Ken Lay and Jeff Skilling got a huge break this week when the judge who will preside over their fraud and conspiracy trial barred government lawyers from playing tapes of Enron Corp. traders bragging about their manipulation of the California power market. Two Enron employees were recorded discussing the operation: “He just f---s California,” one trader says. “He steals money from California to the tune of about a million.” “Will you rephrase that?” a colleague asks. “OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day,” answers the first. The resulting shortages caused rolling blackouts, sent prices soaring and contributed to the downfall of California Gov. Gray Davis—who was recalled in 2003. Sim decided that the conversations on the tapes were too inflammatory to be admitted as evidence. The judge has yet to decide whether jurors will be permitted to hear the phrase “Governor Arnold Schwarzenegger.”—Jeffrey Kanige
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