February 26: Jeffrey Skilling, former Enron CEO, is back in front of a senate committee, with two other witnesses right next to him, and his testimony is contradicted to his face by the other two. Various senators, particularly Barbara Boxer, are grilling away. His lying is so obvious that the senators seem to be getting frustrated, trying to get him to see how clear it is. Even Ken Lay's statements don't mesh with Skilling's -- Lay said Skilling was sleepless with worry over the state of the company, Skilling says he trusted that it was fine.
Another important witness, former Enron treasurer Ben Glisan, appears to be ready to give up and tell the truth. This could undercut Skilling pretty badly. Add about three years for proven perjury to whatever else he's sentenced with.
February 25: The U.S. Senate is now debating whether to pass an energy plan. This morning, Dubya stood in front of some hybrid vehicles in Washington to emphasize how this spiffy new energy plan is going to help conservation and the environment. But his actual proposal is still the exact same stinker that came out of last spring's meetings between Dick Cheney and Ken Lay. It still contains the same kinds of proposals to put the national electricity market onto a type of "competitive" pricing system similar to what worked so well here in California, as well as drilling in the Alaska National Wildlife Refuge. (By the way, there's no guarantee of much oil being in that refuge... another promising field on the north coast of Alaska ended up being the most expensive dry hole ever drilled. The ground was perfect for oil, except the oil had leaked out 35 million years ago. Various groups' estimates of the oil in the refuge differ wildly.)
At least posing with the hybrid vehicles represents some progress from the administration's previous position (which they got from the auto industry) that the answer to automobile energy usage issues should be to shoot for hydrogen powered fuel cell cars 20 years from now, and do nothing about today's cars. The Senate is looking to start putting on some pressure again to get car-makers to improve mileage -- which they could do easily enough if they tried, given that today's cars are often much heavier than those of 30 years ago even in the same size class (especially with imports) -- and the auto industry is protesting that such pressure would be bad for you, bad for me, and bad for America, since it would thwart our love of giant SUVs.
(The auto industry has always greatly exaggerated how much Americans want big cars. The buying public never asked Detroit to make fewer small cars and more big ones -- what they did instead was go along with big cars being more expensive. Since big cars hardly cost more than small cars to make, they are much more profitable.)
The White House bill also contains more of the usual Bushian corporate welfare, for energy producing companies. They seem to think that the only way to make industries more industrious is to give them more money. Funny, when it's poor people, they think taking money away is what makes them more industrious.
Many on Capitol Hill are saying the bill is too cumbersome to be passed in a non-crisis atmosphere.
Meanwhile, the state of California is applying to the Federal Energy Regulatory Commission to nullify some of the expensive long term contracts it had to sign at the height of the crisis last spring. Some generating companies, like Calpine, are saying they are confident that FERC will rule in favor of letting them keep their contracts. This would be unsurprising, given that FERC had even more friendly policy meetings with Enron than Dick Cheney's energy commission did, and its present chair is an Enron pick. Also, state officials say that FERC pushed them to sign those deals.
Some political opponents of Governor Davis blame him for signing too many of these contracts at too high a price. But such blame is empty coming from people who didn't do squat to stop the crisis. Do not forget that those contracts stopped the rising price spiral.
Gubernatorial candidate Richard Riordan, smarting from attack ads that say he gouged the rest of the state when the L.A. power company had juice to sell, has aired attack ads of his own accusing Davis of taking more Enron money than any other politician in the country. This is outrageously false, of course -- Dubya, for one, took much more than Davis ever did -- and if you think that Davis did Enron any real favors, you only have to look at the result of those long term contracts. Far from helping Enron, Davis could make a claim to being the man who destroyed the company.
The counter-claim might come from those members of FERC who finally voted to impose price caps. It's hard to say whether it was the long-term contracts or the price caps that did more damage. In combination, they were the one-two punch that decked Enron.
Oddly, though there is every appearance that Enron pushed to remove Curtis Herbert and replace him with Pat Wood (see below, a few paragraphs down), it was Wood who voted for price caps while Herbert did not. It isn't like one is the good guy and the other is the stooge. Enron worked hard on every member of the commission with lots of time and attention, and clearly felt they were getting some kind of worthwhile overall results.
The Texas Republican Party is attempting to use legal threats to shut down EnronOwnsTheGOP.com. Apparently putting an Enron logo on top of a flag-colored elephant constitutes some kind of illegal trademark infringement... they hope. Sorry, boys, we aren't living in a fascist state just yet, no matter how hard some of your friends are working toward that goal.
The Center for Public Integrity estimates that tax cheating by companies like Enron has unfairly shifted so much of the tax burden onto working people that it costs the average taxpayer $1600 a year. That is some large scale theft, and you have a quite substantial interest in doing something about it.
I heard a news item this morning about a couple that grabbed a $40,000 ring from Tiffany's and ran with it. It said that when caught they'd likely get six years. Any bets on whether Jeff Skilling serves six years for stealing a thousand times that amount?
Another question to ask: What happened to Curtis Herbert, chairman of the Federal Energy Regulatory Commission? He was appointed to FERC by Clinton in 1997, and Bush made him the head of it in January 2001. My previous California electricity crisis page describes many of the actions FERC then took regarding the power crisis. But in August, he was booted out and replaced with Pat Wood. Why?
According to Bill Moyers, Herbert was sacked because he opposed Ken Lay's wish to create a national energy grid. Pat Wood was one of eight names named in Ken Lay's notorious memo to Dick Cheney, as suggested new members of FERC. Bush and Cheney appointed Wood and one other from that set of eight, and not long thereafter made Wood the chair.
Also, it was Herbert who finally relented and imposed
price caps on the California electricity market, after Bush and Cheney
(and of course Lay) had very explicitly opposed such caps. Herbert
lasted about three months after that -- up to about the same time that
Lay, Skilling, Fastow and the other Enron crooks started selling off all
their stock, because the price caps had destroyed their company's income.
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