Thursday morning headlines

Whistles blow at Southwest: Two FAA inspectors are making some extraordinary charges on how the airline tried to sidestep needed maintenance inspections - and how their government supervisors went along with the sidestepping. One of the FAA honchos even went to work at Southwest. This is hardly the first time that the FAA has been accused of a too-cozy relationship with the airlines they're supposed to regulate. But Doug Peters and "Bobby" Boutris lay out the conflicts in pretty detailed and damning ways, even raising some potential criminal issues. They spoke with NPR and the WSJ. From NPR:

In 2003, Boutris was in charge of reviewing the engine maintenance for 737s in his region. He says that when he looked at Southwest Airlines' paperwork, it was so inconsistent and incomplete that he couldn't tell what was going on with the engines. "I had found a lot of inconsistencies with the records," Boutris says. "They were different from aircraft to aircraft; it was very hard to determine compliance." He complained to his supervisor but was largely ignored. The situation came to a head in 2006, when Boutris was named program manager for the Boeing 737-700 series. He says he was responsible for the safety of the entire aircraft and that Southwest's record-keeping had not improved. He again went to his supervisor and explained that he was seeing the same problems. Boutris wanted to send a letter of investigation, but the supervisor refused. An FAA letter of investigation is a serious matter for an airline. And in Boutris' particular circumstances, according to FAA rules, he was required to investigate further. Boutris says he was blocked yet again by the supervisor, Douglas Gawadzinski, and thinks he knows why. He says Gawadzinski was friends with a man named Paul Comeau, a former FAA inspector who had accepted a position with Southwest Airlines as the manager for regulatory compliance.

ATA shuts down: LAX suddenly has a bunch more room – and passengers are stuck. The low-cost carrier has filed for bankruptcy protection after losing its share of military airlift contracts, a huge piece of business. Based in Indianapolis, ATA was serving about 10,000 passengers daily with a mixed fleet of 29 owned and leased aircraft (lots of action between L.A. and Hawaii). Jet fuel woes had already forced the airline to scale back. (Aviation Week)

What about the passengers?: They've got a problem. With no advance notice of the bankruptcy filing, ATA ticket holders have been arriving at LAX this morning, only to discover that it might be a while before they get to their destination. ATA customers who purchased tickets by credit card were told to contact their credit card company for information on how to get a refund.

Jay-Z nears deal: L.A.-based Live Nation strikes again. The superstar rapper plans to leave his longtime record label Def Jam in favor of a 10-year $150-million package that includes financing for his own entertainment venture, in addition to recordings and tours. Live Nation has been expanding well beyond its concert promotion base, cutting deals with Madonna and U2. From the NYT:

Live Nation’s core business has revolved around major rock and country tours, and with Jay-Z it is making an unexpected foray into hip-hop. The company is also placing an enormous wager on a performer who, like many others, has experienced declining record sales. (Last year’s “American Gangster” sold one million copies in the United States; “The Black Album,” from 2003, sold well over three million.) But the arrangement would also position Live Nation to participate in a range of new deals with Jay-Z, one of music’s most entrepreneurial stars, whose past ventures have included the Rocawear clothing line, which he sold last year for $204 million, and the chain of 40/40 nightclubs.

MySpace music deal announced: The long-reported arrangement with three of the four major music companies would have Bev Hills-based MySpace spinning off its MySpace Music service as an independent joint venture. It'll be in partnership with Universal Music, Sony BMG and Warner Music Group. EMI, the fourth major label, might join up soon, according to the NYT.

Visitors to the site will be able to listen to free streaming music, paid for with advertising, and share customized playlists with their friends. They will also be able to download tracks to play on their mobile devices, putting the new site in competition with similar services like Apple, Amazon and eMusic. A subscription-based music component, where users pay a monthly amount for unlimited access to downloadable tracks, is also being considered.

SAG internal squabble: Remember the efforts by a bunch of Screen Actors Guild members to prevent the non-working or seldom-working members from voting on a new contract? Ned Vaughn and Amy Brenneman gathered more than 1,400 signatures in favor of the change, including A-listers like Glenn Close, Meryl Streep and Kevin Bacon. But SAG President Alan Rosenberg said the issue will go nowhere when the 71-member national board meets on April 12 (71 members?). "Our board and our members will never vote for this and I wish we weren't discussing it in any major way," Rosenberg tells the WSJ.

From L.A. to China: In the schmata biz, it's normally the other way around, but American Apparel CEO Dov Charney seldom takes the conventional route. AA will be opening stores in China this spring, and stocking them with T-shirts, shorts and hoodies made in downtown L.A. Charney said the company would pay clerks in the Chinese stores hourly wages exceeding the U.S. minimum of $5.85, which in some parts of China is more than a worker makes in a day. (Question: Why was this interesting LAT story truncated in the print edition and run full on the Web?)

Judge dismisses "Borat" suit: This was the one filed by the guy who Sacha Baron Cohen (aka Borat) accosted on a Midtown Manhattan street. The man, Jeffrey Lemerond, visibly alarmed, is shown running and shouting “Go away!” The suit argued that the movie had improperly used his image, without his consent, in violation of a century-old state civil rights law. But Judge Loretta A. Preska noted that state courts have interpreted the ban narrowly. The ban, she said, does not apply to “newsworthy events or matters of public interest.” From the NYT:

Does Borat deserve the same protection as, say, a reporter for The Times? (Readers, be gentle.) Judge Preska skirted that question, saying the court should be wary about judging what is newsworthy or of public interest. She wrote: Of course, the movie employs as its chief medium a brand of humor that appeals to the most childish and vulgar in its viewers. At its core, however, “Borat” attempts an ironic commentary of “modern” American culture, contrasting the backwardness of its protagonist with the social ills [that] afflict supposedly sophisticated society. The movie challenges its viewers to confront not only the bizarre and offensive Borat character himself, but the equally bizarre and offensive reactions he elicits from “ordinary” Americans. Indeed, its message lies in that juxtaposition and the implicit accusation that “the time will come when it will disgust you to look in a mirror.” Such clearly falls within the wide scope of what New York courts have held to be a matter of public interest.