BuzzFlash
BuzzFlash
Interviews Congressman Henry Waxman
December
24, 2001
BUZZFLASH
INTERVIEWS CONGRESSMAN HENRY "BULLDOG" WAXMAN ON ENRON AND THE
BUSH ADMINISTRATION
There
are many Democrats who aren't backing down. One of our favorites is Congressman
Henry Waxman (29th District, CA). BuzzFlash calls the Los Angeles Congressman
"Bull Dog" Waxman.
This
year alone, Waxman has pressured Vice President Cheney to reveal who influenced
the administration's "energy policy" (although Cheney isn't
fessing up yet). He has taken on NBC News in an effort to disclose the
facts surrounding allegations that former GE Chairman Jack Welch told
the NBC election desk to call the November election for Bush. (GE owns
NBC, in case you live on Jupiter and didn't know that.) The pugnacious
Bear State legislator has tried to get Karl Rove to disclose more about
whether he improperly met in the White House with representatives from
companies in which he owned stock. In his spare time, the Congressman
has also taken on the tobacco industry and the gun lobby, among other
formidable foes.
Waxman
is the ranking minority member of the House Government Reform Committee,
where he regularly is a tenacious and articulate counter balance to Dan
"Why Don't I Have Bill Clinton and Janet Reno to Kick Around Anymore"
Burton. For that alone, the "Bull Dog" of the House of Representatives
deserves our praise.
When
BuzzFlash caught up with Congressman Waxman (in a telephone interview
just before the holiday recess) he had just placed an Enron tip line on
his website:
http://www.house.gov/waxman
What
is an Enron tip line? Well, we will let the Congressman explain.
And
hey, send the Congressman a fax or letter and tell him how much you appreciate
his strong spine and unwavering pursuit of justice -- or give his office
a call. (E-mail is not an effective means of communication to most congressional
offices, unless it is addressed to a specific staffer.) He's a true patriot
-- and an innovative and creative one at that.
*
* *
BUZZFLASH:
Congressman Waxman, we are a great admirer of your work on BuzzFlash.
We call you "Bulldog Waxman."
REP. HENRY WAXMAN: [laughs] Thank you very much.
BUZZFLASH:
And we have worked with your staff on covering your investigation of the
NBC election-night coverage and a couple of other issues. Today, we're
calling specifically to ask you why you have an Enron tipline on your
website and what sort of information that you're looking for.
REP. HENRY WAXMAN: We have a tipline on Enron on our website
because we're
asking people to give us information that they may have as we take on
our own investigation of Enron; especially as we investigate Enron, not
only for its financial dealings, but also for the larger political connections
that this corporation and its leaders have had with the Bush administration.
What has happened with Enron is quite breathtaking. This was the seventh-largest
corporation in the country. And it collapsed while its executives were
able to walk away with hundreds of millions of dollars. Their employees
and their investors were left in the rubble.
The
fact of the matter is that Enron and Ken Lay, who was the Chief Executive
Officer of Enron, had an extraordinary amount of influence and access
to the Bush Administration. Lay was called a close friend by both the
President and the Vice President. When the Vice President chaired an Energy
Task Force, Ken Lay had an opportunity to meet privately with the Vice
President and to have a great deal of influence in their recommendations.
We know he met one-on-one with Karl Rove. We also know that many people
in this administration came right out of Enron and went to the administration.
So we are seeking more information as we look at all these times that
the Enron corporation had contact with the Bush Administration, how they
handled their own financial affairs, how they came to the situation they
are in, which I think is an outrage. Their executives had inside information
about the fragile condition of this corporation, were able to bail themselves
out, but left everybody else in shambles.
BUZZFLASH:
You sent a letter on December 4, which is also accessible on your website,
to the Vice President of the United States, a four-page letter, asking
for more information about Enron and particularly, among other things,
their role in the deliberation process by which the Vice President came
up with an energy policy for the administration. Have you received an
answer from the Vice President?
REP. HENRY WAXMAN: We have not yet received an answer from the
Vice President.
I'm disappointed that he hasn't responded, yet. I'm even more disappointed
that when he did respond to earlier requests to make the information public
about how his Energy Task Force operated, he refused to do so. We had
asked the General Accounting Office, which is a non-partisan watchdog
for the Congress, to do a report about this Energy Task Force. They, by
the way, did a similar report on the Clinton Health Task Force in the
last administration. And when they sought information from the Clinton
Administration, they received everything that there was to receive. The
position that the Vice President took when he was requested to furnish
information about his Energy Task Force by the General Accounting Office
was that he just refused to give it to them. The General Accounting Offices
issued what is called a demand letter. And it's quite an extraordinary
move on their part. To send it to the Vice President is the first time
in their history they've ever sent such a letter to any Vice President.
They had stonewalling by the Administration, continued stonewalling by
the Administration. And they're contemplating filing a lawsuit to force
the Administration to give them this information.
Now
I think that the Vice President ought to make public or certainly give
to the General Accounting Office everything that went on with the Energy
Task Force. With Enron's collapse, it's even more important that we know
at least what went on with Enron. Because it may well be that the Enron
executives misrepresented their corporation's situation in asking for
policy recommendations from the Administration. And that could also be
that they told the Administration that they needed certain legislative
or executive actions because they were on the brink of bankruptcy. Either
way, this is not the kind of thing that ought to be kept secret, kept
secret by the Bush Administration. The President has often talked about
how he believes in transparency in government. I certainly believe that
there is a fundamental principle of accountability. And that they are
trying to keep their actions secret and not to be accountable for either
the simple routine information about how a task force on energy policy
was organized when they met and how they came to their recommendations.
BUZZFLASH:
In your letter of December 4, you include references to an article from
the Los Angeles Times and other sources about alleged direct influences
of Enron upon the resulting energy recommendations. It's my understanding
that beyond confirmation of that, the Vice President has not even released
to you a list of people he met with as part of this process. Isn't that
right?
REP. HENRY WAXMAN: That's my understanding. The Los Angeles
Times did an outstanding
job of investigative journalism. And they were able to point out how there
were all sorts of different ties between people either who are in the
Administration or contacting the Administration to advance energy policy
on behalf of some of the energy corporations, particularly Enron.
So
when the LA Times did its scathing report about what they were able to
find out about the Energy Task Force, it certainly came as no surprise
and it's hard to imagine there is much more left to hide. But the Bush
Administration is trying to hide everything they've done and the information
about everyone they met with as they formulated their own thinking on
energy policy.
BUZZFLASH:
It was in your letter that you include information that Bush Senior Adviser
Karl Rove owned over $60,000 worth of Enron stock and reportedly spoke
frequently about energy policy with Mr. Lay, and that Mr. Lay and his
company, since 1993, donated nearly $2 million to the Bush campaign. Are
there any conclusions to be drawn from that or do we still just need to
hear from the Vice President about the details of what went on during
the deliberation over the energy policy?
REP. HENRY WAXMAN: I think those facts you cite raise very serious
concerns,
not just about the Energy Task Force, but further, about people in the
Administration like Karl Rove who gave Ken Lay, the CEO of Enron, the
opportunity to talk to him one-on-one to talk about policy -- and at the
same time, that Karl Rove had a large sum of money in Enron stock, which
would appear to be a conflict of interest. We asked Karl Rove -- and we
asked the White House counsel -- whether Karl Rove had any waiver from
the traditional conflict of interest laws that would prevent him from
having such a meeting. The White House said he didn't need it, which is
in our view contrary to the law.
We
asked other information of the White House counsel's office about Karl
Rove's apparent conflict of interest -- to determine if he did in fact
have a conflict of interest -- and they stonewalled us on that information
as well. It's worth noting in some of the particulars that you get from
our letter that there are a significant number of ties between Enron and
the Bush Administration. Not only did Karl Rove hold a substantial amount
of stock in Enron, but Lawrence Lindsay, the President's chief economic
advisor, was an advisor to Enron itself (reportedly receiving $50,000
last year from Enron) -- and U.S. Trade Representative Robert Zoellick
served on Enron's Advisory Council. Others had stock. The Enron executives
had given substantial amounts of contributions to Mr. Bush over the years.
There are a lot of ties that raise a lot of concerns about -- with such
intimate contacts between Enron and people in the Administration -- how
much did they knew about what was going to happen with this corporation,
which took us all by surprise when it suddenly collapsed.
[BuzzFlash
Note: According to Congressman's Waxman letter to Cheney, "Secretary
of the Army Thomas White, a former Enron executive, valued his company
stock between $25 million and $50 million earlier this year.]
BUZZFLASH:
On the political side, you're the ranking Minority member of the House
Committee on Government Reform, led by President Clinton's nemesis, Dan
Burton. Is the Republican side cooperating in this effort to let the American
people transparently see whatever relationship might exist between Enron
and the executive branch?
REP. HENRY WAXMAN: By and large, it's the Republicans who control
the House
of Representatives who are trying to treat the Enron issue in a very isolated
way. There have been hearings about some of the financial aspects of Enron,
or how the accountants handled the information. I think they're making
hearings on the fact that the Enron employees couldn't dispose of their
stock. But I think the Republicans can't avoid the issue. This is a dramatic
collapse of such an important corporation. But the Republicans don't want
to take on the broader perspective of how Enron has been able to manipulate
a lot of the policies this Administration is pursuing because they are
the recipients themselves of substantial campaign contributions from Enron.
I
think their strategy is to try to take disparate aspects of the Enron
story and try to bore people to death with the sliver that they're looking
at, and have people think, well, that this is a complicated financial
picture and maybe we'll never know what all went on. And it was interesting
how the Republican majority leader Dick Armey responded when he was asked
about the Enron corporation. Armey, who is also from Texas, responded
that Enron is a private corporation, so therefore what happened to Enron
is their private business. I don't look at it that way. When people are
thrown out of work right before Christmas, when investors find that their
investments become worthless and the executives of the company are able
to loot hundreds of millions of dollars for themselves, it seems to me
that something criminal has probably taken place, and we ought to get
to the bottom of it.
BUZZFLASH:
Meanwhile, Enron's pension plan went under.
REP. HENRY WAXMAN: That's right. The people who were in the
know sold their
stock, while the employees who didn't know anything were forced to buy
the stock for their pension plans and were prohibited from even selling
that stock. So they ended up seeing their investments evaporate right
before their eyes.
BUZZFLASH:
During the Clinton Administration, the chairman of the Committee on Government
Reform, was relentlessly tenacious in calling an investigation any time
there was even the merest allegation of alleged impropriety in the Clinton
Administration. To us, it seems a little hypocritical at this point that
they are sort of sitting back on Enron and any other number of issues
that have emerged in the Bush Administration. Do you have any comment
on that?
REP. HENRY WAXMAN: Well, there is no question about the
hypocrisy of the Republicans.
You only have to look at this from the perspective of what would the response
be of the Republicans if this were the Clinton Administration? If the
Clinton Administration had such close and intimate ties with a corporation,
or put it another way, a labor union, in which executives walked away
with hundreds of millions of dollars while the union's pensions were dissipated.
They would be not only calling for an investigation before they got the
facts; they would be calling for impeachment. I have made no accusations
because I need to get more facts to find out if there has been wrongdoing
by the Bush Administration. And all we are asking for is an honest investigation
of the facts. I don't think that we're going to get it from the Republicans.
That's why we're doing it on our own.
It's
interesting also to note how this administration has handled policy information.
They are not only withholding the information about their ties to Enron
and Enron's role in the Energy Task Force and how the Energy Task Force
operated, but they've lied to the American people about a Social Security
surplus. They have been very careful to try to keep the public from getting
information that I think, that should rightfully belong in the public
domain, that they single-handedly changed the presidential records that
should be made available to public and academics. And to try to withhold
those records, they've used executive privilege most recently in one of
the hearings in the Government Reform Committee, which even prompted Chairman
Dan Burton to speak with outrage that we had information being withheld
on the pretense -- and I think it was a real reach for them -- of claiming
executive privilege.
But
those are the policy issues. If you evaluate the constant ways that the
Bush Administration has treated certain facts in the time that they have
been in office, it's disconcerting. Because if you look back, there was
a time when it looked like Vice President Cheney had a heart attack. And
they said, "No, he didn't." But it turned out he had. They came
into office and immediately claimed there had been vandalism by the Gore
people. And that it turned out that there were no facts behind that allegation.
It was just a fiction.
In
August, the President was faced with a difficult decision on stem-cell
research, so he came up with the idea that there were 63 lines. It turned
out later that it was all made up. There was no such thing as 63 lines
that were available for research. And even on September 11, when the issue
was raised where the President might be and he received some criticism
for not returning to Washington, Karl Rove issued a statement that there
was specific and credible evidence that Air Force One was going to be
a target of terrorists. And then it turned out later that the Vice President
I think said that just wasn't anything they could verify, that they had
no real information about it. So if they're in a tight squeeze, they're
willing to make up information that's not real. And when it comes to policy
matters, they want to withhold information that is real and ought to be
available to Congress, which has the legal responsibility to conduct oversight
of the administration on behalf of the public that ought to know how their
government is operating.
BUZZFLASH:
So instead of the transparent administration that they promise, they're
giving us an opaque administration.
REP. HENRY WAXMAN: That's right.
BUZZFLASH:
OK, Congressman, thank you so much.
Contact
information for Congressman Henry Waxman is available at:
http://www.house.gov/waxman
Also
visit the House Committee on Government Reform/Minority Office at:
http://www.house.gov/reform/min/
You
can read Congressman Waxman's letter to Vice President Cheney at:
http://www.house.gov/reform/min/pdfs/pdf_inves/pdf_energy_cheney_enron_let.pdf
-- Cherri (jessam5@home.com), December 26, 2001
Ah geeze, this is all hype right? How about a little history.....
Enron Power Trader brags about his influence over Bush FERC and
regulatory
appointments.
May 25, 2001
Power Trader Tied to Bush Finds Washington All Ears
By LOWELL BERGMAN and JEFF GERTH
urtis
Hébert Jr.,
Washington's top electricity regulator, said he had barely settled
into his new job this year
when he had an unsettling telephone conversation with Kenneth L. Lay,
the head of the
nation's
largest electricity trader, the Enron Corporation.
Mr.
Hébert, chairman of
the Federal Energy Regulatory Commission, said that Mr. Lay, a
close friend of President
Bush's, offered him a deal: If he changed his views on electricity
deregulation, Enron would
continue to support him in his new job.
Mr. Hébert
(pronounced A- bear)
recalled that Mr. Lay prodded him to back a national push for retail
competition in the energy
business and a faster pace in opening up access to the electricity
transmission grid to
companies like Enron.
Mr. Hébert said he refused the offer. "I
was offended," he
recalled, though he said he knew of Mr. Lay's influence in Washington
and thought the refusal
could put his job in jeopardy.
Asked about the conversation,
Mr. Lay praised Mr.
Hébert, but recalled it differently. "I remember him requesting"
Enron's support at the White
House, he said of Mr. Hébert. Mr. Lay said he had "very possibly"
discussed issues relating to
the commission's authority over access to the grid.
As to Mr.
Hébert's job, Mr. Lay
said he told the chairman that "the final decision on this was going
to be the president's,
certainly not ours."
Though the accounts of the discussion
differ, that it took
place at all illustrates Enron's considerable influence in Washington,
especially at the
commission, the agency authorized to ensure fair prices in the
nation's wholesale electricity
and natural gas markets, Enron's main business.
Mr. Lay
has been one of Mr.
Bush's largest campaign contributors, and no other energy company gave
more money to
Republican causes last year than Enron.
And it appears that
Mr. Hébert may soon be
replaced as the commission's chairman, according to Vice President
Dick Cheney, the Bush
administration's point man on energy policy.
Mr. Lay has
weighed in on
candidates for other commission posts, supplying President Bush's
chief personnel adviser with
a list of preferred candidates. One Florida utility regulator who
hoped for but did not
receive an appointment as a commissioner said he had been
"interviewed" by Mr. Lay.
Mr. Lay also had access to the team writing the White House's
energy report, which
embraces several initiatives and issues dear to Enron.
The report's
recommendations include finding ways to give the federal government
more power over
electricity transmission networks, a longtime goal of the company that
was spelled out in a
memorandum Mr. Lay discussed during a 30-minute meeting earlier
this spring with Mr.
Cheney.
Mr. Cheney's report includes much of what Mr. Lay
advocated during their
meeting, documents show. Both men deny discussing commission
personnel issues
during
their talk. But Mr. Lay had an unusual opportunity to make his case
about candidates in writing
and in person to Mr. Bush's personnel adviser, Clay Johnson. And when
Mr. Bush picked
nominees to fill two vacant Republican slots on the five- member
commission, they both had
the backing of Enron, as well as other companies.
Mr. Lay
is not shy about
voicing his opinion or flexing his political muscle. He has
transformed the Houston-based
Enron from a sleepy natural-gas company into a $100 billion energy
giant with global reach,
trading electricity in all corners of the world and owning a
multibillion- dollar power project in
India. He has also led the push to deregulate the nation's electricity
markets.
Senior
Bush administration officials said they welcomed Mr. Lay's input but
did not always embrace it:
President Bush backed away from curbing carbon-dioxide emissions, an
effort supported by
Enron, which had looked to trade emission rights as part of its energy
business.
"We'll make decisions based on what we think makes sound public
policy," Mr. Cheney said in
an
interview, not what "Enron thinks."
The Bush-Lay bond traces
back to Mr. Bush's
father and involves a personal and philosophical affinity. Moreover,
Enron and its executives
gave $2.4 million to federal candidates in the last election, more
than any other energy
company. While some of that went to Democrats, 72 percent went to
Republicans, according to
an analysis of election records by the Center for Responsive Politics,
a nonprofit group.
"He's for a lot of things we're for," said Mr. Johnson.
But when it came to
deciding on nominees for the commission, Mr. Johnson said that Mr.
Lay's views were not that
crucial. The two most important advisers, he said, were Andrew
Lundquist, the director of Mr.
Cheney's energy task force, and Pat Wood 3rd, the head of the Texas
public utility
commission.
As governor, Mr. Bush named Mr. Wood to the
utility commission. This
year, when the White House filled the two Republican slots on the
federal agency, Mr. Wood
was the first choice, Mr. Johnson said.
Consumer advocates
and business executives
praise Mr. Wood. But Mr. Lay also had a role in promoting him. Shortly
after Mr. Bush was
elected governor in 1994, Mr. Lay sent him a letter endorsing Mr. Wood
as the "best qualified"
person for the Texas commission.
In all, there are five seats
on the commission, two
held by Republicans, two by Democrats and one held by a chairman who
serves at the pleasure
of the president. Mr. Hébert, who became a commissioner in 1997, was
named chairman by
Mr.
Bush in January.
The Federal Energy Regulatory Commission's
mandate to ensure fair
prices in wholesale electricity and natural gas markets makes it
crucial to sellers like Enron as
well as consumers.
The movement toward deregulation sometimes
leaves the
commission caught in a tug of war: power marketers like Enron are
trying to break into
markets
and grids controlled by old-line utilities, which operate under state
regulation. The
commission's chairman has considerable latitude in setting its
agenda.
As part of its
oversight of the wholesale electricity markets, the commission ordered
several companies to
refund what it considered excessively high prices this year in
California. One lesser offender
named in the commission's public filings — $3.2 million, of a total of
$125 million — was an
Enron subsidiary in Oregon.
Enron owns few generating assets,
but buys and sells
electricity in the market. Many of those transactions resemble the
complicated risk-shifting
techniques used by Wall Street for financial instruments.
Mr.
Hébert, after he
became
chairman, initiated an examination into the effects those techniques
have on the electricity
markets. "One of our problems is that we do not have the expertise to
truly unravel the
complex arbitrage activities of a company like Enron," he said,
adding, "we're trying to do it
now, and we may have some results soon."
William L. Massey,
one of the agency's
two Democratic commissioners, said he supported the inquiry but had
not been aware of it —
an indication of the chairman's ability to set the commission's
agenda.
Finally, the
commission is trying to speed the pace of electricity deregulation by
opening up the nation's
transmission grid, much of which is owned by privately owned utilities
that enjoy retail
monopolies. Some Enron officials say the commission has been moving
too slowly to open the
grid. They attribute some of the problem to utilities. But they also
fault Mr. Hébert.
"Hébert still has undeserved confidence in some of the vertically
integrated companies coming
to the table and dealing openly" with transmission access issues, said
Richard S. Shapiro, an
Enron senior vice president.
The utilities, however, maintain
that they provide cheap
and reliable service for their customers. Washington lobbyists for one
Southern utility said that
Enron was really interested in focusing on the utility's big-business
clients, which under state
regulation pay higher rates than residential customers.
Since
1996, about half the
states have moved to open their retail markets to competition, and the
commission has begun
to make it easier for outsiders to use the nation's transmission grid.
But the promise of
cheaper
rates has been largely unfulfilled. So the push for more deregulation,
in which Enron has been
a leader, has slowed, especially when California's flawed program led
to skyrocketing rates and
chaotic markets.
Mr. Hébert is a free-market conservative who
favors deregulation
but also recognizes the importance of state's rights. A former
Mississippi regulator, he is a
protégé of Trent Lott, the Senate Republican leader from Mississippi.
Mr. Hébert said Mr. Lott
was instrumental in his nomination to the commission in 1997 by
President Clinton.
President Bush elevated Mr. Hébert to chairman on Inauguration Day, a
move Mr. Lay said he
told the White House he supported.
Mr. Johnson, the White
House personnel chief,
said that Mr. Lott and Mr. Hébert had both been told that Mr. Hébert
could remain chairman at
least until the administration's nominees — Mr. Wood and Nora
Brownell, a Pennsylvania utility
regulator — are confirmed by the full Senate. The Senate energy
committee voted earlier this
week to approve the two nominees, after a hearing last week indicated
strong support.
It is widely expected that President Bush will name Mr. Wood to
replace Mr. Hébert as
chairman after the Senate acts.
In an interview for a
forthcoming episode of
"Frontline," the PBS series, Mr. Cheney suggested as much. "Pat Wood's
got to be the new
chairman of the F.E.R.C., and he'll have to address" various problems
in the electricity markets,
he said.
Mr. Hébert said that no one had told him he was being
replaced. If someone
else is named chairman, Mr. Hébert can remain a commissioner until the
end of his term,
which
expires in 2004.
It was a few weeks after President Bush made
him chairman that
Mr.
Hébert said he spoke by telephone with Mr. Lay.
Mr. Lay told
him that "he and Enron
would like to support me as chairman, but we would have to agree on
principles" involving the
commission's role in expanding electricity competition, Mr. Hébert
said of the
conversation.
A senior commission official who was in Mr.
Hébert's office during the
conversation said Mr. Hébert rebuffed Mr. Lay's offer of a quid pro
quo. The official said that
he
heard Mr. Hébert's side of the conversation and then, after the call
ended, learned the rest
from him.
Mr. Hébert said that he, too, backed competition but
did not think the
commission had the legal authority to tell states what to do in this
area. Concerning the issue
of opening transmission access through the creation of regional
networks, Mr. Hebert supports
a voluntary process while Enron seeks a faster and more compulsory
system.
Mr. Lay
said that while he might have discussed issues relating to the
commission's authority
concerning access to the grid, "there was never any intent" to link
that or any other issue to Mr.
Hébert's job status.
The commission is a quasijudicial agency,
so decision-makers
like Mr. Hébert must avoid private discussions about specific matters
pending before the
commission. Mr. Hébert and Mr. Lay both said that line was not
crossed, but Mr. Hébert said he
had never had such a blunt talk with an energy-industry executive.
Mr. Lay added
that his few recent conversations with Mr. Hébert were nothing
special. "We had a lot of access
during the Clinton administration," he said.
And he said that
while making political
contributions "probably helps" to gain access to an official, he made
them "because I'm
supporting candidates I strongly believe in."
Last June, Enron
executives were asked
to make voluntary donations to the company's political action
committee. The solicitation letter
noted that the company faced a range of governmental issues, including
electricity
deregulation.
This year, some people who sought but did not
get nominations to the
commission said that Mr. Lay and Enron had had a role in the
process.
One was Joe
Garcia, a former Florida utilities regulator and prominent
Cuban-American activist. He said he
had been "interviewed" by a few Enron officials, including Mr. Lay,
who he said had not been as
"forceful or insistent" as the other Enron officials.
But in
their conversation, Mr.
Garcia said, Mr. Lay made clear that he would be visiting the White
House, adding that
"everyone knew of his relationship and his importance."
Mr. Johnson, the White
House personnel chief, could not cite another company besides Enron
that sent him a list of
preferred candidates for the commission, but he remembered hearing the
views of Tom Kuhn,
who heads the utility industry trade group, the Edison Electric
Institute. Mr. Kuhn was a
classmate of Mr. Johnson and Mr. Bush at Yale.
As for his
conversation with Mr.
Garcia, Mr. Lay said he was comfortable with his candidacy but "I'm
not sure what I told him
about my friends at the White House."
-- Cherri (jessam5@home.com), December 27, 2001.