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#31
02-06-2005, 10:28 PM
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 I thought that was apparent.I totally think Enron screwed Calif. and did so with the WH's blessing. I just think the R's were not alone in that boat and it was not to get Davis out of office, though that may have been a fringe benefit. I think Enron did it because they thought they would not get caught  
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#32
02-06-2005, 10:40 PM
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ok here goes:
KRON channel 4 San Francisco article
you'll see at the bottom the AP tag line Posted: December 4, 2003 at 3:33 p.m. SAN FRANCISCO (AP) -- A former top executive at Enron Corp. was charged Thursday in a superseding indictment with 11 counts of conspiracy and fraud in connection with the company's manipulation of energy markets during California's power crisis. John Forney, 41, of Ohio, is the third former Enron official to be charged with illegally manipulating California's electricity prices from the company's Portland, Ore., office. His attorney said he's innocent and will fight the charges at trial. Two other former Enron energy traders pleaded guilty and are cooperating in the federal investigation into Enron's role in the energy debacle, which bankrupted Pacific Gas & Electric Co. and will leave California consumers paying abnormally high electricity prices for years. Forney allegedly concocted a scheme known as "Ping Pong" designed to evade federal price caps on California energy. The scheme involved buying energy from California and later selling it back to the state at inflated prices, making it appear the energy was generated elsewhere, prosecutors said. The indictment filed in federal court in San Francisco also alleges that Forney was responsible for "Death Star," a scheme known inside Enron as "Forney's Perpetual Loop," that attempted to generate revenue by fraudulently charging fees for services Enron did not provide. From Forney's trading desk in Portland, Enron charged California for electricity that wasn't delivered, thus failing to alleviate backlogged transmission lines in 2000, at a time when some parts of the state suffered rolling blackouts, prosecutors said. "They made it look like they were relieving congestion and they would just get paid for it," said federal prosecutor Matthew Jacobs. Jacobs said Forney was charged with one count of manipulation this summer and 10 more were added Thursday. He said the government and Forney's counsel had been discussing a plea bargain, but "those negotiations concluded without resolution." Neither Jacobs nor the indictments said how much money Houston-based Enron allegedly bilked from California energy consumers. Forney's attorney, Robert Breakstone, said his client will enter an innocent plea on Friday. "The government has to try to prove he is guilty," Breakstone said. Forney worked at the now-bankrupt Enron from 1993 to 2002 before being hired as an energy trader at Columbus, Ohio-based American Electric Power, before the Enron scandal broke. AEP put him on administrative leave after he was arrested in June. Former Enron executives Timothy N. Belden and Jeffrey S. Richter have pleaded guilty and cooperated with the FBI. Belden and Richter are expected to testify against Forney at his Oct. 12 trial next year. Forney remains free on $500,000 bail, Jacobs said. The case is United States v. Forney, 03-0178. (Copyright 2003 by The Associated Press. All Rights Reserved.) ========================================================== URL is at end of article THE ENRON COLLAPSE Questionable Accounting Practices Huge profits from California hidden away Feds investigating reserves totaling as much as $1.5 billion - David Barboza, New York Times Sunday, June 23, 2002 Houston -- The Enron Corp. used undisclosed reserves to keep as much as $1.5 billion in trading profits off its books during the California energy crisis, according to six former managers and executives who handled or reviewed the accounts. The enormous reserves, which would have doubled the company's reported profits, were hidden in late 2000 and early 2001, as energy prices soared in California and politicians accused trading companies like Enron of price gouging. The former Enron officials said that the company swelled the reserves in hopes of damping the political firestorm. Further, some former executives said, Enron manipulated the reserves to help it report steady profit growth to Wall Street and credit-rating agencies. Investors generally are not willing to pay as much for the stock of a volatile trading operation as they would for companies -- like Enron before its collapse -- that report steady quarter-by-quarter growth. The Securities and Exchange Commission and investigators from the Justice Department have interviewed witnesses to determine whether the practices violated securities laws by creating "cookie jar reserves" or a kind of corporate slush fund to doctor quarterly earnings reports, according to people who have been interviewed by investigators. The existence of the huge reserves adds a strange twist to the Enron story. The company filed for bankruptcy protection last December amid reports that executives inflated profits and hid losses with off-balance-sheet partnerships. But interviews with more than a dozen former executives and managers suggest that the company at times also held back trading profits to serve its political and financial ends. The majority of these gains were "paper" profits on long-term contracts, rather than cash that could have helped Enron stave off the liquidity crisis that led to its collapse last fall. In any event, one former executive said, the reserves were depleted in the months before Enron's bankruptcy. The use of reserves to manage profits is outlawed, but it is not uncommon. This month, the Microsoft Corp. agreed to settle an enforcement action in which the SEC charged it with maintaining huge reserves in the late 1990s that could have been used to enhance profits when the company's earnings growth began to wane. Former top executives at Enron, including Kenneth L. Lay, the longtime chairman, and Jeffrey K. Skilling, the company's president and later chief executive, said last week through their spokeswomen that they were aware of the reserves but considered them proper. Judy Leon, Skilling's spokeswoman, said that money was set aside mainly in credit reserves to insulate Enron from the risk that California's utilities could be bankrupted by the crisis and left unable to pay their debts. "At no time did Skilling have any knowledge of inappropriate or illegal activity in the reserve account," she said. Accounting rules allow for credit reserves -- and, indeed, California's biggest investor-owned utility, Pacific Gas and Electric, sought bankruptcy protection in April 2001, owing Enron $500 million. And trading companies can use so-called prudency reserves to protect against market risks, like the inability to exit a trading position at a good price. But six former Enron officials who handled or reviewed the accounts said that Enron used prudency reserves to manipulate the reported profits of its energy trading operations. The economic value of energy trades -- particularly deals providing for the delivery of electricity long in the future -- is highly subjective. As the dominant trader, analysts say, Enron had great leeway to establish market prices. Likewise, when profits seemed bloated during the California crisis, executives said, it became common to give trades a "haircut," shifting a portion of the profits into a reserve that could later be drawn down. One former executive recounted how Enron traders made close to $500 million on a single day in the summer of 2000, after a natural gas pipeline burst near Carlsbad, N.M., and market prices spiked. "We made such an incredible amount of money we didn't want to recognize it all into earnings," said the executive, who like others interviewed requested anonymity because of concern about being drawn into litigation. "We were supposed to make $500 million in a quarter and we were doing it in a day." Accounting experts said that the subjectivity of prudency reserves makes them susceptible to abuse. "If you're using trading reserves as a mechanism for understating your positions in good times -- and therefore not reporting profits -- and later reporting the old profits in times that aren't as good, that would clearly be an abuse of the accounting rules," said Lynn Turner, a professor at Colorado State University and the former chief accountant for the SEC. During the energy crisis, power shortages led to rolling blackouts and price spikes in California. Elected officials railed at power merchants, with Gov. Gray Davis accusing them of profiteering and market manipulation. At the time, Enron executives denied the charges, blaming a poorly designed energy market for California's problems. And while the company reported profits of $350 million for the last three months of 2000 -- 34 percent more than a year earlier -- executives minimized the impact of the crisis on Enron's bottom line. "Now for Enron, the situation in California had little impact on fourth- quarter results," Skilling told Wall Street analysts in a Jan. 22, 2001, conference call. "Let me repeat that. For Enron, the situation in California had little impact on fourth-quarter results." He explained that because Enron did not own power plants in California, the company did "not invite the same accusations the generators have faced regarding excessive profits." The disclosure of internal documents last month describing ways that Enron's traders operated in California's market prompted officials to renew their demand for billions in refunds from energy companies. Told about the reserves, Davis expressed fresh outrage. "Enron's made such a killing off this state, they were embarrassed to disclose it to their shareholders," the governor said on Friday in a statement. "Unfortunately, Enron will live on as a symbol for everything that has gone wrong with electricity deregulation." Several high-ranking Enron executives said that the company began using reserves to "smooth" or "manage" earnings growth as early as 1998, when energy price spikes in the Midwest brought traders unwanted scrutiny. Enron's disclosures about its reserves were limited, and, according to former executives, incomplete. In its year-end report for 2000, it listed $452 million in "credit and other reserves." There was nothing disclosed about prudency reserves. Enron's use of the reserves was approved by Arthur Andersen LLP, the company's longtime auditor, and by Richard A. Causey, the company's chief accounting officer. His lawyer, J.C. Nickens, said that Causey -- who left the company after its collapse -- told Enron's board that the company was using a combination of credit and prudency reserves. Kelly Kimberly, the spokeswoman for Lay, Enron's former chairman, said that both the growth of the prudency reserves and their subsequent release into the company's profit stream were appropriate. "It is a common practice and in fact a responsible practice to increase prudency reserves when volatility is high and when prices are rising," she said. Patrick Dorton, a spokesman for Andersen, said the firm did not engage in any wrongdoing. Former managers and executives said there were at least three types of reserve funds and that they totaled between $800 million and $2 billion at various times in 2000 and 2001. During the California energy crisis, the reserves skyrocketed, former managers and executives said. Enron's traders were making more than enough to meet profit targets. And there were concerns that the big gains would not last. http://sfgate.com/cgi-bin/article.cg.../23/MN8189.DTL ---------------------------------------------------------------------------- yet another article by The Free Republic note the NY Times tagline on this one: Enron Forced Up California Energy Prices, Documents Show New York Times | May 7, 2002 | By RICHARD A. OPPEL Jr. and JEFF GERTH Posted on 05/07/2002 5:52:11 AM PDT by NCDoc WASHINGTON, May 6 Electricity traders at Enron drove up prices during the California power crisis through questionable techniques that company lawyers said "may have contributed" to severe power shortages, according to internal Enron documents released today by federal regulators. Within Enron, the documents show, traders used strategies code-named Fat Boy, Ricochet, Get Shorty, Load Shift and Death Star to increase Enron's profits from trading power in the state techniques that added to electricity costs and congestion on transmission lines. The documents memorandums written in December 2000 by lawyers at Enron to another lawyer at the company also describe "dummied-up" power-delivery schedules, the submission of "false information" to the state, and the effective increasing of costs to all market participants by "knowingly increasing the congestion costs." The memos, which provide the first inside look at the complex trading strategies Enron used in California, give strong ammunition to state officials who have long argued that Enron and other power marketers manipulated the state's market and played a crucial role in the crisis that cost California consumers and utilities tens of billions of dollars in 2000 and 2001. The documents state that other power companies used similar techniques. Tonight, Senator Dianne Feinstein, Democrat of California, said she would ask Attorney General John Ashcroft "to pursue a criminal investigation to determine whether in fact federal fraud statutes or any other laws were violated" by Enron's energy-trading activities. Federal prosecutors are already conducting an inquiry into Enron's accounting, which falsely increased reported profits but ultimately led to the company's filing for bankruptcy protection in December. Enron agreed to sell its energy-trading unit earlier this year to UBS Warburg, a division of UBS, Switzerland's largest bank. Nearly all of Enron's senior executives, and most of its board members, have departed in the last nine months. Enron's senior management learned of the documents in late April, and the company's board decided during a meeting on Sunday to waive attorney-client privilege and turn the memos over to investigators at the Federal Energy Regulatory Commission, a person close to the company said. The company has also informed the Justice Department, the Securities and Exchange Commission and the attorney general of California about the documents. At a noon meeting today, lawyers for Enron gave the memos to investigators from the regulatory commission, which is examining whether Enron manipulated energy markets in the West. The agency released the documents a few hours later. Officials at the commission declined to comment, but they are continuing their investigation into Enron's effect on power prices and asked the company today to provide additional documents on its electricity and natural-gas trading activities. In a letter sent by officials at the commission today to Enron, investigators at the agency said the documents described how Enron traders were "creating, and then `relieving,' phantom congestion" on California's electricity grid. The documents also detail what investigators described as "megawatt laundering," in which Enron bought power in California, resold the power out of the state and then bought the power back and resold it back into California allowing Enron to circumvent price caps meant to clamp down on costs. "These documents prove that these companies can manipulate the market," said Loretta Lynch, the president of the California Public Utilities Commission. "Enron prevented California from seeing these documents for years, and now we know why." Ms. Lynch said the documents supported her argument that FERC should leave in place temporary electricity price restraints, introduced last June, which state officials say have played a large role in reining in prices. "I don't see how FERC can remove the boundaries they put in place on our market last June." An outside lawyer for Enron, Robert S. Bennett, said he could not comment on the trading strategies described in the documents. "Because we have sold the trading unit and the people with the knowledge of trading practices are no longer with the company, we do not know what the true facts are, and we do not know which parts of the memoranda are correct and which parts are incorrect," Mr. Bennett said tonight. But he emphasized that the company had agreed to waive that attorney-client privilege because it was trying to cooperate with the various investigations into Enron's business practices. "These memoranda came to the attention of the board and current management in late April, and the board instructed its counsel to not assert the attorney-client privilege and produce these documents to the appropriate government entities," Mr. Bennett said. Another memo written by a separate group of lawyers for Enron in 2001 apparently in January or February, after soaring wholesale power prices in California pushed the state's largest utilities to the brink of insolvency tried to play down the strategies described in the December 2000 memos. In this later memo, which was written to prepare Enron for the "various investigations and litigation" it faced because of the California power crisis, the lawyers repeatedly tried to play down or cast doubt on the conclusions drawn by Enron's own lawyers in the earlier memos. "Some of the information" in the earlier memos "which resulted in some erroneous assumptions and conclusions, cannot be supported by the facts and evidence which are now known," the later memo stated. In one strategy described in the December 2000 memos, Enron would buy power from a state-run exchange for $250 a megawatt-hour (the maximum under the price caps) and resell it outside California for almost five times as much. "Thus, traders could buy power at $250 and sell it for $1,200," according to one memo. In that document, the Enron lawyers acknowledged that such activity could be playing a big role in causing electricity shortages in the state, but they suggested that was not a significant concern. "This strategy appears not to present any problems," the memo stated, "other than a public relations risk arising from the fact that such exports may have contributed to California's declaration of a Stage 2 Emergency yesterday." The Death Star strategy, as described in the memos, allowed Enron to be paid "for moving energy to relieve congestion without actually moving any energy or relieving any congestion." And the Load Shift strategy allowed Enron to generate about $30 million in profits in 2000 using techniques that, according to the documents, included creating "the appearance of congestion through the deliberate overstatement" of power to be delivered. In the past, Enron officials said the California power crisis was caused by the state's deeply flawed electricity deregulation plan, the lack of new power-generation capacity and by temporary factors, like a drought that drastically reduced available hydropower. Even some economists who think price manipulation was widespread say these other factors contributed to soaring prices. But Enron executives always insisted that absolutely nothing their traders had done contributed to the crisis. In an interview last year, Enron's former chairman, Kenneth L. Lay, dismissed accusations that manipulation was even partly to blame for California's troubles. "Every time there's a shortage or a little bit of a price spike, it's always collusion or conspiracy or something," Mr. Lay said in the interview, which was also taped for " Frontline" on PBS. "I mean, it always makes people feel better that way." Copyright 2002 The New York Times Company SF Chronicle article Last edited by irishgrl; 02-06-2005 at 11:05 PM..
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#33
02-06-2005, 11:09 PM
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addendum to above
I apologise for the original post being so mixed up, the copy/paste function started to have a mind of its own
 and I had to manually delete the extra bits and edit down, I think its all correct at this point. Oh I might have missed a stray ? or two....
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#34
02-06-2005, 11:12 PM
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oops Jason, too late!
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#35
02-06-2005, 11:16 PM
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 "never mind" I originally meant the original request as an in addition to the one you posted, but then thought I would be smart  BUT - maybe you efforts will not be in vain and educate some poor soul who thinks that Enron did nothing wrong Interestingly, I wonder if ANYONE of any significance from Enron will EVER be prosecuted. Personally, I think they have to many politicians on both sides in their pockets. I think they ought to hang the men (and it is almost all men) by their testicals while in the hot Texas sun covered with baby oil 
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#36
02-07-2005, 07:30 AM
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oh yes, one more: return all the $$$ they STOLE from CA WITH INTEREST. THAT should shrivel their winkies to nothingness eh?
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#37
02-07-2005, 12:05 PM
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Also, of course Lay would say this is just "conspiracy theory" stuff. That is how these right wingers attempt, and largely succeed to, silence liberals and provide evidence that we're the crazy ones. Most people buy into this and it's a shame. 
__________________
~Suzy
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#38
02-07-2005, 12:48 PM
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Thus, I think it is appropriate to lambaste all politicians on this one
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#39
02-07-2005, 01:18 PM
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__________________
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#40
02-07-2005, 01:24 PM
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-- Words to live by, courtesy of Mencken
__________________
 moviekinks.blogspot.com
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#41
02-07-2005, 01:30 PM
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#42
02-07-2005, 01:32 PM
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#43
02-07-2005, 06:19 PM
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Proclamation
Hear ye Hear ye~
let it be known from this day henceforth that February 7th, 2005 is officially to be hereinafter and heretofore known as DISS JASON DAY! In regocnition of the fact that these two worthies have lowered the boom--I mean--lowered their verbal weapons and did create an accord, the likes of which we may NEVER see AGAIN! To therefore mark the occasion with the pomp and circumstance with which it is due, let us all hoist a beverage of our choice and shout in a loud ringing voice DISS JASON DISS JASON DISS JASON diss-claimer: this has been an equal opportunity spoof. We now return you to your regularly scheduled activities.
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#44
02-07-2005, 08:31 PM
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He is still a communist
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#45
02-07-2005, 08:40 PM
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 I just raised my beer to them. 
__________________
"Do not be afraid! I am Esteban de la Sexface!" "In order to live free and happily, you must sacrifice boredom. It is not always an easy sacrifice" Whehyll I can do EHYT!! Wehyll I can make it WAHN moh thihme! (wheyllit'sA reayllongwaytogooo! To say goodbhiiy!) -
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