Wednesday PM October 3rd, 2007
by: Ed Mayberry, October 3, 2007 5:10:00 am
Citigroup is refuting an Enron lawyer's claim that the bank is using severance agreements to "intimidate former employees into silence.'' A Citigroup statement released late last night says that almost 50 present and former employees have testified so far in various Enron proceedings. When Enron collapsed in 2001, a multibillion-dollar fight began between the energy company and the Wall Street banks that financed it. In papers filed recently with a Manhattan federal bankruptcy court, Enron lawyer William McSherry said Citigroup is using severance agreements to "intimidate'' its former employees. He said the resulting silence was impairing Enron's ability to obtain information for use at trial. Dow Jones Newswire says McSherry has asked U.S. Bankruptcy Judge Arthur Gonzalez to prohibit Citigroup from using its severance agreements to prevent their testimony.
Vice President Dick Cheney says he can't recall being told the oilfield services company he once headed had booked millions of dollars in construction cost overruns as income. The statement came in a 2004 interview with the Securities and Exchange Commission about accounting problems at Houston-based Halliburton. The SEC released the comments in response to a request by Dow Jones Newswires through the Freedom of Information Act. The SEC said Cheney wasn't the target of its inquiry, and he cooperated fully with the probe into Halliburton's accounting for cost overruns at a construction project in Egypt and other countries. In his testimony, Cheney suggested former Halliburton finance executives were to blame for the accounting issue. Two days after Cheney testified, Halliburton agreed to pay $71.2 million to settle SEC charges.
ConocoPhillips says profit from its global refining operations is likely off significantly from last quarter. The nation's third-largest oil company also says its oil and gas production is also down. The Houston-based company says refining margins fell by half in some regions during the July-September period from the previous quarter. But margins are largely in line with the year-ago quarter. The company provided the details in an overview of market and operating conditions for the recently completed third quarter. ConocoPhillips is scheduled to report those results October 24th. The company attributed the declining output to the loss of its Venezuelan assets, unplanned downtime in the United Kingdom and planned downtime in the Timor Sea and Alaska. Earlier this year, ConocoPhillips refused to sign a deal with Venezuelan officials to keep pumping oil under tougher terms posed by President Hugo Chavez's government. Venezuela took control of the projects. ConocoPhillips has said it continues to negotiate compensatory terms with government authorities.
Former Federal Reserve Chairman Alan Greenspan says "the worst is over,'' as far as the subprime credit meltdown is concerned. However, at a meeting with local businessmen in Lisbon, the ex-fed chief said the U.S. economy is likely to suffer continued fallout from the weak housing market. He's predicting that economic growth is likely to slow in coming months, a trend he says should bottom out early next year.
High bids that were opened at a sale of federal offshore oil and gas leases in the central Gulf of Mexico totaled $2.9 billion. Officials say it's the second-largest such sale for central Gulf tracts. Seventy-three companies were competing for the tracts. The bids were opened in New Orleans by the U.S. Minerals Management Service, which manages the leases. Petroleum developers put up 1,428 bids on 723 offshore tracts off the coasts of Louisiana, Mississippi and Alabama that could produce oil and natural gas. Of the tracts receiving bids, 477 were in ultra-deep water, or in depths of 800 meters or greater. Development of such leases can take hundreds of millions of dollars in investments and take years to bring into production. Also drawing continued interest were tracts of 200 meters or less on the shallow Gulf shelf, considered prime ground for the development of natural gas deposits deep in the earth. Those tracts picked up 187 bids. The central Gulf sale has been generally held in March. This year's sale was delayed by a dispute between Louisiana Governor Kathleen Blanco and the federal Interior Department over the state's share of offshore royalties. In December 2006, Congress agreed to send Louisiana about $13 billion expected over the first 30 years for storm protection, flood control and coastal restoration projects.
The real estate developer at the center of a Dallas city hall corruption case has surrendered to federal authorities. Southwest Housing President Brian L. Potashnik, his wife Cheryl, and his father Jack, were named in indictments alleging an elaborate bribery and extortion scheme. The three have pleaded not guilty. The indictments stem from an FBI investigation that became public more than two years ago when agents raided city offices. The central allegation is that public officials accepted bribes and kickbacks to help Potashnik's company receive construction contracts. Indictments unsealed Monday accuse 14 defendants of illegal dealings with contractors building publicly funded affordable-housing in Dallas. A 15th defendant was indicted on allegations of tax fraud and a 16th was indicted on a count of embezzlement. Among the key figures indicted are the Potashniks, State Representative Terri Hodge and former Mayor Pro Tem Donald W. Hill. Hodge has declined to comment and Hill has said he is not guilty. Car dealer Rickey E. Robertson also surrendered and pleaded not guilty to charges of conspiracy to commit bribery, conspiracy to commit extortion and conspiracy to commit money laundering.