Early Briefing: Another New Stadium For DC?
* A coalition of D.C. Council members is drafting legislation that would authorize Mayor Adrian M. Fenty to spend $150 million in public money to subsidize construction of a soccer stadium for D.C. United in Southeast Washington, city government sources said.
Under the plan being developed by Chairman Vincent C. Gray (D), Jack Evans (D-Ward 2) and Marion Barry (D-Ward 8), the 27,000-seat stadium would be included in a larger, mixed-use development at Poplar Point, a 110-acre swath of parkland along the Anacostia River. The site is across the river from the Washington Nationals' baseball stadium.
The three council members have said they must act soon to keep the soccer team in the District. Team owner Victor B. MacFarlane has been talking with Prince George's County officials about moving the franchise to Greenbelt or New Carrollton if the District is unwilling to help build the stadium.\
* Orbital Sciences said federal prosecutors would not pursue criminal charges over allegations that the company defrauded the U.S. government of millions of dollars through improper billing and accounting.
The U.S. Attorney's Office for the District of Arizona told the Dulles rocket and satellite manufacturer that the government had ended its criminal investigation, according to an Orbital filing yesterday with the Securities and Exchange Commission. Still to be resolved is a civil lawsuit over the allegations in the U.S. District Court for the District of Arizona.
The government's investigation began after a former senior director for finance, W. Austin Sallade, filed a civil lawsuit in February 2005 under a whistle-blower provision of the False Claims Act, which allows an individual to bring suit in the name of the U.S. government and share a cut of any settlement.
* The District converted a large and troubled portion of its bond portfolio into a safer form of debt, financial officials said. The District had borrowed about $800 million to build recreation centers, schools and part of Nationals Park, among other capital improvements, using nontraditional bonds called auction-rate securities.
These securities are variable-rate bonds that are repeatedly put up for auction, as often as once a week, to determine their interest rates. Normally, the bidding process produces a lower rate than that of traditional municipal bonds. City officials said they were able to save as much as $100 million since 2001 through auction rate securities.
But over the past few months, as the credit crisis spread, bidders were unwilling to buy them except at high rates, and the interest on some of the District's bonds soared to as much as 14.75 percent from 4.75 percent.
City officials have since refinanced the debt into more traditional bonds. The new bonds have interest rates of about 2.2 percent and can be refinanced anytime without penalty, said Lasana K. Mack, the District's treasurer.
* Despite the 2005 passage of a law that made it more difficult and expensive to file for personal bankruptcy, more Americans are choosing bankruptcy over destitution. Filings -- including Chapter 7, which wipes out debt, and Chapter 13, which reorganizes it -- totaled 822,590 last year, up 38 percent from 2006.
The numbers tell the story of a crippled economy, one in which people owe more than they can pay to their creditors -- be they credit card companies, mortgage lenders or auto and student loan servicers. And it's one more disturbing chapter in the saga of the subprime mortgage crisis, in which homeowners unable to handle higher interest payments on their adjustable rate mortgages are turning to bankruptcy to avoid foreclosure.
Bankruptcy attorneys and economists said the trend cuts across all segments of society -- the young and the old, homeowners with bad mortgages and renters, the poor and the middle class. In the past, bankruptcies were more common among people who had sudden life changes, such as a divorce, illness or job loss. Now, the bankrupt are people who have simply racked up too much debt.
"It is pretty widespread because there are widespread problems in the economy," said Peter Morici, an economist at the University of Maryland at College Park. "Americans have been spending 105 percent of their income for the last three or four years. That's not sustainable."
May 28, 2008; 7:16 AM ET
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