Wednesday May 24th, 2006
by: Ed Mayberry, May 24, 2006 5:05:00 am
The eight-woman, four-man jury deliberated for a fifth day to determine whether Ken Lay and Jeff Skilling are guilty of fraud and conspiracy in the fall of Enron. The two former executives are charged with lying to investors and employees about the financial state of the company.
The jury sent a note asking for a copy of the exhibit list and also asked if they could have some testimony transcripts. U. S. District Judge Sim Lake wrote back, asking which specific part of the testimony they needed. It's not clear how much advance notice will be given by the judge when the panel arrives at a verdict, so lawyers and reporters are standing by.
The courtroom has largely been empty, except for defense attorneys Mike Ramsey and Daniel Petrocelli, who were seated at the defense table sipping coffee this morning. Around 30 reporters have been waiting in the overflow room for the verdict, as well as the large contingent of photographers and cameramen outside the courthouse, where defense attorneys have been giving street-level press conferences since late January. The jury set a four-day, 8-to-4 schedule, usually taking an hour for lunch, and will follow Judge Lake's pattern of using Fridays for other matters. For the judge, that means other non-Enron cases, and for the jurors, a day to return to their jobs or lives. The panel has elected to take off on Memorial Day.
The judge plans to announce his verdict on Ken Lay's separate personal banking bench trial when the jury returns with its verdicts on Lay's six Enron fraud and conspiracy counts and Jeff Skilling's 28 counts.
A second federal jury continues deliberations in the fraud and conspiracy retrial of two former executives of Enron's defunct broadband unit. They began deliberations late Monday in the trial of former broadband unit finance chief Kevin Howard and accountant Michael Krautz, the first two of five former Enron broadband executives to be retried after their first trial last year ended with a hung jury. The government contends they conspired to fabricate earnings for the failing broadband unit in late 2000 by selling an interest in future revenue of a video-on-demand venture that flopped. The defendants counter that the deal was legitimate.
A federal judge gave final approval today for three more banks to pay $6.6 billion to settle civil claims that they helped Enron manipulate earnings. U.S. District Judge Melinda Harmon approved the deals with the Canadian Imperial Bank of Commerce, JPMorgan Chase and Citigroup. The settlement tally has so far reached $7.3 billion, with interest, against Wall Street firms. Those firms were accused of helping the energy trader hide losses and inflate profits before it careened into bankruptcy proceedings in December 2001. Ken Lay and Jeff Skilling are also defendants in the litigation, much of which was filed in Enron's final months. Other banks and brokers that have yet to settle include Merrill Lynch, Barclays, Toronto-Dominion Bank, Royal Bank of Canada, Deutsche Bank and the Royal Bank of Scotland Group.
The government reports a rebound in new home sales last month. The Commerce Department says sales rose 4.9 percent to the highest level this year. At the same time, there are plenty of signs of strain in the housing market. The price of homes sold last month declined, and the level of unsold homes rose to a new record high. Analysts had been expecting a decline. The backlog of unsold homes rose by 2.4 percent to a new record of 565,000 homes on the market at the end of April. At the April sales pace, it would take nearly six months to deplete that backlog. A reading on a broader snapshot of the housing market is due tomorrow, covering so-called existing home sales. That's expected to show some easing. April orders to U.S. factories for big-ticket manufactured goods fell by the largest amount in three months, down 4.8 percent. Aircraft orders plunged and demand for computers and other electronic products took the biggest tumble in nearly six years.
After two straight weeks of price drops, the price of retail gasoline is back on the upswing, according to the AAA Texas Weekend Gas Watch. In Texas, the current average is $2.854 a gallon--up three cents since last week. The Galveston-Texas City area has the highest priced gasoline at $2.944 a gallon--about the same as a week ago. Corpus Christi has the lowest average at $2.711 a gallon, despite a five cents increase. Houston's rate is up 4.5 cents to $2.942 a gallon. AAA Texas spokesperson Rose Rougeau said crude oil fell to a five week low this week and the weekly government report showed gas supplies rising. However, concerns about the U.S. standoff with Iran regarding its nuclear ambitions, the threat of possible supply disruptions in Nigeria, and the upcoming hurricane season have created anxiety in the energy market. The national average for regular self-serve gasoline is $2.922 a gallon--up nearly four cents in a week.
The chief executive officer of Valero Energy, the largest U.S. oil refiner, said the company may avoid buying some refineries because price expectations from sellers are higher than they're willing to pay. Valero still wants to grow by acquiring plants in North America and Europe, but Bill Klesse said not if a seller's price expectations are too high. He said the San Antonio-based company remains interested in a Houston plant partially owned by Lyondell Chemical.
High gas prices have a lot of Americans looking at trading in their cars. Consumer Reports says more than a third of the drivers it surveyed are looking at alternative cars like hybrids. Others are considering downsizing for better fuel economy. Of those who say they may replace their vehicles, 50 percent are considering gasoline-electric hybrids. Another 38 percent say they're considering either flexible-fuel vehicles or diesel vehicles. Hybrids currently make up just one percent of total new-car sales. Orders for big-ticket manufactured goods fell in April by the largest amount in three months. For computers and other electronic products, the drop was the biggest in nearly six years. There's a 32 percent falloff in demand for commercial aircraft after big gains in previous months. The durable goods report tends to be volatile.
Dell plans to open its first two full-sized retail stores this year. The company, known for selling computer systems directly to consumers and businesses, is putting 3,000-square-foot stores in high-traffic shopping malls in Dallas and West Nyack, New York. However, Dell is sticking with its direct-sales approach, with the stores carrying only display models. Customers will still have to order online or over the phone and then wait for their purchase to arrive in the mail. The Dallas store is set to open this summer and the one in New York in the fall.
The Houston Independent School District will host a job fair for certified teachers on June 9th at the University of Houston Hilton Hotel. Applicants are asked to bring resume, teaching certificate, test scores and any other relevant information for immediate consideration. Alternative Certification candidates must bring letter of acceptance and passing content test score report. Speech therapists and evaluation specialists are especially encouraged to call for an appointment at 713-556-7373 or 800-446-2821.
Harris County Tax Assessor-Collector Paul Bettencourt and Harris County Appraisal District chief appraiser Jim Robinson have mailed letters to nearly 7,000 taxpayers over the age of 65 reminding them of the over-65 homestead exemption. Robinson's office began mailed the letters using tax records and Texas driver's license information. Taxpayers who turned 65 by December 31, 2005 can qualify for the over-65 tax exemption on their homestead for all of 2005, as well as for 2006 and later years. Taxpayers turning 65 during 2006 qualify for a 2006 exemption. In addition to being 65 at the time the original application is filed, the taxpayer must own and occupy the property as principal residence and must not have existing homestead exemptions. Married couples qualify for the exemption when either spouse reaches 65.
A $1 million grant by the Houston Endowment will establish a fund for trails to develop a regional master plan for hiking, biking, and canoeing trails, according to the Greater Houston Community Foundation. The fund is named in honor of Rosie Zamora, who recently completed 12 years on the Houston Endowment board and is known for her passion for Houston's natural spaces. The community foundation will oversee use of the funds toward a regional master plan for hiking, biking and canoeing trails throughout the greater Houston area. A regional master plan will enable us to move forward on a trail system that will truly be a celebration of our region's ecological capital. The proposed trail system will connect existing trails and identify possible new trails in Harris and the surrounding counties. Much of the planning will be done in collaboration with Houston Wilderness, an alliance of business, environmental and government interests to protect, preserve and promote the biodiversity of the region.
Lone Star Funds managing partner John Grayken is denying any wrongdoing in the fund's 2003 acquisition of a majority stake in Korea Exchange Bank. Grayken also said the sale of its stake in KEB to Kookmin Bank should be completed by year's end. Dallas-based Lone Star and Kookmin Bank signed a final agreement with KEB Friday. Under the deal, the bank will pay about $6.7 billion for Lone Star's 64.62 percent stake in KEB. Kookmin says that's 1.3 percent less than the original price because the bank's due diligence revealed certain items that warranted a revision. This still represents a massive return on investment for Lone Star, which paid a total $1.2 billion for a 51 percent stake in KEB. However, the deal remains subject to the completion of ongoing probes. Korean prosecutors, an audit agency and tax authorities are investigating the Korean unit of Lone Star Funds because of allegations that the private-equity firm bought into the bank at a discount.