Reliant CEO Finds Religion
Like an evangelist exhorting the sinners at a brush arbor revival to come forward, confess their sins, and seek absolution -- the Federal Energy Regulatory Commission has been calling on energy trading corporations to confess, under oath, whether they have been doing any of the down-and-dirty deals that the devilish Enron got caught making.
And, oh, there's been quite a rush to that altar. The latest is Reliant Energy Inc. of Houston, an Enron neighbor who now tearfully concedes that, yes, it too has strayed from the straight and narrow, worshipping the god of mammon over the righteous path.
Reliant, which used to go by the plain Jane name of Houston Industries now flashes its hipper, "new economy" brand name on the Astrodome and other Houston landmarks to let everyone know that it's a major money player in the high-flying world of corporate traders. The problem with high-flyers, though, is that they can lose sight of earth, and Reliant did just that when it engaged in a bit of bookkeeping fakery called "round-trip trades."
The game here is to sell megawatts of power to another company and -- Hocus Pocus! -- buy them back all at once, which jacks up your revenue picture, even though nothing happened -- no power moved, no money actually changed hands. It's designed to fool investors and artificially inflate the company's stock price. It's pure flim-flam.
Of course, Reliant's CEO, Steve Letbetter, says this is merely the work of a couple of lower-level corporate miscreants who are long gone, and that he personally knew nothing -- nothing! -- of this malfeasance ... even though he admits that 20 percent of his corporation's business last year came from these phantom trades. Hello. One Fifth of your corporate revenues are fake, and the CEO doesn't take notice?
This is Jim Hightower saying ... It's another Enron moment, in which today's hot shot CEOs are "geniuses" ... until they claim that they actually don't know anything about what went on in their own companies.