Senator Cantwell's Opening Statement (as prepared) before the Judiciary Committee's hearing on "Accountability Issues: Lessons Learned from Enron's Fall"
WASHINGTON, DC - Thank you, Chairman Leahy for holding this hearing and for inviting my home state's Attorney General, Christine Gregoire, to testify before the committee today on behalf of the people of Washington state.
Mr. Chairman, working people in Washington state - including our teachers, police, and firefighters - lost over $100 million dollars as their pension fund's investment in Enron collapsed.
Attorney General Christine Gregoire has taken a leadership role in filing a class-action lawsuit on behalf of investors defrauded by Enron.
In addition to her work on behalf of investors, she has played a key role in defending ratepayers and consumers against unfair market manipulation by Enron.
We are fortunate to have her with us today to give us the perspective of state Attorneys General.
At its core, Enron was a make-believe company more worthy of a paperback novel than a business school textbook.
But even as the details of how Enron defrauded its shareholders emerge, we are now learning of a new scheme to bilk ratepayers and line Enron's pockets.
Some of the very same people who have lost money in my state's pension fund are now hit with a double whammy.
Why? Because despite its collapse, Enron continues to earn hundreds of millions of dollars from over-inflated energy contracts which have resulted in massive rate hikes for consumers - including the very same people who lost money in my state's pension fund.
I was visited by a representative of a utility in rural Washington state recently. This utility has been forced to raise its rates by about 40 percent in the last year. Customers visit its office daily - in tears - because they simply can't pay their power bills.
What is shocking is that even after its bankruptcy, Enron has charges this utility and others like it energy prices more than triple today's market.
Mr. Chairman, where there's smoke there is usually fire, and when I hear that Enron has charged utilities triple current market rates, I naturally become extremely suspicious.
And in yet another blatant attempt to conceal its activities, Enron has actually slapped a restraining order on one Northwest utility, to prevent it from disclosing just how absurd the terms of its contract are.
Last week the Energy Committee - on which I serve with Sen. Feinstein and others here today - heard testimony that Enron is only able to charge such high-prices for long-term contracts because it was able to manipulate prices in forward energy markets.
The Federal government has an obligation to right this wrong for energy consumers in the West.
That is why I called upon FERC Chairman Pat Wood to open an investigation into whether power prices in the West have been unjust and unreasonable as a result of alleged manipulation by Enron.
Thank you.
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