HP and UBS Hide Behind Their Scapegoats

The rogue is a perfect villain. This week we had two: Kweku Adoboli, the former UBS trader who got seven years in jail for rogue trades, and Mike Lynch, the rogue leader who allegedly tricked Hewlett-Packard into buying Autonomy with dodgy accounting. Both are being blamed for causing massive damage—a $ 2.3 billion loss for UBS (UBS) and an $ 8.8 billion writedown for HP (HPQ). Both are colorful characters who’d made their homes in London. Adoboli is a Ghanian-born son of privilege who was nurtured as a high-potential player at the bank; Lynch is the Irish-born mathematical genius and entrepreneur who’d built one of the U.K.’s greatest tech companies.

Whatever blame they may deserve for their actions—and Lynch has said several times this week that he deserves none—neither is a solo actor in these losses. The companies that are portraying themselves as victims deserve some blame, too.

Let’s start with UBS. On the surface, it’s a clear-cut case. Adoboli was found guilty of unauthorized trades and will spend years in jail. But UBS is also under scrutiny for failing to detect the trades. Ben Moshinsky and Lindsay Fortado of Bloomberg News report that UBS faces a fine of about £45 million from the U.K.’s Financial Services Authority. If so, that would be a welcome reminder that culture plays a role in many crimes. At the very least, UBS had a culture that enabled this young man to rack up stunning losses with relatively little oversight.

Adoboli himself goes further. In an e-mail to Bloomberg News, he says leaders such as JPMorgan Chase (JPM) Chief Executive Jamie Dimon and former Barclays (BCS) chief Bob Diamond were rewarded for taking big risks early in their career. Whether or not that’s true, neither was accused of committing fraud. But Adoboli makes an interesting point. Imagine if his behavior had resulted in a $ 2.3 billion gain for the bank. Would he have been hauled into court for those unauthorized trades? Would he even be fired? Think about the accolades that AIG (AIG) heaped on its London-based financial products unit when its credit default swaps boosted the bottom line. Then the housing market blew up and those exotic instruments essentially brought down the company, forcing a AAA-rated global giant to put itself in government hands. Suddenly, a role model unit was cast as a rogue.

The story behind HP and the culpability of Autonomy founder Mike Lynch continues to unfold. What we do know is that more than a dozen firms were involved in advising on the $ 11 billion acquisition last year. We know that HP chief Meg Whitman, who was on the board at the time of the deal, told investors on Nov. 20 that the company now needs to take a $ 8.8 billion charge on the deal because of a “willful sustained effort” to “inflate the underlying financial metrics” to “mislead investors and potential buyers.” And who inflated those numbers? “Some” Autonomy employees, according to Whitman, though she also blames accounting firm Deloitte for failing to catch it. (The FBI has opened an investigation.) What about the HP management or directors who voted to pay an 80 percent premium on top of what investors thought Autonomy was worth? Do they deserve any blame? Well, Apotheker and the former head of strategy are gone.

But let’s not ignore the environment in which this massive hit is taking place. HP is a company that’s battling a persistent decline in its revenue, net income, and market share. Last quarter, it took an $ 8 billion charge for another acquisition—Electronic Data Systems, which HP bought for $ 13.9 billion in 2008. HP’s stock has more than halved since Apotheker left. Lynch may have been a marketing genius in allegedly selling HP a bill of goods on his company, but even he can’t be blamed for that.

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Former Ivory Coast leader’s wife wanted by ICC

THE HAGUE, Netherlands (AP) — The International Criminal Court unsealed an indictment Thursday against former Ivory Coast President Laurent Gbagbo‘s wife on charges including murder, rape and persecution. It was the first time in the court’s 10-year history it has charged a woman.

The world’s first permanent war crimes tribunal said the arrest warrant was issued on Feb. 29 for former first lady Simone Gbagbo for crimes against humanity.

Her husband, Laurent Gbagbo, is already in custody at the court’s detention unit in The Hague facing similar charges stemming from his fight to retain power after losing a 2010 presidential election. If his wife is extradited, they could face justice together in an unprecedented husband-wife trial.

But a senior member of Ivory Coast President Alassane Ouattara‘s government, who requested anonymity because he wasn’t authorized to speak to the media, said Ivory Coast has already informed the ICC that the nation will not let her go.

“We informed them of this a long time ago,” he said.

The court’s chief prosecutor, Fatou Bensouda, urged Ivory Coast to extradite Gbagbo.

“The type of crimes committed in the aftermath of the 2010 elections did not happen by chance — they were planned and coordinated at the highest political and military levels and all those bearing the greatest responsibility must be held to account,” Bensouda said in a statement.

She said prosecutors continue to investigate crimes committed by both sides in Ivory Coast’s bloody power struggle and expect to issue further arrest warrants in the future.

“The investigations are objective, impartial and independent, and are conducted in strict accordance with the law,” she said.

Ivory Coast officials are holding the 63 year old under house arrest in the northwest town of Odienne. Last week, Ivorian prosecutor Noel Dje Enrike Yahau said lawyers had questioned Simone Gbagbo there for two days and that the domestic charges against her remained the same: genocide, blood crimes and economic crimes.

Unsealing the ICC arrest warrant issued nearly nine months ago appears to be a tactic by the court to put pressure on Ouattara’s administration to hand over Ms. Gbagbo.

If authorities in Ivory Coast want to prosecute her, they have to convince judges at The Hague tribunal that their case involves the same crimes she is charged with at the ICC. It is a court of last resort, meaning it only takes cases from countries unwilling or unable to prosecute them.

The international court said in the warrant that there is evidence pro-Gbagbo forces deliberately attacked perceived supporters of Ouattara in the aftermath of the election.

Judges who reviewed evidence supporting the charges against Ms. Gbagbo said they found “there are reasonable grounds to believe that Ms. Gbagbo bears individual criminal responsibility for the crimes … as ‘an indirect co-perpetrator.’”

The warrant called Gbagbo an “alter ego for her husband” with the power to make state decisions. It said there is evidence to suggest she “instructed the pro-Gbagbo forces to commit crimes against individuals who posed a threat to her husband’s power.”

Her husband was the first former head of state to be taken into custody by the court when he was extradited to The Hague by the Ivory Coast government last year.

Prosecutors say about 3,000 people died in violence by both sides after Gbagbo refused to concede defeat following the election. Ouattara finally took power in April 2011 with the help of French and U.N. forces.

Ivory Coast is not a member state of the court, but has voluntarily accepted its jurisdiction.

It is very rare for a woman to be charged by an international war crimes court. In the past, the Yugoslav war crimes tribunal convicted former Bosnian Serb President Biljana Plavsic of persecution and sentenced her to 11 years imprisonment.

The announcement of the arrest warrant and Ivory Coast’s refusal to hand over Gbagbo appeared likely to raise tensions between supporters of her husband and those who back Ouattara.

Moussa Toure Zeguen, a leader of the Gbagbo allies in exile in Ghana, said by phone from Accra that the former president’s supporters had no faith in the Ivorian authorities to give Simone Gbagbo a fair trial.

“We don’t trust them. The only thing that Ouattara is doing is revenge,” Zeguen said. “He wants to try us without trying any of the fighters from his side who also committed crimes. It is not fair, and this cannot bring reconciliation.”

____

Associated Press writers Rukmini Callimachi in Dakar, Senegal, and Robbie Corey-Boulet in Abidjan, Ivory Coast, contributed to this report.

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Ex-’Price is Right’ model gets $8.5M in damages

LOS ANGELES (AP) — The producers of “The Price is Right” owe a former model on the show more than $ 7.7 million in punitive damages for discriminating against her after a pregnancy, a jury determined Wednesday.

The judgment came one day after the panel determined the game show’s producers discriminated against Brandi Cochran. They awarded her nearly $ 777,000 in actual damages.

Cochran, 41, said she was rejected when she tried to return to work in early 2010 after taking maternity leave. The jury agreed and determined that FremantleMedia North America and The Price is Right Productions owed her more than $ 8.5 million in all.

“I’m humbled. I’m shocked,” Cochran said after the jury announced its verdict. “I’m happy that justice was served today not only for women in the entertainment industry, but women in the workplace.”

FremantleMedia said it was standing by its previous statement, which said it expected to be “fully vindicated” after an appeal.

“We believe the verdict in this case was the result of a flawed process in which the court, among other things, refused to allow the jury to hear and consider that 40 percent of our models have been pregnant,” and further “important” evidence, FremantleMedia said.

In their defense, producers said they were satisfied with the five models working on the show at the time Cochran sought to return.

Several other former models have sued the series and its longtime host, Bob Barker, who retired in 2007.

Most of the cases involving “Barker’s Beauties” — the nickname given the gown-wearing women who presented prizes to contestants — ended with out-of-court settlements.

Comedian-actor Drew Carey followed Barker as the show’s host.

___

Anthony McCartney can be reached at http://twitter.com/mccartneyAP .

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Do drunks have to go to the ER?

NEW YORK (Reuters Health) – With the help of a checklist, ambulance workers may be able to safely reroute drunk patients to detoxification centers instead of emergency rooms, according to a new study.

Researchers in Colorado found no serious medical problems were reported after 138 people were sent to a detox center to sleep it off, instead of to an ER.

In 2004, according to the researchers, it’s estimated that 0.6 percent of all U.S. ER visits were made by people without any problems other than being drunk. Those visits ended up costing about $ 900 million.

“Part of the issue has been – as it is in many busy ER departments – there’s a lot of chronic alcoholics that are brought in by ambulance, police or just come in. Often they are brought in because they have not committed a crime or there is limited space in our detoxification center. So the majority were brought to the ER department,” said Dr. David Ross, the study’s lead author from Penrose-St. Francis Health Services in Colorado Springs.

Ross said the ambulance company where he serves as medical director created the checklist with the help of the local detox center, which provided limited medical care by a nurse, and the local hospitals to reduce the number of drunks without medical needs being sent to the local ERs.

They created a checklist with 29 yes-or-no questions, such as whether the patient is cooperating with the ambulance worker’s examination and if the patient is willing to go to the detox center.

The patient was sent to the ER if the ambulance worker checked “no” on any question.

The researchers then went back to look at the patients they transported between December 2003 and December 2005 to see whether or not any of them ended up having serious medical problems at the detox center.

During that two year period, the ambulance workers transported 718 drunks. The detox center received 138 and the local ERs got 580.

Overall, 11 of the patients who were taken to detox were turned away because there was no room, their blood alcohol level exceeded the limit, their family came to pick them up or they were combative.

Another four patients at the detox center were taken to the ER because of minor complications, including chest and knee pain. However, there were no serious complications reported.

“We really believe that we did not miss anybody with a serious illness and injury that didn’t go to the ER as they should have,” said Ross.

But the researchers write in the Annals of Emergency Medicine that their study did have some limitations.

Specifically, the researchers did not plan in advance to do a study when they were creating the checklist, which means their findings are limited to whatever information was collected at the detox center and ERs.

Also, the number of people who were sent to the detox center in their study is relatively small, so it’s hard to tell how many serious complications they’d see among a larger group of people.

“We tried to estimate how likely we would have been to encounter a serious event… We estimated at most we’d encounter three serious adverse events (in 748 patients),” Ross told Reuters Health.

SOURCE: http://bit.ly/QgPCT5 Annals of Emergency Medicine, online November 9, 2012.

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Serious About Free Markets? Prove It

On Friday the Republican Study Committee, a policy shop for congressional Republicans, published a memo on how to fix copyright law. By Saturday afternoon the group’s executive director had pulled the memo, which had evidently failed to approach the subject with “all facts and viewpoints in hand.” This is Washington’s way of saying that an interest group hit the roof, and indeed, Ars Technica reports that lobbyists from the “content industry”—Hollywood and recording companies—pressured the group to renounce the memo.

Copyright being in fact broken, you can still read copies of the memo online. It lays out what copyright reform advocates have been saying for years. Copyright protections now extend 70 years past the life of the author; for a corporation, 95 years after publication. This, along with punitive laws on copyright violation, hinders creativity and innovation. These facts aren’t new. What’s new is the tone. Derek Khanna, the memo’s author, writes like an unashamed free marketeer, and in doing so manages to latch on to a larger point: Laws that help businesses often harm markets. From the memo:

Today’s legal regime of copyright law is seen by many as a form of corporate welfare that hurts innovation and hurts the consumer. It is a system that picks winners and losers, and the losers are new industries that could generate new wealth and added value. We frankly may have no idea how it actually hurts innovation, because we don’t know what isn’t able to be produced as a result of our current system. (Emphasis in the original.)

Radical stuff. There’s no one in Washington to lobby for industries that don’t exist yet, and ever so briefly, Khanna and the Republican Study Committee stepped into that breach. Then they stepped back, to gather more facts and viewpoints. Here’s one: Pro-business and pro-market are not the same thing. The most pleasant place for a business is not elbows-out in the middle of a free market, but sitting alone, atop a fat monopoly. Ask your local cable provider. The larger a business gets, the more it has to protect from the companies and industries that might follow it with something better or cheaper. And the best way to protect what you have is to have it written into law.

Real markets, with real competition, are most helpful to newcomers. Small businesses and new industries create new value. Once created, they, too, move to Washington to protect it. Witness the growth of Google (GOOG) and Facebook’s (FB) lobbying operations in the Capitol. Khanna describes extended copyright protection as rent-seeking—in his words, “non-productive behavior that sucks economic productivity and potential from the overall economy.” What’s true of Hollywood and the recording industry could be said of any established industry.

Luigi Zingales, a professor at the University of Chicago Booth School of Business and a regular contributor to Bloomberg View, points out that larger companies can lobby for special exemptions in the tax code. This creates complexity in the tax code, which punishes smaller businesses that can’t pay for tax lawyers and don’t have anyone’s buttonhole on Capitol Hill. Zingales prefers simple regulations and simple taxes, which are harder for lobbyists to game and easier for democracies to understand. He sees this as a bipartisan problem. The left is inclined toward more regulation, and the right is pro-business, rather than pro-markets.

The direction Khanna was headed—a defense of open, competitive markets at the expense of existing businesses—is still wide open space, claimed by no party. This summer, conservatives such as Timothy Carney at the Examiner and Yuval Levin at National Review urged Mitt Romney to back markets, not businesses. But he chose not to, even though he, in his day, disrupted existing markets of his own. Some enterprising Republican can still do it. Derek Khanna in 2016! He’s young. Maybe VP.

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Ivory Coast: New prime minister named

ABIDJAN, Ivory Coast (AP) — President Alassane Ouattara has tapped Foreign Minister Daniel Kablan Duncan to serve as prime minister in a new government one week after the surprise dissolution of cabinet.

The appointment of Duncan, a member of the PDCI party of former President Henri Konan Bedie, was announced at a press conference Wednesday by Amadou Gon Coulibaly, general secretary of the presidency.

Ouattara dissolved the cabinet last week over a feud between his political party and the PDCI over proposed changes to the country’s marriage law.

The PDCI supported Ouattara in the November 2010 runoff election in exchange for the prime minister’s post, helping him defeat incumbent President Laurent Gbagbo. Gbagbo’s refusal to cede office led to five months of violence that claimed at least 3,000 lives before Ouattara’s forces won.

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Tom Hanks, Will Farrell offer custom recordings

NEW YORK (AP) — Imagine having William Shatner supply your outgoing voicemail message. Or maybe you’d prefer Morgan Freeman coolly telling callers to wait for the beep. Or perhaps having Betty White joke around is more your speed.

All it takes is $ 299 and some luck.

The advocacy group Autism Speaks is offering custom-recorded messages from those celebrities as well as Will Ferrell, Carrie Fisher, Tom Hanks, Derek Jeter, Leonard Nimoy, Patrick Stewart and Ed Asner.

From Dec. 3 to Dec. 9, a limited number of 20-second long MP3 messages will be recorded by each celebrity on a first-come, first-served basis for fans to do with as they wish. All requests must be of the PG variety.

Asner, the curmudgeonly Emmy Award winner of “The Mary Tyler Moore Show” and “Lou Grant,” dreamed up the unusual fundraiser with his son Matt, who works for Autism Speaks.

“I think people will get a charge out of it,” says Asner, who is currently on Broadway in the play “Grace.” ”I’ll probably say, ‘What are you wearing?’ Or, ‘Take it off.’ Something like that.”

All proceeds will support autism research and advocacy efforts.

If he could get a message from one of the other stars participating, which would Asner want?

“I’m awfully stuck on Will Ferrell, having been subjected to him in ‘Elf,’” Asner says. “But they’re all such standouts — Patrick Stewart, Leonard Nimoy, Shatner. The list doesn’t stop. Even Betty White,” he adds about his “MTM” co-star. “She’s still got some good left in her.”

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In “beautiful China”, local polluters still hold sway

TIANYING, China (Reuters) – In ramshackle semi-industrial Tianying in China’s Anhui province, a state-owned lead smelter and foundry sits at the center of town, behind high walls and secure gates that make it look more like a prison than the mainstay of the local economy.

Decades of pollution from it and similar plants — Tianying once accounted for half of China’s total lead output — has made much of the town’s land uninhabitable and its water undrinkable.

In 2007, the Blacksmith Institute, a New York-based non-profit group that helps clean up polluted sites, included Tianying in its list of the world’s most polluted regions.

For China’s new leadership, reversing the environmental destruction wreaked by three decades of unrestrained economic growth is among its highest priorities. Across the country, to the government‘s alarm, social unrest spurred by environmental complaints has become increasingly common.

In a pledge taken up by the new leadership, outgoing President Hu Jintao said in his address to the Communist Party Congress earlier this month that the country had to “reverse the trend of ecological deterioration and build a beautiful China”.

Environment minister Zhou Shengxian reinforced the pledge at a briefing in Beijing last week, saying China needed to “quickly change the current situation in which too much emphasis is put on economic growth and too little on environmental protection”.

Tianying, in the northwest of poor and landlocked Anhui, will test that commitment.

Here, like hundreds of other blackspots from the stripmined cities of the northeast to the mercury contaminated fields in the southwest, the local government is intimately entwined with the most powerful economic interests in town.

“LEAD BOSSES”

In Tianying the government and the town’s largest employer are all but indistinguishable: the Jiaxin Group, owner of the main foundry at the center of town, is a state-owned company.

Unsurprisingly, amidst the town’s dwindling population of around 100,000, the words “beautiful China” elicit skepticism.

“I heard the central government is going to protect the environment more, but it won’t happen here,” said Zhang Weimin, a 58-year-old resident who lives a mile from the smelter. “I don’t trust the local government or the public security bureau or the lead factory bosses.”

Fear of the local authorities is palpable. Many residents were reluctant even to be seen near Reuters correspondents during a recent visit, saying they would be punished by the “lead bosses” as well as the police.

Asked about the state of local water supplies, a worker standing outside the factory gates grinned nervously and muttered “go see for yourself”.

China’s richer, coastal regions have improved environmental conditions over the last 10 years, driven as much by the profit motive as by tougher regulation. Rehabilitated land in Beijing or Shanghai can be turned into lucrative real estate.

But Beijing has struggled to provide the incentives for poorer regions like Anhui to clean up.

“The places I worry about in China are no longer the large wealthy metropolises but the small township and village enterprises – a lot of those are ignored and highly polluting and toxic to the very poorest communities,” said Richard Fuller, the Blacksmith Institute’s founder and president.

ALGAE AND SLUDGE

Tianying today is not as polluted as it was a decade ago. A 2002 study showed lead concentrations were as much as 10 times higher than national standards and children had suffered “adverse effects” as a result of prolonged exposure to the metal, which is especially damaging to children as it can impede learning and affect behavior.

Regulators by then had identified it as a blackspot urgently in need of remedy. The worst small-scale smelters and recycling workshops were shut, and production was left to large state firms like the Jiaxin Group.

Local authorities have also set up a wetland preserve nearby and forced the town’s remaining farmers to vacate land around the factories, replacing pasture with rows of fragile saplings.

The perimeter of the main Jiaxin plant is marked by signs urging residents not to drink water within an 800-metre radius, but even a mile away the risks do not appear to have abated. Some irrigation streams were clogged with algae — the result of fertilizer use — but others were filled with sludge.

“If you look you will see it – they are all black, nothing can grow in them and nothing can live in them,” said Zhang.

As China’s top leaders pound the “beautiful China” rhetorical drum, richer cities have already been forcing big polluters to clean up or relocate. Along the richer east coast, big polluting industries have come under growing pressure from urban residents now willing to fight for a better environment.

Demonstrations against chemical plants or garbage incinerators have erupted across China, from Dalian in the northeast to Xiamen in the southeast.

“You’ve got the local population becoming a lot more aware of environmental issues as they affect them on a day-to-day basis, and that isn’t going to go away,” said James Pearson, founder of Pacific Risk Advisors, which advises investors on potential environmental risks.

“HERE, NO ONE DARES TO PROTEST”

The protests have had an impact on government policy. Environment minister Zhou said last week that local residents needed to be consulted and new projects would now be forced to conduct “social impact assessments” before being approved.

But while the new procedures might help allay the “NIMBY” (Not In My Backyard) fears of affluent urban residents, they will not address longstanding problems like those in Tianying. Despite encouraging words from the central government, standing up to the polluters is not an option, residents said.

“Here, no one dares to protest – we would end up in jail because the lead bosses are protected by the police,” said an elderly resident standing at a kiosk a mile away from the plant.

The interests of the local government are now more aligned with the lead producers than they were a decade ago. Then, as part of the clean-up effort, lead production was taken out of private hands and passed to bigger state enterprises.

That has caused considerable resentment among residents. While pollution has been cut, the surviving plants and local authorities have had little incentive to clean up further, or to rehabilitate ruined land and water supplies.

“That is where they need to spend some serious cash — China has so far been focusing all its efforts on land that is worth selling when it is cleaned up,” Fuller of the Blacksmith Institute said.

Local resident Zhang said little would change under China’s new leaders as long as local industries and the governments that protect them continue to hold sway.

“If Wen Jiabao or Xi Jinping came here now I would certainly tell them what’s going on,” referring to the outgoing premier and anointed president-in-waiting. “But I wouldn’t trust anyone else.”

(Editing by Alex Richardson)

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Twinkies liquidation is approved

21 November 2012 Last updated at 16:27 ET

A US bankruptcy judge has given the go-ahead for the liquidation of Hostess Brands, owner of some of the country’s best known food brands, including cream-filled sponge snack Twinkies.

The hearing was delayed from Monday to allow for last-ditch talks with unions, but those failed.

As a first step in the liquidation of the company, Hostess is expected to lay off about 15,000 of its employees.

But Hostess’ advisers are confident that parts of the business can be sold.

In a statement, the company blamed the need for liquidation on a strike by the Bakery, Confectionery, Tobacco and Grain Millers (BCTGM) union, which started on 9 November.

Hostess Brands had sought protection from its creditors through Chapter 11 bankruptcy in January, but said it could not afford to continue operating through a strike.

The BCTGM blamed the company’s problems on years of mismanagement and being saddled with debt by private equity owners.

But Hostess said: “The wind-down was necessitated by an inflated cost structure that put the company at a profound competitive disadvantage”, adding that the main problem was its collective bargaining agreements with its staff.

‘Iconic brands’

One of the firm’s lawyers said there had been a “flood of enquiries” about buying some of the brands.

Advisers to Hostess Brands said they had been showing a potential buyer for the Drake’s cakes brand around the factory in New Jersey on Tuesday.

“These are iconic brands that people love,” said Joshua Scherer from Perella Weinberg Partners.

Hostess expects to keep on about 3,200 staff to help shut down its properties, but only about 200 of them are likely to still be employed at the firm by the end of March.

Hostess said the liquidation would mean the closure of 33 bakeries, 565 distribution centres, approximately 5,500 delivery routes and 570 bakery outlet stores.

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AP Exclusive: Syrian rebels seize base, arms trove

BASE OF THE 46TH REGIMENT, Syria (AP) — After a nearly two-month siege, Syrian rebels overwhelmed a large military base in the north of the country and made off with tanks, armored vehicles and truckloads of munitions that rebel leaders say will give them a boost in the fight against President Bashar Assad‘s army.

The rebel capture of the base of the Syrian army’s 46th Regiment is a sharp blow to the government’s efforts to roll back rebels gains and shows a rising level of organization among opposition forces.

More important than the base’s fall, however, are the weapons the rebels found inside.

At a rebel base where the much of the haul was taken after the weekend victory, rebel fighters unloaded half a dozen large trucks piled high with green boxes full of mortars, artillery shells, rockets and rifles taken from the base. Parked nearby were five tanks, two armored vehicles, two rocket launchers and two heavy-caliber artillery cannons.

Around 20 Syrian soldiers captured in the battle were put to work carrying munitions boxes, barefoot and stripped to the waist. Rebels refused to let reporters talk to them or see where they were being held.

“There has never been a battle before with this much booty,” said Gen. Ahmad al-Faj of the rebels Joint Command, a grouping of rebel brigades that was involved in the siege. Speaking on Monday at the rebel base, set up in a former customs office at Syria’s Bab al-Hawa border crossing with Turkey, he said the haul would be distributed among the brigades.

For months, Syria’s rebels have gradually been destroying government checkpoints and taking over towns in the northern provinces of Idlib and Aleppo along the Turkish border.

Rebel fighters say that weapons seized in such battles have been essential to their transformation from ragtag brigades into forces capable of challenging Assad’s professional army. Cross-border arms smuggling from Turkey and Iraq has also played a role, although the most common complaint among rebel fighters is that they lack ammunition and heavy weapons, munitions and anti-aircraft weapons to fight Assad’s air force.

It is unclear how many government bases the rebels have overrun during the 20-month conflict, mostly because they rarely try to hold captured facilities. Staying in the captured bases would make them sitting ducks for regime airstrikes.

“Their strategy is to hit and run,” said Elias Hanna, a retired Lebanese army general and Beirut-based strategic analyst. “They’re trying to hurt the regime where it hurts by bisecting and compartmentalizing Syria in order to dilute the regime’s power.”

The 46th Regiment was a major pillar of the government’s force near the northern city of Aleppo, Syria’s economic hub, and its fall cuts a major supply line to the regime’s army, Hanna said. Government forces have been battling rebels for months over control of Aleppo.

“It’s a tactical turning point that may lead to a strategic shift,” he said.

At the 46th Regiment’s base, about 25 kilometers (15 miles) west of Aleppo, the main three-story command building showed signs of the battle — its walls punctured apparently from rebel rocket attacks. The smaller barracks buildings scattered around the compound, about 2.6 square kilometers (1 square mile) in size, had been looted, with mattresses overturned. A number of buildings had been torched.

Reporters from The Associated Press who visited the base late Monday saw no trace of the government troops who had been defending it — other than the dead bodies of seven soldiers.

Two of them, in camouflage uniforms, lay outside the command building. One of them was missing his head, apparently blown off in an explosion.

The rest were in a nearby clinic. Four dead soldiers were on stretchers set on the floor, one with a large gash in his arm, another with what appeared to be a large shrapnel hole in the back of his head. The last lay on a gurney in another room, his arms and legs bandaged, a bullet hole in his cheek and a splatter of blood on the wall and ceiling behind him as if he had been shot where he lay.

It could not be determined how or when the soldiers had been killed.

The final assault that took the base came after more than 50 days of siege that left the soldiers inside demoralized, according to fighters who took part.

Working together and communicating by radio, a number of different rebels groups divided up the area surrounding the base and each cut the regime’s supply lines, said Abdullah Qadi, a rebel field commander. Over the course of the siege, dozens of soldiers defected, some telling the rebels that those inside were short of food, Qadi said.

The rebels decided to attack Saturday afternoon when they felt the soldiers inside were weak and the rebels had enough ammunition to finish the battle, Qadi said. The battle was over by nightfall on Sunday. Seven rebel fighters were killed in the battle, said al-Faj of the rebels’ Joint Command. Other rebel leaders gave similar numbers.

It remains unclear how many soldiers remained in the base when the rebels launched their attack and what happened to them.

Al-Faj said all soldiers inside were either killed or captured. He said he didn’t know how many were killed, but that the rebels had taken about 50 prisoners, all of whom would be tried in a rebel court. Aside from the 20 prisoners seen at the rebel’s Bab al-Hawa base, the AP was unable to see any other captured soldiers.

The Syrian government does not respond to requests for comment on military affairs and said nothing about the base’s capture. It says the rebels are terrorists backed by foreign powers that seek to destroy the country.

Disorganization has plagued the Syrian opposition since the start of the anti-Assad uprising in March 2011, with exile groups pleading for international help even when they have no control over those fighting inside of Syria.

A newly formed Syrian opposition coalition received a boost Tuesday, when Britain officially recognized it as the sole representative of the Syrian people.

The National Coalition of the Syrian Revolutionary and Opposition Forces was formed in the Gulf nation of Qatar on Oct. 11 under pressure from the United States for a stronger, more united opposition body to serve as a counterweight to more extremist forces.

British Foreign Secretary William Hague said Tuesday the body’s members gave assurances to be a “moderate political force committed to democracy” and that the West must “support them and deny space to extremist groups.”

The United States and the European Union have both spoken well of the body but stopped short of offering it full recognition.

Key to the body’s success will be its ability to build ties with the disparate rebel groups fighting inside Syria. Many rebel leaders say they don’t recognize the new body, and a group of extremist Islamist factions on Monday rejected it, announcing that they had formed an “Islamic state” in Aleppo.

Anti-regime activists say nearly 40,000 people have been killed since Syria’s crisis started 20 months ago.

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Associated Press write Elizabeth Kennedy contributed reporting from Beirut, Lebanon.

Middle East News Headlines – Yahoo! News

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