The Investors at War With Political Power -- How a once-obscure federal agency targeted two brothers, and what happened when they decided to fight back in the age of Obama -- By Joseph Rago, The Wall Street Journal

(Ken Fallin illustration)

West Chester, Pa.

 

There's a quote hanging on the wall of Rich Gates's office, here in a suburb west of Philadelphia: "No person, in any culture, likes to be bullied. No person likes living in fear because his or her ideas are different. Nobody likes being poor or hungry, and nobody likes to live under an economic system in which the fruits of his or her labor go unrewarded." President Obama, in his book "The Audacity of Hope," meant those words as inspirational; for Mr. Gates, they are ironic. 

Late last summer Mr. Gates and his identical-twin brother, Kevin, learned in a letter from the government that they were being accused of having manipulated electricity markets, a serious fraud violation. After a three-year investigation, federal energy regulators had concluded that two of their investment partnerships, known as Powhatan and Huntrise, had "profited, intentionally so" from sham power trades. The Gates's reply to the 28-page document, in its entirety:

"Your preliminary findings make no sense. Should you choose to proceed with a public notice against Powhatan and/or Huntrise, please be advised they will respond publicly and forcefully." The Gates brothers debated whether the second sentence was redundant. By then, they had decided they wouldn't be bullied any longer.

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