Ex-Enron traders receive probation
Two former Enron Corp. traders accused of driving up energy prices during California’s power crisis were each sentenced Wednesday to two years of court-supervised release.
Timothy Belden, the former head of trading in Enron’s Portland, Ore., office, was sentenced in federal court after pleading guilty in October 2002 to one count of conspiracy to commit wire fraud. His plea was the first prosecution of anyone related to the West’s energy crisis in 2000 and 2001. Belden, who had faced as many as five years in prison, must forfeit $2.1 million.
The second defendant, Jeffrey Richter, was a lower-level trading manager in charge of the so-called “short-term desk” who also pleaded guilty to two counts related to the manipulation of energy prices.
Richter, who had faced as many as five years, agreed to pay a $410,000 fine.
Another trader, John Forney, is expected to be sentenced next month for his role in the scam that sent California energy prices soaring, causing energy shortages and rolling blackouts.
The crisis played a role in Pacific Gas & Electric Co.'s bankruptcy and will leave California consumers paying abnormally high electricity prices for years.
Prosecutor Laurel Beeler said the government sought lenient sentences for Belden and Richter because of their “extraordinary assistance” in the investigation.
Beeler said the two gave hundreds of hours of their time to help authorities understand the scheme, assisting in the government’s successful case against Enron Chairman Kenneth L. Lay, Chief Executive Jeffrey K. Skilling and dozens of others.
Enron’s trading schemes -- with colorful nicknames such as “Death Star,” “Get Shorty” and “Ricochet” -- had the effect of inflating consumer prices.
Transcripts of Enron energy traders showed them openly discussing manipulating California’s power market during profanity-laced phone conversations in which they gloated about ripping off “those poor grandmothers” during the energy crunch.
On the calls, other traders openly and gleefully discussed creating congestion on transmission lines and taking generating units off-line to pump up electricity prices.