Responding to an inter-office email in October 2000, J. Robert (Bo) Collins the current head of the New York Mercantile Exchange (Nymex), then employed by El Paso Corp., advised El Paso traders to report only verifiable price information to index developers rather than El Paso’s own “book bias,” according to documents filed in a Houston court case.

The round-robin of emails questioning whether to report actual trades in November 2000 surfaced in documents filed in the trial of Todd Geiger, an El Paso vice president and trader who pleaded guilty last week in the district court for the Southern District of Texas to one count of false reporting of prices and agreed to cooperate with the prosecution (see Daily GPI, Dec. 12). In exchange for the guilty plea, one wire fraud count was dropped against him.

“We plan to work with Mr. Geiger as we continue our investigation into false reporting at trade journals,” Assistant U.S. Attorney John Lewis said in a statement submitted to the court Friday. Lewis indicated that there was an “agreement” between Geiger and other unnamed El Paso traders to report false trades “for the purpose of favoring El Paso’s trading positions.” The statement indicated that “El Paso traders reported many hundreds of fictitious trades to Inside FERC, NGI and Gas Daily and other publications.”

Lewis declined comment on the targets of the continuing investigation. Collins’ email was the only one which definitively said they should report only verifiable trades. “Given the current investigations by Congress, CPUC, CFTC, and other as yet unknown regulatory bodies, I believe we should stick to [reporting only verifiable price trades].

Several responses to the reporting question from others evidenced the belief that other companies reported their “book bias” instead of actual verifiable trades and El Paso would lose out in the market if it didn’t report its bias.

An El Paso spokesman said the company has cooperated with investigators into false reporting and, has no further comment. El Paso in March entered into a settlement estimated at $1.7 billion with California and three other western states resolving all regulatory and legal actions related to the sale or delivery of natural gas and electricity from September 1996 to the present.

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