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Oct 14, 2003
CONTACT: Doug Heller - 310-392-0522 x309
Gov.-elect Schwarzenegger Should Come Clean About Ken Lay Meeting Or Face Inquiry, Group Says
Energy Deregulation Agenda CriticizedSanta Monica, CA -- Governor-elect Schwarzenegger must explain the substance of his private May 2001 meeting with Enron chief Ken Lay, the Foundation for Taxpayer and Consumer Rights (FTCR) wrote in a letter to Schwarzenegger today. Read the letter.
A copy of internal Enron e-mails confirming the Schwarzenegger-Lay meeting is available from FTCR. FTCR, which was the state's most vocal critic of Governor Davis' handling of the energy crisis, said that if the governor-elect did not recount the meeting by the time of his inauguration, the group would ask state lawmakers to open an investigation to uncover the substance of the meeting, including any information that might further the state's efforts to return billions of dollars that taxpayers and consumers overpaid for electricity during the energy crisis.
"A meeting with the biggest corporate crook in recent memory, while he and his firm were in the midst of ripping off the state, should not be taken lightly," FTCR wrote. "As Governor, you must explain to Californians what you were doing at that meeting, what information Ken Lay shared with you and how the meeting has influenced your thinking on energy issues."
In addition to calling on Schwarzenegger to come clean about the meeting with Ken Lay, the group highlighted key aspects of the governor-elect's energy program that reflect an Enron-perspective on energy policy. In the letter, FTCR asked Schwarzenegger to rewrite his energy policy and remove his push for further energy deregulation.
The policy proposals, available online at www.joinarnold.com, call for the expansion of California's failed experiment with electricity deregulation, including a dramatic ceding of power from state regulation to federal control. Schwarzenegger also proposes to dismantle the California Power Authority, which FTCR identifies as the "state's last line of defense against a real or manufactured energy shortage."
"Your proposal to revisit the deregulation experiment that exploded into California's single worst financial and public policy disaster directly contradicts the public interest in ending deregulation once and for all. Californians cannot afford another deregulation nightmare," FTCR wrote.
A copy of the full letter follows.
October 14, 2003
Governor's Transition Office
Sacramento, CA 95814
Re: Energy crisis meeting with Ken Lay and the energy policy of your administration
Dear Governor-elect Schwarzenegger:
Your campaign tapped into Californians' anger, often highlighting the failure of leadership during the state's devastating energy crisis. This outrage over a lack of decisive leadership is what we at Foundation for Taxpayer and Consumer Rights articulated since the very early days of the crisis. What businesses and consumers needed most was a courageous leader to take on the power industry, yet the politicians were still defending their imprudent decision to deregulate the nation's largest electricity system.
While California faced blackouts and rate hikes, however, you were secretly meeting with Enron's Ken Lay, who had come to be widely reviled by Californians as the progenitor of deregulation and the head of the gang stealing billions from our businesses, consumers and taxpayers. It was his firm, you will recall, that developed the market manipulation strategies known by such names as Get Shorty, Death Star and Fat Boy. A meeting with the biggest corporate crook in recent memory, while he and his firm were in the midst of ripping off the state, should not be taken lightly.
As Governor, you must explain to Californians what you were doing at that meeting, what information Ken Lay shared with you and how the meeting has influenced your thinking on energy issues. Though you are just one week into your transition period, Californians should not be expected to wait too long for you to come clean about your private engagement with Ken Lay.
By the time of your inauguration, we expect you to provide a recounting of the substance of that May 17, 2001 meeting. If, for some reason, you should refuse, we will ask the State Legislature to investigate this meeting; we will call on lawmakers to subpoena you and other attendees in order to reveal your knowledge of the details surrounding the biggest financial rip-off in state history and Enron's efforts to continue that crime. In attending that meeting, you were privy to information inaccessible to the federal government, as Ken Lay has "taken the fifth" during investigations into his role in the crisis. Furthermore, Californians should have access to any information that might affect your decision as to whether or not you will fully commit to the fight for the billions of dollars stolen from this state by the energy firms that were manipulating our market, including Enron.
In addition to whatever you might have learned about Enron's strategies and goals at this meeting, Californians deserve to know the extent of Ken Lay's influence over your energy policy. A review of your proposals raises serious concerns that you share many of Ken Lay's views on deregulation. By the time of your meeting with Ken Lay, after three sets of rolling blackouts, the massive increase in consumer energy prices and the insolvency of the state's private utilities, every Californian knew that electricity deregulation was an unmitigated disaster. It had become indisputably clear that electricity is simply too vital to the economy and public safety to leave in the hands of unregulated corporations.
Your proposal to revisit the deregulation experiment that exploded into California's single worst financial and public policy disaster directly contradicts the public interest in ending deregulation once and for all. Californians cannot afford another deregulation nightmare.
In the energy program that you have made available online there are a number of points that deserve particular attention:
As a candidate you have promised to do things differently than the "politicians," but your assessment of the crisis and your proposals for California's energy future look very much like a return to the miserable policy of deregulation, which was foisted on California by a unanimous vote of Sacramento politicians in 1996 and signed by Governor Wilson, who is now among your chief advisors.
Yours is not a gutsy, independent proposal. It is a retread of special interest policy that will not only raise the ire of the voters who were fed up with special interest politics, but it will ensure the continued failure of a vital economic engine of our society.
While it is evident from both the proposals in your energy policy and recently discovered Enron e-mails, that you met with Ken Lay, it is equally clear that you have not considered the interest and needs of taxpayers, consumers and small businesses in this energy plan.
Californians elected you to be different. Coming clean about your meeting with Ken Lay is a first step and rewriting your energy policy would be the next one.
Senior Consumer Advocate
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