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Fri March 18, 2011
Friday morning's headlines
Making headlines around the Northwest this morning:
- Lawsuits Blame Top WaMu Execs
- Deeper Cuts for State Ahead
- New Findings in Port Orchard Wal-Mart Shooting
Killinger on FDIC Allegations: "Fiction"
Negligence led to the nation's largest-ever bank failure, claims the Federal Deposit Insurance Corporation (FDIC), which filed suit against former Washington Mutual leaders Kerry Killinger, David Schneider and Stephen Rotella. The Seattle Times' Sanjay Bhatt reports the FDIC wants:
"to hold these three highly paid senior executives, who were chiefly responsible for WaMu's higher risk home lending program, accountable for the resulting losses,"...The three executives repeatedly assured WaMu's board that they were properly pricing loans for the risks, but that wasn't true, the FDIC alleged. WaMu's top credit officer warned Killinger that the bank was "putting borrowers into homes that they simply cannot afford," according to the complaint.
WaMu failed in 2008 and was purchased by J.P. Morgan Chase. The suit was filed in Seattle, and also names Killinger's wife, and Rotella's wife, Esther, alleging they moved money into trusts to keep it out the reach of creditors. Kerry Killinger called the suit "political theater," and, in a statement, says management was "sound and prudent."
Schneider was retained by Chase to work in its mortgage services division. Calls to his office by The Seattle Times were not returned yesterday.
Reaction to New State Economic Forecast
The state's budget troubles worsened yesterday. The latest economic forecast predicts another $800 million drop in revenues, pushing the shortfall past $5 billion through 2013. KPLU's Austin Jenkins reports the news is heating up the political divide between Republicans and Democrats.
Chief Economist Arun Raha's predictions are $2 billion lower than he'd forecast last June, according to The Olympian's Brad Shannon and Katie Schmidt:
Raha said the North African unrest is jacking up fuel prices, which in turn lowers consumer confidence and cuts consumer spending that an economic recovery requires. He said Japan’s earthquake, tsunami and nuclear disaster are adding to uncertainty about manufacturing supply chains in the auto industry and also may cut state exports in agriculture.
Gov. Chris Gregoire called on lawmakers to forge a budget plans that "protects our fiscal integrity," and rejects one-time, or short-term, cuts, according to Jenkins.
Report: Teen Killed by Suspect, Not Kitsap Deputies
Astrid Valdivia, a 13-year old who died in the shooting at a Port Orchard Wal-Mart in January, was killed by bullets shot at close range from the suspect's gun, and not by police. That's the finding of a State Patrol investigation, according to the Kitsap Sun's Chris Henry.
Suspect Anthony Martinez ran from Port Orchard police, then fired on them in the store's parking lot, injuring two Kitsap County deputies. Martinez was shot twice, writes Henry:
One bullet that came from a deputy's weapon hit Martinez in the knee or lower leg, disabling him, Hauge (the investigator) said. A bullet that hit the center of Martinez's chest, piercing his heart, matches bullets fired from his own gun.
One of the Kitsap deputies who was shot remains on medical leave. The other has returned to his job.