Lay Convicted, Bush Walks
By Greg Palast
t r u t h o u t | Perspective
Thursday 25 May 2006
Don't kid yourself. If you think the conviction of Ken Lay means
that George W. Bush is serious about going after corporate bad guys,
think again.
First, Lay got away with murder - or at least grand larceny.
Like Al Capone convicted of failing to file his taxes, Ken Lay,
though found guilty of stock fraud, is totally off the hook for his
BIG crime: taking down California and Texas consumers for billions
through fraud on the power markets. Lay co-convict Jeff Skilling and
Enron did not act alone. They connived with a half dozen other power
companies and a dozen investment banks to manipulate both the stock
market and the electricity market. And though their co-conspirators
have now paid $3 billion to settle civil claims, the executives of
these other corporations and banks get a walk on criminal charges.
Furthermore, to protect our president's boardroom buddies from any
additional discomfort, the Bush Justice Department, just days ago,
indicted Milberg-Weiss, the law firm that nailed Enron's finance
industry partners-in-crime. The timing of the bust of this firm - the
top corporation-battling law firm - smacks of political prosecution,
and is a signal to Big Business that it's business as usual. Lay and
Skilling have to pay up their ill-gotten gains to Enron's
stockholders, but what about the $9-plus billion owed to electricity
consumers? The Federal Energy Regulatory Commission, Bush's
electricity cops, have slapped Enron and its gang of power pirates on
the wrist. Could that have something to do with the fact that Ken
Lay, in secret chats with Dick Cheney, selected the Commission's
chairmen? Team Bush had to throw the public a bone, so they threw us
Lay and Skilling for the crime - note - not of ripping off the
public, but of ripping off stockholders - the owner class. This
limited conviction, and the announcement of only one more indictment
- of the crime-busters at Milberg-Weiss - is Team Bush's "all clear!"
signal for the sharks to jump back into the power pool.
That leaves one question: If Bush's Justice Department let Ken
and company keep the California loot, what about that state's own
government? If you want to know how Californians' $9 billion went
bye-bye, read on...
When Ahnold Got Lay'd
Peninsula Hotel, Beverly Hills. May 17, 2001. The Financial
Criminal of the twentieth century, not long out of prison, meets with
the Financial Criminal of the twenty-first century, who fears he may
also have to do hard time. These two, bond-market manipulator Mike
Millikin and Ken Lay, not-yet-indicted Chairman of Enron Corporation,
were joined by a selected group of movers and shakers - and one movie star.
Arnold Schwarzenegger had been to such private parties before.
As a young immigrant without a nickel to his name, he put on private
displays of his musculature for guests of his promoter. As with those
early closed gatherings, I don't know all that went on at the
Peninsula Hotel meet, though I understand Ahnold, this time, did not
have to strip down to his Speedos. Nevertheless, the moral undressing
was just as lascivious, if you read through the 34 page fax that
arrived at our office.
Lay, who convened the hugger-mugger, was in a bit of trouble.
Enron and the small oligopoly of other companies that ruled
California's electricity system had been caught jacking up the price
of power and gas by fraud, conspiracy and manipulation. A billion
here, a billion there, and pretty soon it was real money - $6.3
billion in suspect windfalls in just six months, May through December
2000, for a half-dozen electricity buccaneers, at least $9 billion
for the year. Their skim would have been higher, but the tricksters
thought they were limited by the number of digits the state's
power-buying computers could read.
When Ken met Arnold in the hotel room, the games were far from
over. For example, in June 2003, Reliant Corporation of Houston
simply turned off several power plants, and when California cities
faced going dark, the company sold them a pittance of kilowatts for
more than gold, making several million in minutes.
Power-market shenanigans were nothing new in 2000. What was new
was the response of Governor Gray Davis. A normally quiet, if not
dull, man, this Governor had the temerity to call the energy sellers
"pirates" - in public! - and, even more radically, he asked them to
give back all the ill-gotten loot, the entire $9 billion. The state
filed a regulatory complaint with the federal government.
The Peninsula Hotel get-together was all about how to "settle"
the legal actions in such a way that Enron and friends could get the
state to accept dog food instead of dollars. Davis seemed unlikely to
see things Ken's way. Life would be so much better if California had
a governor like the muscle guy in the Speedos.
And so it came to pass that, in 2003, quiet Gray Davis, who had
the cojones to stand up to the electricity barons, was thrown out of
office by the voters and replaced by the tinker-toy tough guy. The
Governator performed as desired. Soon after Schwarzenegger took over
from Davis, he signed off on a series of deals with Reliant, Williams
Company, Dynegy, Entergy and the other power pirates for ten to
twenty cents on the dollar, less than you'd tip the waitress. Enron
paid just about nothing.
--------
On June 6, Penguin Dutton will publish Greg Palast's new book,
Armed Madhouse: Dispatches From the Front Lines of the Class War,
from which this is taken. Armed Madhouse includes the Project
Censored Award-winning story of George Bush and the Enron chief,
"Power Outage Traced to Dim Bulb in White House."
<http://www.gregpalast.com/armedmadhouse/preorder.html>Order it today.
Palast, an internationally recognized expert on Enron and
electricity market manipulation, is co-author of Democracy and
Regulation, the United Nation's guide to control of the utility industry.
Special thanks to the Foundation for Taxpayer and Consumer
Rights, Los Angeles,
<http://www.ConsumerWatchdog.org>www.ConsumerWatchdog.org, who first
uncovered the confidential Peninsula Hotel documents.
View Palast's investigative reports for Harper's Magazine and
BBC Television's Newsnight at <http://www.gregpalast.com/>www.GregPalast.com.
John Johnson
Change-Links Progressive Newspaper
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