The Maryland Senate passed a bill Wednesday to ignore the US Electoral College in presidential elections, instead awarding the state's 10 electoral votes to the winner of the national popular vote. Currently, the state's 10 votes go to the candidate who won the popular vote in Maryland.

The Senate approved SB 634 by a 29-to-17 vote, and it now goes to the state House. The plan would only go into action if enough states representing a majority of the nation's 538 electoral votes adopt it, making it unlikely that it would be in effect by next year's presidential election.

Other states are also considering the plan as a way to avoid a situation where a candidate wins the popular vote but loses the election, as happened with Democrat Al Gore in 2000.

The city of Chula Vista has issued a response to a lawsuit filed by a police officer who wants to compete in beauty pageants.

Deana Mory is currently representing California in the Ms. United States beauty pageant. But she is also a police officer who patrols the streets of Chula Vista.

She told NBC police administrators said if she competes she could be reprimanded or fired because prize money and gifts from the pageants violate city police.

Mory said she would refuse the money if she won the national title, but the city did not accept her compromise.

As a result, Mory and the Police Officers Association filed a lawsuit against The Chula Vista Police Department.

Wednesday night, Liz Pursell from the city of Chula Vista released a statement saying, "There is no merit to the allegations. Ms. Mory did participate in the pageant. The city is in the process of responding to the second lawsuit. We anticipate filing a motion seeking a judgment in favor of the city."

The beauty pageant is in July, and Mory said she plans on taking part.

U.S. District Judge Thomas F. Hogan threw out a lawsuit brought on behalf of nine former prisoners in Iraq and Afghanistan . He said Rumsfeld cannot be held personally responsible for actions taken in connection with his government job.

Lawyers for the American Civil Liberties Union and Human Rights First had argued that Rumsfeld and top military officials disregarded warnings about the abuse and authorized the use of illegal interrogation tactics that violated the constitutional and human rights of prisoners.

"This is a lamentable case," Hogan began his 58-page opinion Tuesday.

"Despite the horrifying torture allegations," Hogan said, he could find no case law supporting the lawsuit, which he previously had described as unprecedented.

Allowing the case to go forward, Hogan said in December, might subject government officials to all sorts of political lawsuits. Even Osama bin Laden could sue, Hogan said, claiming two American presidents threatened to have him murdered.

Had the Rumsfeld lawsuit been allowed to go forward, attorneys for the ACLU might have been able to force the Pentagon to disclose what officials knew about abuses such as those at Abu Ghraib prison in Iraq and what was done to stop it.

The Justice Department had no immediate comment.

Karpinski, whose Army Reserve unit was in charge of the Abu Ghraib prison, was demoted and is the highest-ranking officer punished in the scandal. Sanchez, who commanded U.S. forces in Iraq, retired from the Army and said his career was a casualty of the prison scandal.

The word is spreading among the thousands of cocktail waitresses, food servers, bartenders, busboys and bellhops who make most of their money from tips. The rank-and-file workers complain that they were not consulted on the new tip formulas.

If there really is more money in town, said Arturo Valadez, a sommelier at Mandalay Bay, it's not necessarily reaching workers' pockets.

"I'm not against paying (more) taxes, but the way they are doing it isn't necessarily the most accurate or effective," he said.

The issue is coming to a head as the IRS and Las Vegas casinos negotiate a new agreement on how much tip income workers should declare to avoid being audited by the government.

Since the early 1990s Las Vegas casinos and the IRS have agreed on how much tip income the employees should declare.

Since then, the IRS has struck similar agreements with other industries nationwide, including restaurants, hair salons and barbers. In total, tip agreements with employers have yielded billions of dollars in additional taxes for the government. Included in the voluntary participation are more than 47,000 establishments nationwide. That the agreements were born in the cash-rich casino industry is apparent in the IRS tip-reporting guide for taxpayers, which specifically mentions casino workers and features an illustration of a royal flush on its cover page.

The agreements, much like hard-won union contracts, are complex, site-specific and subject to change. Each tipped position at each participating Las Vegas casino has its own tip estimate because casinos individually negotiate rates, which differ by shift and job.

A food server in a coffee shop during the day shift, for instance, might be expected to declare $13,000 in tip income, whereas a swing-shift server in a full-service restaurant could be required to declare more than $20,000 in tip income. Employers withhold taxes on the estimated tips.

The agreements ease the paperwork burden for workers and the IRS. Workers don't have to track their tips, and the IRS doesn't spend time auditing workers.

And workers know a good deal when they see it: Many earn more in tips than the amount estimated by the IRS.

That's probably why, according to the IRS, 80 percent of Nevada's more than 100,000 tip-earning hotel workers participate in the agreement program, which is voluntary for employers and workers.

More than four years ago the casino industry fought to keep down proposed tip rates that lobbyists said would have doubled, tripled and even quadrupled workers' claimed tips. Both sides wrangled over rates in the years leading up to the three-year tip agreement reached in 2003. Hoping to capture even more unreported tips, the IRS expanded the template of the Nevada agreement to casinos nationwide.

The local tip agreements expired Dec. 31, although the old rates apply until a new agreement is reached in coming weeks.

Even though tip rates probably will go up for many Las Vegas casino workers, the alternative to participating in the tip agreement isn't all that appealing.

The IRS requires tipped workers who don't participate in the agreements to track daily tips and report the aggregate on their tax returns - and risk being audited. The IRS offers a worksheet with spaces for tips earned each day, a separate column for tips shared with others and spaces for co-workers' names.

After spending eight hours on their feet at work, most are unlikely to spend their free time logging tips on a spreadsheet.

That's why the IRS negotiated rates that might be less than actual tips yet guarantee a stream of tip taxes - up to $900 million annually in Nevada - that might otherwise go uncollected.

The American Gaming Association, which helped casinos negotiate the 2003 agreement, is involved in the latest round of discussions with the IRS.

A spokesman for Senate Majority Leader Harry Reid, D-Nev., who has assisted the industry in the negotiation process, said the IRS has agreed to phase in tip-rate increases over the three years of the new agreement rather than hit workers with a bigger tax bill all at once. The phased-in increase would extend beyond Nevada to include New Jersey, the Gulf Coast and other U.S. casino markets.

The second step of the process - determining the tip rates for each casino - has been more time consuming and contentious, with the IRS "pushing for substantial increases for certain positions," Reid spokesman Jon Summers said.

IRS, American Gaming Association and Culinary Union representatives are meeting this week to iron out a compromise.

The Culinary, which began union contract negotiations with Strip casinos two weeks ago, isn't taking any chances. The union, which represents 55,000 tip-earning workers, is proposing that employers contribute to a "defense fund" to assist employees who choose not to participate in the upcoming agreement and therefore might become subject to IRS audits.

"A coffee shop waitress on graveyard can be audited after she decides not to participate because she thinks rates are too high. We don't think that's fair," Culinary Union Secretary-Treasurer D. Taylor said. "A casino executive who gets called in for an audit and is questioned has legal representation. An individual worker should not have to take on the IRS by himself."

For now, the casinos appear to have the upper hand in this high-stakes game. The industry has threatened to chuck the program entirely - a potential tax loss in the billions for the IRS - unless the agency can agree to a smaller increase in tip rates.

"The rates (the IRS is) talking about are quite scary to folks," Taylor said.

Distributed by Scripps-McClatchy Western Service, www.scrippsnews.com.

Dallas law firm Jenkens & Gilchrist will close and pay a $76 million fine to settle a federal criminal tax-shelter probe, government officials said Thursday. 
 
The penalty stems from the firm's "promotion of abusive and fraudulent tax shelters in violation of the tax law," the Internal Revenue Service said.

Jenkens & Gilchrist, which had more than 600 attorneys until recently, intends to close its main office in Dallas at the end of the month, after having already closing other offices, the U.S. Attorney's office said.

The firm was shutting down because it realized its illegal activities had "caused serious damage to its reputation, revenues and stability," the U.S. Attorney's office said.

The law firm did not have an immediate comment, but in an earlier statement said, "We deeply regret our involvement in this tax practice, and the serious harm it caused to the United States Treasury."

The IRS said some 1,400 high-net-worth investors followed Jenkens & Gilchrist's advice "and will owe interest and penalties on their underpayment of tax."

Government agencies are expected to spend at least $20 billion on the contract over 10 years, the GSA estimates -- a move that will overhaul the government's telecommunications services.

Under terms of the GSA contract, called Networx Universal, agency spending could be increased to as much as $48 billion.

The announcement comes after weeks of anticipation and years of preparation. The four companies have spent millions of dollars preparing bids and called on thousands of their employees to develop proposals and hammer out the details.

The failure to include Sprint is seen as a huge upset as it has provided telecommunication services to U.S. government agencies for 18 years.

"Sprint is disappointed not to receive a portion of the Networx Universal contract," it said in a statement. "The Sprint team spent significant time and energy on the program and has made large investments to meet the diverse requirements of the agencies."

The company said it will request a meeting with GSA next week and will decide whether to "protest or not" after that.

JOCKEYING FOR CONTRACTS MOVES TO SECOND STAGE

Even though Sprint is out of the picture, the three winning companies will still have to compete for individual contracts within the government agencies.

The companies agreement with the GSA would allow them to sell phone and Internet services to as many as 135 federal agencies, such as the treasury and defense departments.

"It's a big win for Qwest," said the company's senior vice president Diana Gowen, while AT&T senior vice president Don Herring said his company could not be happier that it won.

Both said it was too early to say how the contract would impact overall revenue and earnings except to acknowledge that Networx Universal is a very large contract.

"We will get our fair share of the 20 billion, or 40 billion, it's all about your creativity," Gowen said.

It is not mandatory for the agencies to use a company the GSA has chosen, but there are benefits to be had, such as a common billing platform.

The Networx Universal contract is one of two that comprise the Networx program. Companies bidding on Networx Universal had to demonstrate that they could provide 36 mandatory services, such as private phone lines and secure e-mail.

The second, called Networx Enterprise, is expected to be awarded in May 2007 and required companies to show they could provide nine mandatory services. Projected spending on Enterprise is estimated at $20.1 billion.

The complete Networx contract is the third in a series of telecommunications procurement programs developed by GSA that are designed to leverage the buying power of the federal government and save U.S. taxpayers money.