BP guilty of criminal misconduct, negligence in gulf oil spill

BP to Pay US Billions for Gulf Spill

By Michael Muskal

November 15, 2012, 9:53 a.m.

Oil company BP has agreed to plead guilty to misconduct and negligence charges and pay a record $4.5-billion fine in connection with the massive Gulf of Mexico oil spill, one of the nation’s worst environmental disasters.

In an announcement Thursday morning from its London headquarters, BP confirmed that it had reached an agreement with the U.S. Justice Department to resolve all federal criminal charges and all claims by the Securities and Exchange Commission against the company stemming from the 2010 Deepwater Horizon rig explosion, the subsequent oil spill and the response.

As part of the agreement, BP said it has agreed to plead guilty to 11 felony counts of misconduct or neglect in connection with the 11 people who died in the explosion. In all, the company agreed to plead guilty to 14 criminal charges including one count of obstruction of Congress.

';



jQuery(document).ready(function(){
jQuery('#story-body-text').append(muskalsig);
});

The agreement is subject to U.S. federal court approval. Atty. Gen. Eric Holder will hold a news conference in New Orleans on Thursday afternoon to announce matters concerning “a major environmental case,” according to the DOJ announcement.

PHOTOS: Deepwater Horizon disaster in hi-res

“All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf Coast region,” Bob Dudley, BP’s group chief executive, said in a statement. “From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the gulf. We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.”

According to the company, the agreement means that no further federal criminal charges can be filed in connection with the incident, enabling the  company to concentrate on defending itself against future civil claims. Under pressure from the government, BP established a $20-billion fund to cover claims and has been paying out billions of dollars since the accidents.

The tragedy began with a fire and explosion on the Deepwater Horizon rig in April 2010. At the time, the rig was drilling into the company’s Macondo well, about 50 miles off of the coast of Louisiana and about a mile below the water’s surface.

Gulf Oil Spill: One Year Later

Once the rig sank, the well ruptured and poured more than 200 million gallons of crude into the waters before it was plugged on July 15. For some 85 days, the nation watched live online video from underwater cameras showing oil gushing into the ocean.

The crude washed ashore on the beaches of five states, imperiling the environment, shutting down commercial fishing for months and dealing a blow to the key tourism industry in Gulf Coast states. 

The spill set the stage for one of the nation’s largest cleanups and for months of battles over responsibility. The response to the spill also became a political problem for the Obama administration and prompted an overhaul of federal agencies that regulate offshore oil drilling.

Tony Hayward, the BP president at the time, was forced to step down, in part for commenting that "I'd like my life back" during the frenetic cleanup period when oil was washing ashore in Louisiana and many livelihoods were in ruins.

"We believe this resolution is in the best interest of BP and its shareholders,” Carl-Henric Svanberg, BP’s chairman, stated. “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”

Thirteen of the 14 criminal charges pertain to the accident itself and are based on the negligent misinterpretation of the negative pressure test conducted on board the Deepwater Horizon, the company said.

“BP acknowledged this misinterpretation more than two years ago when it released its internal investigation report,” the company noted. “As part of its resolution of criminal claims with the U.S. government, BP will pay $4 billion, including $1.256 billion in criminal fines, in installments over a period of five years. BP has also agreed to a term of five years’ probation,” the company said.

The total cost of the package will exceed $4.5 billion and includes a civil penalty of $525 million to be paid in three installments to the Securities and Exchange Commission for alleged securities violation in connection with oil flow estimates in the early days after the accident. The package also includes an extra $350 million to the National Academy of Sciences to be paid over five years, the company said.

The agreement also provides for the appointment of two monitors, each to serve for four years. One will monitor safety and the other ethics issues, the company said.

Prior to the settlement, the only person facing charges so far in the case was former BP engineer Kurt Mix, who was arrested in Texas in April on obstruction of justice charges.

ALSO:

FDA seeking regulations after meningitis deaths

James Holmes, Colorado shooting suspect, hospitalized

New Jersey to use lottery for some post-Sandy housing

michael.muskal@latimes.com

Read More..

Listen: The Music of a Human Brain

Researchers have turned human mental activity into music, and it sounds uncannily like free-form jazz piano.

The new brain-to-sound method translates a brain’s electrical fluctuations to pitch and blood flows to intensity. With more sophisticated scores and trained ears, a mind might be heard as a cognitive symphony.

“We hope the on-going progresses of the brain signals-based music will properly unravel part of the truth in the brain,” wrote neuroscientists led by Jing Lu and Dezhong Yao of China’s University of Electronic Science and Technology in a study Nov. 14 in the online journal PLoS One.

In earlier work, the researchers based their translation solely on scalp-conducted electrical activity, familiar to most people through electroencephalograph (EEG) readings, but the resulting notation didn’t quite rise to the level of music.

In the new study, they added blood flow measurements from an fMRI machine to the mix. Combining EEG and fMRI allowed pitch and intensity to operate independently, a baseline distinction separating noise from music. To demonstrate, Lu and Yao recorded the brains of a 14-year-old girl and 31-year-old woman at rest (hear samples at left.)

For now, the mind music is more rehearsal than meaningful performance. Both EEG and fMRI provide fairly general measurements. But it’s possible to envision refinements of the approach in which mental states have distinctive sounds, and listening to them aids in diagnosis or treatment.

“Music therapy would be a good application of brain music,” said Lu. “I think this will be a wonderful application if we do more research.”

Citation: “Scale-Free Brain-Wave Music from Simultaneously EEG and fMRI Recordings.” By Jing Lu, Dan Wu, Hua Yang, Cheng Luo, Chaoyi Li, Dezhong Yao. PLoS One, November 14, 2012.

Read More..

Springsteen, McCartney, Kanye set for Sandy show

NEW YORK (AP) — Paul McCartney, Bruce Springsteen & the E Street Band and Kanye West will hit the stage at a Superstorm Sandy benefit concert next month at Madison Square Garden.

MSG announced Thursday that Billy Joel, The Who, Alicia Keys and Jon Bon Jovi will also perform at the Dec. 12 show, dubbed “12-12-12.” More performers will be announced at a later date.

Proceeds from the concert will go to the Robin Hood Relief Fund to benefit those affected by Sandy in New York, New Jersey and Connecticut. Sandy’s assault more than two weeks ago created widespread damage and power outages throughout the area.

Entertainment News Headlines – Yahoo! News

Read More..

Hospital Death in Ireland Renews Fight Over Abortion

DUBLIN — The death of a woman who was reportedly denied a potentially lifesaving abortion even while she was having a miscarriage has revived debate over Ireland’s almost total ban on abortions.

The woman, Savita Halappanavar, 31, a dentist who lived near Galway, was 17 weeks pregnant when she sought treatment at University Hospital Galway on Oct. 21, complaining of severe back pain.

Dr. Halappanavar was informed by senior hospital physicians that she was having a miscarriage and that her fetus had no chance of survival. However, despite repeated pleas for an abortion, she was told that it would be illegal while the fetus’s heart was still beating, her husband, Praveen Halappanavar, said.

It was not until Oct. 24 that the heartbeat ceased and the remains of the fetus were surgically removed. But Dr. Halappanavar contracted a bacterial blood disease, septicemia. She was admitted to intensive care but never recovered, dying on Oct. 28.

Mr. Halappanavar, in an interview with The Irish Times from his home in India, said his wife was told after one request, “This is a Catholic country.”

Two investigations into the case have been announced, and politicians have been quick to express their condolences and to call for legal clarity. Kathleen Lynch, a junior health minister, said medical professionals needed guidelines to deal with such circumstances.

In a statement, the hospital said it would cooperate fully with any inquest but that it had not started its own review because it wanted to consult the woman’s family first.

Mr. Halappanavar told the newspaper that he still could not believe his wife was dead. “I was with her those four days in intensive care,” he said. “They kept telling me: ‘She’s young. She’ll get over it.’ But things never changed; they only got worse. She was so full of life. She loved kids.

“It was all in their hands, and they just let her go. How can you let a young woman go to save a baby who will die anyway?”

But Mr. Halappanavar said he saw no use in being angry. “I’ve lost her,” he said. “I am talking about this because it shouldn’t happen to anyone else.”

Medical professionals were less forgiving. During a miscarriage, the cervix is opened, exposing the woman to infection, and the longer the miscarriage persists, the greater the risk, said a prominent medical commentator here, Dr. Muiris Houston. While Dr. Halappanavar’s death was “on the rare end of the spectrum,” and the facts surrounding the case are not all known, Dr. Houston said, she “undoubtedly needed to go to theater,” meaning to surgery.

“If she had gone to theater earlier she might still have died, but perhaps not,” he said. “Medicine is now increasingly driven by guidelines, and the question must be, ‘Did the hospital have protocols in place when a woman presented with such a condition?’ ”

The legal issues are, if anything, more clouded. In 1992, the Irish Supreme Court ruled that abortion was permissible in cases where there was a “real and substantial risk” to the life of a pregnant woman — including the possibility of suicide. But 20 years later, the Irish government has still not passed a law to this effect.

In 2010, the European Court of Human Rights found that Ireland was in violation of the European Convention on Human Rights by failing to provide an accessible and effective procedure to ascertain whether a woman qualified for a legal abortion.

In response, the current coalition government commissioned a report from an expert group on the issue. It was initially expected in July, but was then postponed until September — a deadline also missed. Given the divisiveness of the abortion issue in Ireland, which has prompted two bitterly fought referendums, successive governments have avoided passing any legislation.

The report was eventually delivered Tuesday night, hours before news broke of Dr. Halappanavar’s death. The government warned people not to link the two, but inevitably the death has led to calls for urgent reform.

Read More..

BP to Admit Crimes and Pay $4.5 Billion in Gulf Settlement

BP, the British oil company, said Thursday that it would pay $4.5 billion in fines and other payments to the government and plead guilty to 14 criminal charges in connection with the giant oil spill in the Gulf of Mexico two years ago.

US Coast Guard, via Associated Press

The explosion on the Deepwater Horizon drilling rig in the Gulf of Mexico that was connected to a well owned by BP killed 11 workers and spilled millions of barrels of oil.

The payments include $4 billion related to the criminal charges and $525 million to securities regulators, the company said in a statement. As part of the settlement, BP agreed to plead guilty to 11 felony counts of misconduct or neglect related to the deaths of 11 people in the Deepwater Horizon accident in April 2010, which released millions of barrels of oil into the gulf over the course of the next few months.

A law enforcement official familiar with the case said that two BP employees would also be charged with manslaughter in the case. United States Attorney General Eric Holder was scheduled to hold a news conference in New Orleans at 2 p.m. E.S.T. on Thursday to discuss the government’s actions in the case.

“All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region,” Robert Dudley, BP’s chief executive, said in a statement. “From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.”

While the settlement dispels one dark cloud that has hovered over BP since the spill, others remain. BP is still subject to other claims, including billions of dollars in federal civil claims and claims for damages to natural resources.

In particular, BP noted that the settlement does not resolve what is potentially the largest penalty related to the spill: fines under the Clean Water Act. The potential fine for the spill under the act is $1,100 to $4,300 a barrel spilled. That means the fine could be as much as $21 billion.

In addition to the 11 felonies related to the men killed in the accident, the company agreed to plead guilty to one misdemeanor violation of the Clean Water Act and one misdemeanor violation of the Migratory Bird Treaty Act.

BP also acknowledged that it had provided inaccurate information to the public early on about the rate at which oil was gushing from the well.

The company agreed to plead guilty to one felony count of obstruction of Congress over its statements on that issue. It also agreed to pay a civil penalty of $525 million to the Securities and Exchange Commission, spread over three years, to resolve the agency’s claims that the company made misleading filings to investors about the flow rate.

As part of its resolution of criminal claims with the Department of Justice, BP will pay about $4 billion, spread over five years. That amount includes $1.256 billion in criminal fines, $2.394 billion to the National Fish & Wildlife Foundation and $350 million to the National Academy of Sciences.

The criminal fine is one of the largest ever levied by the United States against a corporation, roughly equal to the $1.3 billion fine paid by Pfizer in 2009 for illegally marketing an arthritis drug.BP has repeatedly said it would like to reach a settlement with all claimants if the terms were reasonable. The unresolved issue of the claims has been weighing on BP’s share price.

On Thursday, BP’s American shares were trading at about $40 at midday, roughly unchanged on the day and down about 34 percent since the accident.

“It’s one less thing to be negative on BP about and a minor step in the right direction toward the rehabilitation of BP,” Iain Armstrong, an equity analyst at the investment manager Brewin Dolphin, in London, said. But he added that there were still concerns about remaining claims and that “lawyers might yet have their day at court.”

As part of Thursday’s agreements, BP said it was increasing its reserve for all costs and claims related to the spill to about $42 billion.

Brian Gilvary, BP’s chief financial officer, said in a conference call with analysts that the board weighed the balance between the settlement struck with the government and the prospect of a much wider criminal indictment that would have involved more people in the company. “A criminal indictment would have been a huge distraction,” he said.

Stanley Reed reported from London and Clifford Krauss from Houston. Julia Werdigier contributed reporting from London, John Schwartz from New York and Charlie Savage from Washington.

Read More..

Three pilots flying to safety meeting die in plane crash

Flames lit up the night sky in Jackson, Miss. Tuesday night, where a small plane crashed into a home.

By Michael Muskal

November 14, 2012, 9:17 a.m.

Federal officials will investigate the crash of a single-engine plane carrying three pilots traveling to a safety conference when the craft slammed into a Jackson, Miss., house, killing the three.

The pilots were heading to a Federal Aviation Administration conference about 30 miles from Jackson’s Hawkins Field Airport. The FAA and the National Transportation Safety Board will investigate.

According to the Jackson Municipal Airport Authority, the craft took off from the airport about 5:10 p.m. Tuesday, heading for Raymond, Miss., to the FAA conference.

';



jQuery(document).ready(function(){
jQuery('#story-body-text').append(muskalsig);
});

Moments after leaving the airport, one of the pilots asked for permission to return. Before the plane could land, however, it crashed into a house that was set ablaze.

A deputy fire chief told WJTV-TV that one person escaped the burning home with minor injuries, but it was not immediately clear if anyone else was inside. One patient from the scene was listed in good condition at University of Mississippi Medical Center, according to the Associated Press.

The names of the dead pilots were not  released, pending tests to confirm their identities.

ALSO:

Long Island utility executive resigns

Jury rules 'code of silence' protected felon cop

Top general demoted amid questions about his lavish expenses

michael.muskal@latimes.com

Read More..

Microsoft Previews Internet Explorer 10 for Windows 7

Microsoft has delivered a new preview release of Internet Explorer 10 for Windows 7, bringing the company’s next-gen web browser to its previous-gen operating system.

If you’d like to try out IE 10 on Windows 7, head on over to the IE 10 downloads page and grab a copy for Windows 7 (requires SP1).

This release is still technically a preview, but given that installing it replaces IE 9, clearly Microsoft is a little more confident about its stability and polish than with previous platform previews.

For most users the experience of IE 10 on Windows 7 will be very similar to that of Windows 8′s desktop mode. (Obviously on Windows 7 there is no “Metro” or “Modern” mode for IE 10.) And under the hood you’ll still find the same web standards support, faster JavaScript engine and, of course, the same controversial “Do Not Track” header turned on by default.

While for the most part IE 10 for Windows 7 looks and quacks like IE 10 for Windows 8, there are a couple of differences. The most noticeable is the appearance of IE 10, which uses Windows 8 scrollbars even on Windows 7, making it look out of place alongside other Windows 7 apps.

Web developers should also be aware that a few touch-related DOM events present on Windows 8 are missing on Windows 7. The user agent string is slightly different as well, with the Windows 8 version reporting “Touch” at the end of the string. For full details on the differences for web development, see the Internet Explorer Developer Center docs.

Should you decide that you don’t want to use this latest Platform preview, just use the control panel to uninstall IE 10, which also re-installs IE 9.

Read More..

Wakeman reworks rock epic Journey to Centre of Earth

LONDON (Reuters) – The story behind the upcoming re-issue of Rick Wakeman‘s 1974 concept album “Journey to the Center of the Earth” sounds almost as unlikely as the Jules Verne tale that inspired it.

Progressive rock veteran Wakeman had presumed the original orchestration to his chart-topping disc was lost for good when his record company MAM, where the manuscripts had been stored in boxes, was brought to its knees in the early 1980s.

Although he could have re-orchestrated the work from the original album, recorded live at the Royal Festival Hall in London in 1974, Wakeman knew it would be far from perfect.

And the original score was 55 minutes long whereas the 1974 version had to be cut to closer to 40 due to the constraints of vinyl recordings at the time.

“In about 1983 or 1984 I had an enquiry to do Journey again in America,” Wakeman recalled in a telephone interview.

“I thought ‘great’. But MAM had gone, and nobody there had any idea what had happened to all the stuff of mine,” the former Yes keyboardist told Reuters.

“Up until recently I would get phone calls to do it and I said ‘no, I can’t', there is no music any more. You just resign yourself to disappointment.”

Everything changed about four years ago when a box of papers arrived at his doorstep – a fairly regular occurrence, he explained, for a man who had been married several times and had “stuff in storage all over the place”.

Sifting through the contents, Wakeman found a pile of music that was not his own, but “something told me to empty the entire box.” At the very bottom was the long-lost conductor’s score of Journey, albeit so damp the pages were stuck together.

To this day Wakeman does not know where the box came from, and is amazed it reappeared nearly 30 years after going missing.

ORIGINAL SONGS

Once the music had been downloaded on to a computer, Wakeman set about reintroducing the songs and other sections he removed for the 1974 recording with the help of notes he had kept.

He decided to make a studio recording of the rock opera, and sought to replicate the sound of the original instruments.

For the narrator’s voice, he could not go back to David Hemmings, who died in 2003, and so invited actor Peter Egan.

The result is a re-mastered version of Journey, complete with 20 minutes of unheard music, which hits shelves on November 20. It comes in the form of a “fanback” comprising the music, a 132-page magazine and a replica of the program to the 1974 show.

For Wakeman it was a labor of love, but one he hopes will prove profitable.

“We did have record companies come forward,” the 63-year-old said. “But I don’t want an A&R (artists and repertoire) man coming in and saying it could do with this and that.

“The only way I can get this done as I believe it should be is to finance it and do it myself which we did. It broke the bank, there’s no doubt about it.”

While the concept of a rock opera based on French author Verne’s 1864 sci-fi classic may not instantly appeal to young listeners today, Wakeman believes there is a market for his latest release.

“Music audiences today don’t put a date on anything, they either like it or they don’t,” he said, adding that the “prog-rock” genre for which he is best known has made something of a comeback in recent years.

PROKOFIEV FAN

The prolific musician who has made around 100 albums and sold millions of records started piano lessons when he was seven, and at about that time the seeds of his career were sown.

“Story telling to music is something I have loved since my father took me to see ‘Peter and the Wolf’ aged eight, and (Sergei) Prokofiev became my hero,” he recalled.

By his late teens he was an established session musician and joined the band Yes in 1971 with whom he recorded the hit album “Fragile” and, the following year, “Close to the Edge”.

In 1973 he released “The Six Wives of Henry VIII” a solo concept album, and in 1974, which his official online biography calls “probably the most significant year in Rick’s career”, he made Journey and toured the world with it.

Another concept album, “The Myths and Legends of King Arthur and the Knights of the Round Table” followed in 1975, and Wakeman returned to Yes for spells throughout the 1990s.

Next week he plays six dates in South America, including the first concert performance of the new, full Journey and a rendition of The Six Wives.

The new “holy grail” following the rediscovery of Journey is to track down the original music to King Arthur, which was also lost. Wakeman is orchestrating the existing recording for a show next June, but would love to find the full score.

“All of us involved hope very much that it (Journey) makes its money back, because it would then allow me to look for the King Arthur music. We are doing a version next June and it would be lovely to say we’ve done it from the original music.”

(Reporting by Mike Collett-White, editing by Paul Casciato)

Music News Headlines – Yahoo! News

Read More..

F.D.A. Asking for More Control Over Drug Compounding

WASHINGTON — The commissioner of the federal Food and Drug Administration will recommend changes in the regulatory landscape for compounding pharmacies, placing those that produce drugs on a large scale in a new category that would give the agency greater powers to police them.

The commissioner, Dr. Margaret Hamburg, will tell the House Committee on Energy and Commerce during a hearing on Wednesday that compounding in its traditional form — mixing medicine for individual patients — should be preserved, but that pharmacies that have in effect turned into mini-drug companies should be placed under the agency’s oversight, according to her written testimony posted by the committee.

Pharmacy compounding has come under a spotlight in recent months since the New England Compounding Center in Framingham, Mass., produced thousands of vials of pain medicine contaminated with fungus that caused a national meningitis outbreak, sickening more than 400 people and killing 32. Dr. Hamburg’s testimony was her first substantive comment on regulatory problems in the compounding industry since the outbreak, and outlines the changes that the Obama administration will seek.

Among the changes proposed by Dr. Hamburg are requiring larger compounders to register with the F.D.A. and abide by its so-called good manufacturing practice, which requires drug producers to report any problems with their products to the agency. She is also recommending new labeling requirements that would make the origin and the risks of a compounded drug clear. She is also requesting that some products, including drugs with complex dosage forms, be banned for compounders.

“In light of growing evidence of threats to the public health, the administration urges Congress to strengthen federal standards for nontraditional compounding,” Dr. Hamburg stated in the written testimony. “Such legislation should appropriately balance legitimate compounding that meets a genuine medical need with the reality that compounded drugs pose greater risks than those that are evaluated by F.D.A.”

Large-scale pharmacy compounding has greatly expanded since the early 1990s, lifted by tectonic shifts in the health care industry, including a widespread turn toward outsourcing. The practice fills shortage gaps in the health care system and provides lower-cost drugs. But pharmacies are primarily regulated by states, a situation that federal regulators argue is risky.

The F.D.A. had dealings with the New England Compounding Center in the past, including an inspection in 2002 after reports of problems and a warning letter in 2006. The agency argued that the actions failed to head off the current disaster, in part, because the company took great pains to avoid F.D.A. oversight.

“Throughout this time, N.E.C.C. has repeatedly disputed F.D.A.’s jurisdiction over its facility,” Dr. Hamburg said in the written testimony.

Barry J. Cadden, the chief pharmacist at the company and one of its principal owners, was subpoenaed by the House committee. To every question posed by committee members on Wednesday, he replied: “On advice of counsel, I respectfully decline to answer on the basis of my constitutional rights and privileges, including the Fifth Amendment to the U.S. Constitution.”

Read More..

Samuel Adams Brewer Counsels Small Businesses

Gretchen Ertl for The New York Times

Jim Koch, who started brewing Samuel Adams Boston Lager at his house in 1984, and Carlene O'Garro, who runs a cake business, participate in a program in which big businesses help small ones.

Carlene O’Garro’s cake business was barely a month old when she arrived at the Samuel Adams brewery in South Boston recently to meet with business counselors, but she brought with her an agenda that hinted at outsize ambitions.

Ms. O’Garro bakes nondairy cheesecakes that she was selling at a handful of grocery stores, including two Whole Foods outlets, in the Boston area. She hoped to learn how to expand the business and distribute the cakes nationally. “I know Jim is all over the place,” she said, “and I want to be like that.”

Jim is Jim Koch, the founder of the Boston Beer Company and one of 36 advisers who spent an evening last August “speed coaching” fledgling food, beverage and hospitality businesses. In 20-minute sessions, some 95 bakers, brewers and restaurant owners peppered the coaches — Boston Beer employees and consultants who included lawyers, accountants and small-business counselors — with questions about both basic day-to-day issues and more strategic concerns.

Speed coaching is one element of “Brewing the American Dream,” a program Boston Beer established with a microlender, Accion, to help small businesses. Mr. Koch, who started brewing Samuel Adams Boston Lager at his house in 1984, remains central to these efforts even as he presides over a company with a market capitalization of $1.4 billion and annual revenue of more than $500 million. He said he had not forgotten his early days, when he struggled to find capital, get his beer into distribution networks and expand.

In six sessions that August evening, Mr. Koch spoke with perhaps a dozen entrepreneurs and then stayed another hour to visit with six or eight more. This year, Boston Beer and Accion are staging 12 speed-coaching events in 11 cities, and Mr. Koch expects to attend about half of them.

Big businesses reaching out to help smaller businesses has come into vogue since the recession. In 2009, Goldman Sachs introduced its 10,000 Small Businesses campaign. Starbucks raises money from customer donations to finance small-business loans. American Express encourages consumers to shop locally on “Small Business Saturday” after Thanksgiving. The New York Stock Exchange links small vendors with large corporations and finances loans through Accion. And several corporations have run contests — Wal-Mart, Chase Bank and Staples have furnished winning small companies with opportunities for retail distribution, capital and office equipment.

It is the latest example of what is known in corporate circles as cause marketing — hitching a brand to a social issue. “How you improve the American economy and create jobs is on everybody’s minds these days,” said David Hessekiel, founder and president of Cause Marketing Forum. “Companies know that it’s on the minds of their consumers, and they want to be seen as part of the solution, not as the enemy.”

That has been a particular concern for chains like Wal-Mart and Starbucks, given their longstanding reputations for forcing local competitors to close. Helping small businesses, Mr. Hessekiel said, “helps them deal with an old issue.”

The Boston Beer program actually predates the recent economic crisis. The seeds of the idea, Mr. Koch said, came to him in 2007 as he walked to his car after he and his employees had volunteered to paint a nearby community center. “I should have felt really good, and I didn’t — I felt a little depressed,” he said. “What I realized is, I’d just taken about $10,000 worth of management time and talent, and turned it into about $1,000 worth of painting. And it was pretty bad painting, too.”

Mr. Koch retooled his company’s philanthropy to take advantage of its resources, particularly its employees’ expertise. The company has committed $1.4 million to finance loans, which are handled by Accion. The loans are small, typically $5,000 to $7,000, with terms of 18 months to two years and interest rates that vary regionally. (In New England, the rate is around 13 percent, typical for microloans.) Perhaps as important as the money is the tutoring by Mr. Koch and his employees. Most microloan programs provide borrowers with rudimentary counseling, but Boston Beer is unusually “high touch,” said Shaolee Sen, vice president for strategy and development at the Accion U.S. Network.

Ms. O’Garro was one of the program’s original clients — she has had two loans, totaling $4,000 — and though she’s repaid that debt and though the muffin business it helped finance has been dormant since 2010, she continues to derive benefits from the program with her cheesecake business, Delectable Desires. She learned how to price her cakes from an employee in Boston Beer’s finance department, Mike Cramer, who went to Whole Foods and scoped out the competition. “He actually made a spreadsheet for me of how much the high-end and low-end desserts cost,” she said.

Another borrower, Sandy Russo of Lulu’s Sweet Shoppe in Boston, said that when she had questions, she sometimes called Mr. Koch’s executive assistant. Last summer, when Lulu’s opened a second location, Boston Beer’s lawyers reviewed the lease and its public relations staff wrote the news release.

Of course, it’s one thing to provide that kind of support to a handful of companies. The question facing Accion and Boston Beer is whether the program can remain as intensive as it expands nationally. “We’re really struggling with that right now,” Ms. Sen said. “The portfolio has been so small up until this point that they really are passionate about their clients.”

Read More..