Enron verdict: Lay & Skilling guilty

Great! Now set the SOBs to work making little ones out of big ones for the next 20 years.

Sentencing
Lay and Skilling will be sentenced on September 11th.

Both must surrender their passports and post bonds.

BBB

Al Capone of Electricity Ken Lay and His Real Crimes
I lived in California during the Enron attact on California. Ken Lay turned the state into a third world energy state.---BBB

The Al Capone of Electricity Ken Lay Will Get Away with His Real Crimes
By Greg Palast
The Seattle Post-Intelligencer
Wednesday 24 May 2006

Al Capone cut throats, machine-gunned people to build his gang and went to jail - for not filing his taxes properly. Likewise, Ken Lay, buccaneer of the power industry, will go down - if the jury doesn't buy his alibi - for not filing his SEC forms properly.

And just as Capone went up the river leaving us a permanent legacy of organized crime, so Lay, whether or not he's sent to the slammer, has left us, with the connivance of a few well-placed politicos, an electricity system that is little more than a playground for power-industry predators.

We've been here before. In the 1930s, a character named Samuel Insull created the first giant power holding companies. Insull played fast and loose with his account books, fast and loose with cash for politicians and pocketed millions by gouging electricity customers. Insull was indicted, like Lay, for crimes against his stockholders.

In 1933, President Roosevelt made Insull's power piracy a crime. FDR signed the Public Utility Holding Company Act and laws that capped the profit of electricity monopolies. The act required them to keep lights on by accounting for all maintenance expenses, barred "trading" electricity and, most important, banned donations by the power giants to politicians.

Fast-forward to January 2001. The George W. Bush administration, within 72 hours of his inauguration, issued an executive order lifting the Clinton Energy Department's effective ban on speculative trading in the California power market. The state was still in crisis, facing blackouts and 300 percent increases in power bills, the result of "deregulating" its electric system, as first suggested by Lay.

Instead of a "free" market, California's electricity bidding system became a fixed casino where Lay's operatives and a tight-knit cabal of corporate cronies jacked up prices through such tricks as "death star," "ricochet" and "kilowatt laundering."

In one instance, Enron "sold" the state 500 megawatts of electricity to go over a 15-megawatt line. Enron knew that sending that much power through those wires would have burned them to a crisp. To prevent this Enron-designed blackout, the state scrambled for other sources of electricity, which Enron and friends sold them at a big mark-up.

California's Independent System Operator put the cost to consumers of this "gaming" at $6.3 billion in a six-month period. Under the Roosevelt rules, when utilities were regulated to a fare-thee-well, the gaming rooms would have been busted.

Instead, the games have been institutionalized. For example, TXU, the corporate alias of Texas Utilities, has seen earnings per share rise 500 percent in five years. The reason: So-called deregulation allows the company to sell electricity at a price based on the sky-high cost of oil although much of its power is produced from cheaper coal or uranium. In effect, deregulation has become de-criminalization of price gouging.

Even more sinister than Bush's hasty executive order allowing Enron to resume speculation in the California power market was his appointment of Pat Wood as chairman of the Federal Energy Regulatory Commission, the government's electricity cops. The choice of Wood was suggested, in secret, by Enron.

This put Lay one step ahead of Al Capone who had to buy the cops. Lay just had them appointed.

Wood may have been as honest as the day is long, but on his watch, Enron and the industry treaded through the power market like Godzilla through a kindergarten. And it continues under a new chairman, also suggested by Enron.

What about the $6.3 billion filched from the wallets of California consumers, let alone the larger sums taken in by power profiteers nationwide? The Lay-blessed federal regulators barely batted an eye.

Lay's brainchild of deregulation was coupled with his other grand idea: a massive increase in industry largesse to politicians. By unsubtle, but perfectly legal, means around FDR's prohibition on political donations, Enron PACs and its executives became the top Bush funders.

Capone never lived to see armed robbery made legal. But Lay, even if convicted, can leave the courthouse for the Big House knowing power profiteering is now as legal as prayer. On July 14, 2005, Roosevelt's Public Utility Holding Company Act, bulwark of consumer protection, was repealed by a Congress fattened with utility industry cash.

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On June 6, Penguin Dutton will publish Greg Palast's new book, ARMED MADHOUSE: Dispatches From the Front Lines of the Class War. Armed Madhouse includes the Project Censored Award-winning story of The Governator of California and the Enron chief, When Ahnold Got Lay'd. Order it today at http://www.gregpalast.com/armedmadhouse/preorder.html

Palast, an internationally recognized expert on Enron and electricity market manipulation, is co-author of Democracy and Regulation, the United Nation's guide to control of the utility industry.

It's about time too. The rich must be punished for any crimes they commit.

Bush links energized Enron
Bush links energized Enron
Robert Scheer, Creators Syndicate, Inc.
Wednesday, May 31, 2006
San Francisco Chronicle
Page B - 9
URL: http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/05/31/EDGDOIJLQR1.DTL

THE BUSH FAMILY consistently acted to put Enron and its longtime CEO Ken Lay into a position to rip off investors and taxpayers. Why is the mass media ignoring that fact now that Lay has been convicted in arguably the most egregious example of white-collar fraud in U.S. history? Until he hooked up with the Bushes, Lay was just another mid-level energy trader complaining endlessly about being hemmed in by onerous government regulations and those terrible consumer lawyers who prevent free-market hustlers from doing their thing. But after he and his company became top supporters of the Bushes -- eventually giving $3 million combined to various Bush political campaigns and the Republican Party -- doors opened for them in a big way. In particular, once Bush the father got rid of key energy industry regulations, Lay was a made man and Enron's fortunes soared. This program of corporate welfare led Lay to dub the first President Bush "the energy president" in a column supporting his re-election because "just six months after George Bush became president, he directed ... the development of a new energy strategy," which, in effect, compelled local utility companies to carry Enron electricity on their wires. It was, Lay crowed, "the most ambitious and sweeping energy plan ever proposed."

Another huge gift from the first Bush regime came in the form of a ruling by Wendy Gramm, head of the Commodity Futures Trading Commission, that permitted Enron to trade in energy derivatives, making possible the company's exponential growth. Five weeks after that ruling, Gramm resigned and joined the Enron board of directors, serving on its subsequently much criticized audit committee. Six years later, Gramm's husband, U.S. Sen. Phil Gramm, R-Texas, further enabled Enron greed by pushing through additional anti-regulation legislation.

A long list of George H. W. Bush's Cabinet and inner circle, including Secretary of State James A. Baker III and Commerce Secretary Robert A. Mosbacher, went to work for Enron after his 1992 defeat. An even greater number of Enron officials returned the favor by joining the George W. Bush administration in 2001 shortly before the Enron scandal exploded.

The close connections between President Bush and Lay began when they both worked on the 1992 Bush père presidential re-election campaign. In fact, a long paper trail of their friendly and collaborative correspondence has been made public through Freedom of Information Act requests. "Dear Ken, one of the sad things about old friends is that they seem to be getting older -- just like you!" wrote then-Texas Gov. Bush in April 1997. "Thank goodness you have such a young beautiful wife." In Lay's typed responses -- some are handwritten -- he sometimes crossed out Bush's formal titles to scrawl a friendly "George," emphasizing their personal history before he urged the governor to, for example, help Enron secure foreign energy contracts with regimes in Romania or Uzbekistan, or for so-called tort reform designed to protect corporations from lawsuits.

Typical was Bush's role in Enron's lobbying Pennsylvania's governor to permit Enron to enter his state's energy market. As Lay wrote in a letter dated Oct. 7, 1997, "I very much appreciated your call to Gov. Tom Ridge a few days ago. I am certain that will have a positive impact on the way he and others in Pennsylvania view our proposal." After the Enron crash, Bush attempted to distance himself from the "Bush pioneer," who had sent more than $2 million in Enron funds George W.'s way, as well as supplying him with the Enron company jet on at least eight occasions. "I have not met with him personally," Bush said after the scandal broke. What Bush left out was not only his hundreds of personal encounters with Lay before he assumed the presidency but, more important, Lay's key role in drafting the Bush administration's energy policy, meeting with energy task force chairman Dick Cheney at least six times. It was Lay, as well, who submitted a key memo opposing price caps in response to the energy crisis in California that Enron had helped engineer. Lay was also instrumental in the abrupt dismissal of Curtis Hebert Jr. as Federal Energy Regulatory Commission chairman. The neutered FERC later conveniently refused California's loud pleas for help.

So far, California has recouped some of the billions in taxpayer and pension funds it lost, and several of Enron's top dogs are looking at hard time. Perhaps, after this November, if the opposition party can retake at least one branch of government, the connections between these corporate criminals and their buddy in the White House can be more fully investigated as well.