A Retailer, Eileen Fisher, Shakes Off Storm’s Impact to Reopen

Richard Perry/The New York Times

For Eileen Fisher, the storm was the biggest blow to her company's operations since she opened it in 1984.

IRVINGTON, N.Y. — Eileen Fisher had no time to spare. For her clothing stores to be up and running for Thanksgiving weekend, and her many retail clients stocked for the holiday rush, her company’s response to Hurricane Sandy would need to be close to flawless.

Eileen Fisher

The flooding from Hurricane Sandy decimated an Eileen Fisher store in Irvington, N.Y., and forced the company to close its headquarters there.

And it was.

All but one of the company’s 58 stores are open, and retailers like Nordstrom and Bloomingdale’s have Ms. Fisher’s latest designs on their racks. On a recent afternoon, aside from its cramped quarters, there was no sign of the storm on the second floor of the Eileen Fisher headquarters here, 20 miles north of Manhattan. Phones were ringing, online orders were being processed and Ms. Fisher was at her desk.

But step downstairs, where work crews were sawing off the bottom part of walls, removing mold-ridden desks and pulling up drenched carpet, and the magnitude of the last month’s miracle was hard to dismiss.

“It was a mess,” Ms. Fisher said. “I couldn’t believe it.”

Hurricane Sandy hurt retailers large and small. It closed airports, ports and roads, jamming merchandise at critical shipping times. More than a third of stores in the Northeast closed for at least a day, according to the research firm RetailNext. Macy’s has said that the storm delayed sales. Target said November started off choppily, and a Kohl’s store in Brooklyn will be closed at least through January.

For Eileen Fisher, started by Ms. Fisher in 1984, the storm was the biggest blow to operations ever. It decimated a store here and closed her headquarters, her Manhattan design center and her warehouse in Secaucus, N.J. For smaller retailers — Eileen Fisher expects about $350 million in revenue this year — a week or two of closed offices, stores and warehouses in early November could be ruinous.

Recovery was both an urgent and daunting task. A broad insurance policy helped a lot. So did some planning and a good amount of luck. As did an almost out-of-body detachment on executives’ parts to see past the emotion of sewage-soaked shirts and stained rolls of fabric to the prize of reopening a ravaged business.

Even the cash in the register at the Irvington store had to be taken home and blown dry. Almost $1.5 million, 12 Dumpsters and eight moving-truck-size mobile storage units of damaged goods later, Eileen Fisher was — for the most part — back.

“It was just stuff,” Ms. Fisher said.

Perils of a New Location

Ms. Fisher moved her headquarters to Irvington 20 years ago, choosing a brick building that was just a couple of yards from the Hudson River. It reminded her of the TriBeCa location where she had started the business, she said, and who doesn’t get inspiration from water?

Now that inspiration had become a liability. On a recent sunny day, the Hudson seemed calm and threatless, a cool gray-brown river about 10 feet below its banks. But on the night of the storm, the river rose over a barrier and stampeded north, churning through buildings “like a washing machine,” said Peter Joslin, the company’s facilities manager.

Mr. Joslin is from the Midwest, and he’s seen his fair share of river flooding, including last year, when a corner of the building took on water during Hurricane Irene. In the week before Sandy hit on Monday, Oct. 29, he was watching the weather forecasts, but, as he says, “we’re pretty laid back down here.”

Then, on the Friday before the storm, he received an e-mail from his predecessor in the job. It contained just four words: “Get out them sandbags.”

“That started to freak me out,” Mr. Joslin said.

He called the owner of a remediation company that had done work for Eileen Fisher in the past and obtained a promise that if anything went wrong, the company would be on site within two hours. He then called a moving company to see if it could remove some important files and other valuables, like $20,000 copiers. The moving company was already booked.

Employees worked through the weekend, piling sandbags three high along the building, encasing the second floor of headquarters in plastic in case the roof leaked and caulking windows. The storm struck Monday night.

Assessing the Damage

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Clinton Arrives in Middle East as Egypt Says Truce in Gaza Is Close

JERUSALEM — Diplomatic efforts accelerated on Tuesday to end the lethal confrontation between Israel and Palestinian militants in Gaza on one of the most violent days yet in the conflict, as the United States sent Secretary of State Hillary Rodham Clinton to the Middle East and Egypt’s president and his senior aides expressed confidence that a cease-fire was close.

But by late evening there was no announcement, and Mrs. Clinton said she would be working in coming days to complete an agreement. Appearing beside Prime Minister Benjamin Netanyahu of Israel to speak briefly to the press, Mrs. Clinton said she hoped to achieve an end to the hostilities with a deal that moves “toward a comprehensive peace for all people in the region.”

The diplomatic moves to end the nearly week-old crisis came as the antagonists on both sides intensified their attacks before any cease-fire takes effect.

Israeli aerial and naval forces assaulted several Gaza targets in multiple strikes, including a suspected rocket-launching site near Al Shifa hospital, which killed more than a dozen people. Those deaths brought the total number of fatalities in Gaza so far to more than 130 — roughly half of them civilians, the Gaza Health Ministry said.

A delegation visiting from the Arab League canceled a news conference at the hospital because of the Israeli aerial assaults as wailing ambulances brought victims in, some of them decapitated.

Militants in Gaza fired a barrage of at least 200 rockets into Israel, killing an Israeli soldier — the first military casualty on the Israeli side since the hostilities broke out last week. The Israel Defense Forces said the soldier, identified as Yosef Fartuk, 18, died from a rocket strike that hit an area near Gaza. Israeli officials said a civilian military contractor working near the Gaza border was also killed, bringing the total number of fatalities in Israel from the past week of rocket mayhem to five.

Other Palestinian rockets hit the southern Israeli cities of Beersheba and Ashdod, and longer-range rockets were fired at Tel Aviv and Jerusalem, but neither main city was struck and no casualties were reported. One Gaza rocket hit a building in the Israeli city of Rishon Lezion, just south of Tel Aviv, injuring one person and wrecking the top three floors.

Senior Egyptian officials in Cairo said Israel and Hamas, the militant Islamist group that governs Gaza, were “very close” to a cease-fire agreement that could be announced within hours. “We have not received final approval but I hope to receive it any moment,” said Essam el-Haddad, President Mohamed Morsi’s top foreign affairs adviser.

Foreign diplomats who were briefed on the outlines of a tentative agreement said it had been structured in stages — first, an announcement of a cease-fire, followed by its implementation for 48 hours. That would allow time for Mrs. Clinton to involve herself in the process on the ground here and create a window for negotiators to agree on conditions for a longer-term cessation of hostilities.

By late evening, however, there was no word on an announcement, and Israeli television was saying the talks needed more time. In Cairo, Egyptian news reports quoted Hamas officials as blaming Israel for delaying a deal and an announcement was unlikely before Wednesday.

The announcement of Mrs. Clinton’s active role in efforts to defuse the crisis added a strong new dimension to the multinational push to avert a new Middle East war. Israel has amassed thousands of soldiers on the border with Gaza and has threatened to invade the crowded Palestinian enclave for the second time in four years to stop the persistent rockets that have been lobbed at Israel.

Mrs. Clinton, who accompanied President Obama on his three-country Asia trip, left Cambodia on her own plane immediately for the Israel, and upon arrival in the late evening went into immediate talks with Israeli leaders.

She was scheduled to visit the West Bank later to meet with Palestinian leaders and then go to Cairo to consult with Egyptian officials.

Mr. Obama made a number of late-night phone calls from his Asian tour to the Middle East on Monday night that contributed to his conclusion that he had to become more engaged and that Mrs. Clinton might be able to accomplish something.

Isabel Kershner reported from Jerusalem; Peter Baker from Phnom Penh, Cambodia; and Rick Gladstone from New York. Reporting was contributed by Jodi Rudoren and Fares Akram from Gaza City, David D. Kirkpatrick from Cairo, Ethan Bronner from Jerusalem and David E. Sanger from Washington.

This article has been revised to reflect the following correction:

Correction: November 20, 2012

Because of an editing error, an earlier version of this article misspelled the family name of the Israeli soldier who was killed in a Palestinian rocket attack on Tuesday. He is Yosef Fartuk, not Yosef Faruk. 

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DealBook: Hewlett-Packard Takes $8.8 Billion Charge

Hewlett-Packard said on Tuesday that it had taken an $8.8 billion accounting charge, after discovering “serious accounting improprieties” and “outright misrepresentations” at Autonomy, a British software maker that it bought for $10 billion last year.

It is a major setback for H.P., which has been struggling to turn around its operations and remake its business.

The charge essentially wiped out its profit. In the latest quarter, H.P. reported a net loss of $6.9 billion, compared with a $200 million profit in the period a year earlier. The company said the improprieties and misrepresentations took place just before the acquisition, and accounted for the majority of the charges in the quarter, more than $5 billion.

Shares in H.P. plummeted nearly 11 percent in early afternoon trading on Tuesday, to less than $12.

Hewlett-Packard bought Autonomy in the summer of 2011 in an attempt to bolster its presence in the enterprise software market and catch up with rivals like I.B.M. The takeover was the brainchild of Léo Apotheker, H.P.’s chief executive at the time, and was criticized within Silicon Valley as a hugely expensive blunder.

Mr. Apotheker resigned a month later. The management shake-up came about one year after Mark Hurd was forced to step down as the head of H.P. after questions were raised about his relationship with a female contract employee.

“I’m both stunned and disappointed to learn of Autonomy’s alleged accounting improprieties,” Mr. Apotheker said in a statement. “The developments are a shock to the many who believed in the company, myself included. ”

Since then, H.P. has tried to revive the company and to move past the controversies. Last year, Meg Whitman, a former head of eBay, took over as chief executive and began rethinking the product lineup and global marketing strategy.

But the efforts have been slow to take hold.

In the previous fiscal quarter, the company announced that it would take an $8 billion charge related to its 2008 acquisition of Electronic Data Systems, as well as added costs related to layoffs. Then Ms. Whitman told Wall Street analysts in October that revenue and profit would be significantly lower, adding that it would take several years to complete a turnaround.

“We have much more work to do,” Ms. Whitman said at the time.

Hewlett-Packard continues to face weakness in its core businesses. Revenue for the full fiscal year dropped 5 percent, to $120.4 billion, with the personal computer, printing, enterprise and service businesses all losing ground. Earnings dropped 23 percent, to $8 billion, over the same period.

“As we discussed during our securities analyst meeting last month, fiscal 2012 was the first year in a multiyear journey to turn H.P. around,” Ms. Whitman said in a statement. “We’re starting to see progress in key areas, such as new product releases and customer wins.”

The strategic troubles have weighed on the stock. Shares of H.P. have dropped to less than $12 from nearly $30 at their high this year.

The latest developments could present another setback for Ms. Whitman’s efforts.

When the company assessed Autonomy before the acquisitions, the financial results appeared to pass muster. Ms. Whitman said H.P.’s board at the time – which remains the same now, except for the addition of the activist investor Ralph V. Whitworth – relied on Deloitte’s auditing of Autonomy’s financial statements. As part of the due diligence process for the deal, H.P. also hired KPMG to audit Deloitte’s work.

Neither Deloitte nor KPMG caught the accounting discrepancies. Deloitte said in a statement that it could not comment on the matter, citing client confidentiality. “We will cooperate with the relevant authorities with any investigations into these allegations,” the accounting firm said.

Hewlett-Packard said it first began looking into potential accounting problems in the spring, after a senior Autonomy executive came forward. H.P. then hired a third-party forensic accounting firm, PricewaterhouseCoopers, to conduct an investigation covering Autonomy sales between the third quarter 2009 and the second quarter 2011, just before the acquisition.

The company said it discovered several accounting irregularities, which disguised Autonomy’s actual costs and the nature of the its products. Autonomy makes software that finds patterns, data that is used by companies and governments.

H.P. said that Autonomy, in some instances, sold hardware like servers, which has higher associated costs. But the company booked these as software sales. It had the effect of underplaying the company’s expenses and inflating the margins.

“They used low-end hardware sales, but put out that it was a pure software company,” said John Schultz, the general counsel of H.P. Computer hardware typically has a much smaller profit margin than software. “They put this into their growth calculation.”

An H.P. official, who spoke on background because of ongoing inquiries by regulators, said the hardware was sold at a 10 percent loss. The loss was disguised as a marketing expense, and the amount registered as a marketing expense appeared to increase over time, the official said.

H.P. also contends that Autonomy relied on value-added resellers, middlemen who sold software on behalf of the company. Those middlemen reported sales to customers that didn’t actually exist, according to H.P.

H.P. also claims that that Autonomy was taking licensing revenue upfront, before receiving the money. That improper assignment of sales inflated the company’s gross profit margins.pfront, before receiving the money. It had the effect, the company said, of significantly bolstering Autonomy’s gross margin.

Hewlett Packard turned over its findings to Securities and Exchange Commission in the United States and the Serious Fraud Office in Britain with the last week. In a conference call with analysts, Ms. Whitman said the company might consider legal actions against several parties.

The former management team of Autonomy, which includes the company’s founder Mike Lynch, rejected H.P. claims about the accounting issues.

“H.P. has made a series of allegations against some unspecified former members of Autonomy Corporation PLC’s senior management team. The former management team of Autonomy was shocked to see this statement today, and flatly rejects these allegations, which are false,” the group said in a statement. “It took 10 years to build Autonomy’s industry-leading technology and it is sad to see how it has been mismanaged since its acquisition by H.P.”

While Mr. Schultz would not detail H.P.’s future legal strategy, he said “we intend to be aggressive in recovering value for our shareholders.” In addition to Mr. Lynch, the company indicated this could include other individuals, including perhaps former senior executives of H.P. who missed the bad accounting. “We’re not limiting it to Autonomy,” Mr. Shulz said.

H.P. also underscored the importance of Autonomy to the broader strategy, emphasized the quality of the products. “This is a very healthy company with good products that exist,” said Mr. Shultz. “At its core, these are very good products.”

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Global Update: Meningitis Vaccine Gets Longer Window Without Refrigeration

In what may prove to be a major advance for Africa’s “meningitis belt,” regulatory authorities have decided that a new meningitis vaccine could be stored without refrigeration for up to four days.

The announcement was made last week at a conference in Atlanta of the American Society of Tropical Medicine and Hygiene. While a few days may seem trivial, the hardest part of protecting poor countries is often keeping a vaccine cold while moving it from electrified cities to villages with no power. In antipolio drives, for example, the freezers, generators and fuel needed to make ice for the shoulder bags of vaccinators can cost more than the vaccine.

The new vaccine, MenAfriVac, made in India for 50 cents a dose, was introduced in 2010. In bad years, epidemics during the hot harmattan winds have killed as many as 25,000 Africans and disabled 50,000 more. In Chad this year, vaccination drove down cases to near zero in districts where it was used, while others nearby had serious outbreaks.

Experts decided that the vaccine is safe for four days as long as it stays below 104 degrees.

While temperatures get higher than that in Africa, said Dr. Godwin Enwere, medical director for the Meningitis Vaccine Project, teams normally get the vaccine out of coolers at dawn, drive to villages and finish before the day heats up. Other experts said it should be kept in the shade and monitored with colored paper “dots” that darken after hours in the heat.

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Global Update: Meningitis Vaccine Gets Longer Window Without Refrigeration

In what may prove to be a major advance for Africa’s “meningitis belt,” regulatory authorities have decided that a new meningitis vaccine could be stored without refrigeration for up to four days.

The announcement was made last week at a conference in Atlanta of the American Society of Tropical Medicine and Hygiene. While a few days may seem trivial, the hardest part of protecting poor countries is often keeping a vaccine cold while moving it from electrified cities to villages with no power. In antipolio drives, for example, the freezers, generators and fuel needed to make ice for the shoulder bags of vaccinators can cost more than the vaccine.

The new vaccine, MenAfriVac, made in India for 50 cents a dose, was introduced in 2010. In bad years, epidemics during the hot harmattan winds have killed as many as 25,000 Africans and disabled 50,000 more. In Chad this year, vaccination drove down cases to near zero in districts where it was used, while others nearby had serious outbreaks.

Experts decided that the vaccine is safe for four days as long as it stays below 104 degrees.

While temperatures get higher than that in Africa, said Dr. Godwin Enwere, medical director for the Meningitis Vaccine Project, teams normally get the vaccine out of coolers at dawn, drive to villages and finish before the day heats up. Other experts said it should be kept in the shade and monitored with colored paper “dots” that darken after hours in the heat.

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DealBook: Latest Slip for H.P. Forces a New Write-Down

Hewlett-Packard‘s already troubled history with deal-making just got worse.

The technology giant said on Tuesday that it had taken an $8.8 billion accounting charge, in part related to accounting problems at Autonomy, the British software company it bought for $10 billion last year. The announcement comes just one quarter after another large write-down by H.P. in relation to Electronic Data Systems, which itself follows a string of deal-making missteps by the company.

“I’m speechless,” said Brian Marshall, an analyst at the ISI Group, which downgraded H.P. to “neutral” from “buy” following the news on Tuesday.

The charge contributed to a quarterly loss of $6.9 billion for H.P., compared with a $200 million profit in the quarter a year earlier. H.P. said it had discovered “serious accounting improprieties” and “outright misrepresentations” at Automony that took place prior to the acquisition.

The company’s shares fell more than 11 percent on Tuesday to around $11.74.

The latest setback comes as H.P. has struggled to revive its business. For years, H.P. has turned to deal-making to help it grow, buying of E.D.S., Palm and Compaq. Since 2001, the company has spent at least $67 billion on acquisitions, according to Robert W. Baird & Company. That’s more than H.P.’s current market capitalization of about $23.4 billion.

“If you think about the companies they’ve acquired over the last several years,” Mr. Marshall said, “it’s just unbelievable how much value has been destroyed.”

In August, H.P. said it would take an $8 billion charge related to E.D.S., which it acquired for $13.9 billion four years earlier. The business, which provides consulting services to enterprise clients, had been losing ground to rivals.

Last year, H.P. announced a $1.7 billion charge when it said it would close its webOS device business — just a year after picking up the handset maker Palm for $1.2 billion.

The deal-making engine, however, has recently slowed as its cash pile has dwindle. The company reported about $11.3 billion of cash in the recent quarter. While that an improvement over the quarter last year, it is lower than the $13 billion of cash in 2009.

The takeover of Autonomy was criticized as too expensive when it was announced in the summer of 2011. Léo Apotheker, the chief executive at the time, soon resigned. He was replaced by Meg Whitman, a former head of eBay.

Ms. Whitman said on Tuesday that the company was “starting to see progress in key areas.” The company said in a statement that it remained “100 percent committed” to Autonomy, despite being “extremely disappointed” by its findings.

Some analysts had been skeptical of Autonomy before Tuesday’s announcement. But the size of the write-down was largely unexpected. And the language H.P. used — “improprieties” and “misrepresentations” — came as a surprise.

“That’s not something I expected to hear,” said Jayson Noland, an analyst at Robert W. Baird & Company.

The ISI analyst, Mr. Marshall, described the company as being in “free fall.”

“There has been perhaps irreparable damage to the franchise,” Mr. Marshall said. “A lot of people in the tech industry are pretty sad about that.”

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Hamas Leader Dares Israel to Invade Amid Gaza Airstrikes

GAZA CITY — The top leader of Hamas dared Israel on Monday to launch a ground invasion of Gaza and dismissed diplomatic efforts to broker a cease-fire in the six-day-old conflict, as the Israeli military conducted a new wave of deadly airstrikes on the besieged Palestinian enclave, including a second hit on a 15-story building that houses media outlets. A volley of rockets fired from Gaza into southern Israel included one that hit a vacant school.

Speaking at a news conference in Cairo, where the diplomatic efforts were under way, the Hamas leader, Khaled Meshal, suggested that the Israeli infantry mobilization on the border with Gaza was a bluff on the part of Prime Minister Benjamin Netanyahu of Israel.

“If you wanted to launch it, you would have done it,” Mr. Meshal told reporters. He accused Israel of using the invasion threat as an attempt to “dictate its own terms and force us into silence.”

Rejecting Israel’s contention that Hamas had precipitated the conflict, Mr. Meshal said the burden was on the Israelis. “The demand of the people of Gaza is meeting their legimitate demands — for Israel to be restrained from its aggression, assassinations and invasions, and for the siege over Gaza to be ended,” he said.

Mr. Netanyahu met with top ministers Monday evening and Israeli media said they discussed the next steps in the Gaza conflict, including the possibility of a truce. Israeli officials declined to comment on those reports.

The Hamas Health Ministry said Monday evening that a total of 107 people had been killed since Wednesday morning, when Israeli airstrikes began, following months of Palestinian rocket fire into Israel. A spokeswoman for the Israeli military said she believed that a majority of these were militants, though it is difficult to know because Hamas’s own fighting brigade and the other factional groups are secretive.

The Hamas ministry said that the dead included at least 26 children, 10 women and 12 men over 50, who were presumably not involved in combat. Of the remainder, at least 36 are known militants. Hamas officials said more than 860 have been wounded, 260 of them children, 140 of them women and 55 men over 50.

Three people have been killed so far in Israel, all civilians, in a rocket strike that hit an apartment house in the southern Israeli town of Kiryat Malachi on Thursday morning. The Israelis have said that at least 79 Israelis have been wounded and that Gaza rockets have reached as far north as Tel Aviv.

The latest Gaza casualties — 22 people reported killed since midnight local time — included Palestinians killed in strikes by warplanes, a drone attack on two men on a motorcycle, and a father and two toddler sons in their bombed northern Gaza home, witnesses and medical sources said. Another Israeli drone attack killed the driver of a taxi hired by journalists and displaying “Press” signs, although it was not clear which journalists had hired it, Palestinian officials said.

On Sunday, Israeli forces attacked two buildings housing local broadcasters and production companies used by foreign outlets. Israeli officials denied targeting journalists, but on Monday Israeli forces again blasted the Al Sharouk block, a multiuse building where many local broadcasters, as well as Sky News of Britain and the channel Al Arabiya, had offices.

That attack, which struck a computer shop on the third floor, sparked a blaze that sent plumes of dark smoke creeping up the sides of the building. Video footage showed clouds of smoke billowing.

An Israeli bomb pummeled a home deep into the ground here on Sunday, killing 11 people, including nine in three generations of a single family, in the deadliest single strike since the latest conflict began. Members of the family were buried Monday in a rite that turned into a gesture of defiance and became a rally supporting Gaza’s militant Hamas rulers.

A militant leader said Tel Aviv, in the Israeli heartland, would be hit “over and over” and warned Israelis that their leaders were misleading them and would “take them to hell.”

Israel says its onslaught is designed to stop Hamas from launching the rockets, but, after an apparent lull overnight, more missiles hurtled toward targets in Israel, some of them intercepted by Israel’s Iron Dome defense system. Of five rockets fired on Monday at the southern Israeli city of Ashkelon, four were intercepted but one smashed through the concrete roof at the entrance to an empty school. There were no reports of casualties. Other rockets rained on areas along the border with Gaza.

Later a second salvo struck Ashkelon. Several rockets were intercepted, but one crashed down onto a house, causing damage but no casualties.

Israeli officials said 135 rockets were fired from Gaza at Israel on Monday, of which 42 were intercepted by Iron Dome, Most of the others landed in open areas.

On Sunday, a new volley of Palestinian rockets totaled nearly 100 by nightfall, including two that soared toward Tel Aviv but were knocked out of the sky by Israeli defenses.

Fares Akram and Jodi Rudoren reported from Gaza City, and Alan Cowell from London. Reporting was contributed by Isabel Kershner from Ashkelon, Israel; Ethan Bronner, Myra Noveck and Irit Pazner Garshowitz from Jerusalem; Rina Castelnuovo from Ashdod, Israel; Peter Baker from Bangkok; and David D. Kirkpatrick from Cairo.

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Europe Seeks More Taxes From U.S. Multinationals

Ralph Orlowski/Reuters

Starbucks, which operates in Germany and throughout Europe, has faced criticism on taxes.

PARIS — Google reported sales of more than $4 billion in Britain last year. It paid less than $10 million in taxes.

Some tax collectors, lawmakers and competitors of Google in Europe say this is unfair.

As governments throughout the region seek to close gaping holes in their budgets, they are taking aim at United States multinational companies, especially Internet giants like Google and Amazon.com, which pay little or no taxes in Europe, despite generating billions of dollars in revenue on the Continent.

“Why on earth do you manipulate your accounts so that you get away with not paying corporation tax in the U.K.?” Margaret Hodge, a member of Parliament, asked representatives of Google, Amazon and Starbucks last week, during a heated committee hearing in London.

In France, tax collectors have gone further. Amazon says it has received a bill from France for taxes and penalties related to the “allocation of income between foreign jurisdictions” from 2006 through 2010. Other companies, including Google, are also reportedly in the French authorities’ sights.

“Even if the Internet is a zone of freedom, it shouldn’t be a lawless zone,” Najat Vallaud-Belkacem, a spokeswoman for the French government, said last week. “Fiscal rules should be able to be applied to those activities as well.”

Google, Amazon, Starbucks and other American companies facing tax scrutiny say they are doing nothing wrong. They use complex accounting strategies to exploit national differences across Europe in corporate tax rates, which range from less than 10 percent to more than 30 percent, and loopholes that can reduce their effective European tax levies to almost nothing.

Google, for example, records most of its international revenue at its European headquarters in Ireland, where the corporate tax rate is 12.5 percent. Across Europe, customers who buy advertising, Google’s primary source of revenue, sign contracts with the company’s subsidiary in Ireland, rather than with local branches.

Google ends up paying Irish taxes on only a fraction of the billions of euros that course through its Dublin office. That is because the company uses a variety of methods, including royalty payments to a unit in Bermuda, to reduce further the amount of money exposed to tax liability.

So, while Google told the Securities and Exchange Commission that it generated more than $4 billion in sales in Britain last year, it reported revenue of only £396 million, or $629 million, in its official filings there. The total, the company said, reflected the amount that Google’s British unit billed Google Ireland for promotional work, consulting and other activities. Google declared a profit of £31 million in Britain, resulting in a British tax bill of only £6 million.

“We pay the tax we are required to pay in every country in which we operate,” Matt Brittin, Google vice president for North and Central Europe, told the parliamentary panel.

Ms. Hodge, chairwoman of the Public Accounts Committee, acknowledged that she thought Google, Amazon and Starbucks were probably complying with the law. “We are not accusing you of being illegal, we are accusing you of being immoral,” she said.

In France, more than morality is at stake. In his testimony to the parliamentary panel, Andrew Cecil, director of public policy for Amazon in Europe, confirmed that the company had received a demand for $252 million from the French tax collection agency. He said Amazon was contesting the claim, which was originally disclosed in an American regulatory filing.

Amazon, which has European headquarters in Luxembourg, another small country with favorable tax conditions for multinational companies, reported 9.1 billion euros, or $11.6 billion, in revenue across Europe last year. It posted an after-tax profit of 20 million euros on those sales, and paid about 8 million euros in tax, Mr. Cecil said.

Mr. Cecil told the parliamentary committee that when customers across Europe bought books from Amazon, they were actually buying them from the Luxembourg-based Amazon entity, rather than their local subsidiaries. That response was met with incredulity by Ms. Hodge, who noted that when she ordered a book from the company, she used a British Web site, Amazon.co.uk, and the goods were delivered from a British warehouse via the British Royal Mail.

News reports in France note that French fiscal authorities are also seeking back taxes and penalties from Google, amounting to 1.7 billion euros. Ms. Vallaud-Belkacem told reporters that she could not comment on individual companies for privacy reasons. Google, in a statement, said the reports were premature.

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News Analysis: Tainted-Drug Deaths Spawn Heated Debate Over F.D.A.’s Powers

If she kept being defensive, Mr. Dingell warned, “I would assure you that you are putting your head in the noose.”

Hearings like this may be partly theater, a chance for politicians to strut their righteous indignation and threaten tough new laws. But a public health disaster had occurred on Dr. Hamburg’s watch, one about which she has been mostly silent, and the hearing was a chance for her to show leadership and mastery. Instead, her answers were vague and long-winded, and it was clear by the reactions of the panel members that they brought more frustration than clarity.

The hearing was titled “The Fungal Meningitis Outbreak: Could It Have Been Prevented?” But the question was never really answered, and hours of testimony left the ominous impression that the country has few safeguards to prevent an outbreak like that from happening again.

Democrats on the committee wanted to quickly pass new legislation to strengthen the F.DA.’s ability to police rogue drug makers, but Republicans seemed less eager. It was not clear whether the hearing would actually accomplish anything.

So far, 33 people have died and 447 others have become ill from injections of a fungus-contaminated steroid drug made by the New England Compounding Center in Framingham, Mass. The number of cases is still rising. Inspections of the drug maker have revealed a stunning array of dangerous practices and unclean equipment, as well as vials of medicine with visible blobs of fungal matter floating in it. The center has been shut down.

Joyce Lovelace, a white-haired woman with a soft voice and a Southern accent, addressed the committee from a wheelchair. She described the illness and death of her husband, Eddie, who at 78 had still been serving as a judge in Kentucky.

“It was not an easy death we witnessed,” Mrs. Lovelace said. She added, “These committees, the F.D.A., the N.E.C.C., whoever is responsible, I want them to know their lack of attention to their duties cost my husband his life.”

The next witness was Barry Cadden, the chief pharmacist and an owner of the New England Compounding Center. Flanked by his lawyers, he invoked the right to avoid incriminating himself and did not answer any questions.

Mr. Cadden’s company was shipping a huge array of drugs to clinics and hospitals around the country, including some of the nation’s most prestigious medical centers. The business, which opened in 1998, had several run-ins with the F.D.A. and with health officials in Massachusetts over the years, and pharmacy boards in other states had complained about its practices. But it kept operating.

Dr. Hamburg came in for a grilling because a deadly outbreak from a contaminated drug is exactly the kind of public health tragedy that her agency is meant to prevent.

She used much of her testimony to insist that the agency’s authority over the New England Compounding Center and other companies like it was not clear, and that new laws were required. Currently, she said, companies like New England Compounding could thwart oversight by suing the F.D.A. if it tried to regulate them, and by refusing to allow inspections without search warrants.

But the lawmakers said that existing laws gave the agency all the power it needed, and that it had simply failed to use that power.

“Commissioner, two agencies here have dropped the ball,” Mr. Dingell said, referring to the F.D.A. and the Massachusetts Board of Pharmacy.

The issue is that New England Compounding identified itself as a compounding pharmacy, a practice that is supposed to involve making unusual drug formulations to fill prescriptions for individual patients with special needs. Compounding is legal on a small scale, and does not have to follow the strict rules that apply to mass-produced drugs. It is generally regulated by states rather than the federal government, which has jurisdiction over manufacturers.

But the company was mass-producing drugs and shipping them all over the country, without the manufacturing standards or inspections imposed on big drug makers. It shipped 16,676 vials of the contaminated steroid, methylprednisolone, to 23 states, and 14,000 people were injected with it.

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News Analysis: Tainted-Drug Deaths Spawn Heated Debate Over F.D.A.’s Powers

If she kept being defensive, Mr. Dingell warned, “I would assure you that you are putting your head in the noose.”

Hearings like this may be partly theater, a chance for politicians to strut their righteous indignation and threaten tough new laws. But a public health disaster had occurred on Dr. Hamburg’s watch, one about which she has been mostly silent, and the hearing was a chance for her to show leadership and mastery. Instead, her answers were vague and long-winded, and it was clear by the reactions of the panel members that they brought more frustration than clarity.

The hearing was titled “The Fungal Meningitis Outbreak: Could It Have Been Prevented?” But the question was never really answered, and hours of testimony left the ominous impression that the country has few safeguards to prevent an outbreak like that from happening again.

Democrats on the committee wanted to quickly pass new legislation to strengthen the F.DA.’s ability to police rogue drug makers, but Republicans seemed less eager. It was not clear whether the hearing would actually accomplish anything.

So far, 33 people have died and 447 others have become ill from injections of a fungus-contaminated steroid drug made by the New England Compounding Center in Framingham, Mass. The number of cases is still rising. Inspections of the drug maker have revealed a stunning array of dangerous practices and unclean equipment, as well as vials of medicine with visible blobs of fungal matter floating in it. The center has been shut down.

Joyce Lovelace, a white-haired woman with a soft voice and a Southern accent, addressed the committee from a wheelchair. She described the illness and death of her husband, Eddie, who at 78 had still been serving as a judge in Kentucky.

“It was not an easy death we witnessed,” Mrs. Lovelace said. She added, “These committees, the F.D.A., the N.E.C.C., whoever is responsible, I want them to know their lack of attention to their duties cost my husband his life.”

The next witness was Barry Cadden, the chief pharmacist and an owner of the New England Compounding Center. Flanked by his lawyers, he invoked the right to avoid incriminating himself and did not answer any questions.

Mr. Cadden’s company was shipping a huge array of drugs to clinics and hospitals around the country, including some of the nation’s most prestigious medical centers. The business, which opened in 1998, had several run-ins with the F.D.A. and with health officials in Massachusetts over the years, and pharmacy boards in other states had complained about its practices. But it kept operating.

Dr. Hamburg came in for a grilling because a deadly outbreak from a contaminated drug is exactly the kind of public health tragedy that her agency is meant to prevent.

She used much of her testimony to insist that the agency’s authority over the New England Compounding Center and other companies like it was not clear, and that new laws were required. Currently, she said, companies like New England Compounding could thwart oversight by suing the F.D.A. if it tried to regulate them, and by refusing to allow inspections without search warrants.

But the lawmakers said that existing laws gave the agency all the power it needed, and that it had simply failed to use that power.

“Commissioner, two agencies here have dropped the ball,” Mr. Dingell said, referring to the F.D.A. and the Massachusetts Board of Pharmacy.

The issue is that New England Compounding identified itself as a compounding pharmacy, a practice that is supposed to involve making unusual drug formulations to fill prescriptions for individual patients with special needs. Compounding is legal on a small scale, and does not have to follow the strict rules that apply to mass-produced drugs. It is generally regulated by states rather than the federal government, which has jurisdiction over manufacturers.

But the company was mass-producing drugs and shipping them all over the country, without the manufacturing standards or inspections imposed on big drug makers. It shipped 16,676 vials of the contaminated steroid, methylprednisolone, to 23 states, and 14,000 people were injected with it.

Read More..