Horse-Butchering Plan Gains as U.S. Agrees to Inspect

A plant in New Mexico that plans to slaughter horses to produce meat for human consumption moved a step closer to operation on Friday when the Agriculture Department said it would provide legally required inspection services.

Courtney Rowe, a spokeswoman for the department, said it was likely to grant inspection services to two more plants “in the coming days.” The department did not name them but has said it has applications from facilities in Iowa and Missouri.

Although the plant, owned by the Valley Meat Company in Roswell, N.M., still has hurdles to overcome in the state, it is on track to become the first operation in the nation permitted to process horses into meat since Congress effectively banned the practice seven years ago.

Ms. Rowe said the department had determined that the company met all of the requirements of the Federal Meat Inspection Act.

The Obama administration has asked Congress to reinstate a ban on horse slaughtering in the United States. The House and Senate appropriations committees have approved similar amendments that would deny government financing for horse slaughter.

But “until Congress acts, the department must continue to comply with current law,” Ms. Rowe added.

In a statement, Valley Meat said it was “encouraged that after well over a year of delay that the process has finally reached completion.”

It said it planned to hire as many as 100 employees to work in the plant.

Opponents of horse slaughter said the federal government had options that would have allowed it to withhold inspection. They said that it had agreed to provide inspection services in an effort to put an end to a lawsuit filed by Valley Meat.

“This looks like a strange obedience to a Hail Mary lawsuit filed by the company,” said Wayne Pacelle, chief executive of the Humane Society of the United States.

Valley Meat said, however, that it would continue to press the lawsuit. “Given the unjustifiable failures of U.S.D.A. to comply with the law for a period extending well over 14 months, Valley Meat intends to continue to pursue the case,” the company said.

Gov. Susana Martinez of New Mexico and Gary K. King, the state’s attorney general, have opposed horse slaughtering, in part because of animal welfare issues but also because of potential hazards to humans. Horses are routinely injected with veterinary drugs by owners who never expect them to be eaten.

The Humane Society maintains a list of more than 100 drugs administered to horses, some of which carry labels stating they are not to be used in horses intended for human consumption. Bruce A. Wagman, a lawyer for Front Range Equine Rescue, a group opposing horse slaughter, said those drugs also posed an environmental hazard that the Agriculture Department was ignoring.

“The offal and waste byproducts produced by horse slaughter is put into lagoons where those drugs and other contaminants can leach out into streams and ground water,” Mr. Wagman said.

Phil Sisneros, a spokesman for Mr. King, New Mexico’s attorney general, said Valley Meat still faced hurdles to resuming operations there. (The plant was shut in 2007, after Congress effectively banned horse slaughtering). In a recent opinion, Mr. King said drugs administered to horses could constitute illegal contamination under New Mexico law.

“As I understand it, their attorney has said they have a testing process ready to go, and that’s a good thing,” Mr. Sisneros said. “We’re not going to just take their word for it, so there will be some sort of independent testing that has to be done.”

He said the environmental crime unit in the attorney general’s office would monitor Valley Meat, along with the state’s environment department, which has dealt with the company in the past.

Wells Fargo Agrees To Pay $42 Mil. in Fair Housing Case

Wells Fargo Bank agreed to pay $42 million to settle a complaint that it failed to maintain foreclosed properties in minority neighborhoods, turning the vacant houses into dilapidated eyesores.

Occidental Chairman Irani Agrees to Leave Company

The decision, announced at the company’s annual meeting, was the climax of a brutal boardroom struggle between Mr. Irani and Stephen I. Chazen, the chief executive during the last two years, over leadership and direction of the company. Earlier this week, the Occidental board bowed to investor pressure by announcing that Mr. Chazen would continue to serve in his position through the end of 2014 and help find a successor.

The company announced that Edward P. Djererjian, a former ambassador in the Middle East who has served as an independent director since 1996, will assume the role of independent chairman of the board, and that former Energy Secretary Spencer Abraham will become the independent vice chairmen. Both were elected by the board.

Mr. Irani has been chairman of Occidental since 1990, and many observers of the company believed he had been maneuvering to remove Mr. Chazen and retake the post of chief executive. He did not attend the shareholder meeting, held in Santa Monica, Calif.

Mr. Irani, 78, took over the Los Angeles-based company from Armand Hammer and stretched its reach across the Middle East, including Iraq, Oman and the United Arab Emirates. But he angered many investors by rewarding himself and some of his most senior executives with pay packages that were outsize even by the generous standards of large oil companies. Shareholders forced him to step down as chief executive two years ago.

Mr. Irani will be eligible for a severance payment of $38 million, which includes a life insurance payout, and additional annual payments of more than $2 million.

In recent years, Mr. Chazen tried to turn the company’s focus toward domestic oil fields to take advantage of the shale oil boom, but the financial results of his approach did not satisfy Mr. Irani. Occidental’s stock price has lagged those of competitors.

The shareholders had voted against Mr. Irani’s retention as chairman by more than 3 to 1.

“This means Chazen is really in charge until his time is up next year,” said Philip H. Weiss, a senior energy analyst at Argus Research. “This ends the battle at the top and clears a path for new leadership.”

In another sign of change, Aziz D. Syriani, the lead independent director, submitted his resignation. Mr. Syriani is the chief executive of the Olayan Group, a global trading and investment company, who received stock and cash worth $879,000 last year as an Occidental board member.

The developments were welcomed by activist investors who wanted Mr. Irani to retire.

“I am happy and cautiously optimistic but the devil’s in the details,” said Steven Romick, a managing partner of First Pacific Advisors and overseer of the $11 billion FPA Crescent fund, who attended the annual meeting. He said he hoped the company would now restructure its compensation policies for the board and senior management, and he was open to the possibility that Mr. Chazen might stay in his position longer.

Mr. Chazen is 66, two years younger than the new retirement age set for the chief executive just this week by the board.

Mr. Romick added, drawing a clear distinction with Mr. Irani’s direction, “My preference would be to be very circumspect about the Middle East.”

In February, Occidental surprised investors when it announced that it was creating a search committee to replace Mr. Chazen as chief executive. Fear spread among some investors that Mr. Irani was trying to put off his retirement and even return to his old post as chief executive. That stirred a revolt by the California State Teachers’ Retirement System and other shareholder activists who came out in favor of Mr. Chazen. They were supported by many Wall Street analysts who have complained that the company under Mr. Irani was often secretive.

Mr. Chazen, who previously served as chief financial officer, won the support of many investors because he was viewed as a smart allocator of capital and efficient manager of new projects.

Institutional Shareholder Services, the influential proxy adviser, had recommended that shareholders refuse to re-elect Mr. Irani or Mr. Syriani.

Greece Agrees to Sell Stake in State-Owned Betting Firm

ATHENS — In Greece’s first major privatization deal since the country’s debt crisis erupted three years ago, the government on Wednesday agreed to sell a controlling stake in the state gambling company OPAP to Emma Delta, a Greek-Czech investment fund, Finance Minister Yannis Stournaras said.

“The first major privatization in our country has been completed successfully,” Mr. Stournaras said.

Emma Delta is buying a 33 percent stake in OPAP, making it the company’s largest shareholder. Greece’s state privatization fund said the purchase price was €652 million, or $860.5 million, with Greece also retaining €60 million in dividends.

The government last month rejected a €622 million offer from Emma Delta, which was the sole bidder for the stake.

Mr. Stournaras did not comment on what the deal might mean for OPAP’s 1,000 employees.

OPAP was Greece’s most profitable company last year, with net profit of €505.5 million. About two-thirds of that came from lottery games, with the rest from sports betting.

Mr. Stournaras said the deal would have “multiple” benefits for Greece as it “demonstrates the trust of investors in the Greek economy.”

He added that Greece’s privatization drive, which has failed to take off over the past three years, would contribute to “accelerating the country’s exit from the crisis.”

NCAA Agrees Not to Dole Out Any Penn State Fine Money for Now

The NCAA has agreed to not dole out any of the $12 million Penn State has paid to it as part of the unprecedented sanctions the organization levied against the school for its handling of sex-abuse allegations against Jerry Sandusky, the school?s former assistant football coach and a convicted serial child molester.

Amgen Agrees to Pay $762 Million in Drug Marketing Case

David Scott, Amgen’s general counsel, entered the guilty plea at the United States District Court in Brooklyn to a single count of misbranding Aranesp, meaning selling it for uses not approved by the Food and Drug Administration.

The company agreed to pay $136 million in criminal fines and $14 million in a criminal forfeiture, as well as $612 million to settle various civil lawsuits from whistle-blowers.

The United States attorney’s office for the Eastern District of New York said in court that Amgen had promoted uses of Aranesp at different frequencies and different doses than stated on the drug’s label. This was apparently to try to increase use of the drug and to compete with a rival anemia drug from Johnson & Johnson.

Prosecutors also said that Amgen promoted Aranesp as a treatment for anemia in cancer patients who were not undergoing chemotherapy, even though the drug’s approval was only for patients getting chemotherapy. The use of the drug in cancer patients not getting chemotherapy was later found to be dangerous.

The presiding judge, Sterling Johnson Jr., scheduled a hearing for Wednesday at which he said he would announce whether he had accepted the settlement. Until then, the whistle-blower lawsuits remain under seal.

Amgen announced 14 months ago that it had set aside $780 million for a settlement of federal and state investigations and 10 separate whistle-blower lawsuits. In more recent regulatory filings, Amgen said the settlement was likely to include an 11th whistle-blower suit, one regarding the marketing of Enbrel, its blockbuster drug for rheumatoid arthritis and psoriasis.

The company has also said that as part of the settlement it would sign a corporate integrity agreement with the inspector general of the Health and Human Services Department. That would put some restrictions on the company’s future practices.

The corporate integrity agreement requires the executives and board members to personally certify compliance. They can be held personally and criminally liable if the company does not comply.

Marshall L. Miller, a federal prosecutor, called the agreement “a sweeping victory for the American public.”

“If you introduce misbranded drugs into interstate commerce, we will find you, prosecute you and hold you accountable,” Mr. Miller said.

The United States attorney’s office in Brooklyn has been investigating Amgen since 2007, according to Amgen’s regulatory disclosures. Aranesp, which is used to treat anemia caused by kidney disease or by cancer chemotherapy, was once Amgen’s biggest seller. But sales have been declining because of concerns that the drug can cause heart attacks and make cancer worse.

One whistle-blower lawsuit that was not under seal was filed by Kassie Westmoreland, a former Amgen sales representative.

Her suit charged that Amgen overfilled vials of Aranesp as a way of providing doctors with free medicine. The doctors could bill Medicare and private insurers for this extra amount, providing the doctors with extra profits. The suit said that this was intended to induce doctors to buy Aranesp for use in their practices rather than Procrit, a competing anemia drug from Johnson & Johnson.

During depositions in that case, five former Amgen executives invoked the Fifth Amendment against self-incrimination, according to court documents.

American Express Agrees to Refund $85 Million

The settlement is the latest in a series of enforcement actions that federal and state regulators have brought against some of the nation’s largest financial institutions for problems in their credit card businesses. In each of the cases, regulators have exposed critical flaws in how the banks monitor vendors that perform central business functions.

The multiagency investigation of American Express included the Consumer Financial Protection Bureau, the Federal Reserve, the Office of the Comptroller of the Currency and the Utah Department of Financial Institutions. They discovered violations of consumer protection laws between 2003 and this year that started “from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt,” Richard Cordray, the director of the consumer protection bureau, said in a statement.

To win customers for its Blue Sky travel reward credit card program, the lender sometimes offered customers a misleading promotion. Some customers thought they would receive a $300 reward, but that never materialized, the regulators said.

In doling out credit, they said, American Express also discriminated against applicants based on their age. The company also duped consumers into paying off stale credit card debt with the promise of improving their credit score, the investigators said; in fact, regulators found, American Express was not reporting the payments to the credit bureaus at all.

The action was directed at the two main bank subsidiaries of American Express, Centurion Bank and American Express Bank, FSB, which are both based in Utah and issue credit cards. Also singled out was American Express Travel Related Services Company, which provides support and marketing for the banking units.

American Express customers should expect refunds by March 2013, regulators said. The company also agreed to pay $27.5 million in fines to the regulators.

American Express, long known for its aspirational cards and wealthier customer base, said it had outlined plans to address each of the violations and “cooperated fully” with regulators. The company is the country’s biggest credit card issuer by purchase volume. Last year, the lender had revenue of $30 billion, up 9 percent from a year earlier.

The move against the bank is part of a broader push by federal and state regulators to protect consumers from illegal credit card and debt collection practices as millions of Americans struggle to pay their bills in a floundering economy.

So far this year, the newly minted Consumer Financial Protection Bureau has leveled enforcement actions against Capital One and Discover Financial over sales tactics. Last week, Discover agreed to pay $200 million to more than 3.5 million cardholders who bought credit protection services over the phone, and $14 million in civil penalties to banking regulators. Through those actions alone, the bureau has forced credit card companies to give refunds to more than five million customers.

In each of the three cases, the regulators found that the companies failed to monitor so-called third-party vendors. In the action against Capital One, for example, the consumer bureau took aim at a company that used high-pressure marketing tactics to persuade consumers to buy expensive and largely unnecessary products presented as a way to protect them from identity theft and hardships like unemployment or disability.

In the latest move against American Express, federal regulators said that “all violations” aside from the credit discrimination “are attributed to deficient management oversight of the bank’s service providers.”

Problems at American Express surfaced in February 2011 during an examination of Centurion Bank, and soon the Consumer Financial Protection Bureau was delving into similar issues at the other two American Express units.

Particularly vexing, consumer advocates said, were the bank’s debt collection practices. Appealing to consumers who wanted to clean up their credit scores, a crucial metric that is used beyond the lending arena to sometimes even determine employment eligibility, American Express told customers that those scores would improve if they paid off old debts.

Despite those promises, regulators found, American Express never reported those payments to the credit agencies. Many of the debts were so old that they no longer marred the credit reports at all.

Regulators accused American Express of “deficient” compliance systems. As a result, some bank employees who pitched credit cards were not given adequate training or information about all the applicable federal laws. Adding to a deficit in oversight, regulators found, was turnover in Centurion bank’s chief compliance officer. Regulators said that position “turned over frequently,” undermining the compliance monitoring.

American Express has so far dodged censure for its payment protection plans, which were at the center of the consumer agency’s actions against Capital One and Discover. The company said it stopped marketing those services earlier this year and is cooperating with regulators.

Such products have drawn the ire of state attorneys general who have said that they prey on customers’ fears, particularly those who are anxious about a persistent recession. Typically, the products promise to forgive or trim the debts of card holders in the event they lose their jobs, become disabled or die.

In a statement, American Express said it was “continuing its own internal reviews and is also cooperating with regulators in their ongoing regulatory examination of add-on products in accordance with an industrywide review.”

Monday’s enforcement action was “intended as a message to all entities,” said Kent Markus, assistant director of enforcement for the consumer bureau. “There are consequences for violating the law.”

Under the deal with regulators, American Express must halt the deceptive practices and set up independent auditors to ensure that its practices comply with consumer protection laws.

The fines and customer refunds will be paid, for the most part, by reserves established in previous quarters, American Express said.

DealBook: Sony Agrees to Acquire Stake in Olympus

TOKYO — Sony is set to become the biggest shareholder in Olympus with an investment of 50 billion yen, or $645 million, investment, the two companies announced Friday.

The deal could give struggling Sony a jump-start in the lucrative medical equipment business, while helping to bolster Olympus’s balance sheet following its $1.7 billion accounting scandal.

Sony and Olympus will form a joint venture to develop and manufacture endoscopes and other medical devices, the companies said in a statement. Olympus controls about 70 percent of the world’s market for medical endoscopes.

The two companies will also consider cooperating in digital cameras, they said.

Sony, struggling after four years of losses because of its slumping TV business, has been looking for new sources of revenue. It entered the medical device field last year by acquiring the American medical diagnostics firm Micronics for an undisclosed sum. Sony’s president, Kazuo Hirai, has said medical businesses could one day be a major profit driver.

Meanwhile, Olympus, which admitted last year to hiding losses for over a decade, is desperate to shore up its capital.

It replaced its entire board, restated five years of earnings and took a $1.3 billion write-down after acknowledging that it obscured what it said were past investment losses in inflated mergers and acquisition payments.

The deal announced on Friday calls for Sony to take a 11.5 percent stake in Olympus by buying new Olympus shares for 1,454 yen a share — a 4 percent discount to Friday’s closing price.

The two companies will set up a joint company by the end of the year, of which Sony will hold 51 percent and Olympus will hold 49 percent, the companies said. Sony will also select a director to serve on Olympus’s board.

In statements, Hiroyuki Sasa, the Olympus president, and Mr. Hirai of Sony both stressed that the deal would bring together Sony’s technological edge in digital imaging with Olympus’s already-dominant position in the medical field.

‘‘By accepting an investment from Sony, we will not only strengthen our financial base, but also combine our strengths and develop the kind of medical devices that we may not have been able to develop on our own,‘‘ Mr. Sasa said.

Sony will position the medical field ‘‘as one of Sony’s future core businesses,’’ Mr. Hirai said.

Olympus shares gained 1.7 percent to 1,520 yen in Tokyo on Friday, after the Nikkei business daily carried a report on the deal in its morning edition. Shares in the company, which lost nine-tenths of their value after the scandal erupted last October, have recovered to almost half their pre-scandal levels.

Shares in Sony fell 1.1 percent to 919 yen. Its shares have already slumped 34 percent this year.

On Tuesday, Standard & Poor’s cut Sony’s long-term debt rating a notch to BBB, the second-lowest investment grade, and warned of further downgrades unless Sony turns its business around.