-Caveat Lector-
>From SF Chron
www.sfgate.com Return to regular view
THE ENRON COLLAPSE
Memo details Cheney--Enron links
Company's suggestions resembled elements of the administration's
energy policy
David Lazarus, Chronicle Staff Writer
Wednesday, January 30, 2002
©2002 San Francisco Chronicle
URL: http://www.sfgate.com/cgi-
bin/article.cgi?f=/c/a/2002/01/30/MN46204.DTL
While the White House insists that details of its talks with Enron
officials remain secret, a memo outlining those discussions reveals
the extent to which the Houston energy giant lobbied to influence
government policy.
The memo, a copy of which was obtained by The Chronicle, was handed
by former Enron Chairman Ken Lay to Vice President Dick Cheney last
April when the two met to discuss the administration's response to
California's energy crisis.
The White House acknowledged last night that aspects of the memo
resembled elements of Cheney's energy plan, but it refused to say
whether the document was included in notes that Cheney now refuses to
divulge to congressional investigators.
The General Accounting Office is threatening to sue the
administration if it doesn't disclose details of its talks with Enron
officials.
The three-page document contains eight points spelling out Enron's
case for why federal authorities should refrain from imposing price
caps or other measures sought by California officials to stabilize
runaway electricity prices.
A number of the positions in the memo subsequently made it into
Cheney's energy plan or were reflected in comments by senior
administration officials.
"Events in California and in other parts of the country demonstrated
that the benefits of competition have yet to be realized and have not
yet reached consumers," the memo argues.
"The following actions need to be taken," it continues, outlining
positions on a series of matters. Some of the topics, such as equal
access to transmission grids and interconnection of power networks,
are largely technical in nature.
ENRON FROWNED ON PRICE CAPS
The key point as far as California was concerned was whether soaring
wholesale power prices should be limited or whether such prices were
merely a reflection of normal supply-and-demand dynamics.
"The administration should reject any attempt to re-regulate
wholesale power markets by adopting price caps or returning to
archaic methods of determining the cost-base of wholesale power," the
memo says.
It adds that even temporary price restrictions "will be detrimental
to power markets and will discourage private investment."
The memo blames California officials for having made only "limited
progress" in tackling the state's power woes. It says that if the
administration were to follow all of Enron's recommendations, the
measures "would mitigate this crisis."
An Enron spokesman confirmed that the memo had been given by Lay to
Cheney during their one-on-one talks.
Mary Matalin, an adviser to the vice president, said Cheney's energy
plan included input from many sources. "Just because some of the
things (in the memo) are included in the plan doesn't mean they were
from the talks" between Cheney and Lay, she said.
LIMITS CALLED 'A MISTAKE'
Still, as far as price caps go, the administration was quick to fall
into lockstep with Enron's opposition to any federal regulatory
moves. "We think that's a mistake," Cheney said just weeks after his
meeting with Lay.
Nevertheless, federal regulators finally imposed price limits in June
based on the cost of the least-efficient, and thus most expensive,
generating plant. Democrats in Washington had threatened to act on
their own if the regulators did not come up with a remedy for
California's troubles.
Cheney also echoed Enron's position on the culpability of
California's leaders in exacerbating the state's energy problems.
"When the problem became obvious last year, over a year ago, they
didn't respond," he said in May.
Noting that California had experienced rolling blackouts and the
bankruptcy of its biggest utility, he also said, "I don't think
that's a sterling record of leadership, I would guess, on their
part."
SHARED FAITH IN DEREGULATION
To be sure, Cheney, Lay and President Bush, as well as other industry
players, shared a belief in deregulation well before the lights went
out in California. But the memo underscores the broad kinship between
Enron and the administration in drafting official policy.
Steve Maviglio, a spokesman for Gov. Gray Davis, said it came as no
surprise that Enron had substantial clout in formation of the Bush
administration's stance on California's difficulties.
"What the federal government did during the energy crisis was pretend
that the problem didn't exist and say that the markets can solve
everything, and that's the same thing Ken Lay told the governor,"
Maviglio said.
He added that "the administration was espousing what Enron was
espousing -- that the markets should fix themselves."
Whatever else, it's extraordinary for a private company, particularly
one accused by California officials of having gouged the state with
wildly inflated energy prices, to have played such a prominent role
in the White House's response to the crisis.
'CONSUMERS SHOULD BE OUTRAGED'
"If the administration was allowing Enron to guide its policy during
the California energy crisis, consumers should be outraged," said
Janee Briesemeister, senior policy analyst at Consumers Union in
Austin, Texas.
"It's not unusual for a company to hand policymakers their ideas for
what should be done," she added. "Things break down when policymakers
refuse to admit that they used what was brought to them by industry."
Cheney's argument, as he told an interviewer Sunday, is that
revealing details of his talks with Enron would undermine "the
ability of the president and the vice president to solicit advice
from anybody they want in confidence."
Bush echoed this sentiment a day later, saying that confidential
talks are necessary to "get good, sound opinions." He reiterated that
stance yesterday in a meeting with congressional leaders.
Craig McDonald, director of Texans for Public Justice, a watchdog
group, called it laughable for the administration to cast its secrecy
as a defense of high-minded principle.
"All they're fighting for is to keep the wraps on how much clout
Enron had over Dick Cheney's energy plan," he said.
©2002 San Francisco Chronicle Page A - 1
~~~~~~~~~~~~~~~
Forwarded as information only; no endorsement to be presumed
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
In accordance with Title 17 U.S.C. section 107, this material
is distributed without charge or profit to those who have
expressed a prior interest in receiving this type of information
for non-profit research and educational purposes only.
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + +
The only real voyage of discovery consists not in seeking
new landscapes but in having new eyes. -Marcel Proust
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
"Do not believe in anything simply because you have heard it. Do not believe
simply because it has been handed down for many generations. Do not
believe in anything simply because it is spoken and rumored by many. Do
not believe in anything simply because it is written in Holy Scriptures. Do not
believe in anything merely on the authority of Teachers, elders or wise men.
Believe only after careful observation and analysis, when you find that it
agrees with reason and is conducive to the good and benefit of one and all.
Then accept it and live up to it."
The Buddha on Belief, from the Kalama Sutta
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
A merely fallen enemy may rise again, but the reconciled
one is truly vanquished. -Johann Christoph Schiller,
German Writer (1759-1805)
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
It is preoccupation with possessions, more than anything else, that
prevents us from living freely and nobly. -Bertrand Russell
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
"Everyone has the right...to seek, receive and impart
information and ideas through any media and regardless
of frontiers."
Universal Declaration of Human Rights
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
"Always do sober what you said you'd do drunk. That will
teach you to keep your mouth shut."
--- Ernest Hemingway
<A HREF="http://www.ctrl.org/";>www.ctrl.org</A>
DECLARATION & DISCLAIMER
==========
CTRL is a discussion & informational exchange list. Proselytizing propagandic
screeds are unwelcomed. Substance—not soap-boxing—please! These are
sordid matters and 'conspiracy theory'—with its many half-truths, mis-
directions and outright frauds—is used politically by different groups with
major and minor effects spread throughout the spectrum of time and thought.
That being said, CTRLgives no endorsement to the validity of posts, and
always suggests to readers; be wary of what you read. CTRL gives no
credence to Holocaust denial and nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://peach.ease.lsoft.com/archives/ctrl.html
<A HREF="http://peach.ease.lsoft.com/archives/ctrl.html";>Archives of
[EMAIL PROTECTED]</A>
http:[EMAIL PROTECTED]/
<A HREF="http:[EMAIL PROTECTED]/";>ctrl</A>
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
