Wednesday AM June 27th, 2007

Government audit question's KBR contract management in Iraq...New home sales decline for fourth straight month; consumer confidence index falls...Reliant Energy partnering with eight Houston Multi-Service Centers for heat relief...

A government audit says problems with KBR's management of its U.S. troop support contract in Iraq may have resulted in excessive government costs, according to the Houston Chronicle. The review by the special inspector general for Iraq reconstruction says KBR incorrectly accounted for the amount of fuel it used, exceeded its food service budget and made numerous errors with lodging assignments. The audit--which covers just $1.3 billion of the sprawling contract--is the latest to question KBR's handling of a $23 billion contract with the Pentagon. Some 50,000 KBR employees and subcontractors have been serving food, building bases, driving trucks and providing other logistical support for troops in Iraq.


The Commerce Department says sales of new homes fell in May, marking the fourth decline in five months. The 1.6 percent drop follows a rise of 12.5 percent in April. Every region of the U.S. but the midwest saw sales declines. Home prices have been falling and are expected to continue to do so as builders look to rid themselves of a supply glut. The inventory of unsold homes dropped 1.1 percent. However, because the sales pace slowed, the length of time it would take to shed inventories rose slightly to 7.1 months.


Job worries sent consumer confidence tumbling more than expected this month. The Conference Board says its Consumer Confidence Index fell to 103.9 from a revised reading of 108.5 last month, surprising analysts who had looked for a reading of 106. The June level is the lowest since last August. Conference Board Consumer Research Center Director Lynn Franco blames what she calls "a perceived softening in present-day business and employment conditions.'' Readings for both the Present Situation and the Expectations Index, were lower.


Reliant Energy is once again partnering with Houston Multi-Service Centers to support eight community locations for heat relief. The centers are for the elderly and residents on fixed incomes to conserve energy during the hottest times of the day by visiting the centers. Each center will provide adult and youth games, movies, snacks and water. The centers will operate 9 a.m. to 5 p.m. Monday through Friday, through September 28th. The multi-service centers are at: Acres Homes on West Montgomery; Fifth Ward at Market; Kashmere at Lockwood; Magnolia at Capitol; Southwest at High Star; Sunnyside at Wilmington; Third Ward at Ennis; and West end at Heights.

Map of Reliant Energy Heat Relief Centers


Global Santa Fe is conducting an internal investigation of its Nigerian operations, according to the Houston Chronicle. The probe by the Houston-based offshore oil and natural gas driller follows similar announcements by Tidewater and Noble that both companies were independently investigating their businesses in Nigeria. The company is focusing on agents who handled customs matters for a Nigerian affiliate, and will investigate whether its Nigerian operation violated the U.S. Foreign Corrupt Practices Act.


A study projects that a proposed experimental coal-fired power plant would create 360 permanent jobs and almost $20 million a year in wages. Developers say the $1.5 billion FutureGen plant will be built at either Tuscola or Mattoon in eastern Illinois, or one of two sites in Texas. A decision is expected later this year. The plant is being jointly developed by coal and power companies and the U.S. Energy Department. They say it would have almost no emissions and be a prototype for others. Southern Illinois University conducted the study. It projected the plant would employ 150 people, and indirectly create another 210 jobs. According to the study, the plant also would create another 1,300 construction jobs while it's being built. The Texas sites are in central Texas near Jewett, about 50 miles north of Bryan, and near Odessa in west Texas.


Ohio is offering $16 million in incentives to try to persuade Houston-based Continental Airlines to expand its hub at Cleveland Hopkins International Airport. The financial package includes grants, loans, tax credits and hiring services. Cleveland's airport is trying to land the expansion over Continental hubs in Houston and Newark, New Jersey. The $50 million project would add flights and about 700 jobs. The state previously said it would give Continental a grant for $900,000. But in a letter to Continental, Lieutenant Governor Lee Fisher said tax money might be used in the expansion. A Continental spokeswoman says Ohio's incentive offer will be considered in the decision making process.

Continental is launching another bid for a second route between the United States and China. The airline has a route between Beijing and Newark, New Jersey, but lost on its recent bid to fly to Shanghai. The U.S. Department of Transportation is granting three more routes to Shanghai in 2009.


As part of its Clean Cities/Clean Vehicles program, the Houston-Galveston Area Council is hosting an all-day conference in Stafford called Flip This Fleet: 2007 Advancing the Choice at the Stafford Centre. Transportation professionals will discuss the latest alternative fuels and engine technologies to improve the region's air quality.


Pacific Lumber Company has reached a deal to borrow $75 million from a pre-bankruptcy lender. The logging company had asked a Corpus Christi bankruptcy judge on Friday to approve the loan. Otherwise, it says it won't have enough money to keep operating past next month without the financing from the Marathon Structured Finance Fund. Pacific Lumber says its Chapter 11 reorganization would be "undermined'' without the $75 million loan. The company said its cash balance would drop to $123,000 by July 20th. Pacific Lumber is a subsidiary of Houston conglomerate Maxxam Incorporated. Maxxam is owned by Houston tycoon Charles Hurwitz. He bought Pacific Lumber in 1986 with help from junk-bond king Michael Milken.


Wireless service for the soon-to-be-launched iPhone could cost you close to $100 a month. San Antonio-based AT&T and Apple say service contracts for the phone, which goes on sale this Friday, range from $59.99 a month to $99-99. There also is a $36 activation fee, and iPhone requires a new two-year AT&T service plan. The lowest-priced plan includes 450 minutes of voice time. For $79.99 you get 900 minutes, and the top of the line plan includes 1,350 minutes. All three offer 200 text messages, unlimited data services, minutes that roll over month-to-month and mobile-to-mobile calls. The highly anticipated "smart phone'' will sell for $499 for a model with four gigabytes of storage. An eight-gig version will go for $599.


A federal court in Oregon is the battleground over care of animals at a Texas sanctuary now under new management. The lawsuit filed Monday in Eugene, Oregon, involves the well-being of two chimpanzees, 12 gibbons and a longhorn steer transferred from Primarily Primates in San Antonio. The suit says the animals should remain in the care of other sanctuaries in Oregon, South Carolina and New Mexico. Attorney Eric Turton with Primarily Primates calls the sanctuary a "retirement home for animals.'' But Bruce Wagman, a San Francisco attorney who filed the lawsuit, says the south Texas site can't effectively manage the care. In April, a judge ended a legal battle over control of Primarily Primates after the Texas Attorney General's Office last October had the sanctuary seized and a receiver named. A settlement was later reached.


Flamingo pink laptops, anyone? Round Rock-based computer maker Dell is hoping to jazz up its image as a stodgy maker of desktop and notebook computers—and it's banking on some new color options to do the trick. In what Dell says is a first wave of changes intended to turn around its lagging consumer business, the company has unveiled a new line of consumer computer products in a rainbow of eight hues. They include "Ruby Red,'' "Sunshine Yellow'' and "Espresso Brown.'' The new products represent the latest attempt by Dell to regain some footing in the consumer PC business, which it dominated just a few years ago. But HP is now the top dog in PCs with 18 to 19 percent of the global market, compared to Dell's 14 to 15 percent. That's according to the most recent figures by technology firms Gartner Incorporated and IDC. Analyst Roger Kay of Endpoint Technologies Associates says Dell is heading in the right direction--but it still has a long way to go compared to HP and recognized design leaders like Apple. Apple pioneered the use of color in PCs with the iMac in the 1990s.


It was nearly 16 years ago that the landmark glass terrarium known as Biosphere Two sprang to life in the desert north of Tucson, Arizona. Since then, the three-acre facility has had three go-arounds as a research facility. And now, the University of Arizona is taking over the research reins as of Sunday, leasing the structure and its 34-acre campus for $100 a year. Fort Worth billionaire Ed Bass, who founded Biosphere Two, is providing $30 million over ten years to cover operating costs and research. Biosphere Two has been solely a tourist attraction since 2003, when Columbia University ended its seven-year research association. Earlier this month, the facility and the 1,700 acres surrounding it were sold for $50 million to a housing developer. However, the buyers said the biosphere dome would remain open to researchers and tours.


Even by the standards of Texas--where beef is no trivial matter--rancher Jose Antonio Elias Calles has coddled his cattle. The livestock imported from Japan are guarded by off-duty Texas Rangers and kept away from American bulls that might contaminate their coveted gene pool. They're meticulously reared for 12 years before a single hamburger could be sold. Japanese cattle--which come in red and black varieties--are a closely guarded national treasure. Their beef is often called "Kobe beef'' by American restaurants, where it commands staggering prices. But it's cherished by chefs for its thorough marbling of fat that gives the meat tenderness and rich flavor. On a zero-to-12 quality scale used to rate beef in Japan, where heavy fat marbling is preferred, Kobe rates a minimum nine points and Angus beef four-and-a-half. Calles' beef rate around seven-and-a-half to eight-and-a-half. Through careful breeding and with help from surrogate cows, Calles's tiny herd of 11 has grown to 5,000 head. It's now the largest herd of purebred Akaushi cattle outside Japan. A number of American producers sell beef from half-breed Japanese cattle. But Calles' Heartbrand beef now has enough livestock grazing in south Texas to market purebred American-raised Japanese beef to restaurants and consumers.


An Aggie retailer will modify his "Saw 'em off'' merchandise and pay $25,000 to settle a trademark infringement lawsuit. That suit was brought by the University of Texas. The UT System Board of Regents in January sued Fadi Kalaouze, owner of Aggieland Outfitters and its parent company Kalcorp. The dispute involves merchandise adorned with an inverted longhorn logo with its horns detached. Wnder the settlement, the owner agreed to alter his logo by adding two nostrils to the longhorn's snout and a patch of white on its forehead. The businessman is a 1991 Texas A&M graduate who's been selling "Saw 'em off'' merchandise since 1997. An attorney for the Aggie argued that his client's logo is about first amendment protection of satire and parody.


Bio photo of Ed Mayberry

Ed Mayberry

Local Anchor, All Things Considered

Ed Mayberry has worked in radio since 1971, with many of those years spent on the rock 'n' roll disc jockey side of the business...