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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
