ENRON & FRIENDS

The theme of references to Star Wars continues here.  Many of their fake shell companies were given names from Star Wars, and so too is one of their chief strategies for stealing unearned money from the California electricity market:  the tactic of pretending to sell electricity back and forth between one fake company nominally positioned at the south end of the state, and another at the north end, to create an appearance on paper of congestion in the transmission lines, was called the "Death Star" technique.  In the memo's own words, "The net effect... is that Enron gets paid for moving energy to relieve congestion without actually moving any energy or relieving any congestion."

Another tactic was called "ricochet".  In this one, they sent power out of state and then sent it back in on another wire; out-of-state power commanded higher prices.  There were a number of others, with names like "Fat Boy" and "Get Shorty".  "Fat Boy" consisted of buying megawatts that were price-capped, and selling them out of state at higher prices, which were created over there by their power having been shipped to California.  The memos date back to December of 2000, shortly before the main period of rolling blackouts began.

Enron's new post-bankruptcy management apparently released the memos voluntarily.  (Though hardly promptly.)  One interesting point the memos make is that some of Enron's competitors were pulling the same tricks, using the identical facetious names for them.  The Western Power Trading Forum promptly denied that anyone but Enron was guilty.  If some others actually are guilty... that's good news, because they aren't broke and we can get their share of the money back.

Politicians such as Davis and Feinstein and Boxer are saying that this gives them grounds to demand a lot of money back.  Indeed, if we ever manage to recover any assets from Enron, or the individuals who bailed out of it, about half of the total is probably owed to the state of California and its ratepayers.  They're demanding that Attorney General John Ashcroft mount a criminal investigation.  Ashcroft?!  They must be more interested in making the white house squirm than in getting results.  Or rather, I suppose there's just no proper way to bypass him in favor of someone who might be willing to do a proper job.

For those who think that Ashcroft, despite his partisanship, is going to have the integrity to uphold the law... consider this item, which got virtually no media coverage at all until Michael Moore wrote it up in his recent book.  In September 2000, the federal government brought a 97 count criminal indictment against a company called Koch Industries, and four of its managers, for knowingly releasing 91 tons of benzene -- a carciongenic volatile organic solvent -- into the air and water, and covering it up.  This was one of a series of repeated environmental violations they'd been charged with, and paid fines for, in the past.  But they'd done something to correct their problem: they'd contributed $800,000 to the George W. Bush campaign, and other republican candidates.

When John Ashcroft took office as Attorney General, the government dropped 88 of the 97 charges.  Koch still faced fines of $352 million for those nine.  Then, two days before the trial, Ashcroft abruptly settled for a plea bargain, in which Koch pled guilty to falsifying documents, and all the major charges were dropped and the four employees were freed from all prosecution.  A small fine was paid, and the original crime of dumping tons of carcinogen was cheerfully forgotten.  That's the kind of attorney general we have.

Various "leaks" and "speculation" in the press -- the kind which insiders often give to the press in order to put pressure on their rivals -- say that Army Secretary Thomas White, who personally operated some of the Enron shell companies guilty of these flim-flams, could soon be forced out of the administration.  Not over his crimes with Enron, though -- over a conflict with Defense Secretary Rumsfeld regarding a boondoggle weapons contract.  The Crusader mobile howitzer, a gigantic artillery cannon, is considered by many in the military to be an utterly obsolete weapon that will be of no use.  Rumsfeld shares this opinion, and he cancelled the program.  Yet many in the Department of Defense -- often with ties to George H.W. Bush (the elder) and his Carlyle Group -- were working to keep the contract alive, and apparently attempted to do an end-run around Rumsfeld to get Congress to save it.  The recent purge of many generals (and voluntary resignation of at least one more who said he was "sick of Rumsfeld") is possibly related to this conflict... or, it may be related to the sense, reportedly widespread among the generals, that George Bush has fucked up so badly in the Middle East that if we ever have to fight there, we won't have a single ally that will let us base forces on their land.

Joe Lieberman is griping that the White House is stalling on giving him the results of their internal questionnaire about who had what ties to Enron, and wrote White House counsel Alberto Gonzales that he was "deeply disappointed" with their level of cooperation in his investigation of what actions the executive branch took that affected Enron.

The U.S. Senate is now starting an investigation of Enron's board of directors.  But guess what -- they're giving an exemption to one board member: Wendy Gramm, the wife of Senator Phil Gramm.  Phil Gramm, R-TX, was one of the biggest recipients of Enron campaign contributions after George W. Bush.  The committee's staff is saying the excusing of Wendy Gramm is entirely unconnected with this relationship.  They say they're concentrating on the ones who knew stuff and were responsible.
 

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