Business and Finance

Robert Deluce is the president and chief executive officer of Porter Airlines. In our series on the financial habits of notable Canadians, Deluce told the Toronto Star’s Emily Mathieu what he learned working at his family’s hunting and fishing charter business, the significance of a 1956 Oldsmobile and why, when it comes to purchases and sales, almost everything is negotiable.s

How did your family influence your attitude toward money?

My family is very entrepreneurial, so I’ve always looked at finances from a business perspective. Whether as an individual or a household it’s important to understand your revenue streams and expenses, and to look for quality and value when making decisions about how to spend money wisely.

What is the best financial advice you ever received?

I’ve always had to earn my own money. Even though I was involved in a family business, there was no free ride for me or my eight siblings. My parents always made sure that we were compensated for the work we did. I appreciate the value of money because of this.

What lessons did you take away from your first job?

My parents started a hunting and fishing charter business in 1951 in Northern Ontario called White River Air Services. I later boarded as a student at St. Michael’s College School in Toronto and worked at the family business when I went home during summer holidays. I would pump gas, load aircraft and do other odd jobs while learning the ropes as a teenager. I didn’t realize it at the time, but that was my apprenticeship for running a business, and an airline in particular.

What was the first item you purchased with your own money?

The first item of any significance was the purchase of an old 1956 Oldsmobile from my grandfather for $500. This was in 1968 while I was attending McGill University.

What has been your savviest investment?

The purchase of a home in 1987 from an investment banker on the day after the stock market tumbled. After doing a really light “freshen up” renovation, which consisted primarily of interior paint, we resold the house six months later for about $400,000 more than we had paid for it.

What is your worst spending habit?

Like many people, my morning coffee is a habit that adds up. Of course, I have to have the premium drinks, which makes it worse.

How do you prefer to pay, cash, card or debit?

Credit card. It helps me keep track of expenses and I always pay the full balance every month. Cash is my back up. I never use debit cards.

What hard financial lessons have you learned?

Never leave yourself with only one supplier; you must have choice and some tension to ensure value.

What is your best money-saving advice?

Everything is negotiable. Rarely should you pay the sticker price for a product or service. You can get a better price simply by asking, comparing suppliers, buying in larger quantities or employing other strategies. Sometimes you can negotiate more value by having upgrades or bonus items included in the cost. If you’re somewhere, like in a grocery store, where this doesn’t usually apply, you can still save money by planning ahead and buying staple items when they’re on sale before you absolutely need them and have no choice but to pay the going rate that day. Never be in a hurry to conclude the transaction. And if you are buying a car, absolutely do not ask for a certain colour as your first item of discussion.

Are there any money saving tips you can pass on to travellers?

It’s important to know what you’re getting for your ticket when flying. You can usually choose from various fare types and each one gives you different benefits. Buying the lowest fare usually means you’ll have to pay extra to make changes later on, but you save upfront. A premium fare has things like this built into the upfront price. You should purchase according to your needs and be aware of fees if they’re required for baggage, seat selection, etc. We try to offer real value at Porter by including certain amenities that other airlines either don’t offer or make you pay for.

Do you worry about retirement?

I don’t plan on retiring anytime soon, but I do have a financial plan.

Are money and success the same thing?

I don’t think so. There are a lot of ways to make money, but success is something that you earn. Most successful people also have a sense of accomplishment. This may come from building a business or contributing to a cause where there is also benefit to others, not just you. Often this has nothing to do with making money or your total net worth.

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Leaders from across Latin America and the Caribbean pledged closer ties to safeguard their economies from the world financial crisis as they formed a new bloc on Saturday including every nation in the hemisphere except the U.S. and Canada.

Several presidents stressed during the two-day summit that they hope to ride out turbulent times by boosting local industries and increasing trade within the region.

“It seems it’s a terminal, structural crisis of capitalism,” Bolivian President Evo Morales said in a speech Saturday. “I feel we’re meeting at a good moment to debate … the great unity of the countries of America, without the United States.”

Venezuelan President Hugo Chavez and some of his closest allies called the new regional bloc a tool for opposing U.S. influence. But other leaders focused more on economic concerns and on working together to confront issues such as drug trafficking and the effects of climate change.

Brazilian President Dilma Rousseff said that if the nations are to keep thriving they will need to look more to their neighbors.

“The economic, financial crisis should be at the center of our concerns,” Rousseff said Friday night. She said Latin America should “realize that to guarantee its current cycle of development despite the international economic turbulence, it means that every politician must be aware that each one needs the others.”

The region has so far weathered the economic woes better than the U.S. or Europe, achieving economic growth of more than 5 percent last year.

Colombian President Juan Manuel Santos said the region has immense potential “in this world that’s going through great uncertainty, where there’s a hurricane that’s hitting the so-called industrialized economies hard.” He said Colombia’s current trade with Brazil, for instance, is minimal and could grow significantly.

Chavez read aloud a letter from Chinese President Hu Jintao congratulating the leaders on forming a new 33-nation regional bloc, the Community of Latin American and Caribbean States. Hu pledged to deepen cooperation with the new group.

The U.S. remains the top trading partner of many countries in the region, with exceptions including Brazil and Chile, where China has become the biggest trading partner. China has also made diplomatic inroads, including by granting about $38 billion in loans to Venezuela in exchange for increasing shipments of oil.

Chilean President Sebastian Pinera touted the region’s opportunities for growth, while Argentine President Cristina Fernandez said building trade among the countries should be a priority.

Bolivia’s Morales took a different focus, strongly criticizing the International Monetary Fund and saying “they’ve just pillaged us and led us to poverty.”

Morales also appealed for strong steps at this month’s climate change conference in South Africa, saying it’s critical that developed nations renew pledges to cut greenhouse gas emissions under the 1997 Kyoto Protocol.

“If they kill the protocol, they kill the planet,” Morales said.

Trinidad and Tobago’s prime minister, Kamla Persad-Bissessar, also expressed concerns about changing weather patterns and said nations should work together to better plan for disasters.

Several leaders called for closer cooperation to fight criminals and drug trafficking.

“Our region is seriously threatened by organized crime,” Guatemalan President Alvaro Colom said.

Colombia’s Santos said the new bloc could help in re-examining whether current counter-drug efforts are the right approach.

Caribbean leaders including Haitian President Michel Martelly thanked Chavez for selling their nations oil on preferential terms, including long-term, low interest loans.

“The people of Haiti love you with all their hearts,” Martelly told Chavez during his speech, saying “south-south cooperation” is key to the future of his impoverished country.

Chavez assured leaders he will survive cancer, reiterating that he underwent recent tests in Cuba after finishing chemotherapy and they found no “malignant cells in any part of my body, thanks to God.”

Trinidad’s prime minister gave Chavez a vial of what she described as holy water, and Chavez thanked her, saying “soon we will have a summit of those of us who’ve beaten cancer.”

Venezuela’s government celebrated the gathering at a Caracas military base with bursts of fireworks that could be heard from the session. Other events included an orchestral performance led by Venezuelan conductor Gustavo Dudamel and a post-summit concert headlined by Puerto Rican hip-hop duo Calle 13.

The leaders planned to formally launch the new bloc known by its Spanish initials CELAC on Saturday by approving the group’s procedural rules as well as a clause dealing with democratic norms and a declaration of shared principles.

Both Chavez and Ecuadorean President Rafael Correa said they hope the bloc eventually overshadows the importance of the Washington-based Organization of American States. Unlike the OAS, the new group will have Cuba as a full member and exclude the U.S. and Canada.

“We need a new inter-American system and, more specifically, a new system to guarantee human rights,” Correa said Friday, referring to the Washington-based Inter-American Commission on Human Rights, which has received complaints from Ecuadorean newspapers and television channels that accuse his government of trying to silence critics.

“All these attacks and threats are made in the name of freedom of expression,” Correa added, accusing powerful media outlets of manipulating public opinion.

Several other presidents said they see CELAC as an important forum to resolve conflicts and build closer ties, but not as an alternative to existing bodies such as the OAS.

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Spain’s next prime minister is a lusterless career politician who thrives on ambiguity _ rarely revealing what he thinks.

With results Sunday night showing that his conservative Popular Party crushed the ruling Socialist party and won a big parliamentary majority, Mariano Rajoy may finally be forced to show his hand.

Rajoy inherits a devastating economic downturn that has caused unemployment to swell to more than 21 percent, and comes as similar financial crises in fellow EU nations like Greece and Italy threaten to combine with Spain’s woes and drag down the global economy.

As Rajoy, 56, begins forming the next government Monday, all eyes will be on whether the gray-bearded, bespectacled leader will finally unveil a clear political vision or continue to dodge efforts to pin him down.

Many see him as a the perfect caricature of his native region _ Galicia. The people of the misty and rainy northwestern region are legendary for pokerfaced obscurity. According to a Spanish saying, when you meet a Galician on the stairs you can never tell if he’s going up or down.

“He is a Galician. They say things but you have to read between the lines,” said Rodrigo Herrero, 48, a villa caretaker.

“He’s not spontaneous or extroverted like other politicians,” added Herrero. “He lacks that friendliness and touch of charm.”

Others says there is a hidden side.

“He’s a master because he achieves his aims without apparently doing anything,” Xavier Pomes, a Catalan politician and friend of Rajoy, told El Pais, Spain’s leading newspaper.

“He’s sensible, frank. Some see him as indolent and indecisive but in reality he’s reflexive,” said Pomes.

But true to his cagey character, Rajoy has so far made little known of his plans. And with bond interest rates soaring and stock markets jittery, he is not likely to have any more time to dawdle or fudge.

In a lengthy interview in El Pais on Thursday, Rajoy said that barring pensions, “cuts will have to be made wherever they can.” But the paper pointed out that he “maintained his ambiguity on what sacrifices Spaniards will face.”

Eurasia Group analyst Antonio Barroso expects Rajoy to initially go for a “shock and awe strategy” with “quick policy changes in an effort to impress markets and his European partners, and boost Spanish credibility.”

That would also dispel questions about his own credibility.

Rajoy, a property registrar by training, held four ministerial portfolios _ among them education and interior _ in the governments of Jose Maria Aznar between 1996 and 2004. But being hand-picked as party leader in 2003 by Aznar set Rajoy up for years to accusations that he was never actually elected by those in his party, a smear that weakened his attempts to shake himself free of Aznar’s shadow.

Sunday’s ballot was third-time lucky for Rajoy. He lost general elections in 2004 and 2008 against Jose Luis Rodriguez Zapatero, who is now deeply unpopular and did not seek re-election this time. In many ways, it’s a tribute to his dogged determination to survive.

In 2004, Rajoy was also strongly tipped to win. But he lost amid voter outrage over the Madrid terror bombings by Islamic militants three days before the election. The massacre killed 191 people direct payday lenders. Rajoy and his party had initially blamed Basque separatists and continued to do so even as evidence of Islamic involvement emerged.

The party was devastated by the defeat and Rajoy had to battle to keep it unified amid divisions between moderate and more conservative factions. The 2008 loss, although not as severe, exacerbated his tenuous position, thrusting even normally friendly rightist media against him.

But Rajoy fought on, skillfully remaining silent while his party and the media were ablaze with the succession debate. His efforts bore fruit at a party congress in June when his candidacy as leader _ albeit the only one presented _ was backed by 84 percent of delegates.

A cycling and sports enthusiast, Rajoy has freely acknowledged he reads little and prefers light sports dailies to mainstream newspapers or literature. However, sensing he may soon be representing Spain on the international stage, he is now studying English, a language none of his predecessors has ever managed to command.

At 24, he suffered a serious car accident that left his face badly scarred, reportedly the reason he grew the beard.

Stiff in manner, Rajoy has never topped popularity polls and is not known for imagination or charm. In a recent TV debate with his Socialist opponent Alfredo Perez Rubalcaba, Rajoy almost never took his eyes off prepared notes. Nevertheless he scraped through the near two-hour clash, skirting questions and shedding no light on his program.

No one can deny Sunday’s victory came easy, with his opponents in the governing Socialist party crippled by their inability to cope with the economic crisis.

Over the past two years, Rajoy used the crisis to perfection in weekly parliamentary debates, hammering away relentlessly at the Zapatero government’s perceived incompetence.

But careful not to scare potential voters, Rajoy remained virtually mute on what he would do differently besides pledging to make things easier for small and medium-sized businesses _ which provide 80 percent of employment in Spain _ and indicating he will carry out the labor market and social welfare system reforms he deems necessary.

Outside the economy, he has traditionally been a close ally of the Catholic Church on moral and social issues and has repeatedly said he will revise Spain’s abortion law. His party has also appealed the country’s gay marriage law before the Constitutional Court. Both bills were considered key achievements of the Zapatero governments.

In the past, he has demanded strict law-and-order measures to control immigration and education reforms to improve one of Europe’s worst dropout rates.

A lover of Cuban cigars, Rajoy has also suggested he may ease Spain’s anti-smoking ban in the workplace.

On foreign policy, he is likely to try to win back the special friend status Aznar held with U.S. while taking a less open approach than Zapatero to some of the more radically left-leaning governments of Latin America such as Cuba and Venezuela.

____

Jorge Sainz contributed to this report.

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The press likes to cast itself as society’s guardian. On Monday, the judge leading the investigation into Britain’s deepening phone hacking scandal vowed to find an answer to the question: Who guards the guardians?

For years, the British media’s answer has been that it mainly looks after itself. But following explosive allegations of pervasive criminality at Rupert Murdoch’s News of the World tabloid, Lord Justice Brian Leveson suggested it was time for a change.

“Guarding the guardians is not an optional add-on,” he said.

Britain’s phone hacking inquiry was set up by Prime Minister David Cameron shortly after the scandal boiled over in July, pulling the lid off illegal spying at the nation’s best-selling Sunday newspaper and exposing police corruption.

It’s one of several investigations spurred by public anger over unethical practices at the now defunct paper. The long-running scandal has threatened Murdoch’s global media empire, which includes the Wall Street Journal and dozens of other properties.

Parallel inquiries launched by police, prosecutors and parliamentarians have called Murdoch to Britain for dramatic testimony before lawmakers, led to more than a dozen arrests and the resignation of several top-ranking Murdoch executives, including News International CEO Rebekah Brooks and The Wall Street Journal publisher Les Hinton.

The first part of Leveson’s inquiry seeks to go beyond assigning blame to individual journalists or newspapers to evaluate the media’s wider role: Is the press above the law? Is it too close to police and politicians? Does society’s guardian need a powerful guardian of its own? These are some of the questions on his agenda.

Although the News of the World has few defenders, editors and broadcast bosses have publicly voiced concern that recommendations from any inquiry could leave Britain’s press less aggressive _ and less free. Few if any want more government regulation _ especially since Britain’s press already labors under strict libel laws and contentious new privacy rules.

While inquiry counsel Robert Jay said that the importance of a free press was “almost self-evident,” he warned that the media may not necessarily like the solutions the inquiry finds for tricky ethical issues.

“These solutions will not necessarily have been the solutions which the press themselves would have devised,” he said.

Leveson said he hoped to have the first part of his inquiry wrapped up by the end of 2012.

He’s expected to recommend either scrapping or radically reforming the Press Complaints Commission, the self-regulatory body whose failure to get to grips with the hacking scandal has been roundly criticized. The scope of his inquiry’s recommendations will hinge in part on whether illegal behavior is found to have been limited largely to the News of the World or whether it was practiced more widely.

There seemed to be plenty of evidence that shady practices were widespread at Monday’s hearing.

Jay told the inquiry _ whose proceedings were broadcast live over the Internet _ that it appeared that illegal interception of voicemails went beyond the News of the World. He said that the inquiry had seen the names of no fewer than 28 News International employees in the notes kept by Glenn Mulcaire, the private investigator which the News of the World paid to illegally eavesdrop on its victims.

The words “The Sun” _ a possible reference to the News of the World’s sister-title _ also cropped up in Mulcaire’s notes, Jay said. So, too, did a name linked to the Daily Mirror, the Sun’s left-wing rival.

Jay said that the evidence on phone hacking pointed to what he described as “at the very least, a thriving cottage industry.”

The inquiry was briefly disrupted when David Sherborne, a lawyer for phone hacking victims, said that a Trojan, or data-stealing virus, had been found on his computer _ raising the possibly that he was being hacked.

The otherwise cool and clinical Leveson briefly seemed speechless.

“I’m not often thrown, but Mr. Sherborne has managed to do that,” he said. Sherborne later said the problem was being dealt with.

Sherborne was one of several dozen lawyers and journalists packed into a room at London’s neo-gothic Royal Courts of Justice, with more in a spillover tent pitched into a nearby courtyard.

A handful of members of the public came to watch the proceedings as well _ among them Bob Dowler, whose daughter Milly had her phone hacked by the News of the World at the height of the media frenzy over her disappearance in 2002.

Dowler’s case was the first to arouse broad public anger when it was reported by the Guardian newspaper in July, though several celebrities had earlier won settlements from News International. Among the people who will be legally represented at the hearings are “Harry Potter” author J.K. Rowling, singer Charlotte Church, actor Hugh Grant and actress Sienna Miller.

Katriona Ormiston, a 21-year-old journalism student, said she was there to see media history being made.

“Obviously it’s got quite a big impact on the future,” she said.

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U.S. Trade Representative Ron Kirk says leaders of Asia-Pacific economies will deliver meaningful steps to boost trade and growth at their annual summit this weekend.

Kirk ended a meeting of regional trade ministers Friday with praise for Japan’s plan to join efforts to forge a Pacific free trade bloc. He said leaders meeting in Hawaii intend to announce a broad outline for the plan.

He said the so-called Trans-Pacific Partnership would complement other efforts to promote freer trade and that other countries can join if they are willing to meet the very high standards required.

China’s trade minister, Chen Deming, said Beijing would seriously consider it if invited. Kirk said, “You should not wait for an invitation.”

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It sounded like a can’t-miss proposition: Buy the winners, drop the losers.

Developing countries from Brazil to China are expanding much faster than aging economies in the U.S. and Europe, where borrowing during the boom years has been a drag on growth. So the smart money bought stocks in emerging markets, expecting that rapid economic expansion there would provide better rewards. This year, that bet hasn’t worked out.

The broadest measure of U.S. stocks, the Standard & Poor’s 500 index, is down just 0.4 percent this year. Markets in Brazil, China and the like have lagged far behind, even though their economies are still growing faster than the U.S.

“If you were anywhere in the world other than in the S&P 500 this year, you got crushed,” said Greg Peterson, director of research at Ballentine Partners, an investment advisory firm.

The main reason emerging market stocks have suffered deeper losses isn’t because their economies are suddenly sluggish. Analysts say it’s because people have been worried about the European debt crisis and a possible recession in the U.S. It may seem unfair, but when fear of another financial crisis strikes money managers, they tend to flee emerging markets and stay closer to home.

This summer, panicked money managers dropped the most risky investments first. That meant bonds from deeply indebted countries like Italy and Portugal, small companies in the U.S and emerging market stocks got hit the hardest. Even gold, an asset normally considered safe, dropped as traders shifted money into dollars.

“There was a globalization of fear,” says Nathalie Wallace, a senior portfolio manager at Batterymarch Financial Management.

The same thing happened when the U.S. financial crisis hit in 2008. The S&P 500 fell 38.5 percent for the year. But the MSCI Emerging Market index, made up of countries where the banks didn’t peddle subprime mortgage bonds, plummeted 47.3 percent.

“Anytime you see risk and fear coming, you see emerging markets get hit a bit more,” Wallace says. “It doesn’t mean the underlying fundamentals of the economy have changed.”

Consider the collection of emerging-market rising stars known as the BRICs, which stands for Brazil, Russia, India and China. All have economies whose growth exceeds the U.S.

_ Brazil: The economy has expanded 3.1 percent over the past year. The benchmark Bovespa has lost 15.3 percent.

_ Russia: Economic growth of 5.1 percent. The Micex has dropped 11.1 percent this year even after a 10 percent rebound in the past month.

_ India: Economic growth of 7.7 percent. The BSE Sensex index is down 14.4 percent.

_ China: Economic growth of 9.1 percent. The Shanghai Composite has slumped 10 percent this year.

By contrast, the U.S. economy has expanded 1.6 percent over the past 12 months. That’s sluggish compared to the developing world’s stars. And worries that the U.S. could slip into a recession, or that Europe’s debt crisis could tip it into one, have weighed on investors for months. Even after those fears dragged down stocks nearly 20 percent in a month, the S&P 500 outshines indexes in nearly all of the world’s fastest growing economies.

In fact, if you rank the U.S. against emerging markets this year, it places ahead of 20 countries and behind just one, Indonesia.

China and other emerging markets long relied on shipping toys, timber and other goods to consumers in the U.S. and Europe. Trade helped them grow. But that has a downside, says Tim Morris, a portfolio manager at J.P. Morgan’s asset management unit. When a small country hitches its fortunes to U.S. shoppers, it’s bound to suffer when the U.S. economy slows down.

A related problem for many emerging market countries is that they’re dominated by energy and material producers, the type of companies most vulnerable to a global slowdown. Todd Henry, an emerging markets equity specialist at T. Rowe Price, points to Brazil, a country that isn’t as dependent on exports for growth. “It’s a relatively closed economy,” Henry says. “But commodity and energy companies make up a large part of their stock market. So if the world is slowing down, that gets priced in.”

The largest company in Brazil’s stock index is the oil giant Petrobras. When the U.S. economy looks weak, the price of oil falls and the companies that sell oil fall, too. That pushes down Petrobras, which tugs on the Bovespa. In other words, when the U.S. has the sniffles, Brazil’s stock market still catches a cold.

“Americans tend to think our problems are limited to the U.S.,” says Richard Bernstein, chief executive officer of Richard Bernstein Advisors LLC. “But our problems are their problems, too.”

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Local officials in London say they are suspending legal action to evict anti-capitalist protesters camped outside St. Paul’s Cathedral, after church officials gave the tent city a reprieve

The City of London Corporation says legal action due to start Tuesday is being “paused overnight” so that officials can meet for more talks.

Cathedral authorities said earlier that they had halted legal action against the tent city and wanted to address the issues the protesters had raised.

The two-week standoff over the scores of tents set up outside the iconic cathedral has been an embarrassment for the church, but an attention-getting bonanza for protesters, who are inspired by New York’s Occupy Wall Street movement.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

LONDON (AP) _ London officials say they are suspending legal action to evict anti-capitalist protesters camped outside St low interest rate personal loans. Paul’s Cathedral, after church officials gave the tent city a reprieve

The City of London Corporation says legal action due to start Tuesday is being “paused overnight” so that officials can meet for more talks.

Cathedral authorities said earlier that they had halted legal action against the tent city and wanted to address the issues the protesters had raised.

The two-week standoff over the scores of tents set up outside the iconic cathedral has been an embarrassment for the church, but an attention-getting bonanza for protesters, who are inspired by New York’s Occupy Wall Street movement.

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Canada

Scratch the Timbits the next time you order that double-double. How about a nice slab of lasagna instead?

Tim Hortons announced Monday it

The United States has raised the tempo in its war against al-Qaida in Yemen, killing nine of the terror group’s militants in the second, high-profile airstrike in as many weeks. The dead in the late Friday night strike included the son of Anwar al-Awlaki, the prominent American-Yemeni militant killed in a Sept. 30 strike.

Yemeni officials on Saturday attributed the recent U.S. successes against al-Qaida to better intelligence from an army of Yemeni informers and cooperation with the Saudis, Washington’s longtime Arab allies.

The successes come even as Yemen falls deeper into turmoil, with President Ali Abdullah Saleh clinging to power in the face of months of massive protests. Saturday saw the worst bloodshed in weeks in the capital, Sanaa: At least 18 people were killed when Saleh’s troops fired on protesters and clashed with rivals. Witnesses estimated up to 300,000 people joined Saturday’s demonstrations, the largest in the capital in several months.

“Everyone with interests in Yemen, including al-Qaida and the Americans, is raising the stakes at this time of uncertainty” said analyst Abdul-Bari Taher. “The Americans are wasting no time to try and eliminate the al-Qaida threat before the militants dig in deeper and cannot be easily dislodged.”

Also dead in the Friday airstrike in the southeastern province of Shabwa was Egyptian-born Ibrahim al-Banna, identified by the nation’s Defense Ministry as the media chief of the Yemeni branch of the al-Qaida.

Al-Qaida in the Arabian Peninsula, as the branch is known, is considered by the U.S. the most dangerous of the terror network’s affiliates after it plotted two recent failed attacks on American soil. Its fighters and other Islamic militants have taken advantage of Yemen’s chaos to seize control of several cities and towns in a southern province. That has raised American fears they can establish a firmer foothold in the strategically located country close to the vast oil fields of the Gulf and overlooking key shipping routes.

The U.S. airstrikes in Shabwa pointed to Washington’s growing use of drones to target al-Qaida militants in Yemen. The missile attacks appear to be part of a determined effort to stamp out the threat from the group.

Yemeni officials familiar with the U.S. military drive against al-Qaida in Yemen said a shift of strategy by the Americans was finally yielding results, with human assets on the ground directly providing actionable intelligence to U.S. commanders rather than relying entirely on Yemen’s security agencies the Americans had long considered inefficient or even suspected of leaking word on planned operations.

They said there were as many as 3,000 informers on the U.S. payroll around the country _ some without even knowing it.

The Saudis, on the other hand, have traditionally kept an elaborate patronage system and an information network in Yemen, their neighbor to the south. They have for decades paid monthly stipends to key tribal leaders, military commanders and politicians to secure their loyalty. They also paid ordinary Yemenis to provide them with intelligence.

“The Saudis are making their information available to the Americans,” said one of the defense officials, all of whom spoke on condition of anonymity because they were not authorized to share the information. “Both them and the Americans are broadening their cooperation without direct Yemeni involvement.”

Tribal elders in the area where Friday’s strikes took place said the dead included Abdul-Rahman al-Awlaki, the 21-year-old son of Anwar al-Awlaki, a Muslim preacher and savvy Internet operator who became a powerful al-Qaida recruiting tool in the West and who was on a U one hour payday loan.S. capture-or-kill list. The elder al-Awlaki and another propagandist, Pakistani-American Samir Khan, were killed in the Sept. 30 srike.

The tribal elders, who spoke Saturday on condition of anonymity because they feared reprisals, said four other members of the al-Awlaki clan and another local militant were also killed in the same drone attack. There was no immediate confirmation of the younger al-Awlaki’s death from Yemeni authorities.

Security officials said the strike was one of five carried out overnight by American drones on suspected al-Qaida positions in Shabwa and neighboring Abyan province in Yemen’s largely lawless south. They said two more militants were killed and 12 wounded in other strikes in the two provinces.

The first strike late Friday targeted a house in the Azan district of Shabwa, but hit just after al-Qaida militants had a meeting in the building, security officials and tribal elders said.

They said a second strike then targeted two sport utility vehicles in which the seven were traveling, destroying the vehicles and leaving the men’s bodies charred. It was not clear whether other participants in the meeting were targeted in separate strikes.

Yemen’s al-Qaida offshoot has taken advantage of the political turmoil roiling the country. Saleh, who has ruled the country for more than 30 years, has been struggling to stay in power in the face of eight months of massive street protests demanding his ouster and the defection to the opposition of key aides and military commanders.

In Sanaa, forces loyal to Saleh opened up on protesters with assault rifles and anti-aircraft guns, medical officials and witnesses said. The casualty figures _ 12 dead and up to 300 wounded _ were confirmed by Mohammed al-Qubati, director of the field hospital set up at Change square, the name given to a central Sanaa intersection that saw the birth of the eight-month-old, anti-Saleh uprising.

The medical officials requested anonymity because they were not allowed to speak to journalists.

In Sanaa’s northern district of Hassaba, fighting between Saleh’s forces on one side and anti-regime tribesmen and renegade troops on the other killed two civilians and four supporters of tribal chief Sadeq al-Ahmar, a one-time regime ally who defected to the opposition in March. At least 13 people were wounded in the fighting.

A three-story building housing an independent TV station, Al-Saeedah, in the area took a direct hit, destroying the channel’s equipment and studios, according to a statement by the management. The privately-owned station went off the air.

Khaled al-Ansi, a prominent leader of the protest movement, blamed the death of the proetsters on opposition parties, arguing that their acceptance of a U.S.-backed settlement plan proposed by Yemen’s Gulf Arab neighbors gave Saleh license to kill protesters at will. The plan provides for the Yemeni leader to step down and hand over power to his deputy in exchange for immunity.

“The political parties are participants in the killings,” said al-Ansi. “The immunity from prosecution is giving Saleh a temptation to kill more of us.”

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