New evidence: Enron was scamming years before energy crunch

[Newsjock]

http://www.theolympian.com/home/news/newsupdate/story3.shtml

SEATTLE (AP) — Disgraced energy giant Enron Corp. was running scams to drive up the cost of power years before the West Coast energy crunch, according to audio transcripts and documents unveiled today by a small public utility district north of Seattle.

It's the first evidence that Enron appears to have been honing its fraudulent schemes well before the power crisis of 2000-01, when rolling blackouts darkened California as the company made at least $1.6 billion.

By November 1997, Enron apparently knew of loopholes in California's ill-advised deregulation plan, and by May 1998 — a month after the plan took effect — Enron was already falsifying transmission schedules to inflate prices, Snohomish County PUD officials said.

In another scheme, believed to have been nicknamed ``Project Stanley'' in honor of the Stanley Cup hockey trophy, Enron traders in Alberta conspired with other companies to artificially inflate energy prices in Canada in 1999.

more

[Nomad559]

1. CBS Video

Enron Traders caught on tape.

http://www.putfile.com/media.php?n=Enron_Traders

[PROGRESSIVE1]

15. THANK YOU!!!!

[UL_Approved]

20. The direct link:

http://x1.putfile.com/videos/c8-2115034924.wmv

It is from the source on the page, but I can't seem to get it to work.

[Liberty Belle]

2. Schwarzenegger met with Enron before his election.

I wonder what they talked about?

[Megahurtz]

11. BLEH!

:puke:

[Rockerdem]

3. Thats what you get when you have a Congress that is bought & paid for

It goes on all the time. Both sides sell their souls to the corporate beast.

[0007]

6. .....and if the truth were known your big corporations like G.E.

are doing the same thing as Enron and World Com. They have a lock on the media and the best attorneys coming out of the best universities on this planet. All in the name of Democracy and Religion and Free Enterprise do these pigs exist.

French Revolution: It's Deja Vu All Over Again

There is, admittedly, a lot more social mobility nowadays; money lavished on the right — or right — political causes can do wonders for one's business prospects; and even the lowliest citizen gets to vote. (Well, maybe not the last one.) But isn't there something eerily familiar about the rest of the setup?

Catherine Atherton

[Eurobabe]

4. Someday this headline will be printed about the Bu$h Regime

and their glorious plans for an ownership society. Yeah, they hit the trifecta alright!

[annabanana]

22. Or in the case of "Stanley".... a Hat Trick................n/t

[jdj]

5. "Power Failure" by Sherron Watkins and Mimi Swartz is a great read.

If you can take it...

[cliss]

7. In case anyone's wondering about Ken Lay's role

in all this. This elusive snake surfaces from time to time, and statements occasionally come out that Ole Ken was duped, that Jeffrey Skilling fooled him, that Andrew Fastow did sneaky deals behind his back.

Bull Crap. Ken Lay knew all along what was going on. He was most probably the driving force behind all the illegalities.

Ken Lay started Enron as a small start-up (I believe in Kansas?).

This anaconda took the company from small to big. All along, he set the policy and moved his tentacles into the Congress and bought people.

In my business classes, they taught us that a company IS ONLY AS GOOD AS ITS MANAGEMENT. A company IS its management, pure and simple.

[420inTN]

8. I'm shocked

:eyes:

[GarySeven]

9. But wait - I thought Gray Davis was LYING when he made this charge?

I thought the energy crisis was all his fault, creating a situation of such imminent peril that the electoral process had to be circumvented so Davis could be removed before he caused any more trouble.

I can't think of a single other instance in American history in which we were led something was a dire threat then found out later that premise was wrong.

[WildClarySage]

10. you mean like the current ss 'crisis'?

[arikara]

12. Wasn't enron was created to perpetrate a scam?

I thought that's what the whole thing was about.

[salin]

13. Yep. Late 80s Lay strategizes with Milliken

then starts schmoozing govt officials to score a boat load of rule changes... then gets bushsr to include some loopholes in a major energy policy that paves the opening by FORCING utility companies to allow their lines to be used by other companies.... last minute before the transition between bush1 and the Clinton admin rules get changed by Sen. Phil Grahms wife that allow energy "futures" to be traded without regulation (another loophole). Then Enron moves from directly providing energy into this new field of energy "trading". Then they start the whole (multi year) process again in several states. THey don't start with the lawmakers - but with lobbying energy/utility officials (executive branch) and when they get that support they make a hard push in the legislatures to get energy deregulation passed. And when this worked in California (and reportedly the speed with which the law was passed in California was HIGHLY unusual - things that usually take years to happen happened within months)... and they passed deregulation with out a plan of how to do it - and a panel was formed to make the plan... All those loopholes that Enron "discovered" (per this story...) well guess who was on the panel that wrote the whole plan... yep - KEN LAY. Guess it is no surprise that they so quickly (within a year) found ways to game the system.

[Garbo 2004]

23. Oh yeah, the restructuring bill as I recall passed the CA Leg on a

unamimous vote. Even while it was pending in the Legislature word was out that it was going to be a done deal. Lots of campaign dollars flowed no doubt, not just from Enron, but Duke and others. The CA market was a cherry ripe for the picking and they made sure that they'd get it.

Furthermore, Pete Wilson's Administration also was pushing the bill as well as stifling state gov't staff's concerns/objections regarding the bill. Concerns like electricity supply reliability and the potential for manipulating (gaming) the market. The potential problems (those darn "loopholes") were not unforeseen: they simply were ignored by those in power. Corporate interests overruled the public interest.

When the restructuring bill became law the Leg and the Wilson Administration were patting themselves on the back and taking credit. When the shit later hit the fan, even the bill's author Steve Peace tried to pretend that he had nothing to do with it. And of course Davis took the rap for it. (And recall when Ahnold came in to "save" the state from Davis's Administration, Pete Wilson was Ahnold's campaign co-chair but they interestingly kept Wilson's profile real low during the campaign.)

And another oh BTW, a significant if not indeed major portion of the CA budget deficit was due (if my recollection serves) to the state under Davis entering into electricity contracts to try to ensure the lights would stay on in California. The Davis Administration also wanted to lock in prices since they were continuing to rise out of control. But the prices were still outrageous. It was a crisis mode play, but the state paid and is still paying a real price for that. Which is why Davis later tried to get out of the contracts, since it was evident the state had been held up by corporate crooks using the threat of blackouts and even higher prices as their weapons.

It wasn't as if the state's energy staff didn't figure that the market was being gamed while it was going on. Plants were shut down due to "unscheduled maintenance" etc. But being able to prove it at the time was another matter. It was a nightmare.

Another Enron article from the LA Times here: http://www.latimes.com/business/la-fi-enron4feb04,1,2769758.story?coll=la-headlines-business

And the Washington's paper's Enron article is now at this link: http://www.theolympian.com/home/news/20050201/business/79473.shtml

[cosmicdot]

24. Milken is reported to have been at the 2001 Peninsula Hotel meeting, too

"...the Peninsula Hotel in Beverly Hills two years ago where he(Schwarzenegger), former Los Angeles Mayor Richard Riordan and junk bond king Michael Milken, met secretly with former Enron Chairman Kenneth Lay..."

"While Schwarzenegger, Riordan and Milken listened to Lay’s pitch, Gov. Davis pleaded with President George Bush to enact much needed price controls on electricity sold in the state, which skyrocketed to more than $200 per megawatt-hour. Davis said that Texas-based energy companies were manipulating California’s power market, charging obscene prices for power and holding consumers hostage. Bush agreed to meet with Davis at the Century Plaza Hotel in West Los Angeles on May 29, 2001, five days after Lay met with Schwarzenegger, to discuss the California power crisis."


Ahnuld, Ken Lay, George Bush, Dick Cheney and Gray Davis
http://www.commondreams.org/views03/0817-07.htm

Arnold Unplugged - It's hasta la vista to $9 billion if the Governator is selected
http://www.gregpalast.com/detail.cfm?artid=283&row=0

Did Ken Lay and Arnold Schwarzenegger Collaborate to Screw Californians on Energy?
http://www.dailykos.net/archives/004435.html

[elsiesummers]

19. They shifted from being an energy company to a energy trading company.

My husband worked for a rival company as an intern, composed mostly of former Enron employees. Three of his classmates took internships at Enron. (This was the summer of 2001, I think.)

Anyway - he learned a bit about the Energy industry (which he is not a part of) and the two things he learned about Enron - (1) - anyone who was working there was a backstabber and a shark - employee rating systems forced the low man out - you didn't want to be a part of that place. The people he was working with were very happy not to be at Enron. (2) They went from being a brick and mortar sort of place that performed a service to an essentially financial/trading company. They shifted their purpose - changed their objective as a company from providing a product to trading a product.

[Trajan]

14. I seem to recall a story about Britain being gamed before CA ....

Greg Palast has this ....

http://www.gregpalast.com/printerfriendly.cfm?artid=32

A high price to pay for the power and the glory

Observer (London)

Sunday, February 4, 2001
The Firms that are pulling the plug on California learnt their trade from Maragaret Thatcher


Inside Corporate America

by Gregory Palast

The fact that a truly free market didn't exist and can't possibly work did not stop Margaret Thatcher from adopting it. In 1990, Littlechild's market, the England-Wales Power Pool, went into business. On paper, it was an academic beauty to behold. In this auction house for kilowatt-hours, private power-plant owners would ruthlessly bid against each other to cut electricity prices for British consumers.

I can't say for certain whether the market scheme failed in minutes or days, but the pool quickly became a playground for what the industry calls 'gaming' - collusion, price gouging and all means of fleecing captive electricity consumers. Ten years of hapless fixes by Littlechild and his successor have failed to stem the tide of rip-offs at the heart of this unfixable system.

At the same time, 'deregulated' regional electric companies expertly vacuumed the pockets of captive customers. From their besieged Atlanta headquarters, Southern's executives learned they could charge in England double the price permitted in Georgia. The moment the Government permitted it, Southern bought SWEB, the old South Western Electricity Board. This was the first purchase ever by a US power company outside the States. The cash rolled in and American operators soon grabbed the majority of the British electricity sector.

Although Thatcher's private power market scheme was a poor idea that proved worse in practice, the International Monetary Fund and World Bank adopted it as a requirement of every single structural assistance programme worldwide. The World Bank's former chief economist, Joe Stiglitz, told me how IMF and Bank teams would fly into Russia and Asia, preach the wonders of privatising electricity markets, 'and you could see the wheels turning in the local officials' minds'. Here was a means for their corruption 'rents' to multiply a thousand-fold.

-snip-

Found this as well .... note the year: 1989

http://www.gregpalast.com/printerfriendly.cfm?artid=211

California Reamin': California and the Power Pirates

Excerpt from The Best Democracy Money Can Buy published by ZNet

Wednesday, April 23, 2003

On April 10, 1989, Jacob "Jake" Horton, senior vice president of Southern Company's Gulf Power unit, boarded the company plane to confront his board of directors over the company's accounting games and illegal payments to local politicians. Minutes after takeoff, the plane exploded. Later that day, police received an anonymous call: "You can stop investigating Gulf Power now."

Fast-forward to December 2000. The lights in San Francisco blinker out. Wholesale electricity prices in California rise on some days by 7,000 percent, and San Francisco's power company declares bankruptcy. Dick Cheney, just selected vice president by the U.S. Supreme Court, begins a series of secret meetings with power company executives. On their advice, within three days of Bush's inaugural, his Energy Department wipes away regulations against price gouging and profiteering ordered that December by outgoing President Clinton.

Out of Cheney's off-the-record meetings came the energy plan released by the president in May 2001. Billed as the response to the California electricity crisis, the president told us the plan contained the magic potion to end the power shortage. Then, after the horrors of September 11, 2001, the plan was remarketed as a weapon against Middle East terrorists. Nasty-minded readers may believe the Bush energy program, still rolling around Congress, is just some pea-brained scheme to pay off the president's oil company buddies, fry the planet and smother Mother Earth in coal ash, petroleum pollutants and nuclear waste. In truth, it's more devious than that.

There is a link running from Jake's exploding plane to blackouts on the Golden Gate Bridge to the polluters' wet dream of an energy plan offered by Cheney and Bush. They are connected through the mystical economics of electricity deregulation. Beneath the murky surface of this odd backwater of market theory is a multicontinental war over the ownership and control of $4 trillion in public utility infrastructure-gas, water, telephone and electricity lines-a story that began a decade earlier with Jake Horton and continued through a coup d'etat in Pakistan and the bankruptcy of a company called Enron. Andersen's Magic Show

-snip-

[cliss]

18. Very nice post.

Thanks, Trajan.

They're all in bed together.

[Sivafae]

16. I really, really, really, wish that the democrats hadn'a let the

repugs pin this on them. It should have been used in the presidential election.

[reprobate]

17. Pugs and Dems, they're all responsible. The corporations own them all.

There's only one trough, and ALL the pigs are sucking the swill from it.

[BushSpeak]

21. Arnold's Enron Secret

Great links!

Here are a couple more.

Arnold's Enron Secret
http://www.alternet.org/story/16902

Enron E-mails Confirm Schwarzenegger-Ken Lay Meeting
http://www.consumerwatchdog.org/utilities/pr/pr003708.php3

by the way, the original link at "theolympian.com" is no longer valid. It links to the current day's news