WASHINGTON -- In its highflying days, Enron
Corp. sought to guide the new Bush administration
toward a sweeping energy agenda, ranging from creating a national electricity grid to opposing protection
of domestic steel products, according to documents made public Tuesday by congressional investigators.
Memos released during an oversight hearing
by the Senate Governmental Affairs Committee show that in
2001 Enron lobbied the White House for the appointment of two top energy regulators and fretted that
the Bush administration was losing the energy policy battle to Democratic critics.
"The Democrats so far seem to be winning the political
high ground," said an Enron briefing paper for
Kenneth L. Lay, the company's chairman, in advance of an April 17, 2001, meeting with VP Dick Cheney.
"What the Bush team needs to do is steal a page from the Clinton new economy playbook and to relegate
the Democrats to the Carter 'eat your peas' playbook."
The White House must link the Democrats
to "blackouts, waste, Luddites, regulation, government
ownership, stagnation" while positioning Bush as the agent of "abundan[ce], efficiency, new economy,
innovation, open markets," the document said.
Democrats said the documents showed how
Enron wielded its clout -- by, among other things, backing
specific nominees to the Federal Energy Regulatory Commission and meeting with high administration
officials on energy policy -- before collapsing into bankruptcy protection in December in a wave of
accounting scandals. Republicans pointed out that Enron also enjoyed access to high-level appointees
in Bill Clinton's administration.
The documents provide a glimpse at the behind-the-scenes maneuvering on major policy debates.
Lay, now a pariah in business and political
circles, was then on a first-name basis with powerful
"Congratulations on the speed with which you,
Dick and others have been able to place high-quality
individuals in every cabinet post," he faxed Bush transition team director Clay Johnson on Jan. 8, 2001,
after Bush's cabinet picks had been announced. The "Dick" referred to was Cheney, and Lay signed
his note "Ken."
Enron's efforts, however, did not always lead to the desired results.
Its two candidates for the Federal Energy
Regulatory Commission -- Patrick H. Wood III and Nora
Brownell -- were approved, despite some strong competition. But in the summer of 2001, Wood and
Brownell voted for energy price limits in the West, a policy opposed by Enron. Wood is now FERC chairman.
While limits on soaring prices in the West
took up much public debate during 2001, the documents
show that Enron focused on an insider's issue: the creation of a national electricity transmission grid.
It coined an egalitarian term for the issue: "open access."
A national grid would have radically shifted
the fortunes of some of the biggest players in the electricity industry.
Old-fashioned utility companies that still control much of the regional transmission infrastructure would have
seen their influence diminish, while the new breed of energy marketers epitomized by Enron would have seen
their ascendancy confirmed.
To Enron's chagrin, administration officials were treading cautiously.
"For the purposes of this meeting, we strongly
recommend that most of the discussion center on our core concern:
open access," Enron's Washington lobbyists wrote Lay before his meeting with Cheney.
The company also retained Ed Gillespie, a top GOP political and policy consultant, to lobby the White House.
"It is not clear that [administration officials]
are fully committed to our open access issues," Enron lobbyist
Linda Robertson wrote Lay. "Their lack of zeal for open access, while totally unacceptable, is understandable
given that the West Coast power crisis has presented the administration with difficult and unique political issues."
In the end, Bush's energy plan did endorse
the concept of a national grid but left it to FERC and Congress
to work out the details.
FERC, an independent agency that functions
like a national utilities commission, has since unveiled a proposal
for such a grid. But it has been sharply criticized by elected officials, state regulators and utilities in the West
and the South, and it appears far from becoming official policy.
The documents show that in the spring of
2001, Enron's lobbyists correctly forecast that the administration
would eventually accept price limits on electricity in the West.
White House energy advisor Andrew Lundquist
"stated he is getting pressure from both Democrat and
Republican members of Congress about price caps in the West," Enron's Washington lobbyists reported to Lay.
This was interpreted as "a warning that price caps might be inevitable."
Although opposed to price caps, Enron believed
that a more visible role for federal regulators might calm
public concerns and allow for more far-reaching changes in the industry.
"More aggressive action by the FERC on both
market power issues and pricing issues would give the
administration enormous political cover and would allow them to redefine the debate," the Enron lobbyists wrote.
White House officials have said that though they consulted with Enron, the company received no special favors.
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