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Oil Patch Angst

Someone must be sticking pins in a voodoo doll representing BP (BP). On Aug. 7 the oil giant said it would shut down Prudhoe Bay, the Alaskan field that produces 8% of the oil consumed in the U.S., for weeks or months. Inspectors found corrosion and a small leak in an aging pipeline network. This follows an explosion at a Texas BP refinery last year that killed 15 workers, a spill in March in Alaska that leaked 250,000 gallons, and accusations by regulators that BP traders manipulated propane prices in 2004 -- charges the company denies.

The news sent oil skyward by 3%, to $77 a barrel, and couldn't come at a worse time for consumers, with world supplies tight. Under Chief Executive John Browne, BP has tried to position itself as the most environmentally cozy oil major by pouring money into solar power and changing its logo to a green and yellow sun.

See "BP's Pipeline Trouble" Ben Bernanke's Gang of Ten voted on Aug. 8 to take a break from its rate-hiking campaign. But there are signs they could soon go back on the warpath.

See "The Pause That Perplexes" How many handsomely paid financiers does it take to bring one company private? For food-service company Aramark (RMK) the answer is: a bunch. CEO Joseph Neubauer, who took the company private once before, may put in as much as $250 million. He and five private equity firms will pay $6.3 billion -- and assume $2 billion in debt -- for the vendor to college cafeterias and baseball parks. S&P cut Aramark debt to junk status.

What's better for Hollywood moguls than a big audience? A big audience with money. Google has both, offering eyeballs and bucks to both News Corp. (NWS) and Viacom (V) in separate deals. Google will pay an estimated $900 million to provide a search engine to News Corp.'s mammoth MySpace social network site. And it will sell shows from Viacom's MTV and distribute ad-supported videos of other Viacom shows to hundreds of Web sites.

See "Google's Duet with MTV" and "Google Gets Back into MySpace" The options scandal continued to darken reputations, including that of normally Teflon-coated Steve Jobs. On Aug. 3, Apple (AAPL) said it might have to restate earnings from 1997 to 2001 because of options irregularities. On Aug. 7, Bloomberg reported that another Jobs company, animator Pixar, may have backdated options repeatedly. On Aug. 8, New York cable giant Cablevision (CVC) said it would restate for six years, and the next day three ex-Comverse Technology (CMVT) officers were indicted in New York on fraud charges related to the alleged manipulation of grant dates.

See "A Worm in the Apple" NASDAQ to Cisco (CSCO): Thanks, I needed that. The networking goliath posted better-than-expected results on Aug. 8, lifting some of the tech-heavy bourse's malaise of recent months. Cisco's quarterly sales rose 21%, thanks to brisk overseas demand and signs of an upgrade cycle among its bread-and-butter corporate buyers. CEO John Chambers said the company could grow as much as 20% in the next year. The stock leaped 15% on the news, and other networking shares came along for the ride.

The fight is over. On Aug. 7, Martha Stewart agreed to cough up $195,000 to settle her civil insider-trading case with the SEC. Stewart can't be a director of a public company for five years or engage in activities like financial reporting at her company -- a twist from the usual blanket ban on being a director or officer. She served five months in jail for lying about a 2001 sale of ImClone (IMCL) stock.

Wasting no time, Toyota (TM) put to rest a salacious sexual harassment case just three months after it was filed. Sayaka Kobayashi, an assistant to Hideaki Otaka, head of Toyota Motor North America, accused her boss of making repeated sexual and romantic advances. Toyota had previously said Otaka would take a new post back in Japan. But in announcing a settlement on Aug. 3, Toyota stated that both Otaka, 64, and Kobayashi, 42, had left the company. No terms were disclosed.

More than 30 names were bandied about, but in the end, as expected, the National Football League picked one of its own. Roger Goodell, 47, the No. 2 executive under outgoing Commissioner Paul Tagliabue, started at the league as an intern 24 years ago. The new commish won't have to worry about negotiating TV deals or a labor pact with players any time soon because Tagliabue got those done. His priorities will be bringing a team back to Los Angeles and trying to make an essentially American sport more international.

It was too late to matter much to IBM (IBM) when on Aug. 7 the U.S. 7th Circuit Court of Appeals ruled that its former pension plan didn't discriminate against employees based on their age. But the decision matters a lot to other companies. The ruling and a law recently passed by Congress confirm the legality of more than 1,200 so-called cash-balance pension plans, under which employers promise to contribute a certain percentage of employees' annual salaries but don't guarantee a certain payout. In September of 2004, IBM settled part of the case, agreeing to pay the plaintiffs about $300 million. Last year it eliminated its cash-balance plan and boosted company contributions to the 401(k) program.

It sure looks like the Odd Couple. On Aug. 4 the Forbes family revealed that it had sold a chunk of a new company, Forbes Media, to Elevation Partners, a group led by private equity ace Roger McNamee and including activist rock star Bono of U2. The family will probably take out some of the estimated $250 million to $300 million and invest much of the rest in

See "Elevation Aims High" Is Hank Greenberg's private insurance empire struggling? On Aug. 7 the former American International Group (AIG) chief sued three AIG staffers -- and up to 100 co-conspirators -- alleging that they have tried to "systematically destroy" the four private insurance companies he now runs under C.V. Starr. It's yet another missile in the ongoing war between AIG and Greenberg, 81, who was ousted amid accounting scandals last year. But the lawsuit also prompts some to ask how the four highly specialized agencies are doing. During Greenberg's 38 years at AIG's helm, Starr was closely tied to the insurance giant. Merrill Lynch (MER) says AIG doesn't seem to have lost much business to this point, so unless the pie has grown, someone is suffering. Spokesman Howard Opinsky says AIG is just "continuing to harass Mr. Greenberg," but that Starr is doing fine nevertheless. AIG prefers to stay mum. Nobody wins in a nasty divorce.

See "Greenberg's Lawsuit: Sign of Trouble?"

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