REGULATORY

SEC FACES $48 MILLION GAP FOR SECURITY, CONSTRUCTION

The Securities and Exchange Commission, the nation’s top market regulator, must close a $48 million funding shortfall after misjudging security and construction costs at its new Washington headquarters and offices in New York and Boston.

The SEC discovered the errors in March and put an employee on leave for mismanagement, said Peter Derby, a senior aide to Chairman William Donaldson. In addition to putting one person on leave, the SEC moved two additional workers to areas where they have no responsibility for budgeting, Mr. Derby said.

In New York, the commission failed to budget for renovations to new offices in Lower Manhattan near the World Trade Center site.

– Bloomberg News

AUTOMOTIVE

FITCH LOWERS GENERAL MOTORS DEBT RATING TO JUNK

General Motors Corporation’s debt was cut to junk by Fitch Ratings, the second time in three weeks the world’s biggest automaker lost an investment-grade credit rating on concern about a drop in market share.

Fitch followed Standard & Poor’s, which on May 5 roiled bond markets by reducing $196 billion of Detroit-based GM debt to high-risk, high-yield status. The downgrade means that GM will fall out of Lehman Brothers Holdings Incorporated’s benchmark investment-grade bond index.

Fitch and S&P cited falling revenue from GM’s largest sport-utility vehicles in lowering the Detroit-based company’s ratings. Sales of the vehicles, which have been among the company’s most profitable, are down 25% this year, according to Global Insight Incorporated.

– Bloomberg News

NATIONAL

BUFFETT’S MIDAMERICAN TO BUY PACIFICORP FOR $5.1 BILLION

Warren Buffett’s utility company agreed to buy PacifiCorp from Scottish Power Plc for $5.1 billion in cash, gaining low-cost power generators in the western United States. “PacifiCorp is a business that may not fit the profile of Scottish Power, but it fits our profile,” Mr. Buffett said today on a conference call with reporters. “Our favorite holding is one that is forever. Utility assets fit the bill.”

The purchase is the biggest by Buffett since his Berkshire Hathaway Incorporated bought General Re Corp. in 1998. Buffett on April 30 told shareholders he’s looking for ways to invest Berkshire’s $44 billion in cash. The Berkshire utility company, MidAmerican Energy Holdings Company, already owns the Kern River pipeline, which carries natural gas to California. PacifiCorp supplies power to California, at least partly from hydroelectric generators.

Berkshire owns 83.4% of MidAmerican and has 9.9% of the voting control. The structure, set up when a Berkshire-led group bought MidAmerican in 2000, was a way to comply with the Public Utility Holding Company Act, a Depression-era law that limits ownership of utilities by non-utility companies.

– Bloomberg News

STATEWIDE

KODAK DELAYS SHIPMENT OF WIRELESS DIGITAL CAMERA

Eastman Kodak Company is delaying its launch of a highly touted digital camera that will use wireless technology to transfer images to computers, printers, or kiosks.

The 4-megapixel Easy Share-One camera, unveiled in January, was expected to arrive in stores next month. But Rochester, N.Y.-based Kodak said yesterday that it will be shipped in October to take advantage of the end-of-year holiday shopping season.

“What we’re doing is taking the necessary time to ensure the best possible customer experience with the camera,” said a Kodak spokesman, Gerard Meuchner, adding that the camera brings “significant technological advances to the marketplace.”

The camera will carry a $699 price tag and boasts a 3-inch touch-screen display.

– Associated Press