BRIEFCASE KAISER HAS AGREED TO PAY $1 MILLION.

Byline: - Staff and Wire Reports

SACRAMENTO - Kaiser Permanente, the state's largest HMO, has agreed to pay a $1 million fine, the largest in state history against a full-service health plan.

The HMO previously had contested the fine by the state Department of Managed Care, unsuccessfully filing a contempt complaint against department director Daniel Zingale in federal court.

The company had alleged Zingale overstepped his authority by basing the fine on the deaths of three Medicare patients he said suffered poor emergency room care. The company argued Medicare members are subject to federal law, not from Zingale's department. But the judge ruled Zingale was within his rights to levy the fine.

Kaiser had previously indicated it might fight that decision. It signed a stipulation to pay the fine Thursday, however, which was made public Friday.

Cost of gas might have hit a plateau

Gasoline prices started to level off this week, possibly indicating pump prices could remain close to current levels through the Thanksgiving holiday period, the Automobile Club of Southern California reported Friday.

The average price of self-serve regular unleaded gasoline in the Los Angeles area this morning was $1.60 per gallon - nine-tenths of a cent more than last week, 4 cents more than last month and 32 cents more than at this time last year, according to the Auto Club.

``Prices at the wholesale level, which had been rising during the previous month, have started to back off a little and it usually takes a week or so for that to be reflected at the retail pump,'' said Auto Club spokeswoman Carol Thorp.

``In the near term, prices could climb a little more, but in all likelihood they will stay within a couple of cents of where they are now.''

Gateway reveals 2-year SEC probe

POWAY - Computer maker Gateway has been under investigation by the Securities and Exchange Commission for nearly two years, according to a company regulatory filing.

The investigation began in December 2000, the same month that Gateway was hit by the first of six class-action securities lawsuits.

The lawsuits were eventually combined and settled earlier this year for $10.5 million, paid by company insurers. Gateway admitted no wrongdoing.

Spokesman Brad Shaw said Friday the company was not required to disclose the probe and that it expects the SEC to complete its investigation by the end of next quarter.

WorldCom leader vows new ethics

NEW YORK - Freshly named the new chairman and chief executive of WorldCom Inc., Michael Capellas promised Friday to improve ethics at the scandal-plagued telecommunications company and pledged to lead it out of bankruptcy without selling off huge chunks of assets.

Capellas, 48, comes to WorldCom after wrestling with another knotty business challenge: serving as president of Hewlett-Packard Co. after its $19 billion acquisition of Compaq Computer Corp.

The changes at the top come as WorldCom is making a concerted effort to turn attention beyond its $9 billion accounting fraud, which has led to criminal charges against five former executives and federal investigations of the company.

Price index jumps tenfold in month

WASHINGTON - Wholesale prices shot up by 1.1 percent in October, the biggest leap in nearly two years, catapulted by sharply higher costs for gasoline, cars and trucks. Industrial production plunged by the largest amount in a year.

The big jump in the Producer Price Index, which measures prices of goods before they reach store shelves, came after a tiny 0.1 percent rise in September and a flat reading in August, the Labor Department reported Friday.

Separately, production at the nation's factories, mines and utilities fell by 0.8 percent in October, following a 0.2 percent decline the month before, the Federal Reserve reported. It marked the third straight month that industrial activity declined and was the worst showing since September 2001, when industrial production plummeted by 1.1 percent.