Enron: Friends in High Places

Enron and its employees were the largest contributors to president Bush’s campaigns over the years, and Enron gave more money to politicians in the last election cycle than did any other energy company. Since 1993, its employees and its chairman, Kenneth L. Lay, have donated nearly 2 million dollars to Mr.Bush. In the 2000 election cycle, more than 1 million dollars was donated to federal political campaigns, most of it to Republicans.

Lay also had powerful friends. He recruited Wendy L.Gramm, the top commodities regulator in the administration of president Bush’s father and the wife of Senator Phil Gramm, Republican of Texas, to serve on Enron’s board in 1993. The appointment came just five weeks after Ms Gramm helped push through a ruling at the Commodity Futures Trading Commission that exempted many energy contracts from regulation.

Last year [2000], as congress and the Clinton administration debated whether to exercise more over-sight of the financial instruments used by Enron and other companies to trade energy contracts, Lay courted Linda Robertson, a senior Treasury official who was the department’s liaison with congress.

Ms Robertson twice accepted paid trips to talk with company executives while she was still employed at the Treasury, her financial disclosure shows. The measure that became law, the Commodity Futures Modernisation Act of 2000, specifically exempted energy trading from the regulatory scrutiny applied to brokers of money, securities and commodities.

Ms Robertson, who became the head of Enron’s Washington office, did not return a phone call seeking comment.

Last spring, when the Bush administration drafted a new national energy policy, Lay had a 30-minute meeting with vice president Dick Cheney to discuss the report. The policy blueprint endorsed breaking up monopoly control of electricity transmission networks, an Enron goal that was spelled out in a memorandum Lay discussed during his meeting with Cheney.

Enron also had an unusual opportunity to influence Bush’s choices for the Federal Energy Regulatory Commission, which oversees the markets in which Enron operates. Lay met Bush’s personnel adviser, Clay Johnson, to discuss nominees. When Bush picked people to fill two vacant Republican slots on the five-member commission, both had the backing of Enron.