‘Angry’ Obama says acting IRS chief fired over conservative targeting

President Barack Obama will make previously unannounced remarks on the IRS scandal at 6 p.m. Wednesday, his press office said. The president's statement from the East Room of the White House will come a little more than an hour after a meeting with senior Treasury Department officials to discuss the controversy, which centers on the IRS' acknowledgement that it improperly targeted conservative groups for scrutiny.

In a written statement late Tuesday, Obama called the IRS' behavior "intolerable and inexcusable," and said that he had directed Treasury Secretary Jack Lew "to hold those responsible for these failures accountable."

On Wednesday, Attorney General Eric Holder promised angry lawmakers that the Justice Department will undertake a national investigation into the IRS wrongdoing.

"We will take a dispassionate view of this," said Holder, who faced tough questioning from the House Judiciary Committee. "This will not be about parties ... anyone who has broken the law will be held accountable."

Holder said he had launched an investigation last Friday into why the IRS subjected conservative groups to more review when they applied for tax-exempt status. The IRS inspector general's report said that a group of low-level staffers in an Ohio office were responsible, and a top IRS official has apologized on their behalf.

But Holder promised that the investigation will look well beyond Ohio, and suggested that civil rights laws could have been violated.

Rep. Bobby Scott, D-Va., asked Holder at the hearing whether an "apology" from the IRS protected them from criminal prosecution. Holder answered, "No."

The Obama Administration is under fire over the IRS, the president's handling of the Sept. 11, 2012 terrorist attack in Benghazi, Libya, and the Department of Justice's secret collection of telephone records of Associated Press reporters and editors.

Republicans have been hammering Obama on all three matters. While Democrats have largely defended him—and former Secretary of State Hillary Clinton—on Benghazi, they have joined their GOP colleagues in denouncing the IRS and in expressing deep concerns about the AP phone records.

On Monday, Obama dismissed Republican charges of a cover-up in the Benghazi situation as a "sideshow" lacking any merit. He has yet to comment directly on the AP issue.

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Next BoE chief Carney says clear framework key to policy success

OTTAWA (Reuters) - The next Bank of England governor Mark Carney said on Wednesday a key lesson he will bring from Canada to his new job is the need for clear objectives and communication about what exactly the central bank aims to achieve with its policies.

Carney, who steps down as Bank of Canada chief in June to take over at the Bank in July, said that during the 2008-09 recession in Canada, having a well-understood inflation target helped policy makers explain directly to Canadians how they planned to stimulate the economy and boosted confidence.

"I think the core lesson that was reinforced and that I have an even greater appreciation for now than I had when I started as governor, is the importance of having clearly articulated policy frameworks," Carney said when asked what lessons he would bring to the Bank.

"That's not a very snappy thing to say but it's absolutely essential," he said in his testimony to a Senate committee.

Expectations are high for Carney as he gears up for a daunting task: turn around Britain's ailing economy, fix its banks and overhaul the Bank.

Under his watch, Canada's recession was milder than that of the United States or the United Kingdom and it has since recovered. At the height of the crisis, the central bank dropped its key interest rate to an ultra-low level of 0.25 percent and, in its most innovative move, pledged to keep the rate at that level for more than a year unless inflation picked up.

Carney said Bank of Canada officials "reached over the heads of commentators and spoke directly to Canadians" about the low cost of borrowing, persuading them to spend and boost growth.

But the bank never had to resort to unconventional policy such as buying bonds, as done in the U.K., the U.S. and Japan.

Despite the differences with the U.K., Carney stressed that unconventional policy should also be guided by clearly communicated principles and frameworks that the public can understand.

"I prefer not to comment too much on the U.K. but I think the benefit of the institution to which I'm going, one of the benefits, is a tremendous amount of thought has been given ... by the institution itself but ultimately decided by the government and parliamentarians, to the framework that the Bank of England has," he said.

The Bank has much broader powers than the Bank of Canada, encompassing regulation of banks and financial stability as well as monetary policy. Each area of work should have its own separate framework, Carney said.

"And they also have to think through, and they have thought through, how the three of those interact within one institution," he said.

(Reporting by Louise Egan; Editing by Carol Bishopric)

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Ex-HBOS chief Crosby asks to be stripped of knighthood

By Steve Slater and Matt Scuffham

LONDON (Reuters) - James Crosby, former boss of failed British bank HBOS, offered on Tuesday to give up his knighthood and nearly a third of his pension after being denounced by lawmakers for the "colossal failure" that led to his bank's collapse.

Crosby, whose bank had to be bailed out by taxpayers in 2008, effectively volunteered for the same punishment as that visited on Fred Goodwin, former head of Royal Bank of Scotland, the other large Scottish bank bailed out after the 2008 financial crisis. Goodwin's knighthood was stripped last year and he gave up part of his pension in 2009.

Crosby becomes the first person to voluntarily give up a knighthood for almost a century. He said 30 percent of his 580,000 pounds a year pension would either be returned to shareholders or given to charity.

"In view of what has happened subsequently to HBOS, I believe that it is right that I should now ask the appropriate authorities to take the necessary steps for its removal," he said of his knighthood in a statement on Tuesday.

The government was clearly pleased with the decision. A Treasury spokesman said: "This must be a matter for an individual's conscience, but the Government believes it is right that this decision has been reached."

Crosby, 57, was awarded his knighthood shortly after stepping down as HBOS chief executive in 2006.

The bank did not collapse until two years after he left it, but a report on Friday by the Parliamentary Commission on Banking Standards (PCBS) put the blame squarely on him and two other former bosses for the decisions that wrecked it.

The report said Crosby had so badly run the bank that it would have failed even without the 2008 financial crisis.

John Mann, a Labour lawmaker who has been a critic of Crosby during hearings into the banking crisis, welcomed Crosby's decision to accept blame and suggested it set an example to other failed bankers.

"At last we have a banker who is prepared to say he got it wrong and wishes to make amends," Mann said.

A knighthood is one of the highest honours an individual in Britain can achieve. A committee recommends the honour to the Prime Minister and then to the Queen.

The last person to give up a knighthood voluntarily was Nobel Prize-winning Bengali writer Rabindranath Tagore, who renounced his in 1919 in protest against the Amritsar massacre when British troops killed hundreds of civilians. Others to have been stripped of the honours include Zimbabwe's Robert Mugabe, Romania's Nicolae Ceausescu and former spy Anthony Blunt.

"SET THE COURSE FOR DISASTER"

The PCBS, tasked with finding ways to reform Britain's banks, said Crosby had been the "architect of the strategy that set the course for disaster" at HBOS.

Crosby set the strategy that saw HBOS lose billions of pounds from reckless lending to companies and a disastrous expansion into Ireland and Australia. After its bailout by the state, the bank was acquired by rival Lloyds Banking Group.

Crosby said the report was "very chastening reading" and he was "deeply sorry for what happened at HBOS and the ensuing consequences for former colleagues, shareholders, taxpayers and society in general".

Crosby's pre-emptive action means he effectively volunteers to share the fate of Goodwin, whose knighthood and lavish pension became a focus of public anger and attracted venomous denunciations from politicians after the financial meltdown.

Crosby said he would discuss with the pension scheme's trustees how the reduction in his pension would be implemented and if the amount waived should go to support good causes or benefit shareholders.

Under his proposal, he would still receive 406,000 pounds a year, to add to almost 8 million pounds he was paid during his tenure as HBOS's chief executive.

He said his pension had been built up over his 30 year career, including 12 years at Halifax and HBOS, and was "entirely contractual in nature".

Crosby resigned as an adviser to private equity firm Bridgepoint on Friday. He remains a senior independent director at Compass, the world's biggest catering company, and is chairman of Moneybarn, a small West Sussex company that lends to people with a bad credit history.

Compass and Moneybarn declined to comment.

After leaving HBOS, Crosby advised former Prime Minister Gordon Brown and became deputy chairman of the Financial Services Authority (FSA), stepping down from that role in February 2009 after criticism of his role at HBOS.

(Additional reporting by Kate Holton and David Milliken; Editing by Peter Graff)

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Syria accuses UN chief of expanding weapons probe

DAMASCUS, Syria (AP) — Syria has rejected what it says is an attempt by the U.N. secretary-general to broaden the scope of a government request for an international investigation of an alleged chemical weapons attack in the country's north.

Syria asked the U.N. last month to investigate the alleged use of chemical weapons by rebels in March on the village of Khan al-Assal. The rebels blame regime forces.

On Monday, U.N. chief Ban Ki-moon said all reports about the use of chemical weapons in Syria — not just those in which the government accuses rebels — should be examined.

The Foreign Ministry responded that granting U.N. investigators access to the whole country would constitute "a violation of Syrian sovereignty."

It said Syria is still is ready to grant inspectors access to Khan al-Assal.

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Spy who foiled jet bomb plot to be MI5 chief

By Peter Griffiths

LONDON (Reuters) - A British spy who thwarted an al Qaeda plot to blow up planes with explosives hidden in drinks bottles and led the response to the 2005 London bombings will be the new head of Britain's domestic intelligence agency, the government said on Thursday.

Andrew Parker has three decades' experience at the agency, known as MI5, countering Islamist militants, Irish republicans and organised criminals, and was deputy head since 2007.

The 50-year-old, a keen birdwatcher and wildlife photographer, will be in charge of 3,800 staff investigating threats ranging from bomb plots and the spread of weapons of mass destruction to espionage and cyber attacks.

One of his first tasks will be to protect U.S. President Barack Obama, British Prime Minister David Cameron and other world leaders at the Group of Eight summit in Northern Ireland in June.

The last time Britain hosted the annual G8 meeting in 2005, four suicide bombers killed 52 commuters in London in co-ordinated attacks. Parker was in charge of the agency's reaction to the bombings and oversaw a significant expansion of its role.

Parker, who led the MI5 team that disrupted a 2006 conspiracy to attack multiple passenger jets with bombs hidden in drinks bottles, said it was a "great honour" to be made head of the agency, also known as the Security Service.

"I look forward to leading the Service through its next chapter," he said in a statement.

The bespectacled father-of-two will replace the current head, Jonathan Evans, when he steps down in April after six years in the job during which Britain suffered no significant attacks.

SECRECY

In contrast to the secrecy that defined its work for decades, MI5 published Parker's name and picture on its website. The government did not acknowledge the agency's existence until 1989 and its head remained anonymous until 20 years ago.

Based in an imposing white stone building near parliament on the River Thames, MI5's role is to fight "espionage, terrorism and sabotage, from the activities of agents of foreign powers, and from actions intended to overthrow or undermine parliamentary democracy".

Parker takes over at a time of pressure on public spending, a persistent threat from al Qaeda and worries about a small group of Irish nationalists who refuse to accept a 1998 peace deal in Northern Ireland.

Outgoing MI5 chief Evans warned last year that al Qaeda militants were using the countries which toppled their leaders in the Arab Spring protests as bases to train radical Western youths for potential attacks on Britain.

Prime Minister Cameron said in January that Britain and other western countries face a "large and existential threat" from Islamist militants that could last for decades.

(Editing by Pravin Char)

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Central African Republic rebel chief to name power-sharing government

By Ange Aboa and Paul-Marin Ngoupana

BANGUI (Reuters) - The leader of rebels in Central African Republic pledged to name a power-sharing government in a bid to defuse international criticism of a coup that killed 13 South African soldiers and has plunged the mineral-rich nation into chaos.

Regional peacekeepers said that leader of the Seleka rebel coalition, self-proclaimed president Michel Djotodia, appealed for their help in restoring order after his own men joined in a second day of looting on Monday in the riverside capital Bangui.

The rebels' ousting of President Francois Bozize on Sunday was condemned by the United Nations and African Union. But in a sign of pragmatism, the United States, France and regional powerbroker Chad called on the insurgents to respect a January peace deal creating a unity government.

Some 5,000 Seleka fighters swept into the capital on Sunday after a lightning offensive in which they fought their way from the far north to the presidential palace in four days after the collapse of the power-sharing deal, the Libreville Accord.

Neighboring Cameroon confirmed on Monday that Bozize had arrived there but said it was not giving him permanent refuge.

The removal of Bozize, who had himself seized power in a coup backed by Chad in 2003, was just the latest of many rebellions since the poor, landlocked country won independence from France in 1960.

"We will lead the people of Central African Republic during a three-year transition period, in accordance with the Libreville Accord," Djotodia said in a recorded statement issued to reporters. It was not broadcast due to power cuts.

January's peace deal signed at Libreville, the capital of Gabon, was drafted by regional mediators after the rebels has besieged Bangui in December. The accord had created a government drawn from Bozize loyalists, rebels and the civilian opposition.

Djotodia said that civilian opposition representative Nicolas Tiangaye would remain in place as prime minister.

The U.N. Security Council on Monday called for all parties to refrain from violence against civilians, the restoration of the rule of law, constitutional order and the implementation of the Libreville deal. The council said it would monitor the situation and was ready to consider further steps if necessary.

In Bangui, 600,000 residents of the capital remained without power and running water for a third day. Despite a curfew, there was widespread pillaging of offices, public buildings and businesses by rebels and civilians.

"Public order is the biggest problem right now," said General Jean Felix Akaga, commander of the regional African peacekeeping force. "Seleka's leaders are struggling to control their men. The president has asked us to help restore calm."

He said rebels would be confined to barracks from Monday.

International aid group Doctors Without Borders said its offices in Bangui and elsewhere in the country had been looted, and urged all sides to ensure people had access to health care.

'SAD MOMENT' FOR SOUTH AFRICA

With France's military contingent refusing to intervene, two heavily armed columns of insurgents in pick-up trucks stormed into Bangui the previous day, brushing aside a South African force of 400 troops which attempted to block their path.

South African President Jacob Zuma said at least 13 soldiers were killed and 27 others wounded in the fighting, the worst military setback for Pretoria since the end of apartheid in 1994 and an embarrassing snub to its efforts to project its power in the resource-rich heart of Africa.

"It is a sad moment for our country," Zuma said, adding that another soldier was still missing.

"The actions of these bandits will not deter us from our responsibility of working for peace and stability in Africa."

Zuma said South Africa had yet to decided whether to pull out its force, which he said had inflicted heavy casualties on the rebels during a nine-hour attack on the South African base.

"This is complete disaster for South Africa," said Thierry Vircoulon, Central African specialist at the International Crisis Group. "They did not at all understand they were backing the wrong horse. They did not consult within the region."

French troops patrolling the international airport in the capital killed two Indian citizens when three vehicles tried to enter the facility, France's defense ministry said.

Seleka, a loose coalition of five rebel groups whose name means "alliance" in the Songo language, was formed last year after Bozize had failed to implement power-sharing in the wake of disputed 2011 elections boycotted by the opposition.

It resumed hostilities on Thursday after military leaders of the group detained its five members of Bozize's government and accused the president of violating January's peace deal by failing to integrate 2,000 of its fighters into the army.

"The movements that make up Seleka have a long history of divisions," Vircoulon said. "The cohesion of Seleka will be tested now they are in full control."

Despite rich deposits of gold, diamonds and uranium, Central African Republic remains one of the world's least developed and most unstable nations.

Bozize rose in the military during the 1966-1979 rule of dictator Jean-Bedel Bokassa, a self-styled emperor found guilty of the murder of schoolchildren and other crimes.

In recent years, Bozize's government had hosted U.S. Special Forces helping regional armies hunt down the Lord's Resistance Army rebels, led by a Ugandan warlord, who have killed thousands of civilians during decades of conflict.

FRENCH NATIONALS SAFE

Paris, which already had 250 soldiers in Central African Republic, has sent another 300 troops to ensure the security of its citizens and diplomatic missions.

Foreign Minister Laurent Fabius said there was no need to evacuate the 1,200 French nationals, most of whom are in the capital. "Things are under control from our point of view regarding French nationals," Fabius told Europe 1 radio.

French President Francois Hollande spoke to U.N. Secretary General Ban Ki-moon and Chadian President Idriss Deby to suggest that any solution to the crisis should be based on the Libreville agreement, Fabius added.

"For now, there is no legitimate authority there," he said, adding that France did not see it as its place to intervene.

France offered its condolences to India for the killing of Indian civilians and Defense Minister Jean-Yves Le Drian was due to speak with his Indian counterpart in the coming hours, the defense ministry said in a statement.

The U.S. State Department also called on Seleka to ensure the implementation of the Libreville agreement and provide full support to Tiangaye's government. Regional military power Chad said the same in a statement on Sunday.

(Additional reporting by Leigh Thomas in Paris, Richard Valdmanis in Dakar and Michelle Nichols at the United Nations; Writing by Daniel Flynn and David Lewis; Editing by Peter Graff, Anna Willard, Alastair Macdonald and Cynthia Osterman)

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'Embarrassed' ex-Pittsburgh chief to plead guilty

PITTSBURGH (AP) — Former city police Chief Nate Harper will plead guilty to charges that he conspired to steal city police funds deposited into unauthorized police credit union accounts and failed to file federal tax returns from 2008 to 2011, his attorneys said Friday.

Harper's lawyers made the announcement at a news conference on a day of fast-moving developments in the federal investigation after prosecutors announced the grand jury indictment, Harper pleaded not guilty to the charges at an arraignment, and the judge said the former chief could remain free.

U.S. Attorney David Hickton called Harper's actions "the worst kind of public corruption," and said it was "a sad day" for authorities who had worked closely with the soft-spoken, generally well-liked and seemingly humble man on issues ranging from gang violence and security for the G-20 economic summit in 2009.

"This is puzzling and baffling behavior," Hickton said.

Later, Harper begged off appearing at the news conference at the last minute because he was "embarrassed and distraught," defense attorney Robert DelGreco said. The 36-year police veteran has lost 20 pounds since Mayor Luke Ravenstahl demanded his resignation Feb. 20 after meeting with the FBI about the investigation, Harper's attorneys said.

But the former chief, who came up through the ranks of Pittsburgh's roughly 800-officer force and was chief since 2006, takes "full responsibility" for his actions, said Robert Leight, another Harper attorney.

"I think we're prepared to plead to that indictment without modification," DelGreco said.

The indictment alleges the 60-year-old Harper conspired with unnamed others to divert more than $70,000 from a city account into two unauthorized credit union accounts, then spent nearly $32,000 of that himself. It includes a single charge of conspiracy and four counts of willfully failing to file income tax returns.

Although the federal crimes carry a maximum combined penalty of nine years in prison, Harper's attorneys said guidelines dictate a likely sentence of 10 to 16 months — low enough for them to argue for probation or alternative incarceration, like house arrest.

Hickton wouldn't comment Friday on a likely sentence. He said the investigation is continuing, although he wouldn't say whether the mayor or other city personnel are targeted.

Ravenstahl denies any wrongdoing or being a target of the probe, although he's acknowledged two bodyguards, also city officers, used debit cards from the same credit union accounts. The 33-year-old mayor has decided not to run for re-election, citing the toll on his family from the scandal.

In statements Friday, Ravenstahl and interim police Chief Regina McDonald said the indictment against Harper was "sad." They said they are working to bolster confidence in the police bureau.

The investigation centers on a $3.85 hourly fee that bars, restaurants and other businesses pay the city when they hire off-duty officers to work security details. The money is collected on top of whatever hourly wage the officers are paid and, by law, must be kept in city-controlled accounts and spent only on certain types of police business.

Instead, Harper helped open the credit union accounts from which he spent $31,987 — mostly at restaurants, bars and department stores — using two Visa debit cards to make automatic teller machine withdrawals and purchases, Hickton said.

Harper's attorneys said the former chief was somewhat "naive" and may have believed at first that it was OK to open the unauthorized accounts because the money was still being spent on police-related business, including a massive Gatorade purchase to quench the thirst of officers brought in to handle the G-20 protests, for example.

At some point, however, Harper began spending the money on himself, which DelGreco said Harper understands was "unambiguously and indefensibly" wrong.

The attorneys hinted that Harper, who has three daughters and five grandchildren, exhausted his wages on his family and became tempted by the credit union funds.

"I think the lure of the unmonitored accessibility of that account proved to be an irresistible temptation," DelGreco said.

The attorneys said Harper didn't fail to file his tax returns to hide the money, but simply because of "procrastination" and "personal issues" that took precedence. Among other things, three city police officers were fatally gunned down in April 2009 — when the first of Harper's delinquent tax returns would have been due — and Harper never got back on track in handling his personal affairs, the attorneys said.

The indictment grew out of another federal investigation in which a former city employee has already pleaded guilty to taking $6,000 in bribes to help a business owned by a man Harper has described as a former friend land a $327,000 contract to install computers and radios in squad cars in 2007.

Harper continues to deny taking bribes or making money from that contract, Leight said. But as investigators poked into Harper's finances to see if he had any unexplained income from that scheme, Harper told investigators about money he stole from the police fees fund, Leight said.

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Chemical weapons use in Syria would be "outrageous crime:" U.N. chief

UNITED NATIONS (Reuters) - U.N. Secretary-General Ban Ki-moon and the director general of the independent Organization for the Prohibition of Chemical Weapons (OPCW) said on Tuesday they were deeply concerned about the alleged used of chemical weapons in Syria.

"The Secretary-General remains convinced that the use of chemical weapons by any party under any circumstances would constitute an outrageous crime," Ban's office said in a statement after he spoke by telephone with OPCW Director General Ahmet Uzumcu.

The OPCW is a Hague-based body charged with overseeing the implementation of the Chemical Weapons Convention.

(Reporting by Michelle Nichols; Editing by Sandra Maler)

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Defense chief orders strategy review in response to budget cuts

WASHINGTON (Reuters) - Defense Secretary Chuck Hagel has directed senior Pentagon officials to re-examine the military strategy approved last year to see how priorities may have to be adjusted due to budget cuts that took effect on March 1, U.S. officials said.

The two-month review will define the major strategic choices and international challenges facing the military in the coming decade and will provide the framework for the 2015 fiscal year defense budget, according to a memo from Hagel obtained by Reuters on Monday.

The review also will provide the foundation for the Pentagon's Quadrennial Defense Review, which is due in February 2014. The congressionally mandated review assesses long-term threats and challenges facing the military and rebalances U.S. strategies and forces to meet them.

A senior Pentagon official said the review ordered by Hagel was not a "fresh start toward a new strategy," but would flow directly from the strategic guidance approved by President Barack Obama last year, which calls for a shift in emphasis to the Asia-Pacific region.

"The department hopes never to have to work toward the contingencies this review might identify," the official said. If the budget cuts, under a process known as sequestration, are lifted, "those contingencies are likely to go away," the official said.

(Reporting By David Alexander; Editing by Mohammad Zargham)

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Antibiotic resistance a "catastrophic threat" - medical chief

LONDON (Reuters) - Antibiotic resistance poses a catastrophic threat to medicine and could mean patients having minor surgery risk dying from infections that can no longer be treated, Britain's top health official said on Monday.

Sally Davies, the chief medical officer for England, said global action is needed to fight antibiotic, or antimicrobial, resistance and fill a drug "discovery void" by researching and developing new medicines to treat emerging, mutating infections.

Only a handful of new antibiotics have been developed and brought to market in the past few decades, and it is a race against time to find more, as bacterial infections increasingly evolve into "superbugs" resistant to existing drugs.

"Antimicrobial resistance poses a catastrophic threat. If we don't act now, any one of us could go into hospital in 20 years for minor surgery and die because of an ordinary infection that can't be treated by antibiotics," Davies told reporters as she published a report on infectious disease.

"And routine operations like hip replacements or organ transplants could be deadly because of the risk of infection."

One of the best known superbugs, MRSA, is alone estimated to kill around 19,000 people every year in the United States - far more than HIV and AIDS - and a similar number in Europe.

And others are spreading. Cases of totally drug resistant tuberculosis have appeared in recent years and a new wave of "super superbugs" with a mutation called NDM 1, which first emerged in India, has now turned up all over the world, from Britain to New Zealand.

Last year the WHO said untreatable superbug strains of gonorrhoea were spreading across the world.

Laura Piddock, a professor of microbiology at Birmingham University and director of the campaign group Antibiotic Action, welcomed Davies' efforts to raise awareness of the problem.

"There are an increasing number of infections for which there are virtually no therapeutic options, and we desperately need new discovery, research and development," she said.

Davies called on governments and organisations across the world, including the World Health Organisation and the G8, to take the threat seriously and work to encourage more innovation and investment into the development of antibiotics.

"Over the past two decades there has been a discovery void around antibiotics, meaning diseases have evolved faster than the drugs to treat them," she said.

Davies called for more cooperation between the healthcare and pharmaceutical industries to preserve the existing arsenal of antibiotics, and more focus on developing new ones.

Increasing surveillance to keep track of drug-resistant superbugs, prescribing fewer antibiotics and making sure they are only prescribed when needed, and ensuring better hygiene to keep infections to a minimum were equally important, she said.

Nigel Brown, president of the Society for General Microbiology, agreed the issues demanded urgent action and said its members would work hard to better understand infectious diseases, reduce transmission of antibiotic resistance, and help develop new antibiotics.

"The techniques of microbiology and new developments such as synthetic biology will be crucial in achieving this," he said.

(Editing by Jason Webb)

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France says al Qaeda chief Abou Zeid "probably" killed

PARIS (Reuters) - Al Qaeda's senior field commander in the Sahara, Abdelhamid Abou Zeid, has probably been killed in Mali, the head of France's joint chiefs of staff said on Monday.

Edouard Guillaud's remarks are the first indication from the French government that Abou Zeid died in fighting in the rugged north of Mali.

Asked on Europe 1 radio whether he had been killed, Guillaud said: "It is probable but only probable. We don't have any certainty for the moment (but) it would be good news."

Chad's army, which is fighting alongside French forces in northern Mali, said last week that it killed Abou Zeid and another al Qaeda commander in the area, Mokhtar Belmokhtar.

(Reporting by Leigh Thomas; Editing by Pravin Char)

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Exclusive: Obama to name O'Connor new Secret Service chief - source

WASHINGTON (Reuters) - President Barack Obama has chosen a veteran Secret Service official who oversaw criminal investigations to head the agency, which last year became embroiled in a prostitution scandal in Colombia, a government source said.

In the next few days, Obama will appoint David O'Connor, a former assistant director of investigations who retired last year, as director of the agency that protects the president and other top officials.

The White House had no comment and the Department of Homeland Security would not confirm that he was to be appointed.

O'Connor will replace Mark Sullivan, who retired last month after almost three decades with the agency. The post of Secret Service director does not require Senate confirmation.

Sullivan was in charge of the Secret Service when it became embroiled in a scandal involving agents taking prostitutes back to their hotel rooms in Colombia ahead of a visit by Obama to Cartagena in April 2012. Sullivan was generally credited with acting aggressively in response to one of the biggest scandals to hit the agency.

O'Connor, who was with the Secret Service for more than 25 years, oversaw all criminal investigations and was in charge of agents in the field.

Previously he was in charge of dignitary protection, which included the 2008 Democratic National Convention where Obama was selected as the party's presidential candidate.

According to a blog post on MassLive.com during the Denver convention, O'Connor spoke to a group about his experiences when he was assigned to presidential candidate Al Gore, Pat Buchanan's campaign, first daughter Chelsea Clinton, and a U.S. visit by Pope Benedict, who stepped down last month.

Earlier in his Secret Service career O'Connor was special agent in charge of the Newark, N.J., office.

(Reporting By Tabassum Zakaria and Deborah Charles; Editing by Vicki Allen)

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Obama to nominate Walmart's Burwell as White House budget chief

WASHINGTON (Reuters) - President Barack Obama will nominate Walmart's philanthropic head Sylvia Mathews Burwell on Monday to become director of the White House budget office, a White House official said on Sunday.

Burwell, 47, is a veteran of Bill Clinton's White House and for the past year has been president of the Walmart Foundation at the corporation's Bentonville, Arkansas, headquarters. The charity organization in 2011 gave out nearly $1 billion in corporate contributions to projects around the world such as fighting hunger and empowering women.

Burwell, who is originally from West Virginia, will replace Jeffrey Zients, who has been serving as acting director at the White House Office of Management and Budget, known by the acronym OMB.

Obama is set to announce Burwell's nomination at 10:15 a.m. EST/1515 GMT on Monday, the White House official said, adding that Burwell had a proven record as a problem solver and consensus builder. The job requires Senate confirmation.

"Burwell's deep knowledge of budget and economic issues along with her record of fighting for working Americans make her the perfect choice to lead the OMB at this important time," the White House official said.

Mike Duke, president and chief executive of Wal-Mart, congratulated Burwell on her nomination, describing her as "a strong leader who both masters the details and has a clear vision for making big thing happen."

The move will reunite her with another Clinton White House veteran, Jack Lew, who was Clinton's OMB director for a time and was recently confirmed as Obama's treasury secretary.

Burwell will take the office that carries out the administration's spending policies and prepares an annual budget. That office will inevitably be caught up in the ongoing budget battle between Democrats and Republicans as lawmakers seek ways to reduce annual $1 trillion federal budgets.

She brings a certain outsider status to Obama's inner circle and may offer a fresh perspective from the business world far away from Washington.

Burwell would also bring gender diversity to the top echelons of the Obama White House after the president drew fire from critics for picking men for many top jobs.

Burwell served as deputy OMB director during part of Clinton's 1990s presidency. She was also deputy White House chief of staff and served as chief of staff for Treasury Secretary Robert Rubin.

After her work in the Clinton administration, Burwell was president of the Global Development Program at the Bill and Melinda Gates Foundation. She led the foundation's grantmaking and advocacy efforts aimed at lifting the world's poorest people out of hunger and extreme poverty.

(Additional reporting by Lesley Wroughton. Editing by Eric Beech and Christopher Wilson)

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Syria risks "dissolution", U.N. chief says

GENEVA (Reuters) - United Nations Secretary-General Ban Ki-moon said on Friday there was a very small window of opportunity for the Syrian government and opposition to hold talks on ending the civil war.

Syria's government has shown increased willingness to hold talks with the opposition to end the two-year conflict that has killed 70,000 people.

At a news conference in Geneva, Ban said he would meet his Syria envoy Lakhdar Brahimi in Switzerland on Saturday for private talks.

"This is a very small window of opportunity which we strongly support and encourage them to use that. The opportunity may soon close," Ban said.

The situation in Syria was deteriorating and it was crucial to stop the violence and start a political dialogue, he said.

Foreign Minister Walid al-Moualem said on Monday the government would even speak to armed rebels. On Thursday, it extended passport terms for its nationals abroad, meeting a condition set by the opposition for talks.

Moaz al-Khatib, head of the opposition Syrian National Coalition, said he would speak to President Bashar al-Assad's representatives if expired passports were extended for two years.

(Reporting by Stephanie Nebehay; Editing by Tom Pfeiffer)

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Syrian rebel chief pleads for weapons

BEIRUT (AP) — The chief of Syrian rebel forces says his fighters are in "desperate" need of weapons rather than food supplies and bandages that the U.S. now plans to provide.

The Obama administration says it will — for the first time — provide non-lethal aid directly to rebels, and announced an additional $60 million in assistance to the political opposition fighting to topple President Bashar Assad's regime.

But Gen. Salim Idris, chief of staff of the Syrian opposition's Supreme Military Council, told The Associated Press in a telephone interview on Friday that the modest package of aid to rebels — comprising an undetermined amount of food rations and medical supplies — will not help them win against Assad's forces who have superior air power.

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Syrian rebel chief: Fighters desperate for weapons

BEIRUT (AP) — The head of Syria's rebels said Friday that the food and medical supplies the United States plans to give his fighters for the first time won't bring them any closer to defeating President Bashar Assad's forces in the country's civil war.

"We don't want food and drink, and we don't want bandages. When we're wounded, we want to die. The only thing we want is weapons," Gen. Salim Idris, chief of staff of the opposition's Supreme Military Council, told The Associated Press by telephone.

The former brigadier in Assad's army warned that the world's failure to provide heavier arms is only prolonging the nearly 2-year-old uprising that has killed an estimated 70,000 people.

In what was described as a significant policy shift, the Obama administration said Thursday it was giving an additional $60 million in assistance to Syria's political opposition and said it would, for the first time, provide non-lethal aid directly to rebels battling to topple Assad.

The move was announced by U.S. Secretary of State John Kerry at an international conference on Syria in Rome. In the coming days, several European nations are expected to take similar steps in working with the military wing of the opposition to increase pressure on Assad to step down and pave the way for a democratic transition.

But the frustration expressed by Idris is shared by most of his colleagues in the Syrian opposition, as well as by scores of rebels fighting in Syria. They feel abandoned by the outside world while the Assad regime pounds them with artillery and bombs.

The main rebel units, known together as the Free Syrian Army, regrouped in December under a unified, Western-backed command headed by Idris and called the Supreme Military Council, following promises of more military assistance once a central council was in place. Despite those pledges, opposition members say very little has been delivered in terms of financial aid, and more importantly, in weapons and ammunition.

The international community remains reluctant to send weapons, fearing they may fall into the hands of extremists increasingly gaining ground among the rebels.

Mouaz al-Khatib, the leader of the Syrian opposition coalition, has lamented the West's focus on the presence of Islamic militants among the fighters. In a forceful speech Thursday to the Rome conference, he said the media reports give "more attention to the length of fighters' beards than to the (regime's) massacres."

Some Syrians expressed their disappointment on social media websites. One showed a photo of Kerry carrying a toy gun as a gift for the rebels. Another depicted a three-wheeled cart, of the kind usually used by farmers, with the words: "The first of the nonlethal weapons has arrived."

Idris, a 55-year-old who studied in Germany and taught electronics at a Syrian military college before defecting in July, said the modest package of aid — consisting of an undetermined amount of food rations and medical supplies — will not help them win against Assad's forces who regularly use warplanes to pound rebel strongholds.

"We need anti-tank and anti-aircraft missiles to stop Bashar Assad's criminal, murderous regime from annihilating the Syrian people," he said. "The whole world knows what we need, and yet they watch as the Syrian people are slaughtered."

Still, he said he hoped that the promised aid is delivered, which would provide some relief to the civilians caught in the fighting.

Russia, meanwhile, sharply criticized the decision by Western powers to boost support for Syrian opposition forces, saying the promised assistance would only intensify the conflict. Russian Foreign Ministry spokesman Alexander Lukashevich said the moves announced in Rome "encourage extremists to seize power by force."

Russia is a close ally of Syria that has continued to supply arms to Assad's regime as well as shielding the country from U.N. Security Council sanctions.

Idris denied media reports that the rebels have recently received arms shipments and said his troops were suffering from "severe shortages" in weapons and ammunitions.

Croatia's president said Friday his country will withdraw about 100 peacekeeping troops from the Syria-Israel border after reports that Syrian rebels have been armed with Croatian weapons. The Croatian government fears its troops could become targets for Syrian government soldiers fighting the rebels.

Croatian officials have also denied reports by local media and The New York Times that arms, including machine guns, rifles and anti-tank grenades used in the Balkan wars in the 1990s have recently been sent to the Syrian rebels.

Croatian Prime Minister Zoran Milanovic said despite the official denials, "everyone has read those reports, and our soldiers are no longer safe."

Fierce clashes continued in northern Syria between government forces and rebels attacking a police academy near Aleppo, the country's largest city and commercial hub.

Rebels backed by captured tanks have been trying to storm the police academy outside the city since launching a new offensive last week. Activists say the academy, which has become a key front in the fight for Aleppo, has been turned into a military base used to shell rebel-held neighborhoods in the city and surrounding countryside.

Syrian's state-run news agency said government troops defending the academy had killed dozens of opposition fighters and destroyed five rebel vehicles.

The Britain-based Syrian Observatory for Human Rights activist group also reported heavy fighting around the school and said there were several rebel casualties.

The Observatory said clashes were still raging around Aleppo's landmark 12th century Umayyad Mosque in the walled Old City, which is a UNESCO World Heritage Site. The mosque was heavily damaged last year just weeks after a fire gutted the city's famed medieval market.

There were conflicting reports about whether the rebels had managed to force regime troops out of the mosque and take full control of the holy site.

Mohammed al-Khatib of the Aleppo Media Center activist group said the mosque was in rebel hands, although clashes were still raging.

"The regime forces left lots of ammunition in it (the mosque), with guns and rocket-propelled grenades," he said via Skype.

Observatory director Rami Abdul-Rahman said rebels have been in control of at least half of the mosque complex for days, but he could not confirm that they had captured all of it.

Near the capital of Damascus, activists said the bodies of 10 men — most of them shot in the head — were found dumped on the side of a road between the suburbs of Adra and Dumair. Such incidents have become a frequent occurrence in the civil war.

___

Associated Press writers Ryan Lucas and Ben Hubbard in Beirut contributed to this report.

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Senate approves Lew as new Treasury chief

WASHINGTON (Reuters) - The Senate Finance Committee on Tuesday backed President Barack Obama's nominee to head the U.S. Treasury, Jack Lew, despite some concerns about his perks from previous employers, clearing the way for a confirmation vote in the full Senate.

With the 19-5 vote, about half the panel's 11 Republicans opposed Lew's nomination. Senate Democratic leader Harry Reid said he was hoping to consider Lew's nomination on Wednesday, but was still seeking agreement with Republicans.

Five Republicans on the committee also voted against Timothy Geithner, the previous Treasury secretary, who left last month.

Some Republicans hold deep reservations about the nomination and it is unclear whether they will throw up procedural hurdles to the vote. Nevertheless, Lew is expected eventually to win confirmation in the Senate, where Democrats hold a 53-45 majority.

Senate approval would pitch Lew into the heated budget battle between the White House and congressional Republicans. Both sides oppose the estimated $85 billion in across-the-board government spending cuts set to take effect on Friday, but disagree about alternatives.

Previously Obama's chief of staff and budget director for both Obama and former President Bill Clinton, Lew is a policy wonk who has spent much of his career in public service in Washington. But some observers have questioned his financial expertise and international credentials.

'NOT ANOTHER ACOLYTE'

The top Republican on the Finance Committee, Senator Orrin Hatch, said he supports Lew as head of the Treasury Department in deference to Obama, but has "serious reservations" about him.

"I hope we end up with the Jack Lew of the Clinton administration, not just another acolyte of the Obama White House," Hatch said before the panel vote.

At a hearing on his nomination earlier this month, Republicans also grilled Lew about an investment he once held in a fund linked to the Cayman Islands and a nearly $1 million dollar bonus he received from Citigroup in 2009 just before the bank got a taxpayer-funded bailout.

In addition, Senator Charles Grassley, the No. 2 Republican on the Finance Committee, said he was unsatisfied with Lew's response to questions about a $1.4 million loan he received while working as an executive with New York University.

"If Mr. Lew will not answer our questions now, why should we on this committee expect him to answer any questions if he's confirmed?" Grassley said before voting against Lew.

TAX PRIORITIES

Lew has said revamping the U.S. tax code would be a top priority if he wins confirmation. The tax system was last fully overhauled in 1986, though prospects for achieving tax reform are clouded by Washington's constant fiscal fights and conflict over whether new revenue is needed to cut budget deficits.

He will also deal with implementing new financial regulations, China's growing economic clout and winding down government-controlled mortgage finance giants Fannie Mae and Freddie Mac.

In addition, he may have to start paying more attention to Europe, where financial markets are on edge over election results in Italy that some analysts fear could exacerbate the euro zone's debt crisis.

Lew answered at least 444 written questions from the senators on the Finance Committee on these matters and others. Geithner was required to answer fewer than half that number when he was seeking confirmation.

While a few lawmakers, including Senator Jeff Sessions, the top Republican on the Budget Committee, plan to vote against Lew when his confirmation gets to the full Senate, Senate Democrats believe they have the requisite 60 votes to get Lew through the process even if some hurdles are raised.

(Additional reporting by Rachelle Younglai; Editing by Todd Eastham)

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