Daily Archives: April 14, 2005

Houston businessmen arrested in connection with Oil for Food investigation

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UN Oil for Food Scandal.jpgThe shoe dropped today for a couple of Houston-based businessmen in regard to the criminal investigation into the allegedly corrupt administration of the United Nation’s Oil for Food program.
Following this earlier post from last December, this New York Times article reports that David B. Chalmers, Jr. — a Houston resident who owns Bayoil, Inc., a Bahamian company — was arrested today along with two other oil traders under a Southern District of New York indictment that alleges that they paid millions of dollars in secret kickbacks to Saddam Hussein’s Iraqi regime and, in so doing, cheated the United Nations’ oil-for-food program of humanitarian aid funds. Ludmil Dionissiev, a Bulgarian citizen and permanent U.S. resident, was also arrested today at his Houston home in connection with the indictment, and the U.S. Attorney in New York is seeking the the extradition from England of a third defendant, John Irving.
Under the indictment, the government accused the defendants of paying millions of dollars in kickbacks so that Mr. Chalmers’ oil companies could continue to sell Iraqi oil under the oil-for-food program. The kickbacks between mid-2000 and March 2003 involved over $100 million in funds that allegedly otherwise would have been earmarked for humanitarian relief. Another criminal complaint unsealed on Thursday in New York charged South Korean citizen Tongsun Park with conspiracy to act in the U.S. as an unregistered government agent for the Iraqi government’s effort to create the oil-for-food program.
The U.N. program, which the U.S. originally endorsed, began in 1996 and permitted Iraq to sell oil despite a stiff U.N. economic embargo against Saddam’s regime. Under the program, the proceeds of the oil sales were to be used to buy food and medicine for Iraqi people suffering under the sanctions. The indictment alleges that “the government of Iraq alone had the power to select the companies and individuals who received the rights to purchase Iraqi oil,” and, beginning in 2000, the government demanded that distribution of oil be conditioned upon the recipients’ willingness to pay kickbacks.
The investigation of Mr. Chalmers and others in regard to the Oil for Food scandal has been ongoing for some time, and the connections between the individuals allegedly involved are certainly intriguing, as this Laurie Mylroie Financial Times article reports.

Lay’s response to government’s quick trial request

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Ken Lay3.jpgThe gamesmanship continues in the battle between the Enron Task Force and former Enron chairman and CEO Ken Lay over when and how to handle the trial of the government’s bank fraud charges against Mr. Lay. Prior posts on this flanking action in the war between the Task Force and Mr. Lay can be reviewed here, here, and here.
In response to the government’s request for a trial within the next two months on the severed bank fraud charges, Mr. Lay not surprisingly has asked U.S. District Judge Sim Lake to include the bank fraud charges in the January 2006 trial of the larger conspiracy-securities fraud charges in which Mr. Lay is a defendant along with former Enron CEO Jeff Skilling and fomer Enron chief accountant Richard Causey. However, in an interesting twist, Mr. Lay has requested that Judge Lake adjudicate the bank fraud charges himself rather than allowing those charges to be considered by the jury that will hear the conspiracy-securities fraud charges. Thus, Mr. Lay’s attorneys are attempting to hedge the substantial risk that a jury might be inclined simply to throw the book at Mr. Lay and convict him on all counts whereas he might stand a better chance of acquittal on the bank fraud charges in front of Judge Lake.
Although an interesting strategy, my sense is that Mr. Lay’s approach will not work because the Task Force will want to try the bank fraud charges to a jury, which the government figures will be more sympathetic to its case than Judge Lake. A hearing is scheduled on the matter on April 21. The Chronicle’s Mary Flood’s report on the skirmish is here.

Godbold named State Bar Board Chairman

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godbold.jpgOne of the truly good guys in Houston’s legal community — Fulbright & Jaworski litigator Tom Godbold — has been elected chair of the board of the State Bar of Texas and will assume the one-year term during the State Bar’s annual meeting to be held June 23-24 in Dallas.
Tom has given his time generously to Bar activities for some time. He has served on the State Bar Board since 2003, and was awarded a State Bar Presidential Citation for serving as Chair of the Legal Services for the Poor Funding Request Work Group in 2004. Tom has also been active in the Houston Bar Association for years and served as its president in 2002-2003.

It’s time for the MS 150

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MS 150.gifThis Chronicle article reports on the 20th anniversary taking place this weekend of the two-day, Houston to Austin, 186 mile bicycle excursion known in these parts as the “MS 150.”
In the first event 20 years ago, 237 riders braved the ride and raised $117,000 for research into Multiple Sclerosis. Incredibly, the event has now grown to over 13,000 riders who will raise about $10 million, which is the largest event by far of this type of event organized by the National Multiple Sclerosis Society. Check out the MS 150 website, which allows you to donate money in the name of any of the riders in the event.

New study on drinking water while exercising

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runner drinking1.jpgThis New York Times article reports on a just released New England Journal of Medicine study that indicates athletes who drink as much liquid as possible during intense exercise to avoid dehydration face an even greater health risk than dehydration.
The study reports that an increasing number of people who engage in intense exercise or recreation are severely diluting their blood by drinking too much water or sports drinks, risking serious illness and, in some cases, death.
The condition — called Hyponatremia — occurs because, during intense exercise, the kidneys cannot excrete excess water. Accordingly, as intense exercisers continue to exert themselves and drink more fluid, the extra water moves into their cells, including brain cells. The expanded brain cells eventually have no room to expand further and press against the skull and compress the brain stem, which controls vital functions such as breathing.
Indeed, the mantra from docs to intense exercisers over the past generation — i.e., avoid dehydration at any cost — may be part of the culprit. As the Times article notes:

“Everyone becomes dehydrated when they race,” [said one of the researchers involved in the study]. “But I have not found one death in an athlete from dehydration in a competitive race in the whole history of running. Not one. Not even a case of illness.”
On the other hand, he said, he knows of people who have sickened and died from drinking too much.

To make matters even more complicated, Hyponatremia can be treated,
but doctors and emergency workers often pressume that a person feeling ill after intense exercise is simply suffering from dehydration. Thus, they give the exerciser intravenous fluids, which makes the Hyponatremia worse and can kill the patient.
I guess those old high school football coaches of mine back in the late 1960’s who didn’t allow my teammates and I so much as a drink during two-a-days in the summer heat knew more than they were letting on? ;^)