New Tapes Reveal More Evidence of Power Scheming by Enron
Enron Corp. manipulated state electricity markets nearly every day during California’s 2000-01 energy crisis, reaping at least $1.1 billion in profit that the company hid in five sets of accounting books, according to documents and audiotapes released Monday.
The latest evidence of apparent scheming by Enron’s traders is similar to previously released transcripts and tapes of conversations between traders, which are routinely recorded.
In language profane and colorful, traders laugh about “stealing” from Californians and causing blackouts through trading techniques dubbed “Fat Boy” and “Death Star,” among other nicknames. Some documents have suggested that Enron’s top management, possibly including former President Jeffrey K. Skilling and former Chairman Kenneth L. Lay, knew about the schemes.
This newest batch, which includes hundreds of pages of financial documents, was unveiled by a Northwestern utility and Sen. Maria Cantwell (D-Wash.), who demanded a new investigation by the Federal Energy Regulatory Commission.
On one tape, an Enron trader coaches a new employee on ways to overload California’s transmission grid and then collect a fee for relieving the faked congestion.
“If the line’s not congested, then I just look to congest it,” said a trader identified as Mallory on the transcript. “If you can congest it, that’s a moneymaker no matter what, ‘cause you’re not losing any money to move it down the line.”
The data are “clear and compelling evidence” that FERC should allow Western utilities to cancel or renegotiate billions of dollars in long-term contracts with Enron, Cantwell said during a news conference attended by officials of the Snohomish County Public Utility District, a municipal utility near Seattle.
Cantwell said that FERC’s failure to uncover Enron’s schemes wound up hurting thousands of customers in California and nearby states and that the commission tried to keep the utility district from getting access to Enron’s tapes, which surfaced as part of a criminal investigation by the Justice Department.
Two top Enron traders have pleaded guilty to fraud-related charges for manipulating California’s energy market, and a third awaits trial.
California officials are seeking nearly $9 billion in refunds of alleged overcharges by Enron and other power sellers. FERC so far has approved about $3.3 billion in refunds but has rejected requests by California and other states to cancel long-term contracts signed during the energy crisis.
An Enron spokeswoman declined to comment on the latest tapes and said the company continued to “cooperate fully with all investigations.”
FERC’s staff will review the new evidence but will act “based on the facts and the law and not on politics,” an agency spokesman said.
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Associated Press and Reuters were used in compiling this report.
