- The Washington Times - Monday, April 8, 2002

Enron Corp. grew in the 1990s from a small Texas natural gas company to a $50 billion global energy-trading giant with extensive help from the Clinton administration.
The company's international stature grew remarkably in the 1990s, to a point that Clinton officials sought its help in solving problems big and small, including drumming up support for the global-warming treaty, promoting economic development in the war-torn Middle East and Bosnia and drafting the details of an arcane bankruptcy reform measure.
One key success for the company was getting the administration to propose a new round of world-trade negotiations on energy services, an industry Enron dominated at home and hoped to turn into a trillion-dollar enterprise abroad.
Documents released by the Treasury Department show that President Clinton's trade representative, Charlene Barshefsky, seized upon the idea, offered to her by a coalition of energy companies headed by Enron, and presented it almost verbatim in World Trade Organization negotiations in May 2000. Other nations agreed in March 2001 to start discussions on energy services, with the aim of lowering regulations and other barriers to trade.
With the help of more than $1 billion in subsidized loans and insurance from Clinton agencies, Enron also built dozens of international projects, from a natural gas pipeline in China to clean-burning power facilities in Brazil and the Gaza Strip, according to a top Clinton official. The projects are said to have dovetailed with Mr. Clinton's twin goals of promoting American business overseas and encouraging environmentally friendly energy development.
"The whole world was just waking up and becoming export oriented" in the 1990s, and Enron was on the cutting edge of the globalization wave, said the official, speaking on the condition of anonymity.
"Clinton was a big supporter of companies doing business overseas. He was a huckster for corporate America, and that's how he got big contributions" from companies such as Enron that had global ambitions, the official said.
Enron, its political action committee and its employees contributed more than $1.5 million to Democratic candidates and causes during the Clinton years.
While Enron and Mr. Clinton shared many interests, the official said he was shocked at how successful Enron was with the administration; it won approval for 19 of 20 loan applications it made for its far-flung and often risky international projects. The largest of those, in Dabhol, India, has since failed and may become a liability for U.S. taxpayers.
"They were great pros at working Washington, there's no doubt about it," the official said, ranking Enron among the most formidable corporate lobbying powerhouses with dozens of Washington representatives to push its interests in the 1990s. "The reality is, that's what our democracy begs for. You can't knock the fact that people play that game well."
The Clinton official noted the irony that Enron contributed more to Republican candidates but seemed to get more for its money from Democrats.
"We think it is a function of the government to support American companies and their workers. But conservatives say that's baloney," he said. Despite receiving generous campaign contributions from Enron, the Bush administration denied Enron requests for assistance as it was spiraling toward bankruptcy last fall.
That contrasts with the working relationship Enron had developed with the Clinton administration. One internal Enron document says the Clinton White House sought Enron's assistance in getting China and India to participate in the Kyoto global-warming treaty, mindful that the accord faced a key obstacle in the Senate: Lawmakers were loath to ratify any treaty that left out major developing nations whose greenhouse-gas emissions were projected to soon outstrip the emissions of the United States.
"The administration is concerned about getting China and India into the family of nations committed to" reducing emissions of carbon dioxide through an international-trading regime championed by Enron, said company lobbyist John Palmisano in an October 1996 memo describing how the company was working with the Clinton administration and environmentalists to secure support for the treaty.
Mr. Palmisano said the White House specifically suggested that Enron consider expanding its natural gas business by building clean-energy projects in China, a heavy user of coal, which is the biggest source of carbon emissions. In April 1999, three years later on a trade mission to China, Commerce Secretary William M. Daley announced a first joint venture between Enron and Beijing to build a natural gas pipeline.
It was one of more than a dozen Clinton trade missions in which Enron Chairman Kenneth L. Lay and other company executives accompanied the commerce secretary and touted Enron's international projects.
Enron expected to earn big money from its clean-energy projects under the Kyoto treaty. The accord rewards such projects with "credits" for carbon reductions that Enron expected to be able to resell at a large profit to other companies seeking to comply with the treaty. Enron was positioning itself to be a pioneer in the huge international emissions-trading market envisioned under the treaty.
At the time Mr. Palmisano wrote his 1996 memo, Mr. Clinton and Enron had hopes that other countries would agree to let companies like Enron build projects in Third World nations and then resell the credits they earned to other companies a provision that would have made the energy giant's projects in China, India, Brazil and other developing countries more lucrative.
Negotiators at subsequent U.N. talks, however, did not agree to authorize such "joint implementation" projects in developing countries, although a provision authorizing such projects in former Soviet bloc states was included in the treaty.
"This means that Enron projects in Russia, Bulgaria, Romania or other Eastern countries can be monitized in part by capturing carbon reductions for sale back in the U.S. or other Western countries," Mr. Palmer said in a December 1997 memo trumpeting the Kyoto treaty as a "victory" for Enron that would drive up its stock price.
"This agreement will do more to promote Enron's business than will almost any other regulatory initiative" because of the premium the treaty places on projects involving natural gas and renewable energies like wind power another area of expansion for Enron, Mr. Palmisano wrote. "Enron has immediate business opportunities which derive directly from this agreement."
Enron saw the potential to work with Mr. Clinton from the day he was elected, noting in a November 1992 company newsletter that Mr. Clinton's energy and environmental policies would aggressively expand the use of natural gas because it emits only half as much carbon as coal. The newsletter also notes that Al Gore, Mr. Clinton's vice president, was one of the strongest proponents of a global-warming treaty.
By the end of the decade, Enron built on its success by winning Mr. Clinton's approval for its proposal on energy services trade. Enron had evolved from a producer of physical infrastructure like pipelines and power plants into the leading international energy trader, earning most of its money buying and selling intangible financial assets.
Enron got considerable help along the way from Clinton Treasury Secretary Lawrence H. Summers and other top officials by winning regulatory exemptions for its domestic activities.
It hoped to amplify those gains by pushing for the same kind of deregulated markets overseas.
Mr. Lay made a pitch for Enron's vision of a deregulated, global energy market to delegates at the ill-fated world trade talks in Seattle in December 1999. But although those negotiations fell apart amid anti-globalization street protests, Enron's dream of beginning a round of trade talks on energy services survived when talks resumed the next spring.
While Enron's lobbying achievements at times were sublime, the company was no shirker of details when money was involved. It sought and received help from the Treasury Department to gain more favorable tax treatment of its overseas energy projects. Enron complained that its efforts to expand overseas were being undermined by obscure provisions of U.S. tax law, and it lobbied both the Clinton and Bush administrations to remove the impediments.
Enron didn't shy away from inserting itself into even the most arcane matters that stood in the way of business.
Documents show that company lawyers provided the Clinton Treasury Department with line-by-line legislative language to be included in the bankruptcy-reform bill to ensure the quick settlement of energy derivative contracts in the event of bankruptcy.
Ironically, the bankruptcy provision never became law, and Enron was unable to take advantage of the procedures when it filed for Chapter 11 bankruptcy protection Dec. 2.

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