October 17, 2002
Another Enron guilty plea

Timonty Belden, former head of trading in Enron's Portland, Oregon office, has pleaded guilty to one count of conspiracy to commit wire fraud. As with Michael Kopper, he may have a deal in the works for his future testimony.

Belden was a key figure in the California price gouging situation from last year:

Federal investigators have interviewed a California Senate panel investigating the state's energy crisis about evidence uncovered in its long-running investigation of market manipulation. A federal grand jury in San Francisco has been weighing criminal charges related to the energy crisis, according to reports.

The Senate panel has long believed Belden to be the mastermind behind price manipulation as outlined in the so-called Enron memos.

Those internal company memos describe how Enron took power out of California at a time of rolling blackouts and shortages and sold it out of state to elude price caps, according to documents obtained by investigators.

Enron bought California power at cheap, capped prices, routed it outside the state, and then sold it back into California at vastly inflated prices, authorities said.

Belden was "the mastermind behind the strategies described in the Enron memos," said Chris Schreiber, an attorney working with California's Senate Select Committee to Investigate Price Manipulation of the Wholesale Energy Market.

"He's been our on radar for a long time," Schreiber added.

Schreiber said Belden declined an invitation to testify in front of Republican Rep. Doug Ose's hearing on the energy crisis, the same hearing that H. Ross Perot refused to attend in July.

Transactions that moved power out of California, then back into the state, were called "ricochet" deals. They were designed to circumvent the California-only price caps on wholesale energy.

That strategy ended when the Federal Energy Regulatory Commission implemented regional price caps.

"We knew that Enron was using them as a parking agent to move electricity out of state, park it in Oregon, then bring it back down to California, avoiding the price caps," Schreiber said.

Do you think the prosecutors crank up "Another One Bites The Dust" when they nail these guys? I'm just wondering.

Posted by Charles Kuffner on October 17, 2002 to Enronarama