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Context of 'Late February 2001: Enron Influences Cheney’s Energy Task Force to Help Troubled Dabhol Plant'

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A photograph of the Republican operatives mobbing the Miami-Dade elections offices. Those identified in the photograph include Thomas Pyle, Garry Malphrus, Rory Cooper, Kevin Smith, Steven Brady, Matt Schlapp, Roger Morse, Duane Gibson, Chuck Royal, and Layna McConkey.A photograph of the Republican operatives mobbing the Miami-Dade elections offices. Those identified in the photograph include Thomas Pyle, Garry Malphrus, Rory Cooper, Kevin Smith, Steven Brady, Matt Schlapp, Roger Morse, Duane Gibson, Chuck Royal, and Layna McConkey. [Source: Pensito Review]Miami-Dade County election officials vote unanimously to halt the county’s manual recount of presidential ballots (see November 7, 2000 and Before 10:00 a.m. November 19, 2000), saying the county does not have enough time to complete its recount by the November 26 deadline. Instead, they vote to recount only 10,750 “undervotes,” ballots that don’t clearly indicate a presidential choice. The decision costs Democratic candidate Al Gore a 157-vote gain from the halted recount process. That evening, a Florida State appeals court denies a motion by Democrats to force Miami-Dade County to restart the manual recount. [US News and World Report, 12/13/2000; Pittsburgh Post-Gazette, 12/17/2000; Leip, 2008]
Opposing Beliefs - The next day, the Florida Supreme Court will also refuse to order Miami-Dade to restart the recount (see 2:45 p.m. November 23, 2000). Press reports say that the decision “dramatically reverse[s] the chances of Al Gore gathering enough votes to defeat George W. Bush.” Gore’s senior campaign advisor William Daley calls the recounts “mandatory” and calls for “the rule of law” to be upheld. For his part, Bush says: “I believe Secretary Cheney and I won the vote in Florida (see After 3:30 a.m. November 8, 2000). And I believe some are determined to keep counting in an effort to change the legitimate result.” In light of the Miami-Dade decision, the Bush campaign’s chief legal advisor James Baker invites the Republican-controlled Florida Legislature to unilaterally declare Bush the victor, saying, “One should not now be surprised if the Florida legislature seeks to affirm the original rules.”
Agitators Disrupt Recount Proceedings - The recount proceedings are disrupted and ultimately ended by a mob of Republicans, some local and some bussed and flown in from Washington by the Bush campaign. The agitators are protesting outside the Miami-Dade County election offices, shouting and attempting to interfere with the proceedings of the canvassing board. Republicans have accused a Democratic lawyer of stealing a ballot. [Guardian, 11/23/2000; Guardian, 11/25/2000]
Rioters Made Up of Republican Staffers, Others - Democrats accuse Republican protesters of intimidating the Miami-Dade County officials into stopping the recount. Democratic vice-presidential candidate Joe Lieberman says the demonstrations in Miami have been orchestrated by Republicans “to intimidate and to prevent a simple count of votes from going forward.” Six Democratic members of the US Congress demand the Justice Department investigate the claims, saying that civil rights have been violated in “a shocking case of undermining the right to vote through intimidation and threats of violence.” Jenny Backus, a spokeswoman for the Democratic National Committee (DNC), says, “The Republicans are out of control,” and accuses them of using paid agitators to “create mob rule in Miami.” [Guardian, 11/25/2000] Later investigations show that the “spontaneous protests” by Republican protesters were far more orchestrated and violent than generally reported by the press at the time. Investigative journalist Robert Parry will write that the protests, called the “Brooks Brothers Riot” because of the wealthy, “preppie” makeup of the “protesters,” helped stop the recount, “and showed how far Bush’s supporters were ready to go to put their man in the White House.” He will write that the protests should be more accurately termed a riot. At least six of the rioters were paid by the Bush recount committee, payments documented in Bush committee records only released to the IRS in July 2002 (see July 15, 2002). Twelve Republican staffers will later be identified in photographs of the rioters. The six who can be confirmed as being paid are: Bush staffer Matt Schlapp from Austin, Texas; Thomas Pyle, a staff aide to House Majority Whip Tom DeLay (R-TX); DeLay fundraiser Michael Murphy; Garry Malphrus, House majority chief counsel to the House Judiciary Subcommittee on Criminal Justice; Charles Royal, a legislative aide to Representative Jim DeMint (R-SC); and former Republican House staffer Kevin Smith. Another Republican is identified as Doug Heye, a staffer for Representative Richard Pombo (R-CA). At least three of the rioters—Schlapp, Malphrus, and Joel Kaplan—will later join the Bush White House. Many of the rioters were brought in on planes and buses from Washington as early as mid-November, with promises of expenses payments. On November 18, 2000, the Bush campaign told activists, “We now need to send reinforcements” to rush to Florida. “The campaign will pay airfare and hotel expenses for people willing to go.” Many of the respondents are low-level Republican staffers from Congress. “These reinforcements… added an angrier tone to the dueling street protests already underway between supporters of Bush and Gore,” Parry will write. Quoting ABC reporter Jake Tapper, Parry will write, “The new wave of Republican activists injected ‘venom and volatility into an already edgy situation.’” Signifying the tone, before the Miami riot, Brad Blakeman, Bush’s campaign director of advance travel logistics, screamed down a CNN correspondent attempting to interview a Democratic Congressman: “This is the new Republican Party, sir! We’re not going to take it anymore!” [Consortium News, 11/27/2000; Consortium News, 8/5/2002; Vanity Fair, 10/2004] Some of the local protesters are summoned to the Miami-Dade electoral offices by angry broadcasts over radio stations with largely Cuban-American audiences; over these radio stations, listeners hear Bush campaign lawyer Roger Stone, coordinating the radio response, say that the recounts intend to disenfranchise Hispanic voters. Republican operatives coordinate the protests by shouting orders through megaphones. [Consortium News, 11/24/2000; Center for American Progress, 12/9/2010] Cuban-Americans voted heavily for Bush in the November 7 election. [Tapper, 3/2001]
Details of the Riot; Staffers Assaulted and Beaten - After learning that the Miami-Dade County canvassing board was beginning to examine 10,750 disputed ballots that had not previously been counted, US Representative John Sweeney (R-NY) issues the order to “Shut it down!” (Sweeney is coordinating his efforts with a local Cuban congressman who himself is coordinating the Cuban-American mob response.) Brendan Quinn, the executive director of the New York Republican Party, tells some two dozen Republican operatives outside the Miami-Dade County election offices to storm the room on the 19th floor where the canvassing board is meeting. Tapper later writes: “Emotional and angry, they immediately make their way outside the larger room in which the tabulating room is contained. The mass of ‘angry voters’ on the 19th floor swells to maybe 80 people,” including many of the Republican activists from outside Florida, and joined by local protesters. As news organizations videotape the scene, the protesters reach the board offices and begin shouting slogans such as “Stop the count! Stop the fraud!” “Three Blind Mice!” and “Fraud, fraud, fraud!” and banging on doors and walls. The protesters also shout that a thousand potentially violent Cuban-Americans are on the way. Official observers and reporters are unable to force their way through the shouting crowd of Republican operatives and their cohorts. Miami-Dade spokesman Mayco Villafena is physically assaulted, being pushed and shoved by an unknown number of assailants. Security officials, badly outmanned, fear the confrontation will swell into a full-scale riot. Miami-Dade elections supervisor David Leahy orders the recounts stopped, saying, “Until the demonstration stops, nobody can do anything.” (Although board members will later insist that they were not intimidated into stopping, the recounts will never begin again. Leahy will later say: “This was perceived as not being an open and fair process. That weighed heavy on our minds.”) Meanwhile, unaware of the rioting, county Democratic chairman Joe Geller stops at another office in search of a sample ballot. He wants to prove his theory that some voters had intended to vote for Gore, but instead marked an adjoining number indicating no choice. He finds one and leaves the office. Some of the rioters spot Geller with the sample ballot, and one shouts, “This guy’s got a ballot!” Tapper will later write: “The masses swarm around him, yelling, getting in his face, pushing him, grabbing him. ‘Arrest him!’ they cry. ‘Arrest him!’ With the help of a diminutive DNC [Democratic National Committee] aide, Luis Rosero, and the political director of the Miami Gore campaign, Joe Fraga, Geller manages to wrench himself into the elevator.” Rosero stays behind to attempt to talk with a reporter, and instead is kicked and punched by rioters. A woman shoves Rosero into a much larger man in what Tapper will later theorize was an attempt to start a fight between Rosero and the other person. In the building lobby, some 50 Republican protesters and activists swarm Geller, surrounding him. Police escort Geller back to the 19th floor in both an attempt to save him from harm and to ascertain what is happening. The crowd attempts to pull Geller away from the police. Some of the protesters even accost 73-year-old Representative Carrie Meek (D-FL). Democratic operatives decide to leave the area completely. When the mob learns that the recounts have been terminated, they break forth in lusty cheers.
After-Party - After the riots, the Bush campaign pays $35,501.52 for a celebration at Fort Lauderdale’s Hyatt Regency, where the rioters and campaign officials party, enjoy free food and drink, receive congratulatory calls from Bush and Dick Cheney, and are serenaded by Las Vegas crooner Wayne Newton, singing “Danke Schoen,” German for “thank you very much.” Other expenses at the party include lighting, sound system, and even costumes.
Media Reportage - Bush and his campaign officials say little publicly about the riot. Some press outlets report the details behind the riots. The Washington Post later reports that “even as the Bush campaign and the Republicans portray themselves as above the fray,” national Republicans actually had joined in and helped finance the riot. The Wall Street Journal tells readers that Bush offered personal words of encouragement to the rioters after the melee, writing, “The night’s highlight was a conference call from Mr. Bush and running mate Dick Cheney, which included joking reference by both running mates to the incident in Miami, two [Republican] staffers in attendance say.” The Journal also observes that the riot was led by national Republican operatives “on all expense-paid trips, courtesy of the Bush campaign.” And, the Journal will note, the rioters went on to attempt to disrupt the recounts in Broward County, but failed there to stop the proceedings. The Journal will write that “behind the rowdy rallies in South Florida this past weekend was a well-organized effort by Republican operatives to entice supporters to South Florida,” with DeLay’s Capitol Hill office taking charge of the recruitment. No similar effort was made by the Gore campaign, the Journal will note: “This has allowed the Republicans to quickly gain the upper hand, protest-wise.” And the Journal will write that the Bush campaign worked to keep its distance from the riots: “Staffers who joined the effort say there has been an air of mystery to the operation. ‘To tell you the truth, nobody knows who is calling the shots,’ says one aide. Many nights, often very late, a memo is slipped underneath the hotel-room doors outlining coming events.” But soon, media reports begin echoing Bush campaign talking points, which call the “protests” “fitting, proper,” and the fault of the canvassing board: “The board made a series of bad decisions and the reaction to it was inevitable and well justified.” The Bush campaign says the mob attack on the elections office was justified because civil rights leader Jesse Jackson had led peaceful, non-violent protests in favor of the recounts in Miami the day before. The campaign also insists that the protests were spontaneous and made up entirely of local citizens. On November 26, Governor Marc Racicot (R-MT), a Bush campaign spokesman, will tell NBC viewers: “Clearly there are Americans on both sides of these issues reflecting very strong viewpoints. But to suggest that somehow this was a threatening situation, in my view, is hyperbolic rhetoric.”
Effect of the Riot - According to Parry, the riot, broadcast live on CNN and other networks, “marked a turning point in the recount battle. At the time, Bush clung to a lead that had dwindled to several hundred votes and Gore was pressing for recounts (see November 20-21, 2000). The riot in Miami and the prospects of spreading violence were among the arguments later cited by defenders of the 5-to-4 US Supreme Court ruling (see 9:54 p.m. December 12, 2000)… that stopped a statewide Florida recount and handed Bush the presidency. Backed by the $13.8 million war chest, the Bush operation made clear in Miami and in other protests that it was ready to kick up plenty of political dust if it didn’t get its way.” In the hours after the riot, conservative pundits led by Rush Limbaugh will engage in orchestrated assaults on the recount process as fraudulent and an attempt by the Gore campaign to “invent” votes. No one is ever charged with any criminal behaviors as a result of the riot. [Consortium News, 11/24/2000; Washington Post, 11/27/2000; Village Voice, 12/19/2000; Consortium News, 8/5/2002; Vanity Fair, 10/2004; Center for American Progress, 12/9/2010]

The Chevron oil tanker named after National Security Advisor Rice.The Chevron oil tanker named after National Security Advisor Rice. [Source: ABC News]George W. Bush is inaugurated as the 43rd US President, replacing Bill Clinton. The only Cabinet-level figure to remain permanently in office is CIA Director Tenet, appointed in 1997 and reputedly a long-time friend of George H. W. Bush. FBI Director Louis Freeh stays on until June 2001. Numerous figures in Bush’s administration have been directly employed in the oil industry, including Bush, Vice President Cheney, and National Security Adviser Rice. Rice had been on Chevron’s Board of Directors since 1991, and even had a Chevron oil tanker named after her. [Salon, 11/19/2001] It is later revealed that Cheney is still being paid up to $1 million a year in “deferred payments” from Halliburton, the oil company he headed. [Guardian, 3/12/2003] Enron’s ties also reach deep into the administration. [Washington Post, 1/18/2002]

Entity Tags: William Jefferson (“Bill”) Clinton, Condoleezza Rice, Richard (“Dick”) Cheney, George W. Bush, George J. Tenet, Louis J. Freeh, Enron Corporation

Timeline Tags: Complete 911 Timeline

Exxon logo.Exxon logo. [Source: Goodlogo (.com)]One of the first officials to meet with Vice President Cheney’s energy task force (the National Energy Policy Development Group—see May 16, 2001) is James Rouse, the vice president of ExxonMobil and a large financial donor to the Bush-Cheney presidential campaign. Several days later, Kenneth Lay, the CEO of Enron, meets with the group. It will not be his last meeting (see April 17, 2001 and After). The names of the various officials, executives, lobbyists, and representatives who meet with the task force will not be released until 2007 (see July 18, 2007). [Washington Post, 7/18/2007]

Entity Tags: National Energy Policy Development Group, Enron Corporation, James Rouse, ExxonMobil, Richard (“Dick”) Cheney, Kenneth Lay

Timeline Tags: US Environmental Record

Vice President Cheney is holding a series of secret energy task force meetings to determine the Bush administration’s future energy policy. Starting at this time, Enron leader Ken Lay and other Enron officials take part in a least half a dozen of these secret meetings. After one such meeting, Cheney’s energy task force changes a draft energy proposal to include a provision boosting oil and natural gas production in India. The amendment is so narrow that it apparently is targeted to only help Enron’s troubled Dabhol power plant in India. [Washington Post, 1/19/2002]

Entity Tags: Enron Corporation, Bush administration (43), Kenneth Lay, Richard (“Dick”) Cheney

Timeline Tags: Complete 911 Timeline

Representatives of 13 environmentalist groups meet with officials from Vice President Cheney’s energy task force (the National Energy Policy Development Group—see May 16, 2001). Since late January, some 40 task force meetings have been held, all with oil and energy company executives and lobbyists (see Before January 20, 2001, After January 20, 2001, Mid-February, 2001, Mid-February, 2001, March 5, 2001, March 20, 2001, March 21, 2001, March 22, 2001, April 12, 2001. April 17, 2001, and April 17, 2001 and After). Today is the one day where environmental groups are allowed to have any input. Anna Aurilio of the US Public Interest Group will later say, “It was clear to us that they were just being nice to us.” (Notably, the only people ever identified as “lobbyists” by the task force to the press are the representatives from the environmental groups from today’s meeting.) Their input is neither wanted nor used; an initial draft of the task force’s report has already been prepared and President Bush has already been briefed on its contents. The names of the various officials, executives, lobbyists, and representatives who meet with the task force will not be released for six years (see July 18, 2007). Until this meeting, the only environmentalist group to meet with the Cheney task force has been the Council of Republicans for Environmental Advocacy, founded in 1998 by conservative tax activist Grover Norquist and Gale Norton, now the Bush administration’s Secretary of the Interior. That group is now run by Italia Federici, described by the Washington Post as “socially involved” with Norton’s deputy, J. Steven Griles. [Dubose and Bernstein, 2006, pp. 18; Washington Post, 7/18/2007]

Entity Tags: Richard (“Dick”) Cheney, J. Steven Griles, US Public Interest Group, National Energy Policy Development Group, Italia Federici, Anna Aurilio, Grover Norquist, Council of Republicans for Environmental Advocacy, George W. Bush, Gale A. Norton

Timeline Tags: US Environmental Record

Vice President Cheney meets with Enron CEO Kenneth Lay as part of Cheney’s secretive energy task force (the National Energy Policy Development Group—see May 16, 2001). Though Cheney may not know it, Enron is on the verge of collapse, with liabilities far outweighing assets and heavily doctored earnings statements. Enron’s only income generation comes from the unregulated energy markets in California and other Western states (see January 23, 2001). Enron traders are gouging the California markets at an unprecedented pace; as authors Lou Dubose and Jake Bernstein later write, Enron is “taking power plants off-line to create shortages, booking transmission lines for current that never move[s], and shuttling electricity back and forth across state lines to circumvent price controls,” among a plethora of other illegal market manipulations.
Ignoring California's Energy Crisis - Unable to make a profit between buying Enron’s energy at staggering prices and then selling it at regulated rates, one of California’s two largest utility companies has filed for bankruptcy and the other has accepted a government bailout. California is in a calamitous energy crisis. Governor Gray Davis is pleading for rate caps that would help both utility companies and consumers. But price caps are the last thing Lay wants. Once in Cheney’s office, Lay gives Cheney a three-page memo outlining Enron’s recommendations for the administration’s national energy policy Cheney’s group is developing. Prominently featured in the memo is the following recommendation: “The administration should reject any attempt to deregulate wholesale power markets by adopting price caps.” Almost every recommendation in the Lay memo will find its way into the energy task force’s final report. Cheney may not know that Enron is in such dire financial straits, but he does know that energy prices in California have gone from $30 to $300 per megawatthour, with periodic jumps to as high as $1,500. He also knows that Enron’s profits in California, along with other power producers, have gone up 400% to 600%.
Price Caps in Spite of Lay, Cheney - Lay does not get his way; the Federal Energy Regulatory Commission will override Cheney’s arguments and impose price caps on energy traders working in California. The state’s energy prices are brought under control, Enron’s trading schemes—luridly given such sobriquets as “Death Star,” “Fat Boy,” and “Get Shorty”—are brought to an end, and Enron collapses six months later (see December 2, 2001). Cheney will have a measure of revenge by forcing one of Lay’s adversaries on FERC, Curtis Hebert, out of his position (see August 14, 2001).
Avoiding Scrutiny and Oversight - This meeting and others are cleverly designed to avoid legal government oversight. According to the Federal Advisory Committees Act (FACA), the energy task force should be subject to public accountability because private parties—in this case, oil and gas industry executives and lobbyists—are helping shape government policy. Cheney’s legal counsel, David Addington, devises a simple scheme to avoid oversight. When a group of corporate lobbyists come together to create policy, a government official is present. Suddenly, FACA does not apply, and the task force need not provide any information whatsoever to the public. Dubose and Bernstein will later write: “It was bold as [artist] Rene Magritte’s near-photographic representation of a pipe over the inscription ceci n’est pas une pipe—‘this is not a pipe.’ Fifteen oil industry lobbyists meet in the Executive Office Building and one midlevel bureaucrat from the Department of Energy steps into the room—and voila, ceci n’est pas une foule de lobbyists. Because one government employee sat in with every group of lobbyists, a committee of outside advisers was not a committee of outside advisers.” Between Addington’s bureaucratic end-around and Cheney’s chairmanship of the working group giving the entire business the cloak of executive privilege, little information gets out of the group. “The whole thing was designed so that the presence of a government employee at a meeting could keep the Congress out,” a Congressional staff lawyer later says. It also keeps the press at bay. [Dubose and Bernstein, 2006, pp. 3-4, 10]

Entity Tags: National Energy Policy Development Group, US Department of Energy, Richard (“Dick”) Cheney, Kenneth Lay, Jake Bernstein, Enron Corporation, David S. Addington, Curtis Hebert, Federal Energy Regulatory Commission, Gray Davis, Lou Dubose, Federal Advisory Committees Act

Timeline Tags: US Environmental Record

National Energy Policy report.National Energy Policy report. [Source: Climate Change Technology Program]Vice President Cheney’s National Energy Policy Development Group releases its energy plan. The plan, titled Reliable, Affordable, and Environmentally Sound Energy for America’s Future, warns that the quantity of oil imported per day will need to rise more than fifty percent to 16.7 million barrels by 2020. “A significant disruption in world oil supplies could adversely affect our economy and our ability to promote key foreign and economic policy objectives, regardless of the level of US dependence on oil imports,” the report explains. To meet the US’s rising demand for oil, the plan calls for expanded oil and gas drilling on public land and the easing of regulatory barriers to building nuclear power plants. [US President, 5/16/2001, pp. 8.5 pdf file; Associated Press, 12/9/2002; Guardian, 1/23/2003]
Emphasis on Foreign Oil - The report places substantial emphasis on oil from the Persian Gulf region. Its chapter on “strengthening global alliances” states: “By any estimation, Middle East oil producers will remain central to world oil security. The Gulf will be a primary focus of US international energy policy.” [US President, 5/16/2001, pp. 8.5 pdf file] But it also suggests that the US cannot depend exclusively on traditional sources of supply to provide the growing amount of oil that it needs and will have to obtain substantial supplies from new sources, such as the Caspian states, Russia, Africa, and the Atlantic Basin. Additionally, it notes that the US cannot rely on market forces alone to gain access to these added supplies, but will also require a significant effort on the part of government officials to overcome foreign resistance to the outward reach of American energy companies. [Japan Today, 4/30/2002]
Revamping of Clean Air Act - The plan also calls for a clarification of the New Source Review section of the Clean Air Act, which requires energy companies to install state-of-the-art emission control technology whenever it makes major modifications to its plants. The administration’s energy plan gives the Environmental Protection Agency 90 days to review NSR and determine whether it is discouraging companies from constructing or expanding power plants and refineries. It also instructs the attorney general to review current NSR litigation efforts against utility companies to determine whether those efforts are contributing to the country’s energy problems. “The outcome could determine whether the government drops some cases, approaches others more leniently, or even renegotiates settlements already reached,” the New York Times reports. [US President, 5/16/2001, pp. 8.5 pdf file; New York Times, 5/18/2001]
Dodging the EPA - The representative of the Environmental Protection Agency (EPA) on the task force had blocked the recommendation of a technique called “hydraulic fracturing.” Sometimes called “fracking,” the technique, used to extract natural gas from the earth, often contaminates aquifers used for drinking water and irrigation. The recommendation was removed to placate the EPA official, then quietly reinserted into the final draft. Halliburton, Cheney’s former firm, is the US leader in the use of hydraulic fracturing. [Dubose and Bernstein, 2006, pp. 18]
Cheney Stayed Largely behind the Scenes - Much of the task force’s work was done by a six-member staff, led by executive director Andrew Lundquist, a former aide to senators Ted Stevens (R-AK) and Frank Murkowski (R-AK). Lundquist served as the Bush-Cheney campaign’s energy expert, earning the nickname “Light Bulb” from the president. Lundquist will leave the Bush administration and become a lobbyist for such firms as British Petroleum, Duke Energy, and the American Petroleum Institute. Much of the report is shaped by Lundquist and his colleagues, who in turn relied heavily on energy company executives and their lobbyists. For himself, Cheney did not meet openly with most of the participants, remaining largely behind the scenes. He did meet with Enron executive Kenneth Lay (see April 17, 2001 and After), with officials from Sandia National Laboratories to discuss their economic models of the energy industry, with energy industry consultants, and with selected Congressmen. Cheney also held meetings with oil executives such as British Petroleum’s John Browne that are not listed on the task force’s calendar. [Washington Post, 7/18/2007]
Controversial Meetings with Energy Executives - Both prior to and after the publication of this report, Cheney and other Task Force officials meet with executives from Enron and other energy companies, including one meeting a month and a half before Enron declares bankruptcy in December 2001 (see After January 20, 2001), Mid-February, 2001, March 21, 2001, March 22, 2001, April 12, 2001, and April 17, 2001). Two separate lawsuits are later filed to reveal details of how the government’s energy policy was formed and whether Enron or other players may have influenced it, but the courts will eventually allow the Bush administration to keep the documents secret (see May 10, 2005). [Associated Press, 12/9/2002]

Entity Tags: Kenneth Lay, Halliburton, Inc., Environmental Protection Agency, Enron Corporation, Andrew Lundquist, Bush administration (43), American Petroleum Institute, Richard (“Dick”) Cheney, British Petroleum, Duke Energy, John Browne

Timeline Tags: US Environmental Record, Complete 911 Timeline, Events Leading to Iraq Invasion, Peak Oil

Senator Dianne Feinstein (D-CA) calls for the Senate Committee on Governmental Affairs to hold hearings on a possible improper relationship between Enron and the Federal Energy Regulatory Commission (FERC). Her call for an investigation is prompted by media reports of Enron CEO Kenneth Lay pressuring FERC chairman Curtis Hebert to deregulate the energy industry in ways favorable to Enron (see August 14, 2001). Feinstein writes to Senator Joseph Lieberman (D-CT), the ranking member of the committee, “Despite evidence of manipulation and price gouging in both the electricity and natural gas markets in California and the West, and a finding by FERC last November of ‘unjust and unreasonable’ rates, the commission has failed to take the actions necessary to bring reliability and stability to the marketplace… [I]t is clear that the citizens of the United States, especially the people of California, who are suffering from FERC’s failure to do its job, deserve an investigation and full public hearing into what happened. FERC is a $175 million a year agency charged with regulating the energy industry, and it would be unconscionable if any of the nation’s electricity traders or generators were in a position to be able to determine who chairs or becomes a member of the commission.” Lay is accused of forcing Hebert from his position in favor of another, more Enron-friendly chairman, Pat Wood. Feinstein adds, “Since FERC has refused to fulfill its legally mandated function under the Federal Power Act to restore ‘just and reasonable’ electricity rates, we need to ask whether undue influence by the companies that FERC regulates has resulted in its failure to act… In California, the total cost of electricity in 1999 was $7 billion. This climbed to $28 billion in 2000 and is predicted to reach $70 billion this year. At the same time, with FERC refusing to act, power generators and marketers have made record profits. The people of our nation deserve a full investigation.” [US Senate, 5/25/2001]

Entity Tags: Joseph Lieberman, Curtis Hebert, Dianne Feinstein, Federal Energy Regulatory Commission, Kenneth Lay, Pat Wood, Enron Corporation

Timeline Tags: US Environmental Record

Curtis Hebert of the FERC.Curtis Hebert of the FERC. [Source: PBS]Curtis Hebert is replaced by Pat Wood as the head of the Federal Energy Regulatory Commission (FERC). Hebert announced his resignation on August 6. [US Department of Energy, 12/2001] Hebert, a Clinton appointee who nevertheless is a conservative Republican, an ally of Senator Trent Lott (R-MS), and quite friendly towards the energy corporations, had been named to the FERC shortly before Clinton left office; Bush named him to chair the commission in January 2001. [Consortium News, 5/26/2006]
Replaced at Enron Request - Hebert is apparently replaced at the request of Enron CEO Kenneth Lay, who did not find Hebert responsive enough in doing Enron’s bidding. Hebert had just taken the position of FERC chairman in January when he received a phone call from Lay, in which Lay pressured him to back a faster pace in opening up access to the US electricity transmission grid to Enron and other corporations. (Lay later admits making the call, but will say that keeping or firing Hebert is the president’s decision, not his.) When Hebert did not move fast enough for Lay, he is replaced by Pat Wood, a close friend of both Lay and President Bush. [Guardian, 5/26/2001; Los Angeles Times, 12/11/2001] Lay apparently threatened Hebert with the loss of his job if he didn’t cooperate with Enron’s request for a more pro-Enron regulatory posture. [CNN, 1/14/2002]
Opposed Enron Consolidation Plan - Hebert was leery of Enron’s plan to force consolidation of the various state utilities into four huge regional transmission organizations (RTOs), a plan that would have given Enron and other energy traders far larger markets for their energy sales. Hebert, true to his conservative beliefs, is a states’ rights advocate who was uncomfortable with the plan to merge the state utilities into four federal entities. Lay told Hebert flatly that if he supported the transition to the RTOs, Lay would back him in retaining his position with FERC. Hebert told reporters that he was “offended” at the veiled threat, but knew that Lay could back up his pressure, having already demonstrated his influence over selecting Bush administration appointees by giving Bush officials a list of preferred candidates and personally interviewing at least one potential FERC nominee (see January 21, 2001). [PBS, 2/2/2002; Consortium News, 5/26/2006] According to Hebert, Lay told him that “he and Enron would like to support me as chairman, but we would have to agree on principles.” [Guardian, 5/26/2001] Hebert added to another reporter, “I think he would be a much bigger supporter of mine if I was willing to do what he wanted me to do.” Lay recently admitted to making such a list of preferred candidates: “I brought a list. We certainly presented a list, and I think that was by way of letter. As I recall I signed a letter which, in fact, had some recommendations as to people that we thought would be good commissioners.…I’m not sure I ever personally interviewed any of them but I think in fact there were conversations between at least some of them and some of my people from time to time.” [PBS, 2/2/2002]
Cheney Behind Ouster - Joe Garcia, a Florida energy regulator, says he was interviewed by Lay and other Enron officials. After Hebert made it clear to Lay that he wouldn’t go along with Lay’s plans to reorganize the nation’s utilities, Vice President Dick Cheney, who supervises the Bush administration’s energy policies (see May 16, 2001, began questioning Hebert’s fitness. [Guardian, 5/26/2001] Cheney said in May 2001, “Pat Wood has got to be the new chairman of FERC.” In private, Cheney said then that Hebert was out as chairman and Wood was in, though Hebert did not know at the time that his days were numbered. [PBS, 2/2/2002] “It just confirms what we believed and what we’ve been saying, that the Bush-Cheney energy plan is written by corporations and it’s in the interests of the corporations,” says the National Environmental Trust’s Kevin Curtis. [Guardian, 5/26/2001] Not only was Hebert not responsive enough to Lay’s pressure, but he had become a focus of criticism for his refusal to scrutinize Enron’s price gouging in the California energy deregulation debacle. Wood’s more moderate position helps ease the worries of other states themselves losing confidence in the Bush administration’s deregulation advocacy. [American Prospect, 1/2/2002]
Hebert Investigating Enron Schemes - And even more unsettling for Enron, Hebert was beginning to investigate Enron’s complicated derivative-financing procedures, an investigation that may have led to an untimely exposure of Enron’s financial exploitation of the US’s energy deregulation—exploitation that was going on under plans nicknamed, among other monikers, “Fat Boy,” “Death Star,” “Get Shorty,” all of which siphoned electricity away from areas that needed it most and being paid exorbitant fees for phantom transfers of energy supposedly to ease transmission-line congestion. [Consortium News, 5/26/2006] “One of our problems is that we do not have the expertise to truly unravel the complex arbitrage activities of a company like Enron,” Hebert recently told reporters. “We’re trying to do it now and we may have some results soon.” [Guardian, 5/26/2001] Instead, Hebert is forced out of FERC. Senator Dianne Feinstein (D-CA) called for an investigation into Enron’s improper influence of the FERC committee after the media revealed Lay’s phone call to Hebert in May 2001 (see May 25, 2001).

Entity Tags: National Environmental Trust, Trent Lott, Kevin Curtis, Pat Wood, Kenneth Lay, Federal Energy Regulatory Commission, George W. Bush, Curtis Hebert, Joe Garcia, Dianne Feinstein, William Jefferson (“Bill”) Clinton, Richard (“Dick”) Cheney, Enron Corporation

Timeline Tags: US Environmental Record

After nearly two years of legal wrangling, the Bush administration releases financial and other records from the November-December 2000 campaign to the Internal Revenue Service. Those records include hundreds of pages of documents regarding the Bush campaign’s efforts to win the Florida recounts (see 9:00 a.m. and after, November 22, 2000). The George W. Bush recount committee spent $13.8 million on its efforts to influence the recount, while long-available documents from the Al Gore recount operation show that Gore spent about a quarter of that amount, $3.2 million. The Bush campaign spent more than that on lawyers—$4.4 million. The Bush records document some 250 paid staffers, payouts of $1.2 million to fly operatives to and from Florida, and about $1 million in hotel bills. Additionally, a fleet of corporate jets was provided to the recount operation, many of them paid for by Enron Corporation and its CEO Kenneth Lay, a prominent Bush backer. Other jets were provided by Halliburton, where Vice President Dick Cheney had served as chairman and CEO. [Consortium News, 8/5/2002]

Entity Tags: George W. Bush, Albert Arnold (“Al”) Gore, Jr., Bush administration (43), Halliburton, Inc., Enron Corporation, Kenneth Lay, Internal Revenue Service, Richard (“Dick”) Cheney

Timeline Tags: 2000 Elections

In an 8-0 ruling, the District of Columbia Court of Appeals dismisses a lawsuit by the Sierra Club and Judicial Watch asking that the court require information to be disclosed from Vice President Cheney’s energy task force from 2001 (the National Energy Policy Development Group—see May 16, 2001). The US Supreme Court sent the case back to the appeals court (see April 27, 2004 and June 24, 2004). The appeals court ignores reports from the Government Accountability Office finding that energy executives and lobbyists took part in the task force deliberations (see After January 20, 2001, Mid-February, 2001, March 21, 2001, March 22, 2001, April 12, 2001, and April 17, 2001), and accepts the government’s contentions that the executive branch should not be forced to disclose information about its workings to either the legislative or judicial branches. Because no evidence was submitted that showed the energy executives or lobbyists cast votes or exercised veto power over task force decisions, the court rules, the task force is not obligated to comply with federal laws mandating that such governmental working groups reveal details of their deliberations. The executives and lobbyists are essentially no different than staff aides, the court finds. Cheney’s energy task force was not an advisory committee, and therefore “the government owed the plaintiffs no duty, let alone a clear and indisputable or compelling one,” says the court’s opinion. The court applies the Supreme Court’s standard of law as recommended in the case, a standard far more favorable to the executive branch than any previously applied in the case. Several of the appellate judges will later say that they took the Court ruling to mean that the judiciary should not be involved in a legal struggle with the executive branch. The ruling allows Cheney to keep the task force documents secret, and says that the task force is not bound by the Federal Advisory Committees Act (FACA). [Associated Press, 5/10/2005; Savage, 2007, pp. 176]
'Double Blow' - David Bookbinder, a lawyer for the Sierra Club, says, “The decision is not going to be helpful in assuring open and accountable government.” [Sierra Club, 5/15/2005] He says the ruling is a double blow: “As a policy matter, we see the Bush administration has succeeded in its efforts to keep secret how industry crafted the administration’s energy policy. As a legal matter, it’s a defeat for efforts to have open government and for the public to know how their elected officials are conducting business.” Judicial Watch official Chris Farrell will later say the ruling leaves the open-government laws “a hollow shell.” [Savage, 2007, pp. 176] The New York Times calls the decision “regrettable,” and observes, “The Bush administration hardly needs encouragement to deny public access to vital government information.” [New York Times, 5/15/2005]
Rejected Judicial Precedent - In 2007, author and reporter Charlie Savage will write: “The decision relied entirely upon the assertion of two Cheney aides that the lobbyists had not cast any votes, a claim no judge ever verified by looking at the records. The court’s ruling also dismissed arguments that ‘influential participation’ by outsiders made them de facto members of the task force whether or not they cast votes, rejecting the standard the courts had applied to the 1994 Clinton health care task force.” [Savage, 2007, pp. 176]

Entity Tags: Sierra Club, New York Times, Government Accountability Office, Judicial Watch, Bush administration (43), David Bookbinder, Federal Advisory Committees Act, National Energy Policy Development Group, Richard (“Dick”) Cheney

Timeline Tags: US Environmental Record, Civil Liberties

A White House document shows that oil company executives lied in recent Senate hearings when they denied meeting with Vice President Cheney’s energy task force (the National Energy Policy Development Group—see May 16, 2001) in 2001. The document, obtained by the Washington Post, shows that officials from ExxonMobil, Conoco (before it merged with Phillips), Shell Oil, and British Petroleum met with the task force (see March 22, 2001). Last week, the CEOs of ExxonMobil, Chevron, and ConocoPhillips denied participating in the task force’s deliberations. Shell Oil’s CEO said his company did not participate “to my knowledge,” and the chief of BP America said he did not know. Though Chevron is not named in the White House document, that firm and others “gave detailed energy policy recommendations” to the task force, according to the Government Accountability Office. Cheney also met separately with John Browne, BP’s chief executive, in a meeting not included in the document. Environmentalists have long stated that they were almost entirely shut out of the deliberations, while corporate interests were heavily represented (see April 4, 2001). The Supreme Court ruled in 2004 that the government could keep the records of the task force secret (see June 24, 2004). Senator Frank Lautenberg (D-NJ) says, “The White House went to great lengths to keep these meetings secret, and now oil executives may be lying to Congress about their role in the Cheney task force.” Since the oil executives were not under oath—a decision by Senate Commerce Committee chairman Ted Stevens (R-AK) protested by committee Democrats—they cannot be charged with perjury. However, they can be fined or imprisoned for up to five years for making “any materially false, fictitious or fraudulent statement or representation” to Congress. After the Washington Post releases the document, former Conoco manager Alan Huffman confirms, “We met [with the task force] in the Executive Office Building, if I remember correctly.” A ConocoPhillips spokesman says that CEO James Mulva had been unaware of the meetings when he testified at the hearing. ExxonMobil says it stands by CEO Lee Raymond’s denials; James Rouse, an Exxon official named in the document (see Mid-February, 2001), denies meeting with the task force, calling the document “inaccurate.” [Washington Post, 11/16/2005]

Entity Tags: Frank R. Lautenberg, Ted Stevens, Chevron, British Petroleum, Alan Huffman, ExxonMobil, Royal Dutch/Shell, US Supreme Court, National Energy Policy Development Group, Government Accountability Office, James Mulva, ConocoPhillips, John Browne, Lee Raymond, Richard (“Dick”) Cheney, James Rouse

Timeline Tags: US Environmental Record

The White House finally releases a list of officials and organizations who met with Vice President Cheney’s energy task force (the National Energy Policy Development Group—see May 16, 2001) in 2001. Cheney and the White House have successfully battled for six years to keep virtually all details of the task force secret (see May 10, 2005), and many other documents and files pertaining to the task force remain secret. The list of participants confirms what many have always suspected—that oil, gas, and energy executives and lobbyists were virtually the only ones to have any input in the task force’s policy deliberations. Many of the participants were also heavy donors to the Bush-Cheney campaign, and to the Republican Party in general.
Secrecy - Some participants say they were never sure why the White House fought so hard to keep the information about the task force secret. “I never knew why they fought so hard to keep it secret,” says Charles A. Samuels, a lawyer for the Association of Home Appliance Manufacturers. “I am sure the vast majority of the meetings were very policy-oriented meetings—exactly what should take place.” Others say that their meetings with the task force were routine.
API Input - American Petroleum Institute president Red Cavaney says that when he met with the task force, he and his fellow API officials discussed position papers the organization had given to the Bush-Cheney campaign and to newly elected members of Congress. “We’re in the business of routinely providing advocacy materials,” Cavaney says. “Speaking for myself, I had zero hand in authoring or sitting with anyone from that task force and changing anything.” But Cavaney is seriously downplaying API’s influence (see March 20, 2001).
"Ridiculous" - Representative Henry Waxman (D-CA), chairman of the House Oversight and Government Reform Committee, who has been a driving force behind the effort to reveal the inner workings of the task force to the public, says it is it is “ridiculous” that it has taken six years to see who attended the meetings. He describes the energy task force as an early indicator of “how secretively Vice President Cheney wanted to act.” As to the makeup of the participants, Waxman is not surprised to see the dominance of energy industry groups in the meetings. “Six years later, we see we lost an opportunity to become less dependent on importing oil, on using fossil fuels, which have been a threat to our national security and the well-being of the planet,” he says. Climate expert David Hawkins of the Natural Resources Defense Council says: “Cheney had his finger on a critical issue. He just pushed it in the wrong direction.” [Washington Post, 7/18/2007]

Entity Tags: National Energy Policy Development Group, Bush administration (43), Association of Home Appliance Manufacturers, American Petroleum Institute, Charles A. Samuels, Henry A. Waxman, Natural Resources Defense Council, Richard (“Dick”) Cheney, David Hawkins, Red Cavaney

Timeline Tags: US Environmental Record, Civil Liberties

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