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APRIL 19, 2004
Edited by Monica Roman Lea Fastow: The Fastows In A Fix In a blow to the government and to former Enron assistant treasurer Lea Fastow, a federal judge on Apr. 7 rejected a deal that would have confined the Houston mother to prison for five months and to her home for five more in exchange for a guilty plea on a charge of filing a false tax report. 
Prosecutors will now have to divert resources from their cases against former Enron CEO Jeffrey Skilling and other Enron execs. Fastow's subsequent withdrawal of her plea "is a lose-lose situation for both her and the government," says Philip Hilder, an ex-federal prosecutor who represents several former Enron workers. In January, Fastow helped win a deal for her husband, Andrew. The former Enron CFO pleaded guilty to conspiring to commit wire and securities fraud and will serve 10 years in prison. The Justice Dept. says that the new turn in Lea's case doesn't give Andrew grounds to ask the court to withdraw his deal. Meanwhile, Lea appears headed to trial in June, possibly on additional charges, and could face a longer sentence than the one she turned down. By Wendy Zellner Static At Nokia What's ailing Nokia (NOK )? The mobile-phone giant shocked markets on Apr. 6 with a warning that first-quarter sales wouldn't meet expectations due to weakness in the company's product lineup. While the overall handset market grew 25% over the previous year, Nokia's unit sales grew just 19%. That could trim two points off its global market share. Worse, skidding prices pulled handset revenues down 6.3%. "This is bad news," says analyst Richard Windsor at Nomura Securities in London. Investors drove Nokia shares down 20% over two days in Helsinki and New York. The company promises that 40 new models this year will entice buyers. But Nokia won't catch up quickly from a late start in the popular "clamshell" phones.   Home, Sweet Delaware  Australian-turned-American citizen Rupert Murdoch is hoping that moving News Corp. (NWS
) to the U.S. will broaden his shareholder base, improve trading liquidity, and provide better access to the capital markets. Indeed, the restrictions some big U.S. institutions face in owning foreign stocks would be lifted, and News Corp.'s likely addition to the Standard & Poor's 500-stock index will attract more investors. The decision to leave Australia and become a Delaware corporation also comes because News Corp. gets about 75% of its revenues, profits, and cash flow from the U.S. The Murdoch family's 29% stake in the media empire will be virtually unchanged by the move. Voters Nix Wal-Mart Voters in the working-class Los Angeles suburb of Inglewood roundly rejected an initiative to let Wal-Mart Stores (WMT ) build a new superstore without public hearings and environmental review. City council members, lobbied by rival supermarkets and their union representatives, had previously turned down Wal-Mart, citing low employee compensation, reliance on offshore manufacturing, and potential traffic problems. So Wal-Mart took its proposal directly to voters. A company spokesman said it would continue the practice where appropriate. UTC's Engine Trouble Pratt & Whitney's (UTX ) future in commercial airplanes is in doubt after the engine maker lost a bid to supply new engines for Boeing's (BA ) proposed 7E7 jetliner. The contract could be worth as much as $40 billion over 25 years to the two winners, General Electric (GE ) and Rolls-Royce (RYCEY ). They will supply engines, spares, and service to the airlines that buy the 7E7 -- which will consume 20% less fuel than similar-size planes. For Pratt & Whitney, a division of United Technologies (UTX ), the loss is a blow to a troubled commercial-jet-engine business. Analysts viewed winning the 7E7 contract as Pratt's last chance to revive its fortunes. But Pratt execs noted the engine maker still has a strong military business, including contracts to supply engines for Lockheed Martin's (LMT ) F-22 and Joint Strike Fighter. Et Cetera... -- Alcoa's (AA ) first-quarter profit more than doubled, to $355 million, or 41 cents a share. -- Spiegel (SPGLA ), in bankruptcy, wants to sell Eddie Bauer. -- The FCC will appeal a ruling requiring cable companies to offer other ISPs. Closing Bell: Seagate Technology 
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