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Thursday, July 08, 2004

Lay's Incomplete Indictment May Cost Californians Billions

As reported here by Kristen Hays of the AP and here by Mary Flood and Tim Fowler of The Houston Chronicle, Ken Lay pleaded not guilty on Thursday to the indictment returned against him on Wednesday by the Justice Department's Enron Task Force. The indictment failed to include any counts relating to Enron's manipulation of the Californian electricity markets - this despite a wealth of evidence which demonstrates that senior Enron management knew about the manipulative trading practices as early as August 2000. As you can read here, in our news release on the indictments, Lay is getting off easy.

Attorney General Bill Lockyer said this morning that he hoped that the evidence gathered under the Lay indictment will help California in its efforts to recoup some of the billions of dollars lost during the energy crisis. However, the indictment's failure to include any charges relating to Enron's manipulation of the markets makes it much less likely that such evidence will be introduced, thereby weakening the state's chances.

The whole thing stinks like 2001, when in the midst of rolling blackouts and skyhigh electricity prices, Enron was enjoying records profits. This of course, just a few years after Ken Lay and Enron had spread millions of dollars around the country to get politicians elected to office who favored deregulation. Today's indictment, issued by John Ashcroft's Justice Department (the Ashcroft Victory Committee got $25,000 from both Lay and Enron in 2000), which ignores credible evidence that Lay knew what was his trading goons were up to in California, seems like ol' Kenny Boy Lay is once again getting a nice return on his investments.

However, the Justice Department still has the opportunity to pursue further charges. Governor Schwarzenegger, other California leaders, and all Americans should call on the Justice Department to expand its investigation of Ken Lay to include his knowledge of Enron's fraudulent manipulation of the California energy markets.

Democracy never thrust itself upon anyone. We must be ever vigilant to make sure that the various organs of our elected government do their job, which in this case, means making sure that one of the fattest cats of them all receives the justice that he, and we, deserve.

For more Enron materials:

- Our June 25 Enron Post

- Ken Lay and Enron - Factsheet and Timeline

- John Rowland, Electricity Deregulation, and Enron - Background and Analysis

- What Did Dick Know and When Did He Know It? - Derek's Op-Ed in the San Francisco Chronicle and his related Post

Or Sign Up for our Enron Updates

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