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<P>Another three bite the dust. Three former executives from real estate dot-com Homestore have agreed to plead guilty to criminal charges and repay $4.6 million in stock gains. What's more interesting is that they'll cooperate with an investigation into AOL's role in the dubious dealing. This is the most real estate drama you'll get this week without renting "Glengarry Glen Ross."</P><P>
Homestore's former COO was charged with wire fraud and conspiracy to commit securities fraud (up to 10 years in jail), the former CFO with just the conspiracy charge (up to five years), and an ex-VP with insider trading (less time, but unknown). The big accusation here is "round tripping," in which Homestore would buy goods from a company as long as the company then spent most of the money on AOL ads. Then AOL would supposedly spend the same amount of money at Homestore, "thus allowing
Homestore effectively to 'buy' revenue using its own cash," explained the Wall Street Journal.</P><P>
Homestore has become a cause celebre for Attorney General John Ashcroft, who held a press conference to emphasize that the Bush administration really means it about this corporate clean-up thing. Neither Ashcroft, the Justice Department, nor the SEC named names, referring only to Homestore's relationship with "a major media company." Nice try for anonymity, but AOL Time Warner was the only major media company Homestore dealt with, observed the New York Times. Now the heat's on AOL while
investigators try and figure out how much of AOL's revenue was inflated like a Thanksgiving Day Parade float.<br>
The L.A. Times' sources said AOL execs pointed the finger at former company dealmaker Eric Keller. The Journal led with, and expanded on, this info. It seems two of the three busted Homestore execs are expected to say Keller helped Homestore do its round-tripping, and that some AOL ad revenue that looked legit on paper really came from Homestore. Keller has already been pink-slipped for shady deals with Homestore and another company; his boss got booted last month for possible book-cooking.
So where's the perp walk? The umbrella stand? The theatrics that make the corporate crime beat great? We're kidding (mostly), but that could be why overseas outlets barely noticed this comparatively tame example of American excess. The Journal had one amusing tidbit, though: After Keller got fired, AOL vice chairman Ted Leonsis hired him as a consultant for the hockey team the Washington Capitals, of which Leonsis is the majority owner. Leonsis said he let Keller go after finding out why he
lost his AOL job, but Keller still picked up his Capitals phone as of Wednesday. As outrageous severance packages go, it's no Jack Welsh/GE $9 million annual pension, but it'll have to do. - Jen Muehlbauer</P><P>
Homestore Executives Agree to Guilty Pleas <br>
Homestore, AOL Ad Deals Yield Guilty Pleas (USA Today)<br>
U.S. Focuses on Executive at Homestore<br>
Homestore's Ex-Execs to Aid Investigators<br>
Probe of Homestore Turns To an Ex-AOL Executive<br>
<P>What does Vivendi want to be when it grows up? The media can't figure it out. Can CEO Jean-Ren&eacute; Fourtou? His fuzziness at yesterday's board meeting got reporters to wondering. If he can't explain his vision, does that mean he's lacking the 20/20 clarity that observers on two continents were banking on? For Fourtou, worse than the Monsieur Magoo accusations are the comparisons, starting to bubble through media accounts, that he resembles -- wait, we're rubbing our eyes -- the
Media watchers can rate reporters' confusion over Fourtou's latest pronouncements by tallying the amount of space outlets devoted to their coverage of the mess. The New York Times ran 24 paragraphs on the board meeting -- and then filed another 19 in an analysis that sought to examine what the latest moves meant.  The Financial Times posted two articles on the meeting and still had more to say, lambasting Fourtou in Lex, the peach paper's influential column. Lex called the exec's update "more
like a rambling fireside chat ... than a strategy presentation."</P><P>
There's little that's clear about what's ahead for Vivendi. The company now says that it will dispose of 12 billion euros worth of assets over the next 18 months. Here's how reporters examining the tea leaves read the current plan: Out are Telepiu, an Italian pay-TV operation, and Canal Plus Technologies, a maker of set-top boxes. On the way out are Vivendi's publishing properties, which include Houghton Mifflin, and a minority stake in a PC gamemaker. That leaves Vivendi's stake in telecom,
via its Cegetel investment, and its Universal entertainment properties, and -- hey, wait a minute, wasn't that Messier's plan, the New York Times wondered by way of an analyst's quote. To confuse matters further, News Corp., the alleged partner in the done deal for Telepiu, says no deal is in place, according to the Financial Times. As for Cegetel, Fourtou said he'd consider selling Vivendi's 44% stake; then again, maybe he'll increase it. And that was all in one post-meeting telephone
The only decision by Vivendi in which Fourtou seemed sure was his claim that the company won't pay any severance to Messier. "He enjoyed making deals too much and overpaid," the Guardian quoted Fourtou as saying, and then adding, "This all went to his head." </P><P>
With heads other than Messier's now in question, is Vivendi's viability again in doubt? Outlets today report that Enron's logo, the oversize capital "E" that stood outside its headquarters, sold at auction for $44,000. How many euros might a V bring? - Deborah Asbrand</P><P>
Vivendi Will Move Quickly to Sell Many Assets<br>
What's New at Vivendi? Depends Who's Talking<br>
Vivendi in Move to Sell Raft of Assets (Financial Times)<br>
Vivendi Board to Deny Messier Severance Pay (Financial Times)<br>
Lex: Vivendi Universal (Financial Times) <br>
News Corp Counters Report of Telepiu Sale (Financial Times)<br>
Vivendi Aims to Realise Eu12bn from Asset Sales (Daily Telegraph)<br>
Vivendi Shakes Up Board, Denies Messier's Severance<br>
Enron Auctions Off Furniture and Famous 'E'<br>
Former WorldCom Controller To Plead Guilty To Two counts (Wall Street Journal)<br>
Tyco Rewarded an Executive During a Grand Jury Inquiry<br>
Bell Labs Researcher Falsified Experiments (AP)<br>
Resources Dry Up As Joblessness Drags On (USA Today)<br>
Merrill Aide to Plead Guilty (Wall Street Journal)<br>
Enron Ex-CFO Clears His Throat For Feds <br>
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