At issue is Pricewaterhouse's work for both Enron and those controversial debt-shielding partnerships controlled by then-Chief Financial Officer Andrew Fastow. On two occasions, the world's biggest accounting firm certified that Enron was getting a fair deal when it exchanged its own stock for options and notes issued by Fastow-controlled partnerships in 1999 and 2000. Investigators will ask whether those stock transfers really were "fair," as Pricewaterhouse certified. A Pricewaterhouse spokesman says the company stands by its earlier assessment of the deals and is cooperating with congressional investigators.
Investigators will also ask whether Pricewaterhouse had conflicts of interest: It did tax consulting for one of the partnerships, LJM2. Accounting experts say that could have affected Pricewaterhouse's advice to Enron. Pricewaterhouse says there's no conflict between tax consulting and preparing fairness opinions.
Pricewaterhouse's new CEO, Samuel DiPiazza Jr., is likely to escape the worst of the flak. Instead, ex-CEO James Schiro may well be the next one hauled before Congress. It's looking increasingly as if Hewlett-Packard (HWP
) CEO Carly Fiorina could win her Mar. 19 proxy fight with dissident board member Walter Hewlett over HP's bid for Compaq Computer (CPQ
Many shareholders who share Walter's concerns have been selling shares, fearing the merger will go through. That dilutes his ability to nix it. Others are buying stock just in case HP manages to pull off the merger, cuts costs by $2.5 billion, and ends up boosting the stock price.
Government filings show that big institutional investors Alliance Capital Management, Dodge & Cox, and Vanguard Investments increased HP holdings by 112%, 29%, and 6%, respectively, in the fourth quarter of last year. Another of HP's largest shareholders, which dumped millions of shares after the deal was announced, says it recently has more than doubled its stake.
Why are investors more willing to bet on HP? Both HP and Compaq just announced better-than-expected quarterly results. And unless the merger ends up a complete disaster, investors believe HP stock is unlikely to fall much further. Before the olympics, berets were largely limited to art-school nerds. But cute caps are all the rage since appearing on the heads of the U.S. team during opening ceremonies. Toronto-based Roots designed the U.S., British, and Canadian Olympic teams' uniforms. Its $19.95 beret has become the must-have memento of the Salt Lake City Games. Fans line up to buy them. They're even getting bids of up to $255 on eBay. Baseball caps, hats, fleece tops and parkas are also selling well.
Roots is racing to keep up with demand and expects to sell at least half a million berets by the time things wrap up in Utah. "This is the most exciting thing to happen to us in 28 years," says Roots CEO Marshall Myles, who has 140 stores in Canada but just six in the U.S., plus two temporary ones in Utah.
Why is a foreign company making U.S. Olympic wear? Myles says the U.S. team approached Roots after U.S. athletes at the Nagano Games asked: "Why do the Canadians look so great?" International competition is what the Olympics is all about. Golfers have a litany of excuses for wayward putts--the wind, the club, not to mention the green. Some, including famed putt meister Dave Pelz, even blame the golf balls. Now, Wilson Sporting Goods agrees, saying that golf balls often don't roll straight. Naturally, Wilson has a solution--a new ball that rolls straighter. It goes on sale in March.
Small manufacturing irregularities can cause the heavier core of golf balls to be off-center within the lighter cover, says Wilson's golf biz head Luke Reese. One in 12 high-end balls has the problem. To find out, float a ball in salt water and see if one side always comes up. Wilson says its new True ball, with a lighter core and heavier cover, solves the problem. "A bad ball can really hurt your putting," says Pelz. "If Wilson has eliminated the problem, this would be a plus."
And if the ball still doesn't roll straight? Maybe it really is your fault. Airbus can't seem to get a ticket to the hottest party in its own neighborhood: the rapid expansion of no-frills air travel. None of Europe's discount carriers, from Ryanair to easyJet to Virgin Express, owns an Airbus. And on Jan. 24, Ryanair ordered up to 150 more Boeing 737-800s, making the Irish airline all-Boeing for at least 10 years.
Why can't Airbus get in on the action? Its slightly smaller A320 is cheaper--$54 million, vs. $60 million for a 737. But industry execs say Boeing probably did the Ryanair deal for $40 million a pop. More important, the 737 has been flying since 1966, 22 years longer than the A320, so there's a supply of used 737s for carriers starting up on a shoestring. "The 737 is the aircraft of choice for low-cost carriers," boasts Toby Bright, executive vice-president for sales at Boeing.
To sell to this crowd, Airbus would have to match Boeing's discounts, then throw in extras such as spare parts and free training. With worldwide aircraft orders expected to drop 60% this year, Airbus can't afford such generosity. Airbus has fared better in the U.S. JetBlue and Frontier say the Airbus is more fuel-efficient and has wider seats. In Europe, though, it's still Boeing's party. You needn't look up statistics to know that men outnumber women in the top ranks of Washington. If you're interested, though, the ratio is 4 to 1: Of federal jobs paying $120,000 or more, roughly 12,000 are held by men, 3,000 by women.
But there's one place where women have trumped the ratio: the Office of the U.S. Trade Representative (USTR). Even though the current top gun, Robert Zoellick, is a man, women hold many of the senior positions at the Cabinet-level agency that conducts America's trade talks with other nations and within the World Trade Organization. Eight of the 15 assistant trade reps--top staff at most negotiating tables--are female, and two of the four deputy and associate trade reps are women. That's a ratio of nearly 1 to 1.
Hammering out trade deals can involve lots of travel and uncertain schedules, with long evenings and weekend work--hardly a family-friendly routine. And in some countries, women aren't exactly welcome as equals at the bargaining table.
But Catherine Novelli, an assistant rep who heads the Europe and Mediterranean desk, says women are attracted by the meritocracy and the lack of a glass ceiling at USTR. "Establishing your bona fides as a negotiator is always an issue regardless of your gender," says Novelli. "It is doubly difficult for a woman in the male-dominated cultures of some countries, but demonstrating your negotiating skills overcomes those barriers."
The trade office was headed by women, Carla Hills and Charlene Barshefsky, during the elder Bush and Clinton Presidencies. And even though the State Dept. once was too, its men-to-women ratio at the top level is 3 to 1.