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Business Digest
Microsoft delays release of Windows XP update

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Microsoft plans to make the XP "service pack 2" available by download or on free update discs by the end of this month. It was originally scheduled to ship by June 30.

It will also provide computer makers with a new version of XP that incorporates the updates, but it may take up to six or eight weeks longer to appear on new PCs, said Greg Sullivan, lead product manager with Microsoft's Windows Client division.

That means the kit is late for the back-to-school selling season, "but the thing we're focused on is getting this release to the quality it can be and then getting it into the hands of customers," Sullivan said.

The update kit installs all security improvements made since XP was released in 2001. It also changes the software's settings to make it less vulnerable to attack, and installs a "dashboard" control to help users manage security settings. It will also install the latest version of Microsoft's media player and improved controls for accessing wireless Internet connections.

One factor in the delay is testing to see how the kit affects other software. The kit may interfere with some applications, and Microsoft has acknowledged it will cause problems with its own business customer-relationship management product.

More than 210 million copies of Windows XP are in use, and it's now the standard operating system sold on new PCs.

Harbor Freight Tools

Federal suit charges sex discrimination

The U.S. Equal Employment Opportunity Commission (EEOC) filed a sex-discrimination and sexual-harassment suit against Harbor Freight Tools, a tool and equipment retailer with a store in Everett.

The suit alleges that an assistant manager repeatedly harassed four former and current female employees by touching them inappropriately, suggesting they join a partner-swapping club and talking about pornography.
 
Sexual harassment is considered a form of sex discrimination, which is prohibited by federal law.

The EEOC claims that the Everett store failed to respond to the harassment complaints, then fired a female head cashier because of her gender.

"It is distressing to find companies such as this which still subject their workers to such relentless violations of the law and of common decency," said Jeanette Leino, director of the EEOC's Seattle office.

Harbor Freight Tools, based in Camarillo, Calif., owns more than 150 retail stores in 36 states. A company official declined to comment on the case yesterday.

The lawsuit, announced yesterday, was filed June 30 in U.S. District Court, Western Washington. It seeks an undisclosed sum for back pay and punitive damages.

Whidbey-investor fraud

Mukilteo man pleads guilty to bond scam

A Mukilteo real-estate developer could get up to eight years in prison after pleading guilty to fraud, conspiracy and money-laundering charges in federal court last week.

Terry Martin, 57, admitted to using false information when he persuaded members of a small sewer district on Whidbey Island to issue $20 million in municipal bonds to help fund an Everett development project that was never built.

According to court documents, Martin told the members of the Holmes Harbor Sewer District and bond investors that he had $63 million in financing for an office-park project in Everett, and prelease agreements with Microsoft to occupy the development. Martin also said he had secured building permits for the development. None of this was true, Martin admitted in a plea agreement.

Martin and several others involved in the scheme took more than $2.5 million from the bond funds for their personal use, the U.S. Attorney's Office said. Three other defendants have pleaded guilty in the Holmes Harbor bond-fraud case, including Leslie Killingsworth, an engineer who worked for the sewer district. Martin will be sentenced in November.

Compass Communications

FiberCloud acquires Internet-services firm

Everett-based FiberCloud, a seller of high-speed Internet and data services to business, has picked up a third data center in Seattle by buying the assets of 10-year-old Compass Communications, a Seattle provider of business Internet services.

Terms were not disclosed for the purchase, which includes the transfer of Compass' customers to FiberCloud along with a data center located in Seattle's Westin Building.

FiberCloud, a wholly owned subsidiary of Langley-based Whidbey Telephone, said the new center will strengthen its regional position in providing businesses with off-site networking and server facilities, which are used in part to protect companies from losing data in a disaster.

Nation/world

TiVo

Subscribers can send shows over Internet

WASHINGTON — Federal regulators yesterday approved technology allowing TiVo subscribers to send copies of recorded shows over the Internet.

The idea was opposed by Hollywood and pro sports teams who believe it will lead to mass redistribution of movies and games. But in its unanimous decision, the Federal Communications Commission said there are enough protections already in place to prevent that.

TiVo allows subscribers to digitally record shows off their televisions. The new technology would allow a subscriber to download those broadcasts to their computer and then send copies of recorded shows to their offices, homes, or from different rooms within a home.

A recording could also be sent to a few friends as long as they are on the subscriber's registered account.

Bristol-Myers Squibb

Drugmaker settles accounting charges

WASHINGTON — Bristol-Myers Squibb is paying $150 million to settle a major alleged accounting fraud as federal regulators accused the company yesterday of manipulating its inventory of drugs to inflate earnings and meet Wall Street targets.

The pharmaceutical giant, which also recently settled a lawsuit by shareholders for $300 million, still faces a criminal investigation by the Justice Department.

In its settlement of the civil case with the Securities and Exchange Commission, Bristol-Myers agreed to pay a $100 million civil fine and an additional $50 million, both of which will go into a fund for shareholders.

Bristol-Myers neither admitted nor denied wrongdoing in the accord but did agree to abide by a permanent injunction against future violations.

Express Scripts

New York sues for rebates from pharmacy costs

ALBANY, N.Y. — New York authorities sued one of the nation's largest pharmacy-benefit managers yesterday accusing Express Scripts of pocketing as much as $100 million in drug rebates that should have gone to the state.

New York Attorney General Eliot Spitzer and state Civil Service Commissioner Daniel Wall accused the firm of violating its $600,000 contract to negotiate the lowest prices for drugs under health plans for state workers. The contract required the company to negotiate the lowest prices and return any rebates to the state.

Instead, ESI called the rebates an administrative fee or similar term and kept it, Spitzer contended. The state is seeking as much as $100 million in reimbursements, plus any penalties and fines, Spitzer said.

The company denied the accusations yesterday.

Compiled from Seattle Times staff and The Associated Press