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NEWS RELEASE
Jan 30, 2002


CONTACT: Doug Heller - 310-392-0522 x309

Enron Memo to Cheney Urged Him to Ignore California Power Woes

Memo Given to VP by Ken Lay Shows That Enron Influenced Federal Response to California, National Energy Policy
Santa Monica, CA--A memo uncovered by the San Francisco Chronicle indicates that Enron heavily influenced the Bush Administration. Further, it may indicate an effort by the White House to intervene on Enron's behalf to help that company avoid its eventual demise. The memo, reportedly given to Vice-President Cheney in April, outlines a prescription for extending energy deregulation and avoiding any price regulation that might lower energy prices in California.

For a copy of the memo, go to:
the San Francisco Chronicle .

A review of the Bush Administration's National Energy Policy, issued one month after the Vice President received the memo from Enron CEO Ken Lay, indicates that much of Mr. Lay's "priorities" became a part of the national policy.

"This memo is a smoking gun that demonstrates how influential Enron was over Vice President Cheney's Energy Policy," said consumer advocate Doug Heller with the Foundation for Taxpayer and Consumer Rights.

Examples of the influence abound throughout the National Energy Policy:

Enron, notably, calls on the Administration "to reject price caps," and the eventual National Policy developed by the Administration seeks "to avoid subsidies, price caps, and other constraints."

As another example, Enron's priority #2 states:
"Legislation [is needed] that permits the FERC to delegate authority [to an Independent Reliability Organization] to develop reliability standards and enforce those standards."

And the National Energy Plan, in section 7-6 advises:
"the Secretary of Energy [should] work with FERC to improve the reliability of the interstate transmission system and to develop legislation providing for enforcement by a self-regulatory organization subject to its oversight."

According to consumer advocates, Enron CEO Ken Lay knew that if deregulation was not continued in California and expanded nationwide, his company could face economic disaster because of accounting improprieties within the company. The Administration took this plea and placed Enron's needs as a priority over those of Californians.

"This memo may mark the first example of how the Bush Administration attempted to give Enron special assistance before that company's downfall became apparent to the public," said Heller.

For a copy of the memo, go to:
the San Francisco Chronicle .

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