The Times on C1 reports on a bizarre turn of events at the Federal Communications Commission, where a top aide to the chairman is being accused of participating in a Ponzi scheme that cost investors $54 million. The aide, Daniel Gonzalez, was on the fraudulent energy company’s board and personally guaranteed $7 million in loans despite being not having nearly enough money to cover it (of course, they went bad). The company was run by a dude named Robert Miracle.
Despite all that, the FCC chairman Kevin Martin declined his offer to resign several months ago, saying there “was no evidence that Mr. Gonzalez violated any ethics rules or criminal laws.”
Maybe not under this administration’s standards, but his poor judgment alone ought to be reason enough for him to be gone from such an important job in a conflict-ridden industry.
Mr. Gonzalez has denied the lenders’ accusations. But commission officials said they were baffled by how one of the most important telecommunications regulators in Washington—one known to be a cautious lawyer leading a seemingly modest lifestyle—could be accused of being so careless.
Another electricity retailer goes belly up
The Journal reports on A4 that an electricity retailer has defaulted in Texas, becoming the third one to do so in the past two months as wholesale prices for energy have soared there—“slammed by a deregulated market.”
To fend off more crashed companies, Texas is considering re-regulating its market, for now, in an emergency board meeting. The Journal says the price spikes are “unexplained,” but the Houston Chronicle says they’re due to an overloaded grid and soaring natural-gas prices.
Kinder, gentler Wal-Mart?
The Times on C1 says Wal-Mart’s union-backed foes are beginning to acknowledge that the Arkansas retailing giant has changed some of its bad ways.
The mellowing of the anti-Wal-Mart movement is an unexpected development for the retailer, whose public image and share price were bruised by the well-financed union campaigns… The union-financed campaigns were started in 2005. As the groups turned up the heat on the company, Wal-Mart was at first defensive, but eventually it responded in ways few of its critics expected. The company expanded its health care plans to cover more workers, though still not enough to satisfy the unions. And it made commitments to the environment, like becoming the country’s biggest seller of more efficient light bulbs.
Indeed, Wal-Mart has gone so far on some initiatives, like the environmental programs, that it has started to draw scattered attacks from the right…
It’s a good story, but the Times should have noted that part of the reason for the decreased heat on Wal-Mart is surely due to the fall of the company’s outlook from a few years ago, which has revealed chinks in its armor that weren’t apparent then. It’s seriously scaled back its expansion plans as new stores increasingly cannibalize each other, for instance, as the Journal notes in a B1 story on the company.
Hey, that’s our oil!
The Los Angeles Times reports that Mexico is considering allowing foreign oil companies to help it drill offshore in part to fend off oil companies that are encroaching on its territory.
Mexicans fear that companies drilling in U.S. waters close to the border will suck Mexican crude into their wells. Actor Daniel Day-Lewis’ fictional oilman in “There Will Be Blood” likened the concept to siphoning a rival’s milkshake…
But for a growing chorus of Mexicans, sharing a milkshake is preferable to watching your neighbor drink it up. Mexico has no viable deepwater drilling program to match U.S. efforts near the maritime border. And it lacks an iron-clad legal means to defend its patrimony. Some are urging their government to partner with the U.S. to co-develop border fields or risk losing those deposits.
The paper says the U.S. has approved drilling rights just ten miles from Mexican waters. The two countries have a prickly history over oil—Mexico nationalized its industry in the 1930s because of interference from Standard Oil. The country faces declining production and doesn’t have the ability to drill in deep water.