Herman Cain's "Enron-esque Scandal"

In case you're talking to any Herman Cain fans, you might want to know about this:

http://atlantapost.com/2011/05/25/a-real-reason-to-be-mad-at-herman-cain/

“Cain clearly believes that his pro-business message is what GOP voters want to hear. So much so, in fact, that on Saturday he officially unveiled his candidacy for the 2012 GOP nomination. But scrubbed from Cain’s official story is his long tenure as a director at a Midwest energy corporation named Aquila that, like the infamous Enron Corporation, recklessly drove into the wild west of energy trading and speculation – and ultimately screwed its employees out of tens of millions of dollars,” Mother Jones reports.


http://motherjones.com/politics/2011/05/herman-cain-aqu...

According to five lawsuits filed in federal court in 2004, Aquila's board of directors—which Cain joined in 1992—allegedly steered employees into heavily investing their retirement savings in company stock. At the same time, the company shifted its business model from straightforward energy generation to risky energy trading, an unregulated market made infamous by now-defunct Enron. The suits, later folded into a single, massive class action (PDF), alleged that Cain and top company officials violated a 37-year-old federal law requiring that employers manage employees retirement programs responsibly. (Cain's presidential exploratory committee did not respond to a request for comment.)

Founded in 1917 as Green Light and Power, Aquila traditionally made its money operating electric and gas plants and selling the energy they produced. In the years after Cain joined the board, Aquila's earnings climbed, from $254 million in 1995 to $351 million in 1998. Then, in early 1999, the company's leadership decided running power plants wasn't lucrative enough; energy trading and speculation had grown popular, and as the class suit lays out, Aquila wanted a piece of the action.

It was a dangerous move—as a company spokesman later put it, "the risk was huge." In the end, it proved disastrous. Aquila's decision to join Enron, Reliant Energy, and the other heavy-hitters in the energy trading markets would ultimately wipe out 94 percent of Aquila's stock value between 1999 and 2004. The company also faced criticism for using some of the same trading tricks that Enron did as a way to puff up its stock price, the lawsuit says. That included using "roundtrip" trades, a scheme in which Aquila would sell a trading partner some energy and then that partner would sell the same amount back to Aquila, a deal that canceled itself out. In the end, nothing actually changed hands. But it boosted Aquila's trading volume and revenue, sending a positive signal to the markets. The company also engaged in megawatt laundering, or "ricochet" trading, the lawsuit alleges. In such transactions, Aquila and other companies would buy energy from California at a lower capped price, move that energy out of the state, then re-sell it back to California at a higher price for a tidy profit.

But this financial trickery couldn't save a listing ship. In 2002, Aquila teetered on the brink of collapse. And for Aquila's employees, the result of the company's foray into energy trading was devastating: The company's employee retirement fund, overseen by the board of directors, lost more than $200 million in 2002. The reason: At the same time Aquila's executives and directors were investing more and more in highly risky energy speculation, they were selling their employees on the conservative nature

just sitting there, it drives the greedheads crazy. They gotta have it!!!!