Marketplace: News Archives

Friday, December 20, 2002
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It's Friday, the 20th of December. I'm David Brancaccio.

Trent Lott of Mississippi is out as Senate majority leader; Bill Frist of Tennessee is in.

After struggling for weeks attempting to make amends for a remark that seemed to favor segregation, Lott stepped aside today as the Senate's Republican leader. Marketplace's Stephen Henn takes a look at some of those who stand to lose, and those who stand to gain.

Henn: "It was a terrible day for Mississippi ship builders. Trent Lott was a tenacious advocate of his hometown industry."

Larry Nobel: "He has brought a lot of jobs to his hometown, to his state, through the shipping industry, and I think they are very concerned now about what this means."

Henn: "Larry Nobel at the Center for Responsive Politics says Sen. Frist might not be crazy about cruise ships -- he is a big fan of big healthcare."

Nobel: "They have been big contributors to his in the past and this has been a big issue of his, so I suspect that you will see that they will really benefit from this."

Henn: "But it’s not all about money: First, is a heart and lung surgeon, and his family founded the largest for-profit healthcare company in the world, HCA.

Just 2 days ago, HCA settled a massive federal fraud investigation, agreeing to pay the government more than $630 million, and that was just the most recent chapter of a fraud case that stretches back more than 15 years."

John Phillips: "Well over $2 billion has been the cost of this to the company."

Henn: "John Phillips represented two corporate whistleblowers whose lawsuits lead to a massive private investigation of HCA."

Phillips: "They’ve had a whole range of practices across the board -- systematically overcharged the Medicare program."

Henn: "In effect, stealing money from American taxpayers. HCA eventually plead guilty to criminal charges of fraud and admitted paying kickbacks to doctors.

Now that Frist is the heir apparent in the Senate, he will have a huge say over the federal rules which govern the family business.

In Washington, I’m Stephen Henn for Marketplace."

Moon: "There were plenty of platitudes at today’s elaborately staged news conference at the New York Stock Exchange, where chairman Dick Grasso seemed eager to declare the matter ended:"

Grasso: "It is time to close this, perhaps one of the darkest chapters in the history of modern finance."

Moon: "While the regulators and big Wall Street firms did agree on a total of $1.4 billion in fines, and new lines of separation between their investment banking business and analyst advice, SEC enforcement chief Steven Cutler brushed over what for some is a key point: Other issues remain unresolved."

Cutler: "When a final agreement is reached among the parties, and the last details are hammered out, the commitments among the parties will be articulated."

Mark Maddox: "So, often in these situations, the devil is in the details -- and from where I’m sitting, the details I’m most concerned about are the ones that apparently haven’t been finalized yet."

Moon: "It’s good that regulators are trying to close the barn door, says Indianapolis securities lawyer Mark Maddox. But he’s worried about those already out billions of dollars:"

Maddox: "This deal would be absolutely ridiculous if the final settlement agreements do not contain very strong language about the frauds that the regulators have uncovered."

Moon: "While regulators say they’ll try to return as much of the fines as possible to investors, New York Attorney General Eliot Spitzer told reporters the $1.4 billion is by no means a cap on what victims might recover on their own:"

Spitzer: "Above and beyond that, will be funds that result from litigation and/or arbitration."

Moon: "Southern Methodist University securities professor Alan Bromberg says the firms benefit from their agreement by ending the regulatory investigations. Investors should benefit from better analyst advice -- but of that, he’s skeptical:"

Bromberg: "To me, that’s a hope, rather than something I think we can absolutely count on."

Moon: "To restore investor confidence, the devil, again, may be in the details.

In New York, I’m Bob Moon for Marketplace."

Dimsdale: "Ed Rice is the coordinator of a business coalition on visa policy. He says the biggest problem for these companies is the slow processing of visa applications."

Rice: "A large U.S. telecommunications company lost a substantial contract in Asia in September because officials of the overseas company could not get into the U.S. for final negotiations over the contract. As a result, the contract was reopened for bids and several European companies are competing for that contract."

Dimsdale: "Some manufacturers complain they lost purchase orders when Chinese buyers were not allowed to come to a U.S. trade show. And, a small houseware supply business in Los Angeles has been shut down after the father and son owners were detained by immigration officials when they showed up to register last week.

Los Angeles immigration attorney Angelo Pepparelli says post-9/11 travel and immigration restrictions are rippling through businesses of all sizes."

Pepparelli: "On a micro level like that, these rules have a pronounced effect. And on a macro level, companies all over the country are having to take into account what sort of extra snares and hurdles have to be overcome under the immigration laws."

Dimsdale: "Specific companies have yet to complain publicly, but their emissaries have approached government officials to urge them to find a more efficient way to process visas."

Stuart Patt: "The resources we’ve got are finite: they’re limited."

Dimsdale: "Stuart Patt, a spokesman for the Consular Affairs Bureau at the State Department, acknowledges the visa reviews did originally create lengthy delays. But he says more reviewers are now on the job."

Patt: "Most cases, overwhelmingly most, should be resolved in less than a month -- in fact, maybe even within a couple weeks."

Dimsdale: "But businesses say even that’s too long. They’re asking the government to create a list of frequent travelers who, once checked, can be expedited through subsequent visa reviews.

In Washington, I'm John Dimsdale for Marketplace."

And, that's the top of our news for Friday. The Dow put on 147 points today, three-quarters percent. The NASDAQ went up 9 points, seven-tenths percent. There were some odd dynamics distorting the market today; we'll get the Texas ‘broker on the line from Dallas to help us with this...in just a minute.

Music Bridge: Tomato Soup - The Incredible Moses Leroy
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Rundown

Streetcorner War Talk
Reporter Philip Martin talks with folks on the corner of 42nd Street & Broadway about how a potential war with Iraq would effect the national economy and their personal lives.
www.usstuff.com

Music Bridge: Something To Talk About - Badly Drawn Boy & Jon Brion
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"Best Gift Ever" Series
What's the best gift you’ve ever received? Marketplace’s Cheryl Glaser talks with folks who’ve had life-changing experiences that came gift-wrapped.
» Listen to others talk about their favorite gifts.
» Would you like to share your story? Go to our discussion forum.

Music Bridge: What Child Is This - Ali Ryerson

Enron For Christmas
Who's getting nothing for Christmas? You'd think it would be Enron, the year's ultimate naughty child. But commentator Nadia Martinez says there'll be no coal in its stocking this year -- Enron is getting a helping hand to continue doing business in developing countries.

Music Bridge: Can't Stand It - Wilco
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Young & Alone
What's it mean to be the new kid on the cubicle block? This time of year, it means you'll be working over the holidays. When it comes to vacation time, seniority still rules, and many young people getting started on their careers find themselves celebrating Christmas stuck in the office.

Look Ahead:
Coming up on Marketplace: tracking the toys you give tiny tots for Christmas. All too many of them come from the hands of children themselves, in countries that have less stringent child labor laws.