Enron had plans to take over the water supply in FLorida. I don't know if folks understand just how bad they were how evil, how fortunate we are that their own greed took them out.
Sunday, January 20
Schultz: Enron tried to corner state water
By Randy Schultz, Palm Beach Post Staff Writer
Sunday, January 20, 2002
The company that was Enron never had much in the way of real assets. Now, it has plenty of liabilities, financial and political. Employees' lives are in ruins, organizations throughout the Houston area that expected money are hurting, and front-running political parties that once competed for Enron's money make a show of returning contributions, pretending that earlier donations didn't buy favors.
So much that Enron touched has gone bad or will go bad. Imagine where South Florida might be if Enron had touched the region's water supply.
In July 2000, Enron owned a company named Azurix, which wanted to privatize public water systems in the state. Azurix sponsored a Florida Chamber of Commerce conference in Naples. The conference decided that the public might benefit if a private company like Azurix bought into and managed the water system. Azurix had asked about financing all of the then-$7.8 billion Comprehensive Everglades Restoration Project in return for being able to sell the water.
As it turned out, Azurix got in trouble before the South Florida Water Management District even could debate the issue. It's easy to think that it was a long shot under unique circumstances by a firm whose corporate parent had a pipeline to the president, who also is the Florida governor's brother. South Floridians had better hope that's the case.
Private profit, public mess
Those who would sell off the state's most important public asset operate under the mistaken assumption that every government service, not just functions such as garbage pickup, is a potential market. In fact, government has to run certain services because there shouldn't be or isn't a market for them. Schools won't work under private ownership because they can't bypass marginal markets, also known as difficult students. Privatizing services to poor people won't work because there's no profit in it.
Still, the anti-government attitude of too many state legislators guarantees that privatization schemes will get hearings, if only because such schemes come with the promise of cutting the state payroll. Rather than determine where a private company can provide equal or better service for the same amount of money or less, however, privatization zealots ask only how many state jobs they can cut.
Also, Gov. Bush's private foundation that he set up after losing for governor in 1994 suggested in 1997 that private water systems would encourage conservation more than the public system, which provides water free to utilities. Last year, the governor supported a bill in the Legislature that would have allowed near-statewide use of massive underground storage wells and permitted owners to pump in water contaminated with human and animal waste.
The law would have taken effect before results from eight test wells around Lake Okeechobee showed whether the technology works and is safe. One theory among opponents was that private companies wanted to create the water equivalent of gasoline stations. According to Audubon of Florida, there's no talk at the moment of water trading, but there are proposals for landowners "capturing" stormwater runoff and owning it.
A company with the connections
Backers of energy deregulation insist that Enron's flameout doesn't mean deregulation is bad. California did it wrong, they say, because the state didn't have enough electric capacity. Maybe. As the drought showed, however, Florida can't whip up water capacity when the supply runs low. In the worse case, privatization would mean that in a severe drought, water companies would be like plywood sellers as a hurricane approaches.
If you're thinking that this all sounds like a conspiracy theory, there was plenty of evidence to support it. When Azurix was pitching itself to Florida, one of its lobbyists was a former chairman of the water district board and a big supporter of Gov. Bush in 1998. Another Azurix lobbyist wrote the paper for the governor's foundation that supported private sale of water. Since taking office in 1999, Gov. Bush has refused to set up a dedicated, reliable source of money for the Everglades restoration plan.
The free market punished Azurix before it could turn Florida water into a market. Enron punished everyone but the executives who looted the company. The state retirement fund did lose about $300 million on Enron holdings. Had things gone differently, the damage for Florida could have been much worse.
Randy Schultz is editor of the editorial page of The Palm Beach Post. Comments about the Opinion section may be sent to him at schultz@pbpost.com |
