Former Enron shareholders ask for help in holding banking partners accountable for lost savings…Texas and Illinois continue courting FutureGen project…President Hugo Chavez says former Venezuelan officials should be charged for allowing foreign oil companies to plunder Venezuela’s petroleum wealth…
Former Enron shareholders are asking U.S. Senator John Cornyn to assist them in their efforts to hold Enron’s banking partners accountable for their lost savings. Gene Stilp with the Center for Justice & Democracy says the Senator stands by his original position while attorney general of Texas in support of “scheme liability.”
“But his previous quotes were ‘the view that those crafty enough to benefit from participating in a securities fraud while carefully avoiding the public attribution of a false statement to them can escape liability directly conflicts with both the broad language and purposes of the antifraud provisions’.”
In a news conference set at the National Press Club this morning, shareholders will ask President Bush to support their efforts to hold the Enron banks accountable. Stilp says nothing’s been heard from the White House on whether it will intervene on behalf of the defendants in an unrelated Supreme Court case that could determine the outcome of the Enron case.
“There is no smoke signal in regard to this plea at this point, and hopefully these people going to Washington will have a, will have an impact along with other investors who’ll be at that press conference tomorrow. But already, these folks have had an impact, and so my hat’s off to them as an objective observer from the side. And I encourage other folks to keep on fighting.”
Twenty former Enron workers–whose retirement savings were wiped out–want Cornyn to reaffirm that he feels the banks and financial firms can be held responsible for fraud. The group also asked Cornyn to urge the Bush administration not to support such institutions in a similar case before the U.S. Supreme Court. Cornyn, as Texas Attorney General in 2002, joined 26 other states in filing a brief supporting the claims of Enron investors. Cornyn spokesman Brian Walsh says the Senator stands in support of the shareholders and behind that 2002 brief. The issue concerns the liability of several large investment banks that knowingly participated in the fraudulent scheme with Enron, including Merrill Lynch, Credit Suisse First Boston, Barclays Bank, Royal Bank of Scotland, Royal Bank of Canada and Toronto-Dominion Bank.
NRG Energy is increasing its contributions to the Heart of Brazos FutureGen project site in Jewett with a donation of access to 4,800 acre-feet per year of groundwater for its operations. The contribution is made in collaboration with TXU and the Brazos River Authority. Texas is trying to make the Heart of Brazos site the optimal choice for the $1.5 billion demonstration plant.
Illinois Governor Rod Blagojevich has signed a package of economic incentives meant to attract the FutureGen project. Two sites in Texas are also vying for the cutting-edge, coal-powered plant. Backers say the project will minimize air pollution by storing emissions underground. Developers are considering sites in Mattoon and Tuscola, Illinois. A decision is expected in November. Illinois is offering $82 million worth of incentives to FutureGen developers. The package also protects the project from liability due to accidents.
Whatever relief airlines hoped to receive from lower oil prices this winter is quickly disappearing. As second-quarter reporting wraps up, carriers have again warned that fuel is headed higher in the third and fourth quarters. That would put overall fuel costs for 2007 as high or even higher than they were in 2006. The forecasts include gains from locking in fuel prices through hedges. It’s a strategy that gave Dallas-based Southwest Airlines a huge advantage over rivals during the first part of this decade—but that can also backfire if prices go lower. AMR Chief Financial Officer Thomas Horton says rising fuel prices are a real concern in the second half. AMR is the parent of the nation’s largest carrier–American Airlines.
President Hugo Chavez is accusing former Venezuelan officials of allowing foreign oil companies to “rob” Venezuela’s immense petroleum wealth, saying they should be charged with crimes. Chavez says former executives at state-run oil company Petroleos De Venezuela, or PDVSA, permitted international companies to blatantly violate contracts by extracting billions of barrels of light, sweet oil without investing in technology required to produce heavy crude. Chavez’s government took majority control of Venezuela’s last privately run oil projects on May 1st, giving foreign oil companies the option of accepting less profitable terms or stop pumping petroleum.
A new state law will make it easier for small businesses to operate their own on-site childcare centers for the children of employees. Signed into law last month, House Bill 1385 simplifies the daycare licensing process for small businesses and doesn’t require them to obtain a commercial license. The new law will apply to companies with fewer than 50 employees and allows workplace care for as many as 12 children. The law takes effect September 1st, but rules for implementing it are not expected to be final until March 1st. While small businesses will face a simplified licensing process, officials say the new rules will likely require background checks for daycare employees and will address health and safety issues.
Landry’s Restaurants says it will now file its annual report and first two 2007 quarterly reports, now that an audit of its stock-option granting process has been completed. The Houston-based restaurant chain says the review found no misconduct by current or former management or members of the compensation or stock option committee relating to stock-option granting practices. But the committee found discrepancies in the administration and oversight of the process, causing an $8.6 million charge.
RadioShack said it swung to a second-quarter profit from a year-ago loss. But the Fort Worth-based electronics retailer says its revenue fell nearly 15 percent. It says its profit was helped by lower costs, improved inventory management and a gain related to tax reserves. RadioShack reported net income of $47 million for the three months ended June 30th. That’s versus a loss a year ago of $3.2 million. The latest-quarter’s results included a $10 million gain from the reversal of an income tax contingency reserve. Revenue fell to $934.8 million. A weak post-paid wireless business dropped RadioShack’s same-store sales by 8.9 percent.