'McDreamy' says he beat Starbucks for coffee chain

SEATTLE (AP) — "Grey's Anatomy" star Patrick Dempsey may be the real "McSteamy."

The actor, who was dubbed "McDreamy" as a star of the hospital drama while his co-star was called "McSteamy," may soon be serving hot, steaming cups of Joe.

Dempsey won a bankruptcy auction to buy Tully's Coffee, a small coffee chain based in Seattle. Among those he beat out is Tully's much bigger Seattle neighbor, Starbucks Corp., which is known for its ubiquitous white cups with a circular green mermaid logo.

Dempsey, whose company Global Baristas LLC plans to keep the Tully's name, declared victory on the social media site Twitter: "We met the green monster, looked her in the eye, and...SHE BLINKED! We got it! Thank you Seattle!

The win for Dempsey deals a rare setback for Starbucks on its home turf. Starbucks has long been both praised for bringing "coffeehouse culture" to the U.S. and criticized for crushing smaller chains. The coffee giant, which had planned to convert the Tully's cafes to its own brand, last month announced plans to expand its global footprint to 20,000 cafes over the next two years, up from the current 18,000.

Dempsey said in an interview on Friday that as the underdog in Seattle, Tully's will need to find its identity.

"It's a much smaller chain that has a lot of potential that hasn't been given the proper care," he said.

But in a statement shortly after the auction on Thursday, Starbucks insinuated that Dempsey shouldn't celebrate just yet.

Starbucks, which wanted to convert the Tully's cafes to its own brand, said that a final determination on the winning bid won't be made until a court hearing on Jan. 11. Starbucks said it's in a "backup" position" to buy 25 of the 47 Tully's cafes, with another undisclosed bidder making an offer for the remainder.

The combined bids of Starbucks and the undisclosed bidder come to $10.6 million, above the $9.2 million Dempsey's company is offering to pay through his company, which was formed in order to purchase Tully's. The other investors in Global Baristas aren't being disclosed.

Tully's Coffee, which is known for serving Joe with a milder taste than Starbucks brand, filed for Chapter 11 bankruptcy protection in October, citing lease obligations and underperforming stores. Tully's wholesale business, which includes Tully's Coffee in bags and single serve K-cup packs that are sold in supermarkets and other stores, is owned separately by Green Mountain Coffee Roasters Inc.

TC Global Inc., the parent company of Tully's, said in a release Friday that it was "encouraged and excited" about Dempsey's commitment to the chain.

Tully's President and CEO Scott Pearson called the deal a "great match" and that the goal is to make sure creditors get paid and to keep as many people employed as possible.

A bankruptcy court document signed late Friday by Pearson and Dempsey said TC Global had determined that Global Baristas submitted the successful bid.

"With this court filing, it's official - our group has been chosen as the successful bidder," Dempsey said in a statement. "We look forward to the court's final approval on Jan. 11."

Earlier in the day, Dempsey said he planned to be very involved in the running of the company, adding that the immediate challenges were to address bookkeeping issues, staff morale and sprucing up the coffee shops. Once the business is stabilized, Dempsey said the long-term goal would be to take the chain national.

"We can pull this off. We just have to take steps that are slow and smart," he said. "I'm going to get behind the counter. I'm going to serve coffee...I'm going to give the company a boost of energy."

Although Dempsey lives in Los Angeles, he plans to spend more time in Seattle, the city where "Grey's Anatomy" is set in. Dempsey said he believed there is room in the city for Tully's and the much larger Starbucks; he noted there might be people who are rooting for the underdog.

"In a society where there are so many big corporations that swallow the little guy, we thought, let's not let this happen to this company," he said.

Dempsey made an appearance Friday morning at a Tully's near Pike Place Market, shaking hands with workers and greeting customers before visiting other stores. Several dozen people, mostly women, came into the store.

Patrease Estelle, 45, works nearby, and came in with a small group from her office.

"I will take whatever I can get. A photo, a hug, a 'hey, how you doing,' a wink," said Estelle, who got a picture and handshake with the actor.

___

Blankinship reported from Seattle and Choi from New York.

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F.D.A. Offers Rules to Stop Food Contamination

The Food and Drug Administration on Friday proposed two sweeping rules aimed at preventing the contamination of produce and processed foods, which has sickened tens of thousands of Americans annually in recent years.

Nicole Bengiveno/The New York Times

Checking the temperature of lettuce at an Arizona farm. Safety measures would start at farms.

The proposed rules represent a sea change in the way the agency polices food, a process that currently involves taking action after contamination has been identified. It is a long-awaited step toward codifying the food safety law that Congress passed two years ago.

Changes include requirements for better record keeping, contingency plans for handling outbreaks and measures that would prevent the spread of contaminants in the first place. While food producers would have latitude in determining how to execute the rules, farmers would have to ensure that water used in irrigation met certain standards and food processors would need to find ways to keep fresh food that may contain bacteria from coming into contact with food that has been cooked.

New safety measures might include requiring that farm workers wash their hands, installing portable toilets in fields and ensuring that foods are cooked at temperatures high enough to kill bacteria.

Whether consumers will ultimately bear some of the expense of the new rules was unclear, but the agency estimated that the proposals would cost food producers tens of thousands of dollars a year.

A big question to be resolved is whether Congress will approve the money necessary to support the oversight. President Obama requested $220 million in his 2013 budget, but Dr. Margaret Hamburg, commissioner of the F.D.A., said “resources remain an ongoing concern.”

Nonetheless, agency officials were optimistic that the new rules would protect consumers better.

“These new rules really set the basic framework for a modern, science-based approach to food safety and shift us from a strategy of reacting to problems to a strategy for preventing problems,” Michael R. Taylor, deputy commissioner for foods and veterinary medicine, said in an interview. The Food and Drug Administration is responsible for the safety of about 80 percent of the food that Americans consume. The rest falls to the Agriculture Department, which is responsible for meat, poultry and some eggs.

One in six Americans becomes ill from eating contaminated food each year, the government estimates; most of them recover without concern, but roughly 130,000 are hospitalized and 3,000 die. The agency estimated the new rules could prevent about 1.75 million illnesses each year.

Congress passed the Food Safety Modernization Act in 2010 after a wave of incidents involving tainted eggs, peanut butter and spinach sickened thousands of people and led major food makers to join consumer advocates in demanding stronger government oversight.

But it took the Obama administration two years to move the rules through the regulatory agency, prompting complaints that the White House was more concerned about protecting itself from Republican criticism than about public safety.

Mr. Taylor said that the delay was a function of the wide variety of foods and the complexity of the food system. “Anything that is important and complicated will always take longer than you would like,” he said.

The first rule would require manufacturers of processed foods sold in the United States to come up with ways to reduce the risk of contamination. Food companies would be required to have a plan for correcting problems and for keeping records that government inspectors could audit.

An example might be to require the roasting of raw peanuts at a temperature guaranteed to kill salmonella, which has been a problem in nut butters in recent years. Roasted nuts would then have to be kept separate from raw nuts to further reduce the risk of contamination, said Sandra B. Eskin, director of the safe food campaign at the Pew Charitable Trusts.

“This is very good news for consumers,” Ms. Eskin said. “We applaud the administration’s action, which demonstrates its strong commitment to making our food safer.”

The second rule would apply to the harvesting and production of fruits and vegetables in an effort to combat bacterial contamination like E. coli, which is transmitted through feces. It would address what advocates refer to as the “four Ws” — water, waste, workers and wildlife.

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Corporations and execs need penalties that hurt

If you're concerned about corporate crime, 2012 looked like a pretty successful year for the good guys.

The Thousand Oaks biotech giant Amgen paid $762 million in fines and penalties and pleaded guilty to a federal charge related to illegal marketing of its anemia drug Aranesp. Britain's GlaxoSmithKline and Illinois-based Abbott Laboratories paid $3 billion and $1.5 billion in government penalties, respectively, in connection with their off-label promotions of blockbuster drugs. Glaxo's was the biggest drug company settlement in history.

The global bank HSBC paid a record $1.92 billion to settle federal accusations that it operated a huge money-laundering scheme for Mexican drug dealers and Middle Eastern terrorists. BP agreed to pay $4.5 billion and plead guilty to 11 felony counts in connection with the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. It was the biggest federal criminal penalty ever.

To the companies, however, these big numbers are just chump change. Typically they don't even represent repayment of ill-gotten gains — more often merely the cost of doing business. And to the public, they're insults piled atop the injuries caused by the firms' wrongdoing.

"These fines are a carny act to keep the rubes happy," according to William K. Black, who was a thrift regulator during the savings and loan crisis of the 1980s. "It's cynical — the art is to make the amount sound large but make sure that it has no material effect."

What might really get the attention of the CEOs and other top executives of lawbreaking companies would be some time in the hoosegow. Does that sound quaint? If so, it's because not a single high-ranking executive of any of the companies mentioned above faced indictment or was even forced to step down.

The absence of criminal cases against perpetrators of the 2008 financial crisis is a continuing scandal. It's not as though there haven't been suitable candidates for the docket. Angelo Mozilo, the chairman of Countrywide Financial, was the face of mortgage company excesses in the housing bubble.

He settled Securities and Exchange Commission charges against him for $67.5 million (of which $45 million was covered by insurance companies and Countrywide's new owner, Bank of America). But although SEC documents showed he was fully aware that some of the mortgage products his firm was peddling were toxic garbage, federal prosecutors dropped their criminal case.

Earlier scandals produced plenty of pelts. Starting in the 1980s, the savings and loan crisis generated 30,000 criminal referrals from one regulatory agency alone, the Office of Thrift Supervision, according to Black, who oversaw the referral process for federal regulators as litigation director for the Federal Home Loan Bank Board and in other posts. Fast forward to the 2001 collapse of Enron. Its CEO, Jeffrey Skilling, is still serving a 24-year jail term. He might have been joined there by Enron Chairman Ken Lay, had Lay not died before his sentencing for 10 counts of fraud and other charges in 2006.

Federal prosecutors today say multibillion-dollar fines and related good-behavior pledges are as good as jail time at discouraging bad behavior — "the same punitive, deterrent and rehabilitative effect as a guilty plea," as Lanny A. Breuer, the Justice Department's white-collar crime chief, said in a speech last year.

But that's nonsense. For a corporation, the fines aren't even that big. The HSBC settlement comes to about 11 days' worth of revenue for that bank holding company; Abbott's about two weeks' worth. Amgen sells about $2 billion of Aranesp every year; the mismarketing for which it forked over $762 million lasted for years.

Prosecutors' interest in corporate white-collar cases has been dissipating like the air in an old balloon. The cases are complex and time consuming and require facts to be gathered by aggressive regulators (themselves a vanishing breed). After 9/11, national security became the hot field for ambitious crime fighters. The fewer convictions for corporate crime there are to make the news, the less interest there is in finding more. An important turning point came in 2008, when then-U.S. Atty. Gen. Michael Mukasey refused to appoint a task force to investigate mortgage fraud, dismissing it as "white-collar street crime."

Even when prosecutors are handed a weapon, they don't use it. The post-Enron Sarbanes-Oxley Act carries stiff criminal penalties for top executives who sign off on false financial statements. Statistics are hard to come by, but when the law marked its 10th birthday in mid-2012 the number of prosecutions it had produced appeared to be less than five.

But Black and other experts in white-collar crime say that effective deterrence comes only from putting the responsible executives in jail. "I question the efficacy of bringing a criminal case against an institution," says former California Treasurer Phil Angelides, who chaired the government's Financial Crisis Inquiry Commission, which held public hearings and issued a report on the causes of the 2008 financial meltdown. "Where they're warranted, the pursuit of criminal charges ought to be focused on individuals and the leadership, not inanimate entities."

Yet federal policy is moving in the opposite direction. Instead of criminal sanctions, the Justice Department relies increasingly on "corporate integrity agreements" or "deferred prosecution agreements." In the first case, a company averts indictment by agreeing to augment its internal legal controls; in the second, it acknowledges that it might be subject to prosecution if it's caught breaking the law again.

Either way, it's a free pass.

Corporate lawyers love these deals because history shows that the threat of subsequent prosecution is a paper tiger. Indeed, enforcement in the pharmaceutical industry, where illegal off-label marketing of drugs is an epidemic, is a joke. Pfizer, Novartis, Lilly and Schering-Plough have all entered into multiple corporate integrity agreements or other consent decrees; in almost every case, when the first one is breached, it's simply replaced by a new one. As of mid-2012, when the Glaxo settlement was announced, 25 major drug companies were operating under corporate integrity agreements, including eight of the 10 biggest firms in the industry — and more cases of illegal drug marketing were coming to light all the time.

Prosecutors resort to these deals because they're afraid that stringent penalties that damage a corporation will hurt innocent victims such as employees or suppliers. Imposing the nuclear option on a drug company, which is forbidding it to do business with Medicare and Medicaid, could mean depriving patients of needed medicine. Prohibiting a big bank from doing certain transactions could hurt the financial system.

But that means the regulation of corporate wrongdoing has become "all about damage control, not crime control," says Henry N. Pontell, a leading criminologist at UC Irvine. That gives corporations powerful leverage to avoid serious penalties, and it encourages the imposition of penalties firms can absorb as merely the cost of doing business.

There's light on the horizon, but it's not yet shining brightly. An SEC whistle-blowers program established by the 2010 Dodd-Frank Act, which allows tipsters to share in recoveries in securities fraud cases, received more than 3,000 tips in its first full year. But so far there's been only one payout, for $50,000.

And whistle-blowers can't shoulder the burden by themselves. What's needed is a new regulatory mind-set, and rewards for prosecutors who put guilty executives behind bars. You'll never stem corporate crime if it's treated as something to be wrist-slapped away while Jean Valjeans rot in jail for petty offenses.

"I always cite the following," says Angelides. "If someone robbed a 7-Eleven for $1,000 and they could settle a week later for $25 and no admission of wrongdoing, would they do it again? Absolutely."

Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.

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Audit of L.A. County assessor's office urges key changes

An audit of the embattled Los Angeles County assessor's office released late Thursday recommends key changes, including the appointment of a chief deputy with "managerial competence" and the requirement that private tax consultants register with the county.

Conducted by Strategica Inc., the audit comes as elected Assessor John Noguez fights accusations that he pocketed $185,000 in bribes from a prominent tax consultant and campaign contributor who requested lower tax appraisals on client properties.

Though the audit did not comment specifically on Noguez's alleged malfeasance, its authors wrote that the controversy had helped undermine public confidence in the department with potentially grave results.

"If taxpayers feel that the property tax system in Los Angeles County is being gamed by politically connected taxpayers or contributors to the Assessor's political campaigns then they will be tempted to game the system themselves to re-establish equity," the auditors wrote.

As a means of improving overall management of the department and restoring integrity, auditors said, the county charter should be amended so that supervisors could appoint a permanent chief deputy with strong management and tax assessment skills. Doing so would ensure institutional knowledge and continuity as newly elected assessors rotate through the post.

The position also would make up for the elected official's operational shortcomings.

"The criteria for being the Assessor is not management experience but rather the number of votes received," the auditors wrote.

To avoid potential abuses or the perception of favoritism, the county should adopt new rules that essentially treat tax agents as lobbyists, requiring them to register with the county, prohibiting them from offering gifts and outlining exactly which officials they are authorized to negotiate with.

The audit released Thursday is one of four that have been commissioned by the Los Angeles County Board of Supervisors. It will be formally presented to the board Tuesday.

Among other findings, auditors cited a significant "brain drain" in the assessor's office: 44% of its senior managers have left since 2010 and have been replaced by managers who lack experience or training in running a department. Additionally, the report said, staffers have been given very little supervisory or management training since 2007.

The assessor's office oversees 2.4 million parcels and has a staff of almost 1,400 employees, making it the largest assessment jurisdiction in the nation.

In the last five years, the office has seen the number of assessment appeals quadruple. That increased workload, combined with an antiquated computer system, has greatly increased staff workload, according to the report. Auditors recommended establishing a $35 fee for the filing of all assessment appeals, to help offset expenses and to deter frivolous appeals.

Supervisors called for the audit in April after several stories by The Times about allegations that Noguez and his staff were giving tax breaks to political supporters, who then donated to Noguez's campaign fund. About the same time, Noguez gave two conflicting projections of 2012-2013 tax roll revenues. In December 2011, Noguez estimated that the county's property tax base would grow by $18.7 billion, but then changed the number to $5.1 billion.

So far, the ongoing probe at the assessor's office has resulted in the arrests of Noguez, his chief deputy Mark McNeil, former county appraiser Scott Schenter and private tax consultant Ramin Salari. All four have pleaded not guilty to numerous charges, including conspiracy, bribery and misappropriation of public funds.

To date, auditors have completed three of four audits that the board has requested. The next audit will focus on properties with reductions in value exceeding 20%.

ruben.vives@latimes.com

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Facebook updates Messenger app to support voice messages

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Adele's 2011 holdover '21' still tops in 2012

NASHVILLE, Tenn. (AP) — Turns out Adele ruled 2012, too — and set a record while she was at it.

The British singer's "21" was the highest-selling album in the U.S. for the second consecutive year, according to 2012 sales figures released by Nielsen SoundScan on Thursday. That's a first in the SoundScan era.

Adele sold 4.4 million copies of the album in 2012 after selling 5.8 million in 2011. She crossed the 10 million threshold in November and was only rivaled by Taylor Swift, whose "Red" was second on the list. If her album sales continue apace in 2013, '21' will move into the top 10 list for sales since 1993, when SoundScan began current tracking methods.

Gotye scored the year's top-selling song with "Somebody That I Used To Know" featuring Kimbra. The song was downloaded a record 6.8 million times. Carly Rae Jepsen's "Call Me Maybe" was next at 6.5 million. Both songs are the first to cross the 6 million digital sales mark, while fun. came close with 5.9 million downloads of "We Are Young" featuring Janelle Monae.

Forty-one songs crossed the 2 million download mark, helping drive digital and overall sales to a new high even as album sales began to drop again after a momentary gain.

A record 1.65 billion music units — combining physical albums, digital albums and digital songs — were sold in 2012, fueled by an increase of 9.1 percent in total digital sales and a 14.1 percent increase in digital album sales.

Overall, however, album sales declined 4.4 percent. That continues a downward trend since 2004 that was only briefly halted by last year's 3 percent gain — mostly due to the surprise success of "21." Only two genres showed album sales gains in 2012. Rock gained by 2 percent and country, fueled by the format's assault on the top 10, jumped 4.2 percent.

Swift led a record five country artists into the top 10, selling 3.1 million copies of "Red" in just over two months. Other country artists on the list included Carrie Underwood's "Blown Away" at No. 7 (1.2 million) followed by Luke Bryan's "tailgates & tanlines" (1.1 million), Lionel Richie's duets album "Tuskegee" (1 million) and Jason Aldean's "Night Train" (1 million).

One Direction nearly matched Swift's sales total, but did it by placing two 2012 releases in the top 10 — "Up All Night" placed No. 3 with 1.6 million sold and "Take Me Home" was fifth with 1.3 million.

Mumford & Son's "Babel" at No. 6 (1.4 million) and Justin Bieber's "Believe" at No. 6 (1.3 million) round out the top 10. Only 10 albums reached 1 million in sales.

Katy Perry received the most radio airplay for the second year in a row with 1.4 million spins, while Swift was the most streamed artist at 216 million streams.

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Scant Proof Is Found to Back Up Claims by Energy Drinks

Energy drinks are the fastest-growing part of the beverage industry, with sales in the United States reaching more than $10 billion in 2012 — more than Americans spent on iced tea or sports beverages like Gatorade.

Their rising popularity represents a generational shift in what people drink, and reflects a successful campaign to convince consumers, particularly teenagers, that the drinks provide a mental and physical edge.

The drinks are now under scrutiny by the Food and Drug Administration after reports of deaths and serious injuries that may be linked to their high caffeine levels. But however that review ends, one thing is clear, interviews with researchers and a review of scientific studies show: the energy drink industry is based on a brew of ingredients that, apart from caffeine, have little, if any benefit for consumers.

“If you had a cup of coffee you are going to affect metabolism in the same way,” said Dr. Robert W. Pettitt, an associate professor at Minnesota State University in Mankato, who has studied the drinks.

Energy drink companies have promoted their products not as caffeine-fueled concoctions but as specially engineered blends that provide something more. For example, producers claim that “Red Bull gives you wings,” that Rockstar Energy is “scientifically formulated” and Monster Energy is a “killer energy brew.” Representative Edward J. Markey of Massachusetts, a Democrat, has asked the government to investigate the industry’s marketing claims.

Promoting a message beyond caffeine has enabled the beverage makers to charge premium prices. A 16-ounce energy drink that sells for $2.99 a can contains about the same amount of caffeine as a tablet of NoDoz that costs 30 cents. Even Starbucks coffee is cheap by comparison; a 12-ounce cup that costs $1.85 has even more caffeine.

As with earlier elixirs, a dearth of evidence underlies such claims. Only a few human studies of energy drinks or the ingredients in them have been performed and they point to a similar conclusion, researchers say — that the beverages are mainly about caffeine.

Caffeine is called the world’s most widely used drug. A stimulant, it increases alertness, awareness and, if taken at the right time, improves athletic performance, studies show. Energy drink users feel its kick faster because the beverages are typically swallowed quickly or are sold as concentrates.

“These are caffeine delivery systems,” said Dr. Roland Griffiths, a researcher at Johns Hopkins University who has studied energy drinks. “They don’t want to say this is equivalent to a NoDoz because that is not a very sexy sales message.”

A scientist at the University of Wisconsin became puzzled as he researched an ingredient used in energy drinks like Red Bull, 5-Hour Energy and Monster Energy. The researcher, Dr. Craig A. Goodman, could not find any trials in humans of the additive, a substance with the tongue-twisting name of glucuronolactone that is related to glucose, a sugar. But Dr. Goodman, who had studied other energy drink ingredients, eventually found two 40-year-old studies from Japan that had examined it.

In the experiments, scientists injected large doses of the substance into laboratory rats. Afterward, the rats swam better. “I have no idea what it does in energy drinks,” Dr. Goodman said.

Energy drink manufacturers say it is their proprietary formulas, rather than specific ingredients, that provide users with physical and mental benefits. But that has not prevented them from implying otherwise.

Consider the case of taurine, an additive used in most energy products.

On its Web site, the producer of Red Bull, for example, states that “more than 2,500 reports have been published about taurine and its physiological effects,” including acting as a “detoxifying agent.” In addition, that company, Red Bull of Austria, points to a 2009 safety study by a European regulatory group that gave it a clean bill of health.

But Red Bull’s Web site does not mention reports by that same group, the European Food Safety Authority, which concluded that claims about the benefits in energy drinks lacked scientific support. Based on those findings, the European Commission has refused to approve claims that taurine helps maintain mental function and heart health and reduces muscle fatigue.

Taurine, an amino acidlike substance that got its name because it was first found in the bile of bulls, does play a role in bodily functions, and recent research suggests it might help prevent heart attacks in women with high cholesterol. However, most people get more than adequate amounts from foods like meat, experts said. And researchers added that those with heart problems who may need supplements would find far better sources than energy drinks.

Hiroko Tabuchi contributed reporting from Tokyo and Poypiti Amatatham from Bangkok.

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Auto sales reach a new post-recession high

In a key sign of a stronger economy, automakers posted a strong December to cap off the industry's best annual U.S. sales since 2007.

The strong sales — Nissan, Hyundai, Kia, Mercedes-Benz, Subaru, Audi and Porsche all set annual U.S. sales records — led several encouraging economic reports out Thursday.

The private sector grew by 215,000 jobs in December, boosted by solid gains in construction, professional services and trade and transportation, according to Automatic Data Processing. Meanwhile, planned layoffs announced in December plunged to 32,556 — the second-lowest monthly total of 2012, according to outplacement consulting firm Challenger, Gray & Christmas Inc. Overall, last year had the lowest 12-month job-cut total since 1997.

That contrasted with a murkier forecast for the retail sector. Although stores moved plenty of product through the holidays, much of it sold at deep discounts, raising concerns about maintaining sales momentum. Major chains did, however, post a 4.5% sales increase over December 2011, beating analysts' expectations, according to a Thomson Reuters tally of 17 retailers.

Auto sales and a strengthening housing recovery look to be the big drivers of the economy this year, said David Shulman, senior economist at the UCLA Anderson Forecast.

"Part of the auto recovery is tied to housing, as businesses and the construction trades go out and purchase trucks and other vehicles," Shulman said.

December truck sales were particularly strong. Beyond the housing recovery, the surge was driven by big discounts, as Ford and Chevrolet battled for market share, and a worry by business that Congress would end certain tax advantages for truck purchases in its "fiscal cliff" negotiations. (The tax benefits ultimately survived the political fray.)

As the industry heads into 2013, analysts project annual sales of about 15.5 million vehicles, barring an unforeseen disaster or political meltdown over budget issues in Washington.

"I think the underlying fundamentals of the economy are very sound," said Mark Reuss, president of General Motors' North American operations. "Access to money is sound, you see employment steadily increasing.... That's pretty upbeat."

Automakers sold 14.5 million vehicles last year, up 13.4% from 2011, according to Autodata Corp. That included almost 1.4 million sold last month, a 9% gain compared with the prior December.

Still, some car companies are maintaining caution.

"It would have been nice if all the open questions with the 'fiscal cliff' would have been resolved over the holiday. But clearly they weren't, and that does extend this period of uncertainty from a consumer point of view," said Jonathan Browning, chief executive of Volkswagen Group of America.

Nonetheless, U.S. sales of the automaker's VW brand grew 35.4% to 44,005 vehicles last month — its best December since 1970.

Ford's F-series trucks, Chevrolet's Camaro, Toyota's Camry and Honda's CR-V were the bestselling models in their segments of the market.

In an age-old battle, GM's Chevrolet Camaro narrowly edged out Ford's Mustang — 84,391 versus 82,995 — to become the top-selling muscle car.

But Ford remained king in trucks. With sales of 645,316, its F-series pickup was the bestselling vehicle of any type in America last year, outselling the Chevrolet Silverado, which had sales of 418,312.

Once again, Toyota had the bestselling passenger car. It sold 404,886 Camrys, making the Camry the top-selling car and No. 3 among all vehicles. Honda sold 331,872 Accords and 317,909 Civics last year.

Honda's CR-V took the crown in the small sport utility segment. Honda sold 281,652 CR-Vs, while Ford's Escape finished at 261,008.

The BMW brand topped the luxury segment, ending 2012 with sales of 281,460 vehicles, a 13.5% gain from 2011. The Mercedes-Benz brand reported record annual sales of 274,134 vehicles, up 11.8% from the prior year. Meanwhile, Audi, the third German luxury brand, came on strong. It sold 139,310 new cars and SUVs, eclipsing the prior year's sales by 18.5%.

In the rechargeable car segment, Chevrolet's Volt retained an edge over Nissan's Leaf. GM sold 23,461 of the plug-in hybrid Volts last year — three times what it sold the previous year. Nissan sold 9,819 of the all-electric Leafs, just 145 more than in the prior year. Later this month it is set to announce improvements to the vehicle that it hopes will improve sales.

Volkswagen ruled sales of diesel vehicles. The automaker sold 90,295 diesels in 2012 — up 55% from 2011. Diesels now account for 1 of every 5 VW sales in the nation.

Nissan, including its Infiniti brand, sold more than 1.1 million vehicles, up 9.5% from 2011. It was also the first time the Nissan brand saw U.S. annual sales top 1 million. But Nissan was also one of the few automakers to report that its December U.S. sales declined, falling 1.6% to 99,290 vehicles from a year earlier.

A host of new vehicle offerings should help the industry's sales this year and next.

Automakers plan to make 43 new vehicle introductions in the U.S. this year — up nearly 50% from 2012 levels, according to auto research firm R.L. Polk & Co. In addition, 60 vehicle redesigns are expected in the coming year.

"A lot of marketing dollars are put into the product launches," said Tom Libby, a Polk analyst. "That drives showroom traffic and sales."

jerry.hirsch@latimes.com

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Bieber urges crackdown on paparazzi after photographer's death

Justin Bieber and his collection of exotic cars have been tantalizing targets for celebrity photographers ever since the young singer got his driver's license.

A video captured the paparazzi chasing Bieber through Westside traffic in November. When Bieber's white Ferrari stops at an intersection, the video shows the singer turning to one of the photographers and asking: "How do your parents feel about what you do?"

A few months earlier, he was at the wheel of his Fisker sports car when a California Highway Patrol officer pulled him over for driving at high speeds while trying to outrun a paparazzo.

This pursuit for the perfect shot took a fatal turn Tuesday when a photographer was hit by an SUV on Sepulveda Boulevard after taking photos of Bieber's Ferrari. And the singer now finds himself at the center of the familiar debate about free speech and the aggressive tactics of the paparazzi.

Since Princess Diana's fatal accident in Paris in 1997 while being pursued by photographers, California politicians have tried crafting laws that curb paparazzi behavior. But some of those laws are rarely used, and attorneys have challenged the constitutionality of others.

On Wednesday, Bieber went on the offensive, calling on lawmakers to crack down.

"Hopefully this tragedy will finally inspire meaningful legislation and whatever other necessary steps to protect the lives and safety of celebrities, police officers, innocent public bystanders and the photographers themselves," he said in a statement.

It remained unclear if any legislators would take up his call. But Bieber did get some support from another paparazzi target, singer Miley Cyrus.

She wrote on Twitter that she hoped the accident "brings on some changes in '13 Paparazzi are dangerous!"

Last year, a Los Angeles County Superior Court judge threw out charges related to a first-of-its-kind anti-paparazzi law in a case involving Bieber being chased on the 101 Freeway by photographer Paul Raef. Passed in 2010, the law created punishments for paparazzi who drove dangerously to obtain images.

But the judge said the law violated 1st Amendment protections by overreaching and potentially affecting such people as wedding photographers or photographers speeding to a location where a celebrity was present.

The L.A. city attorney's office is now appealing that decision.

Raef's attorney, Dmitry Gorin, said new anti-paparazzi laws are unnecessary.

"There are plenty of other laws on the books to deal with these issues. There is always a rush to create a new paparazzi law every time something happens," he said. "Any new law on the paparazzi is going to run smack into the 1st Amendment. Truth is, most conduct is covered by existing laws. A lot of this is done for publicity."

Coroner's officials have not identified the photographer because they have not reached the next of kin. However, his girlfriend, Frances Merto, and another photographer identified him as Chris Guerra.

The incident took place on Sepulveda Boulevard near Getty Center Drive shortly before 6 p.m. Tuesday. A friend of Bieber was driving the sports car when it was pulled over on the 405 Freeway by the California Highway Patrol. The photographer arrived near the scene on Sepulveda, left his car and crossed the street to take photos. Sources familiar with the investigation said the CHP told him to leave the area. As he was returning to his vehicle, he was hit by the SUV.

Law enforcement sources said Wednesday that it was unlikely charges would be filed against the driver of the SUV that hit the photographer.

Veteran paparazzo Frank Griffin took issue with the criticism being directed at the photographer as well as other paparazzi.

"What's the difference between our guy who got killed under those circumstances and the war photographer who steps on a land mine in Afghanistan and blows himself to pieces because he wanted the photograph on the other side of road?" said Griffin, who co-owns the photo agency Griffin-Bauer.

"The only difference is the subject matter. One is a celebrity and the other is a battle. Both young men have left behind mothers and fathers grieving and there's no greater sadness in this world than parents who have to bury their children."

Others, however, said the death focuses attention on the safety issues involving paparazzi

"The paparazzi are increasingly reckless and dangerous. The greater the demand, the greater the incentive to do whatever it takes to get the image," said Blair Berk, a Los Angeles attorney who has represented numerous celebrities. "The issue here isn't vanity and nuisance, it's safety."

richard.winton@latimes.com

andrew.blankstein@latimes.com

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Apple may have sold up to 4 million iPhones to businesses in Q4

As we’ve mentioned countless times, it’s a good thing that RIM (RIMM) will release BlackBerry 10 soon, because otherwise Apple (AAPL) and Android will continue to wreck its market share among enterprise users. Benzinga reports that Trip Chowdhry, a managing director at Global Equities Research, has put out a research note estimating that Apple sold between 3 million and 4 million iPhones to businesses over the past quarter, some of whom have switched over from BlackBerry.

[More from BGR: ‘iPhone 5S’ to reportedly launch by June with multiple color options and two different display sizes]

“This figure emerges from a combination of new purchase of iPhones and users switching to iPhones from Blackberry,” Chowdhry writes. “After the two-year contract expiration on Apple iPhone[s], [the] majority of the enterprises have replaced their employees’ current phones with the new iPhone 5.”

[More from BGR: Nokia predicted to abandon mobile business, sell assets to Microsoft and Huawei in 2013]

As for reasons why more companies are switching to the iPhone, Chowdhry says that salespeople for key enterprise apps such as Salesforce, Workday and VMware are increasingly “demonstrating their enterprise offering on iPhones, which is also acting as a trigger for enterprises to purchase iPhones for their employees.” Chowdhry also thinks that the advent of mobile device management software has boosted the iPhone’s security capabilities and has made it less risky for companies to adopt.

This article was originally published by BGR

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