Wednesday November 16th, 2005
by: Ed Mayberry, November 16, 2005 5:11:00 am
Federal regulators have approved an agreement worth about $250 million to let Enron settle civil claims of price gouging and energy market manipulation. The claims stem from the rolling blackouts of 2000-2001 in western states. A suit alleged that Enron Power Marketing manipulated energy markets. Under the settlement, California and several utilities in that state will split $47.5 million. According to the California Attorney General's office, they also will receive an $875 million unsecured claim in the Enron bankruptcy. Oregon and Washington state will each get $22.5 million in unsecured claims out of California's unsecured claim.
Three British bankers who are contesting their extradition to the U.S. on Enron-related fraud charges are accusing British officials of subcontracting financial prosecutions, according to Bloomberg News. The three say they should be investigated in Britain on charges that they used an Enron partnership to defraud a Royal Bank of Scotland Group unit. David Birmingham, Giles Darby and Gary Mulgrew claim Great Britain's Serious Fraud Office made errors in declining jurisdiction.
FEMA on December 1st will stop paying for hotel rooms for most evacuees of Hurricanes Katrina and Rita. Texas Governor Rick Perry responded by saying he recognizes and agrees with FEMA's decision to make "personal responsibility'' a part of the hurricane recovery process. But Perry is concerned that there are still no long-term housing plans for evacuees. The Federal Emergency Management Agency estimates more than 50,000 families remain in hotels--mostly in Texas, Louisiana, Georgia and Mississippi. Several hundred thousand evacuees headed for Texas after Katrina slammed parts of the Gulf Coast in late August--swamping New Orleans along the way. Rita made landfall September 24th near Sabine Pass. Perry also notes that FEMA says by March 1st, the agency will end all funding for hurricane housing assistance.
U.S. Secretary of Housing and Urban Development Alphonso Jackson gave an update on Katrina relief efforts related to public housing for members of the Greater Houston Partnership.HUD Secretary Alphonso Jackson audio 1
Jackson says HUD doesn't want to go back to New Orleans and build public housing as it was before the hurricane.HUD Secretary Alphonso Jackson audio 2
Jackson says Houston reached out to help evacuees, and HUD will help Houston with public housing for its new residents.HUD Secretary Alphonso Jackson audio 3
Houston Mayor Bill White is talking with FEMA over reviewing deadlines the agency has set for evacuees to supplement the Houston/FEMA hotel rental rates with their own funds.
Texas officials are meeting this week to tally the expenses of Hurricanes Katrina and Rita. A preliminary budget report says the hurricane response has already cost state agencies $1.4 billion this fiscal year. Lieutenant Governor David Dewhurst toured hurricane damage in Beaumont today. The state Senate Finance Committee will hold a hearing on hurricane costs tomorrow in Beaumont. The budget report prepared for the Finance Committee was obtained by the Fort Worth Star-Telegram. It says that as of November 10th, the state spent an average of $20 million per day on hurricane response since Katrina struck Louisiana in late August. Rita made landfall September 24th near Sabine Pass. So far the federal government has paid about 70 percent of the costs in Texas this fiscal year.
The Texas Workforce Commission today announced a hurricane-related job partnership with a Louisiana group. The goal is to help Louisiana employers hire workers who evacuated to Texas after Katrina hit in late August--but they want to return home. The agreement is with the Louisiana Association of Business and Industry. Louisiana employers can use a toll-free number, 1-800-695-6879, to call the commission to list job openings. Commission representatives will key the job posting into the Web site job-matching system. The job-seeker database includes thousands of candidates from entry level to executive. About 33,000 of those job seekers have indicated they're Katrina evacuees.
When Hurricane Katrina hit, Wal-Mart had food and water. Electric company workers were set to restore power. Guests at the New Orleans Sheraton had hot meals in safe areas of the hotel. The government? Not so ready. That's the assessment of senators from both parties. The Senate Homeland Security and Governmental Affairs Committee today complimented the planning made by private businesses. Republican Chairwoman Susan Collins of Maine said it contrasts sharply with the lack of planning and the slow response of FEMA. About 85 percent of the nation's communication networks, transportation systems and financial health services are owned by private companies.
Farmers who lost crops during a 2005 hurricane would be eligible for extra financial help under a bill filed in Congress. The plan for farmers from Florida to Texas is sponsored by Florida Senator Mel Martinez. The measure would apply to producers who suffered crop losses due to Hurricanes Dennis, Katrina, Rita or Wilma. The measure is expected to cost around $500 million. A preliminary federal assessment of damage from Rita, which hit Texas and Louisiana in late September, showed about $200 million in crop and livestock losses.
The statewide monthly average price of gasoline has dropped to $2.16 a gallon, according to AAA Texas--a drop that coincides with the decline in crude oil prices. The group expects further declines before Thanksgiving. The national average is around $2.29 a gallon, with the lowest averages in Oklahoma at around $2.03 a gallon. Hawaii's averages are the highest nationwide at $2.77 a gallon.
A bipartisan group of Senators is looking to slash U.S. oil use by more than ten percent within a decade. Their proposed legislation includes tax breaks and loan guarantees to get automakers to switch from producing gas guzzlers to cars that are gas-electric hybrids or use other technologies. It also includes incentives for developing alternative fuels. Connecticut Senator Joe Lieberman warns that if the U.S. doesn't act, it'll be subject to "the whims'' of small oil-producing countries. Kansas Senator Sam Brownback says there's growing public support for saving energy. He says "there was a mental sea change'' when gas hit $3 a gallon. The long-term goal is to cut U.S. consumption by ten million gallons a day. The country now uses a little over 20 million barrels of oil a day, most of that for transportation.
The upcoming NBA All-Star Weekend in Houston could inject as much as almost $80 million into the Texas economy. That's the finding of State Comptroller Carole Keeton Strayhorn today. Strayhorn predicts 25,000 out-of-state basketball fans will spend an average of $317 a day for eating, shopping and lodging during the events February 16th through the 18th. Projected out-of-state visitor spending is $24 million. Also, the NBA's organizer's expenses and promotions would add another $10 million in direct economic impact. She expects the Houston-area economy to see 60,000 visitors for All-Star Weekend activities.
T-Mobile today announced it will open an operations center north of Dallas next summer. The U.S. mobile subsidiary of Germany's Deutsche Telekom says the Frisco Operations Center will create 850 new jobs. Governor Rick Perry joined T-Mobile officials for the announcement. Perry hailed the move as a step toward revitalizing a North Texas telecom industry that had been in decline in recent years. The governor says Texas is helping out with $2.1 million from the Texas Enterprise Fund, while the city of Frisco is contributing another $1 million. T-Mobile officials say the jobs created will include engineering and sales positions.
Plaintiffs lawyers say whether Vioxx can be lethal if taken for just a few weeks will be the crux of the first federal trial on the drug's safety. Jury selection begins November 29th in Houston. The update came today from attorneys for the widow of a man who had a fatal heart attack one month after taking the painkiller. The case involves the 2001 death of Dicky Irvin, a 53-year-old manager of a wholesale seafood distributor in St. Augustine, Florida. Attorney Andy Birchfield says the plaintiffs will challenge Vioxx-maker Merck's contention that the drug can't cause heart hazards unless taken for a year and a half or more. A Merck lawyer cited a judge's request and declined comment. In August, a jury in Angleton slapped Merck with a $253 million verdict. Merck is appealing. Merck this month won a Vioxx-related New Jersey case.
D.R. Horton said today that its fiscal fourth-quarter earnings rose 61 percent on a 45 percent rise in revenue. Net income for the quarter ended September 30th rose to a company-record $563.8 million. Revenue increased to $5.02 billion. It says homes closed increased 38 percent to 18,622. The earnings and revenue both exceeded Wall Street estimates. The Fort Worth-based company is one of the nation's biggest homebuilders. It says its sales order backlog of homes under contract was a fiscal year-end record $5.8 billion--or 19,244. That's up 28 percent from a year ago.
Zale Corporation today reported a wider first-quarter loss, reflecting a charge for shutting down stores. The Irving-based company's loss totaled $23.7 million dollars for the three months ended October 31st. The quarter's results include a $5.3 million charge for closing about 30 Bailey Banks and Biddle stores. Stripping out the charge, Zale posted a loss of $18.4 million. Revenue edged up one percent at the nation's biggest specialty jewelry retailer to $427.6 million--but same-store sales slipped 1.2 percent.
Delta Air Lines plans to begin offering flights between McAllen-Miller International Airport and Atlanta in February through a regional carrier. The flights will be operated by Delta's recently sold feeder carrier, Atlantic Southeast Airlines. It will fly 50 passenger jets to and from Hartsfield-Jackson Atlanta International Airport. The Atlanta-based airline is reorganizing after filing for bankruptcy. It's expanding the cities served from its Atlanta hub. Delta says the move allows more flight options for Southern Texas and Northern Mexico customers.
Stanford University's Graduate School of Business will receive $30 million from philanthropists Anne T. and Robert M. Bass. Bass earned his master's in business administration at Stanford in 1974. He is president of the Texas investment firm Keystone and is a member of the business school's advisory council. This is the largest single gift in the business school's 80-year history, school officials say. The donation will include $15 million earmarked for the business school's faculty endowment. It supports new faculty positions, teaching, and research. Bass has an estimated net worth of $3 billion, according to Forbes magazine.