Jury Told to Ignore WPPSS Settlements

The judge in the securities fraud trial of the Washington Public Power Supply System’s $2.25-billion bond default told the jury Wednesday not to draw conclusions from out-of-court settlements in the case.

“This does not infer that any of the parties remaining in the case are right or wrong or liable or not,” U.S. District Judge William Browning said of settlements reached Monday involving 14 utility defendants. “You should not consider it.”

Also Wednesday, as the trial resumed following a five-day recess, Browning denied a mistrial request. Lawyers declined to comment on the request, citing the judge’s gag order.

Browning informed the jury of Monday’s settlement, but did not give details.

The settlement totaled $226 million with contributions from the federal Bonneville Power Administration and Washington state.

Browning’s comments on the settlements were the first time that he brought up the issue in the trial. Of more than 100 original defendants in the suit, only 18 remained at the start of the trial. Four defendants remain.

He reminded the jury Wednesday that the remaining defendants were Snohomish County Public Utility District, the sole remaining utility defendant in the case; engineering firms Ebasco Services Inc. and United Engineers & Contractors Inc., and financial adviser Blyth Eastman Paine Webber Inc.

They are accused of conspiring to lie and to hide information that might have discouraged potential investors from buying WPPSS municipal bonds, which were used to build two nuclear power plants.