Arnold acts for ‘Kenny boy’

It didn’t take Arnold long to announce he would carry out former Enron CEO Ken Lay’s plans. A recent press report, received by investigative reporter Greg Palast, states one of Schwarzenegger’s aides said only three days after the election that Arnold intends to settle pending energy fraud lawsuits. That would probably include the lawsuit filed by Lt. Gov. Cruz Bustamante under California’s Unfair Practices Act section of the Civil Code. That act bars “unfair, dishonest, deceptive, destructive, fraudulent and discriminatory practices by which fair and honest competition is destroyed or prevented.” Schwarzenegger’s aide said the governor doesn’t want to be saddled with someone else’s lawsuits. He intends to settle the lawsuits for pennies on the dollar. That was part of Ken Lay’s plan when he met with Arnold in 2001. Attorney Hillary Rowen said the plaintiff in the suit can seek injunctive and restitutionary relief under California law. That would include coughing up the $9 billion the power companies collected in the California energy scam. There is another lawsuit in federal court, brought by the state against the Federal Energy Regulatory Commission (FERC). California claims it is entitled to a $9 billion refund because the FERC was not authorized to OK a fluctuating market-based rate structure. Judges of the 9th U.S. Circuit Court of Appeals appeared skeptical of the FERC’s contention that it acted legally three years ago when it relied on competition among energy wholesalers to set the cost of California’s power supply. The FERC did not require the power companies to file the rates they planned to charge. The unknown in the equation is whether Arnold will try to settle this lawsuit as well. Involvement of Ken Lay, CEO of Enron at the time, and other power companies with Schwarzenegger and others, came to light when 34 internal Enron memos were obtained by Palast. The memos were originally discovered by the Foundation for Taxpayer and Consumer Rights, based in Los Angeles. Palast said they showed Lay’s intent was to sabotage the efforts of Gov. Gray Davis and Bustamante to recover the $9 billion. Schwarzenegger is already pushing for further deregulation of energy suppliers, thus opening the door for another round of ripoffs.

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