Summit Notebook

Paranoid governments and conspiracy theories

Adi Godrej, who marshals his namesake $2.5 billion diversified group, believes the Indian government is “paranoid” about the possible effects of allowing more foreign investments into sectors such as airlines.

“They (the Indian government) have not allowed foreign airlines to invest in private airlines, and they cite security. I don’t see what security would be compromised,” Godrej told the Reuters India Investment Summit in Mumbai.

“If British Airways or Delta got to own part of an Indian private airline, they are worried about what would happen in times of a war, etc. You are in control of your country. What can they do in difficult times to stop it?” he said.

Godrej also said that allowing more private players into sectors such as roads and education would help lift India away from infrastructure perils plaguing the country.

It’s not hard to think of Indian government officials sitting at their gnarled desks in crumbling office buildings doing what Mel Gibson’s character did in the movie Conspiracy Theory. But as Mel Gibson discovers, the enemy probably lies within. How’s that for a conspiracy?

Infrastructure still top-of-mind in India

On Monday, we kick-off the 2010 India Investment Summit. We’ll have exclusive interviews in Mumbai and Bangalore. In 2006 we held the first Reuters India Investment Summit. It was my first time in India. I’ve had the privilege to return every year. How time flies. Here we are four years later. Some of the key players may have changed but the big, over-arching theme is still the same: Infrastructure. It’s the key to realizing the country’s potential but bureaucracy, tough financing and hesitant overseas investment have slowed development in the sector, calling into question the future of India as a powerhouse.

India has had only mixed success in its efforts to accelerate construction of roads, bridges and power plants. The statistics are mind-blowing…the country is growing at 8.5% and has a population of 1.2 billion that is making a mad-dash from the countryside to sprawling cities. Call them growing pains…in India’s expanding cities there is an acute need to speed project approvals, implement new financing models and attract overseas investment for much needed infrastructure. But, while the business opportunity is tremendous investors looking to India as a way to play the emerging markets are wary given the history of missed deadlines and red tape that makes getting projects completed a challenge.

Is red tape getting better or worse? Which sectors are attracting most interest? How do returns compare with similar projects globally? How do sector companies attract foreign investment in large projects? Are the challenges forcing investors and developers to look overseas instead?

These topics and more will be the key points of discussion at the Reuters India Investment Summit in Mumbai and Bangalore September 27-29.

To read our exclusive stories and analysis starting September 27 copy and paste the link below to your browser: www.reuters.com/summit/IndiaInvestment10

Lady Gaga may not be the only one singing a new tune in November

The 2010 Reuters Washington Summit included 4 days of on-the-record interviews with policymakers, congressmen and Obama Administration officials here in the DC bureau. The interviews covered a wide range of topics…from the impact of the mid-term elections to the importance of the Lady Gaga vote.

With less than six weeks to go before the mid-term elections the focus was on what a potential shift in power to a Republican-controlled Congress could mean for policy priorities in the coming year. We heard from Senators’ McCain, Dodd, Gregg and Bingaman. On the House side we spoke with the man responsible for getting Democrats elected…Rep. Chris Van Hollen, Chairman of the Democratic Congressional Campaign Committee. He called this election season a “tough and challenging environment,’ but predicted Democrats would retain control of the House.

From the Obama Administration, White House Press Secretary Robert Gibbs opened his comments by admitting that early on the administration did not have a “real understanding of the depth of what we were in.” News of Larry Summers’ departure as White House advisor came on the eve of our interview with a man who has worked with Summers, Austan Goolsbee, Chairman of the White House Council of Economic Advisors. Goolsbee said he expected that Mr. Summers’ replacement wouldn’t be part of “a dramatic change in direction.” On the economy, Goolsbee noted that he does not see a double dip on the horizon and that “pulling back on current spending programs could spook the markets.”

On the regulatory front, FDIC Chairman Sheila Bair was adamant in her remarks about “ending too big to fail” and said that “the banking system is healing…and there is continuing improvement in low quality loans.” Meanwhile, Treasury’s Special Inspector General for TARP, Neil Barofsky, the man charged with policing the government’s exit from GM and AIG, said his group would begin a probe into the GM IPO after it launches to make sure that it was in the best interest of taxpayers.

On Afghanistan, we heard from Richard Holbrooke, Special Advisor on Afghanistan and Pakistan who was measured in his response to the Obama Administration’s planned timetable for withdrawal.

And, what about the Lady Gaga vote? Senator McCain brought up the pop star and her opposition to ‘Don’t Ask Don’t Tell’ which was scheduled for a vote the day after McCain’s visit to our bureau, saying “I didn’t Twitter back. I only twitter with Snooki as you know. I did say, I said, look, I welcome her in the debate, I’ll welcome all of her young fans into the debate. Let’s have everybody in the the debate…it’s good to have lots of people involved.”

The summit upshot: if polls are correct and Republicans win more seats in the Senate and retake the House, all of Washington may be singing a different tune come November 3rd.

Five weeks: It’s an eternity in the world of politics

By Christopher Doering

Five weeks:  It may not be a lot of time for many people, but with the pivotal mid-term elections looming on Nov. 2 Delaware Senator Tom Carper said five weeks is an eternity for Democrats to use to turn the tide in their favor.

“Today, five weeks a lot happens. A lot of minds change in five weeks,” Carper, a self-proclaimed “optimist”, told the Reuters Washington Summit.

“What we have to do is to be able to remind people if there is some good news here in the next five weeks of what that is and get people to focus on the future.”

Carper, a former Delaware governor, said there is a slew of economic data coming out between now and the election that Democrats could embrace. He pointed to another unemployment report next week, and several more weekly jobless claims.

“If the election were held today we’d lose seats in the House, I don’t know if we’d lose the house,” the Democrat said. “We’d lose seats in the Senate. That usually happens in the off year election.”

Carper is up for reelection in 2012.

No time for fun for White House officials

While senators like Lamar Alexander have time to play classical piano with the symphony or attend sporting events, some people in Washington don’t have as much time for fun or relaxation.

Take Austan Goolsbee, the new chairman of the White House Council of Economic Advisers, who until recently worked as a member of the council and a long-time economic adviser to Obama.

Goolsbee used to compete in triathlons. Now he jokes that he is so out of shape he can hardly make it up the stairs without losing his breath.

“I stopped working out completely when I got here,” Goolsbee told the Reuters Washington Summit. Now I can’t walk up the stairs without going a-huff, a-huff, a-huff,” he said as he made the sounds of someone gasping for air.

Of course the trim Goolsbee — who doesn’t look at all like he would be panting for air going up the stairs — is also a jokester.

Though he claims he is not very good, he lists “improv” as well as triathlons as his extracurricular activities. Last year he won the Funniest Celebrity in Washington Contest, though in self-deprecating humor he dismissed the honor saying the competition was not tough, noting that one of his opponents was “Joe the Plumber.”

Remember him? He’s the man who became a Republican icon after challenging Obama on the economy during the 2008 election campaign.

Senator Lamar Alexander tickles the ivories

In the run up to the Nov. 2 mid-term election, senior Republican Sen. Lamar Alexander has more to worry about than just the results of the vote.

Just three days before the election, Alexander has a date on center stage to play the piano with the Jackson Symphony in Jackson, Tennessee.

“I try to keep a balanced life,” the chairman of the Senate Republican Conference told the Reuters Washington Summit. “I even get to play the piano some, though not as much as I’d like to.”

But on Oct. 30, the classically-trained senator will perform at a concert in Jackson, which he joked “is not Carnegie Hall.”

“I used to do that when I was governor,” he said. “It’s been 26 years since I’ve performed with the Jackson Symphony and that may say something about what they thought of their last experience. Everyone who remembers it is gone.”

Alexander will be playing some Mozart, Chopin and a medley of gospel songs written for him to perform with orchestras and symphonies.

The senior senator from Tennessee, who ran an unsuccessful presidential bid in 1996, even uses music analogies to talk about politics. When speaking about how to get rid of earmarks he said “If someone’s singing out of tune in the Grand Ole Opry, the cure for that is not to cancel the Opry — you cancel the act. So I think that’s how we should deal with earmarks — get rid of the bad ones.”

After a hard day’s work in Afghanistan, Petraeus reads… about Afghanistan

After spending 16-plus hours each day running the U.S.-led war in Afghanistan, American General David Petraeus tries to thumb through a few pages of a book each night before his eyes close and it falls to the ground.  The most recent topic? Afghanistan of course.

The four-star general told Reuters that currently on his nightstand is a book by a leading expert on the country:  Thomas Barfield, Afghanistan: a Cultural and Political History, a book ranked 21,047 on Amazon.com (as this blog was being published).

The general, speaking in a telephone interview as part of the Reuters Washington Summit, acknowledged that he probably only gets through a few pages each night.

“When you start at working at 5:30 in the morning, and I mean really start working, and you go down somewhere around 2200-2300 (10 p.m.-11 p.m.), you don’t get more than a couple of pages into whatever book you read before it falls on the floor,” he said.

In the preface of the book, Barfield said he embarked on writing the book during what he described as a “period of neglect” of Afghanistan by the Bush administration. Barfield first visited Afghanistan nearly four decades ago as a student and said he decided to write the new book because of the renewed focus on the country by the Obama administration.

Petraeus, widely hailed by both Democrats and Republicans, was tapped by President Barack Obama to oversee the war effort in Afghanistan after his tour leading the U.S. military in Iraq.

Barfield, an anthropology professor at Boston University and head of the American Institute for Afghanistan Studies, was just in Afghanistan and visited the general’s office the other day, Petraeus said.

Rumors of our demise exaggerated, Van Hollen says

Representative Chris Van Hollen likes to paraphrase Mark Twain when talking about the Democratic chances in the November mid-term election.

“News of the Democratic demise is greatly exaggerated,” the man in charge of the House Democrats’ election effort told the Reuters Washington Summit. “I think the pundits have been wrong before and they’ll be wrong again. Democrats will retain a majority in the Congress. I’m very confident of that.”

Of course it’s Van Hollen’s job to be confident or at least project an image of confidence six weeks ahead of the election where Republicans and the conservative Tea Party movement are trying to convince Americans to vote Democrats out of office and take back Republican control of the Congress.

Van Hollen predicted a “tough, rough election” but believed his party would prevail in part because moderate Americans would be scared by possible Tea Party victories.

He said the “political energy deficit” was beginning to close, presumably meaning that Democrats were starting to get a bit more excited about the election, though polls don’t seem to be showing that.

“You have a very energized group, obviously, on the right,” he said about the Tea Party. “That is also having an impact on moderate and centrist voters who are waking up and saying ‘I agree the economy’s not where we want it to be but it’s a little scary going to Bush economic policy on steroids.’”

“This election should be a wakeup call to the ordinary citizen,” he said.

Gregg sees Republican victory in November as keeping Obama in check

If Republicans are able to capture either chamber of the U.S. Congress in the November election, they will use that power to try to block any further expansion of the federal government by the Obama administration, Republican Senator Judd Gregg said on Wednesday.

“I think clearly going into the next Congress, if you have one or the other houses controlled by the Republican party, you’re going to have much more financial discipline, there’s no question of that,” Gregg, who is from New Hampshire and is retiring after the election, told the Reuters Washington Summit.

Republicans lost control of both the House and Senate in the last two election cycles, in part because they strayed from their position of holding the line on federal spending during the Bush administration. As the economy slowly recovers from the worst recession in decades, the deficit and the mounting debt have become major themes in the 2010 congressional elections.

“We won’t be able to set the agenda in the sense that the president sets the agenda, but we will at least be able to control the expansiveness of the government and slow the rate of growth and start to raise the issues that are important for being fiscally disciplined,” Gregg said, noting that “we can’t overpromise because we don’t control the presidency.”

He said that New Hampshire voters chose Democrats in the last two elections because they thought Republicans had walked away from their traditional principle of fiscal discipline and supported the Iraq war. Candidates running in the state this time are dedicated to returning to fiscal conservativism, he said.

However, he offered some caution that Republicans can only do so much without controlling the White House.

“The presidency is still extremely strong, and I don’t think anybody is overpromising what can occur,” he said.

With end of TARP, investigations into fraud take center stage

While the much maligned $700 billion Troubled Asset Relief Program (TARP) has officially ended, not everything has wrapped up — auditors are just starting to hit their stride investigating scores of cases of possible malfeasance.

Neil Barofsky, special inspector general for the program, nicknamed SIGTARP, said his office has more than 120 criminal investigations underway. They are looking into whether the money loaned to financial institutions and automakers was used properly or not, if there was fraud in applications for TARP financial backing and other wrongdoing.

“Our focus on investigations is growing and that’s an area where we are definitely in a ramp-up phase,” Barofsky told the Reuters Washington Summit. “The crimes that have been committed were committed in 2008, 2009 and 2010. The most common statute of limitation for fraud is five years and there’s a reason for that, it takes a while for these type of sophisticated while collar investigations … to hit, for fraud to be discovered and it takes a while to investigate them.”

Barofsky lamented that finding experienced people willing to come to work for a temporary agency was proving to be a challenge.

“We’re looking for experienced, white collar investigators who want to come over to a temporary agency, that is not the deepest of pools, to be honest with you, if I could find more I would hire more,” he said.

Additionally, Barofsky plans to launch an after-action audit of the U.S. Treasury Department’s role in General Motors’ initial public offering, which would include examining the decision-making process and whether it maximized the return for taxpayers.

“I expect it will be a broad inquiry that goes into this. In many ways, this is a pretty unprecedented activity for a government to be selling its shares to the public in an IPO like this,” he said, adding that he expected other such audits of other companies that the federal government has stakes in and plan to go public.