STATE
THE BATTALION
7A
Wednesday, September 1, 2004
Former Enron Broadband executive
pleads guilty to conspiracy Tuesday
By Kristen Hays
THE ASSOCIATED PRESS
HOUSTON — A former executive from
Enron Corp.'s defunct high-speed Internet
unit pleaded guilty Tuesday to one count
of conspiracy related to the scandal-choked
company’s collapse.
Kevin Hannon, 44, chief operating officer
for Enron Broadband Services, was ordered
to surrender $2.2 million in assets and $8 mil
lion in deferred compensation from Enron’s
bankruptcy estate. His maximum sentence is
five years and a $250,000 fine.
U.S. District Judge Vanessa Gilmore asked
Hannon, “Did you commit this crime, sir.”
“Yes, 1 did,” he responded.
Hannon is the second of seven former
broadband executives charged in a 221-count
indictment to cut a deal. In July, the unit’s for
mer CEO, Kenneth Rice, who had faced more
than 40 counts of conspiracy, fraud, insider
trading and money laundering, pleaded guilty
to a single count of securities fraud and agreed
to cooperate with prosecutors.
The remaining five are scheduled for
trial on Oct. 4.
Hannon left Bankers Trust to join Enron
in April 1992. Once a top trader at Enron, he
became chief operating officer of the broad
band unit in January 2000 and quit Enron in
June 2001, according to the indictment. The
company collapsed in December 2001 under
crushing weight of revelations of hidden debt,
inflated profits and accounting trickery.
Prosecutors allege Hannon and four other
former broadband executives, including Rice,
schemed to tout Enron's broadband network
as having capabilities it didn’t have to impress
analysts and inflate company stock. Hannon
also is accused of pocketing $7.8 million
from selling 94,000 Enron shares in Decem
ber 2000 largely intlated by. broadband hype
to $83 per share. Enron shares reached a high
of $90 in August 2000.
The other three former executives facing the
same charges originally filed against Hannon
and Rice are Joseph Hirko, who once ran the
broadband unit with Rice and two software ex
ecutives, F. Scott Yeager and Rex Shelby.
Hirko, Yeager and Shelby are set for tri
al alongside two other former executives
Kevin Howard and Michael Krautz
who face narrower charges. Howard and
Krautz are charged with conspiracy and
fraud for allegedly faking $111 million in
earnings in late 2000 and early 2001 from
a video-on-demand deal with Blockbuster
Inc. that flopped.
All five have pleaded innocent.
Hannon’s plea change comes a day before
lawyers for the other defendants argue to
move the trial outside of Texas or at least as
far from Houston as Corpus Christi. Defense
attorneys claim in court filings that a survey
shows a strong consensus in Houston that
accused Enron executives are guilty.
But prosecutors oppose moving the trial,
noting that the defense-commissioned sur
vey asked only about respondents’ familiar
ity with Enron generally, their perception of
media accounts of Enron and whether those
accounts suggested “unnamed generic ex
ecutives” are guilty.
UT creates high-level
diversity position
New organizations launch
under reorganization
AUSTIN (AP) — The University of Texas has created a sc-!
nior position to oversee and improve diversity in everything!
from stafTrecruitment to course offerings.
The vice provost for inclusion and cross-cultural effective-!
| ness will report to Sheldon Ekland-Olson, the university's ex
ecutive vice president and provost.
Ekland-Olson and other university officials plan to meet this I
I week to finalize the post’s job description and plan a search for
• candidates, the Austin American-Statesman reported.
He said the position will address “all aspects of campus life,
including the curriculum, how we represent ourselves to the world
and how we recruit and retain faculty, staff and students.”
The creation of the position is part of a broader effort by UT
President Larry Faulkner to improve racial and ethnic harmony.
In May, Faulkner called for sweeping changes in both curriculum
and culture to make the largest student body in the nation a more
welcoming place for minorities.
The changes include requiring undergraduate courses on multi-
culturalism, rearranging statues of Confederate icons on campus to
convey the artist’s original intent and delaying fraternity and sorority
rush until spring each year to give students time to get their social |
and academic bearings.
By Kelley Shannon
THE ASSOCIATED PRESS
AUSTIN Texans who rely on
state health, mental health, mental
retardation and disability programs
probably will notice changes in
their serv ices as a new round of
agency consolidations takes effect
Wednesday, officials say.
Telephones will be answered with
the new agency names when clients
call the Department of State Health
Sen ices and Department of Aging
and Disability Services. Both are
starting operations under a massive
ongoing state reorganization.
Most of the offices that clients
visit for services aren’t relocat
ing right away.
“Our hope is that there’s no per
ceived change or difference because
we don’t want any disruption of ser
vices to take place," said Dr. Eduardo
Sanchez, commissioner of the health
senices department.
The new departments will in
corporate the duties of agencies
that are being eliminated.
The health serv ices department will
handle programs dealing with pub
lic health, immunizations, substance
abuse and mental health and state hos
pitals. The aging and disability servic
es department will oversee programs
for the mentally retarded, people with
disabilities and the elderly.
It’s all part of a bill approved
by the Legislature last year to con
solidate health and human services
from 12 agencies to four new de
partments under the umbrella of
the Texas Health and Human Ser
vices Commission.
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ADVERTISEMENT
Area college student dating self
THINGS ARE REALLY STARTING TO HEAT UP
By LISA CHENEY
Local college student Eric Peterson
recently announced that he’s entered a
committed relationship—with himself.
Peterson vehemently denied rumors that
the two were dating other people. “We’re
totally committed to each
other. We’ve never been
happier.” When asked what
prompted the campus
heartthrob to take himself off the market,
he chalked it up in large part to his current
financial situation, claiming that monthly
fees from his checking account were
making it too expensive for him to date
around. “It was partly a cost-effective
decision on my part, but it’s been really
nice for us to spend more time together.”
Peterson was apparently unaware of Free
Checking from Washington Mutual. It’s
an account with no monthly fees and the
option to add Deluxe services like free
online bill pay. And he could
have gotten Free Checking
just by visiting a Washington
Mutual Financial Center,
then signed up for online bill pay at
wamu.com. “Dang,” said Peterson, “if I
had known about Free Checking Deluxe,
my current dating situation would be
different. I probably wouldn’t have settled
down with someone so soon.”
“We’ve never
been happier.”
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