.S. intelligence officials had also been tracking the unit’s cyber activities.

On its Web site, Mandiant released a lengthy report on Tuesday detailing some of its evidence, including Internet protocol addresses and even the identities of several Chinese individuals it believes were behind some of the attacks. Mandiant said it had monitored the hackers as they logged onto social networking sites or through e-mail accounts.

Attempts to contact two of the individuals through telephone numbers and instant message service addresses linked to them were unsuccessful. In one case, the individual — whose online profile says he is 28 years old and a graduate of a university that specializes in computer science — declined to answer questions.

Several military analysts said they had also traced some major cyber attacks back to the P.L.A. and its Shanghai Unit 61398, which is known to be engaged in network security.

Still, many security experts concede that it is difficult if not possible to know for certain where attacks originate because hackers often take control of computers in various locations.

Chinese officials have insisted in recent years that China is one of the biggest targets of cyber attacks.

“Statistics show that Chinese military terminals connected to the Internet have been subjected to large numbers of attacks from abroad, and I.P. addresses indicate that a considerable number of these attacks are from the United States, but we have never used this as a reason to accuse the United States,” the defense ministry said Wednesday. “Every country should handle the problem of cyber security in a professional and responsible manner.”

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Japan Finds Swelling in Second Boeing 787 Battery

TOKYO (Reuters) - Cells in a second lithium-ion battery on a Boeing Co 787 Dreamliner forced to make an emergency landing in Japan last month showed slight swelling, a Japan Transport Safety Board (JTSB) official said on Tuesday.

The jet, flown by All Nippon Airways Co, was forced to make the landing after its main battery failed.

"I do not know the exact discussion taken by the research group on the ground, but I heard that it is a slight swelling (in the auxiliary power unit battery cells). I have so far not heard that there was internal damage," Masahiro Kudo, a senior accident investigator at the JTSB said in a briefing in Tokyo.

Kudo said that two out of eight cells in the second battery unit showed some bumps and the JTSB would continue to investigate to determine whether this was irregular or not.

The plane's auxiliary power unit (APU) powers the aircraft's systems when it is on the ground. National Transportation Safety Board investigators in the United States are probing the APU from a Japan Airlines plane that caught fire at Boston's Logan airport when the plane was parked.

The U.S. Federal Aviation Authority grounded all 50 Boeing Dreamliners in commercial service on January 16 after the incidents with the two Japanese owned 787 jets.

The groundings have cost airlines tens of millions of dollars, with no solution yet in sight.

Boeing rival Airbus said last week it had abandoned plans to use lithium-ion batteries in its next passenger jet, the A350, in favor of traditional nickel-cadmium batteries.

Lighter and more powerful than conventional batteries, lithium-ion power packs have been in consumer products such as phones and laptops for years but are relatively new in industrial applications, including back-up batteries for electrical systems in jets.

(Reporting by Mari Saito; Editing by Richard Pullin)

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Allure of Self-Insurance Draws Concern Over Costs

WASHINGTON — Federal and state officials and consumer advocates have grown worried that companies with relatively young, healthy employees may opt out of the regular health insurance market to avoid the minimum coverage standards in President Obama’s sweeping law, a move that could drive up costs for workers at other companies.

Companies can avoid many standards in the new law by insuring their own employees, rather than signing up with commercial insurers, because Congress did not want to disrupt self-insurance arrangements that were seen as working well for many large employers.

“The new health care law created powerful incentives for smaller employers to self-insure,” said Deborah J. Chollet, a senior fellow at Mathematica Policy Research who has been studying the insurance industry for more than 25 years. “This trend could destabilize small-group insurance markets and erode protections provided by the Affordable Care Act.”

It is not clear how many companies have already self-insured in response to the law or are planning to do so. Federal and state officials do not keep comprehensive statistics on the practice.

Self-insurance was already growing before Mr. Obama signed the law in 2010, making it difficult to know whether the law is responsible for any recent changes. A study by the nonpartisan Employee Benefit Research Institute found that about 59 percent of private sector workers with health coverage were in self-insured plans in 2011, up from 41 percent in 1998.

But experts say the law makes self-insurance more attractive for smaller employers. When companies are self-insured, they assume most of the financial risk of providing health benefits to employees. Instead of paying premiums to insurers, they pay claims filed by employees and health care providers. To avoid huge losses, they often sign up for a special kind of “stop loss” insurance that protects them against very large or unexpected claims, say $50,000 or $100,000 a person.

Such insurance serves as a financial backstop for the employer if, for example, an employee is found to have cancer, needs an organ transplant or has a premature baby requiring intensive care.

In a report to clients last year, SNR Denton, a law firm, wrote, “Faced with mandates to offer richer benefits with less cost-sharing, small and midsize employers in particular are increasingly considering self-insuring.”

Officials from California, Maine, Minnesota, Utah, Washington and other states expressed concern about the potential proliferation of these arrangements at a recent meeting of the National Association of Insurance Commissioners.

Stop-loss insurers can and do limit the coverage they provide to employers for selected employees with medical problems. As a result, companies with less healthy work forces may find self-insuring more difficult.

Christina L. Goe, the top lawyer for the Montana insurance commissioner, said that stop-loss insurance companies were generally “free to reject less healthy employer groups because they are not subject to the same restrictions as health insurers.”

Insurance regulators worry that commercial insurers — and the insurance exchanges being set up in every state to offer a range of plan options to consumers — will be left with disproportionate numbers of older, sicker people who are more expensive to insure.

That, in turn, could drive up premiums for uninsured people seeking coverage in the exchanges. Since the federal government will subsidize that coverage, it, too, could face higher costs, as would some employees and employers in the traditional insurance market.

Large employers with hundreds or thousands of employees have historically been much more likely to insure themselves because they have cash to pay most claims directly.

Now, employee benefit consultants are promoting self-insurance for employers with as few as 10 or 20 employees.

Raeghn L. Torrie, the chief financial officer of Autonomous Solutions, a developer of robotic equipment based in Petersboro, Utah, said her business started a self-insured health plan for its 44 employees on Jan. 1 as a way to cope with the uncertainties created by the new law.

“We have a pretty young, healthy group of employees,” she said.

In Marshfield, Mo., J. Richard Jones, the president of Label Solutions, an industrial label-printing company with 42 employees, said he switched to a self-insurance plan this year “to hold down costs that were going up because of government regulation under Obamacare.”

The Township of Freehold, N.J., made a similar decision in January to gain more control over benefits and costs for its 260 employees.

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Dismissed as Doomsayers, Advocates for Meteor Detection Feel Vindicated

For decades, scientists have been on the lookout for killer objects from outer space that could devastate the planet. But warnings that they lacked the tools to detect the most serious threats were largely ignored, even as skeptics mocked the worriers as Chicken Littles.

Jim Watson/Agence France-Presse — Getty Images

Dr. Edward Lu, a former NASA astronaut and Google executive, has warned about space threats.

No more. The meteor that rattled Siberia on Friday, injuring hundreds of people and traumatizing thousands, has suddenly brought new life to efforts to deploy adequate detection tools, in particular a space telescope that would scan the solar system for dangers.

A group of young Silicon Valley entrepreneurs who helped build thriving companies like eBay, Google and Facebook has already put millions of dollars into the effort and saw Friday’s shock wave as a turning point in raising hundreds of millions more.

“Wouldn’t it be silly if we got wiped out because we weren’t looking?” said Edward Lu, a former NASA astronaut and Google executive who leads the detection effort. “This is a wake-up call from space. We’ve got to pay attention to what’s out there.”

Astronomers know of no asteroids or comets that pose a major threat to the planet. But NASA estimates that fewer than 10 percent of the big dangers have been discovered.

Dr. Lu’s group, called the B612 Foundation after the imaginary asteroid on which the Little Prince lived, is one team of several pursuing ways to ward off extraterrestrial threats. NASA is another, and other private groups are emerging, like Planetary Resources, which wants not only to identify asteroids near Earth but also to mine them.

“Our job is to be the first line of defense, and we take that very seriously,” James Green, the director of planetary science at NASA headquarters, said in an interview Friday after the Russian strike. “No one living on this planet has ever before been hurt. That’s historic.”

Dr. Green added that the Russian episode was sure to energize the field and that an even analysis of the meteor’s remains could help reveal clues about future threats.

“Our scientists are excited,” he said. “Russian planetary scientists are already collecting meteorites from this event.”

The slow awakening to the danger began long ago, as scientists found hundreds of rocky scars indicating that cosmic intruders had periodically reshaped the planet.

The discoveries included not just obvious features like Meteor Crater in Arizona, but wide zones of upheaval. A crater more than a hundred miles wide beneath the Yucatán Peninsula in Mexico suggested that, 65 million years ago, a speeding rock from outer space had raised enough planetary mayhem to end the reign of the dinosaurs.

Some people remain skeptical of the cosmic threat and are glad for taxpayer money to go toward urgent problems on Earth rather than outer space. But many scientists who have examined the issues have become convinced that better precautions are warranted in much the same way that homeowners buy insurance for unlikely events that can result in severe damage to life and property.

Starting in the 1980s and 1990s, astronomers turned their telescopes on the sky with increasing vigor to look for killer rocks. The rationale was statistical. They knew about a number of near misses and calculated that many other rocky threats whirling about the solar system had gone undetected.

In 1996, with little fanfare, the Air Force also began scanning the skies for speeding rocks, giving credibility to an activity once seen as reserved for doomsday enthusiasts. It was the world’s first known government search.

The National Aeronautics and Space Administration took a lead role with what it called the Spaceguard Survey. In 2007, it issued a report estimating that 20,000 asteroids and comets orbited close enough to the planet to deliver blows that could destroy cities or even end all life. Today, with limited financing, NASA supports modest telescopes in the southwestern United States and in Hawaii that make more than 95 percent of the discoveries of the objects coming near the Earth.

Scientists lobbied hard for a space telescope that would get high above the distorting effects of the Earth’s atmosphere. It would orbit the Sun, peering across the solar system, and would have a much better chance of finding large space rocks.

But with the nation immersed in two wars and other earthly priorities, the government financing never materialized. Last year, Dr. Lu, who left the NASA astronaut corps in 2007 to work for Google, joined with veterans of the space program and Silicon Valley entrepreneurs to accelerate the asteroid hunt.

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Common Sense: High Taxes Are Not a Prime Reason for Relocation, Studies Say

Pool photo by Mikhail Klimentyev

Gerard Depardieu with Vladimir Putin in January. Russia granted Mr. Depardieu a passport after his spat with France over taxes.

Last month, Vladimir V. Putin hugged his newly minted fellow Russian citizen, the actor Gerard Depardieu, posing for cameras at the Black Sea port of Sochi. “I adore your country,” Mr. Depardieu gushed — especially its 13 percent flat tax on personal income.

Sochi may not be St. Tropez, but it does have winter temperatures in the 60s and even palm trees. Mr. Putin’s deputy prime minister confidently predicted a “mass migration of wealthy Europeans to Russia.”

Here in the United States, the three-time Masters champion Phil Mickelson recently walked off the 18th hole at Humana Challenge and said he might move from California because the state increased its top income tax rate to 13.3 percent from 10.3 percent.

“Hey Phil,” Gov. Rick Perry of Texas wrote in a Twitter message, “Texas is home to liberty and low taxes ... we would love to have you as well!!” Tiger Woods later said that he had left California for Florida for just that reason years ago. Mr. Mickelson can “vote with his Gulfstream,” a Wall Street Journal editorial noted, and warned California to “expect a continued migration.”

It’s an article of faith among low-tax advocates that income tax increases aimed at the rich simply drive them away. As Stuart Varney put it on Fox News: “Look at what happened in Britain. They raised the top tax rate to 50 percent, and two-thirds of the millionaires disappeared in the next tax year. Same things are happening in France. People are leaving where the top tax rate is 75 percent. Same thing happened in Maryland a few years ago. New millionaire’s tax, the millionaires disappeared. You’ve got exactly the same thing in California.”

That, at least, is what low-tax advocates want us to think, and on its face, it seems to make sense. But it’s not the case. It turns out that a large majority of people move for far more compelling reasons, like jobs, the cost of housing, family ties or a warmer climate. At least three recent academic studies have demonstrated that the number of people who move for tax reasons is negligible, even among the wealthy.

Cristobal Young, an assistant professor of sociology at Stanford, studied the effects of recent tax increases in New Jersey and California.

“It’s very clear that, over all, modest changes in top tax rates do not affect millionaire migration,” he told me this week. “Neither tax increases nor tax cuts on the rich have affected their migration rates.”

The notion of tax flight “is almost entirely bogus — it’s a myth,” said Jon Shure, director of state fiscal studies at the Center on Budget and Policy Priorities, a nonprofit research group in Washington. “The anecdotal coverage makes it seem like people are leaving in droves because of high taxes. They’re not. There are a lot of low-tax states, and you don’t see millionaires flocking there.”

Despite the allure of low taxes, Mr. Depardieu hasn’t been seen in Russia since picking up his passport and seems to be hedging his bets by maintaining a residence in Belgium. Meanwhile, Russian billionaires are snapping up trophy properties in high-tax London, New York and Beverly Hills, Calif.

“I don’t hear about many billionaires moving to Moscow,” said Robert Tannenwald, a lecturer in economic policy at Brandeis University and former Federal Reserve economist. Along with Nicholas Johnson, he and Mr. Shure are co-authors of “Tax Flight Is a Myth,” a 2011 research paper.

Of course, some people do move for tax reasons, especially wealthy retirees, athletes and other celebrities without strong ties to high-tax locations, like jobs and families. In renouncing his French citizenship, Mr. Depardieu follows other French celebrities, the chef Alain Ducasse, the singer Johnny Hallyday and Yannick Noah, a former tennis star. Several Paris hedge fund managers have decamped to London and the fashion mogul Bernard Arnault applied for Belgian citizenship, though not, he has said, for tax reasons.

Stars like Mr. Depardieu and Mr. Mickelson certainly have incentives to move. Mr. Depardieu complained that he paid 85 percent of his income in taxes in France last year and has paid 145 million euros over 45 years. France has a top rate of 41 percent as well as a wealth tax, and the Socialist president, François Hollande, is trying to impose a temporary surcharge of 75 percent on incomes over 1 million euros. Mr. Mickelson earned more than $60 million last year, Sports Illustrated estimates, which means the three-percentage-point California tax increase could add up to an additional $1.8 million in tax.

This article has been revised to reflect the following correction:

Correction: February 15, 2013

An earlier version of this column misstated Mr. Depardieu’s citizenship. He has applied for residency in Belgium; he is not a citizen of that nation. The earlier version also misidentified the golf tournament at which the golfer Phil Mickelson said he might move from California to escape its taxes. It was the Humana Challenge, not Pebble Beach.

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Airbus Abandons Plan to Use Controversial Batteries

PARIS — Faced with a potentially prolonged investigation into what caused batteries on two Boeing 787 Dreamliner jets to catch fire or emit smoke last month, Boeing’s European rival, Airbus, said Friday that it had abandoned plans to use the same battery technology on its forthcoming wide-body jet, the A350-XWB.

Airbus said that it began informing airline customers on Thursday that it would not move ahead with an original plan to use the lightweight lithium-ion batteries to power a number of the A350’s onboard systems, and would revert instead to a conventional battery, made of nickel-cadmium, that is already used extensively on existing Airbus models.

“Airbus considers this to be the most appropriate way forward in the interest of program execution and reliability,” said Marcella Muratore, an Airbus spokeswoman.

Airbus completed the assembly of its first test version of the A350 late last year and initial ground tests of that plane using the lithium-ion batteries had already begun at its factory in Toulouse, France. By switching gears now, the company said it hoped to be able to stick to its schedule of delivering the first aircraft in the second half of 2014.

Investigators at the U.S. National Transportation Safety Board have not determined the root cause of two episodes in January involving fire or smoke from the 787’s lithium-ion batteries, which are made by a Japanese company, GS Yuasa. The incidents prompted the U.S. Federal Aviation Administration to ground all 787s on Jan 17.

In recent weeks Airbus executives had indicated their concern that the continued uncertainty about the cause of the 787 battery problems, as well as the nature of any fixes that might be ordered by the F.A.A. and its European counterpart, the European Aviation Safety Agency, might endanger the A350’s development schedule, leading to potentially significant compensation payments to airlines.

Airbus currently has 617 orders for the A350 from 35 airline customers.

Ms. Muratore, the Airbus spokeswoman, stressed that the company remained confident that the lithium-ion battery system that it had been developing with its French supplier, Saft, was “robust and safe,” and added that Airbus planned to use lithium-ion batteries on the A350s it will use for flight tests scheduled to begin this summer.

The decision to revert to nickel-cadmium batteries, she said, was made purely for commercial reasons.

“As a result of making this decision now, Airbus does not expect it to impact the entry into service schedule,” Ms. Muratore said.

The Boeing 787 is the first commercial airliner to make extensive use of lithium-ion batteries. Prior to the A350, Airbus had only used the technology to power a limited number of auxiliary functions on its twin-deck A380 superjumbo, which entered service in 2007.

Battery makers have promoted lithium-ion batteries as being significantly lighter and faster to recharge that nickel-cadmium batteries. Promotional materials from both Yuasa and Saft have also described the technology as requiring significantly less maintenance that conventional batteries, reducing operating costs for airlines.

But investigations by Japanese and U.S. regulators in recent weeks have revealed that airlines had experienced multiple problems with the 787's batteries before the overheating incidents in January, raising questions about their reliability.

Battery experts say that while lithium-ion batteries weigh 30 percent to 40 percent less than conventional batteries, their contribution to the overall weight of a jetliner is minimal: The empty weight of a Boeing 787, for example, is about 242,000 pounds or 110,000 kilograms; its two lithium-ion batteries weigh 63 pounds each.

Ms. Muratore of Airbus said that it was too early to say what, if any, impact the battery switch may have on the A350's fuel-efficiency or other performance targets. But she stressed that weight ''was not a factor'' in the decision. She added that the dimensions of the nickel-cadmium batteries were not expected to be significantly larger than those of the four lithium-ion batteries they will replace, reducing the design adjustments that will have to be made.

Airbus said it was too early to estimate the financial impact of making the battery switch. But analysts said it was likely to be minimal compared to the potential burden of hundreds of millions of dollars in penalty payments to customers in the event of a delivery delay.

“I think this probably gets lost in the wash,” said Nick Cunningham, an aerospace industry analyst at Agency Partners in London. “You’re probably only talking about a few million dollars.”

He estimated that the added weight of the nickel-cadmium battery was probably equivalent to losing one passenger seat of payload. “That’s likely to be well within the margin of guarantees” on performance that Airbus has made to airlines, he said. “This seems like the thoroughly sensible thing to do.”

Aviation regulators have long known about the risks of lithium-ion batteries, which are more prone to overheating if improperly charged or discharged. Because of their unique chemistry, a fire that begins in one cell of a lithium-ion battery is difficult to extinguish and can rapidly spread to neighboring cells — a condition known as thermal runaway.

The technology was nonetheless approved by the F.A.A., the E.A.S.A. and regulators in other countries for use on the 787 in 2007, with the provision that Boeing employ a series of additional safeguards to contain smoke and fire in the event of an incident.

Airbus that it would continue to study the lithium-ion technology as it moves forward with the A350’s development and would “take on board” any relevant findings that resulted from the ongoing investigation of the Boeing 787 incidents.

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DealBook: American and US Airways Vote to Join Into Biggest Carrier

Ending a yearlong courtship by US Airways, American Airlines agreed on Wednesday to merge with the smaller carrier, paving the way for the creation of the nation’s largest airline.

The boards of the companies met separately to approve the combination, according to two people with knowledge of the vote. A merger would bolster American’s domestic footprint, strengthen its presence in the Northeast and give it a bigger network to attract business travelers and corporate accounts.

The merger, the details of which will be announced Thursday morning, would create a rival with the size and breadth to compete against United Airlines and Delta Air Lines, which have grown through mergers of their own in recent years and are currently the biggest.

But while United and Delta went through bankruptcies and mergers over the last decade, American has been steadily losing ground while racking up losses that have totaled more than $12 billion since 2001. It was the last major airline to seek court protection to reorganize its business when it filed for bankruptcy in November 2011.

The wave of big mergers in the industry has created healthier and more profitable airlines that are now better able to invest in new planes and products, including Wi-Fi, individual entertainment screens and more comfortable seats for business passengers. But some consumer advocates said they worried that reducing the number of airlines would lead to higher fares over the long run and allow airlines to increase revenue by imposing new or higher fees.

The deal, which was completed in recent days, could be formalized as American leaves bankruptcy. W. Douglas Parker, the chairman and chief executive of US Airways, will take over as American’s chief executive. Thomas W. Horton, American’s current chairman and chief executive, will be chairman, though his tenure could be limited.

The merger still needs to pass several steps. It must be approved by American’s bankruptcy judge in New York. US Airways shareholders, who will also have to approve the deal, would hold 28 percent of the combined carrier.

In addition, it will be reviewed by the Justice Department’s antitrust division, though analysts expect regulators to clear the deal.

If approved, the nation’s top four airlines — American, United, Delta and Southwest Airlines — would control nearly 70 percent of the domestic market.

The merger is a victory for Mr. Parker. Over the last year, he has convinced American’s creditors that the carrier needed to expand its network to compete. In April, he won the critical backing of American’s three labor groups, which defied American’s management and publicly endorsed a deal with US Airways.

The biggest challenge for the merged company, which will be called American Airlines, will be to integrate operations over the next couple of years. That is no easy task since airline mergers are often rocky — involving complex technological systems, big reservation networks as well as large labor groups with different corporate cultures that all need to be seamlessly combined.

United angered passengers last year after a series of merger-related computer and reservation mistakes, and late and delayed flights.

Mr. Parker has done this before. In 2005, when he was the head of America West, he engineered a merger with the larger US Airways.

In this case, the merged American Airlines will still be based in Fort Worth and have a combined 94,000 employees, 950 planes, 6,500 daily flights, eight major hubs and total sales of nearly $39 billion. It would be the market leader on the East Coast, the Southwest and South America. But it would remain a smaller player in Europe, where United and Delta are stronger. The merger does little to bolster American’s presence in Asia, where it trails far behind its rivals.

American has major hubs in Dallas, Miami, Chicago, Los Angeles and New York. US Airways has hubs in Phoenix, Philadelphia and Charlotte, N.C., and has a big presence at Ronald Reagan National Airport in Washington.

In reviewing previous mergers, federal regulators have not focused on the overall size of the combined airline but instead looked at whether a merger would decrease competition in individual cities. To do so, regulators examine specific routes, or city-pairs, and look at whether a merger reduces the number of airlines there.

The last time the Justice Department challenged a merger was the proposed combination between United Airlines and US Airways in 2001. It rejected that on the ground that it would reduce consumer choice and possibly lead to higher fares.

Since then, the department has allowed a wave of big mergers that have reshaped the industry, said Alison Smith, a former antitrust official and now a partner in the law firm McDermott Will & Emery.

American and US Airways only have about 12 overlapping routes, a figure that is unlikely to set off regulatory opposition, she said. One problem, however, could come up at National Airport, where the combined carriers hold a market share of about 60 percent. There, regulators might request that American give up some takeoff and landing rights before approving the merger.

Regulators sought similar concessions from United at Newark Liberty International Airport after its merger with Continental Airlines.

It is also unclear whether American needs all of its combined hubs. Analysts pointed out that Phoenix was at risk because of its proximity to Dallas, since it makes little sense to have two big hubs so close to each other.

Despite the increased concentration, consumers can still expect to find vibrant competition, said William S. Swelbar, a research engineer at the Massachusetts Institute of Technology’s International Center for Air Transportation.

“We will have four very big, very vigorous competitors in the market,” he said.

Travelers are better served by bigger airlines offering more connecting flights and more destinations, analysts said. Consumers today can easily compare fares and shop for the cheapest flight online, which keeps airfares in check.

But Kevin Mitchell, chairman of the Business Travel Coalition, disagreed. He said that consumers would see few benefits to offset the merger’s negative impact — including “reduced competition, higher fares and fees and diminished service to small and midsize communities.”

Michael J. de la Merced contributed reporting.

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Media Decoder Blog: Comcast Buys Rest of NBC in Early Sale

8:53 p.m. | Updated Comcast gave NBCUniversal a $16.7 billion vote of confidence on Tuesday, agreeing to pay that sum to acquire General Electric’s remaining 49 percent stake in the entertainment company. The deal accelerated a sales process that was expected to take several more years.

Brian Roberts, chief executive of Comcast, said the acquisition, which will be completed by the end of March, underscored a commitment to NBCUniversal and its highly profitable cable channels, expanding theme parks and the resurgent NBC broadcast network.

“We always thought it was a strong possibility that we’d some day own 100 percent,” Mr. Roberts said in a telephone interview.

He added that the rapidly changing television business and the growing necessity of owning content as well as the delivery systems sped up the decision. “It’s been a very smooth couple of years, and the content continues to get more valuable with new revenue streams,” he said.

Comcast also said that NBCUniversal would buy the NBC studios and offices at 30 Rockefeller Center, as well as the CNBC headquarters in Englewood Cliffs, N.J. Those transactions will cost about $1.4 billion.

Mr. Roberts called the 30 Rockefeller Center offices “iconic” and said it would have been “expensive to replicate” studios elsewhere for the “Today” show, “Saturday Night Live,” “Late Night With Jimmy Fallon” and other programs produced there. “We’re proud to be associated with it,” Mr. Roberts said of the building.

With the office space comes naming rights for the building, according to a General Electric spokeswoman. So it is possible that one of New York’s most famous landmarks, with its giant red G.E. sign, could soon be displaying a Comcast sign instead.

When asked about a possible logo swap on the building, owned by Tishman Speyer, Mr. Roberts told CNBC, that is “not something we’re focused on talking about today.” Nevertheless, the sale was visible in a prominent way Tuesday night: the G.E. letters, which have adorned the top of 30 Rock for several decades, were not illuminated for an hour after sunset. But the lights flickered back on later in the evening.

Comcast, with a conservative, low-profile culture, had clashed with the G.E. approach, according to employees and executives in television. Comcast moved NBCUniversal’s executive offices from the 52nd floor to the 51st floor — less opulent space that features smaller executive offices and a cozy communal coffee room instead of General Electric’s lavish executive dining room.

Comcast took control of NBCUniversal in early 2011 by acquiring 51 percent of the media company from General Electric. The structure of the deal gave Comcast the option of buying out G.E. in a three-and-a-half to seven-year time frame. In part because of the clash in corporate cultures, television executives said, both sides were eager to accelerate the sale.

Price was also a factor. Mr. Roberts said he believed the stake would have cost more had Comcast waited. Also, he pointed to the company’s strong fourth-quarter earnings to be released late Tuesday afternoon, which put it in a strong position to complete the sale.

Comcast reported a near record-breaking year with $20 billion in operating cash flow in the fiscal year 2012. In the three months that ended Dec. 31, Comcast’s cash flow increased 7.3 percent to $5.3 billion. Revenue at NBCUniversal grew 4.8 percent to $6 billion.

“We’ve had two years to make the transition and to make the investments that we believe will continue to take off,” Mr. Roberts said.

The transactions with General Electric will be largely financed with $11.4 billion of cash on hand, $4 billion of subsidiary senior unsecured notes to be issued to G.E. and a $2 billion in borrowings.

Even with the investment in NBCUniversal, Comcast said it would increase its dividend by 20 percent to 78 cents a share and buy back $2 billion in stock in 2013.

When it acquired the 51 percent stake two years ago, Comcast committed to paying about $6.5 billion in cash and contributed all of its cable channels, including E! and some regional sports networks, to the newly established NBCUniversal joint venture. Those channels were valued at $7.25 billion.

The transaction made Comcast, the single biggest cable provider in the United States, one of the biggest owners of cable channels, too. NBCUniversal operates the NBC broadcast network, 10 local NBC stations, USA, Bravo, Syfy, E!, MSNBC, CNBC, the NBC Sports Network, Telemundo, Universal Pictures, Universal Studios, and a long list of other media brands.

Mr. Roberts and Michael J. Angelakis, vice chairman and chief financial officer for the Comcast Corporation, led the negotiations that began last year with Jeffrey R. Immelt, chief executive of General Electric, and Keith Sharon, the company’s chief financial officer. JPMorgan Chase, Goldman Sachs, Centerview Partners and CBRE provided financial and strategic advice.

The sale ends a long relationship between General Electric and NBC that goes back before the founding days of television. In 1926, the Radio Corporation of America created the NBC network. General Electric owned R.C.A. until 1930. It regained control of R.C.A., including NBC, in 1986, in a deal worth $6.4 billion at the time.

In a slide show on the company’s “GE Reports” Web site titled “It’s a Wrap: GE, NBC Part Ways, Together They’ve Changed History,” G.E. said the deal with Comcast “caps a historic, centurylong journey for the two companies that gave birth to modern home entertainment.”

Mr. Immelt has said that NBCUniversal did not mesh with G.E.’s core industrial businesses. That became even more apparent when the company became a minority stakeholder with no control over how the business was run, according to a person briefed on G.E.’s thinking who could not discuss private conversations publicly.

“By adding significant new capital to our balanced capital allocation plan, we can accelerate our share buyback plans while investing in growth in our core businesses,” Mr. Immelt said in a statement. He added: “For nearly 30 years, NBC — and later NBCUniversal — has been a great business for G.E. and our investors.”

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