Federal regulators are searching the globe for the billions of dollars investors have entrusted to Stanford International Bank. Authorities tracked down the Texas billionaire in Virginia and served Allen Stanford with a civil complaint accusing him of committing an $8 billion fraud. Billions of dollars remain unaccounted for. Investigators say Stanford's offshore bank and financial companies used rosy financial predictions and old-fashioned deceit to lure investors into a scam. In a mid-2008 newsletter touting the company's growth, Stanford wrote he has "an unbridled optimism and enthusiasm" for the future. The Securities and Exchange Commission shut down three of Stanford's companies this week. Stanford has not been charged with any crime. FBI agents in Houston are running a parallel investigation, according to a U.S. official who spoke on condition of anonymity because the criminal probe is ongoing.
Caribbean regulators have taken control of an Antiguan bank owned by Stanford. The Eastern Caribbean Central Bank says it acted to stop a run on deposits at the Bank of Antigua after civil fraud charges were filed against Stanford. Separately, Antigua's Financial Services Regulatory Commission appointed a British firm as a receiver of Stanford International Bank and Stanford Trust Company.
The Men's Professional Tennis Tour had been using the Stanford Financial Group as an investment advisor but now is examining its sponsorship deal with the company. The tour uses multiple investment firms and no player pension funds were invested with Stanford Financial. The group was promoted as the tour's "official financial advisor." In addition, in 2006, Stanford Financial Group entered into a three-year commitment to be the official title sponsor for the ATP doubles team race and ATP doubles rankings.
Stanford Financial Group has ended its ten-year relationship as sponsor of the Houston Polo Club. The club says it was contacted in late January—before federal fraud charges were filed against Stanford on February 17th.
The England and Wales Cricket Board cut ties with Allen Stanford. The cricket board says it's canceling all its contracts with Stanford and won't participate in events he planned to back. Stanford funded a winner-take-all $20 million Twenty20 match between England and a West Indies all-star team in Antigua in November. It was the first of five planned annual games worth a total of $100 million.
President Barack Obama told a group of mayors at the White House that if they waste any of the money from the economic stimulus plan, he'll call them on it. Obama told the gathering, "the American people are watching." Miami Mayor Manny Diaz, who heads the U.S. Conference of Mayors, agrees. He says mayors have "plenty of constituents" who'll be complaining about wasted stimulus money before Obama does. Houston Mayor Bill White is one of the 60 or so mayors participating in the conference. The group also met with Attorney General Eric Holder, HUD Secretary Shaun Donovan, Transportation Secretary Ray LaHood, Energy Secretary Steven Chu, Education Secretary Arne Duncan and White House senior staff. They also met with EPA Administrator Lisa Jackson, Department of Energy Weatherization Program Director Gil Sperling and Department of Justice COPS Office Acting Director Tim Quinn. Mayors from both parties are warning that the stimulus plan will only work if leaders at the state level direct the money to cities in a clear and timely way.
President Barack Obama's top budget aides are putting in place strict reporting requirements for all government agencies that will be involved in spending the $787 billion economic package. Obama's budget chief has revealed a 25,000-word document detailing exactly how cabinet and executive agencies, states and local organizations use the money that's designed to save or create more than three million jobs over the next two years. Officials says it's a strict system meant to streamline reports so they can be reviewed readily on the administration's new Web site
The highest-ranking black Congressman says opposition to the federal stimulus package by southern governors is "a slap in the face of African-Americans.'' Democratic Congressman Jim Clyburn of South Carolina said he was insulted when the GOP governors of Texas, Louisiana, Mississippi and South Carolina said they might not accept some of the money from the $787 billion stimulus package. Texas Governor Rick Perry said he would accept the money.
A federal judge has ordered the Treasury Department to give the Fox Business Network records about how the agency spent billions in bailout money. The network filed requests under the Freedom of Information Act for records related to the funds spent on American International Group, the Bank of New York Mellon and Citigroup. The network specifically asked the department to identify the troubled assets purchased, any collateral extended and any restrictions placed on the financial institutions for their participation in this program. U.S. District Judge Richard Holwell ruled that the treasury must comply with the request by March 23rd.
Consumer prices rose by the most in six months in January, propelled by higher energy costs. But over the past year inflation has been flat, the lowest reading in more than a half-century. The Labor Department says consumer prices rose by 0.3 per cent last month, the biggest monthly increase since a 0.7 per cent rise in July. Even with the January increase, which was in line with economists' expectations, inflation for the 12 months ending in January was zero. That's the lowest reading since prices actually fell by 0.4 per cent for a 12-month period ending in August 1955.
Energy prices rose 1.2 per cent in the Houston area during January from higher fuel prices, according to the Bureau of Labor Statistics—the first monthly increase since July 2008. Prices for food at home and shelter were up 1.4 and 1.1 per cent, respectively.
Retail gasoline prices are down across Texas this week. AAA Texas says the average price for a gallon of unleaded is down a penny from last week to $1.82. Houston's average is down less than a penny to $1.79 per gallon. Nationwide, the average is up a fraction of a cent to $1.96 per gallon. AAA says some refiners have cut production by as much as ten per cent, and crude oil supplies remain abundant.
Members of Congress are asking the Pentagon to review a $35 million contract awarded to a company under criminal investigation in the electrocution deaths of U.S. soldiers in Iraq. The Associated Press reported that Houston-based KBR was given the contract involving electrical work months after a senior Pentagon official rejected the company's explanation of mistakes in Iraq and questioned whether confidence remained in KBR's electrical work. The letter from New Hampshire Representative Carol Shea-Porter is signed by 18 other Congress members. Company spokeswoman Heather Browne said that KBR has not done shoddy electrical work as the letter contends, and the company denies any wrongdoing. At least 18 troops and contractors have died in electrical-related incidents in Iraq.
Hollywood producers have given the Screen Actors Guild another contract offer in hopes of ending a labor dispute that has lasted for months. The Alliance of Motion Picture and Television Producers announced the proposal last night, calling it their "last, best and final offer." Producers are giving the union 60 days to accept the proposed three-year contract. The guild has rejected the producers' previous offer, saying it failed to guarantee guild coverage in productions made for the Internet and failed to make residual payments on made-for-Internet content that is rerun online, among other issues. It's not clear if the new proposal addresses those concerns. SAG is the last holdout among several unions that have agreed to long-term contracts with the studios.
Innovative Beverage Group Holdings has signed a distribution deal with NBC-United Wholesale. Atlanta-based NBC will distribute the Houston firm's Drank "relaxation" beverage throughout Alabama. Innovative Beverage recently signed a distribution deal for Georgia with Atlanta-based Clayton Distributing Company.
ACORN members are hosting a town hall meeting on Saturday to discuss solutions for families falling behind on mortgage payments. It's at St. Paul's Methodist Church on Main, and will feature union leaders, religious leader and elected officials.
Houston's Lee High School hosts its first Alternative Energy Ideas Festival on Saturday, sponsored by the World Affairs Council of Houston. Experts in wind, solar, nuclear and landfill energy will discuss alternative energy, with guests from the University of Houston, the University of Texas at Austin, Horizon Wind Energy and Element Markets.
Spaceman is changing its name to Stretch, which it says is more in line with its redirection and core business. Shareholders of the Webster-based commercial space company have approved the name change, as has the state of Washington, where the company is incorporated.
The economy is the subject of Houston 8 on KU HT-TV channel 8 this evening at 8:30 p.m., followed by InnerVIEWS with Ernie Manouse at 8:30 p.m. Manouse hosts both programs. In the first half hour, he leads a panel through a discussion of the recently-passed stimulus package, as it affects Houston. The second half hour is an interview with Congressman Barney Frank, chairman of the Houston financial Services Committee. Both programs will be repeated on Sunday afternoon.
The number of rigs actively exploring for oil and natural gas in the United States dropped by 39 this week to 1,300. Of the rigs running nationwide, 1,018 were exploring for natural gas and 269 for oil, Houston-based Baker Hughes reported. A total of 13 were listed as miscellaneous. A year ago, the rig count stood at 1,771. Of the major oil- and gas-producing states, Texas lost 17 rigs. Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted several record lows in 1999, bottoming out at 488.
J.C. Penney says fourth-quarter profit fell 51 per cent as customers sharply cut spending on clothing and other more discretionary purchases as the recession deepened. The Plano-based department store chain said that earnings for the three-month period ended January 31st were $211 million. That compares with $430 million in the year-ago period. Sales at J.C. Penney dropped almost ten per cent to $5.76 billion from $6.39 billion in the year-ago period. Analysts surveyed by Thomson Reuters expected revenue of $5.76 billion.