Bits Blog: The Origins of ‘Big Data’: An Etymological Detective Story

Words and phrases are fundamental building blocks of language and culture, much as genes and cells are to the biology of life. And words are how we express ideas, so tracing their origin, development and spread is not merely an academic pursuit but a window into a society’s intellectual evolution.

Digital technology is changing both how words and ideas are created and proliferate, and how they are studied. Just last month, for example, the Library of Congress said its archive of public Twitter messages has reached 170 billion tweets and rising, by about 500 million tweets a day.

The Library of Congress archive, resulting from a deal struck with Twitter in 2010, is not yet open to researchers. But the plan is that it soon will be. In a white paper, the Library said that social media promises to be a rich resource that provides “a fuller picture of today’s cultural norms, dialogue, trends and events to inform scholarship, the legislative process, new works of authorship, education and other purposes.”

The new digital forms of communication — Web sites, blog posts, tweets — are often very different from the traditional sources for the study of words, like books, news articles and academic journals.

“It’s almost like oral language instead of edited text,” said Fred R. Shapiro, editor of the “Yale Book of Quotations” and an associate librarian at the Yale Law School. “It’s the way of the future.”

The unruly digital data of the Web is a big ingredient in what is now being called “Big Data.” And as it turns out, the term Big Data seems to be most accurately traced not to references in news or journal archives, but to digital artifacts now posted on technical Web sites, appropriately enough.

To our modest tale of word sleuthing: Last August, I wrote a Sunday column about 2012 being the breakout year for Big Data as an idea, in the marketplace, and as a term.

At the time, I did some reporting on the roots of the term, and I asked Mr. Shapiro of Yale to dig into it. He scoured data bases and came up with several references, including in press releases for product announcements and one intriguing use of the term by a now-famous author (more on that later).

But Mr. Shapiro couldn’t find anything as crisp and definitive as he had done for me years earlier when I asked him to try to find the first reference to the word “software” as a computing term. It was in 1958, in an article in “The American Mathematical Monthly,” written by John Tukey, a Princeton mathematician.

So, without a conclusive answer, I didn’t write about the origins of the term Big Data in that Sunday column. But afterward, I heard from people who had ideas on the subject.

Francis X. Diebold, an economist at the University of Pennsylvania, got in touch and even wrote a paper, with the mildly tongue-in-cheek title, “I Coined the Term ‘Big Data’ ” I had not thought of economics as the breeding ground for the term, but it is not unreasonable. Some of the statistical and algorithmic methods now in the Big Data tool kit trace their heritage to economic modeling and Wall Street.

Mr. Diebold staked a claim based on his paper, “Big Data Dynamic Factor Models for Macroeconomic Measurement and Forecasting,” presented in 2000 and published in 2003. The economic-modeling paper was first academic reference found to Big Data, according to research by Marco Pospiech, a Ph. D. candidate at the Technical University of Freiberg in Germany.

By then, I had heard from Douglas Laney, an veteran data analyst at Gartner. His said the father of the term Big Data might well be John Mashey, who was the chief scientist at Silicon Graphics in the 1990s.

I replied to Mr. Diebold that I thought from what I had seen he probably had plenty of competition. And I passed along the e-mail correspondence I had received. Mr. Diebold said thanks much, and added that he had a University of Pennsylvania research librarian looking into it as well.

The term Big Data is so generic that the hunt for its origin was not just an effort to find an early reference to those two words being used together. Instead, the goal was the early use of the term that suggests its present connotation — that is, not just a lot of data, but different types of data handled in new ways.

The credit, it seemed to me, should go to someone who was aware of the computing context. That is why, in my view, a very intriguing reference, discovered by the Yale researcher Mr. Shapiro, does not qualify.

In 1989, Erik Larson, later the author of bestsellers including “The Devil in the White City” and “In The Garden of Beasts,” wrote a piece for Harper’s Magazine, which was reprinted in The Washington Post. The article begins with the author wondering how all that junk mail arrives in his mailbox and moves on to the direct-marketing industry. The article includes these two sentences: “The keepers of big data say they do it for the consumer’s benefit. But data have a way of being used for purposes other than originally intended.”

Prescient indeed. But not, I don’t think, a use of the term that suggests an inkling of the technology we call Big Data today.

Since I first looked at how he used the term, I liked Mr. Mashey as the originator of Big Data. In the 1990s, Silicon Graphics was the giant of computer graphics, used for special-effects in Hollywood and for video surveillance by spy agencies. It was a hot company in the Valley that dealt with new kinds of data, and lots of it.

There are no academic papers to support the attribution to Mr. Mashey. Instead, he gave hundreds of talks to small groups in the middle and late 1990s to explain the concept and, of course, pitch Silicon Graphics products. The case for Mr. Mashey is on the Web sites of technical and professional organizations, like Usenix. There, some of his presentation slides from those talks are posted, including “Big Data and the Next Wave of Infrastress” in 1998.

For me, looking for the origins of Big Data has been a matter of personal curiosity, something to get back to someday and write up on a weekend.

When I called Mr. Mashey recently, he said that Big Data is such a simple term, it’s not much a claim to fame. His role, if any, he said, was to popularize the term within a portion of the high-tech community in the 1990s. “I was using one label for a range of issues, and I wanted the simplest, shortest phrase to convey that the boundaries of computing keep advancing,” said Mr. Mashey, a consultant to tech companies and a trustee of the Computer History Museum in Mountain View, Calif.

At the University of Pennsylvania, Mr. Diebold kept looking into the subject as well. His follow-up inquiries, he said, proved to be “a journey of increasing humility.” He has written to two papers since the first one.

His most recent paper concludes: “The term Big Data, which spans computer science and statistics/econometrics, probably originated in the lunch-table conversations at Silicon Graphics in the mid-1990s, in which John Mashey figured prominently.”

Tracing the origins of Big Data points to the evolution in the field of etymology, according to Mr. Shapiro. The Yale researcher began his word-hunting nearly 35 years ago, as a student at the Harvard Law School, poring through the library stacks. He was an early user of databases of legal documents, news articles and other documents, in computerized archives.

The Web, Mr. Shapiro said, opens up new linguistic terrain. “What you’re seeing is a marriage of structured databases and novel, less structured materials,” he said. “It can be a powerful tool to see far more.”

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Media Decoder Blog: In Wake of Restructuring, NBC News President Quits

8:30 p.m. | Updated

The longest-serving president of any of the three network news divisions, Steve Capus of NBC News, stepped down from his position on Friday, six months after Comcast restructured its news units in a way that diminished his authority.

Pat Fili-Krushel, chairwoman of the NBCUniversal News Group, said in a brief telephone interview on Friday that she would “cast a wide net” while searching for a successor to Mr. Capus. In the interim, the leaders of the news division will report directly to her.

Ms. Fili-Krushel became Mr. Capus’s boss last July when Steve Burke, the chief executive of NBCUniversal, consolidated all of NBC’s news units — NBC News, the cable news channels MSNBC and CNBC, and its stake in the Weather Channel — under a new umbrella, the NBCUniversal News Group. Mr. Burke asked Ms. Fili-Krushel, one of his most trusted lieutenants, to run it, while keeping Mr. Capus and the heads of the other units in place.

Ms. Fili-Krushel worked early in her career at HBO and Lifetime. A veteran of the Walt Disney Company, where she helped program ABC, and  Time Warner, where she was an administrator, she is by her own admission not a journalist.  But now she is, by default, the highest-ranking woman in the American television news industry — not just at the moment, but in the history of the medium. The heads of the news divisions at ABC and CBS are men, as are the heads of the Fox News Channel, CNN, and Bloomberg.

Ms. Fili-Krushel has kept a low public profile, but has been a forceful presence behind the scenes, recently moving from her office on the 51st floor of 30 Rockefeller Center, near Mr. Burke’s, to a new one on the third floor, where NBC News is based. On Friday, she said she had spent her first six months “learning, listening and getting to know the players here.” She called the News Group an “unbelievably strong organization.”

Though Mr. Capus’s exit saddened many at NBC News on Friday, it came as little surprise. He had previously reported directly to Mr. Burke, but after the restructuring he reported to Ms. Fili-Krushel, and he made no secret of his unhappiness with the change. His contract had a clause that allowed him to leave in the event that he no longer reported to Mr. Burke, according to two people with direct knowledge of the arrangement at NBC, and he decided to exercise that right after months of contemplation. The people insisted on anonymity because they were not authorized by the network to speak publicly.

Mr. Capus told Ms. Fili-Krushel of his intent to leave last Friday. It is likely that he would have left sooner, but a series of major news stories kept him busy late last year — including Hurricane Sandy, the presidential election and the school shooting in Newtown, Conn. Mr. Capus also oversaw the network’s response to the kidnapping of Richard Engel and an NBC News crew in Syria last month.

“It has been a privilege to have spent two decades here, but it is now time to head in a new direction,” he wrote in an e-mail to staff members on Friday afternoon.

Mr. Capus guided NBC through a revolutionary time in news-gathering and distribution. He maintained the news division’s profitability, managed tensions between NBC News and its increasingly liberal cable channel MSNBC, and fostered new business ventures like an in-house production company and an annual education summit. Last year, he unwound an old deal with Microsoft to give the news division complete control over its Web site, now named NBCNews.com, for the first time.

Ms. Fili-Krushel wrote in a separate e-mail to staff members that “NBC News is America’s leading source of television news and Steve has been a big part of that success.”

NBC News is the producer of the most popular evening newscast in the country. But its single biggest source of profits, the morning show “Today,” fell to second place last year, behind ABC’s “Good Morning America,” for the first time since the 1990s. The decline caused widespread anxiety inside the news division and speculation that Mr. Capus would be relieved of his duties.

Inside NBC, both Mr. Capus and the executive producer of “Today,” Jim Bell, received much of the blame for the botched removal of Ann Curry from “Today” last June, which worsened the show’s already tenuous position in the ratings. Ms. Fili-Krushel was put in charge just a few weeks later.

Mr. Bell was replaced at “Today” last fall and is now the executive producer for NBC Olympics. Savannah Guthrie is now the co-host of “Today,” and Ms. Curry is a national and international correspondent for the network, but is rarely seen. Mr. Capus’s exit was seen by some at the network as the last shoe that had to drop.

In his e-mail to staff members, Mr. Capus called it an “extremely difficult decision to walk away,” noting that he started at NBC as a producer 20 years ago this month. He did not make any mention of what he would do next. “Journalism is, indeed, a noble calling, and I have much I hope to accomplish in the next phase of my career,” he wrote.

“Today” continues to lose to ABC’s “Good Morning America” among total viewers, but lately it has won a few weeks in the 25- to 54-year-old demographic that advertisers covet.

“NBC Nightly News” has more successfully fended off ABC’s “World News,” despite an aggressive push by ABC. Mr. Capus said, “NBC News has grown in all key metrics — from ratings and reputation to profitability.”

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Ferrol Sams, Doctor Turned Novelist, Dies at 90

Ferrol Sams, a country doctor who started writing fiction in his late 50s and went on to win critical praise and a devoted readership for his humorous and perceptive novels and stories that drew on his medical practice and his rural Southern roots, died on Tuesday at his home in Lafayette, Ga. He was 90.

The cause, said his son Ferrol Sams III, also a doctor, was that he was “slap wore out.”

“He lived a full life,” his son said. “He didn’t leave anything in the tank.”

Dr. Sams grew up on a farm in the rural Piedmont area of Georgia, seven mud-road miles from the nearest town. He was a boy during the Depression; books meant escape and discovery. He read “Robinson Crusoe,” then Mark Twain and Charles Dickens. One of his English professors at Mercer University, in Macon, suggested he consider a career in writing, but he chose another route to examining the human condition: medical school.

When he was 58 — after he had served in World War II, started a medical practice with his wife, raised his four children and stopped devoting so much of his mornings to preparing lessons for Sunday school at the Methodist church — he began writing “Run With the Horsemen,” a novel based on his youth. It was published in 1982.

“In the beginning was the land,” the book begins. “Shortly thereafter was the father.”

In The New York Times Book Review, the novelist Robert Miner wrote, “Mr. Sams’s approach to his hero’s experiences is nicely signaled in these two opening sentences.”

He added: “I couldn’t help associating the gentility, good-humored common sense and pace of this novel with my image of a country doctor spinning yarns. The writing is elegant, reflective and amused. Mr. Sams is a storyteller sure of his audience, in no particular hurry, and gifted with perfect timing.”

Dr. Sams modeled the lead character in “Run With the Horsemen,” Porter Osborne Jr., on himself, and featured him in two more novels, “The Whisper of the River” and “When All the World Was Young,” which followed him into World War II.

Dr. Sams also wrote thinly disguised stories about his life as a physician. In “Epiphany,” he captures the friendship that develops between a literary-minded doctor frustrated by bureaucracy and a patient angry over past racism and injustice.

Ferrol Sams Jr. was born Sept. 26, 1922, in Woolsey, Ga. He received a bachelor’s degree from Mercer in 1942 and his medical degree from Emory University in 1949. In his addition to his namesake, survivors include his wife, Dr. Helen Fletcher Sams; his sons Jim and Fletcher; a daughter, Ellen Nichol; eight grandchildren; and nine great-grandchildren.

Some critics tired of what they called the “folksiness” in Dr. Sams’s books. But he did not write for the critics, he said. In an interview with the Georgia Writers Hall of Fame, Dr. Sams was asked what audience he wrote for. Himself, he said.

“If you lose your sense of awe, or if you lose your sense of the ridiculous, you’ve fallen into a terrible pit,” he added. “The only thing that’s worse is never to have had either.”

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Ferrol Sams, Doctor Turned Novelist, Dies at 90

Ferrol Sams, a country doctor who started writing fiction in his late 50s and went on to win critical praise and a devoted readership for his humorous and perceptive novels and stories that drew on his medical practice and his rural Southern roots, died on Tuesday at his home in Lafayette, Ga. He was 90.

The cause, said his son Ferrol Sams III, also a doctor, was that he was “slap wore out.”

“He lived a full life,” his son said. “He didn’t leave anything in the tank.”

Dr. Sams grew up on a farm in the rural Piedmont area of Georgia, seven mud-road miles from the nearest town. He was a boy during the Depression; books meant escape and discovery. He read “Robinson Crusoe,” then Mark Twain and Charles Dickens. One of his English professors at Mercer University, in Macon, suggested he consider a career in writing, but he chose another route to examining the human condition: medical school.

When he was 58 — after he had served in World War II, started a medical practice with his wife, raised his four children and stopped devoting so much of his mornings to preparing lessons for Sunday school at the Methodist church — he began writing “Run With the Horsemen,” a novel based on his youth. It was published in 1982.

“In the beginning was the land,” the book begins. “Shortly thereafter was the father.”

In The New York Times Book Review, the novelist Robert Miner wrote, “Mr. Sams’s approach to his hero’s experiences is nicely signaled in these two opening sentences.”

He added: “I couldn’t help associating the gentility, good-humored common sense and pace of this novel with my image of a country doctor spinning yarns. The writing is elegant, reflective and amused. Mr. Sams is a storyteller sure of his audience, in no particular hurry, and gifted with perfect timing.”

Dr. Sams modeled the lead character in “Run With the Horsemen,” Porter Osborne Jr., on himself, and featured him in two more novels, “The Whisper of the River” and “When All the World Was Young,” which followed him into World War II.

Dr. Sams also wrote thinly disguised stories about his life as a physician. In “Epiphany,” he captures the friendship that develops between a literary-minded doctor frustrated by bureaucracy and a patient angry over past racism and injustice.

Ferrol Sams Jr. was born Sept. 26, 1922, in Woolsey, Ga. He received a bachelor’s degree from Mercer in 1942 and his medical degree from Emory University in 1949. In his addition to his namesake, survivors include his wife, Dr. Helen Fletcher Sams; his sons Jim and Fletcher; a daughter, Ellen Nichol; eight grandchildren; and nine great-grandchildren.

Some critics tired of what they called the “folksiness” in Dr. Sams’s books. But he did not write for the critics, he said. In an interview with the Georgia Writers Hall of Fame, Dr. Sams was asked what audience he wrote for. Himself, he said.

“If you lose your sense of awe, or if you lose your sense of the ridiculous, you’ve fallen into a terrible pit,” he added. “The only thing that’s worse is never to have had either.”

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Deadly Firefight on Lebanon’s Border With Syria

BEIRUT, Lebanon — At least three Lebanese Army soldiers were killed on Friday in a shootout as they tried to arrest a resident of a village that has become a hub of refugees and where Syrian rebel fighters often cross the border. Their target was also fatally shot.

There were conflicting reports about the nature of the clash, in which security forces were ambushed as they pursued a wanted man, but the episode played into fears that the accelerating influx of Syrians could spread the conflict into Lebanon.

The village, Aarsel, lies in the eastern Bekaa Valley, a mountainous region bordering Syria, and is a stronghold of support for the rebellion against the Syrian president, Bashar al-Assad. Syrian refugees who prefer to avoid areas of the Bekaa closely controlled by Hezbollah, an ally of Mr. Assad, have also crammed into the town.

In a statement, the Lebanese Army said that a captain was among those killed and declared without elaborating, “There will be no compromises on attempts to hide armed militants.”

Some reports, citing unnamed security sources, said that the soldiers were attacked by Syrian rebels, while residents said that villagers chased down and attacked plainclothes security personnel who arrived to arrest a Lebanese suspect without coordinating with local leaders.

The suspect, a resident of Aarsel, was identified as Khaled Hummayed. Lebanon’s national news agency said that he was wanted for involvement in the kidnapping of Estonian tourists in the Bekaa in 2011.

Several Lebanese media outlets said that members of the Free Syrian Army, the loose-knit rebel coalition, attacked the soldiers, while Reuters reported that Mr. Hummayed was believed to be a member of a jihadist rebel group that has been active in Syria, Al Nusra Front, who traveled frequently in and out of the country.

The deputy mayor of Aarsel said that Mr. Hummayed was driving a pickup truck when security personnel in civilian cars confronted him, shot him, and left with his body. He said he did not know if Mr. Hummayed was involved with Syrian rebels, but added, “90 percent of Aarsel’s people support the revolution.”

A smuggler from Aarsel, who gave only a nickname, Abu Hussein, said he was on the way to Friday Prayer and witnessed the shootout. He said that Mr. Hummayed’s pickup truck was left behind, smeared with blood, as angry residents pursued the cars. He said that Mr. Hummayed had once draped the flag of the Syrian revolution around his body.

Supporters of the revolution are deeply suspicious of Lebanese security forces, which they see as aiding the Syrian government. Lebanon has officially adopted a policy of “disassociation” from the Syrian conflict.

But in practice, many Lebanese have taken sides, with many Sunni Muslims supporting the rebellion led by Syria’s Sunni majority, while Hezbollah, a Shiite Muslim movement that relies on Syria as an arms conduit, has supported the government dominated by Mr. Assad’s Alawite sect, an offshoot of Shiism.

The border area has been tense, with rebels hiding and resting on the Lebanese side, and Syrian troops sometimes shelling Lebanese territory, crossing the border to fight rebels or shooting civilian refugees as they flee.

New pressures are growing as the flow of refugees — there are already more than 200,000 in Lebanon, a country of 4 million — overtaxes Sunni areas that have hosted most of them and pushes refugees into new areas.

More than 2 million people are displaced inside Syria, and on Friday, the United Nations children’s agency said 420,000 people — half of them children — needed urgent help in the province of Homs.

A spokeswoman for Unicef, Marixie Mercado, told reporters in Geneva that 200 of Homs’s 1,500 schools were damaged, with 65 more housing refugees, news agencies reported.

The United Nations refugee agency said it had for the first time reached the town of Azaz, near the Turkish border, to deliver tents with Syrian government permission, and found 45,000 people living in makeshift tents.

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Making Web Sites Completely Addictive

Looking for a real estate agent who loves dogs? You’ll find 314 results for “dog lover” on Corcoran’s redesigned Web site.

Want to know how locals rate the suburb you’re considering moving to? What if during Sunday brunch you get the sudden urge to go apartment hunting? Warburgrealty.com now offers an app that offers up nearby listings based on your current location.

Recognizing that it’s no longer enough just to present real estate listings based on price, location and the number of bedrooms, many New York brokerage firms are redesigning their Web sites as glossy one-stop shops with new tools to help guide buyers and sellers through the deal.

Uncluttered pages with eye-catching full-screen photos that translate well to iPads and other mobile devices are now de rigueur. And on many sites, video walk-throughs of apartments are on the way out. They have made way for tours of neighborhoods and advice pieces on everything from timing the sale of a home to deciding whether it’s better to buy or rent.

Sites are also providing more comprehensive searches that make it easier for buyers to sort through new offerings and connect with agents through social media.

The idea is to give potential clients a reason to cleave to a particular site rather than shop the competition. After all, with apartment data made ubiquitous by sites like Trulia, Zillow, NYTimes.com and more, brokerage firms can no longer rely on listings alone. And while agents are still featured prominently on most sites, they have generally been recast as neighborhood specialists as opposed to the listing gatekeepers they once were.

Online consultants say that what is happening to online brokerage firms is not unlike what happened to brick-and-mortar travel agencies.

“Once all flights were made available on Expedia, Travelocity and Kayak, what’s the travel agent’s unique value proposition?” said Marc Davison, a founder of 1000Watt Design, a creative digital agency for real estate in Portland, Ore., that worked with Houlihan Lawrence on its recent redesign. “Real estate brokers are grappling with that same problem. What compels you to come to my site, what else can I offer?”

Corcoran.com is betting that less is more. In November it unveiled a new site with streamlined searches designed to uncover a smaller but more relevant number of listings based on what the consumer is looking for.

Visitors to the site still select a neighborhood, a price range and a number of bedrooms and baths. But there is less of the clicking back and forth and redoing of searches that the site previously required. It now offers all results on one page and has turned its agent search into something of a matchmaking service, allowing customers to look up agents not just by the properties they represent, but by the languages they speak, hobbies or other interests. Signing in with Facebook or LinkedIn will turn up a list of agents who may be known to your friends or contacts.

Consumers can also use keywords to search apartment listings and agents. Want a view of the Chrysler building? A recent search produced more than 300 listings. You could even search for the word “sexy,” just to make sure all your expectations were met. Such a search turned up 75 results, mostly listings in the Hamptons and links to related articles.

Corcoran also has a nifty feature that shows the number of listings meeting your criteria and ticks down as your search narrows. For example, the site offered a total of 1,262 available listings in New York early last week. A search for two-bedrooms in Brooklyn brought the count to 69 “matching homes.” That number dropped to just 24 when the search was limited to two-bedrooms with two baths.

Clicking on a listing produces full-screen photos and a neighborhood map showing restaurants, grocery stores, shopping and schools. Want more recommendations? Click a link to tips and data compiled from Twitter, Pinterest, Tumblr, Foodspotting and Foursquare, the location-based social networking site.

Instead of “just putting forth hundreds of search results,” said Christina Lowris Panos, the chief marketing officer of the Corcoran Group, “we’re the curator of the information. We’re not just giving you volume.”

HoulihanLawrence.com, which revamped its Web site about the same time as Corcoran, has taken a similar approach. It also allows customers to search by keyword and offers more robust information on neighborhoods, including “community videos” of local historians, residents and small-business owners discussing favorite aspects of a given town.

A new “community conversations” section, powered by StreetAdvisor, invites residents to review their neighborhoods. For example, a snapshot of the stately Westchester town of Bedford, N.Y., ranks it 7.8 out of 10, noting who lives there (“country lovers, families with kids, professionals, retirees, gay & lesbian”), positive aspects (“peace & quiet,” “safe & sound,” schools) and what it is “not great for” (night life, public transport, cost of living, shopping and medical facilities).

You can pose a question to the forum, read answers to popular questions like “where is the closest mall?” or peruse reviews by residents.

“When looking for a home on a real estate Web site,” said Chris Meyers, the chief operating officer of Houlihan Lawrence, “very often people are shopping for a community more than an individual home. Where do I want to live that feels right for me? How do I understand that, in a market I haven’t been in before?”

Halstead Property, which is refreshing Halstead.com, already offers video tours of 23 neighborhoods in New York, New Jersey and Connecticut. The site also taps into New York Magazine’s best restaurants, shopping, night life and salons.

Other firms are not making the neighborhood a focus. Stribling & Associates, for example, has pared down its site to offer a cleaner presentation.

This article has been revised to reflect the following correction:

Correction: February 1, 2013

An earlier version of this article gave the incorrect web address for a real estate brokerage. It is Warburgrealty.com, not Warburg.com.

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DealBook: Doubt Is Cast on Consultants Hired to Fix Banks’ Abuses

Federal authorities are scrutinizing private consultants hired to clean up financial misdeeds like money laundering and foreclosure abuses, taking aim at an industry that is paid billions of dollars by the same banks it is expected to police.

The consultants operate with scant supervision and produce mixed results, according to government documents and interviews with prosecutors and regulators. In one case, the consulting firms enabled the wrongdoing. The deficiencies, officials say, can leave consumers vulnerable and allow tainted money to flow through the financial system.

“How can you be independent if you’re hired by the entity you’re reviewing?” Senator Jack Reed, Democrat of Rhode Island, who sits on the Senate Banking Committee, said.

The pitfalls were exposed last month when federal regulators halted a broad effort to help millions of homeowners in foreclosure. The regulators reached an $8.5 billion settlement with banks, scuttling a flawed foreclosure review run by eight consulting firms. In the end, borrowers hurt by shoddy practices are likely to receive less money than they deserve, regulators said.

On Thursday, Senator Elizabeth Warren, Democrat of Massachusetts, and Representative Elijah Cummings, Democrat of Maryland, announced that they would open an investigation into the foreclosure review, seeking “additional information about the scope of the harms found.”

Critics concede that regulators have little choice but to hire outsiders for certain responsibilities after they find problems at the banks. The government does not have the resources to ensure that banks follow the rules. Still, consultants like Deloitte & Touche and the Promontory Financial Group can add to regulators’ headaches, the government documents and interviews indicate. Some banks that work with consultants continue to run afoul of the law. At other times, consultants underestimate the extent of the misdeeds or facilitate them, preventing regulators from holding institutions accountable.

Now, regulators and lawmakers are rethinking their relationship with the consultants. Officials at the Federal Reserve, which oversees many large banks, are questioning the prudence of relying on consultants so heavily, said two people with direct knowledge of the matter.

When the Office of the Comptroller of the Currency penalized JPMorgan Chase last month for breakdowns in money-laundering controls, it imposed stricter requirements, ordering the bank to hire a consultant with “specialized experience” in money laundering and to ensure that the firm “not be subject to any conflict of interest.” In a separate action against the bank related to a $6 billion trading loss last year, the agency opted not to mandate an outside consultant at all.

While the comptroller’s office will continue requiring consultants in certain cases, some agency officials are worried about the quality of the work, as well as the consultants’ independence, according to three government officials briefed on the matter.

Since the financial crisis, regulators have increasingly relied on consultants. The comptroller’s office ordered banks to hire consultants in more than 130 enforcement actions since 2008, or nearly 15 percent of the cases.

It can be a lucrative business. In 2011, regulators mandated that 14 banks employ consultants to determine whether homeowners were wrongfully evicted. Over 14 months, the consultants collected about $2 billion in fees, according to regulators and bank officials.

Those fees amounted to more than half of what homeowners will receive under the $8.5 billion settlement that ended the review. As part of the deal, officials will disburse $3.3 billion to 3.8 million borrowers in foreclosure.

According to consultants and regulators, the broad review was plagued with inefficiencies. For example, Promontory initially instructed employees to calculate lawyers’ fees for each loan, to assess if borrowers were overcharged. Later, it scrapped the original procedure, only to reverse the policy again two weeks later, according to two reviewers who worked for Promontory.

“From Day 1, Promontory strove to conduct its review work as thoroughly and independently as possible,” a spokesman for the firm, Christopher Winans, said in a statement. “Our overarching concern at all times was to serve the best interests of borrowers.”

Some lawmakers question whether a consultant’s regulatory connections helped it secure contracts. PricewaterhouseCoopers, which has a stable of former Securities and Exchange Commission officials, won much of the foreclosure review work, signing deals with four banks, including Citigroup. Promontory, the firm examining loans for Wells Fargo, Bank of America and PNC, was founded in 2000 by the former head of the comptroller’s office, Eugene A. Ludwig.

When the contracts were initially awarded, some housing advocates complained that consulting firms could not objectively evaluate banks with which they had pre-existing business relationships. The comptroller’s office said it vetted the firms to spot such potential conflicts, and argued that the process provided swifter relief for homeowners than if the government had hired the companies directly through a lengthy contracting process.

But concerns persisted. Deloitte, which won the contract to review JPMorgan’s loans, had previously audited Washington Mutual and Bear Stearns, two firms JPMorgan acquired during the financial crisis. In May, the comptroller’s office replaced Allonhill, the consultant for Aurora Bank, after the firm disclosed that it had already reviewed some “of the same pool of loans” as part of an earlier contract.

“It’s clear from the foreclosure settlement that oversight over consultants was inadequate and the review process was deeply flawed,” said Representative Carolyn B. Maloney, Democrat of New York, who recently pressed regulators to detail how consultants were paid. People close to the review say consultants relied on a process that the comptroller’s office designed in 2011, under previous leadership.

“This was a very complex process,” a spokesman for the comptroller said. “Throughout the process, regulators provided continuous oversight, guidance and were available to discuss issues.” The agency also performs spot checks on the consultants.

Still, the foreclosure review highlighted broader concerns about the role consultants play.

Since the financial crisis, the comptroller’s office has issued nearly 20 enforcement actions against banks that had already hired consultants to help iron out problems, according to government documents. While consultants cannot be expected to remedy every last issue at the banks, the actions raise questions about the effectiveness of their work.

When HSBC, the British bank, was sanctioned in 2003 over porous money-laundering controls, the bank turned to Deloitte to review its compliance, an official briefed on the matter said. Deloitte also worked for HSBC from 2006 to 2008, the person said, building a system to monitor money flows more effectively. But the bank ran into trouble in 2010 over similar issues, as highlighted in a recent scathing report by the Senate’s Permanent Subcommittee on Investigations.

As part of a regulatory order, HSBC again hired Deloitte, this time to assess the number of times the bank failed to report suspicious transactions. Deloitte, three officials said, generously bundled hundreds of missed transfers into a single report. That helped save the bank from some government fines.

Despite the undercounting, HSBC still paid a record $1.9 billion last year to settle accusations that it enabled drug cartels to move money through its American subsidiaries.

In a statement, a spokesman for the firm said, “Deloitte fully stands behind the quality and integrity of its work on behalf of regulatory authorities.”

Deloitte has also been suspected of helping institutions cloak illicit transfers of money to rogue nations around the globe. In August, New York’s top banking regulator, Benjamin M. Lawsky, accused Deloitte of helping the British bank Standard Chartered flout American sanctions.

The consulting firm was hired to flag suspicious transfers routed through Standard Chartered’s New York branches. Instead, it instructed bankers on how to escape regulatory scrutiny, according to state court documents.

Deloitte turned over “highly confidential information” from which the bank gleaned insight into “regulators’ concerns and strategies,” the court documents said. The firm later doctored its report to regulators, Mr. Lawsky said, deliberately removing some illegal transfers on behalf of Iranian clients. In an e-mail, a Deloitte partner admitted that a report on the transactions was a “watered-down version.”

The authorities never took legal action against Deloitte, and federal officials noted in a separate settlement agreement that Standard Chartered employees withheld critical information from the consulting firm.

Despite these concerns, regulators are turning to a familiar source to help Standard Chartered. As part of a $327 million settlement last year, the bank is required to hire “an independent consultant.”

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During Trial, New Details Emerge on DuPuy Hip

When Johnson & Johnson announced the appointment in 2011 of an executive to head the troubled orthopedics division whose badly flawed artificial hip had been recalled, the company billed the move as a fresh start.

But that same executive, it turns out, had supervised the implant’s introduction in the United States and had been told by a top company consultant three years before the device was recalled that it was faulty.

In addition, the executive also held a senior marketing position at a time when Johnson & Johnson decided not to tell officials outside the United States that American regulators had refused to allow sale of a version of the artificial hip in this country.

The details about the involvement of the executive, Andrew Ekdahl, with the all-metal hip implant emerged Wednesday in Los Angeles Superior Court during the trial of a patient lawsuit against the DePuy Orthopaedics division of Johnson & Johnson. More than 10,000 lawsuits have been filed against DePuy in connection with the device — the Articular Surface Replacement, or A.S.R. — and the Los Angeles case is the first to go to trial.

The information about the depth of Mr. Ekdahl’s involvement with the implant may raise questions about DePuy’s ability to put the A.S.R. episode behind it.

Asked in an e-mail why the company had promoted Mr. Ekdahl, a DePuy spokeswoman, Lorie Gawreluk, said the company “seeks the most accomplished and competent people for the job.”

On Wednesday, portions of Mr. Ekdahl’s videotaped testimony were shown to jurors in the Los Angeles case. Other top DePuy marketing executives who played roles in the A.S.R. development are expected to testify in coming days. Mr. Ekdahl, when pressed in the taped questioning on whether DePuy had recalled the A.S.R. because it was unsafe, repeatedly responded that the company had recalled it “because it did not meet the clinical standards we wanted in the marketplace.”

Before the device’s recall in mid-2010, Mr. Ekdahl and those executives all publicly asserted that the device was performing extremely well. But internal documents that have become public as a result of litigation conflict with such statements.

In late 2008, for example, a surgeon who served as one of DePuy’s top consultants told Mr. Ekdahl and two other DePuy marketing officials that he was concerned about the cup component of the A.S.R. and believed it should be “redesigned.” At the time, DePuy was aggressively promoting the device in the United States as a breakthrough and it was being implanted into thousands of patients.

“My thoughts would be that DePuy should at least de-emphasize the A.S.R. cup while the clinical results are studied,” that consultant, Dr. William Griffin, wrote.

A spokesman for Dr. Griffin said he was not available for comment.

The A.S.R., whose cup and ball components were both made of metal, was first sold by DePuy in 2003 outside the United States for use in an alternative hip replacement procedure called resurfacing. Two years later, DePuy started selling another version of the A.S.R. for use here in standard hip replacement that used the same cup component as the resurfacing device. Only the standard A.S.R. was sold in the United States; both versions were sold outside the country.

Before the device recall in mid-2010, about 93,000 patients worldwide received an A.S.R., about a third of them in this country. Internal DePuy projections estimate that it will fail in 40 percent of those patients within five years; a rate eight times higher than for many other hip devices.

Mr. Ekdahl testified via tape Wednesday that he had been placed in charge of the 2005 introduction of the standard version of the A.S.R. in this country. Within three years, he and other DePuy executives were receiving reports that the device was failing prematurely at higher than expected rates, apparently because of problems related to the cup’s design, documents disclosed during the trial indicate.

Along with other DePuy executives, he also participated in a meeting that resulted in a proposal to redesign the A.S.R. cup. But that plan was dropped, apparently because sales of the implant had not justified the expense, DePuy documents indicate.

In the face of growing complaints from surgeons about the A.S.R., DePuy officials maintained that the problems were related to how surgeons were implanting the cup, not from any design flaw. But in early 2009, a DePuy executive wrote to Mr. Ekdahl and other marketing officials that the early failures of the A.S.R. resurfacing device and the A.S.R. traditional implant, known as the XL, were most likely design-related.

“The issue seen with A.S.R. and XL today, over five years post-launch, are most likely linked to the inherent design of the product and that is something we should recognize,” that executive, Raphael Pascaud wrote in March 2009.

Last year, The New York Times reported that DePuy executives decided in 2009 to phase out the A.S.R. and sell existing inventories weeks after the Food and Drug Administration asked the company for more safety data about the implant.

The F.D.A. also told the company at that time that it was rejecting its efforts to sell the resurfacing version of the device in the United States because of concerns about “high concentration of metal ions” in the blood of patients who received it.

DePuy never disclosed the F.D.A. ruling to regulators in other countries where it was still marketing the resurfacing version of the implant.

During a part of that period, Mr. Ekdahl was overseeing sales in Europe and other regions for DePuy. When The Times article appeared last year, he issued a statement, saying that any implication that the F.D.A. had determined there were safety issues with the A.S.R. was “simply untrue.” “This was purely a business decision,” Mr. Ekdahl stated at that time.

This article has been revised to reflect the following correction:

Correction: February 1, 2013

A headline on Thursday about a patient lawsuit against DePuy Orthopaedics, a unit of Johnson & Johnson, misstated the start of the trial in some copies. It began last week, not on Wednesday.

Read More..

During Trial, New Details Emerge on DuPuy Hip

When Johnson & Johnson announced the appointment in 2011 of an executive to head the troubled orthopedics division whose badly flawed artificial hip had been recalled, the company billed the move as a fresh start.

But that same executive, it turns out, had supervised the implant’s introduction in the United States and had been told by a top company consultant three years before the device was recalled that it was faulty.

In addition, the executive also held a senior marketing position at a time when Johnson & Johnson decided not to tell officials outside the United States that American regulators had refused to allow sale of a version of the artificial hip in this country.

The details about the involvement of the executive, Andrew Ekdahl, with the all-metal hip implant emerged Wednesday in Los Angeles Superior Court during the trial of a patient lawsuit against the DePuy Orthopaedics division of Johnson & Johnson. More than 10,000 lawsuits have been filed against DePuy in connection with the device — the Articular Surface Replacement, or A.S.R. — and the Los Angeles case is the first to go to trial.

The information about the depth of Mr. Ekdahl’s involvement with the implant may raise questions about DePuy’s ability to put the A.S.R. episode behind it.

Asked in an e-mail why the company had promoted Mr. Ekdahl, a DePuy spokeswoman, Lorie Gawreluk, said the company “seeks the most accomplished and competent people for the job.”

On Wednesday, portions of Mr. Ekdahl’s videotaped testimony were shown to jurors in the Los Angeles case. Other top DePuy marketing executives who played roles in the A.S.R. development are expected to testify in coming days. Mr. Ekdahl, when pressed in the taped questioning on whether DePuy had recalled the A.S.R. because it was unsafe, repeatedly responded that the company had recalled it “because it did not meet the clinical standards we wanted in the marketplace.”

Before the device’s recall in mid-2010, Mr. Ekdahl and those executives all publicly asserted that the device was performing extremely well. But internal documents that have become public as a result of litigation conflict with such statements.

In late 2008, for example, a surgeon who served as one of DePuy’s top consultants told Mr. Ekdahl and two other DePuy marketing officials that he was concerned about the cup component of the A.S.R. and believed it should be “redesigned.” At the time, DePuy was aggressively promoting the device in the United States as a breakthrough and it was being implanted into thousands of patients.

“My thoughts would be that DePuy should at least de-emphasize the A.S.R. cup while the clinical results are studied,” that consultant, Dr. William Griffin, wrote.

A spokesman for Dr. Griffin said he was not available for comment.

The A.S.R., whose cup and ball components were both made of metal, was first sold by DePuy in 2003 outside the United States for use in an alternative hip replacement procedure called resurfacing. Two years later, DePuy started selling another version of the A.S.R. for use here in standard hip replacement that used the same cup component as the resurfacing device. Only the standard A.S.R. was sold in the United States; both versions were sold outside the country.

Before the device recall in mid-2010, about 93,000 patients worldwide received an A.S.R., about a third of them in this country. Internal DePuy projections estimate that it will fail in 40 percent of those patients within five years; a rate eight times higher than for many other hip devices.

Mr. Ekdahl testified via tape Wednesday that he had been placed in charge of the 2005 introduction of the standard version of the A.S.R. in this country. Within three years, he and other DePuy executives were receiving reports that the device was failing prematurely at higher than expected rates, apparently because of problems related to the cup’s design, documents disclosed during the trial indicate.

Along with other DePuy executives, he also participated in a meeting that resulted in a proposal to redesign the A.S.R. cup. But that plan was dropped, apparently because sales of the implant had not justified the expense, DePuy documents indicate.

In the face of growing complaints from surgeons about the A.S.R., DePuy officials maintained that the problems were related to how surgeons were implanting the cup, not from any design flaw. But in early 2009, a DePuy executive wrote to Mr. Ekdahl and other marketing officials that the early failures of the A.S.R. resurfacing device and the A.S.R. traditional implant, known as the XL, were most likely design-related.

“The issue seen with A.S.R. and XL today, over five years post-launch, are most likely linked to the inherent design of the product and that is something we should recognize,” that executive, Raphael Pascaud wrote in March 2009.

Last year, The New York Times reported that DePuy executives decided in 2009 to phase out the A.S.R. and sell existing inventories weeks after the Food and Drug Administration asked the company for more safety data about the implant.

The F.D.A. also told the company at that time that it was rejecting its efforts to sell the resurfacing version of the device in the United States because of concerns about “high concentration of metal ions” in the blood of patients who received it.

DePuy never disclosed the F.D.A. ruling to regulators in other countries where it was still marketing the resurfacing version of the implant.

During a part of that period, Mr. Ekdahl was overseeing sales in Europe and other regions for DePuy. When The Times article appeared last year, he issued a statement, saying that any implication that the F.D.A. had determined there were safety issues with the A.S.R. was “simply untrue.” “This was purely a business decision,” Mr. Ekdahl stated at that time.

This article has been revised to reflect the following correction:

Correction: February 1, 2013

A headline on Thursday about a patient lawsuit against DePuy Orthopaedics, a unit of Johnson & Johnson, misstated the start of the trial in some copies. It began last week, not on Wednesday.

Read More..

Syria’s Confirmation of Airstrike May Undercut Israel’s Strategy of Silence

Jim Hollander/European Pressphoto Agency

In East Jerusalem, Israelis distributed gas masks on Wednesday as worries about security spread. More Photos »

JERUSALEM — Israeli officials remained stone silent on Thursday about their airstrike in Syrian territory the day before, a tactic that experts said was part of a longstanding strategy to give targeted countries face-saving opportunities to avoid conflict escalation. But Syria’s own confirmation of the attack, followed by harsh condemnation not only by Israel’s enemies Iran and Hezbollah but also by Russia, may have undercut that effort, analysts said, increasing the likelihood of retaliation, which could prompt further Israeli attacks.

“From the moment they chose to say Israel did something, it means someone has to do something after that,” said Giora Eiland, a former head of Israel’s National Security Council and a longtime military leader. “Contrary to what I could hope and believe yesterday, that this round of events would end soon, now I am much less confident.”

The Iranian deputy foreign minister warned Thursday that Israel’s strike would lead to “grave consequences for Tel Aviv,” while the Russian Foreign Ministry issued a statement saying that the strike “blatantly violates the United Nations Charter and is unacceptable and unjustified, whatever its motives.”

Israel has not acknowledged the attack, which American officials say hit a convoy before dawn Wednesday that was ferrying sophisticated antiaircraft missiles called SA-17s to Lebanon. The Syrians and their allies said the target was actually a scientific research facility in the Damascus suburbs. It remained unclear Thursday whether there was in fact one strike or two, and what involvement the research outpost might have had in weapons production or storage for Syria or Hezbollah, the militant Lebanese Shiite organization that has long battled with Israel.

Most experts agree that Syria, Hezbollah and Israel each have strong reasons to want to avoid a new active conflict right now: the Syrian president, Bashar al-Assad, is fighting for his survival in a violent and chaotic civil war; Hezbollah is struggling for political legitimacy at home and battling its label as a terrorist organization internationally; and Israel is trying to keep its head down in an increasingly volatile region.

But it is equally clear that Hezbollah — backed by Syria and Iran — wants desperately to upgrade its arsenal in hopes of changing the parameters for any future engagement with the powerful Israeli military, and that Israel is determined to stop it. And Hezbollah is perhaps even more anxious to gird itself for future challenges to its primacy in Lebanon, especially if a Sunni-led revolution triumphs next door in Syria.

Benjamin Netanyahu, the Israeli prime minister, and his deputies said loud and clear in the days leading up to the strike that they saw any transfer of Syria’s extensive cache of chemical weapons, or of sophisticated conventional weapons systems, as a “red line” that would prompt action. Now that it has followed through on that threat, even without admitting it, analysts expect Israel — perhaps backed by its Western allies — to similarly target any future convoys attempting the same feat.

“Once this red line has been crossed, it’s definitely going to be crossed time and again from now on, especially as the situation of the Assad regime will deteriorate,” said Boaz Ganor, head of the International Institute for Counterterrorism at the Interdisciplinary Center in Herzliya, Israel. “They will do the utmost to gain control of those weapons. In that case, I don’t see why Israel wouldn’t have the same type of calculation that Israel had two days ago into the future.”

Mr. Ganor said the United States and Europe should be as concerned as Israel, because Syria’s chemical weapons could end up in the hands not of Hezbollah but of jihadist organizations like Al Qaeda or its proxies. “If one organization will put their hands on this arsenal, then it will change hands in no time and we’ll see it all over the world,” he said. “We, the international community, are marching into a new era of terrorism.”

Eyal Zisser, a historian at Tel Aviv University who specializes in Syria and Lebanon, said that if there was no retaliation to Wednesday’s airstrike, “Why not repeat it? For Israel it’s going to be the practice.” The question, Professor Zisser said, “is what they will try to do next, Syria and Hezbollah, if there is another Israeli attack, whether they will avoid any retaliation the next time as well.”Israel’s steadfast silence on the airstrike was reminiscent of its posture after it destroyed a Syrian nuclear reactor in 2007 — an attack it has never acknowledged, though many officials discuss it with winks and nods. But in that case, President Assad bought into the de-escalation strategy by saying the attack had hit an unused — and implicitly unimportant — military building, relieving the pressure for a response.

Syria and Israel are technically at war, though there has long been a wary calm along the decades-old armistice line. Though Wednesday’s strike was on Syrian soil, analysts said its actual goal was to send a strong signal to Hezbollah — something the Lebanese organization tried to deflect in its own statement after the attack, which expressed “solidarity with Syria’s leadership, army and people.”

Reporting was contributed by Irit Pazner Garshowitz from Jerusalem, Ellen Barry from Moscow, Thomas Erdbrink from Tehran and Anne Barnard from Beirut, Lebanon.

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