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Analysis of under-reported news, updates on previous Monitor stories


[Editor's note: Before there were blogs, there were the Monitor "404 Reports," which began in 1997 as a forum to offer updates on previous Monitor stories and discuss items in today's news that deserved greater media attention. Significant additions or changes to the Albion Monitor site will also be announced here. Do not bookmark this page, as the 404 Reports address will change with each edition.]

Ken Lay, Enron, and 9/11


Bush Was Kenny-Boy's Unindicted Co-Conspirators (Molly Ivins)

Media Ignores Bush Links To Enron Crimes (Robert Scheer)

The Puzzle of the Enron Coverups (2002)

Bush to Lay: What Was Your Name Again? (Robert Scheer 2002)

Repubs Scramble For Ways To Spin Enron Ties (2002)

The Man Who Screwed the World (2001)

Connect the Enron Dots to Bush (Robert Scheer 2001)

Media Swallows Enron PR About Collapse (Molly Ivins 2001)

Behind Bush (2000)

  + COUNTING KENNY-BOYS     Ken Lay may have frustrated justice with his abrupt death, but there's still some comfort in knowing that Jeff Skilling, Andrew Fastow, and the other crooked Enron boys will be trading their Armani pin stripes for Texas prison stripes. Also deserving to be held to account are Lay's other pals, but don't hold your breath waiting for prosecutors to go after that bunch; they work at 1600 Penn. Ave, Washington, D.C.

Bush & Co. began distancing themselves from Lay once it became clear that Enron was flaming out at the end of 2001, so it's no surprise that official comments about Lay's demise were low key. White House press secretary Tony Snow said, "The president has described Ken Lay as an acquaintance, and many of the president's acquaintances have passed on during his time in office." (Had a Clinton spokesman made such a remark, of course, Repubs would be howling that it was tantamount to an admission of Clintonista murders.) The president's only comments were that Lay was a "good guy," a "generous person," and Bush hoped that his "heart was right with the Lord" before he died -- although it might have been more useful to implore the devil to keep his bargains with the heinous Enronite.

But Lay was far more than an acquaintance of Bush; he was better known as "Kenny Boy" around the Texas governor's mansion, and Gov. Dubya sent his pal a gushy note in 1997: "One of the sad things about old friends is that they seem to be getting older -- just like you! ... Laura and I value our friendship with you. ... Your younger friend, George W. Bush."

The Bushies aren't the only ones downplaying the Bush-Lay relationship; anyone who doubts that the U.S. press still gives President Bush preferential treatment should simply count the number of times that the revealing "Kenny Boy" monicker can be spotted in mainstream news coverage of Lay's death. Nexis currently shows roughly 125 different obits, op/eds, or news stories about his dying, but only 1 in 7 mentions that once-famous nickname bestowed by his pal.

Truth is, George W. Bush is equally the political creation of Karl Rove and Kenneth Lay. As Robert Scheer has tallied in his columns, it was Lay who saw to it that Junior Bush received nearly $2 million from himself and other top Enron executives, starting in 1993. Lay also gave the GOP $326,000 in soft money before Bush ran for president, and was additionally a "pioneer" who raised $100,000+ in smaller contributions for Bush. Then there was another $100 thousand for the Y2000 inaugural balls (which came on top of $50,000 the year before to help pay for Bush's re-election inaugural bash in Texas), another $10,000 to the Bush-Cheney Recount Fund, and over a dozen free rides on Enron's private jets during the 2000 campaign and during the recount. The total contributions were so high that Enron/Lay was still ranked as Bush's top contributor through January 2004, over two years after the company collapsed.

Lay got his money's worth, and more:


Shortly after Bush moved into the Governor's mansion, he signed legislation that gave Enron and other polluters immunity from prosecution as long as they conducted internal environmental or safety audits -- and Enron, of course, always gave itself a clean bill of health. A few years later, in secret 1999 meetings, Governor Bush's office extended a "grandfather clause" in the Texas Clean Air Act to allow Enron's methanol plant in Pasadena, Texas to continue belching out 13x over legal limits, or 3,500 tons of nitrogen oxide annually.


During Enron's push for energy deregulation by the states in the late 1990s, Ken Lay used Gov. Bush to lobby Gov. Tom Ridge for a foothold in Pennsylvania's electricial utillity market. Also in 1997, Lay asked Bush to lobby the federal government for changes to make it easier for companies to invest in projects in developing countries (more about that below).


Shortly after Bush moved into the White House, the chairman of the Federal Energy Regulatory Commission received a strong-arm phone call from Lay, demanding Enron have access to the national electricity transmission grid. The chairman balked, and was quickly replaced with a Lay-approved Texan.


Also in early 2001, Cheney held the first of several secret meetings with top Enron officials, including Lay, who had a private session with the vice president in April.

Today everyone remembers those secret meetings between Cheney and energy company officials as the first of many grabs for new executive privileges from the Bush administration, as the White House refused to reveal the participant's names or even the meeting agendas. It's presumed that the purpose of the meetings was to set policy for the Energy Task Force, which Cheney directed, but if that's truly all that was discussed, Cheney's tooth-and-nail fight to keep the proceeds secret makes little sense; it's known, for example, that Ken Lay handed Cheney an Enron memo with eight energy policy recommendations, seven of which were adopted in the administration's final energy plan. Was Cheney afraid of public censure if it was known that he was cozy with energy company officials? That's about as likely as Britney Spears worrying that she'll offend fans if her latest music video shows too much skin.

Kenneth Lay cartoon
2001 Monitor caricature of Ken Lay
But the Task Force's draft energy proposal contained a hint of something else Cheney might have privately discussed with Ken Lay: Enron's troubled India project. A provision was added to boost oil and natural gas production in India that was so narrowly written that it could have applied only to Enron's Dabhol power plant. And there was a secret worth fighting to keep: As Enron steadily marched steadily towards its doom at the end of 2001, this project became the last hope that Enron could be yanked back from the abyss. And the only person who could possibly pull off that miracle was Kenny-Boy's buddy, George W. Bush.

The tale is told in our exclusive 2002 investigative feature, "The Puzzle of the Enron Coverups," so there's no need to rehash the whole story here, but Ken Lay hoped to save his neck by selling the plant to the Indian government for an inflated $2.3 billion price. After his meeting with Cheney, the National Security Council created a "Dabhol Working Group" composed of officials from various Cabinet departments during the summer of 2001, complete with a "war room." As noted in our story, the Working Group prepared talking points for both Cheney and Bush. Every development was closely monitored: "Good news" a NSC staff member wrote in a e-mail memo: "The Veep mentioned Enron in his meeting with [India opposition party leader] Sonia Gandhi." The Washington Post commented that the NSC went so far that it "acted as a sort of concierge service for Enron Chairman Kenneth L. Lay and India's national security adviser" in trying to arrange a dinner meeting between the Indian official and Lay.

India didn't want to buy the liquefied natural gas- powered plant because energy produced cost 700 percent more than electricity from other sources. To make the plant cost-effective, Enron needed an inexpensive LNG supply, and its best option was a pipeline through Afghanistan (see map in article). The big problem with that route, however, was who controlled that country at the time: The Taliban, and Osama bin Laden. While lobbying India to buy the overpriced plant, it appears that the Bush Administration was also raising the heat on the Taliban to give permission to build a pipeline. As noted in our feature:

The book "Bin Laden: the Forbidden Truth" by Jean-Charles Brisard and Guillaume Dasique claims that the U.S. tried to negotiate the pipeline deal with the Taliban as late as August, 2001. According to the authors, the Bush Administration attempted to get the Taliban on board and believed they could depend upon the regime to stabilize the country while the pipeline construction was underway. Bush had already indirectly given the Taliban $43 million for their supposed efforts to to stamp out opium-poppy cultivation. Was this an award -- or a bribe? The circumstances make this a valid question.


But according to the Brisard and Dasqui book, relationships became strained. The Taliban demanded that the U.S. also reconstruct Afghanistan's infrastructure and that the pipeline be open for local consumption. Instead, the U.S. wanted a closed pipeline pumping gas for export only and was not interested in helping to rebuild the country. In turn, the U.S. allegedly threatened the Taliban during the negotiations. The directive of "we'll either carpet you in gold or carpet you in bombs" U.S. representatives were reported to have told the Taliban.

The book's claims are credible; it's known that the last meeting between U.S. and the Taliban took place five weeks before the attacks on New York and Washington, as U.S. envoy Christina Rocca met the Taliban ambassador to Pakistan in Islamabad, just three days after a memo from the Dabhol Working Group pressuring diplomats to "broaden the advocacy" for the project.

Even in the chaos following 9/11, Enron remained a high White House priority. On October 3, Cheney met with India External Affairs Minister and the NSC sent another list of Dabhol talking points to Cheney's staff. But the curtain fell in late October as Enron disclosed to the Treasury Dept. that it had overstated earnings dating back to 1997 by almost $600 million. Within days, an e-mail ("Importance: High") warned, "President Bush cannot talk about Dabhol." Lawrence Lindsey, chairman of Bush's National Economic Council, was "advised that he could not discuss Dabhol" in a meeting with India's National Security Adviser. "Kenny-boy" became "Kenny-who?" among the powers-that-be, and so he remained to the grave.

It's intriguing to speculate that the Dabhol debacle played some role in the 9/11 attacks. Might Osama have postponed the terror mission if the U.S. had continued pipeline diplomacy? If the U.S. agreed to share gas flowing through those pipes and Afghanistan became dependent on the energy supply, would the planes still have been hijacked? And did anyone in the White House have a glimmer of what they were putting at stake by raising Enron's business deal to the red-hot priority of an international crisis? It will be a long time before anyone knows the answer to those questions: on November 1, 2001, Bush signed Executive Order 13233 which limits public access to papers of all presidents since 1980 -- including everything from the years of George W. Bush.   (July 11, 2006)

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