Wednesday PM March 17th, 2010

Judge sets aside $100 million jury award against BP for injured contract workers…Houston janitors begin negotiations with cleaning contractors…Government Procurement Directions begins two-day event at George R. Brown Convention Center…

A $100 million jury award against BP over a 2007 refinery leak at its Texas City plant has been rejected. A federal judge in Houston set aside the punitive judgment of $10 million apiece for ten contract workers who said they were injured. U.S. District Judge Kenneth M. Hoyt agreed with the jury’s finding that London-based BP was responsible for the leak, but found no intent to cause harm. Actual damages awarded per worker range from about $6,000 to more than $244,000. The release happened at the same refinery where a 2005 explosion killed 15 people and injured 170. BP spokesman Scott Dean said the company agrees with the judge’s decision to set aside punitive damages. Attorney Tony Buzbee, representing workers, says he will ask the judge to reconsider before a formal appeal is filed.

OPEC oil ministers have agreed to keep their output targets unchanged. The decision comes at the end of a meeting of the 12-nation Organization of the Petroleum Exporting Countries. OPEC has left its members’ production quotas unchanged since December 2008, when it announced the last of a series of cuts aimed at bringing their output down by 4.2 million barrels per day. The cuts helped engineer a rebound in crude prices, which had collapsed fallen into the low $30s from a mid-2008 high of almost $150 per barrel. A statement at the end of the meeting said members also reiterated their commitment to honoring individual production quotas. Overproduction is now at nearly two million barrels a day. With that overproduction, OPEC now pumps about 27 million barrels a day.

Prices at the wholesale level plunged in February by the largest amount in seven months as a big drop in energy prices offset higher food costs. The Labor Department said that wholesale inflation dropped 0.6 percent in February, much larger than the 0.2 percent decline economists had expected. Excluding food and energy, prices edged up a slight 0.1 percent, in line with expectations. The deep recession and weak economic rebound are keeping inflation at bay and giving the Federal Reserve leeway to maintain record low interest rates in an effort to build momentum from stronger economic growth.

Houston’s janitors have returned to negotiations to reach new union agreements with six Houston cleaning contractors. Janitors went on strike in 2006, winning a collective bargaining agreement that more than doubled their income to $7.75 per hour with additional work hours and gave them access to affordable healthcare. Faith leaders and more than 300 janitors with Service Employees International Union Local 1 conducted an interfaith blessing and procession beginning at Jones Plaza and ending at Pennzoil Place this afternoon, as janitors and their employers returned to the bargaining table.

A call center in Bryan employing 260 people is closing May 15th. West Corporation officials notified employees of the planned shutdown and pending layoffs. Investor relations spokesman David Pleiss at corporate headquarters in Omaha, Nebraska, cited a decline in call volume. A memo to West employees, obtained by KBTX-TV, said business considerations and realignments forced the company to make the decision. Pleiss told the Associated Press that the Bryan unit opened in November 2005. The company in June 2009 laid off 160 workers. He says West will continue to operate four call centers in the San Antonio area, plus one each in Beaumont and El Paso. Pleiss says professional staffers at West sites in Austin, Houston and Sherman are not affected.

President Barack Obama is thanking lawmakers–and Republicans especially–for their help sending him a jobs bill. The Senate passed the bill with 11 Republican votes. It contains about $18 billion in tax breaks and a $20 billion infusion of cash into highway and transit programs. Obama told reporters that the bill marks the beginning of Congress’ efforts to put the unemployed back to work. Obama spoke in the oval office after a meeting with Irish Prime Minister Brian Cowen. He said he looked forward to bipartisan support on other measures in Congress.

A group that lobbies on behalf of small business predicts a bill passed today won’t have much effect. The bill gives a temporary payroll tax holiday to companies that hire unemployed workers. It won final Congressional approval in the Senate with bipartisan support, and President Barack Obama has said he will sign it. The bill exempts businesses that hire the unemployed from paying the 6.2 percent social security payroll tax through December, and gives employers an additional $1,000 credit if new workers stay on the job a full year. But the National Federation of Independent Business says most businesses that are going to be able to take the credit were probably going to hire the workers anyway. It says until the economy picks up, there won’t be much incentive for businesses to add new workers. Optimistic estimates say the tax break could generate 250,000 jobs through the end of the year. It would add $13 billion to the debt in the coming three years–prompting one Republican Senate opponent to ask, “when are we going to stop spending money around here as if there’s no tomorrow?”

The head of the Securities and Exchange Commission says the agency is investigating several companies’ actions in the run-up to the financial crisis of 2008. SEC Chairman Mary Schapiro said “it would be safe to assume” that the agency is looking very carefully at the conduct of a number of firms during this time. Schapiro spoke in testimony to a House Appropriations Subcommittee weighing the agency’s request for about $1.3 billion for the budget year starting October 1st. She did not name the companies. Lawmakers want to know if the sort of accounting gimmick recently uncovered that was used by the collapsed giant Lehman Brothers to mask billions in debt was widely deployed on Wall Street.

The Associated Press has learned that Wachovia has agreed to pay $160 million to settle a federal investigation into laundering of drug money through Mexican exchange houses. Two federal law enforcement officials say the agreement calls for Wachovia to also institute better money-laundering controls. The officials spoke on condition of anonymity because the official announcement had not yet been made. In return, the bank and its executives would avoid any criminal prosecution. The Mexican exchanges are used by immigrants to send money home. Prosecutors say they are also used by drug traffickers to transfer illicit cash. Wachovia is a unit of San Francisco-based Wells Fargo.

With oil prices up $30 a barrel from last year, energy companies issued $949.3 million in high bids for federal offshore petroleum leases off the coasts of Louisiana, Mississippi and Alabama. The Minerals Management Service says 67 companies submitted 642 bids on 468 tracts in the central Gulf of Mexico. Crude oil closed Tuesday at $81.70 per barrel. Last year, oil was around $50 a barrel–and the sale attracted 476 bids on 348 tracts. That sale garnered $703 million in winning bids. In 2008, with oil well above $100, the sale set a record $3.67 billion in high bids.

Government Procurement Directions has begun its two-day GPC 2010 Reloaded event at the George R. Brown Convention Center, linking minority, small and women-owned businesses with more than $5.3 billion in government contract opportunities. The agenda features participation by the City of Houston, METRO, the Port of Houston Authority, the Houston Independent School District and the University of Texas System.

Flight attendants at American Airlines are asking federal officials to declare that their negotiations with the airline are stalled. That’s a common first step toward winning permission to strike. If the National Mediation Board agrees, it would start a 30-day clock ticking. After that the union might be allowed to strike. That’s often when negotiators make a deal. The carrier called the request premature. It said negotiators have agreed on 71 percent of contract items and identified the areas they need to talk about more. The airline said it expects a decision from the mediation board in mid-April. American’s unions took big pay cuts in 2003 to keep the airline out of bankruptcy. The flight attendants want at least some of that compensation back.

Spring Branch Medical Center on Long Point Road ceases inpatient operations on May 1st, according to the Houston Business Journal. But outpatient programs such as radiation oncology, imaging services and emergency care will continue to operate. Some 400 of the hospital’s 500 employees could be affected. Center officials plan to work with affected employees to determine career opportunities at other HCA-affiliated facilities.

Texas Comptroller Susan Combs is urging consumers to sign up early to receive rebates on selected Energy Star appliances purchased during the Texas Trade-Up appliance rebate program April 16 through the 25th. About $23 million in federal stimulus funds are available for the rebate program. Combs is also announcing 32 renewable energy projects around the state have been selected to receive a first round of federal stimulus grants as part of the Distributed Renewable Energy Technology Program.

Magazine publishers may have a new way to boost flagging circulation: the iPad. The Audit Bureau of Circulations said that it has changed its definition of a digital magazine to accommodate the new class of tablet-style devices. The new rules allow publishers to count paid digital subscriptions as part of a magazine’s overall circulation as long as all the same editorial and advertising material is included. That means publishers can custom design their articles and photo spreads for Apple’s iPad, which goes on sale April 3rd. Without the rule change, they could only count exact digital copies of a printed edition. Of course, magazines would only get this circulation boost out of the iPad if they can persuade readers to pay for applications.

Houston has been named as one of the top cities in America for young workers, according to, which says the city is fifth of 67 metropolitan areas with the best opportunities for the 18 to 34 age group. Austin ranks first, followed by Washington, D.C., Raleigh, North Carolina and Boston. High marks were given for growth rates, moderate costs of living and substantial pools of young adults who are college-bound and educated.

Shares of Blockbuster sank by more than 30 percent after the video rental chain warned that it may have to file for Chapter 11 bankruptcy protection. Competition from DVD-by-mail company Netflix and DVD vending machines operated by Coinstar have eroded the Dallas company’s revenue even as it staggers under a heavy debt load. Blockbuster said in a regulatory filing that it was suffering “significant liquidity constraints,” and could have to file for bankruptcy protection if it was unable to convince creditors to restructure a big chunk of its debt or its business continued to deteriorate.

The Associated Press has found that the chairman and CEO of Schlumberger, the world’s biggest oilfield services company, saw his total compensation fall 4.2 percent in 2009 from a year earlier. Andrew Gould’s pay was $13.1 million last year, compared with $13.7 million the year before. The Houston-based company was hit hard last year as crude prices sagged and drilling companies idled half of all rigs in the U.S. The AP’s executive pay calculation, based on a regulatory filing, aims to isolate the value the company’s board placed on the CEO’s total compensation package. The figure includes salary, bonus, incentives, perks and the estimated value of stock options and awards.

The Houston Bar Association conducts its LegalLine legal advice call-in this evening through 9 p.m. The number is 713-759-1133.


Ed Mayberry

Ed Mayberry

News Anchor

Ed Mayberry has worked in radio since 1971, with much of his early career as a rock’n’roll disc jockey. He worked as part of a morning show team on album rock station KLBJ-FM, and later co-hosted a morning show at adult rock station KGSR, both in Austin. Ed also conducted...

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