Sunday, October 5, 2008

Massachusetts asks for federal loan

BOSTON | The treasurer of Massachusetts has asked the federal government about lending Massachusetts money under the same favorable terms it has given banks and other firms during the financial crisis.

Treasurer Timothy Cahill‘s requests to the U.S. Treasury and Federal Reserve Bank of Boston last week were prompted by the state’s inability to borrow from the short-term debt markets, the Boston Globe reported Saturday. The financial turmoil has caused credit markets to stop lending or to charge prohibitive rates.

California has made a similar request, saying it would run out of money by the end of the month if the short-term debt markets do not ease. The state asked whether it could not obtain loans from the Fed.

Massachusetts has enough money to cover its expenses for the coming weeks, Mr. Cahill said. But a low-rate loan would ease a cash shortfall if the credit problems persist. “That’s all we would ask them to do: Treat us like the investment banks,” he said.

Federal officials have not responded to his request, Mr. Cahill said Friday.

Clinton neighbor guilty of murder

WHITE PLAINS, N.Y. | A disbarred lawyer who lived three doors down from Bill and Hillary Rodham Clinton in suburban New York was convicted Saturday of murdering his wife in what prosecutors said was an attempt to collect life-insurance money.

A Westchester County jury found Carlos Perez-Olivo guilty of second-degree murder. He could get life in prison.

Prosecutors said the troubled lawyer shot his schoolteacher wife, Peggy, in the back of the head as she dozed in their car during a drive to their home in Chappaqua on Nov. 18, 2006.

The 59-year-old then gave himself a superficial gunshot wound, tossed the weapon into a lake, and called 911 claiming that a carjacker had attacked him and his wife.

Perez-Olivo said the armed stranger forced him off the road, muscled his way into the car and fired three shots as the two men struggled. That elaborate claim of innocence failed to convince the jury, which also convicted Perez-Olivo of illegal weapons possession.

Airline maintenance heading overseas

Nine major U.S. airlines are farming out aircraft maintenance at twice the rate of four years ago and now hire outside contractors for more than 70 percent of major work, the government says. Contractors overseas handled one-quarter of the outsourced maintenance.

At the same time, U.S. oversight of repair facilities is lagging, the Transportation Department’s inspector general found. Investigators said the Federal Aviation Administration has failed to closely track how much maintenance is outsourced and where it is performed.

Although the FAA has taken steps to improve, “the agency still faces challenges in determining where the most critical maintenance occurs and ensuring sufficient oversight,” investigators said in the report last week.

In airlines’ efforts to lower costs, the report said, they continue to shift heavy airframe maintenance from in-house mechanics and engineers to hundreds of repair companies in the United States, Canada, Mexico and countries in Central America and Asia.

The airlines examined in the report were AirTran Airways, Alaska Airlines, America West Airlines, Continental Airlines, Delta Air Lines, JetBlue Airways, Northwest Airlines, Southwest Airlines, and United Airlines. American Airlines was not included, the inspector general said, because it handles most maintenance in-house.

Al Qaeda American touts market woes

An American member of al Qaeda pointed to economic troubles in the United States as proof that “the enemies of Islam” face defeat, in an English-language video released Saturday.

In a half-hour video message, California-native Adam Gadahn urged Pakistanis to unite against their government and U.S. forces, and taunted Americans over their economic crisis, relating it to their military interventions.

“The enemies of Islam are facing a crushing defeat, which is beginning to manifest itself in the expanding crisis their economy is experiencing,” said Gadahn, in a clip of the message distributed by the SITE Intelligence Group, a Washington-based monitor of militant Web sites.

“A crisis whose primary cause, in addition to the abortive and unsustainable crusades they are waging in Afghanistan, Pakistan, and Iraq, is their turning their backs on Allah’s revealed laws, which forbid interest-bearing transactions, exploitation, greed and injustice in all its forms.”

Gadahn, 29, grew up in Riverside County, east of Los Angeles. He was indicted by a federal grand jury in Santa Ana in 2005 and charged with one count of treason and two counts of providing material support to a designated foreign terrorist organization. The FBI says Gadahn moved to Pakistan in 1998 and attended an al Qaeda training camp six years later, serving as a translator and consultant.

From wire dispatches and staff reports

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