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There’s a group of very happy defense lawyers in San Francisco right now. On Tuesday, nearly three years after then-U.S. Attorney General John Ashcroft announced on TV that an energy company had been charged with conspiring to jack up electricity prices during California’s 2001 power crisis, the case ended with a set of deferred prosecution agreements. The deals will dismiss charges against Reliant Energy and four of its traders, provided they stay out of trouble for the next two years. The company will also have to pay a $22.2 million fine. “Obviously, we’re extremely pleased with the result,” said William Goodman, a partner at Topel & Goodman in San Francisco, who represents the company. While the energy defendants won’t get the penalties the government had sought, including prison time for the traders, freeing up four prosecutors will allow the San Francisco U.S. attorney’s office to focus more attention on probes of tech companies like Apple Computer, which have been cooperating in options investigations for months. Reached late Tuesday, defense lawyers and a spokesman for the prosecutors said they wouldn’t comment until Northern District Chief Judge Vaughn Walker finalized the deal, nor would they discuss details of the arrangement. In general, non-prosecution agreements involving a company require that it pay a fine, but do not make it admit to criminal liability. When it was first charged, the case was widely assumed to be something of a slam dunk, since prosecutors had audio tapes of Reliant traders talking about how they had shut down four of the company’s five California plants to limit supply and boost their profits. But the case also had obvious peculiarities, most notably the fact that the defendants were the first people to face criminal charges under a 70-year-old commodities regulation statute. Once defense lawyers were able to persuade Walker to take the case from another judge � which he was able to do because he had related energy crisis litigation � things really started heading downhill for the government. In 2005, Walker excluded a key piece of the government’s regulatory evidence from the case and issued a set of proposed jury instructions that created a high bar for the government to prove fraud. By then the prosecutors who charged the case had already left for private practice, and then-U.S. Attorney Kevin Ryan was forced to assemble a new team. They appealed Walker’s pretrial rulings to the Ninth Circuit on the eve of trial in late 2005, upsetting the judge, who already had requested that a jury pool be assembled. But the appeal didn’t work in the prosecutors’ favor. A three-judge panel didn’t get to the substance of their claims, and it remanded the case back to Walker. Since then, four prosecutors � including two section chiefs, Michael Wang and Jonathan Schmidt � have been occupied with preparing the case for trial. That’s sent ripples across an office where the white-collar corps is already stretched thin by dozens of high-profile stock option investigations and other already indicted fraud cases. In addition to Goodman, Reliant was represented by William Jeffress Jr. of Baker Botts in Washington, D.C. George Cotsirilos Jr. of Cotsirilos & Campisano in San Francisco represented trader Jackie Thomas; and Mary McNamara of the San Francisco firm Swanson & McNamara represented another trader, V. Reginald Howard II. Trader Lisa Flowers was represented by Nanci Clarence of San Francisco’s Clarence & Dyer. John Williams, of Manchester, Williams & Seibert in San Jose, represented trader J. Kevin Frankeny.

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