Reid steps up fight with Koch 'oil barons' over Republican funding

By Gabriel Debenedetti

WASHINGTON (Reuters) - Democratic senate leader Harry Reid delivered his latest attack on billionaire industrialists Charles and David Koch, saying they were trying to buy the American political system by funding conservative and libertarian candidates in midterm elections.

Reid, 74, repeatedly used the word "radical" to decry the influence on U.S. politics of the Kochs in a speech to the U.S. Senate on Thursday. The brothers spent over $100 million on the 2012 elections and continue to pour money into races for the November midterms in which control of Congress is at stake.

The Nevada senator's bitter jabs appeared to reflect concerns among Democratic leaders over the Kochs' big spending at a time when polls show displeasure over President Barack Obama's healthcare overhaul hurting his ratings, and those of other Democrats.

"These are two oil barons, and they're trying to rig the political system to favor the rich and especially favor themselves," Reid said, marking at least the seventh time in recent weeks he has gone after the Kochs in public.

Through a network of advocacy groups - most prominently Americans For Prosperity (AFP) - the Kochs have put out a range of television and Internet advertisements bashing Democratic House and Senate candidates who support the healthcare law known as Obamacare.

AFP and other Koch groups have spent more than $30 million in this election cycle. Reid's speech was part of a Democratic push to fight back by casting the Koch brothers as villains.

The Democratic Senatorial Campaign Committee (DSCC) has launched a campaign claiming the Republican Party is "addicted to Koch" (pronounced "coke"). The committee has promised to aggressively point out when Koch-backed ads are discredited and to create Web ads and a social media push.

"Senator Reid knows that Republicans are going to pay a price in 2014 for their unshakeable allegiance to the Koch brothers by pushing an agenda that is good for billionaires and bad for almost everyone else in the country," DSCC spokesman Justin Barasky said.

"If the Kochs get their way, they will buy a U.S. Senate that wants to end Medicare as we know it and wants to dismantle Social Security. That's a huge problem for the country."

Democrats have begun releasing television ads targeting the Koch brothers, whom Forbes lists as each having a net worth of about $40 billion.

Senate Majority PAC, a Democratic group, put out an ad in Louisiana criticizing the Kochs' spending in that state's Senate race. Alaska Senator Mark Begich, another Democrat targeted in Koch-sponsored ads, attacked the brothers in a television spot of his own.

Robert Tappan, a spokesman for Koch Industries, fired back at Reid on Thursday, casting the senator as a man who "sounds desperate to keep his job."

Reid is up for election for a sixth six-year term in 2016. Many Republicans are hoping that Nevada's popular governor, Brian Sandoval, will challenge him.

"Like most Americans, we believe his conduct is beneath his office, and his statements about us are false," Tappan said.

"For the sitting majority leader to go out on the floor of the Senate and single out two individuals and try to demonize them because they're exercising their First Amendment rights ... we find that very, very troubling," he added.

DEMOCRATS' BILLIONAIRE "HYPOCRISY"

Democrats' concerns about the influx of major out-of-state donations influencing congressional races were exacerbated on Tuesday when Republican David Jolly won a special election over Democrat Alex Sink in Florida's 13th District.

Both parties and their supporters spent millions of dollars on the race, which was widely seen as an early sign of Democrats' election vulnerability on Obamacare.

For months, Democratic leaders have urged major donors to step up their contributions for the midterm elections. They are concerned Republicans are more focused on the midterms than Democratic donors, who may be looking ahead to 2016, when former secretary of state Hillary Clinton may run for president.

Obama has asked donors to contribute more in a series of fundraisers. Billionaire hedge fund manager Tom Steyer has pledged to spend as much as $100 million on the midterm elections, focusing on candidates who favor plans to curb climate change.

On Thursday, Republicans seized on such efforts in chiding Democrats over Reid's comments about the Kochs. Republican National Committee spokesman Jahan Wilcox pointed to a series of recent speeches by Senate Democrats on climate change, remarks that many Republicans saw as a nod to Steyer.

"The hypocrisy of the Senator Reid knows no end, because a few days ago he rented out the chamber so Democrats could curry favor with liberal billionaire Tom Steyer," Wilcox said.

(Additional reporting by Susan Cornwell; Editing by David Lindsey and Andrew Hay)

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Democratic leader’s bitter jabs at ‘oil barons’

Senate Majority Leader Harry Reid says Charles and David Koch are "trying to rig the political system."
Billionaires’ response

WASHINGTON (AP) — Seeking to pacify frustrated immigration advocates, President Barack Obama is directing the government to find more humane ways to handle deportation for immigrants in the U.S. illegally, the White House said Thursday.

With prospects for an immigration overhaul in Congress appearing ever dimmer, immigration advocates have been ramping up pressure on Obama to halt all deportations — a step the president has insisted he can't take by himself. By announcing he's open to changing how the U.S. enforces its current laws, Obama is signaling he may be growing more inclined to test the limits of his authority in the face of congressional inaction.

Obama's announcement came Thursday in a meeting with three Latino lawmakers who are seeking ways to resuscitate an immigration overhaul despite resistance from Republicans and election-year politics that have confounded their efforts. The White House said Obama told the lawmakers — all Democrats — that he's deeply concerned about the pain that families suffer when they are separated due to a broken immigration system.

"He told the members that he has asked Secretary of Homeland Security Jeh Johnson to do an inventory of the department's current practices to see how it can conduct enforcement more humanely within the confines of the law," the White House said in a statement.

Without new laws, it's unclear what Obama can do on his own. As recently as last week, Obama said he already had "stretched my administrative capacity very far" when he issued an executive order in 2012 removing the threat of deportation for children brought to the U.S. illegally.

"I cannot ignore those laws any more than I could ignore any of the other laws that are on the books," Obama said in a virtual town hall with Spanish-language media outlets.

White House officials declined to answer questions Thursday about what the government could do to make deportation more humane or the timeline for Johnson to report back to the president. But immigration activists will likely call for Obama to halt deportations for parents of children brought to the U.S. illegally, among other steps.

Rep. Luis Gutierrez, who represents a heavily Latino district in Illinois, said after the Oval Office meeting that he will present options to Johnson next week, and then the secretary will meet with the entire Congressional Hispanic Caucus to discuss those and other options.

"It is clear that the pleas from the community got through to the president," said Gutierrez, who traditionally has been an Obama ally but recently has grown critical of Obama for doing too little.

Obama still intends to pressure Republicans to pass an immigration overhaul, the White House said — a sentiment echoed by Gutierrez and others in the Hispanic caucus. To that end, Obama was planning to meet Friday with organizations working to pass bipartisan immigration legislation.

Ironically, by moving to ease deportation practices now, Obama may make the task of getting that overhaul through Congress even tougher. Republicans have already insisted they are reluctant to rewrite immigration laws out of concern that Obama will not dutifully enforce them, citing the broad latitude he has granted himself in implementing his health care law.

A top second-term priority for Obama, immigration appeared to be an area of potential bipartisan agreement coming out of the 2012 election, in which Republicans lost the Hispanic vote by a wide margin. The Senate passed a comprehensive immigration bill in June with strong bipartisan support that would create a pathway for citizenship for about 11 million immigrants in the U.S. illegally, tighten border security, and establish new visa and enforcement programs.

But the measure stalled in the House, despite calls for lawmakers to act from Republican leaders, business groups, religious organizations and labor. Although House Republicans said they wanted to pursue their own, piecemeal approach, Speaker John Boehner has acknowledged that stands little chance of happening this year, as Congress becomes consumed with the looming midterm elections.

Refusing to wait any longer, immigration groups have grown increasingly critical of Obama, lambasting him in a stark departure from the broad support he long has enjoyed from Latinos generally. While Congress dawdles, Obama has stringently enforced the same immigration laws he insists must be fixed, advocates argue.

Under Obama's leadership, almost 2 million people have been removed from the U.S.

"For us, this president has been the deporter in chief," Janet Murguia, who heads the National Council of La Raza, said in a recent speech.

Pablo Alvarado, who heads the National Day Laborer Organizing Network, said after Thursday's announcement that halting deportations is "now a consensus position." He said Obama now has no excuse to "continue his unjust deportation policy" and mustn't let immigrants fall victim to a Congress that is "held hostage by a vigilante wing of the Republican Party."

"Relief delayed is relief denied," Alvarado said.

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Follow Josh Lederman at http://twitter.com/joshledermanAP

Mark Zuckerberg, CEO of the personal data sharing site Facebook, is not a fan of the National Security Agency.

Just a day after a report revealed that the government agency posed as Facebook to secretly spy on millions of people, the 29-year-old company founder took to — where else? — Facebook to directly criticize the massive surveillance system. In the message, he said he called President Barack Obama to express his frustrations “over the damage the government is creating for all of our future.” Which is colloquially known around the Facebook office as “that thing that’s making us look bad.”

Per his note on Facebook:

“When our engineers work tirelessly to improve security, we imagine we’re protecting you against criminals, not our own government.

“The US government should be the champion for the internet, not a threat. They need to be much more transparent about what they’re doing, or otherwise people will believe the worst.” (Read the whole note here.)

In other words, Zuckerberg is “confused” that Obama would allow for such appalling violations of his 500 million members’ information. For its part, Facebook uses secure protocols for traffic and offers two-step authentication for fraud prevention.

Nonetheless, Facebook isn’t known as a company that makes its privacy policies or settings perfectly transparent. Zuckerberg’s own sister couldn’t figure out the company’s privacy settings.

That doesn’t mean Zuckerberg’s criticism isn’t valid. But we must take it with a grain of salt. This may be a rare instance of Facebook being on the right side of a privacy dispute.

Zuckerberg concludes his note by saying it’s up to us “to build an internet we want,” assuring us that we “can count on Facebook” to do its part. More than 117,000 people liked his message, and more than 14,000 shared it.

It’s a good public relations move, but it highlights how low the bar is for decency in this area: The CEO of a company that has an entire Wikipedia page dedicated solely to privacy issues is calling out the government for spying on us.

You can find us on Facebook right here.

Facebook CEO posts critical note over NSA spying

Mark Zuckerberg expresses his frustrations over the “damage the government is creating for all of our future.”
Called Obama

SIMFEROPOL, Ukraine (AP) — Russia conducted new military maneuvers near its border with Ukraine on Thursday, and President Vladimir Putin said the world shouldn't blame his country for what he called Ukraine's "internal crisis."

In Crimea, where the public will vote on Sunday whether to break away from Ukraine and become part of Russia, jittery residents lined up at their banks to withdraw cash from their accounts amid uncertainty over the future of the peninsula, which Russian troops now control. Violence engulfed the eastern Donetsk region, where violent clashes between pro-Russia demonstrators and supporters of the Ukrainian government left at least one person dead.

"These people are afraid their bank will collapse and no one wants to lose their money," said resident Tatiana Sivukhina. "Nobody knows what will happen tomorrow."

U.S. Secretary of State John Kerry and Russian Foreign Minister Sergey Lavrov plan to meet in London on Friday in a last-ditch bid to end the international standoff over the Crimean referendum, which Ukraine and the West have rejected as illegitimate.

In Berlin, German Chancellor Angela Merkel sharply criticized Russia, saying the territorial integrity of Ukraine cannot be compromised.

Speaking to Germany's Parliament, Merkel said Russia risks "massive" political and economic consequences, if it does not enter into "negotiations that achieve results" over the situation in Ukraine.

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Pro Ukraine protestors, some of them injured, are shielded by police at right during clashes with pr …

She said the only way out of the crisis is through diplomacy and that "the use of the military is no option."

On Wednesday, Moscow rejected the Ukrainian government's claim that a massive Russian military buildup near the countries' border was raising the threat of a possible invasion.

But on Thursday Russia's Defense Ministry announced that thousands of Russian troops in the regions of Rostov, Belgorod, Kursk and Tambov bordering Ukraine are involved in the exercises, which will continue until the end of the month.

In the southern Rostov region, the maneuvers involved parachuting in 1,500 troops, the ministry said. The drills included the military conducting large artillery exercises involving 8,500 soldiers and artillery and rocket systems in the south.

During the Ukrainian crisis, the U.S. has sent additional fighter jets to Poland and Lithuania. Russian responded on Thursday by deploying six fighter jets to Belarus, its ally.

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Ukrainian interim Prime Minister Arseniy Yatsenyuk speaks as he holds a copy of the United Nations c …

Ukraine's parliament voted Thursday to create a 60,000-strong National Guard to help protect the country as its under-staffed and under-funded military was in disarray.

In New York on Thursday, Ukrainian Prime Minister Arseniy Yatsenyuk condemned Russia's "military aggression," but told the U.N. Security Council he doesn't believe Moscow wants a conflict. "If we start real talks with Russia, I believe we can be real partners," he said.

Putin, who has received his parliament's permission to use the Russian military in Ukraine, has warned that he reserves the right to "use all means" to protect Russian speakers in Ukraine from violent nationalists, even though there have been no signs they are facing such a threat.

In recent weeks, pro-Russia demonstrators in eastern Ukraine have seized government buildings and engaged in clashes with supporters of the Ukrainian government. Violence erupted late Thursday in the city of Donetsk, where people rallying in support of the central authorities were attacked by pro-Russia crowds.

At least one person died and 17 others were wounded, according to the local health department.

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Pro Ukraine protestors shelter inside a police bus during clashes with pro Russia protesters followi …

On Thursday, Putin did not sound conciliatory about Ukraine when he convened a meeting of his Security Council, an advisory body of top defense and security officials, including Lavrov.

"It's foremost Ukraine's internal crisis," Putin said. "But, regrettably, we have been drawn into these events."

"We can't ignore the developments around Ukraine, Crimea and everything related to that uneasy problem, which, I want to underline, has emerged through no fault of ours," he said.

In brief remarks at the start of the session, Putin didn't refer to harsh warnings from President Barack Obama and other Western leaders not to annex Crimea.

Merkel said the European Union and other Western nations would soon freeze bank accounts of Russians and implement travel restrictions, if Moscow refuses to enter "negotiations that achieve results."

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Pro Ukraine protestors are shielded by police, at left, during clashes with pro Russia protestors fo …

"Let me be absolutely clear so that there is no misunderstanding, the territorial integrity of Ukraine is not up for discussion," she said.

If Moscow does not begin to "de-escalate" the situation, Merkel said, the 28 European Union nations, the U.S. and other allies are prepared to take even stronger measures that would hit Russia economically.

"If Russia continues on its course of the past weeks, that will not only be a great catastrophe for Ukraine," Merkel said in the nationally televised address. "It will cause massive damage to Russia, both economically and politically."

Crimea, which hosts Russia's Black Sea Fleet base, became the hotbed of tensions in Ukraine after its pro-Russia president, Viktor Yanukovych, fled last month following protracted anti-government protests and outbursts of violence.

In Crimea, Oleh Serha, a spokesman for Ukraine's largest Privat bank, said Thursday that all banks in Crimea are struggling to deliver more cash to the region. He said, "There is panic in Crimea because nobody understands what will happen later."

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Pro Ukraine protestors are shielded by police, visible at left, during clashes with pro Russia prote …

Serha said his bank is continuing to service its clients, but that it has imposed a limit of 1500 hryvna ($150) on daily withdrawals across the whole country.

About 60 people lined up to withdraw money from an ATM at Privat Bank near a pedestrian mall in Simferopol, Crimea's capital.

"People are in panic. They have been fooled before. People are confused," said Vyacheslav Leonenko, one of those in the line.

The Ukraine crisis has previously created turmoil in global markets, especially in Russia, where Moscow's Micex stock index fell sharply and the ruble fell to a record low against the dollar. It has since recovered slightly, thanks to massive Central Bank interventions.

The West, meanwhile, intensified efforts to quickly shore up the Ukrainian economy roiled by the political turmoil. Ukraine's finance ministry has said it needs $35 billion for this year and next to avoid default.

The head of the International Monetary Fund said its fact-finding team in Ukraine will begin negotiations with authorities to develop an economic reform program that could lead to financial help from the lending organization. Christine Lagarde said Thursday the team that went to Ukraine March 4 and normally would return to Washington to report to the IMF board will now remain until March 21.

___

Isachenkov reported from Moscow. Maria Danilova in Kiev and David Rising in Berlin contributed to this report.

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By Andrew Osborn and Lina Kushch

SEVASTOPOL/DONETSK, Ukraine (Reuters) - The CEOs of Russia's two largest firms are on a list of those who may be hit next week with European and U.S. sanctions over the Crimea crisis, a German newspaper said on Friday, suggesting tougher than expected measures against Russia's elite.

Moscow shipped more troops and armor into Crimea on Friday and repeated its threat to invade other parts of Ukraine, showing no sign of heeding Western pleas to back off from the worst East-West confrontation since the Cold War.

Russia's stock markets tumbled and the cost of insuring its debt soared on the last day of trading before pro-Moscow authorities in Crimea hold a vote to join Russia, a move all but certain to lead to U.S. and European Union sanctions on Monday.

European officials told Reuters the EU was working on a five page list of 120-130 Russians who could be subjected to asset freezes and travel bans. Officials were still debating whether to hit a large number of Russians when the measures take effect at the start of next week, or target a smaller number initially and expand the list if the crisis continues.

Germany's Bild newspaper reported that Alexei Miller, boss of natural gas monopoly Gazprom, and Igor Sechin, head of Russia's biggest oil firm Rosneft, would be among those targeted, along with senior ministers and Kremlin aides.

Man killed as rival protesters fight in eastern Uk …Play video

Reuters was not immediately able to confirm the Bild report. Rosneft spokesman Mikhail Leontyev said sanctions on his firm's boss would be "stupid, petty and obvious sabotage of themselves most of all. I think it will primarily affect Rosneft's business partners in the West in an extraordinary way." Gazprom and the Kremlin declined to comment.

FELLOW CITIZENS

The Russian Foreign Ministry, responding to the death of at least one protester in Ukraine's eastern city of Donetsk, repeated President Vladimir Putin's declaration of the right to invade to protect Russian citizens and "compatriots".

"Russia is aware of its responsibility for the lives of compatriots and fellow citizens in Ukraine and reserves the right to take people under its protection," it said.

Ukrainian health authorities say one 22-year-old man was stabbed to death and at least 15 others were being treated in hospital after clashes in Donetsk, the mainly Russian-speaking home city of Ukraine's ousted President Viktor Yanukovich.

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Trucks drive out of Russian landing craft Yamal 156 near the Crimean port of Sevastopol March 14, 20 …

Organizers of the anti-Moscow demonstration said the dead man was from their group.

Moscow denies that its forces are intervening in Crimea, an assertion Washington ridicules as "Putin's fiction". Journalists have seen Russian forces operating openly in their thousands over the past two weeks, driving in armored columns of vehicles with Russian license plates and identifying themselves to besieged Ukrainian troops as members of Russia's armed forces.

A Reuters reporter watched a Russian warship unload trucks, troops and at least one armored personnel carrier at Kazachaya bay near Sevastopol on Friday morning. Trucks drove off a ramp from the Yamal 156, a large landing ship that can carry more than 300 troops and up to a dozen APCs.

U.S. Secretary of State John Kerry held talks with Russian Foreign Minister Sergei Lavrov in London in a last-ditch effort to persuade Moscow to call off the referendum in Crimea, now seen as all but inevitable.

FACTS ON THE GROUND

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Armed men, believed to be Russian servicemen, stand guard and talk with a local man outside an Ukrai …

Russian troops seized the Black Sea peninsula two weeks ago as a pro-Moscow regional government took power there. The new regional authorities intend to secede from Ukraine and join Russia in a vote described in the West as illegal.

"What we would like to see is a commitment to stop putting new facts on the ground and a commitment to engage seriously on ways to de-escalate the conflict, to bring Russian forces back to barracks, to use international observers in place of force," a U.S. State Department official said ahead of Kerry's talks.

But Russia has shown no sign of veering from Putin's plan to annex Crimea.

Putin declared on March 1 that Russia had the right to invade its neighbor, a week after its ally Yanukovich fled the Ukrainian capital following three months of demonstrations that ended with about 100 people killed in the final days.

In further signs of Moscow's belligerent posture ahead of the Crimea vote, the Defence Ministry announced on Friday it would hold exercises with fighter jets and helicopters over the Mediterranean Sea. On Thursday it announced artillery drills near Ukraine's border.

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Armed men, believed to be Russian servicemen, walk outside a Ukrainian military base in Perevalnoye, …

U.S. and EU sanctions, including travel bans and asset freezes on Russian officials and their firms, are now seen as inevitable. The only mystery remaining is who will be on the lists of targets when they are agreed at the start of next week.

U.S. and European officials say the targets will not include Putin or Lavrov, but will include senior figures in the government and members of parliament in an effort to impose hardship on Russia's elite for backing Putin's policies.

Bild's list included Defence Minister Sergei Shoigu, Deputy Prime Minister Dmitry Rogozin, presidential administration chief Sergei Ivanov and the secretary of the National Security Council, Nikolai Patrushev.

SHARES FALL, DEBT INSURANCE COSTS RISE

Russia's MICEX stock index was down 2.3 percent at 1330 GMT, having lost more than 16 percent of its value in the two weeks since Putin declared his right to invade. At one point in the morning it had fallen 5 percent to its lowest since 2009.

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Armed men, believed to be Russian servicemen, stand guard outside an Ukrainian military base in Pere …

The cost of insuring Russia's debt against default for five years rose nearly 7 percent and is now up by half since the crisis began.

Although Russian public opinion, fed by overwhelmingly state-controlled media, is still solidly behind the plan to annex Crimea, Western countries believe sanctions could undermine support for Putin among the wealthy elite.

Goldman Sachs lowered its prediction for Russian economic growth for this year to 1 percent from 3 percent on Thursday, blaming the Ukraine crisis for sparking capital flight that will destroy investment.

Former Finance Minister Alexei Kudrin told Russian media that the threat of Western sanctions was already imposing higher borrowing costs on Russian businesses and that further sanctions would push capital flight to $50 billion a quarter.

Renaissance Capital estimated capital outflow in the first quarter would exceed $55 billion, compared with $63 billion for the whole of 2013.

The ruble has declined only slightly despite the fall in share prices, held aloft by a central bank that raised its lending rates on March 3 and has been spending reserves to keep the currency from falling.

Russia's strong words over the violence in Donetsk again raised the prospect of a wider invasion beyond Crimea, a risk that had seemed to ease after the first few days of the crisis, when Putin called an end to war games involving 150,000 troops.

The party of Estonia's outgoing defence minister said it believed Putin was preparing an invasion of eastern Ukraine.

(Writing by Peter Graff; Editing by Will Waterman and Giles Elgood)