Monthly Archives: April 2005

Former Seitel CEO Paul Frame convicted

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Seitel logo.gifPaul Frame, the former CEO of Houston-based geophysical seismic company Seitel, Inc., was convicted yesterday by a jury in Houston federal court of of swindling $750,000 from the company to settle a civil lawsuit that his former fiancee had filed against him. Here is a previous post on Mr. Frame’s indictment on those charges.
In an unusual move, U.S. District Judge David Hittner ordered Mr. Frame taken away by U.S. Marshals and placed in the Federal Detention Center in downtown Houston after the verdict rather than allowing him to remain free on bond pending sentencing. Prosecutors had requested a small increase in his bond, but had not opposed Mr. Frame’s release pending sentencing. Sentencing is scheduled for July 7, and Mr. Frame faces up to 20 years in federal prison.
Seitel emerged earlier from a chapter 11 case in 2004 that was commenced in 2003 several months after Mr. Frame had been terminated as the company’s CEO amidst revelations of his use of corporate assets for personal purposes and accounting issues regarding the value of Seitel’s primary asset, which is its library of geophysical seismic data.

How would you like this P.R. job?

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michael-jackson-mugshot.jpgThe Wall Street Journal’s ($) Washington Wire reports today that Michael Jackson’s 72% negative rating dwarfs his 5% positive rating, and that those numbers are worse than those of O.J. Simpson.
However, of some comfort to Mr. Jackson is that his ratings are slightly better than those of Saddam Hussein.

Did Buffett rat out AIG?

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warren_buffett.jpgIn an extraordinary development in the unfolding criminal investigation of transactions between American International General, Inc. and Berkshire-Hathaway, Inc., this NY Times article reports that Berkshire chairman Warren Buffett — in an effort to win leniency for Berkshire in an unrelated case — directed Berkshire’s lawyers several months ago to turn over documents describing the transaction between Berkshire unit General Re and AIG that is at the heart of the criminal investigation. Here are the previous posts on the AIG and Berkshire saga.
As a result of Mr. Buffett’s peace offering, former AIG chairman and CEO Maurice “Hank” Greenberg is facing the prospect of giving a deposition next week to the Justice Department, Securities and Exchange Commission, Eliot Spitzer and the New York attorney general’s office, and New York insurance regulators. In comparison, Mr. Buffett will merely be “interviewed” on Monday by the investigators, who consider him merely a witness in the AIG probe at this point.
According to the Times article and this similar Wall Street Journal ($) article, Mr. Buffett and Berkshire served up AIG and Mr. Greenberg on a platter to prosecutors in December when prosecutors were questioning Berkshire officials regarding General Re’s transactions with Reciprocal of America, a failed Virginia-based insurer. The prosecutors are investigating whether General Re had helped Reciprocal disguise loans as reinsurance to hide losses from insurance regulators. Two Reciprocal executives have copped plea deals and began cooperating with investigators, which led prosecutors to inform Berkshire lawyers that General Re and Berkshire executives may face criminal charges in connection with their probe of Reciprocal. A couple of weeks later, the Times and WSJ report that, at Mr. Buffett’s behest, Berkshire lawyers gave investigators documents regarding General Re’s questionable transaction with AIG.
Sort of makes one feel warm and fuzzy about doing business with that American business icon, Warren Buffett, doesn’t it?

Reds come to town

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After splitting the first two games of the season with the Cardinals, the Stros have their first weekend series of the season at Minute Maid Park against the slugging Cincinnati Reds, who are coming off a satisfying season-beginning three game sweep of the Mets. The Rocket takes the hill on Friday against the Reds’ Ramon Ortiz, followed by Backe on Saturday and Roy O. in the Sunday matinee.
It’s not prudent in baseball to make concrete conclusions based on the anecdotal experience of two games, but the Stros’ lack of hitting — particularly power hitting — is apparent. In Games 1 and 2 against the Cards, the Stros were able to score a total of seven runs on 22 hits, 15 of which were singles and none of which were home runs. Pitchers Pettitte, Qualls, and Lidge looked good in Game 2 against the Cards, but without more run production, good pitching will only go so far.
reds.gifThe Reds are sort of the polar opposite of the Stros, with a raft of mashers at the plate (Houston area resident Adam Dunn, Ken Griffey, Jr., Austin Kearns, etc.), but marginal pitching, at best. The Reds also started fast last season, but faded badly after the All-Star break as the club’s deficient pitching simply could not keep the team in many games. I think they will do better this season, but my sense is still that they do not have enough pitching to get to the 90 win level that is necessary to compete for a playoff spot.
The only thing that I’ve seen during the first two games that is truly baffling is Stros’ manager Phil Garner’s decision to bat light hitting shortstop Adam Everett in the leadoff spot in the Stros’ order. So far in his career, Everett has been a far below average hitter. Over the past two seasons, Everett has a -24 RCAA (explained here) — i.e, he has created 24 fewer runs than an average player in the National League would have produced in the same number of games. Moreover, Everett has a career on-base percentage of .315, which is well below the 2004 average OBP of .329 in the National League. Inasmuch as a club should not be batting someone at lead off who is merely average in terms of on base average, it goes without saying that a player who is below average in that department should not be leading off.
Although Garner’s reputation rode the crest of the Stros’ marvelous finish last season, his record during his eleven previous seasons as a manager before coming to the Stros was not good. Although Everett is a wonderful defensive player and those skills can justify playing him despite his offensive deficiencies, it is simply managerial malpractice for Garner to place him in the leadoff spot in the Stros’ order. A few more moves like that and Garner might as well hire Jimy Williams as his bench coach.
Meanwhile, over at the Brazosport News, Banjo Jones reports on a rather embarrassing problem pertaining to Alvin, Texas’ statute of former Stros star and local icon, Nolan Ryan.

A true character at the Naval Academy

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Paul Johnson2.jpgWhen Naval Academy head football coach Paul Johnson took over the head coaching job after the 2001 season, he inherited a Navy football program that that had gone 1-20 over the two seasons before he was hired.
In Coach Johnson’s first season, Navy went 2-10, playing six teams that played in postseason bowl games. But then, in 2003, Navy went 8-5 and became just the sixth team in NCAA history to make a bowl game two years or less after a winless season. This past season, the Midshipmen were 10-2, which was Navy’s first 10 win season in 99 years. In so doing, the Midshipmen wrapped up their second consecutive Commander in Chief’s Trophy (their last one had been in 1981) and beat New Mexico in the Emerald Bowl in San Francisco to give Navy its first bowl win since 1996.
In short, Coach Johnson can flat out coach.
Longtime Houston oil and gas attorney Dick Watt gained an appreciation for cogent football coaches while playing under the legendary Darrell Royal and Coach Royal’s late Defensive Coordinator, Mike Campbell, on the fine University of Texas football teams from 1966-68. Dick’s son, Andrew, is currently attending the Naval Academy and so Dick has taken an interest in Coach Johnson, whose blunt nature reminds him of football coaches from bygone eras.
Along those lines, Dick passes along this recent interview with Coach Johnson, who is just not pleased with the way spring football practice is going at the Naval Academy. Here are a few pearls of wisdom from the interview:

Q. How does the team look?
A. Lovely.
Q. Who’s your best fullback?
A. I don’t know. I don’t know if we have one.
Q. Have you not been pleased with what you’ve seen from the fullbacks so far?
A. Not really.
Q. In what way?
A. I just haven’t been pleased.
Q. They don’t run hard enough?
A. It’s a myriad of things, each one has his own problems. It hasn’t sorted itself out at all in my mind.
Q. Do you think the three guys that are out here (Kimbrough, Ballard and Hall) are capable?
A. Yeah, I think they have the ability. But if they don’t get better, we will play with a freshman.
Q. What happened to Marvin Dingle?
A. He quit.
Q. Is he expected to return? Is he just taking the spring off?
A. Nope. Not when you quit. You don’t do that here with me. When you quit, you quit.
Q. Any injuries of note?
A. Not really, same guys that were hurt before.
Q. How does the quarterback situation look at this point?
A. It’s about like I thought. Some days are better than others.
Q. Just watching the kickers briefly, it appeared that the kid that came over from the sprint football team (Joey Bullen) has a decent leg.
A. Today he did better than the others.
Q. But it’s not that way every day?
A. None of them are consistent right now.

Now, that’s my idea of a football coach!

Possible relief from the worst television commercials ever?

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viagra_wild.jpgThis BBC News article reports on a University of Minnesota Medical School study that links use of Viagra to vision loss:

[Researchers at the University of Minnesota Medical School] writing in the Journal of Neuro-ophthalmology, said it brought the total number of reported cases to 14. But Pfizer, the makers of the drug which has been used by more than 20m men since its launch in 1998, said the cases were a coincidence. The seven men, aged between 50 and 69 years old, had all suffered from a swelling of the optic nerve within 36 hours of taking Viagra for erectile dysfunction.

If the plaintiffs’ lawyers can use this information to prompt Pfizer to use Viagra’s advertising budget for defense costs rather than advertising, then I will be strong advocate of the plaintiffs’ bar in this case. Hat tip to the HealthLawProf Blog for the link to the BBC News article.

Lawyers, bring your schedules

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lake.jpgComing on the heels of this earlier post on the Enron Task Force’s use of Ken Lay’s prior public statements to move for an early trial on the pending bank fraud charges pending against him, Mary Flood of the Chronicle reports that U.S. District Judge Sim Lake (picture on the left) has called a hearing in the case for next Friday to discuss scheduling matters in regard to the bank fraud charges against Mr. Lay.
Contrary to my earlier speculation, Ms. Flood speculates that Judge Lake — who does run an efficient docket — will schedule the bank fraud trial against Lay this summer before the bigger January 17, 2006 trial of the securities fraud charges against Mr. Lay and his co-defendants Jeff Skilling and Richard Causey.
This is a horrifying development not only for Mr. Lay, but also for Messrs. Skilling and Causey. The adverse publicity that will result from a trial of Mr. Lay six months before the trial of the multi-defendant case will be hard for the defendants to deal with in an environment that is already hostile to anyone associated with Enron.
Meanwhile, Ms. Flood also reports that there will be a panel discussion about the Enron scandal before the Houston premiere of Alex Gibney’s documentary, Enron: The Smartest Guys in the Room on April 19, which was the subject of this earlier post.
By the way, I have not been asked to participate on the panel. ;^)

It’s The Masters and Martha time

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masters100.gifThe Master’s Golf Tournament cranks up today and, almost on cue, Martha Burk is railing against the capitalist roaders wasting money on such nonsense. Writing in today’s Wall Street Journal ($), Ms. Burk asserts that corporate sponsorship of a rich man’s club that does not allow women members is only part of the good ol’ boys network that prevents an equal number of women from becoming members of corporate boards:
MarthaBurksmallimage.jpg

Augusta National Golf Club, which openly and proudly discriminates against women, will produce its Masters Golf Tournament with considerable help from the masters of corporate America. After two years without sponsors, the tournament will again be underwritten — by stockholders and customers of IBM, SBC and ExxonMobil. The companies will spend between $7 million and $12 million for the privilege of sharing four commercial minutes per hour on the air. Even so, CBS will lose money on the broadcast, giving its stockholders — male and female alike — the opportunity to pick up the slack.
With the return of corporate sponsorships, there will no doubt be a return of corporate entertainment. Citigroup, Coca-Cola, Bank of America, and others will spend up to a million dollars apiece on lavish meals, liquor, housing, transportation, and gifts to customers. And that doesn’t count hidden overhead expenses such as use of the company plane, staff time, and cash-only “all-night entertainment services.”
It’s hard to imagine this kind of corporate involvement with a club that flaunted its race discrimination. In a parallel situation in 1990, when the subject was exclusion of blacks at the Alabama club hosting the PGA Championship, IBM pulled its sponsorship with the statement: “Supporting even indirectly activities which are exclusionary is against IBM’s practices and policies.” Yet because the subject is now gender discrimination, IBM repudiates these selfsame policies, and other corporate lemmings follow suit. If it’s good enough for Big Blue, why not?
The harm to stockholders pales beside the harm to working women. If the largest companies can send the message that sex discrimination is acceptable, it has a legitimizing effect that goes far beyond Augusta. It trickles down to frontline management, it permeates the culture, and it stifles women’s progress. If women were fully represented on corporate boards, it is doubtful they would approve company entertainment at places that keep females out, or nominate new board members who condone sex discrimination by belonging to such clubs. But females constitute only 10% of boards in the Fortune 500.
Why?

Well, maybe because of the good ol’ boy network, which happens to be the focus of Ms. Burk’s new book, Cult of Power, published this week by Scribner. But I’m sure that Ms. Burk would not use the purity of her criticism regarding corporate support for Augusta National Golf Club to promote her new book.
Apparently, Ms. Burk has a policy of advocating rather odd views. Apart from the dubious notion that a corporation’s support for a popular golf tournament means that it is supporting a golf club’s policy of discriminating against women, Ms. Burk’s argument fails to acknowledge that wealthy businessmen — as well as strident women — have the right in America to associate in a private organization with whomever they want. Those of us not in the organization may not like it, but about the time that we start advocating that the government do something about the club excluding people like us, we better start worrying about what else that a government so empowered can do. And believe me, a government so empowered can generate much greater injustice to women than anything Augusta National can do.
By the way, The Master’s website has a pop-up screen that allows you to watch players on the practice tee hitting balls while warming up and on a couple of holes on the course. Check it out. That is, if you can tolerate using the website of a club comprised of a bunch of rich, white guys.

Golf Digest’s Greatest 100 American golf courses

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no 17 TPC hole.jpgGolf Digest’s annual survey of America’s Greatest 100 Golf Courses is always an interesting and controversial article, and this year’s edition is no exception.
The following is Golf Digest’s Top 10 courses in the United States or, as one friend of mine from the Midwest points out, “the Top 10 courses near the East and West Coasts”:

1. PINE VALLEY G.C.
Pine Valley, N.J.– George Crump & H.S. Colt (1918)
2. AUGUSTA NATIONAL G.C.
Augusta, Ga.– Alister Mackenzie & Bobby Jones (1933)
3. SHINNECOCK HILLS G.C.
Southampton, N.Y. — William Flynn (1931)
4. CYPRESS POINT CLUB
Pebble Beach, Calif. — Alister Mackenzie & Robert Hunter (1928)
5. OAKMONT C.C.
Oakmont, Pa. — Henry Fownes (1903)
6. PEBBLE BEACH G. LINKS
Pebble Beach, Calif.– Jack Neville & Douglas Grant (1919)
7. MERION G.C. (East)
Ardmore, Pa. — Hugh Wilson (1912)
8. WINGED FOOT G.C. (West)
Mamaroneck, N.Y. — A.W. Tillinghast (1923)
9. NATIONAL G. LINKS OF AMERICA
Southampton, N.Y.?C.B. Macdonald (1911)
10. SEMINOLE G.C.
Juno Beach, Fla.?Donald Ross (1929)

One cannot quibble much with most of this list, although Golf Digest’s Eastern U.S. bias shows with the inclusion of both Shinnecock Hills and National Golf Links of America. Both of those are fine courses and clearly should be included in the Top 100 somewhere, but neither are Top 10 material.
In addition to its East Coast bias, Golf Digest’s annual survey has long had an anti-Texas bias, reflected by its inclusion of only a couple of Texas courses each year in the Top 100. This year, Golf Digest includes the deserving Tom Fazio-designed Dallas National Golf Club (65th) and traditional favorite Colonial Country Club in Ft. Worth (73rd), which is really not one of the top ten golf courses in Texas anymore. Texas might not have the number of great golf courses of such golf meccas as Florida, California, and Arizona, but it does have its share of outstanding golf courses that compare favorably with golf courses anywhere. Golf Digest’s persistent failure to include more Texas golf venues among its Top 100 U.S. courses borders on the absurd.
Golf Digest’s annual survey also includes a list of the best courses in each state, and here is its list of the Top 25 Texas courses:

1. Dallas National G.C. Dallas
2. Colonial C.C. Fort Worth
3. Whispering Pines G. C. Trinity
4. Spanish Oaks G. C. Bee Cave
5. The Club at Carlton Woods, The Woodlands
6. Briggs Ranch G. C. San Antonio
7. Champions G. C. (Cypress Creek ) Houston
8. Brook Hollow C. C. Dallas
9. Shadow Hawk G. C. Richmond
10. Crown Colony C. C. Lufkin
11. Royal Oaks C. C. Houston
12 The Rawls Course, Lubbock
13. The Tribute G.C. The Colony
14. River Oaks C. C. Houston
15. Cimarron Hills C. C. Georgetown
16. The Vacquero Club, Westlake
17. Preston Trail G. C. Dallas
18. The Hills C. C. (Flintrock Falls) Austin
19. Barton Creek Resort & Spa (Fazio Foothills) Austin
20. The Club at Comanche Trace, Kerrville
21. Pine Dunes Resort & G. C. Frankston
22. Austin Country Club, Austin
23. Deerwood at the Clubs at Kingwood, Houston
24 Hyatt Hill Country G. C. San Antonio
25. Barton Creek Resort & Spa (Fazio Canyons)

Here are the Houston area golf courses included in that Top 25 list:

3. Whispering Pines G. C. Trinity
5. The Club at Carlton Woods, The Woodlands
7. Champions G. C. (Cypress Creek ) Houston
9. Shadow Hawk G. C. Richmond
11. Royal Oaks C. C. Houston
14. River Oaks C. C. Houston
23. Deerwood at the Clubs at Kingwood, Houston

Golf Digest does a reasonable job with its Texas list, but there are several errors and oversights. As noted above, Colonial is rated far too highly and realistically should come in around number 20 or so. Houston’s Lochinvar Golf Club, which Golf Digest usually rates in the top 10 or so of Texas courses, is not even rated in the top 25 this year. On the other hand, Golf Digest always rates Houston’s River Oaks Country Club highly because of its Donald Ross design, and it is certainly — along with Memorial Park Golf Course — one of Houston’s finest old golf courses. However, there are at least a dozen golf courses in the Houston area alone that are superior to River Oaks, so its rating as number 14 in Texas and six in Houston is a bit too high. The inclusion of Houston’s Royal Oaks at no. 11 in Texas and no. 5 in the Houston area is downright bizarre as that nice but otherwise pedestrian course probably would barely eke into the Top 20 courses in the Houston area, much less all of Texas.
Of Houston’s top three courses, Golf Digest gets it right, although I would rate Champions Cypress Creek first, Whispering Pines second, and Carlton Woods third. I would put Lochinvar at four, followed by Shadow Hawk, Deerwood, and The Woodlands East Course (formerly the TPC at The Woodlands) as the top seven golf courses in the Houston area. By the way, the picture of the golf hole above is no. 17 at The Woodlands East Course — the notorious “Devil’s Bathtub” — and one of the best holes in Houston.
One final note. Two new Houston-area golf courses that are about ready to open may edge their way into the top courses in Texas and the Houston area. First, Rees Jones’ long-awaited tournament course for the Shell Houston Open golf tournament will open this summer at Redstone Golf Club. And then, Tom Fazio’s new course in The Woodlands — where many folks believe the Shell Houston Open should be played — will open on a beautiful piece of land later this year. These two new courses will surely add to the outstanding array of courses that makes Houston one of the truly under-rated golf venues in the United States.

Promising new drug to treat alcoholism

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Alcoholism.jpgA new Journal of the American Medical Association ($) article (abstract here) described in this summary reports on a once-monthly, injectable medication that has been shown to reduce heavy drinking substantially among alcoholics.
The drug is a formulation of naltrexone, a drug that is currently approved to treat alcohol dependence. However, the drug is currently rarely prescribed because it must be taken daily, which most alcoholics simply will not do. Cambridge, Mass.-based Alkermes Inc. filed an application with the Food and Drug Administration earlier this month to approve the drug, which will be known under its brand name of Vivitrex. According to the study, Vivitrex — which must be taken only monthly — has the “potential to improve intervention strategies for alcohol dependence.” Alkermes funded the JAMA-Vivitrex study and the development of the drug was supported by a grant from the National Institute on Alcohol Abuse and Alcoholism, a unit of the National Institutes of Health.
The NIAAA estimates that up to 18 million Americans have an alcohol-related disorder. Alcohol dependence is defined as women who consume four or more drinks a day on a regular basis and men who consume five or more drinks, which researchers used to define a “heavy drinking” day in the JAMA study involving Vivitrex.
James C. Garbutt of the University of North Carolina at Chapel Hill headed up the study, which involved 624 alcoholic adults. The patients received either an intramuscular injection of 380 milligrams of Vivitrex, 190 milligrams of Vivitrex, or a placebo (i.e., a fake injection), and all of the patients received counseling. Overall, the study showed that the number of “heavy drinking” days was cut by 25%, a drop that researchers deemed “significant” among those using the highest dose of the drug.