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Update on the latest news, sports, business and entertainment

Feb 27, 2013 12:07pm

BUDGET BATTLE-OBAMA

Obama: Budget cuts would cause 'tumble downward'

WASHINGTON (AP) — President Barack Obama says looming automatic budget cuts will cause a "tumble downward" for the economy.

He acknowledges many people may not immediately notice the full impact of the so-called sequester cuts if they take effect Friday. But he says yanking $85 billion from the economy this year would be a "big hit" on a nation still trying to fully recover from a recession.

Speaking to business executives Wednesday, Obama acknowledged it will be difficult for lawmakers to reach a deal to offset the cuts by Friday. He says the logjam is not technical, "it's political.

The president wants Republicans to drop their opposition to using some new tax revenue to offset the cuts. And he says members of his own party must accept some changes to government entitlement programs.

DOW CHEMICAL-TAX SHELTER

Court rejects $1B in 'phony tax deductions' by Dow

WASHINGTON (AP) — A federal court in Louisiana is rejecting transactions by The Dow Chemical Co. that created $1 billion in what the U.S. Justice Department calls "phony tax deductions."

Justice said Wednesday that the tax-reduction scheme was created by Goldman Sachs and the law firm of King & Spalding.

It involved creating a partnership that Dow operated out of its European headquarters in Switzerland.

Justice said Chief Judge Brian Jackson ruled correctly in saying that the tax benefits created by the scheme were artificial and that the corporate structure was created to exploit weaknesses in the tax code, not for legitimate business reasons.

The judge also imposed unspecified penalties.

Assistant Attorney General Kathryn Keneally praised the decision, calling the tax-avoidance scheme "offensive to all taxpayers who pay their fair share."

NAVY KICKBACKS

Whistle-blower suit claimed Navy kickbacks in 2006

PROVIDENCE, R.I. (AP) — A recently unsealed whistle-blower lawsuit claims a civilian Navy employee and a Navy contractor engaged in a bribery and kickback scheme going back to at least 2004.

The lawsuit was first filed in a federal court in Georgia in 2006. It predates by more than four years criminal charges brought by federal prosecutors in Rhode Island in 2011 that allege a similar scheme by some of the same people cost the government $10 million.

Authorities would not comment on why the contractor and Navy employee were allowed to continue their alleged criminal conduct for years after authorities were first alerted to it.

One of the men named in the lawsuit has pleaded guilty to similar allegations in the criminal case. The other has pleaded not guilty.

GUN CONTROL-NEWTOWN FATHER

Father of Newtown victim: Ban assault weapons

WASHINGTON (AP) — Fighting tears, the father of one of the first graders slain in the Newtown, Conn. mass shooting is begging the Senate Judiciary Committee to ban assault weapons.

A ban is not expected to pass Congress. But the father, Neil Heslin, on Wednesday urged lawmakers to consider the prohibition his son, Jesse, who was 6 years old.

The 50-year-old construction worker said he supports the Second Amendment right to bear arms, and backs sportsmen who like using firearms. But he said the Second Amendment wasn't written a time when firearms were as sophisticated as today's assault weapons.

Heslin spoke in support of a bill by Sen. Dianne Feinstein, D-Calif., that would ban assault weapons. Republicans at the hearing said the ban could violate the Constitution.

BODY PARTS PROBE

NEW: Son, 2nd person arrested in NYC dismemberment case

NEW YORK (AP) — The son of a woman whose dismembered remains were found in trash bags on New York City streets has been arrested on murder charges.

Police say 23-year-old Bashid McLean and an acquaintance were picked up on Wednesday in connection with the death of McLean's mother, 45-year-old Tanya Byrd.

A nearby resident walking a dog found a bag with some of the remains on a Bronx street Tuesday. Police then found three other bags on surrounding blocks.

McLean and 26-year-old William Harris also are charged with unlawfully dissecting a human body and hindering prosecution.

It's unclear whether the suspects have lawyers. No phone numbers can be found for their homes.

SUPREME COURT-VOTING RIGHTS

Voting rights law gets Supreme Court challenge

WASHINGTON (AP) — The Supreme Court is wrestling with the fate of a section of a landmark civil rights law that has helped millions of Americans exercise their right to vote.

In an argument at the court on Wednesday, liberal and conservative justices engaged in a sometimes tense back and forth over whether there is an ongoing need in 2013 for a key provision of the Voting Rights Act of 1965.

The measure requires states with a history of discrimination, mainly in the Deep South, to get approval before making changes in the way elections are held.

Chief Justice John Roberts asked the government's top Supreme Court lawyer whether the Obama administration thinks Southerners "are more racist than citizens in the North."

The answer from Solicitor General Donald Verrilli was no.

SUPERSTORM SANDY-CLEANUP

NJ governor: Fed flood insurance program 'awful'

TRENTON, N.J. (AP) — New Jersey Gov. Chris Christie says federal flood insurance claims from Superstorm Sandy are being paid too slowly.

Christie stepped up criticism of the federal program on Townsquare Media's "Ask the Governor" program Wednesday.

The Republican governor says he complained to President Barack Obama over the weekend that "the performance of the national flood insurance program is unacceptable, that it's awful."

Christie says private insurers have been more responsive, settling more than 90 percent of claims. He also reports most of the debris left on land at the Jersey Shore after the October storm is gone.

Christie has been criticized for hiring a Florida debris removal firm without putting the $100 million contract to bid.

Obama last month signed a $9.7 billion bill to replenish the National Flood Insurance Program, which has received more than 100,000 Sandy claims.

MIT LOCKDOWN

MIT: Hoax caller cited revenge for activist death

CAMBRIDGE, Mass. (AP) — The Massachusetts Institute of Technology says a person who called in a hoax about a gunman on campus said the gunman was a staff member looking for revenge after the suicide of an Internet activist accused of illegally using MIT computers.

The Boston Herald says (http://bit.ly/13ZSoN2) MIT executive vice president Israel Ruiz wrote in a campus-wide email Wednesday the caller indicated the gunman "was retaliating against people involved in the suicide of Aaron Swartz." Ruiz says MIT's president was identified as the target.

Swartz killed himself in New York last month while awaiting trial on charges he used MIT's computer network to illegally download academic articles. Critics blame federal prosecutors for his suicide. Prosecutors have defended the charges.

MIT says investigators determined the staffer named in the Saturday call was "found not to be connected to the incident."

OBIT-STREET

Ex-Temptations singer Richard Street dies at 70

LAS VEGAS (AP) — Former Motown vocalist Richard Street, a member of the Temptations for 25 years, has died. He was 70.

Street's wife, Cindy, says her husband died early Wednesday at a hospital in Las Vegas after a short illness.

Richard Street sang as a young man with Temptations members Otis Williams and Melvin Franklin, but didn't join the famed Motown group until the early 1970s. He later made the move from his native Detroit to Los Angeles with other Motown acts and stayed with the group until the mid-1990s.

Funeral arrangements are incomplete, but Cindy Street expects services to be held sometime next week in Cypress, Calif.

She says her husband "was a really good person" who should be remembered for his work with the Temptations.

OBIT-ROBERTSON

Actor Dale Robertson dies in California hospital

OKLAHOMA CITY (AP) — Oklahoma native Dale Robertson — a star of television and movie westerns during the genre's heyday — has died at age 89.

Robertson died Tuesday at a hospital in La Jolla, Calif., after a brief illness — his niece Nancy Robertson said Wednesday.

Dale Robertson had small parts before being cast in film roles including Jesse James in "Fighting Man of the Plains." He moved to television in the 1950s with starring roles in "Tales of Wells Fargo," ''Iron Horse" and later in "Death Valley Days."

Robertson worked in TV into the 1970s and 1980s with roles in "Dallas" and "Dynasty" but by the 1990s he took fewer jobs and spent more time at his ranch in Yukon, Okla., where he lived until his family moved him recently to California.


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