Robert Bryce
RE: ENRON: Come on, Ken, spill the beans.
Fri Jul 9, 2004 14:35
64.140.158.22

Oh, the stories he could tell! [from a friend]

There'll be no more White House sleepovers, if indicted Bush crony Kenneth
Lay decides to tell all.
By Robert Bryce

July 8, 2004 | Now that former Enron chairman Kenneth Lay has been
indicted for his role in the company's downfall (the specific charges are to
be unsealed Thursday), the question that needs to be asked is: Will he turn
against the Bushes?

Lay recently told the New York Times that it was a "tougher decision not to
indict me than to indict me." Indeed, for the Bush administration, Lay's
indictment is the perfect Machiavellian political move. Once the presumably
humbled, handcuffed Lay has been paraded in front of the news media, Justice
Department prosecutors are likely to give statements to the press saying, in
effect, that they're going after all of the Enron miscreants -- even the
ones who are friends of President Bush and his father.

But what if Lay responds with his own Machiavellian move? Others crossed by
George W. Bush have decided to speak out rather than stand by quietly. Paul
O'Neill did so after he was forced out as treasury secretary. The Bush
administration's chief of counterterrorism, Richard Clarke, also emerged as
a critic. Both men wrote bestselling books and got a measure of revenge. Lay
could do the same. And while his brigade of lawyers would obviously advise
him to keep quiet, Lay could choose to ignore them. He doesn't have much to
lose.

The grand jury that issued his indictment took more than two years to return
a true bill. It's unlikely that it will be able to hit him with additional
charges out of spite. Furthermore, the man President Bush used to call
"Kenny Boy" is already a pariah in Houston, a town he used to own. He has
become something of a recluse -- shuttling between his lavish condo in the
heart of Houston's exclusive River Oaks neighborhood and a lavish office
nearby. He'll never get another job in corporate America. As a political
player, his future prospects are nonexistent. So why not provide an inside
look at the way politics is really played in a place like Enron -- a company
that, for years, was Bush's biggest career patron?

Lay could dish the dirt on several important topics: the Karl Rove-brokered
push that resulted in Enron paying Christian conservative turned
super-lobbyist Ralph Reed $300,000; Lay's dealings with secretary of state
turned super-lobbyist James Baker; why Enron hired Ed Gillespie, the man who
now heads the Republican National Committee; the reason for Lay's decision
to allow the Bushes to use Enron's fleet of airplanes as their own; what
happened in those meetings with Dick
Cheney and his energy task force; and what really happened with the
California energy crisis.

In 1997, Rove, Texas Gov. Bush's closest political advisor, went to someone
at Enron and asked that person to hire Reed, who was just leaving his job as
head of the Christian Coalition. The Enron gig was very important for Reed.
As one of his first clients, Enron gave his new outfit, Century Strategies,
instant credibility. It also put Reed squarely on the Bush/Rove/Lay team.
And in those days, as Bush was cranking up his presidential run, having Reed
on his side was critically important.

Lay could explain why Enron decided to hire Reed. He could tell us whether
Rove offered him any quid pro quo. He could also offer his opinion on
whether Reed was worth the expense and describe exactly what Reed did for
Enron. Finally, he could explain why, just a few months before Enron filed
for bankruptcy, Reed was given an additional contract, this one paying him
$30,000 per month plus expenses.

While Reed was a good ally for Enron, the really big-name lobbyist was
Baker. Lay hired the former secretary of state (then back in Houston) in
early 1993, just 33 days after the first Bush administration left the White
House. Lay put Baker to work lobbying for contracts in Kuwait, Turkey, Qatar
and Turkmenistan. But it's not at all clear that Baker knew what he was
doing. One former Enron employee who specialized in developing power plants
told me that Baker didn't know anything about the electric power business
and that the only reason Lay hired Baker was that he wanted to be Baker's
pal.

In fact, Baker and Lay did become chums. A short time after Baker went on
Enron's payroll, the James A. Baker III Institute for Public Policy at Rice
University began awarding the prestigious Enron Prize -- an honor that soon
was bestowed on a variety of Bush family friends, including Colin Powell,
Mikhail Gorbachev and, just before Enron's bankruptcy, Federal Reserve
chairman
Alan Greenspan.

Lay could tell us what Greenspan said when he refused to accept the crystal
trophy and cash award that came with the Enron Prize. He could also divulge
another secret: the amount of money that winners of the Enron Prize have
received.

Lay could tell us exactly how lucrative the revolving door has been for
Baker -- the man who, for decades, has been the Bush family's political
consigliere. Sources at Enron told me that Baker demanded huge sums of money
for his work. In one case, an Enron subsidiary had sought an oil concession
in India. The project's managers wanted Baker to call a certain minister on
their behalf, but learned that it would cost them $500,000 for the contract
and $500,000 for the phone call, according to a former Enron employee who
worked on the deal. Enron didn't use Baker on that deal, but he did work on
several Enron projects. Baker has trouble remembering how much he was paid.
A few months ago, he told Texas Monthly that he was given a "base fee" and a
chance to collect a "success fee" but that he "never got a success fee."
Surely Lay could refresh
Baker's memory.

Lay could tell us why Enron needed a lobbyist like Gillespie. In 2000, Enron
paid Gillespie's firm, Quinn, Gillespie & Associates, $700,000 to lobby the
White House on the ongoing energy crisis in California. As with Baker, Lay
could explain whether Gillespie -- who is now one of Bush's lead attack dogs
at the Republican National Committee -- earned his keep. Or Lay might tell
us that Gillespie was just another in a string of hires made to appease the
powers that be in the Republican Party.

Lay might discuss why Enron was so eager to fly the Bushes around the
country. In 2000, Enron provided jet service to the Bush campaign on an
ongoing basis. The company's fleet of six jets had already been made
available to George H.W. and Barbara Bush whenever they wanted to fly to
Kennebunkport, Maine, and other destinations. But the key use of Enron jets
came during the Florida recount, when Enron provided jets to the Bush
campaign on four occasions.

Lay could detail the cost of all those airplane trips. (The campaign
reimbursed Enron about $73,000 for use of the planes, but the actual cost
was far greater than that.) More important, he could explain exactly what he
hoped to get in return for all that air taxi work.

Perhaps the most intriguing information Lay could impart involves his
meetings with Cheney and his energy task force in early 2001. Last month,
the U.S. Supreme Court ruled that a lower court should decide how much
Cheney must disclose about the meetings that took place prior to the release
of the National Energy Policy Development Group's final report, "Reliable,
Affordable, and Environmentally Sound Energy for America's Future." That
report, released in mid-May of 2001, contains a number of provisions
favorable to Enron. For instance, the report recommended the creation of a
national electricity grid, a move that would have allowed Enron to trade
electric power more readily in all regions of the country. The report also
promoted legislation to create a market-based program for trading of
pollution credits. When the report was released, Enron was one of the
biggest traders of pollution credits in the world. (In early 2001, the
company paid the Environmental Protection Agency more than $21 million for
pollution credits in sulfur dioxide. Enron bought 45 times more credits than
any other company participating in the auction.)

Or better still, what might Lay tell us about the California energy crisis?
Some may recall that Lay had a private meeting with Cheney on April 17,
2001, to talk about the state's energy markets, which were reeling from
skyrocketing power prices. During the meeting, Lay told Cheney that the
federal government should not impose any restrictions on the markets. His
memo to Cheney said that "the administration should reject any attempt to
re-regulate wholesale power markets by adopting price caps." Even temporary
price restrictions, the memo argued, "will be detrimental to power markets
and will discourage private investment."

Cheney immediately began parroting Lay's argument. The day after the
meeting, Cheney mocked the idea of price caps during an interview with a
reporter from the Los Angeles Times, saying caps would provide only
"short-term political relief for the politicians." He also said they would
discourage investment, a matter Cheney called "the basic fundamental
problem."

Today we know that one of the fundamental problems with the California
energy crisis was that traders from Enron and other energy companies were
manipulating power prices at their whim -- and that they liked to joke about
how they were taking money from those "poor grandmothers in California." Lay
could tell us when he first learned that his traders were making huge
profits by scamming California's gas and electricity markets.

Finally, Lay could tell us what a White House sleepover is like -- the
quality of the sheets, if you get room service, all that stuff. He got that
rare privilege during the first Bush administration, when the elder Bush was
working hand-in-glove with Lay to give the energy business more tax breaks.
Now that Lay has been indicted, he doesn't have to worry about being invited
back to the White House anytime soon.

Come on, Ken, spill the beans. You'll feel better afterward. Confession
soothes the soul.


http://www.salon.com/opinion/feature/2004/07/08/kenneth_lay/index.html

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