Thursday AM November 16th, 2006
by: Ed Mayberry, November 16, 2006 5:11:00 am
The last of the top Enron executives involved in one of the biggest corporate scandals in U.S. history has learned his punishment. Richard Causey, the company's former chief accounting officer, has been sentenced to five-and-a-half years in prison. Causey pleaded guilty last December to securities fraud two weeks before he was to be tried with Enron founder Ken Lay and former chief executive Jeffrey Skilling. Attorney Reid Weingarten says Causey made the right decision.
"Well, I mean 20/20 hindsight, we plead right on eve of trial. Rick Causey, as I said in court, believed in the main his accounting was consistent with principles he learned in accounting school and carried out his entire accounting career. So we did carry with us the hope, when all the facts were laid out, that there was a chance that we'd be acquitted. For a variety of reasons, we concluded that the best course of action was a plea agreement with the United States, and I'm not suggesting that the verdict had Causey gone to trial would have been different than Lay and Skilling."
Causey pleaded guilty to aiding and abetting securities fraud for helping mislead investors about Enron's finances.
"Enron is reputed to be the worst accounting scandal in the history of the world. As far as we know, the only accountant in Enron—and there were hundreds, both inside and outside—who is going to receive a prison sentence is Rick Causey. And one could question whether or not that's fair, and of course I emphasized the Fastow sentence, as well. I believe that anyone who is familiar with the Enron world would conclude that Andy Fastow's malefactions were far, far worse than Rick Causey's."
Causey has also agreed to hand over more than $1 million to the government and forfeit a claim to about $250,000 in deferred compensation as part of the plea deal.
Eleven armed men attacked an oil facility owned by a subsidiary of Royal Dutch Shell in southern Nigeria on Wednesday, leaving two attackers dead in a fight with naval forces. Another assailant was captured. More than 60 foreigners have been kidnapped in Africa's largest oil producer since the beginning of the year. Hostage-taking has become increasingly common in Nigeria's oil-rich delta. Tens of billions of dollars are made in oil revenues by Nigeria, but government corruption means little of it is invested in infrastructure such as electricity, roads or education. Nigeria is the fifth-largest supplier of crude to the United States.
Former Hewlett-Packard chairwoman Patricia Dunn has pleaded not guilty to four felony identity theft and fraud charges. It's alleged that she instigated the company's ill-fated spying probe into boardroom leaks. Dunn appeared briefly for her arraignment in Santa Clara County Superior Court. Dunn was released on her own recognizance after a lawyer entered the plea for her. The 53-year-old Dunn is one of five people charged in the technology giant's efforts to unmask board members who discussed company business with reporters. Investigators used a shady ruse known as "pretexting'' to obtain the confidential phone logs of directors, reporters and others to trace the source of the leaks. Dunn resigned from HP's board after the scandal broke in September. The two-time cancer survivor recently began chemotherapy for ovarian cancer. Houston-based Compaq Computer merged with HP in 2001.
Another day of talks was held between Goodyear and the union for thousands of striking workers in the U.S. and Canada. Negotiations resumed in Cincinnati nearly six weeks after discussions broke down and workers walked out. Neither side is telling much about what's going on at the bargaining table. A union spokesman will only say that there's still a conversation going on and things haven't broken off. The major issues in the dispute include plant closings and job security, as well as health insurance for retirees. Goodyear's already announced it plans to close its Tyler, Texas tire plant.
Governor Rick Perry is announcing the creation of a new Governor's Competitive Council, which will collaborate with key regulatory industries, the private sector and colleges and universities to create innovation in state government. Governor Perry says in order for the state's economy to prosper, Texas must be even more competitive and nimble in the effort to attract jobs, corporate expansions and relocation projects. Perry spoke at the Texas Lyceum 2006 Public Conference in San Antonio, where business and community leaders gathered with elected officials to create a public policy agenda for economic growth. The council will begin meeting after the first of the year, although specific membership and size of the council has yet to be determined.
It isn't the new car smell, but Toyota's first manufacturing plant in Texas definitely smells new. Toyota has unveiled its sprawling new manufacturing plant in San Antonio--two days before its first Tundra is set to roll of the line. The highly automated facility will produce up to 200,000 pickups per year. Company spokesman Mike Goss says the 2.2 million-square foot plant has robotic arms to help create what Toyota hopes will be a "nearly perfect truck.'' The full-size pickup has been revamped for 2007 and is called the Next Generation Tundra. It will be available at dealerships beginning in February.
Customer satisfaction with the process of buying a new car has hit an all-time high. J.D. Power and Associates, which has been doing the study of consumer attitudes for 20 years, says the industry got a record high sales satisfaction index score of 847 on a 1,000-point scale. That's a five-point improvement from last year. Customer satisfaction is measured in five areas: dealership facility, salesperson, paperwork/finance process, delivery process and vehicle price. The survey notes that a leading cause of lost sales at new-vehicle dealerships is poor customer treatment. Nearly half of all shoppers who walk away from a dealership cite poor treatment as a reason. Jaguar ranks highest in satisfying buyers with a score of 912--the highest score since the study was redesigned five years ago. It's the third straight year Jaguar has taken top honors.
Venezuela's state oil company says it could cost $9 billion to develop newly established heavy crude deposits in the Orinoco River region. Petroleos de Venezuela and Brazil's Petrobras have been working to quantify tar-like crude deposits in the Orinoco. Venezuela announced Monday that the Carabobo One block has successfully been certified as holding 45.5 billion barrels of oil. Separately, Venezuelan tax authorities has been auditing dozens of private oil companies, including those operating in the Orinoco, for taxes that have allegedly gone unpaid. The tax agency this week billed Chevron $4 million and Houston-based ConocoPhillips $7 million in taxes from 2002 and 2003 for their Hamaca project.
The Senate has approved final passage of the 2007 Military Construction and Veterans Affairs Appropriations bill, which includes more than $741 million for Texas base improvements. Senator Kay Bailey Hutchison, chair of the Military Construction and Veterans Affairs Appropriations Subcommittee, says the budget ensures that bases in Texas receive necessary training capabilities and proper community facilities and family housing. The budget includes more than $455 million for Fort Bliss infrastructure improvements and more than $109 million for Fort Sam Houston.
The U.S. Department of Labor's Occupational Safety and Health Administration has unveiled new safety and health guidance for employers about occupational exposure to avian influenza from infected birds. OSHA guidelines, with practical recommendations on ways to avoid infection, are on the agency's Web site. Public health officials are concerned that a new avian flu subtype may acquire the capability of human-to-human transmission and become an agent for the next flu pandemic.
Plenty of corporate good cheer apparently will be going around this holiday season. A survey released Challenger, Gray and Christmas, the outplacement firm, finds 79 percent of companies plan a holiday party--about the same as last year. But nearly a third of those firms will be spending more on the gatherings. Just 23 percent boosted their party budgets last year. Corporations likely can afford the increase. The Congressional Budget Office says before-tax corporate profits are expected to rise by 30 percent this year. Challenger, Gray and Christmas CEO John Challenger advises you to accept a company party invitation if you get one. He says those who know how to work the party room could boost their career potential.
Western Michigan University's College of Aviation has signed a hiring agreement with ExpressJet Airlines. The deal signed means that students who graduate from the College of Aviation every year could have an advantage in getting a job. Students could walk from graduation straight to an interview and maybe a pilot's job with ExpressJet. Houston-based ExpressJet operates as Continental Express—the regional carrier for Continental Airlines. The College of Aviation--which has facilities at W.K. Kellogg Airport in Battle Creek, Michigan--is pursuing agreements with other airlines.
A fund run by billionaire investor Car Icahn has disclosed a stake in Houston-based Cyberonics. News of the 2.4 percent stake has triggered a rise in share value. Meanwhile, the U.S. Securities and Exchange Commission is investigating the firm, which makes a medical device to treat epilepsy and depression by stimulating the vagus nerve, over the handling of options grants.
Save-A-Lot is opening its second store in Houston on Broadway near Hobby Airport. The grocery chain features an "edited-assortment" format of the more-purchased food items. As it opens outlets in the Houston area, the chain has been donating money to the Guadalupe Pantry Center in the East End. Save-A-Lot has partnered with Catholic Charities of the Archdiocese of Galveston-Houston to donate groceries.
Blockbuster says it's reached a deal for exclusive U.S. rental rights to movies from the Weinstein Company. The agreement runs from January 1st through 2010 and gives the Dallas-based video rental chain three years of exclusive rental rights to Weinstein movies. The deal doesn't cover retail sales of the movies. The brothers Bob and Harvey Weinstein were founders of Miramax before selling it to the Walt Disney Company in the early 1990s. Blockbuster said it would pay Weinstein a minimum amount based on box-office performance of theatrical releases and production costs of direct-to-video movies. Detailed terms were not disclosed. The companies said the deal would cover such upcoming movies as "Bobby,'' a biopic about Senator Robert F. Kennedy that opens this month; "The Nanny Diaries,'' starring Scarlett Johansson and Paul Giamatti; and the martial-arts film "The Protector.''
Scottsdale, Arizona-based Giant Industries' planned merger with a Texas company has become a bit bumpy. Giant now says it'll seek another buyer during the next 30 days. El Paso-based Western Refining said in late August that it had agreed to buy Giant. But Monday, it announced that it had lowered its bid in a move that could cost investors more than $100 million. It cited Giant's disappointing third-quarter performance. The merger between Giant and Western Refining would create the fourth-largest publicly traded independent oil refiner in the United States.