CA: Don't forget: Politicians share blame with Lay for energy debacle

Sac Bee ^ | 7/7/06 | Dan Walters

[NormsRevenge]

The purveyors of revisionist political history are back at work this week, inspired by the death of Enron Corp. founder -- and convicted felon -- Kenneth Lay to revive the myth that were it not for Enron and Lay, California wouldn't have experienced its 2001 energy crisis. ...

--snip--

Attorney General Bill Lockyer had the good manners to remain silent about Lay's death from heart disease three months before he was to be sentenced for lying to mask the failing company's condition. It was Lockyer who in 2001 told an interviewer that "I would love to personally escort Lay to an 8-by-10 cell that he could share with a tattooed dude who says, 'Hi, my name is Spike, honey.' "

Dunn and Lockyer have been the most vociferous politicians in blaming Lay and Enron for California's energy woes, but they're not alone. Gray Davis, the governor when the crisis struck, claimed vindication last May when Lay was convicted along with associate Jeffrey Skilling. ...

--snip--

Did Lay's Enron play a role in the crisis that continues to cost California consumers tens of billions of dollars? Of course, but it was just one of many factors, and not even the most important one.

--snip--

In the mid-1990s, then-Gov. Pete Wilson and Daniel Fessler, Wilson's Public Utilities Commission president, pushed for deregulation, saying that competition could bring down California's high power rates. The PUC formulated a plan but the Legislature -- especially a state senator named Steve Peace -- decided to intervene. Lobbyists for utilities, power generators, traders such as Enron and consumer advocates engaged in marathon negotiating sessions known in the Capitol as the "Steve Peace death march" and produced a scheme that legislators, including Lockyer as a state senator, unanimously endorsed in 1996.

[Mo1]

You can put Robert Rubin into that mix also

[Jaded]

I think people will be surprised at who actually has the front row seats in hell.

[marron]

You can't game the system unless there is a restricted supply to begin with. Fix the restriction in the supply, and the "profiteering" disappears on its own.

California has systematically fought every energy project to come down the pike, and the result is that it is fairly easy to send the state into brown-outs. A maintenance problem on a pipeline here, a high-line down there, a plant shutdown yonder, and suddenly you're scrambling.

Even during the brown-outs, Democrats were organizing to shut down existing power plants, and refusing to permit new plants. Some plants that were permitted during the worst of it found the rules changing as soon as the brown-outs were over, effectively the state reneged on their permits. People like this are begging for a few smart brokers to take them to the cleaners.

[Brilliant]

Maybe just the way that you clipped it, but seems like Gray Davis ought to shoulder a huge share of the blame, and he's not mentioned.

[NormsRevenge]

Duly noted.. Thanks!

also,, add in other peripheral involvement of some sort or other.

---

Enron and Clinton ^
http://www.freerepublic.com/focus/f-news/1638702/posts
Posted by Obadiah
On News/Activism ^ 05/26/2006 6:51:23 AM PDT · 9 replies · 533+ views
NewsMax ^ | Charles R. Smith

[spintreebob]

Would that be politicians like Gray-out Davis?

California pretended to "de-regulate" energy. But in reality they just changed one way of regulating it for another way of regulating it. As in other states, a gap occurred between the old way and the new way.

The Enrons of the 90s arbitraged that gap between the old and new regulations.

This practice was accurately predicted and opposed by the capitalist economists who wanted true de-regulation and not a different kind of regulation that was mis-labeled.

[NormsRevenge]

I hate to snip to satisfy excerpt rules..

The debacle was a group effort...

--

btw
The La Times has a piece on Gray today

http://www.latimes.com/news/local/la-me-davis7jul07,1,2782388.story?coll=la-headlines-california

Bright Days for Gray Davis -- Three years after the recall, the former governor is basking in private life. He has work as a lawyer, book plans, even time to golf with his wife. John Balzar - Los Angeles Times

[Brilliant]

I'm glad to see he's finally found a way to make himself useful. Being a couch potato seems to be his expertise.

[TheOracleAtLilac]

the conspiracy is bigger than that.

i.e. every stock brokerage house has "sector" experts.

So, out of the hundreds of energy sector experts at the various brokerage houses....none could spot that Enron was a house of cards ?

C'mon

[NormsRevenge]

California has systematically fought every energy project to come down the pike, and the result is that it is fairly easy to send the state into brown-outs. A maintenance problem on a pipeline here, a high-line down there, a plant shutdown yonder, and suddenly you're scrambling.

--

Much is still as it was then.. we live on the edge ,, of darkness..

Buld nukes now, while we still can..

[NormsRevenge]

Build

[spinestein]

[Lay's death from heart disease three months before he was to be sentenced for lying to mask the failing company's condition. It was Lockyer who in 2001 told an interviewer that "I would love to personally escort Lay to an 8-by-10 cell that he could share with a tattooed dude who says, 'Hi, my name is Spike, honey.' "]



Wow, such hatred toward a man whose only crime was overstate the financial stability of his company in order to fool the public into thinking it was more secure than it really was.

I makes me wonder what's in store for the members of congress who continue to lie to the public year after year about the financial state of Social Security by pretending that it has a chance to remain solvent for more than a few years and that no one will notice the 7 trillion dollars they've "borrowed" from the fund with no way of repaying.

[calcowgirl]

Retail power rates were frozen while utilities bought juice from a newly created wholesale market at prices that had no caps.

Stupid, stupid, stupid. A flawed model from the get-go. Failure was inevitable.

Kind of seems like a set-up, doesn't it? Nah--couldn't be. /s

[lilylangtree]

Put the whole demoncRAT party to blame for Enron. Lay contributed heavily to the demoncRATS even though the democrazies and press have tried repeatedly to link Enron's mess to the Bush Admin. In late 2001 on the heels of 911, the congressional budget included a bailout clause for a number of corporations. The Bush Admin said no to the clause. The budget was passed w/o that particular bailout and corporations including Enron went belly up after making billions from the consumers and the politicians, especially demoncRATS, feeding consistently feeding at the corporate trough.

[concrete is my business]

I think BC Hydro also made some big money off the same types of trades as Enron.

IIRC, BC Hydro got stiffed by California for some of it though.

[cd jones]

yes....see drudge report from 1997

---

FLASHBACK: CLINTON OFFICIAL MET WITH ENRON CHAIRMAN; $100,000 CASH DONATION TO DEMOCRATS TIMED TO PLANT APPROVAL
TIME MAGAZINE
SEPTEMBER 1, 1997

On Nov. 22, 1995 President Clinton scrawled an FYI note to chief of staff Mack McLarty, enclosing a newspaper article on Enron Corp. and the vicissitudes of its $3 billion power-plant project in India.

McLarty then reached out to Enron's chairman, Ken Lay, and over the next nine months closely monitored the project with the U.S. ambassador to New Delhi, keeping Lay informed of the Administration's efforts, according to White House documents reviewed by TIME magazine.

In June 1996, four days before India granted final approval to Enron's controversial $3 billion power-plant project, Enron's gave $100,000 to President Clinton's party.

Enron denies that its gift was repayment for Clinton's attention, and White House special counsel Lanny Davis says McLarty acted out of concern for a major U.S. investment overseas, TIME's Michael Weisskopf reported.

****

DRUDGE NOTE: McLarty was later hired by Enron. Lay also played golf with President Bill Clinton and slept in the Clinton White House. A master of political manipulation of both parties, Lay served as an adviser to the Clinton White House on energy issues. The Clinton administration, in turn, helped Enron get a contract for a gas pipeline in Mozambique and other projects, according to reports.

END

[Rte66]

For some, it was easier to play now, pay later. And they are. Just not very much, proportionately.

[dr_who_2]

The people who write up the news will be surprised, anyway.