Enron: What Dick Cheney Knew

Enron: What Dick Cheney Knew

A probe of the company’s White House ties should begin at his door.


In the spring of 2001 the severity of the California energy emergency had inspired demands for government action, and Enron had a problem. Officials in California were arguing that federal price caps on wholesale energy sales would prevent profiteering and stabilize wildly fluctuating energy markets, and even some Republicans were saying that caps made sense. But the caps would cost Enron–which had come to dominate energy markets by taking advantage of deregulation–a fortune.

Enron CEO Kenneth Lay knew he needed high-level help. So he arranged to meet with a man who had headed a corporation with extensive business ties to Enron and who had been a prime recipient of Enron’s political largesse. Vice President Dick Cheney cleared his calendar for an April 17 private meeting with Lay regarding what aides described as “energy policy matters” and “the energy crisis in California.” At the meeting Lay handed Cheney a memo that read in part: “The administration should reject any attempt to re-regulate wholesale power markets by adopting price caps….”

The day after he met with Lay, Cheney gave a rare phone interview to the Los Angeles Times that had one recurrent theme: Price caps were out of the question. Dismissing the strategy as “short-term political relief for the politicians,” Cheney bluntly declared, “I don’t see that as a possibility.”

Cheney’s prognosis was flawed; within days, the Federal Energy Regulatory Commission agreed to price caps and the markets calmed down. But Cheney was undeterred in his drive to deliver for Enron. The Houston-based firm enjoyed a level of vice-presidential attention during the Bush/Cheney team’s first year that included explicit support of Enron’s choices for key regulatory positions, intervention in the affairs of a foreign government and the structuring of an energy policy task force to allow Enron and other corporations to effectively set policy. Indeed, so close was the Cheney-Enron relationship that it is entirely reasonable to ask whether ethical and legal lines were crossed. That possibility offers the most realistic explanation for Cheney’s refusal to disclose details of his Enron contacts to Congress. “Cheney says he is refusing to provide information to the Congress as a matter of principle. He told the Today show that he wants to ‘protect the ability of the President and the Vice President to get unvarnished information advice from any source we want,'” notes former White House counsel John Dean. “That sounds all too familiar to me. I worked for Richard Nixon.”

Less than ten days after he became Vice President–promising that a Bush/Cheney Administration would “restore decency and integrity to the Oval Office”–Cheney took charge of the Administration’s energy policy task force, the National Energy Policy Development Group. No initiative interested Enron more, and Cheney welcomed the company’s active participation in its deliberations. Cheney was hardly a stranger to the company. He had chaired Halliburton, a Texas-based oil services and construction conglomerate whose subsidiary, Brown & Root, helped build Houston’s Enron Field, and his return to politics–after he selected himself to be Bush’s running mate–benefited from Enron-linked contributions that paid for the Bush/Cheney campaign, the Florida recount fight fund and the inauguration. Cheney and his aides met at least six times with Lay and other Enron officials while preparing the group’s report, which is the basis for the Administration’s energy policy proposals. Additionally, Cheney’s staff met with an Enron-sponsored lobbying organization, the “Clean Power Group.”

Cheney claims this access gave Enron no advantage. “The fact is Enron didn’t get any special deals,” he declared when questioned in January. Yet an Enron memo discovered after that interview suggests the corporation shaped substantial portions of the task force’s recommendations. When Cheney and Lay met in April 2001, Lay handed Cheney a three-page “wish list” of corporate recommendations. Representative Henry Waxman, the ranking minority member of the House Committee on Government Reform, ordered an analysis of the memo against the final report of the task force; it shows that the group adopted all or significant portions of the recommendations in seven of eight policy areas. Seventeen policies sought by Enron or that clearly benefit the company–including proposals to extend federal control of transmission lines, use federal eminent-domain authority to override state decisions on transmission-line siting, expedite permitting for new energy facilities and limit the use of price controls–were included. Noting that “there is no company in the country that stood to gain as much from the White House plan as Enron,” Waxman wrote Cheney, “the recent revelations regarding the extent of Enron’s contacts with the White House energy task force have only underscored the need for full public disclosure.”

Under the Federal Advisory Committee Act of 1972, task forces like Cheney’s must conduct public meetings, must allow interested parties to attend and must keep publicly available records. But arguing “executive privilege,” Cheney, his aides and Cabinet departments have refused requests for records, despite legal challenges from the General Accounting Office and private groups. One lawsuit has freed up Energy Department documents that begin to hint at the extent of the influence that energy corporations exercised over Administration policies.

Cheney also provided other official services to Enron. Copies of e-mails obtained by the New York Daily News indicate that Cheney aided an attempt by Enron to force the Maharashtra State Electricity Board in India to pay it at least $2.3 billion in connection with a failed $2.9 billion effort to develop a power plant. A June 28, 2001, e-mail from a National Security Council aide read, “Good news is that the veep mentioned Enron in his meeting with [Indian Congress Party leader] Sonia Gandhi yesterday.” In an October 3, 2001, discussion with India’s foreign minister, Cheney raised the issue again. And when Cheney’s energy task force was finalizing its report in August, a draft document was altered to include a provision recommending that the US Secretaries of State and Energy work with India to help that country maximize its domestic oil and gas production. “The energy plan does not discuss this recommendation or explain why maximizing oil and gas production in India should be a US national energy priority,” Waxman wrote in a letter to Cheney. Instead, Waxman argued, the provision “benefited Enron by formally enlisting two Cabinet secretaries in Enron’s conflict with the Indian government.”

With the notable exception of Waxman, the Enron-Cheney connection so far has received troublingly limited attention from Congressional Democrats. Senator Joseph Lieberman announced that a committee he heads would issue more than two dozen subpoenas that could cast light on Enron-White House contacts, but Lieberman’s determination to maintain a “bipartisan” approach has so far limited the scope of the inquiry. Democratic leaders moreover appear reluctant to invite charges that they are repaying the GOP for eight years of investigations of the Clinton Administration.

Cheney’s refusal to cooperate with investigators–which presidential historian Stanley Kutler refers to as part of a broad “assault on the legal and Constitutional order” by the Bush Administration–forms the most powerful argument for the appointment of a special counsel. Congress allowed the Independent Counsel Law to expire in 1999, ceding to the Attorney General the right to make such appointments. Current Attorney General John Ashcroft recused himself after it was learned that he had taken campaign contributions from Enron, but his aides are free to make the call. John Conyers Jr., the ranking Democrat on the House Judiciary Committee, wrote the Justice Department in January to argue, “The Enron case represents one of the largest corporate frauds in the nation’s history, and the potential for conflicts of interest is so sweeping that it necessitates an outside counsel to insure public confidence.” So far, however, Conyers’s call has been little noted beyond the ranks of serious reformers like Representative Bob Filner, whose “sense of Congress” call for a special counsel has drawn only eight co-sponsors.

Conyers and Filner have recognized reality. Neither the Justice Department nor Congress appear to be prepared to conduct the sort of investigation that is required to expose the full extent of the Bush Administration’s service to Enron. That investigation would have to be broad, since the connections with Enron are not limited to Cheney’s office. From Army Secretary Thomas White, a former Enron executive, to Trade Representative Robert Zoellick, formerly on Enron’s advisory council, Enron’s tentacles have reached throughout the Bush White House, shaping tax, trade, energy and environmental policy. All such connections are worthy of legal and Congressional scrutiny. But make no mistake, the place to begin is at Dick Cheney’s door. If there is any realistic hope of exposing the extent to which Enron’s machinations corrupted US policy at home and abroad, then the Office of the Vice President is not only a good place to start, it is the essential beginning point.

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