Wednesday, June 09, 2004

More Enron Tapes, More Gloating

June 8, 2004

(CBS) The Department of Justice reportedly has thousands of hours of Enron employees recorded during the West Coast power crisis. Now, some in Congress want all the tapes released.

“I want to make sure that no federal agency suppresses this information, makes the case harder for us to get relief,” says U.S. Sen. Maria Cantwell, D-Wash.

After CBS broadcast the voices of Enron energy traders gloating over the crisis they helped create, more tapes were released.

In one tape, an employee says, “You gotta think the economy is going to fucking get crushed, man. This is like a recession waiting to fucking happen.”

The tapes show Enron tried to bring California to its knees.

Elsewhere on the tapes, another employee says, “This is where California breaks.”
“Yeah, it sure does man,” says another.

And they proposed to do that by exporting energy out of the state so the company could drive up prices even more.

“What we need to do is to help in the cause of, ah, downfall of California,” an employee is heard saying on the tapes. “You guys need to pull your megawatts out of California on a daily basis.”
“They’re on the ropes today,” says another employee. “I exported like a fucking 400 megs.”
“Wow,’’ says another employee, “fuck ‘em, right!”

During California’s rolling blackouts, when streets were lit only by head lights and families were trapped in elevators, Enron Energy traders laughed. One trader is heard on tapes obtained by CBS News saying, “Just cut ‘em off. They’re so fucked. They should just bring back fucking horses and carriages, fucking lamps, fucking kerosene lamps.”

And when describing his reaction when a business owner complained about high energy prices, another trader is heard on tape saying, “I just looked at him. I said, ‘Move.’ (laughter) The guy was like horrified. I go, ‘Look, don’t take it the wrong way. Move. It isn’t getting fixed anytime soon.”

California’s attempt to deregulate energy markets became a disaster for consumers when companies like Enron manipulated the West Coast power market and even shut down plants so they could drive up prices. Traders can be heard manipulating the market, using now-infamous schemes with names like death star, ricochet and fat boy.

One employee is heard asking, “You want to do some fat boys or, or whatever, man, you know, take advantage of it.”

In fat boy, Enron traders used fake power sales to hide megawatts, shrinking the supply of energy and driving up prices. They also used the oldest trick in the book: lies.

“It’s called lies. It’s all how well you can weave these lies together...” an employee is heard saying.
The other employee says, “I feel like I’m being corrupted now.”
The first employee adds, “No, this is marketing,”
“OK.’’

Another taped exchange between different employees regarding a possible newspaper interview goes like this:

Employee 3: “This guy from the Wall Street Journal calls me up a little bit ago…”
Employee 4: “I wouldn’t do it, because first of all you’d have to tell ‘em a lot of lies because if you told the truth…”
Employee 3: “I’d get in trouble.”
Employee 4: “You’d get in trouble.”

Eventually, the lies unraveled and traders scrambled.

“I’m just—fuck—I’m just trying to be an honest camper so I only go to jail once,” says one employee.

The tapes could affect dozens of cases already filed against the company by California Attorney General Bill Lockyer.

“If these are ever heard by a jury, they’re going get strung up,” says Lockyer.

After hearing the tapes, the state’s two U.S. senators demanded an immediate $8.9 billion refund.

At a recent hearing Sen. Barbara Boxer, D-Calif. said, “All I can tell you is you have to listen to what’s happening out there to ordinary people who you are responsible to help through this.”

With Enron and other major energy companies in bankruptcy, big refunds are unlikely. But the tapes could provide the evidence states and cities need to break contracts they were forced to sign at the height of the energy crisis.

There was quick reaction in Washington to the Enron audiotapes first aired by CBS News, and the tapes have become part of the debate over the President’s massive energy bill.

“People were talking about market manipulation. People were talking about schemes, people were making jokes,” said U.S. Sen. Maria Cantwell, D-Wash.

“While the president would like to have an energy bill, I’d like to have an energy bill that protects consumers,” said Cantwell.

It’s clear from the tapes that Enron employees knew what they were doing was wrong, and now lawmakers are responding.

“I will offer an amendment to compel the Bush administration to get off the dime and get back this money that has been stolen,” said Rep. Jay Inslee, D-Wash.

Two Enron traders, from the office where the tapes were made, have admitted manipulating energy prices and pled guilty in court. Another goes on trial in October. Former Enron chief Ken Lay is the only top company official who has never been charged with any crime.