The News

nytimes.com — Treasury Secretary Henry M. Paulson Jr. called on Wednesday for a new regulatory system that would prevent future financial turmoil while allowing even large financial institutions to fail without risking a wider market collapse. "Looking beyond the current market challenges of today, we need to create a resolution process that ensures the financial system can withstand the failure of a large, complex financial firm," Mr. Paulson said, during a London stop on his European tour. He said that any new regulation must give the Federal Reserve, the United States" central bank, access to information from all types of financial institutions, including investment banks, and tools that would reduce risk to the financial system without creating the sense that any troubled institution would be bailed out.

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hosted.ap.org — Claude Kicklighter, the Pentagon's inspector general, is resigning after just over a year in the job and at a time when defense spending has skyrocketed but personnel shortfalls in the oversight office have strained its ability to probe allegations of waste, fraud and abuse. Kicklighter's departure marks yet another shift in leadership at this key Pentagon office. In September 2005, Joseph Schmitz resigned to be chief operating officer and general counsel for the Prince Group, which owns security contractor Blackwater Worldwide. Schmitz's more than three-year tenure as Pentagon inspector general was marred by allegations he improperly interfered with two ongoing investigations to protect senior Bush administration officials. An independent inquiry later cleared Schmitz of any wrongdoing.

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iht.com — Bush administration officials knew that a Texas oil company with close ties to President George W. Bush was planning to sign an oil deal with the regional Kurdistan government that runs counter to U.S. policy and undercuts Iraq's central government, a congressional committee has concluded. U.S. policy is to warn companies that they incur risks in signing contracts until Iraq passes an oil law and strengthens Iraq's central government. The Kurdistan deal, by ceding responsibility for writing contracts directly to a regional government, infuriated Iraqi officials. But documents show that State Department officials did nothing to discourage the deal and in some cases appeared to welcome it.

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reuters.com — The latest U.S. natural disaster is triggering fresh rounds of concern and debate about how to repair America's aging infrastructure. The worst Midwest flooding since 1993 has generated images of swamped towns, cracked roads, washed-out bridges, overwhelmed dams, failed levees, broken sewage systems, stunted crops and water-logged refugees. The disaster has reminded policymakers of the decrepit state of U.S. infrastructure, stirring concerns similar to those following the deadly Minneapolis bridge collapse in 2007 and the flooding of New Orleans after Hurricane Katrina in 2005.

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washingtonpost.com — More than 900 cases alleging that government contractors and drugmakers have defrauded taxpayers out of billions of dollars are languishing in a backlog that has built up over the past decade because the Justice Department cannot keep pace with the surge in charges brought by whistle-blowers, according to lawyers involved in the disputes. Many of the cases involve the wars in Iraq and Afghanistan, rising health-care payouts, and privatization of government functions — all of which offer rich new opportunities to swindle taxpayers.Since 2001, 300 to 400 civil cases have been filed each year by employees charging that their companies defrauded the government. Whistle-blowers routinely wait 14 months or longer just to learn whether the department will get involved. Disputes can stay buried for years more while the government investigates the allegations.

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usatoday.com — The Food and Drug Administration activated its Food Emergency Response Network, adding as many as 100 laboratories to its efforts to trace the source of the salmonella outbreak that has sickened more than 800 since April. The extra labs are needed because the Centers for Disease Control and Prevention (CDC) over the weekend expanded its investigation of the outbreak originally blamed on contaminated tomatoes. The federal agencies are now collecting samples of foods typically consumed with tomatoes.

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