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The government runs the filter, but ISP participation remains voluntary. Currently, Maxnet and Watchdog are confirmed to be using the filter, though other ISPs are said to be interested. Maxnet CEO John Hanna explained his company’s position to Computerworld New Zealand: “Filtering out child pornography is also very much in line with our company values—our customers would be disappointed to hear if we weren’t participating. So participation for us has always been a no-brainer.”

After 14 years with the firm, the New York-based Edinburgh University graduate was convinced the bank was heading for disaster. He wrote a memo to senior management detailing his concerns.

Lee’s warning contained several allegations, all of which proved horribly prescient. Lehman had “tens of billion of dollars of unsubstantiated balances, which may or may not be ‘bad’ or non-performing assets or real liabilities,” said Lee.

He was worried that the bank had failed to value tens of billion of dollars of assets in a “fully realistic or reasonable way” and did not have staff and systems in place to cope with its rapid growth.

Lehman’s auditors, Ernst & Young, were worried. “We are also dealing with a whistle-blower letter, that is on its face pretty ugly and will take us a significant amount of time to get through,” William Schlich, a former lead partner on E&Y’s Lehman team, wrote in a June 5, 2008, email to a colleague.

Time was not on E&Y’s or Lehman’s side. By September, the 158-year-old bank was bust, thousands of people had lost their jobs and the world’s economy had been pitched into a black hole from which it is still struggling to emerge.

Lee’s warning forms a key part of a damning 2,200-page report into the bank’s collapse released last week by Anton Valukas, the court-appointed bankruptcy examiner. He found Lehman used accounting jiggery-pokery to inflate the value of toxic real-estate assets it held, and chose to “disregard or overrule the firm’s risk controls on a regular basis”.

His most juicy finding was Repo 105, which the report alleges was used to manipulate the balance sheet to give the short-term appearance of reducing assets and risk. Not since Chewco and Raptor — Enron’s “off balance sheet vehicles” — has an accounting ruse been so costly.

Valukas won’t judge. His brief from the court was to determine only what happened. But he does highlight “colourable claims” — ones that could potentially lead to legal action. And the report looks set to pour petrol on a raging fire.

Questions have emerged over the way banks including JP Morgan and HSBC put the squeeze on Lehman in its dying days, although both argue they were simply acting to protect their own interests.

Lehman’s collapse is already subject to numerous legal actions and government inquiries. E&Y is in the line of fire. Linklaters, the London law firm, has been forced to defend the advice it gave Lehman.

Then there are Lehman’s senior staff.

Dick Fuld, Lehman’s former chief, and finance chiefs Christopher O’Meara, Erin Callan and Ian Lowitt “certified misleading financial statements,” according to Valukas.

The US Justice Department is all over Lehman and this report will provide plenty of new avenues for investigation.

Reached at his Brooklyn home last week Lee told reporters he had not yet read the report and wouldn’t comment until the Lehman litigation was settled.

“I have a lot to say, but unfortunately it is going to have to wait,” he said.

REPO 105’s roots can be traced back to a series of meetings held nine years ago in Lehman’s offices in New York and London. A new accounting rule had just come in that, under specific circumstances, seemed to allow a bank to move securities off its balance sheet and disguise the size of the risks it took. Every bank on Wall Street was looking at this, or so Lehman’s top executives believed.

The repo markets act as the oil on the wheels of the international finance machine. They work like a pawnbroker’s shop: a bank that wants access to cash agrees to sell a portfolio of government bonds, or other high-grade securities, to one of its rivals for a fixed period of perhaps just a few days.

In a typical deal in the booming markets of three or four years ago, Bank A would post securities worth say £102 and receive £100 of cash from Bank B. When the contract expired, Bank A would be obliged to buy back the securities, and pay interest. The name repo comes from the “repurchase” of the securities that takes place at the end of the deal.

It is one of the most common means by which banks lend money to one another, allowing billions of pounds to flow around the world every day between companies and individuals.

Pinning down the overall size of the repo market is hard, although analyst reports suggest it could account for easily more than £10 trillion of transactions every year in America and Europe alone.

A typical repo transaction would show up on both sides of the balance sheet. The cash received from the transaction would show up as an asset, while the obligation to buy back the assets would show up as a liability.

With Repo 105, however, Lehman found a loophole that, in effect, allowed it to show the asset without admitting to the liability. The trick hinged on the amount of collateral it posted.

If Lehman put up securities worth £105 to get £100 of cash, the new rules, under certain circumstances, allowed it to treat the transaction as a sale rather than a loan deal. The fact it was obliged to buy back the assets a few days later was ignored.

American law firms were uncomfortable with the structure. In London, however, Linklaters reckoned it was fine. It provided an opinion letter to Lehman’s London office that allowed the transactions to be conducted on British soil, under English law.

Gerstein posts a televised interview of Obama and John Walsh of America’s Most Wanted. The nation’s chief executive extols the virtues of mandatory DNA testing of Americans upon arrest, even absent charges or a conviction. Obama said, “It’s the right thing to do” to “tighten the grip around folks” who commit crime.

When it comes to civil liberties, the Obama administration has come under fire for often mirroring his predecessor’s practices surrounding state secrets, the Patriot Act and domestic spying. There’s also Gitmo, Jay Bybee and John Yoo.

Now there’s DNA sampling. Obama told Walsh he supported the federal government, as well as the 18 states that have varying laws requiring compulsory DNA sampling of individuals upon an arrest for crimes ranging from misdemeanors to felonies. The data is lodged in state and federal databases, and has fostered as many as 200 arrests nationwide, Walsh said.

The American Civil Liberties Union claims DNA sampling is different from mandatory, upon-arrest fingerprinting that has been standard practice in the United States for decades.

A fingerprint, the group says, reveals nothing more than a person’s identity. But much can be learned from a DNA sample, which codes a person’s family ties, some health risks, and, according to some, can predict a propensity for violence.

The ACLU is suing California to block its voter-approved measure requiring saliva sampling of people picked up on felony charges. Authorities in the Golden State are allowed to conduct so-called “familial searching” — when a genetic sample does not directly match another, authorities start investigating people with closely matched DNA in hopes of finding leads to the perpetrator.

Do you wonder whether DNA sampling is legal?

Law enforcement officials told The Associated Press that both guns were once seized in criminal cases in Memphis. The officials described how the weapons made their separate ways from an evidence vault to gun dealers and to the shooters.

The use of guns that once were in police custody and were later involved in attacks on police officers highlights a little-known divide in gun policy in the United States: Many cities and states destroy guns gathered in criminal probes, but others sell or trade the weapons in order to get other guns or buy equipment such as bulletproof vests.

In fact, on the day of the Pentagon shooting, March 4, the Tennessee governor signed legislation revising state law on confiscated guns. Before, law enforcement agencies in the state had the option of destroying a gun. Under the new version, agencies can only destroy a gun if it’s inoperable or unsafe.

Kentucky has a similar law, but it’s not clear how many other states have laws specifically designed to promote the police sale or trade of confiscated weapons.

A nationwide review by The Associated Press in December found that over the previous two years, 24 states — mostly in the South and West, where gun-rights advocates are particularly strong — have passed 47 new laws loosening gun restrictions. Gun rights groups are making a greater effort to pass favorable legislation in state capitals.

John Timoney, who led the Philadelphia and Miami police departments and served as New York’s No. 2 police official, said he doesn’t believe police departments should be putting more guns into the market.

“I just think it’s unseemly for police departments to be selling guns that later turn up,” he said, recalling that he had once been offered the chance to sell guns to raise money for the police budget.

“Obviously, we always need the money but I just said, `No, we will take the loss and get rid of the guns’,” said the former police chief, who now works for Andrews International, a security consulting firm.

A spokeswoman for the Memphis police said gun swaps are a way to save taxpayer money.

One of the weapons in the Pentagon attack was seized by Memphis police in 2005 and later traded to a gun dealer; the gun used in the Jan. 4 courthouse shooting in Las Vegas as sold by a judge’s order and the proceeds given to the Memphis-area sheriff’s office. Neither weapon was sold by the Memphis law enforcement agencies directly to the men who later used them to shoot officers.

In both cases, the weapons first went to licensed gun dealers, but later came into the hands of men who were legally barred from possessing them: one a convicted felon; the other mentally ill.

The history of the two guns in the recent attacks was described by officials from multiple law enforcement agencies on condition of anonymity because they were not authorized to discuss details of the investigations. The Bureau of Alcohol, Tobacco, Firearms and Explosives provided reports on the gun traces to the investigating agencies, but is barred from publicly disclosing the results.

At the Pentagon, gunman John Patrick Bedell carried two 9 mm handguns, one of them a Ruger.

Law enforcement officials say Bedell, a man with a history of severe psychiatric problems, had been sent a letter by California authorities Jan. 10 telling him he was prohibited from buying a gun because of his mental history.

Nineteen days later, the officials say, Bedell bought the Ruger at a gun show in Las Vegas. Such a sale by a private individual does not require the kind of background check that would have stopped Bedell’s purchase.

Mike Campbell, an ATF spokesman in Washington, would not confirm the details. He would only say Bedell “appears to have purchased the gun from a private seller.”

The gun already had changed hands among gun dealers in Georgia and Pennsylvania by the time Bedell bought it. Officer Karen Rudolph, a Memphis police spokeswoman, said her department traded the weapon to a dealer in 2008 for a different gun that was better for police work.

The Ruger had sat in Memphis police storage for years at that point, after being confiscated from a convicted felon at a 2005 traffic stop.

The trail of the gun used at the Las Vegas federal courthouse is older and harder to pin down. Johnny Lee Wicks, an elderly man enraged over cuts to his Social Security benefits, opened fire with the shotgun at the security entrance to the courthouse. He killed one officer, Stanley Cooper, and wounded another.

Wicks, like Bedell at the Pentagon, was killed by officers’ return fire.

Before that courthouse attack, what records exist suggest officers in Memphis confiscated that gun in 1998.

A judge in Memphis ordered the sale of the shotgun as part of a criminal case, and the proceeds of that sale went to the Shelby County Sheriff’s Office, confirmed sheriff’s spokesman Steve Shular.

He said the gun dealer who bought it later sold the weapon to a dealer in Nevada. It is not clear how Wicks got the shotgun.

Rich Wyatt, a former police chief in Alma, Colo., who now operates a gun store — and who has bought weapons from police agencies — defended the practice of police selling guns.

It’s time to start cashing them in.

For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn’t be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.

Social Security’s shortfall will not affect current benefits. As long as the IOUs last, benefits will keep flowing. But experts say it is a warning sign that the program’s finances are deteriorating. Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there’s concern that the looming crisis will lead to reduced benefits.

Arriving at Harv’s Metro Car Wash in midtown Wednesday afternoon were two dark-suited IRS agents demanding payment of delinquent taxes. “They were deadly serious, very aggressive, very condescending,” says Harv’s owner, Aaron Zeff.

The really odd part of this: The letter that was hand-delivered to Zeff’s on-site manager showed the amount of money owed to the feds was … 4 cents.

Inexplicably, penalties and taxes accruing on the debt – stemming from the 2006 tax year – were listed as $202.31, leaving Harv’s with an obligation of $202.35.

Zeff, who also owns local parking lots and is the president of the Midtown Business Association, finds the situation a bit comical.

“It’s hilarious,” he says, “that two people hopped in a car and came down here for just 4 cents. I think (the IRS) may have a problem with priorities.”

Now he’s trying to figure out how penalties and interest could climb so high on such a small debt. He says he’s never been told he owes any taxes or that he’s ever incurred any late-payment penalties in the four years he’s owned Harv’s.

In fact, he provided us with an Oct. 22, 2009, letter from the IRS that states Harv’s “has filed all required returns and addressed any balances due.”

IRS spokesman Jesse Weller isn’t commenting “due to privacy and disclosure laws.”

Google announced in January that it would no longer comply with China’s internet censorship laws.

It warned that it may shut down google.cn because of censorship and a hacking attack on the portal.

Minister of Industry and Information Technology Li Yizhong was speaking at China’s annual legislation session.

“We need to preserve our nation’s interest, our people’s interest, we cannot be relaxed with any information that will cause harm to the stability of our society, to our system, and to the health of our under-age young people,” he said.

“So, of course, what needs to be shut down will be shut down, what needs to be blocked will be blocked.”

‘Up to them’

Google began operations in China in 2006 to widespread criticism. While many argued Google was complicit in the censorship imposed by Chinese government, Google insisted it was nevertheless serving the public interest even though it was furnishing censored results.

Relations between China and Google cooled in January after what Google described as a sophisticated cyber attack in which the webmail accounts of Chinese human rights activists were targeted.

Since then, the firm has been in talks with Chinese officials about how to provide an unfiltered service but still remain within the law. Google chief executive Eric Schmidt said this week that he hoped the results of those consultations would be revealed soon.

Mr Li said that whether the firm quits China or not is “up to them”, saying the internet would flourish in China regardless.

“I hope that Google will abide and respect the Chinese government’s laws and regulations,” he said.

“But, if you betray Chinese laws and regulations… it means that you are unfriendly, irresponsible, and you will have to pay the consequences.”

The priest was later reassigned by another church official and committed more abuse, the Archdiocese of Munich and Freising said in a statement on its Web site. Benedict, at the time Archbishop Joseph Ratzinger, “was involved” in a 1980 decision to move the priest, identified only as “H.,” from a church in Essen, Germany, to a rectory in the Munich region for treatment, the diocese said.

A former vicar-general in the church administration, Gerhard Gruber, subsequently allowed the accused priest to continue pastoral duties, during which he committed abuse and was convicted by a court in 1986. Gruber said in the statement that the decision to re-post “H.” was his alone.

“The repeated employment of ‘H.’ in pastoral duties was a serious mistake,” Gruber said. “I take full responsibility for this and I deeply regret that this decision led to offenses against youths — I apologize to all those who were harmed by this.”