Secrets and Lies

by JASON LEOPOLD

The front pages of California’s major daily newspapers were buzzing last week with fresh reports of one energy company ripping off the state in the spring of 2000 by deliberately keeping a power plant from generating electricity so the company could take advantage of sky-high wholesale electricity prices the state was forced to pay to keep the lights on.

The evidence, a transcript of a tape-recorded telephone conversation between an employee at Williams Companies, the Tulsa, Okla. based energy company, and an employee at a Southern California power plant operated by Williams, shows how the two conspired to jack up power prices and create an artificial electricity shortage by keeping the power plant out of service for two weeks. The scheme worked. Williams earned $10 million from California consumers through its manipulative tactics. In March 2001, in a settlement reached with FERC, Williams agreed to refund California $8 million it obtained through the scam without admitting any guilt.

But here’s the real tragedy. The evidence has been under seal and in the possession of President Bush’s Federal Energy Regulatory Commission; the governing body that is supposed to make sure power prices is just and reasonable, for more than a year. FERC released the transcripts after the Wall Street Journal sued the commission to obtain the full copy of its report. However, it was New York Times op-ed columnist Paul Krugman who first wrote about the existence of the Williams tapes in a Sept. 27 column. The Journal sued FERC after Krugman’s column ran and reported the findings of the FERC investigation last week.

How could FERC keep this smoking gun concealed for a year? It’s no secret that California politicians and consumer groups have blamed energy companies like Williams and Enron for the state’s energy crisis and even alleged that energy companies created the illusion of an electricity shortage by shutting down power plants in the state. Had this evidence been released 18 months ago, pre-Enron, it would have driven that point home. But it wouldn’t have jibed with Bush’s energy policy, which was made public instead in May 2001. Around the same time, President Bush was in California and met with Gov. Gray Davis about the state’s energy crisis. Bush told Davis the state implemented a flawed energy plan and that and that alone was the reason for electricity price spikes. Meanwhile, FERC is sitting on a pot of gold and no one in California even knows it.

A few weeks before the meeting between Bush and Davis, Vice President Dick Cheney, who chairs Bush’s energy task force, was interviewed by PBS’ Frontline for a special series on California’s energy crisis. During the interview, Cheney flat-out denied that energy companies ripped off California.

"The problem you had in California was caused by a combination of things–an unwise regulatory scheme, because they didn’t really deregulate," Cheney said in the May 17 Frontline interview. "Now theey’re trapped from unwise regulatory schemes, plus not having addressed the supply side of the issue. They’ve obviously created major problems for themselves and bankrupted PG&E in the process."

It’s true that California created a horribly flawed deregulation plan. But as state Sen. Joseph Dunn, a Democrat leading the investigation into California’s energy crisis, told me: "we may have left the car running but the energy companies stole the car."

When asked whether it was possible whether energy companies were behaving like a "cartel" and if some of the high power prices in California could be the result of manipulation, Cheney responded with a resounding "no."

It’s highly unlikely that Bush, Cheney and members of the energy task force were kept in the dark about the Williams scam, especially since the findings of the investigation by FERC took place around the same time the policy was being drafted.

According to evidence obtained by Congressman Henry Waxman, D-California, earlier this year, the energy task force "considered and abandoned plans to address California’s energy problems in its report." Despite my best efforts to get an answer from the White House about whether the energy task force knew about the Williams scam while it was drafting its policy my call was never returned. Additional evidence has been released this year by federal and state investigators that show a pattern of deceit by energy companies and give credence to the claims that California’s energy crisis was manufactured. To think that some of these companies influenced President Bush’s energy policy is like asking a convicted murderer to decide his own fate.

Unfortunately, with a change in leadership in the Senate and the House it doesn’t appear that new information about the energy task force will be released anytime soon, according to John Hess, an aide to Senator Barbara Boxer, D-California.

"According to our energy person, the Commerce Committee has no plans at this time to hold a hearing on Cheney and his Task Force. With the change in the majority, I’m not surprised that the Republicans who now control the Committee agenda prefer not airing this issue further."

But this latest saga is just an example of why it’s crucial that Cheney release the names of the people in the energy sector he met with while preparing the President’s energy policy. Cheney’s stonewalling tactics have bought the administration some time. But the heat is on.

JASON LEOPOLD can be reached at: jasonleopold@hotmail.com

Like What You’ve Read? Support CounterPunch
Weekend Edition
July 31-33, 2015
Jeffrey St. Clair
Bernie and the Sandernistas: Into the Void
John Pilger
Julian Assange: the Untold Story of an Epic Struggle for Justice
Roberto J. González – David Price
Remaking the Human Terrain: The US Military’s Continuing Quest to Commandeer Culture
Lawrence Ware
Bernie Sanders’ Race Problem
Andrew Levine
The Logic of Illlogic: Narrow Self-Interest Keeps Israel’s “Existential Threats” Alive
ANDRE VLTCHEK
Kos, Bodrum, Desperate Refugees and a Dying Child
Paul Street
“That’s Politics”: the Sandernistas on the Master’s Schedule
Ted Rall
How the LAPD Conspired to Get Me Fired from the LA Times
Mike Whitney
Power-Mad Erdogan Launches War in Attempt to Become Turkey’s Supreme Leader
Ellen Brown
The Greek Coup: Liquidity as a Weapon of Coercion
Stephen Lendman
Russia Challenges America’s Orwellian NED
Will Parrish
The Politics of California’s Water System
John Wight
The Murder of Ali Saad Dawabsha, a Palestinian Infant Burned Alive by Israeli Terrorists
Jeffrey Blankfort
Leading Bibi’s Army in the War for Washington
Geoffrey McDonald
Obama’s Overtime Tweak: What is the Fair Price of a Missed Life?
Brian Cloughley
Hypocrisy, Obama-Style
Robert Fantina
Israeli Missteps Take a Toll
Pete Dolack
Speculators Circling Puerto Rico Latest Mode of Colonialism
Ron Jacobs
Spying on Black Writers: the FB Eye Blues
Paul Buhle
The Leftwing Seventies?
Binoy Kampmark
The TPP Trade Deal: of Sovereignty and Secrecy
David Swanson
Vietnam, Fifty Years After Defeating the US
Robert Hunziker
Human-Made Evolution
Shamus Cooke
Why Obama’s “Safe Zone” in Syria Will Inflame the War Zone
David Rosen
Hillary Clinton: Learn From Your Sisters
Sam Husseini
How #AllLivesMatter and #BlackLivesMatter Can Devalue Life
Shepherd Bliss
Why I Support Bernie Sanders for President
Louis Proyect
Manufacturing Denial
Howard Lisnoff
The Wrong Argument
Tracey Harris
Living Tiny: a Richer and More Sustainable Future
Kollibri terre Sonnenblume
A Day of Tears: Report from the “sHell No!” Action in Portland
Tom Clifford
Guns of August: the Gulf War Revisited
Renee Lovelace
I Dream of Ghana
Colin Todhunter
GMOs: Where Does Science Begin and Lobbying End?
Ben Debney
Modern Newspeak Dictionary, pt. II
Christopher Brauchli
Guns Don’t Kill People, Immigrants Do and Other Congressional Words of Wisdom
S. Mubashir Noor
India’s UNSC Endgame
Ellen Taylor
The Voyage of the Golden Rule
Norman Ball
Ten Questions for Lee Drutman: Author of “The Business of America is Lobbying”
Franklin Lamb
Return to Ma’loula, Syria
Masturah Alatas
Six Critics in Search of an Author
Mark Hand
Cinéma Engagé: Filmmaker Chronicles Texas Fracking Wars
Mary Lou Singleton
Gender, Patriarchy, and All That Jazz
Patrick Hiller
The Icebreaker and #ShellNo: How Activists Determine the Course
Charles Larson
Tango Bends Its Gender: Carolina De Robertis’s “The Gods of Tango”