NGI The Weekly Gas Market Report / NGI All News Access

Two More Ex-El Paso Gas Traders Indicted

El Paso Corp.'s former natural gas trading desk chief and a former trader were indicted in Houston last week as part of the ongoing investigation into alleged manipulation of gas prices.

The charges against Jim Brooks, the former desk chief, and Wesley Walton, were added to existing charges against former El Paso gas trader James Phillips. Phillips and four former gas traders who worked for El Paso, Dynegy Inc. and Reliant Energy Inc., were indicted last year by the U.S. Attorney's Office in Houston for allegedly reporting bogus gas trades to industry newsletters (see NGI, Dec. 6, 2004).

Phillips and the other former traders were originally charged with conspiracy, false reporting and wire fraud. Phillips also was accused in a separate indictment of knowingly causing the transmission of reports that included inaccurate volume and price data for natural gas trades by their companies to Inside FERC.

Brooks was mentioned in court documents related to a case against former El Paso vice president Todd Geiger, who was charged with reporting bogus trades in 2002 and who later pleaded guilty (see NGI, Dec. 27, 2004; Sept. 1, 2003). In the Geiger documents, Brooks was named as the author of an e-mail in October 2000 to El Paso gas traders. He apparently polled them on how El Paso should report its trading data to Inside FERC.

Brooks' e-mail read in part: "In an effort to get everyone's opinion on this, reply as to the following: 1. Report according to our book bias (as in the past). 2. Report verifiable fixed price trades only." The "book bias" report would favor positions held by El Paso. In e-mail replies to Brooks, Geiger and another ex-trader William Ham said the company should report book bias numbers. Brooks' preference was not indicated in the document. Ham has since pleaded guilty to reporting false trades, and he is cooperating with federal investigators (see NGI, Oct. 25, 2004).

Also in Houston last week, U.S. District Judge Vanessa Gilmore ordered Justice Department prosecutors to turn over interviews with former gas traders to the defense team of Donald Burwell, also a former El Paso gas trader. Burwell was originally indicted in November 2004 on one count each of conspiracy, false reporting and wire fraud in connection with the bogus trade reports, and additional charges of false price reporting and wire fraud were added earlier this year. Burwell's attorney requested the numerous interviews as exculpatory evidence to show "an industrywide practice" to improperly influence price indexes.

Gilmore also granted a defense motion to delay Burwell's trial to March 2006. It had been scheduled to begin on Nov. 16. However, Gilmore denied a motion by The McGraw-Hill Cos., publisher of Inside FERC, which had requested additional confidentiality protection for some trading data given to the federal investigators following a grand jury subpoena. Gilmore said a previous order requiring the data be kept under seal was sufficient to protect confidentiality.

©Copyright 2005 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus