U.S. AND WORLD NEWS FROM
THE NEW YORK TIMES

Ethics investigation finds
Palin abused power

Legislative committee releases investigation
into firing of public official

ANCHORAGE, Alaska - Sarah Palin unlawfully abused her power as governor by trying to have her former brother-in-law fired as a state trooper, the chief investigator of an Alaska legislative panel concluded Friday. The politically charged inquiry imperiled her reputation as a reformer on John McCain's Republican ticket.

Investigator Stephen Branchflower, in a report by a bipartisan panel that investigated the matter, found Palin in violation of a state ethics law that prohibits public officials from using their office for personal gain.

The inquiry looked into her dismissal of Public Safety Commissioner Walter Monegan, who said he lost his job because he resisted pressure to fire a state trooper involved in a bitter divorce with the governor's sister. Palin says Monegan was fired as part of a legitimate budget dispute.
The panel found that Palin let the family grudge influence her decision-making even if it was not the sole reason Monegan was dismissed. "I feel vindicated," Monegan said. "It sounds like they've validated my belief and opinions. And that tells me I'm not totally out in left field."

Branchflower said Palin violated a statute of the Alaska Executive Branch Ethics Act.

Palin and McCain's supporters had hoped the inquiry's finding would be delayed until after the presidential election to spare her any embarrassment and to put aside an enduring distraction as she campaigns as McCain's running mate in an uphill contest against Democrat Barack Obama.

But the panel of lawmakers voted to release the report, although not without dissension.

"I think there are some problems in this report," said Republican state Sen. Gary Stevens, a member of the panel. "I would encourage people to be very cautious, to look at this with a jaundiced eye."

The nearly 300-page report does not recommend sanctions or a criminal investigation.

Paulson 'Actively' Eyes Bank Investment
	Republicans Rely on More "F.D.R." social solutions
At a White House briefing on Thursday, Perino confirmed reports that the United States could soon join the United Kingdom, Iceland and Italy in announcing a plan to inject capital directly into their troubled banking systems. "These capital injections are something that Secretary Paulson is actively considering," said Perino. She said she couldn't comment on the timing or extent of such investments. The move would be made under the $700 billion Wall Street bailout law enacted on Friday. The focus of the bailout was a plan to have Treasury buying damaged mortgage-backed securities from banks and financial firms. The aim is to help firms improve their balance sheets and profit prospects and attract capital from the private sector. But the administration is now arguing that direct investment is part of the powers under the act. Treasury Secretary Henry Paulson first hinted of such a move Wednesday in a speech about the bailout. He said increasing capital investment in the nation's banking system is one of Treasury's goals, and he seemed to suggest that such capital could come directly from taxpayers. The new law gives "broad flexible authorities for Treasury to buy or insure troubled assets, provide guarantees, and inject capital," Paulson said. Paulson vowed to "use all of the tools we've been given ... including strengthening the capitalization of financial institutions of every size." The reports cheered some experts who had argued that such direct investment was the best way to help financial companies. "The proper way to resolve a banking crisis is not to buy toxic assets but rather to recapitalize banks directly via injections of public capital (in the form of preferred shares) into distressed but solvent financial institutions," wrote Nouriel Roubini, professor of economics at New York University's Stern School of Business, on his blog Thursday. Treasury had been reluctant to move in that direction during debate over the bailout bill and it is significant that officials are now talking about the possibility of such direct investment, Roubini wrote. "The 180 degree turn in the Treasury position is driven by the disastrous market reaction to the passage of this legislation and to the realization that U.S. banks are in such a deep trouble that, absent a direct partial public takeover of the banks, this severe financial crisis will get much worse," wrote Roubini. Jaret Seiberg, a financial services analyst at the Stanford Group, said in a note that he believes buying shares would be a good move for banks and their shareholders. He said even if government stock purchases dilute the value of shares held by investors, they are unlikely to wipe out current holdings.

"TROOPERGATE"
Began prior to Palin's Selection as McCain Mate
	Husband Wanted `Dangerous' Alaskan Trooper to Be Fired
Thursday, Oct 9, 2008 Alaska Governor Sarah Palin's husband spoke numerous times to state officials about firing his ex- brother-in-law, a state trooper he described as ``dangerous'' to the governor's family, according to a sworn statement. Todd Palin, who had refused to answer questions, agreed on Oct. 6 to cooperate with an inquiry into the governor's firing of Walt Monegan, the state Public Safety Commissioner, on July 11. Monegan alleges Sarah Palin took the action after he resisted pressure to fire trooper Mike Wooten, who was involved in a divorce and custody battle with the governor's sister. ``I had hundreds of conversations and communications about Trooper Wooten over the last several years with my family, with friends, with colleagues and with just about everyone I could, including government officials,'' Todd Palin said in a 25-page statement to a state investigator that was released to media late yesterday. The probe took on national importance after Republican presidential nominee John McCain picked Palin as his running mate. A legislative report is due tomorrow on whether Governor Palin abused her power by firing Monegan. The governor has said she didn't pressure Monegan and dismissed him because of budgetary disagreements. The investigation, dubbed ``Troopergate,'' began before McCain picked Sarah Palin as his running mate on Aug. 29. The Alaska Legislative Council, a bipartisan committee of 14 lawmakers that conducts business when the full Legislature isn't in session, voted unanimously on July 31 to start the investigation. Sarah Palin and the McCain campaign say the inquiry is politically biased. She is cooperating with a separate investigation conducted by the state Personnel Board and has agreed to be questioned within two weeks as part of that inquiry. No deadline has been announced in that investigation.

They don't call him President Bush in Venezuela anymore.
	Now he's known as "Comrade."
CARACAS, Venezuela — With the Bush administration's Treasury Department resorting to government bailout after government bailout to keep the U.S. economy afloat, leftist governments and their political allies in Latin America are having a field day, gloating one day and taunting Bush the next for adopting the types of interventionist government policies that he's long condemned. "We were just talking about that this morning on the floor," said Congressman Edwin Castro , who heads the leftist Sandinista congressional bloc in Nicaragua . "We think the Bush administration should follow the same policies that they and the International Monetary Fund have always told us to follow when we have economic problems — a structural adjustment that requires cutting government spending and reducing the role of government. "One of our economists was telling us that Bush has just implemented communism for the rich," Castro said. No one in Latin America has been making more hay of Bush's turnabout than Venezuela's President Hugo Chavez , a self-proclaimed socialist who is the U.S.'s biggest headache in the region. "If the Venezuelan government, for example, approves a law to protect consumers, they say, 'Take notice, Chavez is a tyrant!'" Chavez said in one of his recent weekly television shows. "Or they say, 'Chavez is regulating prices. He is violating the laws of the marketplace.' How many times have they criticized me for nationalizing the phone company? They say, 'The state shouldn't get involved in that.' But now they don't criticize Bush for having nationalize . . . the biggest banks in the world. Comrade Bush, how are you?" The audience laughed and Chavez continued. "Comrade Bush is heading toward socialism." That certainly isn't the view of the Bush administration, which sees the government plan to buy toxic mortgages and the takeover of a major insurance company as well as two huge mortgage lenders as distasteful but necessary temporary measures to right the listing U.S. economy and prevent a worldwide depression. Mark Weisbrodt , director of the leftist Washington -based Center for Economic and Policy Research , advises numerous Latin American governments. He called the recent Bush administration policies ironic. "The biggest nationalization in the world was of Fannie Mae and Freddie Mac . The biggest nationalization of an insurer was AIG. People are saying that Bush is privatizing risk and socializing losses," Weisbrodt said. John Ross , who has begun providing advice to the Chavez government, along with his boss, former London Mayor "Red" Ken Livingstone , criticized the U.S. president and his conservative political allies. "They have abandoned every policy that they've advocated that other governments should follow over the past 20 years," Ross said by telephone from London . "And they've adopted the measures that they've condemned other governments for taking. "This is not the end of capitalism. But it is the end of Reaganism and Thatcherism," he added. British Prime Minister Margaret Thatcher , a conservative, was a close ally of President Reagan in the 1980s. In Peru , Congresswoman Nancy Obregon said she thought Bush's actions were sounding the death knell for capitalism. "He's driving it into the ground," said Obregon, a socialist. "He's imitating Evo Morales ." Morales is the socialist president of Bolivia who has nationalized a half dozen foreign companies. But Bolivia's ambassador in Venezuela , Jorge Alvarado , took issue with Obregon's comparison. "Bush is guilty of a double-standard, but it would be an exaggeration to say he's imitating Evo," said Alvarado. "He'd have to be re-born to imitate Evo!" Manuel Sutherland , a senior official in the Caracas -based Latin American Association of Marxist Economists , said that Bush has become a fellow traveler. But Sutherland said he wasn't about to let Bush join his group. "He carries out nationalizations to save capitalism," Sutherland said. "We want to sink it."


	"Not for Use in Kids Under Four'"
New cough syrup labels to say 'not for use in kids under four' Manufacturers of non-prescription pediatric cough and cold medicines are advising parents not to give them to children under age four, a consumer group announced. "Leading manufacturers of these medicines are voluntarily transitioning the labeling on oral over the counter pediatric cough and cold medicines to state 'do not use in children under four years of age'," said a statement issued Tuesday by the Consumer Healthcare Products Association. The announcement comes a week after federal authorities said they had little data on the benefits of such medicines for very young children. But the US Food and Drug Administration decided not to pull them from the market, fearing parents might begin administering adult cough and cold medicine to their offspring if they did so. Labels on the pediatric medicines will continue to carry dosing instructions for children four and above, the group said. Products with existing labeling will not be removed from store shelves but will gradually be replaced with products containing the new labels and packaging during the 2008-2009 cold season, it said. Manufacturers are also adding language to labels of products containing antihistamines, warning parents not to give them to children to make them sleepy, the statement said. In January 2008, after the FDA warned of the serious risk such medicines pose for children younger than two, pharmaceutical firms stopped marketing them for that age group. American pediatricians welcomed the move, although they would like to see it extended for children up to the age of five. The FDA is currently studying the effectiveness of over the counter cough and cold medicines for children under the age of 12, but a decision could be a year away.

French and German scientists
Win Noble Prize for Medicine

French and German scientists credited with the discovery of the viruses behind AIDS and cervical cancer won Monday the Nobel Medicine Prize, the first of the prestigious awards to be announced this year.

France's Francoise Barre-Sinoussi and Luc Montagnier, who shared one half of the award, discovered the human immunodeficiency virus (HIV) that causes AIDS, one of the biggest scourges of modern times.

Harald zur Hausen of Germany won the other half of the award for going against the then-current dogma and claiming that a virus, the human papilloma virus (HPV), causes cervical cancer, the second most common cancer among women.

The French pair's HIV discovery was "one prerequisite for the current understanding of the biology of the disease and its antiretroviral treatment," the Nobel citation said.

Their work "led to development of methods to diagnose infected patients and to screen blood products, which has limited the spread of the pandemic," it said.

Montagnier dedicated his award to AIDS sufferers and predicted results on a "therapeutic vaccine" for the pandemic within four years.

"I think my first reaction is to think of all the people sick with AIDS and all those who are still alive and fighting against the illness," Montagnier told AFP.

He said a treatment could be possible in the future with a "therapeutic" rather than preventive vaccine for which results could be published in three or four years if the researcher can secure financial backing.

AIDS -- acquired immune deficiency syndrome -- first came to public notice in 1981, when US doctors noted an unusual cluster of deaths among young homosexuals in California and New York.

It has since killed at least 25 million people, and 33 million others are living with the disease or harbouring HIV.

In May 1983, in a paper published in the US journal Science, a team from France's Pasteur Institute, led by Montagnier and including Barre-Sinoussi, described a suspect virus found in a patient who had died of AIDS.

Their groundbreaking discovery was also helped by US researcher Robert Gallo's determination that the virus was indeed the cause of AIDS.

Both Montagnier and Gallo are co-credited with discovering that HIV causes AIDS, although for several years they staked rival claims that led to a legal and even diplomatic dispute between France and the United States.

The Nobel jury made no mention of Gallo in its citation.

"We gave the prize for the discovery of the virus. The two to whom we gave the prize, Francoise Barre-Sinoussi and Luc Montagnier, discovered the virus," Hans Joernvall of the Nobel committee told AFP.

Acknowledging that the American had "done a lot of other work" in the field, Joernvall noted that Gallo and the two French scientists now "agree that the discovery was made in Paris."

Another member of the jury, Bjoern Vennstroem, said he hoped the award would silence those who claim that HIV does not cause AIDS.

"We hope this will put an end to conspiracy theories and others who defend ideas that are not founded in research," he told Swedish Radio.

Montagnier, 76, is a professor emeritus and director of the World Foundation for AIDS Research and Prevention in Paris, while Barre-Sinoussi, 61, is a professor at the Institut Pasteur, also in the French capital.

"I must admit that I never for a moment dreamt I would hear such news," Barre-Sinoussi told French radio by telephone from Cambodia.

Meanwhile, Zur Hausen was rewarded for his work on what is sometimes called "the silent killer" of women because it is often undetected until it is too late.

"His discovery has led to characterisation of the natural history of human papilloma virus (HPV) infection, and understanding of mechanisms of HPV-induced carcinogenesis and the development of prophylactic vaccines against HPV acquisition," the jury said.

It pointed out that five percent of cancers worldwide were caused by the virus. Fifty to 80 percent of the population is infected with the virus, though not all infections are cancerous.

"This prize means a great deal to me because on the one hand an area has been recognised that has increasingly moved to the forefront in cancer research, namely the role of infectious agents," Zur Hausen, 72, said in an interview with German television.

Today, a simple smear test can detect HPV and there are two effective vaccines against it.

Zur Hausen is a professor emeritus and former chairman and scientific director of the German Cancer Research Centre in Heidelberg.

The laureates will receive a gold medal, a diploma and 10 million Swedish kronor (1.42 million dollars, 1.02 million euros) -- half for Zur Hausen and half for the French pair -- at a formal ceremony in Stockholm on December 10.

The Nobel Medicine Prize website

Iraq

The Only Place Unaffected by Financial Turmoil

WASHINGTON — Fear and uncertainty were hot commodities in global markets Monday.

Stocks plummeted and currencies fell as shock waves from the Wall Street meltdown continued to reverberate across financial capitals.

The Mexican peso plunged to its lowest level in years. Its stock market dropped 5.4 percent.

Brazil and Russia temporarily halted trading after a series of steep drops on their exchanges.

Meanwhile, Sweden , Denmark and Austria joined Ireland and Germany on a growing list of European countries that have pledged to guarantee bank deposits to tamp down consumer worries.

"This is a stampede," said Valerie Plagnol , chief strategist at CM-CIC Securities in Paris .

On the very day that Washington began to unfold the $700 billion economic rescue mission, foreign governments and investors seemed resigned to a long period of tight credit and turmoil.

Russia suspended its benchmark RTS stock index twice on Monday, as it fell 19.1 percent, its worst ever one-day drop. It had already halted trading three times last Friday, hoping to slow sliding shares and capping the market's worst week in nearly a decade.

Russia on Monday also shut down its second major market, the Micex, three times. It had fallen nearly 19 percent.

The global credit crunch has compounded Russia's financial woes. It's already reeling from the one-two punch of falling oil prices and the loss of billions in foreign investment after the August war with Georgia .

In Latin America , the U.S. financial crisis caused trading on Brazil's stock exchange to be halted twice on a day when the value dropped by 8 percent.

In Argentina , stocks fell 10 percent, and currencies across the region tumbled against the dollar.

"The turmoil is really starting to hit Latin America ," Jane Eddy , a senior regional specialist for ratings agency Standard & Poor's . "You have stock market drops, currencies weakening and credit really drying up. Everyone is on hold waiting to see what will happen over the next two weeks."

The uncertainty comes at a time when Latin America has been enjoying its strongest sustained economic growth in 25 years. The region grew by 5.7 percent in 2007 and was projected to grow by about 4.5 percent in 2008.

Thomaz Teixeira , a stock analyst at Socopa Corretora in Sao Paulo , said investors were not necessarily in a "panic."

"But they're selling for the sake of selling at whatever price," he said. "In time, though, we believe that the market will heal."

In South Africa , the stock market hit its lowest mark in more than eight years. Banks in Zimbabwe ran out of cash after depositors tried to pull out their money.

In Pakistan , already embattled on the political front, the rupee hit a new low against the dollar. With its currency having lost 21 percent of its value already this year, Standard & Poor's warned that the country was close to bankruptcy.

Next door, in India , stocks fell nearly 5.8 percent, the lowest close in two years. The index has shed more than 42 percent of its value this year, with foreign investors leading the retreat.

In response, the capital market regulator lifted curbs Monday on overseas investors to halt record sales by offshore funds.

In the Middle East , Kuwait pumped $374.3 million into the banking systems Monday and Saudi Arabia injected more $26 million into its stock market, local newspapers reported.

Apparently immune to all the turbulence was Iraq . The government has little if any investments in the institutions affected by the crisis and a barely functioning stock market. Most Iraqis keep their money in their homes rather than trust banks.

"We don't believe it will affect our bank balance," said Minister of Industry Fawzi Hariri . "In the short term we'll be one of the least affected nations."

The Iraqi government has more than $25 billion in cash reserves. Even with oil prices dropping below $90 a barrel, the Iraqis forecast oil revenues to be in the neighborhood of $80 billion .

Suicide watch

War veterans at risk need care and follow-up

July 29, 2008

In its first year of operation, a suicide hot line has prevented 1,221 veterans from taking their lives. That's the sobering word from the Veterans Affairs Department, which launched the help line last July. We say sobering because no one can say how many others might have been saved had the government that sent men and women into war in Iraq and Afghanistan been adequately prepared to serve the numbers of returning soldiers at risk of suicide because of post-traumatic stress disorder.

Just as the Bush administration lacked a postwar plan for Iraq, it lacked the resources and staff to treat the physical and mental health concerns of service members returning from combat. The most disgraceful example was the poor treatment of many war veterans recuperating at Walter Reed Army Medical Center, conditions that led to firings and congressional hearings.

The suicide prevention hot line was started by the VA and the Substance Abuse and Mental Health Services Administration after families of at-risk soldiers, veterans groups and others complained. The hot line has since served 22,000 veterans. How many are Iraq and Afghanistan war veterans isn't readily available because hot line counselors don't routinely ask.

But the need is there. In 2006, the Army reported the highest suicide rate since it began recording the deaths in 1980 - 17.3 per 100,000 soldiers. Of the 99 soldiers who killed themselves that year, nearly a third took their lives while in Iraq or Afghanistan, the Army reported.

A VA study found that 53 percent of veterans returning from Iraq and Afghanistan who committed suicide between 2001 and 2005 were reservists or National Guardsmen, citizen soldiers who may be less able to navigate the bureaucracy to get help.

A Rand Corp. study released in April found that 300,000 Iraq and Afghanistan war veterans suffered from PTSD or depression, which puts them at greater risk for other psychological problems or suicide attempts.

A suicide prevention hot line may be the first attempt by a veteran to seek help. In 90 percent of the calls, a veteran was contacted and referred for help. That's as it must be. After surviving the battlefield, American service members can't be forgotten at home.

VA Gets 55,000 Plus Suicide Calls

July 28, 2008(CBS) CBS News investigative producer Pia Malbran wrote this story for CBSNews.com.

More than 55,000 people - including about 22,000 who identified themselves as veterans - have called the Department of Veterans Affairs’ suicide hotline during its first year in operation and CBS News has learned that many of the calls, in recent months, have come from the mid to south central part of the country.

According to the VA’s own count, during a three month time period between March and May of this year, the regions where the highest number of calls originated include the states of Texas, Tennessee, Illinois and Florida among other surrounding areas. (California and Florida have the nation's largest veteran populations.)

Other data, obtained by CBS News, shows that during the first six months of the hotline’s operation, the state of Texas had more callers than any other state with 2,102 out of 21,439 calls. California came in second with 2,088 calls, then Florida (1,250 calls) and Massachusetts (1,051 calls.)

Calls to the VA’s hotline more than doubled this calendar year going from a total of about 21,000 in January to more than 55,000 by the end of June, averaging about 250 calls a day.

Out of 55,469 calls that the VA’s suicide hotline has received in the last year, 22,044 callers identify themselves as veterans. Callers can remain anonymous if they choose. About 3,000 (2,966) identified themselves as a family member or friend of a vet. Six hundred (621) said they were on active-duty. The VA rescued 1,221 callers with emergency responders while 2,911 received help in what the VA calls a “warm transfer.” More than 4,500 (4,592) callers were referred to a VA suicide prevention coordinator in their local area. The VA says they don’t know of any individuals who committed suicide after using the 1-800-number. A spokesperson for the VA told CBS News that “there are none that we are aware of that have occurred when they called the hotline.”

Janet Kemp, the VA coordinator in charge of the hotline, told The Associated Press (AP) that the hotline is geared prevent deaths and help vets who may not get the help they need in time. “They have indicated to us that they are in extreme danger, either they have guns in their hand or they're standing on a bridge, or they've already swallowed pills,” Kemp said, according to the AP.

The VA launched its suicide prevention hotline last July. It teamed up with the government’s mental health agency, the Substance Abuse and Mental Health Services Administration (SAMHA), which had a pre-exiting 24-hour, toll-free number that had been around since 2005. The VA created an option on that national hotline dedicated specifically for those who have served in the military.

When veterans, their family members or friends call 1-800-273-TALK (8255), a voice recorder instructs them to press "1" to reach the VA hotline. The calls are then routed to a call center in Canandaigua, New York where mental health professionals, who work with the VA, answer phones.

A recent RAND Corporation study found that nearly 20 percent, or about 300,000 veterans out of the approximately 1.64 million who served in Iraq and Afghanistan, currently suffer from major depression or post traumatic stress disorder. A news report last November by CBS News Chief Investigative Correspondent Armen Keteyian discovered that in 2005 more than 6,200 veterans had committed suicide at a rate twice that of non-veterans. A series of internal VA emails, which were exposed earlier this year, confirmed CBS’ findings as well as revealed that about 1,000 vets seeking care from the VA attempt suicide every month for a total of about 12,000 a year.

The VA is making several efforts to improve the hotline. The agency just started a three-month pilot project to test several public service announcements in Washington, D.C. advertising the 1-800-number. They created a television PSA featuring actor Gary Sinise who famously portrayed a disabled veteran in the 1994 movie Forrest Gump. If the ads go well in the D.C. area, the VA will then consider advertising in other states across the country.

“The need for this is clear, and I hope this program will be taken nationwide soon,” said Congressman Harry Mitchell, a democrat from Arizona, who was instrumental in pushing the VA to beef up its suicide outreach. “We can't just wait for veterans to come to us, we need to bring the VA to our veterans,” he added.

The VA also told The Associated Press that there is a plan to hire 212 more people to answer phones and, according to the AP, counselors can quickly match callers with their medical records and then connect them directly with local VA hospitals for follow-up and care.

McCain shakes up staff amid
concern about 'unforced errors'

Insiders say severe campaign structural problems caused series of missteps

Steve Schmidt to take over day-to-day operations in McCain campaign

The Bush campaign veteran will report to campaign manager Rick Davis

An aide says Schmidt's top priority will be to stop campaign 'errors'

July 2,2008 - WASHINGTON -- Sen. John McCain's campaign announced a shakeup at the top Wednesday, in the wake of growing Republican concern about its ability to compete against Sen. Barack Obama.

Campaign manager Rick Davis said Tuesday that senior adviser Steve Schmidt would take over day-to-day operations of the campaign.

The Bush campaign veteran will report to Davis, but the rest of the campaign will report to Schmidt, who will be in charge of everything from messaging and communications to the political structure, organization and scheduling.

Davis will shift into what's being described as a more "natural role" for him -- the kind of duties he handled before last summer's mass firings in the McCain campaign. He will work on the vice presidential search and on planning matters such as the Republican National Convention.

Schmidt's top priority, according to a senior aide, will be to stop "unforced errors in the campaign."

Schmidt had been a regular on the road with McCain until recently, when he quietly returned to headquarters to help fix what insiders admit are severe structural problems that caused a series of missteps:

Hiring, then firing, lobbyists who worked for the military junta in Myanmar, then creating a strict anti-lobbyist policy that caused several lobbyists to be dismissed from the campaign.

Poor vetting that led to endorsements by controversial figures like ministers John Hagee and Rod Parsley, which McCain didn't reject until after months of bad press.

The campaign also paid for a TV ad to distance McCain from President Bush. The ad's script read, "John McCain stood up to the president and sounded the alarm on global warming ... five years ago." McCain later reversed his position and stood with Bush on the controversial idea of offshore oil drilling.
That, combined with an erratic schedule of speeches too late to make newscasts, and inconsistent themes against Obama, all have made for what senior McCain advisers admit has been a muddled message.

Schmidt is also expected to shore up what some believe is a misguided political operation put in place by Davis -- a decentralized system of regional campaign managers who are not given clear instructions from the central campaign.

After Davis announced Schmidt's new role, 11 regional directors were told via phone that they would report to Schmidt. Changes to the campaign structure were not discussed during the call, but CNN has been told that the structure will almost certainly be altered.

Schmidt will be assisted by Mike McDonald, a fellow veteran of the Bush-Cheney and Arnold Schwarzenegger campaigns, who recently joined him on the McCain team.

Mike DuHaime, Rudy Giuliani's former campaign manager and another longtime associate of Schmidt's, who has been working for both the McCain team and the Republican National Committee, will also be taking on more responsibility.

McCain advisers privately tell CNN that the moves are a direct result of missteps in messaging and scheduling that didn't give the candidate a good platform, and a political structure that many thought was misguided.

The Wednesday shakeup comes on the first anniversary of what McCain aides call "Black Monday" -- when much of the campaign's staff was fired because it ran out of money and began collapsing.

U.S. criticizes report Israel
likely to attack

The U.S. State Department on Tuesday criticized reported comments by a senior defense official who said there was an increasing likelihood Israel would attack Iran over its nuclear program.

The unidentified U.S. defense official told ABC News it was increasingly likely Israel would attack Iran, prompting retaliation against both Israel and the United States.

"I have no information that would substantiate that, and I think it's rather foolish of people who often have no clue what they're talking about to assert things and not even have the courtesy to do so on the basis of their name," State Department spokesman Tom Casey said.

The defense official told ABC News one red line that could trigger an Israeli offensive would be when Iran's nuclear facility had produced enough enriched uranium to create an atomic weapon. That could happen in 2009 or later this year, ABC News reported, citing U.S. and Israeli intelligence assessments.

Pentagon spokesman Bryan Whitman said "I don't comment for Israel" when asked about the ABC News report.

"We are going to address the concerns that we have with Iran diplomatically and with international organizations that can bring some pressure to bear on this issue," he said. "That is the focus of the U.S. effort."

Asked if he had noticed increasing concern within the Pentagon in recent weeks about the possibility of an Israeli strike, Whitman told reporters: "You guys have all worked here long enough, you can find somebody with just about any opinion you want in this building."

In Tel Aviv, a Western diplomat said there was unlikely to be any Israeli or U.S. attack on Iran in the next six months "because the military option is the last thing that we need to do and it will not be used easily."

He also said he expected France, which took over the presidency of the European Union on Tuesday, to be tougher on Tehran because President Nicolas Sarkozy has a strong position against Iran.

The diplomat said there was no consensus in Israel in favor of an attack and that the United States was unlikely to take action because it estimated Iran's nuclear program would not reach a point of no return for about two years.

"I don't think there will be an attack in the next six months," the diplomat said.

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Ethics investigation finds Palin abused power

Ethics investigation finds
Palin abused power