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. Like 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 consumers
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,
if 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 sixmonths, 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 digits 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.
Palast,
an internationally recognized expert on Enron and electricity market manipulation, is co-author of
"Democracy
and Regulation," the United Nation's guide to control of the utility industry.
Special
thanks to the Foundation for Taxpayer and Consumer Rights, Los Angeles, www.ConsumerWatchdog.org,
who first uncovered the confidential Peninsula Hotel documents.
View Palast's investigative reports for
Harper's Magazine and BBC Television's
Newsnight at
www.GregPalast.com.
