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Twenty-three thousand executives and employees of various private firms work with the FBI and the Department of Homeland Security. The group, called InfraGard, receives secret warnings of terrorist threats well in advance of public notification, and sometimes before elected officials. In return, InfraGard provides information to the government. InfraGard is a quiet quasi-governmental entity which wields an unknown, but extensive, amount of power and influence. Michael Hershman, the chairman of the advisory board of the InfraGard National Members Alliance (INMA) and the CEO of an international consulting firm, calls InfraGard “a child of the FBI.” The organization started in Cleveland in 1996, when business members cooperated with the FBI to investigate cyber-threats. The FBI then “cloned it,” according to Phyllis Schneck, chairman of the board of directors of the INMA. Schneck is one of the biggest proponents of InfraGard. As of February 2008, 86 chapters of InfraGard exist in each of the 50 states, operating under the supervision of local FBI agents. “We are the owners, operators, and experts of our critical infrastructure, from the CEO of a large company in agriculture or high finance to the guy who turns the valve at the water utility,” says Schneck. According to the InfraGard website, “At its most basic level, InfraGard is a partnership between the Federal Bureau of Investigation and the private sector. InfraGard chapters are geographically linked with FBI Field Office territories.” After the 9/11 attacks, InfraGard experiences explosive growth—from 1,700 members in November 2001 to 23,682 members in January 2008. 350 members of the Fortune 500 have members in InfraGard. Prospective members are sponsored by existing members, then vetted by the FBI. The organization accepts members from agriculture, banking and finance, and chemical industry, defense, energy, food, information and telecommunications, law enforcement, public health, and transportation industries.
Controlled Exposure - InfraGard’s inner workings are not available to the general public; its communications with the FBI and DHS are not accessible through the Freedom of Information Act under the “trade secrets” exemption. And InfraGard carefully controls its exposure and contact with the media. According to the InfraGard website: “The interests of InfraGard must be protected whenever presented to non-InfraGard members. During interviews with members of the press, controlling the image of InfraGard being presented can be difficult. Proper preparation for the interview will minimize the risk of embarrassment.… The InfraGard leadership and the local FBI representative should review the submitted questions, agree on the predilection of the answers, and identify the appropriate interviewee.… Tailor answers to the expected audience.… Questions concerning sensitive information should be avoided.”
Advance Warning from the FBI - InfraGard members receive quick alerts on any potential terrorist threat or a possible disruption of US infrastructure. Its website boasts that its members can “[g]ain access to an FBI secure communication network complete with VPN encrypted website, webmail, listservs, message boards, and much more.” Hershman says members receive “almost daily updates” on threats “emanating from both domestic sources and overseas.” Schneck adds, “We get very easy access to secure information that only goes to InfraGard members. People are happy to be in the know.” Shortly after the 9/11 attacks, an InfraGard member passed along an FBI warning about a potential threat to California’s bridges to then-Governor Gray Davis, who had not yet heard anything from the FBI (see November 1, 2001). In return, InfraGard members cooperate with FBI and DHS operations. Schneck says: “InfraGard members have contributed to about 100 FBI cases. What InfraGard brings you is reach into the regional and local communities. We are a 22,000-member vetted body of subject-matter experts that reaches across seventeen matrixes. All the different stovepipes can connect with InfraGard.” The relationships between the FBI and InfraGard members are key, she says. “If you had to call 1-800-FBI, you probably wouldn’t bother,” she says. “But if you knew Joe from a local meeting you had with him over a donut, you might call them. Either to give or to get. We want everyone to have a little black book.” InfraGard members have phone numbers for DHS, the FBI, and to report cyber-threats. InfraGard members who call in “will be listened to,” she says; “your call [will] go through when others will not.” The American Civil Liberties Union, who has warned about the potential dangers of Infragard to constitutional liberties (see August 2004), retorts, “The FBI should not be creating a privileged class of Americans who get special treatment. There’s no ‘business class’ in law enforcement. If there’s information the FBI can share with 22,000 corporate bigwigs, why don’t they just share it with the public? That’s who their real ‘special relationship’ is supposed to be with. Secrecy is not a party favor to be given out to friends.… This bears a disturbing resemblance to the FBI’s handing out ‘goodies’ to corporations in return for folding them into its domestic surveillance machinery.”
Preparing for Emergencies, Martial Law - InfraGard members are “very much looped into our readiness capability,” says a DHS spokeswoman. Not only does DHS “provide speakers” and do “joint presentations” with the FBI, but “[w]e also train alongside them, and they have participated in readiness exercises.” InfraGard members are involved with the Bush administration’s “National Continuity Policy,” which mandates that DHS coordinate with “private sector owners and operators of critical infrastructure, as appropriate, in order to provide for the delivery of essential services during an emergency.” InfraGard members participate in “national emergency preparation drills,” Schneck says, sometimes by the hundreds. InfraGard members are drilling in preparation for martial law, members say. One business owner recently attended a meeting conducted by FBI and DHS officials. He recalls, “The meeting started off innocuously enough, with the speakers talking about corporate espionage. From there, it just progressed. All of a sudden we were knee deep in what was expected of us when martial law is declared. We were expected to share all our resources, but in return we’d be given specific benefits.” In the event of martial law being declared, Infragard members will have the ability to travel in restricted areas and to evacuate citizens. But they will have other abilities and duties as well. InfraGard members, says the business owner, will be authorized to “shoot to kill” if necessary to maintain order and “protect our portion of the infrastructure. [I]f we had to use deadly force to protect it, we couldn’t be prosecuted.… We were assured that if we were forced to kill someone to protect our infrastructure, there would be no repercussions. It gave me goose bumps. It chilled me to the bone.” Other InfraGard members deny that they have ever been told such; Schneck says InfraGard members will have no civil patrol or law enforcement responsibilities. The FBI calls such assertions “ridiculous.” But the business owner’s story has been corroborated by other InfraGard members. “There have been discussions like that, that I’ve heard of and participated in,” says Christine Moerke, an InfraGard member from Wisconsin. (InfraGard 2008; Rothschild 2/7/2008)
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)
George Skelton, a reporter for the Los Angeles Times, gets an unexpected call asking if he wants to interview Vice President Cheney. Skelton thinks the call might be to lay some groundwork for the 2004 Bush-Cheney re-election campaign. But Cheney wants to talk energy. Skelton is happy to oblige: energy prices are out of control in California. Cheney doesn’t just want to talk energy, though, he wants to talk about how bad an idea price caps are (see April 17, 2001 and After). “Price caps provide short-term relief for politicians,” Cheney says, in an oblique swipe at California’s Democratic governor, Gray Davis. He continues, “But they do nothing to deal with the basic, fundamental problem.” Skelton asks if the administration will support temporary price caps to get California through the immediate crisis period, and Cheney replies: “Six months? Six years? Once politicians can no longer resist the temptation to go with price caps, they usually are unable to muster the courage to end them.… I don’t see that as a possibility.” Cheney goes on: “Frankly, California is looked on by many folks as a classic example of the kinds of problems that arise when you do use price caps.” What Skelton does not know is that Cheney is echoing the recommendations of Enron CEO Kenneth Lay, whose company is primarily responsible for the California energy crisis. (Dubose and Bernstein 2006, pp. 4-5)
The FBI alerts InfraGard members (see 1996-2008) of a potential terrorist threat to bridges in California. Officials of Enron are also notified. However, the FBI does not immediately notify California governor Gray Davis, who learns of the threat from his brother, Barry Davis, an employee of the financial firm Morgan Stanley. Davis’s press secretary, Steve Maviglio, later recalls: “[Governor Davis] said his brother talked to him before the FBI. And the governor got a lot of grief for releasing the information. In his defense, he said, ‘I was on the phone with my brother, who is an investment banker. And if he knows, why shouldn’t the public know?‘… You’d think an elected official would be the first to know, not the last.” (Rothschild 2/7/2008)
A new advertising and poster campaign attacking pro-choice Catholic senators harks back to the dangerous “Deadly Dozen” campaign of 1995 (see 1995 and After), according to pro-choice advocates. The 1995 advertising and poster campaign targeted over a dozen health care and abortion providers, usually listing their names, addresses, and telephone numbers. The new campaign is by the American Life League (ALL—see 1979), an anti-abortion organization centered in Stafford, Virginia. Both the 1995 and the current campaigns feature “Old West” themed posters. ALL’s posters provide photographs of a dozen pro-choice US senators under the announcement, “Wanted For Fradulently Claiming Catholic Faith”; like the earlier campaign, the senators are branded as “The Deadly Dozen.” The senators pictured include Ted Kennedy (D-MA), Tom Daschle (D-SD), John Kerry (D-MA), and Barbara Mikulski (D-MD). The campaign calls for bishops to refuse communion to the senators. Vicki Saporta of the National Abortion Federation says she is appalled by ALL’s choice of slogans. “This type of language is associated with violence,” she says. “Seven people lost their lives as a result of this type of verbiage. What is the American Life League thinking?” The new ad campaign is running in selected newspapers, including the Washington Times and The Wanderer, a weekly Catholic newspaper in Massachusetts. A new round of posters is planned, targeting, among others, Governor Gray Davis (D-CA) of California and other California pro-choice lawmakers, according to ALL official Joseph Giganti. Giganti says ALL is opposed to violence and calls comparisons between his organization’s campaign and the 1995 campaign “reckless and careless.… Our ads don’t refer to being wanted dead or alive; it is referencing the fact abortion kills. We are simply saying, if you are in fact Catholic, how can you continue to support abortion?” Giganti blames pro-choice groups for “purposely… misinterpret[ing]” the campaign and using it “as a stepping stone to voice their own opinions.” At least 11 Catholic diocesan newspapers have turned down the ads. “The kind of advertising they are doing is inflammatory,” says Frances Kissling, president of Catholics for a Free Choice. “It could incite someone, set someone off. But the more dominant issue is that they will disgust people. This ad will only reinforce pro-choice. People who have mixed feelings about abortion, people who are moderates will be turned off by the advertisements.” A spokesman for one targeted senator, Christopher Dodd (D-CT), says of the campaign: “There is no place in America for personal attacks on those with whom one disagrees. Ultimately, Senator Dodd’s religious views are a personal matter between him and God.” (Life 1/22/2003; Smith 4/21/2003)
The campaign of Arnold Schwarzenegger (R-CA), the leading contender in California’s gubernatorial recall election, launches a strong counterattack against a Los Angeles Times story that reported six women’s accusations that Schwarzenegger sexually assaulted them (see October 2, 2003).
Candidate Apologizes - The campaign denies the accusations, but Schwarzenegger backs away from his campaign’s initial insistence that he had never acted inappropriately around women. He now says that he had “behaved badly sometimes” and “done things which were not right, which I thought [were] playful [on movie sets]. But I now recognize that I have offended people. And to those people that I have offended, I want to say to them I am deeply sorry about that, and I apologize.”
'Complex Strategy to Minimize' Impact of Allegations - Authors and media observers Kathleen Hall Jamieson and Joseph N. Cappella will later write: “Schwarzenegger’s supporters engaged in a complex strategy to minimize the effect of the allegations. The response included testimonials from the candidate’s wife, newscaster and Kennedy family member Maria Shriver, that Schwarzenegger was a good father and husband and an ‘A-plus human being.’ Shriver also claimed that many of the stories had been fabricated and attacked the Los Angeles Times for the investigation and for publishing the story so close to the election.” Conservative media outlets quickly move to support Shriver’s attacks, and add a new wrinkle: that the Times was quick to print such allegations against Schwarzenegger, but was refusing to print allegations that Democratic Governor Gray Davis had engaged in abusive behavior against women on his staff. Therefore, they say, the Times is engaging in a double standard. Jamieson and Cappella will write: “The conservative claim was a standard one: the ‘liberal media’ were eager to undercut conservatives and protect ‘liberals.’ And voters were encouraged to reject the Schwarzenegger groping allegations but trust those about Davis’s supposed staff abuse.” Columnist Jill Stewart of the Los Angeles Daily News accuses the Times of “sitting on” the Davis story “since at least 1997… that [Davis] is an ‘office batterer’ who has attacked female members of his staff, thrown objects at subservients and launched into red-faced fits, screaming the f-word until staffers cower.” Fox News reports the Davis allegations, and conservative talk show hosts, led by Rush Limbaugh, repeat and embellish the story. Mainstream cable TV outlet MSNBC, in shows hosted by conservatives Joe Scarborough and Pat Buchanan, also report the Davis allegations. On Fox, Stewart accuses the Times of “journalistic malpractice” and “horrible, horrible bias.” (Jamieson and Cappella 2008, pp. 152-154)
Strategy Successful - The strategy is apparently successful, with Schwarzenegger ousting Davis and 134 other challengers in the recall election. CNN exit polls show that despite the sexual harassment charges, around 47 percent of women voters cast their ballots for Schwarzenegger. (CNN 10/8/2003)
Times Defends Reporting, Limbaugh Warns Listeners to 'Remember This Business' - Days later, the editor of the Los Angeles Times, James Carroll, will defend the Schwarzenegger sexual harassment story, describing the seven weeks of meticulous interviewing and fact-checking that went into it, and reveal that the Times had twice investigated the allegations of Davis’s supposed ‘office battering’ and found nothing to support the charges. Limbaugh, however, will remind his listeners: “The next time the LA Times or any other mainstream liberal institution starts talking to you about the aftermath in Iraq or the war on terrorism, I want you to remember this business of what they did with Schwarzenegger, and I want you to tell yourself, ‘Schwarzenegger is not an isolated episode.’ If they’re doing it there, where else are they acting as Democrat house organs?” (Jamieson and Cappella 2008, pp. 154)
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