Study: People worldwide living longer, but sicker

LONDON (AP) — Nearly everywhere around the world, people are living longer and fewer children are dying. But increasingly, people are grappling with the diseases and disabilities of modern life, according to the most expansive global look so far at life expectancy and the biggest health threats.

The last comprehensive study was in 1990 and the top health problem then was the death of children under 5 — more than 10 million each year. Since then, campaigns to vaccinate kids against diseases like polio and measles have reduced the number of children dying to about 7 million.

Malnutrition was once the main health threat for children. Now, everywhere except Africa, they are much more likely to overeat than to starve.

With more children surviving, chronic illnesses and disabilities that strike later in life are taking a bigger toll, the research said. High blood pressure has become the leading health risk worldwide, followed by smoking and alcohol.

"The biggest contributor to the global health burden isn't premature (deaths), but chronic diseases, injuries, mental health conditions and all the bone and joint diseases," said one of the study leaders, Christopher Murray, director of the Institute of Health Metrics and Evaluation at the University of Washington.

In developed countries, such conditions now account for more than half of the health problems, fueled by an aging population. While life expectancy is climbing nearly everywhere, so too are the number of years people will live with things like vision or hearing loss and mental health issues like depression.

The research appears in seven papers published online Thursday by the journal Lancet. More than 480 researchers in 50 countries gathered data up to 2010 from surveys, censuses and past studies. They used statistical modeling to fill in the gaps for countries with little information. The series was mainly paid for by the Bill & Melinda Gates Foundation.

As in 1990, Japan topped the life expectancy list in 2010, with 79 for men and 86 for women. In the U.S. that year, life expectancy for men was 76 and for women, 81.

The research found wide variations in what's killing people around the world. Some of the most striking findings highlighted by the researchers: — Homicide is the No. 3 killer of men in Latin America; it ranks 20th worldwide. In the U.S., it is the 21st cause of death in men, and in Western Europe, 57th.

— While suicide ranks globally as the 21st leading killer, it is as high as the ninth top cause of death in women across Asia's "suicide belt," from India to China. Suicide ranks 14th in North America and 15th in Western Europe.

— In people aged 15-49, diabetes is a bigger killer in Africa than in Western Europe (8.8 deaths versus 1 death per 100,000).

— Central and Southeast Asia have the highest rates of fatal stroke in young adults at about 15 cases per 100,000 deaths. In North America, the rate is about 3 per 100,000.

Globally, heart disease and stroke remain the top killers. Reflecting an older population, lung cancer moved to the 5th cause of death globally, while other cancers including those of the liver, stomach and colon are also in the top 20. AIDS jumped from the 35th cause of death in 1990 to the sixth leading cause two decades later.

While chronic diseases are killing more people nearly everywhere, the overall trend is the opposite in Africa, where illnesses like AIDS, malaria and tuberculosis are still major threats. And experts warn again shifting too much of the focus away from those ailments.

"It's the nature of infectious disease epidemics that if you turn away from them, they will crop right back up," said Jennifer Cohn, a medical coordinator at Doctors Without Borders.

Still, she acknowledged the need to address the surge of other health problems across Africa. Cohn said the agency was considering ways to treat things like heart disease and diabetes. "The way we treat HIV could be a good model for chronic care," she said.

Others said more concrete information is needed before making any big changes to public health policies.

"We have to take this data with some grains of salt," said Sandy Cairncross, an epidemiologist at the London School of Hygiene and Tropical Medicine.

He said the information in some of the Lancet research was too thin and didn't fully consider all the relevant health risk factors.

"We're getting a better picture, but it's still incomplete," he said.

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Online:

www.lancet.com

http://healthmetricsandevaluation.org

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AMR pilots union meets company CEO, still backs USAir merger: spokesman

(Reuters) - American Airlines' pilots union still supports a merger with US Airways Group, a union spokesman said on Thursday, unmoved by a pitch from AMR Chief Executive Tom Horton that the company should exit Chapter 11 as an independent carrier.

Next week, US Airways CEO Doug Parker is expected to meet with the board of the Allied Pilots Association, spokesman Dennis Tajer said.

Horton, who became CEO of American parent AMR Corp as the company filed for bankruptcy protection in November 2011, requested the meeting with the pilots union leadership and met with the board for about three hours on Thursday, Tajer said.

"The case was made for the standalone plan, and APA leadership gave the standalone plan pitch due consideration but after the meeting continued to believe that a merger is best for the longtime interest of our pilots and our airline," the spokesman added.

American Airlines met with the union to thank it for its leadership in reaching a new labor contract, "discuss the next steps in our evaluation of strategic alternatives and exchange information," according to a statement from spokesman Mike Trevino.

US Airways declined to comment.

US Air has been pushing for a merger with American all year, and its plan has the support of unions that represent American's flight attendants and ground workers, in addition to the pilots union. The two carriers combined would be on par with current No. 1 United Continental Holdings in scope.

"We anticipate that Mr. Parker will articulate his vision and plan for the new American Airlines next week," Tajer added.

American Airlines creditors want a potential merger with US Airways to be an all-stock deal rather than one that pays some claims in cash, people familiar with the matter said this week. Merger discussions among US Airways, AMR and its creditors are at an advanced stage, the sources said.

The pilots unions at both American and US Airways said this week they would join the merger talks with AMR creditors and the companies. The Allied Pilots Association last week approved a new labor accord with American that grants it a 13.5 percent equity stake in a reorganized AMR.

Keith Wilson, president of the pilots union, said in a message to members on Wednesday that Wall Street analysts suggest an American-US Airways merger is likely. "While I will refrain from speculation, we must be ready to move quickly toward a potential merger," Wilson said.

American Airlines shares rose 16.9 percent to 76 cents on Thursday, while US Airways rose 2.1 percent to $12.97.

(Reporting by Karen Jacobs; Editing by Dan Grebler)

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North Korea rocket launch raises nuclear stakes

SEOUL/TOKYO (Reuters) - North Korea successfully launched a rocket on Wednesday, boosting the credentials of its new leader and stepping up the threat the isolated and impoverished state poses to opponents.

The rocket, which North Korea says put a weather satellite into orbit, has been labeled by the United States, South Korea and Japan as a test of technology that could one day deliver a nuclear warhead capable of hitting targets as far away as the continental United States.

"The satellite has entered the planned orbit," a North Korean television news reader clad in traditional Korean garb announced, after which the station played patriotic songs with the lyrics "Chosun (Korea) does what it says".

The rocket was launched just before 10 a.m. (0100 GMT), according to defense officials in South Korea and Japan, and was more successful than a rocket launched in April that flew for less than two minutes.

The North American Aerospace Defense Command (NORAD), a joint U.S.-Canadian military organization, said that the missile had "deployed an object that appeared to achieve orbit".

North Korea followed what it said was a similar successful launch in 2009 with a nuclear test that prompted the U.N. Security Council to stiffen sanctions that it originally imposed in 2006 after the North's first nuclear test.

North Korea is banned from developing nuclear and missile-related technology under U.N. resolutions, although Kim Jong-un, the youthful head of state who took power a year ago, is believed to have continued the state's "military first" programs put in place by his late father, Kim Jong-il.

North Korea hailed the launch as celebrating the prowess of all three members of the Kim family to rule since it was founded in 1948.

"At a time when great yearnings and reverence for Kim Jong-il pervade the whole country, its scientists and technicians brilliantly carried out his behests to launch a scientific and technological satellite in 2012, the year marking the 100th birth anniversary of President Kim Il Sung," its KCNA news agency said. Kim Il Sung, the current leader's grandfather, was North Korea's first leader.

The United States condemned the launch as "provocative" and a breach of U.N. rules, while Japan's U.N. envoy called for a Security Council meeting. However, diplomats say further tough sanctions are unlikely from the Security Council as China, the North's only major ally, will oppose them.

"The international community must work in a concerted fashion to send North Korea a clear message that its violations of United Nations Security Council resolutions have consequences," the White House said in a statement.

U.S. intelligence has linked North Korea with missile shipments to Iran. Newspapers in Japan and South Korea have reported that Iranian observers were in the North for the launch, something Iran has denied.

Japan's likely next prime minister, Shinzo Abe, who is leading in opinion polls ahead of an election on Sunday and who is known as a hawk on North Korea, called on the United Nations to adopt a resolution "strongly criticizing" Pyongyang.

A North Korean Foreign Ministry spokesman reiterated that the rocket was a "peaceful project".

"The attempt to see our satellite launch as a long-range missile launch for military purposes comes from hostile perception that tries to designate us a cause for security tension," KCNA cited the spokesman as saying.

"STUMBLING BLOCK"

China had expressed "deep concern" prior to the launch which was announced a day after a top politburo member, representing new Chinese leader Xi Jinping, met Kim Jong-un in Pyongyang.

On Wednesday, its tone was measured, regretting the launch but calling for restraint on any counter-measures, in line with a policy of effectively vetoing tougher sanctions.

"China believes the Security Council's response should be cautious and moderate, protect the overall peaceful and stable situation on the Korean peninsula, and avoid an escalation," Chinese Foreign Ministry spokesman Hong Lei told journalists.

Bruce Klingner, a Korea expert at the Heritage Foundation, said: "China has been the stumbling block to firmer U.N. action and we'll have to see if the new leadership is any different than its predecessors."

A senior adviser to South Korea's president said last week it was unlikely there would be action from the United Nations and Seoul would expect its allies to tighten sanctions unilaterally.

Kim Jong-un, believed to be 29 years old, took power when his father died on December 17 last year and experts believe the launch was intended to commemorate the first anniversary of his death. The April launch was timed for the centennial of the birth of Kim Il Sung.

Wednesday's success puts the North ahead of the South which has not managed to get a rocket off the ground.

"This is a considerable boost in establishing the rule of Kim Jong-un," said Cho Min, an expert at the Korea Institute of National Unification.

There have been few indications the secretive and impoverished state, where the United Nations estimates a third of people are malnourished, has made any advances in opening up economically over the past year.

North Korea remains reliant on minerals exports to China and remittances from tens of thousands of its workers overseas.

Many of its 22 million people need handouts from defectors, who have escaped to South Korea, for basic medicines.

Given the puny size of its economy - per capita income is less than $2,000 a year - one of the few ways the North can attract world attention is by emphasizing its military threat.

It wants the United States to resume aid and to recognize it diplomatically, although the April launch scuppered a planned food deal.

The North is believed to be some years away from developing a functioning nuclear warhead although it may have enough plutonium for about half a dozen nuclear bombs, according to nuclear experts.

It has also been enriching uranium, which would give it a second path to nuclear weapons as it sits on big natural uranium reserves.

"A successful launch puts North Korea closer to the capability to deploy a weaponized missile," said Denny Roy, a senior fellow at the East-West Center in Hawaii.

"But this would still require fitting a weapon to the missile and ensuring a reasonable degree of accuracy. The North Koreans probably do not yet have a nuclear weapon small enough for a missile to carry."

The North says its work is part of a civil nuclear program although it has also boasted of it being a "nuclear weapons power".

(This story has been refiled to clarify reference to NORAD in paragraph five)

(Additional reporting by Jumin Park and Yoo Choonsik in SEOUL; David Alexander, Matt Spetalnick and Paul Eckert in WASHINGTON; Linda Sieg in TOKYO, Sui-Lee Wee and michael Martina in BEIJING,; Rosmarie Francisco in MANILA; Writing by David Chance; Editing by Raju Gopalakrishnan and Robert Birsel)

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Tevin Hunte Is 'So Happy' After His Voice Elimination

TV Watch

The Voice

By Jessica Herndon and Julia Haskins

12/12/2012 at 07:45 PM EST

Team Cee Lo's Trevin Hunte was eliminated on Tuesday's episode of The Voice, but the soulful singer isn't letting the end of this journey hold him back.

"I feel like the best person on the planet Earth. I am so happy and excited to be honest," Hunte told PEOPLE after the show. I feel like a weight has been lifted. Being away from family and friends and what you're used to was definitely a hard thing for me."

Hunte is looking forward to his mom's cooking and seeing his friends back home, and he won't waste a second wondering what if he'd made it further.

"I have no regrets. I am glad that I took a leap of faith and auditioned," he said. "I auditioned for American Idol and told my family I didn't have the strength to do it again. But I am definitely happy and excited that I made it this far."

And he still has a long way to go. "I'm only 18," he said. "I'm just really excited."

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Asian shares rise, yen falls after Fed's stimulus steps

TOKYO (Reuters) - Asian shares extended gains for a seventh day on Thursday, after the U.S. Federal Reserve took new stimulus steps to bolster the economy, pressuring the yen with expectations the Japanese central bank will follow suit with more easing next week.

While stocks gained, oil and gold fell from post-Fed rallies, as investors took profits ahead of the year-end.

Despite the Fed's fresh dose of liquidity-pumping measures, the upside for stocks was also contained by concerns about the lack of breakthrough in U.S. budget talks to avert the "fiscal cliff," some $600 billion of tax hikes and spending cuts scheduled to start in January.

Failure to reach a compromise by the end of the year risks pushing the U.S. economy into recession and has stoked fears that a fragile recovery trend emerging in China and some other countries would be stifled.

U.S. stocks ended little changed on Wednesday, giving up most of the day's gains after Fed Chairman Ben Bernanke warned of damage from the "fiscal cliff", and as U.S. House of Representatives Speaker John Boehner said "serious differences" remain with President Barack Obama.

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> added 0.3 percent to a 16-month peak, having hit successive 16-month highs since December 5. South Korean shares <.ks11> hit a two-month high and were last up 0.5 percent.

"The Fed's easing measures met the market's expectations, while the setting of clear inflation and unemployment targets exceeded hopes and will clear uncertainty on the monetary front," said Kim Yong-goo, an analyst at Samsung Securities.

The U.S. central bank, cut its forecasts for economic growth and inflation next year, committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September.

But it also took the unprecedented step of indicating interest rates would remain near zero until unemployment falls to at least 6.5 percent.

YEN WEAKNESS CONTINUES

The dollar advanced to its loftiest in nearly nine months against the yen, touching a high of 83.44 yen. The yen's slump boosted Japan's Nikkei share average <.n225> up 1.6 percent and above 9,700 for the first time in eight months. <.t/>

The Bank of Japan meets December 19-20 and is widely expected to further ease monetary policy to support its weak economy.

The Fed's latest move to make the jobless rate a target for its monetary policy could have a longer-term implication on the BOJ.

"While the BOJ's ultimate goal is to pull Japan out of deflation, the Fed's latest move could prompt Japanese politicians or the government to urge the BOJ to also commit itself to growth, not just price stability," said Chotaro Morita, chief fixed income strategist at Barclays.

Morita said that market consensus is for the BOJ to expand its asset-buying and lending program, currently at 91 trillion yen ($1.1 trillion), by another 5-10 trillion yen, and put off taking bolder steps until after a new cabinet is formed.

Japan holds an election on Sunday, with opinion surveys showing conservative former Prime Minister Shinzo Abe's opposition Liberal Democratic Party and its smaller ally heading for a resounding victory.

Abe wants to step up aggressive monetary easing along with heavy public works spending, policy prescriptions dubbed "Abenomics" by the media, and while his threat to curtail the BOJ's independence has unsettled investors, investors reckon the responsibility of power will prevent Abe taking excessive risks that could lead to a bond market meltdown.

The euro was relatively less volatile compared to the dollar and the yen, steadying around $1.3066 after reaching a high of $1.3098 on Wednesday.

Greece's foreign lenders welcomed a bond buyback even though it narrowly fell short of a target to cut the country's debt, paving the way for Athens to get long-delayed aid to avoid bankruptcy.

In Italy, another debt-straddled euro zone country, Silvio Berlusconi offered to stand back and make way for Mario Monti as Italy's next leader if the outgoing technocrat premier agreed to run as the candidate for a center-right coalition. Monti's intention to resign has raised concerns that his austerity policies may not be carried out.

Oil prices retreated from overnight rises, with U.S. crude futures easing 0.3 percent to $86.48 a barrel and Brent falling 0.5 percent to $109.01.

Gold tumbled more than 1 percent on stop-loss selling, after the Fed's announcement of a fresh round of bond buying lifted prices to their highest levels in nearly two weeks. Spot gold dropped 1 percent to $1,694.16.

($1 = 82.9300 Japanese yen)

(Additional reporting by Somang Yang in Seoul; Editing by Jacqueline Wong)

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North Korea's new leader burnishes credentials with rocket

SEOUL/TOKYO (Reuters) - North Korea successfully launched a rocket on Wednesday, boosting the credentials of its new leader and stepping up the threat the isolated and impoverished state poses to its opponents.

The rocket, which North Korea says was designed to put a weather satellite into orbit, has been labeled by the United States, South Korea and Japan as a test of technology that could one day deliver a nuclear warhead capable of hitting targets as far as the continental the United States.

"The satellite has entered the planned orbit," North Korea's state news agency KCNA said.

North Korea followed what it said was a similar successful launch in 2009 with a nuclear test that prompted the United Nations Security Council to stiffen sanctions against Pyongyang that it originally imposed in 2006 after the North's first nuclear test.

The state is banned from developing nuclear and missile-related technology under U.N. resolutions, although Kim Jong-un, the youthful head of state who took power a year ago, is believed to have continued the state's "military first" programs put into place by his deceased father Kim Jong-il.

After Wednesday's launch, which saw the second stage of the rocket splash down in seas off the Philippines as planned, Japan's U.N. envoy called for a Security Council meeting. However, diplomats say further tough sanctions are unlikely to be agreed at the body as China, the North's only major ally, will oppose them.

The rocket was launched just before 10 a.m. Korea time (9 p.m. ET on Tuesday), according to defense officials in South Korea and Japan, and easily surpassed a failed April launch that flew for less than two minutes.

There was no independent confirmation it had put a satellite into orbit.

Japan's likely next prime minister, Shinzo Abe, who is leading in opinion polls ahead of an election on December 16 and who made his name as a North Korea hawk, called on the United Nations to adopt a resolution "strongly criticizing" Pyongyang.

There was no immediate official reaction from Washington, South Korea's major military backer, or from China.

China had expressed "deep concern" over the launch which was announced a day after a visit by a top politburo member to Pyongyang when he met Kim Jong-un.

On Wednesday, China's state news agency Xinhua said North Korea had the "right to conduct peaceful exploration of outer space."

But it added: "Pyongyang should also abide by relevant U.N. Security Council resolutions, including Resolution 1874, which demands (North Korea) not to conduct 'any launch using ballistic missile technology' and urges it to 'suspend all activities related to its ballistic missile program.'"

U.S. Representative Ileana Ros-Lehtinen, a Florida Republican who heads the House of Representatives Foreign Affairs Committee, quickly condemned the launch and called for tougher sanctions.

"It is clear that Pyongyang is moving ever closer towards its ultimate goal of producing a nuclear ballistic missile in order to threaten not only our allies in the Asia-Pacific region but the U.S. as well," she said.

A senior adviser to South Korea's president said last week it was unlikely that there would be a meaningful set of sanctions agreed at the United Nations but that Seoul would expect its allies to tighten sanctions unilaterally.

A YEAR ON FOR THE THIRD KIM

Kim Jong-un, believed to be 29 years old, took office after his father died on December 17 last year and experts believe that Wednesday's launch was intended to commemorate the first anniversary of the death.

The April launch was timed for the centennial of the birth of Kim Il Sung, the founder of North Korea and the grandfather of its current ruler.

"This is a considerable boost in establishing the rule of Kim Jong-un," said Cho Min, an expert at the Korea Institute of National Unification.

There have been few indications the secretive and impoverished state, where the United Nations estimates a third of the population is malnourished, has made any advances in opening up economically over the past year.

North Korea remains reliant on minerals exports to China and remittances from tens of thousands of its people working on labor projects overseas.

The 22 million population often needs handouts from defectors who have escaped to South Korea in order to afford basic medicines.

Given the puny size of its economy - per capita income is less than $2,000 a year - one of the few ways that North Korea can attract world attention is by emphasizing its military threat.

Pyongyang wants the United States to resume aid and to recognize it diplomatically, although the April launch skippered a planned food deal.

It is believed to be some years away from developing a functioning nuclear warhead and to have enough plutonium for around half a dozen nuclear bombs, according to nuclear experts.

The North has also been enriching uranium which would give it a second path to nuclear weapons as it sits on vast natural uranium reserves.

It says that its development is part of a civil nuclear program, but has also boasted of it being a "nuclear weapons power".

(Additional reporting by Jumin Park and Yoo Choonsik in SEOUL; Writing by David Chance; Editing by Raju Gopalakrishnan)

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Facebook helps FBI bust cybercriminals blamed for $850 million losses

SAN FRANCISCO (Reuters) – Investigators led by the Federal Bureau of Investigation and aided by Facebook Inc, have busted an international criminal ring that infected 11 million computers around the world and caused more than $ 850 million in total losses in one of the largest cybercrime hauls in history.

The FBI, working in concert with the world’s largest social network and several international law enforcement agencies, arrested 10 people it says infected computers with “Yahos” malicious software, then stole credit card, bank and other personal information.

Facebook’s security team assisted the FBI after “Yahos” targeted its users from 2010 to October 2012, the U.S. federal agency said in a statement on its website. The social network helped identify the criminals and spot affected accounts, it said.

Its “security systems were able to detect affected accounts and provide tools to remove these threats,” the FBI said.

According to the agency, which worked also with the U.S. Department of Justice, the accused hackers employed the “Butterfly Botnet”. Botnets are networks of compromised computers that can be used in a variety of cyberattacks on personal computers.

The FBI said it nabbed 10 people from Bosnia and Herzegovina, Croatia, Macedonia, New Zealand, Peru, the United Kingdom, and the United States, executed numerous search warrants and conducted a raft of interviews.

It estimated the total losses from their activities at more than $ 850 million, without elaborating.

Hard data is tough to come by, but experts say cybercrime is on the rise around the world as PC and mobile computing become more prevalent and as more and more financial transactions shift online, leaving law enforcement, cybersecurity professionals and targeted corporations increasingly hard-pressed to spot and ward off attacks.

(Reporting By Edwin Chan; Editing by Matt Driskill)

Social Media News Headlines – Yahoo! News

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Hugh Hefner's Engagement Ring to Crystal Harris Revealed

By Mike Fleeman

12/11/2012 at 07:00 PM EST

The wedding's back on – though it may be a good idea to save that gift receipt.

Hugh Hefner, 86, officially confirms that he is once again engaged to Crystal Harris, 26, telling his Twitter followers, "I've given Crystal Harris a ring. I love the girl."

And to prove it, Harris posted photos of the big diamond sparkler, calling it "my beautiful ring."

Neither announced a wedding date, though sources tell PEOPLE they're planning to tie the knot at the Playboy Mansion in Los Angeles on New Year's Eve.

Whether that still happens remains to be seen.

This is the plan they had in 2011 – a wedding at the mansion – except that Harris called it off just days before the nuptials were scheduled to happen in front of 300 invited guests.

Hugh Hefner and Crystal Harris

David Livingston / Getty

The onetime Playmate of the Month then ripped Hef's bedroom skills, calling him a two-second man, to which Hefner replied, "I missed a bullet" by not marrying her.

A year later, Hefner's "runaway bunny" bounded back to him.

• Reporting by JENNIFER GARCIA

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DA investigating Texas' troubled $3B cancer agency

AUSTIN, Texas (AP) — Turmoil surrounding an unprecedented $3 billion cancer-fighting effort in Texas worsened Tuesday when its executive director offered his resignation and the state's chief public corruption prosecutor announced an investigation into the beleaguered agency.

No specific criminal allegations are driving the latest probe into the Cancer Prevention and Research Institute of Texas, said Gregg Cox, director of the Travis County district attorney's public integrity unit. But his influential office opened a case only weeks after the embattled agency disclosed that an $11 million grant to a private company bypassed review.

That award is the latest trouble in a tumultuous year for CPRIT, which controls the nation's second-largest pot of cancer research dollars. Amid the mounting problems, the agency announced Tuesday that Executive Director Bill Gimson had submitted his letter of resignation.

"Unfortunately, I have also been placed in a situation where I feel I can no longer be effective," Gimson wrote in a letter dated Monday.

Gimson said the troubles have resulted in "wasted efforts expended in low value activities" at the agency, instead of a focused fight against cancer. Gimson offered to stay on until January, and the agency's board must still approve his request to step down.

His departure would complete a remarkable house-cleaning at CPRIT in a span of just eight months. It began in May, when Dr. Alfred Gilman resigned as chief science officer in protest over a different grant that the Nobel laureate wanted approved by a panel of scientists. He warned it would be "the bomb that destroys CPRIT."

Gilman was followed by Chief Commercialization Officer Jerry Cobbs, whose resignation in November came after an internal audit showed Cobbs included an $11 million proposal in a funding slate without a required outside review of the project's merits. The lucrative grant was given to Dallas-based Peloton Therapeutics, a biomedical startup.

Gimson chalked up Peloton's award to an honest mistake and has said that, to his knowledge, no one associated with CPRIT stood to benefit financially from the company receiving the taxpayer funds. That hasn't satisfied some members of the agency's governing board, who called last week for more assurances that no one personally profited.

Cox said he has been following the agency's problems and his office received a number of concerned phone calls. His department in Austin is charged with prosecuting crimes related to government officials; his most famous cases include winning a conviction against former U.S. House Majority Leader Tom DeLay in 2010 on money laundering charges.

"We have to gather the facts and figure what, if any, crime occurred so that (the investigation) can be focused more," Cox said.

Gimson's resignation letter was dated the same day the Texas attorney general's office also announced its investigation of the agency. Cox said his department would work cooperatively with state investigators, but he made clear the probes would be separate.

Peloton's award marks the second time this year that a lucrative taxpayer-funded grant authorized by CPRIT instigated backlash and raised questions about oversight. The first involved the $20 million grant to M.D. Anderson Cancer Center in Houston that Gilman described as a thin proposal that should have first been scrutinized by an outside panel of scientific peer-reviewers, even though none was required under the agency's rules.

Dozens of the nation's top scientists agreed. They resigned en masse from the agency's peer-review panels along with Gilman. Some accused the agency of "hucksterism" and charting a politically-driven path that was putting commercial product-development above science.

The latest shake-up at CPRIT caught Gilman's successor off-guard. Dr. Margaret Kripke, who was introduced to reporters Tuesday, acknowledged that she wasn't even sure who she would be answering to now that Gimson was stepping down. She said that although she wasn't with the agency when her predecessor announced his resignation, she was aware of the concerns and allegations.

"I don't think people would resign frivolously, so there must be some substance to those concerns," Kripke said.

Kripke also acknowledged the challenge of restocking the peer-review panels after the agency's credibility was so publicly smeared by some of the country's top scientists. She said she took the job because she felt the agency's mission and potential was too important to lose.

Only the National Institutes of Health doles out more cancer research dollars than CPRIT, which has awarded more than $700 million so far.

Gov. Rick Perry told reporters in Houston on Tuesday that he wasn't previously aware of the resignation but said Gimson's decision to step down was his own.

Joining the mounting criticism of CPRIT is the woman credited with brainstorming the idea for the agency in the first place. Cathy Bonner, who served under former Texas Gov. Ann Richards, teamed with cancer survivor Lance Armstrong in selling Texas voters in 2007 on a constitutional amendment to create an unprecedented state-run effort to finance a war on disease.

Now Bonner says politics have sullied an agency that she said was built to fund research, not subsidize private companies.

"There appears to be a cover-up going on," Bonner said.

Peloton has declined comment about its award and has referred questions to CPRIT. The agency has said the company wasn't aware that its application was never scrutinized by an outside panel, as required under agency rules.

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Follow Paul J. Weber on Twitter: www.twitter.com/pauljweber

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HSBC became bank to drug cartels, pays big for lapses

(Reuters) - In February 2008, Mexican authorities told the CEO of HSBC Holdings Plc's Mexico unit that a local drug lord referred to the bank as the "place to launder money," U.S. prosecutors said on Tuesday, as they announced a record $1.92 billion settlement with the British bank.

Lax money laundering controls at HSBC allowed two cartels - one each in Mexico and Colombia - to move $881 million in drug proceeds through the bank over the second half of the last decade, according to prosecutors and federal court documents.

So rampant was the practice, prosecutors said, that on some days drug traffickers deposited hundreds of thousands of dollars at HSBC Mexico accounts. To speed things along, the criminals even designed "specially shaped boxes" that fit the size of teller windows at HSBC branches, according to the documents.

Prosecutors said a multi-year, multi-agency probe into such transactions revealed how HSBC had degenerated into the "preferred financial institution" for drug traffickers and money launderers. And on Tuesday, that culminated in a far-reaching deferred prosecution agreement with HSBC.

An HSBC spokesman declined to discuss specific transactions or clients. But as part of the agreement, the bank acknowledged major lapses in compliance and ignoring red flags. It also acknowledged enabling clients to avoid U.S. sanctions that prohibit dealings with countries such as Iran, Libya, Sudan, Myanmar and Cuba.

The bank agreed to take steps to fix problems, forfeit $1.256 billion, and retain a compliance monitor. It also agreed to pay $665 million in civil penalties to resolve regulatory actions by the U.S. Office of the Comptroller of the Currency, the Federal Reserve, the Treasury Department and others.

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes," HSBC Chief Executive Stuart Gulliver said.

The settlement, the largest penalty ever paid by a bank, had been expected.

In November, the bank told investors its penalty could exceed $1.5 billion. And many of the details of the bank's lapses that allowed shadowy money to sluice through HSBC were contained in a U.S. Senate investigative report in July.

HSBC shares closed up 0.6 percent in London on Tuesday, and its Hong Kong-listed shares were up about 0.25 percent by late morning on Wednesday.

MONEY LAUNDERING AND WASHING MACHINES

Top U.S. law-enforcement officials, standing sternly at a news conference in Brooklyn, New York, gave new details on Tuesday of how the bank was used. They pointed to flow charts decorated with green dollar bills showing how cartels used HSBC accounts to move money through Mexico, Colombia and elsewhere.

In one type of money-laundering transaction, the documents show how millions of dollars of drug money flowed through HSBC as Colombian drug cartels used the so-called Black Market Peso Exchange to convert U.S. dollars to Colombian pesos.

In a multi-step laundering process, middlemen - referred to as peso brokers - used U.S. dollars from drug cartels to buy consumer goods such as washing machines and then exported them to Colombia, where they were sold, according to the documents and a source familiar with the situation. Part of the sale proceeds, now in Colombian pesos, was then given back to the drug cartels, the documents show.

Other transactions involved Mexican drug cartels, prosecutors said.

After the February 2008 meeting with Mexican authorities, HSBC conducted an internal inquiry that found a small number of Mexican clients accounted for a large percentage of the U.S. dollars moving through HSBC, according to the documents, which include a "statement of facts" that HSBC has agreed to.

A significant sum ultimately was traced to the city of Culiacan in the rugged Mexican state of Sinaloa, home to one of Mexico's powerful drug gangs that is directed by the country's most-wanted man, Joaquin "Shorty" Guzman, the documents show. In 2001, Guzman escaped from a maximum security prison in a laundry cart.

HSBC closed the suspected accounts, but the bank kept accepting dollar deposits in Sinaloa. Between 2006 and 2008, HSBC's Mexican unit moved $1.1 billion from Sinaloa to the bank's U.S. branches, according to the documents.

Drug cartels earn an estimated $60 billion a year from trafficking in the United States, according to the United Nations. Half of that money is routed back to Mexico to pay off politicians, fund private arsenals and fuel violence that killed more than 60,000 people over the past six years.

Loretta Lynch, the U.S. Attorney in Brooklyn, said that compliance at HSBC was "woefully inadequate."

HSBC's compliance employees were vastly outnumbered, according to prosecutors. Less than a handful of bank employees, for example, were charged with reviewing 13,000 to 15,000 suspicious alerts generated monthly, they said.

FIXING PROBLEMS

Prosecutors agreed to a deferred prosecution deal, which means that HSBC avoids being criminally charged. They also decided against charging any individuals.

Lanny Breuer, chief of the Justice Department's criminal division, defended the move, saying, "HSBC is paying a heavy price for its conduct."

Later, he said that while HSBC permitted itself to be an essential element in money laundering, it was not the mastermind. "They are not the Sinaloa cartel," he said.

HSBC said it had increased spending on anti-money laundering systems by about nine times between 2009 and 2011, exited business relationships and clawed back bonuses for senior executives. As evidence of its determination to change, it cited the hiring last January of Stuart Levey, a former top U.S. Treasury Department official, as chief legal officer.

Under the five-year agreement with the Justice Department, HSBC has agreed to have an independent monitor evaluate its progress in improving its compliance.

It also said that as part of the overhaul of its controls, it has launched a global review of its "Know Your Customer" files, which will cost an estimated $700 million over five years. The files are designed to ensure that banks do not unwittingly act as conduits for criminal funds.

There is already some evidence that the crackdown on HSBC has slowed the flow of illegal cash.

In 2009, HSBC began exiting a business that moves bulk cash through the global financial system and a year later, the Office of the Comptroller of the Currency ordered the bank to improve its compliance.

Since then, the repatriation of U.S. dollars from Mexico has fallen to less than $5 billion in 2011 compared with $12 billion in 2008, according to Donald Semesky, a former Drug Enforcement Administration official who provided the data last month at an anti-money laundering conference in Washington.

(Additional reporting by Aruna Viswanatha in Washington, Jessica Dye in New York, Brett Wolf and Steve Slater in London and Lawrence White and Michael Flaherty in Hong Kong; Editing by Eddie Evans, Paritosh Bansal and Ken Wills)

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