Enron: What Dick Cheney Knew

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."

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