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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. (Parry 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. (Borger 5/26/2001; Scheer 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). (Moyers 2/2/2002; Parry 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.” (Borger 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.” (Moyers 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. (Borger 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. (Moyers 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. (Borger 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. (Bradley 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. (Parry 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.” (Borger 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).
The Dartmouth Review, a conservative weekly student newspaper funded by off-campus right-wing sources (see 1980), publishes its latest edition; the cover depicts a Native American as what Indian Country Today later describes as a “crazed ‘savage’ holding up a scalp.” The cover headline: “The Natives Are Getting Restless”; the story ridicules Native American students for protesting a recent spate of anti-Native incidents on campus. Dartmouth College was founded in 1769 as a school for Native Americans, and has a long history of supporting Native American causes; in light of its history, the local and national Native American communities have been dismayed in recent years by what they call the anti-Indian sentiments espoused by the Review and other Dartmouth students. The National Congress of American Indians (NCAI) joins with the student organization Native Americans at Dartmouth (NAD) to ask college administrators to address the recent string of “culturally insensitive, biased, and racist” events that they say have created a hostile campus environment at the school. “Colleges and universities are places where diversity and tolerance should foster productive, inclusive, and thriving intellectual communities,” says NCAI President Joe Garcia. “When cartoonization, mockery, and insensitivity of Native peoples, cultures, and traditions persist on college campuses, Native students are at a unique disadvantage in that intellectual community. NCAI joins NAD, [Dartmouth] President James Wright, and the broader Dartmouth community in condemning the recent series of biased incidents at the college, and stands with NAD in its efforts at combating bias in your community.” In recent months, Review staffers and Dartmouth students have orchestrated a number of events that Native Americans call racist and intolerant, including the distribution of homecoming shirts depicting a knight performing a sex act on an American Indian caricature, and the physical disruption by fraternity pledges of an American Indian drumming circle. The publication of the Review with its offensive cover sends the Native American community, and its supporters, into new levels of outrage, with Indian Country Today noting that the illustration of the “savage” has often been used by anti-Native American organizations. Over 500 students, faculty, and administrators take part in a demonstration supporting the Native American community. In response, the Review editor, Daniel Linsalata, calls the cover “hyperbolic” and “tongue-in-cheek,” and says that while he “regret[s]” that the cover “may have” offended some, he stands behind “the editorial content” of the edition. The remainder of his response attacks NAD, and argues that the cover is appropriate to the discussion: “The accusation that this cover was maliciously designed as a wantonly racist attack on Native Americans is patently false,” he says. Wright issues a statement apologizing for the racial slur. Four days after Linsalata’s response, editors Nicholas Desai and Emily Ghods-Esfahani write that the cover was “a mistake” that “distracted attention from the serious journalism the Dartmouth Review has been publishing.” (Linsalata 12/2/2006; Dartmouth Review 12/6/2006; Toensing 12/15/2006)
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