A New Horizon for the Democratic Party
Speech to The Democratic National Committee--Western Caucus
Saturday, May 25, 2002
I love the West. In some ways, the spirit of my own politics is animated by the mythology of the West: independent, restless, striving, seeking new paths, pushing the frontiers, seeking new horizons. Whether contemplating the pioneering spirit atop the Oregon capital in Salem, the daring trek of Lewis and Clark, the California experience of Carey McWilliams or Seattle's own Space Needle which flung the dreams of a people toward the stars, the spirit of the West is one of daring, of exploration, of courage and creativity. The narrative of the West has become the narrative of our nation. If all Americans could remember where we came from, a people of courage and daring, we could easily pass through the momentary challenge to our national nerve and recapture the heartfelt rhythms of the land of the free and the home of the brave celebrated in our national anthem.
In November of 1979, I came West to begin my own odyssey. In 1977, I was elected mayor of Cleveland, on a promise to save Cleveland's 46,000-customer, municipally owned electric system, Muny Light, from a takeover by the privately owned utility, the Cleveland Electric Illuminating Company, CEI. Muny Light's rates were as much as 25 percent lower. CEI was in the middle of an aggressive nuclear-power building program. A utility monopoly in Cleveland would have enabled CEI to raise utility rates to help pay off their rapidly expanding debt on the nuclear power plants.
How people come to pay what they pay for electricity is one of most fascinating economic questions of our time. City-owned utilities, of which there are over 2,000 in America, have lower rates, are publicly accountable and do not have to pay stock dividends and high salaries. CEI tried to block the creation of Muny Light at the turn of the twentieth century. Federal antitrust case records proved CEI tried for years to put Muny Light out of business. CEI damaged Muny's self-sufficiency by blocking repairs to the Muny system through exercising undue influence with the City Council.
When Muny looked to purchase power, CEI quietly intervened to stop other utilities from selling to the city. When the city had to turn to CEI for emergency power, CEI charged the city triple what it charged other customers, creating great financial pressures on the public system. It lobbied members of City Council to raise Muny's rates to wipe out the price difference. Once, when Muny Light needed emergency power from CEI, the transfer was operated in such a way as to deliberately cause a blackout in the Muny system. CEI used its advertising dollar influence with the media to attack Muny Light as unreliable and worthless, even though the system was making a profit. With a military-type precision, the case for a sale of the Muny system soon became the cause of all the radio, television and newspaper outlets in Cleveland. At the time Cleveland was the number three corporate headquarters city in America. The corporate community supported the sale. So did both political parties.
The City Council and the mayor obliged in 1976 and sold the system for a fraction of its value. I organized a referendum that blocked the sale. I ran for mayor and won on a promise to save the light system. On December 15, 1978, Ohio's largest bank, Cleveland Trust, demanded that I sell the city's electric system as a precondition for the bank extending $5 million in credit to the city on loans taken out by the previous mayor. Cleveland Trust was CEI's bank, and managed its cash flow. The bank had four interlocking directorates with the utility. It held CEI's pension funds and other investments. With another bank, it was CEI's largest shareholder. If I said yes to the sale, the bank promised not only to renew the city's credit and gain the cooperation of other banks but it would grant the city another $50 million in loans. If I said no, Cleveland would become the first American city since the Depression to go into default on its loans.
Where I come from it always mattered how much people paid for electricity. I can still remember my mother and father sitting in the kitchen of our apartment, counting pennies on a porcelain-topped table, to make sure they could pay the utility bill. I can still hear those pennies clicking on that porcelain top. So when the bank president demanded sale of our city's electric system, I said no. The city was thrown into default, and a year later, I lost the office it took me ten years to achieve.
After default, I couldn't get a job in Cleveland. I went West, first to California, then Washington State, then Oregon, then New Mexico, then Alaska, seeking a new start, trying to find a way to make a new beginning, trying to reclaim a career in public life. The years rolled along. I wandered back and forth from the West to Cleveland. Muny Light remained unsold. And fifteen years after default, carried aloft on Muny Light's expansion, with a system that provided electricity at a savings of up to 30 percent, I began the road back toward national politics with a 1994 election to the Ohio Senate. Two years later I came to Congress.