Bridgewater official under investigation for alleged financial misconduct

BRIDGEWATER -- The chairman of the town's Board of Finance has resigned from the board in the wake of reports he has been fired from his place of employment and is under investigation for alleged possible misdeeds.

Gregory Buchholz was terminated two weeks ago from his investment adviser position with Raymond James Financial Services Inc. in Southbury, a company spokesman, Anthea Penrose, said Tuesday.

According to the spokesman, Buchholz was fired after the company learned he was under investigation for alleged misappropriation of investors' funds.

Penrose said the financial firm was contacted by authorities about the investigation, and it terminated Buchholz's employment.

The company closed its Southbury branch office, where Buchholz had worked.

Penrose would not say how much money may have been misappropriated.

A publicly traded company, Raymond James Financial Services is regulated by the Federal Commerce Commission. The investigation is being conducted on a local and federal level, Penrose said.

"Raymond James confirms a former ... financial services adviser, Gregory Buchholz, is being investigated for allegedly misappropriating client funds. The firm ... is cooperating fully with authorities in the investigation of this matter," a prepared statement by the company reads.

Calls to Buchholz's home Tuesday were not returned.

Bridgewater First Selectman Bill Stuart said he was stunned by the allegations.

"I just can't believe it," Stuart said. "When this happens with someone who has been on one of your boards for a long time and who's done a good job, it's hard to believe."

Stuart said Buchholz came to Town Hall on Tuesday morning and told him he would be resigning from the finance board and also from theBridgewater Board of Trustees, of which Buchholz was vice chairman.

Buchholz served on the finance board since 2001 and was appointed to the Board of Trustees in 2007.

"The last thing people ought to be doing is speculating on matters yet to be proven," said Ned Bandler, chairman of the Board of Trustees.

"I've worked closely with George," Bandler said. "He has been a valued colleague, a strong contributor in the work of managing the town's trust funds."

Bandler said Buchholz did not manage any money for the board.

The present allegations of mismanagement of funds are not the first to be made against Buchholz.

In February 1999, the state Department of Banking's Securities and Business Investments Division issued a consent order, restricting Buchholz's work as a financial agent.

It required Raymond James Financial Services to give prior approval to any trades Buchholz made with clients' mutual funds, according to a department securities bulletin.

The consent order was based on allegations that while he was associated with Edward D. Jones & Co., Buchholz "engaged in unsuitable investment strategies with respect to certain mutual fund transactions," the bulletin says.

Contact Susan Tuz

at stuz@newstimes.com

or 860-355-7322.

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Given Money, Schools Wait on Rehiring Teachers

As schools handed out pink slips to teachers this spring, states made a beeline to Washington to plead for money for their ravaged education budgets. But now that the federal government has come through with $10 billion, some of the nation’s biggest school districts are balking at using their share of the money to hire teachers right away.

With the economic outlook weakening, they argue that big deficits are looming for the next academic year and that they need to preserve the funds to prevent future layoffs. Los Angeles, for example, is projecting a $280 million budget shortfall next year that could threaten more jobs.

“You’ve got this herculean task to deal with next year’s deficit,” said Lydia L. Ramos, a spokeswoman for the Los Angeles Unified School District, the nation’s second-largest after New York City.

“So if there’s a way that you can lessen the blow for next year,” she said, “we feel like it would be responsible to try to do that.”

The district laid off 682 teachers and counselors and about 2,000 support workers this spring and was not sure it 

would be able to hire any of them back with the stimulus money. The district says it could be forced to cut 4,500 more people next year.

In New York City, Mayor Michael R. Bloomberg committed to no teacher layoffs this year in exchange for not offering raises. A spokeswoman said the city’s budget had already taken the federal aid into account.

In New Jersey, where about 3,000 teachers were let go in May, Gov.Chris Christie’s administration worries that the federal aid will only forestall difficult decisions later, and it is unclear how much will be spent immediately.

“It’s a real double-edged sword,” said Michael Drewniak, a spokesman for the governor. “This money will not be there next year, and we’re not going to get back up to the funding that they had previously been used to.”

A $26 billion federal aid package, signed by President Obama on Aug. 10, allocates $10 billion for school districts to retain or rehire teachers, counselors, classroom aides, cafeteria workers, bus drivers and others — with the remainder of the money directed toward health care for the poor, emergency personnel and other state purposes.

The education measure requires states to distribute the money for the current school year, but allows school districts to spend it as late as September 2012. It also allows schools to roll back furlough days. The education department estimates it could salvage about 160,000 jobs.

“We can’t stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe,” President Obama said last week. “That doesn’t make sense.”

Though preserving jobs will be good for the economy, it will disappoint out-of-work teachers and parents who have been expecting a surge in rehiring. Many districts, like Kansas City, Kan., face the likelihood of midyear cuts, and administrators will count themselves lucky to save jobs. In the nation’s fifth-largest district in Clark County in Las Vegas, administrators are eager to hire some teachers, though they wonder what they will do when the federal money runs out.

“We’re a little wary about hiring people if we only have money for a year, but we know that’s the intent of this bill,” said Jeff Weiler, chief financial officer for Clark County schools.

In Texas, Republican Gov. Rick Perry so far has rejected the new federal education dollars. Should he relent, Houston’s superintendent, Terry B. Grier, proposes to use $40 million to $70 million of it to extend the school day and year, and to hire tutors. He does not plan to rehire 414 people — including quite a few certified teachers — laid off from the central office staff.

“We can’t treat this money as if it’s a supplement to a jobs bill,” Mr. Grier said. “I want to put people to work to help children.”

Still other obstacles loom for districts, not the least of which is timing. School has resumed in many districts in struggling states, including Arizona, California and Illinois. Assigning new teachers and juggling classrooms could disrupt students. In California, the budget picture is further clouded by the state’s failure to pass its own budget for the coming year.

Even administrators in districts that start school after Labor Day have only weeks to rearrange class rosters. And with classes largely set in many places, they might more quickly deploy the money by hiring support personnel, like those tutors in Houston.

In Arizona, where most schools opened this month, nonteaching employees are more likely to be recalled. “It would be hard to add teachers this year,” said Paul Senseman, a spokesman for Gov. Jan Brewer. “But the funds could be used on any school-level position like counselors, after-school programs, aides, nurses or coaches.”

Teachers’ unions are strongly urging districts to use the money right away to keep class sizes manageable and to reduce the jobless rolls. “The intent is to help districts avert layoffs now,” said Randi Weingarten, president of the American Federation of Teachers. “Kids don’t have a pause button.”

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G.M. Chief Stepping Down After Report of Strong Quarter

DETROIT — In a surprise development, General Motors’ chairman and chief executive, Edward E. Whitacre Jr., announced Thursday that he would step down as chief executive on Sept. 1 and be succeeded by Daniel F. Akerson, a G.M. board member and a managing director of the Carlyle Group.Mr. Whitacre, 68, said he would stay on as chairman until the end of the year, when Mr. Akerson would assume that role as well.

“I believe we’ve accomplished what we set out to do,” Mr. Whitacre said. “We’re going to have a smooth seamless transition here.”

Mr. Akerson, 61, will become the fourth chief executive at the nation’s largest automaker in less than two years. Rick Wagoner, who had been chief executive since 2000 and chairman since 2003, was asked to resign in March 2009 by President Obama’s automotive task force. He was followed by another long-time G.M. executive, Fritz Henderson, who led the company through its bankruptcy restructuring but was then replaced in November by Mr. Whitacre.

The announcement came shortly after General Motors reported that it earned $1.3 billion in the second quarter and cited sustained progress in rebuilding operations after emerging from its government-sponsored bankruptcy last year.

Mr. Whitacre, a former chief of AT&T who came out of retirement to lead G.M., had previously said he would leave once the company stabilized its finances. But the timing of his announcement was unexpected, as was the choice of Mr. Akerson, a former chairman of Nextel Communications, as his successor.

Mr. Akerson said on a conference call that he did not anticipate major changes in strategy when he takes over. “We share a common vision for the goals and objectives of this company,” he said.

He is currently a managing director at the Carlyle Group, the giant private equity firm, where he is a senior executive of its buyout business. Before joining Carlyle, Mr. Akerson was a longtime telecommunications executive, having worked as chief financial officer at MCI and as the chairman and chief executive of XO Communications, where he supervised a turnaround of the company.

“We still have important work ahead of us,” Mr. Akerson said, “but I am confident that we are building the foundation for G.M.’s long-term success.”

Mr. Whitacre came to G.M. claiming to know little about automobiles and describing himself as “not a car guy.” But he made himself a public face for the company by appearing in several ad campaigns highlighting the quality of G.M.’s vehicles. He was criticized by some members of Congress for an ad in which he claimed that G.M. had repaid its government loans “in full,” even though the payment represented only a portion of the taxpayer money invested in G.M.

Under Mr. Whitacre, G.M. increased its market share in the United States and the average amount that buyers paid for vehicles, two big contributors to this year’s profits. He shuffled executives several times until he created a lineup of managers that he felt was best-suited to lead the turnaround.

He also pushed G.M. to simplify its operations and focus on his oft-repeated mantra: “Design, build, and sell the world’s best vehicles.” Anything that did not directly contribute to that goal “is dead now, or it’s on its way out,” he said on multiple occasions.

Mr. Whitacre, like his successor, came from a telecommunications background. An engineer who joined Southwestern Bell in 1963, he worked his way up to become the company’s chief executive in 1990. Mr. Whitacre then transformed the company into SBC Communications, and went on an acquisitions spree that included buying AT&T in 2005, with the company assuming its name. He retired in 2007, and was then chosen by the auto task force two years later to lead G.M.’s restructuring.

The quarterly profit reported on Thursday marked G.M.’s strongest financial performance since 2004, and set the stage for the automaker to file for an initial public offering, possible as soon as Friday. It was G.M.’s second consecutive quarterly profit.

The automaker’s results were a marked improvement over the $865 million profit in the first quarter. Revenue also rose in the quarter, to $33.2 billion, from $31.5 billion in the first. G.M. did not report second-quarter results a year ago because it spend part of the period reorganizing under bankruptcy protection.

The second-quarter profit was driven by strong results in G.M.’s core North American business, which had lost money for several years leading up to its bankruptcy filing.

G.M. said it had earnings before interest and taxes of $1.6 billion in North America during the quarter, a 33 percent improvement over its first quarter performance. The company’s European unit lost $200 million in the quarter, and its other international operations earned $700 million.

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Judge Allows, but Delays, Gay Marriage in California

SAN FRANCISCO — Same-sex marriage is legal again in California. Sort of.Eight days after ruling thatProposition 8 — a 2008 voter-approved ban on same-sex marriage — was unconstitutional, a federal judge on Thursday denied a motion to stay his decision, opening the door for untold numbers of gay and lesbian couples to wed in the nation’s most populous state. But the judge delayed the effective date of his order until Wednesday.

Vaughn R. Walker, the chief judge of Federal District Court in San Francisco, issued a temporary stay last week when he invalidated Proposition 8, in order to allow arguments for and against same-sex ceremonies being performed while supporters of the ban appealed.

On Thursday, Judge Walker declined to extend that stay, but built in the delay to allow the United States Court of Appeals for the Ninth Circuit, where the case has been appealed by proponents of Proposition 8, time to consider the matter.

In the ruling, the judge wrote, “The evidence presented at trial and the position of representatives of the state of California show that an injunction against enforcement of Proposition 8 is in the public’s interest.”

News of the ruling set off a joyous eruption at San Francisco City Hall, where several dozen gay couples had lined up outside the county clerk’s office in hopes of getting marriage licenses and a large crowd of supporters had slowly built on the City Hall steps during the morning. Several ministers had arrived to perform ceremonies and rainbow flags were being waved. But that mood soon turned to disappointment as couples realized that same-sex ceremonies would still be delayed.

One couple — Adrian Molina, an artist for Pixar, and Ryan Dooley, a Latin teacher, both 24 — were among those feeling mixed emotions.

“We’re excited, but we’re also sad,” said Mr. Dooley, who said he wanted to marry as soon as possible. “At least we’ll have a little more time to prepare and dress up.”

Supporters of Proposition 8 were confident, arguing that they would win in the long run, which is likely to be before the United States Supreme Court. Jim Campbell, a lawyer for the Alliance Defense Fund, which had helped defend Proposition 8, said that “the right of Americans to protect marriage in their state constitutions will ultimately be upheld.”

“It makes no sense to impose a radical change in marriage on the people of California before all appeals on their behalf are heard,” Mr. Campbell said in a statement. “If the trial court’s decision is eventually reversed, refusing to stay the decision will senselessly create legal uncertainty surrounding any same-sex unions entered while the appeal is pending.”

Opponents of Proposition 8 expressed hope that gay men and lesbians would soon have the same marriage rights as opposite-sex couples.

“It would be delightful to have marriages resuming this afternoon, but it is understandable why Judge Walker would want the Ninth Circuit to have an opportunity to review,” said Kate Kendell, executive director of the National Center for Lesbian Rights. “We look forward to the resumption of marriages next week, not only based on principles of equality and fairness, but as affirmations of love and basic humanity.”

Gov. Arnold Schwarzenegger, a Republican, who had asked the court to lift the stay, said that he was pleased with the decision. “Today’s ruling continues to place California at the forefront in providing freedom and equality for all people,” he said in a statement. Any decision from the appellate court would come from a three-judge panel.

If it holds, Thursday’s ruling will make California the sixth state to allow same-sex marriage, joining Iowa, New Hampshire, Massachusetts, Vermont, Connecticut and the District of Columbia. California briefly allowed such ceremonies in 2008 after a decision by the State Supreme Court struck down two laws that had limited marriage to opposite-sex partners. Over the next five months, some 18,000 gay couples wed.

In November 2008, however, California voters passed Proposition 8 by 52 percent, amending the State Constitution to establish marriage as only between a man and a woman. The ballot measure was challenged in state court, but in May 2009 it was upheld, though the State Supreme Court allowed the 18,000 same-sex marriages to stand.

Shortly after that, two gay couples filed a federal challenge — the case settled by Judge Walker, who agreed with their argument that Proposition 8 violated their constitutional rights to equal protection and due process. “Proposition 8 fails to advance any rational basis in singling out gay men and lesbians for denial of a marriage license,” Judge Walker wrote in his opinion, issued Aug. 4.

Supporters of Proposition 8 denounced Judge Walker’s reasoning, saying that it defied the will of the voters of California.

For many gay couples, the possibility of marriage, even while delayed, seemed tantalizingly close. Roger Hunt, 52, and Rod Wood, 56, were the first in line outside the clerk’s office at City Hall here on Thursday.

A couple for the last seven and a half years, the two men said the time had come to tie the knot, buying a pair of inexpensive stainless steel wedding rings until they can get something fancier.

“I’ve wanted to get married for a while now,” said Mr. Wood, who works for a publishing company. “There was a window, and we missed it. I did not want that to happen again.”

Malia Wollan contributed reporting.

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India Faces Intifada-Like Revolt in Kashmir

SRINAGAR, Kashmir — Late Sunday night, after six days on life support with a bullet in his brain, Fida Nabi, a 19-year-old high school student, was unhooked from his ventilator at a hospital here. He was the 50th person to die in Kashmir’s bloody summer of rage. He had been shot in the head, his family and witnesses said, during a protest against India’s military presence in this disputed province.

For decades, India maintained hundreds of thousands of security forces in Kashmir to fight an insurgency sponsored by Pakistan, which claims this border region, too. The insurgency has been largely vanquished. But those Indian forces are still here, and today they face a threat potentially more dangerous to the world’s largest democracy — an intifada-like popular revolt against Indian rule that includes not just angry young men but their sisters, mothers, uncles and grandparents.

The protests — which have erupted for a third straight summer — have led India to one of its most serious internal crises in recent memory. Not just because of their ferocity and persistence, but because they signal the failure of decades of Indian efforts to win the assent of Kashmiris using just about any tool available — money, elections and overwhelming force.

“We need a complete revisit of what our policies in Kashmir have been,” said Amitabh Mattoo, a professor of strategic affairs at Jawaharlal Nehru University in New Delhi and a Kashmiri Hindu. “It is not about money — you have spent huge amounts of money. It is not about fair elections. It is about reaching out to a generation of Kashmiris who think India is a huge monster represented by bunkers and security forces.”

Indeed, Kashmir’s demand for self-determination is sharper today than it has been at perhaps any other time in the region’s troubled history. It comes as — and in part because — diplomatic efforts remain frozen to resolve the dispute created more than 60 years ago with the partition of mostly Hindu India and Muslim Pakistan. Today each nation controls part of Kashmir, whose population is mostly Muslim.

Secret negotiations in 2007, which came close to creating an autonomous region shared by the two countries, foundered as Pervez Musharraf, then Pakistan’s president, lost his grip on power. The terrorist attacks in Mumbai, India’s financial capital, by Pakistani militants in November 2008 derailed any hope for further talks.

Not least, India has consistently rebuffed any attempt at outside mediation or diplomatic entreaties, including efforts by the United States. The intransigence has left Kashmiris empty-handed and American officials with little to offer Pakistan on its central preoccupation — India and Kashmir — as they struggle to encourage Pakistani cooperation in cracking down on the Taliban and other militant networks in the country.

With no apparent avenue to progress, many Kashmiris are despairing that their struggle is taking place in a vacuum, and they are taking matters into their own hands.

“What we are seeing today is the complete rebound effect of 20 years of oppression,” said Mirwaiz Umer Farooq, the chief cleric at Srinagar’s main mosque and a moderate separatist leader. Kashmiris, he said, are “angry, humiliated and willing to face death.”

This summer alone there have been nearly 900 clashes between protesters and security forces, which have left more than 50 civilians dead, most of them from gunshot wounds. While more than 1,200 soldiers have been injured by rock-throwing crowds, not one has been killed in the unrest, leading to questions about why Indian security forces are using deadly force against unarmed civilians — and why there is so little international outcry.

“The world is silent when Kashmiris die in the streets,” said Altaf Ahmed, a 31-year-old schoolteacher.

On Tuesday, Prime Minister Manmohan Singh made an emotional appeal for peace in Kashmir.

“I can feel the pain and understand the frustration that is bringing young people out into the streets of Kashmir,” the prime minister said in a televised speech. “Many of them have seen nothing but violence and conflict in their lives and have been scarred by suffering.”

Indeed, there is a palpable sense of opportunities squandered. Despite the protests of recent years, the Kashmir Valley had in the past few years been enjoying a season of peace.

The insurgency of the 1990s has mostly dried up, and elections in 2008 drew the highest percentage of voters in a generation. High expectations met the new chief minister, Omar Abdullah, a scion of Kashmir’s leading political family, whose fresh face seemed well suited to bringing better government and prosperity to Kashmir.

But election promises, like repealing laws that largely shield security forces from scrutiny and demilitarizing the state, went unfulfilled. After two summers of violent protests on specific grievances, this summer’s unrest has taken on a new character, one more difficult to define and mollify.

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