U.S. to pull out of Iraq after nearly 9 years of war (Reuters)

WASHINGTON (Reuters) – President Barack Obama vowed on Friday to pull all U.S. troops from Iraq this year, symbolically ending the war but dashing U.S. hopes of leaving a few thousand troops to buttress a still shaky Iraq and offset neighboring Iran's influence.

After months of negotiations with officials in Baghdad failed to reach an agreement to keep possibly thousands of U.S. troops in Iraq as trainers, Obama announced he would stick to plans to pull out the remaining force of 40,000 by year's end.

"After nearly nine years, America's war in Iraq will be over," Obama told reporters.

The announcement is a milestone more than eight and a half years after the Bush administration led the invasion to topple Saddam Hussein based on warnings of weapons of mass destruction that turned out not to exist.

Obama, eyeing a 2012 re-election campaign likely to be fought over his handling of the U.S. economy, is looking to wind down a decade of war in the Muslim world that did lasting damage to the U.S. image worldwide and stretched its military and budget to the brink.

In Iraq, where the U.S. force peaked at around 190,000 during the height of President George W. Bush's troop surge in 2007, almost 4,500 U.S. soldiers have died and the war has cost U.S. taxpayers over $700 billion in military spending alone.

Even as leaders of Iraq's fragile democracy seek to distance themselves from Washington, Iraq is only slowly getting to its feet after years of ferocious violence that shattered its society and killed tens of thousands of people.

While Washington has hailed Iraq's halting progress, especially as tumult has swept the Middle East, its political system remains gripped by perennial deadlock on issues dividing a religiously and ethnically fractured country.

Violence there is a far cry from the sectarian slaughter of 2006-07, but Iraq still suffers daily attacks from a stubborn insurgency allied with al Qaeda, and from Shi'ite militiamen.

"I wish we had been able to make more progress in resolving the internal differences while our troops are still there," said retired Gen. Brent Scowcroft, who was national security advisor to President George H.W. Bush, and became a prominent Cassandra before the Iraq war.

SHARED VISION FOR IRAQ?

Obama's announcement in the White House briefing room was freighted with political overtones.

The president, who was an early opponent of the war and campaigned on a promise to end it, repeated his mantra that "The tide of war is receding."

But prominent Republicans criticized the president. Sen. John McCain told Reuters the decision went against the advice of U.S. military commanders, could embolden Iran and likely will be met with alarm by Afghan President Hamid Karzai, who is already concerned about U.S. commitment to his country.

"In retrospect, I don't think the political side of the Obama administration ever had any serious intentions of keeping a residual force there because none of their actions were serious," said McCain, ranking GOP member of the Senate Armed Services Committee.

Obama made his announcement after a video conference with Iraqi Prime Minister Nuri al-Maliki. He said the two leaders agreed to stick to an earlier arrangement to pull the remaining 40,000 U.S. troops by year's end.

About 160 U.S. soldiers will remain behind under State Department authority to train Iraqi forces along with a small contingent of soldiers guarding the U.S. Embassy. There will also likely be a U.S. special operations presence in Iraq.

But the announcement underscores the gaps that remain between U.S. and Iraqi priorities and political realities.

Earlier this week, U.S. Defense Secretary Leon Panetta said American and Iraqi officials were continuing discussions that might permit his soldiers to stay beyond the December 31 deadline.

The prospect of extending the troop presence was very sensitive for Iraq's fractured political elite.

Maliki, heading a tenuous coalition including politicians vehemently opposed to foreign troops, eventually advocated a training presence but rejected any legal immunity for U.S. soldiers. Those terms were deemed unacceptable in Washington and in the end there was no deal to be had.

"This has been inevitable," said David Mack, a former U.S. ambassador in the Middle East.

"National security strategists in both Washington and Baghdad made a strong case for keeping US military forces beyond 2011, but the domestic politics in both countries were against it," he said.

U.S. MILITARY ROLE

The U.S. military role in Iraq has been mostly reduced to advising the security forces in a country whose military was rebuilt from scratch following the 2003 invasion.

Lingering weaknesses in Iraq's military capability would have been one reason to keep a larger U.S. troop presence.

Another was Iran. Chronically critical of Iran's nuclear program, Washington is especially sensitive to the prospect of an expansionist Iran following its recent allegations about a foiled Iranian plot to kill the Saudi ambassador in Washington.

"We remain very concerned that Iran is meddling, not just in the affairs of Iraq but of other countries in the region. And that's unacceptable," Pentagon spokesman George Little said this week when discussing a possible extended troop presence.

Brian Katulis, a security expert at the Center for American Progress in Washington, said the specter of Tehran dictating decisions to Baghdad was a red herring.

"Iranian influence is overstated," he said. "And it's not as if a few thousand U.S. troops was going to be a linchpin."

Both sides appeared to leave the door open to revising the arrangement announced on Friday. An Iraqi government advisor said after Obama's remarks that officials from both countries would discuss post-2011 trainers at their next meeting.

Even without soldiers, the U.S. presence will remain substantial. U.S. officials say the embassy in Baghdad, an imposing, fortified complex by the Tigris River in Baghdad's Green Zone, will be the largest in the world.

(Reporting by Tabassum Zakaria, Deborah Charles, Alister Bull and Warren Strobel in Washington and Patrick Markey in Baghdad; Writing by Missy Ryan; Editing by Jackie Frank and Philip Barbara)

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6 years after Katrina, Lower 9th Ward still bleak (AP)

NEW ORLEANS – In New Orleans' Lower 9th Ward, the grasses grow taller than people and street after street is scarred by empty decaying houses, the lives that once played out inside their walls hardly imaginable now.

St. Claude Avenue, the once moderately busy commercial thoroughfare, looks like the main street of a railroad town bypassed long ago by the interstate. Most buildings are shuttered, "For Sale" signs stuck on their sides. There aren't many buyers. And the businesses that are open are mostly corner stores where folks buy pricey cigarettes, liquor and packaged food.

Six years after Hurricane Katrina slammed into the Gulf Coast, the New Orleans neighborhood that was hardest hit still looks like a ghost town. Redevelopment has been slow in coming, and the neighborhood has just 5,500 residents — one-third its pre-Katrina population.

But politicians, investors and celebrities continue to promise a better future. City leaders recently announced plans to rebuild a high school and pave the neighborhood's roads. And actor Wendell Pierce, who stars in an HBO series about New Orleans, is backing a new supermarket for an area that hasn't had one in 20 years.

While residents welcome the news, they remain skeptical. Promises have been dashed too many times.

"Look around you at the Katrina houses!" said Robert Stark, a 54-year-old disabled veteran, sweating in stifling August heat on a porch looking onto Flood Street. He waved at two vacant crumbling houses, like so many that dot the Lower 9th Ward.

He shook his head and added: "Look at the grass." In many lots, fields of high grass grow in place of houses. "There ain't nothing new down here. Nothing new ... nothing new."

That's not completely true.

Since Katrina, the predominantly black neighborhood has been the site of rebuilding by environmental groups and thousands of volunteers. There's now an eco-friendly community center and a cluster of more than 50 modernistic houses, built with the help of actor Brad Pitt. It sits near where the floodwall toppled on Aug. 29, 2005, killing dozens of people and swamping thousands of homes with floodwaters that reached rooftops.

Also, a charter school has been rebuilt and many of the shotgun-style homes and Creole cottages in the older part of the neighborhood, Holy Cross, are a display of bright New Orleans colors and cheery yards.

But residents of the Lower 9th Ward, downriver from the French Quarter, nevertheless feel left behind.

Other parts of New Orleans have flourished thanks to federal recovery dollars that have brought new businesses, schools and streets.

Entrepreneurship and civic engagement is up, city schools have shown test-score gains and the middle class is growing, according to a new report by the Greater New Orleans Community Data Center, a group tracking the city's recovery. Even crime — still nearly twice the national average — is being held in check and falling, the report said. Meanwhile, the Army Corps of Engineers is getting closer to finishing $14 billion in work to better shield the city from future hurricanes.

"Some of the data shows that New Orleans is rebuilding better than before," said Allison Plyer, deputy director of the Greater New Orleans Community Data Center.

Still, Plyer said the Lower 9th Ward is among a number of low-income communities that have had difficulty rebuilding since Katrina's flooding.

In the Lower 9th Ward, the fire station for Engine 39 hasn't been rebuilt. Instead, the firefighters use a trailer. Schools and churches are boarded up. Scores of houses still bear the markings of search-and-rescue crews — the now familiar "X" spray painted on doors and the front of houses to designate whether a building had been searched, by whom and whether any bodies had been found inside. The only difference is they are faded now.

The lack of people makes those who've come back feel that their neighborhood has been forgotten, even though a steady stream of politicians came to promise to help after Katrina and millions of dollars flowed in.

Now there's a new push to revive the neighborhood.

In recent days, city leaders have put forward plans to rebuild the Alfred Lawless High School and spend $45 million repaving most of the streets where the heaviest damage took place.

A group of investors that includes Pierce, a New Orleans native starring on the HBO show "Treme," has announced plans to build a full-scale grocery store on the grounds of a former baseball field by 2013. Developers hope to get federal hurricane recovery low-interest and forgivable loans. If built, the 25,000-square-foot store would represent one of the first pioneering commercial investments for the Lower 9th Ward since Katrina.

Pierce said big-chain supermarkets are unable to see the potential for profit in a place like the Lower 9th Ward, where his parents lived before he was born.

"Corporate America only sees the risk side of the ledger," he said. "I'm tired of industry standing on the sidelines. There is value here, there is wealth here... It's pent-up demand and I feel as though it is something that can be mined."

Not everyone is convinced.

David J. Livingston, a Wisconsin-based grocery consultant who's studied the New Orleans market, said the Lower 9th Ward is too depopulated to support a supermarket. He questioned whether the Lower 9th Ward, cut off by an industrial canal from the rest of New Orleans, can ever be a lively spot for commerce despite the best efforts of actors Pitt and Pierce.

"All the work that Brad Pitt has done, has it really made a significant difference? Glad he did it, better than it was. But it's still not the garden spot of New Orleans," Livingston said, referring to the cluster of eco-friendly homes built by the Pitt-backed foundation Make It Right.

But local residents and merchants hold out hope the supermarket can help turn things around.

"Maybe some of the folks going to the supermarket would come here," said April Lawrence, the owner of a beauty salon who took a chance and opened in 2009 on Dauphine Street. "Today, I have just one client," she said glumly. Unless business picks up, she said, she will have to close.

Down the street, regulars sat outside on the sidewalk in front of Mercedes' Place, a bar and video poker spot, chatting, drinking and smoking. For them, anything would be better than the options they have now: Drive miles to get something decent to cook up at home.

"It's needed!" Lynette Gibson said emphatically and loudly. She helps her 72-year-old mother, Mercedes, run the bar.

She shook her head at the thought of the handful of gas stations and convenience stores on the main streets. "It's limited," she said. "They only satisfy neighborhood people who drink."

Roosevelt Johnson Sr., a 51-year-old disabled veteran, stood outside his house and looked at the empty grass field where the grocery store would be built.

"With them bringing a supermarket, it might increase property values," he reasoned. "It might bring some normalcy back here. Make it like any other neighborhood where you go 10 minutes to the supermarket."

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Somalis dying in world's worst famine in 20 years (AP)

NAIROBI, Kenya – Tens of thousands of Somalis are feared dead in the world's worst famine in a generation, the U.N. said Wednesday, and the U.S. said it will allow emergency funds to be spent in areas controlled by al-Qaida-linked militants as long as the fighters do not interfere with aid distributions.

Exhausted, rail-thin women are stumbling into refugee camps in Kenya and Ethiopia with dead babies and bleeding feet, having left weaker family members behind along the way.

"Somalia is facing its worst food security crisis in the last 20 years," said Mark Bowden, the U.N.'s top official in charge of humanitarian aid in Somalia. "This desperate situation requires urgent action to save lives ... it's likely that conditions will deteriorate further in six months."

The crisis is the worst since 1991-92, when hundreds of thousands of Somalis starved to death, Bowden said. That famine prompted intervention by an international peacekeeping force, but it eventually pulled out after two American Black Hawk helicopters were shot down in 1993.

Since then, Western nations have mainly sought to contain the threat of terrorism from Somalia — an anarchic nation where the weak government battles Islamic militants on land and pirates hijack ships for millions of dollars at sea.

Oxfam said $1 billion is needed for famine relief. On Wednesday, the U.S. announced an additional $28 million in emergency funding on top of the $431 million in assistance already given this year.

Most importantly, as long as the Islamists don't interfere with aid distributions, those new U.S. funds aren't restricted under rules implemented in 2009 that are designed to keep food and money from being stolen by the insurgency.

"If (the insurgents) are willing to allow access we are willing to stand fully with the humanitarian actors," said Dr. Raj Shah, head of the U.S. Agency for International Development.

Aid groups have repeatedly called for the restrictions to be lifted and say the rules severely limited their operations in the past two years. U.S. humanitarian contributions in Somalia fell from $237 million in 2008 to $29 million last year.

"We've seen a very large shortfall over the past few years given the political restrictions attached to humanitarian funding," said Tanja Schumer of the Somalia NGO Consortium, which represents 78 aid agencies working on Somalia. "To get American money we have to vouch for all our contractors and all our local partners and that is tricky."

Susan Rice, the U.S. ambassador to the United Nations, blamed al-Shabab for exacerbating the crisis.

"The reason the aid hasn't gone in sufficient quantities into south and central Somalia is because al-Shabab has prevented those capable of delivering large quantities of aid from having access — and when they have had access they've taxed them, harassed them, killed them, kidnapped them," Rice told reporters at U.N. headquarters in New York.

Somalia is the most dangerous country in the world to work in, according to the U.N.'s World Food Program, which has lost 14 relief workers in the past few years. Kidnappings, killings and attacks on aid convoys occur frequently. Two years ago WFP pulled out of Islamist-controlled southern Somalia after the rebels demanded cash payments and other concessions.

U.S. military operations against terrorism suspects also have disrupted humanitarian operations, said Bowden. Insurgents vowed to target foreign aid workers after a U.S. missile strike killed the head of the Islamist al-Shabab militia and 24 other people in 2008. Aden Hashi Ayro was reputedly al-Qaida's commander in Somalia and linked to a string of attacks on foreign aid workers and journalists.

But WFP head Josette Sheeran said the agency is willing to return to southern Somalia if the insurgents guarantee safe passage and free access to aid. Two regions of Somalia — Bakool and Lower Shabelle — are suffering from famine and eight more are at risk.

"We are absolutely fully committed to going where the hungry are," she said.

The Horn of Africa is suffering a devastating drought compounded by war, neglect, poor land policies and spiraling prices. Some areas in the region have not had such a low rainfall in 60 years, aid group Oxfam said. Kenya, Ethiopia and Djibouti have all been badly affected, and Eritrea is also believed to be suffering, although its repressive government does not release figures.

Yet only parts of Somalia are technically suffering from famine, defined as when two adults or four children per 10,000 people die of hunger each day and a third of children are acutely malnourished.

In some areas of Somalia, six people are dying a day and more than half of children are acutely malnourished, Bowden said. Prices of staple foods have increased 270 percent over the last year, compounding the misery.

Somalia's civil war is partly to blame, said Joakim Gundel, who heads Katuni Consult, a Nairobi-based company often asked to evaluate international aid efforts in Somalia.

He said aid groups found fundraising easier if they blamed natural disaster rather admitting the emergency was partly caused by a complex, 20-year civil war worsened by international apathy and incompetence.

"There is no clear cut answer," he said. "People are suffering and there is a need to respond. But drought is not the only cause. Conflict is a key reason and it is not being addressed properly."

___

Associated Press writer Edith M. Lederer at the United Nations contributed to this report.

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Ex-Taylor, Bean chairman gets 30 years in prison (Reuters)

ALEXANDRIA, Virginia (Reuters) – Taylor, Bean & Whitaker Mortgage Corp's former chairman, convicted of masterminding a $2.9 billion fraud scheme before the company collapsed, was sentenced on Thursday to 30 years in prison.

Lee Farkas, 58, was convicted in April on 14 counts of conspiracy, bank, securities and wire fraud that brought down one of the largest private mortgage firms in 2009 as well as contributed to the implosion of one of the top U.S. banks, Colonial BancGroup Inc's Colonial Bank.

He was the last to be sentenced in the fraud case, which represents a victory for the Obama administration because it has been criticized for prosecuting few senior executives over the housing market collapse and subsequent financial crisis.

Farkas was convicted for a scheme that ran from 2002 until 2009 in which he and others hid massive losses by shuffling money between Colonial Bank accounts, as well as by selling mortgages that either didn't exist, had already been sold or worthless.

Before being sentenced, Farkas read a brief statement in which he said he "strived to be a good person" and that he believed the employees of the mortgage firm and the bank were "acting together in good faith" rather than greed.

While he said he was remorseful, Judge Leonie Brinkema said that she did not detect any remorse in his statement -- rather "you regret getting caught." She imposed the 30-year sentence and also ordered him to forfeit more than $38.5 million.

"This was a very serious series of crimes," Brinkema said.

Farkas and other executives at the mortgage company were also accused of misappropriating money from one of its multi-billion dollar funding mechanisms that had two big investors, Deutsche Bank AG and BNP Paribas SA.

After the 90-minute hearing, Justice Department officials called Farkas' statement refusing to take the blame for masterminding the scheme "truly astounding."

"Lee Farkas perpetrated an absolutely staggering fraud," Lanny Breuer, assistant attorney general for the Justice Department's criminal division, told reporters afterward. "This was a man who lived the life of a prince."

Prosecutors sought an order that Farkas be required to forfeit at least 11 properties in Florida and Maine as well as 11 luxury and antique vehicles, including a 1929 Ford Model A Woody and a 1965 Shelby Cobra.

PROSECUTORS WANTED AT LEAST 50 YEARS

Prosecutors had sought at least 50 years in prison so that Farkas would be sure to spend the rest of his life there and serve as a deterrent. Farkas' lawyer had requested that the sentence be limited to no more than 15 years.

"I think 30 years is a very powerful deterrent message," Breuer said, adding that anyone who didn't think so was "brain dead."

Before the sentencing, Farkas' lawyer Bruce Rogow tried to lay much of the blame on Colonial Bank, which was struggling on its own, and said those involved in the fraud scheme were "delusional" because they thought "it will all work out."

During much of the hearing Farkas, thinner than when he was first arrested a year ago, sat silently in a green prison jumpsuit looking straight ahead with his hands clasped together, occasionally rocking back and forth in his chair.

Farkas had also attempted to help Colonial Bank obtain a $553 million loan from the federal bank bailout program, but the money was never disbursed. The bank was shut down by regulators and most of its assets were sold to BB&T Corp.

Colonial Bank's collapse was the sixth-largest bank failure and the third largest during the financial crisis which began in 2007. Hundreds of workers lost their jobs from the collapse of both firms.

Half a dozen other executives from Taylor, Bean & Whitaker and Colonial Bank pleaded guilty after cooperating with investigators. Prosecutors have said that the investigation into Taylor, Bean and Colonial Bank was continuing.

Farkas' main contact at the bank, Catherine Kissick, was sentenced to eight years in prison while the former chief executive at Taylor, Bean, Paul Allen, was sentenced to 40 months. The shortest sentence handed out was three months in prison.

(Editing by Lisa Von Ahn and Gerald E. McCormick)

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APNewsBreak: Bulger lived in CA apartment 15 years (AP)

By THOMAS WATKINS and STEVE LeBLANC, Associated Press Thomas Watkins And Steve Leblanc, Associated Press – 23?mins?ago

LOS ANGELES – Boston mob boss James "Whitey" Bulger spent almost all of his 16 years on the lam in the same Santa Monica apartment complex, paying his rent in cash every month while he and his girlfriend hid from one of the biggest manhunts in U.S. history, the property managers said Thursday.

The managers, who asked their names not be used because they didn't want additional attention from the media, told The Associated Press on Thursday that the couple moved in around 1996.

The FBI finally caught the 81-year-old Bulger on Wednesday living on the third floor of the Princess Eugenia, a three-story, 28-unit building of one- and two-bedroom apartments three blocks from a bluff overlooking the Pacific Ocean. He lived with longtime girlfriend Catherine Greig, just days after the government began circulating pictures of her on daytime TV in a new campaign to find the feared crime boss.

The arrest was based on a tip from the campaign, the FBI said without giving details.

The managers recalled the couple, who went by the names Charles and Carol Gasko, as ideal tenants who always paid their rent on time. Santa Monica property records show the apartment had a rent-controlled rate of $1,145 a month.

The managers were shocked by news of the arrest and recalled the Gaskos as sweet people who seemed concerned for the wellbeing of others.

In one instance, the man who called himself Charles Gasko gave a worker at the 28-unit apartment building his flashlight because he was concerned about her crossing the road after she finished her shift at night.

Bulger had a $2 million reward on his head and rose to No. 1 on the FBI's Ten Most Wanted list after Osama bin Laden was killed. He fled in 1995.

FBI agents put the apartment under surveillance on Wednesday afternoon and, employing a ruse officials would not explain, lured Bulger out and arrested him without incident, authorities said.

A variety of guns and a large amount of cash were found in the apartment, the FBI said. Federal investigators declined to say how Bulger got enough money to live on.

"Although there are those who have doubted our resolve at times over the years, it has never wavered," said Richard DesLauriers, agent in the charge of the FBI's Boston office. "We followed every lead. We explored every possibility, and when those leads ran out, we did not sit back and wait for the phone to ring."

The model for the ruthless gangland boss played by Jack Nicholson in the 2006 Martin Scorsese movie "The Departed," Bulger was wanted for 19 murders. One victim was shot between the eyes in a parking lot at his country club in Oklahoma. Another was gunned down in broad daylight on a South Boston street to prevent him from talking about the killing in Oklahoma. Others were taken out for running afoul of Bulger's gambling enterprises.

"He left a trail of bodies," said Tom Duffy, a retired state police major in Massachusetts. "You did not double-cross him. If you did, you were dead."

At the same time he was boss of the Winter Hill Gang, South Boston's murderous Irish mob, Bulger was an FBI informant, supplying information about the rival New England Mafia. But he fled in January 1995 when a retired agent tipped him off that he was about to be indicted.

That set off a major scandal at the FBI, which was found to have an overly cozy relationship with its underworld informants in Boston, protecting mob figures for decades and allowing them to commit murders as long as they were supplying useful information.

A congressional committee, in a draft report issued in 2003, blasted the FBI for its use of Bulger and other criminals as informants, calling it "one of the greatest failures in the history of federal law enforcement."

Patricia Donahue, wife of alleged Bulger victim Michael Donahue, said she could not believe it when she heard the news of Bulger's capture.

"I actually never thought I would see this day. I thought the man was dead," she said. Her husband, a construction worker and truck driver, was killed in 1982 in a hit on an underworld figure who was cooperating with investigators. Donahue had given the target of the hit a ride home that day.

"I am very satisfied to know that the person pulled the trigger to end my husband's life is going to go to jail," said Donahue, 66.

At a news conference in Boston, federal authorities gave no details on where he had been and what he might have been doing over the past 16 years, except to say that the last known sighting of him was in London in 2002.

Barbara Gluck, who lived on the same floor as the couple, said she didn't know their names but recognized them from photos on the Internet after their arrest. She said they lived in the apartment for "a good couple of years."

Gluck described Greig as "sweet and lovely" and said they would have "girl talk" when they ran into each other in the building. Bulger became angry whenever he saw the two of them talking, and would say, "Stop talking to her," Gluck said.

"He was nasty," she added. At one point, Greig said Bulger had a "rage issue," the neighbor said.

Bulger and Greig were scheduled to appear in Los Angeles federal court Thursday. He faces federal charges that include murder, conspiracy to commit murder, narcotics distribution, extortion and money laundering. Greig, 60, is charged with harboring a fugitive.

The arrest brings an end to a manhunt in which the FBI received reported sightings of Bulger and Greig from all over the U.S. and parts of Europe. In many of those sightings, investigators could not confirm whether it was Bulger.

On Monday, the FBI announced a new publicity campaign that asked people, particularly women, to be on the lookout for Greig. The 30-second ad started running Tuesday in 14 TV markets to which Bulger may have ties and was to air during programs popular with women roughly Greig's age, including "The View" and "Regis and Kelly."

The campaign pointed out that the blond-haired Greig had plastic surgery several times before going on the lam and was known to frequent beauty salons. It also noted that Greig, a former dental hygienist, had impeccable oral hygiene and perfect teeth as a result of monthly visits to the dentist.

The FBI was hoping that a patron or employee of a dental office, hospital, manicurist, beauty salon or other business would remember seeing Greig.

The hunt for Bulger touched the highest level of Massachusetts politics. Bulger's younger brother, William, was one of the most powerful politicians in the state, leading the Massachusetts Senate for 17 years and later serving as president of the University of Massachusetts. He resigned the post in 2003 under political pressure.

William Bulger told a congressional committee that he spoke to his brother by phone shortly after he went on the run but had no idea about his whereabouts.

He declined to comment to The Boston Globe about his brother's arrest.

"Whitey Bulger has left behind in the Boston area a lot of victims and a lot of pain, and I think for them and for justice in general, it's a great day," said William Christie, an attorney for the families of two alleged Bulger victims.

Bulger, nicknamed "Whitey" for his shock of bright platinum hair, grew up in a gritty South Boston housing project and went on to become Boston's most notorious gangster.

Along with Stephen "The Rifleman" Flemmi, he led the Winter Hill Gang, which ran loansharking, gambling and drug rackets in the Boston area. U.S. Attorney Donald K. Stern said in 2000 that the two were "responsible for a reign of intimidation and murder that spanned 25 years."

Prosecutors said Bulger went on the run after being warned by John Connolly Jr., a then-retired FBI agent in Boston who had made Bulger an informant 20 years earlier. Connolly was convicted of racketeering in 2002 for protecting Bulger and Flemmi, also an FBI informant. Connolly was also found guilty of murder in Miami for helping to set in motion a mob hit in 1982 against John Callahan, president of World Jai-Alai.

Retired Massachusetts state police Detective Lt. Bob Long, who investigated Bulger in the 1970s and `80s, said each time state police got close to getting enough evidence to charge Bulger and Flemmi, they were stymied. Long said he believes Connolly and possibly a corrupt state police detective tipped them off to the investigations.

"If our case wasn't compromised, a lot of people wouldn't be dead. An awful lot of people wouldn't be dead today," Long said.

On Thursday, Bulger's picture on the Ten Most Wanted list was spanned by a red banner that said "Captured." Greig's photo carried the same banner.

Duffy, the retired state police major in Massachusetts, said people in South Boston wrongly saw Bulger as a Robin Hood figure who protected the neighborhood from criminals.

"There was this horrendous misconception that he kept drugs out of South Boston, when actually, he controlled the drug trade in South Boston," Duffy said. "If you were a drug dealer, you didn't operate in South Boston without paying him."

For Bulger and his gang, "killing people was their first option," he said.

Along with the federal charges in Boston, Bulger faces murder charges in Miami in the killing of the gambling executive and in Oklahoma in the slaying of a businessman. Both Florida and Oklahoma have the death penalty.

___

LeBlanc contributed from Boston. Associated Press writers Brian Melley in Santa Monica, Calif.; Greg Risling and Christopher Weber in Los Angeles; and Denise Lavoie, Jay Lindsay and Mark Pratt in Boston contributed to this report.

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