The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Enron’s hidden profits from energy deregulation:
an embarrassment of riches

Jul 1, 2002

New disclosures show that Enron made a lot more money off of last year’s fake California energy crisis than they were willing to admit at the time.

During the winter and spring of 2000-01, when California’s electricity market was “deregulated,” Enron and the rest of the electric utilities and energy companies created artificial electricity shortages, rolling blackouts and brownouts. Of course, corporate and government officials claimed that these shortages were just a product of supply and demand. In other words, they blamed the people of the state for supposedly using “too much” electricity. These companies then turned around and used these fake shortages to justify enormous rate increases, as well as a taxpayer-funded bailout.

All of those executives adamantly denied that they were profiting from the fake crisis. Enron, the biggest energy trader in California, did show that its profits in one three-month period during the crisis increased by 34%, to 350 million dollars, already a huge amount of money. But that was small potatoes compared to what the company was really taking in. Enron really made 1.5 billion dollars more out of the crisis than they admitted. Said one former Enron executive, “We were supposed to make 500 million dollars in a quarter and we were doing it in a day.”

So, what did Enron do with the extra 1.5 billion dollars? They secretly created special, off-the-books partnerships to park the money. Then, over the next year, even during Enron’s dramatic crash, the top 100 Enron executives rewarded themselves with over 300 million dollars in cash payments. Former Enron chairman and close Bush buddy, Ken Lay, paid himself $103,559,793 in 2001. That’s 103 million! Remember when Lay’s wife had the nerve to declare on national television that she and her husband were going broke! As for Jeffrey Skilling, another former Enron honcho, who claimed that he had no idea about all of the Enron wheelings and dealings that were later disclosed, he was paid close to nine million dollars in that year!

No matter what they say, they are cooking the books, hiding profits when it suits them, then hiding losses when they’ve drained the wealth.

In either case, we have no reason to believe them or accept their view of society.