Schwarzennegger To Terminate $9 billion Lawsuit

California's two biggest problems, debt and electricity, are more closely connected that you might think.

Last year, Cruz Bustamante, the Lieutenant Governor of California and a leading contender for the Governor's job, filed a private lawsuit against the California energy giants under California's "Unfair Business Practices Act." The case includes allegations of fraudulent reporting of sales transactions, megawatt "laundering," fake power delivery scheduling and conspiracy. If successful, the litigation (now underway in an LA courtroom) would make the power companies return $9 billion to California electricity and gas customers.

The existing Gray Davis Administration is simultaneously demanding that George Bush's energy regulators order the $9 billion refund. But there is not much chance of those demands being met - the head of Bush's Federal Energy Regulatory Commission is a man who was nominated by Enron energy chief Kenneth Lay.

According to a new article on Alternet, the Bush commissioners expect the case against the energy companies to be proven. So, rather than wait for a $9 billion repayment order, they want to charge the energy companies with conspiracy but offer them, behind closed doors, deals in which they have to pay only 2 cents on each dollar they filched. The problem is, only the Californian governor has the power to make such a settlement. Hence the need for a new governor...

The Alternet article claims that Schwarzennegger launched his gubernatorial bid after meeting with Kenneth Lay and convicted stock swindler Mike Milken on May 17, 2001, at the Peninsula Hotel in Los Angeles.