Tuesday PM October 17th, 2006

Federal judge vacates Ken Lay's conviction...Former British bankers seek bail reduction...Strike fund set up for Houston janitors as negotiations continue...

U.S. District Judge Sim Lake this afternoon vacated the conviction of Enron founder Ken Lay, who died in July. His conviction on ten criminal charges will be erased from the record. Regulators at the Securities and Exchange Commission can still pursue civil cases against Lay's estate, but they can no longer introduce the fact of his conviction. Lay was convicted in May of conspiracy and fraud. He unexpectedly died of heart disease July 5th while vacationing in Colorado--as his attorneys were preparing their appeal. They then began working to erase his convictions. Co-defendant Jeff Skilling faces sentencing on Monday on 19 fraud, conspiracy and false filing charges. Enron collapsed and filed for bankruptcy protection in late 2001.

Two former British bankers accused of Enron-related fraud have asked U.S. District Judge Ewing Werlein to lower their bail by $450,000. David Birmingham, Giles Darby and Gary Mulgrew are released on the condition that they each post a $1 million bond. Prosecutors accuse the so-called NatWest Three of bilking their former employer, Greenwich NatWest, of millions of dollars from the sale of an Enron off-the-books partnership.

The sentencing of former Enron Broadband Services chief financial officer Kevin Howard has been reset for February 5th. The extension is to allow Howard more time to file objections to a pre-sentence report and the government's report on losses. A jury last May found Howard guilty of one count of conspiracy, three counts of wire fraud and a count of falsifying books and records. He plans to appeal.

A million-dollar strike fund has been set aside to pay Houston janitors if they go on strike. A planned negotiation with cleaning companies was postponed Monday because of weather. The two sides met again this morning at the DoubleTree Hotel. Three weeks ago, members of the Service Employees International Union local authorized its 14-member bargaining committee to order a strike if negotiations fail. More than 5,300 janitors are asking for a raise to $8.50 an hour, more hours and health insurance. They now average $5.30 an hour without benefits. Building owners who contract with companies to clean their buildings are staying out of the talks between cleaning companies and union representatives.

ConocoPhillips and a subsidiary that owns a tanker blamed for a Puget Sound crude oil spill will pay the federal government more than $2.3 million. Most of the settlement will repay the roughly $2.23 million it cost to clean up the October 2004 spill that spoiled 21 miles of Puget Sound shoreline in the state of Washington. Houston-based ConocoPhillips and its subsidiary also will pay an $80,000 civil penalty under the federal clean water act. The settlement came after ConocoPhillips agreed last Friday to pay Washington's State Department of Ecology $540,000 in civil penalties. ConocoPhillips and subsidiary Polar Tankers never reported the spill in Dalco Passage between Tacoma and Vashon Island, which authorities say happened at night. Authorities estimate more than 1,000 gallons of crude oil spilled from the tanker Polar Texas. Federal and state claims for damage to natural resources remain unresolved. Federal lawyers announced last month that they wouldn't press criminal charges related to the spill.

South Korean prosecutors raided the Seoul office of Citigroup's securities unit today. The prosecutors say the raid is part of an ongoing investigation of the Dallas-based private equity fund Lone Star. A spokesman for the South Korean prosecutors' office says four prosecutors and 20 investigators raided Citigroup Global Markets Incorporated. He says they took away three boxes of documents. Lone Star declined to comment on the raid. Citigroup Global Markets was lead manager when Lone Star acquired a controlling stake in Korea Exchange Bank in 2003. Lone Star has been under investigation since March over allegations it acted with former KEB management and government officials to misrepresent the bank's financial health. Prosecutors say Lone Star might have been trying to lower KEB's purchase price.

Houston port officials are vying with other entities for additional customs agents as a result of the Port Security Improvement Act of 2006 recently signed into law. The Port of Houston Authority says 125 to 150 additional agents are needed to properly staff the port and the city's biggest airport. It would cost about $22.8 million to hire 150 new customs agents. Decisions on where agents will be assigned are expected to be made in mid-2007.

Port of Houston Authority Commissioner Elyse Lanier received the Purple Boot Award from the Women's Chamber of Commerce today at the Houston Women in Business luncheon at the Westin Oaks. Lanier is the first Houston recipient of the award, given for cumulative life achievements.

Tags: News


Share Options