All [plaintiffs' lawyers, regulators and short-sellers] hoped to take Mr. Beatty's information and benefit from it, in different ways. Some, he says, assured him his assistance would earn him big money. But no such payout has materialized, and now, unemployed and in financial stress, he is feeling betrayed. "They all said they wanted to help me," he says. "I was dumb. I fell for it." […]
Still unable to find a job, Mr. Beatty blames not so much the weak economy and energy-sector layoffs as his former employer. In August, the Beattys became so sure they were being watched and harassed that they loaded a rented van and moved to a small town in the Midwest. It's all far from the ending they expected when Mr. Beatty decided to take on the company.
"What did it accomplish?" asks his father, Jerry Beatty, an administrator at the Iowa Supreme Court in Des Moines. "I have a lot of reservations about what he did because I'm thinking about his family and security and employment. It wouldn't be so bad if it was just himself, but he's got three children and a wife." […] In September 2001, they filed for bankruptcy.
[...] One year ago, after Dynegy briefly moved to take over troubled Enron Corp., Dynegy publicly portrayed itself as above the kind of questionable deals that brought down its larger crosstown competitor. It also said energy trading on DynegyDirect, its small rival to EnronOnline, had risen 20% since Enron's crisis began, in a "flight to quality."
Mr. Beatty, who had rotated through DynegyDirect, was skeptical. He still had a password for the system, so he took a look. What he saw seemed odd: The volume increase was based on four huge trades. Even stranger, these were two pairs of simultaneous trades that canceled each other out. They provided no apparent economic benefit but made volume look much bigger.
He printed out the trading records and took them to his boss, Anthony Carrino, a divisional vice president. "Keep quiet," he says Mr. Carrino responded. Mr. Carrino, who has left Dynegy, didn't return a call seeking comment.
A few weeks later, Mr. Beatty was among management trainees invited to lunch with Dynegy's president, Stephen Bergstrom. The group chatted about the turmoil from Enron's failure, and then Mr. Bergstrom casually mentioned that Dynegy was beginning to restrict access to many of the internal files on its shared computer drive. He added that the process wasn't finished yet, according to Mr. Beatty. Mr. Bergstrom, who has left Dynegy, declined to comment.
Mr. Beatty, already suspicious because of the trades he'd discovered, was curious about what the files might contain. When he looked, he found nearly impenetrable descriptions of a highly complex arrangement involving special-purpose vehicles and bank financing. It was Project Alpha, a deal that exaggerated cash flow from operations and cut taxes but was all but impossible for outsiders to fathom from Dynegy's public reports.
Mr. Beatty says he went to Mr. Carrino and was again told to keep quiet. He did so, Mr. Beatty says, but grew queasy about Dynegy, beginning to feel that company posters extolling integrity were hypocritical.
The theme of this story (and many others of current import): Shut up and let us steal. Hypocritical is far too small a word to describe the geniuses who run the energy industry in Texas, and the morons* they support.
