- Enron Corp. employees spoke of "stealing"
up to $2 million a day from California during
the 2000-01 energy crisis and suggested that
their market-gaming ploys would be presented
to top management, possibly including Jeffrey
K. Skilling and Kenneth L. Lay, according
to documents released Monday.
evidence of apparent scheming - in one recorded
conversation, traders brag about taking money
from "Grandma Millie" in California - is in
a filing by a utility in Snohomish County,
Wash. The municipal power unit north of Seattle
wants refunds for alleged overcharges made
by Enron during the electricity market meltdown.
utility obtained transcripts of routinely
recorded trader discussions from the Justice
Department, which seized them in its Enron
it has long been established that Enron engaged
in market-gaming tactics - two top traders
have pleaded guilty to fraud-related charges
for manipulating California's energy market
and a third awaits trial - the 450 pages of
recorded conversations provide another vivid
look into the organization's exploitive subculture.
also suggest that knowledge of alleged wrongdoing
may have reached the level of Skilling, Enron's
former chief executive, and Lay, the former
a Sept. 14, 2000, conversation, an employee
named "Sue" from Enron's governmental affairs
operation checks in with a trader named "Bob"
for information that could be used in an in-house
presentation to corporate executives.
is the time of year when government affairs
has to prove how valuable it is to Ken Lay
and Jeff Skilling," Sue said, according to
Snohomish utility identified Sue as Susan
J. Mara, Enron's California director of regulatory
affairs until December 2001, when she and
thousands of others lost their jobs as the
result of Enron's financial collapse.
talking with Bob, whose identity couldn't
immediately be learned, Mara touts Enron's
success in delaying a lowering of energy price
caps by state officials.
still seeking helpful material for the planned
executive presentation, she asks: "Do you
know when you started overscheduling load
and making buckets of money on that?"
load - a tactic that Enron traders famously
dubbed "Fat Boy" - involved purposely overstating
how much electricity would be needed in the
future, creating the appearance of power shortages
and leading to inflated prices.
who is now an energy consultant, said Monday
that the recorded conversation came about
as she gathered information for a budget presentation
to be made to executives at corporate headquarters
in Houston. "We had to show what our accomplishments
were for the year," she said.
said she didn't recall what the final presentation
contained or which executives heard it. The
presentation was not prepared expressly for
Skilling and Lay, she said, even though her
statement in the recorded conversation implied
that they would hear it.
trading tactics discussed on the recording
weren't considered illegal or manipulative
by Enron, Mara added.
Monday about the transcripts, Enron spokeswoman
Karen Denne declined to comment, save to say:
"We have been and we're continuing to cooperate
with all investigations."
lawyer, Bruce Hiler, declined to comment.
Earl J. Silbert, an attorney for Lay, could
not immediately be reached.
prosecutors in February brought a range of
fraud charges against Skilling for his actions
when he was at the helm at Enron, but none
was related to trading in the California market.
Lay has not been charged.
a different conversation in the transcripts,
Enron's West Coast trading chief, Timothy
N. Belden, discusses the profitability of
the company's strategies in California, particularly
those executed by a trading desk led by Jeffrey
he makes Š between one and two [million] a
day, which never shows up on any curve shiftŠ.
He steals money from California to the tune
of about a million - "
this point the other speaker interrupts, asking
Belden to rephrase what he just said.
Belden says. "He, um, he arbitrages the California
market to the tune of a million bucks or two
about the transcript Monday, Belden's lawyer,
Chris Arguedas, said that it was not possible
to draw conclusions about the meaning of Belden's
remarks without a better sense of the whole
conversation. "You can't understand words
spoken unless you see the context in which
they are spoken," she said.
October 2002, Belden pleaded guilty to a federal
conspiracy charge and has been cooperating
with the government. Richter pleaded guilty
to similar charges the following February.
spokesman for California Atty. Gen. Bill Lockyer
said the state was continuing to investigate
Enron. "The comments made in these transcripts,
if they're accurate, contain the kind of information
that could bolster" a case against Enron,
said spokesman Tom Dresslar.
Christensen, a lawyer for the Snohomish utility,
said the transcripts strongly suggest top
Enron executives knew of the trading ploys
used in California.
was common knowledge at least in the government
relations unit, and they reported to upper
management in Houston," he said.
staff writer Nancy Rivera Brooks in Los Angeles
contributed to this report.
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