Dow Jones: Enron, Bush's Biggest Contributor

----- Forwarded by Steven J Kean/NA/Enron on 09/27/2000 05:26 PM -----

Cindy Derecskey
09/25/2000 10:25 AM

To: Steven J Kean/NA/Enron@Enron, Richard Shapiro/HOU/EES@EES
cc:
Subject: Dow Jones: Enron, Bush's Biggest Contributor

----- Forwarded by Cindy Derecskey/Corp/Enron on 09/25/2000 10:23 AM -----

Andrew Morrison@ECT
09/25/2000 09:38 AM

To: Mark Palmer/Corp/Enron@ENRON
cc: Karen Denne/Corp/Enron@ENRON, Jackie Gentle/LON/ECT@ECT, Cindy
Derecskey/Corp/Enron@Enron
Subject: Dow Jones: critical article re Enron

Mark

This came up on the wire over the week-end - apparently it is based on a
previously released story, so you may have already seen it.

You are quoted mid-way through re Houston emissions.

Tx

Andrew

Meet Enron, Bush's biggest contributor
Pratap Chatterjee

09/01/2000
The Progressive
23
Copyright © 2000 Bell & Howell Information and Learning Company. All
rights reserved.
Copyright Progressive Incorporated Sep 2000

Early last October, members of the ninth grade girls' track team
and the boys' football team at suburban Houston's Deer Park High
School's north campus returned from practice reporting severe
breathing problems. That day, Deer Park registered 251 parts of
ozone per billion, more than twice the federal standard, and Houston
surpassed Los Angeles as the smoggiest city in the United States.

One of the biggest contributors to Deer Park's pollution is a plant
owned by Enron, Houston's wealthiest company. Enron and its
executives are also the single largest contributors ($550,000 and
counting) to the political ambitions of Texas Governor George W
Bush, Republican candidate for President of the United States.
Kenneth Lay, the chief executive of Enron, has personally given at
least $250,000 in soft money to Bush's political campaigns. He is
also one of the "Pioneers"-a Bush supporter who has collected
$100,000 in direct contributions of $1,000 or less.
What is Enron? And what does it get in return for this largesse?

Enron is the largest buyer and seller of natural gas in the
country. Its 1999 revenues of $40 billion make it the eighteenth
largest company in the United States. Enron invests in energy
projects in countries around the world, including Argentina,
Bolivia, Brazil, China, India, Indonesia, Mozambique, and the
Philippines.

The company has recently expanded onto the Internet, buying and
selling a dizzying array of products ranging from pulp and paper to
petrochemicals and plastics, as well as esoteric products like clean
air credits that utilities purchase to meet emission limits.

Texas activists say that the tight connection between Bush and Lay
bodes ill if Bush is elected. Andrew Wheat, from Texans for Public
Justice, a campaign finance advocacy group in Austin, compares the
symbiotic relationship between Enron and the governor to
"cogeneration"-a process used by utilities to harness waste heat
vented by their generators to produce more power. "In a more
sinister form of cogeneration, corporations are converting economic
into political power," he says. "A Bush election fueled by Enron
dollars could ignite in the public policy arena, and consumers would
get burned."

And so may people in the Third World.

Amnesty International and Human Rights Watch have both criticized
Enron for colluding with police who brutally suppressed protests at
the company's giant power plant in western India. The plant's
operating firm is called the Dabhol Power Company. From 1992 to
1998, Enron owned 80 percent of it, with General Electric and
Bechtel each holding a 10 percent share. (In 1998, the Indian state
electricity board bought a 30 percent share of the company, which
reduced Enron's stake to 50 percent.)

For years, the plant has been the site of many nonviolent protests.

"The project has met with opposition from local people and
activists from elsewhere in India on the grounds of its social,
economic, and environmental impact," Amnesty wrote in a July 1997
report. "Protesters and activists have been subjected to harassment,
arbitrary arrest, preventive detention under the ordinary criminal
law, and ill treatment. Amnesty International considers those who
have been subjected to arrest and temporary periods of imprisonment
as a result of undertaking peaceful protest to be prisoners of
conscience, imprisoned solely for exercising their right to freedom
of expression."

Amnesty's report found that "women, who have been at the forefront
of local agitation, appear to have been a particular target."

Just before dawn on June 3, 1997, police stormed the homes of
several women. "The policemen forcibly opened the door and dragged
me out of the house into the police van parked on the road. (While
dragging me) the police kept beating me on my back with batons. The
humiliation meted out to the other members of my family was similar
to the way I was humiliated. . . . My one-and-a-half year-old
daughter held on to me but the police kicked her away," says
Sugandha Vasudev Bhalekar-a twenty-four-year-old housewife who was
three months pregnant at the time of her arrest, according to
Amnesty's report. Amnesty found that another pregnant woman was
beaten and several other women sustained injuries, including
bruising, abrasions, and lacerations on arms and legs.

Amnesty said the police involved in suppressing protests included
"the Special Reserve Police [SRP] on the site of the company." It
added: "The involvement of the SRP in the harassment of protesters
indicates the need for the three U.S. multinationals participating
in the joint venture to take steps to ensure that all the management
and staff of the DPC [Dabhol Power Company)-in particular, any
security staff subcontracted to, seconded to, or employed by the
company-are trained in human rights and are fully accountable for
their actions.

A January 1999 investigation by Human Rights Watch came to a
stronger conclusion. "Human Rights Watch believes that the Dabhol
Power Corporation and its parent company Enron are complicit in
these human rights violations," it said. "The company, under
provisions of law, paid the abusive state forces for the security
they provided to the company. These forces, located adjacent to the
project site, were only stationed there to deal with protests. In
addition, contractors (for DPC) engaged in a pattern of harassment,
intimidation, and attacks on individuals opposed to the Dabhol Power
project. . . . The Dabhol Power Corporation refused to acknowledge
that its contractors were responsible for criminal acts and did not
adequately investigate, condemn, or cease relationships with these
individuals."

Enron denies any wrongdoing. "While we respect the mission of Human
Rights Watch, we do not feel that its report on the Dabhol Power
project is accurate," says an Enron spokesperson. "The report refers
to peaceful protests, when, in fact, the reason the police were
positioned near our site is that there have been many acts of
violence against our employees and contractors. Dabhol Power Company
has worked hard to promote positive relations with the community.
Unfortunately, the good relationship we have built with a large
percentage of the community was not reflected in the report. Enron
is committed to providing energy and communications services while
preserving the human rights of citizens and our workers."

Enron has also raised a stink in Bolivia with its involvement in
the Cuiaba Integrated Energy Project. The project is run by
Transredes, Bolivia's hydrocarbon transport company, which came into
being in 1997 after Bolivia privatized its oil sector under the
influence of the World Bank. A joint venture of Enron and Shell owns
50 percent of Transredes. On January 31, 2000, a Transredes oil
pipeline erupted and dumped an estimated 10,000 barrels of refined
crude oil and gasoline into the Desaguadero River, which supports
indigenous communities such as the Uru Muratos.

"This problem is Transredes's number one priority, and we are
committed to continue to work hard to mitigate the short- and
long-term social and environmental impact," wrote Steve Hopper,
president of Transredes, in a letter addressed "To the People of
Bolivia" on February 7.

Facing starvation from the Loss of their life-sustaining waterfowl
and fish, the Uru Muratos left their ancestral lands at the southern
shores of Lake Poopo in April and marched eighty-five miles to the
city of Oruro to ask for government help.

"We subsequently reached an agreement with them to provide certain
levels of relief and assistance," says Keith Miceli, general manager
for public relations for Enron, South America.

In its actions overseas, Enron has made a practice of taking
advantage of corporate welfare. And it has enlisted George W Bush in
this effort.

For example, in March 1997, Lay wrote a letter to Bush that was
subsequently released to the press under Texas open records laws,
asking him to contact every member of the Texas delegation in
Congress to explain how "export credit agencies of the United States
are critical to U.S. developers like Enron, who are pursuing
international projects in developing countries." These agencies
include the Overseas Private Investment Corporation (OPIC), which
provides political risk coverage and financial support to U.S.
companies investing abroad.

"OPIC provided financing or insurance coverage worth almost $300
million for Enron's foreign projects just last year, according to
government records," The New York Times reported. "Enron officials
have in the past asked Mr. Bush to help lobby lawmakers to
appropriate funds of OPIC, as well as for the Export-Import Bank,
another federal agency that aids American companies abroad."

Enron received $200 million in political risk insurance for the
Dabhol project in 1996. And it received $200 million in insurance
from OPIC in 1999 for its Bolivian project.

The Enron Methanol plant in Pasadena, Texas, lies in the Houston
Ship Channel area, the nation's largest concentration of
petrochemical plants just east of the city. The plant has won
special concessions from Governor Bush, allowing the company to
pollute without a permit, as well as giving it immunity from
prosecution for violating some environmental standards.

Plants like this in Texas cumulatively emit twice as much nitrogen
oxide, a key ingredient of smog, as do all the nine million cars in
Texas put together.

Only 7 percent of the more than 3,500 tons of nitrogen oxide
emitted by the Enron Methanol plant in 1997 would have been
permitted had Enron not gotten away with this under the "grandfather
clause" of the 1971 Texas Clean Air Act, which allows plants built
before 1971 to continue their polluting practices. Bush extended
this clause under the 1999 Clean Air Responsibility Enterprise
(CARE) program that his office drew up in a series of secret
meetings with representatives of the top polluters in the state, as
Molly Ivins reported. CARE waives permit requirements for plants
that volunteer to cut emissions.

The CARE program is backed up by an act that Bush signed in May
1995 giving sweeping protections to polluters that perform internal
environmental or safety audits. The law makes these audit documents
confidential and allows polluters to escape responsibility for
environmental violations. To date, Enron has conducted five such
audits and filed for immunity from prosecution for violations of the
law, according to the Texas Natural Resources Conservation
Commission (TNRCC), the state equivalent of the Environmental
Protection Agency.

Tamara Maschini, who lives about five miles from the Enron plant,
is one of the founders of a local environmental group called Clean
Air Clear Lake.

"Whole families in this neighborhood have asthma because of the
pollution from plants like Enron," she says.

Mark Palmer, head of public relations for Enron, says that the
company's contribution to local pollution is minimal.

"If the grandfather clause was canceled right now, we would benefit
the most of any of the companies in Texas because our nitrogen oxide
emissions add up to less than half a percent of the total," he says.

Last year, the Bush campaign borrowed Enron's corporate jets eight
times to fly aides around the country, more times than any of the
thirty-four other companies that made their company aircraft
available to the Presidential hopeful.

And Lay often acts as George W. Bush's chaperone.

On April 7, 2000, he played host to Bush and his father, the former
President, at the Houston Astros' first home game of the season. The
game was held in the baseball team's brand new stadium-Enron
Field-which was built with the help of a $100 million donation from
Enron. (The company got free advertising, a tax break, and a $200
million contract to supply power to the stadium in return.)

Less than three weeks later, Lay joined candidate Bush in
Washington, D.C., for a Republican fundraiser that topped all
previous records by bringing in a staggering $21.3 million, easily
the biggest one-night haul for any political party in history.

"Ken Lay is a noted business leader in Texas who has long been
active in Republican politics," says Ray Sullivan, a spokesman for
the Bush campaign. "He is chair of the Governor's Business Council.
But the governor has his own agenda based on what he believes is
best for Texas and for the country."

For his part, Lay tries to put his contributions in a favorable
light. "When I make contributions to a candidate, it is not for some
special favor, it's not even for access-although I'll be the first
to admit it probably helps access," he told The New York Times. "It
is because I'm supporting candidates I strongly believe in
personally."

In January 1999, Enron pitched in $50,000 to help pay for Bush's
inaugural bash in Austin, Texas, after he won reelection for
governor. Today, the polls show that George W Bush has a better than
even chance of winning the Presidential election. If he does, it is
very likely Ken Lay will be pitching in for another inaugural bash.

Pratap Chatterjee works for the on-line magazine "Corporate Watch, "
which ran an earlier version of this story. The magazine can be
reached at www. corpwatch. org.