Feds arrest third former Enron trader in Calif. energy crisis

TheAssociated Press

SAN FRANCISCO -- Federal authorities Tuesday arrested a third former Enron executive for allegedly manipulating California's energy market in a scheme that led to rolling blackouts across the state two years ago.

John M. Forney, 41, was accused of being the architect behind several illegal strategies Enron used to drive up California's energy prices between 1999 and 2001.

Forney, who lives in Upper Arlington, Ohio, is the third energy trader who worked at Enron's power trading office in Portland, Ore., to be charged with crimes related to California's energy crisis. The two other traders at now-bankrupt Enron pleaded guilty in October and February.

Forney was accused of concocting a scheme known as "Ping Pong" designed to evade federal price caps on California energy. He was also allegedly responsible for a strategy known as "Death Star" that sought to exploit weaknesses in California's energy management system.

"These criminal charges are utterly without merit," said his lawyer, Brian Murphy. "He's intent on vindicating himself in front of a jury."

The energy debacle bankrupted a major California utility and will leave consumers paying abnormally high electricity prices for years.