China steps up effort to diversify FX reserves

BEIJING (Reuters) - China has set up a new unit to help diversify its $3.31 trillion holdings of official reserves, the country's currency regulator said on Monday.
The State Administration of Foreign Exchange (SAFE) said the SAFE Co-Financing office had been created to explore new investment options that preserve and increase the value of the world's largest currency reserve stockpile.
"In recent years, the central bank and SAFE have been creating new ways of using foreign exchange reserves to support the real economy and serve for the "venturing abroad" strategy," SAFE said in a statement on its website.
"After conducting this co-financing work, we have provided favorable financing environment and conditions for Chinese financial institutions and other FX market players to expand their economic and trade activities," it added.
The statement did not specify how much of the reserves would be at the disposal of the new office nor what the possible investment directions would be.
Caixin magazine, an independent publication focused on finance, reported on Monday that the new SAFE office would provide liquidity for Chinese banks to make loans for domestic firms to support overseas investments.

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U.S. economy to grow 2.5 percent this year: Fed's Evans

HONG KONG (Reuters) - The U.S. economy is expected to grow by 2.5 percent in 2013, improving to 3.5 percent growth in 2014, top Fed official Charles Evans said on Monday.
Evans also forecast the U.S. unemployment rate would be 7.4 percent this year, easing to about 7 percent in 2014.
"One good indicator of labor market improvement would be if we saw payroll employment increase by 200,000 each month for a number of months. We've been averaging about 150,000, but it's been very uneven ... we need a higher pace of employment growth and less volatility in that pace," Chicago Fed President Evans said.
The creation of 1 million jobs over six months would be a "substantive" improvement, but bringing unemployment down to the key level of 6.5 percent was likely to take much longer, probably until mid-2015, he said, speaking at the Asian Financial Forum in Hong Kong.
The U.S. Federal Reserve's decision last year to tie monetary policy to specific economic conditions should help boost the recovery without letting inflation take hold, said Evans, a chief architect of the policy.
It also provides additional accommodation by assuring markets that rates will remain low even after the economy perks up, he said.
"Given more explicit conditionality, markets can be more confident that we will provide the monetary accommodation necessary to close the large resource gaps that currently exist," he said. "Additionally, the public can be more certain that we will not wait too long to tighten if inflation were to become a substantial concern."
Last month, the Fed ramped up asset purchases aimed at spurring growth, and pledged to keep rates near zero until the unemployment rate drops to 6.5 percent, as long as inflation expectations do not climb above 2.5 percent.
Evans, who rotates into a voting spot on the Fed's policy-setting panel this year, had been pushing for exactly such a threshold-based policy for more than a year, saying the Fed needed to take a much more activist role in trying to meet its mandate to boost employment.
His speech on Monday was his first since mid-2011 to omit an explicit call for further Fed easing, suggesting he is now comfortable that the current stance of monetary policy will help bring down unemployment, still high at 7.8 percent.
Kansas City Fed President Esther George and other critics of the Fed's bond-buying program and low-rate policy have warned the central bank's actions could overheat the economy, leading to unwanted inflation.
Evans, one of several policy "doves" set to speak early this week, sought to head off such criticism.
While the Fed's new 2.5-percent inflation threshold "allows for inflation at times to run modestly above" the Fed's 2-percent goal, it in fact acts as a safeguard against overheating, he said.
The U.S. economy grew at a 3.1 percent annual rate in the third quarter, but growth is expected to have slowed in the final months of the year. Last month, Fed policymakers said they expected GDP growth of between 2.3 to 3.0 percent this year, and 3.0 to 3.5 percent in 2014.
Meanwhile, most expect inflation to run a bit below the Fed's 2-percent target.
U.S. lawmakers on January 1 struck a partial deal that avoids the worst of planned tax rises known as the "fiscal cliff," but put off big decisions on spending cuts for two more months.
Evans said the effects of fiscal policy on U.S. growth are so far about what he had expected when making his growth forecasts late last year.
But he cautioned lawmakers on taking overly aggressive steps to cut back spending.
"The United States must consolidate its public sector finances; but it must do so gradually if we are to avoid further economic turmoil or another downturn," Evans said.

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Chicago-area RTA: United running 'sham' business

CHICAGO (AP) — A transportation agency plans to file a lawsuit Monday alleging that United Airlines is falsely claiming to buy huge amounts of jet fuel out of a small, rural Illinois office that doesn't even have a computer to avoid paying tens of millions of dollars in taxes in Chicago, where the purchases are allegedly being made.
The Regional Transportation Authority alleges United Aviation Fuels Corp., a subsidy of United Airlines, has operated a "sham" office in the DeKalb County community of Sycamore since 2001 after reaching an agreement to pay the town more than $300,000 a year — a fraction of what it would have owed in sales taxes in Chicago and Cook County.
"The only reason that United Fuels has an office in Sycamore is to attempt to create a sham tax situs (location) for fuel sales in a lower taxing jurisdiction," reads a draft of the lawsuit obtained by The Associated Press.
United officials say they have not seen the lawsuit, but that the Sycamore operation is legal.
The RTA, which contends the office has no computer and is staffed by one person who only works part time, said consultants visited the site on a recent weekday and found it locked with nobody inside. The agency said judging from the few chairs and empty desks seen through a window, there is little, if any, business occurring in the office.
"Whoever is out there is not negotiating hundreds of millions of dollars worth of jet fuel," said Jordan Matyas, the RTA's chief of staff. He said any negotiations for fuel — as well as delivery scheduling, accounting, credit approval and administrative decisions — are being done in the Willis Tower in downtown Chicago, where United is headquartered.
The RTA alleges that American Airlines is engaged in a similar "sham" business out of an office it rents in Sycamore's City Hall. But Matyas said American was not included in the lawsuit because the airline remains in bankruptcy, and that suing American would require litigating the case both in federal bankruptcy court in New York and in Cook County Circuit Court, where the RTA plans to file its suit against United. He added that the RTA does plan to pursue legal action against American at some point.
The two airlines are spending a staggering amount of money on fuel. Based on sales taxes that were paid in Sycamore, the RTA estimates that in 2012 alone the two airlines spent "approximately $1.2 billion on jet fuel the airlines" for jets at O'Hare, Matyas said in an email, adding that it is unclear how much of that was later sold to other airlines.
United officials said they have not received a copy of the complaint, but "believe that any such suit would be without merit."
"In fact, the operation of our fuel subsidiary in Sycamore has been examined by tax authorities in the past and has been determined to comply with all applicable laws," spokeswoman Megan McCarthy said in an email.
American spokeswoman Mary Frances Fagan said in an email that the airline does not comment on pending litigation but added: "What American is doing is permitted under Illinois law."
Sycamore's city manager, Brian Gregory, declined comment.
The RTA said in a prepared statement that "sales tax dodges" have cost the city of Chicago $133 million in lost sales tax revenue since 2005. They have cost Cook County an additional $60 million and Metra, Pace and the Chicago Transit Authority another $96 million, according to the RTA, which oversees the three agencies and relies on sales tax revenue for much of its funding.
"CTA, Metra and Pace have had to work with constrained budgets and have needed to raise fares and reduce service because the money's just not there," RTA executive director Joe Costello said in the news release. "Now we know why."
The lawsuit is potentially embarrassing for Chicago Mayor Rahm Emanuel, who earlier this year called United's decision to move its corporate headquarters to Chicago "great news for all Chicagoans."
When told of the lawsuit, Emanuel spokeswoman Sarah Hamilton said: "The City has been supportive of efforts in Springfield to ensure corporations pay their fair share, but we have not seen this specific lawsuit and therefore cannot comment on it."
According to the RTA, the total sales tax rate in Sycamore is 9.5 percent, compared to 8 percent in Chicago. But the RTA contends the airlines are getting an even better deal: The two companies have entered 25-year agreements that call for Sycamore to "kick back" most of its share of the sales tax on jet fuel — as much as $14 million a year — in exchange for payments of at least $300,000 a year from each airline.
A document provided by the RTA contends that the agreement with United calls for Sycamore to receive $360,000 to $556,000 between 2003 and 2026.
The lawsuit is part of a larger effort by the RTA to combat similar deals between various communities and companies.
The RTA, the city of Chicago and Cook County in 2011 filed lawsuits against Kankakee and the village of Channahon. They alleged that those communities' tax incentive programs are costing other government agencies millions of dollars, because they allow companies to avoid paying higher sales taxes by moving purchases through satellite offices in areas where the sales tax rates are lower.
According to the RTA's lawsuit against Kankakee and Channahon, the agency is owed at least $100 million in lost revenue. The communities contend their programs are legal.

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Sweden scraps rule, paves way for more north Americans

STOCKHOLM (Reuters) - The Swedish Ice Hockey Association has cleared the deck for more players from north America in its clubs by deciding to scrap a rule that limits teams to two non-EU players.
"There has been a desire from clubs to avoid having to limit themselves only to the European market," association chairman Christer Englund told Aftonbladet newspaper.
"Instead of forcing clubs to limit themselves, they can now recruit from north America. There aren't too many countries that can deliver players of high class. We also get players with a different playing style."
Englund ruled out any negative impact of the decision taken by the association's elite committee.
"It makes no difference if they come from the Czech Republic or north America," he added.
(Reporting by Philip O'Connor in Dublin; editing by Amlan Chakraborty)

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Mediators unable to breathe life into stalled labor talks

NHL and the NHL Players Association regarding the difficulties of their current labor …more
(Reuters) - National Hockey League (NHL) owners and players appear no closer to ending a lockout that could wipe out an entire season after working with U.S. federal mediators for a second consecutive day on Thursday.
The mediators and NHL Players' Association (NHLPA) Executive Director Donald Fehr were back at the table Thursday but, unlike Wednesday, NHL Commissioner Gary Bettman and deputy commissioner Bill Daly did not participate.
"There has been contact between the parties today," NHLPA special counsel Steve Fehr, who said he spoke with lead NHL counsel Bob Batterman, told reporters.
"I think we're done with contact for tonight, expect there will be contact tomorrow but I am not sure if it will be by telephone or in person."
Bettman has said he cannot see the NHL, which normally runs an 82-game regular season, playing less than a 48-game campaign. But with 42.8 percent of the season already canceled, time is quickly running out.
The two sides appear to have inched closer on the main sticking point of how to divide $3.3 billion in revenue.
The league is seeking an immediate 50-50 split while players, who will see their share chopped from 57 percent, want the cuts brought in gradually with a "make whole" provision in place to cover money that would be lost on current contracts.
Several other contentious items remain on the table, including the length of a new collective bargaining agreement and contract limits to drug testing and continued participate in the Winter Olympics.

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Labor dispute moves into courts with talks stalled

(Reuters) - After three months of failed negotiations, the labor dispute between the National Hockey League and locked out players moved into the courts on Friday, with the league filing a class action complaint against the players' union.
The league asked U.S. courts to confirm the legality of the lockout. It also filed an unfair labor practice against the players' union.
The move appears to be a pre-emptive strike by the league after reports circulated that the NHL Players' Association (NHLPA) would seek a vote from its members to proceed with a "disclaim of interest" and no longer represent players in bargaining.
Dissolving the union would free players to file anti-trust lawsuits in the courts and have the lockout found illegal.
"Today, in response to information indicating that NHL players have or will be asked to vote to authorize the National Hockey League Players' Association's executive board to proceed to "disclaim interest" in continuing to represent the players in collective bargaining, the National Hockey League filed a class action complaint in Federal Court in New York seeking a declaration confirming the ongoing legality of the lockout."
The league also said it was simultaneously filing an unfair labor practice charge with the National Labor Relations Board alleging that by threatening to "disclaim interest," the NHLPA is engaging in an unlawful subversion of the collective bargaining process and conduct that constitutes bad faith bargaining under the National Labor Relations Act.
The legal maneuvering comes a day after the sides had spent two unsuccessful days with U.S. federal mediators trying to jump start stalled talks on a new collective bargaining agreement.
NHL commissioner Gary Bettman has said he cannot see the league, which normally runs an 82-game regular season, playing less than a 48-game campaign. But with 42.8 percent of the schedule already canceled, time is quickly running out on salvaging even a partial season.
The two sides appear to have inched closer on the main sticking point of how to divide $3.3 billion in revenue.
The league is seeking an immediate 50-50 split while players, who will see their share chopped from 57 percent, want the cuts brought in gradually with a "make whole" provision in place to cover money that would be lost on current contracts.
Several other contentious items remain on the table, including the length of a new collective bargaining agreement and contract limits to drug testing and continued participate in the Winter Olympics.

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Local Leaks Tipsters Allege Steubenville Victim Was Drugged

The latest information posted to Local Leaks, the Wikileaks-like site that has devoted itself to finding details about Steubenville's so-called "Rape Crew", is what they say is an account from the night of the alleged gang-rape of a 16-year-old girl. Local Leaks, which uses and utilizes hacks and tipsters driven to the site from the hacktivist group known as Anonymous, posted what they say is a basic picture of what happened on the night in question which they say is derived "from a number of young people in Steubenville who were witness to various parts of this horrendous crime." Their account goes on to name specific people, but since we aren't privy to those documents or tips, naming those people without verification doesn't seem fair and we've redacted the names of the boys who are not facing charges.
RELATED: One of Steubenville's 'Rape Crew' Wants to Get Out of Steubenville
(Update, January 8: Local Leaks speaks out — meet the hackers behind the Steubenville Files.)
RELATED: Everything You Need to Know About Steubenville High's Football 'Rape Crew'
Here's the first section of the newly posted report:
After being convinced, with some amount of coaxing – to attend the parties that night with the “Rape Crew” by by XXX’s girlfriend XXX, Jane Doe was picked up at a volleyball team party she was attending in the early evening of August 11th and transported in a vehicle with Richmond, XXX and XXX in it. Jane Doe was administered a “date rape” drug snuck into her drink almost immediately, possibly while still in the vehicle enroute to the nights “festivities”.
That sort of falls in line with what's been said. But we're not sure how someone knows for sure that the victim was snuck a "date rape drug." That's a dangerous implication and adds a sinister side of premeditation. As The New York Times Juliet Macur and Nate Schweber reported, because by the time the alleged victim went to the police "it was too late for toxicology tests to determine if she had been drugged." However, there were reports of the victim being drugged, according to Rachel Dissell of the Cleveland Plain Dealer.
RELATED: Inside the Anonymous Hacking File on the Steubenville 'Rape Crew'
The second portion reads:
In any case, she has no memories after being picked up. The first party of the night was at the home of Assistant Coach XXXXX, where XXXXX, XXXX, XXXXX, and XXXXX were already engaged in heavy drinking and drug use. At this location Jane Doe was raped multiple times by Richmond and Mays and at least two other assailants from the “Rape Crew”. At that point the “party” went on the move. They first stopped at another Assistant Coach’s home, Coach XXXX. XXXXX didn’t like what he saw, and asked them to leave. Once again, they hit the road with an unconscious Jane Doe in tow.
We know there was drinking. "Some in the crowd, which would grow to close to 50 people, arrived with beer. Those who did not were met by cases of it and a makeshift bar of vodka, rum and whiskey, all for the taking, no identification needed," reads the Times report. From reports we know there were multiple parties that night, but the apartments being at multiple coaches' houses have largely been unconfirmed.
RELATED: A Heartbreaking Look Inside the World of India's Gang Rape Victim
Anonymous, from tips from Steubenvillers, has a theory that the boys involved had an apartment which they used for parties:
4401 the athletes used to party. It was known as "the apartment". I am told this is where the rape crew honed their skills
— #KnightSec (@KYAnonymous) January 3, 2013
And they're also claiming that a coach or coach's house was involved:
RELATED: Protestors Take to Streets of India While Victim's Body Is Flown Home


Here's the next part:
While en route to XXXX’s house, Jane was again raped and sodomized in the back seat of a vehicle – and this was video recorded by XXXXX who was in the front seat. Her attackers in the car were again Mays and Richmond.
Now, again, knowing exactly what happened in the back seat would be hard for anyone that wasn't there. Though, this account jibes with what at least one witness told police. From the Times report:
That player told the police that he was in the back seat of his Volkswagen Jetta with Mays and the girl when Mays proceeded to flash the girl’s breasts and penetrate her with his fingers, while the player videotaped it on his phone. The player, who shared the video with at least one person, testified that he videotaped Mays and the girl “because he was being stupid, not making the right choices.” He said he later deleted the recording.
And the last part:
Once they arrived at XXXXX’s house Jane Doe was carried to the basement where she was again raped multiple times by multiple attackers, one of which was XXXXX. Finally, having sated themselves and exhausted any further entertainment that Jane Doe could provide for these animals, she was unceremoniously dumped (still unconscious) onto the front lawn of the XXXXX residence – where at least one member of the “Rape Crew” proceeded to urinate on her.
Well there's obviously some editorializing there ("further entertainment"... "animals"). But tweets from that night confirm that people were, at the very least talking about the alleged victim being urinated on while unconscious. According to The New York Times report, the party didn't end with this girl on the front lawn. "The girl slept on a couch in the basement of that home that night, with Mays alongside her before he took a spot on the floor.
The big takeaway from this report is that the account, from which is said to be gathered and confirmed from multiple sources, says there the girl was raped multiple times by multiple people and that the two Steubenville foortball players facing charges, Malik Richmond and Trent Mays, weren't the only ones involved.
Since the Times report last month, the reporting on this story has been driven by a kind of hacker vigilantism more than professional journalists. These new details may be unconfirmed, but they are the leads that the mainstream outlets who are headed for Ohio will be following.

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Android’s explosive content consumption growth threatens Apple

Smartphone market share surveys from IDC and Kantar have shown for a long time that the Android phone volume surge is leaving the iPhone in the dust in major growth markets from Brazil to India. But one thing that Apple has had on its side has been the propensity of iPhone owners to consume far more content than Android phone owners. One argument has been that it does not matter if iPhone has a 5% share vs. Android’s 40% share if Apple (AAPL) still dominates in  app revenue generation and browsing volume. Content is king. Another argument is that it does not matter who moves the most units, since only hardware margins count. Here Apple reigns supreme.
[More from BGR: First leaked picture of the Samsung Galaxy S IV emerges]
In the long run it’s difficult to say whether selling smartphones at extremely high margins is more important than dominating mobile content. As consumers keep shifting their precious entertainment consumption minutes to smartphones from television, print media and video games, the value of owning the mobile browsing and mobile application markets increases. Samsung (005930) is playing the deep game of flooding the world market with hundreds of millions of Android phones, most of them cheap, some of them very expensive. The goal is to blanket the globe with Samsung devices and bet that the content consumption of Android devices can catch up with Apple in aggregate.
[More from BGR: Google’s rumored ‘X Phone’ could be an ‘attack on Samsung’]
That is why it’s interesting to see how different research houses started to detect clear signs of Android surge in content consumption in 2012. According to AppAnnie, Google Play showed 48% download growth over the summer, while iOS download volume ticked up by just 3%. In South Korea, Google Play moved ahead of iOS in app revenue generation.
And StatCounter numbers on mobile browser usage seem to be pointing to the same direction. A year ago, Android phones had 17% mobile browsing market share in the Philippines vs. iPhone’s 12%. In January 2013 that lead had grown to 27% vs. 14%. This was the first month when Android took the browsing share lead from Opera in the Philippines. As feature phones fade, Android is grabbing their share of mobile page views.
In Brazil, Android’s mobile browser share has vaulted from 19% to 38% in a year. The iPhone still has a respectable 11% share, which is maybe five times higher than iPhone’s slice of smartphone shipments in Brazil. But that outperformance is no longer enough to keep up with the avalanche of Android phones that are now a prime vehicle for mobile content consumption for Brazil’s middle classes.
In Germany, Europe’s leading mobile market, Android has just pulled into a dramatic 51% vs. 31% lead in page views. In Russia, Android has opened a 25% vs. 18% lead in just the past five months. In affluent Japan, iPhone is leading Android by just 48% v. 44%.
Apple is still punching way above its unit volume class when it comes to grabbing consumers who use the smartphone most frequently for content consumption purposes. But the Google (GOOG)-Samsung strategy of swamping the market with cheap smartphones is working. Android’s lead in mobile browsing is growing at an accelerating rate in many major markets. The new wave of sub-$150 smartphones from Samsung, Huawei and ZTE is shooing consumers across the globe under Google’s mobile content umbrella. These consumers will shape the future of mapping, shopping, localized news and other mobile content industries.
One of these days Apple must choose between the goals of dominating mobile content and maintaining sky-high phone operating margins. The blended iPhone ASP of $620 is not compatible with competing against the Android Armada in Latin America, Africa and Asia, and perhaps not even in Germany or Spain.

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Look Who's Already in Trouble Over the Steubenville Rape Case

If this was the week that the whole country found out about the alleged gang rape of a 16-year-old girl in football-crazedSteubenville, Ohio, next week might be the one when the punishments arrive. Steubenville High's famed football coach may resign as soon as Monday, and the recent graduate whose shocking video confession was leaked by hackers who took the case nationalmay be in trouble with his college.

RELATED: Everything You Need to Know About Steubenville High's Football 'Rape Crew'

Instagram photos from the night in question emerged almost immediately after the August incident, and today the site LocalLakes, which is partnering with the hacking collective Anonymous to collect eyewitness details and speak truth to rumor, provided a narrative of what it says happened. But the most emotional — and viral — leak out of the so-called The Steubenville Files came in the form of this unsavory video, in which a former Steubenville student is thought to be referring to the victim when he says local football players "raped her more than the Duke lacrosse team": 

RELATED: Inside the Anonymous Hacking File on the Steubenville 'Rape Crew'

RELATED: Local Leaks Tipsters Allege Steubenville Victim Was Drugged

The YouTube video identifies the speaker as former Steubenville student Michael Nodianos, who according to his Twitter account or someone who had access to it, said some pretty gross things the night of the alleged attack: 

Local Leaks and Anonymous tracked Nodianos, now 18, to Ohio State University and released his e-mail and personal information on the Internet, adding that he might have had a gun in his possession during the filming. On Friday afternoon OSU's press office gave in to just how crushing the effects of the viral wave of leaked information has become, releasing the following cryptic statement:

Sexual assault is a terrible act of aggression and violence, and our hearts go out to all victims. The situation in Steubenville is particularly disturbing, and our thoughts are with those affected. To our knowledge, the only students who have been criminally charged in this matter are high school students with no affiliation to Ohio State. To the extent there are inquiries about any Ohio State student, the university is not at liberty to comment due to Family Educational Rights and Privacy Act (FERPA) regulations, other than to confirm that the student in question was in attendance at Ohio State only through Dec. 12.

When reached for comment by The Atlantic Wire, an Ohio State spokeswoman refused to clarify the statement, merely repeating the last line above (emphasis ours). But the phrase "only through" is still throwing us for a loop: Why isn't he there any longer? Because OSU is still on vacation until January 7? Because Nodianos decided to leave? Or has he been punished by the school? Nobody's really saying.

Someone who has spoken up about Nodianos and the viral video is Jefferson County Sheriff Fred Abdala. "Sheriff Abdalla is proud of his town but when it comes to the video released Wednesday, he called it disgusting," reports WTRF-TV. But Sheriff Abdala still doesn't like the way the national press has covered the involvement of Anonymous and LocalLeaks: 

This is all over the world now. It's in the Huffington Post and New York Times but some of these papers are reporting this stuff based on what this Anonymous is telling them. How do you support what they're saying? Where's your proof? I thought newspapers where to be able to back it up with good, solid information. How can you do a story when someone is giving you information that's not even factual?

But... but... that video? Can't we agree it's pretty disgusting? The Steubenville Files allege that Sheriff Abdala and Steubenville football's head coach, Reno Saccoccia, are friends. Abdala hasn't denied that allegation because, well, it seems like everyone in Steubenville knows Coach Reno.

Now rumors are surfacing that Saccoccia, who has become a Friday Night Lights-style legend in the small Ohio city during his 35 years at Steubenville High, will be resigning on Monday. The school is on a community-wide gag order at least until the rape trial's preliminary hearings on Februar 13, butthere are growing calls for the coach, who didn't bench his players when he was told even the non-accusers were posting photos of the alleged victim as she was allegedly being attacked, to either resign or be fired. And those calls will only grow louder on Saturday, when an Occupy Steubenville rally rolls into town.

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Egypt's ultraconservative party names new leader

CAIRO (AP) — Egypt's largest ultraconservative Islamist party, which has emerged as a potent political force in the country, elected a new leader on Wednesday after the previous head broke away to form his own political group following months of infighting.
Younis Makhyoun, a 58-year-old cleric and trained dentist, was selected in a consensus vote to lead the Salafi Al-Nour party, one of several religion-based parties to take root after the 2011 Egyptian uprising. His election marks the consolidation of power of the religious clerics who cofounded the party and successfully faced down a challenge from the previous leadership to separate the group's politics from its religious ideology.
Makhyoun takes over just two months before President Mohammed Morsi is expected to call for new parliamentary elections, and Al-Nour's new leader immediately turned his sights on the vote. He described the next parliament as "the most dangerous and the most important" in Egypt's history because its mission will be "to purify all laws from whatever violates Islamic Shariah law."
Makhyoun was among the Islamist-dominated constituent assembly that wrote Egypt's new constitution. The charter deeply polarized Egyptians and sparked deadly street protests, but passed by a 64 percent "yes" vote in a referendum in which around 33 percent of voters participated.
Islamists perceive the constitution as the first step toward redefining Egypt's identity to conform to Shariah, or Islamic law.
"We want to liberate Egypt from slavery and submission," Makhyoun said while trying to assuage fears of women and Christians by saying Shariah would "liberate women from the West's moral decay that brought humiliation."
Al-Nour was founded by a group of influential hardline Salafi clerics shortly after the 2011 Egyptian uprising that toppled longtime strongman Hosni Mubarak.
Their single-minded dedication to applying Islamic law sets them apart from Egypt's strongest Islamist force, the Muslim Brotherhood, which shares many of the Salafi fundamentalist beliefs but also has a history of political pragmatism to achieve its ends.
Salafis follow the Wahhabi school of thought, which predominates in Saudi Arabia. They promote a strict interpretation of Islamic law which mandates segregation of the sexes, bans banks from charging interest and punishes theft by cutting off thieves' hands.
Al-Nour made a surprisingly strong showing in the country's first parliamentary elections last year, capturing 25 percent of the seats and trailing only the Muslim Brotherhood, the country's best-organized political force. Their success reflected years of grassroots organizing throughout the country, giving them a ready-made network of support when they entered politics.
That parliament was disbanded by a court order last year. A new one should be elected within two months starting from the day the Egypt's new constitution is put into effect, according to the charter.
The party has been riven by internal feuds over the past year as it struggles to reconcile democratic maneuvering with religious ideology. Al-Nour's founder, Emad Abdel-Ghafour, broke away earlier this month to form a new party over disagreements tied to the role of a body of clerics in the group's politics.
Some of the divisions were also linked to concerns with the Brotherhood. Some Salafis fear the Brotherhood is too willing to compromise in pursuit of an Islamic state. During last year's parliamentary elections, Al-Nour split from an electoral alliance with the Brotherhood after complaining of the group's attempt to monopolize the alliance.

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