Penalty could keep smokers out of health overhaul

WASHINGTON (AP) — Millions of smokers could be priced out of health insurance because of tobacco penalties in President Barack Obama's health care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.

The Affordable Care Act — "Obamacare" to its detractors — allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting next Jan. 1.

For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 on top of premiums.

Younger smokers could be charged lower penalties under rules proposed last fall by the Obama administration. But older smokers could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge.

Workers covered on the job would be able to avoid tobacco penalties by joining smoking cessation programs, because employer plans operate under different rules. But experts say that option is not guaranteed to smokers trying to purchase coverage individually.

Nearly one of every five U.S. adults smokes. That share is higher among lower-income people, who also are more likely to work in jobs that don't come with health insurance and would therefore depend on the new federal health care law. Smoking increases the risk of developing heart disease, lung problems and cancer, contributing to nearly 450,000 deaths a year.

Insurers won't be allowed to charge more under the overhaul for people who are overweight, or have a health condition like a bad back or a heart that skips beats — but they can charge more if a person smokes.

Starting next Jan. 1, the federal health care law will make it possible for people who can't get coverage now to buy private policies, providing tax credits to keep the premiums affordable. Although the law prohibits insurance companies from turning away the sick, the penalties for smokers could have the same effect in many cases, keeping out potentially costly patients.

"We don't want to create barriers for people to get health care coverage," said California state Assemblyman Richard Pan, who is working on a law in his state that would limit insurers' ability to charge smokers more. The federal law allows states to limit or change the smoking penalty.

"We want people who are smoking to get smoking cessation treatment," added Pan, a pediatrician who represents the Sacramento area.

Obama administration officials declined to be interviewed for this article, but a former consumer protection regulator for the government is raising questions.

"If you are an insurer and there is a group of smokers you don't want in your pool, the ones you really don't want are the ones who have been smoking for 20 or 30 years," said Karen Pollitz, an expert on individual health insurance markets with the nonpartisan Kaiser Family Foundation. "You would have the flexibility to discourage them."

Several provisions in the federal health care law work together to leave older smokers with a bleak set of financial options, said Pollitz, formerly deputy director of the Office of Consumer Support in the federal Health and Human Services Department.

First, the law allows insurers to charge older adults up to three times as much as their youngest customers.

Second, the law allows insurers to levy the full 50 percent penalty on older smokers while charging less to younger ones.

And finally, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.

Here's how the math would work:

Take a hypothetical 60-year-old smoker making $35,000 a year. Estimated premiums for coverage in the new private health insurance markets under Obama's law would total $10,172. That person would be eligible for a tax credit that brings the cost down to $3,325.

But the smoking penalty could add $5,086 to the cost. And since federal tax credits can't be used to offset the penalty, the smoker's total cost for health insurance would be $8,411, or 24 percent of income. That's considered unaffordable under the federal law. The numbers were estimated using the online Kaiser Health Reform Subsidy Calculator.

"The effect of the smoking (penalty) allowed under the law would be that lower-income smokers could not afford health insurance," said Richard Curtis, president of the Institute for Health Policy Solutions, a nonpartisan research group that called attention to the issue with a study about the potential impact in California.

In today's world, insurers can simply turn down a smoker. Under Obama's overhaul, would they actually charge the full 50 percent? After all, workplace anti-smoking programs that use penalties usually charge far less, maybe $75 or $100 a month.

Robert Laszewski, a consultant who previously worked in the insurance industry, says there's a good reason to charge the maximum.

"If you don't charge the 50 percent, your competitor is going to do it, and you are going to get a disproportionate share of the less-healthy older smokers," said Laszewski. "They are going to have to play defense."

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Online:

Kaiser Health Reform Subsidy Calculator — http://healthreform.kff.org/subsidycalculator.aspx

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'Dallas' returns with J.R. Ewing's final schemes

NEW YORK (AP) — J.R. Ewing wouldn't hesitate to cheat his fellow man. He also famously cheated death.

In the second-season finale of "Dallas" back in 1980, he was shot by an unknown assailant in his office and left for dead. But he recovered nicely, and the cliffhanger question that gripped the nation (Who shot J.R.?) was answered that November in an episode seen by 80 million viewers.

This time, J.R. won't get off so easy. During the second season of TNT's rebooted "Dallas," J.R. cashes in his chips and goes to his reward ... wherever that may be.

Meanwhile, viewers, however braced they are for J.R.'s demise, will have to reckon with the loss of arguably TV's greatest villain, and bid farewell to the actor who portrayed him so indelibly and also cheated death for years. Larry Hagman, who died of cancer at 81 the day after Thanksgiving, was diagnosed in 1992 with cirrhosis of the liver from a life of heavy drinking and, three years later, when a malignant tumor was discovered on his liver, successfully underwent a transplant.

This double loss would be a burden for any show to bear. "Dallas," returning at 9 p.m. EST Monday, comes fully loaded.

"I think viewers want closure," said Linda Gray, who plays J.R.'s long-suffering ex-wife, Sue Ellen. "They want to mourn Larry Hagman and J.R. Ewing. They want to know they can grieve the fact he won't be around."

But all that comes later. With its two-hour season premiere, "Dallas" carries on in familiar fashion, with the expected two-timing, squabbles, a kidnapping revealed, a stolen identity and assorted other mischief.

And never fear: J.R., though visibly frail, continues his reign as a scheming oilman and rascally Ewing patriarch.

"I came over to deliver some muffins to the pretty little secretaries," he announces on making an unannounced visit to Ewing Energies headquarters before he laments, "Who could have guessed so many would turn out to be MEN? Where's the sport in THAT?"

In another scene, J.R. shares sly counsel with his son, John Ross, on double-crossing other members of the family: "Love, hate, jealousy: Mix 'em up and they make a mean martini. And when we take over Ewing Energies, you'll slake your thirst — with a twist!"

The new "Dallas," which debuted last June, is stocked with a troupe of young regulars (including Josh Henderson, who plays John Ross), as well as veterans of the original CBS series, notably Gray and Patrick Duffy as J.R.'s ever-upright brother, Bobby. J.R. will appear in a minimum of five or as many as seven of the season's episodes before he meets his fate.

After that, can "Dallas" survive the dual deaths of its central character and legendary star?

"Larry being gone doesn't eliminate the influence of the character of J.R.," Duffy pointed out. Who knows what land mines J.R. will have left behind? "We can find business deals he did or schemes he started that now are coming home to roost, and they can turn up for years to come."

"Whatever will happen on the show, we will be talking about J.R. Ewing and he will have done things that have a ripple effect," Gray agreed. "He will always be there."

"There's a lot of driving forces on the show — not just J.R.," added "Dallas" executive producer Cynthia Cidre, who, interviewed by phone a couple of weeks ago, was parked outside a posh Dallas social club where the wake for J.R. was about to be filmed.

She said this season she tried to use Hagman sparingly.

"He was the most delightful man and a total professional," she said, "but he wasn't well and we didn't want to overtax him."

Now, with his passing, "we want to give J.R., and Larry, the proper send-off."

But she insisted there had been no contingency plan for how to plot J.R.'s demise in the event Hagman died in mid-season.

"We didn't have a Plan B, on purpose," said Cidre. "We just knew that we had Larry, so let's use him, let's enjoy him, and if something happens, we'll scramble and fix it. I had great faith in the writers' room. We knew the day might come and what we would do then: Figure it out."

That day came in late November when she got a call from Duffy. "He told me, 'Larry's in the hospital and it isn't good. He's saying goodbye.' In 24 hours we had fixed one of the scripts. We had two more scripts that had to be adjusted, and then this episode we're shooting now, the Goodbye Episode."

Roughly 85 percent of the season's story line remains intact, she said, supplemented by the death of J.R. and the mystery surrounding it: Who Killed J.R.?

"The mystery has all the machinations of a great J.R. business deal, as opposed to a whodunit," said Duffy. "Cynthia constructed a really interesting plot, of which I know Bobby's portion" — including whodunit — "but I don't know other stuff."

"We all know, up to a point," Gray said. "But they've got secret pages that we've not seen."

"I hope that we have come up with something really wonderful and enticing," said Cidre, "and by the time you're done watching episode 208, which I call the Funeral Episode, I hope you're saying, 'Omigod, I didn't see that coming, and I can't wait to watch the rest of the season.'"

The mystery, she said, will continue through episode 15, "with a giant, delightful, delicious climax in the season finale."

To get there, shooting continues until April on the Dallas set, where, even two months after Hagman's passing, "I'm lonely because my best friend isn't there to play with," Duffy said. "I was with him from 1978 until his final hours in the hospital. But I have no regrets. Every day I think of him and smile."

"I keep expecting him to walk in the door," Gray said. "He's so missed. But his presence is everywhere!"

___

Online:

http://www.tntdrama.com

___

Frazier Moore is a national television columnist for The Associated Press. He can be reached at fmoore(at)ap.org and at http://www.twitter.com/tvfrazier

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Burnt circuit boards snag Japan's 787 probe

A device seen as key to explaining why a Boeing Co. 787 Dreamliner jet made an emergency landing in Japan last week is burnt and unlikely to provide safety inspectors with data they need, said a person with knowledge of the ongoing investigation.

Circuit boards that control and monitor the performance of the plane's lithium-ion battery unit were charred and may be of little use to the teams investigating why the battery effectively melted, forcing safety investigators to scramble for possible clues from other components in the plane's electronics, said the person, who didn't want to be named as the probe is ongoing.

Aviation authorities in Japan face a painstaking reconstruction that may take months before they can unravel what caused one of the batteries to overheat, triggering warnings in the plane's cockpit.

That relatively inexpensive circuit boards may be keeping $10 billion worth of futuristic aircraft idle underscores how dependent the Boeing jet is on advanced electronics rather than more traditional, but less fuel-efficient, parts, experts said.

"The circuit board (system) is badly damaged. We'll see how much we can learn from examining it, but we'll also have to look at other recording devices on the aircraft to try and find out what happened," the person with direct knowledge of the investigation told Reuters.

BATTERY "BRAIN"

The circuit boards, known as the battery monitoring unit, are the "brains" of the battery, experts said. About the size of a laptop computer, the boards monitor functions of the lithium-ion battery's eight cells and feed this information to the charger. That effectively makes the boards responsible for preventing a battery from overcharging.

One key question for safety investigators is how the battery's eight individual cells became volatile even though the overall voltage to the battery was steady and didn't exceed the 32-volt capacity, officials have said. That data is not recorded in the Dreamliner's "black box" flight-data recorder.

U.S, Japanese and Boeing representatives have this week been at the Kyoto headquarters of GS Yuasa Corp, which makes batteries for the 787, looking at everything from manufacturing quality to technical standards.

The main battery from the All Nippon Airways flight is still at the GS Yuasa plant, where it is being cleaned and disassembled for further checks. Once they are done, Japanese safety officials plan to take the damaged circuit boards to the manufacturer, Fujisawa-based Kanto Aircraft Instrument, for a detailed inspection.

All 50 of Boeing's Dreamliners in service were grounded last week after the ANA-operated flight's emergency landing on a domestic flight. That followed an auxiliary battery fire in a Japan Airlines Co. Ltd 787 parked at Boston Airport.

"There is a possibility that a fire destroyed the elements that caused the problem and if so, it will become difficult to investigate the cause," said Hideaki Horie, project professor at the Institute of Industrial Science at Tokyo University.

Horie said Boeing should re-think the design of the battery safety and data recovery system even while it investigates what caused the recent Dreamliner incidents.

The 787 uses two lithium-ion batteries, which are about twice as large as a car battery. The batteries weigh less than a conventional battery and provide more power. They are Boeing's first step toward hybrid power systems like those used by automakers General Motors Co. and Toyota Motor Corp .
 

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Sentencing today for Chicago man in Mumbai terror attack

A man convicted in the 2008 terror attacks in Mumbai will be sentenced in Chicago Thursday. ( WGN - Chicago)

By Annie Sweeney




Tribune reporter

7:56 a.m. CST, January 24, 2013

David Coleman Headley, an admitted terrorist with links to al-Qaida who helped plot the 2008 massacre in Mumbai, is scheduled to be sentenced today at Chicago’s federal courthouse.

Headley, 52,  who is to be sentenced amid heightened security measures in U.S. District Judge Harry Leinenweber’s courtroom, faces up to life in prison. He pleaded guilty to scouting out sites to be targeted in the terrorist attack that killed more than 160 people – including six Americans -- in India’s largest city. He also admitted playing a similar role in an aborted plot to storm a Danish newspaper and behead staffers in retaliation for printing a cartoon of the Prophet Muhammad.

Federal prosecutors have cited Headley’s extraordinary cooperation for seeking a sentence of 30 to 35 years in prison.

Headley, who agreed to cooperate on the day of his arrest at O’Hare International Airport as he prepared to fly overseas, detailed the inner-workings of Lashkar-e-Taiba, the Pakistani terror organization that planned the Mumbai attacks. His information led to charges against seven terrorist figures, including his childhood friend from a Pakistani school, Tahawwur Rana, a former Chicago businessman.

Headley was the key witness at the trial of Rana, who was convicted of aiding the Denmark plot and providing support to Lashkar.  Judge Leinenweber sentenced him  last week to 14 years in prison, about half what prosecutors sought.

Headley, an American citizen of Pakistani descent,  came to the United States at age 17 and was twice convicted of drug smuggling in the late 1980s. He later agreed to work as an informant for the DEA. Headley also revealed during testimony  at Rana’s trial that there was an overlap between his work for the DEA and his early days with Lashkar.

Headley became involved with Lashkar, a radical group that opposes Indian rule in divided Kashmir, around 2000, attending training camps between 2002 and 2005. He had moved to Chicago by 2009 and reconnected with Rana.

Though embraced by Rana’s family, Headley lived a very different life that included multiple wives and apparently indoctrinating even his children with his ideologies. His 5-year-old son once dropped to the ground in a Chicago park and pretended to fire a weapon after a soccer coach yelled "shoot, shoot!" to him during a game, Headley testified at Rana’s trial.

asweeney@tribune.com

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Apple results spur price target cuts, shares fall 9 percent

(Reuters) - Weaker-than-expected holiday sales of Apple Inc's iPhone reinforced fears that it is losing its dominance in smartphones, driving its shares down 9 percent in premarket trading and drawing another round of stock price target cuts.

Fourteen brokerages including Barclays Capital, Mizuho Securities USA, Credit Suisse, Deutsche Bank, Raymond James, Robert W. Baird & Co and Canaccord Genuity cut their price target on the stock by $142 on average to $599.

Apple's shares closed at $514 Wednesday on the Nasdaq.

Jefferies & Co cut its rating on Apple's stock to "hold" from "buy" and slashed its share price target by $300 to $500.

Jefferies analyst Peter Misek, who has previously raised red flags about Apple cutting orders to suppliers, said the iPhone slowdown was "real and material" and here to stay.

"We think Apple is losing the screen-size wars," Misek said, noting that demand was moving away from the iPhone's 3.5-inch and 4-inch screens to screens of 5 inches offered by rivals such as Samsung Electronics Co Ltd, HTC Corp and Nokia Oyj.

Misek is a top-rated analyst for the accuracy of his earnings estimates for Apple, according to Thomson Reuters StarMine.

Apple said it shipped a record 47.8 million iPhones in the December quarter, but this trailed the average analyst forecast of 50 million units.

Deutsche Bank trimmed its price target to $575 from $800, and said Apple should start making a lower-priced iPhone to arrest the market share loss.

Credit Suisse analysts said a new product cycle and wider telecom carrier selection could be possible catalysts for the company, but added that these were not imminent.

"We believe a lower ability to beat earnings per share expectations, and some concerns on demand, may weigh on the stock near-term," said Credit Suisse, which cut its target price by $150 to $600.

Up to Wednesday, 24 analysts had lowered their price targets since October when Apple reported its fourth-quarter results, according to Thomson Reuters data.

Apple is the lowest ranked stock among the marquee technology firms in the United States based on the change in analyst sentiment, or Analysts Revision Model (ARM), according to StarMine.

Apple's global ARM score of 10 is well below Google Inc's 34 and Microsoft Corp's 19 out of a possible 100. Nokia and Samsung have scores of 82 and 89, respectively.

Research in Motion Ltd has a perfect score of 100, according to the model, which measures analysts' revision of key indicators such as earnings and revenue estimates and changes to their ratings.

Apple shares were trading at $468 before the bell.

(Reporting by Himank Sharma and Saqib Ahmed in Bangalore; Editing by Saumyadeb Chakrabarty)

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No. 1 Duke routed by No. 25 Miami 90-63

CORAL GABLES, Fla. (AP) — With a steady din coming from the sea of orange behind the visitors' basket, No. 1 Duke had a tough time making a shot.

The Blue Devils went more than 8 minutes without a field goal in the first half Wednesday night, and a sellout became a blowout for No. 25 Miami, which delighted a boisterous crowd with a 90-63 victory.

The defeat was the third-worst ever for a No. 1 team. The last time Duke lost a regular-season game by a bigger margin was in January 1984.

"It wasn't demoralizing; they played better," Blue Devils guard Rasheed Sulaimon said. "I believe we have them on the schedule again."

"We expected them to be terrific, and we have to match terrific, and then you have a terrific game," Duke coach Mike Krzyzewski said. "What you had was a terrific win for them, but not a terrific game. We didn't hold our end of the bargain."

Miami (14-3, 5-0 Atlantic Coast Conference) beat a No. 1 team for the first time, taking control with a stunning 25-1 run midway through the opening half. The Blue Devils missed 13 consecutive shots despite numerous good looks, while four Hurricanes hit 3-pointers during the run that transformed a 14-13 deficit into a 38-15 lead.

Duke (16-2, 3-2) fell to 0-2 when playing on an opponent's court. The Blue Devils' other loss came at North Carolina State, a defeat that cost them the No. 1 ranking.

They regained the top spot this week but seemed rattled by the capacity crowd, only the 10th in 10 years at Miami's on-campus arena. Students began lining up for seats outside the arena almost 24 hours before tipoff, a rarity for the attendance-challenged Hurricanes.

"I don't know how you can sit outside for a basketball game for that long," Miami guard Durand Scott said. "That made me want to win for them even more."

The Hurricanes, who are alone atop the league standings, won their sixth consecutive game. They beat Duke for the second straight time — but only the fourth time in the 19-game series.

Miami had been 0-6 against No. 1 teams. Coach Jim Larranaga also beat a No. 1 team for the first time.

"This is a great memory," Larranaga said.

Scott scored a season-high 25 points for the Hurricanes, and Kenny Kadji added a season-high 22. Shane Larkin had 18 points, 10 rebounds and five assists, and Durham, N.C. native Julian Gamble had 10 rebounds and four blocked shots.

Miami senior center Reggie Johnson came off the bench in his first action since being sidelined with a broken left thumb Dec. 18. He had two points and five rebounds in 16 minutes.

The Hurricanes, ranked this week for the first time in three years, improved to 8-0 at home.

Seth Curry, Tyler Thornton and Quinn Cook went a combined 1 for 29 for the Blue Devils, who shot a season-low 30 percent. Sulaimon led them with 16 points.

Duke went 4 for 23 from 3-point range, while Miami went 9 for 19 and shot 57 percent overall.

"Especially in the first couple of minutes, we got a lot of great shots," Blue Devils forward Mason Plumlee said. "You're going to miss some, but you have to keep shooting. The biggest mistake you can make is questioning your shot because you're missing open shots."

Kadji made two 3s during the Hurricanes' first-half spurt, then capped it with a three-point play. Duke shot 22 percent in the first half, including two for 11 on 3-pointers, and trailed 42-19 at halftime.

There was no letup by the Hurricanes to start the second half. They scored the first seven points for a shocking 49-19 lead, and punctuated the drubbing with five dunks in the final 10 minutes.

"Some teams come out in the second half flat and think they have the game won," Larkin said, "but we stayed with it with the same energy in the second half. We played great the whole game."

A Duke mistake — one in a long series — early in the second half had Krzyzewski red-faced and on the court, screaming at his team. But he couldn't inspire a turnaround.

"Over-rated," fans chanted with 3 minutes left. When the game ended, they poured onto the court and mobbed their team.

"The crowd I'm sure helped them some," Krzyzewski said. "But they didn't need much help."

Back in North Carolina, fans of the Tar Heels savored the loss by their rivals. When the final score of the Duke game was posted on the video board at the North Carolina-Georgia Tech game, students chanted, "Go to hell, Duke!"

___

AP Sports Writer Joedy McCreary in Chapel Hill, N.C., contributed to this report.

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Country singer Gary Allan’s new album gets label’s early push

NASHVILLE, Tennessee (Reuters) – The release of country music singer Gary Allan’s new album “Set You Free,” this week, his first since undergoing vocal surgery in 2010, was not meant to happen so soon.

But when his record label, MCA Nashville, saw his new song “Every Storm (Runs out of Rain),” race up the charts in September, the label pushed the album’s release up two months from March.

“I’ve been doing this forever and it usually goes the other way,” Allan told Reuters. “It’s super exciting for me.”

Now in its 20th week on Billboard’s country chart, “Every Storm (Runs out of Rain),” peaked last week at No. 4 and has been downloaded some 685,000 times, according to Nielsen SoundScan.

Allan, 45, who has scored three country chart toppers in his 17-year career, said his latest hit was the right song at the right time for a country politically divided and seemingly down on its luck.

“It’s a song about hope,” he said. “Sometimes a song really resonates with people and the public because of the timing of its release. This is a time when our country needs hope and I think that’s why it’s doing so well.”

Allan’s voice is stronger on the album and he credits surgery he underwent in 2010 to remove a polyp from his vocal cords, which made it difficult for him to sing high notes.

“I don’t think I realized it really, but there were a few years where I couldn’t hit the falsetto notes on songs like ‘Smoke Rings in the Dark.’ After the surgery, it was like I was 18 again,” he said.

Allan, a California native who often plays down-home American rodeos and state fairs, is best known as a brooding troubadour who likes to pack an emotional punch.

TEAM OF RIVALS

“I don’t want to hear songs about how sunshiny things are,” he said. “I don’t like songs that feel like radio candy … I like the ones that make you think, laugh or cry – they pull some kind of emotion out of you.”

Allan for the first time played a part in writing every song on “Set You Free” to achieve that sentiment. He also used a team of rivals to freshen up his sound on his ninth studio album.

“I think you need to do something new to keep reinventing yourself,” he said. “I used three different producers and we were all a little competitive with each other to see who could get the best songs,” he said.

“The result was we got better quality in the songs and the recording. It’s my favorite album I’ve ever done.”

Among his favorite songs on the album is “One More Time,” a song about the death of his father in 2008, written with Hillary Lindsey and Matt Warren – co-writers on “Every Storm.”

“We just wanted to write an introspective song,” Allan said. “We kept thinking ‘What would you say when you got to the pearly gates?’, and what I would say is ‘I want one more time, I’m not ready to be there.’”

Another song, “Pieces,” describes Allan’s life philosophy.

“No matter who you meet in life, you take something from them, positive or negative,” Allan said. “That’s what the song is about, pieces of what I’ve been through and of the people I’ve met.”

MCA Nashville is part of Universal Music Group, a subsidiary of France’s Vivendi SA.

(Reporting by Vernell Hackett, editing by Eric Kelsey, desking by G Crosse)

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AP Interview: UN wants better family planning

DAVOS, Switzerland (AP) — The U.N.'s top population official wants governments to do more to ensure that women have access to family planning.

The U.N. says the world will add a billion people to its current population of some 7 billion within a decade, further straining the planet's resources.

Babatunde Osotimehin, executive director of the U.N. Population Fund, says more than 220 million women in the developing world want family planning but aren't getting it.

Speaking to The Associated Press at the World Economic Forum in Davos, he said many women want to have fewer children and that "30 percent of those who die giving birth we can prevent with family planning."

He also called for providing girls with "comprehensive sexuality education."

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Paris Opera Ballet names Millepied of 'Black Swan'

PARIS (AP) — Benjamin Millepied, the "Black Swan" choreographer who helped transform Natalie Portman into an obsessed, paranoid ballerina for the film and later married the actress, was named director of the Paris Opera Ballet on Thursday.

Millepied, 35, is a former principal dancer with the New York City Ballet who left in 2011 to create his own dance company in Los Angeles, L.A. Dance Project. He'll start at the Paris company in October 2014, when the current dance director, Brigitte Lefevre, retires.

Millepied and Portman, who have a son, met during the making of "Black Swan," Darren Aronofsky's psychological thriller that stars Portman as a ballet dancer.

Portman won the best actress Academy Award or her performance in the movie.

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U. of I. to launch tech research center in Chicago

Plans to launch a University of Illinois-affiliated technology research center in Chicago will be unveiled Thursday — the latest regional effort to stem an exodus of high-tech brainpower and entrepreneurship to the coasts.

A private, not-for-profit company, to be called UI Labs, is expected to open offices in or near the Loop to foster collaboration between the region's scientists and engineers from academia, industry and government.

The project, expected to be financed by private donations, corporate partnerships and federal grants, will be outlined for U. of I. trustees Thursday. The goal is to raise $20 million for first-year operations.

The aim is build a research and engineering powerhouse that will attract a range of industries to Chicago, along the lines of what the former Bell Labs did for the East Coast. The University of Illinois at Urbana-Champaign will offer up its vast tech resources, including the National Center for Supercomputing Applications and its Blue Waters supercomputer. It is anticipated other local universities and national research centers will participate.

"I was in India last week, talking with firms that were thinking of coming to Illinois to engage with university scientists," said U. of I. President Robert Easter. "And they say, 'We have a presence in Chicago or we're thinking of having a presence in Chicago, and it would be much more convenient if we could work with you there.'"

Or as project adviser James Duderstadt, president emeritus of the University of Michigan, put it, the U. of I. is among the top five universities in the nation in such high-tech fields as computer science and engineering, "but it's down there in the cornfields."

"All the pieces are there, but some of the things Chicago is lacking are things Urbana-Champaign has," he said.

The idea is to marry the two, helping Chicago attain the sort of direct scientific underpinnings that long have fostered tech hotbeds in Boston and the San Francisco Bay Area.

"This is an opportunity to essentially build some of the glue and connective tissue … and that's needed to keep students from leaving and, frankly, to grow some companies in Chicago," said Lesa Mitchell, vice president of innovation and networks for the Kansas City, Mo.-based Kauffman Foundation, which focuses on entrepreneurship.

Chicago faces intense competition nationwide, as many cities aim for technological prowess and growth. The start of the year brought the launch of a Cornell NYC Tech campus, for instance, a graduate program in applied sciences that will turn out high-level scientists in New York City.

In Illinois, the challenge is retaining talent. One telling statistic: 32 percent of computer science graduates from the U. of I. in Urbana-Champaign get jobs in California, said Larry Schook, the university's vice president for research.

Among U. of I. grads who made their names out West are Marc Andreessen, co-founder of Netscape; software entrepreneur Thomas Siebel, a major U. of I. donor; and Ray Ozzie, who recently retired as chief software architect for Microsoft Inc.

The goal of this project, supported by Gov. Pat Quinn and Mayor Rahm Emanuel, is to retain the next generation of Illinois-trained innovators.

The University of Illinois will have an affiliation agreement with the lab that would outline the flow of personnel, resources and services between them. The goal is to attract 250 faculty fellows during the first three years. Additionally, more than 1,000 undergraduate and graduate students are expected to participate in UI Labs training and entrepreneurial programs during the first five years.

"Some students and researchers prefer the city to a smaller community … so this could increase the quality of the faculty," said Bruce Rauner, a prominent Chicago venture capitalist who has worked on the development of this plan. "This can drive better research."

The intent is to develop a "junior year abroad program" as well, with the aim of attracting top students from overseas.

The UI Labs project will start within the next month or so, Schook said, with the naming of board members and a director search.

"We'd love to have … the smartest tech students in the world come to participate and stay here to create companies," Schook said.

Rauner, who made his fortune as co-founder of private equity firm GTCR and heads venture firm R8 Capital Partners, said he intends to participate in fundraising and to donate millions personally. Ultimately, to bring the center to world-class status, it may be necessary to raise a $300 million endowment, he said.

The University of Illinois has programs aimed at linking businesses to applicable academic research, including the University of Illinois at Chicago's Innovation Center and research parks at Chicago and Urbana. While those attempt to match faculty research with companies that could use it, the UI Labs model would aim for even deeper collaborative brainstorming, Easter said.

"A company struggling with a problem related to its technology could come in and sit with faculty who do theoretical work to see if those principles could lead to a solution," he said. "Out of that will come innovation, and that will drive economic growth."

kbergen@tribune.com

Twitter @kathy_bergen

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