-Caveat Lector- from: http://www.newsmakingnews.com/ Click Here: <A HREF="http://www.newsmakingnews.com/">NewsMakingNews Secret Connections Covert Operat�</A> ----- Covert action and political clout help Enron win contracts By Pratap Chatterjee © 2001 WASHINGTON, Jul 31 (IPS) - What links Enron, the largest natural gas company in the United States, the Central Intelligence Agency (CIA), the Pentagon and the fast-growing energy markets of developing countries around the world? If you said covert intelligence operations to support Washington's aggressive pursuit of emerging markets and a network of ''good old boys'' who have long helped each other in and out of government, you probably got it right. Consider the facts. Houston-based Enron was the one of the first companies to bag lucrative new deals to build private energy projects in both the Philippines and India. One of the Filipino deals was to take over a power plant from the Pentagon, the popular name for the U.S. Defense Department. Enron also bagged two other projects to build power plants in the country. The Indian deal was clinched with the help of the CIA which provided Enron and U.S. government officials with key data on the risks of the project and strategies of possible competitors, according to published accounts. ''A number of U.S. government agencies worked on helping Enron in the Department of Commerce's new advocacy center. Several of them told me that the CIA had helped them get information, but the Commerce people themselves would not talk about it,'' David Sanger of the New York Times told IPS. Curiously enough, the most senior U.S. diplomat in both countries when the deals were negotiated was the same, Frank G. Wisner. He served as ambassador to the Philippines from 1991 well into 1992. He has presided over the U.S. Embassy in New Delhi since last August. Enron agrees that the ambassador helped it in the final stages of the Indian deal but says it had no contact with him in Manila. ''Enron officials paid a courtesy call on the embassy in Manila, but ...did not meet Wisner until his arrival in India. The U.S. government's assistance for the trip to India was to prepare for (Commerce Secretary) Ron Brown's trip. You must remember that we had been negotiating in India two years before Wisner or Brown arrived,'' says Diane Bazelides, Enron's chief spokesperson. Enron struck a deal to manage a 28-megawatt power plant in Subic Bay, formerly the largest U.S. military base in the region, shortly after Wisner left Manila in July 1992. Enron took over the plant in January, 1993, two months after the last U.S. troops left the base. ''The U.S. embassy staff produced an excellent report on how U.S. business could win contracts in the former base. They had an edge because they knew it so well,'' recalls a senior staffer at the Filipino embassy in Washington. Wisner spent a lot of time after arriving in New Delhi last year helping Enron win a 2.8-billion-dollar deal to build a 2,015-megawatt power plant near the southwestern coastal town of Dhabol, close to Bombay. The deal is now under heavy fire for being over-priced. Allegations of bribery are rife. ''If anybody asked the CIA to help promote U.S. business in India, it was probably Frank. That's his style - take action rather than wait for somebody else to make a decision,'' a former Wisner staffer told IPS. In recent weeks, newspaper reports have claimed that CIA support for U.S. business abroad is now an official priority. On Monday, for example, the Los Angeles Times reported that the Clinton administration has issued a set of rules for the CIA to engage in ''economic espionage'' in keeping with the new, geo-economic mindset of U.S. foreign policy. ''The idea is that an ambassador can call on a chief of station (the top CIA official in a foreign country) to find out who will take the key decisions on the bid, information on competitors, any possible corruption on the part of foreign companies,'' a former US ambassador told IPS. Wisner is himself long acquainted with the CIA and its capabilities. His father was one of its architects and served as a top official there from just after its creation in 1947 until just before his suicide in 1965. As such, he helped oversee the toppling of the Guatemalan government of Jacobo Arbenz for United Fruit company, a family-owned U.S. business, in 1954. He also was involved in the 1953 overthrow of Iranian Prime Minister Mohammed Mossadeq who had threatened to nationalize U.S. and British oil interests, and in secret operations against Indonesian President Sukarno in the mid-1950s. Wisner, Jr. has not been associated with anything quite so dramatic, but he has gone out of his way to promote both U.S. business and military policy. Before his posting to New Delhi, Wisner held the number three position at the Pentagon. During his stint there, Washington actively courted the Indian military. Help from such powerful sources in the elite and secret worlds of this city are commonplace for Kenneth Lay, the chief executive officer and founder of Enron, who started the company soon after quitting the Federal Power Commission, a now defunct government agency here. Lay had worked in the Pentagon during the Vietnam war, when Richard Nixon was president. An economics PhD, his work got him noticed at the senior echelons of the administration. ''Lay understands how government works. He knows who cuts the deals and he makes sure that he knows people in the right places,'' says a Houston journalist who asked not to be named. Lay, whose posh River Oaks home in Houston is a few kms from the Tanglewood residence of George Bush, is a close friend of the former president. Although Bush himself has never been accused of doing favors for Lay, three of his sons have allegedly used their father's name to try and win contracts for Enron. Neil and Marvin Bush were named in an article in the New Yorker magazine by investigative journalist Seymour Hersh as having tried to influence Kuwaiti officials in favor of an Enron bid to rebuild Shuaiba North, a power plant destroyed in the Persian Gulf war. Enron abandoned the bid a year ago. In 1988, George W. Bush, another of the Bush sons who is now governor of Texas, reportedly telephoned Rodolfo Terragno, Argentina's Public Works Minister, to ask him to award Enron a contract to build a pipeline from Chile to Argentina. ''He assumed that the fact he was the son of the president would exert influence. I felt pressured. It was not proper for him to make that kind of call,'' Terragno recently told The Nation weekly magazine. Enron ultimately won the bid under the next government, headed up by Carlos Menem, another Bush friend. In 1987, Neil Bush, a director of the failed Silverado Banking, Savings and Loan Association, which made millions of dollars in high-risk loan, created a subsidiary of his oil company to conduct business in Argentina. The activities of the two Bush children in Argentina prompted a par- parliamentary inquiry in that country. ''None of Bush's sons have worked for Enron. I don't know why people keep bringing up these old stories,'' says Bazelides. Two weeks ago, the head of Enron Development Corporation denied at in a press conference in Bombay an IPS report that Enron used political clout to swing deals. ''Enron's reputation is being attacked, and we do not do business under the table,'' said Rebecca Mark. But Enron officials acknowledge that the company used James Baker, Bush's Secretary of State, and Robert Mosbacher, his Commerce Secretary as consultants. Also on the Enron payroll is Thomas Kelly, director of operations for the Pentagon during the Gulf War. Another powerful Enron contact is Wendy Gramm, who joined Enron's board of directors in 1993 after resigning as chair of the Commodity Futures Trading Commission (CFTC) here. Previously, she was a senior staffer in the White House for former President Ronald Reagan. In late 1992 Gramm began proceedings to remove energy futures, a highly specialized financial instrument, from government regulation, based on a petition from Enron and other energy companies. She resigned her job just before the commission agreed to the petition. Today a tenth of Enron's profits are derived from playing this financial market. ''Former associates say that Gramm would not be the first CFTC member to go through Washington's revolving door to work for a company that has issues before the agency,'' Jerry Knight, a Washington Post journalist who tracks these markets, told IPS. India State Reviews The Fate of U.S. Power Project From Abhijit Dutta Date: 1995/07/19 Iowa Computer Aided Engineering Network, University of Iowa newsgroups: misc.news.southasia New Delhi: The fate of the biggest U-S investment in India now lies before a state government panel that could decide to scrap the deal, worth nearly three billion dollars. The controversy surrounding the Enron power project in the western state, Maharashtra. At issue is whether a consortium of U-S companies -- lead by Houston-based Enron development corporation -- should be allowed to continue building a two-point-eight billion dollar power plant in western India. But also at stake is investor confidence in energy-starved India, which has only begun to open the power sector to foreign capital. A Maharashtra state cabinet subcommittee has presented a report on the Enron project to the state's leader: Chief minister Manohar Joshi. the report remains secret, but government sources say it recommends canceling the Enron deal. Mr. Joshi will not speculate about what will happen. He says the report must be reviewed by the full cabinet. He says the cabinet could accept or reject its recommendations. No date has been set for final action. Meanwhile, Mr. Joshi says construction can continue at the project site on the Arabian sea south of Bombay. Critics of the project complain Enron got a sweetheart deal (special favors) last year from the previous Maharashtra state administration, which was headed by Sharad Pawar -- a senior member of the Indian Congress party of prime minister P-V Narasimha Rao. Critics say there was no competitive bidding and New Delhi eased the risk by guaranteeing Enron would be paid, in case Maharashtra defaulted. Indian officials also slashed red tape (bureaucratic procedures) and put the deal on a fast-track (speeded up the deal) to showcase their commitment to economic reform. Along the way, some critics suspect kickbacks (bribes) were paid. But Enron officials bristle (stiffen with anger) at those suggestions and no evidence has surfaced to substantiate them. U-S ambassador to India Frank Wisner says the U-S government is convinced Enron violated no laws and did not engage in corrupt practices. If Maharashtra cancels the Enron deal, ambassador Wisner says India may have trouble getting the money it needs to finance such huge infrastructure projects. It has been estimated India needs to spend at least 43 billion dollars (140 thousand crore rupees) on new power plants. The Indian news magazine "India Today" agrees there could be a financial squeeze, if the Enron deal is cancelled without compelling reasons. As the magazine puts it: "It may act as a major deterrent, just when India is desperately looking for money to fund its economic development." The above article was provided by Alex Constantine's Political Conspiracy Research Bin: http://alexconstantine.50megs.com ENRON ALTERNATIVE IN THAILAND By Praful Bidwai © Times of India July 11, 1995 Geneva: As the world moves towards new and holistic strategies of buying power from private producers while balancing the price with criteria such as location, environmental safety and consumer interest, India remains stuck in a primitive groove where opaque, case-by-case, individually negotiated deals a la Enron prevail. Thailand is the latest instance of the evolution of regulation in the power sector towards greater sophistication. On June 30, no fewer than 30 international and domestic groups submitted competitive bids to generate 4,400 MW of power (6 times the capacity of Enron's Dabhol project). This was way beyond official expectations, according to The Financial Times. Egat, Thailand's electricity authority, will evaluate the bids in two phases. First, it will score each proposal not just for the price of power, but from such diverse criteria as location, financial feasibility, type of fuel, and environmental safety. Price will only account for 60% of the score. This will greatly extend the scope of the regulation strategy for power purchase agreements (PPAs) followed worldwide. This typically uses four criteria: assured return on investment; the concept of 'delivered price'; 'avoided cost' or the marginal cost of generation in existing utilities; and finally, a fixed price at which the electricity will be purchased. Further, in the second phase, Egat will negotiate more delicate issues with the short listed corporations: how much cost escalation is to be allowed for rising fuel prices? How certain is the fuel supply"? How flexible the fuel mix? (Thailand, like India, has limited supply of gas). Who will bear the cost of changes in environmental regulation? The successful bidders will be chosen through this procedure.... The capital cost quoted for the Egat tenders for both gas and coal-fired plants, are about $1.02 million per MW. This is 25% lower than the capital cost of the Dabhol plant. According to a Thai govt source here, the unit cost of generation works out to under 6 US cents a kw-hour, against Enron's 7.5 cents. The Dabhol capital cost is the highest among all projects Enron negotiated worldwide in 1994: 51% higher than in China, 35 to 42% than in Indonesia, 26% than in the Dominican Republic, and 19% than in Turkey. Costs apart, our effort is to ensure that the PPA conforms to our needs, uses domestic suppliers wherever possible, and has the maximum macro-economic spin-offs e.g. balanced regional growth, the Thai official says. "We badly need power, but we will drive the best bargain to get it. We seek a political commitment from the investor too." Unlike India, Thailand, according to the official, has learnt from other countries like the Philippines, Malaysia (which recently signed two gas plant agreements at a 44% lower cost than Dabhol and China. The Thai model is more sophisticated than most others, including that of the US and UK. These, in turn, are vastly superior to the Enron type.. The above article was provided by Alex Constantine's Political Conspiracy Research Bin: http://alexconstantine.50megs.com Spies help sell cars, energy, planes and save the rain forest By Pratap Chatterjee © 2001 WASHINGTON, Jul 31 (IPS) - Raytheon, a U.S. company based in Massachusetts, won a 1.4 billion dollar contract from Brazil last July to set up a satellite surveillance system to monitor the destruction of the rain forest. The deal was clinched after President Bill Clinton made a special appeal on behalf of the manufacturer to the Brazilian government. U.S. officials also helpfully pointed out that Thompson CSF, a French company and Raytheon's main rival in the bid, had bribed local officials. ''Our agents were tipped off about the bribes. We don't think that bribery is a fair way to do business, especially because our laws don't allow us to do that,'' William Colby, a former Central Intelligence Agency (CIA) chief, told IPS. Earlier in the year the French were also outsmarted in their bid to win a six-billion-dollar deal to modernize Saudia, the Saudia Arabian airline, by the same combination -- CIA information on French bribes followed up by a personal letter from Clinton. In March 1994, the Saudi government awarded the contract to the U.S. consortium of McDonnell Douglas and Boeing. The French-led Airbus consortium was left out in the cold. Last week the Los Angeles Times, quoting anonymous CIA sources, announced that CIA help for U.S. business was now official policy. This is in keeping with the priority the administration has placed on helping U.S. business abroad. It also benefits the CIA which has been trying to justify its <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! 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