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Lay's Indictment Does Not Signal A Crackdown on Corporate Crime
Published on Friday, July 16, 2004 by CommonDreams.org
Lay's Indictment Does Not Signal A Crackdown on Corporate Crime
by Ralph Nader
 

The widely televised indictment and arraignment of the hand-cuffed Enron CEO, Ken Lay -- one of George W. Bush's closest friends and funders -- should not lull anyone into thinking that this is anything but a limited move against corporate crime in an ocean of still-at-large corporate criminals.

With trillions of dollars stolen or drained away from small investors, pensionholders and workers, this corporate crime wave receives less Justice Department enforcement money than the cost of an annual Congressional salary grab.

To place the defiant, media-touring, though indicted, Ken Lay in perspective, watch Lou Dobbs on CNN who has a regular tally on how few of these corporate crooks are even prosecuted. Ken Lay now says he did not know what his immediate subordinate executives were doing cooking the books and inflating the stock which increased the value greatly of Ken Lay's stock options. He just plumb did not know. What a gas for a corrupt energy company that collapsed on the backs of thousands of its employees now without their jobs and without their 401(k)s!

Listen to Doug Heller who with his associates at the Foundation for Taxpayer and Consumer Rights (FTCR) (consumerwatchdog.org) has been fighting electricity de-regulation for years:

"The indictment of former Enron CEO and Chairman Ken Lay provides cold comfort to California taxpayers and electricity rate-payers who lost billions of dollars as a result of the Ken Lay -- driven energy deregulation disaster and the related crimes." Heller's group estimates the cost to California consumers at $71 billion. The State of California has demanded $8.9 billion in refunds from energy companies like the bankrupt Enron. President Bush has blocked significant refunds. None of the eleven counts in the Lay indictment touched on this well-documented manipulation of California's electricity prices. Recently released Enron tapes show the Enron manipulators joking about jacking up a grandmother's monthly electric bill many times over.

Note this shameful exchange by the Enron boys: "KEVIN: So the rumor's true? They're f--kin' takin' all the money back from you guys? All those money you guys stole from those poor grandmothers in California? BOB: Yeah, grandma Millie, man. But she's the one who couldn't figure out how to f--kin' vote on the butterfly ballot. KEVIN: Yeah, now she wants her f--kin' money back for all the power you've charged right up -- jammed right up her a** for f--kin' 250 dollars a megawatt hour. [laughter]"

California taxpayers also paid, along with ratepayers for this gigantic price-fixing and supply-fixing conspiracy that still has not been properly punished.

The media has had a field day with the evidence of this conspiracy. Under the California deregulation law, shaped by California electric companies, energy companies and the collaborative Natural Resource Defense Council's Ralph Cavanaugh in 1996 -- there was no legislative inquiry or real debate as it passed unanimously -- the debacle of obscene profits oozed out.

A notorious December 2000 memo from Enron's lawyers, described deals with code names like "Fat Boy", "Death Star" and "Get Shorty" that Enron's energy traders used to skyrocket electricity spot market prices to mountain peak levels by creating phony shortages and congested transmission lines. One taped conversation had an Enron employee asking for information about the (illegal) "over-scheduling load and making buckets of money on that,"... to "prove how valuable it is to Ken Lay and Jeff Skilling."

Electricity is a necessity. It should never be turned into a commodity for speculation, which is just what de-regulation allows in one form or another. So Ken Lay is not indicted for these "massive energy crimes," as Heller calls them, but only for securities frauds.

So while the Justice Department is chasing non-violent individuals who are addicted to drugs and jailing them, the corporate criminals escape or, if caught and convicted -- a rare initiative -- are given a modest sentence.

In the meantime, the no-fault federal and state governments continue their anti-consumer binge by pushing for the repeal of the electric company regulation law -- known as the Public Utility Holding Company Act (PUHCA). This brilliantly drafted law, passed when Franklin D. Roosevelt was President, has worked as directed to end the holding-company stability that plagued utilities in the Twenties and Thirties.

So long as there are no penalties for failures, big time corporate bosses and their cozy government officials will continue their deals and the consumers and taxpayers will pay, pay and pay. That is why you must demand a say, a big say in your economic future.

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