In the wake of the California electricity “crisis” last year, Enron hired a Washington, D.C., consultancy, headed by a former Clinton administration official, to improve the public image of the giant energy trader. From early last summer until Enron filed for bankruptcy on Dec. 2, 2001, Intellibridge Corp. essentially served as an independent “propaganda” arm for Enron, developing a news Web site and organizing conferences, which brought regulatory, political, media and business leaders together to discuss the merits of Enron’s vision for restructuring the electric power industry across the United States.
Prior to the revelations of its off-balance-sheet partnerships last October, Enron’s biggest concern had been fallout from California and how other states may become scared to enact their own forms of electric and gas restructuring programs that possibly would benefit Enron and other non-utility energy marketing companies. Through its connections in D.C.’s closely tied political and international business world, Intellibridge landed the multi-million dollar contract with Enron.
David Rothkopf, deputy undersecretary of commerce for international trade during Clinton’s first term, founded Intellibridge_originally called the Newmarket Company_in the late 1990s after serving for two years as managing director of Kissinger Associates, Inc., the geo-political consulting group chaired by the former U.S. Secretary of State. In launching Intellibridge, Rothkopf had the help of several former government officials and spooks, including former National Security Advisor Anthony Lake and former Central Intelligence Agency director John Deutch, who was accused in 2000 of mishandling sensitive data while serving at the CIA and previously as an under-secretary at the Defense Department.
Even before these Intellibridge officials joined the Clinton administration, Enron had succeeded in developing a strong lobbying apparatus inside the Beltway during the first Bush administration. And the Clinton administration did little, if anything, to stand in the company’s way. Plenty of good material has been written about how Enron wooed both Democrats and Republicans to help it with regulatory matters and risky investments (most recently, the March 4, 2002 issue of The Nation contains a comprehensive analysis of government favors for Enron in Texas as well as on the domestic and international fronts).
For example, during both the Clinton and the current Bush administrations, government officials helped Enron with its investment in the Dabhol power plant in India. During the Clinton administration, the Overseas Private Investment Corp. and the Export-Import Bank of the United States provided a total of $460 million in loans to Enron for the Dabhol project.
Vice President Dick Cheney went to bat for Enron last summer when he met with Sonia Gandhi, wife of the slain Indian Prime Minister and current president of the opposition Congress party, to persuade her to help force the Indian state of Maharashtra to pay Enron for power it had received from the plant.
In a well-researched news article, The Washington Post on Jan. 20, 2002, highlighted how Enron garnered U.S. government support for its Dabhol project. The Post even found a former Clinton administration official_Intellibridge’s Rothkopf_still willing to argue, more than a month and a half after Enron filed for bankruptcy, the benefits of the U.S. government using its citizens’ money to support Enron’s position in India.
“There is an appropriate role for the U.S. government to step in on behalf of U.S. companies when foreign governments are treating them unfairly,” Rothkopf told the Post reporters. “Enron, just like any other company, was entitled to that support,” Rothkopf added. Curiously, the Post reporters_White House correspondent Dana Milbank and national correspondent Paul Blustein_failed to mention to the paper’s readers the former connection between Rothkopf’s Intellibridge and Enron.
As part of the contract with Enron, Intellibridge had the mandate to help stop the spread of the energy industry’s equivalent of the “rotten apple theory” through a public image enhancement campaign. Enron wanted to make sure negative perceptions about the company did not spread to segments of the American public that would hear about the company only in terms of the California energy crisis.
After winning the contract, Intellibridge quickly discovered who Enron considered its friends_certain conservative economists, the Wall Street Journal editorial page and large industrial companies_and who Enron viewed as its enemies_New York Times columnist Paul Krugman, then-New York Times editorial page editor Howell Raines, who late last summer moved into the top editorial position at the paper, and consumer advocacy groups.
Enron also wanted Intellibridge to create an advisory committee to help guide the public image campaign. Candidates for the committee included Cambridge Energy Research Associates Chairman Daniel Yergin, New York Times columnist Thomas Friedman, Economist magazine energy and environmental reporter Vijay Vaitheeswaran and Wall Street Journal columnist Rebecca Smith.
Intellibridge unveiled its Enron public image campaign at an Enron-sponsored conference early last October at a Ritz Carlton hotel in the Washington area. Attending the conference were business leaders, politicians and regulators from the Federal Energy Regulatory Commission, excluding former FERC Chairman Curt Hebert, who had left FERC in August 2001 after learning that the Bush administration, based on discussions with Enron officials, had named former Texas Public Utility Commission Chairman Pat Wood to take over as FERC chairman.
Soon after Intellibridge organized the conference in October, though, Enron’ s fortunes began to crumble and the company then had too much damage for Intellibridge to control, thus putting an end to the relationship and forcing Intellibridge to focus once again on the geo-political side of its consulting business. CP