Fastow testifies in trial of Enron’s ex-executives

The former CFO of Enron Corp, Andrew Fastow, has testified in the criminal trial of former Enron executives Jeffrey Skilling and Kenneth Lay. Fastow has already admitted to stealing millions of dollars from the company. His testimony included discussion of the illegal deals between Enron and the two partnerships Fastow ran and partly owned, LJM1 … Read more Fastow testifies in trial of Enron’s ex-executives

Another Twist to the Bielinski Brothers Story

Last week’s scheduled sentencing of former Bielinski Brothers CEO Robert Brownell was postponed after he was allegedly mugged outside his home a few days prior. Federal prosecutors now say that the mugging was staged by Brownell, who had his 14 year-old son hit him with a board.

Brownell pleaded guilty to one count of conspiracy to commit mail fraud, and could be sentenced to as much as 20 years in prison and $250,000 in fines. The fraud scheme allegedly masterminded by Brownell caused losses to Bielinski Brothers estimated at $10 million.

Read moreAnother Twist to the Bielinski Brothers Story

Enron’s ex-CEO will testify this week

Andrew Fastow, the former CEO of Enron will testify this week in the trial of Kenneth Lay and Jeffrey Skilling. Fastow created partnerships to do financial “deals” with Enron, but the partnerships did not meet accounting requirements to make them independent of Enron The defense is expected to say that Lay and Skilling were really … Read more Enron’s ex-CEO will testify this week

9/11 insurance claim by U.S. Airways is denied

U.S. Airways filed an insurance claim with its carrier, PMA Capital Insurance, following September 11, 2001. The claim was for a loss of business related to the terrorist attacks, because Reagan National Airport was closed from September 11 to October 4. The Supreme Court of Virginia, however, has ruled that U.S. Airways cannot collect on … Read more 9/11 insurance claim by U.S. Airways is denied

Adelphia’s Former Executive VP to Serve 10 Months of Home Confinement

Michael J. Rigas, the former executive vice president of cable company Adelphia Communications Corp. will serve 10 months of home confinement and two years of probation. He will also pay a $2,000 fine. This is his punishment for helping to conceal fraud at the company.

Rigas faced up to three years in prison for filing a false statement with the SEC in connection with a 1999 purchase of Adelphia stock for $1.7 million. He reported that source of the money he used to purchase the shares was personal funds. He later admitted that the money actually came from Adelphia.

Read moreAdelphia’s Former Executive VP to Serve 10 Months of Home Confinement

Wal-Mart is looking for an ethics chief

Wal-Mart Stores Inc. is seeking a director of global ethics to help monitor compliance with its worldwide code of conduct. Wal-Mart currently has 1.6 million employees in 15 countries, and over 6,200 stores. The new director would oversee the Global Ethics Office, which was opened in 2004 to offer employees guidance on ethics compliance. Read … Read more Wal-Mart is looking for an ethics chief

U.S. auto makers pay employees to NOT work

A longstanding deal with the United Auto Workers means that U.S. auto makers pays billions for employees who don’t work. The “Jobs Bank” program sees to it that over 15,000 unneeded workers continue to earn wages and benefits that often exceed $100,000 annually per employee. The total cost of this program will be $1.4 billion to $2.0 billion this year.

This was such an interesting story in the Wall Street Journal that I’m posting the entire article here.

Detroit’s Symbol of Dysfunction: Paying Employees Not to Work
By Jeffrey McCracken
WSJ, March 1, 2006

FLINT, Mich. – In his 34 years working for General Motors Corp., one of Jerry Mellon’s toughest assignments came this January. He spent a week in what workers call the “rubber room.”

The room is a windowless old storage shed for engine parts. It is filled with long tables, Mr. Mellon says, and has space for about 400 employees. They must arrive at 6 a.m. each day and stay until 2:30 p.m., with 45 minutes off for lunch. A supervisor roams the aisles, signing people out when they want to use the bathroom.

Their job: to do nothing.

This is the “Jobs Bank,” a two-decade-old program under which nearly 15,000 auto workers continue to get paid after their companies stop needing them. To earn wages and benefits that often top $100,000 a year, the workers must perform some company-approved activity. Many do volunteer jobs or go back to school. The rest must clock time in the rubber room or something like it.

Read moreU.S. auto makers pay employees to NOT work