Ruby is Best for Texas 6th Congressional District

Saturday, August 25, 2007

Gas deals' fine print can be costly

By Mike Lee - Star-Telegram staff writer - Sat. Aug. 25, 2007
FORT WORTH -- More than a year ago, homeowners in Oakhurst, a middle-class neighborhood northeast of downtown, became some of the first in the city to sign up for natural gas drilling.

The landmen called it "mailbox money." By signing the leases, the property owners would get a royalty check for the life of the gas well.

Now, those homeowners are learning about the fine print in natural gas leases. Before they can cash their royalty checks, they have to get legal releases called subordination agreements from their mortgage companies. And the mortgage companies are asking for fees that amount to several years' worth of royalty payments.

Gas-company officials said the problem may affect every homeowner who has signed a gas lease after reaching a mortgage agreement. That could include thousands of people in Fort Worth.

Joe Walker, who has lived in Oakhurst two years, found out about the paperwork requirement in mid-July when he got a letter from Chesapeake Operating Co. He had about two weeks to get the paperwork processed or have his royalty payments "suspended" by the gas company.

Walker sent the paperwork to his mortgage company, Countrywide Home Loans, and got a letter back asking for a $500 fee. And, the letter said, even that $500 didn't guarantee that the company would agree to sign the paperwork.

He eventually negotiated the fee down to $75, but the bank said in a letter that there's no guarantee that it will approve the agreement. And the third-party investor who has bought Walker's mortgage might impose other requirements, according to the letter.

Walker wondered why residents weren't told about the need for subordination agreements when they signed the leases in 2006.

"Somebody should have been able to figure this out," he said in an interview last week. "That would have given people a year and a half to get this taken care of."

Oakhurst resident Jann Miles got a letter from her mortgage company, Washington Mutual, asking for $700 in fees, along with a new survey of her property.

At least one bank, Colonial National, has refused to sign the subordination agreements that Chesapeake sent out, although bank officials say they're willing to work with Chesapeake and the homeowners.

Enough residents were concerned that they held a neighborhood meeting with an oil and gas lawyer and Chesapeake representatives.

Dale Resources, one of the pioneers in inner-city gas leasing in Fort Worth, handled the original leases in Oakhurst. Company President Larry Dale led VIP tours of the drill site, near the Mercado Juarez restaurant on the west side of Interstate 35W, to show how drilling could be done with minimal impact on the neighborhood, which is east of the highway.

Dale later sold the whole operation to Chesapeake. A spokesman for Dale referred questions to Chesapeake.

Julie Wilson, Chesapeake's vice president for corporate development, said her company wasn't involved in the leasing process.

"It's hard for us to know what they were told or what they weren't," she said. "I don't think there's any misrepresentation on the part of any energy company or anybody signing a minerals lease."

Tim Malone, an oil and gas lawyer who spoke to residents at their meeting last week, said part of the problem is that urban gas drilling is so new.

When a gas company leases mineral rights in a rural area, it might need subordination agreements for only two or three landowners. Chesapeake has about 600 leases with homeowners in Oakhurst.

"The logistics are just much more cumbersome," Malone said.

Wilson, the Chesapeake executive, said dealing with property owners who have mortgages is a relatively new experience for the company. Until recently, most gas exploration was done in rural areas, where land is more likely to be owned outright.

"We do realize now that there needs to be a better job of telling people upfront," she said. "We're changing our language in the leases and telling people that they have a responsibility to make sure they get the subordination."

Alan Hegi, a real estate lawyer who is president of the real estate section for the Tarrant County Bar Association, said it's important for homeowners to know what they're doing when they sign a lease.

"Do your homework," he said. "Oil and gas companies are trying to sign up people for leases but they're not going to hold everybody's hands through the process. [Homeowners] have got to have some ownership responsibility."

Banks typically are cooperative, Hegi said.

"That additional income to the homeowner does mean that the homeowner will have an enhanced ability to pay," he said. "I'd be surprised if lenders were refusing to give permission. I'm not surprised if they're charging a fee; that's what lenders do."

The residents give Chesapeake credit for trying to resolve the situation. Chesapeake agreed to pay residents for up to 90 days, even if they had not processed the paperwork. And the gas company also offered a simplified version of the paperwork, known as consent of lien holder.

"I'm not mad at Chesapeake, I think that the mortgage companies are trying to make another dollar," Miles said.

Miles' bank, Washington Mutual, did not respond to three requests for comment this week. Nor did officials at Walker's bank, Countrywide.

Officials at Colonial, the bank that has not signed any subordination agreements, said they're looking out for their interests and customers' interests.

But the company uses a different type of subordination agreement, one that gives it the ability to take over the gas lease if a homeowner defaults on a mortgage. Gas companies typically don't want to get into the middle of a foreclosure.

READ LETTER FROM GAS COMPANY and LETTER FROM MORTGAGE COMPANY

AT&T Paid Lobbyist $240,000 in 2007

By Associated Press - Aug. 24, 2007
WASHINGTON -
AT&T Inc. paid Akin Gump Strauss Hauer & Feld LLP $240,000 in the first half of 2007 to lobby the federal government, according to a disclosure form.

The firm lobbied on policy issues related to the telecommunications industry, according to the form posted online Aug. 13 by the Senate's public records office.

Beside Congress, the firm lobbied the Commerce and Treasury departments.

Under a federal law enacted in 1995, lobbyists are required to disclose activities that could influence members of the executive and legislative branches. They must register with Congress within 45 days of being hired or engaging in lobbying.

AT&T is based in San Antonio.


Copyright 2007 Associated Press.

Wednesday, August 22, 2007

All Biofuels Aren't Created Equal

SIERRA CLUB - Aug. 20, 2007Biofuels can be made from nearly any organic material, but corn, which is the source of 95 percent of U.S. ethanol, would reduce global warming emissions only about 15 percent on average compared to gasoline. Cellulosic ethanol, made from switchgrass, slash, and agricultural byproducts, could cut emissions by more than 90 percent. But it's not commercially available. And then there's sugarcane ethanol, which is booming in Brazil, soybean biodiesel, and cooking grease biodiesel, even biodiesel made from algae -- all with their various pros and cons.

Want help separating the wheat from the chaff? Check out "Bio-hope, Bio-hype" in the most recent issue of Sierra, complete with a useful chart comparing six different biofuels.

Bush adviser Hughes promotes foreign languages, travel at Dallas summit - Dallas: At summit, Hughes pushes for youths to study abroad

By JAMES HOHMANN - The Dallas Morning News - Tuesday, August 21, 2007
Karen Hughes, longtime confidant of President Bush and undersecretary of state for public diplomacy, encouraged about three dozen local teenagers to learn foreign languages and study abroad during a youth summit Monday in Dallas.

"Your generation is going to be the first truly global generation," she said.

"Today's world calls for us to have open doors, open hearts and open minds. It's up to us to break down barriers."

The daylong "diversity dialogue" at Southern Methodist University was promoted as an opportunity for area students to meet government dignitaries and talk about foreign cultures. It was sponsored by Rep. Eddie Bernice Johnson, D-Dallas.

Mr. Bush charged Ms. Hughes with promoting America's image overseas in July 2005. She has kept a low profile domestically since getting off to a rocky start, which included an icy reception during a "listening tour" around the Middle East.

"One of the things people say to me about my job is that it is mission impossible," she said.

In fact, she said in an interview after the morning session, the day after Mr. Bush announced she would take the job, "The vice president looked at me and said, 'Karen, my condolences.' ... I've always liked a challenge."

Ms. Johnson, chairwoman of the Texas Democratic congressional delegation, lauded Ms. Hughes for her efforts and said that peace will take bipartisan cooperation.

During Monday's program, Ms. Hughes fired off a laundry list of initiatives she has spearheaded at the State Department. She said her office laid the groundwork for improving global attitudes about the U.S. by taking better advantage of new forms of media such as the Internet and reaching out to younger children who have not made up their minds about America.

The majority of the population in many countries is under 25 years old, she said, so youth outreach is as important as ever.

"I believe it is possible to imagine a better future," she said.

To apply for the summit, participants sent in an application form and wrote an essay.

Information was sent to all the public middle and high schools in Dallas and to youth organizations such as the YMCA.

The group was divided between 13- to 15-year-olds and 16- to 18-year-olds, each of whom was given a white T-shirt with a drawing of a dove on the front. They went to classrooms for discussions and watched a student theater production after the morning speeches.

Ms. Hughes described the U.S. as a "melting pot." But a second speaker, Mahmoud Eboo, a Shiite Muslim leader based in Atlanta, said that "mosaic" and "tapestry" were better characterizations.

"That creates fusion of color," he said.

Read more in the Dallas Morning News

Attorney claims Rove had role in her firing - Former state worker dismissed for talking to media files lawsuit

By WAYNE SLATER - The Dallas Morning News - Tuesday, August 21, 2007
AUSTIN – An attorney fired from the Texas secretary of state's office for talking publicly about presidential adviser Karl Rove has filed a lawsuit, saying she is the victim of political pressure.

Elizabeth Reyes was dismissed in September 2005 after Mr. Rove called Secretary of State Roger Williams about her quotes in a newspaper story.

In the suit filed in state district court, Ms. Reyes says she was fired "because of the political embarrassment and pressure" after she answered a reporter's questions about Mr. Rove's voting eligibility in Texas.

Mr. Williams, who resigned in June to head the state Republican Party's 2008 campaign effort, said Monday that he had not seen the lawsuit.

"I don't know what it says. So I can't say anything about it," he said.

Mr. Williams has previously said that Ms. Reyes was terminated because she violated agency policy. He said she was not authorized to discuss controversial issues with the media.

In Texas, state employees can be fired at will. Her attorney claims the firing violated her constitutional right of free speech.

A Fort Worth car dealer, Mr. Williams is a major GOP fundraiser and a longtime ally of Mr. Rove and President Bush. He is thought to have political ambitions of his own, perhaps as a Republican candidate for governor in 2010.

The lawsuit seeks lost wages and unspecified punitive damages. In addition, Ms. Reyes asks that references to her termination be eliminated from her state employment file.

At issue are quotes in The Washington Post in which Ms. Reyes questioned whether two small cottages Mr. Rove owns near Kerrville qualified as a residence for purposes of registering to vote. She added that state law is fairly flexible on the issue.

Mr. Rove, who orchestrated Mr. Bush's campaigns for governor and president, sold his home in Austin after moving to Washington and claims the two cottages in Kerr County as his home for voter registration. He also owns homes in Washington and Florida.

Voter eligibility rests largely on whether a displaced Texan intends to return to the claimed residency in the future.

Ms. Reyes said that she was answering a hypothetical question, that she didn't know she was talking with a reporter, and that Mr. Rove's name never specifically came up.

Mr. Rove is known for aggressively taking on opponents and critics. And Mr. Williams has confirmed that Mr. Rove called him after the article appeared, though he has said the White House adviser did not ask that Ms. Reyes be fired.

Read more in the Dallas Morning News

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