Yes, Krugman was a flak for Enron ... they paid him $50K in 1999 and he wrote a piece hyping Enron for Fortune magazine. He thought Enron was the face of the future.
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The retreat of business bureaucracy in the face of the market was brought home to me recently when I joined the advisory board at Enron--a company formed in the '80s by the merger of two pipeline operators. In the old days energy companies tried to be as vertically integrated as possible: to own the hydrocarbons in the ground, the gas pump, and everything in between. And Enron does own gas fields, pipelines, and utilities. But it is not, and does not try to be, vertically integrated: It buys and sells gas both at the wellhead and the destination, leases pipeline (and electrical-transmission) capacity both to and from other companies, buys and sells electricity, and in general acts more like a broker and market maker than a traditional corporation. It's sort of like the difference between your father's bank, which took money from its regular depositors and lent it out to its regular customers, and Goldman Sachs. Sure enough, the company's pride and joy is a room filled with hundreds of casually dressed men and women staring at computer screens and barking into telephones, where cubic feet and megawatts are traded and packaged as if they were financial derivatives. (Instead of CNBC, though, the television screens on the floor show the Weather Channel.) The whole scene looks as if it had been constructed to illustrate the end of the corporation as we knew it.
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pkarchive.org
Ken Lay was a George W. Bush Ranger. GW flew around an Enron jet in his campaign against... Al Gore. Think about how preposterous your proposition, meant to smear Kyoto and tie Enron to liberals, is.
It's only preposterous to you because you don't know much about history. Enron and Ken Lay gave money to both political parties:
Enron Pursued Plan To Forge Close Ties To Gore Campaign
By RICHARD L. BERKE
Published: February 18, 2002
The Enron Corporation quietly drew up a plan to cultivate close political ties to Vice President Al Gore during the 2000 presidential race and tried to build relationships with his inner circle even though the company was one of the biggest campaign contributors to George W. Bush and the Republicans.
The double-sided strategy was intended to ensure that Enron, the Houston-based energy company that has filed for bankruptcy protection, wielded influence with the next president, whoever he was, according to internal company documents and interviews with officials at Enron and from the Gore campaign.
In May 2000, shortly after Mr. Gore was assured of the Democratic nomination, Enron hired Sally A. Painter, a public relations executive, who drafted a 'six-month action plan for Enron' for 'Democratic political outreach in the 2000 presidential election,' the documents show.
Ms. Painter identified influential advisers at the Gore headquarters in Nashville and in Washington whom she said Enron officials should get to know. Her plan called for writing briefs for Mr. Gore's staff on issues important to Enron and for Enron to play an 'active and visible role' at the Democratic National Convention. She also suggested that Enron 'actively participate in campaign activities on the ground in a key swing state.' If Mr. Gore was elected, she said, Enron should 'participate in senior team for inaugural planning.'
In the summer of 2000, Enron hired one of Mr. Gore's old friends and a longtime financial supporter, Charles W. Bone. Mr. Bone, with contacts in Washington and at the Tennessee Valley Authority, helped Enron settle a bitter contractual dispute with the T.V.A. The suit was settled in January 2001 for more than $200 million. The authority, not Enron, disclosed the settlement.
Former Enron officials said an important part of their strategy to win favor with the Gore campaign was a significant increase in the company's donations to Democrats. Enron documents outlined this approach; they show that in 1999 and 2000 the company gave $426,500 in so-called soft-money donations to Republicans and $362,000 to Democrats. That amounts to 54 percent to Republicans and 46 percent to Democrats. In 1997 and 1998, Enron's donations had tilted much more to Republicans -- 67 percent, with Democrats getting only 33 percent.
But Enron continued to give much more to Governor Bush than to Vice President Gore. In all, it gave Mr. Gore's campaign $13,750 and Mr. Bush's $113,800, according to the Center for Responsive Politics.
Enron also gave $250,000 to the host committee for the Republican National Convention, and in 1999 and 2000, Kenneth L. Lay, then Enron's chairman, gave $250,000 in what the documents described as 'personal money to the R.N.C.,' the Republican National Committee.
The documents and interviews with officials at Enron and with the Gore campaign illuminate the Enron executives' determination to cultivate bipartisan relationships at the highest levels of politics.
In what one Enron official recalled as a desire to 'have Enron's message become part of the energy and telecom policy of the Gore campaign,' Enron organized a dinner in the private Nest Lounge of the Willard Hotel, two blocks from the White House, that included top Gore and Enron officials as well as executives in the high-tech industry.
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Even so, Mr. Lay was no stranger to Mr. Gore or to President Bill Clinton. At a meeting at the White House in 1997, for example, Mr. Lay pressed Mr. Clinton and Mr. Gore to support a market-based approach to global warming. Enron was one of the most visible corporate backers of the Kyoto Protocol, which the Bush administration has rejected, because Enron wanted to participate in the market for buying and selling emissions permits for the greenhouse gases that contribute to global warming.
As Ms. Painter was planning more public interaction between Enron and Gore officials, Enron officials said, Mr. Shapiro worked behind the scenes to hire people close to Mr. Gore. In the summer of 2000, they said, Mr. Shapiro wanted to hire Johnny Hayes, one of Mr. Gore's closest friends and top fund-raisers in Nashville. But Mr. Shapiro could not hire Mr. Hayes because he was already on the Gore campaign's payroll. After the campaign, Enron hired Mr. Hayes as a lobbyist.
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nytimes.com
Enron's Democrat Pals
By Michael Weisskopf
Before its messy decline and fall, Enron had plenty of clout in George W. Bush's Washington, from the personal ties between chairman Ken Lay and the President to the company's alleged influence on Vice President Dick Cheney's energy task force. But Enron's cozy relationship with Washington didn't start there. Documents obtained by TIME show the energy giant enjoyed much closer ties with Clinton Administration regulators than was generally known. Long before Cheney's task force met with Enron officials and included their ideas in Bush's energy plan, Clinton's energy team was doing much the same thing. Drafting a 1995 plan to help facilitate cash flow and credit for energy producers, it asked for Enron's input—and listened. The staff was directed to "rework the proposal to take into account the specific comments and suggestions you made," Clinton Deputy Energy Secretary Bill White wrote an Enron official. Clinton officials also made efforts to help Enron get business overseas. Clinton Energy Secretary Hazel O'Leary included Enron officials on trade missions to India, China, Pakistan and South Africa. White, returning from a 1994 trip to Mexico, wrote chairman Lay that "much opportunity" existed there for natural gas, and he sent a copy of Mexico's energy plans. To persuade an Enron senior vice president to join a mission to Pakistan, White wrote, "I have strong personal relationships with the existing government." Enron showed its gratitude. At Christmas 1995, documents show, it donated an unknown sum of cash in O'Leary's name to a charity called "I Have a Dream." And when Clinton ran for re-election a year later, the company made its largest single contribution ever—$100,000—to the President's party.
Read more: http://www.time.com/time/business/article/0,8599,338580,00.html#ixzz1hqmuzjT7
Clinton 'sweetheart' deal
sped up Enron's collapse After investing $1 billion in India plant,
Lay couldn't get state utility board to pay Posted: January 18, 2002
1:00 am Eastern
By Paul Sperry
WASHINGTON – A so-called "sweetheart" deal between Enron Corp. and India – brokered with the help of Clinton administration officials during controversial trade junkets in the mid-'90s – ultimately soured and sped the energy giant's collapse, analysts say. After investing more than $1 billion to help build a huge power plant near Bombay, Enron had problems last year getting paid for power generated by the plant – even after sources say former President Clinton lobbied Indian officials on Enron's behalf during his April visit to India. Desperate, Enron chairman Kenneth L. Lay on Sept. 14 fired off a letter to Indian Prime Minister Atal Bihari Vajpayee threatening legal action to recover claims of up to $5 billion related to the Dabhol Power Co. A month later, on Oct. 15, Lay called Commerce Secretary Don Evans, pleading for help with the nightmarish project. The next day, Enron stunned Wall Street by announcing its first loss in more than four years. In the third quarter, the Houston-based company hemorrhaged $618 million. Enron's once-high-flying stock nose-dived, robbing many of its workers of their retirement nest eggs, and the company filed the biggest bankruptcy in U.S. history. The gas-fired Dabhol project, which stopped production and construction in May, had been a black mark on Enron's books from the start, analysts say. "No doubt about it, it was always the trouble child," said Carl Kirst, an analyst with Merrill Lynch Global Securities in Houston. He says the Indian deal was "one of many factors" that hurt Enron. "But clearly it was one of the better-known pressure points on the stock," Kirst said in an interview with WorldNetDaily. Costly boondoggle Wall Street didn't think much of the deal when it was announced in 1995 by the late Commerce Secretary Ron Brown and Lay during a trade mission to India. The more than $3 billion power-plant project was the single-largest foreign investment ever made in India, which was just opening up its economy to outsiders. "In the mid-'90s, not many people were venturing into the international-development market like this, certainly not in India," Kirst said. "So there was a good deal of risk built in." Of the four investors in the project, which is the largest gas-fired plant in the world, Enron put up the biggest stake –"north of $1 billion," Kirst said. Phase 1 of the project yielded an anemic 7-percent return on investment, he says, contributing roughly under a nickel a year to Enron's earnings per share. That was bad enough. But by the time Phase 2, twice as big as Phase 1, was nearly completed, the local Indian electricity board reneged on payments, claiming the power bills were too high. If Phase 2 had come on line, the board would have owed a projected $1 billion-plus a year starting this year. Enron inked a 20-year contract with the state board. "So here at a net investment of well over $1 billion, Enron almost had Phase 2 completed, but they never got anything for it," Kirst said. And the poor returns from Phase 1 weren't covering the cost of developing Phase 2, he adds. In short, Enron had a costly boondoggle on its hands, one that was starting to punish its financial statement. "You can't have over $1 billion of investment on your books and continue to earn only 7 percent, at best, and not open yourself up to write-downs," Kirst said. The best thing Enron could have done is unload the project, he says. But Lay couldn't find suitors. "Enron hoped, ideally, that someone would buy them out at their book value – roughly $1 billion," Kirst said. "That is, shall we say, optimistic at this point." There have been rumors of buyout offers of between $600 million and $800 million circulating since September, he says. Possible buyers mentioned in the past include Reliance, one of India's largest industrial concerns, and China Light and Power Co. But nothing has panned out. It shouldn't come as much of a surprise. The huge project was never popular. Even back in 1993 – when Indian officials first proposed the idea of converting to gas as a main power source for Maharashtra, one of India's most industrialized states and home to Bombay, the country's financial center – economists were skeptical. The World Bank, for example, concluded such a project was "not economically viable," warning that the plants would produce power too costly for the state. The New York Times, moreover, quoted a senior Indian official who said anyone who invested in such a project was "bankrupting yourself knowingly, willingly, deliberately." So why did Lay press ahead? Political opportunism. 'Sweetheart deal' On May 19, 1994, Clinton met here with former Indian Prime Minister P.V. Rao. Rao told Clinton that India was interested in opening its centrally controlled economy up to American corporate investors. Clinton, in turn, instructed then-Energy Secretary Hazel O'Leary to lead a delegation of corporate executives to India on a trade mission. "The mission marked the first official visit to India by a U.S. cabinet secretary in many years," Energy's internal trip report states. Enron executives joined O'Leary on the July 1994 junket, whereupon they planted the seeds of the ill-fated Dabhol deal. Then in January 1995, Lay accompanied Brown on the Commerce trade mission that helped seal the deal. The Clinton administration got two federal export-finance agencies – the Export-Import Bank and the Overseas Private Investment Corp. – to help underwrite the project by kicking in nearly $400 million in loans. During the final negotiations, Clinton aide Thomas "Mack" McLarty rode herd on the project in Washington for Lay, his old energy-industry buddy. He tracked the progress of Clinton's ambassador to India, Frank Wisner, who was helping speed the deal along. Even Clinton pitched in to help his golfing partner, Lay, by sending McLarty memos and articles on the project. (The ex-president's lobbying for the Enron deal even continued into the Bush administration, sources close to the Dabhol project say, when he visited Indian officials in Mumbai, India, in April. At the time, Enron was fighting the state electricity board for back payments.) In June 1996, India gave final OK to Lay's project. Four days before the approval, Enron gave $100,000 to Clinton's party. McLarty and Wisner were not forgotten. Lay snatched up McLarty for Enron when he left the White House. And Wisner got a seat on the board of an Enron subsidiary when he stepped down as ambassador in 1997. Lay and McLarty have denied the Democratic Party gifts were tied to the Indian deal. And Wisner called "foolishness" any suggestion his board seat was payback for helping Enron close the deal in India. But in India, local foes of the Dabhol project regarded it as a "sweetheart deal" from the start, and even charged that Enron bribed Indian officials. The charge, which Enron has denied, was never proved. For his part, Lay blames the recession, not any bad deals he made, for his company's collapse. Ironically, for all the talk of Lay's cronyism with President Bush, this administration has been relatively hands-off, at least when it comes to aiding Enron in its overseas deals. No Enron executives got seats on last year's sole Bush administration trade mission, which was to Russia. And in March, Bush, who held no Enron stock directly in his 1999 financial disclosure, proposed slashing the next fiscal year's budget of the Ex-Im Bank by 25 percent. What's more, he proposed cutting the subsidies of the Overseas Private Investment Corp. Under the Clinton administration, Enron had benefited famously from both agencies, which support corporate investments abroad. Previous stories: Enron execs regulars on Clinton trade junkets Did Enron insiders smell trouble as early as 1998?
Read more: Clinton 'sweetheart' deal<br>sped up Enron's collapse http://www.wnd.com/?pageId=12439#ixzz1hqnLT9KG[ |
