Joe Sheehan of Baseball Prospetus ($) observed the following regarding the Stros’ sweep of the Cardinals:
The Astros took advantage of the losses by the Cubs and Giants, completing a sweep of the Cardinals to tie those two at 70 defeats. If they run the table this weekend against the Rockies–and they’ve won 15 straight home games–they can do no worse than a tie for the wild-card slot.
What a waste of two-and-a-half years. Someone owes Larry Dierker an apology.
Ouch!
As expected, Houston-based El Paso Corp. disclosed a huge loss for 2003 and restated previous financial results in a delayed Form 10-K filing with the Securities and Exchange Commission.
El Paso posted a full-year 2003 loss of $1.93 billion, or $3.23 a share, on revenue of $6.7 billion. The loss from continuing operations was $616 million, or $1.03 a share. The company also restated its financial results for every year since 1999 as a result of an investigation into its reserve accounting and accounting for hedging transactions. The overall impact of the restatements was to cut shareholder equity by about $2.4 billion at Sept. 30, 2003. Of this amount, about $1.7 billion related to the restatement of El Paso’s historical reserve estimates and about $700 million related to the restatement of its historical accounting for hedges. Here are the earlier posts on El Paso’s mounting financial problems.
The 10-K also disclosed that one of El Paso’s units has been subpoenaed by a grand jury from the U.S. District Court for the Southern District of New York to produce records regarding the United Nations’ Oil for Food Program governing sales of Iraqi oil. The unit, El Paso CGP Company, was formerly Coastal Corp., which the company acquired in January 2001. The former chairman of Coastal — Oscar Wyatt — was an unabashed critic of Operation Desert Storm in the first Persian Gulf War and has been a vocal public critic of El Paso’s management over the past several years.
El Paso also received a subpoena from the SEC earlier this year relating to its reserve revisions, which are also being investigated by the U.S. attorney. Moreover, the company’s hedge accounting is also the subject of an investigation by the U.S. Attorney and may become the subject of a separate inquiry by the SEC.
Man, is El Paso a white collar criminal defense attorney’s dream or what?
Finally, El Paso reported that it expects to meet its November 30 deadline for filing its delayed Form 10-Q’s for the first two quarters of 2004. El Paso remains on my reorganization watch as a likely candidate for a chapter 11 case in the near future, so stay tuned.
After killing his neighbor three years ago and dumping the butchered body into Galveston Bay and then winning an acquittal in his subsequent 2003 murder trial, Robert Durst — an heir to a New York family’s real estate fortune — pleaded guilty Wednesday to two counts of bail jumping and one of evidence tampering that will allow Durst to get out of prison in less than a year. Here are earlier posts on the Durst case.
The deal came just two hours after state appellate judge Judge Jackson B. Smith Jr. had removed removed Galveston State District Judge Susan Criss from the case. Judge Criss had refused the plea deal earlier in the week, which was yet another strange twist in a case. Judge Criss had been rebuked by the appellate court earlier this year for setting Durst’s bail at $3 billion dollars on the three relatively minor charges after Durst had been acquitted in the murder trial (the appellate court reduced the bail to $450,000). With credit for time served both before and after his murder trial, Durst will likely be freed from prison early next year under state prison system rules.
The recusal came after sheriff’s investigators testified before Judge Smith that Judge Criss had given them information in December that prompted an investigation into possible jury tampering during Durst’s murder trial. Although the investigators found no evidence of criminal activity by jurors or anyone involved in the trial, they did secretly tape-record conversations between Durst and a juror who visited him in jail after the trial. Nevertheless, Durst did admit in the taped conversation that he skipped a court appearance after he posted a $300,000 bond in the murder case in September 2001.
As a result, Durst’s defense attorneys Dick DeGuerin and Mike Ramsey maintained that Judge Criss’ involvement in the jury tampering investigation that led to Durst’s taped admission made her a potential witness in Durst’s bail-jumping case, and that such involvement required her to be removed from adjudicating the case. When Judge Criss refused to recuse herself from the case earlier this week, Judge Smith did so in about 10 minutes on Wednesday.
Bags singled in the go ahead run and Berkman doubled in Bags with the insurance run in the seventh inning as the Stros beat the Cards 6-4 on Wednesday night at a rollicking Juice Box. The win completed an unlikely Stros sweep of the Cards, who sport the best record in Major League Baseball. The Stros have now won a record 15 straight at the Juice Box and are 33-10 over the past month and a half. What a ride it’s been!
With the Cubs blowing another one on Wednesday afternoon to the Reds and the Giants losing to the Padres late Wednesday, the Stros have now moved into sole possession of the lead for the Wild Card playoff berth, a half game ahead of both the Cubs and the Giants. The Cubs play the Reds and the Giants play the Pads again on Thursday, which is an off day for the Stros, so the worst shape that the Stros will begin play on Friday is that they will be tied for the Wild Card lead.
The Rocket gave yet another remarkable performance, going six innings and giving up 4 runs on 4 hits while striking out 8 and walking only one. The big blow was Scott Rolen‘s two out, two run yak in the sixth after Clemens thought that he had struck out the hitter before Rolen (that hitter eventually walked). Clemens had some choice words for the home plate umpire as he walked off the field at the end of the sixth.
Qualls, Miceli, and Lidge were again money for the Stros in relief, although the entire Juice Box crowd audibly gasped when Mabry toyed with a game tying yak while flying out deep to right with one on to end the game. When Berkman caught Mabry’s fly, I couldn’t tell whether the resulting Juice Box roar was one of joy or relief. The Stros hitters also battled gamely against tought Cards starter Suppan and managed 9 hits, including a two run Ensberg yak and Kent‘s solo shot.
The Stros have a well deserved day off on Thursday before the Rockies come in for the final weekend series of the season. Pete Munro and the rest of the bullpen pitches in the Friday game, Roy O comes back for the Saturday game, and then I would not be surprised if Clemens comes back on three days rest to pitch on Sunday if the Stros still have a chance. The upcoming weekend is shaping up to be a wild one, something that I had discounted as recently as a few days ago. I am thoroughly enjoying being wrong on that one!
Three former Natwest Bank bankers appeared in a London court yesterday to fight extradition to the United States, where they are facing fraud charges in connection with a deal with Enron Corp.
Natwest bankers David Bermingham, Giles Darby and Gary Mulgrew, are accused of conspiring with Enron’s former CFO, Andrew Fastow and his colleague Michael Kopper, to fleece their employer, Natwest Bank, of around 4 million pounds, which equates to about $7.3 million. The three face extradition to stand trial in Houston on seven counts of wire fraud and illegally gaining money via international banking systems. Messrs. Fastow and Kopper have already admitted involvement in the alleged scheme as part of a plea bargain.
Interestingly, none of the British bankers have have ever been charged with a criminal offense in England. In fact, Natwest Bank is still lending the defendants money to cover their legal defense costs. The defendants contend that they will not receive a fair trail in Texas in the aftermath of the Enron scandal, which is likely true given the adverse publicity regarding Enron that the Government has promoted throughout the Enron investigation.
The Government claims that the bankers conspired with Messrs. Fastow, Kopper and other senior Enron executives in 2000 to sell a stake in a Cayman Island company for $1 million when the true value was much higher. A month later, the company was re-sold and the trio each made a large profit while Messrs. Fastow and Kopper pocketed $12 million each.
Remarkably, if the three are extradited, they could face an extended period of time in a U.S. federal penitentiary before their case gets to court because, as foreign citizens, they could be held without bail until trial. The controversial three-day extradition hearing in London is the first under the new British Extradition Act, which was promoted by British politician David Blunkett to trap suspected terrorists.
Meanwhile, as the Government continues prosecution of its flimsy case in the Nigerian Barge case in Houston federal court, this Wall Street Journal ($) article reports that the Enron Task Force has elected not to pursue criminal charges against Citigroup executives in regard to an Enron-Citigroup transaction that was much larger and strikingly similar to the Nigerian Barge transaction that prompted the Government to indict four former Merrill Lynch executives and two mid-level former Enron executives.
The lack of any meaningful prosecutorial discretion of the Bush Administration’s Justice Department in regard to the prosecution of alleged business crimes continues to be highly troubling. Is this what the Republican Party suggests is a “business-friendly” administration?
Jeff Bagwell drove in both of the Stros’ runs, Brandon Backe and Chad Qualls set the table for Brad Lidge, and Lidge shut down the Cards in the ninth to lead the Stros to a 2-1 heart-pounding win over the Cardinals on Tuesday night at the Juice Box. The Stros have won five of its last six and tied a franchise record with their 14th straight home win, equaling a mark set in 1980.
The Stros moved within a half-game of the Cubs, who lost to the Reds 8-3 at Wrigley Field and the Giants, who beat the Padres 7-5 in San Diego, for the lead in the Wild Card playoff race.
Carlos Beltran and home plate umpire O’Nora prevented the Cardinals from taking the lead in the fifth when Beltran caught a no out line drive, then threw out Reggie Sanders at the plate for a double play. Home plate umpire O’Nora clearly blew the call, but the Stros are accepting charity from any quarter at this point.
In the most important game of this season, the Rocket takes the hill Wednesday night against the Cards to attempt to pull the Stros even in the Wild Card playoff race. The Juice Box will be one juiced place on Wednesday night.
How can anyone on the Harvard faculty or in the Harvard administration not view as a troubling trend this latest episode of, at best, academic sloppiness? To make matters even more dreadful, I’m not sure what’s worse, Tribe’s plagiarism or Dershowitz’s disingenuous defense of it.
Meanwhile, the Harvard Plagiarism Archive has popped up to keep us abreast of these developments.
The Stros beat the Cards 10-3 at the Juice Box on Monday night behind Roy O‘s solid pitching and a 14 hit attack that included five doubles, a Beltran triple and a Jason Lane pinch hit yak.
Unfortunately, the Cubs won, too. Stros hold serve. Backe starts the Tuesday night game.
I had a hearing on Monday afternoon in federal court, so I went a bit early and sat in on the ongoing trial of the first Enron-related criminal case to go to trial — the Nigerian Barge case. Today was a big day during the trial because one of Andy Fastow‘s most trusted lieutenants — Michael Kopper — took the stand as the Government’s main witness.
The first four days of the trial that took place last week were remarkable only because the testimony of the initial Government witnesses confirmed that there is not all that much dispute between the prosecution and the defense about the salient facts of the case. The big difference is in the interpretation of the facts, and that’s why Kopper is an important witness for the Government.
In effect, Kopper is standing in for Fastow, who the Enron Task Force prosecutors do not want to call in this trial of two low-level Enron executives and four Merrill Lynch executives over a relatively small deal. Kopper is testifying under a plea bargain deal in which the Government has agreed not to prosecute Kopper’s gay lover for profiting off of Enron’s off-balance sheet partnerships and to recommend a minimum prison sentence for Kopper if he testifies in accordance with the government’s theory of the case in this trial and others.
Kopper makes a good impression as a witness — young, handsome, courteous, articulate, bright, and soft-spoken. And apparently, he testified this morning in support of the government’s theory of the case — i.e., Enron induced Merrill Lynch to buy the barges at the end of 1999 by orally guaranteeing through Fastow that Enron would arrange a sale of the barges for Merrill by the end of June 2000 at a pre-arranged profit. If such an Enron guaranty existed, then the Government contends that Enron’s booking of the profit from the deal was improper and the Defendants engaged in a fraud on Enron’s investors.
But if the morning went according to the Government’s form, the afternoon was a different story. Kopper was ravaged during cross-examination, first by Lawrence Zweifach, who represents Merrill Defendant James Brown, and then by David Spears, who represents Merrill Defendant William Fuhs.
Kopper readily admitted to Mr. Zweifach that the barge transaction was such a risky deal that he would not approve it originally as an asset purchase for one of Fastow’s now infamous off balance sheet partnerships that Enron used liberally to buy assets from Enron. Inasmuch as the Government’s theory of the case is based largely on the allegation that Merrill’s purchase of the barges was not a risky deal because of Enron’s guaranty, this line of cross-examination of the Government’s primary witness did not go over well with the prosecution lawyers. They objected often and ineffectively throughout the cross-examination as U.S. District Judge Ewing Werlein overruled almost every Government objection.
Then, Mr. Spears took over and Kopper admitted the truth of a mid-2000 memo written by an Enron analyst that openly stated that Enron faced a dilemma with regard to the barges and Merrill — either Enron needed to broker a sale of the barges to an investor to preserve Enron’s client relationship with Merrill or Enron should simply buy the barges back and restate its financial statements to account for the deal as a loan rather than a sale. There was no mention whatsoever in the memo of any Enron “guaranty” to Merrill or that restatement of earnings was all that big of a deal for Enron. Again, you could almost hear the air leaking from the Government’s balloon as Kopper’s cross-examination proceeded.
However, no one really knows how all of this plays out with the jury, which is the only reason that this case is being prosecuted in the first place. The Government figures that it can get convictions on such a flimsy case because most jurors will be biased against anything having to do with the cultural pariah Enron.
Based on what I know about this case and what I witnessed today, if the Government gets convictions in as weak a case as this one, then the Government will have little disincentive to bring equally dubious cases against business executives. Accordingly, if you represent business clients, stay tuned to developments in this trial.
THis long NY Times article about end-of-life decision making provides an excellent overview of the issues that confront families and health care professionals in making those decisions. Check it out.