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Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (4072)	6/10/2002 5:18:06 AM
From: Raymond Duray	Read Replies (1) \| Respond to of 5185

Enthusiasm Ebbs for Tough Reform in Wake of Enron (Page 2 of 2) For now, lawmakers say, they have trumped the arguments of such people as Alan Greenspan, the Federal Reserve chairman, and the multibillionaire investor Warren E. Buffett that the current treatment of options contributed to corporate overreaching in the 1990's. The Bush administration has not been a visible force in the legislative battles, relying instead on likeminded allies — notably Senator Gramm — to bottle up the most ambitious legislation. He has met repeatedly with corporate lobbyists and urged them to press sympathetic Democrats or those facing tight races, like Thomas R. Carper of Delaware, Evan Bayh of Indiana and Zell Miller of Georgia, to block legislation from reaching the Senate floor. Democrats say that effort appears to have failed and that Senator Paul S. Sarbanes, Democrat of Maryland, appears to have the support to get a bill approved by the banking committee. It would sharply curtail the consulting work performed by accounting firms, create a relatively independent oversight board for the accounting profession, require large corporations to rotate their auditors every five years, and impose tighter conflict of interest restrictions on stock analysts than the measure that was passed by the House. Mr. Gramm has been working closely with the administration on an alternative measure that does not tighten conflict of interest regulations for analysts or auditing firms. His wife's Enron ties seem to have produced no political pressure on Mr. Gramm — who has announced his intention to retire from the Senate after this year — to shy from the debate. The post-Enron proposals prompted scores of industry associations and hundreds of corporations to retain lobbyists and use their own employees to try to weaken or kill the measures. They include the American Institute of Certified Public Accountants, which is dominated by the largest firms. Hundreds of companies, including Oracle and Intel, have fought against changing the treatment of stock options. And many of the largest Wall Street firms have lobbied against changes in the laws governing stock analysts. The drift in Congress largely reflects the power of the accounting profession. Accounting firms ranked as three of President Bush's top eight campaign donors in 2000, and over all, the industry made $14.7 million in campaign donations to both Democrats and Republicans during the last election cycle, according to the Center for Responsive Politics. The profession has influential members in many congressional districts and has been known to use lawmakers' own accountants to lobby them. Pension legislation may stand a better chance in Congress, although its prospects remain cloudy. The chairman of the Senate Finance Committee, Max Baucus of Montana, is crafting an alternative to a bill by Senator Edward M. Kennedy, Democrat of Massachusetts, that drew strong opposition from business lobbyists and Republicans. On some points, Mr. Baucus's bill is likely to contain provisions similar to those in the House bill, like permitting workers to sell company stock awarded as a 401(k) match three years after they receive it. Senate aides say the bill may also place limits on certain forms of executive compensation. Mr. Daschle is warming to the provisions that are expected to form the Baucus proposal, Senate aides say. But they say the Baucus plan is unlikely to include the Kennedy proposal's provision prohibiting most companies from both offering their stock as a 401(k) investment option and using it to match employee contributions. This was designed to keep employees from putting too much retirement money in their own stock, as happened at Enron. One major issue that remains unresolved is how to give employees better access to investment advice. Investment management companies have been lobbying to permit firms that administer retirement plans to offer advice to participants. Among other things, they would be permitted to recommend investments for which they could receive a fee. Senate aides say the Baucus proposal may instead contain a provision encouraging employers to hire independent firms to provide advice.

To: Raymond Duray who wrote (4072)	6/20/2002 1:54:05 AM
From: Mephisto	Read Replies (1) \| Respond to of 5185

Microsoft Case Has a Surprise Near Its End The New York Times June 19, 2002 By AMY HARMON "The states say the Justice Department's settlement with Microsoft, reached after an appeals court found the company liable for repeated antitrust violations last year, would allow the company to continue to stifle competition in the market for computer operating systems." The federal judge in the Microsoft antitrust trial indicated for the first time yesterday that she was questioning the government's proposed settlement, which she could reject if she found that it was not in the public interest. Lawyers for Microsoft and the coalition of states pursuing a more restrictive antitrust remedy are scheduled to make their closing arguments today. But in an unexpected order issued yesterday afternoon, the judge appeared less interested in hearing summaries of the opposing views than in structuring a mediation session. Judge Colleen Kollar-Kotelly of the Federal District Court in Washington told Microsoft and the states to be ready to answer questions about how their respective proposals could be modified to make the terms acceptable. The order is significant in part because the states' case has been viewed as a long shot, with legal precedent dictating that the judge show deference to the federal government's decision. But Judge Kollar-Kotelly now appears to be urging Microsoft to reconsider at least certain parts of the proposal. The states say the Justice Department's settlement with Microsoft, reached after an appeals court found the company liable for repeated antitrust violations last year, would allow the company to continue to stifle competition in the market for computer operating systems. Microsoft argues that the states' proposals would destroy the computer software market, raise prices and force the company to stop selling its Windows operating system, which runs on 95 percent of the world's personal computers. "As defendant is well aware, its proposal has been criticized," she wrote, for containing so many exceptions that the effectiveness of its restrictions would be undermined. She ordered Microsoft lawyers to be prepared to indicate places where the proposal could be tightened. The Justice Department, Microsoft and lawyers for the states declined to comment on the order yesterday. "This has got to be chilling to you as the federal government and Microsoft," said Andrew Gavil, an antitrust professor at Howard University who has followed the case closely. "She has accepted to some extent that there are loopholes in the settlement." An appeals court found last June that Microsoft had acted illegally to undermine the Netscape Navigator Web browser, now owned by AOL Time Warner, and the Java programming language of Sun Microsystems, which could have evolved into a threat to its Windows operating system monopoly. But the court discarded the decision by Judge Thomas Penfield Jackson to break up the company, and instead ordered the district court to devise a remedy that would restore competition and prevent Microsoft from repeating its illegal behavior. In November, the Justice Department arrived at a consent decree with Microsoft. Under the settlement, Microsoft agreed to enable computer makers to remove the desktop icons to several of the software programs that it includes in Windows, and to disclose more information to rival developers so that its own programs would not benefit from a superior interaction with the operating system. Nine states who originally joined the Justice Department's lawsuit against Microsoft also signed on to the settlement. But nine other states, led by California and Iowa, argue that the settlement is ineffective. They want Judge Kollar-Kotelly to order Microsoft to sell a stripped-down version of Windows that would allow computer makers actually to substitute rival programs for those produced by Microsoft, rather than simply removing the icons. They are also pushing for broader disclosure provisions, without the exceptions included in the proposed settlement, to ensure that Microsoft shares information about Windows with rivals. Other crucial provisions in the states' proposal include forcing Microsoft to give away the source code for its Internet Explorer browser, and to auction its popular Office software to developers who could create versions for the Linux operating system. Antitrust experts said the judge could run into procedural challenges if she tried to join two entirely separate proceedings into one. If she rejects the government's settlement, she would essentially be ordering the Justice Department to continue litigating a case it had chosen to settle. But if she manages to extract concessions from each side, there is a slender chance that Judge Kollar-Kotelly could modify the Justice Department's settlement without rejecting it and fashion a single remedy that would put an end to the four-year case. "What she may be looking for is a middle-of-the-road document that she can get all of the parties to agree to," Mr. Gavil said. "Then there's no appeal, no reversal. If she can do that then she comes out as a hero." nytimes.com Copyright 2002 The New York Times