- The Washington Times - Tuesday, May 7, 2002

Hoping to fulfill the energy giant's biggest ambition to create a nationwide electricity market, former Enron Chairman Kenneth Lay played a part in getting President Clinton to propose a power deregulation bill, internal Enron documents show.
Mr. Clinton sent the bill to Congress within weeks of receiving a Feb. 20, 1998, letter from Mr. Lay, obtained by The Washington Times, urging him to get personally involved because Congress appeared ready to act on legislation promoting competition and consumer choice in electricity.
Mr. Lay wrote the letter at the suggestion of Federico Pena, then the energy secretary. That day in a meeting, Mr. Pena had told Mr. Lay that he was "frustrated" that the bill was being held up by environmental "roadblocks," but he believed Mr. Clinton could be persuaded to release the bill "within days" if "motivated by some key contacts from important constituents," according to an internal Enron memo recounting the meeting, also obtained by The Times.
A spokesman for Mr. Clinton declined to comment.
Mr. Pena at the meeting sought Mr. Lay's help and advice not only on the power deregulation bill drafted by his department, but also on a "comprehensive national energy strategy" that the administration was developing, according to the memo, written by Enron lobbyist Jeff Keeler.
The evidence of Enron's input into Clinton energy policies comes as former Vice President Al Gore and other Democrats are criticizing President Bush's energy task force for consulting with energy executives in writing the administration's energy policies.
The Senate Governmental Affairs Committee, headed by Sen. Joseph I. Lieberman, the Connecticut Democrat who was Mr. Gore's running mate in the 2000 presidential election, and other Democratic-led panels have been probing since Enron collapsed late last year to find out if the company unduly influenced the Bush administration.
Available evidence suggests Mr. Lay, a major contributor to both parties, assiduously cultivated top officials of all stripes to further the company's interests.
One of the more influential backers won over by Mr. Lay was Mr. Clinton's treasury secretary, Lawrence H. Summers. In a note to Mr. Lay in May 1999, Mr. Summers promised to "keep my eye on power deregulation and energy infrastructure issues."
But ultimately Enron's efforts failed during the Clinton years, so it continued to press its case to create a national electricity market when Mr. Bush took office. It was a critical issue for a major power broker hoping to enlarge its market.
Enron executives lobbied on power issues in meetings with the Bush task force last year, as evidenced by a memo Mr. Lay wrote to Vice President Richard B. Cheney April 17, 2001, detailing Enron's recommendations on dealing with the California power crisis and restructuring the electricity market.
Some of Enron's ideas were included in the Bush energy plan in May 2001. But by that time, the momentum for federal power deregulation had diminished substantially with the collapse of California's partially deregulated power system. Enron itself was in decline and headed toward bankruptcy.
A comparison of the Enron interactions with the two administrations and the policies that came afterward suggests that the Houston company had no more influence over one than the other.
For example, Mr. Lay told Mr. Pena he strongly supported the Clinton administration's "market-based" approach to electricity restructuring over other approaches on Capitol Hill. But he opposed efforts by Mr. Clinton to link the deregulation bill to measures to curb global warming.
"[Mr.] Lay discussed the importance of divorcing environmental mandates, like Clean Air Act amendments [to deal with climate change and emissions] or renewable mandates, from electricity legislation," Mr. Keeler said in his memo to Enron executives in Houston.
But Mr. Pena rejected that advice, telling Mr. Lay that the bill would include a requirement that some electricity sales be generated from renewable sources such as solar and wind power, to satisfy environmental advocates within the administration.
Mr. Pena pointed out that a key Republican bill in Congress had such a renewable mandate and "the administration can't be 'out-greened' by Republicans," the memo recounted.
As a result, Mr. Lay did not mention the environmental issue in his letter to Mr. Clinton, but he assured Mr. Pena that the disagreement was only on strategy.
"Enron will certainly be supportive of the administration's climate change/emissions reduction initiatives," Mr. Lay told the energy secretary. He already was working with Mr. Clinton to develop support for the 1997 global warming treaty.
Enron viewed the meeting with Mr. Pena as a success.
"In all, it seems that Secretary Pena and his staff agree with us on the urgency of [the electricity] legislation, and are willing to work to get something done this Congress,"
The company also won agreement on details of power restructuring from the Bush administration, according to the memo to Mr. Cheney, first published by the San Francisco Chronicle.
Mr. Bush's energy plan included a contentious proposal pushed by Enron to give the federal government the authority to override state decisions and assert eminent domain to put power lines where needed to expand electricity production.
Though opposed by many in Congress, energy analysts said the authority was needed to prevent power shortages like those in California, which are due in part to inadequate transmission facilities.
On the other hand, the Bush administration went against Mr. Lay's advice in June when it decided to establish caps on wholesale power prices in California. As a major power seller in the state, Enron opposed such price controls.
Ironically, it was Pat Wood, whom Mr. Lay had recommended to Mr. Bush to be chairman of the Federal Energy Regulatory Commission, who pushed the price caps through, in a move that sent Enron's stock plummeting.


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