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Another chance to support city's day laborers

By ANA BABIN, FRANKLIN OLSON and RICHARD C. SHAW

On many street corners in Houston, you will find immigrant day laborers like Martin M. who are looking for work each day. Martin is a painter and landscaper who typically works for subcontractors that are building homes for middle-class families. Between jobs and on weekends, he must resort to street corners to support his family. As soon as a car slows to a stop, Martin and several others will rush the driver, pleading for work. Usually congregated around a convenience store, these hard-working immigrants are looking for any kind of job. Contractors and small-business owners oftentimes depend upon them to earn their living. Houstonians depend upon them, too, but don't like them gathering on street corners and being a "nuisance." The city of Houston is doing something about this. With a grant from the Community Development Department, the Gulfton Area Neighborhood Organization operates the Oscar Romero Day Labor Center in southwest Houston. This center provides a safe, orderly "hiring hall" for large numbers of low-income and immigrant workers who seek daily wages from area contractors and companies who use their services. The workers have set their own rules, established a minimum wage and participate in the center's operation. During April, an average of 110 workers used the Oscar Romero Center each day, and nearly 70 of them found jobs each day. While nonpayment of earned wages is still a problem at times, everyone wins most of the time. The so-called "nuisance" problem disappears. The Oscar Romero Center is a model for what can and should happen elsewhere in the city. Because of our geography and the global economic situation, immigrant day laborers will always be a part of Houston's work force. The question is: Do we want day laborers on every street corner or would we rather have them in safe and orderly hiring halls? And while they are there, are there other services that they could be getting, such as English as a Second Language classes, work skills and safety training, citizenship classes, preventative health care information and so forth? Houston Police Department officers have received complaints about the hundreds of men who gather in several locations in northwest Houston each morning, and they have sought to find a solution to the problem. Three community-based organizations -- The Metropolitan Organization, Catholic Charities and the Community Services Program of the AFL-CIO -- have proposed a second site in northwest Houston that would meet the needs of the community and the immigrant day laborers who live there. This proposed worker center would address the concerns expressed by many in the community by providing an indoor site where workers could be dispatched for work. In addition, the center could provide education programs for the workers. We believe this approach will further strengthen the contributions of these workers to the neighborhoods in which we all live. Houston is known for its innovative approaches to solving problems, and this presents an opportunity for the city to do it once again. Babin is president of Catholic Charities, Olson is head of the executive committee of The Metropolitan Organization and Shaw is executive director of the Community Services Program of the AFL-CIO.

Reliant chief stresses 'the right way'

Company takes steps to ensure honesty

By LAURA GOLDBERG

Steve Letbetter, Reliant Energy's chairman and chief executive officer, told angry shareholders Wednesday that officials had taken steps -- including an investigation by the board -- to prevent a repeat of improper actions by rogue traders. Letbetter, speaking at the company's annual shareholders meeting, was referring to the so-called round-trip trades disclosed by Reliant Resources, a unit of Reliant Energy, in mid-May. Such trades involve buying and selling the same amount of energy at the same time. At Reliant, the deals were used to inflate trading volumes and revenues during 1999, 2000 and 2001. The traders responsible are no longer with the company, and two senior Reliant Resources executives also resigned. Those trades, which are under investigation by federal officials, are among the reasons share prices for both Reliant Energy and Reliant Resources have dropped. "We remain committed to the long term and we will strive constantly to do things the right way," Letbetter told shareholders, mentioning integrity and honesty. "And I am convinced that by following these principles as our guide, that the strength of our business will become clear and will be reflected in our stock price." The audit committees of the boards of Reliant Energy and Reliant Resources are directing an internal review led by independent attorneys from two different law firms into the circumstances of the trades. The review is ongoing. Reliant is also creating a new set of trading rules and a compliance program to make sure all trades follow proper criteria. Reliant Resources contains Reliant Energy's deregulated operations, such as providing electricity service to residential and commercial consumers in Texas and wholesale energy trading. In an initial public offering in May 2001, shares of Reliant Resources debuted at $30. They closed Wednesday at $8.73, down 13 cents. Reliant Resources is still about 82 percent owned by Reliant Energy, which has seen its stock fall from $42.75 a year ago to close Wednesday at $17.11. Reliant Resources is to be completely spun off from its parent, which Letbetter said could happen later this summer. When that's done, what's left of Reliant Energy -- regulated operations, including electricity transmission systems -- will be renamed CenterPoint Energy. Letbetter, who also holds the titles of chairman and chief executive of Reliant Resources, will continue to run Reliant Resources after the spinoff. If several shareholders had their way, Letbetter would be out of his job. Roy Kelley, a Reliant Energy shareholder, called for Letbetter's resignation and protested a bonus he received last year. Letbetter made $983,750 in salary last year, along with a $1.7 million bonus. He was also granted stock and stock options. Letbetter told Kelley he knew he was upset but said he believed that once the spinoff was complete, the two individual businesses would deliver shareholder value. Dick Bautch, a Reliant Energy shareholder for eight years, said he bought the stock at $17 a share. "I'm just asking where's my enhanced shareholder value?" he asked Letbetter, adding that the "enrichment" he saw involved the salaries and bonuses of top executives. Still another shareholder, Scott Wiggins, admonished Letbetter that "the company has gone downhill ever since you took it over." Letbetter became chief executive of Reliant Energy in June 1999 and chairman about six months later. Outside of Reliant's downtown headquarters before the meeting started, members of the International Brotherhood of Electrical Workers picketed. Some were protesting the slow pace of contract negotiations at the South Texas Project, a nuclear power plant partially owned by Reliant. Others are upset that their 401(k) plans, many of which include shares of Reliant, have taken hits. "A significant part of these guys' futures is based on the stock," said Rick Childers, an IBEW assistant business agent.

Copyright 2002 Houston Chronicle

Enron settlement final Added severance to be paid by early July

By ERIC BERGER

A $29 million settlement reached Tuesday should begin paying about 4,200 former Enron employees additional severance by early July.

The terms of this deal, which were reported last week in the Chronicle as the talks neared a conclusion, were announced Tuesday morning in front of Enron's downtown headquarters.

The agreement between Enron, its creditors and lawyers for employees laid off when the company filed for bankruptcy on Dec. 2 will pay most former workers an additional $7,000 to $8,000.

"This is a real, immediate solution," said Richard Rathvon, co-chairman of the former employee committee in Enron's bankruptcy case. "This will protect employees from uncertainty and years of delay."

Rathvon, representatives of the AFL-CIO, the Rev. Jesse Jackson and U.S. Rep. Sheila Jackson Lee, D-Houston, were present for the announcement.

The agreement must be approved by U.S. Bankruptcy Judge Arthur Gonzalez at a hearing scheduled for June 24. That is likely a formality, however, because Gonzalez had asked the parties to negotiate a settlement.

Normally, bankruptcy law protects creditors of the company, and ex-employees are relegated toward the back of the line.

Enron and its creditors were under no legal requirement to pay anything beyond the $5,600 employees had already received.

AFL-CIO members backed the fight for higher payments.

They handed out leaflets in Houston and in front of the headquarters of the company's largest creditors. The union also hired lawyers to begin the uphill legal battle.

In April, the court appointed a committee of former employees, increasing their bargaining power so creditors could no longer ignore their demands.

"We're very pleased to have reached a tentative agreement so that we can pay our former employees some more severance payments," Enron spokesman Mark Palmer said.

The deal requires Enron to pay up to $13,500 in severance to employees based on what employees would have received in its retirement plan. The amount includes back vacation pay.

At the outset of negotiations earlier this year, lawyers for the employees sought a $30,000 cap, but Enron's creditors refused to pay more.

Including the payments Enron has already made, and some $17 million in vacation pay given to laid-off employees, the company will have paid about $72 million to former employees.

Ex-workers are not bound by the agreement, and if they opt out in order to pursue alternative legal action they will receive no more severance, AFL-CIO general counsel Damon Silvers said.

"We believe this is the best deal we could have gotten," he said.

If Gonzalez approves the deal, ex-employees will receive $2,000 checks almost immediately, Silvers said. Final payments would come by late August or early September.

Forms to accept the settlement will be available on the employee committee's Web site, employeecommittee.com, as soon as they are available, lawyers said.

As part of the agreement with creditors, the employees committee also has the right to try to recover some of the $83 million Enron paid in retention bonuses in December to get some key workers to remain with the company.

Although those who received bonuses were required to stay with the company for at least 90 days, which would have been Feb. 28, the employee committee will target all employees who have left since receiving the bonuses, even if they did so after that.

Any recovery from these efforts would be apportioned among laid-off workers. That recovery claim could take months, or even years, and its outcome is uncertain, bankruptcy experts said.

Copyright 2002 Houston Chronicle