Enron day traders used an array of schemes to manipulate the energy market for months after company lawyers insisted the practices had been halted, U.S. Sen. Maria Cantwell said Thursday.
Citing “inconsistencies” between testimony to lawmakers by Enron lawyers and transcripts of taped conversations of day traders, Cantwell, D-Wash., called for new congressional hearings to determine whether employees ever stopped activities blamed for driving up the price of electricity charged to Snohomish County PUD.
“What Enron lawyers said and what Enron traders did were two very different things,” Cantwell said a news conference in Washington, D.C.
This salvo is the latest launched by Cantwell and is part of a widening effort on behalf of the PUD to nullify the utility’s 2001 contract with Enron.
The PUD signed the $200 million deal in early 2001, then canceled it in November of that year. Enron sued, charging the PUD owes it $122 million for breaking the contract.
The PUD argues the contract is fraudulent and should be nullified because day traders used illicit schemes with colorful names including “get shorty” and “ricochet” to lie to the utility and inflate the price of the power. The PUD unearthed details from taped conversations of employees in 2000 and 2001.
PUD leaders, along with Cantwell and U.S. Democratic Representatives Jay Inslee and Rick Larsen, have been pushing the Federal Energy Regulatory Commission without success.
“We just can’t get the federal regulators to do their job,” said Cantwell, in explaining her desire for Senate action.
PUD spokesman Neil Neroutsos supported Cantwell. “Our bottom line is to negate any claims that Enron may have against us,” he said.
Enron spokeswoman Karen Denne would not comment on Cantwell’s allegations into the operations of Enron, which filed for bankruptcy in December 2001.
Cantwell argues that the conversations show the manipulative practices occurred in 2001, even though Enron lawyers insisted they had ended in December 2000.
Thursday she released excerpts of testimony from five Enron lawyers at the May 15, 2002, hearing of the Subcommittee on Consumer Affairs of the Senate Commerce Committee.
The internal memo on the practices “came out on Dec. 8 and … by Dec. 10 they were stopped,” Gary Fergus, an outside counsel, said in response to a question from U.S. Sen. John McCain, R-Ariz.
Richard Sanders, a former vice president and assistant general counsel, said, “I understood that the trading practices that I directed to be suspended in December 2000 did not continue.”
Cantwell asked McCain, the commerce committee chair, to schedule a hearing.
“To the extent the subcommittee was provided with inconsistent or incomplete testimony by Enron witnesses, I believe it is appropriate to convene new hearings to consider these matters,” she wrote in a letter accompanying the materials.
Reporter Jerry Cornfield: 360-352-8623 or jcornfield@heraldnet.com.
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