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NOVEMBER 14, 2005
Edited by Dan Beucke Talk Show "What comes to your mind when you think of Kenneth Lay?" -- From a questionnaire sent to lawyers prepping for his January trial, reported by The Washington Post PERK PARADE Nice Work, If You're From Ecuador Sure, oil execs are rolling in dough these days. But in Ecuador, so are the secretaries. Thanks to high oil prices and a mandatory profit-sharing law, Occidental Petroleum's (OXY ) 350 lucky Ecuadoran employees are each taking home windfall pretax payments averaging $130,000 to $150,000. That's because Oxy racked up a hefty $464 million of local profits in 2004. With oil prices even higher this year, office workers, drivers, and oilfield mechanics figure they could get up to $200,000 each. By law, all companies have to distribute 15% of local profits to employees -- 10% divided equally among workers, the rest distributed by number of dependents. Canada's EnCana (ECA ) is the only other oil multinational making such lavish payments this year. For workers in Ecuador, where annual per capita income is just $2,180, the payments are a bonanza. "It's like winning the lottery, more than once," says one worker. Daniel Almaguer, Oxy's legal counsel in Quito, adds: "I think most of our people realize that just as the price of oil can go up, it can go down, so most of them probably try to invest their windfall in something lasting." He wouldn't know from personal experience, though: As one of 25 expatriate employees, he's not eligible for Oxy's payout. By Geri Smith   CHARITY CASES A Big Fund For Tiny Businesses Microfinance is getting a megaboost. On Nov. 4, eBay (EBAY ) founder and Chairman Pierre Omidyar and his wife, Pamela, were expected to announce they're donating $100 million to Tufts University to create a new fund for microfinance lending initiatives. Typically, microfinance groups lend as little as $40 at a time to people in developing countries -- often women creating crafts, selling vegetables, and the like. They repay, with interest, more reliably than consumers in developed countries. Some profitable microlenders exist, such as Grameen Bank in Bangladesh, but most depend on donations for the loans. That's what the Omidyars hope to change. "We'd like to unleash $1 billion in loans through this fund," says Omidyar, who created eBay partly to empower individuals. He owns $8.4 billion of its shares. What's needed, he says, is continued support of traditional institutional investors. Tufts President Lawrence Bacow hopes the Omidyar-Tufts Microfinance Fund's annual return will at least match the university endowment's 9% target. Tufts will keep half the income to invest in its own programs; half will be reinvested in more microfinance initiatives. By Rob Hof THE BIG PICTURE 
AFTER KATRINA BellSouth's Rivals Are Storming Mad Rival phone companies are asking whether BellSouth is exploiting Hurricane Katrina to win back customers. Alternative local service providers such as Momentum Telecom, Trinsic, and Access Integrated Networks resell local phone service purchased from BellSouth -- but they are largely dependent on the Baby Bell to maintain and repair their network. Those three carriers, and others, say they're being deluged with calls from small-business and home customers in cities devastated by Katrina. In some instances, customers of Momentum and the rival carriers complain that BellSouth customers in their apartment complexes, or on their blocks, have had service restored but that they're still phoneless. If they call BellSouth to inquire about the timetable for repairs, the customers claim that BellSouth reps are telling them it will take a month or more to restore service -- but they can be up and running, sometimes the same day, if they switch their local phone service back to BellSouth. A BellSouth spokesman says the company isn't playing favorites: "We are treating all customers the same regardless of the company that provides them service." Still, Access Integrated CEO Vincent Oddo recently met with Federal Communications Commission Chairman Kevin Martin to voice his complaints. An FCC staffer says that if a formal complaint were filed, the agency would consider it as a serious matter for investigation. By Dean Foust DEVOTED FANS My iPod, My Icon? The latest offering in the cult of Apple (AAPL ) comes from a couple of Christian buddies from Portland, Ore., who launched the iBelieve, a simple plastic fitting that turns any iPod Shuffle music player into a cross worn around the neck. Close to 200 Apple addicts shelled out $12.95 each for the doodad the first day it was offered at Web site www.devoted1.com. Creator Scott Wilson, 36, a product designer for major consumer brands by day and former Catholic schoolkid, says he and business partner Mike Prstojevich asked friends who own an electronics factory in China to produce 350 iBelieves for under $5 each. They're preparing to order the next batch. "We weren't sure if we'd sell 10 or 10,000," says Wilson. By Esha Bhandari DISASTER WATCH Anyone Feel Like A Drink? From the agenda of a Council on Foreign Relations conference on avian flu to be held on Nov. 16 in New York: 3:45 to 5:00 p.m. Session V: What Will The World Look Like After a Pandemic? 5:00 to 6:00 p.m. Cocktail Reception FACE TIME Bruce Sherman: A Paper Tiger With Claws  Investor Bruce Sherman, 57, looks like the most powerful newspaper wheeler-dealer since William Randolph Hearst. The press-shy CEO of Private Capital Management, a unit of Legg Mason (LM
), has accumulated major positions in nearly every U.S. public newspaper company. Now the former accountant is exercising his clout. On Nov. 1 he demanded that the languishing No. 2 chain, Knight Ridder (KRI
), of which PCM owns a 17% stake, put itself up for sale. Sherman isn't talking, but with his holdings -- including 15% of The New York Times and 6% of Gannett (GCI
) -- he could force a radical restructuring of vulnerable publishers.Nearly 20 years ago, in one of his first forays, Sherman helped the Collier family sell the Naples Daily News for $170 million. The stakes are higher now. A letter from PCM to the Knight Ridder board points to poor prospects for revenue growth in the industry, which is under siege from the Internet, declining and aging readership, and tepid ad spending. By Tom Lowry EXECUTIVE PAY It Sure Beats A Gold Watch After the Securities & Exchange Commission launched a probe of accounting irregularities at Dollar General, Cal Turner Jr. in 2002 returned $6.8 million that he had been paid for results that were eventually restated; he then stepped down as CEO. The gesture was lauded by BusinessWeek and others. But in the two years since, Turner has remained employed by -- and paid by -- Dollar General, based in Goodlettsville, Tenn. After retiring as chairman in June, 2003, Turner stayed on as an adviser to the board: In 2004 he received $275,000 plus $113,000 in perks. On Oct. 18, Turner fully retired and got another big payout. In an SEC filing reported on the Web site Footnoted.org, Dollar General disclosed that Turner is getting a lump-sum retirement payment of $1 million, access to the company's box suite at Tennessee Titans games, title to a company-owned 2004 Audi A8 that he drives, and up to $100,000 to cover legal and consulting expenses. Dollar General also is making a "gross up" payment to cover taxes on the package. Turner directly owns 3.3% of its shares, worth $200 million. Nell Minow, editor of the governance Web site The Corporate Library, calls the payments "unconscionable," in light of earlier accounting troubles. Dollar General says Turner's compensation recognizes 25 years as CEO, plus board meetings and consultation afterward. It was fair, according to a spokeswoman, "given the valuable service that Mr. Turner provided over the course of two years during the transition and orientation of our new executive team." By Dean Foust BLOGSPOTTING Always Low Prices alwayslowprices.net WHY READ IT: If you're interested in Wal-Mart, the largest U.S. private employer, this blog is a rich resource. It bills itself as covering "the best and worst about Wal-Mart," from internal memos to discussions of employee benefits, from a balanced perspective. WHO'S BEHIND IT: Eight unpaid bloggers claiming to be independent of Wal-Mart or any opposing group. NOTABLE POST: An analysis of a speech by CEO H. Lee Scott points to Wal-Mart's goal of increasing fuel efficiency in its trucks by 25%: "Basically, Wal-Mart is going to leverage its size to obtain environmental goals. It will use the same exact tactics it uses against its suppliers to lower prices, only this time very, very few people will bemoan them as an abuse of corporate power." For more on blogs, see Stephen Baker and Heather Green's blogspotting.net. 
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