Thursday PM August 30th, 2007

Judge rules UN Oil-for-Food jury can hear evidence from Iraqi's diary...Jury selection begins in civil trial over BP Texas City blast...Dynegy chief says coal remains important power source as alternative fuels technology evolves...

A federal judge in New York City ruled against Houston oilman Oscar Wyatt, who's accused of paying kickbacks to Saddam Hussein's regime. U.S. District Judge Denny Chin said Wyatt's jury could hear evidence showing that he encouraged opposition to the U.S. invasion of Iraq and bragged about it to Iraqi officials. Prosecutors say Wyatt conspired to pay millions of dollars in kickbacks to Iraq to win contracts under the United Nations' Oil-for-Food program. If convicted, the 83-year-old millionaire could face more than 60 years in prison. Wyatt's trial is upcoming. Prosecutors had asked the judge to admit statements about Wyatt from a diary kept by an employee of Iraq's state oil marketing organization. The diary asserts that Wyatt bragged that he had convinced a U.S. Senator to speak out against an attack on Iraq.

Jury selection began today in Galveston in the first civil trial over the deadly 2005 blast at a Texas City refinery. The fiery accident at the BP unit killed 15 people and injured more than 170 others. A spokesman says the London-based oil company is working to settle all lawsuits filed over the accident. So far about 1,350 lawsuits have been settled. More than 200 potential jurors answered questions from attorneys representing plaintiffs in five lawsuits that will be tried together. Four of the suits were filed by injured contract workers. Another is on behalf of two boys whose father--contract worker Rene Cardona, Sr.--killed himself six weeks after the explosion. Attorneys for the Baytown family say their experts will show the suicide was a direct result of the explosion. Cardona knew people who were killed or hurt.

The chief of Houston-based power producer Dynegy says eliminating coal as a source for generating electricity is unrealistic. Bruce Williamson says growing energy demand makes it impractical to place coal off limits as a boiler fuel at power plants. But he acknowledges in an interview with the Associated Press that the United States needs an energy policy that balances costs, environmental concerns and other factors. Williamson also says Dynegy is in its best financial condition since he took over as chief executive nearly five years ago. Dynegy was flirting with bankruptcy back then. In April, Dynegy completed a $4 billion acquisition of a rival power group's generating capacity. It now has a dozen power plants in various stages of development, including eight to be fired by coal. Environmental groups that say carbon emissions from such plants contribute to global warming. But Williamson says coal remains an important source for generating power, especially since technology for using alternative fuels is evolving.

Federal regulators say it was market forces, not gouging, that caused the rising prices for gasoline in the spring and summer of last year. The report from the Federal Trade Commission notes rising consumer demand, the increasing costs of crude oil and ethanol and refinery outages, among other causes. The report, sent to President Bush, says the probe of major refinery outages found no evidence of a conspiracy to choke supply or otherwise violate antitrust laws. The vote to issue the report was not unanimous. One of the five commissioners issued a dissenting statement saying the oil industry should not view the findings ''in any way a vindication of its behavior.''

What can Washington do to help homeowners and others who've been slammed by the housing slump and credit crunch? Federal Reserve Chairman Ben Bernanke is telling a Senate Democrat that policymakers should look into providing more mortgages for those in low income groups. Bernanke tells New York's Charles Schumer that the central bank is keeping close tabs on financial markets, "prepared to act as needed'' to contain the problems. He says Congress might want to consider making some changes surrounding the Federal Housing Administration, which insures home loans.

Gasoline prices are rising at the pump after the government reported unexpected declines in refinery activity and inventories of gasoline and oil, according to AAA and the Oil Price Information Service. Prices rose 1.3 cents Wednesday to a national average of $2.75 a gallon. Prices peaked in late May at $3.22 a gallon.

Members of the House and Senate are vowing to look into tougher regulation of credit-rating agencies. Some charge they failed to accurately gauge, or warn about, risks that mortgage investments posed to financial markets. The industry is dominated by Standard & Poor's, Moody's Investors Service and Fitch Ratings. It could be forced to disclose conflicts of interest. Critics say rating agencies should be banned from being paid by debt issuers.

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