***Enron Documents Get National Security Treatment
Deregulated, Deceptive & Now, Deadly
dailyenron.com
JUNE 5: The White House was successful yesterday in assuring that none of the 2,100 pages of documents relating to administration contacts with Enron become public.
While complying with a Senate subpoena to gather all such documents, the administration held them hostage for an additional day, refusing to give Senate investigators physical custody until a plan was in place to assure only a handful of people would ever see them.
The security agreement is unusual and contains provisions normally reserved only for national security inquiries such as those that are underway in the Senate now over the 9/11 intelligence failures.
Under the agreement that freed the Enron documents from a locked room in the Old Executive Office Building, only a limited number of committee staff will have access to the room and those who do must sign confidentiality agreements.
It was reportedly not just the Bush administration that was anxious to keep the documents out of the public eye. The administration was also reportedly acting on behalf of Enron officials who had objected strenuously to handing over the documents to Lieberman's committee.
In a final concession to the White House, and in order to move the investigation forward, the chairman of the Senate Governmental Affairs Committee, Sen. Joseph Lieberman, D-Conn., provided the White House with his personal promise to protect the documents by imposing "extraordinary security precautions" -- including keeping them in a locked room equipped with an alarm.
The last-minute gambit was the final delaying tactic in a months-long cat and mouse game between the administration and Lieberman's committee. The White House employed a number of strategies over the months to avoid releasing documentation of its contacts with Enron officials before and during that company's collapse last December.
Its initial response to a letter from Lieberman requesting the documents was to circulate a simple questionnaire within the Executive Branch asking about Enron contacts. When Lieberman rejected the move as grossly inadequate and subpoenaed the documents the White House tried to satisfy the Senator with a summary of meetings to the committee 24-hours later.
In that summary the administration admitted that Enron chairman Kenneth Lay had made a series of telephone calls to members of the Bush Cabinet, including Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans, as the company sank toward collapse last fall.
Lieberman rejected the summary as inadequate as well and continued to push for compliance with his committee's subpoena.
Finally, with the security agreement in place the documents, filling one box and one large folder, were transferred to the committee early last night, after the panel's noon deadline had passed.
White House officials said the documents comprised "an initial response" to the two subpoenas the committee issued on May 22. While the agreement covers employees of both President Bush and Vice President Cheney's offices, neither of the chief executives' own meeting notes or documentation are covered by the subpoena.
"I'm pleased the White House has begun to deliver the documents I believe are necessary to conduct a complete investigation into the government's oversight of Enron," Lieberman said in a statement. "Thousands upon thousands of people have lost savings, pensions and jobs, and the U.S. economy has suffered a severe loss of confidence. I look forward to determining what, if anything, the federal government might have done differently to avoid these problems."
Meanwhile, the General Accounting Office, Congress' investigative arm, is still waiting for documents it subpoenaed last February containing the names of Enron officials and other oil companies who met last year with the vice president's energy task force. The GAO has sued for release of the documents.
Enron officials played key roles in the formation of the administration's national energy policy. When those policies were unveiled last year they contained several policy initiatives either sought by or helpful to Enron and its business practices, such as deregulating energy markets and opposing electricity price caps in Western states.
Enron and former Chairman Ken Lay were also major financial contributors to Bush's 2000 presidential campaign. Documents previously released by the White House detail at least 24 separate contacts with Enron officials through personal meetings, letters or phone calls.
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Deregulated, Deceptive and Deadly
Another executive of a troubled Houston oil company has apparently committed suicide in the wake of disclosures that his company had participated in bogus energy trades similar to those of its Houston cousin, Enron.
El Paso Corp. senior vice president and treasurer Charles D. Rice, 47, was found dead Sunday, in what police are calling "an apparent suicide."
Rice had worked for the energy company for 25 years.
In January, a month after Enron collapsed into bankruptcy, Enron Corp. vice chairman J. Clifford Baxter was found dead in his car in Sugarland, Texas, a suburb of Houston. Baxter's death was ruled a suicide.
Just as with Enron's Baxter, Rice's death comes amid turmoil in the energy sector over allegedly bogus trades and accounting. Federal regulators are investigating power swaps between energy traders that artificially boosted trading volume and created false revenue on the company's books.
El Paso was in the midst of this controversy when, last week, as part of the restructuring, the company said it would eliminate about 300 jobs within its energy trading unit and reform its financial reporting.
Dynegy Inc., Reliant Resources Inc., and CMS Energy have all acknowledged using such trades, which boost a company's trading volume but bring in no income. Last month, the chairman and chief executives of Dynegy and CMS both resigned.
The turmoil currently rocking the energy sector, critics say, is a direct result of nearly 20 years of industry-inspired deregulation. Beginning in the administration of the current President's father, George H. Bush, energy interests have chipped away at federal, state and public utility regulations.
During President H. Bush's administration the Federal Energy Regulatory Commission (FERC) was chaired by the wife of Texas Senator Phil Gramm. During the last months of her tenure at FERC Wendy Gramm pushed through a controversial rollback of FERC regulations and oversights of energy derivative trading by companies like Enron. When Wendy Gramm left FERC she was hired as a member of Enron's board of directors.
The pace of energy deregulation picked up markedly after the GOP swept control of the House of Representatives in 1994. Deregulation was a centerpiece of the GOP's so-called "Contract With America." Campaign contributions jumped from energy companies to key GOP leaders, particularly the new House Majority Whip Tom DeLay, of Sugarland, Texas.
In return, energy deregulation became a virtual mantra of House Republicans who promised it would bring lower energy prices and more abundant supplies. Rep. DeLay became such a cheerleader for energy deregulation it earned him the nickname "The Senator from Enron" among his House colleagues.
The promise of low prices and abundant energy never materialized. What we got instead was a replay of what happened twenty years earlier with a similar campaign contribution-fueled deregulation of the savings and loan industry.
Just as the S&L high-flyers did before them, rather than use the freedom afforded by regulatory relief to become more efficient and productive, energy executives turned instead to deception and fraud. With their regulatory "cops" out of the way it simply became easier to cheat than play by the few remaining rules.
We can only imagine the pressures that higher-ups put on men like Baxter and Rice that haunted them enough to take their own lives. Their deaths are tragedies for their families. The reprehensible behavior of their deregulated companies who threatened critical energy supplies and bilked ratepayers is another expensive lesson in deregulation. The resulting bankruptcies, cutbacks and layoffs now hitting these deregulated companies and the ensuing losses of worker pensions, savings, and jobs, are devastating for their communities. But, above all, it's the unrepentant complicity of those in Congress who aided and abetted in this latest fleecing of America, by gutting the regulatory apparatus, that's a national tragedy - and contemptible. |
