Tuesday February 5 1:20 PM ET
Astros Want to Drop Enron Name From Stadium
HOUSTON (Ticker) - The Houston Astros want out of their naming rights
agreement with the Enron Corporation, the embattled energy company
that recently filed for bankruptcy.
The Astros on Tuesday filed a motion in the United States Bankruptcy
Court for the Southern District of New York asking the court to
determine whether the naming agreement with Enron should continue.
The National League club signed a 30-year agreement with the company
in April 1999 to call the new playing facility Enron Field. While the
deal may provide income to the Astros, the stadium name has become a
public relations nightmare since thousands of Houston-area residents
lost not only their jobs but their pensions when Enron filed for
bankruptcy.
``The Houston Astros have been materially and adversely affected by
the negative public perception and media scrutiny resulting from
Enron's alleged bad business practices and bankruptcy,'' said Astros
president of business operations Pam Gardner. ``We have worked
diligently with Enron to transition the stadium name, but we've been
unsuccessful. At this point, we have no other alternative but to seek
relief from the bankruptcy court.''
According to the Astros, Enron has spent the bankrupt estate's assets
by paying approximately $108,000 for a suite and paying nearly
$90,000 for box seats. The Astros claim that Enron wishes to sell the
naming rights without the consent of the team.
``We do not believe that it is appropriate for Enron to continue to
spend these large sums of money to have a baseball stadium named
after it because the name of the stadium can not be changed without
the Astros consent, so the naming rights Agreement has no economic
value to Enron,'' Gardner said. ``We believe that it is now time for
the bankruptcy court to determine whether the naming rights agreement
should continue.''
Enron has made three annual rights fee payments under the naming
rights agreement totaling $10.25 million, and the next rights fee
payment of approximately $3.65 million is due on August 31, 2002.
Enron also agreed to purchase on an annual basis a 14-person suite
and 35 Box Seats. The company paid approximately $108,000 for the
2002 suite on January 22 and paid nearly $90,000 for the 2002 box
seat tickets on Monday.
*****
Friday February 8 11:49 AM ET
Enron's Lay Sells Stake in NFL Team
By KRISTEN HAYS, Associated Press Writer
HOUSTON (AP) - Houston Texans owner Bob McNair bought out former
Enron Corp. leader Kenneth Lay's minority share in the expansion NFL
franchise.
``Ken no longer has any interest in the Texans,'' McNair said Friday.
``Neither the team nor I will be making any further comments at this
time.''
Lay, Enron's former chairman and chief executive, was one of 10
minority owners of the Texans. Lay family spokeswoman Kelly Kimberly
confirmed the sale, but neither she nor McNair would reveal the
amount of Lay's stake.
Lay's wife, Linda, has said they are trying to sell real estate
holdings except their $7.1 million penthouse Houston home to stave
off bankruptcy following Enron's collapse.
Enron filed for bankruptcy Dec. 2, leaving thousands of employees
jobless.
McNair paid $700 million for the NFL's 32nd franchise in 1999 and
owned 70 percent of the team. Texans vice chairman Chuck Watson,
chairman and chief executive officer of energy marketer Dynegy Inc.
owns 15 percent.
The rest was spread among Lay and nine other minority owners,
including former Houston Oilers standout and five-time Pro Bowl
defensive lineman Ray Childress.
NFL spokesman Greg Aiello declined to say whether the league was
concerned about Lay's stake in its newest team considering the ever-
growing controversy over Enron's downfall. Aiello referred all
questions regarding Lay and the Texans to McNair.
Lay, who resigned as Enron's chairman and chief executive officer
Jan. 23 and gave up his spot on the board Monday, has been subpoenaed
to appear next week before two of nearly a dozen congressional
committees investigating the company's collapse.
The Securities and Exchange Commission and the Justice Department
also are investigating Enron's downfall, but no charges or
indictments have been handed down.
The Houston Astros have asked the New York bankruptcy judge
overseeing Enron's case to force the company to accept or reject the
30-year, $100 million naming rights agreement for Enron Field.
Enron is current on its payments and has another $3.65 million due in
August. The company has said it's willing to consider a buyout to
remove its name from the ballpark, but Astros owner Drayton McLane
said Enron owes the team.
Enron's name is not so closely identified with the Texans. The team's
new stadium is named for Reliant Energy Inc., in a 30-year, $300
million naming rights deal.
*****
Ex-Enron exec says he was unaware
- - - - - - - - - - - -
By H. JOSEF HEBERT
Feb. 8, 2002 | WASHINGTON (AP) -- Despite a reputation as a hands-on
manager, former Enron Corp. chief executive Jeffrey Skilling insists
he knew nothing of the self-dealing and accounting schemes that
eventually engulfed the company in scandal and bankruptcy.
Skilling, who resigned from Enron in August before the company's
financial problems became public, told a congressional panel Thursday
that when he left he "did not believe the company was in any
financial peril."
But lawmakers said they found it hard to believe that Skilling,
described by some colleagues as a "control freak," could have been
that much in the dark about the complex web of outside partnerships
that investigators said was designed largely to conceal Enron's
losses, hide its debts and make a handful of executives rich.
Two of those executives -- Andrew Fastow, former chief financial
officer, and Michael Kopper, who worked for Fastow -- invoked their
constitutional right under the Fifth Amendment and refused to testify
Thursday before the House Energy and Commerce investigations
subcommittee.
So did Richard Buy, Enron's former chief risk officer, and Richard
Causey, its former chief accounting officer. Former chairman Kenneth
Lay is expected to do the same next week when he appears before two
other committees that have subpoenaed his testimony.
Fastow created the controversial partnerships, which investigators
say were at the heart of Enron's collapse, and brought in Kopper to
run one of them. Together the two made $40 million in transactions
investigators say were marked by self-dealing and conflicts of
interest.
A dozen congressional committees are investigating the Houston-based
energy-trading company, as are the Securities and Exchange Commission
and the Justice Department. Enron entered the biggest bankruptcy in
U.S. history on Dec. 2.
Millions of investors lost money, and thousands of current and former
Enron employees lost the bulk of their retirement savings when the
company collapsed, prompting moves by President Bush and Congress to
consider rewriting laws covering private retirement plans.
During nearly three hours of intense questioning Thursday, Skilling
repeatedly said he had no reason to believe Enron's off-the-books
partnerships were a problem. He also said he did not recall a board
of directors meeting in which it was made clear that he was supposed
to approve all deals involving the partnerships that concealed
hundreds of millions of dollars in debt and overstated the company's
profits by more than $1 billion over several years.
Two Enron senior executives said they had raised serious concerns
about Fastow's business dealings nearly two years ago, but were
rebuffed. At the core of their concerns was what they considered to
be clear conflicts of interest involving Fastow and the partnerships
to the detriment of Enron shareholders.
One of them, Jeffrey McMahon, recently named to head Enron in its
attempt to recover, told the lawmakers that in March 2000 he
complained to Skilling that he had been put in an "untenable
position" involving Fastow.
As Enron's treasurer at the time, McMahon was representing Enron in
negotiating with one of the partnerships headed by Fastow, who also
was McMahon's boss. "I do not believe this to be in the best interest
of the (Enron) shareholders," McMahon said he told Skilling, hoping
that he would take some action to resolve the situation.
"He came to you and said, 'Boss, this place stinks,"' Rep. Jim
Greenwood, R-Pa., told Skilling. "He said we've got a cesspool and
we're got to clean it up. ... This is the cesspool that brought the
company down."
But Skilling remembered the meeting differently, characterizing
McMahon's concerns as being about "an issue of compensation" and not
conflict of interest. He said he assured McMahon he would look into
the problem. But a short time later, McMahon was given a new job, one
that he had rejected a month earlier.
"Part of fixing (McMahon's concern) was to bring in (Benjamin)
Glison," said Rep. Billy Tauzin, R-La., as he pressed Skilling on the
matter. "Glison found it not only easier to negotiate with Mr.
Fastow, but got into bed with him."
A recent internal Enron report named Glison as one of a half dozen
executives and employees brought in by Fastow and Kopper to invest in
the partnerships. Glison invested $5,800 in one of the partnerships
and in a few months made $1 million.
Skilling said he saw no conflict in Fastow's dual role as Enron's
chief financial officer and head of one of the partnerships, noting
that the Enron board had approved that relationship along with a
string of control measures to protect Enron shareholders.
But two board members testified that those controls were ignored.
"Mr. Skilling reported to us that he was discharging these
obligations. It now appears that he did not do so," said Herbert
Winokur, chairman of the Enron board's finance committee.
Skilling insisted he did not have to sign off on the transactions and
denied that he received a memo in May in which Jordan Mintz, Enron's
general counsel, reminded him of an "approval sheet" that he was
supposed to sign on transactions involving the Fastow partnerships.
*****
from the February 08, 2002 edition -
http://www.csmonitor.com/2002/0208/p01s02-uspo.html
The man who wants Cheney's Enron files
By Gail Russell Chaddock | Staff writer of The Christian Science
Monitor
WASHINGTON - David Walker is the kind of guy who rarely wears jeans
and if he does, friends say, they're probably ironed. He likes his
numbers precise - usually carried out to the fourth decimal place.
One of his biggest heroes in life is Elmer B. Staats, the fifth
comptroller general of the United States.
Mr. Walker, in other words, might not seem like the kind of person to
carry out a rebellion against a sitting presidential administration.
But, in fact, he is, of sorts.
As head of the normally obscure General Accounting Office, Walker is
leading an effort to try to force Vice President Dick Cheney to turn
over records of meetings with Enron and other corporate executives
about federal energy policy.
The lawsuit the agency is expected to file against the vice
president - the first ever by the GAO against a federal official for
access to records - could end up influencing the level of openness in
the White House for years to come.
As he sits behind his tidy desk in the GAO building, Walker doesn't
seem perturbed - or puffed up - by his moment in history. He doesn't
want to be on TV and spurns most interview requests. "I'm just doing
my job," he says. "It's not something I was pleased at having to do
or wanted to do, but something I needed to do to comply with our
governing statute and to do my job in an objective and professional
and nonpartisan fashion."
Walker's penchant, almost obsession, with being a straight shooter
helps explain why his crusade against the government may not, in the
end, be a surprising rebellion at all. On the carpet in his office is
the phrase "accountability, integrity, reliability." He had the
carpet made when he took over the job in 1998. Among the people he
most admires in public life are Theodore Roosevelt and John F.
Kennedy - neither mealy conformists. A prolific reader, he's
currently on "Theodore Rex," a book about Roosevelt by Edmund Morris,
and notes with pleasure that three biographies of the man who "said
what he meant and meant what he said" just came out.
But his real affection when it comes to public figures lies with
Staats, whom he calls "a legend in public service." In the Staats
years (1966-1981), the GAO vastly expanded its role beyond the green-
eye shade functions for which it had been established in 1921.
Instead of just auditing federal agencies, GAO investigators began
evaluating the performance of Great Society social programs. That's
when the agency evolved into the main engine for congressional
oversight of the executive branch - Congress's watchdog.
Now Walker wants to expand that role further. "Our scope includes
everything the federal government is doing or thinking about doing
anywhere in the world...," he said in a recent speech (all of which
he writes himself.) The new GAO needs to be not just oversight, "but
insight and foresight," he says.
Origins of a confrontation
Still, about 85 percent of the time of the 3,000-member GAO staff is
spent running down requests of Congress or fulfilling statutory
mandates, Walker says. One of those requests was for more information
about Mr. Cheney's energy task force - and here is where all the
trouble began.
The initial request came from two ranking Democrats in the House of
Representatives, John Dingell of Michigan and Henry Waxman of
California, both with a history of challenging executive-branch
prerogatives. They wanted the names, dates, discussion topics, notes,
and other materials presented at any meeting between task-force
members and outside groups, especially energy firms like Enron.
It's GAO policy to treat requests from ranking members of the
minority on par with those of a committee chair, Walker says. The
request couldn't be refused.
For months, the April 19 request met with rebuffs or silence from the
vice president's office. Walker scaled back his request: Instead of
notes and materials, the GAO would settle for names, dates, and
general topics of discussion. The new request was modest, compared
with the transcripts, e-mails, and tapes of conversations that
previous congressional investigations have accessed, experts say.
But the vice president - a veteran of congressional-executive branch
skirmishes in four previous GOP administrations - was not budging. In
a tough Aug. 2 letter, Cheney warned Senate and House leaders that
the actions of their agent, the Comptroller General, "exceeded his
lawful authority" and if allowed to continue, "would
unconstitutionally interfere with the functioning of the executive
branch."
He argues that turning over the records would undercut the free and
open discussion of issues in the White House.
On Aug. 17, Walker sent a tough letter of his own, notifying the
White House of statutory noncompliance within the executive branch.
Only six such letters have been sent in the last 21 years. According
to statute, the next step is the courts.
Then came the Sept. 11 attacks, which put off the day in court. Then
the Enron debacle, which revived the issue of corporate influence in
government. On Jan. 30, Walker wrote to Congress announcing his
decision to file suit. No comptroller general has ever gone to court
to force the executive branch to release documents it doesn't want to
give up.
But Walker says he has no choice. "To allow someone to absolutely
stonewall you is not something desirable, and if you don't take
definite action, it can wind up proliferating," he says.
Before taking on his appointment as Comptroller General in 1998,
Walker was a partner and global managing director of Arthur Andersen
LLP's human capital services practice - a consulting arm of the firm,
which he expanded dramatically.
He did not handle the Enron accounts, but analysts say the
association with Enron's lead auditing firm could be seen as a reason
to stand tough on this request.
"One can imagine what the controller general - a former partner in
Arthur Anderson - would be opening himself up to, if he decided to go
lightly on this issue," says Peter Shane, law professor at Carnegie
Mellon University in Pittsburgh.
Political reprisals?
He's also opening himself, and the GAO, up to political reprisals.
The office of comptroller general is one of the most secure political
appointments in Washington: a 15 year term. But the job isn't bullet-
proof. A former GAO head resigned after intense criticism, and the
agency saw its budgets slashed in the 1990s.
Still, former associates say that's not likely to be a deciding
factor in what is shaping up as a fight on principles for both the
vice president and comptroller general. "He's a rigidly straight
arrow, absolutely driven by the desire for public service," says
James Klein, a longtime friend. "I'm confident that he's getting no
joy from this scrutiny or having to go up against ... the
administration."
"When he decides to do something and feels it's the right thing,
he'll do it," adds a former coworker. "They had no idea who they were
tackling when they tackled Dave Walker."
*****
EPA initially blasted White House energy plan
Wed Feb 6, 5:50 AM ET
Traci Watson USA TODAY
Less than a month before President Bush presented his energy plan to
the nation, the Environmental Protection Agency sent the White House
energy task force a blistering memo saying that the latest draft
was ''problematic,'' ''overly simplistic'' and ''not supported by the
facts.''
Commenting on what was then Chapter 8 of the energy plan, the memo
says, ''Costs of compliance with environmental requirements are
overstated, several inaccurate statements and opinions are presented
as factual, and no citations are provided for many of these
statements.''
It continues, ''We are very concerned that this language is
inaccurate and inappropriately implicates environmental programs as a
major cause of supply constraints in the United States' refining
capacity.''
The memo suggests there was disagreement among Cabinet members over
the direction of energy policy.
On Tuesday, however, EPA Administrator Christie Whitman's office said
it was satisfied with the final version of the energy report, which
was released last May.
''We thought the issues we raised were addressed,'' EPA spokesman Joe
Martyak said.
Vice President Cheney, who headed the task force, agreed through a
spokeswoman. ''The views and input of all members of the National
Energy Policy Development Group resulted in a balanced and
comprehensive energy plan,'' spokeswoman Jennifer Millerwise said.
The three-page memo is written on stationery labeled ''Office of the
Administrator.''
The memo does not bear Whitman's name or her signature. It is signed
by Tom Gibson, associate administrator for policy, economics and
innovation, and is addressed to Andrew Lundquist, who helped direct
the task force.
Cheney's role in the task force has been an issue. He has been
accused of leaning too heavily toward the interests of energy
companies.
The White House has refused to divulge whom Cheney met with in
developing the report. It says the president and his staff have the
right to hold private consultations.
The memo was obtained by Rep. Henry Waxman, D-Calif., who has
criticized the way Cheney has developed administration energy policy.
Some of the EPA's complaints in the memo were addressed, however. One
referred to low-pollution gasoline blends, which are required by many
states trying to meet clean air-standards.
According to the memo, Cheney's draft plan reported there were 50
different blends of gasoline in the USA, and that caused problems for
refineries. ''EPA disagrees with that figure,'' the memo says. The
final report refers to blends without specifying a number.
In other cases, the final version of the report changes language the
EPA objected to but doesn't address the heart of the agency's
complaints.
The memo says, for example, that ''statements regarding coal-
generated electricity create the false impression that environmental
regulations are the sole cause of the decrease in investment in new
coal generation.''
The final report notes other causes but insists that ''regulatory
uncertainty'' is the main problem.
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