U.S.-Enron deal is assailed

Tape, e-mail showing price manipulation alleged to be barred

April 11, 2006|By NEW YORK TIMES NEWS SERVICE

The government is moving to bar public access permanently to most of the audiotapes, e-mail messages and other documents that show how Enron Corp. earned billions of dollars by manipulating electric-power markets, according to one senator and others opposed to a proposed settlement with Enron.

Enron traders boasted of cheating unsuspecting customers, some of whom they mocked as "poor grandmothers" who would not understand that their pockets were being picked by Enron, according to transcripts of a small portion of the tapes that have been released.

The staff of the Federal Energy Regulatory Commission wants to withdraw materials that are not formally in the public record, as part of a settlement with Enron on charges of market manipulation.

But critics say that would make the records unavailable to those who are suing Enron. The plan was first reported Saturday by The Seattle Times.

Democratic Sen. Maria Cantwell, of Washington, denounced the proposed settlement yesterday, saying it would benefit Enron and its creditors at the expense of electricity customers in the Pacific Northwest who saw their electric bills soar by more than half in 2000 and 2001.

"We expect federal regulators to stand up and do their job of protecting the public with just and reasonable rates," she said in an interview. Instead, she said, the regulators are helping Enron keep "unjust profits" earned "from fraudulent contracts."

She said the proposed settlement would only encourage more fraud in energy markets because "if they don't stop this, then people continue to do it."

Bryan Lee, a commission spokesman, said he was mystified by the criticism by Cantwell and others. "Nothing is being sealed," he said.

Commission staff documents said "thousands of e-mails, documents, etc." that are in the public record "will forever remain in the public record."

But Cantwell said that only a minority of the audiotapes and documents were in the public record and the rest would be removed from any possible access by parties who thought that Enron cheated them.

"They are suppressing the facts," she said, adding that whether the verb was suppress, seal, or withdraw, "it all amounts to the same thing."

Eric Christensen, deputy general counsel for the Snohomish County Public Utility District, which is trying to recover its share of more than $1 billion in profits that Enron made during the peak of the market manipulations, also criticized the commission.

The energy commission "is acting at Enron's behest and completely abdicating its responsibility to the public," he said.

In response, Lee, the commission spokesman, said the ability of the public utility district and others to get access to the tapes and documents would not be diminished by the proposed settlement. He noted that the materials were held by the Justice Department.

Commission records show a relatively small number of Pacific Northwest electric customers bore most of the cost of inflated electric prices, in part because California had put a cap on retail electric rates. Enron earned $694 million in profits from retail customers in the Pacific Northwest in 2000 and 2001, and $347 million in California, Christensen said.

Under the proposed settlement, Enron would pay a fraction of a penny on each dollar of profit it earned in the Northwest.

Harlan Loeb, a spokesman for what he calls "the new team" that is running Enron, described the proposed settlement as "the best deal for creditors," which include the public utility district.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.