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San Diego's Sempra Energy and the deeply troubled Royal Bank of Scotland are exploring sale of their Connecticut-based commodities trading venture for more than $3 billion, the Wall Street Journal reports. The flailing bank is 84 percent owned by the U.K. government, and now there are reports that it has exposure to the debt woes of Dubai. RBS stock is trading at $9.97 this morning, down from its $10.83 close of Monday. The European Commission has ordered the bank to sell certain assets -- probably a reason for the possible sale of the commodities unit, which has generated big profits for Sempra.

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Comments

a2zresource Dec. 9, 2009 @ 8:30 a.m.

RBS Sempra Commodities may be the link between the owner of SDG&E and the Congo conflict gold smuggled through Uganda through Dubai.

Royal Bank of Scotland is one of the leading financials for its involvement in the same Dubai World debt that leads Dubai World to seek delays in debt service payments. RBS Sempra Commodities advertises itself as a founding member of the London Bullion Market Association, a group "that represents the wholesale over-the-counter market for gold and silver in London" (see http://rbssempra.com/metals/products-and-services/precious-metals/default.aspx and http://www.lbma.org.uk/).

Everybody who saw the movie knows the last king of Scotland lived in Uganda.

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Don Bauder Dec. 9, 2009 @ 10:08 a.m.

Response to post #1: I have not heard such charges. RBS Sempra Commodities trades natural gas, petroleum and metals. It's remunerative for the individuals involved. According to TimesOnline, managing directors of RBS Sempra Commodities may receive $5 million each this year. Best, Don Bauder

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a2zresource Dec. 9, 2009 @ 11:37 a.m.

It didn't hit me until I saw the CBS 60 Minutes report on Congo conflict gold being smuggled to Dubai, right after hearing about the Dubai World plea to delay debt payments with mention of RBS having high Dubai exposure...

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Anon92107 Dec. 9, 2009 @ 1:14 p.m.

Response to post #2: RBS Sempra Commodities "has generated big profits for Sempra" plus "managing directors of RBS Sempra Commodities may receive $5 million each this year" equals more screwing than ever before of SDG&E ratepayers.

The Reuters-FBI article I referenced on another of your blogs yesterday definitely applies here also:

'Corruption threatens "soul and fabric" of U.S.: FBI' Reuters, by Pascal Fletcher, Tue Dec 8

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Don Bauder Dec. 9, 2009 @ 1:51 p.m.

Response to post #3: Your connecting of the dots would seem to be tendentious in this instance. This is a stiff charge to make against a public utility. You need more concrete proof. Best, Don Bauder

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SurfPuppy619 Dec. 9, 2009 @ 1:54 p.m.

It didn't hit me until I saw the CBS 60 Minutes report on Congo conflict

I watched that too....that was sad watching how those people in Congo were treated.

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Don Bauder Dec. 9, 2009 @ 1:54 p.m.

Response to post #4: This energy trading is part of Sempra's non-regulated operations. I'm not sure you can argue that ratepayers get taken because of this activity. Best, Don Bauder

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Don Bauder Dec. 9, 2009 @ 1:56 p.m.

Response to post #6: Since I didn't see that 60 Minutes report, I really can't comment on the emotional impact. Best, Don Bauder

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Anon92107 Dec. 9, 2009 @ 2:44 p.m.

Response to post #7: Re: "I'm not sure you can argue that ratepayers get taken because of this activity."

Geez Don, you've got to be facetious, do you also believe in Santa Claus again?

With a corrupt CPUC, especially with Peevey still President, anything is possible in this age where even the FBI admits 'Corruption threatens "soul and fabric" of U.S'.

You are facetious, right??? Again, with Roberts and Scalia overthrowing the Rule of Law, championing corruption by politicians, judges, corporate execs, etc., etc. what are you thinking???

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Don Bauder Dec. 9, 2009 @ 3:35 p.m.

Response to post #9: You seem to be arguing that the PUC's separation of regulated and non-regulated utility activities, with a so-called wall between them, is a phony. You seem to be saying that gains or losses in the non-regulated activities affect decisions on the regulated side. You may be right. You might explain why you think this so-called wall is non-existent. Best, Don Bauder

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a2zresource Dec. 9, 2009 @ 8:31 p.m.

Re #5:

Sempra Energy would rather not want to be known as a public utility.

The public utility SDG&E has no direct ties to Sempra Energy Trading or any other components of RBS Sempra Commodities that I've seen... and SDG&E probably delivers a lot less profit to Sempra Energy than the MarketWatch-reported $85 million out of $200 million total Sempra Energy quarterly profit that RBS Sempra Commodities does.

RBS Sempra Commodities wants to be known and well known among London-centered bullion traders. RBS underwrites more Dubai debt than anyone of record. Dubai sees an estimated $300 million in gold trade per year out of the Congo by way of Uganda.

Those are some rather large, conspicuous dots.

For motive, it's helpful to remember the claim in large type out of Sempra Energy's SIMPLY STATED ANNUAL REPORT 2000: "We stated that we would realize one-third of earnings from our unregulated businesses by 2003."

The entire Congo conflict gold situation appears to be rather unregulated in a global sort of way, no?

There are interesting contrary comments on the utility of the 60 Minutes report at http://www.nationaljewelernetwork.com/njn/content_display/independents/market-developments/e3i7a35e791d5c3a2601060a506787db14a

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Don Bauder Dec. 9, 2009 @ 9:02 p.m.

Response to post #12: I think you will have to come up with direct proof to back up your thesis. Best, Don Bauder

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a2zresource Dec. 9, 2009 @ 9:22 p.m.

Nothing direct about this evidence, merely circumstantial: "RBS Sempra Commodities May Return to Sempra" at WSJ http://online.wsj.com/article/SB125724098523824859.html

Somebody once told a journalist: Follow the money.

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Don Bauder Dec. 10, 2009 @ 8:25 a.m.

Response to post #13: Commodities trading is just money-shuffling, and excessive money-shuffling is one of the major things wrong with the U.S. economy. Increasingly, we have become a nation of money exchangers and NOT a producer of goods and services. I wish Sempra would concentrate more on its utility side. Enron would have been better off to concentrate on production, including utilities, too. Best, Don Bauder

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Anon92107 Dec. 10, 2009 @ 1:25 p.m.

Response to post #10: Yes Don, and I don’t believe in the Easter Bunny any more than I do "walls".

As you have documented many times over the years, “walls” are all too easily disintegrated by high priced lawyers in a city where the Rule of Law no long exists except to serve the interests of the most corrupt and powerful.

I just thought that a corporation that caused the 2000 San Diego energy crisis that we are still paying an outrageous premium for, especially in a city now officially characterized as Enron by the Sea where corruption reigns supreme, might make you a lot more skeptical because I feel like I graduated from your Skepticism 401 course.

I also thought Sempra’s latest larceny by shafting all low usage customers who took energy conservation seriously after the 2000 Sempra energy crisis and charging them a penalty for low energy usage, and then passing that larceny on to their profligate user class should be enough to update your investigations every time they hit the headlines.

Doesn’t Sempra’s never-ending larceny of ratepayers make it worth an update to past Follow The Money Trail investigations by San Diego’s premier investigative reporter? Or do you believe in the integrity of Mike Peevey's "walls"?

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Don Bauder Dec. 10, 2009 @ 2:54 p.m.

Response to post #15: I certainly don't believe Mike Peevey has integrity. I also think the PUC is biased toward the utilities and against consumers, as I have written many times. If the PUC is giving utilities rate breaks to compensate for its failings in non-regulated activities, that should be exposed. Best, Don Bauder

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Anon92107 Dec. 10, 2009 @ 3:22 p.m.

Response to post #15: "If the PUC is giving utilities rate breaks to compensate for its failings in non-regulated activities, that should be exposed."

I agree with you wholeheartedly Don, and there is no one better than you to expose the obvious failures by our government to protect ratepayers from predator executives than you Don.

You might want to form an investigative alliance with organizations like TURN and UCAN on this because San Diego ratepayers have most obviously not been protected by courts and regulatory agencies for far too long.

And the increasingly negative consequences have not only outrageously impacted ratepayers for far too long, but the environmental consequences of firestorms, increasingly unsafe water supplies, drought and lost agricultural productivity are out of control because of political, judicial and economic corruption.

The future quality of life, economic and social stability of your Reader constituency is under attack by these forces of corruption, and totally unacceptable consequences that are already occurring.

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Don Bauder Dec. 10, 2009 @ 10:40 p.m.

Response to post #17: I will check UCAN. Best, Don Bauder

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Anon92107 Dec. 11, 2009 @ 1:40 p.m.

Response to post #18:

Thank you for following up Don, there is just too damn much larceny going on today by every corporation that has the ability to corrupt politicians and judges.

Today more than ever since WWII we must "Fight Like Hell For The Living" as Mother Jones used to say.

The pen is no longer mightier than the sword, especially now that print journalism and literature are dying because too many people don't want to bother to read and think.

It's much easier to believe the hate/fearmongers and allow corruption to triumph until global warming destroys all our opportunities and future.

The U-T had a great opinion by SDSU J-school professor Eger "Tie to rethink the university" which in essence said that our current university majors are "silos" inhibiting learning, making it difficult for administrators and faculty to make meaningful changes in a time of rapid changes.

Far too many graduates today are not learning information that is truly relevant, not motivated to be creative and innovative enough to deal with the overwhelming challenges of change we are are experiencing, not competitive, and not able to get a good job that makes a college education worth the effort.

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Don Bauder Dec. 11, 2009 @ 2:17 p.m.

Response to post #19: There is a new book about Winston Churchill positing that one reason he was so shrewd is he didn't have an Oxford education (or any college education) and his mind didn't get stuck in the academic channels. Best, Don Bauder

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