April 29, 2002:  The SEC has failed in its attempt to block the grabbing of large bonuses by executives who saw an opportunity to grab a piece of the last of the cash as Enron went under.  The judge ruled that the bonuses were sufficiently legitimate.

The question of whether Enron executive Cliff Baxter's death was really a suicide got raised again by Dan Rather.  On April 10, he mentioned on the air some alleged evidence that it was not suicide.  I haven't heard about any follow-up...

Oooooh, check out this tasty tidbit.  Right in the middle of the period when the state of California was trying to investigate whether Enron was doing something illegal with the prices in the electricity market, two leading Republicans in the legislature -- Sen. Jim Brulte and Assemblyman Dave Cox -- asked for, and got, a $50,000 check from Enron to the state GOP.  This story didn't come out of public records, but out of Enron internal documents.  Interestingly, Brulte denies that he made any request himself, while Cox says it happened but was normal and routine and nothing suspicious.

Does this make it any more suspicous?  An internal Enron memo shows that the $50,000 check "entitled" their people to access with Brulte and Cox, and maybe others, during October 2001 -- right around the time Enron was starting to collapse, and also around the late phases of the legislature creating new energy legislation.  The memo warned them to expect requests for another $75,000, and pointed out that opinion polls for the upcoming governor's race were shifting rapidly and therefore Enron should not miss the chance to make their influence felt.  It said that the Republicans in the legislature "have played it about as well as could be expected under the circumstances" -- as well for Enron as could be expected, that is.  It mentioned that only one Republican, Bill Morrow of Oceanside, had spoken up against Enron, and suggested asking Brulte to see if he could do something about Morrow.  The meeting took place in Houston, not in Sacramento, and Brulte didn't show up ("illness"), though Cox did.  Ray Haynes went instead.  By the date of the meeting, Enron was disintegrating and their own people didn't bother to attend.  Instead, various other energy companies were treated to an "update" on the situation in California by Cox's group.

Ironically, the GOP tried to make hay out of Governor Davis taking Enron contributions, demanding that he return them.  Davis refused, on the grounds that he didn't take anything after the energy crisis started in the spring of 2000.  The GOP never returned theirs either.  And according to consumer lobbyist Douglas Heller, it was consistently the GOP that pushed for legislation embraced by Enron and the other energy companies.  Says he, "The Republicans were given a free ticket to escape culpability for the deregulation debacle because it fell on Davis' watch and he bumbled his way through it.  They refused, however, to stand with consumers and fight the energy companies."  Actually, the deregulation bill was passed before Davis was elected, so only the consequences were "on Davis' watch".

Democratic state senator Joe Dunn, heading a committee investigating Enron's role in the mess, testified before Congress:  "On the one hand, California's legislative leaders appealed directly to Enron for contributions and on the other received explicit instruction about specific legislation."  He isn't naming names, though -- they have to work out some agreement about technicalities of confidentiality rules between the various parties.  He says he expects to publicize his evidence and start naming names, "primarily from the Republican side of the aisle," shortly.

When faced with political embarrassment over doing favors for campaign contributors in the energy business, this is not the sort of line you want to come out on a memo:  "If you were king, or Il Duce, what would you include in a national energy policy, especially with respect to natural gas issues?"  That line was written by Joseph Kelliher, a senior political appointee in the Department of Energy and a major member of Dick Cheney's energy task force, to lobbyist Dana Contratto, representing natural gas companies.  Contratto came up with a whole list of goodies that the gas industry wanted.  One of them was to increase the allowed gas pressure in natural gas pipelines, though he knew some lines would not handle it safely.  In the papers originally released by the DoE in response to the lawsuits by Judicial Watch and the Natural Resources Defense Council, this message was "inadvertently" censored.  I mean, redacted.  They got the uncensored version in a later release a couple of days ago.  The administration says that Contratto's suggestions were not included in their final policy recommendation.

Another bunch of memos emerging in that case shows how the new administration was badgered by lobbyist Haley Barbour, representing many energy companies that had given campaign contributions to Bush, such as FirstEnergy.  Barbour's message was simple: Bush must do absolutely nothing about global warming.  Bush had made a campaign promise to take some action in this area, and it was the first major promise he broke once in office.  A spokesman denies that Bush was "unduly influenced" by Barbour.

In other news, Andersen has broken off settlement talks with the Justice department and is apparently going to go ahead and stand trial for their role in the Enron collapse, in which they have pretty nearly admitted guilt already.  Now, just when they didn't need any more trouble, they're also been stuck with another trial over the 1999 bankruptcy of the Baptist Foundation of America, the largest nonprofit bankruptcy in US history, defending against allegations that they could have prevented the collapse if they'd done their job properly.  About half a billion dollars were lost by mostly elderly investors.

It isn't just Andersen that's in trouble for smoothing over Enron's troubles for the sake of Wall Street:  the Attorney General of New York has got Merrill Lynch under investigation for hushing up Enron's troubles in order to keep the stock price up, and is now widening the investigation to several competing brokerages.  The bank J.P. Morgan Chase is also being questioned about its Enron dealings, by California congressman Henry Waxman.  Chase made various loans to Enron which were apparently used as key components of their plan to hide their debt and exaggerate their profits.  The overall picture coming out of these investigations is that all the big financial corporations had conflicts of interest that led them to collaborate with Enron's dishonesty... and that such conflicts are very likely pervasive in their overall method of doing business with other customers.

The House recently passed a bill to tighten up all these financial industry conflicts of interest, but some Democrats are saying that the bill is weak, having been watered down by the House's Republican leaders in ways desired by financial industry lobbyists, who want to protect the status quo as much as politically possible.  The bill would create a new regulatory body -- something Republicans normally hate (or like to say they do).

The Alaska National Wildlife Refuge oil drilling plan was voted down in the Senate 54-46, but one piece of the story remains alive: a possibly illegal propaganda video made by the Department of the Interior, which attempted to depict the refuge's landscape as flat, boring, lifeless, and unworthy of preservation.  (It's not being preserved for its looks, but for the animal species depending on it, which were not seen in the video because it showed winter conditions.)  Interior secretary Gale Norton's spokesman says the film was not illegal and the department's legal team had vetted it, apparently on the grounds that you can't prove that it is truly a "film presentation designed to support or defeat legislation pending before Congress", which is what the law forbids departments such as Interior from spending taxpayers' money on.  The Bush administration is now working on plans to open other new areas to drilling.

Anyone who wants a regular news summary about corporate crime in general might want to check this out.

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