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PARIS, THE NEW NORMAL? — Diana Johnstone files an in-depth report from Paris on the political reaction to the Charlie Hebdo shootings; The Treachery of the Black Political Class: Margaret Kimberley charts the rise and fall of the Congressional Black Caucus; The New Great Game: Pepe Escobar assays the game-changing new alliance between Russia and Turkey; Will the Frackers Go Bust? Joshua Frank reports on how the collapse of global oil prices might spell the end of the fracking frenzy in the Bakken Shale; The Future of the Giraffe: Ecologist Monica Bond reports from Tanzania on the frantic efforts to save one of the world’s most iconic species. Plus: Jeffrey St. Clair on Satire in the Service of Power; Chris Floyd on the Age of Terrorism and Absurdity; Mike Whitney on the Drop Dead Fed; John Wight on the rampant racism of Clint Eastwood’s “American Sniper;” John Walsh on Hillary Clinton and Lee Ballinger on the Gift of Anger.
POWER DYNAMICS:

The Coming of Enron

by Alexander Cockburn And Jeffrey St. Clair

It’s been more than a year now since the Texas conglomerate Enron swaggeredinto Oregon to gobble up Portland General Electric for a cool $3.2 billion.The press delicately referred to the deal as a merger. But this has provena grotesque misnomer. There is no question who the dominant partner is inthis relationship, Enron. It’s a company that never accepts a subservientrole and doesn’t tolerate anyone telling it how to behave.

Initially Wall Street mavens scratched their heads at the merger. Whatinterest would Enron, a global energy giant, have in PGE, a moribund electricutility saddled with a defunct nuclear reactor? The answer came soon enough.Enron’s sights weren’t on Oregon, but our neighbor to the south, the 31million residential electric consumers in California, and the high-tech,aerospace and defense factories that make the state one of the world’s mostpower-hungry regions. This is the mother lode for the new energy robberbarons. But to enter this lucrative market Enron needed credibility as apower provider. But like a apex corporate predator Enron also had its eyeson PGE’s assets, cheap hydro-power that it could sell across the West athuge mark ups, power plants and dams that it could auction off, and a networkof transmission lines that led right into the high-priced California market.

As for PGE’s problem child, the Trojan reactor, Enron’s acquisitionsanalysts believed it would prove only a minor irritant. There was a provensolution: stick the ratepayers with a large share of the costs of this misbegottenventure and dump the nuclear waste, and the attendant risk, on the federalgovernment. This is the old strategy of privatizing the profits and socializingthe costs.

Enron begrudingly admits to all this in one of their latest filings withthe Securities Exchange Commission, where Enron’s CEO Kenneth Lay confirmedthat the acquisition of PGE “has allowed Enron to expand its West Coastpower marketing operations and has assisted in establishing entry into retailmarkets in other parts of the country.” In other words, PGE customersare funding Enron’s expansion plans.

But the target is not just California. Enron truly has a global reach.In fact, more than 35 percent of the company’s income derives from its internationaloperations, pipelines across the Amazon, oil wells off the coast of Venezuelaand Trinidad, power plants in Indonesia, China and India, and a water companyin Great Britain. The guaranteed profits from PGE can be channeled intoany of this overseas operations, where Enron expects to make as much as50 percent of its profits by the year 2002.

Enron has a reputation for getting what it wants and doing whatever ittakes to get the job done. The purchase of PGE presents a microcosm forhow Enron operates on a global scale. The first strategy is to lubricatethe political system with generous infusions of campaign cash. Enron isone of the nation’s top sponsors of both the Democratic and Republican parties,pouring over $3 million into their coffers since 1989. This investment hasyielded the company tremendous rewards, including government brokered andfinanced deals worth billions in China, Indonesia and India. In Oregon,Enron lavished contributions on the state’s congressional delegation, supportingboth Gordon Smith and Ron Wyden. Neither senator uttered a critical peepabout the Texas takeover of Portland’s electric utility.

The second tactic is to buy off the potential opposition, preferablyas cheaply as possible. In Enron’s power deals in India this took the formpolitical bribery. The PGE deal was a fairly straightforward operation.Enron pledged $20 million to local charities and promised to contributean addition $10 million to Oregon environmental groups and conservationprojects, effectively muting any uncomfortable questions about how the Texascompany planned to deal with such home-grown issues as salmon conservationand low-cost electricity.

When philanthropic disbursements don’t quell all the critics, Enron doesn’thesitate to reveal its dark side. The company has a well-earned reputationas one of the most aggressive companies in the energy business. “Theyplay with steel elbows,” one bruised competitor said. In Oregon, Enron,and its partner in crime PGE, wasted no time in going after the Public UtilitiesCommission when the PUC had the temerity to question the public benefitsof the merger. The energy conglomerate rushed to the Oregon legislature,promoting a bill that would eviscerate the PUC’s regulatory power. Ultimately,the PUC buckled under the pressure and approved the deal.

And now the true price tag of Enron’s takeover of PGE is being seen,as deals are cut to ensure that the lowest electric rates will go to largestand most wasteful consumers of power, the pulp mills and aluminum plants.Meanwhile, some of PGE’s most prized assets are being auctioned off to thehighest bidder, with the ratepayers being expected to make up any losses.For the residential consumer and the salmon the honeymoon for the ignominiousmarriage between PGE and Enron is clearly over.