Bankrolling Enron's global exploitation
sunspot.net
By Nadia Martinez and Mark Engler
Originally published June 13, 2002
The Baltimore Sun
WASHINGTON - Why is Enron Corp. still eligible to receive
U.S. taxpayer money?
Instead of wallowing in bankruptcy, Enron continues to do
business internationally. And the scandal-ridden and
discredited corporation continues to pursue public funding
for its global operations.
Reports about Enron's collapse have led people to believe
that the corporation is defunct. Not true.
Enron's decision to file for Chapter 11 bankruptcy
protection forced the company to forfeit its energy trading
operations in the United States and to sell some of its
assets.
But a large number of its overseas ventures remain intact.
Even as it faces shareholder lawsuits and congressional
inquiries, Enron plans to emerge from bankruptcy by
carrying on with its global energy services.
Through numerous consortia and subsidiaries, Enron
continues to be involved in energy markets in countries
throughout the world. Its present assets in Latin America
alone include stakes in gas and electricity companies in
Brazil and Venezuela, pipelines in Colombia and Bolivia
and power plants in Panama, Guatemala and Puerto Rico.
In many of these countries, assurances have been given
that the problems Enron has in the United States will not
affect its local operations.
U.S. taxpayer money has helped build Enron's global
empire. A new report by the Institute for Policy Studies in
Washington shows that since 1992, Enron-related projects
have received more than $4 billion in U.S. government
financing. Other public sources such as the World Bank
and the European Investment Bank contributed an
additional $3 billion.
By any standard, $7 billion is a lot of money. But now
Enron wants more. The Inter-American Development Bank
(IDB), an agency operating with U.S. government money, is
considering a $125 million loan for a Bolivian gas pipeline
expansion that Enron is pursuing through a group called
Transredes. Along with Shell Bolivia, the other key
stakeholder in this consortium, Enron stands to profit in
Bolivia by using public funds.
At the same time, the Bolivian government recently began
investigating irregularities in the process by which Enron
initially gained entry into the country's energy markets.
Environmental and human rights organizations such as
the Organization of Ethnic Communities of Santa Cruz
(Bolivia) decry the fact that the proposed enlargement of
the Transredes pipeline would cut through ever-larger
sections of ecologically sensitive areas and the protected
lands of Bolivia's indigenous peoples.
They point to a previous disaster in which the company's
Sica Sica-Arica oil pipeline ruptured in January 2000,
spewing thousands of barrels of refined crude into the
Desaguadero River before officials got around to making
repairs.
Why would the United States help bankroll such deals?
In the name of "free trade," the IDB and the World Bank,
government-funded organizations, have spent more than
two decades promoting privatization of energy and power
sectors. They have forced countries that want development
assistance to implement harsh "structural adjustment"
measures and deregulate industries. At the same time,
multinational corporations reap tremendous profits as poor
governments vie with one another for much-needed
foreign investment.
As a result, public utilities have increasingly fallen into
private hands, and corporations such as Enron conduct
their business with little or no public accountability.
Ordinary people suffer as companies limit supplies and
raise prices, spreading misery among those who can't
afford to pay more for once-public services like electricity,
water and health care. This also produces social unrest.
For example, Enron's imposition of price hikes has
resulted in blackouts that eventually led to riots in
Guatemala and the Dominican Republic, among other
countries.
Members of Congress will have an opportunity to stop the
flow of government money to Enron when the IDB and
other public financiers come up for reauthorization. Before
approving more money for the banks, legislators can insist
on prohibiting future loans for Enron-related projects. This
would halt potentially destructive deals like the Bolivian
pipeline expansion.
But more is needed to stop abuses. The rules governing
global trade and investment need to be altered to protect
the public interest. Congress needs to reject the drive by
international financial institutions such as the IDB and
the World Bank to privatize utilities and promote
deregulation - policies that invite corruption and fuel
injustice.
Nadia Martinez is a research associate with the Institute
for Policy Studies in Washington. Mark Engler, a writer
based in New York, has worked with the Arias Foundation
for Peace and Human Progress in San José, Costa Rica.
Copyright © 2002, The Baltimore Sun
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