Despite hiking electricity rates 50 percent in the past four years and disconnecting a record number of customers for failure to pay bills, a Seattle area, publicly-owned utility has become a West Coast hero for, as this Washington Post article puts it, “goring the bankrupt carcass of the disgraced Enron Corp. and spilling buckets of deliciously embarrassing blood.”
Snohomish County Public Utility District entered into a costly nine-year contract with Enron in January 2001 during the middle of the West Coast power crisis. At the time, the spot-market cost of regional power had spiked more than a hundred-fold due primarily to dysfunction related to dysfunctional deregulation of power markets. Snohomish’s deal with Enron committed the utility to buy power at three times the cost of any previous long-term contract and about four times the historical rate for electricity in the Pacific Northwest. As a result, the utility had to increase rates substantially to its 295,000 customers.
When Enron filed bankruptcy late 2001, Snohomish seized the opportunity to terminate the Enron contract, which by that time was over-market. Enron’s bankruptcy estate filed an illegal termination claim against the utility seeking $122 million in damages for lost profits from the terminated contract.
Rather than simply fight the Enron lawsuit on technical legal grounds, Snohomish took a more creative approach — the utility sought to obtain through discovery audiotapes of hours of ludicrously obnoxious conversations between Enron power traders during the West Coast power crisis of 2000-2001. The Justice Department had seized the tapes in connection with its criminal investigation into Enron, and a federal judge eventually ordered the government to turn copies of the tapes over to the utility.
The tapes proved to be a gold mine for Snohomish, which has spent about $200,000 over the past year on a team of transcribers who are transcribing more than 2,800 hours of recordings. The first transcriptions of the cynical conversations were released this past June and created a firestorm of media attention even in this Enron-soaked media environment. The utility has continued to release damning transcripts to the public periodically since that time.
Nevertheless, it’s far from clear that the discovery of the obnoxious Enron trader conversations will have any effect whatsoever on the legal question of whether the Snohomish is liable for the $122 million in damages to the Enron estate. That issue remains pending before a federal administrative judge and a decision is expected later this year. Consequently, the entire affair may turn out to be a $122 million anti-Enron public relations campaign for the utility, which commonly receives emails from its customers such as this one quoted in the WaPo article: “I just want to say, ‘You guys rock!'”
I wonder if that customer will have the same reaction if he has to pay his $420 share of the utility’s anti-Enron P.R. campaign cost?

Here is the amicus curie brief of the National Association of Criminal Defense Lawyers in Arthur Andersen’s appeal of its witness tampering conviction to the United States Supreme Court. The NACDL’s brief addresses the prejudicial impact that the Andersen conviction will have on the attorney-client relationship, and notes the following in its Summary of the Argument:

This case places lawyers at risk of investigation, prosecution, and imprisonment for doing their jobs. When a lawyer represents a client in connection with a potential government investigation, one of the lawyer?s goals may appropriately be to prevent the government from developing evidence against the client. Within the bounds of ethics and the law, that is what lawyers do. . .
In prosecuting the accounting firm Arthur Andersen LLP (?Andersen?), the government singled out the conduct of an in-house lawyer, Nancy Temple. Her crime, in the government?s view, was providing legal advice even before the SEC had issued a subpoena or launched a formal investigation. Specifically, she reminded Andersen employees to adhere to a lawful, established document retention policy and recommended changes to a draft memorandum ? actions that lawyers undertake every day. According to several of the jurors, her edits to the draft memorandum were the principal basis for Andersen?s conviction.
By criminalizing this conduct, the Fifth Circuit disregards the traditional role of lawyers, which includes a duty to protect their clients by deflecting potential government investigations. In the court?s view, this goal itself is ?improper? and reflects a ?corrupt? purpose. Any action by the lawyer ? such as vigorously asserting privileges, counseling potential witnesses about their rights, or, as here, advising employees about a company?s document retention policy and editing a draft memorandum ? can violate the witness tampering statute if it is motivated even in part by this goal. Lawyers in the post-Andersen era now will operate in fear of investigation and prosecution. Those fears inevitably will dampen the zealousness of their advocacy. And that will imperil the fair administration of justice.
If allowed to stand, the decision below also will damage the attorney-client relationship by engendering potential conflicts of interest between lawyers and clients. On every close call regarding tactical and legal issues ? and on many that are not so close ? lawyers will have to weigh in the balance their own potential exposure to criminal liability. Yet the fundamental tenet of the attorney-client relationship is that the lawyer?s commitment to the client must be undiluted by concerns for his or her own personal interests. Moreover, by expanding the government?s ability to investigate counsel, the Fifth Circuit?s decision undermines the communication between attorney and client. If the advice of the Andersen lawyer here amounts to witness tampering, then communications long assumed to be privileged are in jeopardy of disclosure under the crime-fraud exception. Clients who are uncertain of the loyalty of their counsel or the confidentiality of their communications will simply not disclose information their lawyers need to know. That, too, imperils the fair administration of justice.

As a technical aside, neither the Anderson brief nor the NACDL brief in this SCOTUS case are bookmarked or linked in Adobe Acrobat to faciliate ease of review. Get with it, appellate lawyers. As federal courts are increasingly relying on electronic versions of pleadings and briefs, using Adobe Acrobat’s bookmarking and linking tools is an easy way to make such documents more reader-friendly. And, as any judge or law clerk will tell you, a brief or pleading that is easy to read is always easier to adopt.

The Chronicle’s Mary Flood, who continues to do a fine job of covering the Enron scandal, posted this article today regarding U.S. District Judge David Hittner‘s denial of Lea Fastow‘s motion to reduce her one year sentence for misdemeanor tax fraud to the seven months that she has already served. Here are previous posts on the Lea Fastow case.
Along with the the sad case of Jamie Olis and the Martha Stewart case, Mrs. Fastow’s case is another example of the egregious lack of prosecutorial discretion that exists in today’s “Justice” Department.

This NY Times article profiles Reid Weingarten, the Washington, D.C.-based criminal defense attorney who is currently representing former WorldCom CEO Bernard Ebbers in his criminal trial.
Mr. Weingarten is also representing former Enron chief accountant Richard Causey in his criminal case that will probably go to trial this fall in Houston.

David Bermingham, Gary Mulgrew and Giles Darby — the three former NatWest investment bankers facing possible extradition to the United States in connection with Enron-related fraud charges — are floating an unusual and creative legal strategy in England that amounts to a motion to change the venue of their criminal case to England. Here are prior posts on this interesting part of the Enron case.
The case is a test of a relatively new English extradition law that allows British citizens to be extradited to the United States without U.S. prosecutors being required to present prima facie evidence against them first in an English court. Last October, an English magistrate court ruled there was a good and proper basis for prosecuting the men in Houston in connection with the ongoing prosecutions of various former Enron executives.
Enron Task Force prosecutors claim that the three men conspired with former Enron CFO Andrew Fastow and his confidant Michael Kopper to defraud NatWest by secretly investing in one of Enron’s infamous off-balance sheet partnerships. The Task Force alleges that the three men conspired with with Mr. Kopper to persuade NatWest to sell its stake in the off-balance sheet partnership for $1 million when it was worth far more. A month or so later, the Task Force alleges that the partnership was sold for a cool $20 million, which allowed the three British men to share $7.3 million in profits. Most of the work on the transaction was carried out in England and the Cayman Islands.
In the trio’s latest motion in their continuing fight against extradition to the U.S., the trio challenges the English authorities’ failure to investigate the Enron-related allegations. The three men contend that a foreign government has charged them without evidence of committing a crime in England against an English bank. Inasmuch as the three men voluntarily brought the transaction to the attention of English authorities well before Enron prosecutors commenced extradiction proceedings, the trio reasons that English criminal authorities have an obligation to evaluate the case and decide on a threshold basis whether the charges should be tried in England, particularly in view of the fact that the case concerns alleged damage to an English financial institution.

Yesterday brought perhaps the first sign that a more measured approach to sentencing in white collar criminal cases may be in the offing since the current trend of criminalizing questionable business transactions began with the meltdown of Enron in late 2001.
In this order, U.S. District Judge Ewing Werlein declared moot the jury findings from the makeshift sentencing hearing that the court held in the Enron-related criminal case known as the Nigerian Barge case last year pending the U.S. Supreme Court’s decision in U.S. v. Booker. As noted in that latter post, the Supreme Court in Booker in late 2004 set aside the mandatory provisions of the federal sentencing guidelines after the Nigerian Barge jury sentencing hearing had been conducted.
In his order, Judge Werlein concluded that, in light of the Supreme Court’s decision in Booker, the sentencing jury finding that the Nigerian Barge transaction cost Enron investors $13.7 million is not binding on the court. Judge Werlein is scheduled to sentence the five defendants that were convicted in the Nigerian Barge case in March.
Judge Werlein is one of the fairest and most gracious men on the federal bench. Accordingly, I am hopeful that Judge Werlein will take the bold step of reversing an ugly trend in the U.S. criminal justice system that has resulted in injustices such as this.

This is the questionnaire that prospective jurors in the upcoming Enron Broadband criminal trial will be given. Here are the prior posts on the Broadband case, which is scheduled to crank up on April 1 in Houston before U.S. District Judge Vanessa Gilmore.