Business briefs

The Mountain View-based company announced the planned shift to "transferable” stock options late Tuesday, several months before the change takes effect.

The unique program is meant to make it easier for employees to assess the value of their stock options — a staple of most compensation packages in Silicon Valley.

With the switch, Google is hoping to make itself an even more appealing place to work than it already has become by feeding employees with free daily meals and ample opportunities to get rich off the company’s high-flying stock.

Recruiting and retaining talented employees is a top priority for Google because it’s in the midst of a hiring spree that is expected to continue for several more years. Since the end of 2004, Google has been hiring an average of about 10 new employees per day to expand its payroll to nearly 10,000 employees.

Skilling’s request for bail denied

HOUSTON — A federal appellate court denied former Enron Chief Executive Officer Jeffrey Skilling’s request to remain free during his appeal Tuesday and ordered him imprisoned immediately.

Judge Patrick Higginbotham of the 5th U.S. Circuit Court of Appeals wrote in his two-page order that "Skilling raises no substantial question that is likely to result in the reversal of his convictions on all of the charged counts.”

As a result, Higginbotham denied Skilling’s request for bail pending his appeal and vacated an earlier order staying his prison report date.

Skilling is now required to report to a low-security federal prison in Waseca, Minn., to begin serving his 24-year sentence on 19 counts of conspiracy, fraud and insider trading.

Although Higginbotham’s order notes "serious frailties” in Skilling’s convictions, it says those problems fail to raise a "substantial question” likely to result in the overturning of all Skilling’s convictions, as would be required to grant bail during appeal.

Justice Department eases grip on legal tools used to fight corporate scandals

WASHINGTON — The Justice Department put new limits on prosecutors seeking confidential data from corporations Tuesday after critics leaned on the government to back off tough tactics authorized during the Enron-era scandals.

Deputy Attorney General Paul McNulty said the new guidelines won’t hinder prosecutors from aggressively going after companies accused of fraud and other white-collar crimes. Whistle-blowers called the changes a setback for shareholders and employees who risk losing billions in pensions and savings if scandal-tainted corporations aren’t fully investigated.

A coalition of allies who had demanded the changes offered only lukewarm support. The new rules bar the government from charging businesses solely on the basis of their refusal to hand over corporate attorney-client communications or their continuing to pay lawyer’s fees for employees under investigation.

Announcing the changes in a New York speech that was closed to the media and public, McNulty said they aimed "to strike a balance between the central concerns of those who have raised questions about the policy ... and continue our aggressive efforts against corporate criminals.” The text of his speech was released in Washington.

The policy should help companies curb fraud internally by encouraging open talk between corporate attorneys and their clients, McNulty said in an interview with The Associated Press. "It, in no way, slows down the ability to prosecute these cases successfully,” he said.

Under the new guidelines, U.S. attorneys and their trial prosecutors:

—Must obtain written approval from the deputy attorney general before demanding confidential information or communications between attorneys and their clients.

—Must consult with the assistant attorney general who oversees all Justice Department criminal cases before seeking results of corporations’ internal investigations or other factual information.

—Cannot consider as uncooperative any firms that pay attorneys’ fees for employees. However, the deputy attorney general could approve harsher charges in rare cases where the payments result in blocking the government’s investigation.

—Cannot bring charges against corporations simply because they refuse to hand over confidential and so-called "privileged” attorney-client information. Firms that do, however, will receive credit for cooperating.

The new rules replace guidelines issued in 2003 to coordinate prosecution tactics among the 94 U.S. attorneys’ offices nationwide following scandals at Enron Corp., WorldCom Corp. and other firms.

Critics charged that those tactics, devised by former Deputy Attorney General Larry Thompson, were too harsh on corporations trying to avoid being branded as uncooperative. They feared that could lead to indictments that publicly scarred even innocent businesses forever.

A coalition that includes former Attorney General Ed Meese, the U.S. Chamber of Commerce, the American Bar Association and the American Civil Liberties Union has fiercely lobbied for changes to the policy they termed coercive. Additionally, a federal judge in New York criticized the old guidelines in June as unconstitutional as they were used in a 2004 case against accounting firm KPMG.

Last week, outgoing Senate Judiciary Chairman Arlen Specter, R-Pa., introduced legislation to bar prosecutors from pressuring corporations against paying legal fees or demanding attorney-client information.

Stan Anderson, senior counsel at the U.S. Chamber of Commerce, said the new guidelines show the Justice Department "clearly recognized that they had a problem.” But he raised concerns over how firms who do not turn over information or refuse to pay attorneys’ fees can escape harsher penalties if those that do are given credit for cooperating.

"To me, that seems inconsistent,” Anderson said.

Stephen Kohn, chairman of the National Whistleblower Center, called the new rules "outrageous” and accused the Justice Department of "backing down to corporate pressure.”

"It becomes very hard to uncover fraud that is hurting shareholders,” Kohn said.

But one attorney who has worked on both sides of the issue praised McNulty’s changes.

The new guidelines "should restore needed balance to the investigation of business entities and their employees,” said Craig Margolis, a former Justice prosecutor who served as counsel in the KPMG case.

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On the Net:

The new guidelines can be found at: http://www.usdoj.gov/dag/speech/2006/mcnulty—memo.pdf