National business news briefs for June 10, 2004

Thursday, June 10, 2004 | 11:11 a.m.

$2 million grant approved

The U.S. Department of Commerce's Economic Development Administration has approved a $2 million capital projects grant to assist the Urban Chamber of Commerce in the building of a $3.1 million business center in West Las Vegas.

The check will be presented Monday at the West Las Vegas Library by U.S. Deputy Assistant Secretary of Commerce for Economic Development David Bearden during a groundbreaking of the Urban Chamber's 30,000-square-foot multi-use business incubator and service center. The center, which is set for completion in late 2005, will house 12 businesses, including a museum and the Urban Chamber's offices.

Louis Overstreet, executive director of the chamber, said the grant was made possible through donations and grants from local sources, including donations of $325,000 from five gaming companies, a $150,000 grant approved by the Clark County commissioners and a deed of three acres of land from the city of Las Vegas.

FTC staff opposes merger

The U.S. government may try to block R.J. Reynolds Tobacco Holdings Inc.'s proposed $3 billion acquisition of Brown & Williamson Tobacco Corp. after antitrust enforcers concluded the combination would stifle competition, people familiar with the matter said.

Federal Trade Commission lawyers have recommended the agency challenge the plan by R.J. Reynolds, the second-largest U.S. tobacco company, to acquire No. 3 Brown & Williamson, the people said. The FTC staff is concerned the merged company and Philip Morris USA, the largest U.S. cigarette maker, would be able to dictate prices and marketing terms, people said.

R.J. Reynolds, the maker of Camel and Winston cigarettes, is counting on the takeover to bolster profits after a 30 percent decline in sales and a loss of almost 3 percentage points in its U.S. cigarette market share since 1999. Brown & Williamson, owned by British American Tobacco Plc, would lose its opportunity to shed billions of dollars in potential liability in smoker suits.

Judge orders fraud hearing

PORTLAND, Ore. -- A state judge has ordered a regulatory hearing into whether Portland General Electric, a unit of Enron, fraudulently collected more than $665 million from ratepayers to cover corporate income taxes that Enron never paid.

The judge's order, made last week, comes as a group of Texas investors is trying to buy Portland General Electric under terms that would allow it to collect $92 million a year for taxes that it would not necessarily have to pay to the federal and state governments. The intended buyer, the Texas Pacific Group, has said that it will not promise to return to ratepayers any taxes it collects but does not have to pay.

An owner, like Enron, that can earn the 10.5 percent profit on investment set by utility regulators and then pocket the tax money as well could earn more than 20 percent annually on its investment in a utility.

Insurer stands by earnings outlook

WASHINGTON -- Insurance company Anthem Inc. expects no changes in its 2004 earnings forecast, the company said today.

In a regulatory filing, Indianapolis-based Anthem said it expects to meet the estimated earnings range it projected in late April of $6.90 to $7 a share for the full year.

At the time, those estimates represented an increase from the company's earlier estimates of $6.15 to $6.25 a share.

Anthem, which provides health insurance and services to 11 million customers, mainly under the Blue Cross and Blue Shield names, said it expects to confirm the latest estimates over the next two weeks in meetings with securities analysts and investors.

Nevada, other states settle suit

LANSING, Mich. -- Ford Motor Co. and 1,300 dealers who sell its vehicles will pay $6.2 million to settle allegations by 38 states, including Nevada, that the company failed to adequately disclose the costs of terminating leases early.

The payment covers legal fees and costs, Michigan Attorney General Mike Cox said in a statement. The accord with the company's Ford Motor Credit unit affects 150,000 Ford customers, the statement said, without elaborating. Dan Jarvis, a spokesman for Ford, the second-biggest U.S. automaker, wasn't immediately available to comment.

Tim Hay, Nevada's chief deputy attorney general consumer advocate, said Nevada was involved in the settlement, but details were not immediately available on how Nevada Ford customers would be affected.

Ford drew scrutiny for its "Red Carpet" lease program, under which customers who ended their leases early were charged a penalty that exceeded the balance owed on the contracts, the statement said. Ford agreed to change language in the lease agreements to "clearly explain" customer rights in ending leases early, Cox said.