Cuts may stunt state’s growth

Higher worker bonuses and a strong technology sector helped the Massachusetts economy grow faster than the nation for the first three months of the year, but experts warned that federal budget cuts and the payroll tax increase are already taking a toll on the commonwealth.

"What the policy is doing is slowing the pace of our growth," said Michael Goodman, a public policy professor at the University of Massachusetts Dartmouth. "It's like driving around with the emergency brake on. You're still moving forward, but not as fast as you would like."

Massachusetts' real gross state product grew at a rate of 3.9 percent in the first quarter, outpacing the nation's 
2.5 percent growth rate.

In a MassBenchmarks report issued yesterday, experts said the state's solid economic growth from January to March was likely caused by "sizable" bonus payments made to workers in the financial and professional services sectors.

However, the state's professional, scientific and business services sector took a big hit last month with the loss of 3,400 jobs even as the unemployment rate dropped down to 6.4 percent. March marked the beginning of federal automatic spending cuts.

The state grew at an annual rate of 2.4 percent during the fourth quarter of last year while the United States posted a paltry 0.4 percent growth rate.

Federal budget cuts are already starting to slow the commonwealth's leading industries, including health care, higher education and research and development, experts said.

"The national and state economies are being strongly influenced by two opposing forces. On the one hand, growth in consumer demand is being supported by rising home prices, stock markets and job expansion," said Northeastern University economist Alan Clayton-Matthews, senior contributing editor of MassBenchmarks. "On the other hand, fiscal drag in the form of the payroll tax increase and federal budget cuts are slowing the economy. This fiscal drag could dampen growth by as much as 1.5 to 2 percentage points this year. And the continuing recession in Europe and an apparent slowdown in China are not helping matters."

Demand for the state's technology resources — information technology and medical devices — continues to give Massachusetts a growth edge over the nation, said Robert Nakosteen, an economics professor at the University of Massachusetts Amherst's Isenberg School of Management. However, the sector will "take a bit of a hit" as the year progresses because it is largely supported by government spending and contracts, he added.

"The state can't sustain this high rate of growth," Nakosteen said. "We're not in danger of a renewed recession, but the growth we've seen in the last quarter is not going to be sustained."

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Gov asks SBA for loans to those hit by bombing

Gov. Deval Patrick has called on the U.S. Small Business Administration to provide some relief in the form of low-interest loans for small businesses and private nonprofits affected by the Boston Marathon bombings last week.

In a letter, Patrick asked the agency to issue an Economic Injury Declaration for Suffolk County so that long-term and low-interest SBA loans would be made available to businesses and private nonprofits.

"Requesting this federal aid will help Boston and the commonwealth recover faster from the tragic events that unfolded at the marathon," Patrick said. "I urge the Small Business Administration to approve our request quickly to help the small businesses that keep our commonwealth strong rebuild."

In order to receive this federal assistance, the commonwealth must show that businesses suffered substantial economic injury.

If the agency issues the declaration, emergency officials will coordinate with the USSBA and Boston's Office of Emergency Management to have specialists available in the city to work with businesses that may be interested in the loans, Patrick said.

Businesses were gradually allowed to reopen on Boylston Street this week, several days after two bombs went off killing three people and injuring hundreds.

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AP hack may prompt Twitter to start two-steppin’

This week's hack of The Associated Press' Twitter account rocked Wall Street and may force execs at the private San Francisco-based social media darling to address online security issues before another major embarrassment occurs.

While no security system is foolproof, experts say Twitter could begin by introducing a two-step authentication process to avoid a repeat of Tuesday's tweet, which claimed that two bombs had exploded at the White House, injuring President Obama.

The tweet sent the stock market tumbling 150 points before the White House reassured the nation that it was a hoax. But it wasn't the first time a news organization's Twitter account had been compromised.

Days before the AP incident, CBS' "60 Minutes" account also was targeted by hackers, another instance that might have been avoided had Twitter implemented the kind of two-step authentication that Google, Microsoft, Facebook and Apple already offer.

In addition to typing in your username and password to get access to your account, those systems typically also require you to enter another piece of information, such as a PIN that's sent to you in a text message.

"I wouldn't necessarily use this method to launch nuclear weapons, but it makes me feel pretty close to perfectly safe," said Chester Wisniewski, senior security advisor at Sophos, a global computer-security firm. "It's a minor inconvenience for peace of mind."

Even a flawless security system, however, doesn't guard against the perils of bad reporting, said David Gerzof Richard, president of BIGfish Communications and professor of social media and marketing at Emerson College.

"If the tweets they're sending out are incorrect," he said, referring to some overanxious reporting in the days following the Marathon bombings, "then a two-step authentication doesn't do much good."

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Cambridge DNA whisperers

Cambridge-based Gen9 has landed another $21 million to keep pushing the limits of synthetic biology, a cutting-edge field where scientists "play God" by creating customized DNA — the building blocks of life — for a variety of different industries.

As part of the deal, Agilent Technologies of Santa Clara, Calif., gained an equity stake in Gen9 and will join its board of directors as the Bay State startup uses the money to increase the scale of its operations and ultimately to make new products, Gen9 CEO Kevin Munnelly said.

"Gen9 was founded to significantly increase the world's capacity to cost-effectively generate high-quality DNA content for use in transforming industries ranging from chemical and enzyme production to agriculture, biofuels, pharmaceuticals and even data storage," Munnelly said. "Agilent's investment is a powerful validation of our proprietary BioFab platform, and we look forward to working closely with them to further innovate around our manufacturing capabilities and build Gen9 into the leading high-throughput supplier to the synthetic biology marketplace."

The investment will also help Gen9, whose early backers include New England Patriots owner The Kraft Group, to increase its 22-person staff by about 50 percent this year, he said.

The company's clients include large chemical, agricultural and pharmaceutical companies that are "starting to realize synthetic biology can reinvent the way they do business," Munnelly said. "You can actually design what you would like these gene products to do. … You can get very inexpensive genetic constructs on a massive scale."

That kind of power is a double-edged sword, which theoretically could be used to create weapons of mass destruction, he admitted.

Because the field is relatively new, Gen9 is left to "do a lot of self-policing," Munnelly said. "We don't supply people who are looking to do those things."

Agilent makes instruments for high-end measurement and testing, including testing of water for contaminants and of fruit for pesticide residue.

"We anticipate an explosion in the use of biological machines," said Neil Cook, vice president and director of Agilent Laboratories, referring to living organisms such as bacteria or yeast, which can be used to produce everything from medicines to car fuel.

"To make molecules at will is going to fundamentally change the way we see chemical synthesis in the future," he said.

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Survey: Small businesses back minimum wage rise

NEW YORK — Small business owners support raising the federal minimum wage because they believe it will help the economy and, in turn, enable small companies to hire more workers.

That's the finding of a survey released Wednesday by the Small Business Majority, a group that advocates on behalf of small businesses. Two-thirds of the 500 owners in the survey supported an increase from the current minimum hourly wage of $7.25, coupled with an annual adjustment for inflation. Eighty-five percent said they pay their employees more than the minimum.

The survey's findings were at odds with the stand against a higher minimum wage taken by small business advocacy groups including the National Federation of Independent Business and the National Small Business Association. Retailers, fast-food restaurants and other small businesses that pay the minimum wage say an increase would cut into their profits. Some say that would prevent them from hiring or expanding.

Nearly two-thirds of the owners in the Small Business Majority survey said a higher minimum wage would benefit small businesses by increasing consumer spending and, in turn, allowing small companies to retain or hire more employees.

The minimum wage has become an issue since President Barack Obama proposed during his State of the Union address in February that the federal minimum be raised to $9 from $7.25 an hour. Democrats in Congress introduced a bill to raise the minimum to $10.10 an hour in March, but it was rejected by the House.

Support for a higher minimum wage cut across political party lines in the survey. Forty-six percent of the small business owners identified themselves as Republican, while 35 percent said they were Democrat and 11 percent said they were independent.

The survey was taken March 4-10, nearly a month after Obama proposed a higher minimum.

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Asia stocks up on US company earns, home sales

BANGKOK — An increase in new U.S. home sales and strong corporate earnings across a range of industries lifted investment sentiment in Asia, where most stock markets rose Wednesday.

Luxury handbag maker Coach, Lockheed Martin and DuPont reported results that were better than analysts expected. Netflix, which streams TV shows and movies over the Internet, announced profits that delighted investors. Meanwhile, the U.S. government reported that sales of new homes rose 1.5 percent in March, adding to evidence of a sustained housing recovery.

That offset results of a survey into manufacturing conditions among the 17 European Union countries that use the euro. The monthly purchasing managers' index fell to a 3-month low in April.

"Sentiment was upbeat yesterday as solid US earnings and new home sales data helped equities shrug off disappointing PMI data earlier in the day," Gary Yau at Credit Agricole CIB said in a commentary.

Japan's Nikkei 225 index jumped 1.3 percent to 13,703.62. Hong Kong's Hang Seng rose 1 percent to 22,014.90. South Korea's Kospi rose 0.8 percent to 1,933.83. Australia's S&P/ASX 200 jumped 1.4 percent to 5,087.90.

On Wall Street, corporate earnings propelled all three major indexes higher. The Dow Jones industrial average climbed 1.1 percent, to close at 14,719.46. The S&P 500 index rose 1 percent to 1,578.78. The Nasdaq composite rose 1.1 percent to 3,269.33.

Later Wednesday in the U.S., consumer goods giant Procter & Gamble, drug maker Eli Lilly and Boeing will release earnings. United Parcel Service, Exxon Mobil and Amazon are among the corporations that will do so on Thursday.

Benchmark oil for June delivery was up 20 cents to $89.38 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 1 cent to close at $89.18 a barrel on the Nymex on Tuesday.

In currencies, the euro rose slightly to $1.2993 from $1.2991 late Tuesday in New York. The dollar fell to 99.30 yen from 99.44 yen.

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Flight delays pile up amid FAA budget cuts

NEW YORK — Flight delays piled up across the country Monday as thousands of air traffic controllers began taking unpaid days off because of federal budget cuts, providing the most visible impact yet of Congress and the White House's failure to agree on a long-term deficit-reduction plan.

The Federal Aviation Administration kept planes on the ground because there weren't enough controllers to monitor busy air corridors. Cascading delays held up flights at some of nation's busiest airports, including New York, Baltimore and Washington. Many operations were more than two hours behind schedule.

At one point, the delays were so bad that passengers on several Washington-New York shuttle flights could have reached their destination faster by taking the train.

Nearly a third of flights at New York's LaGuardia airport scheduled to take off before 3 p.m. were delayed 15 minutes or more, according to flight-tracking service FlightAware. Last Monday, just 6 percent of LaGuardia's flights were delayed.

The situation was similar at Washington's Reagan National Airport, in Newark, N.J., and in Philadelphia, with roughly 20 percent of flights delayed.

At airports, Monday is typically one of the busiest days, when many high-paying business travelers depart for a week on the road. The FAA's controller cuts — a 10 percent reduction of its staff — went into effect Sunday. The full force was not felt until Monday morning.

Travel writer Tim Leffel had just boarded a US Airways plane from Charlotte, N.C., to Tampa, when the flight crew had an announcement.

"They said: 'The weather's fine, but there aren't enough air traffic controllers,'" Leffel said. Passengers were asked to head back into the terminal. "People were just kind of rolling their eyes."

His flight landed one hour and 13 minutes late.

One thing working in fliers' favor Monday was relatively good weather at most major airports. A few wind gusts in New York, snow in Denver and thunderstorms in Miami added to some delays, but generally there were clear skies and no major storms.

However, the furloughs will continue for months, raising the risk of a turbulent summer travel season. And the lack of controllers could exacerbate weather problems, especially spring and summer thunderstorms.

There's no way for passengers to tell in advance which airport or flights will experience delays.

FAA officials have said they have no choice but to furlough all 47,000 agency employees — including nearly 15,000 controllers — because the agency's budget is dominated by salaries. Each employee will lose one day of work every other week. The FAA has said that planes will have to take off and land less frequently, so as not to overload the remaining controllers on duty.

Critics have said the FAA could reduce its budget in other spots that wouldn't delay travelers.

"There's a lot finger-pointing going on, but the simple truth is that it is Congress's job to fix this," said Rep. Rick Larsen, a Washington Democrat and member of the House aviation panel. "Flight delays are just the latest example of how the sequester is damaging the economy and hurting families across the country."

Some travel groups have warned that the disruptions could hurt the economy.

"If these disruptions unfold as predicted, business travelers will stay home, severely impacting not only the travel industry but the economy overall," the Global Business Travel Association warned the head of the FAA in a letter Friday.

Deborah Seymour was one of the first fliers to face the headaches. She was supposed to fly Sunday night from Los Angles to Tucson, Ariz. First her 9:55 p.m. flight was delayed for four hours. Then at 2 a.m., Southwest Airlines canceled it.

"It's pretty discouraging that Congress can't get it together, and now it's reached the point that we can't get on an airplane and fly," Seymour said.

On some routes Monday, it was actually faster to take ground transportation. The 8 a.m. US Airways shuttle from Washington to New York pushed back from the gate six minutes early but didn't take off until almost 10 a.m.

The plane landed at 10:48 a.m. — more than two and a half hours late. If travelers instead took Amtrak's 8 a.m. Acela Express train from Washington, they arrived in New York at 10:42 a.m. — four minutes early.

Normally, there are 10 air traffic controllers at a regional facility handling arrivals for Los Angeles International Airport. On Sunday night, there were just seven, according to Mike Foote, a local union president with the National Air Traffic Controllers Association. A low layer of clouds late compounded the situation.

In such weather, two controllers do nothing but watch planes as they descend below 15,000 feet to ensure they don't veer off course. That allows 68 to 70 planes to land each hour. Because of the furloughs, there were no controllers to do that Sunday, dropping the arrival rate to 42 planes an hour, Foote said.

United Airlines said there were "alarming pockets" of delays and warned that if a solution isn't found, the problem could "affect air travel reliability for our customers."

Delta Air Lines cautioned travelers to expect delays in New York, Philadelphia, Fort Lauderdale, Fla., Chicago, San Francisco, Los Angeles and San Diego.

Many flights heading to Florida were seeing delays of up to an hour. By late Monday, delays into Los Angeles were expected to average three hours.

Having just one fewer controller to handle arrivals to Newark Liberty International Airport can result in the airport being unable to use a relief runway to handle peak traffic, reducing arrivals by about 15 percent, said Dean Iacopelli, a union official at an FAA regional facility for New York's airports.

"It is not just telling one out of 10 people to stay home and so one out of 10 planes get delayed. It's much more complicated that," Iacopelli said.

Prior to the furloughs, if a controller called in sick, there were enough people to take on the extra work, Iacopelli said, or somebody could be asked to work overtime. Now that isn't possible.

The FAA has also furloughed other critical employees, including airline and airport safety inspectors.

In a letter to the FAA Friday, Delta general counsel Ben Hirst asked the agency to reconsider the furloughs, saying it could make the cuts elsewhere and transfer funds from "non-safety activities" to support the FAA's "core mission of efficiently managing the nation's airspace."

Two airline trade associations and the nation's largest pilots union filed a lawsuit Friday asking the U.S. Court of Appeals to halt the furloughs. No hearing date has been set.

The two airline associations — Airlines for America, which represents major carriers, and the Regional Airline Association — are asking the court to place a moratorium on enforcement of the Department of Transportation's three-hour limit on the length of time airlines can keep passengers waiting inside planes on the tarmac without giving them the opportunity to return to a terminal.

Airlines can be fined as much as $27,500 per passenger for violating the limit. The Transportation Department said it is reviewing the industry's request.

___

Associated Press writers Joan Lowy in Washington and Christopher Weber in Los Angeles contributed to this report.

___

Scott Mayerowitz can be reached at http://twitter.com/GlobeTrotScott .

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Reuters editor charged with hacking: I was fired

SAN FRANCISCO — A Reuters deputy social media editor accused of conspiring with hackers to deface a Los Angeles Times story said Monday he had been fired.

His dismissal came the day before 26-year-old Matthew Keys was scheduled to appear in federal court for the first time on the felony charges. His attorneys say he plans to plead not guilty.

Federal prosecutors allege Keys provided the hacking group Anonymous with login information to access the computer system of The Tribune Co., the Times' parent company.

According to a federal indictment handed down last month, a hacker identified only as "Sharpie" used information Keys supplied in an Internet chat room to alter a headline on a December 2010 Times story to reference another hacking group.

Tribune also owns a Sacramento television station Keys had been fired from months earlier.

Keys has said he did not commit the crimes he's accused of. He did not immediately respond to a telephone message seeking comment Monday, but he did post several online messages saying Reuters had not fired him as a result of the indictment.

"Just got off the phone. Reuters has fired me, effective today. Our union will be filing a grievance. More soon," he tweeted to his more than 35,000 followers.

He later tweeted a copy of a "final written warning" he said he received from Reuters in October, which admonished Keys for mocking a Google executive from a fake Twitter account he had created, saying the action demonstrated a "serious lapse of judgment and professionalism that is unbecoming of a Reuters journalist."

His attorney Jay Leiderman confirmed the firing, but said he would not comment on it because the Newspaper Guild was representing him on the matter. He added that "there is an appeals process that I will have to let play out."

Peter Szekely, Secretary-Treasurer of the Newspaper Guild of New York, confirmed the union would be representing Keys.

"Our contract with Thomson Reuters prohibits management from dismissing anyone without just and sufficient cause. We don't believe the company has the required justification here," Szekely said in a statement. "At this point, we intend to vigorously defend Matthew Keys as we would any other hard-working member of the Newspaper Guild of New York who had been fired without cause."

Reuters hired Keys in 2012 and suspended him from his New York social media job March 14. Thomson Reuters spokesman David Girardin declined to elaborate Monday on why Keys was no longer employed.

Keys is scheduled to be arraigned Tuesday in federal court in Sacramento. He is charged with one count each of conspiracy to transmit information to damage a protected computer, as well as transmitting and attempting to transmit that information.

If convicted and sentenced to the maximum for each count, the Secaucus, N.J., resident faces a combined 25 years prison and a $500,000 fine, prosecutors say. However, experts say first-time offenders with no criminal history typically spend much less time in prison than the maximum term.

___

Follow Garance Burke at http://twitter.com/garanceburke.

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Reddit postings on bombing ‘suspects’ shameful

Last week we saw social media at its worst: arrogant, reckless and even racist.

Dozens of users on the social news forum Reddit resolved to launch their own public investigation into the Boston Marathon bombings by analyzing reams of publicly available photos of the attack sites. It's called crowdsourcing, and it was a dismal failure.

The bizarre mess of finger-pointing was largely confined to a subreddit, or forum, titled Find Boston Bombers.

Created by a 23-year-old British man who never set foot on the marathon route, the forum soon spun out of control.

All the "suspects" were innocent bystanders.

They had their faces enlarged, circled in red and were given glib nicknames. There was "blue robe guy" and "green hat man" and "roof man." Users singled out people in photos for holding their backpacks too tightly or looking too serious. False suspects were pointed to because of their race. And some, for all we know, were among the more than 170 victims of the blasts.

It's as if the tragic whirlwind of events in the last week unfolded in two universes.

In one, cops acted methodically, sifting through evidence and hunting down suspected terrorists in some of the finest police work we've seen. In another, self-proclaimed cyber sleuths wasted their time and ours by accusing people with a scant amount of evidence.

The low point for Reddit's gumshoes came in the wee hours of Friday's manhunt, when a member claimed to have heard compelling chatter on a police scanner. But the information was wrong and cruel: that missing Brown University student Sunil Tripathi, 22 — who hasn't been seen since March — was a suspect in the bombings. Worse still: Some media outlets ran with this despicable smear.

Moderation on Reddit is infrequent.

Usually that's OK because the stakes aren't this high. But this past week the stakes couldn't have been higher, especially for Boston.

This chaotic digital search could have easily spawned vigilantes who were thirsty for justice.

And what if being falsely fingered as a suspect sent someone over the edge?

Imagine witnessing unspeakable violence, only to have your photos being circulated as the perpetrator.

Reddit was lucky it didn't incite further suffering. It's lucky Bostonians are smarter than that.

So let's quit while we're ahead. No more crowdsourced "investigations."

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A mission to manage

The founder of Future Chefs can focus on her nonprofit's mission of training city youth for jobs in the food industry because she has enlisted the help of one of the country's top nonprofit innovation centers to take care of the business end.

"If I had to take time away from fulfilling our mission to get up to speed on how to manage the business end of this, I would have failed," said Toni Elka, founder and executive director of Future Chefs.

Boston's Third Sector New England manages Future Chefs' budget, does its payroll, negotiates its leases, does its yearly audit and helps with hiring and diversity issues. The group even extends a tax-exempt umbrella for Future Chefs and other early stage nonprofits.

"Third Sector is a trusted partner with a great track record that provides stability and helps us grow," said Elka, who started the organization herself using Boston school kitchens, but now has six full-time employees and a new teaching kitchen in the South End. The organization has placed 85 students in restaurant jobs including 16 at Aramark at Fenway.

The "Third" in Third Sector stands for the nonprofit world, or the third pillar after government and business.

The nonprofit sector is certainly no slouch in the Bay State, where one of seven workers or some 455,900 employees is employed at a tax-exempt entity, according to a recent report by the Boston Foundation. Massachusetts nonprofits generate $234 billion in revenue annually.

And Third Sector, founded in 1959, has been at the forefront of promoting social justice and helping nonprofits working for change to grow and add workers to fulfill their missions.

"Traditionally, working in the nonprofit sector has not been seen as worthy as toiling in the corporate sector," said Jonathan Spack, Third Sector's executive director. "Nonprofits do pay less than corporations, but there's an opportunity to effect change. What we try to do here and advise our clients is to make it a respectable and desirable career path for young people with good benefits and pay that can support a family. So it's not just something people do for a year or two, but stay on as a career."

Third Sector's mantra is that well-managed organizations are key to attracting and maintaining talented people looking to make a difference in the world. It doesn't just preach good management, but practices it by doing the administrative work for 41 nonprofits, in addition to Future Chefs.

Third Sector also helps its nonprofit clients find new chief executives and create leadership paths for talented employees. And Spack says that 91 percent of the nonprofit executives that the organization has placed in the past five years are still in those positions today.

Another important part of the organization is its grant-making Inclusion Initiative that helps nonprofit clients hire a more diverse workforce that's reflective of the communities they serve.

After 22 years of giving grants to 102 organizations, Third Sector has changed gears and is now directing funds not to individual nonprofits, but to networks that include businesses and faith-based organizations.

"Networks seem to be a more effective way to make change faster," said Ayeesha Lane, program manager for Third Sector's Inclusion Initiative. "Diversity can sometimes just be about numbers. But just because you hire minorities, it doesn't mean they will stay. What we do with our nonprofit clients is to help them develop inclusion in the workplace. That means making people feel they can bring their whole selves to work, and that their perspectives and cultural insights are seen as valuable."

Third Sector doesn't just give money, Lane added. It provides ongoing support and advice even to nonprofits that received grants years ago.

Third Sector owns an eight-story building on South Street that it bought in 2003 and, in addition to its staff, its floors house dozens of other organizations that fit its mission for social change. Those nonprofits provide job training and tutoring, pursue economic development and justice in poor communities, or focus on disability rights and sustainability issues, such as urban gardening and green practices in restaurants.

The basement of the building has a large, shared office area, where smaller nonprofits pay a reduced rent for incubator-like work space.

Third Sector supports itself from rent and by charging for its services, but not just any nonprofit qualifies. Third Sector takes a percentage of its clients' budgets to pay the employees that handle those nonprofits' business matters. Most clients are in Boston, but some are in other parts of the country.

Third Sector doesn't kick nonprofits out of the shared space as a for-profit incubator space might.

Some groups, such as the Chefs Collaborative, a nonprofit that supports sustainable practices in restaurants, have been there for five years. The SAMFund, a group that supports young adult survivors of cancer, is a longtime tenant, as is Tutors for All, which hires some 300-350 college students every year for paid federal work-study positions as tutors for Boston school students.

Organizations can choose to stay under Third Sector's 501(c)3 tax-exempt umbrella or strike out on their own.

But Future Chefs' Elka said Third Sector works for her because it is as passionate about managing nonprofits as her group is about helping students get excited about, and find work in the food industry.

"Boston is a place known for its tech innovation, but our nonprofits are also some of the most innovative in the country," Elka said. "What Third Sector does for nonprofit management is a perfect match for us and is a great model for the rest of the country."

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Safety rules limited for small fertilizer plants

There were no sprinklers. No firewalls. No water deluge systems. Safety inspections were rare at the fertilizer company in West, Texas, that exploded and killed at least 14 people this week.

This is not unusual.

Small fertilizer plants nationwide fall under the purview of several government agencies, each with a specific concern and none required to coordinate with others on what they have found.

The small distributors — there are as many of 1,150 in Texas alone — are part of a regulatory system that focuses on large installations and industries, though many of the small plants contain enough agricultural chemicals to fuel a major explosion.

The plant in West had ammonium nitrate, the chemical used to build the bomb that blew up the Alfred P. Murrah federal building in Oklahoma City in 1995, killing 168 people. According to a document filed in 2012 with the Texas Department of State Health Services, the maximum amount of this "extremely hazardous substance" the plant could store in one container was 90 tons, and the most it could have on site was 270 tons. It is unknown how much was onsite at any given time, or at the time of the explosion.

It was also authorized to handle up to 54,000 pounds of anhydrous ammonia, a substance the Texas environmental agency considers flammable and potentially toxic.

"This type of facility is a minor source of air emissions," Ramiro Garcia, the head of enforcement and compliance at the Texas Commission on Environmental Quality, told The Associated Press.

"So the inspections are complaint driven. We usually look at more of the major facilities."

No federal agency determines how close a facility handling potentially dangerous substances can be to population centers, and in many states, including Texas, many of these decisions are left up to local zoning authorities. And in Texas, the state's minimal approach to zoning puts plants just yards away from schools, houses and other populated areas, as was the case in West.

That plant received a special permit because it was less than 3,000 feet from a school. The damage from the blast destroyed an apartment complex, nursing home and houses in a four-block area.

State and federal investigators have not yet determined the cause of the disaster, which occurred Wednesday night after a fire broke out at the site after work hours. The explosion that followed could be heard miles away and was so powerful it registered as a small earthquake.

The West Fertilizer Co. stored, distributed and blended fertilizers for use by farmers around the Central Texas community. The plant opened in 1962 outside the rural town of 2,800, but development gradually crept closer. Wednesday night, residents and rescue workers tried to evacuate the area as the fire consumed the plant.

Donald Adair, the plant's owner, said in a statement Friday he was cooperating with the investigation and expressed sympathy for the victims. He has not returned phone calls seeking comment.

Over the years, the fertilizer company was fined and cited for violations by federal and state agencies.

Last summer, the U.S. Pipeline and Hazardous Materials Safety Administration assessed a $10,000 fine against West Fertilizer for improperly labeling storage tanks and preparing to transfer chemicals without a security plan. The company paid $5,250 after reporting it had corrected the problems.

The U.S. Environmental Protection Agency also cited the plant for not having an up-to-date risk management plan. That problem was also resolved, and the company submitted a new plan in 2011. That plan, however, said the company did not believe it was storing or handling any flammable substances and didn't list fire or an explosion as a danger.

David Gray, an EPA spokesman in Dallas, said the company's plan identified a worst-case scenario as an accidental release of all 54,000 pounds of anhydrous ammonia, which at room temperature is a gas.

"This scenario is a plausible worse-case scenario as gaseous anhydrous ammonia can be lethal," Gray said.

The risk management plan also did not cite a possible explosion of ammonium nitrate, the solid granular fertilizer stored at the site. But that would not be unusual, he said, because ammonium nitrate is not regulated under the Clean Air Act.

The plant's plan said there was no risk of fire or explosion and noted they had no sprinklers, water deluge or other safety mechanisms installed.

"We do not yet know what happened at this facility. The ongoing investigation will inform us on the plan's adequacy," Gray said.

The Texas Commission on Environmental Quality also dealt with the company and issued a permit for handling anhydrous ammonia, which requires safety equipment the company had told the EPA it didn't have. But TCEQ acknowledged it may never have checked to confirm the equipment was there.

"It's a minor source under the Clean Air Act so it doesn't get much scrutiny at all," said Neil Carman, a Sierra Club clean air expert and chemist who used to work for the TCEQ.

The company's last contact with regulation may have come as recently as April 5, when the Texas Office of the State Chemist inspected the plant. But that agency focuses mostly on ensuring that commercial fertilizers are properly labeled and blended, said Roger Hoestenbach, the office's associate director. His inspectors found no problems, he said, but they would not have checked for safety systems such as sprinklers. That office also provided the company with the required license to store and handle ammonia nitrate and renewed it in September after a summer inspection, he said.

Many other towns in Texas have small fertilizer distributors operating under similar regulations near populated areas.

Matt Murray, owner of ABC Fertilizer and Supply in Corsicana, bought his facility about 15 years ago. It sits in an industrial zone in the town of about 23,700 people, but in a community barely five miles long, it is still not far from the population center, he said.

"Every little community, town that's in Texas, has one of these," he said.

Murray's facility also has a state license to sell ammonium nitrate.

Even though Murray said he has discussed an evacuation plan with his local fire chief, there is nothing in writing. And he isn't required to have a formal plan. That may be changing now, he said.

"It's been something that's been brewing for years and years, ever since Oklahoma," he said.

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Plushnick-Masti, who can be followed on Twitter at https://twitter.com/RamitMastiAP , reported from Houston. Gillum, who can be followed at https://twitter.com/jackgillum , reported from Washington.

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Back Bay businesses hit hard by marathon bombings

The arduous task of rebuilding the Back Bay after the deadly Marathon Monday attacks is under way but could be a tall task for businesses as many are not covered by insurance, because the damage was from a terror attack.

"There is no insurance for terrorism for these businesses," said City Councilor Michael Ross, who represents the Back Bay. "We're talking weeks, possibly months, with no income for some of these businesses."

The bombs struck in the heart of one of the city's busiest retail and business centers, shuttering bars, restaurants and stores, while investigators sift through the wreckage. Some businesses may be beyond repair, but the full extent of damage is not yet known.

Marathon Sports, Forum restaurant and a Lens Crafters store appear to have sustained heavy destruction, while the Charlesmark Hotel may have fire, smoke and blast damage.

"We don't yet know the structural condition of any of the buildings," Ross said.

He's been working with a variety of city agencies to help business owners and will seek aid for those not covered.

Terrorism coverage is optional and most small businesses do not have it, said Robert Hartwig, president of the New York-based Insurance Information Institute.

"Most businesses would have coverage for such things as fire, smoke and explosions, and the business interruption coverage that goes along with that," Hartwig said. "But not all businesses buy (separate) business interruption coverage."

Even if they do, for terrorism coverage to take effect, the federal government must certify an event meets the formal definition of terrorism, which has yet to be done in this case. In addition insured losses must exceed $5 million, Hartwig said.

David Sapers, owner of Sugar Heaven at 669 Boylston St., which was damaged by the first bomb, said he's still waiting for answers from city officials.

"They didn't know when they're going to release our area," he said. "We'd love to have the city step in and cover our losses."

Boston Mayor Thomas M. Menino yesterday issued a notice to impacted residents and businesses about the city's plan for reopening Boylston Street and the surrounding area. The street will reopen slowly but the hardest hit areas could remain closed for weeks as the FBI probe continues. Information is on the city's website at www.cityofboston.gov.

"We believe that some blocks may be ready to open more quickly than others," Menino's letter said.

Ross said the historic Trinity Church has been lent space by Temple Israel, but most businesses have been left without many options. He's exploring federal, state and city aid possibilities as well as setting up a fund to help.

"The Back Bay businesses definitely need the support from the rest of the community," Ross said.

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