CROSS RIVER UNIVERSITY OF TECHNOLOGY

Thursday, 16 October 2014

TOP NEWS Milan summit offers Putin and Poroshenko time to talk

By Andreas Rinke and Crispian Balmer

MILAN (Reuters) - Russian President Vladimir Putin and Ukrainian leader Petro Poroshenko are looking to patch up a faltering ceasefire in eastern Ukraine and resolve a dispute over natural gas supplies when they meet in Milan on Friday.

The pair are expected to talk one-on-one on the sidelines of a Europe-Asia summit, and hold broader discussions with EU leaders alarmed at the potential for their dispute to trigger wider international unrest.

The West has imposed sanctions on Russia for its annexation of Crimea earlier this year and its support of pro-Russian separatists fighting in the east of Ukraine, reviving memories of the Cold War hostilities of the 20th century.

European leaders arriving in Milan on Thursday appeared to put the blame on Moscow for dozens of deaths in constant violations of a ceasefire agreed by Putin and Poroshenko last month in Minsk.

"It is obviously above all Russia's task to make clear that the Minsk plan is adhered to," said German Chancellor Angela Merkel told reporters. "Unfortunately, there are still a lot of shortcomings but it will be important to look for a dialogue here."

Europe fears Russia's decision to cut gas supplies to Ukraine because of unpaid bills could threaten disruptions in the gas flow to the rest of the continent this winter and is working hard to broker a deal.

Russia is Europe's biggest gas supplier, meeting around a third of demand, and the European Union gets about half of the Russian gas it uses via Ukraine.

The stand-off over pricing is the third in a decade between Moscow and Kiev, though this time tensions are higher because of the fighting in eastern Ukraine.

"HOPEFUL"

Kiev and its Western backers accuse Moscow of aiding a pro-Russian separatist revolt in eastern Ukraine by providing troops and arms. Russia denies the charges but says it has a right to defend the interests of the region's Russian-speaking majority.

Launching the Milan diplomacy, Merkel saw Poroshenko on Thursday evening. "The meeting went very well and we have seen a great demonstration of support for Ukraine," the Ukrainian president told reporters afterwards.

Putin warned on Thursday that Russia will reduce gas supplies to Europe if Ukraine steals from the transit pipeline to cover its own needs, although he added that he was "hopeful" it would not come to that.

"I can reassure you that there will be no crisis that could be blamed on Russian participants in energy cooperation," Putin told reporters during a visit to Serbia. But, he said, "there are big transit risks."

Germany is Europe's biggest buyer of Russian gas, paying Russian exporter Gazprom around $15 billion a year. EU members such as Bulgaria and Slovakia are almost entirely reliant on Russian gas imported via Ukraine.

Vygaudas Usackas, the EU's ambassador to Russia, said earlier this week there were "positive signs" that a deal might be within reach.

"It seems like we are entering a more promising and positive chapter of the whole puzzle about the crisis in and around Ukraine," he told Reuters.

However, it was not clear how much progress might be made in finding a lasting answer to the eastern Ukraine conflict.

More than 3,600 people have died in the area since fighting broke out in mid-April when armed separatists declared they were setting up their own state.

Although Putin announced this week that Russian troops near the border with Ukraine would be pulled back, Western officials want to see clear evidence that Moscow is acting on this.

Italian Prime Minister Matteo Renzi will host Friday's meeting, which will also be attended by Merkel, French President Francois Hollande and British Prime Minister David Cameron as well as Herman Van Rompuy, the chairman of European Union leaders, and EU Commission President Jose Manuel Barroso.

(Additional reporting by Elizabeth Pineau and James Mackenzie in Milan, Alexei Anishchuk in Moscow and Pavel Polityuk in Kiev; Editing by Ruth Pitchford)

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TOP NEWS Data shows U.S. economy's pulse is still strong

14:44 No comments

By Jason Lange

WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits fell to a 14-year low last week and industrial output rose sharply in September, positive signals that helped ease fears over the economic outlook.

Initial claims for state unemployment benefits dropped 23,000 to 264,000, the lowest level since 2000, the Labor Department said on Thursday.

A separate report from the Federal Reserve showed production at the nation's factories, mines and utilities advanced a larger-than-expected 1.0 percent last month, the biggest gain since November 2012.

The data offered evidence the economy remained on solid ground, with the labor market gaining steam. Investors in recent days have come to the view that slowing growth overseas will weigh on the U.S. economy and force the Fed to delay a hike in interest rates, with weak retail sales data on Wednesday helping to fuel a global sell-off in stock markets.

The jobless claims report, however, reinforced expectations that slack in the labor market was being reduced and, combined with comments from a top Fed official, put a brake on the selling on Wall Street.

"Have we achieved full employment? Not yet. Are we getting closer? Absolutely," said Stephen Stanley, an economist at Amherst Pierpont Securities.

The Standard & Poor's 500 index (.SPX) closed up marginally, while the blue chip Dow Jones industrials (.DJI) slipped a bit further. Yields on U.S. government bonds US10YT=RR moved higher.

Some of last week's drop in claims may have been related to the Columbus Day holiday, economists at RBS told clients.

The government, however, said there were no unusual factors in the report, and a four-week moving average of claims, which irons out weekly volatility, also fell to its lowest since 2000.

OASIS OF PROSPERITY?

A Reuters poll published on Thursday showed economists still clinging to the view that the Fed would raise benchmark borrowing costs from near zero in the second quarter of next year despite mounting signs of weakness overseas.

The poll, however, was largely completed before the latest stock market sell-off, which has been accompanied by a big shift in investor expectations for the path of U.S. monetary policy. Interest rate futures now point to a rate hike in October 2015.

St. Louis Federal Reserve Bank President James Bullard said in a television interview with Bloomberg that the U.S. central bank might want to keep its bond-buying stimulus program running for longer than anticipated to combat the risk of a drop in already low inflation, comments that eased investors' nerves.

But with the U.S. economy motoring ahead, many analysts said they expected Bullard's advice to fall by the wayside.

Economists still expect third-quarter growth to come in at around a 3 percent annual rate, a view buttressed by the pickup in industrial output.

The Fed pinned part of the gain on unusual weather that boosted air-conditioning use but there was also a broad-based increase in factory output, which grew a solid 0.5 percent.

A third report from the Fed's Philadelphia branch showed slowing growth in factory activity in the mid-Atlantic region.

(Reporting by Jason Lange and Tim Ahmann; Editing by Paul Simao and James Dalgleish)

TOP NEWS Iran, U.S. say some headway made in 'difficult' nuclear talks

14:43 No comments

By Parisa Hafezi and Fredrik Dahl

VIENNA (Reuters) - Iran and the United States said they made some progress in high-level nuclear talks but much work remained to clinch a breakthrough deal by a late-November deadline.

Both sides said they still aimed to meet the self-imposed Nov. 24 date, despite doubts among many experts that they can reach a full agreement to end a decade-old dispute over Tehran's nuclear program with just a few weeks remaining.

U.S. Secretary of State John Kerry left Vienna early on Thursday after six hours of talks with Iranian Foreign Minister Mohammad Javad Zarif and European Union foreign policy chief Catherine Ashton the previous day, but his officials remained to continue the talks through Thursday.

"It was very difficult, serious and intensive ... but instead of focusing on problems, we discussed solutions as well," Zarif told Iranian media on Thursday, sources who were present told Reuters. "There was progress in all the fields."

The U.S. side also said progress was made.

Zarif said he would next meet Kerry and Ashton in three to four weeks' time though not in Vienna, Iranian state television reported. Ashton coordinates talks with Iran on behalf of the six other countries involved, including the United States.

Ashton and Zarif met on Thursday with senior officials from the six - the United States, France, Germany, China, Russia and Britain - before the Iranian foreign minister left Vienna.

The talks are in a "critical phase", Ashton's spokesman said.

"We are trying hard to make progress and remain fully engaged to achieve a comprehensive solution" by the deadline, Michael Mann said in a statement, adding that experts would meet in coming days to continue technical work.

Relations with the West have thawed since Hassan Rouhani was elected president last year seeking to end Iran's international isolation, and the talks are aimed at easing concerns about Tehran's atomic activities in exchange for lifting sanctions.

But Western officials say there are still gaps in the positions, especially over the future scope of Iran's production of enriched uranium, which can have civilian and military uses.

NUCLEAR "PATHWAYS"

One of Iran's chief negotiators, Deputy Foreign Minister Abbas Araqchi, last week raised the possibility the talks could be extended, and Russian Foreign Minister Sergei Lavrov said on Tuesday that the deadline was not "sacred".

But Zarif said none of the parties believed in extending the talks, IRIB said. A senior U.S. official said an extension was not discussed, adding: "You never say never, but today we are focused on Nov. 24 and Nov. 24 only."

Western governments want Iran to cut its uranium enrichment capacity so that it would take a long time to purify enough uranium for an atomic weapon. Tehran, which says all its nuclear work is for peaceful ends, has rejected demands to significantly reduce the number of enrichment centrifuges below the 19,000 it has now installed, of which roughly half are operating.

The U.S. official said gaps in negotiating positions must be narrowed in a way that "ensures that all of the pathways for fissile material for a nuclear weapon are shut down."

Russia's chief negotiator, Deputy Foreign Minister Sergei Ryabkov, said three key areas - uranium enrichment, the future of Iran's Arak research reactor and how to lift sanctions – had not yet been resolved, RIA Novosti news agency reported.

(Additional reporting by Matt Spetalnick in Vienna and Vladimir Soldatkin in Moscow; Editing by Robin Pomeroy)

TOP NEWS Obama open to appointing Ebola 'czar,' opposes travel ban

14:42 No comments

By Steve Holland and David Morgan

WASHINGTON (Reuters) - President Barack Obama said he was considering appointing an Ebola "czar" to coordinate the fight against the virus in the United States, but he remained opposed to a ban on travel from West Africa.

Obama's administration is facing sharp criticism from lawmakers over its efforts to contain the disease at home. Obama authorized calling up military reservists for the U.S. fight against Ebola in West Africa on Thursday.

U.S. concerns have intensified after two Texas nurses who cared for a dying Liberian patient contracted the virus that has killed nearly 4,500 people. Spain is also grappling with the spread of the disease, with four new patients with suspected Ebola symptoms admitted to hospitals.

The disease continues to spread in West Africa where the outbreak began in March, and reached the last remaining district in Sierra Leone that had not been affected by Ebola.

U.S. lawmakers held a congressional hearing about the administration's handling of the Ebola outbreak in the United States. Some have called for a czar and a ban on travel from West Africa.

"It may be appropriate for me to appoint an additional person" to oversee efforts to contain Ebola, Obama told reporters after meeting aides involved in the fight against the disease.

Obama said experts have told him "a flat-out travel ban is not the way to go" because current screening measures at airports are working.

He said he had no philosophical objection to a travel ban but that some travelers might attempt to enter the United States by avoiding screening measures, which could lead to more Ebola cases, not fewer.

Jamaica announced an immediate travel ban on Thursday. South America's Guyana said it has denied entry to citizens from four Ebola-hit West African nations during the past five weeks.

U.S. Federal Aviation Administration chief Michael Huerta told reporters separately that the government was assessing whether to issue a travel ban "on a day-to-day basis."

SCHOOLS CLOSE IN TEXAS, OHIO

Amber Vinson, one of the nurses who treated the Ebola patient at Texas Health Presbyterian Hospital in Dallas and contracted the virus, traveled to Ohio over the weekend on a Frontier Airlines flight while running a slight fever.

Dr. Christopher Braden, a spokesman for the Centers for Disease Control and Prevention (CDC), said Vinson may have been ill as early as Friday, when she boarded the flight from Dallas to Cleveland. Vinson returned to Texas on Monday.

Braden told a news conference in Akron, Ohio, that the CDC may include people who were aboard the flight in its investigation of possible contacts.

Dr. Thomas Frieden, the CDC director, has said it is unlikely passengers who flew with Vinson were infected because the nurse had not vomited or bled on the flight, but he said she should not have boarded the plane.

Concerns about Ebola exposure prompted several schools in Ohio and Texas to close because people with ties to the schools may have shared the flight with Vinson.

An air ambulance transported Vinson to Atlanta's Emory University Hospital on Wednesday for treatment. The first nurse to contract Ebola, Nina Pham, 26, was flown to the National Institutes of Health (NIH) in Bethesda, Maryland, to be treated in an isolation unit.

A YouTube video made by Pham's physician, Dr. Gary Weinstein, before her discharge showed her in a bed at Texas Health Presbyterian Hospital and with Weinstein in protective gear.

In the video, Pham wiped away tears and said, "Come to Maryland, everybody!" and "I love you guys." She requested that the video be shared by the hospital.

But more than a week after Duncan died, the hospital acknowledged it had made mistakes in diagnosing Duncan and in giving the public accurate information.

Dr. Daniel Varga, chief clinical officer and senior vice president of Texas Health Resources, which owns Texas Health Presbyterian Hospital, said the hospital was "deeply sorry".

He said there had been no Ebola training for staff before Duncan was admitted.

The hospital defended its treatment of Duncan, saying in a statement that it had followed CDC guidelines. Criticisms that had surfaced in the media about its Ebola treatment "are often out-of-context and sensationalized. Others are completely inaccurate," it said.

HALT URGED FOR WEST AFRICA FLIGHTS

In the congressional hearing, lawmakers focused on Frieden, with several Republicans saying flights from West Africa should be stopped.

"We need to look at all the options available to keep our families safe and move quickly and responsibly to make any necessary changes at airports," Democratic Representative Bruce Braley of Iowa told the hearing.

The virus is spread through direct contact with bodily fluids from an infected person showing symptoms of Ebola. Ebola is not airborne.

Frieden argued, as he has before, that closing U.S. borders would not work and would leave the country less able to track people with Ebola entering. Moreover, cutting flights to Africa would hit the U.S. ability to stop the virus at its source, he said.

(Additional reporting by Susan Heavey, Will Dunham, Mohammad Zargham, Steve Holland, Jeff Mason and David Alexander in Washington and Jon Herskovitz in Austin; Writing by Tom Brown; Editing by Bernadette Baum, Jonathan Oatis, Lisa Shumaker and Ken Wills)

TOP NEWS Hong Kong police clear protesters, barricades at key site

14:41 No comments

By Clare Baldwin and James Pomfret

HONG KONG (Reuters) - Hundreds of Hong Kong police staged their biggest and boldest raid yet on a pro-democracy protest camp before dawn on Friday, charging down student-led activists who have held a key intersection in one of the main protest zones for more than three weeks.

The operation in the gritty and congested Mong Kok district - across the harbor from the heart of the civil disobedience movement near government headquarters - came while many protesters were asleep on the asphalt in dozens of tents or beneath giant, blue-striped tarpaulin sheets.

The raid was a gamble for the 28,000-strong police force in the Chinese-controlled city who have come under criticism for mounting aggressive clearance operations using tear gas, baton charges and a violent beating of a handcuffed protester by seven policemen on Wednesday.

Storming into the intersection with helmets, plastic riot shields and batons at the ready from four directions, the deployment of 800 officers caught the protesters by surprise. Many retreated without resisting.

"The Hong Kong government's despicable clearance here will cause another wave of citizen protests," said radio talk show host and activist Wong Yeung-tat, who donned protective goggles over his white-rimmed glasses and sported a boxer's sparring pad on his arm as a makeshift shield.

The police sweep of the protest camp in Mong Kok had been expected for several days. It further reduces the number of protest sites that have paralyzed parts of the Asian financial hub since September 28, but could reignite retaliation.

"We have urged protesters to maintain a kind of floating protest strategy to guard the streets," said Wong, flanked by protesters who stared down advancing lines of uniformed police.

Police gave a short warning on loud hailers before moving in although no direct force was used, witnesses said.

The protesters, led by a restive younger generation of students, have been demanding China's Communist Party rulers live up to constitutional promises to grant full democracy to the former British colony which returned to Chinese rule in 1997.

In August, Beijing offered Hong Kong people the chance to vote for their own leader in 2017, but said only two to three candidates could run after getting majority backing from a 1200-person "nominating committee" stacked with Beijing loyalists.

The protesters decry this as "fake" Chinese-style democracy and demand Beijing allow open nominations for a fairer poll.

The raid came less than 24 hours after Hong Kong leader Leung Chun-ying tried to buy time by resurrecting talks next week with the student leaders.

"I am so furious. The government said it would talk to the students about these issues, then it came and cleared our base," said Cony Cheung, a beauty products saleswoman clad in a yellow construction hard hat and an industrial-strength face mask.

Barry Smith, one of several senior British police chiefs - a legacy of the pre-1997 Royal Hong Kong Police - commanding the operation, described it as "fairly peaceful". About 800 officers were involved, he added, and no arrests were made. There were no immediate reports of injuries.

"They've been occupying this whole area now for almost three weeks, so we decided it's time to give the public the right of way, to get the roads back and get access to pedestrians," said Smith as he paced about the area, directing front-line officers.

LITTLE WARNING

Yellow dump trucks with pneumatic backhoes and claws later cleared away debris including smashed wooden pallets, garbage cans, fences, ripped tents and metal barricades, while the scattered belongings of protesters were loaded on to trucks.

Elderly cleaners ripped down democracy posters and notes coating walls, windows and street signs, using cleaning fluid and razors to scrape away stickers stuck to the windows of an HSBC bank branch.

Some remaining protesters tried to salvage some of the hand-drawn protest artwork that have mushroomed across protest zones.

"These drawings represent the voice of the people. We must try to preserve them and I hope in future they establish a democracy museum to keep these voices at this historic moment," one said.

Some protesters used trolleys to cart water, sleeping mats and medical supplies to a nearby park, but later moved supplies back with police saying they'd allow protesters to continue to occupy a section of the heavily trafficked Nathan Road, which leads south down to the harbor, with the world-famous view of Hong Kong Island opposite.

"The occupation here hasn't finished yet," said Simon Siu, a protest logistics coordinator. "People will come back."

A steady trickle of protesters returned to the bare site.

The raid came just days after violent scuffles between police and protesters who attempted to blockade a major road near government headquarters on Hong Kong Island.

Police had also used sledgehammers and chainsaws to tear down concrete, metal and bamboo barricades to reopen a major road feeding the Central business district.

Despite the clearances, perhaps 1,000 protesters remained camped on Hong Kong Island in a sea of tents and umbrellas on an eight-lane highway beneath glass and steel skyscrapers.

Leung has said there is "zero chance" Beijing will give in to protesters' demands, a view shared by many observers and Hong Kong citizens. He has also resolutely refused to step down.

Chief Secretary Carrie Lam canceled planned talks with student leaders last Thursday, saying it was impossible to have constructive dialogue, and it was hard to see how that could change with the two sides poles apart.

At the peak of the protests, 100,000 had been on the streets, presenting Beijing with one of its biggest political challenges since it crushed pro-democracy demonstrations in and around Tiananmen Square in the Chinese capital in 1989.

Those numbers have dwindled significantly.

China rules Hong Kong under a "one country, two systems" formula that gives the city wide-ranging autonomy and freedoms not enjoyed in mainland China, with "universal suffrage" stated as the eventual aim.

It is concerned calls for democracy in Hong Kong, and in the neighboring former Portuguese colony of Macau, could spread to the mainland, threatening the party's grip on power.

(Additional reporting by Bobby Yip; Writing by Anne Marie Roantree and James Pomfret; Editing by Nick Macfie)

TOP NEWS Al Qaeda and Houthis clash in central Yemen: residents

14:28 No comments

By Mohammed Ghobari

SANAA (Reuters) - At least 10 people were killed in fighting between Houthi tribesmen and militants linked to al Qaeda in central Yemen on Thursday, witnesses said, part of a growing struggle over territory and influence between the two enemy sides.

The Shi'ite Muslim Houthis established themselves as Yemen's new powerbrokers last month, capturing Sanaa on Sept. 21 to little resistance from residents or from the weak administration of President Abd-Rabbu Mansour Hadi.

Their ascendance has angered al Qaeda, which views Shi'ites as heretics and Houthis as pawns of Iran. Last week, the Yemeni group al Qaeda in the Arabian Peninsula (AQAP) claimed a suicide bombing on a Houthi gathering that killed at least 47 people.

Houthi fighters have been making advances outside of Sanaa in recent days, taking over cities and towns with the apparent agreement of the authorities there, but clashing with some al Qaeda linked militants in central Yemen.

On Thursday, witnesses said a convoy of Houthi fighters trying to reach the town of Radda in al-Bayda province, 130 km south east of Sanaa, was blocked by fighters from Ansar al-Sharia, the local arm of AQAP.

"There are heavy clashes going on there, with various weapons, including RPGs," one resident said. He estimated that at least 10 Houthi fighters were killed.

The fighting comes after clashes between Houthis and Ansar al Sharia in Radda on Tuesday in which at least 12 people were killed.

Another convoy of several cars carrying Houthis was later seen on the outskirts of Taiz, a city 50 km south of Ibb.

Al Qaeda said in a statement issued on Thursday that its fighters had on the previous day stormed the town Odein, near Ibb, killing three soldiers and holding it for nine hours to prevent the Houthis from taking over.

In the most recent advances outside Sanaa, Houthis took control on Thursday of the small Red Sea port of Medi and al-Dawaymeh island, both near the border with Saudi Arabia.

Earlier this week they took over the Red Sea port of Hodeidah, the second largest port in the Arabian peninsula nation after Aden, with the apparent agreement of the police, according to local officials.

(Reporting by Mohammed Ghobari,; Writing by Sami Aboudi; Editing by Raissa Kasolowsky)

TOP NEWS Brazil's Neves closing campaign cash gap thanks to banks and ethanol

14:27 No comments

By Brad Haynes

SAO PAULO (Reuters) - A late injection of campaign cash is helping business-friendly opposition candidate Aecio Neves push Brazil's presidential runoff against incumbent Dilma Rousseff down to the wire, eroding her huge fundraising advantage.

Many of the banks, builders and ethanol companies that led contributions to Neves doubled down on the centrist senator last month as his sudden polling surge ahead of a first-round vote turned him from an also-ran into a real contender.

Total fundraising for Neves nearly doubled in September to about 140 million reais ($58 million), according to his campaign treasurer Jose Gregori, a former justice minister.

"We saw contributions accelerating from many of the same donors," Gregori said in a telephone interview. "Financial institutions, service providers and builders ... they didn't wait until the second round of the election to give again."

The fresh cash has helped fund a flurry of campaigning by Neves, raising the former state governor's national profile as polls show him in a dead heat with the leftist Rousseff ahead of the runoff election on Oct. 26.

Neves has already won over many investors and business leaders with promises to restore fiscal discipline, clamp down on inflation and revive struggling state-run companies in order to pull Brazil's economy out of recession.

Still, it will be tough to overcome the fundraising lead that Rousseff built in the early months of the race, helped by her incumbent advantage and an initial lead in the polls.

Policies offering tax breaks and cheap loans to select sectors of the economy have also built up a hard core of support for the president in some industries.

Rousseff and the national committees of her Workers' Party had raised more than 185 million reais by early September, according to the most recent campaign finance data published by Brazil's electoral authority.

A Workers' Party spokeswoman declined to comment on fundraising since early September and turned down a request to interview the treasurer of Rousseff's campaign.

Neves and his Brazilian Social Democracy Party had raised about 71 million reais by the start of September. At the time, he was polling around 15 percent support and looked bound for a first-round exit, behind environmentalist icon Marina Silva.

Many of Neves' biggest backers had also supported Silva when polls showed her with the best chance of beating Rousseff. As Silva faded in late September under a barrage of attack ads, however, voters and campaign donors looking for a new president quickly consolidated behind Neves.

EAGER FOR CHANGE

An analysis of campaign finance data shows Neves has done best with fundraising in industries unhappy over what they perceive as Rousseff's heavy-handed policies.

Ethanol producers, for example, have protested for years that they cannot compete against gasoline at the pump because Rousseff's government has kept down official fuel prices and scrapped a traditional gas tax to control inflation.

While Neves collected just one quarter of contributions to the major presidential candidates in the most recent public fundraising data, he was matching Rousseff dollar-for-dollar in the ethanol industry.

Brazil's biggest sugar and ethanol trader, Copersucar, donated 1 million reais to the Neves campaign and nothing to Rousseff. Representatives for Copersucar and most of the other companies mentioned in this story did not respond to questions about their contributions.

A Neves victory would also end years of tense, often hostile, relations between the government and private-sector banks.

Rousseff has accused private banks of charging exorbitant interest rates and she champions aggressive lending by public banks in segments she considers under-served by private lenders.

One of the president's recent campaign ads warned against an independent central bank by showing a dark room of bankers scheming while food disappeared from a family's dinner table.

Neves has found generous support in the finance industry, including contributions of 700,000 reais and 550,000 reais from Banco BMG and insurance company Porto Seguro SA (PSSA3.SA), which have not donated to Rousseff.

'CORPORATE WELFARE'

The president has had far more luck with the companies that benefited from a surge of new lending from state development bank BNDES over the past 12 years of Workers' Party rule.

Rousseff and her predecessor, Luiz Inacio Lula da Silva, pushed BNDES to lend heavily to so-called national champions such as brewer AmBev SA (ABEV3.SA) and meat packer JBS SA (JBSS3.SA), which used the subsidized loans to engineer a spree of mergers at home and overseas.

Neves and his proposed finance minister, former central bank president Arminio Fraga, have questioned the current role of the BNDES, promising more transparency and the end of what they call "corporate welfare."

Grupo JBS has given at least 25 million reais to Rousseff's campaign, some five times its contributions to Neves, according to the latest public data. Ambev and its subsidiaries gave over 8 million reais to Rousseff, more than twice what they offered to the Neves campaign.

Even as Neves trailed Rousseff in fundraising among Brazil's biggest corporations, he has garnered more than twice as much in contributions from individual donors, due in part to his ample support among wealthier Brazilians.

For example, Eugenio Pacelli Mattar and Jose Salim Mattar Junior, who founded car rental agency Localiza SA (RENT3.SA), each donated 1 million reais to Neves' party in August. The brothers are prominent businessmen from the state of Minas Gerais, where Neves served two terms as governor.

The largest private donation to Rousseff's campaign was 500,000 reais from Erai Maggi Scheffer, one of Brazil's biggest soy farmers, whose billionaire cousin, Senator Blairo Borges Maggi, is part of the president's coalition in Congress.

For both candidates, the largest source of contributions by far is the construction industry. Big builders and engineering companies, which profit from government-sponsored infrastructure projects, account for about half of donations to each campaign.

Major construction groups, like donors in most industries, steered about two of every three dollars to the incumbent.

By the start of September, builder Andrade Gutierrez had given nearly 17 million reais to Rousseff and about 12 million reais to Neves. OAS, the industry's biggest donor, went even further, giving over 30 million reais to the president, more than five times its contribution to the challenger.

But Neves' recent surge in polls may have some companies hedging their bets.

In separate statements, representatives for Ambev and Andrade Gutierrez said the companies aimed to support democratic debate by donating to multiple parties based upon the political support behind each one.

(Editing by Todd Benson and Kieran Murray)

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Thursday, 16 October 2014

TOP NEWS Milan summit offers Putin and Poroshenko time to talk

TOP NEWS Data shows U.S. economy's pulse is still strong

TOP NEWS Iran, U.S. say some headway made in 'difficult' nuclear talks

TOP NEWS Obama open to appointing Ebola 'czar,' opposes travel ban

TOP NEWS Hong Kong police clear protesters, barricades at key site

TOP NEWS Al Qaeda and Houthis clash in central Yemen: residents

TOP NEWS Brazil's Neves closing campaign cash gap thanks to banks and ethanol

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