A savvy businessman once told me that there is an inverse relationship between the independence of a board of directors and the level of perks that the board approves for management. This NY Times article details some of the absurd perks that were paid to some of the corporate executives who are defendants in ongoing criminal cases. Not a pretty picture.
This Dallas Morning News article is about the proposal that Dallas officials have made to Dallas Cowboys owner Jerry Jones to bring a new Dallas Cowboys stadium to Fair Park, which is the location of the Cotton Bowl, the stadium that the Cowboys’ left 33 years ago when they moved to Texas Stadium in Irving. Dallas officials are pitching the proposal after rejecting the Cowboys’ overture to redevelop an industrial area near downtown. Fair Park, which is already developed, would require less public investment and benefit from having the Cowboys’ stadium replace the outdated Cotton Bowl.
Within the past five years, Houston has lapped Dallas in terms of sports facilities and related infrastructure. During that time, Houston has built two retractable domed stadiums–Minute Maid Park and Reliant Stadium–and the new Toyota Center basketball arena. In addition, Minute Maid Park and Toyota Center are adjacent to Houston’s downtown Convention Center and related hotel complex, and Reliant Stadium is in Reliant Park, which includes the Reliant Center convention facility and the Astrodome. Each of these facilities played a major role in Houston’s successful hosting of Super Bowl XXXVIII, and the NFL’s recent announcement that it intends to return the Super Bowl to Houston toward the end of this decade. Those developments have been a tremendous boon for Houston’s ability to attract large conventions, which had been lagging for many years. If Dallas builds a new football stadium for the Cowboys, then it would become one of the increasingly few cities that has adequate facilities and infrastructure to accomodate major conventions and events such as the Super Bowl.
Charles O. Rossotti is a Republican businessman who was commissioner of the IRS for five years during the last part of the Clinton Administration and the first part of the Bush Administration. In this recent PBS interview , Rossotti told Bill Moyers that we are paying about 15% too much in taxes due to illegal tax cheats. According to Rossotti, roughly $250-300 billion a year is owed but not being paid. “Which basically means everybody is paying 15 percent more,” says Mr. Rossotti. “You could give everybody twice as big a refund, if they average it out, if you just collected all the taxes that are due.” Mr. Rossetti says that the the biggest single amount of unpaid taxes is attributable to abusive tax shelters promoted by the very people we trust to keep the system honest — accounting firms and law firms.
I think it’s safe to say that Mr. Rossotti will not be on the KPMG expert witness defense team in the investigation noted earlier here.
The Chronicle reports that Houston-based Plains Resources executives are joining Seattle billionaire and Microsoft co-founder Paul Allen to buy out and take private the midstream energy company for about $395 million in cash and the assumption of $50 million in debt. Plains’ board voted in favor of the sweetened $16.75-per-share price, unlike last month when it turned down an earlier offer of $14.25 per share. Plains Resources is Mr. Allen’s first sizable investment in the energy business in general and in pipelines specifically.
The NY Times reports federal grand jury in Manhattan is investigating the sale of tax shelters by Big Four accounting firm KPMG to corporations and wealthy individuals who used them to escape at least $1.4 billion in federal taxes. This announcement comes on the heels of KPMG’s recent shake up of its tax practice and removal of three senior executives in the wake of widening Congressional, IRS, and civil lawsuit scrutiny over failed tax shelters that the firm promoted. KPMG was among the most aggressive sellers of tax shelters, collecting $124 million in fees for tax shelters from 1997-2001, acccording to a recent Senate Permanent Investigations subcommittee report.
The U.S. Securities and Exchange Commission announced that it has decided to conduct a formal investigation into London-based Royal/Dutch Shell Group‘s surprise announcement on Jan. 9 that it was downgrading 20 percent of its proved reserves and reclassifying them into less certain unproved categories. The SEC had been making an informal inquiry into the matter since Shell’s announcement. A formal investigation usually means that SEC regulators have reason to believe laws may have been broken, but do not have sufficient evidence to make that conclusion. The investigation gives the SEC legal power to subpoena documents and testimony from Shell.
Houston-based Crown Castle International Corp, which owns and operates a network of 15,500 towers and rooftop sites that hold a variety of communications transmissions equipment, on Wednesday reported a net loss of $171.4 million on fourth-quarter revenue of $253.8 million for the period ending Dec. 31, 2003. For the year ending Dec. 31, 2003, Crown Castle had total revenue of $930.3 million (up from $902 million in 2002), but a net loss for fiscal year 2003 of $420.9 million, which increased from the 2002 net loss of $273 million. This more optimistic analysis of Crown Castle’s prospects appeared in the Houston Business Journal last September.
The Chronicle reports the Wal-Mart is planning to build a huge distribution center in Chambers County that will boost container tonnage through the Port of Houston and create hundreds of jobs. The 2-million square foot distribution facility, which will be one of the largest import centers in the country, will be at Cedar Crossing Business Park just outside of Baytown. The structure will cover roughly 50 acres of land under one roof.
A serial Ponzi scheme promoter, Lanny Lown, 40 — who posed as an international businessman operating under the name of One West Financial from 2001-03 and scammed nearly $15 million from hundreds of Houston Ship Channel-area retirees — has been sentenced to life in prison, the Houston Chronicle reports here.
State District Judge Michael Wilkinson on Monday also fined Lown $10,000 and ordered him to repay $14.9 million as a condition of any parole after serving at least 15 years. Grizzled courhouse veterans speculated that Lown would have a hard time raising that kind of money while serving his sentence.
In the understatement of the year to date, Lown’s defense attorney told the Chronicle that “he regretted allowing the judge, rather than the jury, decide the sentence.”
For my money, Holman Jenkins of the Wall Street Journal (subscription requried) is one of the most insightful commentators on business and related political matters on the scene today. In today’s column, Mr. Jenkins analyzes Comcast’s bid for Disney. The entire piece is well worth reading, but here are a few tidbits:
Four years ago we adopted Disney and Michael Eisner as our standard example of how the world had been left off-kilter by the absence of hostile takeovers. Nothing would do more to redress the imbalance of power that puts CEOs in the catbird seat, we said, than restoring a lively market for corporate control, which had been all but outlawed by court decisions and state laws.
Picking at the scab in several subsequent columns has finally paid off. That said, last week’s Comcast offer isn’t a good deal for Disney, even if Comcast’s Brian Roberts is hoping Mr. Eisner no longer has the credibility to say so. Disney is a “content” company, and even if badly run, gets up every morning with a chance to start anew. Comcast is the one that finds itself nowadays in a strategic pickle.
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A final note on the content vs. distribution quandary: The merest whiff of a media merger brought out the Chicken Littles, consisting of self-appointed consumer groups in full cry about media monopolization. Listen closely and the substance of current complaints about the media is exactly the opposite: too little control, too many voices, too much programming that serves tastes and values the critics disapprove of.
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Unquestionably, public anxiety over the expanding media cacophony is a real phenomenon, as evidenced by the urge to link every act of juvenile delinquency to something learned on the Internet or heard on a heavy-metal record. There’s almost a neurosis at work here: What critics want is Big Brother, but saying so would be the ultimate political incorrectness, so they phrase their agenda as fear of Big Brother, usually bearing a resemblance to Rupert Murdoch.