Lay Convicted, Bush Walks
(and Ahnold Gets Lay'd)Special For Truthout
Wednesday, May 24, 2006
by Greg Palast
Don't kid yourself. If you think the conviction of Ken Lay
means that George Bush is serious about going after
corporate bad guys, think
again.
First, Lay got away with
murder -- or at least grand larceny LiLike Al Capone convicted of failing to file his taxes, Ken Lay, though
found guilty of stock fraud, is totally off the hook for his
BIG crime: taking down California
and Texas consummers for
billions through fraud on the power markets.
Lay, co-convict Jeff Skilling
and Enron did not act alone. They connived with half a dozen other power companies and a dozen
investment banks to manipulate both the stock market and the
electricity market. And
though their co-conspirators have now paid $3 billion to
settle civil claims, the executives
of
these other corporations and banks get a walk on criminal charges.
Furthermore, to protect our President's boardroom
buddies from any further discomforts, the Bush Justice Department, just
days ago, indicted Milberg, Weiss, the law firm that nailed
Enron's finance industry partners-in-crime. The timing of the
bust of this, the top corporation-battling law firm, smacks
of
political prosecution -- and a signal to Big Business that it's business as usual.
Lay and Skilling have
to pay up their ill-gotten gains to Enron's stockholders,
but what about the $9-plus billion owe electricity consumers?
The Federal Energy Regulatory Commission, Bush's electricity
cops,
have slapped Enron and its gang of power
pirates on the wrist. Could that have
something to do with the fact that Ken Lay, in secret chats with Dick Cheney, selected
the Commission's chairmen?
Team Bush had to throw the public a bone --
so they threw us Lay and Skilling
-- for the crime, note, not of ripping off the public, but ripping off stockholders, the owner class.
This limited conviction, and the announcement
of only one more indictment -- of the crime-busters at Milberg-Weiss -- is Team
Bush's "all clear!" signal for the sharks to jump back into the
power pool.
That leaves one question:
if Bush's Justice Department let Ken and company
keep the California loot, what about that state's own government? If you want to know how Californian's $9 billion
went bye-bye, read on
....
WHEN AHNOLD GOT LAY'D
[From Armed Madhouse ,
Greg Palast's new book out 06-06-06. Order it now at www.GregPalast.com]
Peninsula Hotel, Beverly Hills. May 17, 2001. The Financial Criminal of
the twentieth century, not long out of prison,
meets with the Financial Criminal of the twenty-first century who feared he
may also have to do hard time. These two, bond-market
manipulator Mike Millikin and Ken Lay, not-yet-indicted
Chairman of Enron Corporation, were joined by a
selected group of movers
and shakers -- and one movie star.
Arnold Schwarzenegger had been to such private parties before.
As a young immigrant without a nickel to his name, he put on
private
displays of his musculature for guests
of his promoter. As with those early closed
gatherings, I don't know all that went on at the Peninsula Hotel meet, though I understand
Ahnold,_ this time, did not have to strip down to his
Speedos. Nevertheless, the moral undressing was just as
lascivious, f you read through the 34 page fax that arrived at our office.
Lay, who convened the hugger-mugger, was in a bit of trouble. Enron and
the small oligopoly of
other companies that ruled California's
electricity system had been caught jacking up the price of power and gas by
fraud, conspiracy and
manipulation. A billion here, a billion there, and pretty soon it was real money - $6.3 billion in suspect windfalls in
just six months, May through
December 2000, for a half-dozen electricity buccaneers, at least $9 billion for the year. Their skim would
have been higher but the tricksters thought they were limited
by the number of igits the state's power-buying computers
could read. When Ken met Arnold in the hotel room, the
games were far from
over. For example , in June 2003, Reliant
Corporation
of Houston simply turned off several power plants, and when California cities faced going dark,
the company sold them a pittance of kilowatts for
more than gold, making several million in minutes.
Power-market shenanigans
were nothing new in 2000. What was new was the response of Governor Gray Davis. A normally quiet,
if not dull, man, this Governor had the temerity to call the energy
sellers "pirates_" -- in
public! -- and, even more radically, he asked them to give back all the ill-gotten loot, the entire $9 billion.
The state filed a regulatory complaint with the federal
government.
The Peninsula Hotel get-together
was all about how to "settle" the legal actions in such a way that Enron and friends could get the
state to accept dog food instead of dollars. Davis seemed
unlikely to see things Ken's way. Life
would be so much better if California had a governor like the muscle guy in
the Speedos.
And so it came to pass
that, in 2003, quiet Gray Davis, who had the cojones to stand up to the electricity barons, was
thrown out of office by the voters and replaced by the
tinker-toy tough guy. The Governator_ performed as desired.
Soon after Schwarzenegger took over from Davis, he signed
off on a series of deals
with Reliant, Williams Company, Dynegy, Entergy
and the other power pirates for ten to twenty cents on the dollar, less than you'd tip the waitress.
Enron paid just about nothing.
