The explosion left huge pieces of metal that once encased the plant peeling off its sides. A large swath of the structure was blackened and surrounded by debris, but the building, its roof and its two smokestacks were still standing at the site, which is near Wesleyan University on a wooded and hilly 137-acre parcel of land overlooking the Connecticut River.

Search and rescue crews were combing through the debris from the damaged plant overnight but believed no one was missing amid the rubble, Deputy Fire Marshal Al Santostefano said. The investigation into what caused the explosion was to begin Monday morning, he said.

The U.S. Chemical Safety Board, a federal agency that investigates industrial chemical accidents, was mobilizing a team of workers from Colorado and hoped to have them on the scene by midday Monday, spokesman Daniel Horowitz said.

The nearly completed 620-megawatt plant is being built to produce energy primarily using natural gas, which accounts for about a fifth of the nations electricity. Workers for the construction company, O&G Industries, were purging a gas line, clearing it of air, when the explosion occurred around 11:15 a.m. Sunday, Santostefano said.

About 50 to 60 people were in the area at the time, he said.

One of those killed was Raymond Dobratz, a 58-year-old plumber from Old Saybrook, said his son Erik Dobratz, who called the elder man “a great dad.”

Lynn Hawley, of Hartland, Conn., said her 36-year-old son, Brian Hawley, is a pipefitter at the plant and broke his leg. She said he called her from his cell phone to say he was being rushed to a hospital.

“He really couldnt say what happened to him,” she said. “He was in a lot of pain, and they got him into surgery as quickly as possible.”

Hospital officials didnt immediately release the conditions of the other injured people, whose wounds ranged from minor to very serious.

The thundering blast shook houses for miles.

“I felt the house shake,” Middletown resident Steve Clark said. “I thought a tree fell on the house.”

“It felt almost like a sonic boom,” he said.

Kleen Energy Systems LLC began construction on the plant in February 2008. It had signed a deal with Connecticut Light and Power for the electricity produced by the plant, which was scheduled to be completed by mid-2010 and would be one of the biggest built in New England in the last few years.

The company is run by former City Councilman William Corvo. A message left at Corvos home was not returned Sunday. Calls to Gordon Holk, general manager of Power Plant Management Services, which has a contract to manage the plant, also werent returned.

Energy Investors Funds, a private equity fund that indirectly owns a majority share in the power plant, said it was cooperating with authorities investigating the explosion. In a written statement, the company offered sympathy and concern and said it would release more information on the explosion as it becomes available.

Safety board investigators have done extensive work on the issue of gas line purging since an explosion last year at a Slim Jim factory in North Carolina killed four people. Theyve identified other explosions caused by workers who were unsafely venting gas lines inside buildings.

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As chairman and CEO of Merrill Lynch, Thains deal to sell Merrill was considered a lifesaving move for the company at the height of the financial crisis. But he then came under fire for having paid out $3.6 billion in bonuses to Merrill employees just before the deal closed, and for spending more than $1 million to redecorate his office at Merrill, despite its massive losses.

Thain resigned as head of global wealth management at the combined company shortly after the deal was completed and later repaid the bank for the renovations. He has defended the acquisition, saying Merrill was transparent with Bank of America about the companys losses and bonuses before the purchase closed. New York Attorney General Andrew Cuomos office filed civil charges last week against Bank of America, its former CEO Ken Lewis and former Chief Financial Officer Joe Price, saying they misled investors about the Merrill Lynch deal.

Prior to Merrill, Thain served as CEO of the New York Stock Exchange and president and chief operating officer of Goldman Sachs. A CIT spokesman said Thains role at the NYSE, where he modernized the exchange and better positioned it to compete in the global marketplace, was one of the accomplishments that most impressed CITs board.

“John is a well respected financial services executive and proven leader who is uniquely qualified to lead CIT at this critical stage,” said CIT lead director John Ryan in a statement. “We have the utmost confidence in John and are pleased to welcome him to CIT.”

Jeff Aronson, co-founder and managing principal of CIT investor Centerbridge Partners, said his firm fully supports CITs decision.

Thains appointment brings stability to the top ranks of a company which has seen a series of management departures since it emerged Dec. 10 from a quick stay in bankruptcy court.

President and Chief Operating Officer Alexander T. Mason, 58, is leaving the company Feb. 26. Chief Financial Officer Joseph Leone has said he plans to retire in April. CIT Group also last month announced the resignation of two directors and the appointment of three outsiders as it completed a shift to a more independent board to guide its restructuring effort.

CIT Group, which lends to more than 3,000 businesses including supermarkets and department stores, was forced into bankruptcy after failing to raise cash to pay off outstanding debt. The more than 100-year-old company also was hammered by mounting loan losses as more customers fell behind on repaying loans during the recession.

Common stock holders and the government lost their investments when CIT filed for bankruptcy protection. The Treasury Department had given CIT $2.3 billion in loans as part of its $700 billion financial bailout plan.

The company moved through bankruptcy in just six weeks because its key bondholders had already approved a reorganization plan. It was able to cut its total debt by $10.5 billion and deferred debt maturities for three years. The same month it emerged from Chapter 11 it made plans to start lending again, committing to fund $500 million in new government-guaranteed loans to small business customers in 2010.

CIT Group declined to disclose details of Thains compensation package.

“Much has been accomplished in recent months to position CIT for renewed success,” Thain said in a statement. “We will build upon this progress and work even harder to support small and mid-market businesses. CIT can and will serve an important role in the recovery of the U.S. economy and the creation of jobs.”

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Police in Hubei province arrested three people suspected of running the hacker site known as the Black Hawk Safety Net that disseminated Web site hacking techniques and Trojan software, the China Daily newspaper said. Trojans, which can allow outside access to a computer when implanted, are used by hackers to illegally control computers. The report did not say exactly when the arrests took place.

Black Hawk Safety Net recruited more than 12,000 paying subscribers and collected more than 7 million yuan ($1 million) in membership fees, while another 170,000 people had signed up for free membership, the paper said.

The report said police seized nine servers, five computers and a car, and shut down all Web sites involved in the case. Authorities also froze 1.7 million yuan ($250,000) in assets.

The shutdown of the site followed an investigation involving 50 police officers in three other provinces, the local d iang Times newspaper said.

The case can be traced to a hacking attack in 2007 on an Internet cafe in Macheng city in Hubei that caused Web services for dozens to be disrupted for more than 60 hours, the paper said. A few of the suspects caught in April said they were members of the Black Hawk Safety Net.

Black Hawks Web site 3800hk.com could not be accessed, but a notice purportedly from Black Hawk circulating on online forums said that a backup site had been set up. The notice also sought to reassure members of its continued operations and said its reputation was being smeared by some Internet users.

“At this time, there are Internet users with evil intentions who have deliberately destroyed Black Hawks reputation, deceived our members and stole material,” the notice addressed to members said. “We must join forces and attack these Web sites.”

A customer service officer contacted by phone, who refused to give his name, said the backup site provides content for its paying members to download course material to allow them to continue their computer lessons - though not in hacking.

The Hubei government refused to comment Monday while officials at the provincial public security bureau did not respond to repeated requests for comment.

Google threatened last month to pull out of China unless the government relented on censorship, an ultimatum that came after the search giant said it had uncovered a computer attack that tried to plunder its software coding and the e-mail accounts of human rights activists protesting Chinese policies.

Government officials have defended Chinas online censorship and denied involvement in Internet attacks, saying the country is the biggest victim of Web attacks. The Ministry of Industry and Information Technology said hackers tampered with more than 42,000 Web sites last year.

Security consultants say it is hard to know what proportion of hacking from China is the work of individuals and whether the government is involved. But some say the high skill level of some attacks suggests Chinas military or other agencies might have trained or directed the hackers.

“The scale, operation and logistics of conducting these attacks - against the government, commercial and private sectors - indicates that theyre state-sponsored,” security firm Mandiant Corp. said in a report last month. “The Chinese government may authorize this activity, but theres no way to determine the extent of its involvement.”

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Associated Press researcher Xi Yue contributed to this report.

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A Prius recall may further tarnish Toyotas reputation after the Toyota City, Japan-based company lost about $33 billion in market value amid expanding global recalls of other models to repair defects linked to unintended acceleration. Those recalls have yet to include any vehicles in Japan, where the Prius was last years top-selling model.

“Its really shocking,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo. “The damage to Toyota will be big.”

Ririko Takeuchi, a spokeswoman for Toyota in Tokyo, said the company hasnt decided whether to recall the Prius. Stolze, speaking by phone from Cologne, Germany, declined to say what the carmakers decision will be regarding recalls in Europe. There havent been any proven cases of brake failures in the Prius in Europe, he said.

Kind of Scary

Japans government ordered Toyota to investigate the Prius after receiving complaints from drivers. The company has been looking into reports that Prius owners driving at low speeds on bumpy or icy roads may experience moments where the car continues to coast for about a second after the brakes are applied, because of the anti-lock brake system.

“It sounds kind of scary,” said Steve Wozniak, co-founder of Apple Inc., who drives a 2010 Prius. “You sure dont want your car to continue on, on an icy road, when its supposed to be stopping.”

The New York Times reported that Toyota will recall at least 311,000 Priuses. Toyota has sold at least 332,000 units of the 2010 Prius, including 197,000 in Japan and 103,200 in the U.S., spokesman Takanori Yokoi said. The model is built in Japan.

Sai, Lexus

Toyota also plans to recall Lexus HS250h and Sai hybrid models in Japan this month, one of the people said. The company is considering steps dealers can take for current Prius owners, including exchanging some parts, the person said.

Toyota fell 1.1 percent to close at 3,280 yen in Tokyo trading today. The stock has declined 22 percent since Jan. 21, when the carmaker began recalling vehicles to fix gas pedals linked to unintended acceleration.

He said the reports that have led to recalls of Toyota vehicles arent statistically significant and that he remains a fan of the Prius because of its environmental benefits.

“All these problems should get fixed, but they shouldnt stop people from buying the Prius,” Wozniak said in a phone interview. “There are bugs in every product.”

U.S. Investigation

Toyota said last week it had received complaints about Prius brakes through dealers starting in the last few months of 2009. Toyota changed the design of the brake software at the end of January, the company said.

The U.S. Transportation Department is also investigating reports of Prius brake failures. The departments National Highway Traffic Safety Administration received 124 reports from consumers, including four saying crashes occurred with two “minor” injuries, according to an investigation document.

Toyota told U.S. dealers to expect an update early this week on steps the company plans to take to address the complaints, according to John Hanson, a spokesman for the carmakers sales unit in the country.

The brake complaints arent related to the reports of unintended acceleration, according to Toyotas Takeuchi.

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Acer overtook Dell in the third quarter to become the worlds No. 2 PC company by offering low-cost Aspire One netbooks and higher-priced Ferrari-branded notebooks aimed at consumers. Servers, more powerful computers used to store information and manage networks, will account for around 4 percent of Acers sales this year and offer profit margins up to double that of its other products, Lanci said.

“Thats very aggressive and would be good news if they can make it work,” said Calvin Huang, who rates the stock “buy” at Daiwa Securities Group Inc. in Taipei. “The corporate market is going to pick up and consumer will continue to climb, so theyll have a double engine for growth.”

Acer shares climbed 128 percent last year in Taipei, outpacing a 78 percent advance in the benchmark Taiex index. The stocks 12 percent drop this year is in line with the decline by the Taiex.

The company released so-called blade and modular servers in November, the first move in its plans to offer a full line-up of servers by the end of this quarter, Lanci, 55, said. That will also help it win commercial clients for the companys desktop and notebook computers, he said.

Ferrari Notebooks

In June 2008 the company introduced Aspire One, a low-cost netbook for consumers that helped Acer grab share during the global economic recession. The company also sells red notebooks bearing the Ferrari brand and logo for more than $2,000.

“We took the right decision to develop consumer first and then commercial,” Lanci said. “The other way around would have been a disaster.”

Global server shipments dropped 17.9 percent in the third quarter from a year earlier as companies cut budgets amid the global recession, researcher IDC said in a December report. International Business Machines Corp. led the market by revenue, followed by HP and Dell, it said.

Shipments of computers, excluding servers, climbed 2.3 percent over the same period as Acers 14 percent market share took it to second place behind HP, the Framingham, Massachusetts-based researcher said in a separate report.

Server Margins

“Maybe they expect the server segment will be booming in coming years and they want to join,” said Angela Hsiang, who rates Acer stock “outperform” at KGI Securities Co. in Taipei. “It will need some time. Because they didnt do this product before, strong R&D capability is still needed.”

Hewlett-Packard, the largest PC supplier, got 13 percent of its revenue last year from its servers and storage division, with 11.3 percent of its operating profit, or revenue less the cost of goods sold and administrative expenses, coming from that unit, according to Bloomberg data. Overall gross margin at the Palo Alto, California-based company was 24 percent.

Spend Money

Dell, the No. 3 PC vendor, got 12 percent of its revenue from its servers and networking division during the third quarter, according to Bloomberg data. IBM, the largest server vendor, withdrew from the PC business after it sold that unit to Chinas Lenovo Group Ltd. in 2005.

“Acer may need to spend some money to build up a distribution network for servers, so it may not be very profitable initially,” said Daiwas Huang.

Acers sales will be aided by a 30 percent increase in its marketing budget, excluding sponsorships, Vice President of Marketing Gianpiero Morbello said in a separate interview, declining to give details. The company currently sponsors the Scuderia Ferrari Formula One car racing team, Inter Milan soccer club and the Olympic Games.

Revenue will climb around 15 percent this year with shipments of notebooks to increase 35 percent to 40 percent and surpass 40 million units, Lanci said. Acer will report preliminary 2009 revenue and profit sometime this week, with full-year sales little-changed from 2008, he said.

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One solution will be increased consolidation, with companies led by WellPoint Inc., the biggest U.S. insurer by enrollment, and Community Health Systems Inc., the largest publicly traded hospital chain, scooping up rivals unable to “spread rising costs across fewer customers,” said Paul Keckley, of the Deloitte Center for Health Solutions.

The health-care market “certainly seems to favor bigger, innovative, scalable companies,” said Keckley, executive director of the Washington-based center, in a phone interview. Drugmakers facing the loss of patent protection on top-selling medicines “were looking at decelerating revenues, with or without reform,” he said.

President Barack Obamas plan to expand insurance coverage to more than 30 million Americans and impose more regulations on the medical industry was upended Jan. 19, when Republican Scott Brown won the Massachusetts U.S. Senate seat held for 47 years by the late Edward Kennedy, a Democrat and one of Congress staunchest supporters of widening coverage.

Political Dynamic

Browns victory deprived congressional Democrats of their 60-vote, filibuster-proof majority in the Senate needed to win passage of the health-care measure. The Standard and Poors 500 Managed Health Care Index has fallen 8.3 percent and the S&P 500 Pharmaceutical Index has dropped 7.1 percent since then, compared with the S&P 500s 6.3 percent decline. That follows a six-month period in which health stocks outperformed the S&P.

The drop is partly the result of uncertainty, said Les Funtleyder, a Miller Tabak & Co. health-care analyst in New York. Democrats have talked of passing stripped-down legislation that would ban insurers from denying coverage to people based on their health, while dropping a mandate in the current bills that more Americans buy their products.

Targets for Cuts

Pharmaceutical companies and hospitals negotiated deals with the Obama administration to forego revenue to help pay the cost of expanded coverage. The companies may be targets for bigger cuts now by Democrats who said the agreements hadnt cost industry enough, said Jacob Hacker, a Yale University political science professor who supports Democrats plans for a comprehensive overhaul.

“Absent reform, fewer and fewer Americans are going to be able to afford their services and products,” Hacker said by e- mail. “And there is no prospect they will get the sweet deals they struck with the White House if a broad bill is not on the table.”

Obama said he wont abandon the overhaul at a Feb. 2 town- hall meeting in Nashua, New Hampshire, and repeated that vow four days later at the Democratic National Committees winter meeting in Washington.

One-in-Five

One in five working-age Americans lacked health coverage during the first half of 2009, the highest in six years, the U.S. Centers for Disease Control and Prevention said in a Dec. 16 report. Health-care spending last year reached an estimated $2.5 trillion, rising 6 percent from 2008, analysts with the U.S. Centers for Medicare and Medicaid Services said in another paper, released Feb. 4 in the journal “Health Affairs.”

The U.S. government faces pressure to slow the rise in health spending as it tries to plug a budget deficit projected to reach $1.6 trillion this year, said Deloittes Keckley. The overhaul bills included cuts of more than $120 billion over a decade to Medicare Advantage, a program that pays private insurers to provide benefits to the elderly. Obama also proposed a $20 billion increase in discounts drugmakers must give Medicaid, the joint U.S.-state health program for the poor.

“Entitlement programs are going to be on the front- burner,” if lawmakers want to reduce the deficit, Keckley said.

Insurer Expense Limits

The overhauls death may spare insurers from limits on their administrative expenses, regulations forcing them to accept even the costliest patients and $70 billion in additional taxes on industry premiums. It would also deprive companies of millions of new, taxpayer-subsidized customers at a time when commercial enrollments are dropping.

Among the nations 1,300 health plans, larger companies with a national reach led by Minnetonka, Minnesota-based UnitedHealth Group Inc., and Indianapolis-based WellPoint, will have the advantage, Keckley said.

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The years since have seen hundreds of drivers complaints about unwanted acceleration of their Toyotas, six inconclusive federal investigations, multiple reports of deaths and repeated denials from the automaker that it had a major problem on its hands.

Thats just the sort of bureaucratic inertia Barack Obama pointedly criticized as a presidential candidate. Yet his administration was without a federal highway safety chief for most of its first year and, like the Bush administration before it, missed signals in the Toyota case.

After several investigations, it was only last week that Toyota owners learned federal regulators, concerned that the company was not taking apparently dangerous defects seriously enough, traveled to Japan in December to light a fire under corporate executives. Meanwhile, millions of Toyotas continued to be driven by drivers unaware of the potential scope of the problem, and the cars continued to be sold.

Combined with a recall involving the toxic metal cadmium that arose from press scrutiny rather than federal oversight, the Toyota episode has raised questions about whether the government under Democrats will be any more agile in enforcement of consumer protections than the Bush administration was.

“When youve got a government regulatory agency, it has to be a government cop on the corporate beat,” said Joan Claybrook, who was chief of the National Highway Traffic Safety Administration during the Carter administration. “And its got to act like a cop.”

Claybrook said that while most of the Toyota investigations took place during the Bush administration, the absence of a permanent administrator during Obamas first year prevented a new team from conducting a full review of dozens of pending defect investigations and a fresh look at the Toyota cases.

Toyotas string of recalls burst into the open in late September, leaving millions of car owners unsure if their vehicles were safe to drive and tarnishing the reputation of a company once synonymous with safe, reliable cars. The road to the recall of millions of Camrys, Corollas and other popular Toyota models began years ago, touched off by warnings from Boddeart, who died in April, and others who worried their cars might bolt forward and cause a crash.

Back in 2003, Boddeart told regulators that his accident marked the third time his 1999 Lexus LS400 accelerated unexpectedly and asked them to investigate. Five months later, the 83-year-olds petition to the agency was panned “in view of the need to allocate and prioritize NHTSAs limited resources,” a common refrain in rejection letters.

Several investigations followed.

In 2004, Carol Mathews, a nurse from Rockville, Md., crashed into a tree when her Lexus suddenly accelerated. She asked the agency to investigate. The government reviewed problems with electronic throttles in about 1 million Toyota and Lexus vehicles and found more than 100 complaints.

Seeking to limit the scope of the review, Toyota urged the government to consider a “vehicle surge to be something less than a wide-open throttle.” No defect was found after 4 1/2 months of investigating and the case was closed.

Reviewing Toyota models built from 2002 to 2005, the agency found that 20 percent of 432 complaints reviewed involved “sudden or unintended acceleration.” But regulators said the complaint rate was “unremarkable.” The government closed the case, citing “insufficient evidence.”

A separate investigation launched in March 2007 reviewed allegations that floor mats were interfering with accelerator pedals. Toyota said a month later that there was “no possibility of the pedal interference with the all-weather floor mat if its placed properly and secured.”

By that August, government investigators had tied the problem to 12 deaths and a survey of 600 Lexus owners found about 10 percent reported sudden or unexpected acceleration. In September, Toyota recalled 55,000 Camry and ES350 vehicles to replace the floor mats. But that was hardly the end of the problems.

In January 2008, William Kronholm of Helena, Mont., complained about his 2006 Tacoma truck accelerating while he hit the brakes. During the investigation, Toyota told NHTSA it believed complaints by Kronholm, a retired Associated Press editor, and others were attributed to “extensive media coverage” and many of the problems cited by consumers - including lurching when the vehicle came to a stop and engine idle speed changes when the vehicle was stopped - were “minor drivability concerns.” Kronholms case was closed in August 2008 without a defect finding.

Last August, a high-speed crash near San Diego killed a California highway patrol officer, his wife, daughter and brother-in-law, bringing renewed attention to the problems, now the regulatory responsibility of the Obama administration.

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A jury awarded about $2 million to two Missouri farmers in December, and three additional test cases are scheduled for this year involving farmers from Louisiana and Texas as well as a rice exporter. No punitive damages have been awarded in any of the verdicts.

About 6,000 rice producers have filed claims against Bayer since the U.S. Department of Agriculture announced in August 2006 that trace amounts of the genetically modified Liberty Link rice were found in U.S. long-grain rice stocks, according to Don Downing, lead attorney for the plaintiffs in the first two cases.

Bayer and Louisiana State University had been testing genetically modified rice, bred to resist a Bayer brand of herbicide, at a school-run facility in Crowley, La.

Though the USDA said at the time of the crop contamination that the rice variety posed no health or environmental risk, Japan and the European Union moved to ban U.S. rice, leading to a plunge in rice prices and a drop in U.S. rice exports.

Downing said Bayers negligence was directly responsible for the loss of the European market.

“This was all, we believe, very preventable by Bayer, if they had just exercised the kind of care they should have exercised in handling the (Liberty Link) rice,” Downing said after the verdict.

Downing was disappointed that the jury did not award punitive damages, and said he would continue to seek them in future cases.

In a statement responding to the verdict, Bayer said it was pleased with the jurys decision not to award punitive damages, but otherwise was disappointed in the ruling. The company said a USDA investigation was not able to determine how the altered strain entered the rice supply.

“Bayer CropScience maintains that it acted responsibly and appropriately at all times” in the handling of its biotech rice, the statement said.

Cases scheduled for trial will be different both in claimed damage amounts and underlying facts, according to Bruce Mackintosh, general counsel for Bayer CropScience LP.

“We are presently preparing for those trials and intend to defend ourselves vigorously,” Mackintosh said.

The jury awarded damages under a formula involving the number of acres each farmer planted and the impact of the contamination.

Gary Sebree, chairman of the Arkansas Rice Producers Association, said the states rice producers are still feeling the effects of the contamination 3 1/2 years later.

“We still dont have (the European) market, and I dont know if well ever have it like we had before,” he said. “It definitely has affected every rice farmer in Arkansas.”

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Information from: Arkansas Democrat-Gazette, http://www.arkansasonline.com

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As states scramble to deal with gaping budget deficits, many are looking for any opportunity to increase revenue, and Washington is one of a handful of states weighing whether privatizing liquor sales is the way to get back into the black.

Some lawmakers here want to sell the distribution center - bringing the state a one-time boost of about $33 million - and let the private sector step in to sell liquor, which some say will reap long-term cost benefits.

“To me this isnt a core function of government,” said Sen. Rodney Tom, a Medina Democrat who is a chief budget writer for the Senate. “Its a retail operation. Private companies can do it as good or better.”

Tom has introduced a bill that would have Washington get completely out of the liquor business, allowing an unlimited number of people to buy licenses to sell liquor, as is done in California. Other lawmakers have introduced measures taking smaller steps toward privatization, including bills that would auction off franchise agreements for stores like Costco, or which would allow a limited number of smaller contract stores to sell booze.

“When states are struggling around revenue, the idea of privatization often rises,” said Steven Schmidt, spokesman for the National Alcohol Beverage Control Association, the Alexandria, Virg.-based group that represents states who are directly involved in the sale of liquor. “This year were seeing more efforts to privatize than we have in the recent past.”

In Virginia, which is facing a $2 billion shortfall this year, recently-elected Republican Gov. Bob McDonnell ran, in part, on a pledge to privatize liquor stores as a way to raise transportation money. While privatization bills have been introduced by lawmakers in the current session that runs until March, McDonnell is working on putting together a commission on government reform and restructuring that will look at liquor privatization. His staff said that while McDonnell isnt opposed to the current bills, the issue is most likely to come up later this year, possibly in a special session.

“Liquor sales just dont fall under the category of top government functions to be providing to the taxpayers,” said McDonnells policy director, Eric Finkbeiner.

In Mississippi, bills to privatize wholesale wine business have been introduced. In Vermont, a bill has been introduced to disband the Department of Liquor Control and permit second class licensees to sell spirits. And in North Carolina, a state task force is studying various types of government reform including liquor privatization.

The five states are among 18 so-called “control” or “monopoly” states, which exercise broad powers over wholesale liquor distribution. Of those states, only eight - including Washington, Virginia and North Carolina - also are involved in retail alcohol sales, Schmidt said. Thirty-two states are license states, where the private sector handles wholesale distribution.

Currently, liquor brings in about $320 million in revenue to Washington each year, but a recent report by Washington state Auditor Brian Sonntag found that the state could increase revenue by as much as $277 million over five years if it changed its current liquor model.

In a year when Washington lawmakers are looking to patch a $2.6 billion deficit, Tom said privatization just makes sense.

“I would rather cut jobs at the state liquor store than to cut jobs of teachers,” he said. “We have a decision to make.”

One privatization bill introduced in the Washington state House by Rep. Gary Alexander, R-Olympia, would change the state model to that of Oregons, where all liquor stores are private stores that contract with the state. Another bill by Alexander, along with a companion Senate bill by Sen. Tim Sheldon, D-Potlatch, would auction off franchise agreements to the highest bidder, which would open the door for grocery sales.

While the Senate bill received a public hearing, it was ultimately turned into a study bill. And neither House bill received public hearings, and are likely dead, despite the support of at least one prominent Democrat, Rep. Kelli Linville, D-Bellingham.

“We need to reduce the footprint of government,” said Linville, who as chairwoman of the House Ways and Means Committee, is tasked with writing the House budget proposal.

But Democratic leaders, including Gov. Chris Gregoire, have come out strongly against privatization, saying its not a viable budget solution for the immediate fiscal problem the state is facing. Under the auditors report, the state wouldnt start seeing savings from the change until 2012.

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Blankfeins bonus was less than some had expected. But it reflects Wall Streets changing pay culture. Several banks are paying their CEO restricted stock and adopting clawback provisions in response to a furor over outsized paydays at financial institutions that helped push the economy into a recession and then later took billions in federal bailouts.

Still, Blankfein led Goldman to a stellar 2009 performance, and some had predicted his bonus would range between $15-$20 million.

“It was certainly less than expected,” said Mark Borges, a principal with Compensia Inc., a Northern California compensation consulting firm. “While the fact that hes making this much wont sit well with people out of work, it seems Goldman is being sensitive to the political considerations and optics of this amount.”

“Its almost as if hes taking a bullet for everyone else,” Borges added.

Earlier Friday, JPMorgan Chase & Co. said CEO Jamie Dimon received a $16 million stock bonus, making him the highest paid CEO among the nations largest banks that have announced their pay plans.

Morgan Stanley CEO James P. Gorman received a stock bonus valued at $8.1 million for 2009. Gorman was co-president of the bank for that period. He replaced John Mack as CEO last month. Mack, who remains chairman, received no bonus for 2009 or the previous two years.

Goldman and JPMorgan have emerged from the financial crisis as two of the nations strongest banks, earning billions in profits while rivals including Citigroup Inc. and Bank of America Corp. have suffered losses. Still, neither JPMorgan nor Goldman have escaped scrutiny over employee pay packages.

Under Blankfeins leadership, Goldman earned a record $4.79 billion profit in the last three months of 2009. But Goldman bolstered its fourth-quarter profits by slashing the size of its bonus pool in a move aimed at quashing criticism of outsized paydays at elite New York investment banks.

Blankfein received compensation valued at $42.9 million during fiscal 2008, virtually all of it coming from stock and options awarded for his previous years performance.

He got no performance-based pay for his work in fiscal 2008, when Goldman reported its first quarterly loss since becoming a public company and its stock fell more than 60 percent amid the deepening credit crisis.

Aside from not being able to sell the stock for five years, Goldmans top 30 executives stock awards could be taken back by the bank in cases where the employees took too large a risk or failed to raise concerns about risk in the company.

JPMorgan received $25 billion in bailout money in the fall of 2008 at the peak of the credit crisis. It paid back that money in the middle of 2009.

Dimon received no bonus for 2008. He received a $27.8 million bonus for 2007, just before the financial crisis began to accelerate. Since then, JPMorgan has solidified its status as one of the nations top banks. Dimon led the bank to four profitable quarters in 2009, including a $3.28 billion profit in the final three months of the year.

Even as furor over bank bonuses has grown, JPMorgan increased pay for its workers in 2009. The average pay per employee rose to $121,124 in 2009 from $101,110 a year earlier. The average pay in the investment banking division was about $380,000.

Dimons and Blankfeins stock compensation was disclosed in a securities filing called a Form 4. While those stock-based awards were to reward the CEOs for their work in 2009, those awards will not be included in the calculation of total compensation that the companies will present in their annual proxy statements due out later this year. The pay amounts included in the proxies will only reflect what was granted and paid in the fiscal year 2009.

The stock awards Dimon and Blankfein just received will be included in calculations of their total pay for 2010.

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