New information in the Powhatan Energy Fund case reveals that FERC may be withholding information.
In a motion filed yesterday, Powhatan says that it has become aware that FERC's Office of Enforcement possesses a recording of a telephone conversation between PJM's market monitor and traders at another company who were engaged in trades similar to the ones in this case, where FERC is seeking over $30M in fines for alleged "market manipulation."
On that tape, Dr. Bowring says that the trades did not violate the rules, that he understands why the traders engaged in them, and that the rules need to be changed to remove the incentives that drove the trading. He also says that he would not refer the trading conduct to Enforcement if the traders stopped the trading in question.
The problem here stems from OE's failure to turn over the recording when it was asked to produce exculpatory evidence, i.e. to disclose all evidence that is "favorable to an accused" or "would tend to exculpate him or reduce the penalty."
This seems to be a bit of a double standard, since FERC is relying on the statements of a different trader to make its case to the Commission.
Powhatan also points out that Bowring is obligated to refer trading that he thinks might be market manipulation to FERC's Office of Enforcement. I wonder how many little phone calls he's made to traders over the years, instead of fixing all the flaws in his "markets?"
How is anyone supposed to know what's allowed and what's prohibited? Or do those rules reside only in Bowring's head? So, keep that recorder handy, just in case... unless you've got $30M or so laying around and don't mind parting with it.