William C. Thompson Jr. walked into Tuesday night’s mayoral debate a likeable man who is being outspent 16 to 1, and whose views and background are more than a bit of a mystery to many New Yorkers.
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William Thompson greeted his supporters before his debate with Mayor Michael Bloomberg on Monday night.

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Unfortunately for Mr. Thompson, he seemed to have exited in the same fashion.

Save for his accent, which carries the unmistakable cadence of his native Brooklyn, and for his insistent attacks on Mayor Michael R. Bloomberg’s flip-flop on term limits, Mr. Thompson, the city comptroller, resembled a painter who left too much of his canvas blank.

He grew up as the high-achieving son of a prominent politician and a teacher in Bedford-Stuyvesant, a neighborhood of elegant brownstones that now suffers a plague of foreclosures and homelessness. During his time on the Board of Education, he voted for two chancellors who concentrated on the poorest students and wrested power from corrupt local school boards. Test scores rose sharply in his final years there.

A viewer would have learned little to nothing of these facts. Mr. Thompson’s personal anecdote count Tuesday totaled zero.

The conundrum for Mr. Thompson is that he’s carved a three-decade career in public life by being a conciliator, a nimble-footed inside player herded board members to votes and — with one notable exception — really tried to avoid annoying former Mayor Rudolph W. Giuliani.

He lacked power to make most policy decisions and seemed allergic to crusades. All of which is perfectly defensible, but public powerlessness is not the stuff of compelling narratives.

On Tuesday Mr. Bloomberg attacked him, erroneously, for being “in charge” of the schools in the 1990s. Mr. Thompson scrunched his face, incredulous.

“I was in charge?” he said, turning to look at the mayor. “Nothing could be further from the truth.”

Mr. Bloomberg replied with just a hint of a Cheshire cat smile.

In fairness, neither mayor nor comptroller made the night electric; Mr. Bloomberg in particular tended to dole out energy a miserly watt at a time. The city is sunk into recession’s mire, unemployment tops 10 percent — black male unemployment edges toward 50 percent — and foreclosure threatens working class families, and the candidates made glancing mentions of all of this. (Neither candidate uttered the word foreclosure).

A reporter asked the candidates about a controversial fact of life in minority communities: Police each year frisk more than half a million young men, more than 80 percent of them black or Latino. The number of frisks has increased during the past decade, sweeping up hundreds of thousands of teenagers and college students. Police have arrested fewer than 5 percent of this number.

Mr. Thompson wants to curtail it. “We know it’s being overused,” he said.

Mr. Bloomberg conceded no problem. “I do think the police have struck a good balance,” he said soothingly.

Mr. Bloomberg is not much for emoting. He rolls his eyes, his voice cuts monotone and his touch is rarely common. But he came into the night with considerable advantages. He is a reasonably popular two-term incumbent (residents tend to like his policies more so than him), and he sits atop a great green bag of personal swag, having so far spent $65 million of his own money on this campaign.

Mr. Bloomberg, an independent, is unsentimentally promiscuous about party loyalty. But in his governing style, he looks an awful lot like a moderate Democrat, which complicates matters for Mr. Thompson, who as it happens is a moderate Democrat.

None of which is to suggest that Mr. Thompson has no line of attack — the decaying economy suggests opportunity. But the Thompson campaign has been curiously relaxed — last weekend he appeared at two churches, according to his schedule. He offered passionate words Tuesday night about the plight of middle-class New Yorkers.

But he offered no storehouse of stories of actual suffering to put meat on the bones of his attack.

Instead Mr. Thompson concluded as he began, by doubling down on a single bet: term limits. The election, he said, will be New Yorkers’ referendum on term limits. “And that we say: We are not for sale!”

In less than four weeks, he’ll find out if that is enough.

The federal pay czar is trying to force the American International Group to reduce $198 million in bonuses promised to employees of its trading unit, where problems posed a threat to the global financial system last year.
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But the Treasury’s special master for compensation, Kenneth Feinberg, is running into legal hurdles because those bonuses fall outside new rules against bonus payments at companies receiving government assistance. The bonus agreements at issue were struck before last year’s emergency rescues by the Treasury and the Federal Reserve, and thus are not directly covered by the new rules.

The problem is a recurring one. A.I.G. payments early this year to the same employees elicited public outrage, though government officials said then that they had little legal authority to rescind pre-existing contracts.

To strengthen his hand, Mr. Feinberg is threatening to reduce the compensation packages he does control, according to a person close to the talks. That could mean shrinking the pay of other A.I.G. executives — including its new chief, Robert Benmosche — if the firm does not claw back part of the bonuses for the people in its trading unit, known as A.I.G. Financial Products.

At companies that received extraordinary government support, Mr. Feinberg’s task is to monitor and enforce rules governing new pay packages. He can approve or reject cash pay that exceeds $500,000 for top executives.

Mr. Benmosche, hired by A.I.G. late this summer, received a compensation package that includes $3 million initially and about $4 million in stock that he must hold for five years, as well as annual bonuses based on performance.

A.I.G. has a variety of employee bonus programs. The Financial Products group began a two-year retention program in January 2008, before its government rescue, designed to keep skilled employees from leaving and jeopardizing its derivatives portfolio .

After A.I.G. paid $165 million in retention bonuses to that group in March, it promised to try to recover much of the money to quell the uproar that ensued.

But the insurance company has recovered only $19 million of the $45 million it asked the recipients to repay, according to an audit of its compensation program and the government’s oversight.

A company spokeswoman, Christina Pretto, said in a statement that the people who had received that money had “until the end of the year to fulfill their commitments,” and that the company believed those people would honor them.

But the special inspector general for the Troubled Asset Relief Program, Neil M. Barofsky, who conducted the audit, said some of the money appeared to be unrecoverable, because the employees had resigned rather than return the pay.

Other people are still weighing tax issues arising from those bonuses, and some have asked the insurer to dock their paychecks in the future, rather than make a single payment now.

The inspector general’s audit will be the subject of a hearing Wednesday by the House Oversight and Government Reform Committee.

The report stated that Mr. Feinberg had “informally advised A.I.G. not to pay the full $198 million,” scheduled for payment next March, but did not reveal how sharply Mr. Feinberg hoped to pare the bonuses.

The amount of the bonuses at A.I.G. is quite small relative to the record amount of government assistance received by the firm over the last year, roughly $182 billion.

The $165 million in bonus pay made last March coincided with the news that A.I.G. had just posted the biggest loss in American history and would need a bigger rescue package. That led to stormy Congressional hearings and tours of the suburbs where some bonus recipients lived.

Company officials argued at the time that only a handful of the employees of financial products bore responsibility for the disastrous derivatives trading, and it was unfair to blame everybody for the harm caused by a few. The company also said it wanted to honor its commitments because skilled people might resign en masse if bonuses were rescinded.

The new audit pointed out that the bonus program for the Financial Products unit was unusual because it included payments to unessential people. It cited a $7,700 bonus for a kitchen assistant, a $7,000 bonus for a mailroom assistant and $700 for a file administrator.

The audit also described the lack of coordination between the Federal Reserve and the Treasury over A.I.G.’s compensation program. It said Fed officials had their own conversations with company officials about compensation last fall, and were further briefed over the winter by compensation specialists at Ernst & Young brought in to help.

But the Fed did not convey any of the information it had gathered to the Treasury until just before the bonuses were scheduled to be paid in March. Then, the Fed sent an e-mail message to the general counsel at the Treasury, the report stated, warning that the looming bonuses had “garnered press and congressional attention” and would “not be easy for Treasury and the Fed to defend.”

That message promised to supply more detail, but nothing followed for about a week.

“Despite the strong language” of the Fed’s messages, the audit found “that the e-mail did not raise any flags in Treasury.”

Stephen Labaton contributed reporting.

MOSCOW, Russia (CNN) -- U.S. Secretary of State Hillary Clinton stressed Tuesday that Washington and Moscow are working together to ensure Iran's nuclear program is strictly for peaceful purposes, but Russia has stopped short of committing to Iranian sanctions.
Russian President Dmitry Medvedev greets U.S. Secretary of State Hillary Clinton on Tuesday outside Moscow.

Russian President Dmitry Medvedev greets U.S. Secretary of State Hillary Clinton on Tuesday outside Moscow.

Speaking to reporters after a closed-door meeting, Clinton and Russian Foreign Minister Sergey Lavrov indicated there has been no agreement between the countries on any sort of sanctions plan, even though Russia is not opposed to sanctions in principle.

The United States is using a two-track approach, pursuing diplomacy with Iran and going on to stronger measures -- such as sanctions -- if that effort fails.

"We are aware that we might not be as successful as we need to be," Clinton said. "So we have always looked at the potential of sanctions in the event that we are not successful, that we cannot assure ourselves and others that Iran has decided not to pursue nuclear weapons."

Clinton quoted Russian President Dmitry Medvedev's recent comment that sanctions might be "inevitable" but not at this stage. Video Watch as Clinton stresses the importance of the diplomatic track with Iran »

While the Obama administration has been cautiously optimistic about the "inevitable" comment, Russia has long believed that sanctions are not yet necessary, even though they may be a factor to consider down the road.

Lavrov said that sometimes sanctions theoretically need to be imposed when all diplomatic efforts are exhausted -- but not in the case of Iran.
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"Threats, sanctions and threats of pressure in the current situation, we are convinced, would be counterproductive," he said.

World powers have long been concerned that Iran wants to build a nuclear weapon, and those suspicions were heightened by the discovery of a secret uranium enrichment plant near Qom. However, Iran has consistently said it is developing nuclear power for peaceful purposes.

"Iran's nuclear program remains a matter of serious concern. We're working closely with Russia through the P5 and 1 process," Clinton said, referring to the diplomacy with Iran conducted by Germany and the five permanent members of the U.N. Security Council -- the United States, Britain, France, China and Russia.

"We are working to ensure that Iran moves forward with us on this engagement track," said Clinton, who added that Iran must show without any doubt it is pursuing unequivocally only a peaceful use of nuclear power.

Clinton also met with Medvedev at his residence outside Moscow. Other items on Clinton's agenda included Afghanistan, arms control and the new U.S.-Russia bilateral presidential commission.
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Clinton spoke about surmounting historical difficulties in U.S.-Russian relations, changing a relationship "once defined by the shadow of mutually assured destruction into that based on mutual respect and over time increasingly mutual trust."

"We are different countries; we have different historical experiences, different perspectives," she said. "But we are planting those disagreements in a much broader field of cooperation, and hopefully we are enriching the earth in which this cooperation can take root."

From Kevin Flower
CNN
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(CNN) -- The United Nations Human Rights Council will hold a special session Thursday to reopen discussion of Israel's three-week offensive against the Islamic militant group Hamas in Gaza.
In his speech Monday, Israeli Prime Minister Benjamin Netanyahu called the report an "absurd claim."

In his speech Monday, Israeli Prime Minister Benjamin Netanyahu called the report an "absurd claim."

According to a statement from the council, the meeting request came from the Palestinian Authority in the West Bank and is co-sponsored by 18 members of the 47-member body based in Geneva, Switzerland.

The council commissioned South African Judge Richard Goldstone to lead a fact-finding mission into the hostilities in Gaza that lasted from December 27, 2008, to January 18, 2009.

Goldstone's group issued a report last month which concluded that both Israel and Hamas had committed "actions amounting to war crimes, possibly crimes against humanity."

The council received the report September 29, but took no action, after a request by the Palestinian Authority to defer discussion for six months.

The Palestinian Authority government of Mahmoud Abbas came under withering criticism by Gaza Palestinians for the move.

Abbas defended his request in a televised speech Sunday and vowed to work "to punish everyone who was responsible for the hideous crimes committed against our children, our men and women -- especially in our dear Gaza."

Israeli Prime Minister Benjamin Netanyahu, in a speech Monday at the opening session of the Knesset, called the war crimes charge "an absurd claim."
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"We will not agree to a situation where the [Israel Defense Forces] commanders and soldiers will be treated as war criminals after valorously defending the citizens of Israel against a loathsome enemy," he said.

Netanyahu said that if the report ultimately is referred to the U.N. Security Council or the International Criminal Court, it would deliver "a mortal blow" to the peace process.

There is an ongoing dispute about the number of people killed in the three-week military offensive that Israel called Operation Cast Lead.

The Gaza-based Palestinian Center for Human Rights put the death toll at 1,419 and said 1,167 of those were "non-combatants."

The Israeli military released its own figures earlier this year, claiming 1,166 people were killed, and 60 percent of those were "terror operatives."