Former TSU finance chief receives ten-year sentence…Entergy New Orleans emerges from bankruptcy…Airlines decline to match United’s fare increases…
Former Texas Southern University finance chief Quintin Wiggins was sentenced to ten years in prison for misapplying nearly $300,000 in public funds. The Harris County jury reached the sentence after convicting Wiggins last week of funneling the university funds into secret accounts used by former TSU President Priscilla Slade. The money was used to lavishly furnish and landscape her home. Jurors deliberated for about four hours over two days before reaching the sentence. Wiggins had faced a sentence of anywhere from five years probation to life in prison. Prosecutors had asked jurors to sentence Wiggins to at least 30 years in prison, while defense attorneys asked for probation. The allegations against Wiggins, Slade and others coincide with a series of reports that revealed a pattern of financial mismanagement at TSU. Governor Rick Perry has called for a state takeover of the historically black university. Prosecutors said the financial problems at TSU have prompted one donor to pull back a $250,000 gift to the university.
Entergy New Orleans has emerged from bankruptcy. The move came nearly 20 months after the electric and natural gas utility was forced to reorganize by a loss of customers and massive rebuilding following Hurricane Katrina. The August 2005 storm swamped parts of the Gulf and sent several hundred thousand Louisiana evacuees to Texas. CEO Rod West called the emergence a “wonderful milestone” and sign of recovery both for Entergy New Orleans and the city. He says it should send a signal to shareholders, customers and regulators that the utility on a path to viability. Entergy New Orleans is a subsidiary of Entergy Corporation, which also serves parts of Texas.
Major airlines are in danger of losing ground on fare increases that they attempted over the past week to deal with higher fuel prices. United Airlines is sticking by its increase of up to $100 per round trip for tickets often bought by business travelers. Increases of up to $20 per round trip were in place on other routes. But other airlines were mostly declining to match the increases. Houston-based Continental Airlines started separate increases of $10 per round trip last week. But now Continental has pulled back on many routes, especially where it competes with low-cost carriers. Fort Worth-based American Airlines had matched Continental’s increase–but also retreated on most routes. Neil Bainton of farecompare.com predicts the recent fare increases will be rolled back. Dallas-based Southwest Airlines never raised its fares.
American Airlines announced it’s recalling 200 flight attendants to offset expected attrition during the rest of 2007. Spokeswoman Sue Gordon says about half of the recalled flight attendants are former employees of TWA. American’s parent–Fort Worth-based AMR–bought TWA out of bankruptcy in early 2001. TWA flight attendants were angered at being put at the bottom of American’s seniority list, making them the first to be laid off when the airline industry slumped in 2001. Gordon says there are about 2,000 former TWA flight attendants and about 140 former American employees on a hiring-recall list.
Two financial news and data firms say they aren’t finished talking yet, but they sound like merger partners. Reuters and Thomson Corporation confirm that they are discussing a combination of their businesses valuing Reuters at $17.7 billion. Thomson would pay cash and stock valued at $14.07 per Reuters share. The two companies caution there is much ”still to be resolved and there can be no assurance that agreement will be reached.” Thomson President and CEO Richard Harrington would retire when the possible deal is completed, and Reuters CEO Tom Glocer would succeed him as chief of the new company. Thomson and Reuters provide data to big banks and brokerages.
A massive complex is rising near Hackberry, Louisiana, to handle the nation’s growing demand for natural gas. Sempra Energy expects the $750 million terminal to begin operating in 2008 as the arrival point for tankers carrying liquefied natural gas. The Associated Press reports the energy industry regards LNG as a vital step in keeping up with the demand for natural gas in the U.S. But plans to build terminals are raising environmental and safety concerns. Energy companies have proposed 35 new U.S. terminals in ten states–including Texas–and five offshore areas near the coast. Eighteen terminals have been approved by the Federal Energy Regulatory Commission. Among the projects is a $700 million terminal near Freeport, being built by Freeport LNG Development. On March 28th, Shell Oil dropped plans to build a terminal in the Gulf of Mexico 36 miles south of Cameron Parish, Louisiana, after opposition from fishermen. The dispute arose over Shell’s plans to use seawater in the process. Opponents feared that would kill fish larvae.