FERC: Enron tapes ‘Only scratched the surface’

WASHINGTON — Audio tapes made public Tuesday indicate at least 1,500 conversations in which traders employed by disgraced energy giant Enron Corp. engaged in or discussed violations of federal regulations, a Federal Energy Regulatory Commission staffer says.

Those tapes, including some collected by a Washington state utility, may have “only scratched the surface” of potentially illegal activity by Enron during the West Coast energy crunch of 2000-2001, the FERC staffer said in testimony released Tuesday.

The comment came as the regulatory agency released on its Web site transcripts of thousands of hours of taped conversations involving Enron energy traders.

The tapes contain enough information that there is “sufficient public benefit to be garnered from further review” of the transcripts, which could take thousands of man-hours to complete, said Patrick Crowley, an economist in FERC’s office of administrative litigation.

Crowley’s comment — and the release of the new transcripts — represent a victory for the Snohomish County, Wash., Public Utility District, which has pressed FERC to transcribe thousands of hours of phone conversations involving Enron traders. The utility district, based in Everett, has spent about $200,000 to transcribe and review some of the tapes in recent months.

The utility hopes to prove that an exorbitant contract it agreed to with Enron in January 2001 should be considered fraudulent because of Enron’s manipulation, and that the utility shouldn’t have to pay the $122 million that Enron claims it owes.

Enron founder Kenneth Lay, former CEO Jeffrey Skilling and chief accounting officer Richard Causey are scheduled to be tried early next year on fraud and conspiracy charges.

Houston-based Enron filed for bankruptcy protection after an accounting scandal came to light in December 2001.

Sen. Maria Cantwell, D-Wash., called FERC’s decision to review the transcripts an about-face, saying FERC staff initially tried to exclude the tapes from evidence.

“The fact this evidence almost fell through the cracks is not acceptable,” Cantwell said. “Federal regulators shouldn’t have to be embarrassed into doing their jobs. They’re supposed to be the cops on the beat, standing between consumers and the mass public mugging that took place at the hands of Enron.”

FERC spokesman Bryan Lee disputed Cantwell’s comments, saying the commission “will continue to be guided by the facts and not politics.”