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Doug Gamble- Contributor

Doug Gamble is a former writer for President Ronald Reagan and resides in Carmel. [go to Gamble index]

Enron Outrage
Let's hope feds lay into Lay...
[Doug Gamble] 7/21/04

He may not have the star power of Martha Stewart, but the upcoming trial of Enron founder and former CEO Kenneth Lay, under indictment on 11 charges of conspiring to cook the company's books, should be of particular interest to Californians.

It was Enron energy traders who allegedly bilked the state out of an estimated $1.1 billion during the 2000-2001 power crisis, burdening Californians with rolling blackouts and leading to the eventual ouster of Gov. Gray Davis. All right, so the blackouts weren't all bad.

To those who remember the TV show "Hogan's Heroes," Lay is the Sgt. Schultz of CEOs, maintaining he saw nothing and knows nothing. But the feds disagree. Lay's professed ignorance would be funny if the company he piloted hadn't caused so much human misery.

Thanks to profanity-laced audiotapes obtained from the federal government by the Snohomish (Washington) County Public Utility District, we now know just how evil this company was. Energy merchants routinely tape trader conversations in order that a record of transactions is available.

On the tapes, Enron traders are heard plotting how to bilk a company by purchasing energy from it, rerouting the energy and selling it back to the same company for a higher price. Others are heard discussing the withholding of energy from the West Coast market during the energy crisis to drive up prices.

In one conversation, a trader refers to a colleague by saying, "He steals money from California to the tune of about a million a day." In another, a trader refers to a California wildfire igniting transmission lines and causing a power blackout with the exhortation, "Burn, baby, burn."

Yet another Enron operative is heard saying, "What we need to do is help in the cause of the downfall of California. You guys need to pull your megawatts out of California on a daily basis." When a trader asks about "all the money you guys stole from those poor grandmothers in California," another responds, "Yeah, Grandma Millie, man. Now she wants her (expletive) money back for all the power you've charged up, jammed right up her (expletive) for (expletive) $250-a- megawatt hour."

As Bob Dole once asked, where's the outrage? While ideally I'd like to see Gov. Arnold Schwarzenegger as The Terminator spend five minutes alone in a room with each of these creeps, and I don't mean to smoke cigars, the least he can do is lend some of his muscle to the effort to get our money back.

So far the fight on behalf of California's energy consumers is being led by state Attorney General Bill Lockyer and both of California's senators, Dianne Feinstein and Barbara Boxer. It's unlikely that a lawsuit Lockyer has filed against Enron will result in recovery of any of the billions California claims it was overcharged, since the company is bankrupt financially as well as morally. But he's counting on a positive court ruling vis-a-vis Enron to boost the chances of getting refunds in suits filed against other energy companies.

For their part, Feinstein and Boxer have fired off letters to the chairman of the Federal Energy Regulatory Commission, Patrick Wood, with Feinstein demanding the agency order $1.8 billion in refunds, rather than the $32.5 million recommended by a FERC judge. But Wood says the audiotapes, while "odious and offensive," probably don't show evidence of illegal behavior. This is not surprising coming from an agency known more for playing footsie with energy companies than protecting the consumer.

Meanwhile, the operator of the state power grid, the California Independent System Operator, hopes to have recalculated overcharges done by year-end to help federal regulators decide on refunds, which will likely be much less than we deserve.

Perhaps before then, if there's any justice in the world, Grandma Millie will be able to wave goodbye to Lay as he's hauled off to prison.CRO

California-based Doug Gamble contributed speech material to Presidents Reagan and George H.W. Bush, and writes a twice-monthly column for the Orange County Register and CaliforniaRepublic.org.

Copyright 2004 Doug Gamble

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