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The Federal Energy Regulatory Commission released two Enron memos describing company plans to inflate energy prices during California's energy crisis of 2000.
The practices were considered so outrageous, that an attorney with the California Public Utilities Commission dubbed them a "smoking gun memo."

Enron memo, Dec. 6, 2000 .pdf file

Enron memo, Dec. 8, 2000 .pdf file


Lights Out at EnronLights Out at Enron
Follow the events leading to the bankruptcy of the former energy giant, read about key players and find out how its fall affected employees.
Lights Out at Enron


Electricity: Powering AmericaElectricity: Powering America
Explore how each state produces and consumes electricity. Discover which household appliances gobble up power the fastest and what the average family pays each month in electricity.
Electricity: Powering America


Eye On EnergyEye On Energy
Explore the production and consumption of energy in the United States. Find out more about energy costs, and the use of fossil fuels, nuclear power and renewable energy sources.
Eye On Energy


Enron Tapes Anger Lawmakers
Call For Action After Tapes Reveal Enron Role In Calif. Power Crisis
Enron Tapes Anger Lawmakers

Enron Criminal Trial Postponed
Expected Length Of Trial Cited As Reason; Juror Prospects Sent Home
Enron Criminal Trial Postponed

New Trouble For Ex-Enron CEO
After Bar Fight Allegedly Over His Fears That FBI Is Watching Him
New Trouble For Ex-Enron CEO

Feds Sap Enron's Sales Power
Corporation Barred From Selling Electricity At Competitive Rate
Feds Sap Enron's Sales Power

Calif. To Get $1.8B Power Refund
Energy Regulators Find Widespread Power Manipulation In California
Calif. To Get $1.8B Power Refund

Energy Firms Overcharged $1.8B
Calif. Seeks $8.9B In Refunds For 2000-01 Power Shortage Crisis
Energy Firms Overcharged $1.8B

Enron 'Mastermind' Pleads Guilty
Timothy Belden To Aid Prosecutors In Cases Against Bigger Fish
Enron 'Mastermind' Pleads Guilty

Enron's 'Smoking Gun' Memos
Internal Memos Detail How Enron Drove Up Calif. Energy Prices
Enron's 'Smoking Gun' Memos

Feds Probe Enron Role In Energy Crisis
Did Bankrupt Energy Giant Manipulate California Prices And Supplies?
Feds Probe Enron Role In Energy Crisis

Power Price Gouging Secrets
Power Companies Deny Holding Back Power For Higher Profits
Power Price Gouging Secrets

E-Mail This StoryPrintable Version

Enron Traders Caught On Tape

LOS ANGELES, June 1, 2004

(CBS) When a forest fire shut down a major transmission line into California, cutting power supplies and raising prices, Enron energy traders celebrated, CBS News Correspondent Vince Gonzales reports.

"Burn, baby, burn. That's a beautiful thing," a trader sang about the massive fire.

Four years after California's disastrous experiment with energy deregulation, Enron energy traders can be heard – on audiotapes obtained by CBS News – gloating and praising each other as they helped bring on, and cash-in on, the Western power crisis.

"He just f---s California," says one Enron employee. "He steals money from California to the tune of about a million."

"Will you rephrase that?" asks a second employee.

"OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day," replies the first.

The tapes, from Enron's West Coast trading desk, also confirm what CBS reported years ago: that in secret deals with power producers, traders deliberately drove up prices by ordering power plants shut down.

"If you took down the steamer, how long would it take to get it back up?" an Enron worker is heard saying.

"Oh, it's not something you want to just be turning on and off every hour. Let's put it that way," another says.

"Well, why don't you just go ahead and shut her down."

Officials with the Snohomish Public Utility District near Seattle received the tapes from the Justice Department.

"This is the evidence we've all been waiting for. This proves they manipulated the market," said Eric Christensen, a spokesman for the utility.

That utility, like many others, is trying to get its money back from Enron.

"They're f------g taking all the money back from you guys?" complains an Enron employee on the tapes. "All the money you guys stole from those poor grandmothers in California?"

"Yeah, grandma Millie, man"

"Yeah, now she wants her f------g money back for all the power you've charged right up, jammed right up her a------ for f------g $250 a megawatt hour."

And the tapes appear to link top Enron officials Ken Lay and Jeffrey Skilling to schemes that fueled the crisis.

"Government Affairs has to prove how valuable it is to Ken Lay and Jeff Skilling," says one trader.


"Do you know when you started over-scheduling load and making buckets of money on that?

Before the 2000 election, Enron employees pondered the possibilities of a Bush win.

"It'd be great. I'd love to see Ken Lay Secretary of Energy," says one Enron worker.

That didn't happen, but they were sure President Bush would fight any limits on sky-high energy prices.

"When this election comes Bush will f------g whack this s--t, man. He won't play this price-cap b------t."

Crude, but true.

"We will not take any action that makes California's problems worse and that's why I oppose price caps," said Mr. Bush on May 29, 2001.

Both the Justice Department and Enron tried to prevent the release of these tapes. Enron's lawyers argued they merely prove "that people at Enron sometimes talked like Barnacle Bill the Sailor."

Click here to read part II of this series.

©MMIV, CBS Broadcasting Inc. All Rights Reserved.

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