Bush, Cheney and the Great Rip-Off of California Ratepayers

Society Pakistan & World Affairs
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Question is “When if ever will Congress be allowed to investigate this scandal ?”…

Bush, Cheney and the Great Rip-Off of California Ratepayers](http://www.counterpunch.org/leopold1121.html)

November 21, 2002 Secrets and Lies: by JASON LEOPOLD

The front pages of California’s major daily newspapers were buzzing last week with fresh reports of one energy company ripping off the state in the spring of 2000 by deliberately keeping a power plant from generating electricity so the company could take advantage of sky-high wholesale electricity prices the state was forced to pay to keep the lights on.

The evidence, a transcript of a tape-recorded telephone conversation between an employee at Williams Companies, the Tulsa, Okla. based energy company, and an employee at a Southern California power plant operated by Williams, shows how the two conspired to jack up power prices and create an artificial electricity shortage by keeping the power plant out of service for two weeks. The scheme worked. Williams earned $10 million from California consumers through its manipulative tactics. In March 2001, in a settlement reached with FERC, Williams agreed to refund California $8 million it obtained through the scam without admitting any guilt.

But here’s the real tragedy. The evidence has been under seal and in the possession of President Bush’s Federal Energy Regulatory Commission; the governing body that is supposed to make sure power prices is just and reasonable, for more than a year. FERC released the transcripts after the Wall Street Journal sued the commission to obtain the full copy of its report. However, it was New York Times op-ed columnist Paul Krugman who first wrote about the existence of the Williams tapes in a Sept. 27 column. The Journal sued FERC after Krugman’s column ran and reported the findings of the FERC investigation last week.

How could FERC keep this smoking gun concealed for a year? It’s no secret that California politicians and consumer groups have blamed energy companies like Williams and Enron for the state’s energy crisis and even alleged that energy companies created the illusion of an electricity shortage by shutting down power plants in the state. Had this evidence been released 18 months ago, pre-Enron, it would have driven that point home. But it wouldn’t have jibed with Bush’s energy policy, which was made public instead in May 2001. Around the same time, President Bush was in California and met with Gov. Gray Davis about the state’s energy crisis. Bush told Davis the state implemented a flawed energy plan and that and that alone was the reason for electricity price spikes. Meanwhile, FERC is sitting on a pot of gold and no one in California even knows it.

A few weeks before the meeting between Bush and Davis, Vice President Dick Cheney, who chairs Bush’s energy task force, was interviewed by PBS’ Frontline for a special series on California’s energy crisis. During the interview, Cheney flat-out denied that energy companies ripped off California.

“The problem you had in California was caused by a combination of things–an unwise regulatory scheme, because they didn’t really deregulate,” Cheney said in the May 17 Frontline interview. “Now they’re trapped from unwise regulatory schemes, plus not having addressed the supply side of the issue. They’ve obviously created major problems for themselves and bankrupted PG&E in the process.” It’s true that California created a horribly flawed deregulation plan. But as state Sen. Joseph Dunn, a Democrat leading the investigation into California’s energy crisis, told me: “we may have left the car running but the energy companies stole the car.”

When asked whether it was possible whether energy companies were behaving like a “cartel” and if some of the high power prices in California could be the result of manipulation, Cheney responded with a resounding “no.” It’s highly unlikely that Bush, Cheney and members of the energy task force were kept in the dark about the Williams scam, especially since the findings of the investigation by FERC took place around the same time the policy was being drafted.

According to evidence obtained by Congressman Henry Waxman, D-California, earlier this year, the energy task force “considered and abandoned plans to address California’s energy problems in its report.” Despite my best efforts to get an answer from the White House about whether the energy task force knew about the Williams scam while it was drafting its policy my call was never returned. Additional evidence has been released this year by federal and state investigators that show a pattern of deceit by energy companies and give credence to the claims that California’s energy crisis was manufactured. To think that some of these companies influenced President Bush’s energy policy is like asking a convicted murderer to decide his own fate.

Unfortunately, with a change in leadership in the Senate and the House it doesn’t appear that new information about the energy task force will be released anytime soon, according to John Hess, an aide to Senator Barbara Boxer, D-California. "According to our energy person, the Commerce Committee has no plans at this time to hold a hearing on Cheney and his Task Force. With the change in the majority, I’m not surprised that the Republicans who now control the Committee agenda prefer not airing this issue further."But this latest saga is just an example of why it’s crucial that Cheney release the names of the people in the energy sector he met with while preparing the President’s energy policy. Cheney’s stonewalling tactics have bought the administration some time. But the heat is on.

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interesting, but are there any other sources?

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Yes there is ! The williams saga is another aspect to the greater energy scandal that has enveloped the Californian energy sector in recent months.

LAZARUS AT LARGE Energy providers have juice](http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/11/22/BU137062.DTL&type=business) San Francisco Chronicle. Friday, November 22, 2002

So now we know, thanks to documents just released by federal regulators, that energy providers Williams and AES conspired to drive electricity prices higher during the worst of the California power crisis.What most people don’t know, though, is that board members of both companies have links to the White House, as do directors of other energy heavyweights that have received subpoenas for their alleged role in fleecing California ratepayers.

There’s no evidence of any wrongdoing on the part of these board members. But their ties to the first and second Bush administrations once again raise troubling questions about what federal authorities knew about the energy crisis and when they knew it – and why they didn’t act sooner. Take the case of Thomas Cruikshank, who has served on the Williams board for the past 12 years. He also happens to be the retired chief executive officer of Halliburton and personally selected Vice President Dick Cheney to succeed him at the helm of the Dallas oil services giant.

Cheney subsequently engineered Halliburton’s acquisition of Dresser Industries, which saddled the company with huge asbestos liabilities, and approved accounting practices that are now under investigation by the U.S. Securities and Exchange Commission. Kelly Swan, a Williams spokesman, indicated that Cruikshank likely knew of Williams’ shenanigans with AES no later than the summer of 2001, when the company agreed to play ball with federal investigators.

Williams’ documents and phone records show that the company colluded with AES to keep power plants offline as California grid operators were scrambling in 2000 to avoid blackouts. A limited supply of juice caused electricity prices to soar. “The board is routinely updated on the company’s business,” Swan told me, “but we don’t comment on their discussions.”

Shortly before Williams agreed to cooperate with investigators, Cheney was meeting with a variety of energy-industry bigwigs, including former Enron Chairman Ken Lay, to determine the White House’s official response to California’s difficulties. (The energy pros got their way: Cheney and President Bush all but told California to deal with things itself, setting the stage for the bankruptcy of Pacific Gas and Electric Co. and a huge state budget deficit.)

Did Cheney contact his corporate mentor to discuss the situation in California? Did Cruikshank ever mention that Williams was profiting handsomely from the state’s troubles (it made an extra $10 million in just two weeks)? Who knows? The White House is keeping details of Cheney’s energy-policy talks to itself, including who the vice president and his people spoke with and what was said during the meetings. “The vice president and the president should be able to receive unvarnished advice so they can put forth the best policies,” said Jennifer Millerwise, a spokeswoman for Cheney. And that’s all she’d say on the matter.

Nevertheless, the General Accounting Office, Congress’ investigative arm, and other parties sued to gain access to Cheney’s records. A federal judge has given the White House until the end of the month to finally come clean on at least some of the documents. Maybe then we’ll know whether Cheney discussed the California energy crisis with David Lesar, who took the reins as CEO of Halliburton once Cheney dove back into public service two years ago.

Cedric Burgher, Halliburton’s vice president of investor relations, told me earlier this year that Cheney and Lesar have remained in touch since the corporate baton was passed. “He’ll call us back,” Burgher said of Cheney. “He has a lot of friends here.” There’s more at stake, though, than just a couple of old pals chewing the fat. Lesar is also a director of energy provider Mirant, which has been subpoenaed by the U.S. attorney’s office to explain its actions as California suffered rolling blackouts.

Three successive Halliburton CEOs, each with a unique tie to the energy crisis. A strange coincidence, to say the least. And what of AES, the company Williams was conniving with to send electricity prices skyrocketing? Richard Darman, who worked with Cheney in the first Bush administration (he headed the Office of Management and Budget) has sat on the AES board since August.

Darman is also a managing director of the Carlyle Group, the Washington investment firm led by some of the world’s most influential men, including former Secretary of State James Baker and former Defense Secretary Frank Carlucci.The first President Bush is affiliated with Carlyle as well. Prior to Sept. 11, so was the family of Osama bin Laden.

Has Darman discussed AES’ questionable business practices with his Carlyle cronies? Could any of those talks have made it back to the White House, one way or another? Carlyle spokesman Chris Ullman insisted that Darman “doesn’t discuss any issues with anyone in the government. Period.” An AES spokeswoman declined to comment.

At this point, it’s hard to know what to believe. It has taken more than two years for Californians to learn of the Williams-AES collusion. We found out only last month that Enron’s top West Coast energy trader was rigging power prices as early as May 1999. The energy crisis was clearly more complex, and criminal, than we ever imagined. Exactly how complex, and how criminal, has yet to be seen.

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Energy Scandal Widens](http://www.necandeconews.to/portal/modules.php?op=modload&name=News&file=article&sid=92&mode=thread&order=0&thold=0) NEC Excerpt

The perversion of energy policy and the manipulation of energy prices were the subjects of new revelations and demands for inquiries last month. Internal documents from Enron showed that its traders drove up electricity prices during California’s recent energy “crisis,” using techniques that prompted Senator Dianne Feinstein to demand a criminal investigation. The documents also showed that Enron’s sophisticated financial exploiters dubbed the profit-grabbing strategies with such names as “fat boy,” “get shorty” and “death star.”

Meanwhile new documents amid the 1,500 reluctantly provided by Vice President Dick Cheney’s energy task force showed that the Bush administration implemented recommendations from Chevron. These included expediting permits, removing federal barriers to energy projects and continuing lease sales of the outer continental shelf.*

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California, energy, and foul play](California, energy, and foul play - CSMonitor.com) The Christian Science Monitor. Excerpt from the November 25, 2002 edition

Probe of two-year-old electricity crunch gains momentum in courts and legislature.

SAN FRANCISCO – Two years ago, as California stood on the brink of blackouts that would plunge it into darkness and debt, Gov. Gray Davis made a sensational accusation. “There is no question in anyone’s mind in California that the market here and the rules it operates by have been manipulated to generate obscene profits,” he said.

Voltage rising in California’s kilowatt country
Now, slowly and steadily, a half dozen investigations are turning up evidence to support his claim. The findings have provided some measure of vindication for the state, which has seen its complaints go largely ignored in Washington. Moreover, they have given the investigations - and California’s appeal for billion-dollar refunds - fresh momentum. To some, the evidence is a clear sign that fraud was widespread in the energy industry, and that it was a leading factor in the power crisis. Yet for many, the new revelations still fall short of a slam dunk. The question of whether industry schemes caused the crisis, or merely sharpened the edges, remains in doubt.

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Latest about the Energy Scandal.

Court Requires Cheney to Disclose Energy Documents](http://ens-news.com/ens/nov2002/2002-11-27-03.asp) Environment News Service

WASHINGTON, DC, November 27, 2002 (ENS) - In a setback to the Bush administration’s efforts to avoid handing over key Energy Task Force information, a federal judge Tuesday rejected an attempt by Vice President Dick Cheney to appeal a court order to release the documents. The White House has been resisting disclosure of the documents for months, but the court’s earlier order requiring that the documents be produced by December 9 remains in effect. Judge Emmet Sullivan of the Washington, DC Federal District Court ordered that The White House produce “non-privileged documents” in response to a lawsuit by Judicial Watch and the Sierra Club.

The defendants are Vice-President Dick Cheney; the National Energy Policy Development Group (NEPDG); Andrew Lundquist, executive director of the National Energy Policy Development Office; Joshua Bolten, assistant to the President and deputy chief of staff for policy; and Larry Lindsay, President George W. Bush’s economic advisor.
The defendants are also directed to produce “a privilege log” specifying which documents or categories of documents are being withheld pursuant to an asserted privilege, as well as the grounds on which they are being withheld.

The Sierra Club and Judicial Watch assert in their lawsuit that by refusing to tell the public about the influence energy industries had in crafting the National Energy Policy, the Cheney Energy Task Force violated the Federal Advisory Committee Act (FACA). The plaintiff groups are asking the court to require Vice President Cheney and other defendants “to disclose to the American people what went on behind closed doors in the creation of the National Energy Policy,” the Sierra Club said in a statement today.

The National Energy Policy issued by the Bush administration on May 17, 2001 relies heavily on oil, coal and nuclear energy, and calls for drilling in the Arctic National Wildlife Refuge and on other public lands. While renewable sources of energy are provided for in the policy, they are not emphasized.

**“Today’s decision brings the American people one step closer to finding out just who the Vice President’s energy task force met with in drafting its dirty, dangerous energy plan,” said David Bookbinder, senior attorney with the Sierra Club. “The Vice President should take this as a sign that the game is up, and come clean.” **

The defendants argued that Judge Sullivan’s Orders reflect “clear error,” and urged the Court of Appeals to order the lower court to dismiss Vice President Cheney from the action, and to decide the case on the basis of the administrative record alone, without further discovery. But Judge Sullivan did not agree. He wrote that “once again the defendants have misrepresented precedent,” in Tuesday’s ruling. He admonished the Justice Department for “mischaracterizing the intent and effect of this court’s orders.”

The judge reinforced his earlier decision that more information is needed to satisfy the questions raised by the plaintiff groups. “This Court has already concluded that, in light of the delicate balancing of constitutional concerns required of the Court in this case, more information than is contained in the scant administrative record currently available, which consists in its entirety of the President’s memorandum to the Vice-President establishing the NEPDG, the NEPDG’s final report, and the affidavit of the NEPDG’s former Deputy Director, is necessary to resolve the question of whether and how FACA is applicable to the NEPDG.”

The Bush administration has presented the National Energy Policy as providing for “reliable, affordable, and environmentally sound energy for America’s future.” But the plaintiff groups take issue with the environmentally sound portion of that characterization. “The energy policy that came out of the administration has serious impacts on the health and safety of American communities,” said Bookbinder. “The public deserves to know who drafted that policy.”

The Sierra Club and Judicial Watch are asking for a full accounting of what happened behind the closed doors of the Cheney Energy Task Force. They want to know who was in the room, what proposals did the energy industry executives and lobbyists make, what documents the energy industry submitted, and what Task Force documents they reviewed.

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Ugly business that was.

Absolutely.

Imagine if it was something you couldn't live without.....

Like Water.

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[QUOTE]
*Originally posted by AvgAmericanGirl: *
Ugly business that was.

Absolutely.

Imagine if it was something you couldn't live without.....

Like Water.
[/QUOTE]

Don't worry AAG, water resources privatisation is being planned in Europe and so we'll have artificial shortages created with the consequences one can imagine. What's the situation in USA wrt water privatisation? Anyway water wars are on the cards in the not too distant future around the world - disputes are already a way of life in the M.E., S. Asia, etc.

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Investigators have found that the Bush Administration is trying to stall the investigation process and is deliberately witholding damning evidence linking State officials to the energy scandal. Slowly and surely the TRUTH will be exposed and perhaps the American public will see another aspect to the Bush Adminstration, one with links to Corporate corruption.

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Its not surprising that there is a lack of awareness amongst the american public about the alleged corruption within the Bush Adminstration, the media is full of right wing journals and news channels which have strong links to the Republican party. If Cheyney had been in an Europeon country he would of been investigated and if found guilty, sent to prison long ago. A BBC article from July 02 about Cheyneys alleged links to corruption is below..

Cheney accused of corporate fraud](http://216.239.51.100/search?q=cache:P6wMNOdlAoQC:news.bbc.co.uk/hi/english/world/americas/newsid—2119000/2119981.stm+bush+cheyney+corruption&hl=en&ie=UTF-8) BBC News Excerpt.

A US pressure group has filed a lawsuit against Vice-President Dick Cheney, accusing him of defrauding shareholders in a company he used to run. Judicial Watch, based in Washington DC, says Mr Cheney artificially boosted the share price of the Halliburton energy company during the time he was chief executive in the 1990s. In another development, it has emerged that Mr Cheney took part in a promotional video for the disgraced accounting firm Andersen

Investors ‘misled’
Judicial Watch alleges that Halliburton overstated profits to the tune of $445m during the period 1999 to 2001, resulting in some investors “suffering huge losses”.

**Larry Klayman, chairman and general counsel of Judicial Watch, said the case should demonstrate that even the richest and most powerful could not flout the law. "It is very important to hold high public officials accountable under the rule of law, and Vice-President Cheney obviously is the second-most powerful man in the world.

"As we allege in the complaint, he participated in a securities fraud, a stock fraud, and we can hold him accountable. “We are going to set an example for others that they are held accountable as well.” Mr Cheney was the company’s chief executive from 1995 until 2000, when he left to become US vice-president.**

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CHENEY-HALLIBURTON CASE HEATS UP](http://www.judicialwatch.org/2885.shtml) JUDICIAL WATCH 20 Dec 02

(Washington, DC) Judicial Watch, the public interest group that investigates and prosecutes government corruption, welcomed today the “formalization” of a Securities and Exchange Commission (SEC) investigation into the accounting practices of the Halliburton company, which had been run by Vice President Cheney. Judicial Watch, on behalf of Halliburton shareholders, is suing Vice President Cheney and others over alleged stock fraud at the company.

The formalization of the SEC investigation reportedly allows the SEC to obtain documents through court process from third parties. Halliburton reportedly had turned over documents previously to the SEC during the “informal” stage of its investigation which began six months ago.

“Obviously, the SEC is not satisfied with Halliburton’s evolving explanations about how the company allegedly misled investors about its bottom line. Yet, as the SEC is dysfunctional, we are not confident that their investigation will be thorough, complete, or non-politicized. That is why we are pursuing our lawsuit independent of the SEC,” stated Judicial Watch Chairman and General Counsel Larry Klayman.

Judicial Watch’s lawsuit is proceeding in federal court in the Northern District of Texas. The Vice President and Halliburton are seeking to have the lawsuit dismissed, and Judicial Watch’s response in this regard is due Monday, December 23.

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Latest on the Bush-Cheyney energy scandal.

SUPREME COURT AGREES TO HEAR CASE ON VICE PRESIDENT’S SECRET ENERGY TASK FORCE](http://www.judicialwatch.org/3542.shtml) 15 Dec 03

Judicial Watch Will Argue Before the High Court For “Open Government” And That the Vice President is Not “Above the Law”

(Washington, DC) Judicial Watch, the public interest group that investigates and prosecutes government corruption and abuse, announced that the U.S. Supreme Court will consider its case against Vice President Cheney regarding the secret records from his controversial Energy Task Force. The Supreme Court accepted the case after the Vice President lost his appeal of a lower court decision directing him to respond to discovery requests by Judicial Watch about the membership of the Task Force. Vice President Cheney maintains that he does not have to respond to Judicial Watch’s discovery – and does not even have to invoke “executive privilege” – arguing that he is immune from such lawsuits. The Vice President’s unprecedented claim of immunity already has been rejected by three courts.

Judicial Watch was forced to file its lawsuit in 2001 under the Federal Advisory Committee Act (open meetings law) after it was rebuffed in its requests for information on the Energy Task Force by Vice President Cheney. Judicial Watch sought information concerning the identities of the Task Force participants, how the Task Force operated, and the role of the Vice President in the Task Force. Several months later, the Energy Task Force also was sued by Sierra Club, which is now a co-plaintiff in Judicial Watch’s lawsuit.

“I am confident that the Supreme Court will reject the Bush Administration’s unprecedented assertion of unchecked executive power,” said Judicial Watch President Tom Fitton. In addition its Energy Task Force lawsuit, Judicial Watch’s fight against government secrecy includes its recent lawsuit to open the sealed records of former Vermont Governor Howard Dean.

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I have a feeling that Cheney will end up being a big embarassment for the Bush government. He may be a smart man and an astute politician, but he is a big pain in the posterior due to all his extra curricular interests and pangaybaazi.