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Thursday PM November 19th, 2009

KBR to settle ex-employee's rape claims in Iraq…Environmentalists gather in Dallas to protest coal-fired power plants…Houston City Council unanimously approves amended contracts with Republic Waste Services that will save millions…


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An arbitrator has awarded a woman nearly $3 million to settle her claims that she was raped in Iraq by a state department employee in 2005 while working for a former Halliburton subsidiary. Court records filed this week show Tracy Barker has been awarded $2.93 million to settle her claim against military contractor KBR. Barker had sued Houston-based Halliburton and its former KBR subsidiary in May 2007, alleging she was sexually attacked while working as a civilian contractor in Basrah, Iraq. A federal judge in Houston dismissed Barker’s lawsuit in January 2008, ruling that she had to abide by an agreement she signed that required her claims against the companies to be submitted for arbitration. The Associated Press doesn’t usually identify those who report they were sexually assaulted, but Barker made her identity public in her lawsuit.

E-mails indicate some KBR security personnel expected casualties the night before six civilian drivers were killed in Iiraq in 2004. In one of the e-mails presented in a Houston court, George Seagle, a KBR security director, suggested KBR halt convoys on the first anniversary of the day Baghdad fell in the U.S.-led invasion. A plaintiff lawyer presented the e-mails in a hearing to determine whether a jury should hear three lawsuits against KBR. Injured plaintiffs and family members of the dead in the ambush allege KBR put profit above life. The company says it was acting on the basis of military decisions. The Houston Chronicle reports many e-mails were under seal in the court case for the past year.

Activists are gathered in Dallas to protest coal-fired power plants in Texas. Representatives of environmental, religious and medical groups delivered more than 2,000 comments to the Environmental Protection Agency’s Dallas office, calling for a halt to coal plant construction in Texas. With 17 coal-fired power plants and another 12 are planned, Texas has more than any other state. The Sierra Club and other groups asked the EPA to review the permits of the existing plants and halt construction on the others. The groups have long opposed the plants, which are among the top polluters in Texas. The protest comes the same week the EPA proposed new rules limiting sulfur dioxide emissions.

Treasury Secretary Timothy Geithner says Congress must keep pushing forward to overhaul the nation’s badly flawed financial rules because revamping the system is essential for the health of the economy. In prepared Congressional testimony, Geithner seeks to keep pressure on Congress to change the regulatory regime that failed so terribly in last year’s financial crisis. Geithner was challenged by Congressman Kevin Brady of Texas to step down.

Kevin Brady: “Poll after poll shows the public has lost confidence in this president’s ability to handle the economy. For the sake of our jobs, will you step down from your post?” Timothy Geithner: “Congressman, I, it is a great privilege for me to serve this president, and I am very pleased to have a chance to address the range of concerns you said. I agree with almost nothing in what you said, and I think almost nothing in what you said represents a fair and accurate perception of where this economy is today.”

Geithner told Congressman Brady that Republicans handed the new administration an economy that was falling off the cliff, with savings cut almost in half and millions of Americans out of work.

The government watchdog overseeing economic stimulus spending says the White House was too quick to take credit for saving or creating 640,000 jobs. The White House trumpeted job figures released last month, saying they proved the administration is on track to save or create 3.5 million jobs by the end of next year. But Earl Devaney, whose agency collected and released the data, said there are too many errors to know how many jobs have been created. Under questioning on Capitol Hill, he agreed the White House should have acknowledged the doubt surrounding the numbers. He said the downside of the unprecedented transparency is embarrassment, and there’s enough embarrassment over the accounting problems to go around.

A private forecast of economic activity over the next six months edged up less than expected in October, signaling slow growth next year. The Conference Board says its index of leading economic indicators rose 0.3 per cent last month. Economists polled by Thomson Reuters had expected an 0.5 per cent gain. The index climbed one per cent in September. The Conference Board forecasts economic activity by measuring current jobless aid claims, stock prices, consumer expectations, building permits for private homes, the money supply and other data.

The number of newly laid-off workers seeking unemployment insurance was unchanged last week, while those continuing to claim benefits dipped. The Labor Department says first-time claims for jobless benefits were a seasonally adjusted 505,000, the same as the previous week’s revised figure and matching analysts’ expectations. The four-week average, which smoothes out volatility, fell for the 11th straight week to 514,000, the lowest level in almost a year. Economists closely track initial claims, which are considered a gauge of the pace of layoffs and an indication of companies’ willingness to hire new workers. The number of people continuing to claim benefits dropped by 39,000 to 5.61 million.

The expiration of an emergency measure at the end of the year means more than a million people will lose jobless benefits in January unless Congress does something soon. The recent passage of extended benefits in Washington didn’t address an underlying problem: the Emergency Unemployment Compensation Program, including all 73 additional weeks, expires at the end of this year. If the program isn’t renewed, after January 1st recipients who have used up their 26 weeks of regular state benefits, or jobless who are moving to a new stage of extended payments won’t get the extra coverage. Because of the health care bill, the Senate might not act on the extension until next year. Congress could face opposition over the cost of extending the program into 2010.

The Homeland Security Department says it will give a “seal of approval” to businesses volunteering to use an electronic program to check workers’ immigration status. Homeland Security Secretary Janet Napolitano says the public should know which companies are following the law. The problem is, the program known as e-verify is still under development and the law does not require employers to use it. They are required to use a paper system. About 169,000 employers use e-verify. There are about seven million employers in the U.S. Napolitano made the announcement at an employers meeting about immigration enforcement in Washington.

The Associated Press says that with 90 newsroom layoffs this week it has reached its goal of cutting annual payroll costs by ten per cent. The AP set the target last October and says it achieved most of the reductions through attrition and buyouts. To complete the effort this week, the company resorted to its largest newsroom layoffs in memory–cutting about two per cent of the work force. An undisclosed number in other departments were cut earlier. The not-for-profit news cooperative says it lowered its expenses to deal with a reduction in the fees it charges newspapers and broadcasters. The AP’s revenue is expected to fall about six per cent this year to $700 million.

An industry group says more than 14 per cent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of September, a record-high for the ninth straight quarter. The Mortgage Bankers Association’s quarterly report adds to fears that the housing market’s recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall into default. Fixed-rate loans made to so-called prime borrowers with good credit histories caused nearly 33 per cent of new foreclosures in the July-September quarter, compared with 21 per cent a year ago.

Freddie Mac says rates on 30-year mortgages stayed below five per cent this week but remained above the record set earlier this year. The average rate for a 30-year fixed mortgage fell to 4.83 per cent, down from 4.91 per cent last week, the mortgage company said. Last year at this time, 30-year mortgages averaged 6.04 per cent. Rates hit a record low of 4.78 per cent in the spring, and remain attractive for people looking to buy a home or refinance their existing mortgage.

Houston-based Marathon Oil says it’ll cut capital expenditures by about $1 billion in 2010. Marathon says it’ll also devote a larger percentage of funds toward exploration and production and a smaller percentage toward its hard-hit refining business. An outside analyst says investors had expected the company to focus even more on the exploration of new finds off Angola and huge natural gas plays in North America. Marathon is the fourth-largest U.S. integrated oil company, meaning it’s involved in exploration and production as well as refining and marketing.

The president of Shell Oil says the company did not ask a federal agency to delay a decision on the company’s request to drill for oil and gas in Alaska’s Chukchi Sea. Marvin Odum, the president of Shell Oil, said after a Senate hearing that he only knew what he “read in the papers” about the delay granted this week by the Interior Department, adding that Shell did not request it. But a letter from the Minerals Management Service, an arm of the Interior Department, says Shell requested the delay so it can respond to a deluge of public comments on the drilling proposal. The November 17th letter from John Goll, regional director of the MMS, says Shell has ten days from the receipt of the letter to respond to comments.

American Airlines says several hundred of its flights were being delayed around the country today due to a problem with an FAA system. The Federal Aviation Administration cited trouble with a system that collects the flight plans from airlines. A spokesman for American says the delays are running from a few minutes to a bit over an hour. He says American was told the problem would be fixed soon, but he says “once you get behind, it tends to stay that way” throughout the day. Hartsfield-Jackson Atlanta International Airport, the world’s busiest airport, was among those affected. Passengers are being asked to check the status of their flights online before going to airports. Only minor delays were being reported at metropolitan New York City area airports.

New York Senator Charles E. Schumer says the Federal Aviation Administration needs more resources to prevent problems like the computer glitch that’s causing cancellations and flight delays nationwide. The Democrat says in a statement that the previous FAA’s neglect and poor management has left the current FAA and the public with an aviation system “in shambles.” He says without more resources, glitches that cause delays and chaos across the country will happen more regularly. The FAA says the glitch has been fixed but it’s unclear how much longer flights might be affected.


The Texas Transportation Commission has approved $314.6 million in Proposition 12 funds for construction on the I-610/US 290 interchange, phase one of the US 290/Hempstead Corridor program. Proposition 12, approved by voters in November 2007, authorizes the issuance of $5 billion in general obligation funds for transportation projects.

The Houston City Council unanimously approved amended waste disposal contracts with Republic Waste Services that will save more than $70 million over the term of the new agreement and more than $150 million from the previous agreements. The renegotiated contract covers municipal solid waste disposal and management of the city’s three transfer stations. The disposal rates are reduced from an average of $32 per ton to an average of $19.25 per ton—a reduction of 40 per cent.

A government report says more than 314,000 taxpayers made inaccurate claims for a popular tax credit that helps pay college expenses, getting $532 million they weren’t entitled to receive. The Hope Credit provides up to $1,650 to help pay expenses for the first two years of college. The Treasury Inspector General for Tax Administration said the taxpayers claimed the credit for same student for three consecutive years–instead of the two years available–from 2004 to 2006. Of those, 58,000 claimed the credit for a fourth consecutive year in 2007. The report said the IRS needs better tools to detect and fix inaccurate claims, and the IRS agreed. The problem should ease since Congress has expanded the credit to four years of college in 2009 and 2010.

Economic reality may be cooling the enthusiasm of U.S. college students to study abroad. A survey in September by the Forum on Education Abroad has found that nearly 60 per cent of schools and study-abroad groups surveyed say study abroad enrollment is down this fall from last year. Students’ interest in foreign study was at an all-time high just two years ago. Brown University in Providence saw a ten per cent drop in enrollment this fall. But Kendall Brostuen of Brown’s Office of International Programs says stronger enrollment in spring may indicate people feel the economy is rounding a corner.

Congressional investigators say some companies fraudulently collected at least $100 million in federal contracts from a $4 billion government program. The program is designated for disabled military veterans who run small businesses. The report from the Government Accountability Office says the Small Business Administration failed to check if companies were eligible for the no-bid contracts for veterans. The SBA says it was not obligated to implement fraud controls because the contracting officers at the federal agencies ultimately were responsible for monitoring the contracts. The GAO disagreed. The GAO also recommended SBA work to develop penalties to bar companies from getting federal work if they’re found to knowingly misrepresent their status as veteran-owned businesses. Among the cited abuses, based on the GAO’s spot review of cases since 2003: using veteran-owned businesses as a front, a septic tank company in Austin received an army contract for work at Fort Drum, New York, and Fort Irwin, California. After its status was challenged last year and it was found to be ineligible, the Austin company was allowed to continue work on the Army contract through 2013 for a total value of up to $1.1 million.

Texas retail gasoline prices slip three cents as travelers prepare for next week’s Thanksgiving holiday. AAA Texas reports the average price at the pump is $2.48. Gasoline prices nationally declined by two cents, to average $2.63 a gallon. The weekly survey finds that the cheapest gasoline is in Fort Worth and Galveston, at $2.44 a gallon. El Paso has the state’s most expensive gasoline, at $2.62. Association spokeswoman Rhonda Wilson says the travel and tourism industry “appears to be coming out of a slow period.” AAA Texas projects about 3.3 million residents will travel over Thanksgiving, with nearly three million planning to drive. Nationally, 38.4 million Americans are projected to travel over the holiday weekend. AAA says the region including Texas, Louisiana, Oklahoma and Arkansas should see a more than seven per cent increase in Thanksgiving travel, after a 40 per cent decline in 2008.


Dell says its latest quarterly profit dropped 54 per cent as the company battles a slump has caused it to lose its ranking as the world’s number two personal computer maker. Rivals Hewlett-Packard and Acer have stolen business from Dell as the company grapples with anemic spending on technology by corporations and government agencies. Those large customers make up 80 per cent of Dell’s business. Dell says some areas are improving but repeated its earlier prediction that a meaningful improvement in technology spending by big businesses won’t come until next year. Dell said after the market closed that its net income was $337 million in the three months ended October 30th. Revenue fell 15 per cent to $12.9 billion.

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