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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Gunman 'Tentatively' Identified in Oregon Shooting

A masked gunman who opened fire in the crowded Clackamas Town Center mall in suburban Portland, Ore., killing two individuals and seriously injuring a third before killing himself, has been "tentatively" identified by police, though they have not yet released his name.

The shooter, wearing a white hockey mask, black clothing, and a bullet proof vest, tore through the mall around 3:30 p.m. Tuesday, entering through a Macy's store and proceeding to the food court and public areas spraying bullets, according to witness reports.

Police have not released the names of the deceased. Clackamas County Sheriff's Department Lt. James Rhodes said authorities are in the process of notifying victims' families.

The injured victim has been transported to a local hospital, according to Clackamas County Sheriff Craig Roberts.

PHOTOS: Oregon Mall Shooting

Nadia Telguz, who said she was a friend of the injured victim, told ABC News affiliate KATU-TV in Portland that the woman was expected to recover.

"My friend's sister got shot," Teleguz told KATU. "She's on her way to (Oregon Health and Science University hospital). They're saying she got shot in her side and so it's not life-threatening, so she'll be OK."

Witnesses from the shooting rampage said that a young man who appeared to be a teenager ran through the upper level of Macy's to the mall food court, firing multiple shots, one right after the other, with what is believed to be a black, semi-automatic rifle.

Christopher Onstott/Pamplen Media Group/Portland Tribune

911 Calls From New Jersey Supermarket Shooting Watch Video

More than 10,000 shoppers were at the mall during the day, police said. Roberts said that officers responded to the scene of the shooting within minutes, and four SWAT teams swept the 1.4 million-square-foot building searching for the shooter. He was eventually found dead, an apparent suicide.

"I can confirm the shooter is dead of an apparent self-inflicted gunshot wound," Rhodes said. "By all accounts there were no rounds fired by law enforcement today in the mall."

Roberts said more than 100 law enforcement officers responded to the shooting, and at least four local agencies were working on the investigation, including the FBI and Bureau of Alcohol, Tobacco and Firearms, which is working to trace the shooter's weapon.

READ: Guns in America: A Statistical Look

"For all of us, the mall is supposed to be a place where we can take our families, especially during the holiday season," Roberts said. "Things like this are not supposed to happen."

Roberts also said that shoppers, including two emergency room nurses and one physician who happened to be at the mall, provided medical assistance to victims who had been shot. Other shoppers helped escort individuals out of the mall and out of harm's way, he said.

"There were a huge amount of people running in different directions, and it was chaos for a lot of citizens, but true heroes were stepping up in this time of high stress," Roberts said. "E.R. nurses on the scene were providing medical care to those injured, a physician on the scene was helping provide care to the wounded."

Mall shopper Daniel Martinez told KATU that he had just sat down at a Jamba Juice inside the mall when he heard rapid gunfire. He turned and saw the masked gunman, dressed in all black, about 10 feet away from him.

"I just saw him (the gunman) and thought, 'I need to go somewhere,'" Martinez said. "It was so fast, and at that time, everyone was moving around."

Martinez said he ran to the nearest clothing store. As he ran, he motioned for another woman to follow; several others ran to the store as well, hiding in a fitting room. They stayed there for an hour and a half until SWAT teams told them it was safe to leave the mall.

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Nine hurt as gunmen fire at Cairo protesters

CAIRO (Reuters) - Nine people were hurt when gunmen fired at protesters camping in Cairo's Tahrir Square on Tuesday, according to witnesses and Egyptian media, as the opposition called for a major demonstration it hopes will force President Mohamed Mursi to postpone a referendum on a new constitution.

Supporters of the Islamist leader, who want the vote to go ahead as planned on Saturday, were also gathering in the capital, setting the stage for further street confrontations in a political crisis that has divided the Arab world's most populous nation.

Police cars surrounded Tahrir Square in central Cairo, the first time they had appeared in the area since November 23, shortly after a decree by Mursi awarding himself sweeping temporary powers that touched off widespread protests.

The upheaval following the fall of Hosni Mubarak last year is causing concern in the West, in particular the United States, which has given Cairo billions of dollars in military and other aid since Egypt made peace with Israel in 1979.

The Tahrir Square attackers, some masked, also threw petrol bombs which started a small fire, witnesses said.

"The masked men came suddenly and attacked the protesters in Tahrir. The attack was meant to deter us and prevent us from protesting today. We oppose these terror tactics and will stage the biggest protest possible today," said John Gerges, a Christian Egyptian who described himself as a socialist.

The latest bout of unrest has so far claimed seven lives in clashes between the Islamist Muslim Brotherhood and opponents who are also besieging Mursi's presidential palace.

POLICE POWERS

The elite Republican Guard which protects the palace has yet to use force to keep protesters away from the graffiti-daubed building, now ringed with tanks, barbed wire and concrete barricades.

The army has told all sides to resolve their differences through dialogue, saying it would not allow Egypt to enter a "dark tunnel". For the period of the referendum, the army has been granted police powers by Mursi, allowing it to arrest civilians.

The army has portrayed itself as the guarantor of the nation's security but so far it has shown no appetite for a return to the bruising front-line political role it played after the fall of Mubarak, which severely damaged its standing.

Leftists, liberals and other opposition groups have called for marches to the presidential palace later on Tuesday to protest against the hastily arranged constitutional referendum planned for Dec 15, which they say is polarising the country and could put it in a religious straightjacket.

Mohamed ElBaradei, a prominent opposition leader and Nobel prize winner, called for dialogue with Mursi and said the referendum should be postponed for a couple of months due to the chaotic situation.

"This revolution was not staged to replace one dictator with another," he said in an interview with CNN.

Outside the presidential palace, anti-Mursi protesters huddled together in front of their tents, warming themselves beside a bonfire in the winter air.

"The referendum must not take place. The constitution came after blood was spilt. This is not how a country should be run," said Ali Hassan, a man in his 20s.

Opposition leaders want the referendum to be delayed and hope they can get sufficiently large numbers of protesters on the streets to change Mursi's mind.

Islamists, who dominated the body that drew up the constitution, have urged their followers to turn out "in millions" in a show of support for the president and for a referendum they feel sure of winning.

OPPONENTS ANGERED

Leftist politician Hamdeen Sabahy, one of the most prominent members of the National Salvation Front opposition coalition, said Mursi was driving a wedge between Egyptians and destroying prospects for consensus.

As well as pushing the early referendum, Mursi has angered opponents by taking extra powers he said were necessary to secure the transition to stability after the uprising that overthrew Mubarak 22 months ago.

"The road Mohamed Mursi is taking now does not create the possibility for national consensus," said Sabahy. He forecast polarisation if constitution were passed.

The National Salvation Front also includes ElBaradei and former Arab League chief Amr Moussa.

The opposition says the draft constitution fails to embrace the diversity of 83 million Egyptians, a tenth of whom are Christians, and invites Muslim clerics to influence lawmaking.

But debate over the details has largely given way to street protests and megaphone politics, keeping Egypt off balance and ill equipped to deal with a looming economic crisis.

Mahmoud Ghozlan, the Muslim Brotherhood's spokesman, said the opposition could stage protests, but should keep the peace.

"They are free to boycott, participate or say no; they can do what they want. The important thing is that it remains in a peaceful context to preserve the country's safety and security."

The disruption is also casting doubts on the government's ability to push through economic reforms that form part of a proposed $4.8 billion IMF loan agreement.

(Writing by Edmund Blair and Giles Elgood; Editing by Peter Graff and Janet McBride)

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Heated election campaigns underway all over Japan

TOKYO: A heated election campaign is underway all over Japan as more than 1,500 candidates vie for 480 seats in the lower house of parliament.

This election will also see an unprecedented 12 political parties taking part.

Hundreds of people, sometimes even thousands, gather to listen to election speeches -- especially if they are by prominent lawmakers like Prime Minister Yoshihiko Noda.

The 'celebrity' status of a politician can also help newcomers in their party.

"Today I want our party's new face Miki Yamada, Miki Yamada to win. With that hope I have come to greet you all in Shinjuku ward," said Nobuteru Ishihara, the former secretary general of the Liberal Democratic Party to a crowd.

"I'm hearing from many wishing the Liberal Democratic Party to do well. I'm receiving calls of 'debutant do well'," said Miki Yamada, the Liberal Democratic Party's candidate for Tokyo's 1st district.

For others with a lower profile, the campaign trail can be a lonely one.

Taro Kosai is running for a lower house seat for the first time.

He is a former assembly member of Minato ward in Tokyo who hopes to reform the fundamentals of the country.

"We have to set a new goal that will replace the typical economic growth target to catch up and surpass US and Europe. That has not been done," he said.

According to public opinion polls, what the public wants to hear the most is how each candidate will handle the Japanese economy.

Japan's economy has been facing a slowdown with its GDP in the July-September quarter showing a contraction. A contraction is expected this quarter as well.

It is a tough task that has not stopped the 1,500 candidates from battling for votes.

In Tokyo's 1st district alone, there are nine candidates running for a seat.

Japan will go the polls on 16 December.

- CNA/jc

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Left, Trinamool MLAs scuffle in West Bengal assembly

KOLKATA: The West Bengal assembly today plunged into bedlam with ruling Trinamool Congress and Left members coming to blows and the Speaker suspending three Left MLAs, while three injured members were taken to hospital.

Gouranga Chatterjee, a CPM MLA who received head injuries was taken to hospital as also two TMC MLAs Mahmuda Begum who was hit in the chest and Pulok Roy who was injured in the leg.

Tempers ran high after Left members who tried to bring an adjournment motion on the mushrooming of chit funds in the state rushed to Speaker Biman Banerjee's podium and started shouting slogans.

Senior ministers Partha Chatterjee, Subrata Mukherjee and Firhad Hakim shielded the Speaker as Left members continued to shout slogans.

Subsequently a section of TMC and Left MLAs rushed to to the well and came face to face, with Chatterjee and Hakim trying to separate them.

There was pandemonium as CPM member Nazmul Haque snatched away the microphone of the Speaker who adjourned the House till 1:30pm.

Congress members who were asked to join in the protests by the Left, did not did so.

Trouble broke out again after the House reassembled. Parliamentary affairs minister Partha Chatterjee demanded that action be taken against Left legislators who insulted the Speaker and snatched away his microphone.

The Speaker thereafter suspended three Left MLAs Nazmul Haque, Sushanta Besra and Amjad Hussain.

One Left member, the lone Jharkhand Party MLA Deblina Hembram and a TMC member were seen engaged in a heated verbal exchange.

Subsequently, a free for all ensued in the House with members of TMC and Left coming to blows.

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New tests could hamper food outbreak detection

WASHINGTON (AP) — It's about to get faster and easier to diagnose food poisoning, but that progress for individual patients comes with a downside: It could hurt the nation's ability to spot and solve dangerous outbreaks.

Next-generation tests that promise to shave a few days off the time needed to tell whether E. coli, salmonella or other foodborne bacteria caused a patient's illness could reach medical laboratories as early as next year. That could allow doctors to treat sometimes deadly diseases much more quickly — an exciting development.

The problem: These new tests can't detect crucial differences between different subtypes of bacteria, as current tests can. And that fingerprint is what states and the federal government use to match sick people to a contaminated food. The older tests might be replaced by the new, more efficient ones.

"It's like a forensics lab. If somebody says a shot was fired, without the bullet you don't know where it came from," explained E. coli expert Dr. Phillip Tarr of Washington University School of Medicine in St. Louis.

The federal Centers for Disease Control and Prevention warns that losing the ability to literally take a germ's fingerprint could hamper efforts to keep food safe, and the agency is searching for solutions. According to CDC estimates, 1 in 6 Americans gets sick from foodborne illnesses each year, and 3,000 die.

"These improved tests for diagnosing patients could have the unintended consequence of reducing our ability to detect and investigate outbreaks, ultimately causing more people to become sick," said Dr. John Besser of the CDC.

That means outbreaks like the salmonella illnesses linked this fall to a variety of Trader Joe's peanut butter might not be identified that quickly — or at all.

It all comes down to what's called a bacterial culture — whether labs grow a sample of a patient's bacteria in an old-fashioned petri dish, or skip that step because the new tests don't require it.

Here's the way it works now: Someone with serious diarrhea visits the doctor, who gets a stool sample and sends it to a private testing laboratory. The lab cultures the sample, growing larger batches of any lurking bacteria to identify what's there. If disease-causing germs such as E. coli O157 or salmonella are found, they may be sent on to a public health laboratory for more sophisticated analysis to uncover their unique DNA patterns — their fingerprints.

Those fingerprints are posted to a national database, called PulseNet, that the CDC and state health officials use to look for food poisoning trends.

There are lots of garden-variety cases of salmonella every year, from runny eggs to a picnic lunch that sat out too long. But if a few people in, say, Baltimore have salmonella with the same molecular signature as some sick people in Cleveland, it's time to investigate, because scientists might be able narrow the outbreak to a particular food or company.

But culture-based testing takes time — as long as two to four days after the sample reaches the lab, which makes for a long wait if you're a sick patient.

What's in the pipeline? Tests that could detect many kinds of germs simultaneously instead of hunting one at a time — and within hours of reaching the lab — without first having to grow a culture. Those tests are expected to be approved as early as next year.

This isn't just a science debate, said Shari Shea, food safety director at the Association of Public Health Laboratories.

If you were the patient, "you'd want to know how you got sick," she said.

PulseNet has greatly improved the ability of regulators and the food industry to solve those mysteries since it was launched in the mid-1990s, helping to spot major outbreaks in ground beef, spinach, eggs and cantaloupe in recent years. Just this fall, PulseNet matched 42 different salmonella illnesses in 20 different states that were eventually traced to a variety of Trader Joe's peanut butter.

Food and Drug Administration officials who visited the plant where the peanut butter was made found salmonella contamination all over the facility, with several of the plant samples matching the fingerprint of the salmonella that made people sick. A New Mexico-based company, Sunland Inc., recalled hundreds of products that were shipped to large retailers all over the country, including Target, Safeway and other large grocery chains.

The source of those illnesses probably would have remained a mystery without the national database, since there weren't very many illnesses in any individual state.

To ensure that kind of crucial detective work isn't lost, the CDC is asking the medical community to send samples to labs to be cultured even when they perform a new, non-culture test.

But it's not clear who would pay for that extra step. Private labs only can perform the tests that a doctor orders, noted Dr. Jay M. Lieberman of Quest Diagnostics, one of the country's largest testing labs.

A few first-generation non-culture tests are already available. When private labs in Wisconsin use them, they frequently ship leftover samples to the state lab, which grows the bacteria itself. But as more private labs switch over after the next-generation rapid tests arrive, the Wisconsin State Laboratory of Hygiene will be hard-pressed to keep up with that extra work before it can do its main job — fingerprinting the bugs, said deputy director Dr. Dave Warshauer.

Stay tuned: Research is beginning to look for solutions that one day might allow rapid and in-depth looks at food poisoning causes in the same test.

"As molecular techniques evolve, you may be able to get the information you want from non-culture techniques," Lieberman said.

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Follow Mary Clare Jalonick on Twitter at http://twitter.com/mcjalonick

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Closing Tax Loopholes Not Enough to Avert 'Cliff'?

Closing "corporate tax loopholes" sure sounds good to the average, non-corporate American -- so good, in fact, that politicians talk about it all the time.

House Speaker John Boehner's fiscal-cliff proposal purports to raise $1.6 trillion in revenue by "clos[ing] special-interest loopholes and deductions while lowering rates."

The White House, meanwhile, has complained that Boehner hasn't offered specific loopholes to cut.

On the other side of the aisle, House Democrats have repeatedly offered up "closing overseas tax loopholes" as a means to pay for spending bills -- a plan Republicans routinely reject. In the last two and a half years, President Obama has often been heard griping about writeoffs for corporate jets.

For both Republicans and Democrats, "corporate tax loopholes" are an old saw. But, like most things in politics, raising revenue from "loopholes" gets a bit stickier when the specifics are hashed out.

A misconception about tax "loopholes," some experts say, is that they're loopholes -- gaps in the tax law that corporations have exploited against the law's intent.

Carolyn Kaster/AP Photo; Pablo Martinez Monsivais/AP Photo

Fiscal Cliff Battle: President Obama vs. Speaker John Boehner Watch Video

"Most of these proposals were not 'loopholes,' these were incentives," said Eric Toder, co-director of the left-leaning Tax Policy Center.

For example, take the research-and-development tax credit. During the campaign, both Obama and Mitt Romney suggested making it permanent.

"One wouldn't call the research credit a loophole," Toder said.

Cashing in by closing the biggest "loopholes" could be a politically fraught endeavor. To generate meaningful revenue, House Republicans would have to sign off on measures that raised it from taxing the overseas profits of multinational corporations, from ending immediate writeoffs of equipment purchases, or from ending a credit for domestic manufacturing.

When the Joint Committee on Taxation scored some of these provisions, as part of a tax-reform bill pushed by Democratic Sen. Ron Wyden and then-GOP-senator Judd Gregg, it found the government could save significantly:

Savings Over 10 Years: 2011-2021

Taxing Overseas Profits of Multinational Corps: $582.7 billion. In other words, the "overseas tax loophole" Democrats are fond of trashing. While most countries with large economies tax only profits made at home, the U.S. code taxes all income everywhere. To offset the different, U.S. multinational corporations receive credits to prevent double taxing. They also can defer paying any tax on foreign income, until they transfer the money back to the United States.

Taxing that profit could generate significant revenue. But this could be controversial, and large corporations would fight it. A senior aide to one business lobbying group said ending foreign-income deferral would amount to double-taxing U.S. companies and put them at a disadvantage to foreign competitors; one supporter of ending deferral suggested U.S. companies have been able to hide profits overseas, avoiding taxes altogether.

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Insight: Congo army debacle at Goma raises specter of betrayal

GOMA, Democratic Republic of Congo (Reuters) - When Congo's government army retreated in panic from the eastern city of Goma last month, many observers blamed the poor morale and leadership, ill discipline and corruption that have sapped its fighting capacity for years.

In the hours before Goma fell to M23 rebels on November 20, drunk and terrified Congolese soldiers roamed the streets or huddled in doorways before melting away, witnesses said.

M23's 11-day occupation of the city was one of the worst battlefield defeats for Democratic Republic of Congo's armed forces (FARDC), which at 150,000-strong are among the largest in Africa. They are also backed by 17,000 U.N. peacekeepers.

As recriminations swirl over the Goma defeat, which forced President Joseph Kabila to accept talks with a group he says is a creation of Rwanda, allegations have emerged that betrayal in the army's ranks may have precipitated the rout.

The government has launched an investigation but says it has reached no conclusions; little evidence has come to light beyond anonymous allegations against officers from subordinates who accuse their commanders of selling them out. The general blamed by some denies any such deals with rebels he once commanded.

But the scandal alone shows how deep suspicion runs within an army that has absorbed successive waves of former enemies as a series of civil wars has ended.

One senior FARDC officer who fought the M23 uprising said he believed Goma was lost because of what he called sabotage of the army's fighting capability.

"All of our intelligence was given to M23," the officer alleged, saying that throughout the fighting "there was intense communications with them" from within the government ranks.

Speaking on condition of anonymity because army regulations forbid him from commenting publicly, he said he was convinced former land forces commander, Major General Gabriel Amisi had been in contact with the rebel side. He said he had served alongside the general in the field.

A member of Amisi's military entourage said the general "rejects categorically" allegations of betrayal: "He could never do that, he wants nothing from the rebels," the aide said. "He only just escaped with his life, five of his own men died."

Amisi himself, dressed in colorful robes and sandals, greeted a Reuters reporter at his guarded residence in Kinshasa on Friday. He declined to discuss the allegations. The aide said the general had been ordered by President Kabila not to talk to media about the subject.

An army spokesman, Colonel Olivier Hamuli, said "many factors" led to the debacle, which is being investigated: "As to whether there was treason by General Amisi, I can't say yes or no to that."

Amisi, widely known as "Tango Four" from his old radio call sign, was suspended just days after the rebel capture of the city following a report by U.N. experts alleging he sold weapons to armed groups accused of killing civilians.

TANGLED RELATIONSHIPS

Amisi's ties to a previous, Rwandan-backed eastern rebellion during Congo's 1998-2003 war highlight the confused integration process over the last decade that has seen the FARDC absorb tens of thousands of former rebels and militia fighters.

M23 itself is formed largely of men who were rebels, then were brought into the army and then mutinied again, accusing the Kabila government of breaking a deal signed on March 23, 2009.

Congo's army is widely seen as a symptom of the vast central African nation's dysfunctional state, weakened by years of mismanagement, graft and conflict.

This has produced a security vacuum, particularly in the volatile eastern borderlands, a tinderbox of ethnic conflicts where regional powers and local elites compete for political influence and also for resources of gold, tin and coltan, the latter used in the making of mobile phones.

FARDC spokesman Hamuli said the defeat at Goma was "understandable" because "we were fighting the Rwandan army".

Experts tasked by the U.N. Security Council have issued reports alleging Rwanda, Congo's small but militarily powerful eastern neighbor, created, trained and equipped M23 and directly supported its capture of Goma.

Rwanda has repeatedly dismissed this as "fiction".

M23 fighters withdrew from Goma on December 1 under a deal mediated by regional states. But there is little confidence inside or outside Congo that the city can resist a fresh M23 assault.

"WE WERE ABANDONED"

Reuters journalists who covered the fighting around Goma in November noted the contrast between M23's well-armed fighters, with crisp uniforms and practical rubber gumboots, and the often rag-tag government soldiers, some shod only in flip flops.

M23 rebels showed reporters the abandoned FARDC barracks in Goma - ramshackle buildings littered with fly-infested garbage, where tall marijuana plants grew among military maize plots.

"You see how the Congolese army lived. What kind of army is this?" Amani Kabasha, M23's deputy spokesman, said.

Nevertheless, observers on the ground still struggle to fully explain the abruptness of the army's collapse at Goma.

The FARDC's flight led to MONUSCO peacekeepers choosing not to go on resisting M23's advance. U.N. chiefs rebuffed intense criticism, saying their men could not back an army that was no longer present on the ground.

"They put up a formidable fight the first day, then for reasons we don't understand, they just stopped fighting, turned their backs and left," said Hiroute Guebre Sellassie, who heads the local office of Congo's U.N. peacekeeping force, MONUSCO.

Congo government spokesman Lambert Mende said the inquiry would probe allegations of racketeering and betrayal among the commanders: "Questions of loyalty have regularly been asked, not just about Amisi," he said. "But there has to be proof."

The FARDC officer who denounced Amisi's role highlighted one incident early in the battle for Goma when he says the general ordered his men to stop fighting after inflicting heavy losses on M23 at Kibumba, 30 km (20 miles) north of the city.

"Suddenly we received the order to stop," the officer said.

"It didn't make sense; it just gave them the chance to regroup and pull together a force that went on to take Goma."

Rejecting the allegations on Amisi's behalf, the member of his entourage in Kinshasa blamed the difficulties of fighting a rebel force that, he alleged, was being supported from beyond the border with Rwanda that runs through Goma's suburbs.

"We didn't have the orders to attack Rwanda, even though we were being fired on from there," the aide to Amisi said.

"You saw the morale of our men - everyone was fleeing pell mell. That's when we realized we couldn't hold Goma."

Despite Rwanda's denials of any backing for M23, a Reuters reporter in Goma during the rebel occupation came across several fighters who did not speak local languages, including one who said: "I am Rwandan, a soldier, we're here to help M23.

"There are lots of us and more are coming every day."

REBELS IN THE RANKS

Amisi is a former commanding officer of many of the M23 fighters. He fought with them in an earlier, Rwandan-backed rebellion as a member of the RCD (Congolese Rally for Democracy) during Congo's 1998-2003 civil war that sucked in neighboring states and in which several million people died.

Independent analysts say he has been under suspicion before.

"This is not the first time Amisi has been accused in undermining the army. There is deep suspicion among officers that he has been a fifth columnist for Rwanda," said Jason Stearns, a Congo expert and author who has written a study of M23 for the Rift Valley Institute's Usalama project.

The integration of rebel and militia fighters into the Congolese army was a major plank of the peace accords that ended the last Congo war. This has meant rebel groups often maintaining command structures - and loyalties - once inside the FARDC. That is the case with M23, which includes Tutsi commanders and fighters who participated in a 2004-2009 rebellion led by Tutsi general and warlord Laurent Nkunda.

M23 commanders like Sultani Makenga and Bosco Ntaganda, who is sought for war crimes by the International Criminal Court, were given high ranks in the army after their re-integration following Nkunda's rebellion. They have now rebelled again.

"While desertion is considered the gravest form of indiscipline in other armies, in the DRC, defected units and commanders have instead regularly been welcomed back into the army - often even rewarded with better opportunities when reintegrated," said Maria Eriksson Baaz, a researcher at the Sweden-based Nordic Africa Institute.

She said this was "very demoralizing" for the troops.

PREDATORS RATHER THAN PROTECTORS

Critics say Kabila has little incentive to improve the national armed forces because a strong military could eventually turn against him.

In April, a report by international and Congolese NGOs said the failure to reform Congo's large and ill-disciplined army had kept much of the civilian population in poverty and insecurity despite billions of dollars of foreign aid for the country.

As a result, more than $14 billion of international aid over 5 years had ended up having "little impact on the average Congolese citizen", the report noted. It faulted international powers for not pushing the government to reform the army.

A little over one percent, or $85 million, of official development aid for the Congo was spent on direct security sector reform between 2006 and 2011, according to the report.

Without reform, Congolese soldiers often act more like predators than protectors and whatever the government probe into allegations of treachery may find, people around Goma remain fearful a cycle of revolt and violence will continue.

Residents in the nearby town of Minova spoke of a three-day rampage of drinking, shooting, stealing and rape by thousands of retreating government troops last month. One local man, Mbogos Simwerayi, recalled: "Everyone suffered with the army here."

The U.N. said on Friday investigations showed FARDC soldiers raped and pillaged in Minova, but it added M23 insurgents also killed civilians and looted when they held Goma.

(Editing by Pascal Fletcher and Janet McBride)

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Low-interest environment driving investors to seek higher yields

SINGAPORE: The low-interest environment is driving investors to seek higher returns as global economic conditions improve.

Flushed with liquidity from major central banks' monetary easing, most analysts agreed that there is little upside left on safe assets like sovereign government debts.

Instead, analysts are seeing more investors investing in high yield bonds often classified as distressed that offer returns of over 6 percent per annum.

With the US Presidential election and China's leadership change out of the way, Asian investors are working up an appetite for riskier assets.

But this time, they are putting their money in fixed income products instead of Asian equities, which offer far better returns than bonds.

Thailand and Philippines stock indices have showed a over 30 percent return so far this year, while, bigger market like Hong Kong's Hang Seng Index gained some over 20 percent.

Schroder Investment Management's head of Asian Fixed Income, Rajeev De Mello, said: "Interest rates are going to remain close to zero. So for a lot of investors who need returns, they don't have too much choice -- it is either they buy bonds or buy equities.

"But for many types of investors, equities may be just too riskier and they may need a more predictable revenue stream."

In recent months, Asia has seen a growing number of corporate debt issues, which are oversubscribed.

Some investors are even drawn to beaten-down corporate bonds.

CreditSights' senior credit analyst, Sandra Chow, said: "In the past couple of weeks, we've seen a big shift into the high yield sector. A lot of bonds which was previously traded at double-digit yield are now coming to single-digit or even lower yields."

The credit quality of corporate bonds may not be improving, but analysts said bond funds face growing pressure from clients to deliver better-than-market returns of 9 to 10 percent.

Apart from market liquidity, French bank, Credit Agricole says wealthy individuals in Asia are also on the lookout for steady returns for their growing wealth.

Based on an estimated rate of growth 8 percent a year, China alone is expected to generate some US$560 billion of net new wealth every year.

- CNA/lp

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BJP ally JD(U) backs PM's remark on plight of minorities in Gujarat

NEW DELHI: Backing Prime Minister Manmohan Singh's remarks on the plight of minorities in Gujarat, JD(U) said on Monday there are "serious reservation in the minds of minorities concerning Narendra Modi."

Stepping up the Congress campaign in Gujarat, Singh had told an election rally there on Sunday that minorities, including some government officials, felt insecure under the Modi government.

"Election campaign is going on in the state. It is true that there are serious reservation in the minds of minorities concerning Narendra Modi. There is no doubt about it and he (PM) has utilised it as a Congress leader during the election campaign," Janata Dal (United) leader Shivanand Tiwari told reporters outside Parliament House.

BJP had on Sunday rubbished the Prime Minister's comments that minorities were feeling "insecure" in the BJP-ruled state and said Congress will be in a minority in Gujarat after the assembly elections.

On the issue of reservation in promotion of SC/ST employees, Tiwari said, "We are supporting the promotion in reservation in Bihar."

Asked whether his party would support it at the national level, he said, "We will examine it and then decide."

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