2 Ex-Enron Traders Get Probation

Sentenced For Driving Up Energy Prices During Power Crisis

(AP)  Two of three former Enron Corp. traders accused of driving up energy prices during California's power crisis were each sentenced Wednesday to two years of court-supervised release in federal court.

Timothy Belden, the former head of trading in Enron's Portland, Ore., office, was sentenced after pleading guilty in October 2002 to one count of conspiracy to commit wire fraud. Belden's plea was the first prosecution of anyone related to the West's energy crisis in 2000 and 2001. He had faced up to five years in prison, and must forfeit $2.1 million.

The second defendant, Jeffrey Richter, was a lower-level trading manager in charge of the so-called “short-term desk” who also pleaded guilty to two counts related to manipulating energy prices. He had faced up to five years and agreed to pay a $410,000 fine.

The alleged mastermind behind the scheme, John Forney, is expected to be sentenced next month for his role in the scam that fraudulently sent California energy prices soaring, causing energy shortages and rolling blackouts.

Internal company memos describe how Belden's trading unit took power out of California at a time of rolling blackouts and shortages and sold it out of state to elude price caps, according to documents obtained by investigators.

Enron bought California power at cheap, capped prices, routed it outside the state, then sold it back into California at vastly inflated prices, authorities said. The sham trades were designed to circumvent the California-only price caps on wholesale energy.

The crisis played a role in Pacific Gas & Electric Co.'s bankruptcy and will leave California consumers paying abnormally high electricity prices for years.

Prosecutor Laurel Beeler said the government sought lenient sentences for Belden and Richter because of their “extraordinary assistance” in the investigation. Beeler said the two gave hundreds of hours of their time to help authorities understand the scheme, assisting in the government's successful case against Enron's chairman Ken Lay, CEO Jeff Skilling and dozens of others.

Beeler, however, said it was unclear how much the energy trading scheme cost ratepayers.

“Calculating a particular loss to that activity is difficult,” she told U.S. District Judge Martin Jenkins.

Forney, the manager of Enron's trading desk, pleaded guilty to one of 11 charges in exchange for his cooperation and is to set to be sentenced in March. He pleaded guilty to wire fraud — specifically, that he promised to supply energy Enron did not have and improperly collected electrical grid management fees for Enron.

Enron's scheme to charge fees for services it did not provide was known inside the company as “Forney's Perpetual Loop,” the indictment said. Forney also took part in other schemes — known within Enron as “Death Star,” “Get Shorty,” “Ricochet” and others — that had the effect of inflating consumer prices.

Transcripts of Enron energy traders showed them openly discussing manipulating California's power market during profanity-laced telephone conversations in which they merrily gloated about ripping off “those poor grandmothers” during the energy crunch.

On the calls, other traders openly and gleefully discussed creating congestion on transmission lines and taking generating units off-line to pump up electricity prices. They also kidded about Enron's hefty political contributions — particularly to President Bush's campaign — and how that could translate into more opportunity for profit in California.

[cathaleen]

When are we going to start setting examples of these crooks so that there will be no more Enrons?
It seems you get more time for holding a marijuana joint that ripping off hundres of millions of dollars from corp employees and investors.

[bluestardad]

America needs to know who is being held accountable for several of the out right theft and blunders in Iraq being perpetrated under the shade of the Fog of War. These thefts include but are not limited to; the Slant drilling being done by Saudi Arabia and Kuwait in Iraqi Oil reserves, the theft of OIL during production and sale by not having meters on the line to account for the oil that is processed thru the line, the remaining billions of dollars that have no audit trail from the 363 tons of money, indigenous Iraqi money found in Iraq, and the 4 billion American tax dollars that was sent to Iraq? I know that President Bush gave Paul Bremer a medal for his handling of Iraq and Promoted General Casey but should not someone be disciplined or jailed for this mismanagement?

[luvny-2009]

How sad that we all must sit here with our hands tied while these people get a slap on the wrist. Yes the connection to Bush probably has a lot to do with them pretty much skating. They stuck Ol'Martha in jail, maybe not the worst one but she did her share of cleaning toilets and floors. How can this happen, it's just not right. The people of CA had to go thru all the blackouts, brownouts and money lost by millions. It's a disgrace!

[krg12171936]

Boy this tells it all. Where Corruption is involved whose name appears? President George Bush.

[jammin551]

How can anyone expect the Bushs' friends at Enron, Halliburton, Exxon, the corporate defense contractor establishment and the other corporate criminals who own America ever be brought to justice? Conventional wisdom dictates that America couldn't possibly have a class war. The truth is a class war is being waged against the vast majority of Americans by the wealthy owners of corporations and the politicians they employ to do their dirty work. More and more Americans are falling through the cracks all-the-while their work load and hours increase as their paychecks decrease, benefits steadily shrink, medical insurance is no longer affordable. Our planet is being ruined while Exxon's profits soar. Exxon spends huge sums on a disinformation campaign which denies the truth about their products' disastrous effects on the ecosystem. Wal-Mart profited from secret insurance policies, Wal-Mart received death benefits when their uninformed elderly workers died. We are descending into a dreadful state of affairs where only money has value and life becomes mean and terribly cheap. When the rich tell you a class war can't happen in the United States via their newspapers, TV and universities then it is time they find out the hard way that this is their last big lie.

[acauble1]

Well, as a citizen of CA who experienced first hand, the rolling black-outs that made my home office into a prehistoric cave for hours at a time, there is nothing us Californians can do that doesn't involve violent illegal acts against the perpatrators of these offenses!

Oh, but we are paying for it both in our taxes and our utility bills as a way of saying "thank you" to Enron for gang raping us!

[missut2]

"The crisis played a role in Pacific Gas & Electric Co.'s bankruptcy and will leave California consumers paying abnormally high electricity prices for years.

Prosecutor Laurel Beeler said the government sought lenient sentences for Belden and Richter because of their %u201Cextraordinary assistance%u201D in the investigation. Beeler said the two gave hundreds of hours of their time to help authorities understand the scheme, assisting in the government's successful case against Enron's chairman Ken Lay, CEO Jeff Skilling and dozens of others"

Does this mean that no matter what you do, you are awarded leniency because you give "extraordinary assistance" to the authorities investigating your crime??? Unbelievable...this prosecutor and judge should hang their heads in shame. The citizens of CA should rise up in protest!

[acauble1]

Sadly, after all their fines and punitive damages paid out, these corporate crooks will still live excessively better than most middle class working Americans!

Capitalism, as with any other economic system, has its significant flaws which ultimately hurts more people than it helps.

[themooniac]

What a rip-off. They should have hung these a$$holes.