04 May: Wal-Mart settles California hazardous waste suit
Also today: BP takes full responsibility for plugging Gulf of Mexico oil well; Goldman feels the heat from investors over fraud charges; Craigslist on Connecticut’s hit-list over prostitution ads; Google to ramp up venture capital business.
Wal-Mart settles California hazardous waste suit
Wal-Mart is to pay $27.6 million to settle a lawsuit alleging it improperly stored, handled and dumped hazardous waste at 236 Wal-Mart and Sam’s Club stores, distribution centres and storage facilities throughout California. By assenting to the fine, the world’s largest retailer ends a five-year probe in which Californian investigators had accused Wal-Mart of improperly storing and dumping waste such as aerosols, chemicals, fertilisers, motor oil, paint and pesticides. One filing said a child was found playing on a pile of “yellowish-coloured powder” near one store’s garden department. The agreement calls for Wal-Mart to pay a $20 million fine, and another $3 million to improve store maintenance, $3 million for environmental projects and $1.6 million for legal costs. The settlement is reportedly one of the largest of its kind in the US. Wal-Mart says it’s worked closely with Californian regulators on a comprehensive hazardous waste plan and is now working to resolve a separate federal probe that raises similar allegations.
BP takes full responsibility for plugging Gulf of Mexico oil well
BP has acknowledged that it’s “absolutely responsible” for stopping the leak in a deep-water well that’s gushing some 800,000 litres of oil a day into the Gulf of Mexico, and cleaning up any resulting environmental damage. But it stopped short of admitting culpability for the accident. CEO Tony Hayward, who’s been at the site of the disaster, also said the British oil major would make good on any legitimate claims for business interruption. The spill, which occurred at the Deepwater Horizon oil rig 80km offshore and is emanating from 1,500m under the sea, is threatening coastal areas of Louisiana, Mississippi, Alabama and Florida. Recently, the administration of US President Barack Obama gave the green light for drilling off the US coastline, but now California Governor Arnold Schwarzenegger has withdrawn his support for a plan to allow new wells to be drilled off the coast of Santa Barbara, saying the risk is much greater than the potential profit. The BP debacle will likely force huge changes in US energy policies, especially as BP could take three months to drill a relief well to halt the spill.
Goldman feels the heat from investors over fraud charges
Shareholders are damning Goldman Sachs over government fraud charges, despite Warren Buffett strongly defending Berkshire Hathaway’s $5 billion investment in the company. Goldman has now detailed various legal actions against the firm by shareholders since the US securities and exchange commission sued it in federal court in New York on 16 April, claiming it defrauded investors over mortgage-linked securities. Some of the litigation was brought by investors who say they lost money on holdings of Goldman stock because the company did not disclose the risk of SEC action. But one union pension fund submitted a lawsuit challenging the way Goldman paid huge executive bonuses, saying this action led to unethical behaviour that includes conflicts of interest in its trading business. Goldman can now look forward to more such litigation, even though it says the SEC’s allegations are unfounded.
Craigslist on Connecticut’s hit-list over prostitution ads
Connecticut’s attorney general says popular online classified advertising service, Craigslist.org, isn’t doing enough to fight the promotion of prostitution on its site and claims the firm may be profiting from it. The state is helping 39 other states that are looking into the matter, after thousands of ads for prostitution and alleged human trafficking remained on the site despite assurances they would be removed. Prosecutors suspect the company could be earning more than $36 million a year from paid-for ads offering sex and “therapeutic” services, even though most ads on Craigslist are free. Jim Buckmaster, Craigslist’s chief executive, says his firm has gone above and beyond fulfilling its legal obligations, and is working together with its partners to fight human trafficking and “sexploitation”. But the service came under intense scrutiny after a masseuse who advertised on Craigslist was found dead, and last month the FBI arrested 14 members of the Gambino crime family for selling the sexual services of girls aged 15 to 19 on Craigslist.
Google to ramp up venture capital business
Google’s going on a buying spree, snapping up a start-up venture called BumpTop, and investing in wind farms through Google Ventures, the company’s venture capital fund launched a little more than a year ago. It’s not disclosing how much it’s invested so far, but says it’s made 10 investments and aims to invest about $100 million a year, expanding its activities beyond North America. Google’s investments have ranged from less than $500,000 to tens of millions of dollars, with the latest being in a Texas start-up that makes technology for Web, mobile and retail payments. Google invests in Internet and advertising companies, and also in biotech and clean-tech firms, and has expanded its Google Ventures team from three people to 16 full-time employees. Much of the deal-flow comes from Google’s own employees, who have friends running start-ups.