Obama's carbon-cutting plan might go up in smoke: Don Pittis

So much for reading science fiction as escapism. Last week, as reports emerged that U.S. President Barack Obama was going to deliver an announcement about climate change, the following quote popped out at me from my current subway novel:

"Late capitalism writhed in its internal decision concerning whether to destroy Earth's biosphere or change its rules. Many argued for the destruction of the biosphere, as being the lesser of two evils."

That's from the book 2312 by American sci-fi writer Kim Stanley Robinson. I'm only halfway through, so I don't know if the biosphere survives in the end. But it appears to be another example of life imitating art.

On Monday, Environmental Protection Agency (EPA) Administrator Gina McCarthy announced that the U.S. government is seeking to cut carbon emissions by 30 per cent by 2030, and that U.S. states have until 2017 to comply with the new rules.

Encouraging as it may sound, we can't be certain it will work.

Some legislators see Obama as waging a 'war' on the coal industry. (Charlie Riedel/Associated Press)

Even if the strategy as laid out today could actually turn the tide, there are enormous forces balanced against the Obama plan. Given the lack of support in the Republican-dominated Congress, the president is using his executive powers to push through the new rules, just as he did with changes to the national minimum wage.

The plan fingers coal power plants as the biggest producer of climate-changing carbon gases. The plan is expected to permit individual states to institute a program of cap and trade, though not a national carbon tax, a scheme many economists think would be most effective.

Mind you, some are convinced climate change has already crossed some sort of tipping point, so that as with recent reports about the West Antarctic ice sheet, nothing can be done to stop the slide.

Obama's signature policy

The Obama climate plan, which some see as part of his "war on coal," is being touted as the signature policy of his presidency. But as the New Republic points out, the president is actually late to the party.

Back when he was a senator for his home state of Illinois, Obama was a big supporter of coal. "The people I meet in town-hall meetings back home would rather fill their cars with fuel made from coal reserves in southern Illinois than with fuel made from crude reserves in Saudi Arabia," the New Republic quotes Obama as saying in 2007.

That is not a slight against Obama for changing his mind, because many people will have to change their minds if we are going to change the rules. But it is a reminder that in the politics of climate change, ordinary folks may prefer to vote on the basis of jobs and cheap energy than dreamy thoughts about the biosphere.

One of the changes being mooted is something to encourage power companies to develop climate-friendly energy sources and force them to shut down the oldest, dirtiest plants.

As the Bloomberg business news wire reported last week, even in chilly Alberta, renewable power such as solar is predicted to soon be cheaper than coal. If that is true, think how much more power could be produced even more cheaply in the sunny U.S. south — never mind in places such as India, which are so desperately in need of reliable power sources.

(Having once been forced to walk barefoot over the burning sands in a south Indian temple courtyard, I know from personal experience how much solar energy is waiting to be tapped.)

Ottawa's perspective

However, to see the forces ranged against the Obama plan, Canadians do not have to look south. As I mentioned last month, there are rational reasons why many businesses will fight against new climate change rules. Our federal government and more than one of our provinces have shown themselves to be on the side of not wanting to change the rules.

Kim Stanley Robinson's novel won the prestigious Nebula Award for science fiction in 2013. (Orbit Books)

They would likely side with the U.S. Chamber of Commerce, which has suggested new EPA rules would cost the economy $51 billion in lost revenue, jobs and higher energy costs. In the litigious United States, where most Republicans deny that climate change exists, it is hard to see opponents of the new rules conceding quietly.

Until now, some Canadians have taken the view that while the rest of the world may flood and cook as the climate changes, a warmer north would be to our benefit. However, as Eric Reguly reported last week, even Canadian agriculture is expected to suffer.

Perhaps that, and the shaming effect of Obama's new policy, will compel Canadians to change the rules, too.

In my subway novel so far, humans are busy hollowing out thousands of asteroids and terraforming Mars to replace the earth's shrinking productive capacity. By 2312, says Robinson's novel, Earth will be importing food from other parts of the solar system.

If Obama's plan to change the rules and save the biosphere fails, that idea might seem like an interesting option. But let's face it, that's just science fiction.

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Barack Obama sets 2020 emissions target for U.S. power plants

The Obama administration on Monday will unveil a plan to cut Earth-warming pollution from power plants by 30 per cent by 2030, setting in motion one of the most significant actions to address global warming in U.S. history.

The rule, which is expected to be final next year, will set the first-ever national limits on carbon dioxide, the chief gas linked to global warming from U.S. power plants. They are the largest source of greenhouse gases in the U.S., accounting for about a third of the annual emissions, and make the U.S. the second largest contributor to global warming on the planet.

The regulation is a centrepiece of President Barack Obama's plans to reduce the pollution linked to global warming, a step that the administration hopes will get other countries to act when negotiations on a new international treaty resume next year.

Environmental Protection Agency data shows that U.S. power plants have reduced carbon dioxide emissions by nearly 13 per cent since 2005, or about halfway to their goal. But with coal-fired power plants already beleaguered by booming natural gas supplies and other environmental regulations, experts on Sunday said getting there won't be easy. The EPA is expected to offer a range of options to states based on where they get their electricity from and how much carbon dioxide they emit in the process.

Obama has already tackled the emissions from the nation's cars and trucks, announcing rules to reduce carbon dioxide emissions by doubling fuel economy. That standard will reduce carbon dioxide by more than 1.8 billion tonnes. The power plant proposal will prevent about 390 million tonnes of carbon dioxide from reaching the atmosphere, based on the 30 per cent figure.

The EPA refused to confirm the details of the proposal Sunday. People familiar with the proposal shared the details on condition of anonymity, since they have not been officially released.

The details were first reported Sunday by The Wall Street Journal.

States to play pivotal role

As Obama prepares to announce the tougher new air quality standards, lawmakers in several states already are trying to blunt the impact on aging coal-fired power plants that feed electricity to millions of consumers.

The push against Obama's new carbon emission standards has been strongest in some states that have large coal-mining industries or rely heavily on coal to fuel their electricity. State officials say the new federal regulations could jeopardize the jobs of thousands of workers and drive up the monthly electric bills of residents and businesses.

Environmental Protection Agency data shows that U.S. power plants have reduced carbon dioxide emissions by nearly 13 per cent since 2005, or about halfway to their goal. (Matthew Brown/Associated Press)

It remains to be seen whether new measures passed by the states will amount to mere political symbolism or actually temper what's expected to be an aggressive federal effort to reduce the country's reliance on coal. But either way, states likely will play a pivotal role, because federal clean air laws leave it up to each state to come up with its own plan for complying with the emission guidelines.

The proposed EPA rules to be announced Monday could be the first to apply to carbon dioxide emissions at existing power plants. Coal is the most common fuel source for the nation's electricity and, when it's burned, is a leading source of the greenhouse gasses that trap heat in the atmosphere and contribute to climate change.

Without waiting to see what Obama proposes, governors in Kansas, Kentucky, Virginia and West Virginia have signed laws directing their environmental agencies to develop their own carbon emission plans that consider the costs of compliance at individual power plants. Similar measures recently passed in Missouri and are pending in the Louisiana and Ohio legislatures.

Missouri lawmakers went even further in their defence of the coal industry. When activists proposed a ballot initiative barring local tax breaks for St. Louis-based Peabody Energy, state lawmakers quickly passed a measure banning such moves.

Widespread exceptions

Some states have specifically empowered local regulators to develop emission plans that are less stringent than federal guidelines. According to measures passed recently, the state policies are to take into account the "unreasonable cost" of reducing emissions based on a plant's age and design and the "economic impacts" of shutting down particular power plants.

"The concern is that the federal standards — if they come out the way that most people expect them to — are going to drive the cost of electricity up for every single consumer in the state," said Missouri state Representative Todd Richardson, a Republican.

Federal emission regulations already allow flexibility for states if they can demonstrate costs would be unreasonable for particular facilities. But a spokesman for the EPA's Midwestern region, which oversees several states that rely predominantly on coal for their electricity, said he's unaware of that provision ever being used.

It's unlikely that the Obama administration would essentially undercut its new carbon emission standards by granting widespread exceptions, said Bill Becker, executive director of the National Association of Clean Air Agencies, which represents air pollution control agencies in 42 states and 116 metropolitan areas.

If a state doesn't comply with EPA guidelines, the federal agency can create its own plan for the state.

"This is not a standard that a state then can willy-nilly ignore," Becker said. "It's going to have to achieve at least that standard or more. Period."

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Quebec's TransForce buys U.S. trucking firm for $310M

TransForce is buying Minnesota trucking firm Transport America. (Canadian Press)

Montreal trucking and delivery company TransForce Inc. says it has a $310-million US deal to buy Minnesota-based Transport America, Inc., which offers transportation services across the United States.

Transforce says the acquisition is expected to generate annual revenues of about US$350 million for the Quebec company and will add to its operations in the U.S.

The company says the agreement with Goldner Hawn Johnson & Morrison Inc. to acquire Transport America should close at the end of June.

Transport America operates about 1,500 tractors and about 4,400 trailers and its network includes 12 terminals located throughout the United States.

Montreal-area Transforce has operations throughout Canada and in the United States.

It offers package and courier services, trucking services and specialized services including waste management.

"Transport America is an efficient, well-managed company that generates solid operating margins," Transforce chairman, president and CEO Alain Bedard said in a news release on Monday.

"We expect this transaction to be immediately accretive to earnings and to provide a sound return on investment to the benefit of our shareholders," Bedard said.

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Samsung Z smartphone will have Tizen OS instead of Android

Samsung Electronics Co. said Monday it will begin selling a smartphone that runs on its Tizen operating system in the third quarter of this year, advancing the company's plans to reduce dependence on Google's Android software.

Samsung, the world's top smartphone maker by sales volume, said in a statement that the smartphone called Samsung Z will go on sale in Russia first. It said there are plans to sell the phone in other countries but didn't name them.

Tizen is already used in a few Samsung products including a smartwatch but has not been deployed in a mass produced smartphone until now.

Unlike Apple Inc. with its own operating system, Samsung's popular Galaxy smartphones and tablets use Google's open source Android platform, a reliance that prevents Samsung from challenging the dominance of Apple's App Store and Google Play in the lucrative market for smartphone apps.

The Tizen phone will have preinstalled apps and users will have access to additional apps through Tizen Store.

Samsung has been encouraging the development of Tizen apps but the numbers available are likely to be small in comparison to the App Store and Google Play.

The South Korean company said the Tizen smartphone has a 4.8-inch high definition display, a fingerprint sensor for security and a "slim, angular" design.

It said the operating system will allow users to browse the internet faster and utilize applications more effectively.

Superficially, users may not perceive much difference from the Android operating system because it and Tizen share Linux as the underlying framework.

The Samsung Z will be shown at a Tizen developer conference in San Francisco this week.

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Chrysler fix to faulty airbags under investigation

U.S. safety regulators are investigating Chrysler Group's 2012 recall of 744,822 sport utility vehicles in the United States after six consumers complained of inadvertent airbag deployments even after fixes were made.

The National Highway Traffic Safety Administration said in documents filed on Monday that it had opened a query into the recall of Jeep Liberty SUVs from model years 2002 and 2003, and Jeep Grand Cherokee SUVs from model years 2002 through 2004. The safety agency will study the effectiveness of the previous recall.

Chrysler, a unit of Fiat Chrysler Automobiles, said in a statement that it had notified NHTSA of the six incidents involving inadvertent airbag deployments while the vehicles were in operation and was cooperating with the safety agency's investigation.

Chrysler recalled the vehicles on Nov. 7, 2012, because airbag circuits could degrade. The company addressed the problem by installing an in-line jumper harness with an integrated electrical filter to eliminate electrical spikes that the company believed were causing the problem, according to the NHTSA documents. The safety agency had previously opened an investigation of the issue in October 2011 and three months later upgraded the probe.

In the latest six cases in the NHTSA documents, no crashes were reported, but injuries consisting of cuts and burns were alleged.

At the time of the recall in 2012, another 174,723 SUVs were affected in Canada, Mexico and outside of North America. The probe found 215 cases of inadvertent airbag deployments that resulted in 81 minor injuries in the United States but no crashes.

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Canadian air travel changes: New planes, full flights, less service

The federal government recently announced two new rules that are set to change the way Canadians experience the evolving world of air travel.

Even for frequent flyers, there often seems to be something new at the airport on every trip — from check-in machines to baggage charges.

Here are five recent changes that have affected the airline industry, and five more that are on the horizon.

Change is in the air

1. Bigger, better jets

Here's a look inside the flight deck of a Boeing 787 Dreamliner. Air Canada has purchased 37 of the planes. (Aaron Harris/Reuters)

Air Canada recently showed off the first of the 37 Boeing 787 Dreamliners it purchased to great fanfare. The state-of-the-art jet is said to be quieter, lighter and 20 per cent more fuel efficient than its predecessors, while still carrying more cargo and providing a smoother ride for the some 300 passengers on board.

Porter Airlines, meanwhile, is hoping to fly the Bombardier CS100 (dubbed the whisper jet) in and out of the Toronto Island airport. 

Add the gigantic Airbus A380 — currently only flying between Toronto and Dubai — and a host of smaller, sleeker jets and turboprops and you have a Canadian market served by some expensive new machines.

2. Fuller flights

If you think your odds of sitting next to an empty seat have gotten worse, you're right. Rick Seaney, CEO of the Texas-based air travel site farecompare.com, says that in the last decade most airlines have gone from passenger load averages of 70 per cent to over 90 per cent.

What goes up but not down? Likely your airfare

Airfare in Canada isn't likely to get cheaper, says McGill professor and aviation expert Karl Moore.

"The airline industry doesn't make a lot of money … they're always scratching for profitability," Moore said.

The only things that could make airfare cheaper, Moore said, are more carriers on a select route (unlikely for many flights within Canada), cheaper aviation fuel (also unlikely) or if booming economies like Alberta, which demand a lot of air travel, begin to cool. 

Airlines once had a "grow or die" mentality, Seaney says, which led them to add as many routes and flights as possible, regardless of load. Today airlines are trying to maximize profits by squeezing passengers onto fewer flights. The partially full plane? "They're done with that."

3. Service goes slack

Bruce Cran, the president of the Consumers' Association of Canada (CAC) and a frequent flyer himself, says the service on airplanes is getting "less and less acceptable," for many Canadians.

"Airlines seem to be going for the absolute bare bones of what they can offer passengers," Cran says.

The consumers' group fields a steady stream of complaints from flyers about everything from access to meals and drinks, to the abundance of passenger announcements. Cran says the group has even received complaints from people who fly business class.

4. Credit cards on flights

It might seem obvious, but the ability to pay with plastic while in the sky has changed the culture in the cabin.

"The role of the flight attendant has changed," says Karl Moore, an aviation expert and professor at the Desautels faculty of management at McGill University.

As airlines try everything they can to make money, Moore says, flight attendants are increasingly tasked with selling both meals and duty free goods.

The ability to pay anywhere has also opened up what Seaney calls the "sushi menu" of flight amenities — like the ability to pay for an emergency aisle seat. 

5. Paperless world

Mobile phones are driving change in the aviation world. Most airlines now email flight itineraries with embedded QR codes that can be scanned at the gate.

Meanwhile, a range of apps can provide instant updates on your flight status.

Even the customs areas have turned to self-serve terminals in some airports, forcing travellers to enter their passport and other data before ever setting foot in front of an actual border security agent.

Changes on the horizon

Under new Transport Canada rules, passengers will be able to use their electronic devices throughout takeoff and landing (while keeping them in flight mode). (Darryl Dyck/Canadian Press)

1. Fewer flight attendants

Transport Canada plans to change its rules governing how many flight attendants must be on each flight from one flight attendant for every 40 passengers to one for every 50.

Flight attendants say the move puts passengers at risk in the event of an emergency, but federal officials say the change matches U.S. and European requirements. WestJet and Sunwing have already been granted exemptions to use the 1:50 ratio by Transportation Minister Lisa Raitt.

2. Electronic devices OK'd

Transport Canada also wants to eliminate that brief period of time you're asked to stow electronic devices for takeoff and landing.

The transport minister called it "good news for air passengers and it's good news for the federal aviation industry."

Passengers will still have to switch their phones to flight mode, which turns off transmitting functions, but could theoretically type throughout takeoff if they like. It's now up to airlines to change their cabin rules, something WestJet said it hopes to do by early summer.

3. Wi-Fi-enabled flights?

'You don't want to be offering an antiquated service, because people won't want to fly with you.'—Matt Nicholls, Editor of Wings magazine

The technology ruling likely foreshadows the addition of in-cabin Wi-Fi, something that's already commonplace on major U.S. airlines. Matt Nicholls, the editor of Canadian aviation magazine Wings, says it's about time this country's airliners caught up.

"You don't want to be offering an antiquated service, because people won't want to fly with you," Nicholls says. 

"I think this is a good thing for the Canadian airline industry." 

4. Onboard rules

Though Nicholls says the new rules surrounding technology will likely be well-received by Canadians, he cautioned they could be a "double-edged sword" for flight crews, who will have to change their procedures to deal with passengers more focused on their phones than important safety details.

The work of flight crews, he says, is "way more complicated than the general public even knows."

Nicholls adds that Canadian airlines will have to be more proactive with their public relations if passengers are able to post on social media platforms mid-flight 

5. Airports of the future

Many people dread airports. They're expensive, full of lines and can be a nightmare to navigate. But some of the world's most advanced airports might leave you pleasantly surprised.

Copenhagen Airport lets you plan your route through the airport using an online map featuring 360-degree views, and is hoping to use Google Glass to guide passengers to their gates in the future.

At major airports in Japan and South Korea they're aiming to automate the flow of passengers to the point where there's no longer a need for airport staff at all. 

And in London's Gatwick Airport, you can use a virtual grocery store run by Tesco supermarket to have food delivered to your home when you return. 

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Bombardier CSeries test plane grounded with 'engine-related incident'

The testing program for Bombardier's upcoming CSeries jets has been temporarily halted after what the company called "an engine-related incident" on one of the test planes during maintenance work in Mirabel airport north of Montreal.

A company spokesman said there were no injuries and testing will resume pending an investigation by the company, engine-make Pratt & Whitney and Transport Canada.

Canada's Transportation Safety Board sent an investigator to the scene to gather information and assess the incident.

The nature of the incident in that occurred late Thursday afternoon in Quebec wasn't immediately disclosed, but firefighters from Mirabel airport responded to a call.

"We remain focused on meeting the CSeries aircraft development schedule and entry into service in the second half of 2015, but safety is the priority," Marc Duchesne said.

Montreal-based Bombardier, the world's third-largest maker of civilian commercial aircraft, has said it hopes to capture half the global market of the 100-to-149-seat planes, and has marketed the CSeries plane as being 20 percent more fuel-efficient than the comparable Airbus A320 and Boeing 737 family of aircraft. The CSeries is critical to Bombardier Aerospace, which has spent years designing the advanced-technology jet.

Originally scheduled for commercial delivery in late 2012, the CSeries is Quebec-based Bombardier's ambitious narrow-bodied, twin-engine medium range jet model, tailored toward a growing market of business travellers.

The company began its first real-life flight tests for the prototypes last fall, and is trying to convince airlines to transfer their aging fleets.

Analyst David Tyerman of Canaccord Genuity said the news wasn't good for a program that has already endured a series of delays, but the impact will depend on the seriousness of what occurred.

Tyerman said the incident could delay the certification and will probably further postpone orders, which have been weak as potential customers await flight data from the four test aircraft produced so far.

Bombardier shares shed almost four per cent to trade at $3.68 on the TSX on Friday.

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What would a 2% mortgage hike do to the housing market?

Canada's housing market would be more than able to withstand a modest two per cent increase in mortgage rates as long as it's implemented slowly, over a year or two, BMO economist Robert Kavcic says.

In a report Friday, Kavcic runs some numbers trying to gauge the impact of what would happen if Canadian mortgage rates increased by about two per cent.

The housing market has been pumping out strong gains for more than a decade, which has caused policymakers and many private-sector observers to worry that prices are too high, and think a correction has to be coming — especially once mortgage rates return to more normal levels.

But there isn't necessarily anything to worry about in a modest, two per cent hike, Kavcic finds — depending on how it's implemented.

Most first-time homebuyers in Canada choose a five-year fixed-rate mortgage amortized over 25 years, so that's the baseline that Kavcic works from. (Currently, the average posted mortgage rate for that type of mortgage is something around three per cent.)

In order to gauge affordability, Kavcic looks at the same metric that financial planners say buyers should pay attention to when buying a home — the percentage of the buyer's income that gets eaten up by housing. (A healthy level is when 25 to 30  per cent of one's income is spent on housing. Borrowers historically run into trouble when that ratio hits 35 per cent or higher.)

Kavcic says if mortgage rates jumped by two percentage points overnight (say, to an average of around five per cent) the impact on the housing market would be dramatic, as people would suddenly finding themselves paying a dangerously high percentage of their income on housing.

"If we were to get that increase overnight, housing valuations … would be stretched to levels that preceded significant corrections in the past," Kavcic says.

But if that two-percentage-point increase gets implemented a little more slowly, giving incomes times to catch up, the impact is much less dramatic. If the hike is implemented gradually, until 2016, the income ratio doesn't go into the danger zone, he says.

As well, if the hike is even smaller, something around one per cent, there could actually plenty of room for prices to go up further. "If that increase happens gradually over the next two years, if at all, it's a much different story," Kavcic said.

His assumptions are based on incomes rising by a modest three per cent per year over that time, a reasonable assumption based on the 3.1 per cent pace that Statistics Canada says they're increasing by right now.

The latest data from the Canadian Real Estate Association shows the average Canadian home price hit $409,708 in April, up more than 7.6 per cent in the past year.

Most experts think the days of outsized gains have to come to an end some day soon, but as Kavcic's analysis shows, mortgage rates ticking higher but slowly should be no reason to spark a major sell-off.

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Business week in review

A busy week in business news started with word out of Google that the search giant wants to have a small fleet of 100 self-driving cars on public roads by as early as next year.

A step beyond previous prototypes that had human controls on board in case anything goes wrong, the cars will have no steering wheels or brakes — just an on-off button, as they'll move at speeds of up to 40 km/h while being completely remotely operated by syncing up with Google's mapping network.

A lot of safety and practicality hurdles have yet to be met but Google certainly achieved its intention of taking the idea of driverless cars from theory into reality.

Lenovo deal upsets customers

Another technology company was in the news this week for the wrong reasons, as Chinese computer maker Lenovo angered its customer base by offering a hard-to-believe price on a laptop online, but then failing to deliver.

CBC News was inundated with irate customers complaining that over the weekend the company had offered a laptop that normally costs $1300 for $279. Hundreds of customers who signed up for the deal soon after got an email saying the offered price was a glitch, and the sales were cancelled. Lenovo tried to soothe that anger by offering $100 gift certificates for anyone affected, but the damage was done.

Million jobs plan draws fire

Ontario's going to the polls on June 12 and the focus so far in the campaign is the economy. PC leader Tim Hudak has gained some traction for his so-called "million jobs plan," part of which he outlined in an interview on the Lang & O'Leary Exchange this week.

His critics say the math doesn't add up, but what was looking like a staid campaign certainly got a little more interesting this week.

Apple hints at iHome

The futuristic, all-knowing technology envisioned in Kubrick's 2001: A Space Odyssey took a step closer from science fiction into real-world reality this week with word that Apple was getting into the "smarthome" business, hinting that the focus of an upcoming technology conference will be getting the company's devices to integrate even more to allow for things like having lights automatically come on when your iPhone signals to your house that you're home.

A fully integrated "iHome" is likely years away. But much as rival Google did with their ambitious driverless car news, it's clear that the world's most innovative technology companies aren't resting on their laurels.

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Phil Mickelson denies wrongdoing in insider trading probe

Hall of Fame golfer Phil Mickelson confirmed that FBI agents investigating insider trading approached him this week at the Memorial Tournament. The five-time major champion said Saturday he has done "absolutely nothing wrong."

A federal official briefed on the investigation told The Associated Press the FBI and Securities and Exchange Commission are analyzing trades Mickelson and Las Vegas gambler Billy Walters made involving Clorox at the same time activist investor Carl Icahn was attempting to take over the company.

The official was unauthorized to speak about the ongoing investigation and spoke to the AP on condition of anonymity. Reports of the investigation appeared in several newspapers, including the Wall Street Journal.

'I have done absolutely nothing wrong. I have cooperated with the government in this investigation and will continue to do so. I wish I could fully discuss this matter, but under the current circumstances it's just not possible.'- Statement from Phil Mickelson

Smiling as he stood before a room packed with reporters and cameras, Mickelson said the investigation had not been a distraction until FBI agents approached him after his opening round Thursday. He did not offer any other details, including his relationship with Walters or any stock advice he might have received.

He said it would not affect his preparations for the U.S. Open in two weeks, the only major he lacks for the career Grand Slam.

"It's not going to change the way I carry myself," Mickelson said after an even-par 72 at Muirfield Village left him far behind the leaders. "Honestly, I've done nothing wrong. I'm not going to walk around any other way."

The federal official told the AP that Mickelson and Walters placed their trades about the same time in 2011. Federal investigators are looking into whether Icahn shared information of his takeover attempt of Clorox with Walters, and whether Walters passed that information to Mickelson.

The New York offices of the U.S. Attorney and the FBI declined to comment.

The newspaper reports said federal officials also were examining trades by Mickelson and Walters involving Dean Foods Co. in 2012.

After a brief interview, Mickelson stepped outside and signed autographs for about 20 minutes, like it was any other day at a tournament. Fans were supportive as ever on the golf course, and Mickelson gave away so many golf balls to children and his caddie asked a tour official to retrieve more balls from his locker when they reached the turn.

He had released a statement early Saturday, and said that he wouldn't release details.

"I can't really go into much right now, but as I said in my statement, I have done absolutely nothing wrong," Mickelson said. "And that's why I've been fully cooperating with the FBI agents, and I'm happy to do in the future, too, until this gets resolved."

Trades involving Clorox, Dean Foods

He declined to answer questions about his relationship with Walters, who owns several golf courses. And when asked whether Walters advised him to invest in Clorox or Dean Foods, Mickelson matter-of-factly replied to a Wall Street Journal reporter, "You should know. You wrote the article."

Icahn, 78, is one of Wall Street's most successful corporate raiders, famous for buying stock in underperforming companies, pressuring them to reform and selling out for a fat profit. In recent years, his targets have included Apple Inc., eBay and Dell Inc. His efforts have made him one of America's richest people: Forbes magazine puts his net worth at more than $20 billion US, making him the 18th-wealthiest American.

In the 1980s, he pioneered so-called greenmail raids in which financiers threatened companies with hostile takeovers unless they were paid a premium to go away.

Walters is a legendary figure in sports betting circles, widely feared by sports book operators as one of the few people who can consistently win. He's bet millions on Super Bowls alone, and told "60 Minutes" in a 2011 profile that he has never had a losing year. An early user of computer data, Walters was one of the few bettors whose opinion was so respected that he could move point spreads if it was known what side he was betting on.

Walters and a group of bettors dubbed The Computer Group were indicted in the mid-1980s for running what prosecutors said was a bookmaking operation, but were acquitted at trial. Walters was also indicted on money laundering charges in 1998 and had $2.8 million in cash confiscated from a safe deposit box, but the charges were later dismissed and the money returned.

Walters was also a high stakes gambler on the golf course, regularly playing celebrities or PGA Tour pros for cash. He told Golf Digest that he once lost a $2 million bet and once made a 40-foot putt worth $400,000. Walters teamed up with touring pro partner Fredrik Jacobson to win the AT&T Pebble Beach National Pro-Am by 10 strokes in 2008 while playing as an 11 handicap.

Gambling connection

Walters also owns golf courses and auto dealerships. Politically connected in Las Vegas, Walters is also known for his philanthropy, particularly toward Opportunity Village, which trains developmentally disabled adults.

Mickelson, 43, was inducted into the World Golf Hall of Fame in 2011. He goes to the U.S. Open next month in North Carolina with a chance to become only the sixth golfer to capture all four major championships. He has not won since the British Open last summer in Scotland.

Mickelson has long had a reputation to gamble, though he has said he scaled back his habit after his son, Evan, was born in 2003 following a troublesome pregnancy. The most publicized payoff was when Mickelson and friends won $560,000 on a preseason bet (28-1 odds) that the Baltimore Ravens would win the 2001 Super Bowl.

On the golf course, he has a long history of playing money games during the practice rounds. He occasionally gets a group of players and caddies together for dinner and small wagering during the NBA and NHL playoffs, and prominent fights.

A year ago, Mickelson was criticized for public comments that tax increases in California kept him from being part of the San Diego Padres' new ownership group and might cause him to leave his native state. He said his federal and state taxes amount to over 60 percent.

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