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Bush and Enron: An Overview By: John Hoefle
Under energy deregulation, Texas and the South have become the most notorious havens for pirates since the Barbary Coast, home to energy companies which charge obscene prices for natural gas and electricity, and which get downright obnoxious whenever anyone dares to challenge their right to loot. The worst case may be Houston's Reliant Energy, on whose board sits Bush family consigliere, former Bush Administration Secretary of State and current lawyer for the robber barons, James A. Baker III. Reliant had the nerve to charge the State of California $1,900 per megawatt-hour for electricity in May, power which the state urgently needed to avoid blackouts. When California Gov. Gray Davis (D) publicly criticized Reliant--by name--for price gouging, a shill for Reliant amazingly replied that California had set the company up by accepting their bid, to embarrass poor innocent Reliant....
The involvement of Houston scion Baker with the energy pirates is but one of a plethora of incestuous connections between the Bush family, the Bush Administration, and the energy cartel. Enron, a company close to both the Bush hearts and the Bush pocketbooks (is there a difference?), has served as a virtual home away from home for members of the previous and current Bush administrations. When the one-term President George|I went down to a well-deserved defeat, several top-level officials went to work for Enron, either as officers or consultants--including Reliant's Baker--and George himself collected numerous, lucrative speaking fees from the company. Enron has also provided employment for a number of officials in the Bush II Administration, in addition to being the single largest financial contributor to the political career of President "Duh-bya.'' The relationship between Enron and the Bushes has been long, and profitable. As Vice President under Ronald Reagan, George Bush (George|I) headed a task force which pushed deregulation in both finance and energy, including advocating the repeal of the Public Utility Holding Company Act of 1935 (PUHCA), the law passed by Franklin Roosevelt to bust up the Morgan electricity cartel. While the PUHCA is still on the books, it has been substantially outflanked, in much the same way that the banks ignored Glass-Steagall--the FDR law which broke up the House of Morgan into J.P. Morgan and Morgan Stanley--prior to the repeal of that act in November 1999.
Enron repaid the favor in February 1993, when it announced that two former George|I Cabinet members, Secretary of State Baker and Secretary of Commerce Robert Mosbacher, had agreed to help the company to secure natural gas projects overseas. Both Baker and Mosbacher had previously been directors (and Baker's family among the founders) of Houston's elite Texas Commerce Bancshares, where Enron chairman Ken Lay was also a director.
Their international business experience and knowledge of governments around the world, as well as their great understanding of the energy business, will greatly enhance Enron's goal of becoming the world's first natural gas major,'' Enron's Lay said in announcing what the company described as a joint consulting and investing agreement with Baker and Mosbacher.
Enron also added Lt. Gen. Thomas Kelly (ret.) to its board. Kelly had served as director of operations for the Joint Chiefs of Staff during Bush's Persian Gulf War. In 1993, according to journalist Seymour Hersh, Baker, Mosbacher, and Kelly accompanied Sir George Bush on a trip to Kuwait, to help Enron secure a contract to rebuild energy plants that had been destroyed during the Gulf War. Enron also established close relations with Britain's Prince Charles, through large contributions to his Prince of Wales Trust. Such top-level influence-peddling opened doors for Enron around the world....
If the connections between Enron and the administration of George|I were tight, the connections between Enron and the "Duh-bya'' Administration are so close that it is difficult to tell where one begins and the other ends. The Bush Administration's two nominees to the Federal Energy Regulatory Commission (FERC) were approved in advance by Enron; the pair, former Texas Public Utilities Commissioner Pat Wood III, and former Pennsylvania Public Utilities Commissioner Nora Mead Brownell, are both close to Enron. Wood, a former Baker & Botts attorney, was appointed to his Texas position by then-Gov. George W. Bush, while Brownell (who some prognosticators have dubbed "Nora Mead Brownout'') helped Enron move into Pennsylvania. Needless to say, both Texas and Pennsylvania are deregulated states. Wood has been slated by the Bush Administration to become the next chairman of FERC, replacing current chairman Curt Hebert. Hebert, a deregulation zealot and protégé of Senate Minority Leader Trent Lott (R-Miss.), told the {New York Times} that a few weeks after Bush had appointed him as FERC chairman, he received a call from Enron's Lay, offering to support his chairmanship, if Hebert would support Enron's campaign to further deregulate and force states and utilities to open up their electricity transmission lines to Enron and its fellow marketers. Ultimately, Enron swung its weight behind Wood, to replace Hebert. (Behind the Wood-Hebert fight, according to rumor, is a battle between Enron and Southern Co. over coal. Enron wants stricter environmental regulations on coal, to boost its business selling coal-pollution credits, while Southern, a big supporter of Lott, wants looser coal regulations, to boost its generating profits. Southern, through its Southern Energy/Mirant spin-off, is also a major player in the non-utility electricity market.) Even without Wood and Brownell, FERC has proven to be a disaster. Part of its mandate, from FDR's PUHCA, is to enforce "just and reasonable rates'' for electricity, but FERC has been hard-pressed to find, much less correct, any price gouging in California. After all, as Enron President Jeffrey Skilling likes to ask, who's to say what "just and reasonable'' means? Skilling asked that very question on the June 5 edition of PBS's "Frontline,'' and then answered it by claiming that under the old regulatory system rates were way too high, and that under deregulation, rates would fall. Even more impressive, he said it with a straight face.
Enron also had significant input into the administration's national energy plan, including personal meetings between Lay and White House energy task force head Vice President Dick Cheney. Lay and Cheney are old acquaintances. While Cheney was CEO of Halliburton, his Houston-based Brown & Root subsidiary built Enron's new baseball park in Houston, modestly named Enron Field. Numerous other administration officials have either worked for Enron or have owned Enron stock. Secretary of the Army Thomas E. White, a retired brigadier general, was the vice chairman of Enron Energy Services, while economic adviser Lawrence Lindsey had a $50,000-a-year consulting job with the firm. U.S. Trade Representative Robert Zoellick served on Enron's Advisory Board. Both White House Chief of Staff Karl Rove and the Vice President's Chief of Staff Lewis "Scooter'' Libbey, owned significant amounts of Enron stock.
Enron, as we indicated previously, has been the single largest financial contributor to the political campaigns of President George W. Bush, with the company and its executives providing more than $550,000. Enron, Lay, and Skilling also gave $300,000 to the Bush-Cheney 2001 Presidential Inaugural Committee.
Other energy-related companies and their executives have also contributed heavily to Bush's political career. Brothers Sam and Charles Wyly, who run both the giant Maverick Capital hedge fund and independent energy company Green Mountain, have donated more than $220,000 to Bush's campaigns. Among the Pioneers, a designation for those who raised more than $100,000 for Dubya's Presidential bid, are the former head of Reliant Energy, Don Jordan, its current head Steve Letbetter, Edison Electric Institute head Thomas Kuhn, and, of course, Ken Lay.
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