Wednesday, October 15, 2003
I am deeply unhappy to report on the accuracy
of our report on the success of Ken Lay's plan to have his governor,
Mr. Schwarzenegger, sabotage state lawsuits against the electricity
The following is just in from journalist Katherine Yurica:
Arnold to Settle Lawsuits for Pennies on the Dollar
The Yurica Report has learned that only three days after Mr. Schwarzenegger
won his victory in California, an aide announced that the governor-elect
intends to settle pending energy fraud lawsuits. This apparently
includes the suit filed by Cruz Bustamante under the California
statute, Civil Code section 17200 ,of the Unfair Practices Act.
The purpose of the act °is to safeguard the public against the creation
or perpetuation of monopolies and to foster and encourage competition
the Act expressly prohibits, °unfair, dishonest, deceptive, destructive,
fraudulent and discriminatory practices by which fair and honest
competition is destroyed or prevented.
According to news talk show host Bernie Ward of KGO radio, San Francisco,
who reported the story Friday night on his radio show, (October
10th), Schwarzenegger's aid stated that the governor-elect's administration
did not want to be saddled with someone else's lawsuits. The Unfair
Practices Act, however, has provisions that require businesses who
profit from unfair practices to pay the victims those profits. Although
the Act does not authorize recovery of damages in a representative
action, according to Hiliary N. Rowen, an attorney from the law
firm of Thelen Reid & Priest, °the plaintiffőwho need not have been
harmed by the challenged conductőmay seek injunctive and restitutionary
relief, including the disgorgement of profits on behalf of all those
injured. (See Hiliary Rowen's article) .This provision would make
the power companies, who profited an estimated $9 billion from the
California energy scam, the losers.
In the meantime, Claire Cooper of the Sacramento Bee reported Friday
on another lawsuit in the Federal Court. She reported the judges
from the 9th U.S. Circuit Court of Appeals seemed skeptical of the
Federal Energy Regulatory Commission's (FERC) contention that it
acted legally three years ago, when it relied on competition among
energy wholesalers to determine the cost of California's power supply
and did not require them to file the rates they would charge. California
sued FERC, claiming it is due a refund of $9 billion in gouged profits
because the Federal Power Act didn't authorize FERC to approve a
fluctuating marketbased rate structure. The question is, does the
governor-elect intend to settle the federal suit also?
Mr. Schwarzenegger's announcement to settle the lawsuits comes on
the heels of an article written on the eve of the election by investigative
reporter Greg Palast. Palast, whose reports appear on BBC televisionÉs
Newsnight, said that the Los Angeles-based Foundation for Taxpayer
and Consumer Rights uncovered Enron internal memos regarding Mr.
Schwarzenegger's secret meeting in May 2001 with the disgraced CEO
of Enron, Kenneth Lay. The intent of the power company, according
to Palast, was to sabotage the Davis-Bustamante plan to win back
the $9 billion dollars in illegal profits earned by power moguls.
The plan has worked so far. Clearly, Mr. Schwarzenegger should be
questioned about his actions.