Daily Archives: January 31, 2005

The sad case of Jamie Olis gets even sadder

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This Dallas Morning News article reports that the sad case of Jamie Olis, the mid-level Dynegy executive who was sentenced to a 24 year prison sentence last year for attempting to prove his innocence on accounting fraud charges, has taken what can only be described as a punitive turn for the worse:

First he received 24 years in prison for accounting irregularities that got his plea-bargaining boss a five-year sentence. Now Jamie Olis has been moved to a tougher prison, and his wife has e-mailed friends asking for prayers.
Mr. Olis, 39, a former midlevel accounting executive at Dynegy Inc., has been transferred from a minimum-security lockup at Bastrop, Texas, to a medium-security prison at Oakdale, La., according to U.S. Bureau of Prisons records.
“He is in a place where prison gangs are a necessary part of day-to-day existence and in a population that includes people who are serving multiple life sentences,” Monica Olis wrote in an e-mail to friends.
She has declined to comment to the news media.

Meanwhile, oral argument on Mr. Olis’ appeal of his sentence occurred today at the Fifth Circuit Court of Appeals in New Orleans. David Gerger of Houston is representing Mr. Olis in the appeal. Here is the Chronicle story on the oral argument.
According to the Chronicle story, a substantial part of the oral argument was taken up with questions from the panel to the prosecution regarding the evidence of the financial loss that the accounting scam allegedly caused. That is a key issue because U.S. District Judge Sim Lake relied on an absurdly high financial loss figure in calculating Mr. Olis’ sentence. As noted in this earlier post, even the government expert on financial loss upon whom Judge Lake primarily relied acknowledged that he did not testify that Project Alpha caused the amount of monetary loss that Judge Lake used in sentencing Mr. Olis
Although Mr. Olis is the poster boy of how the federal sentencing guidelines had run amok and needed to be overturned, the darker story is that the case is an egregious example of failed prosecutorial discretion. The conduct of the Justice Department in this case is shameful and the failure of the current Justice Department leaders to do anything about this miscarriage of justice reflects poorly on the Bush Administration. Here’s hoping that the Fifth Circuit uses this opportunity to right a clear wrong.

Pam Prestridge, RIP

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Pamela Adair Prestridge, a well-known Houston attorney and mediator, died suddenly this past Saturday in Houston.
Pam grew up and was educated in Louisiana, but she came to Houston early in her legal career during the early 1980’s where she originally practiced at the old line downtown firm, Hirsch & Westheimer. Over the past decade or so, Pam had been in private practice as a mediator and recently served as a coordinator of Continuing Legal Education for the University of Houston School of Law. Pam was a regular in the Houston Bar Association’s hilarious spoof of the legal profession, “Night Court,” which is annual production and one of the Houston Bar Association’s primary fund raisers.
Pam was a bright light in the Houston legal community and will be sorely missed. Funeral services will be held at 2:00 p.m. Tuesday, February 1, 2005 at Earthman Bellaire Chapel, 6700 Ferris.

Monkey see, monkey do

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This is very interesting. And funny. Hat tip to Instapundit via Slashdot.

Rumbo

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This NY Times article examines one of the most closely watched experiments in the publishing industry.
Rumbo (pronounced “ROOM-boh”) has started four Spanish-language daily newspapers in Texas in the past year, starting in San Antonio before going to Houston, Austin and the Rio Grande Valley. Here is an earlier Houston Press story on Rumbo de Houston’s entry into the local newspaper market.
According to most demographers, Hispanics will become a majority in Texas by 2030 or so and are already the largest ethnic group in several of the state’s largest cities. Edward Schumacher Matos is a former Wall Street Journal editor who founded Rumbo last year with Jonathan Friedland, The Journal’s former Los Angeles bureau chief. Their business plan is to have Rumbo profitable by late 2007 or early 2008. Their bet is that the state’s growing Hispanic population is ready to support a sophisticated daily newspaper in Spanish that mixes coverage of local news and sports with commentary and dispatches from Latin America.
The Hispanic market already supports fast-growing Spanish-language television and radio industries, but Rumbo’s Texas venture is clearly the biggest gamble yet that has been placed on the Hispanic demand for daily news in Spanish. Rumbo’s combined circulation remains small (just under 100,000 a day), but the venture has already generated a market reaction in each of the markets Rumbo entered in recent months. The English language newspaper in each of those markets has reacted to Rumbo by creating or buying newspapers to compete with Rumbo’s tabloids.
As an aside, I am going to be on a panel with Carlos Puig, managing editor of RUMBO de Houston, on February 19 at the Houston Bar Association’s annual Law & the Media Seminar that will be discussing ways in which the media can maintain its independence in the face of legal and economic threats to it.

Disneywar

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First it was the battle to fight off the Comcast bid.
Then, it was the trial of the corporate case of the decade.
Now, it’s the book — Disneywar: The Battle for the Magic Kingdom (Simon & Schuster; 2005) by James B. Stewart, the former Pulitizer Prize winning Wall Street Journal reporter and the author of Den of Thieves, which chronicled the insider trading scandals of the 1980’s. According to this NY Times article, Mr. Stewart’s new book is not going to be particularly complimentary of Disney CEO, Michael D. Eisner.
Regardless of one’s opinion of Mr. Eisner’s performance in running Disney from a business standpoint, everyone must concede that he does have a knack for keeping the company in the news.
Alas, yet another epitaph that few CEO’s envision: “Kept company in the news.”

A diplomatic coup?

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Texan and U.S. Ambassador to Mexico Tony Garza is engaged to marry MarÌa Aramburuzabala, who is reportedly Mexico’s richest woman and who is dubbed “the Beer Queen.”

Big deals brewing

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Following on this post from last week, the boards of San Antonio-based SBC Communications Inc. and AT&T Corp. approved a mostly stock deal under which SBC will acquire AT&T for roughly $16 billion.
SBC’s board approved the transaction Sunday evening, while AT&T’s board approved it just before 1 a.m. Monday. The acquisition remains subject to approval by AT&T’s shareholders and regulatory authorities, and is expected to close by the first half of 2006.
The deal would create the nation’s largest telecommunications company. The merger will end AT&T’s 130-year remarkable run as an independent company, which began with the invention of the telephone.
Meanwhile, the Wall Street Journal ($)is reporting this morning that MetLife Inc. is close to striking a deal for Citigroup Inc.’s Travelers Life & Annuity Co. in a deal that would probably be valued at around $12 billion.
Consolidation within the life insurance industry has been predicted for some time, but the predicted consolidation has not taken place as quickly as many have predicted. If the MetLife-Travelers’ deal makes, that could trigger the predicted round of consolidation in the industry. The theory of the MetLife-Travelers’ deal is that insurance companies can generate better profit margins by serving larger numbers of customers with essentially the same back-office systems and only incrementally larger sales forces.
Both these deals signal that the markets are coming back to the type of big-scale merger deals that had largely disappeared from the business landscape over the past three years.