Friday March 24th, 2006

U.S. and Venezuela seek agreement to avoid the banning of Continental flights...Chief information officer pleads guilty in ERCOT case...Prosecution in Enron trial plans to rest next week...

Venezuelan authorities today said they've yet to decide whether to ban flights by U.S. carriers. American ambassador William Brownfield earlier said the two countries had reached a temporary agreement to avert a potential airline crisis. The matter involves Venezuela's March 30th deadline to block most flights by U.S. carriers--to protest safety restrictions on Venezuelan planes by American aviation authorities. But officials at Venezuela's National Aviation Institute say authorities had not decided to suspend the ban and were still discussing the matter. Brownfield yesterday announced officials from both countries have reached a "temporary'' agreement. The deal would involve a visit to Venezuela by authorities with the U.S. Federal Aviation Administration. The FAA will work with Venezuelan authorities to improve local flight safety standards. Venezuelan authorities want the FAA to end safety restrictions that prevent Venezuelan airlines from flying to the U.S. A March 30th deadline was set by Venezuelan authorities to decide on imposing the ban. The proposed ban would affected Houston-based Continental Airlines, Atlanta-based Delta Air Lines and restricted some flights by Fort Worth-based American Airlines.

The former Chief Information Officer of the Electric Reliability Council of Texas is headed for prison after pleading guilty to engaging an organized criminal enterprise. Kenneth Shoquist entered the plea today. A statement from State Attorney General Greg Abbott's office says Shoquist admitted taking $120,000 from a company owed by former ERCOT Program Developer Stephen C. Wallace. His plea deal call for Shoquist to receive an eight-year prison term and make $120,000 in restitution to ERCOT. Wallace awaits trial, as does former ERCOT Physical Security Manager Chris Luquis. Guilty pleas have already come from contractor John Cavazos and former ERCOT Information Technology and Corporate Security Director Chris Uranga. They await sentencing. Investigators say in some cases the defendants conspired to set up bogus companies that billed ERCOT for "work'' never done. ERCOT runs the state's electric grid.

Texas gas prices at the pump are not only still climbing--they're climbing faster. The weekly AAA Texas gas price survey today says the average price of regular self-serve gasoline climbed 14 cents this week to $2.48 per gallon. That's 47 cents higher than this time a year ago. The national average price climbed 12 cents from last week to $2.51 per gallon. As in recent weeks, auto club spokeswoman Rose Rougeau blames the price spike on the seasonal refinery switchovers. She says refineries are switching from producing winter-grade fuel to producing cleaner-burning summer fuel. That--she says--slows refinery fuel production, lowers fuel inventories and drives up prices. The most expensive gas is in Dallas, where the average price climbed 15 cents from last week to $2.52 per gallon. The biggest increase was in Galveston-Texas City, where the average price climbed 17 cents to $2.51 per gallon. The cheapest gas is in San Antonio, where the average price climbed 12 cents to $2.39 per gallon.

In the fraud and conspiracy trial of Enron founder Ken Lay and former Enron CEO Jeff Skilling, the prosecution's last major witness backpedaled about who OK'd what. Under cross-examination, defense attorneys grilled former Enron Treasurer Ben Glisan, Jr., about his assertion that Skilling approved the use of a fraudulent financial structure. Skilling defense attorney Daniel Petrocelli even challenged on whether the structure was fraudulent. When cross examination of Glisan is complete, several quick government witnesses are scheduled, as Petrocelli notes.

"I frankly don't know any of the witnesses. I don't think they involve Mr. Skilling. One does--the stockbroker. But these will all be, I believe, somewhat routine witnesses. I do think there are a couple of former employees who will be testifying, and they're testimony is--by no means--routine. So we will hear from a couple more former Enron employees. The other ones, I really don't recognize, and then we will begin our case on Monday, April 3rd, so we're looking forward to that."

U.S. District Judge Sim Lake says he's leaning toward allowing defense lawyers a few days off to prepare their case. Petrocelli says Skilling is likely to be on the stand with the second week of defense testimony, and Skilling says he's ready.

"We would like to get through our case efficiently. Mr. Skilling will be on the stand for some time, I expect. He's got, he's got a long story to tell, and I'm sure the government will have a number of questions for him. And then I suspect you'll hear from Mr. Lay." (Reporter's question, directed to Jeff Skilling: "How much are you looking forward to testifying?") "I spent a long time not being able to talk, so I'm very much looking forward to it, Scott."

Glisan is the only former Enron executive to go straight to prison after pleading guilty to conspiracy in September 2003 and receiving a five-year sentence. The defense claims no fraud occurred at Enron--other than a few employees skimming money for themselves. Testimony resumes on Monday in federal court in Houston. Prosecutors say they hope to end their case as early as Tuesday.

More than 300 Texas factories and utilities routinely dump more pollution in rivers and streams than allowed by their permits. That's according to a new study by the consumer action group Environment Texas Research and Policy Center, the environmental arm of the Texas Public Interest Research Group. The report relies on an analysis of U.S. Environmental Protection Agency data. It found 348 Texas plants and utilities exceeded the allowable pollution amounts under Clean Water Act permits more than 2,000 times over 18 months. Harris County, where 99 plants exceeded pollution allowed by their permits, accounted for the most Texas facilities on the list. Harris also led the nation among counties with the highest percentage of violators. The group says the good news is state environmental regulators are considering enforcement changes. The Texas Commission on Environmental Quality will discuss the issue next week.

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