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ByLolitaC.Baldorand Matthew Pennington The Associated Press SINGAPORE U.S. surveil- lance detected two large artillery vehicles on one of the artificial islands that China is creating in the South China Sea, U.S. of- ficials said Friday, height- ening concerns that Beijing could use the land reclama- tion projects for military purposes. The revelation came as Defense Secretary Ash Carter was in the region for an international secu- rity summit in Singapore where he is expected to demand anew that China and other nations halt all such projects. While scold- ing China for aggression, Carter is not expected to offer any indication of what the U.S. might do if the projects proceed. The weaponry was dis- covered at least several weeks ago, and two U.S. officials who are familiar with intelligence about the vehicles say they have been removed. The officials weren't authorized to dis- cuss the intelligence and spoke only on condition of anonymity. The Pentagon would not release any photos to sup- port its contention that the vehicles were there. China'sassertivebehavior in the South China Sea has become an increasingly sore point in relations with the United States, even as Pres- ident Barack Obama and China's President Xi Jinping have sought to deepen coop- eration in other areas, such as climate change. Pentagon spokesman Brent Colburn said the U.S. was aware of the artillery, but he declined to provide other details, saying it was an intelligence matter. De- fense officials described the weapons as self-propelled artillery vehicles and said they posed no threat to the U.S. or American territories. Those officials were not au- thorized to discuss the mat- ter publicly and spoke only on condition of anonymity. The sighting was first re- ported by The Wall Street Journal. Mira Rapp Hooper, di- rector of the Asia Mari- time Transparency Initia- tive, which monitors de- velopments in the South China Sea, said that ana- lysts have previously iden- tified artillery on at least two of the Chinese land reclamation sites in the Spratly Island chain: Fi- ery Cross Reef, where an airstrip is under construc- tion, and Gaven Reef. The transparency initiative is a project of the Washington- based Center for Strategic and International Studies U.S. officials have been watching the rapidly ex- pandinglandreclamationby China, which is estimated to total more than 2,000 acres in the South China Sea. In its annual report on Chi- na's military power earlier this month, the Pentagon warned that five emerging outposts could be used for surveillance systems, har- bors, an airfield and logisti- cal support. SOUTH CHINA SEA US:Chineseweaponryspottedonartificialisland By Andrea Rodriguez and Matthew Lee The Associated Press HAVANA The Obama ad- ministration on Friday for- mally removed Cuba from a U.S. terrorism blacklist, a decision hailed in Cuba as the healing of a decades- old wound and an impor- tant step toward normal- izing relations between the Cold War foes. Secretary of State John Kerry signed off on re- scinding Cuba's "state sponsor of terrorism" des- ignation exactly 45 days af- ter the Obama administra- tion informed Congress of its intent to do so on April 14. Lawmakers had that amount of time to weigh in and try to block the move, but did not do so. "The 45-day congressio- nal pre-notification period has expired, and the secre- tary of state has made the final decision to rescind Cu- ba's designation as a state sponsor of terrorism, effec- tive today, May 29, 2015," the State Department said in a statement. "While the United States has significant concerns and disagreements with a wide range of Cuba's poli- cies and actions, these fall outside the criteria rele- vant to the rescission of a state sponsor of terror- ism designation," the state- ment said. The step comes as offi- cials from the two countries continue to hash out details of restoring full diplomatic relations, including open- ing embassies in Washing- ton and Havana and return- ing ambassadors to the two countries for the first time since the U.S. severed diplo- matic relations with the is- land in January 1961. The removal of Cuba from the terrorism list had been a key Cuban demand. The Cold War-era desig- nation was levied mainly for Cuba's support of leftist guerrillas around the world and isolated the communist island from much of the world financial system be- cause banks fear repercus- sions from doing business with designated countries. Even Cuba's Interests Sec- tion in Washington lost its bank in the United States, forcing it to deal in cash until it found a new banker this month. "We welcome today's an- nouncement by the Secre- tary of State, which is an- other step forward toward a more normal and produc- tive relationship between the United States and the Cuban people," a White House blog post said Friday. "For 55 years, we tried using isolation to bring about change in Cuba," it said. "But by isolating Cuba from the United States, we isolated the United States from the Cuban people and, increasingly, the rest of the world. Through this new approach of engagement, we are finally in a posi- tion to advance our inter- ests while simultaneously improving the lives of the Cuba people." The terror list was a par- ticularly charged issue for Cuba because of the U.S. history of supporting ex- ile groups responsible for attacks on the island, in- cluding the 1976 bombing of a Cuban passenger flight from Barbados that killed 73 people aboard. The at- tack was linked to Cuban exiles with ties to U.S.- backed anti-Castro groups and both men accused of masterminding the crime took shelter in Florida, where one, Luis Posada Car- riles, currently lives. "I think this could be a positive act that adds to hope and understanding and can help the negotia- tions between Cuba and the United States," said director Juan Carlos Cremata, who lost his father in the 1976 bombing. "It's a list we never should have been on," said Ileana Alfonso, 57, who also lost her father in the attack. Still, top U.S. Republi- cans criticized the move, with House Speaker John Boehner of Ohio saying that the Obama administration had "handed the Castro re- gime a significant political win in return for nothing." "The communist dicta- torship has offered no as- surances it will address its long record of repression and human rights at home," he said in a statement. THAWING RELATIONS Fe ds o ffic ia ll y re mo ve C ub a fr om U S te rr or l is t DESMONDBOYLAN—THEASSOCIATEDPRESS This coastal view of Havana, Cuba shows the United States Interests Section diplomatic mission, the third tall building from the right, on Sunday. MATT ROURKE — THE ASSOCIATED PRESS FILE Rodbusters install rebar on the new Comcast Innovation and Technology Center under construction, in Philadelphia. By Martin Crutsinger The Associated Press WASHINGTON The U.S. economy shrank at the start of the year, but the road ahead looks brighter. Just how much brighter is what's up for debate. Steady hiring and low gas prices should help power solid growth through the rest of 2015. The harsh winter and a labor dispute that slowed trade at West Coast ports are both over. Home sales and construc- tion are rebounding, along with business investment. But risks remain: A stron- ger dollar will likely con- tinue to keep the trade def- icit wide. And further cut- backs in oil drilling could depress spending in the en- ergy industry. Here are three reasons the economy is likely to post solid grow this year, followed by three reasons growth might disappoint. Consumerrebound While the overall econ- omy went into reverse, the labor market has been steaming ahead. The U.S. added 223,000 jobs last month, and the unemploy- ment rate dropped to 5.4 percent — the lowest level since the fall of 2008. Theoretically, more peo- ple working means more in- come to spend. Economists are forecasting that the modest 1.8 percent growth in consumer spending in the first quarter will climb. Temporary so patch Economists believe a lot of the bad things that hap- pened in the first quarter are fleeting. The Northeast has emerged from the frigid cold and record amounts of snow that hit the region in the first quarter. The winter blizzards that cur- tailed trips to the mall and auto dealerships could even lead to a surge in pent-up demand in coming months. A labor dispute that dis- rupted shipping at many West Coast ports has been resolved. Economists also be- lieve they are seeing signs that business investment is starting to rise after fall- ing for a number of months. Gains in housing construc- tion and sales are also fuel- ing hopes. Seasonal adjustments The GDP decline in the first quarter this year fol- lowed a similar decline last year. In fact, since the coun- try pulled out of the Great Recession in 2009, there have been three quarters when GDP has gone nega- tive — all in the first quarter. Any gains would make the start of this year look better and mean the econ- omy had less of a hole to climb out of going forward. Stronger dollar A bigger-than-expected trade deficit was a key rea- son that the GDP was re- vised from a tiny 0.2 per- cent gain to the 0.7 percent decline. The widening deficit is a reflection of the dollar's increase in value against other major currencies since last year. The stron- ger dollar hurts U.S. exports by making American-made goods more expensive in overseas markets. Energy bust The big drop in oil prices since last year was sup- posed to be a net positive for the U.S. economy. But so far, the economy has felt more pain than gain. Energy companies have slashed their spending on drilling activity, pushing it down by 48.6 percent in the first quarter — the sharp- est fall since the depths of the 2007-2009 recession. While drilling rig counts are still dropping, econo- mists hope that the drag from these cutbacks will begin to lessen. Fuel and potential fires for the economy ahead SHRINKAGE By Michael Tarm and Eric Tucker The Associated Press CHICAGO Former House Speaker Dennis Hastert paid hush money to con- ceal claims that the Illi- nois Republican sexually molested someone decades ago, a person familiar with the matter said Friday. The person spoke to The Associated Press on the condition of anonym- ity because the investiga- tion is ongoing and the al- legations are not contained in an indictment issued Thursday. The specific na- ture of the claims was not immediately clear. The federal indictment accused Hastert of agree- ing to pay $3.5 million to keep a person from the sub- urban Chicago town where he was a longtime high school teacher and wres- tling coach silent about "prior misconduct," but the court papers did not detail the wrongdoing. Several media outlets re- ported similar details Fri- day, citing unnamed fed- eral officials. The Los Angeles Times, which was the first to re- port the specifics, cited two federal law enforcement of- ficials, one of whom said Hastert paid a male to keep quiet about allegations that the former speaker molested him back in his coaching days. The official said the case had nothing to do with public corruption or Hast- ert's time in elected office. The indictment accused Hastert of agreeing to pay the money to a person iden- tified in the document only as "Individual A," to "com- pensate for and conceal his prior misconduct against" that person. It noted that Hastert was a high school history teacher and coach from 1965 to 1981 in suburban Yorkville, west of Chicago. It went on to say that Indi- vidual A has been a resident of Yorkville and has known Hastert for most of Individ- ual A's life, but it did not de- scribe their relationship. Legal experts say the fact that federal prosecu- tors noted Hastert's ten- ure in Yorkville in the in- dictment's first few sen- tences strongly suggests some connection between the allegations and that time and place. "Notice the teacher and coach language," said Jeff Cramer, a former federal prosecutor and head of the Chicago office of the inves- tigation firm Kroll. "Feds don't put in language like that unless it's relevant." No one has contacted the school district where Hast- ert worked to report any misconduct involving him, school officials Friday said in a statement. The district did not learn of the indict- ment until Thursday. Hastert, who has not been arrested, was a little- known GOP leader when he was chosen to succeed Newt Gingrich as speaker. Hastert was picked after fa- vored Louisiana Rep. Bob Livingston resigned follow- ing his admission of several sexual affairs. As speaker, Hastert pushed President George W. Bush's legislative agenda, helping pass a massive tax cut and expanding federal prescription drug benefits. During those years, he was second in the line for the presidency, after the vice president. He retired from Con- gress in 2007 after eight years as speaker, making him the longest-serving Republican House speaker. INDICTMENT Source: Hastert paid to conceal sex abuse claims LAUREN VICTORIA BURKE — THE ASSOCIATED PRESS FILE Afghan President Hamid Karzai, le , meets with House Speaker Dennis Hastert of Illinois on Capitol Hill in Washington. | NEWS | REDBLUFFDAILYNEWS.COM SATURDAY, MAY 30, 2015 6 B