"Yesterday, I thought about him. Today, I don't think about him at all."
--Russian President Boris Yeltsin, about former Soviet leader Mikhail Gorbachev, during an online chatEDITED BY ROBERT McNATTReturn to top
A BAD SMELL AT WASTE MANAGEMENT
THE $3.5 BILLION WRITE-OFF IN February that contributed to the pending sale of Waste Management to USA Waste Services has resulted in investigations by the Securities & Exchange Commission and by Waste Management itself. Now, people familiar with the internal investigation say that its findings could pose problems for Waste's former managers and auditor and lead to a settlement of a truckload of shareholder lawsuits.
The internal probe, which is being closely monitored by the SEC, is expected to wind up by mid-June with no findings of fraud, says a source familiar with it. But certain former top executives and auditor Arthur Andersen are likely to be blasted for aggressive accounting practices that hid the scope of the business's deterioration.
USA and Waste have also come up with a ballpark figure to settle the shareholder suits and resolve any SEC action, says a USA Waste insider. It's at least $100 million, say several bankers. But a source familiar with the investigation said that Waste's board may consider recouping some costs from Andersen, and past executives, including former Waste Chairman and cofounder Dean Buntrock, putting them on the hook for millions. Neither Buntrock, Andersen, the head of USA, John Drury, or his counterpart at Waste, Robert Miller, would comment.Richard A. MelcherReturn to top
LOCKHEED'S PAPER CHASE
EVEN BY WASHINGTON STANDARDS, paper-shuffling in the Lockheed Martin merger has reached a curious turn. It's not that the Justice Dept. won't give Lockheed Martin certain documents it has examined in deciding to block the deal with Northrop Grumman. The odd thing is one of the documents came from Lockheed Martin in the first place.
Why would the government refuse to hand back Lockheed Martin's own material--standard procedure in antitrust cases? Well, Justice says its own lawyers may have written notes on the document, making the material privileged. That argument didn't go over very well in pretrial skirmishing. Federal Judge Emmet Sullivan called Justice's list of the disputed papers "woefully abysmal." The feds could easily delete their notes, he said. Meanwhile, because the feds didn't specify which of the thousands of company documents they are withholding, Lockheed Martin was left in the dark.
Justice blames the problem on human error and tight deadlines. But one outside lawyer says the department is in a bind because it expected a settlement, not a trial. At any rate, on May 13, some of the papers were to be delivered to the judge, who will soon decide what must be released.EDITED BY ROBERT McNATTReturn to top
MICROSOFT STUBS ITS TOE ON SIDEWALK
MICROSOFT HAS AMASSED A $12 billion pile of cash, but even a software giant needs to make money on the Web. Microsoft's Sidewalk, a chain of local arts and entertainment sites, has lost millions since its May, 1997, startup. That has left company bean-counters less than amused.
Now Microsoft is trying to repave Sidewalk with gold. The plan: turn it into a network of E-commerce sites, selling everything from appliances and computers to cars and air travel.
The new Sidewalk rolls out this fall in 41 top ad markets, including Los Angeles, Chicago, and Miami. Nine existing city sites will get makeovers to accent E-commerce, says Matt Kursh, Sidewalk's general manager. Viewers will be able to buy from local retailers, online shops, or direct marketers. Microsoft will make money from ads and transaction fees. Says Kursh: "We're about consumers and advertisers coming together when the time is right--when consumers are ready to buy." Bill Bass of Forrester Research lauds the change: "Sidewalk wasn't stupid. But clearly it didn't work." And it cost Microsoft $40 million to find out.EDITED BY ROBERT McNATTReturn to top