tecoyah

This is the type of problem that undermines my faith in government....truly a fine example of corruption, and misplaced loyalties. Rather than getting slapped for fraud....these guys are Paid....By Me.

Former Enron Executives Slated to Receive Taxpayer Handouts
for New Project

Senate Energy Bill Contains Provision for Hundreds of Millions of Dollars
in Loan Guarantees for Power Project

WASHINGTON, D.C. – Buried in the 700-plus page energy bill currently under debate in the U.S. Senate is a provision that provides hundreds of millions of dollars worth of federal loan guarantees for a power project apparently to be built by four former Enron executives. One of the former executives is Thomas White, former head of Enron’s retail and energy trading in California during the energy crisis who later served as President Bush’s Secretary of the Army.

Title XIV, Section 1403(c)(1)(B) of the Senate energy bill provides federal loan guarantees for “a project to produce energy from coal … mined in the western United States using appropriate advanced integrated gasification combined cycle technology that minimizes and offers the potential to sequester carbon dioxide emissions and … shall be located in a western State at an altitude greater than 4,000 feet.”

Public Citizen’s investigation to find out who this loan would benefit narrowed the answer to just one company: Houston-based DKRW Energy. This company, named after the four Enron executives that founded it – Jon C. Doyle, Robert C. Kelly, H. David Ramm and White – formed a subsidiary, Medicine Bow Fuel & Power, to develop a $2.8 billion coal gasification project in Medicine Bow, Wyo. The DKRW facility meets all the criteria required in the legislation: The coal will be supplied from Arch Coal mines neighboring the power facility; it will stuff carbon dioxide emissions into oil wells; and the facility will be located in a western state (Wyoming) at an altitude above 4,000 feet.

“Congress should not be in the business of slipping taxpayer subsidies into large bills to benefit individual corporations, especially executives from a company that perpetrated one of the greatest corporate frauds in American history,” said Public Citizen President Joan Claybrook.

The federal loan guarantee makes taxpayers responsible for repaying the loan if the company defaults, or if the project ends up not being economically feasible after its construction. The provision states that if an energy company receiving such a loan guarantee defaults on that loan, the bank to which the loan is owed “shall have the right to demand payment of the unpaid [loan] amount from the Secretary” of Energy. Therefore, taxpayers hold all the risk while energy companies reap all the rewards.

“Has Congress learned nothing from the Enron bankruptcy and the fallout from the company’s fraudulent behavior?” said Tyson Slocum, research director for the energy program. “The fact that the Senate Energy and Natural Resources Committee is willing to back these former Enron executives with taxpayers’ money is truly unsettling.”

The committee has approved the bill, and it is scheduled for Senate action as early as this week. Among the members of the energy committee is Republican Craig Thomas of Wyoming. The provision is not in the House energy bill, which has been approved by the House.

Public Citizen speculated that these four former Enron executives are seeking taxpayer handouts because they have had a difficult time attracting the necessary private capital without the loan guarantee. White served as Secretary of the Army from May 2001 to March 2003. Prior to that, he served as vice chairman of one of Enron’s largest divisions, Enron Energy Services (EES).

Under White’s tenure, EES played a major role in the California energy crisis. In 1998, the year he became its vice chairman, EES was America’s 61st largest energy trader. When he left, his division was the 28th largest energy trading firm in the country. Until March 2001, the trading operations of EES were separate from the rest of Enron’s Wholesale Energy unit – meaning White was responsible for a huge trading operation that played a significant role in California’s energy crisis.

Also, under White’s direction, EES severed at least two large retail contracts in California in January/February 2001 during the height of the energy crisis, which Enron helped create. Based on the evidence on hand, it appears that EES took the power that had been obligated to serve these retail consumers and sold it in the wholesale market, where EES could fetch higher prices than it could by continuing to sell power at lower, fixed rates to retail customers. This significant wholesale trading operation, combined with White’s decision to break retail contracts in California, made the division a major player in California’s deregulated wholesale market.

The energy bill also contains other giveaways to energy corporations. Title XIV, Section 1403(c)(1)(C), provides $800 million in federal loan guarantees to a Minnesota company, Excelsior Energy, whose executives have ties to a company that filed for bankruptcy after amassing $9.2 billion in debt and paid $25 million to settle allegations of energy market manipulation. [See our November 2003 report.]

Title XIV, Section 1403(c)(1)(D), provides loan guarantees to Lexington, Ky.-based EnviRes to build a coal gasification facility in East St. Louis, Ill. The total cost of the project is $254.2 million. EnviRes is a joint venture of three companies, including Triad Research, which in turn is operated by Robert Addington of Addington Energy (AEI Resources), one of the nation’s largest coal conglomerates. Among the members of energy committee is Republican Jim Bunning of Kentucky.

“Since the energy bill was first drafted, it has been larded with pork for corporate America,” said Wenonah Hauter, director of Public Citizen’s Critical Mass Energy and Environment Program.” If this project can’t stand on its own, it shouldn’t get a taxpayer bailout. In this case, taxpayers take all the risk but the former Enron executives will reap all the rewards.”

http://www.citizen.org/pressroom/release.cfm?ID=1960

*Bold added for the short attention spans

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Astrocloud

The present republican administration and thier lapdogs in congress are full of this cronyism. I don't see this quite as bad as something like Halliburton's favored position in Iraq contracting -but it's still pretty bad.

guthmund

Well, to be fair, I think it's always been a bit bad.

It just seems like more shit like this is happening (Enron, Halliburton, airline bail-outs, big oil) on President Bush's watch. Maybe it just gets more attention in today's media or maybe, and I'm inclined this way, cronyism has run amok in Washington.

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Ustwo

The executives of Enron guilty of wrong doing have been getting convicted.

Do you think its possible, just possible that maybe SOME of the people who worked for enron were not corrupt?

P.S. Wrong forum.

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Cynthetiq

I sent a letter to Pres. Clinton and his adminstration about Enron in the early 90s when I knew of some dealings they had in the Philippines and corruption there along with other places they were. I remember getting a really pretty envelope and letter in the mail from the secretary of answering mail...

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Redlemon

Not just possible, but probable. However, in this case, "One of the former executives is Thomas White, former head of Enron’s retail and energy trading in California during the energy crisis." I would expect that he would have known what was going on.

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Ustwo

What exactly were they doing that tipped you off? Could be an interesting story.

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Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host

Obama - Know a Man by the friends he keeps.

Cynthetiq

During that time I knew several powerful families who were invovled in chemical extraction manufacturing throughout SE Asia.

Enron approached a number of these families to assist in investements in building power infrastructure. There were a number of these family members who were praising and waving the Enron banner, but when other family members actually looked at current plans and completed plans in other countries they saw and understood the level of corruption these people were dealing to the investors and the public at large. The members that distrusted Enron were considered "looney" and dismissed as "party poopers". It created lots of bad blood amongst a few family members, and after their house of cards came crashing down everyone lost, even those that did know and tried to protect what assets they could but since it's all family tied monies, well, the whole family took the a hit, so everyone lost.

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chickentribs

I almost have to respect how well they circle the wagons and push this stuff through. I was in LA during the summer of "brown outs" courtesy of Tommy White and it was no joke. Inevitably, every time it happened some nursing home didn't get auxillary power on and people died. There were families who wanted him brought up on criminal charges when it was discovered what he was doing, I guess that didn't go anywhere.

All the Capitalism junkies out there realize this thing is headed right down the toilet, don't you? This is welfare at it's most obscene - a guaranteed loan with first quarter's profits already worked in, no doubt.

Well, if you need me I will be standing over here with my hands cupped, waiting for something to trickle down this way...

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Oft expectation fails...
and most oft there Where most it promises
- Shakespeare, W.

KingOtter67

That's just because you remember now more than you remember before. Clinton had Whitewater, Hillary's cattle deal, the travel office deal, and the pardoning fiasco.

It is all the time. It is why corporations and special interests pay BIG money to put lobbyists in Washington. And it isn't just Republican, or just Democrat... it's both, equally as bad.

This is probably something that was slipped in by a senator or congressman along with a deal 'if you let me add this, I'll vote for the bill, and this other bill you want passed, too'. And it is probably because this corporation donated xxx amount of dollars who whatever politician's re-election campaign.

It's a horrible system, really, and not at all what the founding fathers intended.

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guthmund

That could certainly be the case. I'll admit, I wasn't paying too much attention to corporate cronyism and the like concerning the federal government in high school. I was....well, my thoughts were elsewhere.

Now big government is certainly in the pocket of big business and has been for a while, but it just seems that every other week a new story surfaces about this administration doing something, for lack of a better term, bad. I mean, secret meetings to develop the nation's energy plan, playing corporate cronyism with Enron and Halliburton (two companies with pretty strong ties with the President and Vice President), the secret war planning, the Downing Street memos, the big drug bill that seems to benefit the big drug conglomerates, the bankruptcy bill that seems to benefit the credit card companies, redacted enviromental reports edited not by scientists but folks with ties to big oil, etc...

Maybe it's because the world has gotten a bit smaller what with the crazy news coverage on cable, and the internet, not to mention the millions of "independent" news sources like political blogs and such that these kind of practices are getting more attention than in the past. I couldn't say for sure. Like I said, the federal government has been kowtowing (did I spell that right?) to the needs of big business for years, but it just seems like there's an awful lot of it these days under President Bush's watch.

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chickentribs

It's a valid point, KingOtter, here's what's interesting, though. Each of the above issues you mentioned were personal issues, maybe tying into groups of people but not corporate hand-outs. I think that it is directly related to the fact that Clinton was a career politician and Cheney and Bush are corporate guys.

You can make an argument as to the value of either history, but it's frightening to think that there are millions of dollars to be made by the investments of Dick and George in the very companies they are dealing with every day, not to mention cushy advisor positions waiting for them at these places in '08. Clinton wrote his book and gets paid a lot to speak like most retired presidents and does well. Both Dick and George have $100+ million fortunes to look after which could influence the most ethical of men...

__________________
Oft expectation fails...
and most oft there Where most it promises
- Shakespeare, W.

Marvelous Marv

Dick and George have their investments in blind trusts. Clinton was certainly no better; he just channeled a lot of money from corporatons into his re-election campaign. He rightly thought that he'd make a lot of money from being president.

Here's an old article (the link isn't available to non-subscribers) that I saved because I owned some Global Crossing. It still pisses me off that the CEO isn't in jail.

Ustwo is right though. This should be in politics.

chickentribs

Funny thing about the "blind trusts"... people assume that means they have no knowledge of investments or performance. It just means investmenst "decisions" are made without prior knowledge, but GW and DC each know exactly what stocks they own and the performance of said stocks. Believe me, I know that money is the one bi-partisn thing in D.C., and if you are a politician you have stashed your share of money. It just strikes me odd that this is not more appropriately handled.

__________________
Oft expectation fails...
and most oft there Where most it promises
- Shakespeare, W.