State parks officials deliberately hid millions, report says

SACRAMENTO — Fear of embarrassment and budget cuts led high officials at the California parks department to conceal millions of dollars, according a new investigation by the state attorney general's office.

The money remained hidden for years until it was exposed by a new staff member who described a culture of secrecy and fear at the department.

The attorney general's report, released Friday, is the most detailed official account so far of the financial scandal at the parks department. The controversy broke last summer with the revelation that parks officials had a hidden surplus of nearly $54 million at a time when the administration was threatening to close dozens of the facilities.

Although much of the accounting issues appeared to stem from innocent mistakes and discrepancies, the report said, about $20 million had been deliberately stashed away.

The report said the problem seemed to begin with calculation errors more than a decade ago. But when those mistakes were discovered in 2002, officials made a "conscious and deliberate" decision not to reveal the existence of the extra money, the report said.

Parks officials concealed the funds partly because they were embarrassed, the report said. But they were also worried that their funding would be cut further if state number-crunchers knew they had a larger reserve, according to interviews conducted by a deputy attorney general.

Parks officials underreported the amount of money they had to the Department of Finance, preventing lawmakers from including the extra funds in state spending plans.

The money "was intended to be a safety net," said Manuel Lopez, a former deputy director at the department, who was interviewed in the probe. Lopez resigned in May while being investigated for a separate scheme allowing employees to be improperly paid for unused vacation days.

Multiple high-ranking officials were involved in concealing the parks money, including Lopez and Michael Harris, the chief deputy director who was fired after the scandal broke. Evidence suggests that the initial decision to keep the money secret was made by Tom Domich, an assistant deputy director who left the department in 2004, the report said.

Domich "unpersuasively denies … his role in the deception," according to the report. The Times was unable to reach Domich on Friday.

Staff members who pointed out financial problems were ignored by their bosses.

"Throughout this period of intentional non-disclosure, some parks employees consistently requested, without success, that their superiors address the issue," the report said.

It is unclear whether ousted director Ruth Coleman knew about the accounting problems, the report said. She declined to be interviewed for the investigation; participation was voluntary for former parks personnel.

Officials have not yet determined whether criminal charges will be filed. There's no evidence that any money was stolen or used improperly, the report said.

The accounting problems were eventually exposed by Aaron Robertson, who started an administrative job at the parks department in January 2012. He told a deputy attorney general that people felt uncomfortable raising concerns at the department.

"There was a great deal of distrust," he said. "People felt somewhat fearful of coming forward with information."

John Laird, the California natural resources secretary who oversees the parks department, said new policies and staff are in place to prevent similar problems in the future.

"It is now clear that this is a problem that could have been fixed by a simple correction years ago, instead of being unaddressed for so long that it turned into a significant blow to public trust in government," Laird said in a statement.

A new parks director, retired Marine Maj. Gen. Anthony Jackson, was appointed by Gov. Jerry Brown to replace Coleman in November. Robertson was promoted to become his deputy.

The attorney general's investigation is the third report on the parks department in the last month. One more report, from the state auditor, is due this month.

chris.megerian@latimes.com

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News Analysis: Debt Deal Fails to Allay Fears on U.S. Global Power

WASHINGTON — Two years ago the departing chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, declared that “the most significant threat to our national security is our debt.” After a decade in which the nation had chased Al Qaeda and invaded Iraq, Admiral Mullen was saying, in essence, that the biggest enemy was us.

Paula Bronstein/Getty Images

Some analysts worry that the United States will not maintain influence in places like Myanmar.

Now that Congress and President Obama have slipped past the latest budget deadline with a bill that does little to address the country’s long-term debt issues — and by some measures might worsen them — the worries of the national security establishment have been reignited. Most pointedly, military and diplomatic experts wonder whether the United States is at risk of squandering its global influence.

“There’s a sense that we’ve been playing roulette with our position, and this deal does nothing to stop that,” Richard N. Haass, the president of Council on Foreign Relations, said in an interview. His coming book, “Foreign Policy Begins at Home,” is part of a wave of recent literature arguing that America’s reduced global ambitions are linked to its status as a debtor nation.

Vali Nasr, who will soon publish “The Dispensable Nation,” argues that the debt, among other economic woes, has allowed Mr. Obama and other Democrats to justify a retreat from global engagement. “It’s made it far easier to say ‘We can’t do more,’ ” said Mr. Nasr, the dean of the School of Advanced International Studies at Johns Hopkins University. “And without addressing the debt issues, it will be easier to make that argument for years to come.”

A departing senior diplomat at the State Department who requested anonymity, ruminating on the outcome of the confrontation on the fiscal crisis, said that the failure to attack the long-term debt issues would become another reason “to turn our backs on the Middle East and trim our sails on the new focus on Asia.”

That is the theme that the Chinese — who have an interest in portraying the United States as a declining power unable to manage its economy — are already promoting. “The politicians have chosen to kick the can down the road,” the state-run Xinhua news agency said in a commentary on Wednesday. “The can will never disappear,” it continued, warning that the United States was falling “into an abyss you can never come out of.”

Most evidence suggests that the country’s debt is not an immediate crisis. The deficit is expected to shrink somewhat in coming years, and even after the United States lost its AAA bond rating, foreigners have remained willing to lend the country money at very low interest rates. That is a sign of confidence in the American economy and a recognition that Europe and Asia have problems of their own.

But the aging of the population and the growth of health costs will most likely cause the deficit to grow rapidly in coming decades, meaning that the most difficult choices about taxes and spending are still ahead. Absent decisions on those issues, the government will have fewer resources and be more dependent on foreign lenders — increasingly the Chinese.

“Partly it is about resources,” Mr. Haass said, referring to the national security implications of the deficit. “But it is also about reducing your vulnerability to the machinations of currency markets and potentially hostile central bankers” who choose whether to buy American debt.

“When we appear to be dysfunctional, as we have in recent times, it makes it hard to be the model for the democratic, capitalistic model we say we want to be in the world,” he added.

History suggests that the relationship between debt and American power is a complex one, subject to differing interpretations by both economists and historians. The federal debt exceeded 100 percent of the gross domestic product at the end of World War II, but the postwar period nonetheless marked the beginning of America’s superpower status. The debt fell fairly steadily during the cold war, and it was cut to about a third of gross domestic product by the end of the Nixon administration — even as the country retreated into a post-Vietnam War funk.

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Poll finds people want an ‘iPhone 5S’ with new color options

The latest rumor surrounding Apple’s (AAPL) next-generation “iPhone 5S” is that it will launch in May or June with two different screen sizes and five different color options. So said Topeka Capital Markets analyst Brian White in a research note earlier this week. White has made some good early calls before — he was one of the first to report that Apple was working on the iPad mini — but nothing is official until Apple announces it on stage at a press conference. One thing we can say with some amount of certainty, though, is that a sizable portion of Apple fans would be interested in a next-generation iPhone made available with new color choices.

[More from BGR: Samsung confirms plan to begin inching away from Android]

In a poll published by BGR on Wednesday, 35% of respondents reported that they would purchase the next iPhone in either blue, pink or yellow if Apple were to launch the device in those colors, as suggested by White. Another 28.4% said they would be interested in the new color options, but they would want to see how they look before making a purchasing decision.

[More from BGR: Microsoft called a failing giant that only survives by charging prices that ‘bleed customers dry’]

More than 2,000 people voted in the poll and roughly 85% of respondents live in the United States.

The results are not scientific, however they do suggest that there would be significant demand for an iPhone with new color options in key markets like the U.S. And where the iPhone 4S had Siri and the iPhone 5 had a fresh new design with a larger display, Apple will certainly look to launch its next-generation smartphone with some key points of differentiation.

As they were with the iPod touch, new color options may be among the next iPhone’s key new features when it launches later this year — and if that is indeed the case, it looks like the new colors will be met with significant interest from consumers.

This article was originally published by BGR

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George Lucas Engaged to Mellody Hobson

01/03/2013 at 07:35 PM EST

George Lucas and Mellody Hobson

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George Lucas is following the Force – right down the aisle.

The Star Wars director, 68, is engaged to DreamWorks animation chairman Mellody Hobson, a rep for Lucasfilm confirmed to The Hollywood Reporter on Thursday.

Hobson, 43, has been dating Lucas since 2006. This will be her first marriage and Lucas's second; he previously was married to film editor Marcia Lou Griffin. The exes adopted a daughter Amanda before their 1983 divorce. Lucas went on to adopt two more children.

Lucas's fiancée is also a contributor to Good Morning America's financial segments and has received many honors, including a 2002 listing as one of Esquire's "Best and Brightest" in America.

Lucas has made headlines of his own, recently donating to an education foundation much of the $4 billion from his sale of Lucasfilm to Disney.

According to THR, Lucas said at the time, "As I start a new chapter in my life, it is gratifying that I have the opportunity to devote more time and resources to philanthropy."

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Indian court to rule on generic drug industry

NEW DELHI (AP) — From Africa's crowded AIDS clinics to the malarial jungles of Southeast Asia, the lives of millions of ill people in the developing world are hanging in the balance ahead of a legal ruling that will determine whether India's drug companies can continue to provide cheap versions of many life-saving medicines.

The case — involving Swiss drug maker Novartis AG's cancer drug Glivec — pits aid groups that argue India plays a vital role as the pharmacy to the poor against drug companies that insist they need strong patents to make drug development profitable. A ruling by India's Supreme Court is expected in early 2013.

"The implications of this case reach far beyond India, and far beyond this particular cancer drug," said Leena Menghaney, from the aid group Doctors Without Borders. "Across the world, there is a heavy dependence on India to supply affordable versions of expensive patented medicines."

With no costs for developing new drugs or conducting expensive trials, India's $26 billion generics industry is able to sell medicine for as little as one-tenth the price of the companies that developed them, making India the second-largest source of medicines distributed by UNICEF in its global programs.

Indian pharmaceutical companies such as Cipla, Cadila Laboratories and Lupin have emerged over the past decade as major sources of generic cancer, malaria, tuberculosis and AIDS drugs for poor countries that can't afford to pay Western prices.

The 6-year-old case that just wrapped up in the Supreme Court revolves around a legal provision in India's 2005 patent law that is aimed at preventing companies from getting fresh patents for making only minor changes to existing medicines — a practice known as "evergreening."

Novartis' argued that a new version of Glivec — marketed in the U.S. as Gleevec — was a significant change from the earlier version because it was more easily absorbed by the body.

India's Patent Controller turned down the application, saying the change was an obvious development, and the new medicine was not sufficiently distinct from the earlier version to warrant a patent extension.

Patient advocacy groups hailed the decision as a blow to "evergreening."

But Western companies argued that India's generic manufacturers were cutting the incentive for major drug makers to invest in research and innovation if they were not going to be able to reap the exclusive profits that patents bring.

"This case is about safeguarding incentives for better medicines so that patients' needs will be met in the future," says Eric Althoff, a Novartis spokesman.

International drug companies have accused India of disregarding intellectual property rights, and have pushed for stronger patent protection that would weaken India's generics industry.

Earlier this year, an Indian manufacturer was allowed to produce a far cheaper version of the kidney and liver cancer treatment sorefinib, manufactured by Bayer Corp.

Bayer was selling the drug for about $5,600 a month. Natco, the Indian company, said its generic version would cost $175 a month, less than 1/30th as much. Natco was ordered to pay 6 percent in royalties to Bayer.

Novartis says the outcome of the new case will not affect the availability of generic versions of Glivec because it is covered by a grandfather clause in India's patent law. Only the more easily absorbed drug would be affected, Althoff said, adding that its own generic business, Sandoz, produces cheap versions of its drugs for millions across the globe.

Public health activists say the question goes beyond Glivec to whether drug companies should get special protection for minor tweaks to medicines that others could easily have uncovered.

"We're looking to the Supreme Court to tell Novartis it won't open the floodgates and allow abusive patenting practices," said Eldred Tellis, of the Sankalp Rehabilitation Centre, a private group working with HIV patients.

The court's decision is expected to be a landmark that will influence future drug accessibility and price across the developing world.

"We're already paying very high prices for some of the new drugs that are patented in India," said Petros Isaakidis, an epidemiologist with Doctors Without Borders. "If Novartis' wins, even older medicines could be subject to patenting again, and it will become much more difficult for us in future to provide medicines to our patients being treated for HIV, hepatitis and drug resistant TB."

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Legislators want Army Corps to explain habitat removal decision

Two state senators on Thursday called on the U.S. Army Corps of Engineers to explain its decision to plow under 43 acres of lush wildlife habitat at the Sepulveda Basin without prior notice or coordination with community leaders and environmentalists.

Sens. Kevin de Leon (D-Los Angeles) and Fran Pavley (D-Agoura Hills) asked for details about what led to the agency's declaration in August that its "vegetation management plan" for the area did not require an environmental impact report because it would not significantly disturb wildlife and habitat.

On Dec. 10, Army Corps bulldozers, mowers and mulching machines stripped nearly all the greenery from the swath of Los Angeles River flood plain just west of Interstate 405 and north of Burbank Boulevard, wiping out habitat for mammals, reptiles and hundreds of species of birds.

"When a clunky federal bureaucracy doesn't collaborate with state and local officials and community leaders, you create a real mess, which is what we have right now at the Sepulveda Basin," De Leon said in an interview.

He noted that although the corps is not subject to state environmental laws, protections from the federal National Environmental Policy Act may apply.

"If the Army Corps doesn't cooperate, the next step is to engage members of Congress to exercise their powers, or have the state attorney general notify the U.S. district attorney's office," De Leon said.

Pavley, whose district includes the Sepulveda Basin, said she wants to know the extent of damage caused to trails, markers and signs funded with "state and local park monies" and installed and maintained "by thousands of hours of volunteer work."

Army Corps of Engineers District Cmdr. Col. Mark Toy was unavailable for comment. But corps spokesman Jay Field said the agency will cooperate fully with the senators.

The area existed as a wildlife preserve adjacent to the Sepulveda Dam for more than three decades. In 2010, it was reclassified as a corps "vegetation management area" with a new five-year mission of replacing trees and shrubs with native grasses as part of an effort to improve access for corps staffers, increase public safety and discourage crime, lewd activity, drug abuse and homeless camps.

Environmental groups led by the San Fernando Valley Audubon Society interpreted the plan to suggest the agency would avoid removal of native willow and cotton groves, elderberries, coyote brush and mule fat. Much of that vegetation was planted decades ago under a corps program to create the wildlife preserve.

Kris Ohlenkamp, conservation chairman of the San Fernando Valley Audubon Society, said the corps' management plan was vague. "But this much is clear: What the corps actually did to that land is not represented anywhere in the plan."

Army Corps Deputy District Cmdr. Alexander Deraney has said his agency's actions were "more or less in line with the plan." He said the corps wanted to preserve the native vegetation but discovered that "the native brush was so grown into non-native brush that it would be impossible to separate them."

The corps has ceased operations on the property pending consultations and meetings with environmental and community groups.

louis.sahagun@latimes.com

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Depardieu, in Tax Fight, Gets Russian Citizenship

MOSCOW (AP) — Gerard Depardieu, the French actor who has waged a battle against a proposed super-tax on millionaires in his native country, has been granted Russian citizenship.

A brief announcement on the Kremlin website revealed that President Vladimir Putin signed the citizenship grant on Thursday.

A representative for the former Oscar nominee declined to say whether he had accepted the offer and refused all comment. Thursday was a holiday in Russia and officials from the Federal Tax Service and Federal Migration Service could not be reached for comment on whether the decision would require Depardieu to have a residence in Russia.

Depardieu has been vocal in his opposition to French President Francois Hollande's plans to raise the tax on earned income above €1 million ($1.33 million) to 75 percent from the current high of 41 percent. France's debt burden is around 90 percent of national income — not far off levels that have caused problems elsewhere in the 17-country eurozone. In contrast to the proposed top French rate, Russia has a flat 13 percent tax on income.

"I have never killed anyone, I don't think I've been unworthy, I've paid €145 million in taxes over 45 years," Depardieu wrote in an open letter to Prime Minister Jean-Marc Ayrault, who then called the actor "pathetic."

"I will neither complain nor brag, but I refuse to be called 'pathetic," Depardieu subsequently said.

Depardieu said in his letter that he would surrender his passport and French social security card. In October, the mayor of a small Belgian border town announced that Depardieu had bought a house and set up legal residence there, a move that was slammed by the newly-elected Socialist government.

Though the two-year tax was struck down by France's highest court Dec. 29, the government has promised to resubmit the law in a slightly different form soon. On Wednesday it estimated that the court decision to overturn the tax would cost it €210 million in 2013.

Depardieu has made more than 150 films, among them the 1991 comedy "Green Card" about a man who enters into a marriage of convenience in order to get U.S. residency. Most famously, Depardieu was nominated for an Academy Award for his role as Cyrano de Bergerac in the 1990 film by the same name.

The Kremlin statement gave no information on why Putin made the citizenship grant, but the Russian president did express sympathy with the actor in December, days after Depardieu reportedly said he was considering Russian citizenship.

"As we say, artists are easily offended and therefore I understand the feelings of Mr. Depardieu," Putin said.

Although France and Russia disagree sharply about how to resolve the civil war in Syria, the two countries have strong commercial relations. In 2011, Russia signed a contract worth more than €1 billion ($1.33 billion) Friday to buy two French warships — the largest military deal between a NATO country and Moscow.

Depardieu is well known in Russia, where he appears in an ad for Sovietsky Bank's credit card and is prominently featured on the bank's home page.

Depardieu is not the only high-profile Frenchman to object to the super-tax. Bernard Arnault — chief of the luxury goods and fashion giant LVMH and worth an estimated $41 billion — has also said he would leave for Belgium.

France's Civil Code says one must have another nationality in order to give up French citizenship because it is forbidden to be stateless. Thursday's decision by the Kremlin appears to fulfill that requirement.

____

Hinnant contributed from Paris.

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Microsoft acquires start-up id8: source

SAN FRANCISCO (Reuters) – Microsoft Corp bought start-up id8 Group R2 Studios Inc as it looks to expand further in technology focused on the home and entertainment, a person familiar with the situation said on Wednesday.

id8 Group R2 Studios was started in 2011 by Silicon Valley entrepreneur and investor Blake Krikorian. It recently launched a Google Android application to allow users to control home heating and lighting systems from smartphones.

Krikorian’s Sling Media – which was sold to EchoStar Communications in 2007 – made the “Slingbox” for watching TV on computers.

Krikorian will join Microsoft with a small team, according to the Wall Street Journal, which reported the acquisition earlier on Wednesday. Microsoft also purchased some patents owned by the start-up related to controlling electronic devices, the newspaper added.

Krikorian and a Microsoft spokesman declined to comment.

Krikorian resigned from Amazon.com Inc’s board in late December after about a year and a half as a director at the company, the Internet’s largest retailer.

(Reporting By Alistair Barr; Editing by Steve Orlofsky)

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Hillary Clinton Recuperating at Home

By Stephen M. Silverman

01/03/2013 at 06:30 AM EST

The state of the Secretary of State has improved.

Hillary Rodham Clinton was discharged from New York Presbyterian/Columbia Hospital in Manhattan on Wednesday after checking in on Sunday for treatment of a blood clot in a vein in her head.

News photos showed the secretary, 65, leaving the facility with her husband, former President Bill Clinton, and daughter Chelsea. It is reported that she is now resting at the Clinton home in Chappaqua, N.Y.

"Her medical team advised her that she is making good progress on all fronts, and they are confident she will make a full recovery," Philippe Reines, a senior adviser to the secretary, said in a statement.

On Wednesday, Chelsea Clinton Tweeted, "Thank you to the doctors, nurses & staff at NewYork Presbyterian Hospital Columbia University Medical Center for taking great care of my Mom."

The New York Times quotes Dr. David J. Langer, a brain surgeon and associate professor at Hofstra North Shore-LIJ School of Medicine – and who is not involved in Clinton's treatment – as saying she will require close monitoring in the coming months to ensure she is on the proper doses of blood thinners and that the clot is not growing.

The blood clot was found in the space between her brain and skull behind the right ear during an exam related to a concussion Clinton sustained during a fall earlier last month in her Washington, D.C., home.

The series of health setbacks prevented Clinton from appearing at a Congress probe about the State Department's handling of the fatal attack on an American mission in Libya or attending President Obama's announcement that Senator John Kerry is his pick to serve as her successor when she soon steps down from her cabinet post.

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Flu? Malaria? Disease forecasters look to the sky

NEW YORK (AP) — Only a 10 percent chance of showers today, but a 70 percent chance of flu next month.

That's the kind of forecasting health scientists are trying to move toward, as they increasingly include weather data in their attempts to predict disease outbreaks.

In one recent study, two scientists reported they could predict — more than seven weeks in advance — when flu season was going to peak in New York City. Theirs was just the latest in a growing wave of computer models that factor in rainfall, temperature or other weather conditions to forecast disease.

Health officials are excited by this kind of work and the idea that it could be used to fine-tune vaccination campaigns or other disease prevention efforts.

At the same time, experts note that outbreaks are influenced as much, or more, by human behavior and other factors as by the weather. Some argue weather-based outbreak predictions still have a long way to go. And when government health officials warned in early December that flu season seemed to be off to an early start, they said there was no evidence it was driven by the weather.

This disease-forecasting concept is not new: Scientists have been working on mathematical models to predict outbreaks for decades and have long factored in the weather. They have known, for example, that temperature and rainfall affect the breeding of mosquitoes that carry malaria, West Nile virus and other dangerous diseases.

Recent improvements in weather-tracking have helped, including satellite technology and more sophisticated computer data processing.

As a result, "in the last five years or so, there's been quite an improvement and acceleration" in weather-focused disease modeling, said Ira Longini, a University of Florida biostatistician who's worked on outbreak prediction projects.

Some models have been labeled successes.

In the United States, researchers at Johns Hopkins University and the University of New Mexico tried to predict outbreaks of hantavirus in the late 1990s. They used rain and snow data and other information to study patterns of plant growth that attract rodents. People catch the disease from the droppings of infected rodents.

"We predicted what would happen later that year," said Gregory Glass, a Johns Hopkins researcher who worked on the project.

More recently, in east Africa, satellites have been used to predict rainfall by measuring sea-surface temperatures and cloud density. That's been used to generate "risk maps" for Rift Valley fever — a virus that spreads from animals to people and in severe cases can cause blindness or death. Researchers have said the system in some cases has given two to six weeks advance warning.

Last year, other researchers using satellite data in east Africa said they found that a small change in average temperature was a warning sign cholera cases would double within four months.

"We are getting very close to developing a viable forecasting system" against cholera that can help health officials in African countries ramp up emergency vaccinations and other efforts, said a statement by one of the authors, Rita Reyburn of the International Vaccine Institute in Seoul, South Korea.

Some diseases are hard to forecast, such as West Nile virus. Last year, the U.S. suffered one of its worst years since the virus arrived in 1999. There were more than 2,600 serious illnesses and nearly 240 deaths.

Officials said the mild winter, early spring and very hot summer helped spur mosquito breeding and the spread of the virus. But the danger wasn't spread uniformly. In Texas, the Dallas area was particularly hard-hit, while other places, including some with similar weather patterns and the same type of mosquitoes, were not as affected.

"Why Dallas, and not areas with similar ecological conditions? We don't really know," said Roger Nasci of the Centers for Disease Control and Prevention. He is chief of the CDC branch that tracks insect-borne viruses.

Some think flu lends itself to outbreak forecasting — there's already a predictability to the annual winter flu season. But that's been tricky, too.

Seasonal flu reports come from doctors' offices, but those show the disease when it's already spreading. Some researchers have studied tweets on Twitter and searches on Google, but their work has offered a jump of only a week or two on traditional methods.

In the study of New York City flu cases published last month in the Proceedings of the National Academy of Sciences, the authors said they could forecast, by up to seven weeks, the peak of flu season.

They designed a model based on weather and flu data from past years, 2003-09. In part, their design was based on earlier studies that found flu virus spreads better when the air is dry and turns colder. They made calculations based on humidity readings and on Google Flu Trends, which tracks how many people are searching each day for information on flu-related topics (often because they're beginning to feel ill).

Using that model, they hope to try real-time predictions as early as next year, said Jeffrey Shaman of Columbia University, who led the work.

"It's certainly exciting," said Lyn Finelli, the CDC's flu surveillance chief. She said the CDC supports Shaman's work, but agency officials are eager to see follow-up studies showing the model can predict flu trends in places different from New York, like Miami.

Despite the optimism by some, Dr. Edward Ryan, a Harvard University professor of immunology and infectious diseases, is cautious about weather-based prediction models. "I'm not sure any of them are ready for prime time," he said.

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