L.A. Unified misspent millions marked for school lunches

At least eight California school districts have misappropriated millions of dollars in funding intended to pay for meals for low-income students — the biggest culprit being the Los Angeles Unified School District, according to a state Senate watchdog group.

The California Department of Education has ordered districts to repay more than $170 million in misused funds to their student meal programs, the California Senate Office of Oversight and Outcomes said in a report issued Wednesday. L.A. Unified has been forced to pay back more than $158 million in misappropriations and unrelated charges that the district made over six years ending in 2011.

State officials suspect the alleged misuse of funds could be more widespread across California school districts.

In most cases, school systems attempted to use cafeteria funds to pay for personnel, utilities and other expenses. Other school districts named in the report are Oxnard, San Diego, Santa Ana, San Francisco, Baldwin Park, Centinela Valley and Compton.

Oxnard was forced to repay $5.6 million. San Diego and Santa Ana are challenging the findings of the department, which has ordered them to pay $4.5 million and $2.7 million, respectively.

L.A. Unified redirected funding for years –- ignoring reports from administrators and its own inspector general –- before an employee alerted state authorities, the survey said. Among other expenses, the district diverted funding to pay for sprinklers and salaries of employees at a district television station.

L.A. Unified said in a statement that administrators have been working with the state to ensure compliance and said the district "looks forward to success with state education officials in this work to find a more rational approach to accounting and compliance guidelines for all schools statewide."

Federal regulations require districts to keep the student meal funding in an account to be used only for the improvement of food service. Most districts keep federal, state and other cafeteria revenues in that same account and all funds must comply with federal regulations, the report said.

The report, however, found that the system to monitor the spending of those funds is overloaded and that the regulations governing spending are too complex. School districts, as a result, have repeatedly disregarded the rules and subsequently contested violations as arguable interpretations of the law, the report said.

Oversight of these funds is carried out by 60 state examiners who monitor nearly 3,000 districts. Examiners — who are nutritionists — have not completed all inspections required by law since 2001 and "rarely take more than a cursory look at the books," the report said.

The diversion of funds often contributes to conditions that discourage eligible students from seeking free or reduced-priced meals. To maximize funds, districts have used cost-saving methods of serving processed rather than fresh foods, shortening lunch periods and cutting back on cafeteria maintenance and staff — all of which hinder student participation, the report said.

"They are literally taking food out of the mouths of kids," Richard Zeiger, chief deputy superintendent of public instruction, said in a statement.

From the 2004-2005 school year to 2010-2011, the number of L.A. Unified students eligible for reduced-price or free lunches fell below statewide averages. During those years, the district — the state's largest — averaged a participation rate of between 51% and 60% among eligible students. School districts statewide averaged between 71% and 74% participation.

Students who are eligible for reduced-priced or free lunches are from low-income and poverty-level families.

L.A. Unified has become a leader in providing more healthful meals, offering foods with less sodium and fat, and including more fresh fruit and vegetables. The district serves 650,000 meals a day.

The state has allowed L.A. Unified to use money from its general fund that was already going toward covering a deficit in its food services budget to "write off" the debt, the report said. The district has used those funds to pay off about $120 million so far.

The state Education Department said it has begun training employees on how to flag accounting issues and is in the process of hiring additional monitoring staff.

stephen.ceasar@latimes.com

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Microsoft Teases Future Surface Pro Accessories With Extra Battery Power

Days before Surface Pro’s release date, Microsoft is already teasing the types of accessories we’ll see for the device.

In a Reddit AMA hosted on Wednesday, members of the Surface Team responded to user questions, and suggested that a Surface Pro cover that would double as an extra battery pack is in the works. Good thing, too, since we found that the Surface Pro could barely get around four hours of normal usage.

Naturally, that’s a major concern for people considering buying the computer — Reddit members brought it up on multiple occasions. Asked about the new connectors at the bottom of the Surface Pro on either side of the cover port, a Microsoft rep said, “At launch we talked about the ‘accessory spine’ and hinted at future peripherals that can click in and do more. Those connectors look like can carry more current than the pogo pins, don’t they?”

The cryptic answer was fleshed out in another response. A redditor specifically asked if Microsoft plans to make a thicker keyboard with an extra battery pack.

“That would require extending the design of the accessory spine to include some way to transfer higher current between the peripheral and the main battery. Which we did,” a Surface Team member replied.

Considering that Microsoft already has released two covers for Surface Pro and Surface RT, along with a Surface-branded Wedge Touch Mouse, it’s not hard to imagine the company expanding its Surface accessory lineup. It’s a natural next step as the company continues to focus on its hardware division, which has traditionally offered accessories like mice and keyboards.

The Reddit AMA also covered issues like Surface Pro’s lack of storage space and whether the company plans to release a 3G or 4G Surface. The latter answer was a roundabout “no.” As for storage space, the Surface Team’s Marc DesCamp said, once again, that you can extend storage through the USB 3.0 port and microSDX card slot. He also mentioned that initial reports of available storage space (23GB for the 64GB model, and 83GB for the 128GB model) are conservative; you actually get around 6 to 7GB more than that.

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Selena Gomez works the front row at Neo show

NEW YORK (AP) — Selena Gomez sat front and center at the fashion show to preview the first collection in her collaboration with Adidas‘ streetwear Neo label.

But the runway at Wednesday evening’s show was a next-gen catwalk: Teenager bloggers were charged with styling the outfits instead of industry professionals.

Gomez thanked them as she stood on stage at the end of the show. She was flanked by models in denim shorts, Bermudas, slouchy sweats and T-shirts that read “Pirate Love.” There were a few graffiti prints sprinkled in, and some varsity jackets.

The clothes, mostly in sunny yellow, bright pink and navy, were more surf than sport, which is Adidas’ normal niche.

The show was very briefly interrupted by a protester trying to hand out leaflets about sweatshops.

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Well: Think Like a Doctor: A Confused and Terrified Patient

The Challenge: Can you solve the mystery of a middle-aged man recovering from a serious illness who suddenly becomes frightened and confused?

Every month the Diagnosis column of The New York Times Magazine asks Well readers to sift through a difficult case and solve a diagnostic riddle. Below you will find a summary of a case involving a 55-year-old man well on his way to recovering from a series of illnesses when he suddenly becomes confused and paranoid. I will provide you with the main medical notes, labs and imaging results available to the doctor who made the diagnosis.

The first reader to figure out this case will get a signed copy of my book, “Every Patient Tells a Story,” along with the satisfaction of knowing you solved a case of Sherlockian complexity. Good luck.

The Presenting Problem:

A 55-year-old man who is recovering from a devastating injury in a rehabilitation facility suddenly becomes confused, frightened and paranoid.

The Patient’s Story:

The patient, who was recovering from a terrible injury and was too weak to walk, had been found on the floor of his room at the extended care facility, raving that there were people out to get him. He was taken to the emergency room at the Waterbury Hospital in Connecticut, where he was diagnosed with a urinary tract infection and admitted to the hospital for treatment. Doctors thought his delirium was caused by the infection, but after 24 hours, despite receiving the appropriate antibiotics, the patient remained disoriented and frightened.

A Sister’s Visit:

The man’s sister came to visit him on his second day in the hospital. As she walked into the room she was immediately struck by her brother’s distress.

“Get me out of here!” the man shouted from his hospital bed. “They are coming to get me. I gotta get out of here!”

His blue eyes darted from side to side as if searching for his would-be attackers. His arms and legs shook with fear. He looked terrified.

For the past few months, the man had been in and out of the hospital, but he had been getting better — at least he had been improving the last time his sister saw him, the week before. She hurried into the bustling hallway and found a nurse. “What the hell is going on with my brother?” she demanded.

A Long Series of Illnesses:

Three months earlier, the patient had been admitted to that same hospital with delirium tremens. After years of alcohol abuse, he had suddenly stopped drinking a couple of days before, and his body was wracked by the sudden loss of the chemical he had become addicted to. He’d spent an entire week in the hospital but finally recovered. He was sent home, but he didn’t stay there for long.

The following week, when his sister hadn’t heard from him for a couple of days, she forced her way into his home. There she found him, unconscious, in the basement, at the bottom of his staircase. He had fallen, and it looked as if he may have been there for two, possibly three, days. He was close to death. Indeed, in the ambulance on the way to the hospital, his heart had stopped. Rapid action by the E.M.T.’s brought his heart back to life, and he made it to the hospital.

There the extent of the damage became clear. The man’s kidneys had stopped working, and his body chemistry was completely out of whack. He had a severe concussion. And he’d had a heart attack.

He remained in the intensive care unit for nearly three weeks, and in the hospital another two weeks. Even after these weeks of care and recovery, the toll of his injury was terrible. His kidneys were not working, so he required dialysis three times a week. He had needed a machine to help him breathe for so long that he now had to get oxygen through a hole that had been cut into his throat. His arms and legs were so weak that he could not even lift them, and because he was unable even to swallow, he had to be fed through a tube that went directly into his stomach.

Finally, after five weeks in the hospital, he was well enough to be moved to a short-term rehabilitation hospital to complete the long road to recovery. But he was still far from healthy. The laughing, swaggering, Harley-riding man his sister had known until that terrible fall seemed a distant memory, though she saw that he was slowly getting better. He had even started to smile and make jokes. He was confident, he had told her, that with a lot of hard work he could get back to normal. So was she; she knew he was tough.

Back to the Hospital:

The patient had been at the rehab facility for just over two weeks when the staff noticed a sudden change in him. He had stopped smiling and was no longer making jokes. Instead, he talked about people that no one else could see. And he was worried that they wanted to harm him. When he remained confused for a second day, they sent him to the emergency room.

You can see the records from that E.R. visit here.

The man told the E.R. doctor that he knew he was having hallucinations. He thought they had started when he had begun taking a pill to help him sleep a couple of days earlier. It seemed a reasonable explanation, since the medication was known to cause delirium in some people. The hospital psychiatrist took him off that medication and sent him back to rehab that evening with a different sleeping pill.

Back to the Hospital, Again:

Two days later, the patient was back in the emergency room. He was still seeing things that weren’t there, but now he was quite confused as well. He knew his name but couldn’t remember what day or month it was, or even what year. And he had no idea where he was, or where he had just come from.

When the medical team saw the patient after he had been admitted, he was unable to provide any useful medical history. His medical records outlined his earlier hospitalizations, and records from the nursing home filled in additional details. The patient had a history of high blood pressure, depression and alcoholism. He was on a long list of medications. And he had been confused for the past several days.

On examination, he had no fever, although a couple of hours earlier his temperature had been 100.0 degrees. His heart was racing, and his blood pressure was sky high. His arms and legs were weak and swollen. His legs were shaking, and his reflexes were very brisk. Indeed, when his ankle was flexed suddenly, it continued to jerk back and forth on its own three or four times before stopping, a phenomenon known as clonus.

His labs were unchanged from the previous visit except for his urine, which showed signs of a serious infection. A CT scan of the brain was unremarkable, as was a chest X-ray. He was started on an intravenous antibiotic to treat the infection. The thinking was that perhaps the infection was causing the patient’s confusion.

You can see the notes from that second hospital visit here.

His sister had come to visit him the next day, when he was as confused as he had ever been. He was now trembling all over and looked scared to death, terrified. He was certain he was being pursued.

That is when she confronted the nurse, demanding to know what was going on with her brother. The nurse didn’t know. No one did. His urinary tract infection was being treated with antibiotics, but he continued to have a rapid heart rate and elevated blood pressure, along with terrifying hallucinations.

Solving the Mystery:

Can you figure out why this man was so confused and tremulous? I have provided you with all the data available to the doctor who made the diagnosis. The case is not easy — that is why it is here. I’ll post the answer on Friday.

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Rules and Regulations: Post your questions and diagnosis in the comments section below.. The correct answer will appear Friday on Well. The winner will be contacted. Reader comments may also appear in a coming issue of The New York Times Magazine.

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Profound Weight of Layoffs Seen in Survey

Layoffs have touched nearly every American household in some fashion over the last few years, according to new survey data to be released Thursday by the John J. Heldrich Center for Workforce Development at Rutgers University.

Joe Raedle/Getty Images

Lissette Marquez, center, and Amiel Ali looked for jobs last week in Miami with the help of a South Florida Workforce customer service representative, Nelson Munoz, left.

While about 8 percent of Americans are unemployed, nearly a quarter of Americans say they were laid off at some point during the recession or afterward, according to the survey. More broadly, nearly eight in 10 say they know someone in their circle of family and friends who has lost a job.

“This to me is why the recession was so all-consuming and is likely to influence the American psyche,” said Cliff Zukin, a public policy and political science professor at Rutgers and co-author of the report. “Almost everyone, four out of five, were directly or one step removed from unemployment and all that goes with it financially, socially, psychologically.”

The survey presented a bleak view of the economic future.

A majority of Americans say they think it will be at least six years before the economy is made whole again, if ever. Three in 10 said the economy would never fully recover from the Great Recession.

“Despite significant improvements in the nation’s labor market, American workers’ concerns about unemployment, the job market, job security and the future of the economy have not changed much since we conducted a similar survey in August 2010,” the report said.

Just a third of Americans surveyed in this poll, conducted from Jan. 9-16, said they thought the economy would be better next year, the same share that said so two years earlier.

Of those laid off in recent years, nearly a quarter said they still had not found a job. Re-employment rates for older workers have been particularly bad, with nearly two-thirds of unemployed people 55 and older saying they actively sought a job for more than a year before finding one or had still not found work.

Not surprisingly, those who are unemployed are especially downbeat about many economic issues in addition to their own finances. Of those who were jobless and looking for work, 31 percent said their jobless benefits had run out and 58 percent said they were concerned their benefits would run out before they found work.

Of those who have found work, nearly half say their current job is a step down from the one they lost, and a slim majority say they earn less than they did in their previous job. A quarter of those re-employed said they thought that the hit to their standard of living would be permanent.

The reliance on one’s personal network and savings rather than the social safety net showed up frequently in the survey data.

More people reported borrowing money from friends and family than reported using food stamps. A third cut back on doctors’ visits or medical treatment. A quarter of the unemployed said they had enrolled in retraining programs of some kind; half of them reported paying for the education on their own or through family assistance. Twenty-three percent received some type of government financing for their training programs.

Unemployed workers were more likely than employed workers to say that the government is primarily responsible for helping the jobless. But even then, a majority of the unemployed thought that workers and employers were more responsible for getting people back to work than the government was.

Americans over all were also somewhat less critical of bankers this time than they were two years earlier. About one in three (35 percent) respondents attributed high unemployment levels to the actions of Wall Street, compared with 45 percent in 2010.

Americans were most likely to attribute high unemployment to cheap foreign labor. Four in 10 also said they believed illegal immigrants were taking Americans’ job opportunities — which does not bode well for political support for an amnesty program now being discussed in Washington.

Most people surveyed lost at least some of their savings. Asked about their financial health, six in 10 Americans said their finances would not improve in the next few years; just 16 percent said their family finances were already back to prerecession levels or suffered no loss in the first place.

More educated, better-off people were substantially more likely to report being as financially secure as they were before the recession began.

Responses are based on an online survey conducted by GfK using a nationally representative sample of 1,090 adults. The margin of sampling error is plus or minus three percentage points.

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Child porn suspect indicted by federal grand jury

A North Hills woman whom authorities allege plied a young girl with crack cocaine and photographed her being sexually abused by an older man was indicted Tuesday on federal charges of producing child pornography and sex trafficking.

Letha Montemayor Tucker was named Tuesday in a four-count indictment returned by a federal grand jury. If convicted of all the charges, Tucker would face a mandatory minimum federal sentence of 10 years and could get up to life in prison, authorities said.

The charges come a month after authorities sought the public's help in the investigation by releasing photographs of a man and woman depicted in a set of widely circulated child pornography photos.

Tips started pouring in immediately after the photos were released, investigators said.

Tucker, who goes by the name Butterfly, was located about 10 hours after the release of the photos and taken into custody, said Claude Arnold, special agent in charge for Homeland Security Investigations in Los Angeles, a division of U.S. Immigration and Customs Enforcement.

The alleged victim, who was about 12 when the photos were taken, was found within a week of the case going public, Arnold said. She is an adult now and is cooperating with authorities, he said.

In addition to photographing the girl being sexually abused by the man, authorities said, Tucker also committed sex acts with the alleged victim.

The photos were part of a child pornography collection known as the "Jen Series."

The 40-plus photos were first discovered by investigators in the Chicago area in 2007. Investigators said images in the series have been reported about 300 times and have been found on computers across the country.

The victim "didn't even know these images were out there," Arnold said.

"The horror of child pornography is it's for life, the victimization," Arnold said. "Once the photos are there in cyberspace, they're there forever."

The girl, identified in court records only by the initials J.M.M., lived in the same Los Angeles County residential hotel as Tucker, who worked as a prostitute, authorities said.

Around 2000 or 2001, the girl stopped attending school regularly and spent more and more time in Tucker's room, smoking crack cocaine Tucker provided, according to the indictment.

The girl was present when Tucker engaged in prostitution with clients and was usually high when this happened, authorities allege. Tucker instructed the child to take off her clothes in front of the clients, prosecutors alleged in court papers.

The faces of Tucker and the girl are "clearly visible" in the photos, according to the indictment. Tucker had an eyebrow piercing and a tattoo of a sleeping cat behind her shoulder, which made her easier to identify, authorities said.

The face of the man, however, is blacked out in the photographs. Authorities are still trying to identify the man, Arnold said.

"Obviously, we want him also to answer for his crimes," Arnold said.

Arnold said the alleged victim is "going to be dealing with this for a long time."

Now that she has been identified, she will receive a victim notification every time one of the images turns up in an investigation, he said.

Tucker is being held without bond and is scheduled to be arraigned in federal court on Feb. 13. Her attorney could not be reached for comment.

hailey.branson@latimes.com

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Don't Call It a Tablet

The Surface Pro looks like a tablet, but it’s not a mobile device. It’s a portable device.

Sure, put the Surface Pro next to the Surface RT and it’s hard to spot many differences. One’s a little thicker, but their shapes are otherwise identical. Both have the same matte-black, magnesium-based casing. They both can be used with snap-in keyboards and they’re both propped up into typing position by built-in kickstands.

It’s a full-blown computer, but one that folds up into a tablet-sized package.

While the differences are blurry on the outside, if you use them both for a little while, the dissimilarities become distinct. The Surface RT is thoroughly a tablet, and it exists to directly challenge the iPad. It closely matches Apple’s larger slate in size, weight, performance and price. The Surface Pro, however — which goes on sale Feb. 9 for a starting price of $900 — is something more ambitious than a tablet. It’s a full-blown computer, but one that folds up into a tablet-sized package.

It’s also more expensive than a tablet — and comes with many hidden costs — but is far more capable since it runs full Windows 8 Pro. And though it isn’t perfect, the Surface Pro is certainly very compelling.

Ever since Windows 8 launched in October of last year, Microsoft’s hardware partners have been experimenting with ways of incorporating the OS’s touchscreen capabilities into their computer designs. The result, so far, has been a flood of tablet/PC Frankenbeasts with keyboards that twist, slide, fold, or otherwise play peek-a-boo beneath the touchscreen. The success of these devices varies, but most are flimsy and awkward. They want to be tablets, but they don’t want to leave the laptop behind, and they end up stuck somewhere in the middle.

The Surface Pro is more well-constructed and thoughtfully designed than any of them. It’s the best of the hybrids. The quality of the hardware, the performance, and the simplicity of the design make it a success.

But let me be clear: The Surface Pro is not a tablet. Many people have confusedly asked me if the Surface Pro is even a good tablet. The answer is a clear and resounding, “No.” It’s heavy and thick. It doesn’t invite you to curl up with it on the couch. It’s tough to read with it in bed, and it works much better propped up on a desk than it does resting on a knee or in a lap.

And while it’s portable, it isn’t an amazing laptop, either. Microsoft’s Touch and Type covers don’t come bundled with Surface Pro — you have to pay an extra $120 or $130, respectively, if you want to avoid touchscreen typing (and trust me, you will want to avoid touchscreen typing). And with either keyboard attached, the thing is so top-heavy, it’s physically challenging to use on your lap.

So why bother? Because the Surface Pro is a Windows 8 PC through and through. It comes with an Intel Core i5 processor, and it can run all of your legacy desktop applications. You can surf using your favorite browser, you can type and save and share using the full versions of Office and all your other regular work applications. You can freely download software from the web without depending on the (still anemic) Windows Store.

Microsoft has also given the Surface Pro a killer screen. The 10.6-inch, 1980×1080 pixel resolution display is a visible step up from the Surface RT. With the same 16:9 aspect ratio, it’s great for watching movies. It feels a little silly to use it in portrait mode because it’s so tall, but text is much crisper on the higher-res display, so browsing the web and reading text is more pleasurable. It’s not quite on par with the iPad’s Retina display, but I could barely see a difference between the two. Ten-point touch gestures are supported, as well as the standard swipe gestures.

The touchpads found on both keyboard covers don’t support the standard swipe gestures. They’re accurate enough for pointing, but if you try to swipe in from the right for Charms, or from the left to switch applications, they won’t respond. You’ll need to reach up and use the screen, or buy an extra mouse or trackpad like Logitech’s Rechargeable Trackpad ($80, another additional cost).

The Surface Pro does come with a great pressure-sensitive pen that magnetically attaches to the power connector. The pen really shined in handwriting-driven apps like One Note, or the painting app, Fresh Paint. And the top of the pen acts as an eraser, which is neat.

Performance is generally excellent across all Windows 8 apps I tested. However, one thing that stuck out is a general problem with screen rotations. When switching between portrait and landscape modes, it takes about a second for the Surface Pro to register the rotations. I found this lag to be disconcerting. Also, some apps displayed rotation quirks. The worst offender was Chrome. The desktop version worked flawlessly, but when I used the version made for the tile-based Windows 8 interface, the app repeatedly refused to resize properly when I flipped between landscape and portrait modes. Likewise, whenever I put Chrome in Snap View mode — a Windows 8 trick that lets you run two applications side-by-side in a split-screen arrangement — the Chrome window got smaller and would not readjust back to full-screen size when I exited Snap View.

Otherwise, I was happy with Windows 8 Pro on the Surface. All the apps I used during my tests were super-responsive. Scrolling was smooth, and there were no input latency problems to speak of.

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DealBook: Liberty Global Reaches Deal for Virgin Media

8:07 p.m. | Updated

LONDON – Liberty Global, the international cable company owned by the American billionaire John C. Malone, agreed on Tuesday to buy the British cable company Virgin Media for about $16 billion.

The deal gives Liberty Global access to Europe’s largest cable market, and pits Mr. Malone against Rupert Murdoch, his longtime rival and biggest shareholder in Britain’s largest pay-TV provider British Sky Broadcasting.

Under the terms of the deal, Liberty Global said it had offered a package of cash and stock that it valued at $47.87 for each share in Virgin Media, a 24 percent premium over Virgin Media’s closing price on Monday.

The takeover ranks as one of the 10 largest cable deals of all time, according to figures from the data provider Thomson Reuters.

“Virgin Media will add significant scale and a first-class management team in Europe’s largest and most dynamic media and communications market,” Mike Fries, Liberty Global’s president and chief executive, said in a statement.

“After the deal, roughly 80 percent of Liberty Global’s revenue will come from just five attractive and strong countries — the U.K., Germany, Belgium, Switzerland and the Netherlands.”

News of the talks, confirmed earlier in the day in a statement by Virgin Media, came amid heightened merger and acquisition activity in the European television business. As European broadcasters suffer from stagnant or falling advertising revenue, American media conglomerates, looking to expand their international presence, are playing a significant role.

Mr. Malone and Mr. Murdoch have gone head-to-head before. From 2004 to 2006, they fought for control of DirecTV, the American satellite television provider.

The clash ended with Mr. Malone yielding a stake that he had built up in News Corporation. But the Liberty Group, which has operations in 13 countries, completed its purchase of a controlling stake in DirecTV from News Corporation in a cash-and-equity deal worth roughly $11 billion.

In recent years, Liberty Global has been expanding its presence in Europe and has operations from Ireland to Romania, though it failed last month in its bid to acquire the Telenet Group of Belgium for $2.7 billion. Liberty Global owns a 58 percent stake in Telenet.

Since early 2010, Liberty has bought two German rivals to build its operations in Europe’s largest economy.

In response, News Corporation has been expanding its global cable business, including the $2.1 billion acquisition of Consolidated Media, the Australian pay-television company, late last year.

Since the beginning of the financial crisis, Virgin Media, whose commercials feature the Olympic sprinting star Usain Bolt, has announced job cuts and invested in its broadband structure to reduce costs and increase its market share in Britain’s competitive cable market.

The company’s market capitalization stands at more than $10 billion. Including debt, its enterprise value is around $19.4 billion, according Thomson Reuters. Shares of Virgin Media, which are primarily traded on the Nasdaq, were up nearly 18 percent to $45.61 on the news of the Liberty talks.

Virgin’s shares have jumped almost 90 percent in the last 12 months, as more consumers sign up for so-called bundled services, including Internet and cellphone contracts. Virgin Media will announce its earnings on Wednesday.

Analysts warned that it would be difficult for Liberty Global to make additional savings between its current European operations and those of Virgin Media because Liberty does not have a business in Britain.

They said Liberty waited to make its move until Virgin made several upgrades to its network and restructured its debt. While Virgin has been gaining market share, it has 4.9 million customers, or roughly half the number of subscribers as its larger rival, BSkyB, according to filings by the companies.

The British billionaire Richard Branson, whose Virgin brand is used for a variety of products and services, including airlines and banks, owns less than 3 percent of Virgin Media.

News of the talks also came amid heightened merger and acquisition activity in the European television business. In December, Discovery Communications agreed to pay $1.7 billion for the Scandinavian operations of a large German commercial television company.

According to news reports this week, the majority owners of the German company are considering a sale. American media companies, including Time Warner, have been mentioned as potential buyers.

Analysts say the flurry of activity is driven by a desire among pay-television companies and broadcasters to diversify revenue sources that are coming under increased pressure. So broadcasters are setting up pay-television channels, and cable and satellite companies are looking to new content delivery platforms, like the Internet.

While commercial broadcasters remain powerful in Germany, Britain is the most lucrative pay-television market in Europe, according to Screen Digest, a research firm.

The deal for Virgin Media is expected to close during the second quarter of this year.

LionTree Advisors, Credit Suisse and the law firms Shearman & Sterling and Ropes & Gray advised Liberty Global, while Goldman Sachs, JPMorgan Chase and the law firms Fried Frank and Milbank advised Virgin Media.

Mark Scott reported from London, and Eric Pfanner from Paris.

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This post has been revised to reflect the following correction:

Correction: February 5, 2013

Because of an editing error, an earlier version of this article misstated the first name of the leader of News Corporation. He is Rupert Murdoch, not Richard.

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GOP lawmakers want probe of Cal Fire over off-budget account

State Republican legislators want federal prosecutors to investigate the California Department of Forestry and Fire Protection for putting $3.6 million from legal settlements into an off-budget account.

"This subterfuge money has been spent on a wide array of questionable expenditures that has nothing to do with reimbursing the state for firefighting costs," the legislators wrote in a Friday letter to Gov. Jerry Brown, asking him to request an investigation by the U.S. attorney.

The letter follows a story in The Times that found that from 2005 to 2012, Cal Fire, as the department is commonly known, placed funds with the California District Attorneys Assn. to use for training and equipment. Cal Fire regulations say the money is supposed to be sent to the state general fund.

The legislators said the state attorney general had authorized sending the money to the California District Attorneys Assn. Brown served as attorney general from 2007 to 2011.

Lynda Gledhill, a spokeswoman for the current attorney general, denied that claim.

"The California Department of Justice did not endorse placement of settlement money into an account outside of the budget process," Gledhill said. "Atty. Gen. [Kamala] Harris has directed her office to examine the state's settlement practices to ensure all settlements are not only lawful, but fully transparent to the public."

The state Department of Finance has begun an audit of the fund, which is expected to take about two months, spokesman H.D. Palmer said.

In addition, a joint Assembly and state Senate committee announced last week that it will conduct a hearing to determine the extent California agencies are using off-budget accounts to hold money outside the state system.

The GOP letter was signed by 25 members of the Senate and Assembly. They also are using the issue to call for an end to a law the Legislature passed last year requiring rural homeowners who rely on state firefighters to pay $150 a year for fire prevention services.

"It is clear that the state has not been judicious in its use of taxpayer dollars," the lawmakers' letter said. "The state must stop these outrageous duplicitous tactics."

Senate Republican leader Robert Huff of Diamond Bar and Assembly GOP leader Connie Conway of Tulare sent a letter last week asking the attorney general to refer the matter to the U.S. attorney. A spokeswoman for the U.S. attorney in Sacramento said no information about the fund had been brought to her office.

Janet Upton, a Cal Fire spokeswoman, said the agency would welcome an investigation.

"We stand by the intent of this fund and have many examples of good things it's done that benefit the taxpayers of this state," she said.

Cal Fire's own audit, released in 2009, raised questions about whether the fund was allowed. But many of the critical comments were dropped from the audit's final version.

The scrutiny follows similar revelations that the state Department of Parks and Recreation hid $20 million as budget cuts were forcing the closure of parks. Although the Department of Finance looked for other secret funds, it did not find Cal Fire's account with the prosecutors' association.

jeff.gottlieb@latimes.com

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Navy's Next-Gen Binoculars Will Recognize Your Face

Take a close look, because the next generation of military binoculars could be doing more than just letting sailors and soldiers see from far away. The Navy now wants binoculars that can scan and recognize your face from 650 feet away.

That’s according to a Jan. 16 contract announcement from the Navy’s Space and Naval Warfare Systems Command, which is seeking a “Wireless 3D Binocular Face Recognition System.” During a testing period of 15 months, the plan is to improve “stand-off identification of uncooperative subjects” during daylight, using binoculars equipped with scanners that can read your mug from “100 to 200 meters” away, or about 328 to 650 feet. After scanning your mug, the binoculars then transmit the data to a database over a wireless network, where the data is then analyzed to determine a person’s identity. The no-bid contract, for an unspecified amount of money, went to California biometrics firm StereoVision Imaging.

“High level, it’s a surveillance and identification system,” Greg Steinthal, StereoVision’s president, tells Danger Room. “It’s using the ubiquitous binocular for real-time identification. The data point here is that this is to be used to add objectivity to an operation that’s highly subjective. So this is not intended for kinetic action to go arrest or detain someone. It’s more a tool to put other eyes on him or her.”

It helps that the technology — at least in a more limited form — already exists. StereoVision has developed a face-recognizing binocular system called 3DMobileID, with a maximum distance of around 328 feet, or 100 meters. “You have an unfair advantage,” the company touts in one promotional video, showing images of a human face being scanned at a distance, before the background is stripped out for a blue screen and then matched up to a database.

Depending on how well the binoculars work — and there’s reason to be cautious — it could give the Navy the ability to take advanced facial recognition into a much more portable and long-distance version than many current systems. Facebook uses the technology to match faces when users upload new photos. Google has its own version as well for its its Picasa photo service, and Apple has been researching face recognition as a way to unlock smartphones. (There are apps for iOS that do this, too.)

But the ranges on most systems also tend to max out at a few feet. For the military, that can be dangerous. Close-range biometric scanners (iris scanners are currently used by soldiers in Afghanistan) can pose a danger to the operator, as a person walking up to have their features scanned from a few inches away could be preparing to detonate an explosive vest. And what if a person happens to be on the move, or is bobbing and weaving through a crowd? That can render the scanners ineffective. Once upon a time, many face scanners also depended on the relatively crude practice of scanning 2-D images of the human face, which are an imprecise method when there are varying lighting conditions.

But the key to solving many of these problems could be a simple upgrade: StereoVision’s system scans in 3-D. When the system first scans you, it creates a 3-D model of your face instead of a 2-D image. That allows the system to isolate your face from a crowd, sharpen the image — which boosts the range — and then compares the image to a database. A filter also adjusts for varying degrees of light by smoothing out light across the face into a uniform pattern.

Now for the flaws in the system. The binoculars are not intended to work at night, and have difficulty scanning faces in twilight. When the binoculars can’t draw an image, it gives off a an audible beep to the operator, which is helpful. Otherwise, the process takes “about five to 10 seconds,” says Steinthal.

It’s also less effective when a subject is on the move. “[It] depends on how fast the target is walking,” Steinthal says. “We’re at walking, one-and-half meters per second. Somebody running? We’re not going to be able to do that right now.”

The concept of binoculars that scan and identify is also — perhaps unnervingly — not limited to the military. For one, StereoVision’s binoculars were developed in part with a $409,226 contract from the National Institute of Justice, and face scanners are a popular research topic for the FBI more broadly.

The FBI is spending $1 billion on a program called Next Generation Identification based around developing face scanners and combining the technology with other biometrics like the iris, voice, and fingerprints. A static face recognition system has also been installed at Toucumen International Airport in Panama City that can scan travelers’ faces and match them to criminal databases maintained by the FBI and Interpol. The Los Angeles County Sheriff’s Department and the San Diego Police Department have also tested out the binoculars, according to Steinthal, and are intended there for gang enforcement units and even to track “celebrity stalkers” in the L.A. area. Maybe if the FBI wants its special agents to also have some pretty far-out binoculars too, it should take a peek.

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