The Texas economy is one of the most robust in the world. Wildly profitable companies and ingenious entrepreneurs call this state home, and what happens here influences businesses around the nation. Here’s a slice of the profits, losses, big deals, and backroom decisions happening across Tex
The CEO of Houston’s Riverside General Hospital was arrested this week in connection with a federal Medicare fraud investigation. According to indictments, Earnest Gibson III and six other hospital employees “bilked the Medicare program of $158 million over a period of more than seven years,” the Houston Chronicle reports.
Riverside administrators allegedly paid recruiters to bring patients to the hospital’s mental health clinics, billing Medicare for treatments that “were not medically necessary and, in some cases, not provided.”
The Bottom Line: The arrests at Riverside were part of a national crackdown on medical fraud. Dozens of other officials at 91 healthcare providers in seven states were arrested Thursday, according to the Chronicle. Authorities estimate that the fraudulent billings together totalled $430 million.
Juneau Anything About the Pipeline? Nome? Alaskagain Later.
A group of energy companies including Irving-based Exxon Mobil and Houston-based ConocoPhillips announced this week that it will move forward with plans to build an 800-mile pipeline that will export natural gas from Alaska to Asia. The $65 billion pipeline is one of several projects proposed by U.S. companies that would serve “energy-hungry countries, notably in Asia, where gas sells for several times the U.S. price,” the Wall Street Journal reports.
The Bottom Line: Natural gas production has been booming in the U.S. for the last decade, driving down prices and prompting a rush to increase exports. While a rise in exports would benefit energy producers, some consumer groups are concerned that the “currently proposed projects, which could export more than a third of daily production in the continental U.S., would raise natural-gas prices,” according to the Journal. One recent report estimated that the increase could be as much as 50 percent.
Valero Venture Viewed as Valuable
San Antonio-based Valero is considering plans to either sell all of its convenience stores or spin them off into a separate retail company. According to the San Antonio Business Journal, the move would “allow Valero to focus more on the production and wholesale marketing of fuels.” The company operates 1,802 locations in the U.S. and Canada, and about 4,000 stores are branded under its name.
The Bottom Line: While an auction to outside bidders could net about $3.5 billion, a decision to spin off the retail stores and keep them in the hands of shareholders would come with better tax benefits, the SABJ reports. Either way, Valero CEO Bill Klesse says that once the deal is done, “we’re not going to be selling Twinkies and beer and cigarettes.”
Winner of the Week: SeaWorld
Six beluga whales could be heading to SeaWorld San Antonio, pending approval from federal regulators. The Georgia Aquarium in Atlanta plans to import 18 whales captured off the Russian coast in the Sakhalin Bay and has filed a permit to transport 11 of them to SeaWorld locations “under breeding loan agreements,” the San Antonio Business Journal reports. The other whales would go to SeaWorld’s parks in San Diego and Orlando.
The National Oceanic and Atmospheric Administration has received about 4,000 public comments on the permit so far. A hearing is scheduled for Oct. 12.
Loser of the Week: Yao Ming
Yao Restaurant and Bar Downtown, named for former Houston Rockets star Yao Ming, was forced to close this week after failing to pay its lease, KHOU reports. Business at the restaurant, which opened in 2010, apparently suffered due to a lack of nighttime customer traffic in the area. Ironically, the development in which the restaurant is located is owned by a team of investors that includes another former NBA player, Magic Johnson.