Grassroots business

These crop farmers are finishing up last fall’s harvest. Most farmers planting corn in Rice County received on average $20 an acre in federal subsidies. It costs about $600 an acre to farm corn. (File photo)
These crop farmers are finishing up last fall’s harvest. Most farmers planting corn in Rice County received on average $20 an acre in federal subsidies. It costs about $600 an acre to farm corn. (File photo)

By: Jaci Smith, Regional Editor
Posted: Wednesday, May 26, 2010 1:00 am

Pretend you’ve decided to become a businessman to make your living. You have some start-up capital and assets to get going, but much more is needed, so you take out loans against those assets and your future profits.

You have a tried and true business plan, but there are many variables that affect it. Weather, labor, equipment and market forces that literally change each day buffet your attempts to stay afloat. And even though the demand is certain to be constant and the customer base — literally — is the world, there’s no steady growth, no predictability and no guarantees of success, even from year to year.

In general, unless you make at least $175,000 in sales every year, you don’t make a profit. In the industry you’ve chosen, the data over nearly a century shows that the rate of return on your assets and equity will be negative except for the largest of your brethren.

You are a farmer.

The numbers

Paul Liebenstein was No. 1 on the list of Rice County farmers receiving subsidies from the federal government, a fact that caught him entirely by surprise.

Liebenstein is the owner of Wolf Creek Dairy in Dundas and last year he received $86,340 from the federal government, according to USDA figures compiled by the Environmental Working Group, an organization that has created a website to draw attention to federal farm subsidies and seeks reform to them.

Farm subsidies are federal dollars paid to farmers to do one of two things: fill the gap between the market price (if it falls below a certain level) and “parity” for their commodity, or to make up the difference between the cost to farm a crop per acre and profitability. The federal government also subsidizes crop insurance for farmers and has other, smaller subsidy programs, such as for conservation.

EWG will tell you on their website that federal farm subsidies are not working, that it costs American taxpayers astronomical sums of money — $35 billion since 1995 — and that, most importantly, the vast majority of the money falls into the hands of the wealthiest farmers and not family farms.

“Despite claims of reform, many of the top subsidy recipients in this update are the same operations we’ve seen before,” wrote EWG President Ken Cook in his national analysis of the USDA data. “Six of the top 10 recipients of commodity payments in 2009 were also in the top 20 in both 2007 and 2008. In contrast to the public fury over billion-dollar bailouts of Wall Street banks, all 20 top recipients in 2009 received more than $1 million each, several with multi-million-dollar hauls. And this is only one year’s worth of corporate handouts that have gone on for decades.”

In Rice County, it would seem that Cook’s analysis holds true, according to an analysis done by the Daily News. The county received $9.4 million in federal farm subsidies in 2009, the latest year for which data is available, and ranks 48th among the state’s 87 counties in how much it received. The state as a whole ranks fourth in the nation, receiving nearly $900 million last year.

The top 10 percent of the 1,176 farmers who received subsidies took in nearly half — 49 percent — of all the money Rice County received. The average subsidy payment for those in the top 10 percent was $33,108, or $9,000 more than the median per capita income in the county, according to the U.S. Census.

But the numbers are where the similarities to Cook’s analysis ends.

The reality

After the passage of the 2008 farm bill, intended to equalize payments to all farmers big and small, the media was quick to analyze and find fault with the “reformed” subsidies system. The Wall Street Journal, New York Times and other large newspapers wrote in-depth stories on the law, largely concluding it failed to get the subsidies into the hands of the country’s family farms. Before the bill was signed into law, The Washington Post did a yearlong investigative project on subsidies with a title that said it all: “Harvesting Cash.”

The same was true earlier this month when EWG released its 2009 database. The headlines were the same: “Richest farms reap fattest subsidies.”

But in Rice County, not everything is as the EWG or some media claim, according to Daily News analysis. While it’s true that the top 10 percent of farmers received the most money, comparing that list to property records shows those in the top 10 percent also happen to be farming the most acres or milking the largest herds.

In fact, of the top 10 farms that received subsidies in 2009, none are considered “corporate” farms. All are owned by either one or several related members of the same family.

“I wonder how many people would be surprised to know the huge risks we take and the incredible stresses of long hours, huge debt loads, weather worries and the like that farmers face throughout their careers,” said Steve Albers. Albers farms crops in Dundas and last year was near the bottom half of those in the county receiving subsidy payments. He got $6,515 in 2009, according to USDA figures.

The Economic Research Service of the USDA puts out an annual report measuring the economic health of the family farm. It concludes what many farmers have known for years: Running a farm is the same as running a Main Street business, except there are far more variables beyond the “business” owner’s control – like the weather or a natural disaster.

Or a country’s culture, says Gene Kuntz.

Kuntz is a South Central College farm business management instructor. For years, Kuntz said, this country has had a “cheap food” policy. Rather than let market forces dictate, the federal government since as far back as the beginning of the 20th century determined that it’s more important to pay subsidies to farmers to keep food prices down than to let free market forces reign.

“We make it (food) cheaper than any other country in the world,” Kuntz said. “That, in essence, guarantees subsidies will be needed until we decide as a country to pay the same for food as other countries pay.”

EWG’s Cook says in his analysis that calling the subsidy payments a “bailout” is an insult to the term since the money doesn’t get to those who need it most — family farmers.

Not true, says Kuntz. He says without subsidies, what Cook thinks is happening now would actually be reality.

“Those payments keep family farms in existence,” he said. “Without them the ripple effect would be the elimination of the smaller farm units and the growth of larger ones.”

On the back 40

Liebenstein’s $86,000 federal subsidy went to pay part of his feed and labor bills. Wolf Creek Dairy has six full-time and six part-time employees.

But that same year overall he lost $300,000. He ended up having to take out a loan against his assets in order make his payroll and other costs. His only hope for future profits is if he makes enough to cover his expenses and his new loan.

Albers, who farms corn, beans, and cuts his own and his neighbors’ hay, said there have been years where the subsidy he received was his only profit. Last year his subsidy came to about $17 per tillable acre. The average countywide was about $20 per acre in crop subsidies.

But to farm that same spread would likely cost $600 an acre, Albers said.

“With the price of corn threatening now to go below $3, it’s not hard to see how it’s going to take a really good crop to come out,” Albers said.

The scale is what most people can’t relate to, said Kent Politsch, public affairs chief for the federal Farm Services Agency in Washington, D.C.

“The farmer is a small businessman,” Politsch said. “He operates his business on the scale of someone who owns three hardware stores. They both set up their business the same way — LLC — to get some tax breaks. But the farmer’s profit margin is far smaller than most.

“If you consider that businessman’s average income is about $40,000 and he hears that a farmer got $600,000 in payments, it seems really lucrative. But what no one talks about is that the farmer likely spent $700,000 to survive, and most of that money he put into the local economy. No other local businessman is doing that.”

Ag studies have shown that each dairy cow generates about $5,000 of impact on a local economy. Using that math, Liebenstein’s herd alone pours $2 million into Rice County’s economy. He supports implement dealers, bankers, and seed, fertilizer and chemical dealers. The families of his 12 employees depend on his farm in whole or in part for their income.

“There’s an old saying,” Liebenstein said. “It says ‘give all the money to the farmers because they’ll spend it all.’”

There’s no question that some may have figured out how to abuse the federal farm subsidy system, Politsch said. But for every one of those there are many others, like those on Rice County’s list of top recipients who are one bad crop, one low milk price year away from going broke.

“The last thing our economy needs to have happen is to have a farmer who’s producing the food we need to be lost,” Politsch said. “We lose farmers, we lose production, prices go up. That’s when we lose Main Street.”

—Reach Regional Editor Jaci Smith at 333-3133 or

WHAT ARE SUBSIDIES? A federal government “safety net” to agricultural producers to help them through the variations in agricultural production and profitability from year to year — due to variations in weather, market prices, and other factors.

HOW DOES IT WORK? The primary subsidy system has the following elements:

—Direct payments paid at a set rate every year regardless of conditions.

—Counter-cyclical payments triggered when market prices fall below certain thresholds.

—A revenue assurance program provides for overall profitability for a given crop.

—Marketing loans offer terms whereby farmers can realize gains through loan deficiency payments (LDPs) and commodity certificates.

—Disaster payments recoup large losses due to natural phenomena. The government subsidizes crop insurance to further insulate farmers from risk.


1. Paul Liebenstein, Dundas — $86,340

2. Metogga Lake Dairy LLC, New Prague — $85,099

3. George E Duban, Lonsdale — $82,298

4. Far Gaze Farms, Northfield — $79,334

5. Kuball Dairy Farm Llp, Waterville — $77,363

6. Douglas A Story, Kenyon — $77,219

7. Saemrow Dairy, Waterville — $76,898

8. James D. Duban, Montgomery — $63,893

9. Estrem Farms, Nerstrand — $59,624

10. Dennis L Tatge, Faribault — $54,681


• Stearns County took in more subsidy money in 2009 than any other county in the state, $30.4 million.

• The No. 1 subsidy in Rice County over the last 14 years is for corn crops, with 1,463 recipients taking in nearly $90 million.

Source: U.S. Department of Agriculture and the Federal Reserve


To see the database compiled from USDA data by the Environmental Working Group, click here.

Subsidy sells opportunities down the river

By MARK MULLER : Last update: May 25, 2010 – 5:45 PM

Say the federal government used federal dollars to take development opportunities away from Minnesota and instead create jobs in other countries.

Most of us would be fuming. Market forces working against Minnesota is one thing; the federal government facilitating foreign investment over local job creation is simply unacceptable.

Yet this scenario is just what’s happening through the subsidized export of Minnesota’s agricultural products. The federal government spends an estimated $100 million a year maintaining navigation on the Mississippi River system, which is primarily used to get crops such as corn and soybeans out to international ports. This funding maintains the series of locks and dams from Minneapolis to southern Illinois that create pools of water deep enough to support a 9-foot channel for the navigation industry.

How does this create investment elsewhere? The production of an agricultural commodity is just the first step in the processing that eventually produces food, materials and energy. It isn’t too exciting to think of Minnesota crops becoming the low-cost feed supplier of a Taiwan poultry operation. Why then should we encourage that processing to take place in other parts of the world rather than in job-creating industries in the Midwest?

Navigation industry proponents aren’t satisfied with their current $100 million a year subsidy. They are pushing for the federal government to not only pay the operation and maintenance costs, but to increase taxpayer subsidies for the construction and expansion of Mississippi River locks. Rather than the current 50-50 split of construction costs, the industry’s proposal, which has received little public attention, recommends that taxpayers put $270 million annually toward construction and the industry only $110 million.

When agricultural production is narrowed down to just a couple of crops, such as corn and soybeans, economic opportunities that provide a greater return are lost. This hurts Midwest farmers who have little choice but to grow these crops even when prices are lousy, and hurts rural communities that need economic development. Land locked up in corn and soybeans can’t be used for higher value production such as locally grown fruits and vegetables or grass-fed livestock, products for which consumers are willing to pay a premium.

A recent Iowa State University study found that an increased production of 28 fruit and vegetable crops in the Upper Midwest could create $882 million in additional farm sales and 9,300 new jobs.

Federal policies play a primary role in keeping Midwest agriculture less innovative than it should be. The farm bill drives down prices and reduces the financial risk of growing commodity crops such as corn, soybeans, wheat, cotton and rice. This encourages farmers to grow these crops — and grain buyers to trade and process these crops — at the expense of other opportunities.

Federal transportation policies fall into this same trap. With the farm bill encouraging corn and soybean production, policymakers apparently feel some responsibility for facilitating the export of these crops. Export subsidies, quite simply, are used to try to offset bad policy decisions in the agricultural economy, which have flooded the Midwest with cheap corn and soybeans, and to drive farmers off the land.

Farmers don’t export, and there’s scant evidence that farmers get better prices because of exports. It’s the grain companies that almost always reap the profits from this trade. So why, then, are we spending taxpayer dollars on navigation?

There are much better ways of investing in Minnesota agriculture. What if that $270 million were instead used to encourage business opportunities for the storage, processing and transportation of Minnesota-grown foods?

When you hear about proposals to expand navigation infrastructure, tell Congress to take a pass. If federal funds aren’t going to support the Minnesota economy, at least they shouldn’t work against it.

Mark Muller is director of the Minneapolis-based Food and Society Fellows program, Institute for Agriculture and Trade Policy.

Mutant fungus Ug99 threatens world crops and even political stability.

 Jim Gehrz, Star Tribune - Some wheat plants are grown under controlled conditions in a greenhouse at the Cereal Disease Laboratory at the U of M. Jim Anderson is pictured.
Jim Gehrz, Star Tribune - Some wheat plants are grown under controlled conditions in a greenhouse at the Cereal Disease Laboratory at the U of M. Jim Anderson is pictured.

The battlefields are 8,000 miles away in Africa and the Middle East. But from their bunkers of dew chambers and greenhouses in St. Paul, a strike force of University of Minnesota plant experts is devising strategies to win a high-stakes war that could prevent famine, starvation and political unrest.

The enemy, Puccinia graminis, is a new mutant strain of fungus that erupts from pockmarks on the stems of wheat and barley, exploding with millions of rusty red spores that can blow across continents. Nicknamed Ug99 after it was discovered in Uganda in 1999, this new race of stem rust is the rabbit of cereal grain pathogens — creating new generations of spores in a matter of weeks. It has crippled wheat farms in East Africa and jumped across the Red Sea to Yemen and Iran.

“This fungus has such a tremendously explosive reproductive capacity,” said Brian Steffenson, a plant pathology professor at the U who travels regularly to the Ug99 front lines in Kenya. “By way of the prevailing winds, we’re now afraid that if Ug99 gets a beachhead in the Middle East, it can spread to the breadbaskets of south Asia, Pakistan and India.

“That,” he said, “would be absolutely devastating for the world’s wheat and economy.”

Eighty percent of the world’s wheat and 95 percent of the Upper Midwest region’s top bread-baking grain is vulnerable to the new pathogen, according to University of Minnesota wheat breeder Jim Anderson.

“The stem rust fungus, like various flu strains that attack humans, is capable of mutating and overcoming the resistance of previously resistant cereal crops,” Steffenson said. “The 800-pound gorilla in the room is whether Ug99 will ever make its way to the western hemisphere and into our region.”

Anderson thinks it’s “a matter of when, rather than if” the new rust finds its way to the Red River Valley and other North American wheat fields, prompting a scramble among scientists to cross new varieties of wheat genes that can resist the scourge.

Agricultural authorities are so jittery about Ug99 infecting U.S. wheat, they allow only two labs in the country to experiment with the fungus. And both the U.S. Department of Agriculture’s Cereal Disease Lab and the U’s adjacent containment facility are tucked quietly on the agriculture campus in St. Paul.

To conduct his research in the containment facility in St. Paul, Steffenson walks through a series of seven security doors, removes his clothes and dons a special suit to prevent spreading the pathogen. Just in case a spore accidentally got loose in Minnesota, the government requires all Ug99 research to happen in the winter months when the pathogen would die in the cold. When Steffenson travels to East Africa, ground zero for Ug99, he leaves a set of field clothing and pairs of his size 15 shoes in Kenya to reduce the risk of accidentally importing the fungus.

“Other diseases might nibble at a little bit of yield here and a bit of quality there, but this stem rust pathogen is a real game changer,” Steffenson said. “So we’ve really shifted into high gear to thwart it.”

As in any battle, dire developments duel with positive advances:

•In 2008, after a decade of genetic dabbling, Anderson released a variety of wheat he named Tom, which now grows on nearly 2 percent of Minnesota’s wheat acreage and shows good resistance to Ug99 in the lab.

•The Gates Foundation has funneled $26.8 million, through Cornell University, to help bankroll the research. A portion of that money is going to St. Paul-based plant scientists working on Ug99.

•Fungicides can control the new rust, although affording the chemical sprays is daunting for small-scale farmers in Africa and Asia.

“And we have not had any major epidemics in this region since the 1950s,” Steffenson said. “That’s a huge success story.”

A history at the vortex

It’s no coincidence that one of the world’s leading grain disease think-tanks has kept the upper hand on the region’s plant pathogens for decades.

Not far from the Minnesota State Fair water tower, Steffenson stood on the back of a tractor the other day, orchestrating the planting of barley seeds that will grow into part of his Ug99 research. Minnesotans have long been at the crux of crop rust research. Norman Borlaug, who died last September at 95, earned a Ph.D. at the University of Minnesota in 1942 and a Nobel Peace Prize in 1970 for developing high-yield, disease-resistant wheat credited with saving a billion people in Asia from starvation in the 1960s.

Rust epidemics in 1916, the mid-’30s and early-’50s devastated Minnesota milling, a cornerstone of the state’s early economy, and damaged other sectors, such as railroads that lost profit when grain cars sat empty. That prompted the Legislature to pour money into the research facilities on the farm campus, where Minnesotans remain at the forefront.

Steffenson and Anderson grew up in Anoka and St. Peter, respectively. And the new resistant variety Tom is named after Tom Anderson, a grain research advocate from Sabin, Minn., who died in 2007.

Despite all the Minnesota connections, rust research is an international game. To wit: Yue Jin, the USDA’s top wheat expert in St. Paul, grew up on a farm in Inner Mongolia, and Steffenson recently hosted Russian and Italian scientists, who can’t work with Ug99 in their countries.

Their battle is nothing new. Centuries ago, Romans held an annual festival around this time of year just as rust would have taken hold on grain stems in Italy. They would sacrifice a dog and sheep and pray to the rust god to leave their crops alone.

“Scaly Robigo, god of rust, spare Ceres’ grain,” the ancient Roman poet Ovid wrote. “Let silky blades quiver on the soil’s skin … and keep scabrous hands from the harvest.”

Since those days of yore, the rust fungi have periodically flared up, mutating into new resistance-proof strains that choke the grains’ nutrients and growth. Ug99 is simply the latest scourge to plague wheat and barley growers.

“With some other rusts, you might see yield losses of 10 percent or 40 percent in a worst-case scenario,” Anderson said. “This new stem rust can virtually wipe out a crop.”

So the scientists juggle the need to crossbreed grains that are not only resistant to disease, but grow well enough to give farmers good yields for milling and baking.

The stakes couldn’t be higher. Riots broke out in Eygpt two years ago when low wheat stocks triggered soaring prices and food shortages. Scientific models predict Ug99 will strike in the Punjab valley, a vital wheat-growing region that straddles India and Pakistan.

“If it gets there, there could be massive starvation and political instability,” said Les Szabo, a USDA research geneticist in St. Paul and one of more than two dozen local scientists battling Ug99.

Some of the experts have dissected the DNA sequence in the pathogen’s genome. Others focus on the host or secrets that might be locked in wild grain species. As they continue to cross genes and screen for resistance, Steffenson said both the research and the threat offer a valuable reminder.

“The pathogen is vying against those of us working with disease resistance, kind of like an arms race with one thwarting the other, as in any battle,” Steffenson said. “Many Americans take food for granted because they can easily get what they want from the grocery store. They seem to forget that food comes from crops sown in the fields where diseases have been plaguing man for centuries.”

Monsanto, DuPont Race to Win $2.7 Billion Drought-Corn Market

Bloomberg: Larry W. Smith

By Jack Kaskey and Antonio Ligi – April 21, 2010, 12:16 AM EDT – Bloomberg-BusinessWeek/St. Paul Pioneer Press

April 21 (Bloomberg) — Lance Russell’s neighbors aren’t used to seeing corn growing in the fields around Hays, Kansas, where the plants tend to wither and keel over in the hot, dry summers. They may be in for a surprise this summer.

Russell is planting DuPont Co.’s drought-tolerant corn, one of the seeds heading to market next year that’s designed to thrive where water is scarce. An experimental plot in 2009 improved on the economics of the sorghum crop “by a landslide,” Russell said.

Monsanto Co., DuPont and Syngenta AG are vying for a similar windfall. After battling for a decade to corner the $11 billion market for insect-resistant and herbicide-tolerant technologies, the world’s biggest seed companies are vying to develop crops that can survive drought. At stake is a new global market that may top $2.7 billion for the corn version alone.

“It’s a race at the moment,” said Juergen Reck, a Frankfurt-based analyst at Macquarie Group Ltd. “They must see market potential.”

The technology will have wide-ranging effects, from helping farmers draw less irrigation water to lowering insurance premiums and boosting land values in drought-prone regions, agricultural economists say. The seeds also may increase corn plantings in the U.S. Great Plains at the expense of wheat and sorghum while altering the market for biofuels.

Higher Yields

Perhaps most importantly for farmers, corn yields may climb. DuPont says seed being tested on 5,000 acres (2,023 hectares) this year is expected to boost yields in dry environments by at least 6 percent. Syngenta is targeting yield increases of at least 10 percent for its corn. Both companies used conventional breeding to develop the seeds for sale next year, with biotech versions due later in the decade.

The seeds will be a “big market” for Basel, Switzerland- based Syngenta, Chief Executive Officer Michael Mack said in a telephone interview. “Farmers around the world are going to pay hundreds of millions of dollars to technology providers in order to have this feature.”

Monsanto is moving directly to a biotech version that it says will increase corn yields 6 percent to 10 percent. The company’s seed, developed with BASF SE, may be put on sale in 2012 and become the first product genetically engineered to tolerate drought.

The Monsanto-BASF partnership, created in 2007, aims to have its drought genetics in 55 million acres of U.S. corn by 2020. In comparison, St. Louis-based Monsanto had at least one biotech trait in 82 percent of the nation’s 86.5 million acres of corn last year.

Insurance for Growers

Monsanto and BASF are also developing drought-resistant versions that can serve as insurance for growers who normally have adequate rainfall or access to irrigation. The seeds may generate annual sales of almost $1 billion assuming the trait retails on average for $18 an acre, according to Ludwigshafen, Germany-based Germany BASF, the world’s largest chemicals company.

“All players expect blockbuster potential,” said Patrick Rafaisz, a Zurich-based analyst at Bank Vontobel AG.

The global market for drought-tolerant corn may reach 150 million acres, Wilmington, Delaware-based DuPont said in a February presentation, without providing a timeframe. That implies a market of $2.7 billion, based on BASF’s $18-per-acre projection. In comparison, global sales of all seeds in 2008 were $26 billion, including $9 billion of corn, Edinburgh-based industry consultant Phillips McDougall said in a December report.

‘Game Changer’

Agriculture accounts for 70 percent of global fresh-water use, Monsanto Chief Executive Officer Hugh Grant said in an interview. Reducing irrigation not only contributes to more sustainable farming, it’s a “game changer” that will boost profits and help feed a rising world population, he said.

“The biggest single issue in farming going forward is water, use of water, water availability in many parts of the world, so I think it will be a significant product,” Grant said.

Monsanto also is engineering crop seeds including cotton, wheat and sugar cane for drought tolerance, and the company and BASF are donating drought-resistant corn technologies to farmers in sub-Saharan Africa through the Nairobi-based African Agricultural Technology Foundation.

The prospect of drought-resistant seeds isn’t winning over opponents of genetically modified foods, who say the latest technology may taint conventional corn supplies and allow large companies to perpetuate an industrial agricultural system that harms water resources.

‘System of Expansion’

“Their approach is that the market system of expansion we have is just fine and we can use technology to adapt to any problems and make money at the same time,” Maude Barlow, chairwoman of Washington-based Food and Water Watch, said in e- mailed responses to questions. “We are also very concerned about the possibility of this genetically engineered corn contaminating the stock.”

The technology will expand the U.S. corn-growing region westward while helping the country’s farmers cut their irrigation bill, said Kevin C. Dhuyvetter, an agricultural economist at Kansas State University. The trait may reduce farmers’ insurance premiums and ultimately boost land values in water-starved regions of Nebraska, Kansas and Oklahoma, he said.

“If we can apply 2 inches less water, that would be a huge benefit because the groundwater supplies are always diminishing,” Dhuyvetter said in a telephone interview.

Effect on Markets

By expanding the corn-growing region, the technology can help grow more grain to meet government targets that call for tripling use of biofuels including ethanol, which is made from corn in the U.S, by 2022, said Art Barnaby, an agricultural economist at Kansas State University.

Growing more corn may lower prices, benefiting grain- importing countries, Barnaby said in a telephone interview. The biggest buyers of U.S. corn last year were Japan, Mexico and South Korea, according to the U.S. Department of Agriculture. Still, price changes won’t be significant because increased supply may be consumed by rising ethanol production and a growing world population, he said.

Climate change may affect all of the variables. Global warming will increase vulnerability to drought in many U.S. regions, according to the Geological Society of America, and that may increase the need for drought-resistant seeds.

“If you are in the drylands, this is a big deal,” Mark Gulley, a New York-based analyst at Soleil Securities, said in a telephone interview.

It certainly is for Russell, the Kansas farmer. He said DuPont’s drought-tolerant corn outperformed other varieties by 15 percent last year when the weather was relatively moderate.

“Honestly, I wouldn’t mind a dry, hot year where I can really test these varieties,” Russell said.

–With reporting by Peter J. Brennan in Los Angeles and Richard Weiss in Frankfurt. Editors: Steven Frank, Kevin Miller.

To contact the reporters on this story: Jack Kaskey in New York at; Antonio Ligi in Zurich at