IN THE COURTS

STORE OWNERS SUE GOVERNOR PATAKI Convenience store operators sued Governor Pataki yesterday to compel him to enforce a new law requiring tax collection on tobacco products and gasoline sold to Indian businesses.

The New York Association of Convenience Stores says Mr. Pataki’s failure to collect taxes on the goods before they reach the reservations costs taxpayers $450 million a year and costs businesses $1 billion a year.

The president of NYACS, James Calvin, said Mr. Pataki is “flouting his constitutional duties” by not enforcing the law, which took effect March 1. Businesses located near reservations say they suffer a competitive disadvantage because they must charge subsantially higher prices.

“This is an issue that has crippled the convenience store industry and is getting progressively worse,” Mr. Calvin said. “If there is going to be a tax on these products, let’s administer them fairly, let’s administer them equally.”

The state tax commissioner, Andrew Eristoff, earlier this year said that he wouldn’t enforce the law on reservation and Internet sales to non-Indians until Mr. Pataki had more time to settle the long-standing land claims of several tribes.That delay, however, was rejected by the Legislature.

– Associated Press

LAY ARGUES WITH PROSECUTION ON LAST DAY OF TESTIMONY HOUSTON – The former chairman of Enron, Kenneth Lay, finished six days on the witness stand as he began it, arguing the prosecution has misinterpreted routine business practices while insisting advisers thoroughly approved his decisions.

Mr. Lay and former Enron President Jeffrey Skilling are on trial here on criminal conspiracy and fraud charges in connection with the Houston energy company’s December 2001 collapse.

Under questioning by his defense attorney, Mr. Lay struck at the government’s claim that in October 2001 he suddenly stopped providing investors with a retail energy unit’s contract-signings to hide a slowing business. The prosecution contends the unit was then falling short of its $30 billion target for the year’s signings and so stopped disclosing the details to investors.Thereafter, Mr. Lay told investors that the target was no longer relevant and the business was meeting all its targets.

Mr. Lay called the government’s description of the change as hastily conceived to hide a business slowdown a “complete distortion.” The defense played a tape recording of the unit’s former head telling employees in early June 2001 that he planned to “move away” from the measure and switch to growth and profitability measures. Mr. Lay also argued that online customer signups might have allowed the unit to meet its goal for the year.

He also sought to lessen the impact of the prosecution’s portrayal of him as uncaring and dishonest for selling $70 million in Enron stock back to the company in 2001. The sales were not disclosed to investors and some came as Mr. Lay was telling employees he was net buyer of the stock. Prosecutor John Hueston on Monday hit hard at the Enron sales, noting Mr. Lay retained other investments and the sales were taking cash out of the company amid layoffs and cost cuts.

– The Wall Street Journal

REAL ESTATE

CONTRACTS FOR NEW HOME SALES FALL TO TWO-YEAR LOW Contracts to purchase previously owned homes in America decreased in March to a two-year low as buyers were deterred by rising mortgage rates and selling prices that remain higher than a year ago.

The index of signed purchase agreements, or pending home resales, fell 1.2% to 116.2, the lowest reading since February 2004, the National Association of Realtors said yesterday in Washington. That follows a revised reading of 117.6 in February. Home resales will drop 6% this year, the Realtors group forecast on April 11. After five record years for housing, declining sales and slower appreciation in home values may hold back consumer spending and growth in the second half of the year, economists said. “We’re expecting housing to be flat in the second quarter and a drag on economic growth in the third quarter and fourth quarter,” the chief economist at Wachovia in Charlotte, N.C., John Silvia, said before the report.

– Bloomberg News