Enron's Awesome Cynicism
Editorial
The New York Times
June 6, 2004
One energy trader gloats about cheating "poor grandmothers."
Another suggests shutting down a power plant in order to drive up electricity
prices. A third, hearing of a fire under a transmission line that caused
a power failure, shouts "burn baby, burn." Another says that he would
like to see Kenneth Lay - then Enron's chief executive - wind up as energy
secretary in the new Bush administration.
An exhaustive study released by the Federal Energy Regulatory Commission
in March 2003 confirmed what everyone had long suspected - that
Enron and other major energy companies manipulated California's energy
markets in 2000 and 2001 in ways that cost the state billions. Now
comes the most graphic evidence yet of the cynicism and ruthlessness
with which Enron's floor traders, presumably with the endorsement of their
superiors, rigged the market.
The evidence is in taped conversations among Enron traders, obtained
from the Justice Department by a public utility district near Seattle that
wants to recover what it says are $2 billion in unjust profits.
The tapes, which CBS broadcast last week, are remarkable not only for their cynicism
but also their raw profanity - the average energy trader appears
to have a vocabulary consisting of a half-dozen obscenities as well as "cool," "wow"
and "awesome" - as in wouldn't it be "awesome" if Mr. Lay got the
energy post. But the traders are not politically stupid. One is heard predicting
that President-elect George Bush would oppose caps on wholesale
electricity prices - which indeed Mr. Bush did, until the crisis got completely
out of hand.
The tapes are the equivalent of the cynical e-mail messages
in which Henry Blodget and other Wall Street analysts acknowledged that the stocks
they were peddling were mostly dogs. Those messages ruined
careers and led to big fines. Whether the Enron tapes will have the same effect
remains to be seen. In a case before the United States Court of Appeals
for the Ninth Circuit, California is trying to recover $8.9 billion in refunds
from Enron and others. The state will not get nearly that - most of the
companies are now bankrupt - but the tapes can't hurt their efforts.
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