Sandi Jackson joins husband in pleading guilty

Jesse Jackson Jr. pleads guilty to misusing campaign funds.

Former U.S. Rep. Jesse Jackson Jr. and his wife, former Chicago Ald. Sandi Jackson, pleaded guilty today in what prosecutors said was a conspiracy to siphon about $750,000 in federal campaign funds for their personal use.

Jackson Jr. entered a negotiated plea of guilty this morning on one felony count of conspiracy to commit false statements, wire fraud and mail fraud. He could face years in prison when he is sentenced this summer.

Sandi Jackson pleaded guilty this afternoon to a single charge of willingly filing a false tax return, tied to the same allegations that the couple repeatedly tapped the ex-congressman’s campaign fund, used the money for personal use and then made fraudulent campaign and tax disclosures to cover up the misconduct.

Both Jacksons, wearing dark suits in court, had the opportunity to make short statements to the judge about their wrongs. But unlike her husband, Sandi Jackson merely answered the judge's questions with a string of "Yes, sirs" and eventually sniffled loudly and dabbed her face with tissue as it came time to make her plea.

"Guilty," she said in a tiny voice, choking back tears.

Jackson Jr. was present for his wife's hearing – and in fact took the seat that Sandi had used behind the defense table when he entered his own guilty plea earlier in the day. They left the courtroom holding hands.

Prosecutors say the couple enjoyed a life of luxury with campaign cash. About 3,100 personal purchases were made on campaign credit cards, totaling $582,772.58, prosecutors said.

“These expenditures included high-end electronic items, collector’s items, clothing, food and supplies for daily consumption, movie tickets, health club dues, personal travel and personal dining expenses,” the court filing states.

Jackson Jr. personally opened a bank account under the name “Jesse Jackson Jr. for Congress" in January 2006, then the following year withdrew $43,350 to buy a gold Rolex watch, according to documents filed with Jackson Jr.'s plea agreement state that.

Other expenses included more than $4,000 on a cruise and $243 at a Build-a-Bear workshop. “Records from Best Buy reveal that defendant purchased multiple flat-screen televisions, multiple Blu-Ray DVD players, numerous DVD’s for his Washington, D.C. home,” the documents state.

Prosecutors said $60,000 was spent on restaurants, nightclubs and lounges; $31,700 on personal airfare; $16,000 on sports clubs and lounges; $17,000 on tobacco shops; $5,800 on alcohol; $14,500 on dry cleaning; $8,000 on grocery stores and $6,000 at drug stores.

In one of the more exotic purchases, Jackson used campaign funds in the spring of 2011 to pay a taxidermist in Montana $7,058 for two mounted elk heads to be shipped to his office in Washington. This was the beginning of an FBI sting, according to court documents.

A year after the purchase, the taxidermist was asked to buy the elk heads back or provide the names of people who might buy them or build storage containers for them. This led to an undercover FBI agent offering to pay $5,300 for the heads. The money was to be wired to Jackson’s personal bank account, the documents state.

"Sir, for years I lived in my campaign," Jackson Jr. told U.S. District Judge Robert Wilkins when entering his plea. "I used monies that should have been used for campaign purposes, and I used them for myself personally, to benefit me personally.  And I am acknowledging that that which the government has presented is accurate."

As he entered the courtroom this morning, Jackson Jr. gave his wife a peck on the cheek and took his seat. At one point he stepped from the defense table and shook hands with a lead FBI agent in the case, Tim Thibault, who was seated with government prosecutors.

Jackson Jr. spoke softly during the hearing and sometimes dabbed his eyes with a tissue. When asked by Wilkins how he would plead, Jackson answered: “I am guilty, your honor.”

Pressed by the judge on whether he was freely entering the plea, the former congressman acknowledged he had been under psychiatric care but said he had not been treated for addiction to alcohol or narcotics.

Asked whether he understood what was happening, he answered, "Sir, I've never been more clear in my life."

Leaving the courtroom, Jackson Jr. told a reporter, "Tell everybody back home I'm sorry I let 'em down, OK?"

At a press conference following the hearing, Jackson Jr. attorney Reid Weingarten said Jackson's health problems contributed to his crimes.

"It turns out that Jesse has serious health issues," he said. "Those health issues are directly related to his present predicament. That's not an excuse, that's just a fact."

As part of Jackson Jr.'s plea deal, the parties have agreed that sentencing guidelines call for a term of between 46 and 57 months in prison, but the sides reserved the right to argue for a sentence above or below that range for him when he is sentenced June 28.

After his release from an expected prison term, he might face three additional years of supervised release, or probation.

Also under the guideline range agreed to by Jackson Jr. and lawyers on both sides, what had been a maximum fine of $250,000 drops to one in the range of $10,000 to $100,000. In addition, he remains subject to a forfeiture of $750,000.

The judge said Jackson could be released before sentencing and ordered him to be processed by the U.S. Marshal's Service, surrender his passport and undergo drug testing while awaiting sentencing.
His attorney asked if Jackson Jr. could be allowed to travel back and forth from Chicago, saying he essentially lived in both places, and the judge agreed.

Sandi Jackson's sentencing was scheduled for July 1, a few days after her husband’s. There was dispute between government and defense lawyers about where she would fall under the federal sentencing guidelines, which the judge is not bound to follow.

On the high end, favored by the government, she would face a possible prison term of 18 to 24 months and a fine of $4,000 to $40,000. Her lawyers are pushing for 12 to 18 months and a fine of $3,000 to $30,000. The count has a maximum penalty of three years.

Guidelines are only advisory to judges. Sandi Jackson, like her husband, was given consideration for acceptance of responsibility for her crimes.

As part of her guilty plea, Sandi Jackson agreed to pay $168,500 in restitution.

Dan Webb, Sandi Jackson's attorney and a former top federal prosecutor in Chicago, told reporters following her court appearance that she had faced a "hard decision" to plead guilty rather than fight the charges against her.

"She made the decision to plead guilty today to a one-tax charge, and that's the only thing she pleaded guilty to, because that's the charge the government filed against her," Webb said.

He said the Jackson family had been through a difficult time as a result of Jackson, Jr.'s "mental and emotional issues."

"This gives her a chance now to put it behind her, to focus on her family, to focus on her two young children, and to move forward with the rest of her life," he said.

As the Jacksons arrived at federal court in Washington, D.C. this morning, neither responded to questions from reporters. The two stepped out of a black SUV, and Sandi Jackson walked ahead of her husband, carrying a satchel. Jackson Jr. looked up when reporters shouted questions but said nothing and looked down as he went into the building.

Minutes later, his father, the Rev. Jesse Jackson Sr., and other family members walked through the front entrance of the courthouse, their arms linked together.

Jackson Jr., 47, was in the House of Representatives for 17 years until he resigned last November. Sandi Jackson, 49, was a Chicago alderman from 2007 until she stepped down in January. Both are Democrats.

Jackson Jr. began a mysterious medical leave of absence last June for what was eventually described as bipolar disorder. Though he did not campaign for re-election, he won another term last Nov. 6 while being treated at the Mayo Clinic in Minnesota. He left office two weeks later, saying he was cooperating with federal investigators.

Married for more than 20 years, the Jacksons have a 12-year-old daughter and a 9-year-old son. The family has homes in Washington and on Chicago’s South Side.

Washington defense attorney Stan Brand, the former general counsel of the House of Representatives, said Tuesday that Jackson Jr.’s case involved the largest sum of money he’s seen in a case involving personal use of campaign money.

“Historically, there have been members of Congress who either inadvertently or maybe purposefully, but not to this magnitude, used campaign funds inappropriately,” he said.

Earlier this morning, Judge Wilkins disclosed that he had a past link to Jackson Jr.’s father. But both prosecutors and the Jackson defense waived any attempt to transfer the case, the judge noted in a court memorandum.

Wilkins wrote that he has no interest or bias in the case, but disclosed the following:

“In 1988, while a law student, Judge Wilkins served as a co-chair of Harvard Law School students supporting the presidential campaign of Rev. Jesse L. Jackson, Sr., and on October 24, 1988, Judge Wilkins introduced Rev. Jackson when he came to speak at a campus event supporting the presidential candidacy of Governor Michael Dukakis. On March 21, 1999, while an attorney, Judge Wilkins appeared as a guest on a show hosted by Rev. Jackson on the CNN network entitled ‘Both Sides with Jesse Jackson’ to discuss a civil rights lawsuit in which Judge Wilkins was a plaintiff. Judge Wilkins believes that he has spoken to Rev. Jackson only on these two occasions, and he does not believe that he has ever met or spoken to the two defendants in these cases.”

kskiba@tribune.com

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Twitter begins integrating advertising software

SAN FRANCISCO (Reuters) - Twitter Inc said on Wednesday it is opening up its platform to third-party advertising management software, taking another step to establish its ad-based business model ahead of an initial public offering.

The ads application programming interface, or API, would allow advertisers to connect their existing ad management software to their Twitter account to automate ads on the micro-messaging platform.

Twitter said that it would begin by integrating with ad software by Adobe Systems Inc, Salesforce Inc, Hootsuite, SHIFT and TBG Global.

"With the Ads API, marketers now have more tools in their arsenal to help them deliver the right message, to the right audience, on the desktop and on mobile devices — all at scale," Twitter product manager April Underwood wrote in a blog post.

Under pressure to show growing revenues, Twitter in recent years has ramped up its ad-serving capabilities while building a sales staff to woo corporate marketers. The firm said last year it would allow marketers to target Twitter users based on a profile of their perceived interests and by location.

Twitter makes money every time a user clicks or retweets a "promoted" message paid for by an advertiser. The new API would allow great automation for advertisers, who previously had to manually write every promoted tweet.

In 2013, Twitter's ad revenues are expected to grow nearly 90 percent to $545 million, according to eMarketer which noted that Facebook Inc experienced similarly rapid growth after opening its API to advertisers in 2011.

(Reporting By Gerry Shih; Editing by Bernard Orr)

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Police offer confused testimony in Pistorius case

PRETORIA, South Africa (AP) — The detective leading the police investigation into Oscar Pistorius' fatal shooting of his girlfriend offered confusing testimony Wednesday, at one point agreeing with the athlete's defense that officers had no evidence challenging the runner's claim he accidentally killed her.

Testimony by Detective Warrant Officer Hilton Botha of the South African Police Service left prosecutors rubbing their temples, only able to look down at their notes as he misjudged distances and acknowledged a forensics team left in the toilet bowl one of the bullet slugs fired at Reeva Steenkamp. However, Botha still poked holes in Pistorius' own account that he feared for his life and opened fire on Valentine's Day after mistaking Steenkamp for an intruder.

The second day of the bail hearing in a case that has riveted South Africa and much of the world appeared at first to go against the double-amputee runner, with prosecutors saying a witness can testify to hearing "non-stop talking, like shouting" between 2 a.m. and 3 a.m. before the predawn shooting on Feb. 14. However, Botha later said under cross examination that the person who overheard the argument was in a house 600 meters (yards) away in Pistorius' gated community in the suburbs of South Africa's capital, Pretoria.

Later, prosecutor Gerrie Nel questioned Botha again and the detective acknowledged the distance was much closer. But confusion reigned for much of his testimony, when at one point Botha said officers found syringes and steroids in Pistorius' bedroom. Nel quickly cut the officer off and said the drugs were actually testosterone.

Pistorius' lead defense lawyer, Barry Roux, asserted when questioning the detective — who has 16 years' experience as a detective and 24 years with the police — that it was not a banned substance and that police were trying to give the discovery a "negative connotation."

"It is an herbal remedy," Roux said. "It is not a steroid and it is not a banned substance."

The name of the drug, offered later in court by Roux, could not be immediately found in reference materials by The Associated Press. A spokesman for prosecutors later said it's too early to know what the substance is, as they don't yet have results of forensic testing on the material.

Pistorius, 26, said in an affidavit read in court Tuesday that he and his 29-year-old girlfriend had gone to bed and that when he awoke during the night he detected what he thought was an intruder in the bathroom. He testified that he grabbed his 9 mm pistol and fired into the door of a toilet enclosed in the bathroom, only to discover later to his horror that Steenkamp was there, mortally wounded.

Pistorius, the first Paralympian runner to compete at the Olympics, is charged with premeditated murder in the case.

The prosecution attempted to cement its argument that the couple had a shouting match, that Steenkamp fled and locked herself into the toilet stall of the bathroom and that Pistorius fired four shots through the door, hitting her with three bullets.

Botha said: "I believe that he knew that Reeva was in the bathroom and he shot four shots through the door."

But asked if the police found anything inconsistent with the version of events presented by Pistorius, Botha responded that they had not. He later said nothing contradicted the police's version either.

Nel projected a plan of the bedroom and bathroom in the courtroom and argued that Pistorius had to walk past his bed to get to the bathroom and could not have done so without realizing that Steenkamp was not in the bed.

"There's no other way of getting there," Nel said.

Botha said the trajectory of the bullets showed the gun was fired pointed down and from a height. This seems to conflict with Pistorius' statement Tuesday, because the athlete said that he did not have on his prosthetics and on his stumps and feeling vulnerable because he was in a low position when he opened fired.

Officers also found .38-caliber pistol rounds in a safe, which Botha said Pistorius owned illegally and for which he said the athlete would be charged with a crime. However, Botha also acknowledged investigators didn't take photographs of the ammunition and let Pistorius' supporters at the crime scene take them away.

Botha said the holster for the 9 mm pistol was found under the left side of the bed, the side on which Steenkamp slept. He also implied it would have been impossible for Pistorius to get the gun without checking to see if Steenkamp was there. Roux later argued that Pistorius had suffered an injury to his right shoulder and wore a "medical patch" the night of the killing which forced him to sleep on the left side of the bed.

Steenkamp was shot in the head over her right ear and in her right elbow and hip, breaking her arm and hip, Botha said. However, Roux later asked Botha if Steenkamp's body showed "any pattern of defensive wounds." The detective said no.

Botha also said the shots were fired from 1.5 meters (five feet), and that police found three spent cartridges in the bathroom and one in the hallway connecting the bathroom to the bedroom. However, later on cross-examination by the defense, Botha said he wasn't a forensics expert and couldn't answer some questions.

Police also found two iPhones in the bathroom and two BlackBerrys in the bedroom, Botha said, adding that none had been used to phone for help. Roux later suggested that a fifth phone, not collected by the police, was used by Pistorius to make calls for a hospital and help. After the hearing, Roux told journalists that Pistorius' defense team had the phone, but did not elaborate.

Guards at the gated community where Pistorius lives did call the athlete, Botha said. The detective said that all the athlete said was: "I'm all right."

He didn't hang up, Botha said, and the guards heard him uncontrollably weep.

"Was it part of his premeditated plan, not to switch off the phone and cry?" Roux asked sarcastically.

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Gerald Imray reported from Johannesburg. Associated Press writer Michelle Faul in Johannesburg contributed to this report.

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Jon Gambrell can be reached at www.twitter.com/jongambrellAP. Gerald Imray can be reached at www.twitter.com/geraldimrayAP.

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Obama administration tackles colonoscopy confusion

WASHINGTON (AP) — It's one part of the new health care law that seemed clear: free coverage for preventive care under most insurance plans.

Only it didn't turn out that way.

So on Wednesday, the Obama administration had to straighten out the confusion.

Have you gone for a colonoscopy thinking it was free, only to get a hefty bill because the doctor removed a polyp?

No more.

Taking out such precancerous growths as part of a routine colon cancer screening procedure will now be considered preventive care.

"Polyp removal is an integral part of a colonoscopy," the Department of Health and Human Services said in guidance posted on its website. That conclusion has the backing of several leading medical societies, the department noted.

Also addressed in the notice was genetic testing for breast cancer, coverage of over-the-counter products such as aspirin for heart care and nicotine patches for smoking, and birth control for women. Unlike formal regulations, the guidance does not have the force of law, but advocates for patients say insurers would be ill-advised to ignore it.

President Barack Obama's health care law required most private health plans to cover preventive care at no additional charge to patients. It also expanded preventive coverage without copayments for Medicare recipients. For workers and their families, the expense is borne by the company health plan, which passes on some of those costs in the form of higher premiums. Advocates say preventive care saves the health care system money over time.

Colonoscopy is an expensive test that can cost more than $1,000. It's recommended for adults 50 and over, and has become a rite of passage for aging baby boomers.

News that it would be covered free under the health care law got attention, but that was followed quickly by a letdown when many insurers started charging if a polyp or two was discovered and removed during the procedure.

"Insurers were reclassifying it from a preventive test to a diagnostic procedure," said Stephen Finan, policy director for the American Cancer Society Cancer Action Network. "In some cases the cost-sharing was a significant amount of money."

His group was among several that complained to the administration.

Other free preventive services addressed in Wednesday's guidance:

—Insurers must cover testing, if ordered by a doctor, for rare BRCA genes that dramatically increase the risk of breast cancer. Such tests can cost as much as $3,000.

—Over-the-counter products such as aspirin for heart care and nicotine patches for smoking cessation are covered with a doctor's prescription.

—Insurers won't be able to fulfill the law's requirement to cover contraception as preventive care for women if they only pay for birth control pills. A full range of FDA-approved methods must be covered, including long-acting implant and intrauterine devices. Birth control methods for men are not covered as preventive care.

If a health plan does not have a network doctor who performs a particular preventive service, a patient can see a doctor out-of-network without facing copays or additional charges.

Also Wednesday, the government came out with final rules on the benefits that health plans catering to individuals and small businesses will have to offer starting next year, when new insurance markets called exchanges open in each state.

The coverage generally is better than what's now available to people buying individual policies, but close to what medium-size companies offer, with some important improvements in areas such as mental health care.

Benefits include hospital and outpatient care, emergency services, maternity and newborn care, prescriptions, prevention, rehabilitation and ongoing assistance for people with potentially disabling conditions, and dental and vision care for children.

All plans will have to cover the same benefits, but their premiums and cost sharing will vary. There will be four level of coverage — bronze, silver, gold and platinum. Bronze plans will cover 60 percent of expected costs while platinum plans will cover 90 percent.

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Online:

Health and Human Services Department: http://tinyurl.com/au6lzeo

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Mumford & Sons, Adele among winners at Brit Awards

LONDON (AP) — British music put on a confident show at the Brit Awards on Wednesday, celebrating a resurgent industry whose bands and artists are topping charts around the world.

Winners ranged from established acts such as Coldplay and Adele to surfing English folk singer Ben Howard, who was named British breakthrough act and British male artist of the year.

"I'm not very good at speeches," 25-year-old Howard said, accurately — though he may have to get good at it if his career continues to take off.

American artists Frank Ocean and Lana Del Rey were among the non-British winners at a ceremony that embraced the mainstream while rewarding artists with distinctive personalities.

Long derided as dull, the Brits have become a lively celebration of "Cool Britannia" music and style, featuring a dinner for hundreds of artists and industry figures followed by a televised concert and awards show for thousands of paying fans.

Hard rockers Muse opened the show at London's O2 Arena with a typically robust performance of their song "Supremacy"— all thundering music, dazzling light show and 60-piece orchestra. Other performers ranged from world-conquering boy band One Direction to American artists Taylor Swift and Justin Timberlake.

Timberlake, dapper in a tuxedo as he performed "Mirrors," was described by host James Corden, in a nod to Europe's horse meat scandal, as "95 percent beefcake with just a little touch of horse."

One Direction performed a mashup of post-punk classics "One Way or Another" and "Teenage Kicks," their single for Britain's Comic Relief charity.

Chanteuse Emeli Sande took the first award of the evening, for British female artist, while Mumford & Sons were named best British group.

Both had an outstanding 2012. Singer-songwriter Sande topped the British charts with her debut album "Our Version of Events" and performed at both the opening and closing ceremonies of the Olympics. Mumford & Sons topped U.K. and U.S. charts with their second album "Babel," which was named album of the year at the Grammys earlier this month.

Soul singer Amy Winehouse — who died in July 2011 from accidental alcohol poisoning — was among the other nominees for British female artist, eligible thanks to her posthumous "Lioness: Hidden Treasures" album. Her father, Mitch Winehouse, arrived for the awards ceremony at London's O2 Arena wearing a waistcoat emblazoned with a picture of his daughter.

Coldplay was named best British live act, beating nominees including The Rolling Stones, who celebrated their 50th anniversary with a series of sold-out shows last year.

Adele won the best British single prize for her James Bond theme "Skyfall." The soulful singer sent a message from Los Angeles, where she is rehearsing for Sunday's Academy Awards.

There was no repeat of last year, when she was cut-off mid-speech because the show was running late — an incident Corden referred to in mock-embarrassment several times.

The Black Keys were named best international group, while Del Rey took the trophy for international female solo artist. The U.S. singer, who began as an Internet sensation, won a breakthrough Brit award last year and on Wednesday thanked Britain for supporting her.

The international male trophy went to R&B star Frank Ocean, who said it was "definitely a long way from working fast food in New Orleans" — and was the only winner to thank artist Damien Hirst for creating the polka-dot Brit Awards statuette.

Contenders for the biggest award of the night, best album, include Sande's "Our Version Of Events," Alt-J's "An Awesome Wave," Mumford & Sons' "Babel," Plan B's "Ill Manors" and Paloma Faith's "Fall To Grace."

This year sees the introduction of a new category recognizing global success, with nominees including One Direction, Mumford & Sons and Adele.

Most of the awards are chosen by more than 1,000 musicians, critics and record industry figures, with several decided by public vote.

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Online: www.brits.co.uk

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Office Depot to buy OfficeMax

Office Depot to buy Office Max as an attempt to compete with Staples.

Office Depot Inc. and Office Max Inc. have agreed to merge in a $1.17 billion stock transfer, the companies announced Wednesday, ending nearly two hours of confusion about whether a deal had been reached.

Officials at Naperville-based OfficeMax and Office Depot declined to say who would lead the combined company nor where it would be located when the "merger of equals" is completed, likely by the end of the year.

After some confusion early Wednesday, when a draft press release was posted prematurely on the website of Boca Raton, Fla.-based Office Depot's, both companies issued a joint statement at around 8:30 a.m. CT announcing the planned merger. 

The combined entity's name, headquarters and CEO are all undecided, creating an unusual level of uncertainty that points to the integration challenge the companies face.

"During the appropriated times ... our board will make the right decision,"  OfficeMax President and CEO Ravi Saligram said of the location and leadership of the combined firm. "Now we're independent companies and we've got to go through lots of processes," he said.

On a conference call with analysts, Office Depot CEO Neil Austrian apologized for the announcement mishap on Wednesday morning.  "Our webcast provider inadvertently released our earnings in advance of schedule," he said.  We regret any inconvenience that this may have caused." 

Saligram and Austrian emphasized that the combination, which will create a company that will do roughly $18 billion in revenue, is a merger of equals.

"This [merger] will create a stronger, more global, more efficient competitor able to meet the growing challenges a rapidly changing industry," said Saligram. 

While Office Depot insisted the deal was a merger of equals and not an acquisition, its shareholders will get the larger part of the combined company. CEOs of both companies and outside candidates are being considered for the top job.

When combined, OfficeMax and Office Depot, the world's second and third largest office products companies by revenue, will still not eclipse the segment's largest business, Staples Inc.

The pair had combined revenue of about $18.5 billion in the last fiscal year. They expect to save about $400 million to $600 million per year within three years through layoffs, streamlining of back-office functions and combined advertising. They didn't provide details on how many workers would lose their jobs or the fate of OfficeMax's Naperville headquarters.

After days of speculation that a deal was close, a draft of a press release announcing the news was posted prematurely on Office Depot's website early Wednesday morning. More than an hour after it came out, there was still no mention of the merger on either company's website nor on the SEC or other investor websites. Sources cited by the New York Times Wednesday morning said negotiations were ongoing.

Thomson Reuters Corporate Services, which operates various investor relations websites including Office Depot's, took responsibility for the early publication.

"Unfortunately, Thomson Reuters incorrectly posted this morning's announcement of Office Depot's intention to merge with Office Max prior to its intended release," Lemuel Brewster, PR director - investors at Thomson Reuters, said Wednesday afternoon in an email response to an inquiry. "We regret this error and are taking all steps necessary to enhance our processes and controls to ensure this does not happen again."

Office Depot will issue 2.69 new shares of common stock for each outstanding common share of OfficeMax. At Tuesday's closing prices, the deal is valued at $13.50 per share, or $1.17 billion, based on 86.7 million shares outstanding as of Oct. 26.

After the merger is completed, Office Depot's board will consist of an equal number of directors chosen by that company and OfficeMax.

Although the actual announcement didn’t go as planned, the deal has been rumored for years as the struggling office supply sector deals with fickle consumers and businesses that are conserving costs and doing more online.

Analysts say they expect far less pushback from antitrust authorities for this deal than what Office Depot faced in the 1990s, when it tried to merge with Staples, given the changes in the office supply market since then.

Underscoring how tough that business has become, Office Depot reported a fourth-quarter net loss, hurt by a 6 percent decrease in comparable sales at its North American stores and a revenue drop at its unit that serves North American businesses.

Office supply retailers, which are often seen as reflecting overall economic health, have suffered as demand for their products fell in the years after the last U.S. recession led companies to cut spending.

They also face strong competition from the likes of Amazon and Wal-Mart Stores Inc in selling everything from pens and notebooks to furniture and break room supplies to government, businesses and individuals.

SMALL PREMIUM

The offer represented a premium of just under 4 percent to OfficeMax's $13 close. It was not immediately clear if that was enough to satisfy one of the company's largest shareholders, Neuberger Berman, which said earlier this week it would support a deal depending on the terms.

OfficeMax shares rose 9.2 percent to $14.20 in premarket trading. Office Depot was up 10 percent at $5.52, meaning that OfficeMax was still trading below the value of the bid.

The deal, considered long overdue by many on Wall Street, will also give Office Depot and OfficeMax a chance to save hundreds of millions of dollars by closing stores, cutting advertising costs and streamlining their supply chain.

Industry experts have long hoped Office Depot would join hands with OfficeMax to take on Staples, which boosted its international business and clout with suppliers by buying Dutch rival Corporate Express in 2008.

BB&T Capital Markets analyst Anthony Chukumba said the Office Depot-OfficeMax combination would help Staples, however.

"Clearly, you can't make this deal work unless you close a bunch of stores," he said. "Store rationalization is long overdue, and Staples will clearly benefit from just having fewer stores to compete with."

Staples has 39.9 percent of the U.S. office supply market, Office Depot 19.2 percent and OfficeMax holds 15.7 percent, according to Euromonitor International.

Tribune reporter Samantha Bomkamp and Reuters contributed.

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2 teens die in Antioch crash

Two high schools in northern Lake County were mourning the loss today of two teenagers who died when their SUV crashed into a tree in Antioch in heavy rain.

"People are kind of numb around here," said Brian Glashagel, a football coach at Antioch High School, where one of the victims, Joel Wittkamp, 16, was a student.

"There are a lot of people who stayed home today," said Nathan Hawksworth, who knew the other victim, Ashley Seay, 17 of Lindenhurst.

Wittkamp and Seay were traveling west when Wittkamp's Chevrolet Trailblazer left the road in the 27000 block of Wilmot Road around 7 p.m. Monday, according to the Lake County Sheriff's Office. The SUV went through a yard before hitting the tree, the office said.

Both teens died on the scene.

Authorities said they believe weather contributed to the crash. A man who lives where the crash occurred said it was raining hard when the accident occurred.

"It was pouring," said Tim Staples.

Staples said he was home when "I just saw the headlights spin ... We ran out and you could see the car was in the tree, the tree was on the car ... a mangled car I couldn't recognize."

"We checked the scene," he said. "We had flashlights and we looked inside. It didn't look promising, it looked really bad."

He said firefighters reached the scene in 7 or 8 minutes. "It took them an hour to get them out. They had to take the top of the car off."

Staples said the car hit a tree he had planted on his property 30 years ago.

Antioch High School Principal John Whitehurst said the school had "counselors who are available," and that "someone is following the young man's schedule. If there were kids close to him, we are identifying who they are."

Whitehurst noted an earlier tragedy last November, when freshman Nicole Parfitt, 14, and her father were killed in a plane crash. "I know this is going to bring back some really unfortunate memories with kids intimately familiar with the incident," he said.

Ashley came from a large family, with younger twin sisters and a few older siblings who have already graduated from Lakes Community High School, said Steve Plank, principal of the Lake Villa campus. "There was a deep connection between the family, the school and community," he said.

Ashley was a cosmetology student who attended the high school until about noon, then spent her afternoons at the Lake County High Schools Technology Campus in Grayslake. "That was a passion of hers," Plank said.

Counselors were available when classes began today, for students and staff. "We have a number of faculty who are deeply affected by this, who have also needed support," he said. "It's kind of tough to come to school in the morning and realize there's a hole in your classroom."

Joel was on the high school football team, playing defense and on special teams, according to Glashagel. "He would have helped us out next year. He was working out really hard this season."

He described Joel as a "free spirit" who "made people laugh."

"He was that type of spirited kid. Football-wise, he was just a hard worker, just like he was in the classroom. He worked for everything he got."

Hawksworth said Ashley "was just a great friend. Everyone she met, she became good friends with ... Her personality always lighted up the room. She was an all-around great person."

chicagobreaking@tribune.com

Twitter: @ChicagoBreaking

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Exclusive: Apple, Macs hit by hackers who targeted Facebook

BOSTON/SAN FRANCISCO (Reuters) - Apple Inc was recently attacked by hackers who infected Macintosh computers of some employees, the company said Tuesday in an unprecedented disclosure describing the widest known cyber attacks targeting Apple computers used by corporations.

Unknown hackers infected the computers of some Apple workers when they visited a website for software developers that had been infected with malicious software. The malware had been designed to attack Mac computers.

The same software, which infected Macs by exploiting a flaw in a version of Oracle Corp's Java software used as a plug-in on Web browsers, was used to launch attacks against Facebook, which the social network disclosed on Friday.

The malware was also employed in attacks against Mac computers used by "other companies," Apple said, without elaborating on the scale of the assault.

Twitter, which disclosed that it had been breached February 1 and that hackers might gave accessed some information on about 250,000 users, was hit in the same campaign, according to a person close to the investigation.

Another person briefed on the case said that hundreds of companies, including defense contractors, had been infected with the same malicious software. Though this person said that the malware could have originated from China, there was no proof.

"This is a new campaign. It's not like the other ones you read about where everyone can tell it's China," the first person said.

Investigations into the breaches are ongoing. It was not immediately clear when the attacks had begun, the extent to which the hackers had succeeded in stealing data from targeted systems, or whether all infected machines have been identified.

The malware was distributed at least in part through a site aimed at iPhone developers, which might still be infecting visitors who haven't disabled Java in their browser, the person close to the case said. There is a version that infects computers running Microsoft Windows as well.

Security firm F-Secure wrote that the attackers might have been trying to get access to the code for apps on smartphones, seeking a way to infect millions of end-users. It urged developers to check their source code for unintended changes.

Apple disclosed the breach as tensions are heating up over U.S. allegations that the Chinese military engages in cyber espionage on U.S. companies.

U.S. cyber security firm Mandiant reported over the weekend that it has uncovered evidence that the Chinese military is behind a slew of cyber attacks on U.S. businesses. The White House said it has repeatedly raised concerns about Chinese cyber theft with Beijing.

The breaches described by Apple mark the highest-profile cyber attacks to date on businesses running Mac computers. Hackers have traditionally focused on attacking machines running the Windows operating system, though they have gradually turned their attention to Apple products over the past couple of years as the company gained market share over Microsoft Corp.

"This is the first really big attack on Macs," said the source, who declined to be identified because the person was not authorized to discuss the matter publicly. "Apple has more on its hands than the attack on itself."

Charlie Miller, a prominent expert on Apple security who is co-author of the Mac Hacker's Handbook, said the attacks show that criminal hackers are investing more time studying the Mac OS X operating system so they can attack Apple computers.

For example, he noted, hackers recently figured out a fairly sophisticated way to attack Macs by exploiting a flaw in Adobe Systems Inc's Flash software.

"The only thing that was making it safe before is that nobody bothered to attack it. That goes away if somebody bothers to attack it," Miller said.

NATIONAL SECURITY

Cyber security attacks have been on the rise. In last week's State of the Union address, U.S. President Barack Obama issued an executive order seeking better protection of the country's critical infrastructure from cyber attacks.

White House spokesman Jay Carney told reporters on Tuesday that the Obama administration has repeatedly taken up its concerns about Chinese cyber theft with Beijing, including the country's military. There was no indication as to whether the group described by Mandiant was involved in the attacks described by Apple and Facebook.

An Apple spokesman declined to specify how many companies had been breached in the campaign targeting Macs, saying he could not elaborate further on the statement it provided.

"Apple has identified malware which infected a limited number of Mac systems through a vulnerability in the Java plug-in for browsers. The malware was employed in an attack against Apple and other companies, and was spread through a website for software developers," the statement said.

"We identified a small number of systems within Apple that were infected and isolated them from our network. There is no evidence that any data left Apple," it continued.

The statement said Apple was working closely with law enforcement to find the culprits, but the spokesman would not elaborate. The Federal Bureau of Investigation declined to comment.

Apple said it plans to release a piece of software on Tuesday that customers can use to identify and repair Macs infected with the malware used in the attacks.

(Editing by Andre Grenon, Edwin Chan and Richard Chang)

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Pistorius: Thought lover an intruder in shooting

PRETORIA, South Africa (AP) — Oscar Pistorius wept Tuesday as his defense lawyer read the athlete's account of how he shot his girlfriend to death on Valentine's Day, claiming he had mistaken her for an intruder.

Prosecutors, however, told a packed courtroom that the double-amputee known as the Blade Runner intentionally and mercilessly shot and killed 29-year-old Reeva Steenkamp as she cowered inside a locked bathroom.

Pistorius told the Pretoria Magistrate's Court at a bail hearing he felt vulnerable in the presence of an intruder inside the bathroom because he did not have his prosthetic legs on, and fired into the bathroom door.

The Valentine's Day shooting in Pistorius' home in Pretoria shocked South Africans and many around the world who idolized him for overcoming adversity to become a sports champion, competing in the London Olympics last year in track besides being a Paralympian. Steenkamp was a model and law graduate who made her debut on a South African reality TV program that was broadcast on Saturday, two days after her death.

In a major point of contention emerged even during Tuesday bail hearing, prosecutor Gerrie Nel said Pistorius took the time to put on his prostheses, walked seven meters (yards) from the bed to the enclosed toilet inside his bathroom and only then opened fire. Three of the bullets hit Steenkamp of the four that were fired into the door, Nel said.

Pistorius said in his sworn statement that after opening fire, he realized that Steenkamp was not in his bed.

"It filled me with horror and fear," Pistorius said. The 26-year-old Olympian said he put on his prosthetic legs and tried to kick down the door before finally bashing it in with a cricket bat. Inside, he said he found Steenkamp, slumped over. He said he lifted her bloodied body into his arms and tried to carry her downstairs to seek medical help.

But by then, it was too late.

"She died in my arms," the athlete said.

Nel charged Pistorius with premeditated murder and said the athlete opened fire after the couple engaged in a shouting match and she fled to the bathroom.

"She couldn't go anywhere. You can run nowhere," Nel said. "It must have been horrific."

A conviction of premeditated murder carries a mandatory sentence of life in jail.

Chief Magistrate Desmond Nair ruled that Pistorius must face the harshest bail requirements available in South African law. That means Pistorius' lawyers must offer "exceptional" reasons for the athlete to be free before trial, besides simply giving up his two South African passports and posting a cash bond.

Pistorius sobbed softly as his lawyer, Barry Roux, insisted the shooting was an accident and that there was no evidence to substantiate a murder charge.

"We submit it is not even murder," he said. "There is no concession this is a murder."

Pistorius' emotional outbursts again played a part in how the hearing progessed, as it did during an initial hearing Friday. At one point, Nair stopped the hearing after Pistorius wept as Roux read a portion of the athlete's statement describing how Steenkamp bought him a Valentine's Day present, but wouldn't let him open it the night before.

"Maintain your composure," the magistrate said. "You need to apply your mind here."

Pistorius' voice quivered when he answered: "Yes, my lordship."

Affidavits from friends of Pistorius and Steenkamp described the two as a charming, happy couple. The night before the killing, they said, Pistorius and Steenkamp had canceled separate plans in order to spend the night before Valentine's Day together at his home, in a gated neighborhood.

Outside the court, several dozen singing women protested against domestic violence and waved placards urging that Pistorius be refused bail. "Pistorius must rot in jail," one placard said.

As details emerged at the dramatic court hearing in the capital, Steenkamp's body was being cremated Tuesday at a memorial service in the south-coast port city of Port Elizabeth. Six pallbearers carried her coffin, draped with a white cloth and covered in white flowers, into the church for the private service.

South Africa has some of the world's worst rates of violence against females and the highest rate in the world of women killed by an intimate partner, according to a study by the Medical Research Council. Professor Rachel Jewkes of the council said at least three women are killed by a partner every day in this country of 50 million.

Steenkamp campaigned actively against domestic violence and had tweeted on Twitter that she planned to join a "Black Friday" protest by wearing black in honor of a 17-year-old girl who was gang-raped and mutilated two weeks ago.

What "she stood for, and the abuse against women, unfortunately it's gone right around and I think the Lord knows that statement is more powerful now," her uncle Mike Steenkamp, the family's spokesman, said after her memorial.

He said the family had planned a big get-together at Christmas but that had not been possible. "But we are here today as a family and the only one who's missing is Reeva," he said, breaking down and weeping.

Pistorius has lost several valuable sponsorships estimated to be worth more than $1 million a year.

On Tuesday, the athlete was ousted from a pro-gay campaign being launched in Cape Town, organizers said. In a video axed from the campaign, Pistorius says: "You don't have to worry. You don't have to change. Take a deep breath and remember, 'It will get better.'"

And Clarins Group, which owns Thierry Mugler Perfumes, said in an email that "out of respect and compassion for the families involved in this tragedy, Thierry Mugler Perfumes have taken the decision to withdraw all of their advertising campaigns featuring Oscar Pistorius."

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Costlier robotic surgery soars for hysterectomies

CHICAGO (AP) — Robotic surgery is increasingly being used for women's hysterectomies, adding at least $2,000 to the cost without offering much benefit over less high-tech methods, a study found.

The technique was used in just 0.5 percent of operations studied in 2007, but that soared to almost 10 percent by early 2010. Columbia University researchers analyzed data on more than 260,000 women who had their wombs removed at 441 U.S. hospitals for reasons other than cancer. The database covered surgeries performed through the first few months of 2010.

Women who had the robotic operations were slightly less likely to spend more than two days in the hospital, but hospital stays were shorter than that for most women. Also, complications were equally rare among robotic surgery patients and those who had more conventional surgeries. Average costs for robotic hysterectomies totaled nearly $9,000, versus about $3,000 for the least expensive method, a different type of minimally invasive technique using more conventional surgery methods.

Traditionally hysterectomies were done by removing the womb through a large abdominal incision. Newer methods include removing the uterus through the vagina and minimally invasive "keyhole" abdominal operations using more conventional surgery methods, or surgeon-controlled robotic devices.

Robotic operations involve computer-controlled long, thin robot-like "arms" equipped with tiny surgery instruments. Surgeons operate the computer and can see inside the body on the computer screen, through a tiny camera attached to the robotic arms. The initial idea was for surgeons to do these operations miles away from the operating room, but robotic operations now are mostly done with the surgeon in the same room as the patient.

Theoretically, robotic surgeries make it easier to maneuver inside the patient, and are increasingly used for many types of operations, not just hysterectomies.

The main explanation for the big increase "is that robotic surgery has been marketed extensively to not only hospitals and physicians, but also directly to patients. There is minimal data in gynecology that it is advantageous," said Dr. Jason Wright, an assistant professor of women's health and the study's lead author.

The study was published Tuesday in the Journal of the American Medical Association.

"Our findings highlight the importance of developing rational strategies to implement new surgical technologies," the researchers wrote.

They note that 1 in 9 U.S. women will undergo a hysterectomy, usually after the age of 40. Reasons include fibroids and other non-cancerous growths, abnormal bleeding, and cancer.

Traditional abdominal operations remain common and more than 40 percent of women studied had them, costing on average about $6,600.

A JAMA editorial says the study doesn't answer whether the robotic method might be better for certain women, and says more research comparing methods is needed. Still, it says doctors and hospitals have a duty to inform patients about costs of different surgery options.

Dr. Myriam Curet of manufacturer Intuitive Surgical of Sunnyvale, Calif., said surgical robots can help surgeons overcome the limitations of other minimally invasive methods for very overweight patients, those with scarring from other surgeries and other complexities.

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JAMA: http://www.jama.ama-assn.org

Robotic surgery: http://tinyurl.com/byuljds

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AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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