First it was ENRON. You remember the announcement a couple of weeks ago that in the midst of the California energy crisis last summer the company's traders were buying and selling megawatts out of California then selling it back in a series of phony transactions to run up the price. Now we are told that the Cheney led Energy Task Force was told not to talk about California's problems in its investigation and report. We wouldn't know that if Henry Waxman hadn't dug out the e-mail.

Now it is coming out that the practice of round trip trades to run up the price of energy wasn't confined to ENRON. Reliant Energy and DYNEGY have both revealed that they too were manipulating the energy market. Through 2001 the practice of round-trip trades by all the major players ran up the price of energy. It worked like this. Company A would sell a contract for 1000 Megawatts to Company B at $50 then buy it back at $53 moving the market up. Then B would sell a contract to A for $53 and buy it back at $56.
The real cost of generating and transmitting the power had not changed but the cost to run our households and businesses went up dramatically rising on the tide of market manipulation. It's called fraud and the administration was busy looking the other way.

We were told that it was "market forces" and the answer to the phony shortage was to drill ANWR. No one looked at the trades that ran up the meter prices in California and across the nation. No one looked at the "market forces" that the Cheney commission blamed for the spike in energy prices. The ENRON style "market forces" seem now to have infected the entirety of the energy industry while the administration touts the virtues of the free market. No market is free if the players are free to rig the market. Whether it is power at the meter or gasoline at the pump if the players are suppressing supply and inflating the paper price of the commodity the free market is not setting prices.

One approach would be to strictly regulate energy commodity trading. Another might be to revisit the Nixon era's windfall profits tax that took the incentive out of market manipulation in the oil crisis of the 70s. The fact it that the Bush Administration won't look for an answer beyond drilling ANWR while continuing to look the other way while the high rollers sitting in Houston and Dallas continue to pick our pockets. Where is Teddy Roosevelt's trust busting tradition? It sure isn't in the Republican Party.