Asian markets up on Fed stand, strong yen hits Tokyo

HONG KONG: Asian markets mostly rose on Wednesday after US Federal Reserve head Ben Bernanke reaffirmed the central bank's huge monetary easing scheme, but a stronger yen sent Tokyo lower.

Investors remained hesitant and the euro came under pressure after Italy's election results which left no party in overall control, raising concerns that uncertainty in Rome could see the eurozone return to the dark days of crisis.

Tokyo fell 0.78 per cent by noon but Hong Kong rose 0.44 per cent, Sydney added 0.64 per cent, Shanghai climbed 1.14 per cent and Seoul was 0.18 per cent higher.

In testimony to Congress Bernanke said the Fed's $85 billion a month bond-purchase programme aimed at holding down long-term interest rates and encouraging investment -- known as quantitative easing -- was still merited.

While warning that looming steep budget cuts could slow growth, he stressed high unemployment was a main challenge to the economy, adding that the risks of the programme -- inflation, and risky behaviour in the financial industry -- were being monitored closely.

Bernanke said the programme was "providing important support to the recovery".

His comments on Tuesday were a relief for financial markets, which stumbled last week after minutes from the Fed's latest policy meeting suggested some members wanted to curtail the policy before the economy was back in track.

"Bernanke confirmed the Fed's commitment to continue quantitative easing until unemployment falls, and US economic data are clearly improving," Martin Lakos, division director in Macquarie's Private Wealth division in Australia, told Dow Jones Newswires.

On Wall Street the Dow rose 0.84 per cent, the S&P 500 added 0.61 per cent and the Nasdaq jumped 0.43 per cent.

US investors also took comfort in surprisingly robust new home sales while the Conference Board's February consumer confidence index showed a surprise jump to 69.6 from 58.4 in January, well above the average analyst estimate of 62.0.

But the dollar fell against the yen in Asia as dealers sought the safe havens after the inconclusive Italian elections.

The dollar bought 91.70 yen in Tokyo Wednesday, from 91.93 yen in New York late Tuesday and well off the 94.77 yen high seen on Monday.

The euro slipped to $1.3043 and 119.60 yen from $1.3061 and 120.08 yen.

Eurozone fears have been reignited after the Italian polls, which left the country with a hung parliament and a protest party effectively holding the balance of power.

Investors fear the outcome will mean Italy will reverse the austerity policies put in place to pay off its debts, with implications for the wider region.

Italian leftist leader Pier Luigi Bersani, who said he had "come first but not won", warned that the huge anti-austerity protest vote should be heeded beyond Italy's borders, adding: "The bell tolls also for Europe."

Oil prices were mixed, with New York's main contract, light sweet crude for delivery in April, shedding two cents to $92.61 while Brent North Sea crude for April delivery gained three cents to $112.74.

Gold was at $1,612.40 at 0220 GMT compared with $1,597.80 late Tuesday.

- AFP/ck

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Doomed balloon riders nearly landed, then shot upward

STORY HIGHLIGHTS

• NEW: Conflicting reports emerge over company's safety record


• A British passenger and the pilot are hospitalized


• The balloon carried tourists from the UK, Hong Kong, Japan, France and Hungary


• A gas explosion caused the balloon to fall about 300 meters (almost 1,000 feet)

Were you there? Have you taken such a trip before in Egypt? Send us your experiences.

(CNN) -- The view from above southern Egypt is stunning, a contrast of beige desert valley giving way to green farmland, including fields of sugar cane. Tourists soak in the sight by hiring hot air balloons that have large baskets to carry passengers hundreds of feet above the countryside.

Tuesday morning, as one of the balloons prepared to land, an explosion pierced the air, followed by a spreading billow of smoke.

"My first thought was that it was sugar cane that was burning," said Christopher Michel, a photographer who was a passenger in another balloon at the time.

Smoke from the burning sugar cane painted the ancient city of Luxor below with an eerie haziness.

But the concern shown by the balloon pilot and the blaring sirens from emergency vehicles told Michel that something was wrong. He could not imagine the extent: One of the balloons had exploded, and its 21 passengers and operators plummeted about 1,000 feet (300 meters) to the ground.

By Tuesday afternoon, the number of dead had climbed to 19, making it the world's deadliest hot air balloon accident in at least 20 years.

"This juxtaposition of this great beauty and this wonderful country and this horrible tragedy is just really shocking," Michel told CNN. "We all feel terrible."

It was an early, dark morning, Michel said, and uneventful for 45 minutes until they started to descend. He was overlooking mud-brick buildings and fields, with the Valley of the Kings in the distance, when the explosion shattered the quiet of the morning.

It was a gas explosion, state-run EgyNews reported.

Fatal hot air balloon crash

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Passengers in the balloon included 19 foreign tourists: nine from Hong Kong, four from Japan, three from Britain, two from France and one from Hungary, officials said.

An Egyptian pilot and another Egyptian also were on board, Luxor province spokesman Badawi al-Masri said.

Two people -- a Briton and the pilot -- are hospitalized.

Balloon rides offering panoramic aerial views of the Nile River and the ancient temples of Karnak and Hatshepsut are a popular tourist attraction in Luxor, about a nine-hour drive southeast of Cairo.

"You can see Valley of the Kings in the background bordered by farmland," Pauline Liang of Vancouver, Canada, told CNN's iReport last year. "Below were banana farms, and behind us was the city of Luxor. There was a great contrast between desert landscape, lush farmland and urban development."

Tuesday's crash prompted Gov. Izzat Saad of Luxor province to ban all hot air balloon flights until further notice.

Conflicting reports emerged about the company that operated the doomed balloon, Sky Cruise.

The head of the country's civil aviation authority said the company was licensed and working legally, EgyNews reported.

The agency has begun an investigation of the incident, Mohammed Ibrahim Sharif said.

According to Sharif, a fire broke out in the balloon while the workers were trying to land it, just feet from the ground. The balloon then shot upwards again, he said.

The balloon's basket was divided into four parts, he said, each holding five passengers.

Meanwhile, Luxor's chamber of tourism said the company had previous violations, EgyNews reported.

Several balloon companies had terminated contracts with the local meteorological service after the Egyptian revolution, Tharwat Agami, chairman of the chamber of tourism, said.

Sky Cruise and other companies were known to violate safety and security instructions by flying out of East Luxor, instead of the recommended West Luxor, he said.

Comparing it to a previous hot air balloon experience in another country, Michel noted that there was no safety briefing before the Luxor balloons lifted off the ground, but added that he felt safe during the trip.

From what he could tell, the doomed balloon was not overloaded, he said on his Twitter account.

Luxor is among Egypt's top tourist draws. Visitors go to see ancient temples and tombs, and travel sites often recommend the hot air balloon trips.

The last hot air balloon accident in Luxor occurred in 2009, when 16 foreign tourists were injured after a balloon struck a cell phone transmission tower.

Until Tuesday's incident, the deadliest accident in recent memory took place in 1989, when 13 people were killed as two hot air balloons collided in Australia.

Egyptian government spokesman Alaa Hadidi announced that the Cabinet will form a committee from the Ministry of Civil Aviation to investigate Tuesday's accident, EgyNews said.

CNN's Housam Ahmed and Hamdi Alkhshali, along with journalist Adam Makary in Cairo, contributed to this report.

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Debate over Voting Rights Act changes in Ala.

(CBS News) -- On Wednesday, the Supreme Court will hear a challenge to the landmark Voting Rights Act of 1965. Both sides agree the south have changed in the past half-century. At issue is, has it changed enough?

In Shelby County, Alabama, the question is whether the state's racist past must forever define it.

(Watch: Voting Rights Act challengers take aim at "Section 5", below)

Fifty years ago, Alabama was the cradle of the civil rights movement, where protestors endured fire hoses, arrests and bombings in the fight for equality. One result was the Voting Rights Act.

One provision of the Act, Section 5, still requires all or part of 16 states, mostly in the south, to get approval from the Justice Department before changing voting procedures or electoral maps.

"Section five, which is what we are attacking, was never intended by congress to be permanent," said Frank Ellis, a Shelby County lawyer who is at the center of the battle to eliminate Section 5, and force the federal government to treat Alabama and other covered states like the rest of the country.

"They are still using the same criteria to determine whether these 16 states that are covered, they are still using the same test that they used in 1965," Ellis said.

"Things have changed in the South," he said. "This is a dynamic society."

But Ernest Montgomery says things have not changed enough. He was on the city council in Calera, Alabama when city officials, facing a population boom, redrew his district map. He lost the election to a white candidate. Under Section 5, the Justice Department ordered a new election and Montgomery won.

The minority representation in his district under the old map was about 67% African American, according to Montgomery. With the new map, that number dropped to about 28%.

Voting Rights Act faces Supreme Court challenge

Voting Rights Act Section 5 "not the only tool" to protect voting rights, Obama says

VIDEO: SCOTUS to hear challenge to Voting Rights Act

Shelby County Pastor Harry Jones calls it discrimination.

"I think it was designed to dilute the power of the minority community," Jones said. "It did just that."

Opponents like Ellis say they are not attacking the entire Voting Rights Act. If there's intentional discrimination, people can sue, just like they do in Michigan, Ohio and other states that aren't by Section Five.

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Inside Organized Retail Crime Raids

We used to call it shoplifting, but these days the foot soldiers of retail crime rings are known as boosters. Police even have an acronym for these operations: ORC, which stands for Organized Retail Crime.

"It's just like a Fortune 500 company," said Sergeant Eric Lee of the Gardena Police Department in Gardena, Calif. "All of this is just organized."

Watch the full story on "Nightline" TONIGHT at 12:35 a.m. ET

Police say big retail stores, from Walgreens to J.C. Penny, are getting hit by highly sophisticated shoplifting networks that steal and resell everything from underwear to razors to milk. According to the National Retail Federation, theft can amount to annual losses as high as a $37 billion for retail businesses.

"Every store in every city has to go through this," Lee said. "They wait until no one's paying attention and they walk out."

Tide detergent is currently a hot target because it is compact, expensive and easy to sell on the streets for profit, police said. The Street name: "liquid gold."

"Sometimes we get rings that just do alcohol," Lee said. "And then we get some that do just meat and seafood."

Investigators say boosters move the loot for cents on the dollar to fencing operations -- the black market resellers of the stolen goods -- which sell the stolen merchandise in plain sight in stores. Boosters, fencers, Mr. Bigs, all of those involved in these shoplifting operations can potentially make millions a year from boosting and re-selling stolen goods.

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And Mike Swett is on the case. A former Riverside County sheriff's deputy in Los Angeles, Swett was badly injured in a car wreck and now works as a full-time private investigator on the ORC beat who has worked with Target, Marshalls, T.J. Maxx. Stores hire him to do his own undercover police work, catching thieves before involving local law enforcement.

"Kind of like working a narcotics case, it's like you've got low-level, mid-level and then top dog," Swett said. "We like to go after the top dog and the only way to get to the top dog is mid-level first."

At his command center -- his apartment -- Swett showed off the boxes upon boxes of tapes and photographs he has collected, the fruits of countless silent stake-out hours.

Swett said he has been casing two joints in L.A. for months, both alleged to be mid-level fencing operations. "Nightline" was invited to ride along with him when he sent undercover agents in for a final reconnaissance mission.

At some stores and shopping malls, clerks do little to stop shoplifters and often let them run, which has contributed to the growing fencing operations.

"[The stores] don't want their employees to get injured," Swett said. "So oftentimes they will call the police, but by the time we get there they are already in their car and they are gone."

This leaves professional investigators like Swett to put the pieces together and bust open the gangs to lead over-stretched police departments to the prey.

When raid day arrived, a motorcade of squad cars departed from the Gardena, Calif., police department and pulled up to one fencing operation. Swett said the merchandise being sold was boosted goods.

"There is Victoria's Secret, expensive Victoria's Secret, the gift sets," he said, pointing down a line of tables. "J.C. Penny, Miramax, its real stuff not counterfeit."

He spotted a bottle of Katy Perry brand perfume, which usually retails for around $90 but one seller had it priced at $59.

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Vatican 'Gay lobby'? Probably not

STORY HIGHLIGHTS

• Benedict XVI not stepping down under pressure from 'gay lobby,' Allen says


• Allen: Benedict is a man who prefers the life of the mind to the nuts and bolts of government


• However, he says, much of the pope's time has been spent putting out fires

Editor's note: John L. Allen Jr. is CNN's senior Vatican analyst and senior correspondent for the National Catholic Reporter.

(CNN) -- Suffice it to say that of all possible storylines to emerge, heading into the election of a new pope, sensational charges of a shadowy "gay lobby" (possibly linked to blackmail), whose occult influence may have been behind the resignation of Benedict XVI, would be right at the bottom of the Vatican's wish list.

Proof of the Vatican's irritation came with a blistering statement Saturday complaining of "unverified, unverifiable or completely false news stories," even suggesting the media is trying to influence the papal election.

Two basic questions have to be asked about all this. First, is there really a secret dossier about a network of people inside the Vatican who are linked by their sexual orientation, as Italian newspaper reports have alleged? Second, is this really why Benedict XVI quit?

John L. Allen Jr.

The best answers, respectively, are "maybe" and "probably not."

It's a matter of record that at the peak of last year's massive Vatican leaks crisis, Benedict XVI created a commission of three cardinals to investigate the leaks. They submitted an eyes-only report to the pope in mid-December, which has not been made public.

It's impossible to confirm whether that report looked into the possibility that people protecting secrets about their sex lives were involved with the leaks, but frankly, it would be surprising if it didn't.

There are certainly compelling reasons to consider the hypothesis. In 2007, a Vatican official was caught by an Italian TV network on hidden camera arranging a date through a gay-oriented chat room, and then taking the young man back to his Vatican apartment. In 2010, a papal ceremonial officer was caught on a wiretap arranging liaisons through a Nigerian member of a Vatican choir. Both episodes played out in full public view, and gave the Vatican a black eye.

Pope Benedict XVI

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In that context, it would be a little odd if the cardinals didn't at least consider the possibility that insiders leading a double life might be vulnerable to pressure to betray the pope's confidence. That would apply not just to sex, but also potential conflicts of other sorts too, such as financial interests.

Vatican officials have said Benedict may authorize giving the report to the 116 cardinals who will elect his successor, so they can factor it into their deliberations. The most immediate fallout is that the affair is likely to strengthen the conviction among many cardinals that the next pope has to lead a serious house-cleaning inside the Vatican's bureaucracy.

It seems a stretch, however, to suggest this is the real reason Benedict is leaving. For the most part, one should probably take the pope at his word, that old age and fatigue are the motives for his decision.

That said, it's hard not to suspect that the meltdowns and controversies that have dogged Benedict XVI for the last eight years are in the background of why he's so tired. In 2009, at the height of another frenzy surrounding the lifting of the excommunication of a Holocaust-denying traditionalist bishop, Benedict dispatched a plaintive letter to the bishops of the world, voicing hurt for the way he'd been attacked and apologizing for the Vatican's mishandling of the situation.

Even if Benedict didn't resign because of any specific crisis, including this latest one, such anguish must have taken its toll. Benedict is a teaching pope, a man who prefers the life of the mind to the nuts and bolts of government, yet an enormous share of his time and energy has been consumed trying to put out internal fires.

It's hard to know why Benedict XVI is stepping off the stage, but I doubt it is because of a "gay lobby."

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of John L. Allen Jr.

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UN calls for independent inquiry into Palestinian death

UNITED NATIONS: The United Nations called Monday for an independent inquiry into the death of a Palestinian in Israeli custody, warning that mounting tensions risk an eruption of violence in the occupied territories.

The Palestinians also demanded an independent investigation in a letter to the UN Security Council, which said that Arafat Jaradat, who died at the weekend, could have been tortured.

UN Middle East peace envoy Robert Serry made the call for an investigation in a statement after talks with Palestinian prime minister Salam Fayyad on the Jaradat's death.

Serry noted that Israeli and Palestinian experts had examined the body.

"The United Nations expects the autopsy to be followed by an independent and transparent investigation into the circumstances of Mr Jaradat's death, the results of which should be made public as soon as possible," the envoy added.

Jaradat was detained on February 18 and died five days later.

Israeli prison authorities said Jaradat appeared to have died of a heart attack. But the Palestinian minister of prisoner affairs, Issa Qaraqaa, citing the preliminary findings of the joint autopsy, reported bruises on Jaradat's body, muscle damage and broken ribs.

A letter sent by Palestinian UN ambassador Riyad Mansour to the Security Council said the autopsy revealed that Jaradat "was subjected to severe beatings, abuse and medical negligence during his captivity, possibly amounting to torture."

The letter said Jaradat had six broken bones in his neck, spine, arms and legs, along with other injuries.

Israel has said the prisoner could have suffered broken bones in attempts to resuscitate him after the heart attack.

"This horrific incident is further proof of the inhumane treatment systematically meted out by Israel against Palestinians in its jails," added the letter, which called for an "impartial investigation" and Security Council action to make Israel abide by humanitarian law.

Thousands attended the Jaradat's West Bank funeral on Monday and some militants have threatened revenge for his death.

Serry's statement said "mounting tensions present a real risk of destabilisation".

UN leader Ban Ki-moon expressed concern last week about the deteriorating state of Palestinian hunger strikers in Israeli jails and said that the rights of all Palestinian detainees must be fully respected.

-AFP/sb

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Senate Republican: Pentagon overstating forced cuts

Sen. John Cornyn of Texas said the overall amount of defense spending will actually still rise despite the cuts.

STORY HIGHLIGHTS

• Texas senator believes cuts may not be as bad for defense as the Pentagon says


• John Cornyn could face criticism from fellow Republicans with GOP strong on defense


• Pentagon would absorb half of the automatic, government-wide spending cuts


• Cuts due to take effect on Friday absent congressional action to avert them

Washington (CNN) -- Anticipating possible political backlash if forced federal spending cuts kick in as expected later this week, the Senate's No. 2 Republican said Monday that he is preparing a message he plans to hit hard: The cuts are not going to have as negative an impact as the Pentagon and others in the Obama administration are saying.

Sen. John Cornyn of Texas said he plans to make the case to other Republicans and the public that despite warnings from the Pentagon that the mandated cuts will be devastating, the overall amount of defense spending will actually still rise.

Cornyn conceded that until now he had been parroting what Defense Secretary Leon Panetta continuously warns -- that automatic, government-wide cuts could jeopardize national security.

But the veteran senator said he looked into it and will now argue that even if the cuts go through on March 1, the Pentagon will still see its budget go up.

Cornyn's preview of what he hopes will be a Senate GOP argument is significant since defense cuts are usually something Republicans adamantly oppose. He will surely run up against some in his party who strongly disagree.

To be sure, Cornyn called himself a defense "hawk" and did say the role of the federal government should be first and foremost to protect American citizens.

But he also believes that the deficit should be paramount since the United States has ended its fighting in Iraq and is winding down the war in Afghanistan.

He added that if "God forbid" another 9/11 happens, Congress would act.

Still, Senate Republicans are considering a proposal this week that could alleviate some impacts of the cuts by giving the president flexibility to decide where they would occur.

However, GOP sources tell CNN that Republicans have not yet worked out among themselves whether their measure would give the president that flexibility on all domestic agencies and programs or just on defense.

GOP sources say they are likely to work that out when Senate Republicans huddle for their regular lunch on Tuesday.

The $85 billion in forced spending cuts were written into law intentionally to be indiscriminate.

The law does not allow, for example, the Pentagon to keep funding going for a ship building program by shifting money being spent on a military golf course. And it does not allow the Health and Human Services Department to keep children in Head Start programs by cutting deeper in another agency.

Part of the reason Senate GOP leaders have not decided yet how broad that flexibility should be -- whether it should apply just to the defense cuts, as many Republicans want, or to domestic cuts as well — is due to differences in opinion among Republicans over how much power to give the president.

But it is a key decision, since granting the president flexibility in cuts across the board could make it hard for conservative Democrats, such as those from defense industry-rich Virginia, to oppose.

That's because such an approach could soften the political burden for those Democrats who would be able to argue to their constituents they did everything possible -- including providing flexibility to the White House -- if economic damage ripples through their states.

But one influential Republican senator told CNN on Sunday that he opposes giving the president so much flexibility because it undermines the decision-making authority of Congress.

"I say to my Republican friends, if you want to give the president flexibility as to how to exact these cuts in defense spending, then why don't we go home and just give him the money? I am totally opposed to that," Sen. John McCain, R-Arizona, said on CNN's "State of the Union." "We spent too long on defense authorization and finding out what this country needs to secure this country without saying, 'Hey, well we'll just let the president have the, quote, flexibility.'"

A competing Senate Democratic proposal would replace the automatic spending cuts with a mix of tax increases on wealthier Americans and more targeted spending reductions than those currently required. Democratic leaders believe it will get more than 50 votes -- so they will be able to claim it won a majority in the chamber -- but will fall short of the 60 it would need to win Senate approval.

In the meantime, both sides are preparing for no change -- and for forced spending cuts to take effect Friday.

Democratic leadership sources admit that whether or not they can ultimately do anything to change the way across-the-board cuts are enacted will depend on the level of public outcry -- and media coverage.

Democrats admit the impact may not be felt for at least a month, maybe more.

Assuming no legislation is passed to alter the cuts this week, sources in both parties say they are already looking ahead to the next big deadline on March 27, when the funding for the government runs out.

A Democratic congressional source tells CNN that at this point, Democrats do not believe the White House wants to use that debate to revisit forced spending cuts, but the source said that could change depending on public reaction to the cuts.

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9/11 families upset over "Zero Dark Thirty" recordings

(CBS News) NEW CANAAN, Conn. - "Zero Dark Thirty" took just one minor award at the Oscars last night. There was a lot of debate about the way the film depicted torture during the hunt for Osama bin Laden.

Turns out that wasn't the only controversy.

The film starts with actual voices of victims of September 11, recorded as they made their last phone calls. For Mary and Frank Fetchet, it brings back painful memories. One of those voices was their son Brad, who worked on the 89th floor of the World Trade Center's South Tower.

Mary Fetchet

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"When I arrived home I found Brad's message on our phone, and, of course, these were his last words in my view, because we never heard from him again," Mary said.

"Losing a loved one so horribly -- the ongoing anguish we've been going through -- it's a treasured remembrance, it's a treasured message. It's ours," Frank said.

They say that treasured remembrance was used in the film without their permission.

"My first thought was, 'isn't anything sacred anymore?'" Mary said.

The Fetchets used the recording in testimony for the September 11 Commission, and it has appeared in broadcast TV news reports. But the couple says this is different.

"I used it in situations where I wanted to convey Brad's story," Mary said. "None of those situations were used for promotional or professional or commercial endeavors."

Kathryn Bigelow defends "Zero Dark Thirty" torture scenes
Sony exec: "Zero Dark Thirty" does not advocate torture
Watch: "Zero Dark Thirty" director Kathryn Bigelow talks torture, art

The film has grossed more than $90 million worldwide. In a statement, the film distributor, Sony, and studio, Annapurna Pictures, say "Zero Dark Thirty" is a "tribute" to the victims of September 11 and "before the film's release, (they) initiated contact with a number of family members of the victims of the 9/11 attacks."

Frank said the statement wasn't enough. "To say they've reached out to families -- yeah, reached to say, 'come to the preview' after the film is already completed," he said.

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CBS News

Harry Ong's sister Betty was a flight attendant who was killed on American Airline Flight 11.

"We were never given any notification or asked for permission to use Betty's voice, unlike many documentary companies," Ong said.

"We're asking that they apologize and that they recognize that they used Betty's voice and Brad's and others at liberty."

After the film was released, the Fetchets and Ongs asked Sony and Annapurna for donations to their September 11 charities in exchange for the use of their loved ones' voices. But the filmmakers had already decided to donate to the national 9/11 Memorial Museum.

"The real driver in all of this is getting this record set straight. I'm incensed by it," Frank Fetchet said. "Others run the risk of going through the same thing, so I think this should put a line in the sand that says, 'it's not right.'"

The Fetchets hope that by speaking out, they'll prevent other victims of tragedies from experiencing similar surprises.

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Vatican 'Gay lobby'? Probably not

STORY HIGHLIGHTS

• Benedict XVI not stepping down under pressure from 'gay lobby,' Allen says


• Allen: Benedict is a man who prefers the life of the mind to the nuts and bolts of government


• However, he says, much of the pope's time has been spent putting out fires

Editor's note: John L. Allen Jr. is CNN's senior Vatican analyst and senior correspondent for the National Catholic Reporter.

(CNN) -- Suffice it to say that of all possible storylines to emerge, heading into the election of a new pope, sensational charges of a shadowy "gay lobby" (possibly linked to blackmail), whose occult influence may have been behind the resignation of Benedict XVI, would be right at the bottom of the Vatican's wish list.

Proof of the Vatican's irritation came with a blistering statement Saturday complaining of "unverified, unverifiable or completely false news stories," even suggesting the media is trying to influence the papal election.

Two basic questions have to be asked about all this. First, is there really a secret dossier about a network of people inside the Vatican who are linked by their sexual orientation, as Italian newspaper reports have alleged? Second, is this really why Benedict XVI quit?

John L. Allen Jr.

The best answers, respectively, are "maybe" and "probably not."

It's a matter of record that at the peak of last year's massive Vatican leaks crisis, Benedict XVI created a commission of three cardinals to investigate the leaks. They submitted an eyes-only report to the pope in mid-December, which has not been made public.

It's impossible to confirm whether that report looked into the possibility that people protecting secrets about their sex lives were involved with the leaks, but frankly, it would be surprising if it didn't.

There are certainly compelling reasons to consider the hypothesis. In 2007, a Vatican official was caught by an Italian TV network on hidden camera arranging a date through a gay-oriented chat room, and then taking the young man back to his Vatican apartment. In 2010, a papal ceremonial officer was caught on a wiretap arranging liaisons through a Nigerian member of a Vatican choir. Both episodes played out in full public view, and gave the Vatican a black eye.

Pope Benedict XVI

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In that context, it would be a little odd if the cardinals didn't at least consider the possibility that insiders leading a double life might be vulnerable to pressure to betray the pope's confidence. That would apply not just to sex, but also potential conflicts of other sorts too, such as financial interests.

Vatican officials have said Benedict may authorize giving the report to the 116 cardinals who will elect his successor, so they can factor it into their deliberations. The most immediate fallout is that the affair is likely to strengthen the conviction among many cardinals that the next pope has to lead a serious house-cleaning inside the Vatican's bureaucracy.

It seems a stretch, however, to suggest this is the real reason Benedict is leaving. For the most part, one should probably take the pope at his word, that old age and fatigue are the motives for his decision.

That said, it's hard not to suspect that the meltdowns and controversies that have dogged Benedict XVI for the last eight years are in the background of why he's so tired. In 2009, at the height of another frenzy surrounding the lifting of the excommunication of a Holocaust-denying traditionalist bishop, Benedict dispatched a plaintive letter to the bishops of the world, voicing hurt for the way he'd been attacked and apologizing for the Vatican's mishandling of the situation.

Even if Benedict didn't resign because of any specific crisis, including this latest one, such anguish must have taken its toll. Benedict is a teaching pope, a man who prefers the life of the mind to the nuts and bolts of government, yet an enormous share of his time and energy has been consumed trying to put out internal fires.

It's hard to know why Benedict XVI is stepping off the stage, but I doubt it is because of a "gay lobby."

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of John L. Allen Jr.

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Castro picks 'young' new heir to take regime into future

HAVANA: Cuban President Raul Castro on Sunday won re-election to what he pledged will be his last term, and finally unveiled a 52-year-old political heir he wants to bring the regime into the future.

"This will be my last term," Castro, 81, told lawmakers after the National Assembly reelected him and named a new regime number two -- Council of State Vice President Miguel Diaz-Canel, 52.

Choosing the former military man and professor from Villa Clara, who has represented the president on foreign trips in recent months, "marks a final step in configuring the country's future leadership, through the slow and orderly transfer of the main leadership positions to new generations," Castro said.

This is not the transition Cuba's nemesis, the United States, has fruitlessly spent decades and millions of dollars seeking.

Washington has long prodded neighbor Cuba to open up to a multiparty system and market economics, much of the time during the more than 40-year rule of revolution icon Fidel Castro.

Through the Cold War and now for over two decades after it, the United States has kept trying to isolate Cuba to press for democratic change.

It has had a full trade embargo on Havana, the only one-party Communist regime in the Americas, since 1962 to pressure the communist island to open up democratically and economically.

Cuba finally appears poised to have new leadership lined up -- if only it can continue to prop up its dysfunctional economy while keeping the regime afloat.

In addition to depending on Venezuelan aid, Cuba has so far failed to discover oil in its waters that experts say lies beneath the seabed off its Gulf of Mexico coast.

The fate and future of the Cuban regime also depends on the health of Venezuelan President Hugo Chavez, Cuba's main economic supporter and political ally, who is recovering from cancer surgery.

There is no guarantee a successor would feed Cuba's economy as much as Chavez.

Diaz-Canel, who turns 53 in April, is an electrical engineer by training, a former education minister and the president's de facto political heir seeking to project the Americas' only one-party Communist regime into the future.

Since March, Diaz-Canel has been one of the eight vice presidents on the Council of Ministers.

He took the number two spot from Jose Ramon Machado Ventura, 82, who relinquished the post but remains among Cuba's vice presidents.

Diaz-Canel, as political heir, cuts a starkly different profile from the revolutionary leadership, whose members are mostly in their 80s.

If he comes to lead Cuba, he would be the first leader of the regime whose entire life has been under the Castro regime that started in January 1959.

Barring any changes, Diaz-Canel would succeed Raul Castro, who will be 82 in June, if the president serves out his term through 2018.

A careful speaker, the lanky Diaz-Canel also has been a leader of the Communist Youth Union, and went on an international "mission" to Nicaragua during the first leftist Sandinista government.

He rose up the ranks, leading the party in Villa Clara in central Cuba, before being chosen to lead it in Holguin province in the east.

Diaz-Canel was then bumped up to the Politburo in 2003.

There was more new blood among the five vice presidents on the Council of State, in the person of Mercedes Lopez Acea, 48, the former leader of the Communist Party's Havana provincial assembly.

Raul Castro became Cuba's interim president when Fidel took ill in 2006. He formally became president in 2008.

The National Assembly, whose members ran for office in October unopposed, also chose Esteban Lazo, 68, as their new speaker.

Seen as an ideological hardliner, he is also the regime's most prominent Afro-Cuban leader.

"The choice of Lazo to lead the National Assembly confirms that the approach to any ideological change is a really cautious one.

Lazo has been all about ideological orthodoxy," said professor Arturo Lopez-Levy, at the University of Denver in the US state of Colorado.

On Friday, Raul Castro surprised some by joking publicly about resigning.

"I am going to resign. I am about to turn 82. I have the right to retire. Don't you believe me?" Castro said.

-AFP/sb

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