If you see Gray Davis this week-end, stay out of his way:
More than four years after rolling blackouts and skyrocketing electricity bills shook California and the rest of the West Coast, the Enron Corporation finally settled claims that it played a major role in the energy crisis of 2000 and 2001.
Enron, the former highflying energy trader now operating under bankruptcy protection, announced yesterday that it had reached an agreement to pay as much as $1.52 billion to the State of California and other parties.
But actual payouts are likely to be only a fraction of that amount. Under the bankruptcy plan, Enron will pay unsecured claimants – and California is one of them – about 20 cents on the dollar on average, said Jennifer Lowney, a spokeswoman for Enron.
Enron and other power companies are accused of gouging consumers by artificially inflating electricity prices during the California energy crisis. The crisis led to billions of dollars of surcharges for consumers and businesses on the West Coast.
One of the fastest-growing companies in America in the 1990’s and a star on Wall Street, Enron collapsed into bankruptcy in December 2001 amid accusations of widespread financial irregularities and fraud. It is now facing an estimated $65 billion in claims from investors, consumers, employees and government agencies it defrauded. Against that, the company’s estate is valued at about $13 billion, and Enron has so far paid out $580 million to claimants in other cases, Ms. Lowney said.
They gamed the system and screwed over millions…
ppgaz
The Bush-Lay letters
Christie S.
So…20% of $1.52 billion is $304 million, give or take a dollar. Looks like a bargain to me. To the poster who thought that Ebbers didn’t deserve 25 years for a similar accounting scam…still feel that way?
These robber bastards/barons deserve to be buried UNDERNEATH the frickin’ prison. Billions of dollars scammed, millions of people affected, retirements ruined…all for corporate greed.
Don’t just throw the book at them, make sure it’s the OED. An anvil tied to it would suit me just fine.
Mike T
If I remember this story correctly, there were two major power utilities in California, one of which declared bankruptcy during this crisis. It was around this time that the state stepped in and took over some of the payments. We’re talking billions of dollars, and this undoubtedly fed right into the $38 billion deficit that was such a big issue during the Gray Davis recall.
Anyways, does anyone know the status of the utility that sought bankruptcy protection? I never heard if they came out of it or not.
Andrew J. Lazarus
PGamp;E is out of bankruptcy.
Energy costs had a lot to do with the state deficit and the blackouts had a lot to do with Gray Davis losing the recall.
Kenny Lay is a buddy of our new governor. Funny thing about that.
merlallen
So Enron can declare bankruptcy but I can’t?
SeesThroughIt
I wholreheartedly agree, but before that happens, the assets of Ken Lay, Andrew Fastow, etc. should be liquidated and given to the people they screwed over. There’s no real justice in having these slimeballs hide behind some legalese and economic maneuvering and still get to keep all of their ill-gotten gains while the countless people whose lives they destroyed have no remedy for their suffering.
neil
California has certainly learned the lesson from its brief flirtation with the idea that Republicans could provide good government. And what do they get? Blackouts, profiteering, political manipulation, and a governor who is more owned by the special interests than would have been imaginable 10 years ago. At least, if Hollywood and nutritional supplements are the special interests.
Jess
I watched the documentary about Enron and the one about the Weathermen (The Weather Underground) back-to-back, and found it very instructive to compare and contrast the mindset of the individuals involved. Hubris and self-delusion and lust for power all around. One extreme gives birth to the other, primarily because each undermine the necessary checks and balances to keep things sane.
Jess
ppgaz,
Thanks for the link–interesting stuff. The sad thing about this whole mess is that the perps so totally deluded themselves into thinking they were doing the right thing, heroes of industry and all that. I pitied more than despised them after I saw the film. My inner liberal getting the better of me, even as my inner libertarian wants to see them flogged in public.
Doug
But, wait a second? Corruption and market gaming? Can’t be. The Bush administration told me that lack of capacity and environmental problems were to blame for California’s woes. That’s why FERC sat on its hands as Enron was bilking California for the billions that won’t get paid back.
ppGaz
Don’t feel too bad, Jess. I have those, and an inner Republican too. As a youngster, I Liked Ike.
I mean, the man did pull off one hell of an invasion.
And he warned us about the Military Industrial Complex.
Talk about dating one’s self — I remember the speech in which he coined that phrase.