Syria welcomes Algerian Brahimi as Annan successor

BEIRUT (AP) — The Syrian government on Saturday welcomed the naming of a former Algerian diplomat as the U.N.'s new point-man in efforts to halt the country's escalating civil war. Activists reported more shelling by regime troops, including an air attack on a northern border town where scores died earlier this week.

In a statement, the office of Vice President Farouk al-Sharaa not only expressed support for Lakhdar Brahimi, it also denied reports circulating in Arab media that al-Sharaa had defected to the opposition.

Al-Sharaa "did not think, at any moment, of leaving the country," the statement said.

The vice president's cousin Yaroub, a colonel in the military defected to the opposition earlier this month, appearing on the pan-Arab Al-Arabiya TV. The regime of President Bashar Assad has suffered a string of prominent defections in recent months, though his inner circle and military have largely kept their cohesive stance behind him.

The highest-ranking political defector so far, Assad's former prime minister Riad Hijab, has gone to Qatar where he may reveal his future plans, according to Syrian rebels and a relative of Hijab. Qatar is among a group of Gulf Arab nations that have backed the rebellion against Assad.

The new U.N. envoy, Brahimi, takes over from former Secretary-General Kofi Annan who is stepping down on Aug. 31 after his attempts to broker a cease-fire failed. His appointment comes as U.N. observers have begun leaving Syria, with their mission officially over at the end of Sunday. Their deployment earlier this year had been one of the only concrete achievements in Annan's peace attempts. The observers had been intended to watch over a cease-fire, but no truce ever took hold.

Al-Sharaa's office said the vice president "supports Brahimi's demand to get united support from the Security Council to carry out his mission without obstacles."

In new violence Saturday, regime airstrikes and shelling his rebel areas across the country, including the southern province of Daraa, the northern region of Aleppo, Deir el-Zour to the east and the suburbs of the capital, Damascus, activists said. Activists said at least 15 people were killed in the Deir el-Zour area.

One air raid hit the northern town of Azaz, near the Turkish border, the Britain-based Syrian Observatory for Human Rights said. There was no immediate word on casualties. Earlier this week, an airstrike on Azaz killed more than 40 people and wounded at least 100, according to international watchdog Human Rights Watch, whose team visited the site.

Azaz, which is home to around 35,000 people, is also the town where rebels have been holding 11 Lebanese Shiites captured in May.

Also Saturday, 40 bodies were found piled on a street in the Damascus suburb of al-Tal, according to the Observatory and another activist group, the Local Coordination Committees. The suburb saw days of heavy fighting until regime forces largely took over the area earlier this week.

The 40 had all been killed by bullet wounds, but their identity was not known, nor was it known who had killed them, said Rami Abdul-Rahman, the head of the Observatory.

"It is not clear if they were civilians, army defectors or soldiers," he said. Also unclear was whether they had been killed at the place where the bodies were found or if residents had collected the bodies there.

In Damascus, a U.N. spokeswoman said the last of the organization's observers still in Syria have started to leave the country ahead of the official end of their mission at midnight Sunday. There are about 100 observers left in Syria — a third of the number at the peak of the mission earlier this year.

Most will leave within hours, though some could be delayed by logistics, Juliette Touma told The Associated Press.

The Security Council agreed this week to end the U.N. mission and back a small new liaison office that will support any future peace efforts.

Lt. Gen. Babacar Gaye, head of U.N. Supervision Mission in Syria, said that who stays and leaves is not important, but "what is important is that the United Nations will stay." He said the U.N. is committed to ending violence and triggering dialogue between the Parties.

Babacar urged Syrian parties to stop the violence "that is causing such suffering to the innocent people of Syria."

"Those parties have obligations under international humanitarian law to ensure that civilians are protected. These obligations have not been respected." Babacar told reporters in Damascus.

A series of hostage-takings by Syria's rebels has touched off retaliatory abductions of Syrians in neighboring Lebanon and raised worries Lebanon could be dragged deeper into unrest.

Lebanese security officials said Saturday that five more Syrians were abducted in Beirut's southern suburbs overnight. It was not clear who carried out the latest abductions, but earlier kidnappings were carried out by the al-Mikdad clan, a powerful Shiite Muslim family in Leabanon.

The al-Mikdad clan says it has snatched a number of Syrians and a Turk in Lebanon in retaliation for the abduction of their relative, Hassane Salim al-Mikdad, by rebels in Syria.

___

Associated Press writers Albert Aji in Damascus, Syria and Jamal Halaby in Amman, Jordan, contributed to this report.

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Egypt votes to choose successor to Hosni Mubarak

CAIRO (AP) — Faced with a choice between Hosni Mubarak's ex-prime minister and an Islamist candidate, Egyptians entered their latest round of elections in an atmosphere of suspicion, resignation and worry, voting in a presidential runoff that will mean the difference between installing a remnant of the old regime and bringing Islam into government.

The race between Ahmed Shafiq, a career air force officer like Mubarak, and the Muslim Brotherhood's Mohammed Morsi, a U.S.-trained engineer, has deeply divided this mainly Muslim nation of some 82 million people 16 months after a stunning uprising by millions forced the authoritarian Mubarak to step down after 29 years in office.

Voters lined up outside polling centers an hour or more before they opened at 8 a.m. But turnout was not expected to exceed 50 percent, possibly because of voting fatigue. Since the ouster of Mubarak on Feb. 11, 2011, Egyptians have voted several times — in a March 2011 referendum on a military-sponsored "constitutional declaration," in staggered, three-month parliamentary elections ending in February and in the first round of the presidential elections last month.

Some said they were voting against a candidate as much as for a favorite. With the fear of new authoritarianism in the future, some said they were choosing the one they believed would be easiest to eventually force out by protests. Unlike in previous post-Mubarak voting when Egyptians were confident the balloting would be free, many this time round said they suspected the weekend's election may be tampered with.

"I don't think Shafiq could win, I think he will win," said Nagwan Gamal, a 26-year-old engineering lecturer at Cairo University who was voting for Morsi.

"I think there will be corruption to ensure that he wins, but I think a lot of people will vote for him," she said at a polling center in the Cairo district of Manial.

There were no immediate reports of significant violations at the polls, which are being monitored by several international and local observer groups. But the suspicion expressed by many underscored a widespread belief that the ruling military wants to ensure a win by the president of its choosing. The military has said it does not back either candidate.

Shafiq, a self-confessed admirer and a longtime friend of Mubarak, has campaigned on a platform of a return to stability, something that resonated with many Egyptians frustrated and fatigued by more than a year of turmoil — from deadly street protests, a surge in crime, to a faltering economy and seemingly endless strikes, sit-ins and demonstrations.

In contrast, Morsi marketed himself as a revolutionary who is fighting against the return of the old regime, promising guaranteed freedoms and an economic recovery, while softening his Islamist rhetoric in a bid to reassure liberals, minority Christians and women.

"The revolution was stolen from us," merchant Nabil Abdel-Fatah said as he waited in line outside a polling center in Cairo's working-class district of Imbaba. He said he planned to vote for Shafiq. "We can easily get rid of him if we want to, but not the Brotherhood, which will cling to power."

Brotherhood supporter Amin Sayed said he had planned to boycott the vote, but changed his mind after a court earlier this week dissolved parliament and allowed Shafiq to stay in the race.

"I came to vote for the Brotherhood and the revolution and to spite the military council," he said outside the same polling center in Imbaba, a stronghold of Islamists. "If Shafiq wins, we will return to the streets."

The two-day balloting will produce Egypt's first president since the ouster of Mubarak, now serving a life sentence for failing to prevent the killing of some 900 protesters during the 18-day uprising that toppled his regime.

The winner will be only the fifth president since the monarchy was overthrown nearly 60 years ago.

The election is supposed to be the last stop in a turbulent transition overseen by the military generals who took over from Mubarak. But whether they will genuinely surrender power by July 1 as they promised has been questioned all along, much more intensely since the military-backed government this week gave military police and intelligence agents the right to arrest civilians for a host of suspected crimes. Many saw the move as a de facto declaration of martial law.

On Thursday, judges appointed by the former president before he was toppled dissolved the Islamist-dominated parliament and ruled that Shafiq could stay in the race despite a legislation barring Mubarak regime figures from running for office.

The move robbed the Brotherhood, which dominated the legislature, from its pro-Mubarak gains and threw the entire transitional process into disarray. They also led to suspicions that the vote may be rigged in favor of Shafiq, widely seen as the general's favorite candidate.

The generals deny that charge, but without a parliament or a constitution, and with the right to arrest civilians, they will wield even greater powers going forward, with the future president, whether Morsi or Shafiq, likely to be beholden to them.

"By disbanding parliament, we returned to square one. We wasted a year and a half," 30-year-old contractor Mohammed Kamel said in the impoverished Cairo district of Warraq. "Ahead of us are four years of ambiguity ... We knew that the military council will never hand power because the generals have privileges they want to protect." Said Kamel, who crossed out the names of Morsi and Shafiq on his ballot paper.

Farouq Sultan, the constitutional court's chief judge, said in an interview published on Saturday that a "complementary constitutional declaration" will be issued to spell out the powers of the next president. He did not say who will issue the document, but the generals, as the country's collective presidency, are the only ones who have the authority to do so.

Already, numerous media reports say the generals would also take over the selection of a 100-member panel to draft a new constitution for the country.

The legislature, in which the Brotherhood controlled just under half of all seats, had led the selection of the panel, but charges that it packed it with Islamists led to its annulment by a court ruling. Another one selected earlier this week, also packed with Islamists, collapsed when parliament was dissolved.

Already, the generals have been blamed for mismanaging the transition and they stand accused of killing protesters, torturing detainees and hauling before military tribunals at least 12,000 civilians since January last year.

"We didn't have a revolution to topple a regime that made us live in poverty and didn't treat us like human beings so we can bring it back," said school teacher Mohammed Mustafa as he waited to vote in Cairo.

"We lost this country for 30 years, and we are not ready to lose it again," he added. "I have no doubt there will be fraud. If there is, I will return to the street to win back my dignity because I won't live as a slave anymore."

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Fannie Mae CEO to leave after successor chosen (Reuters)

WASHINGTON (Reuters) – Fannie Mae Chief Executive Michael Williams said on Tuesday he was stepping down from the government-controlled mortgage firm, which is at the center of a fight over how to reduce foreclosures.

He will depart after a successor is appointed to lead the country's largest provider of U.S. residential mortgage funding, the company said in a statement.

With Williams' announced departure, the government now needs to find leaders for both of the two largest U.S. housing finance companies. Freddie Mac CEO Charles Haldeman announced plans to step down in October.

Williams began working at the Fannie Mae in 1991. He was appointed chief executive in 2009 after Fannie Mae and Freddie Mac were seized by the government at the height of the financial crisis as mortgage losses mounted.

The two companies have soaked up about $169 billion in taxpayer support since being placed in conservatorship.

"I decided the time is right to turn over the reins to a new leader," Williams said in the statement.

To provide funds for housing, the two congressionally chartered companies buy mortgages from lenders and repackage them as securities for investors, which they then guarantee.

They were huge players in the mortgage market even before the housing bubble burst. As private mortgage financing evaporated, their footprint grew even larger.

Along with the Federal Housing Administration, they now provide the funds for about 90 percent of all new U.S. mortgages.

Even so, the Federal Reserve last week recommended expanding their role to help combat foreclosures and revive the downtrodden housing market. William Dudley, the influential president of the New York Federal Reserve Bank, argued that loan principal reductions should be considered.

Two Republican senators on Tuesday criticized the central bank for overreaching with its proposals. The regulator for Fannie Mae and Freddie Mac has only allowed the Obama administration to use the firms for targeted foreclosure prevention programs.

"I am surprised that Williams hung out as long as he did," said Anthony Sanders, a professor of real-estate finance at George Mason University. "It is a stressful job to explain to Congress and taxpayers how all that money was lost," he said.

The Obama administration, and Democratic and Republican lawmakers all agree that Fannie Mae and Freddie Mac eventually should be shuttered to reduce the government's role in the mortgage market.

However, they disagree over how quickly to unwind the money-losing firms and what role the government should play in the future.

Williams and Haldeman came under intense pressure from Congress to rein in compensation at the firms after it was disclosed last fall that they paid out $12.79 million in bonuses for 10 executives.

Both argued the hefty pay packages were needed because the uncertain future of their firms was making it difficult to attract and retain staff.

Williams, who worked his way up the ranks from the head of the company's eCommerce division to chief operating officer and eventually CEO, helped reform Fannie Mae's control standards after an accounting and financial restatement scandal.

The company did not provide details on when Williams' successor would be named.

(Reporting By Rachelle Younglai, additional reporting By Margaret Chadbourn; Editing by Kenneth Barry)

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Fannie Mae CEO to leave after successor chosen (Reuters)

WASHINGTON (Reuters) – Fannie Mae Chief Executive Michael Williams said on Tuesday he was stepping down from the government-controlled mortgage firm, which is at the center of a fight over how to reduce foreclosures.

He will depart after a successor is appointed to lead the country's largest provider of U.S. residential mortgage funding, the company said in a statement.

With Williams' announced departure, the government now needs to find leaders for both of the two largest U.S. housing finance companies. Freddie Mac CEO Charles Haldeman announced plans to step down in October.

Williams began working at the Fannie Mae in 1991. He was appointed chief executive in 2009 after Fannie Mae and Freddie Mac were seized by the government at the height of the financial crisis as mortgage losses mounted.

The two companies have soaked up about $169 billion in taxpayer support since being placed in conservatorship.

"I decided the time is right to turn over the reins to a new leader," Williams said in the statement.

To provide funds for housing, the two congressionally chartered companies buy mortgages from lenders and repackage them as securities for investors, which they then guarantee.

They were huge players in the mortgage market even before the housing bubble burst. As private mortgage financing evaporated, their footprint grew even larger.

Along with the Federal Housing Administration, they now provide the funds for about 90 percent of all new U.S. mortgages.

Even so, the Federal Reserve last week recommended expanding their role to help combat foreclosures and revive the downtrodden housing market. William Dudley, the influential president of the New York Federal Reserve Bank, argued that loan principal reductions should be considered.

Two Republican senators on Tuesday criticized the central bank for overreaching with its proposals. The regulator for Fannie Mae and Freddie Mac has only allowed the Obama administration to use the firms for targeted foreclosure prevention programs.

"I am surprised that Williams hung out as long as he did," said Anthony Sanders, a professor of real-estate finance at George Mason University. "It is a stressful job to explain to Congress and taxpayers how all that money was lost," he said.

The Obama administration, and Democratic and Republican lawmakers all agree that Fannie Mae and Freddie Mac eventually should be shuttered to reduce the government's role in the mortgage market.

However, they disagree over how quickly to unwind the money-losing firms and what role the government should play in the future.

Williams and Haldeman came under intense pressure from Congress to rein in compensation at the firms after it was disclosed last fall that they paid out $12.79 million in bonuses for 10 executives.

Both argued the hefty pay packages were needed because the uncertain future of their firms was making it difficult to attract and retain staff.

Williams, who worked his way up the ranks from the head of the company's eCommerce division to chief operating officer and eventually CEO, helped reform Fannie Mae's control standards after an accounting and financial restatement scandal.

The company did not provide details on when Williams' successor would be named.

(Reporting By Rachelle Younglai, additional reporting By Margaret Chadbourn; Editing by Kenneth Barry)

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