WASHINGTON (AFP) — US justice authorities are investigating Wachovia Corp, one of the top five US banks, as part of a probe into Latin American drug money laundering, the Wall Street Journal reported Saturday.

Wachovia is one a several large US banks being examined for relations with Mexican and Colombian money-transfer and foreign exchange firms directly involved in the laundering, the Journal said.

The Journal also said the bank is possibly facing a deferred-prosecution agreement with the US Department of Justice that would subject it to “extensive federal oversight.”

But Wachovia denied that assertion.

“The statement in the article that Wachovia is discussing a deferred prosecution agreement with the Justice Department is not true,” spokeswoman Christy Phillips-Brown told AFP.

“Wachovia is not currently and has not in the past been engaged in any such discussions,” she said.

Phillips-Brown refused to confirm or deny any investigation, saying the bank “does not comment on the status or existence of government investigations and did not comment for the Journal article as implied in the story.”

But “Wachovia is committed to maintaining a strong anti-money laundering program,” she added.

The Department of Justice is investigating drug-money laundering through the hundreds of money-transfer businesses — known in Spanish as casas de cambio — around the country that mostly handle remittances to Latin American countries by workers inside the United States.

The remittance business processes about 50 billion dollars a year, the Journal said.

“Internal emails and documents filed in federal courts in Miami, Chicago and New York describe former ties between Wachovia and money-changing firms,” the Journal said.

It said Miami court documents show that US agents have seized over 11 million dollars in 23 Wachovia accounts that belonged to the Mexican chain Casa de Cambio Puebla. US authorities suspected the money was the laundered funds of a drugs syndicate.

The probe into Wachovia is part of a larger investigation into money laundering by drug cartels through the money transfer firms that involves both US and Mexican authorities.

The Journal said both Union Bank of California and American Express Bank International have paid authorities multi-million-dollar penalties as part of laundering investigations and charges that they fail to implement effective anti-money-laundering programs.

Phillips-Brown said that late last year Wachovia decided to exit its business with the casas de cambio, which she termed “a corporate decision.”

The news about Wachovia came one day after it agreed to pay 144 million dollars in fines and claims after an investigation into telemarketing fraud that involved the use of Wachovia accounts.

The Justice Department was not immediately available for comment.

EAGAN, Minn. (AP) — Northwest Airlines will match the fare increases put in place by other major carriers this week.

Northwest said Friday night it will match the approximately 3 percent to 5 percent increases first implemented Thursday by United Airlines and matched by Delta Air Lines, American Airlines and Continental Airlines.

Jim Cron, senior vice president of revenue management, said Northwest made the move “to offset the extraordinarily high cost of fuel.”

The fare increase comes on the heels of Northwest’s earnings report this week, which showed a $4.1 billion loss in the first quarter, almost all of it from a massive accounting charge.

NEW YORK (AFP) — Rival US media titans have launched a bidding war for Newsday, the New York-area paper reported Saturday as Daily News owner Mortimer Zuckerman matched Rupert Murdoch’s 580-million-dollar bid.

Zuckerman’s deal would involve a joint venture that would see Newsday parent Tribune Company owning approximately five percent of the paper for the next 10 years, according to a source cited by the paper.

The Australian-born Murdoch made a “handshake” offer to buy Newsday from debt-laden Tribune, Newsday reported, although the deal is likely to draw the scrutiny of US federal regulators amid anti-competitive concerns.

Murdoch’s News Corp. owns two New York television stations, and should he buy Newsday it would give him three New York-based newspapers.

Zuckerman did not outbid Murdoch, but instead will argue to the Tribune Co. that his bid makes more sense because it is less likely to undergo delays due to regulatory checks, the New York Times reported.

“One of the things you have to consider when getting an offer is who can close on it,” an executive close to Zuckerman told the Times on condition of anonymity.

The battle for the Long Island-based daily brings together three of the top media barons in the United States, all billionaires: Sam Zell, whose Tribune Company owns the Los Angeles Times and Newsday; Zuckerman, who owns Daily News and US News & World Report; and Murdoch, whose News Corp. already owns the Daily News’s rival tabloid New York Post, The Wall Street Journal and television stations worldwide.

The Post and the Daily News have been battling for New York tabloid supremacy for years, and owning Newsday could provide a distinct financial advantage by consolidating costs for printing and distribution, according to media reports.

NEW YORK (Reuters) - American Airlines (AMR.N) has had early-stage merger talks with US Airways (LCC.N) and is in advanced talks for an alliance with Continental Airlines (CAL.N), sources briefed on the situation said on Friday.

News of the talks comes after Delta Air Lines’ (DAL.N) and Northwest Airlines‘ (NWA.N) announced nearly two weeks ago they planned to merge to become the world’s largest airline, seeking to counter skyrocketing fuel prices, a weak economy and a growing competitive threat from European carriers as trade barriers fall on trans-Atlantic travel.

American Airlines’ talks with Continental are focused on forming an alliance that could share passengers, much like the SkyTeam partnership that includes Air France-KLM (AIRF.PA), Alitalia (AZPIa.MI), Czech Airlines, Delta Air Lines (DAL.N), and Northwest Airlines (NWA.N), the people said.

Alliances have flourished in the industry because they generate profits through marketing programs and flight code-sharing without the headaches of combining operations.

But Continental is also in advanced talks with United Airlines (UAUA.O) for a full merger, the sources said. Continental will choose either the merger or the alliance, not both, sources said.

Meanwhile, United Airlines is also in serious merger talks with US Airways, and will choose to merge with either Continental or US Airways soon, the people said.

American’s talks with US Airways were not serious at this point, one person said.

Aviation consultant Bob Mann said a US Airways-American Airlines merger would not be a marquee matchup and would give American, currently the largest U.S. carrier, little extra depth overseas.

“It doesn’t match Northwest-Delta and it would not match the global presence of a Continental-United, if that were going to happen,” Mann said. “But I think if Delta-Northwest does happen and Continental (and United) does happen, about the only thing left on the board is US Airways.”

All of the airlines declined to comment.

MEGA-MERGER?

Continental, which has said it would prefer to remain independent unless the competitive landscape changes, had laid most of the groundwork for a merger with United even before Delta and Northwest announced their deal, the sources said.

Under the terms being negotiated, Continental Chief Executive Larry Kellner would be CEO of the combined airline and UAL CEO Glenn Tilton could be chairman, the people said. Other details are still being negotiated in what would be another all-stock deal.

Combining United with Continental would create a company with a combined $35 billion in revenue and nearly 100,000 employees, surpassing the Delta-Northwest combination.

But that merger may not happen. United Airlines, whose shares plunged 40 percent when it reported a quarterly loss earlier this week, is also talking to US Airways.

Analysts have said a merger of United and US Airways would be less complex than a United/Continental combination.

JP Morgan analyst Jamie Baker said earlier this week a deal between United and US Airways could be easier when it comes to aligning pilot pay, combining fleets and cutting flights and seats.

Baker also said the merger would be easier because United and US Airways already have code-share agreements and are part of the Star Alliance.

“United was interested in America West in 1998, US Air in 2000. Today, both are available under one roof,” Baker said. America West and US Airways merged in 2005.

REGULATORY APPROVAL

After racking up $35 billion in losses and finally emerging from a 5-year slump in 2006, U.S. airlines are hoping mergers could give them greater market power to reduce flights and raise fares.

The airlines also face a renewed sense of urgency to cut costs as jet fuel prices have more than doubled since the start of last year.

The carriers will be forced to make decisions in the coming weeks as they would like to have any mergers approved under the administration of President George W. Bush, which is considered more merger-friendly but ends in January.

All talks have been ongoing since January this year, after people heard that talks between Delta and Northwest had become serious. Delta and Northwest announced their merger April 14 in an all-stock deal then valued at just above $3 billion.

The Justice Department has said it would, if necessary, weigh multiple merger proposals in the airline industry and try to complete any reviews before the Bush administration leaves office.

While there is broad industry belief that the Northwest/Delta combination stands a good chance of being approved, some competition experts believe a follow-on deal could face a tougher challenge due to a further narrowing of competition that could lead to higher fares and fewer choices for travelers.

RIO DE JANEIRO (AFP) - Brazilian telecommunications group Oi announced Friday it had bought out rival Brasil Telecom for 3.5 billion dollars (5,863 million reals).

The agreement merges the two largest fixed-line telephone companies in Brazil and creates a giant that controls around 70 percent of the country’s telephone land lines.

The new company will also control 18 percent of the mobile phone market and 43 percent of the broadband Internet market, according to company information released in February.

Oi — formerly known as Grupo Telemar — said in a statement that the takeover depends on changes in the Brazilian law that forbids one group to control two separate concessions.

The government of Brazilian President Luiz Inacio Lula da Silva has said it supports changing the law to allow the merger.

Oi is mainly present in northern and southeastern Brazil, and its shares are mainly owned by local investors.

Brasil Telecom operates fixed telephone lines in northern, central-west and southern Brazil. Its main shareholders include the US group Citicorp.

Oi said that the agreed purchase price is the equivalent of 72.30 reals per Brasil Telecom share.

The new company will compete in Brazil with Spain’s Telefonica and Mexico’s America Movil.

DETROIT - General Motors Corp. Chairman and CEO Rick Wagoner received compensation valued at $15.7 million for 2007, up 64 percent from the previous year, according to a federal regulatory filing the company made on Friday.

Wagoner earned $1.56 million in salary and no bonus last year, but he received incentive awards of $1.8 million, and stock options and restricted stock valued at $11.7 million, according to the filing with the U.S. Securities and Exchange Commission.

His package in 2006 was worth $9.57 million, including $1.28 million in salary, no bonus, no incentive awards, and stock options and restricted stock valued at $7.5 million.

GM spokeswoman Julie Gibson said the stock options and restricted stock are based on future performance that will be paid out over three to five years. Depending on company and share performance, Wagoner may not see all the money, she said.

“That’s compensation that is paid out over a period of years,” she said. “That is not his 2007 take-home pay.”

The Associated Press calculates total pay including executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock and options awards granted during the year. The calculations don’t include changes in the present value of pension benefits or the company’s cost of stock and options granted before 2006, and the figures can differ from the company’s total.

GM lost a record $38.7 billion in 2007, largely due to a charge for unused tax credits. Without the charges and other one-time items, the company lost $23 million.

Also in the filing, the company said it had changed its pension plan so executives can retire at age 60 with full benefits. The company’s retirement age was 62. The AP does not include pensions in its compensation figure.

Wagoner received $45,291 for personal and business use of company aircraft, $164,561 worth of security benefits and $185,472 for life insurance and death benefits, according to the filing.

The company said in its filing that it had made significant progress last year in new vehicles, sales and marketing, quality, global growth and cost reductions.

GM also said that Neville Isdell, the outgoing chief executive of Coca-Cola Co., would join its board of directors. Isdell, who has been CEO of Coke since 2004, is stepping down from his post effective July 1 but will remain as chairman of the Atlanta-based company’s board until April 2009.

GM said eight shareholder proposals would be under consideration at the annual meeting in Wilmington, Del., on June 3. Several proposals have failed to win approval in previous years and the company opposes the changes.

The proposals include measures requiring a detailed reporting of political contributions made by the company, the support of health care reforms that include universal coverage, and a proposal by the Community of the Sisters of St. Dominic of Caldwell, N.J., that the company set goals to reduce greenhouse gas emissions.

Other changes include requiring the board to adopt cumulative voting so shareholders can cast as many votes as they hold shares; allowing shareholders with 10 percent or more of GM stock to call a special shareholders’ meeting; and requiring that 75 percent of future stock compensation for senior executives be performance-based.

John Chevedden, a Redondo Beach, Calif., shareholder activist, offered a resolution that would allow put executive compensation packages to a nonbinding vote of shareholders.

He said investors who oppose to pay packages can only vote against the members of the board’s compensation committee who are seeking re-election, which he called “a blunt and insufficient instrument for registering dissatisfaction.”

GM’s board said it would oppose the measure, noting that it discusses compensation issues with large investors.

“We do not believe a symbolic annual advisory vote would provide the Board with any useful information,” the company said.