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June 30, 2005
Kenny Rogers and Benny Hinn compete in public snit contest
Texas Rangers pitcher Kenny Rogers and television evangelist Benny Hinn were in intense competition yesterday over who could have the most outrageous public snit of the month and perhaps the year.
First Rogers:
Rogers shoved two cameramen before the Rangers' game against Los Angeles on Wednesday in a videotaped tirade that included throwing a camera to the ground and threatening to break more.
"Kenny is having anger issues right now," Rangers general manager John Hart said. "I don't know what's going on inside. We're responding to something that's very unusual."Rogers, who missed his last start with a broken pinkie he sustained during an outburst earlier this month, lashed out at the cameramen as they filmed him walking to the field for pregame stretching. He wasn't scheduled to pitch and was sent home by the club following the incidents . . .
The 40-year-old left-hander first shoved Fox Sports Net Southwest photographer David Mammeli, telling him: "I told you to get those cameras out of my face."
Rogers then approached a second cameraman. He wrestled the camera from Larry Rodriguez of Dallas-Fort Worth television station KDFW, threw it to the ground and kicked it.
The 6-foot-1, 210-pound pitcher saw two other cameramen who were recording from the Rangers' dugout and walked toward them. He did not make contact with the men, who were backing away.
"I'll break every ... one of them," Rogers said before he was escorted to the clubhouse by catcher Rod Barajas.
The Rangers sent Rogers home about an hour later . . .
Texas lost eight of nine entering Wednesday night's game.
Rogers, who leads the team with nine wins, has refused to talk to reporters all season. He has also boycotted most media since a report before spring training that he threatened to retire if he wasn't given a contract extension.
But as impressive as Rogers' snit was, Hinn is not backing off. Unimpressed with the number of Nigerians who attended his latest crusade, Hinn went ballistic on the disrespectful Africans:
Whatever disappointment he felt on the first and second days of the miracle crusade, Hinn kept to himself - but he opened up with anger on the final day."Four million dollars down the drain," he shouted into the microphone from the huge rostrum.
He said that he had been assured by the local organising committee that at least six million people would attend the crusade - but the total turnout was only around one million. As a result, he realised that all the mega public address equipment he had flown in from the US was not needed.
He also complained about some claimed expenditures, the charges imposed on pastors who attended his day-time seminar, and journalists who sought to cover the crusade.
He then announced publicly that he would not provide any more funds, and that the local organisers should pay all outstanding bills from the collections they made on the first two days.
Winner of the snit contest to be announced in a few days. Hat tip to Chris Elam for the link to the Hinn article.
Posted by Tom at 6:07 AM | Comments (0) | TrackBack (0)
DOJ decides not to go Arthur Andersen on Shell
Over 15 months after opening a criminal investigation into Royal Dutch/Shell Group's overstatement of oil and gas reserves, federal prosecutors announced Wednesday that they will not charge the company in the continuing criminal probe. Here are previous posts over the past year and a half in regard to the reserve estimate mess and related problems that Shell and other energy companies have been confronting as a result of the government's investigation.
Learning from the Department of Justice's dubious decision to put Big Five accounting giant Arthur Andersen out of business through a misguided criminal prosecution, the Department of Justice observed as follows in its statement yesterday:
Because Shell has cooperated fully with the government's investigation, has implemented substantial remedial efforts to enhance its reserves reporting and compliance, and has paid a $120 million civil penalty to the [Securities and Exchange Commission], the public interest has been sufficiently vindicated. Moreover, criminal prosecution would likely have a severe and unintended disproportionate economic impact upon thousands of innocent Shell employees.
However, just to make sure that no one should jump to the conclusion that the DOJ is backing off its questionable policy of prosecuting agency costs, David Kelley, the U.S. Attorney for the Southern District of New York, confirmed in an interview yesterday that the role of individuals in the energy reserve accounting scandal at Shell is still being investigated.
In 2004, Shell reported it has misstated for several prior years its oil and gas reserves, which are a key market gauge of the long-range health of an exploration and production company. Subsequently, Shell's audit committee generated a report that blamed senior executives for ignoring warnings from Shell employees regarding the accounting of the reserves. As a result, Shell fired the chairman of its committee of managing directors and the chief executive of its exploration-and-production unit, and removed about 23% of the barrels of oil equivalent reserves from its books (about 4.5 billion barrels). Shell settled with the SEC and British regulators over the matter last year.
Posted by Tom at 4:47 AM | Comments (0) | TrackBack (0)
June 29, 2005
Bidg does it!
The Stros' future Hall-of-Famer Craig Biggio set the modern Major League record for being hit by a pitch this afternoon in Denver during the Stros' game against the Rockies.
The Rockies Byung-Hyun Kim nailed Bidg in the 4th inning, which was the record setting 268th time that Bidg has been hit by a pitch. Bidg replaces Don Baylor as MLB's modern hit-by-pitch record holder.
The folks over at Plunk Biggio are going nuts. By the way, that blog has the best disclaimer that I have seen in the blogosphere:
Moral disclaimer: The author of this blog does not support or endorse intentionally throwing at Craig Biggio.
Posted by Tom at 3:53 PM | Comments (0) | TrackBack (0)
Shelby Foote, R.I.P.
Shelby Foote, the historian whose three-volume The Civil War: A Narrative took him 20 years to write and who became the star of Ken Burns' 11-hour 1990 PBS documentary on the Civil War, died on Monday at a Memphis hospital at the age of 88.
Here is Mr. Foote's description of Gen. Robert E. Lee's slow ride home after surrendering at Appomattox:
Grief brought a sort of mass relaxation that let Traveller [Lee's horse] proceed, and as he moved through the press of soldiers, bearing the gray commander on his back, they reached out to touch both horse and rider, withers and knees, flanks and thighs, in expression of their affection.
Posted by Tom at 6:51 AM | Comments (0) | TrackBack (0)
Meanwhile, checking in on the Enron Broadband trial
With the Scrushy trial out of the way, those interested in the criminalization of business are now focusing on the Enron Broadband trial, which is slogging through its eleventh week.
Houston Chronicle Enron reporter Mary Flood battles through the chloroforming pace of the trial to file this report on the fourth day of testimony of the third of the five defendants to tesify -- former Enron Broadband CEO Joe Hirko. Given the glacial examination and cross-examination of the defendants, my earlier prediction was wrong that the trial would pick up speed during the defense case. It now appears that the trial will not wind up until sometime in mid-July.
The trial has resembled a low-scoring, extra innings baseball game -- long periods of tedious boredom spiked by brief spasms of chaotic excitement. Although it is impossible to predict from outside the courtroom how the jury is responding to the tedium, one thing appears to be reasonably clear -- a case that looked like a layup for the prosecution at the beginning of the trial has turned into an old fashioned dogfight.
The trial began in a lively manner as former Enron CEO Jeff Skilling popped in to check out the proceedings first hand, resulting in the prosecution requesting that the judge exclude him from the courtroom for the rest of the case. Then, the prosecution's troubles began when the testimony of it's key witness -- former Enron Broadband co-CEO Ken Rice -- was impeached as the defense showed on cross-examination that a portion of his testimony related to a video segment that was never shown to analysts as the prosecution and Mr. Rice had represented to the jury on direct. The prosecution compounded that error by attempting to shift the blame for its oversight to a female video contractor, a tactic that could well backfire among a jury of predominantly middle-aged Texas men.
However, after those interesting early stages of the trial, the remainder of the prosecution's case-in-chief was mind-numbingly boring, which sparked a jury rebellion at one point. Understandably nervous about the effect of the slow proceedings on the jury, the prosecution quickened their presentation so that they completed their case-in-chief in five weeks, but, in so doing, may have undersold their case against two of the five defendants -- former EBS executives Kevin Howard and Michael Krautz -- whose criminal exposure relates to their participation in a structured finance transaction that is separate and apart from the insider trading and money laundering charges against the other three defendants.
Then, as the defense case opened, the prosecution's case took another huge potential hit when a former Enron Broadband engineer testified that the prosecution had threatened him if he chose to testify during the trial, which brought into focus a dubious Enron prosecution tactic of chilling key defense witnesses in the Enron criminal trials. Nevertheless, as with the early excitement in the trial, that opening dust-up in the presentation of the defense case has evaporated into tedious examination and cross-examination of the three defendants who have testified to date -- Mr. Hirko, Scott Yeager, and Rex Shelby. Given the prosecution's emphasis on its insider trading and money laundering charges against those three and the relative paucity of the prosecution case against Messrs. Howard and Krautz (who are not subject to those charges), it remains unclear whether the latter two defendants will testify, although my sense is that they will.
Although its problematic predicting how all of this plays with the jury, it's clear from Ms. Flood and John Roper's reports from the trial that the three defendants who have testified to date have acquitted themselves reasonably well on the stand. As Ms. Flood's latest report on Mr. Hirko's testimony reflects, Mr. Hirko is defending himself effectively during the prosecution's cross-examination over the key question of whether he and Messrs. Shelby and Yeager overhyped the EBS technology in news releases and at a 2000 stock analysts' conference in order to boost Enron's stock price and cash-in by selling their stock. Inasmuch as the defense probably wins the trial if they can establish reasonable doubt in the jurors' minds on that issue, the fact that the prosecution has not scored a knockout blow on any of the three defendants who are being prosecuted on the insider trading charges bodes well for the defense. Moreover, even if the "elephant in the courtroom" -- that is, the huge amount of money in Enron stock sales that those three defendants made -- is too much for Messrs. Hirko, Yeager and Shelby to overcome, the prosecution appears to have real problems in its case against Messrs. Howard and Krautz, who have been largely ignored for most of the trial.
Consequently, in a case that looked like a tap-in for the prosecution at the beginning of the trial, the Enron Task Force has to be nervous. Despite the Task Force's effective public relations campaign to make the name "Enron" synonomous with "business corruption," the Task Force still has not actually done much in court to prove that proposition. Of the 33 indictments so far in connection with the Enron scandal, 15 defendants have pled guilty and only six (including just one former Enron executive) have been convicted -- five defendants in the controversial Nigerian Barge case and Arthur Andersen, whose conviction was overturned by the U.S. Supreme Court. If some or all of the Enron Broadband defendants are acquitted, then that result will confirm that the federal government's questionable policy of criminalizing agency costs is not nearly as effective as its campaign to destroy reputations.
Posted by Tom at 4:57 AM | Comments (0) | TrackBack (0)
June 28, 2005
Scrushy is acquitted
Former HealthSouth Corp. CEO Richard M. Scrushy was found not guilty today by the jury in the trial over over his alleged participation in a $2.7 billion accounting fraud at the huge health services company. Along with the sentencings in the Enron-related Nigerian Barge trial, the reversal in the Arthur Andersen case and the recent acquittal of Theodore H. Sihpol, the acquittal of Mr. Scrushy is the latest in a series of setbacks to governmental prosecutors' attempts to criminalize business figures in the period after the meltdown of Enron at the end of 2001. Previous posts on the Scrushy case are here and here.
The Scrushy trial had turned into the legal equivalent of the Bataan Death March, as the jury was forced to endure four months of trial and 21 days of deliberations before arriving at a not guilty verdict on all 36 criminal counts against Mr. Scrushy, most of which related to conspiracy and securities fraud charges. The acquittal also marked the Department of Justice's failure in its first attempt to convict a CEO for violating the 2002 Sarbanes-Oxley Act that requires CEO's and CFO's to confirm the accuracy of corporate regulatory filings personally.
But at the end of the day, the Scrushy case will stand for the dubious nature of the government's policy of criminalizing merely questionable business practices. As much as the government protests that true business crimes are deterred by such vigorous prosecution of questionable business conduct, the fact of the matter is that any reasonable interpretation of justice is strained in squaring the result in the Scrushy case with the results in the Martha Stewart case, the sad case of Jamie Olis, the case of Dan Bayly, the case of William Fuhs, the DOJ's handling of the Global Crossing case, the Tyco case, the Bernie Ebbers case and many others. As Professor Ribstein has noted:
So white collar prosecutions become a sort of lottery. If the prosecution can come up with something colorful, it wins, or maybe loses if it's too colorful (Sardinia). These are not the elements of a rational criminal justice system.
Professor Ribstein comments further here.
Posted by Tom at 12:19 PM | Comments (6) | TrackBack (2)
Stros trade rumor
This Seattlepi.com story reports that the Stros (34-40) are considering a trade of RHP Brandon Backe (-8 RSAA/5.31 ERA) for Seattle Mariners (33-41) OF Randy Winn (4 RCAA/.283 AVE/.354 OBP/.384 SLG).
I'm not wild about this proposed deal, but it's certainly not a disaster. Despite his nice run at the end of last season, Backe is still a below average National League pitcher whose value may be at its peak right now. The switch-hitting Winn is no savior, either, but he is similar to Orlando Palmeiro (3/.318/.379/.471), which is not bad, and is a definite upgrade over Chris Burke (-12/.220/.269/.285) in left field. I'd rather have Austin Kearns (-4/.224/.306/.394) and take on the risk that he could turn his career around, but it takes two to tango and the Reds have not shown any inclination to date to dangle Kearns in a trade with the Stros. As noted here, the Stros need to take major steps in improving almost every non-pitching position on the team, and acquiring Winn would be a small step in the right direction.
Posted by Tom at 7:44 AM | Comments (0) | TrackBack (0)
The folly of mercantilism
Sebastian Mallaby joined the Washington Post editorial page in 1999 after 13 years with The Economist magazine, and is the author of The World's Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations (Penguin Press 2004).
In this fine piece regarding the China National Offshore Oil Corp.'s hostile takeover bid for Unocal (previous posts here and here), Mr. Mallaby points out that it's usually a bad idea to prevent a foreign company from overpaying for an American company:
Does it matter if China owns U.S. companies? Japan went on a corporate spending spree in the 1980s, and the chief victims were not Americans, as the protectionists predicted, but the Japanese themselves. The Japanese paid inflated prices for Hollywood studios and landmark New York buildings. The exiting American owners made off with a nice profit. The Japanese got burned.The Unocal bid has triggered the same muddled complaining that attended those Japanese takeovers. The protectionists say the Chinese want to pay for Unocal with cheap loans from their taxpayers, just as Japanese corporations were once denounced for accessing cheap capital from servile banks. But this means that China's taxpayers are offering sure profits to Unocal's shareholders. Admittedly, it also means that Chevron's shareholders stand to forgo a business opportunity, but then that opportunity may not have paid off. From the view of U.S. economic interests, this is a net plus.
Read the entire piece, and also contemplate Exxon CEO Lee Raymond's thoughts on Chevron's earlier bid for Unocal:
Q: What do you think of ChevronTexaco's decision to acquire Unocal?Mr. Raymond: I can never remember an industry consolidating at high prices. But I can remember an industry consolidating at low prices.
Q: Some people think prices will keep going up.
Mr. Raymond: Maybe. I'll bet they'll be lower at some point.
Finally, in pointing out that trade restrictions against China make little sense, Lawrence Kudlow notes in this Washington Times op-ed:
If a store is selling quality products at low prices, why would anyone want to shut it down?
By the way, courtesy of John Wagner, Mark Palmer -- who was Enron's head public relations spokesperson as the company slid toward bankruptcy -- is CNOOC's public relations point person in its bid for Unocal.
Posted by Tom at 6:56 AM | Comments (0) | TrackBack (0)
More on the "As the STCL World Turns"
Following up on this post from last year, it appears from this Chronicle article that the federal lawsuit involving former South Texas College of Law Professor Neil McCabe and the law school over a former student's allegations of misconduct is being dismissed.
The former student's federal lawsuit alleged, inter alia, that STCL college officials "were aware of McCabe's nature as a sexual predator of his female students" and that Mr. McCabe suggested at one point that he would force the former student "to have sex with other" STCL professors and officials. The student's pre-litigation allegations prompted Mr. McCabe, represented by his wife, to file a state court defamation lawsuit against the former student. Details of the settlement that apparently prompted the dismissal of the federal lawsuit are confidential and not contained in the Chronicle article.
Posted by Tom at 6:28 AM | Comments (0) | TrackBack (0)
Big insurance premium for a big insurer
The following is noted at the end of this NY Times article about American International Group Inc.'s proxy statement that was recently published in anticipation of the company's annual meeting on August 11:
A.I.G.'s proxy also noted that the cost of insuring directors and officers against lawsuits had increased significantly since the company disclosed a number of accounting irregularities earlier this year. The premium A.I.G. paid for such coverage last year was $9.4 million; the current premiums are about $32.8 million.
Ouch!
Posted by Tom at 6:20 AM | Comments (0) | TrackBack (0)
DOJ turns up the pressure on Milberg Weiss
Following on this post from over the weekend regarding the developments in the ongoing criminal investigation of lawyers in two firms who used to practice together in the well-known plaintiffs class action law firm formerly known as Milberg Weiss Bershad Hynes & Lerach, this Wall Street Journal ($) article reports that Paul L. Tullman, a former stockbroker and lawyer who referred clients for class action cases to the firm, is cooperating with federal investigators in their criminal investigation of the way in which the firm recruited class representatives in the class action cases that the firm handled. Mr. Tullman was charged with in May 2004 with fraud and false statements on tax returns, and the WSJ reports that he copped a plea late last year. The plea agreement remains under seal.
As Professor Ribstein has pointed out, there is already a witch hunt aura to the government's recent public disclosures regarding its investigation into Milberg Weiss' practices. Referral fees in all types of lawsuits have been common and legal for decades, and there is not even an allegation yet -- much less proof -- that Milberg Weiss failed to disclose any such fees in either its tax filings or disclosures to the various federal courts in the various class action cases. Nevertheless, the government is using leaks of information to play to the general public's resentment toward wealthy lawyers in turning up the pressure in its investigation of Milberg Weiss. Business interests may consider Milbert Weiss' current plight sweet irony, but that does not make what the government is doing right.
As noted in this earlier post regarding Eliot Spitzer's similar tactic toward former AIG chairman and CEO, Maurice "Hank" Greenberg, after over five years of investigating Milberg Weiss, if the government has a case against the firm, then it should get on with it.
Posted by Tom at 4:31 AM | Comments (0) | TrackBack (1)
June 27, 2005
The risks of exporting freedom
Michael Ignatieff is the Carr professor of human rights at the Kennedy School of Government at Harvard, and the editor of the new book American Exceptionalism and Human Rights. In this superb NY Sunday Times Magazine piece, Professor Ignatieff analyzes the risks that American society faces in pursuing a foreign policy based on the Jeffersonian dream of inevitable world-wide Republicanism. The entire article is balanced and well-written, as the following excerpts reflect:
Until George W. Bush, no American president -- not even Franklin Roosevelt or Woodrow Wilson -- actually risked his presidency on the premise that Jefferson might be right. But this gambler from Texas has bet his place in history on the proposition, as he stated in a speech in March, that decades of American presidents' "excusing and accommodating tyranny, in the pursuit of stability" in the Middle East inflamed the hatred of the fanatics who piloted the planes into the twin towers on Sept. 11.
If democracy plants itself in Iraq and spreads throughout the Middle East, Bush will be remembered as a plain-speaking visionary. If Iraq fails, it will be his Vietnam, and nothing else will matter much about his time in office. For any president, it must be daunting to know already that his reputation depends on what Jefferson once called "so inscrutable [an] arrangement of causes and consequences in this world."
The charge that promoting democracy is imperialism by another name is baffling to many Americans. How can it be imperialist to help people throw off the shackles of tyranny?
If the American project of encouraging freedom fails, there may be no one else available with the resourcefulness and energy, even the self-deception, necessary for the task. Very few countries can achieve and maintain freedom without outside help. Big imperial allies are often necessary to the establishment of liberty. As the Harvard ethicist Arthur Applbaum likes to put it, ''All foundings are forced.'' Just remember how much America itself needed the assistance of France to free itself of the British. Who else is available to sponsor liberty in the Middle East but America? Certainly the Europeans themselves have not done a very distinguished job defending freedom close to home.
On this issue, there has been a huge reversal of roles in American politics. Once upon a time, liberal Democrats were the custodians of the Jeffersonian message that American democracy should be exported to the world, and conservative Republicans were its realist opponents. . . The liberals who founded Americans for Democratic Action refounded liberalism as an anti-Communist internationalism, dedicated to defending freedom and democracy abroad from Communist threat. The missionary Jeffersonianism in this reinvention worried many people -- for example, George Kennan, the diplomat and foreign-policy analyst who argued that containment of the Communist menace was all that prudent politics could accomplish.The leading Republicans of the 1950's -- Robert Taft, for example -- were isolationist realists, doubtful that America should impose its way on the world. Eisenhower, that wise old veteran of European carnage, was in that vein, too: prudent, risk-avoiding, letting the Soviets walk into Hungary because he thought war was simply out of the question, too horrible to contemplate. In the 1960's and 70's, Richard Nixon and Henry Kissinger remained in the realist mode. Since stability mattered more to them than freedom, they propped up the shah of Iran, despite his odious secret police, and helped to depose Salvador Allende in Chile. Kissinger's guiding star was not Jefferson but Bismarck. . .
It was Reagan who began the realignment of American politics, making the Republicans into internationalist Jeffersonians with his speech in London at the Palace of Westminster in 1982, which led to the creation of the National Endowment for Democracy and the emergence of democracy promotion as a central goal of United States foreign policy. . . the withdrawal of American liberalism from the defense and promotion of freedom overseas has been startling. The Michael Moore-style left conquered the Democratic Party's heart; now the view was that America's only guiding interest overseas was furthering the interests of Halliburton and Exxon. The relentless emphasis on the hidden role of oil makes the promotion of democracy seem like a devious cover or lame excuse. The unseen cost of this pseudo-Marxist realism is that it disconnected the Democratic Party from the patriotic idealism of the very electorate it sought to persuade.
It would be a noble thing if one day 26 million Iraqis could live their lives without fear in a country of their own. But it would also have been a noble dream if the South Vietnamese had been able to resist the armored divisions of North Vietnam and to maintain such freedom as they had. Lyndon Johnson said the reason Americans were there was the "principle for which our ancestors fought in the valleys of Pennsylvania," the right of people to choose their own path to change. Noble dream or not, the price turned out to be just too high.
If you read just one article this month on American foreign policy, then Professor Ignatieff's article should be it. Kudos to the Times for running it.
Posted by Tom at 8:01 AM | Comments (7) | TrackBack (0)
Lord of the Lawsuit
Everything is not so comfortable these days in the Shire.
Peter Jackson, Oscar-winning director of the "Lord of the Rings" film trilogy, is suing Time Warner subsidiary New Line Cinema, the company that financed and distributed the three movies, for at least $100 million in connection New Line Cinema's handling of revenues from the "Fellowship of the Ring" movie in the trilogy.
In essence, Mr. Jackson is claiming in the lawsuit that New Line did not offer the subsidiary rights to such things as "Lord of the Rings" books, DVD's and merchandise to the open market and, thus, sold them to affiliated companies for far less than fair market value. And in typical Hollywood style, the gloves are already off in the litigation, as the following quote about the portly Mr. Jackson from one of New Line's lawyers reflects:
A litigator for New Line, speaking on the condition of anonymity because he is working on this lawsuit, said the money paid to Mr. Jackson so far is in line with the contract he signed."Peter Jackson is an incredible filmmaker who did the impossible on 'Lord of the Rings,' " this lawyer said. "But there's a certain piggishness involved here. New Line already gave him enough money to rebuild Baghdad, but it's still not enough for him."
Mr. Jackson has received about $200 million to date from the Rings trilogy, which was produced for about $285 million and has produced over $4 billion in retail sales from worldwide film exhibition, home video, soundtracks, merchandise and television showings. New Line has made over $1 billion in net profits from the trilogy.
Posted by Tom at 5:38 AM | Comments (0) | TrackBack (0)
Does Hank Greenberg read Clear Thinkers?
This post from last week made the following comment about the "finite risk" insurance transaction that is at the center of Eliot Spitzer's investigation of AIG and Berkshire Hathaway unit General Re, and AIG's former chairman and CEO, Maurice "Hank" Greenberg:
Despite the government's bludgeoning of various AIG and General Re executives into plea deals and the AIG's board acquiescence to Mr. Spitzer and other governmental investigators, it still has not been proven that the transaction in question in AIG's case was even accounted for improperly, much less illegal. Should not the government wait to address possible criminality (and its corresponding negative effect on value) until at least the underlying transaction has been proven to be violative of applicable accounting rules?
In this letter to the editor in today's Wall Street Journal ($), Mr. Greenberg observes as follows about the same transaction:
That transaction is the subject of litigation so I am not free to respond fully. I can assure you that an appropriate response will be made at a proper time in a proper forum. (I do note that rules for finite reinsurance are opaque and only now have the NAIC and FASB undertaken to clarify these rules.)
Posted by Tom at 4:49 AM | Comments (0) | TrackBack (0)
June 26, 2005
Checking in on the Stros
My son Cody and I attended the Stros' (33-40) Sunday afternoon game against the Rangers (38-35) and enjoyed the 10-inning 3-2 win behind the solid pitching of Andy Pettitte and the game-winning single of 3B Morgan Ensberg. The Stros have now won 13 of their last 20 games, which has generated all sorts of speculation on some local sports talk radio shows and in the Chronicle sports section that this club actually has a chance to make a playoff run.
Well, despite that optimism, this Stros club remains a poor hitting team that will struggle to win as many games as it loses, and likely will not win a playoff spot this season absent a major trade soon for at least one very good hitter or more likely two above-average hitters. Through 73 games (45% of the season), the Stros have scored 67 fewer runs than an average hitting National League club would have scored in an equivalent number of games ("RCAA" explained here). Only one of the other 29 MLB clubs -- the woeful Rockies (24-48) has a worse team RCAA than the Stros. Only three regular players (Berkman 2 RCAA/.265 AVE/.369 OBP/.411 SLG; Ensberg 13/.271/.377/.547; and Bidg 3/.273/.333/.465) have created more runs than an average National League hitter and, beyond Berkman at 1B and Ensberg at 3B, every other non-pitching position on the club is in need of an upgrade.
That does not mean that every regular player in those other positions should or could reasonably be replaced. For example, it probably makes sense to see if Taveras (-7/.279/.317/.359) will turn into an every day player in centerfield given that he jumped from AA ball to MLB. Nevertheless, contrary to glowing reports that one reads about him in the mainstream media, Taveras is no sure thing given that his negative RCAA, poor on base percentage, and anemic slugging percentage are far below average for a MLB hitter (current National League average is 0/.270/.340/.431). Indeed, so far this season, the Stros' regular outfield of Taveras, Jason Lane (-7/.231/.281/.467) and Chris Burke (-14/.202/.248/.269) is producing .35 runs per game less than an outfield of just average National League hitters would produce.
The fact that Bidg remains an above-average National League hitter at the age of 39 is probably remarkable enough to let him stay at 2B for the time being. But beyond Taveras and Bidg's positions, the Stros should be looking at every possible upgrade available in the trade market -- that's what its going to take to turn this miserable hitting club around. Here are the Stros hitters' RCAA so far this season through this past Saturday's game, courtesy of Lee Sinins:
Morgan Ensberg 13
Craig Biggio 3
Orlando Palmeiro 3
Lance Berkman 2
Jeff Bagwell 0
Eric Bruntlett -2
Humberto Quintero -3
Luke Scott -4
Jose Vizcaino -4
Todd Self -5
Willy Taveras -7
Jason Lane -7
Raul Chavez -10
Mike Lamb -10
Brad Ausmus -12
Adam Everett -12
Chris Burke -14
Meanwhile, the Stros pitching staff continues to carry the club and is the only reason that the Stros have a fighting chance of winning as many games as they lose this season. The Rocket and Roy O are now first and third in the National League in runs saved against average ("RSAA," explained here), and Pettitte has a double figure RSAA that is rising with each start. The remainder of the staff has been solid, except for the horrifying fifth starter trio of Duckworth, Astacio, and now Rodriguez. Even with those three dragging down the staff, the Stros are fourth in the National League in RSAA. Replace those three with a fifth starter who would be simply an average National League pitcher in RSAA and the Stros would have the top pitching staff in the National League, by far. The Stros pitchers' RSAA so far this season through this past Saturday's game:
Roger Clemens 34
Roy Oswalt 23
Andy Pettitte 11
Dan Wheeler 9
Brad Lidge 7
Chad Qualls 1
John Franco -1
Chad Harville -1
Mike Burns -2
Russ Springer -5
Brandon Backe -8
Brandon Duckworth -11
Wandy Rodriguez -11
Ezequiel Astacio -14
Speaking of the fifth starter role, the Stros quietly promoted their best pitching prospect in the high minors -- Fernando Nieve -- from AA Corpus Christi to AAA Round Rock last week. If Nieve pitches well at Round Rock, then look for the Stros to promote him to the big league club to assume the fifth starter role sometime after the All-Star break.
By the way, in connection with the Stros' ceremony this past weekend to retire Jimmy Wynn's jersey, Lee Sinins compiled the top ten Stros hitters in career RCAA:
1 Jeff Bagwell 680
2 Craig Biggio 349
3 Jose Cruz 277
4 Lance Berkman 256
5 Cesar Cedeno 249
6 Jimmy Wynn 240
7 Bob Watson 216
8 Joe Morgan 170
9 Moises Alou 128
10 Terry Puhl 114
The Stros hit the road this week for seven games at Colorado and Cincy (30-45), then return home next Monday for seven games against the Padres (41-34) and the Dodgers (35-39) before breaking for the All-Star game.
Posted by Tom at 5:55 PM | Comments (0) | TrackBack (0)
Ripples from the Kelo decision
Professor Sauer over at the Sports Economist reflects in this post on the impact of the Kelo decision on governmental promotion of redevelopment boondoggles related to new stadium construction.
The entire post is a must read, as reflected by the following excerpt:
The economic literature on stadium subsidies is thus very clear: economic development provides no basis for justifying public investment in stadia. Yet peddlers of fantasy under the economic development banner make their living aiding and abetting major league owners in their quest for public handouts. In Kelo, the Supreme Court had the opportunity to ban this tripe from the courtroom in takings cases. But the decision gives these same peddlers the license to aid and abet developers in tearing down neighborhoods.
As Harris County figures out whether to undertake the boondoggle of converting the Astrodome into another underperforming convention center hotel, I am now officially marking time until a promoter engages Commissioner's Court with plans for a "Texanville" development next to the Dome and Reliant Stadium.
Posted by Tom at 7:24 AM | Comments (0) | TrackBack (0)
June 25, 2005
Is Lerach a target?
The dozens of securities fraud lawsuits against Enron and various other parties are consolidated under the federal multi-district litigation rules in Houston federal court. The legal community involved in those cases is abuzz today with the news that a federal indictment last week of two Southern California lawyers is a sign that the lead plaintiff's lawyer in the Enron securities fraud litigation -- William Lerach -- and his former firm (Milberg Weiss Bershad Hynes & Lerach) may also be targets of the investigation. Mr. Lerach and Milberg Weiss split last year, and Mr. Lerach started a new firm based in San Diego.
The indictment of almost 70 pages (press release here) accuses a former Milberg Weiss client -- Palm Springs lawyer Seymour Lazar -- of taking $2.4 million in kickbacks from a "New York law firm," presumably Milberg Weiss. Although Mr. Lazar's personal attorney -- Paul Selzer -- was also named in the indictment, the indictment contains no formal charges against "the New York firm." The indictment alleges that the New York firm reaped $44 million in attorney fees from over 50 cases in which Mr. Lazar was the lead plaintiff. As an inducement for Mr. Lazar and his family members to serve as lead plaintiff, the indictment alleges that the New York firm and others secretly paid Mr. Lazar kickbacks out of a portion of the firm's attorneys fees.
The indictment is the result of an investigation that began in 2002 that resulted in subpoenas being issued to dozens of law firms that have been co-counsel with Milberg Weiss in securities fraud class action cases over the years. Speculation is rampant throughout the plaintiffs' securities class action bar that the purpose of the indictment of Messrs. Lazar and Selzer is to pressure them to turn on the former Milberg Weiss lawyers.
In addition to observing that it is "saddened" by the indictment, a Milberg Weiss press release stated the following:
"We are also surprised and disappointed that, in the face of recent criticism of the government following the reversal of the Arthur Andersen conviction, the U.S. attorney's office would risk harming the Milberg Weiss firm and its many fine lawyers and staff by making this accusation in circumstances where the firm cannot defend itself."
As usual, Professor Ribstein provides insight and caution regarding this latest use of governmental power against an unpopular target (i.e., plaintiffs' class action securities fraud lawyers) of the day. Moreover, check out Professor Hennings' thoughts on the differences between the government's potential case against Milberg, Weiss and the prosecution of Arthur Andersen, and Professor Bainbridge's comments regarding the implications of the possible indictments on the prosecution of class actions.
Posted by Tom at 6:27 PM | Comments (3) | TrackBack (5)
Houston attorney pleads guilty in kickback scheme
Houston personal injury lawyer Gene Burd pleaded guilty Friday to a charge of making a false statement on his 1997 Federal Income Tax Return in connection with a kickback scheme that Mr. Burd engaged in with a local chiropractor, Paul Samson Christie. Here is the Justice Department's press release on Mr. Burd's guilty plea (as well of that of his co-defendant, Mr. Christie), and the earlier press releases on the indictment and superceding indictment are here and here.
According to the DOJ press release, Mr. Burd employed runners to bring him auto accident victims. After signing the victims up to a contingency fee contract, Mr. Burd would refer the clients to Mr. Samson's chiropractic clinics for physical therapy. Subsequently, Mr. Burd would pay the clinics for the chiropratic services provided to the clients out of a portion of the insurance settlement that he would negotiate on behalf of his clients. Mr. Samson would then turn around and kickback to Mr. Burd in cash 40-50% of the payment that Mr. Burd would make to the clinics. Mr. Burd did not report the cash kickbacks as income on his tax returns.
Mr. Burd faces a maximum of three years in federal prison, without parole, a $100,000 fine, and civil monetary penalties. Sentencing is scheduled for September 30 before U.S. District Judge Melinda Harmon.
Posted by Tom at 2:44 PM | Comments (0) | TrackBack (0)
Throwing popcorn at Enron
This NY Times article interviews Bruce A. Williamson, the former Duke Energy executive who the Dynegy, Inc. board brought in to restructure (some would say liquidate) the company following the economic fallout in the energy trading industry resulting from the company's failed bid for Enron and Enron's bankruptcy in late 2001. Previous posts are here and here regarding Dynegy's settlement of claims at least indirectly related to its Enron bid.
The entire interview is mildly interesting and certainly further evidence for the widespread rumors in the business community that Dynegy is for sale. However, Mr. Williamson's observation about life after Enron is priceless:
Q. Yes. What's the mood like [in Houston after Enron]?A. If you're in the oil upstream exploration and production, there's a lot of money coming in. The biggest concern the upstream companies have is where to go from there. What do they do with the money? They're running out of places they want to go to explore.
The power merchants, and that includes ourselves and Reliant, El Paso, Calpine, Duke, are all recovering and have all been inwardly focused for the past two and a half years. I think broadly in the community in Houston, it goes in waves. Enron sort of dies down and then something rears its head up and washes it back in the news.
The Enron movie came out at the River Oaks Theater, literally a few blocks from where Ken Lay lives, and that was quite an event. One person - a board member that I will keep nameless - told me he hadn't been to a movie like this since he was 12 and went to see "Hopalong Cassidy." Someone would come on the screen and people would boo and hiss and throw popcorn.
Posted by Tom at 12:08 PM | Comments (1) | TrackBack (0)
Is Tom Fazio good for golf?
One of the highlights in the development of the blogosphere over the past several years has been the emergence of specialized blogs. As an inveterate golfer, an interesting part of the blogosphere for me has been the golf blogs, a number of which are listed in the blogroll on the right.
One of the golf bloggers who I particularly enjoy is Jay Flemma (he actually maintains two blogs, here and here), who is a New York City-based intellectual property and entertainment lawyer who is carving a name for himself in writing about golf course design. In his latest post, Jay addresses an issue that this Ron Whitten Golf Digest article explored earlier this year: Is well-known golf course designer Tom Fazio good for the game?
Jay's analysis of Fazio's latest designs is timely in this neck of the woods because Fazio's new course here in The Woodlands, Texas -- where many folks still believe the Shell Houston Open should be played -- will open on a beautiful piece of land in the western part of The Woodlands later this year. After noting that several analysts of golf course design are observing that Fazio's recent designs are boring and excessively expensive to maintain (much less play), Jay observes the following about the direction of Fazio's course design:
I stuck up for Fazio here. I love World Woods, Barton Creek, Pine Hill, PGA, TPC-MB, Ventana. . . lots of Tom. Then I played Atunyote in Utica and was underwhelmed. There was nothing of interest except two good risk reward par-5s, 5 and 12, and 9, 11 and 18 were good. The rest was nothing I had not seen before. This is $175. Casino Golf - nuff said. The design was muted, the natural setting was ordinary farmland and the price was twice what it's worth . . . That's why architectural echo is an important factor in rating a golf course. It offers a way to compare courses to the greats.
Jay covered the U.S. Open last weekend and his blogs include interviews with players and a level of analysis that you simply will not see in the mainstream media. If you are interested in golf, take a moment to check out the golf section of my blogroll, particularly Jay's blogs, Geoff Shackelford's, and Texas Golf. The golf blogs are another reflection of how the blogosphere is redefining the way in which specialized information and knowledge is communicated.
Posted by Tom at 10:42 AM | Comments (2) | TrackBack (1)
The latest reason to build a new baseball stadium
Apart from the redevelopment boondoggles that will necessarily follow from the U.S. Supreme Court's Kelo decision, this Washington Post article reports on yet another reason that governmental promoters will cite to support this.
Posted by Tom at 10:14 AM | Comments (1) | TrackBack (0)
June 24, 2005
While Theodore Sihpol goes home, William Fuhs goes to jail
Continuing relentlessly to avoid addressing the real issue, this NY Times article speculates that the problem with Eliot Spitzer's recent unsuccessful prosecution of Theodore C. Sihpol, III was not that he charged Mr. Sihpol in the first place, but that he should have charged all of Mr. Sihpol's superiors, too. In so speculating, the Times confirms that it still does not understand that the governmental policy of regulating business through criminalization of merely questionable business transactions is a slippery slope toward injustice that ultimately undermines the rule of law.
Take the case of William Fuhs. He is the former mid-level Merrill Lynch executive who was recently convicted and sentenced to over three years in prison as a result of his participation in the Enron-related Nigerian Barge case. As has already been noted in regard to the conviction of Daniel Bayly -- the former head of global investment banking at Merrill Lynch and one of Mr. Fuhs' bosses -- the government's prosecution of the Merrill Lynch executives in regard to the Nigerian Barge transaction was dubious, at best. The resulting convictions are a plain miscarriage of justice.
As with its prosecution of Mr. Bayly, the government's case against Mr. Fuhs strains credulity. Of the four Merrill Lynch defendants in the Nigerian Barge case, Mr. Fuhs was the only one who was not a managing director of Merrill Lynch. Mr. Fuhs did not participate in the one telephone conference with former Enron CFO Andrew Fastow in which Mr. Fastow allegedly assured Mr. Bayly and other Merrill Lynch executives that Enron would find a buyer within six months of the interest that Merrill was buying in the barges.
In fact, Mr. Fuhs' only role in regard to the transaction was the ministerial processing of the transaction after Merrill Lynch had agreed to buy the interest in the barges from Enron. Incredibly, during the government's case-in-chief in the Nigerian Barge trial, none of the government's fact witnesses knew or interacted with Mr. Fuhs -- indeed, the only government witness who had ever worked at Merrill had neither met, spoken to, nor even heard of Mr. Fuhs! Mr. Fuhs never conferred with anyone at Arthur Andersen (Enron's auditors) regarding the transaction and the deal was the only Enron transaction that Mr. Fuhs ever worked on. In short, the government presented no witnesses or evidence during its case-in-chief that Mr. Fuhs -- who is not an accountant -- had any idea that Enron's booking of a $12 million gain on the Nigerian Barge transaction was arguably improper, much less that he intended to promote Enron's accounting of the transaction.
Nevertheless, while Mr. Sihpol walks away from the New York courthouse a free man, Mr. Fuhs -- a young man with a wife and two young children -- faces a shattered professional and family life and 37 months in federal prison. As Professor Bainbridge noted in this TCS op-ed and Professor Ribstein has repeatedly observed, the contrasting results in the cases of Mr. Sihpol and Mr. Fuhs -- not to speak of the sad case of Jamie Olis -- confirms that the pursuit of justice in such cases has become a sort of lottery. If the prosecution pursues a bit player such as Mr. Fuhs but can come up with something particularly distasteful to the jury -- such as Merrill Lynch's involvement with the corporate pariah, Enron -- then it wins. On the other hand, if the government slams a little guy such as Mr. Sihpol while not pursuing his dastardly superiors, then the government loses. This is a radical abuse of our criminal justice system, and the carnage to the families of Martha Stewart, Mr. Bayly, Mr. Fuhs, Mr. Olis and others who are caught in this troubling spiral simply cannot be responsibly dismissed as a "trade-off" of an imperfect system.
But as great as my compassion is for members of those families, my even greater concern is for the principles of justice and respect for the rule of law upon which the success of our society is largely based. If we lose those, then, as Sir Thomas More asked Will Roper in A Man for All Seasons, "do you really think you could stand upright in the winds [of abusive state power] that would blow then?"
Posted by Tom at 7:32 AM | Comments (2) | TrackBack (1)
Governmental economic development run amok?
In a controversial 5-4 decision, the U.S. Supreme Court ruled in Kelo v. New London on Thursday that a local government may seize private property in facilitating profit-making private re-development as a legitimate form of "public use" under the Constitution. You can review and download the syllabus, majority opinion, the concurrence, and the dissents here.
My first impression of the decision is that it increases markedly the number of bad business deals that local governmental units will be able to consider. From the perspective of a Houstonian, the thought of a Redevelopment Department at the Metropolitan Transit Authority is truly frightening.
At any rate, the most troubling aspect of the majority decision by Justice Stevens is that, even though a local government could not take homeowners' property "simply to confer a private benefit on a particular private party," the project involved in this particular case is "a carefully considered development plan." Therefore, the majority reasoned, the plan is a legitimate form of public use -- despite the fact that the the resulting project would not be open for public use -- because there is no literal Constitutional requirement of such an outcome. As the Court put it:
"For more than a century, our public use jurisprudence has wisely eschewed rigid formulas and intrusive scrutiny in favor of affording legislatures broad latitude in determining what public needs justify the use of the takigs power."
"Those who govern the city [of New London] were not confronted with the need to remove blight . . ., but their determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to our deference. . . . Clearly, there is no basis for exempting economic development from our traditionally broad understanding of public purpose."
Joining Justice Stevens in the majority were Justices Breyer, Ginsburg, Kennedy, and Souter, although Justice Kennedy filed a concurring opinion (see analysis below). Justice O'Connor's dissenting opinion was joined by Chief Justice Rehnquist and Justices Scalia and Thomas, although Justice Thomas also wrote a dissenting opinion.
The court's ruling came in a case out of New London, Conn., a city that has long been generally depressed economically. In 1998, the city's economic prospects were improved when Pfizer Inc. announced plans to open a research facility there. In the excitement of that economic shot-in-the-arm, local city officials proposed to redevelop the adjacent residential Fort Trumbull neighborhood to capitalize on the new Pfizer presence, including a hotel and a pedestrian riverwalk. Most landowners sold their properties voluntarily, but nine refused and the city condemned their property under principles of eminent domain. Inasmuch as the Fifth Amendment of the Constitution prohibits the government from taking private property "for public use without just compensation," the landowners sued and claimed that the redevelopment plan was not a "public use" because it provided for re-sale of the property to private interests for non-public use. The Connecticut Supreme Court denied the landowners appeal, which prompted the appeal to the U.S. Supreme Court.
In one sense, the decision is consistent with the Supreme Court's tradition of giving government broad discretion to decide what constitutes public use. In 1954, the Court endorsed postwar urban-renewal efforts that paved over neighborhoods in a bid to eradicate blight. However, the difference in the current case is that no one could argue that the middle-class area in New London had fallen into blight. Accordingly, the homeowners and property-rights activists requested that the Court draw a line in the sand between governmental use of its eminent domain power to eradicate slums, on one hand, and using the eminent domain power to promote a trendy redevelopment plan, on the other. In the end, the Court simply declined to make such a distinction.
In her dissenting opinion, Justice O'Connor aptly summed up the risk of the majority decision:
"[T]he specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory."
"Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms."In his dissent, Justice Thomas essentially accuses the majority opinion of endorsing a governmental land grab by replacing the Fifth Amendment's "Public Use Clause" with a very different "public purpose" test:
"This deferential shift in phraseology enables the Court to hold, against all common sense, that a costly urban-renewal project whose stated purpose is a vague promise of new jobs and increased tax revenue, but which is also suspiciously agreeable to the Pfizer Corporation, is for a 'public use.'"
Indeed, Justice Thomas' dissenting opinion is one that folks should remember whenever they hear the common criticism of Justice Thomas that he is a shameless capitalist roader who favors corporate interests against the powerless, including his fellow African-Americans. Hard to square that criticism with his dissent in Kelo.
But the biggest impact of the Kelo decision just may be its erosion of the Constitutional requirement of "just compensation" for the governmental taking of private property. In short, where private developers are investing capital, there really is no need to invoke eminent domain -- the developers should be willing to pay what the owners consider just compensation. In that regard, "just compensation" may differ considerably from so-called "fair market value" given the sentimental and other special value that homeowners may attribute to their homes. Indeed, Kelo will affect even willing sellers because developers in cahoots with local governments will have an incentive to lowball their pre-eminent domain bids on property because they now know that they will be able to take advantage of the government's eminent domain power if the property owner refuses their offer.
In that connection, Justice Kennedy's separate concurring opinion appears to put local governments on notice not to go too far in using the added power that the majority opinion appears to have given them to seize land for economic development. Although he joined the majority opinion, Justice Kennedy's concurring opinion clearly reflects that he perceives the prospect of abuse of the eminent domain power was more evident than the majority opinon acknowledges. Inasmuch as his vote was necessary for the City of New London to prevail in the case, Justice Kennedy's concurring opinion has more clout than a typical concurring opinion. He notes:
"There may be private transfers in which the risk of undetected impermissible favoritism of private parties is so acute that a presumption (rebuttable or otherwise) of invalidity is warranted under the Public Use Clause."
Thus, if an economic development project favors a private developer "with only incidental or pretextual public benefits," Justice Kennedy asserts that the Court tolerate such a use of eminent domain power even by applying the minimum standard of "rational basis review." Nevertheless, he did not elaborate on the heightened standard further by stating that the Kelo decision "is not the occasion for conjecture as to what sort of cases might justify a more demanding standard."
Despite the concurrence and the dissents, Kelo remains a troubling decision for owners of private property in an area where a savvy developer with local political connections sells a compliant city council on a grandiose redevelopment plan. When local governments make bad decisions such as this, it's a very small step to making even worse decisions that favor private developers' interests over those of local property owners.
Update: As usual, Professor Bainbridge nails the right view on Kelo in this (incredibly quick!) TCS op-ed.
Posted by Tom at 4:40 AM | Comments (2) | TrackBack (2)
June 23, 2005
Bainbridge on criminalizing agency costs
U.C.L.A. law professor Stephen Bainbridge is one of America's leading experts in the area of corporate and securities law, and he has long been generous in sharing his expertise on those subjects and others on his popular ProfessorBainbride.com weblog. Professor Bainbridge is also a formidable writer who is particularly gifted in breaking down complex legal issues in a simple and straightforward manner.
In this TCS Central op-ed (his blog post on the article is here), Professor Bainbridge takes dead aim at the dubious governmental policy of criminalizing business interests through the prosecution of agency costs, which are essentially the costs of poor corporate governance. The entire op-ed is a must read, and here is the money quote:
[S]hareholders deserve protection from theft, but not from risk taking, even when the risk in question is how much to pay an executive. Unfortunately, it's not clear that prosecutors know the difference -- or even care.
Posted by Tom at 6:30 AM | Comments (0) | TrackBack (1)
New study promotes change in treating lung cancer
This NY Times article reports on a new research study to be published today in the New England Journal of Medicine that is strong evidence that chemotherapy greatly improves the chances of survival for early-stage lung-cancer patients. Lung cancer is by far the leading cause of death from cancer, exceeding annual deaths from colon, breast, pancreatic and prostate cancer combined.
Lung cancer has long been one of most difficult cancers to treat. A high percentage of lung cancer victims are are smokers or former smokers, and because there is no systematic screening process for lung cancer, almost half of the 175,000 annual lung cancer cases are not discovered discovered until the cancer is metastatic (i.e., spreading), which makes survival unlikely. Currently, only about 15% of lung cancer victims survive beyond five years.
The standard treatment for early-stage lung cancer has long been surgery to remove the lobes containing the tumor, but that treatment has resulted in only a 54% survival rate beyond five years. Until this new study, no published research studies had shown a substantial benefit from chemotherapy after surgery for early-stage lung-cancer patients, who represent nearly a third of all cancer cases.
The results of the 10-year trial of 482 patients with early-stage lung cancer show that intravenous chemotherapy drugs improved five-year survival rates to almost 70%. That 15-point improvement will make doctors and patients much more willing to consider follow-on chemotherapy, which sometimes requires hospitalization. "There's never been a lung-cancer trial that showed this benefit of treatment in any stage of disease," commented Katherine M.W. Pisters, M.D., an oncologist at Houston's M.D. Anderson Cancer Center in the Texas Medical Center, who has an op-ed on the study in the current issue of the Journal. In response to the findings, the American College of Clinical Oncology and the American College of Chest Physicians are currently rewriting their official guidelines to physicians to recommend chemotherapy for early-stage lung-cancer patients.
The study was funded by the American and Canadian governments' National Cancer Institutes, and received $1.6 million from GlaxoSmithKline PLC.
Posted by Tom at 5:56 AM | Comments (0) | TrackBack (0)
This is really, really not going well
During the recent trial of former Tyco CEO Dennis Kozlowski, I noted here and here that the cross-examination of Mr. Kozlowski did not go well for the defense.
Consistent with that theme, this Wall Street Journal ($) article reports today that Mr. Kozlowski -- who essentially was convicted of embezzling excess compensation from Tyco -- wrote this letter several years ago to a Houston assistant district attorney in which he requests that the prosecutor seek the maximum prison term for a former executive of a Tyco unit who had been found guilty in a Houston state court for -- you guessed it -- embezzlement.
In his letter, Mr. Kozlowski wrote that the former Tyco unit executive's crime "cannot be condoned in any manner" and that "not only did he steal from the stockholders ... but he breached the fiduciary duty placed in him." In advocating the "maximum term," Mr. Kozlowski noted that the court needed to send a message that "wrongdoing of this nature against society is considered a grave matter."
The former Tyco unit executive got 20 years, although he was paroled after four.
Posted by Tom at 5:19 AM | Comments (0) | TrackBack (0)
Big Chinese company takes on Chevron over Unocal
Cnooc Ltd., China's third-largest oil company and it's major explorer of offshore oil and gas, yesterday made an unsolicited $18.5 billion cash bid for El Segundo, CA.-based Unocal Corp. The bid is attempting to scuttle the earlier $16.5 billion bid that San Ramone, CA.-based Chevron Corp. made for Unocal in April.
If successful, Cnooc's bid would be the largest foreign acquisition ever attempted by a Chinese company and would be the first time that a Chinese and U.S. company have competed in a takeover battle. Cnooc had been considering making a bid for Unocal in April, but backed off at the last minute.
Inasmuch as a good case can be made that Chevron's bid was over-priced, Cnooc's offer for Unocal reflects that China's government (about a 70% owner of Cnooc) will pay a high price to gain direct control over more energy assets to fuel its booming economy. Nearly half of Unocal's reserves -- the oil and natural gas equivalent of about 1.75 billion barrels -- consists of natural gas in Asia. Cnooc is offering $67 a share for Unocal, and would have to pay Chevron a $500 million breakup fee and assume Unocal's $1.6 billion in debt.
Although Cnooc's bid will undoubtedly raise political concerns in Washington, prominent U.S. executives advised political interests to remain calm. The Wall Street Journal reported that Exxon Mobil Corp. Chief Executive Lee Raymond said it would be a "big mistake" for the U.S. government to block Cnnoc's bid. "You have to have free trade. If you start to put inefficiencies in the system, all of us eventually pay for that."
Posted by Tom at 4:27 AM | Comments (0) | TrackBack (1)
June 22, 2005
Will the Scrushy jury deliberations take longer than the Scrushy trial?
U.S. District Judge Karon O. Bowdre today appointed an alternate juror to replace a male juror suffering from "recurring health problems" during jury deliberations in the corporate-fraud