@canadianman,
I am curious - did you ask why she wants to visit him?
Is there some compelling reason? If she was very close to him say when she was young - does she feel that this person is like a family member? What sort of correspondence is she having with this person's mother? Is the mom asking her to visit? I am just trying to get in her head to understand why she wants to go visit him even if it was little expense on your side.
It does seem like a big expense to go visit someone you haven't seen in years unless she happens to have a family-like relationship with him (which I doubt if she hasn't seen/heard from him in so long--even without the murder charge).
I'd ask the questions just so you can understand her motivations. It might put you in a better spot too, to suggest that the expense is a burden on your family and her priorities should be towards her immediate family rather than some friend from years ago (much less a convicted murderer).
For you -- is it the money? Or is it that she is visiting this "friend" you find most offensive?
One other thought - if the mom is pushing your wife to help out -- and money is an issue - then your wife should see if the mom is willing to pay for her airfare ticket.
One other thing I was thinking as you have such a young baby -- has she been considered for postpartum depression? Maybe this is a symptom she may be? You might want to talk with her doctor or someone else that is experienced in this - maybe that is why she is acting this way?