Judge Orders Enron to Turn Over Documents in Power Crisis Probe

A judge on Thursday ordered Enron Corp. to hand thousands of documents over to California regulators probing the state’s power crisis of last year.

San Francisco County Superior Court Judge A. James Robertson II said the company must respond to the state’s subpoena by June 26 or face contempt charges.

California officials said Enron had dragged its feet in complying with the subpoena the state issued almost a year ago, and on Thursday urged the judge to sanction the firm.

Atty. Gen. Bill Lockyer’s office is investigating whether Enron’s business practices contributed to last year’s rolling blackouts and whether the company artificially inflated wholesale energy prices.

Enron attorney Gary Fergus said the company had not complied with past orders from Robertson for reasons “beyond Enron’s control.”

He cited turmoil at the company, which has filed for bankruptcy protection and is the subject of congressional and federal criminal probes.

Enron’s former auditor, Andersen, faces a May 6 trial date on an obstruction of justice charge for shredding documents related to its Enron work.

With Andersen losing clients and bracing for layoffs, Citigroup Inc. may lose as much as $70 million it loaned in October to Andersen.

Citigroup’s Citibank unit extended the money as part of a $700-million loan it arranged in October with a group of banks.

The other lenders included Barclays Bank and Bank of America Corp., according to Bloomberg data.

The arranger of a loan typically holds about 10%.

“This loan has a small chance of being paid back and a large chance of being a loss,” said Roman Weil, an accounting professor at the University of Chicago. “The likelihood of Arthur Andersen continuing as a going concern has taken a big dip down this week.”

Citigroup closed on the loan Oct. 31, the same day Enron disclosed that the Securities and Exchange Commission was formally investigating its accounting.

About a week earlier, Andersen employees began destroying records of the firm’s Enron audit, the action that led to the firm’s indictment on federal obstruction of justice charges.

Enron filed the largest U.S. bankruptcy in December.

Dan Noonan, a spokesman for Citigroup, the world’s largest financial services company, declined to comment, as did Bank of America spokesman Jeff Hershberger and Linda Wynns of Barclays.

Andersen spokesman Patrick Dorton didn’t return calls.

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Associated Press and Bloomberg News were used in compiling this report.