Mortgage financing giants Fannie Mae and Freddie Mac spent $96 million on ads to influence members of Congress and policymakers in 2003 and 2004, when accounting scandals at both companies led lawmakers to consider legislation to toughen federal oversight of the two companies, according to a recent study by the Annenberg Public Policy Center at the University of Pennsylvania. The legislation died. The $96 million included $87 million spent by Fannie Mae and its nonprofit foundation, compared with the $2 million the company and its foundation spent in 2001 and 2002.
Judge Drops 3 Scrushy Perjury Counts
The judge in the fraud trial of HealthSouth founder Richard M. Scrushy dismissed three perjury counts based on testimony he gave to the Securities and Exchange Commission. Scrushy, who is accused of inflating HealthSouth profit by $2.7 billion, said the SEC wrongly helped prosecutors obtain information for their investigation. Prosecutors said Scrushy lied during the interview on March 14, 2003, when he told an SEC accountant that he signed accurate financial statements, and denied ordering subordinates to change HealthSouth results.
Levi Strauss said it earned $47.3 million in the first quarter, compared with a loss of $2.4 million in the corresponding quarter a year earlier. The privately held clothing maker last year absorbed a $54 million charge, accounting for much of the difference. Revenue for the three months ended Feb. 27 increased 5 percent, to just over $1 billion. Chief executive Philip Marineau, left, and Chairman Robert Haas posed for a publicity photo in 2003 when the company observed its 150th anniversary.
(Ben Margot -- AP)
United Airlines said fuel costs may be $700 million more than it expected this year, intensifying its need to cut other expenses in its Chapter 11 reorganization. The airline expects average fuel prices this year of $1.66 a gallon, 22 percent higher than the carrier estimated when creating a business plan in December.
The Securities and Exchange Commission is likely to grant companies a brief delay in complying with new provisions requiring them to treat stock options as expenses. The accounting standard, which was set to take effect June 15, could result in lower reported profit for companies that make heavy use of options. The five-member commission is likely to release the results of a vote on the issue this week.
Rep. Joe Barton (R-Tex.), chairman of the House committee overseeing the broadcast television industry, said he probably will not introduce a bill this year to extend federal indecency rules to cable and satellite TV services. "The cable industry is working on a voluntary basis to see if they can come up with something," the Commerce Committee chairman said. Barton said he might try to draft legislation or prepare some other plan next year that would have the support of over-the-air, cable and satellite broadcasters.
California's public pension funds should sue American International Group to recover $400 million lost since regulators began a probe of the insurer, state Treasurer Philip Angelides said. Angelides also said the California Public Employees' Retirement System and the California State Teachers' Retirement System should consider filing suit against AIG's executives and its auditor, PricewaterhouseCoopers.
The Financial Accounting Standards Board may act within the next six months to tighten rules on a type of reinsurance that can be used by companies to smooth earnings, Chairman Robert H. Herz said. New York Attorney General Eliot L. Spitzer and the Securities and Exchange Commission are probing whether finite risk policies act as disguised loans, allowing clients to mask losses.
Microsoft released five security patches to fix flaws rated "critical" -- Microsoft's highest threat level -- that affect the Windows computer operating system, Internet Explorer browser, MSN Messenger, Microsoft Word software and Exchange server system. All the flaws affect computers with operating systems dating back to Windows 98. Users who have installed Microsoft's security update for Windows XP, Service Pack 2, also will need to install some patches.
Petco Animal Supplies agreed to stop selling parrots and other large birds to end a boycott by the animal-rights group People for the Ethical Treatment of Animals.
Estee Lauder and Gucci fashion designer Tom Ford made a deal to develop beauty products.