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Enron Mail |
Six Meetings Cited Between Enron Corp. And Officials of Bush Energy Task Fo= rce The Wall Street Journal, 01/09/2002 Democrats squeeze information from White House on Enron-Cheney meetings Associated Press Newswires, 01/09/2002 Enron reps met 6 times with Cheney, staff / Letter to L.A. congressman like= ly to increase controversy The San Francisco Chronicle, 01/09/2002 Big Banks Seeking Enron's Energy-Trading Business The New York Times, 01/09/2002 USA: UPDATE 1-Enron gets bids for trading operations. Reuters English News Service, 01/08/2002 Enron favours Sempra Energy to buy its metals trading group - sources AFX News, 01/08/2002 Philippine Min Expects Enron Pwr Pacts Buyout By End-Jan Dow Jones Asian Equities Report, 01/09/2002 Unresolved Problem: Interview With Terry Keenan Fox News: The O'Reilly Factor, 01/08/2002 Recession-Proof? Hot Texas Deal Climate Could Chill American Banker, 01/09/2002 Caught Off Balance Bond sleuths were ahead on Enron. Now they have their si= ghts on three others. Fortune Magazine, 01/21/2002 Analysts' Ratings: Gas Utilities Dow Jones Professional Investor Report, 01/09/2002 ___________________________________________________________________________= _ Six Meetings Cited Between Enron Corp. And Officials of Bush Energy Task Fo= rce By Tom Hamburger Staff Reporter of The Wall Street Journal 01/09/2002 The Wall Street Journal A4 (Copyright © 2002, Dow Jones & Company, Inc.) WASHINGTON -- Enron Corp. executives met six times last year with officials= of the Bush administration's energy task force, though they did not talk a= bout the energy company's finances, Vice President Dick Cheney's office sai= d in a letter to Capitol Hill.=20 One of the meetings included a 30-minute session between the vice president= and Enron Chief Executive Kenneth Lay that had been previously disclosed. = In addition, Enron officials met in large and small group meetings with the= task-force staff. Two of the meetings occurred after the staff completed w= riting its report, including one as late as Oct. 10 -- days before Enron be= gan its rapid slide into bankruptcy court. "None of these meetings included a discussion of the financial position of = the Enron Corporation," David Addington, the vice president's legal counsel= , wrote in a letter Thursday to Rep. Henry Waxman of California, ranking De= mocrat on the House Government Reform Committee.=20 Mr. Addington, who was responding to a request from Mr. Waxman for informat= ion on Enron's contacts with members of the energy task force, provided few= details. He suggested all of the meetings were consistent with the Energy = Policy Development Group's plan to conduct "meetings with a broad represent= ation of people potentially affected by the Group's work."=20 Nonetheless, these newly disclosed contacts are likely to become grist for = further congressional inquiry as half a dozen committees plan oversight hea= rings into the failure of the giant energy-trading company. Next month, the= Senate Government Affairs Committee expects to open hearings on Enron. Com= mittee Chairman Joseph Lieberman (D., Conn.) said at a news conference last= week that he wanted to explore, among other things, whether Enron influenc= ed administration energy policy.=20 The letter produced a swift response from Mr. Waxman, who wrote the vice pr= esident yesterday asking for more detail. The first response, he said, "rai= ses additional questions about the extent to which Enron may have influence= d the administration's energy policies or provided information about its ow= n operation." For example, Mr. Waxman noted that the day after Mr. Cheney m= et privately with Mr. Lay, the vice president stated his opposition to elec= tricity price caps in California, a position that Enron had espoused previo= usly.=20 Mr. Waxman said the response did not provide names of participants other th= an the vice president, nor did it mention the subject of the meetings, any = requests for policy changes and copies of any documents or e-mail communica= tions between Enron and the administration.=20 White House spokeswoman Claire Buchan said task force members conducted the= meetings to learn as much as possible about energy issues. The meetings, s= he said, were held by the staff with "many, many groups across a broad rang= e of interests to insure they had a thorough understanding" of the topic. S= he said that the White House was committed to cooperating with members of C= ongress reviewing the Enron situation "provided they are not pursuing open-= ended investigations or fishing expeditions."=20 Enron, the nation's biggest marketer of electricity and natural gas, filed = for bankruptcy-court protection following a crisis of confidence among its = investors. The problems have resulted largely from Enron's dealings with pr= ivate partnerships, run by some of its own executives. The company saw its = market value plunge recently to about $540 million from more than $77 billi= on last year. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Democrats squeeze information from White House on Enron-Cheney meetings=20 01/09/2002 Associated Press Newswires Copyright 2002. The Associated Press. All Rights Reserved. Democrats squeeze information from White House on Enron-Cheney meetings=20 WASHINGTON (AP) - Because of Enron Corp.'s sudden bankruptcy, congressional= Democrats have won their first victory in a nine-month effort to squeeze i= nformation from the Bush White House on its ties to the energy industry.=20 For the first time, the White House is acknowledging that Enron representat= ives met six times with Vice President Dick Cheney or his aides on energy i= ssues last year, most recently in mid-October just before the investing pub= lic realized the company was heading for disaster.=20 Since last April, Cheney had fended off congressional requests for the iden= tities of business executives and lobbyists who met with the White House as= the administration formulated its pro-industry energy plan.=20 The picture changed when Rep. Henry Waxman, D-Calif., began pressing the Wh= ite House about last month's crash of Enron, whose CEO, Ken Lay, is among P= resident Bush's biggest political supporters.=20 The vice president's office said the last Enron meeting with a Cheney aide = was Oct. 10, just six days before the first in a series of public admission= s by the company about its true financial condition that sent it careening = into bankruptcy court. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 NEWS Enron reps met 6 times with Cheney, staff / Letter to L.A. congressman like= ly to increase controversy Carolyn Lochhead Chronicle Washington Bureau 01/09/2002 The San Francisco Chronicle FINAL A.3 (Copyright 2002) Vice President Dick Cheney or his aides met six times with Enron Corp. exec= utives while the administration crafted its energy policy, Cheney's office = revealed in a letter made public yesterday, fueling criticism over the ener= gy company's White House influence.=20 The letter to Rep. Henry Waxman, D-Los Angeles, from Cheney counsel David S= . Addington, came after a standoff that has threatened to escalate into a c= ourt battle. But rather than quell the furor, the letter's limited disclosures appeared = likely to lend ammunition to critics seeking to link Enron's Dec. 2 bankrup= tcy to the administration. Waxman called the letter helpful but insufficien= t.=20 "The vice president has given us a letter with some of the information we r= equested about the energy task force," Waxman told The Chronicle yesterday.= "I think that's useful to have, but it only gives us some answers, and I t= hink we need a lot more."=20 Until now, the administration has refused repeated congressional requests t= o disclose whom the Cheney-led task force met with to form its energy polic= y. Comptroller General David Walker is expected to make a decision later th= is month on whether to sue to request the task force's internal documents.= =20 Enron, once the nation's seventh largest corporation, collapsed in a mire o= f dubious financial maneuvers, dealing a major blow to thousands of employe= es and stockholders and sparking an uproar on Capitol Hill.=20 Eight separate congressional investigations into the company's business dea= lings have started, and many Democrats vow extensive probes into Enron's re= lationship to the administration, especially former Enron chief executive o= fficer Kenneth Lay's close ties to President Bush. Lay was a longtime Bush = fund-raiser, and he and Enron were major contributors to Bush's presidentia= l campaign.=20 "Enron was a major player in the energy issue, we saw them actively involve= d in California, and we need to find out what influence they had over the a= dministration's energy policy and whether people in the administration knew= what was going on in Enron before its collapse," Waxman said. "This is goi= ng to be an ongoing investigation of a major financial catastrophe."=20 The letter from Cheney's counsel released by Waxman's office, which is date= d Jan. 3, said Lay had met with Cheney April 17 for a half hour. The letter= said the two had discussed "energy policy matters, including the energy cr= isis in California, and did not discuss information concerning the financia= l position of Enron Corp."=20 The letter responded to Waxman's Dec. 4 request for Cheney to "release info= rmation about secret contacts your energy task force had with Enron Corpora= tion. . . . In light of Enron's financial collapse, it is important to know= whether Enron communicated pertinent facts about its financial situation t= o the task force."=20 Addington noted that Cheney had revealed the meeting with Lay in a May 17 i= nterview on the television program "Frontline."=20 Bush appointed the Cabinet-level task force, called the National Energy Pol= icy Development Group, to develop the administration's energy policy, which= leaned heavily toward boosting supplies, including the controversial propo= sal to open the Alaska National Wildlife Refuge to drilling. The task force= was formed Jan. 29, issued its report in early May and shut down Sept. 30.= =20 The letter said the group's support staff had met with "a broad representat= ion of people potentially affected by the group's work," including energy c= ompanies, environmental advocacy groups, regulators, unions, researchers an= d other parties.=20 But top environmental groups had complained bitterly that they were shut ou= t of its deliberations.=20 "We had one meeting with the vice president a month after the report was re= leased," said David Hawkins, director of the National Resource Defense Coun= cil's climate center, which has also filed a lawsuit to force the task forc= e to hand over documents.=20 "I know that the environmental groups' leadership asked repeatedly for a me= eting with the vice president before the plan was released, and we never go= t that meeting," Hawkins said, adding that they had been allowed one meetin= g with the task force staff.=20 The letter released yesterday by Waxman's office said Enron representatives= had met with the task force's executive director twice, on Feb. 22 and Mar= ch 7. The staff met April 9 with representatives of two dozen utilities, in= cluding Enron.=20 Two more meetings with Enron took place after the report was released, the = letter said, including an Oct. 10 meeting with the former task force execut= ive director, who had moved to the vice president's staff. The letter said = neither meeting had any discussion of Enron's financial position.=20 Addington played down the meetings, noting that Cheney had met with Lay onl= y once and disclosed the meeting on television in May, and that none of the= meetings had discussed the company's finances.=20 Critics were unmoved, however, saying the administration was continuing to = stonewall.=20 "This is one of these things where just hiding the information continues to= make the story worse and worse," Hawkins said. "And dribbling it out by sa= ying, 'OK, we'll tell you some of the people we met with such as Enron,' le= aves the question, . . . why can't they tell us about meetings with other i= ndustry representatives?"=20 The vice president's office did not return requests for a response. PHOTO; Caption: Vice President Dick Cheney led a task force to establish en= ergy policy.=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Business/Financial Desk; Section C Big Banks Seeking Enron's Energy-Trading Business By JONATHAN D. GLATER 01/09/2002 The New York Times Page 4, Column 3 c. 2002 New York Times Company Several financial institutions and companies, including Citibank, UBS and B= P, have indicated a serious interest in buying the energy-trading business = of the bankrupt Enron Corporation, according to people involved in setting = up an auction of the business. Each company was required to put up a $25 mi= llion deposit to bid for all or part of the operation, according to court d= ocuments.=20 An Enron spokeswoman, Karen Denne, would not comment on the number of bidde= rs or their identity. ''All we're saying is that we received multiple bids,= '' she said. There were conflicting reports from different sources yesterday of addition= al interested buyers, and one lawyer whose client will be involved in the a= uction said that other companies might submit bids even though the official= deadline had passed. The auction is scheduled to take place tomorrow. ''We= have the ability to be flexible,'' the lawyer said.=20 Trying to buy a piece of Enron is not as surprising as it may sound, accord= ing to analysts who follow energy trading and Enron's business. What is val= uable in a trading operation, according to one analyst whose firm is involv= ed in the bankruptcy proceedings, is not just the tangible assets -- the co= mputers, proprietary software and other necessary tools of trading -- but t= he experience of its employees. And surprisingly few employees have left th= e trading operation of Enron North America, a subsidiary.=20 More than 500 employees remain, including researchers, traders and analysts= whose job it is to determine what the price of a given transaction should = be, Ms. Denne, the Enron spokeswoman, said. ''There has been a real effort = to keep that business intact so that Enron would retain some of the benefit= s of that business,'' she said.=20 Part of that effort included payments of millions of dollars to keep crucia= l employees, including some natural gas and electricity traders, both befor= e the collapse of Enron's merger with Dynegy and soon before the company so= ught bankruptcy protection. Those payments, which were criticized by credit= ors at the time, may have bolstered the value of the trading business.=20 ''Forget about having all these physical assets,'' said Peter Rigby, direct= or of utilities, energy and project finance for Standard & Poor's. ''It's a= very knowledge-dependent business.''=20 An energy trading business at its simplest sells energy commodities, like g= as or electricity, at a specific time, Mr. Rigby said. But the business bec= omes more complicated for a market maker like Enron, which matches buyers a= nd sellers of commodities, as well as hedging products that allow companies= , utilities or other entities to protect themselves from fluctuations in th= e prices of energy products. Some traders might watch the weather in differ= ent parts of the country to anticipate energy needs, for example.=20 Where the experience becomes valuable, though, Mr. Rigby said, is in unders= tanding more of the complexities of energy markets -- the times of peak use= in different markets in different time zones, the location and capacity of= power plants in different regions and potential matches of buyers and sell= ers.=20 ''You've got to know about markets; you've got to know about the weather; y= ou've got to know about power markets and fuel markets,'' he said.=20 But determining how much that experience is worth is another question -- co= mplicated, Enron's lawyers say, by the fact that bids are taking the form o= f ownership stakes in a joint venture that would also operate the trading b= usiness. Potential buyers propose the percentage of the joint venture they = would own, the lawyer said; the advantage to the trading business is the fi= nancial credibility that it would have as a result of financial backing fro= m outside Enron.=20 A committee of Enron's creditors and company executives will meet with bidd= ers this week to try to improve the offers that have been made. A winning b= id could be approved as early as Friday by the bankruptcy court. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: UPDATE 1-Enron gets bids for trading operations. 01/08/2002 Reuters English News Service (C) Reuters Limited 2002. NEW YORK, Jan 8 (Reuters) - Two banks have submitted bids for a controlling= stake in Enron Corp.'s dormant energy trading business, moves that may all= ow the once-dominant business to revive in coming weeks, people familiar wi= th the company's plans said Tuesday.=20 Enron, which declared bankruptcy on Dec. 2, received bids from Citicorp Inc= . and UBS Warburg for a majority stake in the Houston-based energy trading = operations. But a third financial institution that previously expressed int= erest, J.P. Morgan Chase & Co. declined to submit a bid by last night, the = deadline for bids for the Enron assets, these people said. Citicorp, UBS Warburg and J.P. Morgan declined to comment on any interest i= n Enron assets.=20 Analysts said its difficult to value the once-powerful trading operation th= at has virtually shut down, hobbled by worries over Enron's murky finances.= The assets being auctioned make up the bulk of Enron's wholesale services = business, which generated $94.9 billion in 2000, with $2.2 billion in reven= ue.=20 John Olson, an analyst with Houston-based Sanders Morris Harris, estimated = the trading business stake could go for $1 billion to $1.5 billion, since "= this thing is going to have to crawl before it can walk."=20 However, Robert Chambers, analyst with Lehman Brothers, said he anticipated= bids of no more than $100 million, since he said Enron is basically auctio= ning off only "people, computers and software, but not the book," referring= to contracts that Enron had forged before its bankruptcy.=20 "Chances of getting a $2 billion auction bid are impossible, given that the= y are not selling the book," said Chambers. He acknowledged being "bearish"= on Enron, but said there is still Enron, particularly its distressed bonds= , which he values at 35 cents on the dollar, even though they are trading a= t 24 cents.=20 Another analyst, who asked to remain unnamed, said the operation could comm= and a value of 10 times earnings, or about $10 billion, and any valuation d= epends on "a big caveat of whether this trading operation will come back."= =20 In addition to the banks, British oil giant BP Plc also said it may be inte= rested in the Enron operations, once the world's biggest trader of contract= s for natural gas and other energy commodities.=20 BP said it had submitted a bid of $25 million for a small portion of Enron'= s assets, including some back office functions and information technology a= ssets. A spokesperson for the London-based company it said it may be intere= sted in other assets but declined to elaborate.=20 Enron has all but shut down its Houston-based trading operations while it s= eeks a financial backer that could guarantee contracts for the myriad commo= dities that it has traded. Enron trading operations generated the bulk of i= ts $101 billion in revenue in 2000.=20 Previously, Citicorp, J.P. Morgan and UBS Warburg had expressed interest in= this role, according to people familiar with the company's plans.=20 The company is slated to decide on Thursday whether to accept a bid. Enron = lawyers previously stated that the company is not looking for cash bids, bu= t rather an ownership stake of up to 51 percent. The stake would give the b= idder cash flow from the operations, but it would agree to guarantee contra= cts.=20 Any bid for the trading operations must be approved by Judge Arthur Gonzale= z of the Southern District of New York bankruptcy court, which is overseein= g Enron's Chapter 11 bankruptcy case.=20 Enron is offloading the trading operations to generate cash to pay off as m= uch as $40 billion in debt.=20 Enron collapsed after disclosures of hidden debt in off-balance sheet trans= actions destroyed investor confidence in the Houston-based company. Enron's= advisors have made it a priority to revive the trading operations, which h= ave all but stalled in the wake of the bankruptcy filing. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron favours Sempra Energy to buy its metals trading group - sources 01/08/2002 AFX News © 2002 by AFP-Extel News Ltd LONDON (AFX) - Enron Corp favours the San Diego-based Sempra Energy as an a= cquirer of its metals trading arm over other interested parties Glencore, t= he Swiss commodities trader, HSBC, and Goldman Sachs, sources told AFX News= .=20 "Enron considers Sempra to be the best bidder because it wants the business= and the people while other parties just want the positions," the source sa= id. "The preference of Enron's bankruptcy committee is to find a buyer who is w= illing to take the people as well as the positions," the source said.=20 In this way, Enron would also avoid employee severance costs, he said.=20 Sempra director of media relations David Klein said the company is interest= ed in certain assets of Enron, "which would be complementary to our busines= s."=20 However, those interests have not been identified to the public, Klein said= .=20 Yesterday, Enron company sources told AFX News that Enron has already agree= d to sell its metals trading arm to Sempra.=20 Klein would not comment on the report in line with company policy regarding= market rumours.=20 Enron was expected to formally announce the winning suitor of its metal bus= iness before Christmas, but a decision was delayed because of difficulties = in unravelling the group's complex corporate structure, according to a Fina= ncial Times report last week.=20 However, the deal was completed as early as before Christmas and details ar= e now being formalised, Enron sources said.=20 The London-based business would also include operations in the US, the sour= ce said.=20 Enron could not be contacted at the time of reporting.=20 Shares of Enron closed the trading day up 5 cents to 73 cents, while Sempra= rose 15 cents to 25.14 usd.=20 blms/gc Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Philippine Min Expects Enron Pwr Pacts Buyout By End-Jan 01/09/2002 Dow Jones Asian Equities Report (Copyright © 2002, Dow Jones & Company, Inc.) MANILA -(Dow Jones)- Philippine Energy Secretary Vincent Perez said Wednesd= ay he expects the government to reach a deal by the end of January to buy o= ut power contracts of financially-troubled Enron Corp. (ENE).=20 Perez told reporters that the Power Sector Assets & Liabilities Management = Corp., or Psalm, appears to have secured a large discount for the contracts= . Psalm was created to assume the debts and assets of National Power Corp. (Q= .NAP), or Napocor, prior to its privatization.=20 "For Psalm to sign an agreement with Enron, a higher discount rate must be = offered and it looks like it's going to happen," Perez said.=20 Enron initially offered a 12% discount on future cash flow from its power s= upply contracts with Napocor, but Psalm wanted a discount rate that is in t= he "high teens."=20 "Psalm and Enron are still in discussions. We expect something by the end o= f the month," Perez said.=20 Enron's operations in the Philippines include two oil-fired plants - the 11= 0-megawatt Batangas plant and the 116-MW plant in Subic Bay - which the com= pany runs under build-operate-transfer contracts with Napocor.=20 Under the terms of its power contracts with Napocor for the Batangas and Su= bic Bay power plants, if one party seeks to pull out of the contract ahead = of the expiry date, both parties will negotiate the cost of exiting the con= tract prematurely.=20 -By Cris Larano, Dow Jones Newswires; 632-885-0288; cris.larano@dowjones.co= m Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 News; Domestic Unresolved Problem: Interview With Terry Keenan Bill O'Reilly, Terry Keenan 01/08/2002 Fox News: The O'Reilly Factor © Copyright Federal Document Clearing House. All Rights Reserved. O'REILLY: In the "Unresolved Problem" segment tonight, who's at fault for t= he Enron debacle? I say the Justice Department must investigate Enron execu= tives who made millions while mismanaging the company into bankruptcy, and = the little guy got hosed.=20 But Fox News financial reporter Terry Keenan believes individual stockholde= rs are at fault, as well. Terry, who hosts the weekend business program "CA= SHING IN," joins us now. This is personal to me, because I had Enron stock. And the reason I bought = it was because I buy a tout sheet by a guy named McIntyre up in Massachuset= ts, pretty good reputation, guys have a (inaudible) track record. He's tell= ing me Enron's a good buy. I buy it. And how am I supposed to know what the= se criminals are doing behind the scenes at this company?=20 TERRY KEENAN, FOX NEWS SENIOR BUSINESS CORRESPONDENT: Well, if there was fr= aud involved, and there probably was, that still doesn't negate the fact th= at this stock was extremely overvalued. There wasn't a lot of good reportin= g on it. A lot of people didn't even know what the company did.=20 And the first rule of investing is, don't buy things that you don't know ab= out, and certainly don't...=20 O'REILLY: Well, I knew about it...=20 (CROSSTALK)=20 KEENAN: ... (inaudible)...=20 O'REILLY: ... and I looked at the chart, and this time last year, all the b= ig brokerage houses -- Merrill Lynch, PaineWebber -- all of these people ha= d buys.=20 KEENAN: And you probably looked at the chart, and the stock was trading at = $80 or $90, and like a lot of people...=20 O'REILLY: Well, it had a big P/E.=20 KEENAN: ... (inaudible) -- wow, this is, this is a great company.=20 O'REILLY: OK. But it was in a good industry, and McIntyre is telling me it'= s a good stock, all the brokerage houses are saying it's good, all the CNBC= people are saying, Hey, it's great. So how do I know?=20 KEENAN: Well, the second rule of investing is, don't listen to those Wall S= treet analysts, because they're paid to tout stocks. And what they're...=20 O'REILLY: All right, well, wait a minute...=20 KEENAN: ... (inaudible)...=20 O'REILLY: ... who am I supposed to...=20 KEENAN: ... to do.=20 O'REILLY: ... listen to? I can't get the records from this Enron company, I= can't see...=20 KEENAN: Oh, you can, the SEC, they're filed public records every quarter.= =20 O'REILLY: Who do I go to, down to Washington and look up Enron?=20 KEENAN: No, you go -- there's a Web site, FreeEdgar, doesn't even cost you = a cent. You can go on there, you can see -- all the records are probably wh= at you would find, because there were a lot of footnotes and a lot of unexp= lained questions in this company...=20 O'REILLY: To where? You're telling me...=20 KEENAN: ... and it was, like I said...=20 O'REILLY: ... as an investor, I should go to the SEC Web site and look up E= nron.=20 KEENAN: The other thing is...=20 O'REILLY: And what am I going to find there?=20 KEENAN: You're going to find all of their public documents. And you're goin= g to find a lot of footnotes that are going to raise a lot of questions abo= ut why this stock was trading at 50 times earnings when its counterparts...= =20 O'REILLY: Did you know that stock was...=20 KEENAN: ... are trading at 50.=20 O'REILLY: ... was going to tank? Did you know?=20 KEENAN: I didn't buy it. I certainly had a lot of questions. But I didn't u= nderstand it. They were trading something called broadband. I didn't know w= hat that was, and I didn't know why the stock...=20 O'REILLY: Well, I know what broadband is.=20 KEENAN: I didn't know why -- I didn't know trading broadband was.=20 O'REILLY: All right. Well, here's the deal. Most people, they're not sophis= ticated enough, including me, to go to the Web site and figure out what the= footnotes are. I don't know. I'm trusting certain people to give me financ= ial advice. Obviously, the people who did that are not on my A-list right n= ow. But you've got guys in that company who made millions of dollars as thi= s stock came down, OK? And I saw public announcements. These guys came out = in public and said, "Our stock's fine. Our company's great. There's no prob= lem here." They ought to be arrested!=20 KEENAN: And probably ought to disgorge all of those profits...=20 O'REILLY: That's right!=20 KEENAN: ... from selling the stock.=20 O'REILLY: Absolutely.=20 KEENAN: But as a small investor, you could go on Yahoo, put in the name Enr= on, and this is what you would have found in the summertime. This is the in= sider selling.=20 (CROSSTALK)=20 O'REILLY: But Terry, look.=20 KEENAN: ... those -- those executives selling the stock.=20 O'REILLY: Look at this. How many people have time to do this? See? I mean, = a lot of people had Enron and their 401(k)s. Their advisers bought it for t= hem. I mean, come on!=20 KEENAN: Well, if I had 100 percent of my net worth in Enron stock, I would = have been looking to see if my bosses were selling.=20 O'REILLY: Fine. Granted. But even when you have insider selling, the only w= ay I know about to get it is from "Barron's," and they list it, like, four = or five weeks after it's sold.=20 KEENAN: Yeah, but they started selling in 2000. They sold 6 million shares,= these executives, in the year 2000.=20 O'REILLY: All right.=20 KEENAN: Only two million last year. So they got out right at the top.=20 O'REILLY: All right. So they got out right at the top. These guys inside, t= hey started selling. But they told the public and all they told all the ana= lysts there's nothing wrong with the stock. It's going continue to do well.= So they lied. So they lied. So what should happen to them?=20 KEENAN: They should go to jail. If they lied and if they committed fraud, w= hich it perhaps looks like they did, it's not 100 percent sure...=20 (CROSSTALK)=20 O'REILLY: Well, let's have an investigation, right?=20 KEENAN: Yeah. There's eight federal investigations right now.=20 O'REILLY: Well, there aren't really investigations. There are congressional= hearings. John Ashcroft hasn't assigned the FBI, as we talked about earlie= r, to investigate the Enron guys.=20 KEENAN: No, he hasn't. And hopefully, he will. But you know, $4 trillion in= market value has been lost in the stock market over the last year and half= . More money was lost in Cisco in 2001 than in Enron. Are we going to have = a federal investigations...=20 O'REILLY: Yes!=20 KEENAN: ... into every one of these stocks?=20 O'REILLY: If there's insider selling. If these CEOs are lying and they're s= elling and saying everything's great, yes. That's fraud in the inducement. = That's against the law!=20 KEENAN: Well, it's going to keep a lot of people very busy. The public...= =20 O'REILLY: Well, good. Let's clean this up!=20 KEENAN: The public pronouncements are wrong. You can't tout the stock while= you're selling, but it's legal for them to sell their stock...=20 O'REILLY: And I think...=20 KEENAN: ... and disclose it, as they did.=20 O'REILLY: And I think all of these -- all of these, you know, spinmeisters = that go on your show and Cavuto's show and everything -- I should -- you sh= ould give them their home addresses when they do this kind of stuff!=20 KEENAN: Yeah, but let me tell you, I've had a lot of negative analysts on w= ho've said negative things.=20 O'REILLY: All right.=20 KEENAN: Some of them have gotten death threats.=20 O'REILLY: I got it. I got it.=20 (CROSSTALK)=20 O'REILLY: You know what I'm talking about, though. A lot of these pinheads = don't know what they're talking about. Terry Keenan, thanks very much.=20 We'll be right back.=20 (NEWS BREAK)=20 (COMMERCIAL BREAK)=20 THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY B= E UPDATED.=20 Content and Programming Copyright 2002 Fox News Network, Inc. ALL RIGHTS RE= SERVED. Transcription Copyright 2002 eMediaMillWorks, Inc. (f/k/a Federal D= ocument Clearing House, Inc.), which takes sole responsibility for the accu= racy of the transcription. ALL RIGHTS RESERVED. No license is granted to th= e user of this material except for the user's personal or internal use and,= in such case, only one copy may be printed, nor shall user use any materia= l for commercial purposes or in any fashion that may infringe upon Fox News= Network, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietar= y rights or interests in the material. This is not a legal transcript for p= urposes of litigation. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 News Recession-Proof? Hot Texas Deal Climate Could Chill BY LAURA MANDARO 01/09/2002 American Banker 1 Copyright © 2002 Thomson Financial, Inc. All Rights Reserved. Texas has been having its share of woes -- Enron Corp.'s failure, oil price= s declining, and technology companies and airlines in distress -- none of i= t good news for the banking industry. But opinions differ on how severe the= impact on Texas' economy will be.=20 Wells Fargo & Co. chief economist Sung Won Sohn, for example, says Texas ma= y avoid the recession altogether thanks to its industrial diversity. And his colleague Chip Carlisle, the regional president of Wells' metropoli= tan markets in Texas, said, "Our loan demand has remained really strong. I = wouldn't say that some of the things you see on a national scale you're see= ing here."=20 There are concrete signs, however, that the once-thriving Texas economy has= begun to slow, and some observers say it will suffer the worst of the cred= it problems and rebound later than the rest of the nation.=20 Unemployment in the state, which has a population of more than 20 million, = jumped from 3.8% last January to 5.4% in November. The national figure rose= from 4.2% to 5.6% in the same period.=20 Diane C. Swonk, the chief economist for Bank One Corp., said that when Texa= s recovers "it won't be the boom state it was in the late 1990s."=20 She predicts that the nation will come out of the recession in the first qu= arter, growing at a 0.6% rate. She expects the economies of Texas, Louisian= a, and Oklahoma -- three states tracked by Bank One in its Oil Patch index,= where Texas is the dominant economy -- to shrink at an 0.8% rate, and not = to emerge from recession until the second quarter.=20 However, the recession in Texas "will be more muted, and bouncing out of it= will also be more muted" than at the national level, Ms. Swonk said.=20 Muted or not, the slowdown is making at least one bank consider putting the= brakes on its ambitions in Texas.=20 Zions Bancorp of Salt Lake City, a seasoned acquirer of community banks in = the West, has long had its sights on entering the Texas market. At an inves= tors conference in December, chief executive Harris H. Simmons pointed out = that Zions has branches in five of the top 10 growth markets in the country= but is not in the second- and third-fastest-expanding markets: Dallas and = San Antonio.=20 "I could see us getting into Texas with the right kind of deal," Mr. Simmon= s said. But, he added, with signs of a slowdown there "we're in no rush." R= eached Tuesday, he said that he did not wish to add anything to that statem= ent.=20 Increased caution on the part of out-of-state buyers would be big news for = independent Texas banks. Of 741 banks and thrifts in the state, 714 have le= ss than $1 billion of assets. And out-of-state banks have been eager to pur= chase community banks, particularly in the Houston and Dallas-Fort Worth ma= rkets.=20 In mid-December, for example, Wells Fargo announced plans to buy Tejas Banc= shares in Amarillo for $82.5 million. Regions Financial Corp. in Birmingham= , Ala., and BOK Financial Corp. in Tulsa, Okla., have bought several small = banks, and Bank of Montreal has also expressed interest in Texas.=20 Though many of the acquisitions cost less than $1 billion, the deals eventu= ally add up. The percentage of Texas deposits controlled by out-of-state ba= nks leapt from 19.3% on June 30, 2000 to 41.9% by the end of last June.=20 Texas is not an insignificant market for larger banking companies either.= =20 Bank One gets 14% of its deposits from the state, J.P. Morgan Chase & Co. g= ets 14% and Hibernia National Bank 13%, according to research from Goldman = Sachs Group Inc.=20 Wells Fargo's Mr. Carlisle said that the one significant change he has seen= among commercial borrowers is an increased interest in restructuring their= debt to take advantage of lower interest rates. "We're seeing a lot of req= uests -- certainly something we have to be prepared to do."=20 But even a delayed slowdown could deter more banks from pursuing deals in T= exas.=20 Acquisitions aside, observers say the slowing economy will probably hurt lo= an volume and credit quality, particularly among small-business and middle-= market commercial borrowers.=20 Already, larger national banks such as Morgan Chase, FleetBoston Financial = Corp., and Bank of New York Co. have said that they expect to take charges = for this quarter because of exposure to Houston-based Enron. But it is the = future influence of Enron's failure, the pending sale of Compaq Corp., and = low profits at Texas-based airlines such as Continental that will hurt loan= volume and credit.=20 Texas is likely to experience a "more pronounced erosion in commercial midd= le-market relating to a more-rapid-than-expected slowdown in the economy," = said Credit Suisse First Boston bank analyst Rosalind Looby.=20 "I don't think we're looking at a meltdown, but this is going to cease to b= e the real bright spot that it was," she said. http://www.americanbanker.com=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 FORTUNE Advisor/Investing; Against The Grain Caught Off Balance Bond sleuths were ahead on Enron. Now they have their si= ghts on three others. Herb Greenberg 01/21/2002 Fortune Magazine Time Inc. 116 (Copyright 2002) If you learn nothing else from the Enron mess, take this lesson to heart: A= company's inability to handle its debt can be its downfall-- no matter how= much Wall Street likes its stock. Indeed, while earnings may be a window t= o a company's psyche, the balance sheet is what gives you a truer picture o= f its well-being. Bond analysts make a beeline to this crucial piece of fin= ancial disclosure, paying special attention to a company's ability to servi= ce its debt. And when the ratio of cash to debt plunges--watch out!=20 The best balance-sheet snoops are often way ahead of the pack in finding si= gns of trouble. Sometimes, however, the big credit-rating firms, Standard &= Poor's and Moody's, which get paid by the companies they rate, are slow of= f the mark--slower, as a rule, than independent bond-rating services like E= gan-Jones of Wynnewood, Pa., or research firms like New York-based Gimme Cr= edit. "We don't have the constraint of trying to keep a company happy," say= s Egan-Jones President Sean Egan, whose downgrade of Enron to junk beat the= big guys by about a month. (To be fair, Moody's is revising how it assesse= s companies, taking into account additional information that could lead to = a default. Standard & Poor's, for its part, argues that its existing method= s are adequate.) Given the scope--and the surprise--of the Enron failure, it's worth asking:= Are there other companies out there that these aggressive independent cred= it-rating agencies are flagging now? You can bet on it. We're not necessari= ly talking future Enrons, but simply companies whose financial situation is= more dire than the market thinks. Certainly one where the alarm bells are = ringing loudly (and which--don't remind me--got a positive nod from this co= lumn a year ago) is Ford Motor. It's no secret that Ford is having serious = problems, but you wouldn't know it from its credit rating, which is still i= nvestment grade. Egan-Jones, however, labels it BBB-, a few notches lower t= han the other rating agencies do and just one step above junk. That's where= Egan-Jones thinks Ford will arrive within six months, as the sales boost f= rom the much heralded 0% financing starts to wane and bad auto loans pile u= p. Junk status raises the cost of borrowing and would be particularly damag= ing for Ford, whose ability to cover its debt has been deteriorating rapidl= y. Egan and other bond analysts measure this by calculating a company's int= erest coverage ratio--pretax income plus interest expense divided by intere= st expense.=20 The ratio, which varies widely by industry, is key to credit analysis. Egan= calculates that Ford's interest coverage has tumbled from 2.2 in September= 2000 to just above 1 now. "That's akin to saying that nearly everything yo= u earn will have to be used to pay your interest expense, which doesn't lea= ve a lot of money to invest in the business," he says. Ford responds that i= t's "disappointed" by the Egan-Jones rating; both S&P and Moody's insist th= ey haven't been laggards and that their ratings are appropriate.=20 Egan-Jones is even warier of computer maker Hewlett-Packard. Its credit pic= ture is as imperiled as its proposed Compaq merger, according to Egan-Jones= --which has already tossed the tech giant's debt on the junk heap with a ra= ting of BB+, several notches below that of the major rating agencies. "It's= appropriate to view Hewlett- Packard on a stand-alone basis, which is not = particularly attractive," Egan says. "Today it is hard to name any business= where it's the undisputed leader--even its printer business is being attac= ked." Making matters worse: From October 2000, Hewlett- Packard's interest = coverage has sunk steadily from 19 to just 6.6. (By contrast, IBM's ratio, = according to Egan-Jones, is 11.7.) Hewlett- Packard officials couldn't be r= eached for comment.=20 Finally, there's retailer Gap (another company this column once argued you = should never bet against, because of its miracle-working marketing genius o= f a CEO, Mickey Drexler). While Gimme Credit's Carol Levenson says Gap's ba= lance-sheet condition is not yet critical, it's "not nearly as strong as it= used to be." Egan-Jones points out that Gap's interest coverage ratio has = plunged from 27.3 down to 8.8 over the past four quarters. As a result, the= firm rates the retailer's debt one step above junk and a couple of notches= below that of both Standard & Poor's and Moody's ratings. Gap officials sa= y they have never "worked" with Egan-Jones and point to the retailer's stan= ding with the major rating agencies instead. The problem is, as Enron prove= d, those agencies are not always the first to sound the alarm.=20 Herb Greenberg is a senior columnist for TheStreet.com. Questions? Comments= ? Contact him by e-mail at herb@thestreet.com. COLOR ILLUSTRATION: TODD LAWSON=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Analysts' Ratings: Gas Utilities 01/09/2002 Dow Jones Professional Investor Report (Copyright © 2002, Dow Jones & Company, Inc.) This is a weekly ranking of the stocks within the Gas Utilities industry, b= ased on analysts' recommendations contributed within the past month to Firs= t Call's database. To be included on the list, a company must be rated by a= t least five analysts.=20 Also included in the list are First Call analysts' estimates for the compan= ies' current quarters. Estimates are operating income per share based on a = survey of analysts. First Call Consensus Recommendation Scale=20 1.0-2.4 =3D Buy=20 2.5-3.4 =3D Hold=20 3.5-5.0 =3D Sell=20 Latest # Analysts First Call # Analysts=20 Consensus Covering EPS Estimate Covering=20 --------- ---------- ------------ ----------=20 (N: HPG) 1.4 7 ($0.09) 1Q 4=20 (N: EQT) 1.8 9 $0.48 4Q 9=20 (N: UGI) 2.0 5 $1.25 1Q 1=20 (N: GAS) 2.0 7 $0.97 4Q 5=20 (N: OKE) 2.2 6 $0.34 4Q 5=20 (N: PGL) 2.4 5 $0.95 1Q 2=20 (N: NFG) 2.4 7 $0.49 1Q 5=20 (N: ATG) 2.4 8 $0.43 1Q 4=20 (N: STR) 2.4 9 $0.49 4Q 10=20 (N: ATO) 2.7 6 $0.57 1Q 3=20 (N: WGL) 2.8 6 $0.78 1Q 4=20 (N: TGS) 3.0 5 $0.22 4Q 3=20 (N: ENE) 3.1 10 $0.18 4Q 9 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Sarah Palmer Internal Communications Manager Enron Public Relations (713) 853-9843
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