Monthly Archives: July 2005

Chronicle weblog on terrorist attacks in London

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London.jpgDwight Silverman, the excellent technology columnist for the Houston Chronicle who has sheparded the Chronicle’s increasing contribution to the blogosphere, is contributing to this handy blog on the terrorist attacks of earlier today in London.
Check it out, as Dwight has included lots of good links to commentary and up-to-the-minute news reports. This “instant blog” on a breaking news story is yet another example of how weblogs are redefining the way in which information is delivered to the public.

Is the Lord of Regulation unhinged?

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Spitzer25.jpgShowing an appalling lack of prosecutorial discretion that has become commonplace in this post-Enron era of criminalizing business, prosecutors from the office of New York attorney general Eliot Spitzer announced Thursday that they will re-prosecute beginning August 22nd the four counts in the criminal case against former Bank of America Corp. broker Theodore C. Sihpol on which a mistrial was declared last month. Here are the previous posts relating to the Sihpol case.
Mr. Spitzer’s dubious move comes despite the fact that the jury in the previous trial against Mr. Sihpol deadlocked 11-1 in favor of acquittal on the four charges and acquitted Mr. Sihpol on the other 29 counts that Mr. Spitzer asserted relating to alleged larceny, falsifying business records and related charges. The four counts involved in the re-trial relate to allegations that Mr. Sihpol falsified mutual-fund trading documents and participated a scheme to defraud investors.
Inasmuch as Mr. Sihpol’s defense attorneys will almost certainly request that much of the evidence in the first trial be excluded from the second trial on the grounds that it relates to charges on which Mr. Sihpol has been already found not guilty, Mr. Spitzer’s second prosecution of Mr. Sihpol faces even greater obstacles than the first. But then, Mr. Spitzer has always been more talented in espousing propaganda and demagoguery, so why should he be bothered with actually proving criminal conduct in court, anyway?

Will oil prices top $100 a barrel?

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oil_well3.jpgPrior posts here and here have highlighted the work of University of California at San Diego profeesor James D. Hamilton, who is one of the country’s foremost experts on the economics of energy prices.
In this recent post, Professor Hamilton analyzes the chances of whether the price of oil will hit $100 a barrel in the near future. Using the options market as a guide, Professor Hamilton estimates that there is about a 7 percent chance that the price will rise to that level by June 2006. On the other hand, there is about a 15 percent chance that the price will tumble below $40 a barrel by that same date. Which reminds me of the following exchange, noted in this earlier post, between a Wall Street Journal interviewer and Exxon Mobil CEO Lee Raymond on the rising price of oil:

WSJ Interviewer: Some people think prices will keep going up.
Mr. Raymond: Maybe. I’ll bet they’ll be lower at some point.

The end is in sight in the Enron Broadband trial

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EBS15.jpgAfter three often tortuous months, the end is finally in sight for the Enron Broadband trial, the Chronicle’s Mary Flood reports today.
The last of the five defendants to testify — former Enron Broadband Services CFO, Kevin Howard — took the stand yesterday and will likely finish his testimony today. Inasmuch as the prosecution may begin its rebuttal case today, Ms. Flood is predicting that final arguments will take place next week. As noted in this prior post, this trial has turned out to be a far harder one than the Enron Task Force expected, and the outcome will almost certainly affect the Task Force’s approach to future Enron-related prosecutions, particularly the Task Force’s “legacy” case — that is, the case against former Enron chairman Ken Lay and former Enron CEO Jeff Skilling.

Huge health insurer grows even larger

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stethoscope.jpgMinnetonka, Minn.-based UnitedHealth Group Inc., the second largest health insurer in the U.S., announced yesterday that it had agreed to acquire Cypress, Calif.-based PacifiCare Health Systems Inc. for $8.1 billion in cash and stock. The huge deal is the latest in a series of consolidations that is reshaping the U.S. employer health insurance industry, a trend that affects thousands of workers in the large medical services sector of Houston’s economy.
The consolidation trend in the employer health insurance is noteworthy also because traditional employer health insurance has been losing market share over the past 15 years because of rising costs. Although almost 80% of U.S. workers in the private sector were covered by traditional employer health insurance in 1990, only 56% of of those workers were covered by such insurance in 2003, and the decline has accelerated over the past five years. The deal also narrows the gap in subscriber bases between UnitedHealth and the largest U.S. health insurer — WellPoint Inc (formerly Anthem) — which has 28.5 members.

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More on the CNOOC bid for Unocal

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cnooc.jpgThis earlier post addressed the folly of developing a mercantilist governmental policy in response to the China National Offshore Oil Corp.’s hostile takeover bid for Unocal, which had previously accepted Chevron Corporation’s friendly bid for the company. In this OpinionJournal op-ed, CNOOC, Ltd. chairman and CEO Fu Chengyu takes up that line of thinking in arguing that CNOOC’s bid is actually good for American business interests and poses no threat to those those interests or American security.
unocal6.gifIn the meantime, in this post, Brad Stetser, senior economist for the boutique firm Roubini Global Economics, has been thinking about the CNOOC bid in the context of the amount of foreign assets that the Chinese accumulate each month by exporting more than they import. Mr. Stetser estimates that the value of those assets is around $20 billion, which is more than the $18.5 billion that CNOOC is bidding for Unocal. Thus, Mr. Stetser notes that it’s a tad absurd to worry too much about the Chinese buying one second tier oil & gas company when the real issue is that China has become the largest creditor of an increasingly leveraged U.S. economy. Stated simply, it doesn’t make sense to object when Communists want to buy U.S. companies, but sell away when the same Commies offer to buy U.S. debt.

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Benny Hinn and the I.R.S.

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benny2.jpgLast week, televangelist Benny Hinn was not particularly pleased with, might we say, the responsiveness of his Nigerian hosts to his latest African crusade.
Well, this latest news report probably explains why Benny is a tad jumpy these days:

The IRS is questioning televangelist Benny Hinn’s organization about its operations and finances issues that underlie its tax-exempt status as a church.
The inquiry into the flamboyant faith healer’s ministry began a year ago, and the IRS has asked for dozens of detailed answers, according to documents provided to The Dallas Morning News by a watchdog group. . .

Separately, The News found that another watchdog group’s complaint to the IRS that the ministry lacks financial oversight and independent governance may have led the agency to question the operation through what’s called a church tax-inquiry letter.
While detractors argue that Mr. Hinn improperly profits from a ministry that hasn’t met the IRS definition of a church for years, his public-relations contractor dismissed the possibility that the tax exemptions — worth millions a year — could be at risk. [Hinn’s public relations contractor] repeatedly warned The News should “be very careful about what it reports.”

Geez, Hinn’s public relations contractor sounds a bit like Tom Hagen, Don Corleone’s lawyer, don’t you think?
By the way, did you know that Benny asserted at one time that the Trinity was comprised not of three persons, but nine?!

Mistrial declared in Cleveland corruption trial related to Houston criminal investigation

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MayorBrown3.jpgNot only are a couple of former officials in the administration of former Houston Mayor Lee P. Brown admitted crooks (earlier posts here, here and here), they are apparently not very persuasive witnesses, either.
The Chronicle’s Dan Feldstein has been doing a good job of connecting the dots in this developing story, the latest chapter of which has been playing out in a public corruption trial in Cleveland, Ohio. In his latest article, Mr. Feldstein reports that a federal judge in Cleveland declared a mistrial Tuesday after a jury deadlocked on most bribery charges against Cleveland area entreprenuer Nate Gray, who is the person from whom two former Houston officials — former Brown administration chief of staff Oliver Spellman and building services director Monique McGilbra — testified that they took cash and gifts. The retrial of the case will begin on August 8.
During the trial, an F.B.I. agent testified that Justice Department officials in Houston are continuing to pursue an investigation that is related to the Cleveland prosecution. It is not known at this time whether any other former Brown administation officials have been named as targets of that investigation.

Hank Stram, R.I.P.

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Stram.jpgHank Stram, one of the most creative professional football coaches and indisputedly one of the best evaluators of talent, died on Monday at the age of 82 from complications of diabetes. He was best known for coaching the Kansas City Chiefs to one of the biggest upsets in Super Bowl history, a 23-7 victory over the Minnesota Vikings in 1970’s Super Bowl IV, a game that was particularly notable because of pre-game allegations regarding Kansas City QB Len Dawson’s alleged association with gambling figures.
The Chronicle’s Mickey Herskowitz — the preeminent sportswriter regarding football coaches from Stram’s era — weighs in on Coach Stram in this typically fine column. Mr. Herskowitz’s piece includes the following anecdote about the early days of professional football in Dallas, where Coach Stram coached the Dallas Texans AFL franchise. After sharing the Metroplex with the Dallas Cowboys NFL franchise for a couple of seasons, the Texans franchise moved to Kansas City in deference to the Cowboys. Herskowitz observes:

Stram fought the battle of Dallas, where the Cowboys and Texans both drew so poorly that a playoff was suggested, with the winning team getting to leave town.

Calculating damages in criminal cases against energy traders

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traders.jpegOne of the hot button legal issues in white collar criminal prosecutions these days is the calculation of the financial damage resulting from the defendant’s allegedly criminal actions. Inasmuch as the federal sentencing guidelines correlate the length of a sentence to the amount of financial damage resulting from the criminal act, the government has developed damage models that maximize the amount of financial damage to buttress the prosecution’s argument in favor of draconian prison terms for business defendants.
In that regard, the Chronicle’s Tom Fowler weighs in with this article that reports on the prosecution’s damage claims in the group of criminal cases against Houston business figures categorized as “the trader cases” (previous posts here, here, here, here and here.

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