|Subj:||Cheney's Energy Plan: A disguise for a secret government bailout of Enron?|
|Date:||12/1/01 5:47:29 AM Pacific Standard Time|
According to the Wall Street Journal November 29, 2001:
From the front page article "Running on Empty-Enron Faces Collapse as
Credit, Stock Dive and Dynergy Bolts"
The article details the timeline of events leading up to this, the largest
bankruptcy in history.
On the second page of the article, Page 10, we find an interesting and
"Previously, even though Enron's practices had worried some regulators, the
bush administration had kept its distance.
Over the last decade, the company and its chairman, Mr. Lay, may have been
Mr. Bush's biggest financial backers, donating nearly $2 million to his
campaigns. Before the company's recent problems came to light, Mr. Lay
enjoyed unusually good access to top administration officials, including
Vice President Dick Cheney, who earlier this year drafted a new national
energy plan that seemed to lean heavily on Mr. Lay's suggestions."
Based on this report, from a newspaper highly supportive of the Bush-Cheney
administration, it appears the administration was trying to meet the need of
one of its largest contributors.
From the New York Times more light is shed on the secrecy. In particular,
note the paragraph describing what happened when an analyst asked a pointed
question about the balance sheet: cursing ensued! In other words, we are
not going to tell you.
November 30, 2001
By ADAM LASHINSKY
"SAN FRANCISCO -- In early 2000, Enron, the natural gas pipeline company
turned online phenomenon, held a daylong conference in Houston for Wall
Street analysts and investors. The audience, packed with financial experts
on the natural gas and power industries, was wowed by all the talk of
Enron's online capabilities, especially its rapidly growing business of
electronically matching buyers and sellers of numerous commodities like
electricity and even network bandwidth.
The analysts were particularly receptive when Jeffrey Skilling, then Enron's
president, suggested that the company's money-losing broadband network
business alone was worth $29 billion, or an extra $37 a share. He even had a
nifty PowerPoint slide to explain his company's proper stock price.
Unsurprisingly, Enron's shares skyrocketed by more than 50 percent in the
first half of that year. Enron, it seems, had become an Internet company,
and decidedly old-economy energy-industry analysts were loath to be left
behind. Many openly acknowledged their lack of understanding of Enron's new
lines of business but hey, the company told such a good story. Why quibble
over a few murky details?
Now Enron teeters on the brink of bankruptcy, and it's tempting to paint its
demise as a series of extraordinary events driven by behind-the-scenes deals
hidden by questionable accounting. And in fact, there's no doubt that the
company was engaged in some pretty unusual deals, and that it was less than
forthcoming about them.
One of the lessons of the Internet boom is that it's often difficult for
analysts to understand and evaluate new kinds of businesses. And executives
like Mr. Skilling, who once swore at an analyst during a conference call for
asking a pointed question about Enron's balance sheet, don't do much to
foster the kind of open inquiry that could lead to better information.
But the Enron debacle is also emblematic of another problem that has become
all too evident in the last few years: Wall Street's loss of objectivity.
Investment banks make far more money from underwriting or merger deals than
they do from broker fees. Analysts at these firms often face conflicting
loyalties. They can be put in the position of having to worry as much about
whether a chief executive might find a report offensive as whether an
investor might find it helpful.
In early 2000, Enron let it be known that it was considering a separate
public offering for its Internet operations. Analysts who raised prickly
questions about an initial public offering could be assured that their firm
wouldn't be chosen for the underwriting. That I.P.O. never happened, of
course, as Enron's plans for the broadband business collapsed. Nevertheless,
Wall Street failed to ask the questions that might have protected investors
from Enron's plunging market value."
Obviously, there are very shady dealings around the Enron-Cheney
relationship that need the full attention of Congress, the SEC, and the US
Justice Department. The energy plan wasn't about energy independence at all
or it would have addressed conservation much more seriously.