UNITED STATES: Enron pulls the strings

Wednesday, May 30, 2001 - 10:00

BY SEAN HEALY

One of the corporations which had a direct part in drawing up George W Bush's new energy policy was Houston-based corporate giant Enron, a US$100 billion empire which trades energy in every corner of the world.

Enron and its chief Kenneth Lay are amongst the Republican party's largest corporate backers and wield enormous influence in Washington's corridors of power.

Lay and his advisers had access to the team drafting the policy, and the final version includes measures the company has been lobbying for for years, including giving the federal government more power over electricity transmission networks, which will likely allow Enron to break into networks which are currently state regulated.

Lay also seems to have had a hand in the impending replacement of the head of the Federal Energy Regulatory Commission, Curtis Hebert.

Hebert is a prominent Republican, the chairperson of Bush's Inauguration Day and a protege of the powerful Republican senator Trent Lott. He was appointed to head the commission soon after Bush took office in January.

Only four months later, the White House is likely to replace Hebert with Pat Wood, the head of the public utility commission in Bush's home state, Texas.

At least part of the reason is that Lay felt that Hebert wasn't going to be sufficiently agreeable to Enron, was dragging his feet on electricity deregulation and didn't fully back Enron's attempts to break into state energy markets.

Hebert has told the New York Times that soon after his elevation to the commission, Lay called him and offered him a deal: if he changed his views on electricity deregulation, Enron would continue to support him in his new job. Hebert apparently refused and now looks likely to lose his job.

Enron's influence in this case is not isolated: Lay has supplied Bush's advisors with a list of preferred candidates for other commission jobs. One Florida utility regulator who hoped for but did not receive an appointment as a commissioner said he had been "interviewed" by Lay.