NATIONAL BRIEFING

Wednesday, November 19, 2008

ENERGY

Drilling Ban Called Unlikely

House Majority Leader Steny H. Hoyer (D-Md.) said that he did not expect the new Congress to reimpose a blanket moratorium on offshore drilling along the Atlantic, Pacific and Florida coasts, but he said that he did expect an attempt to delineate areas where drilling would be allowed.

"I do not believe at this point in time that there are any proposals being made to reinstate the moratoria across the board," he said in a speech at the National Press Club.

The American Petroleum Institute called Hoyer's comment "the right approach. . . . Neither Congress nor the next administration should set unreasonable, arbitrary limits on leasing."

LEGAL

Google Book Settlement Approved

Google won preliminary court approval for a settlement of copyright lawsuits brought by publishers and authors, a deal that it said will enable it to make millions of books searchable and printable online.

U.S. District Judge John Sprizzo in New York tentatively approved the agreement and scheduled a hearing for June 11, when he will further consider its fairness. Under the settlement, announced Oct. 28, Google would pay $125 million to resolve claims over its book-scanning project.

The owner of the most popular Internet search engine said the agreement will expand its Google Book Search program to let online readers search for and buy copyrighted and out-of-print books in whole or page by page.

Google will also provide U.S. libraries with free access to the database.

Oppenheimer Accused of Fraud

Massachusetts' top securities regulator accused Oppenheimer & Co. of fraud over the investment bank's sales of auction-rate securities to customers who couldn't access their money after the market for the risky investments froze.

Secretary of State William Galvin's administrative complaint also alleges Oppenheimer executives and managers sold nearly $3 million of their own personal auction-rate securities holdings within two weeks before the market's collapse last February, without warning clients of growing risks amid a downturn in broader credit markets.

Oppenheimer & Co., a New York-based subsidiary of Oppenheimer Holdings, denied Galvin's allegations in a statement saying the company "intends to vigorously defend itself."

FINANCE

GE Capital to Restructure

General Electric said that it is reorganizing its GE Capital unit to save $2 billion next year, a move the company said will lead to job cuts as it restructures and shrinks the size of the lending arm battered by the credit crisis.

In a video posted on the company's blog, GE Capital Chief Operating Officer Bill Cary said GE Capital, which provides commercial and consumer loans, has "evolved to the point where we think we are going to be smaller in 2009."

A special committee will look at reducing the company's holdings in areas that "don't meet our return hurdles," he said, but did not provide details. GE Capital will also reduce its workforce, currently around 75,000 employees, by an unspecified number of jobs.

AIRLINES

United Pilots Face Injunction

A federal judge found that a summer sick-out and work slowdowns by some United Airlines pilots was an illegal job action and said she would issue a preliminary injunction preventing their union from activities that disrupt the airline's activities.

United had blamed the sick-outs alone for the cancellation of 329 flights between July 19 and July 27. The airline sued the union and four individual members on July 30, and announced Monday's ruling by U.S. District Court Judge Joan H. Lefkow yesterday.

The United branch of the Air Line Pilots Association has been angry over what it says is United's refusal to reverse concessions made during United's 2003 bankruptcy reorganization. The union has denied encouraging sick-outs or slowdowns, which are barred by the Railway Labor Act.

The union issued a statement saying it has "already advised the United pilots that it remains essential not to engage in any form of economic action involving United Airlines."

EARNINGS

Home Depot said that its third-quarter profit fell by 31 percent, to $756 million from $1.09 billion in the year-ago period, as shoppers scaled back on everything from custom kitchens to lumber and flooring. Revenue sank 6 percent, to $17.78 billion from $18.96 billion. Same-store sales, or sales at stores open at least a year, a key indicator of retailer performance, dropped 8 percent. The company also forecast a steeper drop in full-year sales -- as much as 8 percent instead of the 5 percent it predicted earlier -- because of the still-challenging housing and home improvement markets.

Saks swung to a wider-than-expected loss for the third quarter as it resorted to deep discounts in an attempt to pull in affluent customers spooked by massive job losses on Wall Street and shrinking stock portfolios. The luxury retailer lost $42.8 million for the period ended Nov. 1, compared with a third-quarter profit of $21.6 million a year before. Sales fell 12 percent, to $698 million.

Medtronic, the world's largest medical-device maker, said it earned $571 million in the period ended Oct. 24, down 14 percent from the corresponding quarter last year. Sales grew 14 percent, to $3.57 billion. The results included a $176 million after-tax charge for litigation expenses.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.