In North American rail towns, some try to stop oil trains

Albany, New York Sheriff Craig Apple assured a room of concerned citizens that county emergency crews were prepared to handle an oil-train accident involving three or four tank cars.

Firefighters have been training to combat railcar fires with foam, and evacuation plans are detailed in a 500-page emergency response plan, Apple told residents in a May 12 address.

But he was blunt about the potential impact of a larger derailment: "Look, let's face it, there's going to be mayhem."

Albany's tracks handle as much as a fourth of the oil pumped from North Dakota's booming Bakken Shale, or up to several 100-car trains per day, each carrying 70,000 barrels.

It is one of several spots along North America's new oil-by-rail corridors where residents and officials are restless, following six fiery derailments in the past 10 months. Some want to limit or halt the traffic, fearful that existing precautions will not prevent deadly blasts, air and waterway pollution, or nuisances including nasty odors.

Since trains play a growing role in getting oil from landlocked North Dakota and central Canada to mostly coastal refineries, efforts to stop them could boost shipping costs or slow the pace of North America's oil boom. This could hit the bottom line of drillers like Continental Resources or refiners like Phillips66.

The opposition extends beyond traditional hotbeds of environmental activism, to oil shipping or processing hubs like Albany, Philadelphia and St. John, New Brunswick in Canada, home to the country's largest refinery.

Efforts to stop oil trains are a new battle front for several major environmental groups that have campaigned to block the Keystone XL pipeline from bringing crude south from Canada's oil sands. With Keystone in limbo, U.S.-bound rail shipments of Canadian oil have risen 20-fold since 2011, the U.S. Congressional Research Service estimated.

With U.S. oil production at a 28-year high, new pipelines in booming shale areas like North Dakota's Bakken have not kept up. This has also pushed more crude onto trains.

Opposition movements have scored a few small victories. Albany County has temporarily halted plans by energy logistics firm Global Partners to install boilers at its rail terminal to make oil flow faster out of tank cars.

The Port of Portland, Oregon issued a blanket rejection of any proposals for class="mandelbrot_refrag">crude oil transfer or storage facilities, and states including California, Washington and New York are reviewing oil-train safety. One project, a $110 million rail terminal proposed by refiner class="mandelbrot_refrag">Tesoro Corp and Savage Cos. in Washington, is over budget and behind schedule, in part due to an extended state review.

Oil-train opponents are adopting tactics that helped to stall Keystone XL, including street protests and demands for detailed environmental studies.

But curbing oil trains may prove far trickier. Rail hubs face much less red tape than major new pipelines, and unlike pipeline operators, railroads usually are not required to submit comprehensive oil-spill response plans.


U.S. cargoes have risen more than 50-fold since 2008, to around 1 million barrels a day. Volumes may reach 3 million barrels a day in 2016 -- more oil than OPEC member class="mandelbrot_refrag">Venezuela pumps daily -- unless pipeline class="mandelbrot_refrag">construction speeds up, Matt Rogers, a director at class="mandelbrot_refrag">business consultancy McKinsey, told an energy conference last week. (For a map of operating and planned U.S. oil-train terminals and a timeline of derailments, click:



California may receive 25 percent of its oil by rail in 2016, up from 1 percent now, according to the state's Energy Commission.


About 60 oil-train terminals already exist along the 140,000 miles of U.S. rail tracks, and at least 30 more are planned, including eight in California.


Phyllis Fox, a well known U.S. air quality expert, said many hubs won quick approval in towns or cities that did not recognize potential hazards.


"They get the district to rubber stamp it," Fox said.


The shipping trend drew little public scrutiny until a runaway oil train killed 47 people in Lac Megantic, Quebec last July.


That and subsequent derailments have ignited a debate between regulators, railroads, drillers, refiners and railcar makers about who is responsible for preventing more disasters.


Railroads say older tank cars known as DOT-111s, which have gained a reputation for exploding during derailments, should be "aggressively" phased out. Shippers say railroads must improve their infrastructure. Others suggest that volatile Bakken shale crude may be to blame.


In January, the U.S. Department of Transportation warned of Bakken crude's fire risks, drawing rebukes from oil companies who say it is as safe as other U.S. varieties. This month, DOT issued a statement "strongly urging" shippers to use newer, safety-enhanced railcars for Bakken cargoes. But regulators did not ban older cars from handling it.


The DOT has ordered railroads to inform states about large rail cargoes of Bakken crude traveling through, following complaints about lack of disclosure.


"I don't think anyone has fully addressed the safety of these things," said Read Brugger of environmental group 350 Maine, which wants to ban oil trains in the state. "People don't think they should be coming through our towns and cities and along our bodies of water."


Derailments have continued. A fiery April 30 oil-train accident in Lynchburg, Virginia was the worst yet to affect a U.S. city. Tank cars carrying Bakken crude toppled into the James River, a source of regional drinking water, leaking 25,000 gallons and setting the river ablaze. The exploding cars included newer models with enhanced safety features like reinforced steel plates.


In January, oil-laden tank cars derailed on a rail bridge in Philadelphia, prompting a local protest.


Hours before Sheriff Apple's speech in Albany, four tank cars derailed at low speed in a rail yard near the city's bustling Ezra Prentice housing complex.


Canadian Pacific, the yard's operator, said there was no oil leak or fire. The railroad was fined $5,000 for failing to report the incident until five hours later.


Albany County Executive Dan McCoy, a former firefighter, said he will seek jail time for rail workers who fail to report future incidents within an hour.




North American railroads are among the world's most efficient. The Association of American Railroads says 99.997 percent of hazardous material cargoes arrive without incident.


But video from Lac Megantic shows the town center reduced to rubble, and images from derailments this year in North Dakota and Virginia feature fireballs up to 60 feet high.


Some worry about more insidious risks. In St. John, the site of Canada's biggest refinery, air quality incidents have risen since operator Irving Oil built about 145,000 barrels per day of rail unloading capacity three years ago, regulatory filings show.


Julie Dingwell, who lives nearby, said foul smells from the new terminal - the destination for the ill-fated Lac Megantic train - have kept her indoors several times over the past year.


Weeks after the Quebec disaster, St. John residents called the fire department as Irving unloaded a batch of high-sulfur Alberta crude from rail cars, filings show.


"You immediately think disaster," Dingwell said. "I've lived in this industrial city most of my life, so I know bad smells. That smell was beyond."


This February, Irving sent scores of apology letters to homes nearby. "We sincerely apologize for any inconvenience these odors may have caused you and your family," they say.


The terminal has begun using a liquid product called Ecosorb, made by Omni Industries, to neutralize the odors, an Irving official said in an email obtained by Reuters in April.


An Irving spokesperson did not respond to requests for comment.




Some 3,000 miles to the west, oil-by-rail is gathering steam along the Pacific Coast, a region long reliant on sea-borne oil imports with no pipeline links to the Bakken.


class="mandelbrot_refrag">Tesoro Corp., which already ships oil by-rail to its Anacortes, Washington refinery, is seeking approval for a 360,000 barrel per day facility in Vancouver, Washington, population 165,000. It faces a months-long delay during a state environmental review. Its approval rests with Democratic Governor Jay Inslee, who has not taken a position on the project.


Tesoro has participated in more than 100 community meetings, a company spokeswoman said, adding that the project would boost energy independence and create hundreds of jobs.


Further north in Washington's Grays Harbor County, fishermen, tribal groups and environmentalists oppose plans by three firms to inaugurate oil-by-rail terminals. Their proposed sites are on an estuary in an earthquake zone, opponents say.


Three trains carrying grain have derailed in the county since late April, prompting a Federal Railroad Administration probe.


"We got lucky this time," said Arthur Grunbaum of the Friends of Grays Harbor group. "We won't be if class="mandelbrot_refrag">crude oil is permitted."


Ed Johnstone, a fisherman who represents the Quinault Indian Nation on policy matters, said that allowing oil-trains would violate the Quinaults' land rights treaty. They have appealed to federal officials to nix the projects.


With each new derailment, the opposition to oil trains is coalescing, said Diana Bailey of the Natural Resources Defense Council, one of the leading national environmental groups and a major opponent of Keystone XL.


"It's no longer ‘not in my backyard.' Now it's ‘not in anyone's backyard,'" she said.


(Reporting by Joshua Schneyer in Albany, New York; Rory Carroll in Vancouver, Washington; and Richard Valdmanis in St. John, New Brunswick. Editing by Jonathan Leff and David Gregorio)


Alaska wildfire scorches more than 100,000 acres, threatens homes

Firefighters in Alaska on Sunday were battling a massive wildfire that was pushing towards hundreds of homes and vacation cabins, with residents urged to be ready for a possible mandatory evacuation, state emergency officials said.


The Funny River wildfire was burning on more than 110,000 acres inside the Kenai National Wildlife Refuge in southern Alaska, expanding from about 96,000 acres on Saturday, according to the Alaska Interagency Incident Management Team.

Crews reported some progress late Saturday, saying the six-day-old blaze was 20 percent contained. The Alaska Air National Guard and Anchorage Fire Department have joined 409 firefighters battling the blaze on the ground, emergency officials said.

More than 1,300 residents were placed under an evacuation advisory and urged to be ready to leave home should a mandatory evacuation order be issued.

Wildfires in Alaska's wooded areas are not uncommon during the summer months, but warm and dry spring conditions have given the fire season an early start, said Michelle Weston, a member of the Alaska Interagency Management Team.

As a precaution, Alaska's Division of Forestry issued a statewide outdoor burn ban on Friday.

(Reporting by Victoria Cavaliere; Editing by Sophie Hares)

Aging veterans build online honor roll of fallen comrades

Air Force veteran Don Skinner, 83, wakes at dawn's early light, downs a cholesterol pill, blood thinner and some instant coffee then boots up his computer to spend eight hours each day telling war stories of the fallen who can't speak for themselves.

The reverential routine is a calling for Skinner, the oldest of 200 volunteers who create online profiles of men and women who died in the line of duty. These accounts can be viewed in a Roll of Honor on the website, an online meeting place for veterans and their loved ones.

"These people's stories have got to be told," said Skinner, who was awarded a Purple Heart Medal and a Bronze Star Medal as a commanding sergeant who tended to his wounded comrades during an assault in Vietnam in 1968 despite being critically wounded himself. His service from 1949 to 1974 included the Korean War.

Between treatments for bladder and colon cancer, Skinner, a widower living in Aiken, South Carolina, has researched and created 858 profiles for the Roll of Honor in the last five years. They are among nearly 100,000 profiles on the site, which serves 1.4 million living vets and is free to veterans and family members to build but charges a $19.95 annual membership fee to connect with old service friends.

Traffic to the site typically surges on Memorial Day, said organizers, who noted that on last year's holiday the site received some 40,731 page views, up from their usual daily 5,889.

Some younger users said the site shed light on the military service of now-dead loved ones.

David Baker, a 38-year-old Navy machinist mate from Dallas currently stationed in class="mandelbrot_refrag">Japan said the profiles provided a window into the World War I experience of his great-grandfather and World War II duties of his grandfather.

"I have learned so much from digging around for information about what he did, since he passed away before I could ask," Baker wrote on the site.


In Destin, Florida, Army veteran Denny Eister, 69, initially struggled but has mastered the skills of uploading pictures and cutting and pasting details into the 993 profiles he's created in the past two years.

Eister, who ran combat missions as an infantry officer in Vietnam, said the work has eased the emotional pain that lingers after coming home to an angry, not grateful, United States, and helped him summon the "courage" to visit the Vietnam Veterans Memorial in Washington, D.C., after decades of avoidance.

"It makes me feel good about that period of my life that I tried to shut out for such a long time," said Eister, who was awarded the Bronze Star for rescuing his wounded platoon sergeant during a heavy firefight.

He said that when he returned to the U.S. after serving from 1965-1968, "We had to get out of airplane and run into the men's room and change into civilian clothes and hope nobody knew what we were doing."

As crowds gather Monday to watch Memorial Day parades and lay wreaths, World War II Navy veteran Barbara "Bobbe" Stuvengen, 89, will pay her respects on the computer her sons helped her purchase.

"It's been a lifesaver for me, especially since my husband died after two years in a nursing home with Alzheimer's," said Stuvengen, of Orfordville, Wisconsin, who served in the Navy from 1945-1959.

Through the site, Stuvengen has met more than 10 friends, some of whom have visited her, hungry for tales of the Navy from a woman whose 17th birthday dinner on December 7, 1941, was interrupted by radio newscasts of Japan's attack on Pearl Harbor.


"I sometimes feel like the matriarch of a very large family," Stuvengen said.




(Reporting by Barbara Goldberg; Editing by Scott Malone and Alden Bentley)


Police officer for Arizona American Indian community killed on duty

A police officer on a Native American Indian reservation in Arizona was shot dead while sitting in his patrol vehicle after ordering a car to pull over, police said Sunday.


Jair Cabrera, an officer on the Salt River Pima-Maricopa Indian Community in metropolitan Phoenix, died early Saturday after being hit by a bullet that pierced the windshield of his police car, according to the Salt River Police Department.

Cabrera, 37, was the first officer to die on the reservation in the line of duty, the department said.

Cabrera had ordered the car to stop at a local gas station when the occupants opened fire, according to FBI spokesman Special Agent Perryn Collier. It was not clear if Cabrera had returned fire.

The three occupants of the car were taken into police custody and at least one was facing criminal charges, the FBI said.

The Salt River community is home to two Native American tribes: the Pima and the Maricopa, according to the community's website.

The police department was established in 1967 and investigates all tribal, state and federal crimes, the website said.

(Reporting by Victoria Cavaliere; Editing by Lynne O'Donnell)

Senator to renew gun control push after California shooting spree

Senator Richard Blumenthal said on Sunday he wanted to revive gun control legislation rejected by Congress in the wake of the 2012 Newtown, Connecticut, school massacre, saying it could have helped prevent this weekend's deadly California shooting spree.


Blumenthal, a Democrat from Connecticut, said on CBS's "Face the Nation" program the legislation, which failed last year, could be revised to emphasize the mental condition of potential gun buyers.

"Obviously, not every kind of gun violence is going to be prevented by laws out of Washington," he said.

"But at least we can make a start and I am going to urge that we bring back those bills, maybe reconfigure them, center on mental health, which is a point where we can agree that we need more resources to make the country healthier and to make sure that these kinds of horrific, insane, mad occurrences are stopped.

"And the Congress will be complicit if we fail in that," he said.

On Friday night a 22-year-old college student identified as Elliot Rodger allegedly stabbed three people to death in his apartment in Santa Barbara, California, and then drove through the city and fatally shot three others with handguns he had legally bought. He later killed himself.

A YouTube video and a lengthy "manifesto" Rodger left behind were filled with rage and plans for "slaughtering" women because he felt they had rejected him.

Rodger had been visited by Santa Barbara authorities last month after a family member expressed concerns about him. Santa Barbara Sheriff Bill Brown said Rodger was courteous to the deputies and did not meet the criteria for legal intervention.

U.S. President class="mandelbrot_refrag">Barack Obama made gun control a priority shortly after Adam Lanza, 20, killed 20 children and six adults at Sandy Hook Elementary School in Newtown with an assault-style rifle and two handguns in December 2012.

The Newtown massacre, coming on top of other mass shootings, set off an intense national debate about gun violence. But a few months later the Senate defeated Obama's proposals to restrict sales of certain types of guns and require greater background checks.

Gun-rights groups, a powerful national political force, opposed the measures, saying they would infringe on Americans' constitutional rights.

Blumenthal said the defeated legislation could have given authorities in Santa Barbara a better chance to intervene in Rodger's case before the killings and would provide for "professionals trained in diagnosing and detecting this kind of derangement."

The Brady Campaign to Prevent Gun Violence ranks California as the state with the strongest gun control measures, requiring background checks for all firearms sales, regardless of the type of gun or where it was purchased.

(Reporting by Bill Trott and Lisa Lambert; Editing by Jim Loney and Paul Simao)

Three shot dead at South Carolina oceanfront hotel

Three people were killed and a fourth wounded in a shooting at a oceanfront hotel in Myrtle Beach, South Carolina, one of the most popular tourist destinations in the U.S. Southeast, police said on Sunday.

Officers responded to a call of shots fired at the Bermuda Sands resort on the Myrtle Beach boardwalk around 11 p.m. EDT on Saturday, according to the Myrtle Beach Police Department.

Two men and one woman were pronounced dead at the scene and the fourth was transported to a local hospital in unknown condition, he said.

The shooting came on a weekend when Myrtle Beach was packed with visitors for the Memorial Day holiday weekend, the unofficial start of the summer season, and for an annual sports rally called the Atlantic Beach Bikefest.

"We certainly don't like to see any type of incident where somebody dies during this event, or any event that Myrtle Beach has," Myrtle Beach Police Captain David Knipes told WISTV. "To have three people (killed) in one night is kind of a big thing; we only had two homicides for a total last year," he said.

Two of the victims were gunned down in the hotel's breezeway, authorities said.

There was no immediate word on a motive and there had not been any arrests by early Sunday, police said.

Witnesses told the Sun News they heard fighting on a sidewalk outside the hotel before gunshots were fired.

(Reporting by Victoria Cavaliere, editing by G Crosse)

California gunman, in manifesto, said police nearly thwarted plot

A 22-year-old man who killed six people before taking his own life in a rampage through a California college town said in a chilling manifesto that police who knocked on his door last month to check on his welfare nearly foiled his plot.

Elliot Rodger, the son of a Hollywood director, stabbed three people to death in his apartment before gunning down three more victims on Friday night in the town of Isla Vista near the campus of the University of California at Santa Barbara (UCSB).

Rodger, who posted a threatening video railing against women online shortly before his rampage, stalked Isla Vista in his car and on foot, firing on bystanders in a killing spree that ended when he killed himself after a shootout with sheriff's deputies, police said.

But less than a month before his attacks, after he had planned the killings and obtained the guns he would use, the community college student opened his door to a knock to find about seven officers looking for him.

"I had the striking and devastating fear that someone had somehow discovered what I was planning to do, and reported me for it," Rodger said in a manifesto obtained by California's KEYT-TV, excerpts of which were published by the Los Angeles Times.

"If that was the case, the police would have searched my room, found all of my guns and weapons, along with my writings about what I plan to do with them. I would have been thrown in jail, denied of the chance to exact revenge on my enemies. I can't imagine a hell darker than that. Thankfully, that wasn't the case, but it was so close," he wrote.

He said he learned that videos he posted online had alarmed his mother, and he believed either she or a mental health agency had asked authorities to check up on him.

"The police interrogated me outside for a few minutes, asking me if I had suicidal thoughts. I tactfully told them that it was all a misunderstanding, and they finally left," he said in the manifesto, according to the Times.

"For a few horrible seconds I thought it was all over. When they left, the biggest wave of relief swept over me. It was so scary," he wrote, adding he removed the videos with plans to repost them closer to the date of his planned attack.

In a YouTube video posted shortly before the rampage, a young man believed by police to be Rodger bitterly complained of loneliness and rejection by women and outlined his plan to kill those he believed spurned him.


Santa Barbara County Sheriff Bill Brown has said that Rodger was seen by a variety of healthcare professionals and it was "very, very apparent he was severely mentally disturbed."

Brown said his department had been in contact with Rodger three times prior to the killings, including for a welfare check in which deputies found him to be polite and courteous. He did not appear to meet criteria to be held involuntarily on mental health grounds, and deputies took no further action, Brown said.

"At the time the deputies interacted with him, he was able to convince them that he was OK," Brown told CBS' "Face the Nation" on Sunday.

"When you read his autobiography and the manifesto that he wrote, it's very apparent that he was able to convince many people for many years that he didn't have this deep, underlying, obvious mental illness that ultimately manifested itself in this terrible tragedy," he added.

In a plot laid out in writing, Rodger said he planned to first kill his housemates then lure others to his residence to continue his killings, before slaughtering women in a university sorority and continuing his spree in the streets of Isla Vista. Then, he would commit suicide.


He wrote that he also planned to kill his younger brother, "denying him of the chance to grow up to surpass me", as well as his stepmother, who he said would be in the way - killings he did not carry out.


But he did not think he was mentally prepared to kill his father, Peter Rodger, an assistant director on the 2012 film "The Hunger class="mandelbrot_refrag">Games," according to the manifesto.


A lawyer for the family, Alan Shifman, said they offered sympathy to those affected by the tragedy. Shifman declined further comment on Sunday, and family members of Rodger could not immediately be reached.


In suburban Los Angeles, authorities carried out search warrants at the homes of both of Rodger's parents. Neither were home at the time.




On Friday, after stabbing to death three people in his residence, Rodger went to a nearby sorority house and knocked on the door. No one answered, and shortly afterward he shot three women standing outside, killing students Katherine Cooper, 22, and Veronica Weiss, 19, Brown said on Saturday.


At a nearby delicatessen, Rodger shot dead 20-year-old UCSB English major Christopher Michael-Martinez before fleeing in his car. As he drove, he shot at pedestrians, traded fire with police and struck two cyclists before crashing. In addition to those killed, 13 people were wounded, eight of whom were shot.


Officers found Rodger dead of an apparently self-inflicted gunshot wound. In his car were three legally purchased semiautomatic guns, two Sig Sauers and a Glock, and more than 400 rounds of unspent ammunition, Brown said.


He told CBS that there was no evidence Rodger had ever been institutionalized or committed for an involuntary hold of any kind, situations that could have prohibited him from legally buying guns.


The incident follows U.S. mass shootings at schools, shopping malls and military bases. The deadliest U.S. mass shooting in modern times was in 2007 when a student at Virginia Tech killed 32 people.


Christina Habas, a lawyer who represented victims and survivors of a 2012 mass shooting in a Denver-area cinema in lawsuits against Cinemark, said any lawsuits arising from the California shootings would face an uphill battle.


Since the shootings happened in such a public setting, there didn't appear to be any businesses or agencies that could be held responsible for failing to prevent the violence, she said.


Lee Kaplan, a Houston trial lawyer who has handled wrongful death cases, said any potential lawsuit would likely target those responsible for supplying the gunman with weapons and overlooking his violent tendencies.


"Even if they obtained them legally, he shouldn't have had access to weapons," said Kaplan, noting that possible defendants could range from the shooter's family members to dealers who may have provided him the guns.


(Additional reporting by Alex Dobuzinskis and Eric Kelsey in Los Angeles, Jim Loney in Washington and Casey Sullivan in New York; Writing by Cynthia Johnston; Editing by Sophie Hares, Andrea Ricci and Eric Walsh)


Ukraine defends vote despite unrest, Putin pledges 'respect'

Vladimir Putin promised that Russia would work with the new Ukrainian administration formed after a presidential election on Sunday that the Kiev government said on Saturday would anchor the ex-Soviet state to the West.

In the eastern region where at least 20 people were killed in recent days, there was less violence, though in fighting near Slaviansk between pro-Moscow rebels and Ukrainian paratroopers, unconfirmed local media reports spoke of up to four deaths.

The separatists reject an election run by a fascist "junta" in Kiev and national electoral officials said few ballot papers had yet been issued in two eastern regions with over 12 percent of the electorate, implying most there will be denied a vote.


Denouncing an "atmosphere of terror" directed against local electoral officials in the east, Europe's OSCE democracy agency pulled out most of the dozens of international monitors it had posted to Donetsk region out of fears for their security.

Polls point to a resounding win for a pro-Western candidate and a heavy turnout elsewhere in the country of 45 million.

President Putin's verbal olive branch after months of East-West feuding and his annexation of Crimea, came at an economic forum where, having earlier acknowledged U.S. and EU sanctions were hurting the Russian class="mandelbrot_refrag">economy, he played down talk of a new Cold War and denied a desire to rebuild Moscow's Soviet empire.

Though he renewed criticism of Western powers for backing what he called a coup in February against the last elected president, his ally Viktor Yanukovich, Putin said: "We will respect the choice of the Ukrainian people and will be working with the authorities formed on the basis of this election."

Ukraine's government and its Western allies, however, view the actions of pro-Moscow militants in disrupting voting in the heavily populated, Russian-speaking east as supported by the Kremlin to deny the new president legitimacy and give Russia perpetual leverage to exert its influence over its neighbor.

Putin again protested Russia's innocence and its desire to see class="mandelbrot_refrag">Ukraine stable after months of worsening national divisions.

His assurances were welcomed by the leaders of France and class="mandelbrot_refrag">Germany who spoke to Putin in a three-way telephone call that underlined the importance of class="mandelbrot_refrag">Ukraine and Russia to a European Union that holds elections to its own EU parliament on Sunday.

A statement from the office of French President Francois Hollande in Paris said he and German Chancellor Angela Merkel had "taken note" of Putin's comments on working with Kiev's new leaders and that all three backed a national dialogue with OSCE support to resolve the crisis and amend Ukraine's constitution.

The interim Kiev leadership, who held a pre-election prayer meeting with religious leaders on Saturday seeking divine aid for the country's recovery, have offered greater autonomy for the east. But they reject Moscow's call for a looser federation and its claims of discrimination against Russian speakers.


Polls point to a resounding victory for pro-Western allies of the interim government on a turnout expected to be high, even allowing for the absence of Crimea and two big eastern regions.

Billionaire businessman and former minister Petro Poroshenko could win outright by passing 50 percent in Sunday's first round. But with 20 other candidates he may be forced into a runoff with former premier Yulia Tymoshenko, a distant runner-up in polls.

Though both have been involved in a feuding political and class="mandelbrot_refrag">business elite that has failed to break a cycle of epic-scale corruption and national impoverishment and disunity since the Soviet collapse 23 years ago, the leading candidates carry the hopes of many Ukrainians desperate for a fresh start after rising up against their leaders for the second time in a decade.


Prime Minister Arseny Yatseniuk said in a televised address urging people to take their responsibility to vote and show "we cannot be intimidated" that the new president would make a first foreign visit to Brussels. There they would sign a free trade deal with the EU, whose rejection by Yanukovich in November triggered protests in Kiev that ended when he fled to Russia:


"The newly elected president will receive from the Ukrainian people a mandate for a determined and unstoppable movement away from the grey zone of lawlessness and dark forces that dream of suffocating us, and into an area of free people rallied around common values - to a place where it is easier to breathe."


Many Ukrainians, especially in the east, where businesses trade with Russia and fear competition from the EU, are wary of opening up the class="mandelbrot_refrag">economy. Millions, however, and not only in more nationalistic, Ukrainian-speaking areas in the west, are keen on the prospect of travelling freely in Europe without a visa.




Yatseniuk assured those in the east whose ability to vote, he said, was being infringed by "the war against Ukraine" that they would soon be free of "bandits". Tensions among rival armed forces continue to run high, however, and government forces, long starved of resources, show little capacity to take charge.


Ukrainian government officials said their forces fought off attempts by militants to break an encirclement of the rebel-held city of Slaviansk, in the north of Donetsk region, on Saturday. Reuters journalists watched rebels and paratroopers exchange mortar fire for nearly two hours in the afternoon.


Interfax-Ukraine news agency quoted separatists saying that two media workers had been killed and a pro-Kiev blogger saying that two Ukrainian soldiers died. The reports could not be confirmed. On Thursday, 17 Ukrainian troops were killed in an ambush and on Friday at least two pro-Kiev militiamen died.


Keeping up a war of words with Moscow against a background of Russian and NATO buildups around Ukraine's borders, the Ukrainian foreign ministry issued a statement on Saturday saying border guards had seized armed men in several vehicles trying to cross the frontier from Russia illegally overnight.


"The penetration onto Ukrainian territory of armed terrorist groups, organized by the Russian authorities, is nothing other than the latest act of aggression against our state," it said.


Away from the restive east, Ukraine's defense ministry said an anti-aircraft battery facing Crimea fired warning shots at two Russian helicopter gunships approaching the mainland.




A civic group that supports the holding of elections said the head of a local polling station on the outskirts of the city of Donetsk was briefly kidnapped by armed men. And other electoral officials spoke of their fear of running the ballot.


"There's an atmosphere of terror," an OSCE source said of conditions facing Donetsk officials from opponents of the poll. "We've found many officials sending us terrified SMSs."


Most of the dozens of foreigners due to monitor voting across Donetsk region were being pulled out, he said. Ukrainian officials said many polling stations in Donetsk and Luhansk regions would not open and that ballot papers had yet to be distributed for fear of militants trying to seize them.


The regions account for over a tenth of the electorate.


Nationwide, over 1,000 OSCE observers will check polling stations and counts. Voting will run for 12 hours until 8 p.m. (1700 GMT). Exit polls will give a rapid indication of the result, but a definitive outcome will only be known on Monday.


Holding the election would itself be a national victory, Prime Minister Yatseniuk said. "Remember, tomorrow, with our ballot papers, we will be defending Ukraine, investing in its prosperity and in the future of our children and grandchildren.


"We will vote, and that means we will triumph."


In Donetsk, capital of the Russian-speaking industrial Donbass area, people are deeply divided, with many keen to vote and remain in Ukraine and others hoping that a makeshift referendum held by rebels two weeks ago will let them follow Crimea into union with the much wealthier Russia.


Calling the Kiev authorities "worse than the Nazis", a pensioner who gave his name as Dmitry said outside the rebel-occupied regional administration building: "We are living under occupation ... Of course I'm not going to vote."


But nearby, 74-year-old Anatoly was equally contemptuous of those who have turned the building into the headquarters of their self-proclaimed People's Republic of Donetsk. Glaring at the barricades and rebel flags, he said:


"This is all nonsense, absolute nonsense. I'm against all of this - I can't believe they are acting against the Ukrainian state. They are Ukrainian fascists."


Saying he would not be able to cast a ballot, he added: "I have a right to vote. But they have taken away my right."


In the port of Mariupol, in the south of Donetsk region, a local electoral official, Viktor Kovba, said at least 10 of the city's 100 stations would not open and more might be affected.


"There's a risk the election will be disrupted. It wouldn't take much," he said. "If they target three stations, the whole city will know immediately and people won't go to vote."


An official at one polling station, who gave her name as Viktoria, was frank. She said: "People are afraid."


(Additional reporting by Gabriela Baczynska in Mariupol and Paul Ingrassia and Alexei Anishchuk in St. Petersburg; Writing by Alastair Macdonald; editing by Gunna Dickson)


EU set for election 'Super Sunday,' with far-right vote in spotlight

European elections reach their culmination on "Super Sunday" when the remaining 20 of the EU's 28 countries go to the polls, with the vote expected to confirm the dominance of pro-European centrists despite a rise in support for the far-right and left.

class="mandelbrot_refrag">Germany, class="mandelbrot_refrag">France, class="mandelbrot_refrag">Spain and Poland are among the major EU member states voting on Sunday, representing the bulk of the 388 million Europeans eligible to cast ballots and elect the 751 deputies to sit in the European Parliament from 2014-2019.

After years of economic crisis, rising unemployment and poor growth, many Europeans have come to question the wisdom of ever-closer EU integration and are expected to vote for Eurosceptic parties on the right or left promising radical changes.

Opinion polls suggest at least a quarter of seats in the parliament will go to anti-EU or protest groups, but at least 70 percent will remain with the four mainstream, pro-EU blocs: the center-left, center-right, liberals and Greens.

Turnout - the most basic measure of citizens' engagement with Europe - is expected to fall again, dropping to just over 40 percent, marginally down from 43 percent in 2009. That would continue the trend of declining participation at every European election since the first direct poll was held in 1979.

While expectations ahead of the vote were that far-right groups would record historic victories in countries such as class="mandelbrot_refrag">France, the Netherlands and Britain, exit polls from the Netherlands, which voted on Thursday, were a surprise.

Geert Wilders' anti-EU and anti-Islam Freedom Party came fourth rather than first, according to exit polls from Ipsos, with the majority voting for pro-EU parties. That has left centrists hoping for a wider surprise.

"At the end of the campaign, and after reflection, the Dutch have drawn the conclusion that the European Union means strength and extreme nationalism is a danger," said Guy Verhofstadt, the leader of the liberal alliance and a former prime minister of Belgium whose group may win up to 70 seats in parliament.

"On Sunday, the only alternative is to vote for candidates with strong liberal and democratic values."

The European Parliament has said it will announce preliminary results shortly after 2100 GMT on Sunday, although officials caution that Italy's decision to keep polls open until the same time may well delay any announcement.

Final results and the precise allotment of seats in parliament is expected to be announced by the end of Monday.


As well as determining the makeup of the next European Parliament, these elections will for the first time influence who becomes president of the European Commission, a powerful role overseeing pan-EU legislation.

Each of the main party groups in Europe has nominated a "Spitzenkandidat" - German for a leading candidate or front runner - who will be their nominee for Commission president if that group should win the election.

Polls are predicting that the center-right European People's Party will secure around 220 seats, putting it 15 to 20 seats ahead of the center-left Socialists & Democrats.

That would position the EPP's top candidate, former Luxembourg Prime Minister Jean-Claude Juncker, to replace Portugal's Jose Manuel Barroso as Commission president.


But it is far from an open and shut case. The Socialists & Democrats may well get support from other parties on the left and claim they have a broader mandate for their front-runner, Germany's Martin Schulz, the current parliament president.


Ultimately, it is up to EU heads of state and government to nominate a candidate for the Commission post, which must then be approved by a simple majority in parliament.


While the "Spitzenkandidat" process has increased the pressure on EU leaders to choose the candidate from the party that wins the most seats, they may well have to look elsewhere for a nominee. Britain is staunchly opposed to either Juncker or Schulz, and other member states have quietly expressed reservations.


Parliament leaders will meet on the morning of May 27 to discuss the election results and the Commission presidency, and EU leaders will do the same at a summit on the evening of the same day. But it is expected to take several weeks before leaders decide on a name to put to a parliamentary vote.


(Writing by Luke Baker; Editing by Lisa Shumaker)


Opposition to Thai coup simmers, ex-PM in 'safe place'

Former Thai Prime Minister Yingluck Shinawatra was in a "safe place" on Saturday after being held by the army following a coup, an aide said, as opposition to the takeover grew among her supporters and pro-democracy activists.

The army moved on Thursday after failing to forge a compromise in a power struggle between Yingluck's populist government and the royalist establishment, which brought months of sometimes violent unrest to Bangkok's streets.

Consolidating its grip, the military dissolved the Senate on Saturday, the only legislative assembly still functioning in class="mandelbrot_refrag">Thailand. It also sacked three senior security officials who were seen as close to the ousted government.

The military detained Yingluck on Friday when she and about 150 other people, most of them political associates, were summoned to an army facility in Bangkok.

More people were summoned over the weekend, including some outspoken academics and journalists. The bosses of 18 newspapers and private and public sector economic administrators were also called to meetings with the military.

A senior officer told Reuters Yingluck could be held for up to a week and media reported she had been taken to an army base in Saraburi province north of Bangkok, but an aide denied that.

"Now she's in a safe place ... She has not been detained in any military camp. That's all I can say at this moment," said the aide, who declined to be identified.

Thailand's political woes are the latest chapter in a nearly decade-long clash between the Bangkok-based establishment and Thaksin Shinawatra, a former telecommunications tycoon who broke the mould of Thai politics with pro-poor policies that won him huge support and repeated electoral victories.

Thaksin was ousted in a 2006 coup and left the country after a 2008 graft conviction, but he remains Thailand's most influential politician and was the guiding hand behind the government of Yingluck, his sister.

The military also detained Thaksin's adult son, and Yingluck's nephew, Panthongtae Shinawatra, according to posts on social media, but his sister later said that was not true.

Army deputy spokesman Winthai Suvaree told a news conference that anyone being held would not be detained for more than seven days. He did not mention Yingluck.

The military also issued an order to financial institutions to freeze dealings with two former ministers in Yingluck's cabinet who had not responded to a military summons.

The army also said King Bhumibol Adulyadej had acknowledged the military takeover, a significant formality in a country where the monarchy is the most important institution.

An undercurrent of the crisis is anxiety over the issue of royal succession. The king, the world's longest-reigning monarch, is 86 and spent the years from 2009 to 2013 in hospital.

Crown Prince Vajiralongkorn does not command the same devotion as his father, but some Thaksin supporters have recently been making a point of their loyalty to the prince.



Despite international calls for the restoration of democratic government, army chief General Prayuth Chan-ocha has not promised a swift return to civilian rule, insisting there must be broad reforms and stability first.


"We must have economic, social and political reforms before elections," Prayuth told civil servants on Friday in his first comments on his plans since the coup. "If the situation is peaceful, we are ready to return power to the people."


But reforms could take many months and stability could be elusive.


Many countries have issued travel warnings for class="mandelbrot_refrag">Thailand.


The United States swiftly condemned the coup and the State Department suspended about $3.5 million in military aid.


The Pentagon said on Saturday it was cancelling training and readiness exercises with Thailand, as well as a visit to Thailand by U.S. Pacific Fleet Commander Admiral Harry Harris, and one by a top Thai commander to the U.S. Pacific Command.


Human Rights Watch said rights in Thailand were in "free fall". But in what appeared to be a quick move to win over some of Thaksin's core supporters, Prayuth said on Friday paying farmers money owed under a failed subsidy scheme organized by Yingluck's government was a priority.




The military has banned gatherings of more than five people, censored the media and imposed a 10 p.m to 5 a.m. curfew, but that has not stopped some from showing their disapproval.


About 200 people gathered outside a mall complex in north Bangkok early on Saturday, holding up handwritten slogans such as "Anti the Coup" and "Get out Dictators".


Police tried to move them on, a Reuters reporter said. The crowd then moved to the Victory Monument but police tried to block them. There was some pushing and plastic water bottles were thrown.


About 100 people gathered in a nearby shopping area before soldiers dispersed them, detaining several, a Reuters photographer said.


About 200 people gathered for a second day in Chiang Mai, Thaksin's hometown, and soldiers detained at least six people, a Reuters reporter said.


Such small protests appear spontaneous and leaderless but the real danger for the military would be a sustained mass campaign by Thaksin's "red shirt" loyalists.


Thaksin has not commented publicly since the coup.


The use of force to put down protesters could squander any legitimacy the military leaders may have after saying they took power in the first place to end violence and restore order.


A 2010 crackdown on Thaksin's supporters ended in serious bloodshed and damage to the army's image. Just over a year later a pro-Thaksin government was back in power after Yingluck's sweeping election victory.


(Writing by Robert Birsel and Alan Raybould; Additional reporting by Khettiya Jittapong; Editing by Angus MacSwan)


Three people killed in shooting at Brussels Jewish Museum

Two women and a man were killed and one person seriously injured during a shooting at the Jewish Museum in central Brussels on Saturday, with Belgian officials saying anti-Semitic motives could not be ruled out.

A spokeswoman for Brussels prosecutors office said there was no clear information about the perpetrator, although a fire brigade official said earlier that the shooter had driven up to the museum, gone inside and fired shots.

"Regarding the motive, we have little information. Everything is possible," Ine Van Wymersch told a news conference.

"We know that the location, the Jewish Museum in Brussels, makes one think of it being an anti-Semitic attack, but we do not have enough to confirm this is the case."

Belgium's interior minister, Joëlle Milquet, was quoted by the RTBF Belgian television station, saying: "It's a shooting ... at the Jewish Museum ... All of this can lead to suspicions of an act of anti-Semitism."

Israeli Prime Minister Benjamin Netanyahu, in a statement from his office, strongly condemned the killings. They were, he said, "the result of endless incitement against the Jews and their state."

Police cordoned off the area around the museum in central Brussels, a busy tourist district packed with cafes, class="mandelbrot_refrag">restaurants and antique furniture shops. An annual outdoor jazz concert due to be held in a popular square near the museum was called off.

A man seen by witnesses driving away from the scene was questioned in connection with the shooting, but officials were not certain if there had been one or more perpetrators, or whether the man had been involved.

"The link between this person and the incident is not clear. The person does admit being present," Van Wymersch said.

No information was released about the nationality of the victims or whether they were tourists or museum staff. They had been shot in the face and neck, and the injured person's condition was life-threatening, the spokeswoman said.

Officials said earlier the victims were two men and one woman.


Security around all Jewish institutions in the country has been raised to the highest level, and Prime Minister Elio Di Rupo met with police and senior officials to discuss the situation.

About half of Belgium's 42,000-strong Jewish community lives in Brussels.

Jewish community officials drew parallels between the shooting and the 2012 killing of four Jews in a school in class="mandelbrot_refrag">France by an al Qaeda-inspired gunman, Mohamed Merah.

"This really reminds of what you experienced in class="mandelbrot_refrag">France with Mr. Merah attacking a Jewish school," Maurice Sosnowski, president of the Coordinating Committee of Belgian Jewish Organizations, was quoted saying by BFM TV.


"This is appalling. I would never have imagined something like that happening in Brussels."


He said no threats have been issued to the Jewish community.


World Jewish Congress President Ronald S. Lauder urged Belgian authorities to protect Jewish sites in the country.


"Two years after Toulouse ... this despicable attack is yet another terrible reminder of the kind of threats Europe's Jews are currently facing."


On Sunday, Belgium holds a general election and throughout Europe, voters will choose the next European Parliament.


Foreign Minister Didier Reynders, who was in the area at the time of the shooting, said witnesses had told him the suspected shooter was carrying bags when he entered the museum.


"I was in the neighborhood. I saw two people on the ground and with other people, we called the emergency services," he told French BFM TV.


"Witnesses told me that the suspected shooter was carrying bags when he entered the museum so it was urgent for the police to check that nothing had been left inside the museum."


(additional reporting by Philip Blenkinsop in Brussels and Gregory Blachier in Paris; Editing by Sophie Hares and Gunna Dickson)


Gunman kills six in drive-by shooting in California college town

A gunman killed six people and wounded seven others in a drive-by shooting in a Southern California college town, spraying bullets from his car until it crashed and he was found dead inside, authorities said on Saturday.

Authorities were investigating a possible link between the Friday night shooting in the town of Isla Vista near the campus of the University of California at Santa Barbara and a threatening video posted online.

In the YouTube video, which Santa Barbara Sheriff Bill Brown said appears to have been made by the suspected gunman, a young man bitterly complains of loneliness and rejection by women and says he plans to kill people.

Witnesses to the violence reported seeing someone driving a black BMW through the streets and shooting at people in Isla Vista, a beachside community where many college students live.

"It's obviously the work of a madman," Brown told a news conference. "There's going to be a lot more information that will come out that will give a clearer picture of just how disturbed this individual was."

Seven people died in the rampage, including the suspect, Brown said. Brown has not publicly named the suspect but a lawyer for the suspected gunman's family tentatively identified him as Elliot Rodger, son of a Hollywood director.

"I cannot confirm that but we believe it," the attorney, Alan Shifman, told reporters outside the family home in the Woodland Hills neighborhood of Los Angeles. "But the police would not give us 100 percent (certainty)."

"We offer our deepest, compassionate sympathy to the families involved in this terrible tragedy," Shifman told reporters, reading from a prepared statement on behalf of the family. "We are experiencing the most inconceivable pain and our hearts go out to everyone involved."

The suspected gunman's father was Peter Rodger, an assistant director on 2012 film "The Hunger class="mandelbrot_refrag">Games."

The New York Times quoted Shifman as saying that Rodger's parents had called the police about a month ago to class="mandelbrot_refrag">express concerns about his YouTube videos "regarding suicide and the killing of people." The newspaper quoted Shifman as saying police officers had interviewed Rodger but concluded he posed no danger. Shifman said they had found him to be a "perfectly polite, kind and wonderful human," the Times said.

Brown said deputies had twice exchanged fire with the suspected gunman on Friday night before his vehicle crashed and the suspect was found dead inside of a gunshot wound to the head. Brown could not say if he was killed by deputies or died of a self-inflicted wound.

A semi-automatic handgun was recovered from the scene, Brown said.

California's KEYT-TV reported that the suspected gunman's apartment complex was also a crime scene and that three bodies had been removed from the site. Authorities could not immediately confirm the report and there was no immediate word whether the bodies were included in the existing death toll.


The YouTube video police were studying showed a young man who identified himself as Elliot Rodger pouring out his hatred of women who have rejected him and "popular kids," and threatening to kill people out of loneliness and sexual frustration.

"You girls have never been attracted to me. I don't know why you girls aren't attracted to me. But I will punish you all for it. It's an injustice, a crime," he said in the video, his speech punctuated by bursts of laughter.


The video appeared to have been uploaded to YouTube on Friday night, shortly before the shooting. "It would appear that is connected," Brown said.


YouTube has since removed the video, posting in its place a notice saying it violated its terms of service. A spokeswoman for class="mandelbrot_refrag">Google, which owns YouTube, was not available for comment.


The identities of those killed in the rampage were withheld pending notification of their families, and there was no immediate word on the condition of the wounded.


But Richard Martinez told reporters that his 20-year-old son Christopher, a UCSB English major who wanted to go to law school, was killed while buying his dinner in a deli store that came under fire by the gunman.


"Why did Chris die? Chris died because of craven, irresponsible politicians and the NRA," an emotional Martinez told reporters outside the Santa Barbara County Sheriff's Office. "They talk about gun rights, what about Chris' right to live? When will this insanity stop?"




Robert Johnson, a 21-year-old UCSB student, said he first noticed trouble after a car drove past him at a busy Isla Vista intersection and he then heard "popping noises" that he originally mistook for firecrackers or the car backfiring.


"Then the sound came again, and by that point it had pulled up in front of a convenience store deli, and someone in the car was firing into a crowd of about eight, 10 people that were gathered in front of the store," he said.


"Everyone that was being fired upon, they all jumped and scrambled to run inside the store," he said.


The car had darkly tinted windows and the occupant was not visible, Johnson said.


College student Brad Martin told a UCSB student newspaper that his girlfriend was "absolutely hysterical" after being approached by the gunman with a weapon she initially was not sure was real.


"She said the next second he raised it up to her face ... and she turned around and started running," Martin told the Daily Nexus. "That's when she heard 'bang, bang, bang' right behind her as she was running."


University of California President Janet Napolitano, formerly U.S. secretary of Homeland Security, said she was "shocked and deeply saddened" by the shooting near the campus.


"Our thoughts and prayers go out to the victims of this tragedy, their families and the entire Santa Barbara community," she said in a statement.


The incident was the latest mass shooting in the United States, where schools, shopping malls and military bases have been scenes of such crimes.


Last month, a gunman killed three people and himself at the Fort Hood U.S. Army base in Texas, where another gunman killed 13 people in 2009.


In December 2012, 20 children and six adults were killed in a mass shooting at an elementary school in Newtown, Connecticut. Six months before that, a gunman killed 14 people in a Denver-area movie theater.


The deadliest U.S. mass shooting in modern times was in 2007, when a student at Virginia Tech killed 32 people in a shooting spree.


Some 23,000 people live in Isla Vista. Many are students at UCSB, which has an enrollment of about 22,000, or at Santa Barbara City College.


(Additional reporting by Cynthia Johnston, Peter Cooney, Jonathan Allen and Jonathan Alcorn, Writing by Alex Dobuzinskis; Editing by Ellen Wulfhorst, Frances Kerry and Bill Trott)


Nigeria's Boko Haram kills 28 in three village attacks

Suspected Islamist Boko Haram gunmen rampaged through three villages in northern Nigeria, killing 28 people and burning houses to the ground in a pattern of violence that has become almost a daily occurrence, according to police and witnesses.

All three attacks happened on Thursday in remote parts of Borno state, the epicenter of Boko Haram's increasingly bloody struggle for an Islamic kingdom in religiously mixed Nigeria.

One took place right next to Chibok, by the Cameroon border, from where more than 200 school girls were abducted last month.

The most deadly was in the town of Kerenua, near the Niger border. Scores of militants opened fire on residents, killing 20 of them, and burned houses, a police source said.

Since the girls' abduction on April 14, at least 450 civilians have been killed by the group, according to a Reuters count.

A spate of bombings across north and central Nigeria has killed hundreds, including two in the capital Abuja and one in the central city of Jos on Tuesday that killed 118 people.

In a sign Jos could be targeted again, a suicide bombing on Saturday that was meant to target an open air viewing of a football match in the central Nigerian city of Jos killed three people before reaching its target, a witness told Reuters.

The bomber approached Jos Viewing Centre while people were watching Real Madrid play Atletico Madrid, but failed to get there before his car exploded, Mohammed Shittu, a local journalist at the scene said.

The source said some phone signals to the militants had been tracked to Niger itself, suggesting they may have been directed from there. Dozens had been wounded by bullets, he said.

Another attack occurred in a small village of Kubur Viu, a few kilometers away from Chibok, resident Simeon Yhana said.

The police source concurred with the attack and toll.

"They killed five people. This place is right next to Chibok. The military is supposed to be protecting this area but we fear these people (Boko Haram) are coming back," Yhana said.

Militants shot dead three other people during an attack on the village of Kimba, the police source said.

Nigerian President Goodluck Jonathan was in South Africa on Saturday, his office said, to discuss ways of tackling Islamist militancy across the continent with African heads of state.

Nigeria and its neighbors say Boko Haram - which has killed thousands during its five-year-old insurgency in Africa's top oil producer - now threatens the security of the whole region.

The insurgents initially attacked mostly security forces and government officials after they launched their uprising in northeast Borno state's capital Maiduguri in 2009. When Jonathan ordered an offensive a year ago to flush them out, civilians formed vigilante groups to help out - making them targets too.


Nigeria accepted help from the United States, Britain, class="mandelbrot_refrag">France and class="mandelbrot_refrag">China last week and around 80 U.S. troops were arriving in Chad to start a mission to try to free the girls, who remain in captivity.


(Writing by Tim Cocks; Editing by Stephen Powell and Lisa Shumaker)


A bitter pill as China crackdowns squeeze pharma margins

A crackdown on corruption and pricing in China's fast-growing pharmaceutical market has squeezed profits and margins, raising a red flag to global Big Pharma that the days of easy growth in the country may be over.

A Reuters' analysis of more than 60 listed Chinese healthcare firms shows average profit margins declined to around 10 percent last year from 15 percent in 2012. Average net profits fell 2.1 percent, down from close to 20 percent growth in previous years.

China has been a magnet for the big global pharmaceutical companies and other healthcare firms as growth slows in Europe and the United States. It is the largest emerging drugs market and is set to be the global number two overall within three years, according to consultancy IMS Health.

While global drugmakers withhold their China profit figures, the analysis suggests profit growth is harder to come by - a concern as many global firms look to China as a future growth driver.

"Most companies, local and foreign, have enjoyed an easy growth phase for 5-6 years as money was thrown at the healthcare system to improve access," said Alexander Ng, Hong Kong-based associate principal at McKinsey & Co. "Now China is more into cost containment mode... and the squeeze on pricing and margins is a lot more apparent."

Over the past year, China has cracked down on high prices and corruption in the healthcare sector. Authorities probed drugmakers over pricing in July, while a high-profile investigation into British drugmaker class="mandelbrot_refrag">GlaxoSmithKline Plc led to executives at the company being charged with bribery earlier this month.

Industry and legal sources said the investigations into the sector are likely to grow more intense, meaning downward pressure on profits is likely to remain.

Graphic: Reuters survey


The climate of investigation has stymied sales growth, with some doctors saying they are worried to meet pharmaceutical reps, fearing being caught in the glare of China's watchdogs.

In 2013, Chinese authorities visited global drugmakers including class="mandelbrot_refrag">Novartis AG, AstraZeneca Plc, Sanofi SA, class="mandelbrot_refrag">Eli Lilly & Co and Bayer AG as part of a broad investigation into the sector.

GSK, which saw its China revenues plunge 61 percent in the third quarter last year, has since overhauled its management structure in China, stopped payments to healthcare professionals and changed its incentive systems for drug reps.

"Of course there will be an impact on sales. The pattern of selling through bribing definitely won't work anymore," said a Shanghai-based sales executive at another global drugmaker, speaking on condition of anonymity.

The Reuters' analysis showed combined revenue growth in the sector fell to 17.9 percent last year, from 22.6 percent in 2012 and more than 28.8 percent in 2011.


Price cuts are also putting a strain on profits and margins as China's leaders look to cut a healthcare bill that is set to hit $1 trillion by 2020, according to McKinsey & Co. Combined profit growth dropped to around 5.2 percent last year from 23.9 percent in 2011, according to the Reuters' analysis.


While authorities have made some moves to step back on price caps, Chinese healthcare procurement still puts the main emphasis on cost, creating an incentive for firms to push prices lower to beat rivals to contracts.


"The industry is in a very competitive stage, where firms want to take market share to stay in the game, but at the same time can't deal with the low prices," said Yu Mingde, president of the Chinese Pharmaceutical Enterprises Association, an organization supervised by China's cabinet.


The crackdown on pricing has pushed some Chinese firms out of class="mandelbrot_refrag">business and forced global drugmakers to rethink their China strategy, industry sources and analysts said, putting greater emphasis on high-tech drugs which command greater pricing power.


International drugmakers have long banked on being able to charge a steep premium in emerging markets for branded generic drugs that have gone off patent in their home market.


Generics specialist Actavis Plc pulled out of China this year, saying the market was too risky and not a business-friendly environment.


"When you have 5,000 competitors you have to be special, and being a foreign company is no longer enough," said Guillaume Demarne, Shanghai-based class="mandelbrot_refrag">business development manager at healthcare research body Institut Pasteur.




Rising competition in the market will also likely spur a round of consolidation as firms look to strengthen in terms of scale or technology to stay ahead of rivals, analysts said.


Bayer said in February it would buy Chinese traditional medicine maker Dihon Pharmaceutical, while Shanghai Fosun Pharmaceutical Group Co Ltd said last month it plans to take U.S.-listed class="mandelbrot_refrag">Chindex International Inc private in a $461 million deal with equity firm TPG.


"The level of industrial concentration will rapidly increase by way of acquisitions and reorganizations," Fosun Pharmaceutical said in a statement with its annual class="mandelbrot_refrag">earnings.


M&A activity this year has so far outstripped 2013, said Phil Leung, China healthcare head and Asia Pacific M&A head for consultancy Bain & Co, noting that local and global firms were looking at acquisitions, joint ventures and other tie-ups.


Drugmakers with advantages of scale, low-cost production or unique, in-demand products should hold their own, he said, while others would struggle to survive.


"In this environment, the strong will get stronger and the stragglers will be more exposed."


(Additional reporting by Li Hui in BEIJING and SHANGHAI newsroom; Editing by Ian Geoghegan)


China, Japan exchange barbs over action by warplanes in East China Sea

class="mandelbrot_refrag">Japan and class="mandelbrot_refrag">China on Sunday accused each other's air forces of dangerous behavior over the East China Sea, with Japan saying Chinese aircraft had come within a few dozen meters of its warplanes.


Japan's defense minister accused Beijing of going "over the top" in its approach to disputed territory. China's defense ministry said Japanese planes had carried out "dangerous" actions during its joint maritime exercises with class="mandelbrot_refrag">Russia.

Tensions have been running high between class="mandelbrot_refrag">China and its neighbors over Beijing's assertive stance on claiming land and sea territory.

Japan's defense ministry said Chinese SU-27 fighters came as close as 50 meters (170 feet) to a Japanese OP-3C surveillance plane near disputed islets on Saturday and within 30 meters of a YS-11EB electronic intelligence aircraft.

"Closing in while flying normally over the high seas is impossible," Defense Minister Itsunori Onodera told reporters in comments broadcast on TV Asahi.

"This is a close encounter that is outright over the top."

Onodera said class="mandelbrot_refrag">Japan conveyed its concerns to the Chinese side through diplomatic channels. He also said the Chinese planes were carrying missiles.

A ministry official said it was the closest Chinese warplanes had come to aircraft of Japan's Self-Defense Force.

China's defense ministry said jets were scrambled in the East China Sea on Saturday after Japanese aircraft entered its air defense zone during maritime exercises with class="mandelbrot_refrag">Russia.

The ministry said the Japanese aircraft had entered the zone

despite "no fly" notices being issued ahead of the exercises. China declared its air defense zone last year despite protests by Japan and the United States.

"Japanese military planes intruded on the exercise's airspace without permission and carried out dangerous actions, in a serious violation of international laws and standards, which could have easily caused a misunderstanding and even led to a mid-air accident," the statement said.

China had proposed urgent talks, it said, and demanded that Japan "respect the lawful rights of China's and Russia's navies ... and stop all reconnaissance and interference activities. Otherwise Japan will bear any and all consequences from this".


China lays claim to Japanese-administered islets in the East China Sea, known as Senkaku in Japanese and Diaoyu in Chinese. It is also pressing its claim to almost all the South China Sea, brushing aside claims by several southeast Asian states.

China's proclamation last November of an air defense zone covering disputed islands and areas in the South China Sea has raised concerns that a minor incident could quickly escalate.

Sino-Japanese ties have long been strained by allegations in China that Japan has not properly atoned for its wartime aggression and by the spat over the uninhabited islands.


Japan scrambled fighter jets against Chinese planes 415 times in the year ended in March, up 36 percent on the year, while in waters near the disputed islands, patrol ships from both countries have been playing cat-and-mouse, raising fears of an accidental clash.


Japanese land, sea and air forces joined last week to simulate the recapture of a remote island, underscoring Tokyo's concerns about the security of the islets.


Tensions between China and its neighbors have also risen sharply in the South China Sea in recent weeks, following the deployment of a Chinese oil rig in waters also claimed by Vietnam. The deployment sparked anti-Chinese riots in Vietnam.


The Philippine foreign ministry this month accused China of reclaiming land on a disputed reef in the South China Sea and said it appeared to be building an airstrip.


(Reporting by Kiyoshi Takenaka and Osamu Tsukimori and Paul Carsten in Beijing; Editing by Ron Popeski)


Police hunt Brussels Jewish Museum shooter, France tightens security

Belgian police on Sunday were hunting a gunman who shot dead two Israelis and a French woman at the Jewish Museum in Brussels, in an attack French President Francois Hollande said was without doubt motivated by anti-Semitism.

Security around all Jewish institutions in Belgium was raised to the highest level following Saturday's shooting, while French authorities stepped up security after two Jews were attacked near a Paris synagogue.

Belgian officials released a 30-second video clip from the museum's security cameras showing a man wearing a dark cap and a blue jacket enter the building, take a Kalashnikov rifle out of a bag, and shoot into a room, before walking out.


"From the images we have seen, we can deduce that the perpetrator probably acted alone and was well prepared," said Ine Van Wymersch, a spokeswoman for the Brussels prosecutor's office.

"It's still too early to confirm whether it's a terrorist or an anti-Semitic attack; all lines of investigation are still open," she told a news conference.

Officials appealed for witnesses to the attack in the busy tourist district which is filled with class="mandelbrot_refrag">restaurants and antique shops. The entrance to the Jewish Museum was lined with flowers and candles, and will remain closed to the public on Monday.

"The anti-Semitic nature of the act - a shooting, with intent to kill, in the Jewish Museum of Brussels - cannot be denied," said Hollande, speaking about the Brussels attack.

"We must do everything to fight against anti-Semitism and racism," he told news channel I-Tele on Sunday.

Hours after the Brussels shootings, two Jews were attacked and beaten in Paris as they left a synagogue in the suburb of Creteil wearing traditional Jewish clothing.


The two Israelis, Emmanuel and Miriam Riva, both in their 50s, were described by friends as former Israeli civil servants who were in Belgium on vacation.

A Belgian man who was also injured in the shooting remained in critical condition in hospital, authorities said.

Belgian Prime Minister Elio Di Rupo spoke by telephone with Hollande and Israeli Prime Minister Benjamin Netanyahu and held talks with the Jewish community in Belgium.

Netanyahu, in a statement from his office, strongly condemned the Brussels killings. They were, he said, "the result of endless incitement against the Jews and their state". He offered Israeli cooperation in the Belgian investigation.

An Israeli official said Emmanuel Riva had formerly worked for Nativ, a government agency that played a covert role in fostering Jewish immigration from the former Soviet Union.

Along with the Mossad and Shin Bet intelligence services, the agency was under the authority of the prime minister's office.


Miriam Riva also formerly worked for the prime minister's office, the official said without elaborating.


Friends of the couple interviewed by Israeli media said they both worked as accountants in government service.


Pope Francis, in Tel Aviv on Sunday, condemned the attack in Brussels, where about half of Belgium's 42,000-strong Jewish community lives.


"With a deeply saddened heart, I think of all of those who lost their lives in yesterday's savage attack in Brussels," he said.


"In renewing my deep sorrow for this criminal act of anti-Semitic hatred, I commend to our merciful God the victims and pray for the healing of those wounded."


At some 550,000, France's Jewish community is the largest in Europe, though violence such as the 2012 murders of three Jewish children and a rabbi by Islamist gunman Mohamed Merah have prompted higher emigration to class="mandelbrot_refrag">Israel or elsewhere.


France's Agence Juive, which tracks Jewish emigration, says 1,407 Jews left class="mandelbrot_refrag">France for class="mandelbrot_refrag">Israel in the first three months of this year, putting 2014 on track to mark the biggest exodus of French Jews to Israel since the country was founded in 1948.


(Additional reporting by Maayan Lubell and Dan Williams in Jerusalem, Leila Abboud in Paris, Justyna Pawlak and Philip Blenkinsop in Brussels; Writing by Justyna Pawlak; Editing by Lynne O'Donnell, Sophie Hares and Eric Walsh)


Business aviation picks up, but jet surplus persists

class="mandelbrot_refrag">Business aircraft are taking to the skies again as many economies around the world improve, but a surplus of jets delivered just before the recession means the equivalent of 2,750 jets remain parked in hangars.

An excess of jets is depressing prices for planes, particularly older ones, and clouding the outlook for manufacturers of new jets, such as Bombardier Inc, Gulfstream and Cessna.

Some companies are cutting back on corporate jet travel and reducing executives' use of corporate jets for personal trips.

With so many jets not being flown, businesses are finding it more difficult to justify new purchases, said Rolland Vincent, president of Rolland Vincent Associates, a jet consulting firm that works with Utica, New York-based JetNet.

"It's like having a lot of cars in your driveway," Vincent said. "If you don't use them that much, you're not going to be out shopping for another one."

The recovery in class="mandelbrot_refrag">business flying is uneven around the world, and prone to setbacks. A global survey of private aircraft, including helicopters and charters, showed a 2 percent decline in the hours flown in the first quarter, from a year ago.

Flight hours in Asia, Europe and the Middle East rose in the past year through March, but declined in the United States and Latin America, according to the survey by Jet Support Services Inc (JSSI), a Chicago-based company that supplies service and support for aircraft.

The harsh U.S. winter played a big role in depressing demand for flying, while political issues in Eastern Europe and slower economic growth in Asia affected flying in those regions, JSSI said.

But demand should "bounce back" in the spring, said Neil Book, chief executive of JSSI. "As the overall class="mandelbrot_refrag">economy ramps up, we expect to see overall flight hours increase more quickly," he said.

Indeed, the longer term trend in operations tracked by the Federal Aviation Administration shows U.S. flying steadily picking up.

In the United States, which is by far the largest business-aircraft market, business jet flights rose about 3.4 percent in the 12 months through March, according to the FAA's tracking of takeoffs and landings. That's a sharp upswing from the prior 12-month period, when flights rose only about 0.3 percent.

But because the industry was cranking out jets at a high rate from 2005 to 2009, the amount of flight time per plane remains well below the peak of 2007, just before the financial crisis.

Some companies are throttling back on personal plane use, or shifting to less expensive options than owning, including new "club membership" plans that don't involve capital outlays that can cost hundreds of thousands or millions of dollars annually.

Several class="mandelbrot_refrag">S&P 500 companies said in recent filings that they have set limits on executive use of corporate jets. Many already require executives to reimburse the company for personal use of the plane beyond a set limit of hours or dollars.

class="mandelbrot_refrag">Danaher Corp, for example, recently curtailed personal use of the corporate jet by its chief executive and chief financial officer, but raised salaries to compensate for loss of the perk.

Some companies also said they are leasing jets or using fractional ownership plans, rather than owning planes outright.


Wheels Up, a plane serviced launched last August, uses a club membership instead of fractional ownership, and cuts the cost substantially. He said some of the demand comes from companies that have given up ownership of some form.


"We've definitely had people joined from other ownership programs," said Rod Williams, president of Wheels Up.


(Reporting by Alwyn Scott; Editing by Ken Wills)


At dinner with Putin, menu of Crimean flounder and Russian grievances

You can't say Vladimir Putin lacks a pointed sense of humor. The entrée at the Russian president's dinner for news agency editors on Saturday night was "Crimean flounder." No kidding.

As dinner was ending in the ornate Konstantinovsky Palace, Putin was asked whether he speaks regularly with U.S. president class="mandelbrot_refrag">Barack Obama.

"We have some contacts," he shrugged. "But now I have to go speak with Mr. (Francois) Hollande and Mrs. (Angela) Merkel," the French president and the German chancellor, respectively.

With that he gave a champagne toast, and left.

But before that he spoke at length on many topics during a three-hour interview before and during a seven-course dinner that included "soft smoked sturgeon salad" and "white asparagus soup with black caviar" as well as the recently Russified flounder.

The topics ranged from the over-arching ( class="mandelbrot_refrag">Ukraine and the prospect of a new Cold War) to the less well-known (the status of four islands disputed by Japan and Russia, in response to a Japanese editor's query).

The former communist quoted the Bible several times, dismissed suggestions that he wants to recreate the former Soviet Union, and said he doesn't want a new Cold War.

He also declared himself "liberal" on social and sexual mores, but added that people should not be "aggressive" in foisting their values on others.

Speaking in Russian, with simultaneous translation into seven other languages, Putin came across as a clever, articulate man, with a grasp of the intricacies of issues, big and small. But the strongest impression, which emerged time and again, was of Putin's strong sense of aggrievement over the West's relegation of Russia, in his view, to second-tier status. It's bitter. And it's personal.

"I always treat our partners with due respect," he said at one point, "and I hope others treat Russia and me, personally, in the same way." Regarding Obama's denunciation of Russia's annexation of Crimea, Putin snapped: "No one should talk like that to Russia."

At another point during dinner he declared: "If Russia is only allowed to sit next to someone and listen to what others say" at international conclaves, "that is not the rightful role for Russia."

He also decried "rude, forceful action against Russian interests" that might have led to class="mandelbrot_refrag">Ukraine joining NATO and deploying missiles within easy range of Russia. He added: "(The West) should have considered the consequences" of encouraging such behavior.

When an Italian editor asked about his reaction to rising nationalism and right-wing radicalism in Western Europe, Putin replied: "I hope you are not blaming us for that!"

The editor hadn't suggested, even indirectly, that Russia was to blame. And the notion that he is trying to re-create the old Soviet Union, Putin declared, was "a tool in the information war" fomented by Western media.

The dinner for journalists culminated the three-day St. Petersburg International Economic Forum, a discussion and networking event, patterned after the annual talkfest in Davos. The forum's aim was to attract foreign investment, which Russia badly needs. Its class="mandelbrot_refrag">economy is teetering on recession, and the Ukraine crisis has helped spark what the central bank put at almost $64 billion in net capital flight in the first three months in the year, almost as much as in the whole of last year.

Putin pointed repeatedly to a recent commercial success: his new deal to provide China with $400 billion of class="mandelbrot_refrag">natural gas over three decades. But most American chief executives stayed away from the forum, at the urging of the Obama administration. And despite Putin's desire to focus the conference on investment opportunities, the discussion kept returning to Ukraine.


After his speech to the conference's plenary session on Friday, for example, Putin sat for an on-stage interview with CNBC Europe anchor Geoff Cutmore. At one point, when Cutmore kept pressing Putin on Ukraine, the president snapped: "Oh, come on, really. You are a difficult man to deal with!"


During the dinner with journalists he declined to name the national leader, past or present, he admires the most. "There is a saying in the Bible, ‘Thou shall not make a graven image," he explained. "That said, I love history and read it a lot, and I surf the web a lot. I often ask myself what other leaders would do in my situation."


But Putin expansively answered most questions, including one from a German journalist about widespread Russian revulsion at the recent winner of the annual Eurovision song contest: an Austrian bearded male drag artist wearing a dress.


"The Bible talks about the two genders, man and woman, and the main purpose of union between them is to produce children," Putin explained. "For us it is important to reaffirm traditional values.... I personally am very liberal (on matters of personal morality). People have the right to live their lives the way they want. But they should not be aggressive, or put it up for show."


On the sidelines of the economic forum there was lots of talk about moving past politics - as if the Ukraine crisis was akin to an everyday spat between Tories and Liberals, Democrats and Republicans, or Social Democrats and Christian Democrats - and getting on with class="mandelbrot_refrag">business. The head of the Russian subsidiary of a major American manufacturer expressed hope that the current East-West crisis would pass within months. And a Russian journalist said he expected that the Russian-American tensions would ease after Obama leaves office.


But asked for evidence to support their views, neither the businessman nor the journalist had much to offer. And the war of rhetoric shows little sign of abating.


Commenting on Britain's Prince Charles, who compared Russia's seizure of Crimea to Hitler's aggression, Putin said: "It reminds me of a proverb: If you are angry, that means you are wrong.... This comparison is not acceptable. It is not what monarchs do."


And at another point, the Russian president observed: "We have a saying: 'You cannot make other people like you'."


(Editing by Timothy Heritage and Peter Graff)