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Friday July 21st, 2006

British bankers must remain in Houston before their Enron-related trial…Halliburton considers tax free spin-off to shareholders of its KBR division…AAA Texas reports average price of gasoline in Texas rose three cents per gallon this week… Three former British bankers extradited to Houston to face STRONG>Enron-related charges will not be allowed to return to the UK […]


British bankers must remain in Houston before their Enron-related trial…Halliburton considers tax free spin-off to shareholders of its KBR division…AAA Texas reports average price of gasoline in Texas rose three cents per gallon this week…

Three former British bankers extradited to Houston to face STRONG>Enron-related charges will not be allowed to return to the UK before their trial. Federal Magistrate Judge Steven Smith ruled the men can remain free on bond, but they can’t leave America. Prosecutors noted all three men had fought extradition before being flown to Texas last week. The judge also required more money be put up for bond. Gary Mulgrew expressed his disappointment after the hearing.

“Very disappointed, very upset. I feel that my sentence has begun today. I’m away from my family, my children, people I care about. I think that makes things very tough.”

David Bermingham also spoke with reporters, many of whom are from the UK, where there is intense media interest in the case.

“This is a very tough day. I don’t think any of us in our wildest dreams could have expected just how severe that were imposed upon us could have been. I think primarily we’d gone into the courtroom this morning, hoping and praying that we’d be able to go back and see our families, and that was the first thing to be denied us. And then the financial conditions imposed upon us are extremely stringent. That’s going to make our lives extremely difficult going forward, and not being able to associate together makes us as we are–three strangers in a strange land, without friends, and unable to associate outside of our lawyers, this is going to be tough. We are tough people, but I’m not underestimating the difficulties that face us. It might be regarded as a form of psychological torture, if you wish. That’s really all I have to say.”

Attorney Michael Sommer spoke for Giles Darby.

“He just wants you to know that he’s obviously very disappointed with what happened today. He misses his family, his daughters, and his friends and neighbors. I think he knows now that he’s not going to be going home for a while. That’s obviously very sad for him, and he’s concerned how he will support himself and support his defense and his effort to vindicate his name.”

The story of the so-called Natwest Three has generated intense media interest in the United Kingdom. Scottish TV reporter Stephen Jardine flew to Houston to cover the former bankers.

“There’s been huge interest in this, Ed, I mean I think you know everyone’s followed the Enron story back home in Scotland, and you know, Enron had implications for companies in Britain, so people were aware of that. But this is the first time that we’ve really seen British people involved in the story. Now, Gary Mulgrew is of particular interest to us in Scotland because his mother is the deputy presiding officer of the Scottish parliament, and some of you listeners might know we got our own separate parliament from the Westminster parliament. Now his mother is the second most important person in that parliament. She’s not got involved in this case at all, she’s not yet spoken about it, but we’re anticipating she might do that over the next 48 hours, and of course there’s also the anticipation of the Scottish parliament–elected representative–she may have some sway in this case and may choose to get involved and lobby the Prime Minister directly, if this doesn’t go her son’s way.” Ed: “I wonder why she hadn’t done that up to this point, you know, when Tony Blair was considering extradition, or was being asked to fight it?” “I think the advice she received was simply not to get involved in this and not even to speak about it. You know, there was an anticipation she may speak over the last couple of days in the run-up to this particular hearing, but the advice from the lawyers seemed to be very strong, you know, keep her out of it, let the lawyers handle it, and then perhaps if it didn’t go their way, as it didn’t today, maybe it’s time for a different tack.”

British newspapers, radio and television have been giving saturation treatment to the story of the NatWest Three.

“I think the extradition thing is what is really interesting people back home in all this, because you know there is this sensitivity that as far as the U.S. is concerned, when they want someone, we just hand them over. You know, it’s this whole thing about Bush and Blair again–Bush, you know, shouts and Blair runs. And it doesn’t seem to work the other way, you know. There’s been a number of examples over the last couple of years where we’ve struggled to get people extradited from the U.S. back to the UK for prosecution.” Ed: “Do you think that will grow, the concerns–the political concerns–as this process moves along?” “I think after this, yeah, you know, because he’s quite a sympathetic character, Gary Mulgrew. You know, one of the things that came up in the last bail hearing a week ago was, you know, he posted some of his shares in Celtic football club, so he’s not seen to be a kind of, you know, big financial whiz kid. You know, he’s not one of the kind of Enron bosses. He’s more of a bit player in this–a guy that likes his football, a single parent. There’s a lot to be sympathetic about there, and I think that will grow as this story continues.” Ed: “They appeared quite shaken, didn’t they, I mean in their statements after this hearing today?” “Yeah, when I watched Gary Mulgrew, in particular, ’cause you know he’s our interest, and he had his hands in his hands at one stage, and I think the whole thing about his ten-year-old son is a real difficulty for him, and the judge says, you kno, the family can come over here, but obviously the boy’s at school, so I think of all the three defendants he’s the one who personally perhaps loses most out of this decision here today.”

The three face trial September 11th. The three each face seven counts of wire fraud for allegedly colluded with former Enron chief financial officer Andy Fastow in a 2000 secret financial scam.

Barclays says a court in Houston has dismissed claims against it in a class-action lawsuit over its role in the Enron bankruptcy. The British bank today reports it received a court order dismissing claims against Barclays in the so-called Newby litigation. The suit alleges several banks helped Enron misrepresent its earnings and revenue. Barclays is one of several financial companies named in the class action brought by Enron shareholders. Barclays didn’t give the court’s reason for the dismissal of the case. The order will end the Newby litigation for Barclays unless plaintiffs, including the University of California, successfully challenge it. There are still other Enron-related lawsuits against Barclays, including the bankruptcy case.

Oilfield services conglomerate Halliburton today told analysts it will consider a tax free spin-off to shareholders of its KBR division. Such a move by Houston-based Halliburton would replace the previously announced initial public offering. Chairman David Lesar says they remain committed to a full and complete separation of KBR from Halliburton. But he says the IPO market right now is showing some pressure, resulting in many offerings being postponed or withdrawn. Halliburton yesterday reported second-quarter net income nearly twice that of one year ago–mostly on strong demand for and higher prices charged by its energy services sector. The Army earlier this month announced it will re-bid the multi-billion dollar contract under which KBR has been providing services to troops around the world.

AAA Texas today reports the average price of gasoline in the state rose three cents per gallon this week–to reach $2.89. It’s the fourth straight week of higher gas prices in the Lone Star State. The lowest average price for self-serve regular is Corpus Christi, at $2.76 per gallon–which is a six-cent jump from last week. The highest average price for gasoline is the Galveston-Texas City area, at $2.94, or one penny higher than last week. The nationwide average price for gasoline this week reached $2.98, up two cents from the previous week. A AAA Texas spokeswoman says fears of supply disruption are causing analysts to predict that crude oil prices will remain above $70 per barrel in coming weeks.

Three Texas companies will share more than $2.2 million in technology grants. The funding was announced today by Governor Rick Perry. The money comes from the Texas Emerging Technology Fund. Endothelix of Houston gets $1 million for development of new diagnostic technology related to medicine and cardiovascular health. IT Robotics of Stafford will receive $750,000 to support development and production of robots that can inspect pipes and tubes in energy plants and other sites. Bauhaus of San Antonio gets $500,000 to support development and distribution of an animation software solution–related to creative arts.

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