NEW YORK – The police commissioner's TV show host son is accused of sexually assaulting and impregnating a woman. Some activists are calling for the commissioner's resignation for appearing in a film they call anti-Muslim. And the CIA is pulling an operative out of his unusual assignment at the NYPD, a partnership he helped create.
It's been a daunting couple of days for Commissioner Raymond Kelly, who's been the city's influential police boss for the last decade. And Friday likely won't be much easier, with Kelly potentially facing questions publicly for the first time since the allegations surfaced Wednesday against his son Greg, who denies them and has not been charged with any crime.
The department was planning a promotion ceremony Friday. The commissioner usually answers questions from reporters after such events.
The Manhattan district attorney's office is investigating a woman's allegation that Greg Kelly, 43, met her for drinks on Oct. 8, then assaulted her after the two went to her lower Manhattan law office, one person familiar with the investigation told The Associated Press. She told authorities she was not capable of consenting to sex, the person said.
She said she became pregnant from the encounter and had an abortion, according to a law enforcement official. Neither the person nor the law enforcement official were authorized to speak publicly and talked to the AP on condition of anonymity.
The woman reported the alleged attack Tuesday to police, who quickly turned the matter over to Manhattan DA Cyrus R. Vance Jr.'s office because of the potential conflict of interest in investigating one of the commissioner's sons, the person familiar with the probe said.
The DA's office declined to comment about the matter Thursday as Greg Kelly took time off from his job as an anchor of the local morning show "Good Day New York," and Mayor Michael Bloomberg found himself facing questions about how police handled the matter, including an episode in which the woman's boyfriend approached the commissioner himself at a public event.
"He said, `Your son ruined my girlfriend's life,'" chief police spokesman Paul Browne said. "The commissioner said, `Well, what do you mean?' He said he didn't want to talk about it here, so the commissioner told him to send a letter."
Browne said that, to his knowledge, no letter was sent. He said he couldn't comment on the investigation because of the potential conflict of interest.
Bloomberg said Thursday that he "thought the police department did exactly what they should do" by turning the matter over to the district attorney.
"Keep in mind: Everyone has a right to have their complaints investigated," the mayor said, noting that Greg Kelly hasn't been charged with any crime.
It wasn't clear how much time elapsed between the man's remarks to the commissioner and the woman's decision to go to a police station Tuesday; why she had waited for nearly three months after the alleged attack to make a report; or whether she supplied any medical evidence to authorities to support her claim.
It's also unclear how long the woman and Greg Kelly knew each other before the alleged encounter at her office. But they apparently were in touch afterward, according to the person familiar with the investigation.
Kelly "strenuously denies any wrongdoing of any kind," his attorney, Andrew Lankler, said in a statement. "We know that the district attorney's investigation will prove Mr. Kelly's innocence."
The woman's identity has not been released, and the AP does not name people who report being sexually assaulted unless they agree to be identified or come forward publicly.
Kelly didn't appear Thursday on "Good Day New York," which airs on local Fox affiliate WNYW-TV. General Manager Lew Leone said later that Kelly had requested some time off; Leone didn't elaborate.
One of Kelly's recent guests was Vance, who appeared on the show on Monday to discuss the problem of elder abuse.
Kelly began his journalism career at NewsChannel 34 in Binghamton, N.Y., after serving for nearly a decade in the Marine Corps. He later covered the Iraq War and the White House for Fox News before joining "Good Day New York" in 2008.

He's been involved in an ongoing feud with Joel McHale, host of "The Soup" on E! Entertainment. The show plays clips from television shows to poke fun at people, and McHale has frequently targeted Kelly and "Good Day New York."

One clip noted his sullen response to co-host Rosanna Scotto the morning after a loss by the NFL's New York Jets. Another showed Kelly playing disco music on his laptop coming off a commercial.

Kelly struck back last Halloween by showing up on "Good Day New York" in a McHale costume and making fun of "The Soup."

In 2007, the television show "Extra" identified Kelly as the most eligible anchorman on TV. The show's website said Kelly "has enough heart and courage to make any woman swoon."

After serving as police commissioner for a stint in the 1990s, Raymond Kelly returned to the post in 2002.

About 20 activists held a news conference Thursday on the City Hall steps to urge Kelly to step down and criticize him for giving an interview to the producers of "The Third Jihad," a film shown to police trainees. The activists said the film encourages Americans to be suspicious of all Muslims. Kelly has apologized for the interview. Bloomberg said Thursday he stood by the commissioner but Kelly would need to redouble his efforts to forge ties with Muslims.

Meanwhile, the CIA operative's assignment inside the New York Police Department is being cut short after an internal investigation that faulted the agency for sending an officer to New York with little oversight after the Sept. 11 terrorist attacks and leaving him there too long, according to officials who have read or been briefed on the inquiry. They spoke on condition of anonymity because they weren't authorized to discuss the investigation.

The inspector general opened its investigation after a series of AP articles revealed how the NYPD, working in close collaboration with the CIA, set up spying operations that put Muslim communities under scrutiny. The CIA said last month that the inspector general cleared the agency of any wrongdoing.

___

Associated Press writers Jennifer Peltz and Samantha Gross and AP Television Writer David Bauder contributed to this report.

NEW YORK (Reuters) – Stock index futures pointed to a steady open on Wall Street on Friday, with futures for the S&P 500 up 0.02 percent, Dow Jones futures up 0.05 percent and Nasdaq 100 futures up 0.2 percent at 4 a.m. ET.

European stocks dipped in early trade following strong increases in the previous session, as gains sparked by the Federal Reserve's pledge of low interest rates gave way to worries about Portugal, seen as the potential next domino in the euro zone crisis, and uncertainty over Greek debt talks. (.EU)

The Federal Reserve's latest efforts to bolster the recovery with unprecedented policy tools will hurt the U.S. economy in the long run, a former member of Fed Chairman Ben Bernanke's inner circle suggested on Thursday.

3M Co's (MMM.N) board of directors are divided over whether to extend the contract of chief executive George Buckley once it expires in a month, the Wall Street Journal reported on Friday, citing a person familiar with the matter.

The economy likely grew at its fastest pace in nearly two years at the end of 2011, but a rebuilding of stocks by businesses and weak exports could be early warning signs of a slowdown in early 2012. U.S. gross domestic product is expected to have expanded at a 3.0 percent annual rate in the fourth quarter, according to a Reuters poll.

The yield on the benchmark U.S. Treasury note was steady in Asia on Friday, while the yield on five-year paper was slightly above a multi-decade low as investors awaited U.S. data later in the session that is likely to show the economy has picked up.

Richmond Federal Reserve Bank President Jeffrey Lacker said on Friday he voted against the central bank's decision this week to keep rates near zero until at least late 2014 because he believes rates will need to rise before then.

Juniper Networks (JNPR.N) and Riverbed Technologies (RVBD.O) disappointed investors with gloomy first quarter outlooks that were below expectations, raising fears that demand for companies that help manage Internet traffic may be weak for some time.

Cirrus Logic Inc (CRUS.O) forecast fourth-quarter revenue higher than analysts' estimates as the analog chipmaker expects to launch several new products during the period.

Delphi Automotive PLC (DLPH.N) reported a nearly four-fold increase in fourth-quarter earnings on stronger sales of vehicle electronics and engine systems in its first results since returning as a public company.

Sallie Mae (SLM.O), the largest U.S. student lender, raised its quarterly dividend and said its board authorized a $500 million share buyback program.

A Brazilian prosecutor plans to file criminal charges against Chevron Corp (CVX.N) and some of its local managers within weeks, adding the threat of prison sentences to an $11 billion civil lawsuit as punishment for a November offshore oil spill.

A month-long rally on Wall Street appears to be sputtering as stocks slipped on Thursday in what investors called a possible warning of weakness ahead. Weaker-than-expected home sales figures and a group of mixed earnings reports tempered the market's recent buying interest.

The Dow Jones industrial average (.DJI) was down 22.33 points, or 0.18 percent, at 12,734.63. The Standard & Poor's 500 Index (.SPX) was down 7.60 points, or 0.57 percent, at 1,318.45. The Nasdaq Composite Index (.IXIC) was down 13.03 points, or 0.46 percent, at 2,805.28.

(Reporting by Blaise Robinson; Editing by Helen Massy-Beresford)

Weather Underground Forecast for Friday, January 27, 2012.
Wet weather will persist across the Eastern US, while snow showers move through the Rockies on Friday. A strong low pressure system over the Eastern Valleys continues moving northward, over the Northeastern US and into eastern Canada. Flow around this system pushes a warm front over the Northeast, kicking up scattered rain showers. Rainfall totals along this front will range from 1.0 to 1.5 inches. Expect cooler temperatures north of this front to produce freezing rain and snow showers over the far Northeast. Additionally, moisture will wrap around this system to the west, kicking up scattered snow showers across the Great Lakes. Snowfall accumulation in these areas will range from 1 to 3 inches. To the South, a cold front will extend south of this system and continue sweeping across the Southeastern states. Some areas may see some severe thunderstorms with heavy rainfall and strong winds. Rainfall totals in most areas will range from 1 to 2 inches, with more likely in areas of severe thunderstorm development. By Friday evening, this system will move offshore and into the Atlantic Ocean. This will bring an end to scattered showers and thunderstorms across the Southeast.
Out West, a low pressure system and associated cold front continue advancing eastward through the Rockies. Some residual moisture with this system will bring periods of heavy snow to the Northern and Central Rockies. Expect snowfall accumulation to range from 6 to 12 inches across Colorado, while Montana and Wyoming will see 6 to 10 inches of new snow. The leading edge of this system will quickly move into the Northern Plains and Upper Midwest. Expect 1 to 3 inches of new snow in these areas. Temperatures in the Lower 48 states Thursday have ranged from a morning low of -3 degrees at Clayton Lake, Maine to a high of 85 degrees at Orlando, Fla.

TOKYO – Nintendo's chief is determined to get right the launch of its next game machine, Wii U, set for this year's holiday shopping season, and acknowledged Friday some mistakes with selling its 3DS handheld.
But Nintendo Co. President Satoru Iwata warned earnings for the fiscal year set to begin April will be the toughest ever for the Japanese manufacturer behind the Super Mario and Pokemon games.
Iwata's remarks come a day after it lowered its annual earnings forecast to a 65 billion yen ($844 million) loss, much larger than the 20 billion yen ($260 million) loss projected earlier. It posted a 77.62 billion yen profit the previous fiscal year.
Iwata blamed the strong yen, which erases overseas earnings, as well as the arrival of smartphones and other devices that offer gaming.
The higher yen slashed nearly 54 billion yen ($701 million) from the company's operating profit for the April-December period.
"I can see how the red ink may be perceived as abnormal," Iwata told analysts and reporters at a Tokyo hotel. "The environment has changed."
The failure of the 3DS handheld, which offers three-dimensional imagery, to take off with enough momentum during the last quarter of 2011 was one of the main reasons for the dismal results, according to Iwata.
The 3DS has gradually started to sell better, but it took a price cut in August. It still lacks a strong lineup of attractive software games, a key factor for a machine to succeed in a big way.
Iwata vowed the company will be better prepared when it introduces the Wii U home console during the 2012 year-end shopping season for a strong comeback.
He declined to give details such as pricing or what the software games available at that time might be.
But he said the Wii U will come with a strong game lineup at the launch as well as secure and safe Internet services that will offer players individual accounts.
The Wii U will come with new ways of playing that will almost make the term "home console" obsolete, Iwata said. It will also offer mobile gaming. The machine has a touch-panel controller.
Nintendo has long competed against rival game makers, such as Sony Corp. and Microsoft Corp. These days, all face the threat from hit devices like the iPad and iPhone from Apple Inc. that also offer games.
Iwata's comments also showed Nintendo is growing less cautious about the Internet, which in the past it had brushed off as mainly for hard-core gamers.
Kyoto-based Nintendo has built its reputation on making games fun to play for casual and newcomer players.
"We are going to put to use our bitter experience with the 3DS," said Iwata.
___
Follow Yuri Kageyama at http://twitter.com/yurikageyama

SAN FRANCISCO – Automakers expressed qualified support for California's proposed rules to require carmakers to build more electric and other less-polluting hybrid cars and trucks by 2025.
Companies including Ford Motor Corp., Chrysler Group LLC, General Motors Co., Nissan Motor Co. Ltd. and others submitted testimony Thursday in support of new emissions standards during a meeting of California Air Resources Board.
The board is scheduled to resume hearing testimony on the regulations — which would require that vehicles emit about 75 percent less smog-producing pollutants — on Friday morning in Los Angeles.
The new standards also include big cuts in greenhouse gas emissions, and would begin with new cars sold in 2015, and get increasingly more stringent until 2025. The rules also mandate that one of every seven new cars sold in 2025 in the state be a zero-emission or plug-in hybrid vehicle.
California Air Resources Board Chairman Mary Nichols said she hopes the rules lead "the nation and the world."
"We can't afford to wait. We have to act on these issues now," she said at the panel's meeting. "Our projections show continued growth in population and vehicle miles traveled, which will affect air quality for years to come."
The overall goal of the state is to have 1.4 million zero-emission and plug-in hybrids on California roads by 2025. But the program also looks ahead to 2050, laying groundwork for a goal of having 87 percent of the state's fleet of new vehicles fueled by electricity, hydrogen fuel cells or other clean technologies.
Yet the rules provide some flexibility for automakers by giving them the ability to claim credits toward the zero-emission mandates if the company's other models exceed the federal greenhouse gas emissions mandates. These credits could be applied toward those zero-emission vehicle mandates in 2018 through 2021.
However, this aspect of the plan was not supported by many of the U.S. car makers like Ford, Chrysler and GM, who said it could result in hundreds of thousands of mandated electric and other clean vehicles being taken off the road in that time period, hurting the emerging market.
"This greenhouse gas over-compliance provision runs counter to the goals of the zero-emission vehicle mandates," said Robert Babick, speaking on behalf of GM. "We don't see how this provision makes the program better."
Industry groups representing auto dealers worried that the new regulations will increase the costs of vehicles for consumers and stifle the industry's growth.
Other states often adopt California's smog emissions standards because they are stricter than federal ones.
Fourteen states, including Washington, New Jersey, New York and Massachusetts, have adopted the state's current emissions goals, which is why the new regulations could have a wide-ranging effect. Of those states, 10 also adopted the zero-emission vehicle standards.
But the California New Car Dealers Association and other industry groups representing those who sell cars said the board is overestimating consumer demand for electric vehicles and other so-called "zero-emission vehicles."
Some dealer groups have estimated that $3,200 would be added to the average cost of a car because of the required technological changes, and that consumers have been slow to adopt them.
Jonathan Morrison, of the state dealers' association, said car retailers are supportive of new technologies that are accepted by their customers, but said the acceptance of electric and other vehicles has been slow.
"Consumers do not make purchasing decisions based upon regulatory mandates," he said.
The board's research staff disputes those estimates and says increases in hybrid and other sales continue to rise as more cars hit the market. They argue that fuel cost savings will make up for any vehicle price increase.

"Our research shows a $1,400 to $1,900 car price increase. But over the life of the vehicles, the owners save $6,000 in reduced fuel and maintenance costs," board spokesman David Clegern said.

One of the nation's foremost consumer groups, the Consumers' Union, the policy and advocacy division of Consumer Reports, supports the regulations.

The rules will "protect consumers by encouraging the development of cleaner, more efficient cars that save families money, help reduce the American economy's vulnerability to oil price shocks and reduce harmful air pollution," according to a letter from the group.

BAGHDAD (Reuters) – A suicide bomber detonated his explosive-filled taxi near a funeral procession in Baghdad on Friday, killing 31 people in the latest attack in a Shi'ite neighborhood amid rising violence since an Iraqi political crisis erupted in December.

The bomber exploded his vehicle near the group of Shi'ite mourners passing by a small market street in the Zaafaraniya neighborhood in the southwest of the Iraqi capital, police officials and hospitals said.

Authorities blame Sunni Islamist insurgents for a spike in attacks targeting Shi'ites in an attempt to stoke the kind of sectarian slaughter which killed tens of thousands of Iraqis at the peak of the war in 2006-2007.

"I was in the old Zaafaraniya market when a funeral came by and just as it passed, a car bomb exploded," said Ali Mohsen. "I helped evacuating the dead and injured people, their blood covered the ground."

The funeral was for a Shi'ite real estate agent who was killed by gunmen in Baghdad a day earlier, police said. The motive for his murder was not clear.

The suicide car bomber may have also tried to target the Zaafaraniya police station, blowing himself up close to shops and the market instead, said an official at the office of Baghdad security spokesman Qassim al-Moussawi.

Sunni insurgents often target local government offices and police stations and patrols as a way to show the authorities are unable to provide security.

At least 60 people were wounded in Friday's attack, officials said.

More than 320 people have been killed in attacks in Iraq since the start of the year alone and nearly 800 more wounded -- more than double last year's figure for violent deaths in January, according to government figures and a Reuters count.

Turmoil in Iraq has wider consequences in a region warily watching neighboring Syria's increasingly sectarian crisis, and where Sunni Gulf Arab nations and heavyweight Turkey are trying to counter the influence of Shi'ite Iran.

Violence has eased since the heights of sectarian strife unleashed by the 2003 U.S.-led invasion that ousted Sunni dictator Saddam Hussein. But Iraqi forces are still battling Sunni insurgents tied to al Qaeda, and rival Shi'ite militias.

Iraq's current crisis was triggered when Prime Minister Nuri al-Maliki's government sought the arrest of a Sunni vice president and asked lawmakers to remove a Sunni deputy prime minister just after the last U.S. troops left Iraq on December 18.

Maliki, a Shi'ite, says his moves against Sunni leaders were legal decisions and not politically motivated. But many Sunnis, already feeling alienated, worry measures are part of a drive by Maliki to consolidate his power at their expense.

The crisis threatens to break apart a fragile power-sharing agreement that splits posts among Shi'ite, Sunni and Kurdish blocs, but that has been hamstrung by political infighting since it was sealed a year ago.

(Additional reporting Kareem Raheem and Jim Loney; writing by Patrick Markey; Editing by Rosalind Russell)

DAKAR, Senegal – Hundreds of youths flooded a downtown square in Senegal's capital, hours before the nation's highest court is supposed to render its verdict on whether the country's president of 11 years can run for a third term.
President Abdoulaye Wade turned in his application this week to be a candidate in the Feb. 26 presidential election. The constitution has a two-term limit, and the population has threatened to riot if the country's constitutional court approves his candidacy late Friday.
The minister of the interior earlier said all public demonstrations would be banned through early next week, but the government granted a last-minute reprieve on Friday. This came after the opposition threatened to go ahead with a rally regardless of whether the government gave it a permit.

(Reuters) – Ford Motor Co reported a lower-than-expected fourth-quarter profit on Friday due to higher commodity costs and losses in its automotive operations in Europe and Asia.

Excluding one-time items, the No. 2 U.S. automaker's operating profit fell to $1.1 billion, or 20 cents per share, from nearly $1.3 billion, or 30 cents per share, a year earlier.

Analysts, on average, expected an adjusted profit of 25 cents per share, according to Thomson Reuters I/B/E/S.

Ford reported a net income of $13.6 billion, or $3.40 per share, buoyed by a one-time tax-related gain of $12.4 billion. A year earlier, Ford posted net income of $190 million, or 5 cents per share.

The company's higher net income was due to an accounting change that Ford said reflects its confidence in its long-term profit outlook. The one-time gain resulted in a full-year net income of $20.2 billion, the highest annual profit since 1998.

(Reporting by Deepa Seetharaman and Ben Klayman; Editing by Derek Caney)

SAN FRANCISCO – Twitter has refined its technology so it can censor messages on a country-by-country basis.
The additional flexibility announced Thursday is likely to raise fears that Twitter's commitment to free speech may be weakening as the short-messaging company expands into new countries in an attempt to broaden its audience and make more money.
But Twitter sees the censorship tool as a way to ensure individual messages, or "tweets," remain available to as many people as possible while it navigates a gauntlet of different laws around the world.
Before, when Twitter erased a tweet it disappeared throughout the world. Now, a tweet containing content breaking a law in one country can be taken down there and still be seen elsewhere.
Twitter will post a censorship notice whenever a tweet is removed. That's similar to what Internet search leader Google Inc. has been doing for years when a law in a country where its service operates requires a search result to be removed.
Like Google, Twitter also plans to the share the removal requests it receives from governments, companies and individuals at the chillingeffects.org website.
The similarity to Google's policy isn't coincidental. Twitter's general counsel is Alexander Macgillivray, who helped Google draw up its censorship policies while he was working at that company.
"One of our core values as a company is to defend and respect each user's voice," Twitter wrote in a blog post. "We try to keep content up wherever and whenever we can, and we will be transparent with users when we can't. The tweets must continue to flow."
Twitter, which is based in San Francisco, is tweaking its approach now that its nearly 6-year-old service has established itself as one of the world's most powerful megaphones. Daisy chains of tweets already have played instrumental roles in political protests throughout the world, most notably in the uprising that overthrew Egypt's government a year ago.
It's a role that Twitter has embraced, but the company came up with the new filtering technology in recognition that it will likely be forced to censor more tweets as it pursues an ambitious agenda. Among other things, Twitter wants to expand its audience from about 100 million active uses now, to more than 1 billion.
Reaching that goal will require expanding into more countries, which will mean Twitter will be more likely to have to submit to laws that run counter to the free-expression protections guaranteed under the First Amendment in the U.S.
If Twitter defies a law in a country where it has employees, those people could be arrested. That's one reason Twitter is unlikely to try to enter China, where its service is currently block. Google for several years agreed to censor its search results in China to gain better access to the country's vast population, but stopped that practice two years after engaging in a high-profile showdown with Chain's government. Google now routes its Chinese search results through Hong Kong, where the censorship rules are less restrictive.
In its Thursday blog post, Twitter said it hadn't yet used its ability to wipe out tweets in an individual country. All the tweets it has previously censored were wiped out throughout the world. Most of those included links to child pornography.

WASHINGTON – A weak year for the economy likely ended on a hopeful note.
The economy likely grew at annual rate of 3 percent in the October-December quarter, according to a survey by FactSet. The Commerce Department will release the actual figure Friday.
The gain would represent modest improvement from this summer, when the economy grew just 1.8 percent. However, even with the strong finish, economists believe the economy expanded just 1.7 percent for the whole year — roughly half the growth in 2010.
And growth is expected to slow in the first three months of this year. A key reason is wages have failed to keep pace with inflation. That will likely force many consumers to pull back on spending after splurging over the holidays.
Consumer spending is important because it makes up 70 percent of economic activity.
Businesses are also expected to reduce spending in the first quarter after building up their stockpiles in the final months of 2011.
Richard DeKaiser, a senior economist at Parthenon Group, expects just 2 percent annual growth in the January-March quarter. But Kaiser says that should be the weakest quarter. He expects the economy to gain strength in each quarter and grow 2.6 percent for the entire year.
The year is off to a good start. Companies invested more in equipment and machinery in December. The unemployment rate fell to 8.5 percent last month — the lowest level in nearly three years — after the sixth straight month of solid hiring.
People are buying more cars, and consumer confidence is rising. Even the depressed housing market has shown enough improvement to make some economists predict a turnaround has begun.
Still, many economists worry that a recession in Europe could dampen demand for U.S. manufactured goods, which would slow growth. And without more jobs and better pay, consumer spending is likely to stagnate.
The Federal Reserve signaled this week that a full recovery could take at least three more years. In response, it said it would probably not increase its benchmark interest rate until late 2014 at the earliest — a year and a half later than it had previously said.
The central bank also slightly reduced its outlook for growth this year, from as much as 2.9 percent forecast in November down to 2.7 percent. The Fed sees unemployment falling as low as 8.2 percent this year.
DeKaiser said part of his optimism stems from a view that housing sales and prices will rise moderately this year. That should lift the battered construction industry, which ended last year with three months of gains in single-family home construction.
At the moment, housing remains the weakest part of the economy. New-home sales fell last month, and total sales for 2011 were the lowest on records dating back to 1963.
"I think the clouds will gradually lift over housing. Rising home prices will make consumers feel wealthier and this will translate into stronger consumer spending," DeKaiser said.

LOS ANGELES – Authorities are set to release a 911 call made from Demi Moore's home earlier this week.
The Los Angeles Times ( http://lat.ms/x6Lu2n) says the Los Angeles city attorney's office has recommended that certain portions of the call be deleted to comply with federal privacy laws.
City attorney's office spokesman Frank Mateljan tells the Times that the office has reviewed the tape and has made certain recommendations.
A spokeswoman for Moore said Tuesday that the actress is seeking professional help to treat her exhaustion and improve her health. Publicist Carrie Gordon says the decision is due to the stresses in Moore's life, and she looks forward to getting well.
Moore announced in November that she had decided to end her marriage to Ashton Kutcher following news of alleged infidelity.

MIAMI (Reuters) – He could be the Republican vice presidential candidate from central casting: telegenic, Hispanic and a fiscal conservative who has been embraced by the Tea Party.

That is why Florida Senator Marco Rubio is presidential hopeful Newt Gingrich's top choice as a running mate - at least he is this week, with Gingrich about to battle Mitt Romney in the Sunshine State's Republican primary on Tuesday.

But Rubio may not be as coveted as Gingrich or Romney would have it appear as they press for votes in Florida, where more than 450,000 Hispanics identify themselves as Republicans.

Despite his reputation as a watchdog over federal spending, Rubio, 40, has had significant financial problems that could keep him from passing any vetting process as a potential vice presidential choice, Republican and Democratic strategists say.

In some ways, the story of Rubio's finances is similar to those of hundreds of thousands of his constituents in a state where more than 40 percent of homeowners are "underwater," owing more on their homes than the homes are worth.

It is a crisis driven by falling property values and ill-advised home equity loans that drove up homeowners' debts.

Rubio owes far more on his $384,000 Miami home than it is worth. He bought the home in 2005 for $550,000 with a $495,000 mortgage. He soon had it appraised for $735,000 and took out a home equity line of credit for $135,000.

In 2008, despite earning a declared $400,000 - including his $300,000 salary from the Miami law firm Broad and Cassel - Rubio failed to pay down the principal on his home for several months, according to Florida campaign finance disclosures.

During the same period he did not pay down the balance of a $100,000-plus student loan from his days at the University of Miami, the disclosures said.

Rubio's spending habits also have gotten attention in Florida.

Before joining the Senate last year, his name surfaced in an Internal Revenue Service investigation of the Florida Republican Party's use of party-issued credit cards. He frequently had used his party credit card for personal use, and later reimbursed the card company for about $16,000.

Rubio's handling of his personal finances contrasts sharply with the image of him on his Senate website, which highlights Rubio's efforts to prevent Washington from "piling up debt."

"We need a government that stops spending more money than it takes in," the website says.

Rubio's financial issues have led Florida Democrats to cast him as a hypocrite.

"Rubio campaigned on reining in government spending, but his own personal spending is out control," said Brannon Jordan of the Florida Democratic Party. "He says one thing but is doing another."

Rubio's office declined to discuss his mortgage issues in detail.

"That's all been pretty well documented," said his spokesman, Alex Conant.

Supporters say his debts are not significant and may have been remedied by an advance for a book deal with Sentinel, a conservative imprint of the Penguin Group.


The book is tentatively scheduled for release this fall, Conant said. Rubio's contract with Sentinel remains confidential.


Campaigning in Florida, Gingrich has praised Rubio as a "great guy" who would "be on the short list of anyone who becomes our nominee" in discussions about a running mate.


Rubio has resisted talk of his being on the Republican ticket.


"I do not think or believe that I will be vice president of this country," Rubio said, but "I appreciate (Gingrich's) comments because they make one feel good."


"MORE THAN JUST A SENATOR"


Reports of his financial problems may have embarrassed Rubio but they have not prevented him from attaining what amounts to rock-star status in the Tea Party, which seeks to limit government and taxes.


Rubio initially cast himself as the U.S.-born son of Cuban immigrants who fled Fidel Castro's revolution in 1959.


That narrative ran aground when records surfaced showing that his parents actually had left Cuba years earlier. But to south Florida's conservative, anti-Castro Cubans, Rubio remains a symbol of second-generation success in America.


Republican leaders, meanwhile, see him as a powerful draw for Hispanic voters, the fastest-growing part of the national electorate.


"Senator Rubio is more than just a senator, he has become a symbol for the Hispanic American ... and an embodiment of the American Dream," said Luis Andre Gazitua, 35, a Miami lawyer who is active in the Republican Party.


Rubio, a father of four who is married to a former Miami Dolphins cheerleader, says he will not endorse a candidate in the race for the Republican nomination for president.


However, he has close ties to Gingrich and Romney.


Several of Rubio's key staff members worked on Romney's unsuccessful bid for the nomination in 2008. They include Rubio's chief of staff, Cesar Conda, a former aide to former Vice President Dick Cheney.


Rubio's former campaign chief, Jose Mallea, is heading Gingrich's campaign in Florida.


Gingrich and Romney have courted Rubio for an endorsement, and Rubio's influence in the presidential campaign here was evident this week.


After Gingrich's campaign released a Spanish-language radio spot that called Romney "anti-immigrant," Rubio blasted the ad as "inflammatory" and "inaccurate."


Gingrich's campaign soon took down the ad.


CAN HE ATTRACT HISPANIC VOTERS?


Many Republicans believe the bilingual Rubio could help the party carry Florida in the presidential election by attracting support from Hispanics, who tend to vote Democratic.


Analysts say the party has good reason to be worried about its image in heavily Hispanic states such as Texas, California, New Mexico, Arizona and Colorado, where Latinos now make up more than 30 percent of the population.


In a Latino Decisions tracking poll last year, 72 percent of Hispanic voters said Republicans either "didn't care" or were "hostile" to their community.


It is unclear whether Rubio is the right choice to fix the party's image. He has not endeared himself to Hispanic voters on several fronts, analysts say.


He opposed the so-called DREAM Act, which would have provided a path to citizenship for some illegal immigrants, and he expressed support for a harsh immigration law in Arizona.


Rubio opposed President Barack Obama's Supreme Court nomination of Sonia Sotomayor, who is of Puerto Rican descent, and more recently blocked the confirmation of another Puerto Rican, Marie Carmen Aponte, as ambassador to El Salvador.


He also opposed Obama's healthcare overhaul, which is popular among many low-income Hispanics.


"He's on the wrong side on every issue that matters to Hispanics," said Fernand Amandi with Bendixen & Amandi, a political consulting firm in Miami that has been retained by the Obama campaign. "He's going to have to answer to those positions."


Despite holding moderate views on immigration as a state legislator early in his career, Rubio's position toughened as he gained national attention.


For example, in 2003 he co-sponsored legislation to allow the foreign-born children of undocumented immigrants to pay in-state college tuition fees.


Recently, however, he said, "If you're here in violation of the laws, you shouldn't benefit from these programs."


He says he would support such assistance for "a limited number" of undocumented students who had "exhibited good moral character."


Rubio also has urged the party to tone down its harsh rhetoric on illegal immigration.


"The Republican Party should not be labeled as the anti-illegal immigration party. Republicans need to be the pro-legal immigration party," he said.


Rubio is expected to address the issue again in a speech on Friday to the Hispanic Leadership Network. The group was founded by former Florida Governor Jeb Bush, one of the most vocal conservative advocates of greater cultural sensitivity toward immigrants.


Bush, a fluent Spanish-speaker whose wife, Columba, was born in Mexico, has been grooming Rubio on the issue, party insiders say.


"I don't think you can underestimate their relationship," Conant said.


(Editing by David Lindsey and Eric Walsh)


(Removes words "and at times has had difficulty paying his mortgage," paragraph 7; removes "he did not make payments on a $100,000-plus student loan" and instead states "he did not pay down the balance of a $100,000-plus student loan," paragraph 10; removes "he was caught up in an Internal Revenue Service Investigation" and instead states "his name surfaced in an Internal Revenue Service investigation," paragraph 12; removes "voted against Sonia Sotomayor, Obama's Supreme Court nominee" and instead states "opposed President Barack Obama's Supreme Court nomination of Sonia Sotomayor," paragraph 41; removes "voted against Obama's healthcare overhaul" and instead states "opposed Obama's healthcare overhaul," paragraph 41)

PRAGUE – The Czech government has signed a deal for Prague to host the headquarters of an ambitious satellite navigation system that is meant to become the main rival to the U.S. Global Positioning System.
The deal was signed Friday in Prague by Czech Transport Minister Pavel Dobes and Carlo des Dorides, executive director of the European GNSS Agency.
The EU wants to dominate the future with a system known as Galileo that is more precise and more reliable than GPS, while controlled by civil authorities.
It foresees applications ranging from precision seeding on farmland to pinpoint positioning for search-and-rescue missions. On top of that, the EU hopes it will reap a financial windfall.
The system with a network of 30 satellites is expected to become operational in 2014.

SANTA FE, N.M. – Republican Gov. Susana Martinez suffered a temporary political setback Thursday in a bid to stop New Mexico from granting driver's licenses to illegal immigrants.
A legislative committee shelved her proposal and approved a Democrat-backed alternative that continues to allow licenses for illegal immigrants but with new restrictions.
The politically-charged fight is far from over, however. The legislation heads to another panel for consideration and Martinez stands a strong chance of success if the issue reaches the full 70-member House for a vote. A measure to overturn New Mexico's license policy for immigrants passed the House last year with the support of eight Democrats and one independent.
"I've got all the votes I need in the House," said Rep. Andy Nunez, a Hatch independent sponsoring the governor's proposal.
Nunez conceded it's very uncertain whether the measure can clear the Democrat-controlled Senate, which solidly rejected it last year.
The House Labor and Human Resources Committee voted 5-4 on a party-line split for what Democrats described as a compromise proposal. Republicans opposed it.
The measure allows illegal immigrants to continue getting licenses but for only two years before needing renewal. Currently, licenses can last four or eight years. The measure increases penalties for license fraud and will cancel licenses previously issued to foreign nationals if they renew them within two years — allowing the state to determine whether people remain New Mexico residents.
House Majority Leader Ken Martinez, a Grants Democrat, said the state's license policy allows illegal immigrants to "come up from the shadows" so they can drive to work and take their children to school and other places without fear of arrest for not having a license. The committee-approved restrictions will "really hit the bad guys hard," he said.
State law enforcement and Martinez administration officials told the committee that New Mexico's licensing law posed a security risk to the state and rest of the country.
"This has never been an immigration issue. It's not about immigration. It's simply about public safety and security," said Keith Gardner, the governor's chief of staff.
But church leaders and immigrant rights advocates disagreed, saying a driver's license is critical for immigrants living and working in New Mexico, many with U.S.-born children. The push to repeal New Mexico's law is stirring an anti-immigrant sentiment, they said.
"I think it is about immigration ... it is about divisiveness," said Santa Fe Mayor David Coss. "We should stop calling people in our community illegal aliens."
The governor's proposal would prohibit the state from granting licenses to illegal immigrants. However, it would continue to allow licenses for foreign nationals in the country legally, such as students with a visa.
New Mexico and Washington are the only states that allow illegal immigrants to obtain the same driver's license as a U.S. citizen. Utah grants immigrants a driving permit that can't be used for identification, unlike a driver's license that helps people open bank accounts and make financial transactions or board a commercial airliner.
Martinez contends that New Mexico's license system is subject to widespread fraud. The state has brought charges against several fraud rings, in which brokers were paid to supplement fraudulent documents for foreign nationals from Poland, China, Mexico and other countries.
During the committee hearing, several legislators noted that a review of license data by The Associated Press found that dozens of addresses — including some for businesses such as a smoke shop — have been used over and over again by immigrants to get a driver's license. The pattern suggests people are abusing the state's licensing system.
However, supporters of the current policy said the state doesn't need to repeal its law to deal with potential fraud.
"It is important the state is enforcing the law. When the law is enforced, the law works," said Allen Sanchez, executive director of the New Mexico Conference of Catholic Bishops.

The AP identified 170 addresses in New Mexico at which 10 or more licenses have been issued to different foreign nationals from 2003 through August 2011. Those account for 2,662 licenses — representing nearly 3 percent of the total issued to foreign nationals during that period. The AP limited its analysis to addresses with a high number of licenses to try to get an indication of the extent of possible fraud. Large families or frequent tenant turnover at rental property are among the legitimate reasons why there are addresses with fewer than 10 licenses over a period of time.

New Mexico changed its law in 2003 to grant driver's licenses to anyone without a Social Security number, which are unavailable to people living illegally in the country. More than 90,000 licenses have been issued to immigrants, and state officials speculate that most of those have gone to illegal immigrants. However, it's impossible to know for certain because license applicants aren't asked about their immigration status.

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Follow Barry Massey on Twitter at http://twitter.com/bmasseyAP

WASHINGTON – President Barack Obama is signaling he'll base part of his re-election campaign on an argument that Republicans are pushing discredited economic ideas.
In an interview with ABC News, Obama says the best strategy for economic revival is avoiding the Bush administration and financial community policies that led to the near-collapse of the economy in the fall of 2008.
Obama said the country has "an economy that was built on debt and flimsy financial deals." He added in the interview broadcast Friday that this is a strategy the Republican Party will have to defend this fall, "whether it's Mitt Romney or Newt Gingrich or Rick Santorum, or somebody else,"
The president said, "Why we would want to adopt something that we just tried, and didn't work, doesn't make sense."