Category Archives: Energy Fraud

A New And Even Better Reason To Vote Against The Recall And For Cruz Bustamante On Tuesday: Arnold’s Direct Involvement In A Plot To Sabotage The Lawsuit Against The California Energy Crooks

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Reminder: NO on the Recall. Yes on Cruz Bustamante. (No on Prop 54.)
As I suspected, this Recall is more about trying to quash a lawsuit against the crooks that took the people of California for 9 Billion dollars than anything else.
Greg Palast has done his homework again. Read on.

Arnold Unplugged – It’s hasta la vista to $9 billion if the Governator is selected

By Greg Palast.

It’s not what Arnold Schwarzenegger did to the girls a decade back that should raise an eyebrow. According to a series of memoranda our office obtained today, it’s his dalliance with the boys in a hotel room just two years ago that’s the real scandal…
It turns out that Schwarzenegger knowingly joined the hush-hush encounter as part of a campaign to sabotage a Davis-Bustamante plan to make Enron and other power pirates then ravaging California pay back the $9 billion in illicit profits they carried off.
Here’s the story Arnold doesn’t want you to hear. The biggest single threat to Ken Lay and the electricity lords is a private lawsuit filed last year under California’s unique Civil Code provision 17200, the “Unfair Business Practices Act.” This litigation, heading to trial now in Los Angeles, would make the power companies return the $9 billion they filched from California electricity and gas customers.
It takes real cojones to bring such a suit. Who’s the plaintiff taking on the bad guys? Cruz Bustamante, Lieutenant Governor and reluctant leading candidate against Schwarzenegger…
But Bush’s boys on the commission have a problem. The evidence against the electricity barons is rock solid: fraudulent reporting of sales transactions, megawatt “laundering,” fake power delivery scheduling and straight out conspiracy (including meetings in hotel rooms).
So the Bush commissioners cook up a terrific scheme: charge the companies with conspiracy but offer them, behind closed doors, deals in which they have to pay only two cents on each dollar they filched.

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GAO Blames Vice President For Interfering With Investigation

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GAO: Cheney Hindered Probe
The Cheney energy plan called for expanded oil and gas drilling on public land and easing regulatory barriers to building nuclear power plants.
By the Associated Press.

Congressional investigators say they were unable to determine how much the White House’s energy policy was influenced by the oil industry because they were denied documents by Vice President Dick Cheney about his energy task force.
Investigators also came up short trying to find out how much money various agencies spent on creating the national energy policy, a General Accounting Office report released Monday said.
The unwillingness of Cheney’s office to turn over records and other information “precluded us from fully achieving our objectives” and limited its analysis, the GAO said…
Last December, a federal judge rebuffed congressional efforts to gather information about meetings that Cheney’s energy task force held with industry executives and lobbyists while formulating the administration’s energy plan.
The judge said the lawsuit filed by Comptroller General David Walker against the vice president was an unprecedented act that raised serious separation-of-powers issues between the executive and legislative branches of government. The comptroller general runs the GAO…
The Cheney energy plan called for expanded oil and gas drilling on public land and easing regulatory barriers to building nuclear power plants. Among the proposals: drilling in the Arctic wildlife refuge and possibly reviving nuclear fuel reprocessing, which was abandoned in the 1970s as a nuclear proliferation threat.

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Greg Palast Connects The Dots Between Deregulation And This Week’s Huge East Coast Blackout

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Power Outage Traced to Dim Bulb in White House
The Tale of The Brits Who Swiped 800 Jobs From New York, Carted Off $90 Million, Then Tonight, Turned Off Our Lights
By Greg Palast.

California fell first. The power companies spent $39 million to defeat a 1998 referendum pushed by Ralph Nadar which would have blocked the de-reg scam. Another $37 million was spent on lobbying and lubricating the campaign coffers of the state’s politicians to write a lie into law: in the deregulation act’s preamble, the Legislature promised that deregulation would reduce electricity bills by 20%. In fact, when in the first California city to go “lawless,” San Diego, the 20% savings became a 300% jump in surcharges.
Enron circled California and licked its lips. As the number one contributor to the George W. Bush campaigns, it was confident about the future. With just a half dozen other companies it controlled at times 100% of the available power capacity needed to keep the Golden State lit. Their motto, “your money or your lights.”
Enron and its comrades played the system like a broken ATM machine, yanking out the bills. For example, in the shamelessly fixed “auctions” for electricity held by the state, Enron bid, in one instance, to supply 500 megawatts of electricity over a 15 megawatt line. That’s like pouring a gallon of gasoline into a thimble — the lines would burn up if they attempted it. Faced with blackout because of Enron’s destructive bid, the state was willing to pay anything to keep the lights on…
Californians have found the solution to the deregulation disaster: re-call the only governor in the nation with the cojones to stand up to the electricity price fixers. And unlike Arnold Schwarzenegger, Gov. Gray Davis stood alone against the bad guys without using a body double. Davis called Reliant Corp of Houston a pack of “pirates” –and now he’ll walk the plank for daring to stand up to the Texas marauders.

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Californians Beware: Don’t Buy In To The Latest Energy “Crisis” Scam

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I’m hearing murmurings on my local TV news (KTVU) a week or two ago about how California might be headed for some kind of new energy crisis because of repairs being made on power plants.
You have got to be kidding me. Every year there’s a new and improved reason for a “crisis” to justify charging Californians even more for their power than the previous year.
Not only is there a “crisis” all of a sudden around summertime every year for a different reason, but every year we find out the year before’s reason was merely a new creative inaccuracy (as revealed later in some report before being swept under the carpet, again).
Here’s a CNN article from November 2002 that I just found in a pile of stuff I never got around to blogging before now that sums up how things were just starting to look back then.
Looks like they’re starting to pick up the offenders. How nice. Nice show for the people. Let’s see if it goes anywhere.
Here are some other articles I’ve posted earlier on this subject that remind us that the important part is to make sure that the State of California doesn’t pay these companies a penny more for these blatant overcharges.
Last I checked, the State Of California still owed the power companies a bundle for the overcharges.
More articles and docs on this in the days to come. Maybe this will be the year that Californians 1) don’t get shafted by the energy companies again and 2) see some of these crooks actually go to jail and 3) (new addition 6/13/03) “Get their money back” from the crooks who conspired to steal it from them by not having to pay one penny of the 7 Billion dollar tab.
I’m not holding my breath, but it sure will be interesting to see how this thing plays out.
Report: Evidence of price-gouging during California energy crisis

SACRAMENTO, California (AP) — A report by federal energy regulators details how two power companies may have conspired to drive up prices during California’s 2000-2001 energy crisis.
The previously undisclosed findings have angered officials who say regulators let the companies off with just a slap on the wrist.
The Federal Energy Regulatory Commission report focuses on discussions between employees of Williams and AES Corporation about prolonging an outage at a power plant to take advantage of higher prices the state was paying at the height of the crisis.
The report says employees also cut deals to shut down a second power plant AES operated for Williams.
As a result of the two plants being closed for 15 days, Williams earned more than $10 million in energy sales from its other plants.
The FERC investigation ended in March 2001 when Williams agreed to refund the state $8 million. The companies did not admit any wrongdoing.

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More On How Californians Were Defrauded By Over 30 Different Companies

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When this thing is over, the state better owe ZERO dollars and charges better be filed against the companies involved.
We can not allow this kind of behavior to just become business as usual. We need to set an example for the rest of the country. If Energy companies want to play these kinds of games, fine. Arguably, we can’t stop them.
We can, however, try to make sure that they will have to pay the consequences when they get caught. At the very least we shouldn’t have to pay for energy that we didn’t really need to buy in the first place.
Energy Market Manipulated, Regulators Say
By Jonathan Peterson and Ricardo Alonso-Zaldivar for the LA Times.

Taking a tough new stance, federal energy regulators said Wednesday that more than 30 private firms manipulated natural gas and electricity prices during the California energy crisis… the Federal Energy Regulatory Commission threatened to revoke the trading authority of eight subsidiaries of troubled Enron Corp. for allegedly gaming the natural gas market. The commission also said it’s prepared to strip the trading authority of Reliant Energy Services Inc., now known as Reliant Resources Inc., and BP Energy Co. for allegedly engaging in “coordinated efforts” to manipulate electricity prices at Palo Verde, a key Arizona trading hub. Both companies denied the charges…
The commission also stopped short of approving the state’s request to renegotiate $20 billion in long-term energy contracts that were signed during the period of feverish prices in 2001.
“Show me the money,” Gov. Gray Davis declared. “Where’s the $9 billion that we’ve been asking for, for two years? That is when I’ll finally feel vindicated, when we get the money back that these energy companies stole from this state.”
Davis said the state is prepared to keep pressing its case in court if California’s refund isn’t boosted when the matter goes back to a federal administrative law judge, the next step in the process.

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Reliant Resources, Williams Cos., Mirant Corp. and ???

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So these as-yet-unnamed energy companies conspired to create the appearance of network congestion so that the state would have to purchase energy from “alternative” suppliers at exorbitant prices.
One more time: Allegedly, (no one’s been convicted in a court of law, yet), most or all of the power companies involved in the California power grid misrepresented to the people, businesses and goverment of California that higher-priced energy was needed, due to demand, when it, in fact, was not.
(They lied to make a bunch of money.)
Energy report claims vast cheating of state
Evidence to feds cites $7.5 billion in overcharges
By Mark Martin and Christian Berthelsen for SF Gate.

Among the discoveries:
— Internal memos from several companies show power traders developed complicated trading strategies that resemble some of the schemes Enron used in California. In separate proceedings, two Enron traders have pleaded guilty in federal court to wire fraud over the company’s colorfully named market games like “Death Star” and “Get Shorty.” Several strategies involved zapping megawatts around the West Coast to create transmission congestion — or the appearance of congestion — and volatility in the marketplace, driving up prices.
Some companies partnered with municipal utilities within California on the gaming strategies, the report shows.
— Electricity generators purposely shut down power plants in California to take advantage of shortages and earn more money selling alternative megawatts. Two companies — Reliant Resources and Williams Cos. — have been forced to turn over money after tape recordings revealed power plant operators and traders discussing turning off plants to boost profits, and a source said the state had uncovered other examples similar to cases brought against Reliant and Williams.
— Energy market manipulation between May 2000 and June 2001 allowed power companies to earn more than $7.5 billion in profits they wouldn’t have seen under fair market conditions.

And what kind of garbage is this below? Why should these people be able to remain nameless and faceless after they ripped us off? So they can go and do it all again?:

The report, due to FERC on Monday, will not be made public unless the commission decides to reverse a protective order. Sources familiar with the report refused to name which companies are accused of wrongdoing.

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