Skip to comments.Henry Waxman letter to Dick Cheney about Enron ( text version ) BARF ALERT !!
Posted on 01/25/2002 6:40:48 PM PST by The Bugler
The Vice President
The Eisenhower Executive Office Building
Washington, DC 20501
Dear Mr. Vice President:
On January 16, I wrote you about 17 provisions in the White House energy plan that
benefitted Enron. New information has now come to my attention concerning one of those
provisions: the recommendation that the United States back natural gas development in India,
where Enron has a major natural gas fueled power plant in Dahbol that has been embroiled in
financial difficulties. It appears that this provision was absent from the final draft that the State
Department circulated during the interagency review process for the energy plan. Instead, the
provision appears to have been added to the plan during the period in which the White House
directly controlled the drafting.
The Dabhol project is a massive combined-cycle power plant on the western coast of
Indias Maharashtra state. This $2.9 billion facility is 65% owned by Enron. In 1993, the World
Bank evaluated the project and concluded that it was not economically viable because the
proposed plant would produce too much power at too high a price for the state. 1 Nevertheless,
Enron pushed the project, and it came into operation after nine years of development. When the
plant started operations in 2001, the power from Dabhol was four times more expensive than that
from domestic power producers.2 It quickly became clear that the state neither needed nor could
afford this power, and the Indian government ceased payment in early 2001 .3 Enron sought to
resolve the dispute by having its interest bought out for $2.3 billion4
2 Enron Issues Veiled Sanctions Threat to India, Financial Times (Aug. 24, 2001).
3 See Enron and Foreign Investment, Business Times (Dec. 11,2001).
4 White House Aided Enron in Dispute: Cheney, Others Intervened Over Indian Power
Plant, Washington Post (Jan. 19, 2002).
The Vice President
On January 18 and 19, the New York Daily News and the Washington Post reported that
you tried to help Enron with its financial problems concerning the Dabhol power plant in India.5
These articles reported that on June 27,2001, you mentioned Enron and the Dabhol plant by
name in a meeting with the Indian opposition leader Sonia Gandhi.6
An aide to the President, Mary Matalin, explained your action in the following manner:
[Vice President Cheney] said, what is the status of the Dabhol project, and he was answered and
they moved on. That is his job. He was asked to do that by no one other than our interagency
process.7 She also stated: This is not our issue. It was in the briefing papers, so he asked the
question. The vice president didnt remember that topic at all. I asked him directly.8
The attached document is a March 30,2001, draft of the chapter on national energy
security and international relations in the White House energy policy.9 According to my
understanding, the White House energy plan was first drafted by the National Energy Policy
Development Workgroup. The Workgroup was composed of staff from various agencies led by
the Executive Director, Andrew Lundquist, a member of your staff. Each chapter of the energy
plan was drafted by one of the participating agencies. Drafts were then circulated among all of
the Workgroup members, and the Workgroup met to discuss each agencys comments on the draft.
My understanding is that the attached March 30,2001, draft of the international chapter
was a product of this interagency process. The draft was written by the State Department. It had
undergone multiple reviews over a roughly six-week period. It had been vetted through the
interagency process. And it had been approved by the State Department to be sent to the White
It is further my understanding that after this draft was submitted to the White House, any
further changes in the plan were made under the direction of the White House. No subsequent
versions of the White House energy plan were circulated to the interagency Workgroup.
This March 30 draft very closely tracks its counterpart chapter in the final White House.
7CNN Wolf Blitzer Reports (Jan. 18, 2002).
8Veep Tried to Aid Firm: Key role in India Debt Row, New York Daily News (Jan. 18,
9Section 10: National Energy Security and International Affairs (filename:
03-30-Ol-NEPG Study-R4a.doc) (March 30,200l).
Henry A. Waxman
cc: The Honorable David M. Walker
The Honorable John D. Dingell
10 The only other changes appear to be slight expansions of earlier discussions, some
reorganization, and the addition of one new recommendation on the Strategic Petroleum Reserve,
which had already been discussed extensively in the earlier draft.
11 Report of the White House National Energy Policy Development Group, 8-20.
12 See Enron Rocks Indias Flagship Investors, Financial Times (May 29,200l) (quoting a
senior executive discussing the hurdle rate of return for investment in India, which is the
minimum rate of return on equity in dollars: If this Enron thing works out badly, the senior
executive said, the hurdle rate is going to be infinity); High Stakes Showdown; Enron s Fight
Over Power Plant Reverberates Beyond India, NY Times (March 20,200l) (The worry that
Dabhol could chill foreign investment is serious for India); NSC Aided Enrons Efforts: Agency
Sought Lay Meeting with Indians on Plant, Washington Post (Jan. 25,2002) (in a meeting with
the Indian government on April 6, Secretary of State Colin Powell told his Indian counterpart that
"failure to resolve the matter could have a serious deterrent effect on other investors).
but the actual text letter wasn't posted.
I hope I haven't broken any sacred posting law :-)
New information was released yesterday showing that the White House amended a draft energy proposal by the State Department to include a provision favorable to Enron. Rep. Henry A. Waxman (D-Calif.), the White House's main antagonist over the energy task force records, released papers indicating the White House added to the final report a call to boost energy production in India. In between the draft and the final report, Enron officials had met with the task force, Waxman's staff said.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.