GREG PALAST
Palast is co-author of the forthcoming book Democracy and Regulation. He said today: “The U.S. Senate is recoiling in phony shock and horror at the games Enron played to manipulate the California power market. The rip-offs, which Enron traders called ‘Get Shorty,’ ‘Deathstar,’ ‘Fat Boy,’ are simply variants on games Enron has been practicing in Britain for a decade, there known as ‘stacking,’ ‘cramming,’ and ‘false scheduling.’ None of this should come as a surprise to the U.S. Congress, which had full knowledge and warning about the ease of ‘gaming’ the power market when both parties voted to deregulate electricity prices in 1992. Rather than call for an end to the electricity deregulation con game, U.S. politicians continue to spread this failed experiment to other states, believing a ‘fix’ is possible…. Andersen’s con is not new either. In 1989, it faced possible criminal charges over cooking the books for another power firm, Southern Company. I was on that investigation, but the first Bush’s Justice Department let the power pirates off the hook, claiming that if Arthur Andersen audited their accounts, it must be fine.”
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TONY TINKER
Professor of accountancy at Baruch College and author of Paper Prophets: A Social Critique of Accounting, Tinker said today: “The imminent demise of Andersen should serve as a wake-up call. Instead, we are witnessing yet another chapter in short-termism, scapegoating, and bandage quick fixes. Does anyone believe that audit-for-rent practices were confined to Andersen? Champagne corks must be popping in the offices of the remaining Big Four accounting firms — after the Andersen funeral service, the Big Four will have accomplished a degree of monopoly and concentration that, just a few years back, they had tendered in merger plans, and then hastily withdrew in the face of public outrage…. The Andersen/Enron affair has exposed a raft of conflicts of interest. To take one example from my own university business school, accounting teaching and research have been severely breached by the Big Five. University professors are dependent on their income-supplements through funded chairs and research grants. The American Accounting Association is itself in the big firms’ financial pocket.”
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JAMIE COURT
A consumer advocate with the Foundation for Taxpayer and Consumer Rights, Court said today: “Our report, ‘Hoax: How Deregulation Let the Power Industry Steal $71 Billion From California,’ shows that California was not a victim of the laws of supply and demand, as it has been widely portrayed. The California energy crisis was a public relations hoax — orchestrated by the power industry — that will cost $2,200 for every Californian…. In the smoking gun memos uncovered earlier, Enron acknowledges that the manipulation of the market is standard practice. In fact, the power traders across the industry colluded in order to game the system. The Wall Street Journal reported that Dynegy — another big Texas power company — set up sham trades to make themselves look more of a market player than the company really was…. The lesson is that electricity should never again be left in the hands of unregulated, private corporations.”
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; Norman Solomon, (415) 552-5378
