Statement of Senator Dianne Feinstein
on the Guilty Plea of Enron Energy Trader
October 17, 2002

"It has been reported that the former head of trading in Enron's Oregon office will plead guilty to one charge of conspiracy to commit wire fraud. This guilty plea clearly indicates that fraudulent practices were used to manipulate energy prices in California during the Energy Crisis.

I do not believe this fraudulent activity begins or ends with this one individual - in fact, we know traders from other companies have engaged in similar behavior. This type of manipulation contributed to the increase in the price of power from $30 per megawatt hour to more than $2,000 a megawatt hour, in some cases.

That is why I am so deeply concerned about the reluctance of Congress to move ahead with a bill that I introduced to provide fraud and manipulation oversight of energy transactions.

The legislation would ensure that records are kept for all energy transactions and would give the Commodity Futures Trading Commission (CFTC) regulatory authority over all energy derivatives trades.

The legislation would also require companies that run on-line trading forums to maintain open books and records for investigation and enforcement purposes, disclose non-proprietary pricing information, and, if appropriate, maintain necessary capital to back up their trades.

This bill has had a hearing in committee, but it has not yet been marked up. I think it is well past time for the Congress to take up and approve this legislation."

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