Crew member says pirates want ransom

By STEVE GUTTERMAN

The Associated Press
Saturday, September 27, 2008; 7:25 AM

MOSCOW -- Pirates who seized a ship laden with tanks off the Horn of Africa were seeking ransom and keeping most of the 35 people aboard in a single stuffy room, a man identified as the captain's aide said in a report on a Russian news Web site Saturday.

In a telephone conversation posted on the site Life.ru, the purported crew member said the ship, the Faina, had anchored close to shore near the Somalian town of Hobyo and that there were two other apparently hijacked ships nearby.

An international anti-piracy watchdog group said Saturday that armed pirates on Friday seized a Greek chemical tanker with 19 crew members in the Gulf of Aden off Somalia.

The tanker, carrying a cargo of refined petroleum from Europe to the Middle East, was ambushed, chased and fired upon, said Noel Choong, who heads the International Maritime Bureau's piracy reporting center in Malaysia.

In the telephone conversation on Life.ru, the man issued what sounded like a coded call for help, repeating part of the Russian word for 'seals' twice.

The 530-foot cargo ship Faina was seized Thursday. Ukraine's defense chief said Friday that it was carrying 33 Russian-built T-72 tanks and a substantial quantity of ammunition and spare parts. Russia's navy said it dispatched a warship to the area, and U.S naval ships were monitoring the situation.

Nobody aboard the Faina was injured, but the captain, Vladimir Kolobkov, was suffering from heatstroke and his condition was "not so good," the man in the report said. He identified himself as Vladimir Nikolsky, the captain's senior assistant, and said the hijackers demanded that he speak only in English.

"They asking that we make contact with the owners about his money," Nikolsky said. Asked how much they were demanding, he said: "I'm not sure, approximately _ I cannot say he exact price." He suggested the hijackers indicated that would be matter for negotiations.

"They would like to speak directly to our owner," he said later.

Ukrainian news agencies have identified the ship's operator as Tomex Team, a company based in the Black Sea port of Odessa. A person who answered the phone at the company's office on Saturday declined to comment and refused to give his name.

Kenyan Defense Department spokesman Bogita Ongeri said on Saturday that Kenyan authorities have had no contact with the pirates or received any demands for ransom.

Ongeri said that the Ukrainian vessel was seized in international waters in the Gulf of Aden, one of the world's busiest shipping lanes. He said that the pirates hijacked the ship beyond 200 nautical miles away from the coast of the northeastern Somali region of Puntland. Two hundred nautical miles in maritime law mark the end of a country's territorial waters.

Hurricane Kyle Races Toward Coast

MACHIAS, Maine -- Fishermen moved boats to shelter from a rare burst of tropical weather along Maine's rugged Down East coast Sunday as Hurricane Kyle plowed past on its way to Canada, threatening a glancing blow equivalent to a classic nor'easter storm without the snow.

A hurricane watch for Maine was discontinued Sunday but a tropical storm warning remained in effect from Stonington, at the mouth of Penobscot Bay, to Eastport on the Canadian border, the National Hurricane Center said. The Canadian Hurricane Centre issued a hurricane warning for parts of southwestern Nova Scotia, with tropical storm warnings for parts of New Brunswick and Nova Scotia.
[Hurricane Kyle] NOAA

Hurricane Kyle is heading toward Nova Scotia and the Gulf of Maine.

The Category 1 storm's track was expected to bring its center ashore in New Brunswick just west of Saint John late Sunday or early Monday, but by then it is expected to have less than hurricane strength, said Peter Bowyer of the Canadian center in Dartmouth, Nova Scotia.

There were no immediate plans for evacuations in Maine, although residents were warned of potential power outages and interruptions in ferry services to islands.

Heavy rain lashed the state Sunday for a third straight day. As much as 5.5 inches had already fallen along coastal areas. Flood watches were in effect for the southern two-thirds of New Hampshire and southern Maine through Sunday evening.

Authorities expected wind gusts in Maine to reach up to 60 mph and waves up to 20 feet, said Robert McAleer, Maine Emergency Management Agency director.

Down East residents are accustomed to rough weather, but it most often comes in the winter when nor'easters howl along the East Coast. Maine hasn't had anything like a hurricane since Bob was downgraded as it moved into the state in 1991 after causing problems in southern New England.

While residents took precautions, many weren't impressed by Kyle.

"It probably won't be much different than a Nor'easter except we don't have to deal with the snow," said Jesse Davis of Marshfield, who planned to ride out the wind and rain at home with his wife and 2-month-old daughter. He gassed up his vehicles and generator, took in his deck furniture and filled up water jugs, but said that's what he does for any big storm.

"Down East we get storms with 50 to 60 mph winds every winter. Those storms can become ferocious," said Washington County Emergency Management Agency Director Michael Hineman. Down East is the rugged, sparsely populated area from about Bar Harbor to the Canadian border.

Many lobstermen moved their boats to sheltered coves, said Dwight Carver, a lobsterman on Beals Island. Some also moved lobster traps from shallow water.

"I'm sure we'll have a lot of snarls, a lot of mess, to take care of when it's done," Carver said. "It'll take us a few days to straighten things out."

In Lubec, the easternmost town in the U.S., town workers pulled up docks and fishermen moved boats across the harbor into Campobello Island, New Brunswick, which has coves and wharves that offer shelter.

At 2 p.m. EDT Sunday, Kyle was centered about 225 miles southeast of Portland, Maine, and about 230 miles southwest of Halifax, Nova Scotia, the National Hurricane Center said. It was moving toward the north-northeast at roughly 24 mph and was expected to continue that track for the next day or so.

Kyle's maximum sustained wind was blowing at nearly 80 mph, with hurricane-force wind of at least 74 mph extending up to 70 miles out from the center.

Emergency Measures officials in New Brunswick were concerned that people living inland were not taking the storm warnings seriously enough.

"We're talking to people on the street and they're shrugging this off," said spokesman Ernie MacGillvray.

He noted that the storm system was hundreds of miles wide. "They need to understand there's going to be a whole bunch of impact and it could be a few days before phones and power is restored," Mr. MacGillvray said.

The deadliest storm to hit the Northeast was in 1938 when a hurricane killed 700 people and destroyed 63,000 homes on New York's Long Island and throughout New England. Other hurricanes that have hit Maine were Carol and Edna in 1954, Donna in 1960 and Gloria in 1985.

A hurricane watch means hurricane conditions, with wind of at least 74 mph, are possible within 36 hours. A tropical storm warning means conditions for that type of storm, with wind of 39 to 73 mph, are expected within the next 24 hours.

Bank-Rescue Compromise Plan Is Under Review by U.S. Lawmakers

By Alison Vekshin and Laura Litvan

Sept. 28 (Bloomberg) -- U.S. lawmakers are reviewing a tentative agreement to revive credit markets by authorizing a $700 billion plan to buy troubled assets from financial institutions.

``The deal is done,'' Senator Judd Gregg, a New Hampshire Republican, a ranking member of the Budget Committee, said this morning. The House and Senate may vote tomorrow, Gregg said.

Still, Republican House members are waiting to see the compromise proposal written into legislation before making a final decision to support it, said Representative Eric Cantor of Virginia.

``We're waiting to see what this looks like on paper to see if we have an agreement,'' Cantor said.

The negotiations were completed about midnight when lawmakers agreed to require the president to offer a plan to recoup any loss to the taxpayers after five years, said a Democratic congressional aide. That clause was intended to address concerns about the cost of the program.

The agreement alters the Bush administration's original request for unchecked authority to purchase distressed debt securities from financial companies reeling from the record number of home foreclosures. That plan evoked a blizzard of emails and phone calls from voters outraged at being asked to foot the bill for the mistakes of Wall Street investors.

Initial Cost

During weeklong negotiations, lawmakers reduced the initial cost by half to $350 billion, with the remainder to be authorized later, and they added provisions creating an oversight structure and help to homeowners facing foreclosure.

The compromise also includes a proposal by House Republicans, whose objections scuttled an earlier agreement in principle, that provides for government insurance for mortgage- backed securities. The plan also imposes limits on the compensation of executives at participating companies.

``It will be the first time in American history that there will be legislative restrictions on CEO compensation,'' said House Financial Services Chairman Barney Frank, Democrat of Massachusetts.

Lawmakers want to announce a firm agreement before Asian financial markets open late today, Senate Majority Leader Harry Reid said. The deadline reflects concern that markets will be further rocked by lack of an agreement after the Standard & Poor's 500 index recorded its largest weekly drop since May.

Treasury Secretary Paulson last night said the proposed deal ``will work and be effective.'' More work needs to be done, ``but I think we're there,'' he said.

Government Bailouts

Paulson and Federal Reserve Chairman Ben S. Bernanke proposed the plan after the collapse and bankruptcy of Lehman Brothers Holding Inc. and the Federal Reserve's takeover of American International Group Inc. earlier this month. They said it was needed to revive lending and restore the flow of credit to the U.S. economy.

President George W. Bush warned yesterday that legislative action was needed to avoid a ``deep and painful recession.''

Bush spokesman Tony Fratto said early this morning that administration officials are ``pleased with the progress tonight and appreciate the bipartisan effort to stabilize our financial markets and protect our economy.'' He said Bush had spoken last night with House Speaker Nancy Pelosi on the negotiations.

The proposal immediately provides $250 billion, and another $100 billion could be used at the request of the president. Congress would have to review the expenditure of the remaining $350 billion, according to an outline distributed to reporters.

The package includes a provision aimed at ``preventing golden parachutes'' for executives of companies who leave firms that have sold troubled assets to the government, said Senator Kent Conrad, a North Dakota Democrat.

Stock Warrants

Companies that sell debt to the government will issue stock warrants to the government so that taxpayers ``can gain as companies recover'' from economic difficulties, Conrad said.

House Republicans initially balked at the cost of Paulson's plan. Missouri Representative Roy Blunt, the lead negotiator for House Republicans, said his colleagues wanted to ``bring both free-market principles and taxpayer protections to the table.''

``I think we will be able to have an announcement'' later today, Blunt said.

Republican leadership aides said that provisions favored by unions that own significant stakes in companies through pension plans were dropped. That includes a requirement for shareholder votes on executive-compensation issues.

At one point during the negotiations, billionaire Warren Buffett spoke by telephone to a lawmaker involved in the talks to offer ``his best thinking about market reaction to various things,'' said Conrad. ``People are trying to reach out to the best minds that they know.''

Obama, McCain Support

Presidential candidates Barack Obama and John McCain backed the compromise.

``My inclination is to support it,'' Obama, a Democrat, said on CBS' ``Face the Nation.''

Obama said the agreement reflects his core concerns by putting limits on executive compensation, providing congressional oversight and protecting taxpayers.

McCain urged lawmakers to ``swallow hard'' and support the proposal in an interview today on ABC's ``This Week'' program.

``Let's get this deal done, signed by the president, get moving,'' McCain, a Republican, said. ``It's going to restore confidence and get some credit out there, get this economic system moving again, which is basically in gridlock today.''

To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.netAlison Vekshin in Washington at