Setback in Birmingham
After a string of wins in cases against corporate executives, the federal government suffered a big setback when an Alabama jury acquitted HealthSouth founder and former chief executive Richard M. Scrushy on all 36 of the criminal charges he faced in connection with a $2.7 billion accounting fraud. Scrushy was the first top executive tried under the Sarbanes-Oxley Act, a new corporate responsibility law. But jurors found testimony from five former HealthSouth chief financial officers less than credible and voted to acquit after 21 days of deliberations.
In a victory for President Bush and for the cause of free trade, the Senate approved the Central American Free Trade Agreement, 54 to 45. The accord faces much tougher sledding in the House, but it gained powerful momentum from the Senate's action. It is the most controversial trade deal in years because it would dramatically lower trade barriers between the United States and poor countries in Latin America. The administration won partly by promising to spend more to help labor enforcement in the region.
Bank of America struck a deal to buy MBNA for about $35 billion in cash and stock, creating a formidable competitor in the credit card industry that would be larger than the current powerhouses, J.P. Morgan Chase and Citigroup. If completed, the deal would give the combined firm a 20.2 percent share of the credit card market, and since the top five firms would control more than 72 percent of the market, consumer groups voiced worries that higher interest charges and bigger fees will be in store.
AMD v. Intel
Advanced Micro Devices filed suit against Intel, alleging that Intel used its market power to bully computer companies so they wouldn't buy AMD microprocessors. The lawsuit contends that Intel threatened retaliation against companies that did business with AMD and used tactics such as discriminatory rebates and subsidies to keep business. Intel disputed the suit, saying that it will show it is competing fairly and that AMD's case is "full of excuses and speculation." Intel has about 80 percent of the computer microprocessor market.
Oil prices shot past $60 a barrel on concerns about tight supplies with rising summer gasoline demand. Higher prices spurred the Senate to approve broad energy legislation that includes $14 billion in tax incentives for oil and gas production but also for development of wind, solar and other alternative energy sources. The House has passed a much different bill emphasizing domestic oil and gas production, and the two versions will have to be reconciled before going to President Bush. The White House objects to some provisions of the Senate bill.