The federal fraud and conspiracy trial of Enron founder Ken Lay and former Enron CEO Jeff Skilling is taking a day off today in Houston. Prosecution testimony by former Enron Broadband unit chief Kevin Hannon is slated to resume on Monday. Yesterday, Hannon testified that Skilling at one point told other top executives--"they're on to us.'' He testified that he heard the comment first hand at a 2001 meeting with Lay, former Chief Accounting Officer Richard Causey and Lawrence "Greg'' Whalley, then CEO of Enron's Wholesale trading unit. Hannon said Skilling's remark came in response to a small analyst firm's criticism of Enron's reliance on partnerships run by its own finance chief to buy underperforming assets. The government charges that Skilling and Lay knew their company's purported success was a sham, propped up by accounting tricks that hid debt and inflated profit. The two defendants insist there was no fraud at Enron. Hannon has admitted to conspiracy for helping promote the weak broadband unit--as healthy.
Defense attorney Daniel Petrocelli says he's pleased with the pace of the trial.
"We're getting anxious to get to the finish line." (Ed: "I guess a lot of the world has been waiting for next week's testimony from Andrew Fastow. Have you been looking forward for the chance to talk with him?") "I'm very much looking forward for the chance to talk to him. We hope he comes in and tells the truth, and if he tells the truth, then the jury will understand. If he doesn't tell the truth, then we'll have to, we'll have to try to bring it out."
Fastow is slated to testify next week. In 2004, he pleaded guilty to two counts of conspiracy.
The Senate passed a bill today to extend unemployment insurance benefits for victims of Hurricanes Katrina and Rita for another 13 weeks. The voice vote sends the bill to President Bush for his signature. House lawmakers passed the bill yesterday as a bipartisan group headed to the Gulf Coast to inspect ongoing cleanup and rebuilding efforts. The bill extends unemployment benefits--scheduled to end tomorrow--for about 165,000 people who wouldn't otherwise qualify for the assistance. Congressman Randy Neugebauer of Lubbock opposed the extension, arguing that lawmakers should reassess their spending in the region. Katrina hit Louisiana, Mississippi and Alabama in late August, forcing several hundred-thousand people to evacuate to Texas and other states. Rita slammed Texas and Louisiana in September.
A federal grand jury in Houston has indicted the operator of Galveston's famed Flagship Hotel for allegedly defrauding the federal hurricane lodging program. The indictment accuses 52-year-old Daniel Yeh of defrauding the Emergency Relief Program of at least $232,000. The Sugar Land resident's accused of 22 counts of wire fraud and 17 counts of filing false claims against the Federal Emergency Management Agency. Yeh's attorneys say their client has undergone surgeries for three brain tumors and is not mentally competent to face trial. The indictment accuses Yeh of filing claims in the names of hotel employees previously housed there for free, as well as hurricane evacuees never housed there. He's also accused of billing for rooms occupied by paying guests and by friends and relatives. The attorneys say the hotel management had relied for FEMA billing guidance on an executive they didn't identify. They say the executive is no longer with the hotel and the hotel has reimbursed the program. The wire fraud counts each carry punishments of up to 20 years in prison. The false claims counts each carry punishments of up to five years in prison. Each of the 39 counts also carry fines of up to $250,000.
Four weeks of declining Texas gas prices ended this week as average prices remained virtually unchanged this week. The AAA Texas gas price survey released today shows price trends varied around the state. But it shows the statewide average retail price of regular self-serve gasoline remained virtually unchanged at $2.15 per gallon. The most expensive gas this week is in Beaumont, where it averaged $2.16 per gallon--down a penny. The cheapest is in Corpus Christi, where it averaged $2.06 per gallon--despite a three cent increase that was the biggest in this week's survey. Fuel prices fell up to three cents per gallon in Galveston-Texas City, where they averaged $2.14 per gallon today. The national average retail price is $2.26--up a penny. Auto club spokesman Jeffrey Spring says gas prices began inching back up in much of the state late this week--which he says is customary as winter moves toward spring.
Texas Congressional leaders are giving Dallas and Fort Worth seven months to try to resolve the controversial Wright Amendment issue. The two cities' mayors asked Republican Senator Kay Bailey Hutchison for a legislative moratorium last week. They want Congress to suspend action to repeal or amend the law until October 1st. In a meeting yesterday, Hutchison obtained cooperation from the eight House members from North Texas and Republican Senator John Cornyn. The cities are in pursuit of a plan to resolve the dispute over the Wright Amendment. The 1979 law limits long-haul flights from Love Field in Dallas, the home of Southwest Airlines. Southwest has lobbied for lifting the amendment's restrictions. American Airlines, a unit of Fort Worth-based AMR Corporation, has fought any effort to weaken the Wright Amendment to protect its hub at the Dallas/Fort Worth International Airport. Members of Congress from other states aren't bound by Thursday's agreement.
The latest check of the services sector by the nation's purchasing executives finds things are looking up. The Institute for Supply Management February index surged to just over 60 percent, marking a rise of more than three points from the previous month. Any number above 50 indicates growth. The group cites accelerating business activity and new orders, as well as employment. Watched for inflation, the group's prices index was down over the past month, but was still at a level drawing concern.
The University of Michigan's update on consumer sentiment is said to have dropped over the past month. The reading is reported to have come in at 86.7, down from 91.2 at the end of January. Both the current conditions index and the expectations measures were on the decline. The University of Michigan data is based on a survey of households, conducted by phone. The report is released directly only to subscribers.
El Paso-based Western Refining reports it earned profits of more than $200 million last year. The 2005 profits on $3.4 billion in sales marked a nearly 200 percent jump from 2004, according to sales and profit data from Western Refining. The company, which started trading on the New York Stock Exchange last month, also recorded fourth-quarter profits of about $7.6 million. Last year was a particularly profitable one for refining companies around the country. Exxon Mobil recorded record profits of about $25 billion.