-Caveat Lector-

California senators urge probe into energy industry's reported influence

Copyright � 2001 Nando Media
Copyright � 2001 Scripps McClatchy Western Service

By MICHAEL DOYLE, Scripps-McClatchy Western Service

WASHINGTON (May 27, 2001 11:22 a.m. EDT) - Sen. Dianne Feinstein,
D-Calif., called Friday for an investigation into accounts of industry
pressure on federal energy regulators.

With the Senate about to fall back into Democratic control, and ahead of a
visit to California from President Bush, Feinstein urged hearings into
allegations concerning the Texas energy company Enron and a member of
the Federal Energy Regulatory Commission.

The New York Times reported that Enron's chairman, Kenneth Lay, had told
FERC Chairman Curtis Hebert Jr. that Hebert's hopes for keeping the
chairmanship would be aided by the industry if Hebert played ball.
Specifically, the paper reported that Hebert was advised to use his
regulatory position to help open up the electricity transmission business to
companies like Enron.

"While Mr. Lay's account differs, it is clear that the citizens of the United
States, especially the people of California, who are suffering from FERC's
failure to do its job, deserve an investigation and full public hearing into
what happened," Feinstein said in a statement.

Feinstein's fellow California Democrat, Sen. Barbara Boxer, added in a
statement that "this story provides further evidence concerning the close
ties of this administration to major energy companies." Boxer termed these
relationships "particularly disturbing" because Enron is one of the
companies "making enormous profits" during California's current energy
crisis.

The Democrats' anger at FERC precedes the New York Times report.
Along with other California lawmakers, they have wanted the commission -
now short-handed and operating with three Senate-confirmed
commissioners - to impose price caps on Western power.

The commission, led by Hebert, has so far refused to impose the price
caps that the energy industry opposes. According to the Times' account,
Lay told Hebert that "he and Enron would like to support me as chairman,
but we would have to agree on principles" concerning energy regulation.

"It would be unconscionable if any of the nation's electricity traders or
generators were in a position to be able to determine who chairs or
becomes a member of the commission," Feinstein said.

Lay told the Times that Hebert had requested Enron's support for keeping
the commission's chairmanship, and that he had "very possibly" discussed
with Hebert issues relating to the commission's regulating access to the
business of energy transmission.

An ally of Senate Majority Leader Trent Lott, Hebert was first named to the
energy commission by President Clinton in 1999. Bush named him
chairman Jan. 22, though he has not been considered secure in the
position.

Besides being a major energy company, Enron is a major political player.
The Houston-based company contributed $1.1 million to Republican
campaign committees in 1999 and 2000, and $532,000 to Democratic
committees during the same period, according to records compiled by the
Center for Responsive Politics.


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