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A former Mirant Corp. employee has claimed that the Atlanta-based energy marketer’s legal department issued orders to erase computer data after the company became the target of an investigation by California. “They [Mirant executives and attorneys] had us deleting files in order to cover up information, to get rid of information that would have been damaging to them in court,” that employee told the Fulton County Daily Report Tuesday on the condition that he not be named. “They knew it and we knew it.” Mirant CEO S. Marce Fuller was among 40 to 50 senior executives and traders whose computers were cleansed of certain e-mail and files, according to the former employee whose allegations have surfaced in a federal suit. Any allegations that Mirant employees “have willfully destroyed documents related to our business in California are utterly baseless,” Mirant spokesman David C. Payne said Tuesday. The company, he continued, “will vigorously defend its actions and reputation.” If proven true, the allegations could suggest to a judge or jury that Mirant was systematically deleting information relevant to its California operations now under investigation by that state’s attorney general. “It demonstrates that defendants were likely threatened by the material, adding to the strong inference that defendants were aware of the illegality of their California operations,” according to the suit. In addition, if California seeks criminal charges against Mirant for federal antitrust violations, destruction of relevant documents could be considered obstruction of justice, also a federal crime. The employee’s allegations are included in an amended complaint filed last week in U.S. District Court in Atlanta. In re: Mirant Corporation Securities Litigation, No. 1:02-cv-1467 (N.D. Ga. Nov. 26, 2002). The amended complaint is attached to at least 20 shareholder suits against Mirant alleging securities fraud that have been consolidated in federal court in Atlanta. The suits accuse Mirant of manipulating California electricity prices to reap illegal profits and artificially inflate its stock. The suits also claim the energy firm broke federal antitrust laws in order to boost California’s electricity prices — and Mirant’s stock prices — to record highs in 2000 and 2001. Atlanta firm Chitwood & Harley and the Boca Raton, Fla., offices of Milberg Weiss Bershad Hynes & Lerach are co-counsel for the plaintiffs. The consolidated cases have been assigned to U.S. District Judge Beverly B. Martin. The former Mirant employee is not named in the consolidated, amended class complaint. He worked at Mirant’s information technology department from August 2001 through February 2002 and provided technological support for company executives, according to the suit. On Tuesday, Chitwood & Harley senior partner Martin D. Chitwood declined to discuss the allegations. The complaint details an interview in which the former IT employee claims he had been instructed to delete “certain specified files concerning Mirant’s activities in California” after that state’s attorney general launched a probe of Mirant and other energy marketers, including Enron. California officials are investigating whether the companies, including Mirant, illegally manipulated energy sales in California during periods of high demand two years ago to drive up prices, sometimes by as much as 200 percent. The IT worker said that after the California investigation began, Mirant’s law department generated a list of employees whose computer hard drives needed to be copied onto a single stand-alone server and then erased. That server then would be made available to any litigants who sought Mirant’s computer files. However, shortly after the project began, he was told “on the side to delete certain drives before they were copied onto the stand-alone server. The orders came from Mirant’s management at corporate headquarters in Atlanta, the director of the IT Department and the director of the Legal Department,” according to the amended complaint. The former employee also said he was instructed to take computers to company lawyers who would review computer files and then give the IT employee a list of files or drives to erase before he copied them. “At other times the legal department would first delete files themselves before giving it to him to copy,” according to the complaint. The IT employee said that much of what he was ordered to delete were e-mails, “all of them pertaining to California,” and briefs that energy traders had shared. According to the employee, Mirant’s legal department “was adamant about the need” to erase files before copying the hard drives onto the stand-alone server. “This former employee stated that there was a list of all the hard drives, all the people who had them, all the computers they had, and that people were called at home and told to bring in their laptops. This former employee explained that by cleaning up the drives before copying, they were deleting information that Mirant did not want anyone to have,” according to the amended complaint. “A couple of ‘higher ups,’ particularly those with laptops, tried to refuse the file copying and deleting, but the Legal Department forcefully reminded them that the computers were ‘not their property’ and required them to turn over the machines,” according to the complaint. “When this employee left Mirant in February 2002, his former IT Department co-worker was still erasing hard drives. The employee stated that all the attention was being placed on the California traders and their systems, and anybody who dealt with California had red flags on all their systems.”

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