Saturday, June 12, 2004
Meet Enron, Bush's Biggest Contributor
By Pratap Chatterjee
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 Cuiabá 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 Poopó 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.