Wednesday January 25th, 2006
by: Ed Mayberry, January 25, 2006 5:01:00 am
Enron founder Ken Lay and former CEO Jeff Skilling today appealed an order that keeps their fraud and conspiracy trial in Houston. Jury selection is slated to begin Monday. Both men have pleaded not guilty. Defense attorneys say a hostile jury pool obliterates the chance of a fair trial for Lay and Skilling. Skilling's attorney Daniel Petrocelli says getting a fair jury is the most important thing to him."There has been such a saturation of poisonous media coverage and misinformation about Enron and about my client, Jeff Skilling, and no one can be fairly tried in that environment. If we are to have a trial here in Houston, the law requires and decency requires there be 12 fair people who are judging Mr. Skilling's case, and that's what we want."
U.S. District Judge Sim Lake on Monday rejected the defense's second request to move the trial to Denver, Phoenix or Atlanta--without hearing oral arguments. The defense now wants a hearing before the Fifth U.S. Court of Appeals. Prosecutors declined comment. Skilling's attorney Daniel Petrocelli says picking jurors is an important part of the process."Open-minded, fair, person who has no agenda, just wants to do his or her civic duty listen to the evidence, not make up one's mind until the evidence is in and base it purely on what goes on in that courtroom."
Lay's attorney Mike Ramsey says the defense is looking for a certain kind of juror."A reasonably sophisticated person that has some exposure to business and understands how businesses work. And I don't want cold and timid souls who, you know, are not really people who had their hands wet in the business atmosphere."
Skilling faces 35 counts of fraud, conspiracy, insider trading and lying to auditors. Lay faces seven counts of fraud and conspiracy. Meanwhile, a pretrial hearing before Lake is set for tomorrow afternoon.
The Texas Employee Confidence Index rose for the third consecutive month in December, rising 2.3 points to 61.7, according to the Texas Spherion Employment Report. The Job Transition Index matched its high for 2005 at 45 percentage points--six points higher than December 2004. The Personal Confidence Index totaled 76.8, with more workers reporting confidence in their own ability to find jobs. The survey says 26 percent of adult Texas workers say they think the economy is getting stronger, compared with 24 percent in November. About 76 percent say they think it's unlikely they will lose their jobs in the next year.
The housing market cool-down continues. Sales of previously-owned homes fell 5.7 percent last month, according to a real estate trade group. It is the third straight monthly decline, something that hasn't happened in more than three years. The National Association of Realtors says sales declined to a seasonally-adjusted annual rate of 6.6 million units. Nevertheless, sales of existing homes set a record for a fifth straight year in 2005. December sales were three percent below the level seen a year earlier. NAR chief economist David Lereah says the housing market will cool this year, marking what he calls a ''soft landing.'' Some analysts fear it could be more dramatic than that, noting the market had soared beyond expectations, in terms of sales and home prices, in recent years.
IMX has been awarded almost $5.8 million in damages in an intellectual property case against LendingTree. A North Carolina jury found in favor of the Houston-based software provider for the mortgage industry, agreeing that LendingTree had willfully infringed on an IMX patent that provides an Internet-accessible, interactive, real-time network for borrowers and lenders to exchange loan information.
Steam leaking from a tank at the Exxon Mobil Baytown refinery wafted a mist of oily material over a nearby neighborhood over the weekend. The mist covered homes, cars and playground equipment with a film of lubricant and waxy material. Contractors hired by Irving-based Exxon Mobil spent yesterday cleaning up the mess at a 58-unit public housing complex. An Exxon Mobil spokeswoman says the material is used in the refinery's catalytic cracker units to produce light hydrocarbons. The cause of the leak is unknown.
ConocoPhillips said today its fourth-quarter profit ballooned as prices and refining margins remained strong versus a year ago. The nation's third-largest integrated oil and gas company says earnings swelled 51 percent to $3.68 billion. The Houston-based company credits higher natural gas prices and volumes, while crude oil prices were lower and exploration expenses rose. Refining margins slimmed from the third quarter as after-effects from the Gulf Coast hurricanes continued to hurt volumes and raise costs. Revenue surged 25 percent to $50.2 billion. ConocoPhillips is the third-largest integrated oil and gas company in the United States, behind Chevron and Exxon Mobil.
A state district judge decided that Allstate won't have to pay for the living expenses of people displaced by Hurricane Rita if their homes were not damaged by the storm. The Texas Department of Insurance took Allstate to court last year to force the company to pay claims filed by the evacuees. Allstate--the state's second-largest insurer--refused to pay living expenses for the displaced homeowners unless their homes were made uninhabitable by direct storm damage. But the state argued that homes can be considered uninhabitable for other reasons--like if a homeowner suffered power outages for significant periods of time, couldn't get home safely, or was barred from coming home by authorities. The judge sided with Allstate yesterday. Category Three Rita hit the Texas and Louisiana coasts September 24th.
League City-based Eagle Broadband will supply a satellite communications system for Textron Systems as part of its contract with the U.S. Department of Defense. Textron has purchased Eagle's SatMAX system that enables users to make reliable, fully wireless, voice and data communications from obscure locations including aboard ships. With the product, users of Iridium satellite network can operate their existing satellite phones and make multiple concurrent calls within SatMAX-enabled "hotspot" areas from any location.
KBR has been awarded a $385 million five-year contract by the Department of Homeland Security to support U.S. Immigration and Customs Enforcement facilities in the event of an emergency. The engineering and construction subsidiary of Houston-based Halliburton held the previous ICE contract from 2000 to 2005. The contract calls for establishing temporary detention and processing capabilities in the event of an emergency influx of immigrants.
The Azerbaijan subsidiary of Houston-based Frontera Resources has been awarded $1.2 million plus interest in arbitration with the State Oil Company of the Azerbaijan Republic, according to the Houston Business Journal. Frontera initiated the arbitration over claims resulting from the Azerbaijan company's halting of exports from the onshore Kursangi & Karabagli oilfields during the fourth quarter of 2000. An arbitration panel in Sweden found the halting of exports of crude oil was in violation of a production sharing agreement.
Halliburton's Russian subsidiary Halliburton International has been awarded a $33 million contract by Russian oil company TNK-BP to provide services for the Ust-Vakh field in Western Siberia. Halliburton will provide integrated services from its fluid systems and drilling and formation evaluation divisions. Halliburton provided services on eight rigs and drilled 85 wells in that field in 2005.
Atmos Energy's Mid-Tex Division says it's asking to reduce the gas cost portion of bills for 1.5 million customers. The Dallas-based natural gas distributor says customers could see a 36 percent reduction as early as next month under a rate request submitted to the Texas Railroad Commission. The company says the move could save the average residential customer about $50 next month. Atmos says it wants to cut the gas cost portion of the bill from $12.61 per thousand cubic feet this month to $8.02 per thousand cubic feet in February. Atmos spokesman Ray Granado says the change would affect customers as far west as Abilene, east to the Louisiana border and south to Round Rock. Dick Erskine is president of the Atmos Mid-Tex division. He says the cost of gas has fallen from a peak of $15 per thousand cubic feet in October. He credits the decline to milder January weather, restoration of Gulf Coast production after Hurricane Katrina and high levels of stored natural gas.
The finance chief of American Airlines said today he expects rising revenue in 2006, but faces higher costs--especially for fuel. But James Beer declines to predict whether the Fort Worth-based carrier can finally break even after five years of heavy losses. He says the nation's biggest air carrier faces "an awful lot of cost headwinds.'' He says fuel costs are going to be the linchpin to American's overall financial performance. American predicts it will pay an average of $1.95 per gallon for fuel this year. That's even more than the $1.75 it paid on average last year. Beer said 2006 is shaping up as a "robust year'' for revenue because some U.S. carriers are cutting back flights which could make it easier to raise fares. American will also spend about $1 billion this year to service its $20 billion in debt. Beer says paying down debt was a high priority for American.
Opening statements got underway today in a Rio Grande Valley court in the fourth Vioxx-related trial against the drug maker Merck and Company. Lawyers for the family of Leonel Garza told the jury today that his fatal 2001 heart attack was caused by the painkiller Vioxx. Joe Escobedo told the jury the 71-year-old man's coronary was a sudden reaction to Merck's popular painkiller, not the end result of 23 years of heart disease as Merck contends. Escobedo said in his opening statement that Garza was told after a stress test shortly before his death that he had a less than two percent chance of dying of a heart attack within a year. A Starr County jury of ten men and two women are hearing the case in the state district court in Rio Grande City. Two women were chosen as alternates. They're hearing testimony on whether Garza's fatal 2001 heart attack resulted from 23 years of heart disease or about three weeks of taking Vioxx for arm pain. Legal experts say attorneys for the Vioxx-maker may face their biggest challenge in the trial in the impoverished border county. They say Starr County is in one of the most plaintiff-friendly regions in the country. Merck faces hundreds of lawsuits from people who took the once-popular painkiller Vioxx before it was pulled from the market in September 2004. That was when a study showed it could double risk of heart attack or stroke if taken for 18 months or longer. Merck says no such risk has been shown for briefer usage.
Taiwan says it is lifting a ban on U.S. beef imports. It is warning it might reconsider the decision if steps aren't followed to prevent beef at higher risk of being infected with mad cow disease from entering the country. The ban was imposed last June after an American cow was found to be infected with mad cow disease. Taiwan's Department of Health issued a statement saying an investigation shows there was no danger to the country's population, and the import of American beef can resume. Taiwan says that all imported beef will have to carry a label of approval from the U.S. Agriculture Department. Only meat from cows aged 30 months or younger will be allowed, while parts like brains, spinal cords and certain bones will be banned because they carry a higher infection risk. The U.S. trade office in Taiwan says it welcomes the announcement. The United States had been the source of 20 percent of Taiwan's beef, and Texas is the leading U.S. beef producer. There have been two confirmed U.S. cases of mad cow disease, with the first homegrown case turning up last June in a Brahma Cross beef cow in Texas.
Profits surged at two of the nation's largest railroads in the fourth quarter, as a growing economy increased demand to move everything from coal to consumer goods. Burlington Northern Santa Fe, the nation's second largest railroad company, said today its fourth-quarter earnings rose 24 percent. CSX, the largest rail operator in the eastern United States, says profits more than tripled from a year ago, a jump magnified by a year-ago loss from a business the company has since sold. Demand was so strong that both companies were able to push rates up in the fourth quarter, allowing them to overcome the high cost of fueling their locomotives.