- WASHINGTON (UPI) -- A former Enron Corp. executive
is the first person charged in the Justice Department's investigation of
the illegal manipulation of the California energy markets, department officials
said Thursday.
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- The manipulation allegedly cost state energy consumers
billions of dollars.
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- Timothy Belden, who was Enron's chief energy trader,
agreed to plead guilty in San Francisco Thursday to conspiracy to commit
wire fraud during the state power crisis of 2000 and 2001, the officials
said.
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- Despite the break in the case, an official with the Federal
Energy Regulatory Commission said Thursday that it was too early to say
whether Californians would be getting a refund on their energy bills.
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- Reaction from California's congressional delegation was
swift.
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- "I do not believe this fraudulent activity begins
or ends with this one individual," Sen. Dianne Feinstein, D-Calif.,
said in a statement. "In fact, we know traders from other companies
have engaged in similar behavior. This type of manipulation contributed
to the increase in the price of power from $30 per megawatt hour to more
than $2,000 a megawatt hour, in some cases."
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- Feinstein is pushing legislation to provide government
oversight of energy transactions, but the legislation has had slow going
in the Senate.
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- Meanwhile, Justice Department documents filed in U.S.
District Court in San Francisco Thursday said the manipulation caused "purchasers
of electricity in the state of California (to pay) approximately $8.9 billion
more than they would have under competitive market conditions."
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- Belden is cooperating with the ongoing investigation.
In addition to facing up to five years and a hefty fine for his plea, department
officials said, he has also agreed to forfeit $2.1 million.
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- The department said the forfeited money represents a
portion of Belden's salary and bonuses that could be directly tied to the
fraud.
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- Belden, 35, lives in Houston, where Enron keeps its corporate
headquarters.
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- "Today's charges demonstrate our significant progress
on the energy trading front investigation," Deputy Attorney General
Larry Thompson said in announcing the charges at the Justice Department
in Washington.
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- Enron's income from Belden's trading unit rose from $50
million in 1999 to $500 million in 2000 and $800 million in 2001.
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- Belden was employed by Enron in its West Power Trading
Division in Portland, Ore. The division bought and sold wholesale electricity
in the Western part of the United States.
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- From 1998 to 2001, Belden allegedly conspired with others
to manipulate the California energy markets.
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- The Justice Department said Belden admitted that he and
others accomplished the manipulation by misrepresenting the type and amounts
of electricity Enron proposed to supply in the state market.
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- The conspirators also created a false congestion on California's
transmission lines, then accepted fees for falsely relieving that congestion,
according to the department.
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- The department said the conspirators also falsely claimed
that energy originated out of state to avoid federally approved price caps.
The energy had in fact been generated in California, exported, and then
brought back into the state.
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- At Thursday's news conference, Thompson rejected any
suggestion that a special counsel is needed to investigate ties by then-Enron
executives to the administration. The executives contributed millions of
dollars to the Republican Party and to President George W. Bush, and Enron
was one of the companies tapped by Vice President Dick Cheney to help shape
U.S. energy policy.
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- Thompson said career prosecutors were more than capable
of following any lead. "No rock is going to be not turned over,"
he added.
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- Thursday's developments were only the latest in Enron's
problems.
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- The company was the largest energy wholesaler in the
United States until it was forced to admit last year that questionable
accounting practices had allowed it to hide billions of dollars in losses
from investors. The company declared bankruptcy in December.
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- The Justice Department is also investigating allegations
that Enron executives were allowed to sell their stock at high prices before
the bad news was released to the public, while thousands of low-level Enron
employees who had company stock in their retirement accounts were forced
to hold onto it until it was nearly worthless.
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