The Supreme Court also has issued recent rulings that could make it tougher for investors to bring class-action claims against corporations. In one case, the court said that plaintiffs must show convincing evidence that fraud occurred or else a lawsuit can be dismissed at the pre-trial stage.

Fifty-nine federal securities cases requesting class-action status were filed in the first six months of this year, down 42 percent from an average mid-year filing rate of 101 from the 1996-to-2005 period, according to the study by legal research firm Cornerstone Research and Stanford University Law School.

Courts must certify lawsuits as class-actions. Many cases end up getting tossed out by judges before they reach that stage. If class-actions do get certified, the vast majority end up getting settled rather than going to trial.

The number of filings this year was up slightly from 53 cases in the same period in 2006, but it still marks the fourth consecutive six-month period with below average filings, the report found.

"We've now had two years worth of extremely low filing activity," said Joseph Grundfest, a Stanford University law professor. "This is starting to look like a permanent shift, not a transitory phenomenon."

"The laws authorizing NSLs, as well as specific rules set down by the FBI and by me, established strict policies for how they would be issued and carried out....

I was upset when I learned this, as was Director Mueller.  To say that I am concerned about what has been revealed in this report would be an enormous understatement.

Failure to adequately protect information privacy is a failure to do our jobs. And although I believe the kinds of errors we saw here were due to questionable judgment or lack or attention, not intentional wrongdoing, I want to be very clear: there is no excuse for the mistakes that have been made, and we are going to make things right as quickly as possible.

I have told the Director that I will not accept the problems identified in the report, and I will not be satisfied until procedures and policies that should have been followed are being followed, to the letter."

Read the full speech here.

DOJ spinmeisters are already trying to smooth things over, claiming that it was unclear whether Gonzales had actually read the reports about legal violations and civil liberties abuses. All the abuses reported to Gonzales were, however, grave enough to also be submitted to an independent intelligence oversight board designed to safeguard civil liberties. A story today in the Washington Post quoted DOJ spokesman Brian Roehrkasse as saying that just because a violation is reported to the oversight board "does not mean that a USA Patriot violation exists or that an individual's civil liberties have been abused."

But Caroline Fredrickson, the Director of the ACLU's Washington Legislative Office condemned Gonzales' actions today in a statement:

"Congress has been hoodwinked by the Attorney General and it's time for consequences.  From the US Attorney scandal to warrantless wiretapping, this administration has misled the American people time and again.  We know now that Mr. Gonzales provided false testimony in order to build a case for reauthorization of the Patriot Act.  It is now apparent that Congress and the public simply cannot afford to take anything this administration says about the war on terror at face value.

No government should have these broad powers in the first place and it has become painfully obvious that our government cannot be trusted to police itself.  This administration seems to think that the end justifies the means and when it comes to the means, it's anything goes.  Without Mr. Gonzales' false testimony, the Patriot Act may not have been authorized in its current form.  Now, more than ever, is the time to reopen and re-examine the Patriot Act."

Congress may also decide it's time to re-examine the possibility that Gonzales shut down a DOJ probe into the administration's NSA warrantless wiretapping program because he knew it would target his actions as former White House counsel. Murray Waas of the National Journal first reported the story here.

As expected, Democratic lawmakers are outraged. Rep. Jerry Nadler (D-New York), the chairman of the House Judiciary Subcommittee on the Constitution, Civil Rights and Civil Liberties, quickly called for Gonzales' resignation, along with the appointment of a special prosecutor to investigate Gonzales' statements to Congress and whether the AG and other officials broke the law with the NSA wiretapping program.

"Attorney General Gonzales has shown an apparent reckless disregard for the rule of law and a fundamental lack of respect for the oversight responsibilities of Congress," Nadler said. "The man entrusted with enforcing our nation's laws must also abide by them, and Mr. Gonzales has apparently failed in that duty. Providing false, misleading or inaccurate statements to Congress is a serious crime, and the man who may have committed those acts cannot be trusted to investigate himself."

A former Alaska lawmaker was convicted Monday of taking thousands of dollars from a corrections company consultant in exchange for his help in the Legislature.

"I'm devastated," former state Rep. Tom Anderson said after the federal jury announced its bribery verdict.

Anderson, 39, was accused of conspiring to take money he thought was coming from a private prison firm, Cornell Industries Inc.

The money was supplied by the FBI through an informant working for Cornell who secretly recorded his conversations with Anderson and a coconspirator, former municipal lobbyist Bill Bobrick.

Anderson was one of four current or former state lawmakers facing federal bribery indictments. The other three face trial this fall for charges related to Anchorage-based oil field services company VECO Corp.

"I think the prosecution has criminalized being a legislator over the last year," Anderson said. "I think I fell victim to that."

Minutes after Anderson's conviction, Gov. Sarah Palin signed into law an ethics reform package for state officials was signed into law.

Palin said the law will help re-establish the public's trust, noting Anderson's case revealed a broader problem with public officials.

"I believe it could be a precursor for what's to come, and it's unfortunate," she said.

Anderson's family, including his wife, state Sen. Lesil McGuire, were not present for the verdict.

Anderson said they couldn't get to the downtown Anchorage courthouse in time after it was announced the jury had reached a verdict.

Judge John Sedwick ordered Anderson to surrender his passport and scheduled sentencing for Oct. 2.

Anderson was arrested Dec. 7 and charged with seven felonies, including conspiracy, bribery, money laundering and interfering with commerce, a charge connected to a demand for payments. He faces a maximum penalty of 115 years in prison and a $1.75 million fine.

Department of Justice officials in Washington said Anderson was held accountable for his crimes.

Anderson "corrupted his elected office when he took official actions in exchange for bribery payments," Assistant Attorney General Alice S. Fisher said. "His illegal conduct impaired the integrity of the oath he took to represent citizens of the state of Alaska."

Bobrick pleaded guilty in May to bribing Anderson. He agreed to testify against Anderson in exchange for prosecutors' request for lenience at sentencing.

Anderson was accused of accepting nearly $26,000 he thought was coming from Cornell through Frank Prewitt, a former corrections department commissioner and an FBI informant was a $150,000-per-year consultant for Cornell.

The Houston-based company operated halfway houses in Alaska and hoped to build a private prison and a juvenile psychiatric treatment center in Alaska.

The defense argued that Anderson backed Cornell without being on the take and that Prewitt wore a wire to bag a legislator and deflect investigators from his legal problems.

Prosecutors contend Bobrick and Anderson trolled for cash in conversations with Prewitt, using a phony Web-based newsletter as a front for Cornell to funnel payments to Anderson.

Anderson, finishing his first term as a Republican legislator from east Anchorage, was strapped for cash, prosecutors said, as he romanced McGuire, who was then a state representative.

He owed child support payments and was looking for a payoff of about $3,000 per month when the Legislature was not in session.

In 1978, Hill ran for governor and defeated incumbent Gov. Dolph Briscoe for the Democratic nomination. But Hill became the first Democrat in 100 years to lose the gubernatorial election, falling to Dallas millionaire Bill Clements, a Republican.

The loss was not the end of Hill's career in public service. After several years as a behind-the-scenes player in state politics, Hill was elected to a four-year term as chief justice of the Texas Supreme Court in 1984.

He resigned before his term ended to begin an unsuccessful crusade to reduce political pressure on the judicial branch by ending the system in which voters elect judges in Texas. Hill continued to push for reforms even after he no longer held public office.

"His retirement from public service was no retirement at all, because he continued to advocate for a method of judicial selection that would assure trust and confidence in our judiciary," Chief Justice Wallace B. Jefferson said.

The setbacks never seemed to discourage Hill, said former Texas Supreme Court Justice Craig T. Enoch.

"He fits the mold of legendary lawyers in Texas," he said.

"I never saw something that would eat at him anyway," Enoch added. "It illustrates a depth to this person far beyond whether he won or lost a particular election."

Hill was born Oct. 9, 1923, in Breckenridge. He later said he "could have outdone Abe Lincoln in terms of the smallness of the house in which I was born."

He spent a year at Kilgore Junior College, where he won a national debate championship, and then went on to the University of Texas at Austin, where he graduated from law school and met his wife, Elizabeth "Bitsy" Graham.

After serving in the Navy during World War II, Hill became a lawyer. He built his reputation by winning large awards for the families of passengers who died in plane crashes in Texas.

He was secretary of state from 1966-68, after helping Gov. John Connally get elected. In 1972, he won an election for attorney general by 100,000 votes.

After the failed gubernatorial run and his stint on the state Supreme Court, Hill returned to private practice. Gov. George W. Bush appointed Hill to the three-member Texas Lottery Commission in 1997.

Since 2005, Hill had been a partner in the Houston office of the law firm Winstead PC.

Gov. Rick Perry ordered flags flown at half-staff through Saturday.

"John Hill represented all that is good about politics and public service," former U.S. Secretary of State James A. Baker III said. "I have been privileged to have been involved in political efforts both with John Hill and against him, and believe me, it was better to be with him."

Texas' two senators also released statements acknowledging Hill's impact on state politics and the judicial system.

"He was dynamic, witty, compassionate and always a gentleman," said Sen. John Cornyn, a former state attorney general and Texas Supreme Court justice. "He generated respect and admiration among his fellow Texans that transcended partisan politics."

Sen. Kay Bailey Hutchison said, "The state of Texas owes him and his family a debt of gratitude."

Hill is survived by his wife; three children, Melinda Elizabeth Hill Perrin, John Graham Hill and Judge Martha Hill Jamison; 10 grandchildren; and two great-grandchildren.

Services are scheduled for 1 p.m. Friday at St. Luke's United Methodist Church in Houston.

Milberg Weiss is one of the best-known law firms that bring class actions on behalf of shareholders and customers against large companies. The firm boasts that it has recovered more than $45 billion (£22.3 billion) on behalf of clients in cases connected with financial fraud.

David Bershad, a 67-year-old former managing partner at the law firm, yesterday agreed to plead guilty to conspiracy to obstruct justice and make false statements under oath. Those charges could attract a sentence of up to five years in prison. Mr Bershad has agreed to return $7.75 million, pay a $250,000 fine and cooperate with the US Attorney’s office in Los Angeles.

For the past seven years, federal prosecutors have been investigating whether Milberg Weiss, the firm, Mr Bershad and his former partner Steven Schulman took part in a scheme to pay millions of dollars in illegal kickbacks to shareholders so that they would serve as lead plaintiffs in class action fraud cases.

The prosecutors were trying to ascertain whether, once a case was settled, some of the legal fees due to the firm were paid to the lead plaintiffs. Such payments are illegal because lead plaintiffs have to represent other members of the class action and have to declare that their interests are in line with the others’.

Mr Bershad was indicted last year by a Los Angeles grand jury along with Mr Schulman for making such payments in cases where the firm was paid $216 million. Milberg Weiss and Mr Schulman, who has since retired, pleaded not guilty. The trial is to due to start in January.

In a statement, Milberg Weiss & Bershad said: “We understand David Bershad will plead guilty today to conspiracy to obstruct justice. Mr Bershad had been on a leave of absence since May 2006 and his relationship with Milberg Weiss LLP has been terminated. We remain confident that his actions will have no effect on the firm’s commitment to its clients and its ongoing work to protect public shareholders and consumers.”

Federal investigators finally got lucky in the long-running inquiry in May last year. Los Angeles prosecutors secured a guilty plea from Howard Vogel, who admitted that he and his family had received $2.5 million in illegal payments from the law firm in return for becoming lead plaintiffs in a number of class actions. Mr Vogel named four partners at Milberg Weiss and also agreed to cooperate with the investigation.

Mr Bershad had responsibility for overseeing the finances and accounting processes of Milberg Weiss, according to court papers.

"Of course, this is the worst possible development," a law professor at New York University, Stephen Gillers, said. "It bodes ill for Partners A & B," the professor said, using the pseudonyms prosecutors have adopted to refer to Messrs. Weiss and Lerach in court proceedings. "Each of them is clearly in the prosecutors' sights," Mr. Gillers said. With Bershad's testimony, prosecutors "may now have the ability to pull the trigger" and obtain an indictment of the two men, Mr. Gillers said.

"It seems pretty damning to me," another professor who has been following the case, Larry Ribstein of the University of Illinois, said. "They are facing a trial or pretty hard time, if all this pans out."

Messrs. Weiss and Lerach have not been charged with any crime. However, in recent weeks, the pair has been in plea discussions with federal prosecutors, a lawyer involved in the case said, speaking on condition of anonymity.

Mr. Weiss's attorney, Benjamin Brafman, declined to comment on the development. Mr. Lerach's lawyer, John Keker, did not respond to a message seeking comment for this article.

Bershad could receive up to five years in prison on the conspiracy count. Prosecutors and Bershad's lawyers agreed that sentencing guidelines call for 18 months to two years in his case, though Judge Walter is not obligated to follow that recommendation. Bershad also agreed to forfeit $7.75 million of his receipts from the various lawsuits and to pay a $250,000 fine.

At yesterday's hearing, Bershad and one of his lawyers, Cristina Arguedas, stood at a lectern as a prosecutor, Richard Robinson, outlined the facts the government would seek to prove if Bershad went to trial. For 15 minutes, the prosecutor described the scheme by which Milberg Weiss used secretly paid plaintiffs to win the race to be first to file securities lawsuits.

"Generally, these individuals were promised that they would be paid approximately 10% of the net attorneys' fees that Milberg Weiss obtained," Mr. Robinson said. This gave Milberg Weiss an advantage because plaintiffs' firms that filed first were likely to be named as lead counsel and to enjoy a larger share of attorneys fees when cases were settled, he said. In 1995, Congress changed the laws related to class actions, and first-to-file status became less critical.

In one of the case's most eye-catching allegations, Mr. Robinson said Bershad kept in his office a stash of cash contributed by Milberg Weiss partners. The prosecutor said this became a "secret payment fund" used to make off-the-books distributions to plaintiffs, who were expected to take less than the customary 10% if they were paid in cash.

Mr. Robinson said Partner A, Mr. Weiss, made at least one payment from the fund, and Partner B, Mr. Lerach, sought reimbursement for a cash payment to a plaintiff. The prosecutor said Partner A also used a "phony option," which court papers indicate related to an artwork, to pay $175,000 owed to one plaintiff involved in the scheme.

During Zheng's tenure, six types of medicine were approved that turned out to be fake and some pharmaceutical companies used false documents to apply for approvals.

In comments on Zheng's case, a spokeswoman for the State Food and Drug Administration, Yan Jiangying, said Tuesday that corrupt officials have shamed the country's food and drug supervision system, Xinhua reported.

"We should seriously reflect and learn from these cases," Yan said. "We should fully protect public food and drug safety. The new drug registration regulation, which will come out soon, will ensure the transparency of the drug approval procedure."

In late June, China shut down 180 food producers that were found to be using improper industrial chemicals and additives.

Also last month, the U.S. Food and Drug Administration said it is imposing stricter controls on farm-raised Chinese seafood because of long-term health concerns about contamination with drugs and unsafe food additives, but that there is no immediate danger to consumers.

The action, which was effective immediately, covers farm-raised shrimp, eel, catfish, and two other kinds of fish, basa and dace, from China, the world's largest producer of farmed fish and the third-largest exporter of seafood to the United States.

The drug varenicline is already on the market under the brand name Chantix to help smokers kick the habit but new preliminary research now suggests it could also be useful in helping heavy drinkers quit.

The research which was carried out on rats provided the rodents with intermittent access to 40 proof alcohol for four months and by varying the access to the liquor supply the rats were made to crave it.

The researchers say every time the rodents had access to booze, they upped their intake and drank all day and withdrawing the alcohol made them want to drink even more.

After months of this behaviour and a total of 37 binge-drinking sessions, all the rats cut their drinking in half when given varenicline.

When taken off the drug, the rats did not immediately imbibe more, a rebound effect that has affected other treatments.

Varenicline has been available as a smoking cessation aid for nearly a year in the U.S. and the European Union, and as well as being safe it does not suppress the appetite and is not metabolized in the liver.

Bartlett says this is a major plus because long term drinkers often have liver damage.

According to the researchers the drug targets a pleasure center in the brain and has the potential to be considered as a treatment for addictions such as gambling and painkillers.

Varenicline works by latching onto the same receptors in the brain that nicotine binds to when inhaled in cigarette smoke, an action that leads to the release of dopamine in the brain's pleasure centers; the drug blocks any inhaled nicotine from reinforcing that effect.

The new study suggests alcohol also acts on the same locations in the brain and varenicline, might be equally as effective for curbing drinking.

Selena Bartlett, a University of California neuroscientist who led the study says the drug has already proven itself safe for people trying to stop smoking and is now a potential drug to fight alcohol dependence.

Experts say smoking and drinking often go together and a single drug able to tackle both addictions is not surprising.

The researchers at the University of California along with the National Institute on Alcohol Abuse and Alcoholism, plan to conduct clinical trials in humans of the drug's effectiveness in curbing alcohol cravings and dependence.

The drug is already approved by Food and Drug Administration and this should speed the process up.

But skeptics warn that varenicline does not work for all smokers and it's highly unlikely it will work for all drinkers and some experts insist there is a common biological basis for addictions to both alcohol and tobacco.

Although drug company Pfizer provided the drug for the study it was not involved in the research and is apparently undecided whether to seek broader FDA approval for the drug.