Bolivian Official Seeks Criminal Charges for Enron Officials for Pipeline Deal

The energy minister said Friday that he's seeking criminal charges against ex-President Gonzalo Sanchez de Lozada and others for allegedly cheating the state in a gas pipeline investment deal.

Andrez Soliz said asked Bolivia's chief prosecutor to pursue charges against Sanchez de Lozada and former officials of collapsed Enron Corp. and Prisma Energy, which had bought Enron shares, for contracts damaging to the state, contravening the constitution and falsification of contracts.

Soliz told a news conference that he also planned to seek charges against former Vice President Victor Hugo Cardenas, people who served as ministers during Sanchez's 1993-1997 presidency and former executives of Bolivia's state oil company.

He singled out former Enron director for Bolivia Peter E. Weidler in his allegations. Weidler could not immediately be reached by phone in Houston Friday evening, and calls were not immediately returned to representatives for Prisma and for former Enron executives.

Soliz said Enron signed a contract in 1994 during Sanchez de Lozada's first administration in the financing of a gas pipeline to connect Bolivian gas fields with Brazil, which went online in 1999.

Enron remained a partner in the operation even after it filed for bankruptcy in the United States, later transferring its shares in Transredes, the gas pipeline company, to Prisma Energy, Soliz said. It remains unclear how much Enron earned from its partnership in the pipeline or what Prisma Energy paid for the transferred shares.

In 2004, the current Bolivian government initiated legal action that never proceeded to recuperate the $130 million that Enron had allegedly promised to invest in the pipeline.

Soliz said previous governments had neglected to pursue the case even though a U.S. judge had sought to obtain reparations for the affected parties after Enron's collapse.

"Instead, Enron was permitted to transfer its shares to Prisma Energy and in turn to another company," Soliz said.

Prisma remains a partner in Transredes but the Bolivian state has announced its intention to obtain majority ownership in the company as part of a gas nationalization plan announced on May 1 by President Evo Morales.

Sanchez de Lozada was unable to complete his second term as president and had to quit in October 2003 after a violent popular uprising in which 56 people were killed.

The former president, who lives in the United States, has been formally charged in absentia with a series of crimes including genocide for those deaths.