American Nuclear Energy Council

<a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council">http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council</a>

he American Nuclear Energy Council was the lobbying arm of the U.S. nuclear power industry. In 1994, it merged with a number of other U.S. nuclear industry lobby groups to form the <a href="http://www.sourcewatch.org/index.php/Nuclear_Energy_Institute" title="Nuclear Energy Institute">Nuclear Energy Institute</a>. <a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#cite_note-0">[1]</a>

The current chairman of the <a href="http://www.sourcewatch.org/index.php/Federal_Energy_Regulatory_Commission" title="Federal Energy Regulatory Commission">Federal Energy Regulatory Commission</a>,<a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#cite_note-1">[2]</a> <a href="http://www.sourcewatch.org/index.php?title=Joseph_T._Kelliher&action=edit&redlink=1" class="new" title="Joseph T. Kelliher (page does not exist)">Joseph T. Kelliher</a>, worked for the American Nuclear Energy Council in the 1980s. <a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#cite_note-2">[3]</a>

<tr>

<td>

<h2>Contents</h2>

[<a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#" class="internal" id="togglelink">hide</a>] </div>

<ul>

<li class="toclevel-1 tocsection-1"><a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#SourceWatch_resources">1 SourceWatch resources</a></li>

<li class="toclevel-1 tocsection-2"><a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#External_links">2 External links</a>

<ul>

<li class="toclevel-2 tocsection-3"><a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#References">2.1 References</a></li>

<li class="toclevel-2 tocsection-4"><a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#Articles">2.2 Articles</a></li>

</ul>

</li>

</ul>

</td>

</tr>

</tbody></table>

<h2>SourceWatch resources</h2>

<ul>

<li><a href="http://www.sourcewatch.org/index.php/Nuclear_Energy_Institute" title="Nuclear Energy Institute">Nuclear Energy Institute</a></li>

</ul>

<h2>External links</h2>

<h3>References</h3>

<li id="cite_note-0"><a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#cite_ref-0">↑</a> "<a rel="nofollow" class="external text" href="http://www.nei.org/index.asp?catnum=2&catid=136">NEI Profile</a>", accessed July 2007.</li>

<li id="cite_note-1"><a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#cite_ref-1">↑</a> "<a rel="nofollow" class="external text" href="http://www.ferc.gov/">FERC</a>" accessed April 2008</li>

<li id="cite_note-2"><a href="http://www.sourcewatch.org/index.php/American_Nuclear_Energy_Council#cite_ref-2">↑</a> "<a rel="nofollow" class="external text" href="http://www.ferc.gov/about/com-mem/kelliher.asp#skipnavsub">About FERC, Joseph Kelliher Chairman</a>", accessed April 2008.</li>

</ol>

<h3>Articles</h3>

<tr>

<td style=" width: 100%; padding: .25em .25em 0.25em .25em;">This article is a <a href="http://www.sourcewatch.org/index.php/SourceWatch:Find_or_fix_a_stub" title="SourceWatch:Find or fix a stub">stub</a>. You can <a href="http://www.sourcewatch.org/index.php/SourceWatch:Find_or_fix_a_stub" title="SourceWatch:Find or fix a stub">help</a> by <a rel="nofollow" class="external text" href="http://www.sourcewatch.org/index.php?title=American_Nuclear_Energy_Council&action=edit">expanding it</a>.</td>

<td>

</td>

</tr>

</tbody></table>

</div>

<div id="mw-normal-catlinks" class="mw-normal-catlinks"><a href="http://www.sourcewatch.org/index.php/Special:Categories" title="Special:Categories">Categories</a>:

<ul>

<li><a href="http://www.sourcewatch.org/index.php/Category:Nuclear_PR" title="Category:Nuclear PR">Nuclear PR</a></li>

<li><a href="http://www.sourcewatch.org/index.php/Category:Nuclear_power" title="Category:Nuclear power">Nuclear power</a></li>

<li><a href="http://www.sourcewatch.org/index.php/Category:United_States" title="Category:United States">United States</a></li>

<li><a href="http://www.sourcewatch.org/index.php/Category:Stubs" title="Category:Stubs">Stubs</a></li>

</ul>

</div>

=

<h1 id="firstHeading" class="firstHeading" lang="en">Joseph T. Kelliher</h1>

<div id="siteSub">From Wikipedia, the free encyclopedia</div>

<div id="jump-to-nav" class="mw-jump">Jump to: <a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#mw-navigation">navigation</a>, <a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#p-search">search</a></div>

Joseph T. Kelliher as Chairman of <a href="http://en.wikipedia.org/wiki/Federal_Energy_Regulatory_Commission" title="Federal Energy Regulatory Commission">FERC</a> 2005</div>

</div>

Joseph Timothy Kelliher (born January 17, 1961) is an <a href="http://en.wikipedia.org/wiki/United_States" title="United States">American</a> <a href="http://en.wikipedia.org/wiki/Energy_industry" title="Energy industry">energy</a> executive and former chairman of the <a href="http://en.wikipedia.org/wiki/Federal_Energy_Regulatory_Commission" title="Federal Energy Regulatory Commission">Federal Energy Regulatory Commission (FERC)</a>.

Kelliher received his <a href="http://en.wikipedia.org/wiki/Bachelor%27s_degree" title="Bachelor's degree">bachelor's degree</a> from <a href="http://en.wikipedia.org/wiki/Georgetown_University" title="Georgetown University">Georgetown University</a>'s <a href="http://en.wikipedia.org/wiki/Edmund_A.Walsh_School_of_Foreign_Service" title="Edmund A. Walsh School of Foreign Service">School of Foreign Service</a> in 1983. In 1994<a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_note-1">[1]</a> he graduated with a <a href="http://en.wikipedia.org/wiki/Juris_Doctor" title="Juris Doctor">Juris Doctor</a>, <a href="http://en.wikipedia.org/wiki/Latin_honors#Types" title="Latin honors">magna cum laude</a>, from <a href="http://en.wikipedia.org/wiki/Washington_College_of_Law" title="Washington College of Law">Washington College of Law</a> at <a href="http://en.wikipedia.org/wiki/American_University" title="American University">American University</a>.<a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_note-ED-bio-2">[2]</a> After law school, Kelliher worked in a private law firm and then on the staff of U.S. Representative Joe Barton, a <a href="http://en.wikipedia.org/wiki/Republican_Party%28United_States%29" title="Republican Party (United States)">Republican</a> from Texas. He served briefly as the director of legislative programs for the <a href="http://en.wikipedia.org/w/index.php?title=American_Nuclear_Energy_Council&action=edit&redlink=1" class="new" title="American Nuclear Energy Council (page does not exist)">American Nuclear Energy Council</a> and represented <a href="http://en.wikipedia.org/wiki/Public_Service_Enterprise_Group" title="Public Service Enterprise Group">Public Service Electric and Gas Company (PSEG)</a> until 1995.

In 1995 he went to work for the <a href="http://en.wikipedia.org/wiki/United_States_House_Committee_on_Energy_and_Commerce" title="United States House Committee on Energy and Commerce">U.S. House Committee on Commerce</a> as <a href="http://en.wikipedia.org/wiki/Republican_Party%28United_States%29" title="Republican Party (United States)">Republican</a> (majority) counsel for oversight over DOE on electricity, nuclear waste, hydropower, and energy conservation matters. After leaving <a href="http://en.wikipedia.org/wiki/Capitol_Hill" title="Capitol Hill">the Hill</a> in 2000, he briefly reenterred the private practice of law, and also served on the Bush/Cheney Presidential Transition Team in late 2000 and early 2001.<a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_note-3">[3]</a> Kelliher then went to work for the <a href="http://en.wikipedia.org/wiki/United_States_Department_of_Energy" title="United States Department of Energy">Department of Energy (DOE)</a> where he served as a senior policy advisor on electricity and other domestic energy issues, including doing staff work for the <a href="http://en.wikipedia.org/wiki/Energy_Task_Force" title="Energy Task Force">Energy Task Force</a>.

Kelliher was appointed to FERC by president <a href="http://en.wikipedia.org/wiki/George_W.Bush" title="George W. Bush">George W. Bush</a> in October 2001, but did not receive his hearing in front of the <a href="http://en.wikipedia.org/wiki/United_States_Senate" title="United States Senate">Senate</a> committee until 2003.<a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_note-4">[4]</a> and took office on November 20, 2003. On July 9, 2005 he was appointed chairman, replacing Patrick H. Wood III. During the appointment process there were charges that he enjoyed too cozy a relationship with industry lobbyists and had, as a member of Vice President Richard Cheney's <a href="http://en.wikipedia.org/wiki/Energy_Task_Force" title="Energy Task Force">energy task force</a>, helped write President Bush's National Energy Policy in such a way that would be financially beneficial to energy companies at the expense of consumers.<a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_note-5">[5]</a> Following the <a href="http://en.wikipedia.org/wiki/Enron_scandal" title="Enron scandal">Enron scandal</a> he worked to reduce <a href="http://en.wikipedia.org/wiki/Market_manipulation" title="Market manipulation">market manipulation</a> and volatility. He created two new divisions at FERC, the Office of Enforcement<a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_note-PL-109-58-6">[6]</a> to investigate violations of FERC requirements, especially as regard to market manipulation, and the Office of Electric Reliability<a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_note-PL-109-58-6">[6]</a> to review and improve the <a href="http://en.wikipedia.org/wiki/Electrical_grid" title="Electrical grid">grid's</a> reliability standards. He left FERC in January 2009 to become Executive Vice President for Federal Regulatory Affairs for <a href="http://en.wikipedia.org/wiki/NextEra_Energy_Resources" title="NextEra Energy Resources">NextEra Energy, Inc. (FPL Group)</a>.<a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_note-7">[7]</a>

<h2>Notes</h2>

<li id="cite_note-1"><a href="http://en.wikipedia.org/wiki/Joseph_T._Kelliher#cite_ref-1">^{</a></span}> <a rel="nofollow" class="external text" href="http://www.wcl.american.edu/dean/documents/09deansreport.pdf?rd=1">"Annual Report of the Dean: 2008-2009"</a> American University Washington College of Law, page 89</li>

<li id="cite_note-ED-bio-2"><a href="http://en.wikipedia.org/wiki/Joseph_T._Kelliher#cite_ref-ED-bio_2-0">^{</a></span}> <a rel="nofollow" class="external text" href="http://www.theenergydaily.com/events/Kelliher_bio/">"The Honorable Joseph T. Kelliher"</a> The Energy Daily, last accessed December 1, 2010</li>

<li id="cite_note-3"><a href="http://en.wikipedia.org/wiki/Joseph_T._Kelliher#cite_ref-3">^{</a></span}> <a rel="nofollow" class="external text" href="http://www.naruc.org/Resolutions/EL%20Resolution%20Honoring%20Former%20FERC%20Chairman%20Joseph%20T%20Kelliher.pdf">"Resolution Honoring Former FERC Chairman Joseph T. Kelliher"</a> National Association of Regulatory Utility Commissioners (NARUC) February 18, 2009</li>

<li id="cite_note-4"><a href="http://en.wikipedia.org/wiki/Joseph_T._Kelliher#cite_ref-4">^{</a></span}> Holly, Chris (2003) <a rel="nofollow" class="external text" href="http://www.theenergydaily.com/articles/ed/2003/ed03130302.htm">"Energy Panel Backs FERC Nominee Amid Dissension"</a> The Energy Daily March 13, 2003, subscription required</li>

<li id="cite_note-5"><a href="http://en.wikipedia.org/wiki/Joseph_T._Kelliher#cite_ref-5">^{</a></span}> Leopold, Jason (July 2, 2005) <a rel="nofollow" class="external text" href="http://www.commondreams.org/views05/0702-25.htm">"Energy Adviser Who Solicited Enron to Help Write Nat’l Energy Policy to Be Named Chair of FERC"</a> CommonDreams.org</li>

<li id="cite_note-PL-109-58-6">^ <a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_ref-PL-109-58_6-0">a</a> <a href="http://en.wikipedia.org/wiki/Joseph_T.Kelliher#cite_ref-PL-109-58_6-1">b</a> Created under the new <a href="http://en.wikipedia.org/wiki/Energy_Policy_Act_of_2005" title="Energy Policy Act of 2005">Energy Policy Act of 2005</a> (Public Law 109-58)</li>

<li id="cite_note-7"><a href="http://en.wikipedia.org/wiki/Joseph_T._Kelliher#cite_ref-7">^{</a></span}> EBR Staff (May 7, 2009) "FPL Group Appoints Joseph Kelliher As EVP Of Federal Regulatory Affairs" Energy Business Review, archived at <a rel="nofollow" class="external text" href="http://www.freezepage.com/1291234345ULPBDJPAYI">FreezePage</a></li>

</ol>

</div>

<div id="mw-normal-catlinks" class="mw-normal-catlinks"><a href="http://en.wikipedia.org/wiki/Help:Categories" title="Help:Categories">Categories</a>:

<ul>

<li><a href="http://en.wikipedia.org/wiki/Category:American_energy_industry_executives" title="Category:American energy industry executives">American energy industry executives</a></li>

<li><a href="http://en.wikipedia.org/wiki/Category:1961_births" title="Category:1961 births">1961 births</a></li>

<li><a href="http://en.wikipedia.org/wiki/Category:Living_people" title="Category:Living people">Living people</a></li>

</ul>

</div>

-----

...

If You Were "King" or "Il Duce"?

Joseph Kelliher, a former Energy Department official, had been soliciting advice from Williams, Reliant, El Paso, Enron and other energy companies on natural gas issues on behalf of Cheney, another area those companies were accused of gaming, particularly in California.

In a March 10, 2001 email, just a week or so after Cheney was briefed by Cruikshank about the Williams scheme, Kelliher emailed energy lobbyist Dana Contratto, asking Contratto if he was "King or "Il Duce, what would you include in a national energy policy, especially with respect to natural gas issues?", according to energy task force documents.

Contratto responded with a three-page list of ideas, many of which were included in the final version of the energy policy.

On another occasion, Kelliher sought out Stephen Craig Sayle, an Enron Corp. lobbyist, to make similar recommendations. Sayle, former counsel for the House Commerce Committee, sent Kelliher Enron's "dream list." The list included a recommendation that the administration commit to market-based emissions trading, which was also used in administration's National Energy Policy.

Sayle wrote Kelliher about the energy policy, saying, "a multi-pollutant regulatory strategy should be estimated for the power generation sector including: Gradually phased in [mercury, nitrogen oxides and sulfur dioxide emissions] reductions; reform/replacement of NSR; use of market-based/emission trading programs; inclusion of both existing and new plants and equal treatment for both. The last bullet is the critical one to ensure that: a) we encourage the new generation that is required; b) we ensure that the new technologies developed through DOE programs can come into the market.

"Obviously, this is a dream list," Sayle said in the March 23, 2001 email he sent to Kelliher. "Not all will be done. But perhaps some of these ideas could be floated and adopted."

Sayle also provided Kelliher with a PowerPoint presentation on behalf of his other energy clients in the so-called Clean Power Group, a consortium made up of a handful of the country's biggest energy companies, including NiSource Inc., Calpine Corp., Trigen Energy Corp. and El Paso Corp, whose mission, according to the group's web site, is to "streamline requirements under the Clean Air Act for electric generating facilities while at the same time making major reductions in air emissions."

The PowerPoint presentation, A Comprehensive Multi-Pollutant Emission Control Strategy for Power Generation, summarized the Clean Power Group's support of a "cap and trade" method in addressing emissions of mercury, nitrogen oxides and sulfur dioxide from power plants, but included a proposal for a voluntary cap on carbon dioxide. The Clean Power Group stood to benefit from the initiative it urged Kelliher to get the White House to adopt in that the companies could release more emissions under its proposed plan than under the more restrictive rules the Clinton administration had put in place.

After receiving Sayle's email and supporting material, Kelliher recommended that President Bush "direct the Administrator of the Environmental Protection Agency (EPA) to propose multi-pollutant legislation that would establish a flexible, market-based program to significantly reduce and cap emissions; provide regulatory certainty to allow utilities to make modifications to their plants without fear of new litigation; provide market based incentives, such as emissions-trading credits to help achieve the required reductions," all of which the president approved and was eventually incorporated into the National Energy Policy.

In fact, President Bush's "Clear Skies" initiative consists of many of the bullet points laid out months earlier in Sayle's email to Kelliher.

In addition to Kelliher's correspondence with Sayle, he also met with oil and gas industry lobbyists who helped draft language that Kelliher passed on directly to the White House. Two months later, the president issued executive orders nearly identical to those Kelliher received from the lobbyists months earlier, according to energy task force documents.

Kelliher now chairs FERC, the agency that is entrusted with keeping a close eye on wholesale energy markets, ensuring that companies like Williams and Reliant refrain from engaging in the type of manipulative practices they were caught doing during the spring and summer of 2000 in California.

Cheney Orders FERC to Seal Evidence

But the documentary evidence of widespread market manipulation that FERC obtained in March 2001, while Kelliher was soliciting energy industry officials to assist in writing the National Energy Policy, and when Cruikshank and Allbaugh disclosed to the vice president the manipulative tactics Williams and Reliant had engaged in, was sealed by FERC on direct orders by Cheney because it would have been a political nightmare for the Bush administration and would have derailed a recommendation of one of the cornerstones of the vice president's National Energy Policy: deregulation, and perhaps scuttle the policy altogether if evidence about the energy companies behavior in California was made public, according to half-a-dozen former FERC officials and former Energy Department officials.

So in May 2001, just days before Cheney unveiled his long-awaited National Energy Policy, FERC entered into confidential settlements with Williams in which the company forfeited $8 million it was owed by California's grid operator for power Williams sold into the marketplace at inflated prices. Williams did not admit any guilt for the power plant shutdown and, on orders from Cheney, FERC agreed to keep details of the settlement sealed. FERC later entered into a similar settlement with Reliant. The company agreed to forfeit $13.8 million it was owed by California's grid operator, did not admit to any wrongdoing, and FERC kept the details of the settlement confidential.

Moreover, FERC kept California officials in the dark about the nature of the state's claims that its wholesale electricity market was being manipulated. Hebert is now the vice president of external affairs for Entergy in New Orleans.

For former Governor Gray Davis, the illegal behavior by energy companies like Williams that federal energy regulators discovered, then covered up, during a time when the former governor had said publicly he believed such behavior had taken place, is beyond disturbing.

Instead of protecting the interests of consumers, FERC's primary job, Hebert toed the White House line and together with Cheney, Hebert had come out publicly to say that Davis should immediately order the California Public Utilities Commission to relax environmental restrictions on the permitting process related to power plant construction and raise electricity rates to keep utilities Pacific Gas & Electric and Southern California Edison from becoming insolvent. The insolvency issue was due to the fact that the utilities were paying higher prices for power than it was legally allowed to charge its customers under the state's deregulation law.

In an interview, Davis, now an attorney with Loeb & Loeb in Century City, California, said he never saw the evidence FERC had obtained implicating Williams in shutting down power plants in the state.

"If I had hard evidence that this was happening, I would have stood out in front of the Congress until they did something," Davis said. "I thought there was something rotten going on but I never believed that these energy companies would outright steal from us."

"This was an absolute outrage and was based on pure greed," Davis added. "I clearly didn't know this was happening with Williams. I think FERC perpetrated a fraud on the American public and California consumers by sealing the findings of this investigation while I was out there saying that this type of manipulation was happening. I think that if the results of this investigation were made public in March 2001, when FERC knew this was taking place, it would have stopped energy deregulation in America in its tracks. This admission in effect by Williams would have been the death knell for energy deregulation."

Davis had a tumultuous relationship with the federal agency that appeared to be based on partisan politics. Just three months before Cruikshank and Allbaugh provided Cheney with details that the energy companies they were affiliated with had gouged California consumers and violated the state's market rules, the vice president, and FERC's chairman, railed against Davis, blaming the energy crisis on him and said the governor's claims that energy companies were acting like a "cartel" were baseless.

"The basic problem in California was caused by Californians," Cheney said, adding that he would resist calls by lawmakers to allow price caps to be placed on wholesale energy prices in the Western United States.

Even after Hebert had secured evidence showing that Williams manipulated the power market, he continued to pin the blame for skyrocketing power prices squarely on the shoulders of Davis and the state's Democratic leaders.

"I went to FERC and laid out our problems and was promised they would look into it. Nothing happened," Davis said. "My experience with FERC during the energy crisis was wholly unsatisfactory. I did not ever feel that they believed their job was to act in the public interest. I always believed they were acting in the interests of the energy companies. They operated as if they were a wholly owned subsidiary of the energy companies."

Hebert, however, fell out favor with the Bush administration when he privately opposed a recommendation by Ken Lay, made to Cheney, to open up the country's transmission lines to corporations such as Enron. Lay requested Cheney and Bush replace Hebert, which they did in the summer of 2001.

PG&E Files for Bankruptcy; Rove Orchestrates Political Spin Campaign

In a televised speech to California residents on April 5, 2001, Davis resisted Cheney's and Hebert's calls to increase electricity rates for average consumers to keep the state's public utilities afloat, opting instead to increase electricity rates of the state's largest power customers such as manufacturing plants. The next morning PG&E filed for Chapter 11 bankruptcy protection.

Davis publicly railed against the Bush administration's refusal to launch an investigation into wholesale energy companies trading practices, and its position on price caps. Davis's rhetoric started to impact the Bush administration's approval ratings. Rove, working closely with Cheney, entered into discussions on how the White House would respond to criticism by Davis that the Bush administration was turning its back on California.

"Karl [Rove] started to talk about using the resources of former Republican National Committee staffers to put together an attack campaign against Davis, and pin the power problems on the governor and his administration," according to one former high-level Energy Department official who was privy to the conversation between Rove and Cheney.

Rove enlisted the help of former RNC staffers Ed Gillespie, then a lobbyist who was working for Enron and other energy companies, and Scott Reed, who used to work for the RNC and was the former manager of Robert Dole's presidential campaign, to start devising a strategy to attack Davis and lead people to believe that the energy crisis was entirely his fault. Gillespie was recently tapped by President Bush to replace Dan Bartlett as White House counselor.

Reed and Gillespie, who was doing double duty advising Cheney's energy task force on behalf of Enron, advised Rove and the vice president that the PG&E bankruptcy left Davis vulnerable and the best course of action for the White House was to take advantage of Davis's vulnerability by stating that Davis single-handedly, in refusing to raise electricity rates, caused one of the largest bankruptcies in American history. Gillespie went a step further, according to Energy Department officials familiar with his conversations with Rove and Cheney, by suggesting that the White House start courting Republican gubernatorial candidates to replace Davis in the 2002 election.

At the White House in April 2001, Rove met with Brad Freeman, President Bush's California finance chairman during the 2000 presidential campaign, and Gerald Parsky, an investment banker, who was Bush's top adviser in California. The discussion centered on Parsky and Freeman's interest in courting actor Arnold Schwarzenegger to discuss his bid for governor in 2002.

"That would be nice," Rove said about the possibility of Schwarzenegger, a Republican, to replace Davis as governor, according to people who were briefed about the meeting. "That would be really, really nice."

Davis said he could see now see how the energy crisis created a political opportunity for the White House in California.

"In retrospect I could see how that happened," Davis said. "There's no question that the energy companies saw me as an adversary when I wouldn't buckle under their demands. I was vulnerable and the [energy companies and the White House] took advantage of it. This crisis took place in the early days of the Bush administration. I figured these guys are too busy picking out furniture for their offices. I didn't think they [the Bush administration] were spending their days in office involved in some full-scale conspiracy. But it turns out they were."

Cheney Takes Aim at Davis

Meanwhile, Cheney continued to meet with energy company officials who were instrumental in drafting key aspects of the National Energy Policy. At the same time, the usually reclusive vice president was granting interviews to numerous reporters discussing his take on the California energy crisis which continued to spiral out of control.

In May 2001, the PBS news program "Frontline" interviewed Cheney who was asked by a correspondent whether energy companies were acting like a cartel and using manipulative tactics to cause electricity prices to spike in California.

"No," Cheney said during the "Frontline" interview, even though he was personally briefed about energy companies manipulating the state. "The problem you had in California was caused by a combination of things - an unwise regulatory scheme, because they didn't really deregulate. Now they’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."

The same month, May 2001, Davis met with Bush at a Century City hotel, not far from the offices he now works at as an attorney. He pleaded with Bush one last time to put price controls in place. Bush refused.

Behind the scenes, while Bush and Davis discussed the state of the energy crisis, Gillespie was emailing Enron officials on the status of Cheney's energy policy. He alerted Enron executives to the exact language that would appear on one of the hot-button issues revolving around price caps in California and the west and allowing energy companies free access to the nation's transmission lines.

"I believe this is the exact language that will appear under the 'energy supply' section of the report," Gillespie wrote. "Recommends that the President encourage the FERC to use its existing statutory authority to promote competition and encourage investment in transmission facilities," which Enron was lobbying heavily for. "Please keep this under wraps. We do not want to circulate this beyond the folks listed on this email. Please let me know any concerns. As we have known for several weeks, the report is not as explicit as we would want, but the White House, vice president, and [Department of Energy] have repeatedly but verbally assured us that they are making clear to FERC exactly what this means."

Another email Gillespie forwarded Enron officials, dated May 17, 2001, came from Cheney's spokeswoman, Juleanna Glover, who told Gillespie "you're really relied upon around here ... hear your name all the time in connection w. tough issues, but you know that already."

On May 21, 2001, five days after unveiling his energy policy, Cheney told Tim Russert on "Meet the Press" that Davis was to blame for the energy issues in the state.

"They knew over a year ago they had a problem, and Gray Davis refused to address that problem," Cheney said. "[They] kept putting it off and putting it off and putting it off, with the notion that somehow price caps could be maintained. Now, today, where are they in California?"

GOP Front Group Attacks Gray Davis, Shields Bush, Cheney

At the same time, Reed informed Rove and Cheney that his nonprofit, the American Taxpayers Alliance, a Republican front organization, would begin to air a series of scathing radio commercials taking aim at Davis's failure to tame the energy crisis in June 2001. The ads, Reed said, were aimed to shift attention away from Republicans in Washington and "back to Sacramento where it belongs." Reed added that the ads would leave Davis "bleeding like a stuck pig."

The ads, which began to air in June 2001, did in fact make an impact:

"He's pointing fingers and blaming others. Gray Davis says he's not responsible for California's energy problems; after all, the Public Utilities Commission blocked long-term cost-saving contracts for electricity. But who runs the PUC? The people Gray Davis appointed - Loretta Lynch and other Davis appointees who left us powerless. That's why newspapers say he just ignored all the warning signals and turned a problem into a crisis. Grayouts on Gray Davis."

The ads and the negative press Davis received helped set in motion a chain of events that would lead to a historic recall campaign and put Schwarzenegger in office.

What the public didn't know, however, is that Cheney and Rove recommended that Reed approach Reliant Energy, the firm that one of Cheney's energy task force advisers, Joseph Allbaugh, was affiliated with via his wife's lobbying for the company, to fund the radio spots, according to former Reliant executives involved in the matter. Reliant donated nearly $2 million of Reed's $3.2 annual budget, yet the company only reported spending a total of $340,000 on government lobbying in apparent violation of the law, according to the company's public records.

Gillespie also launched a public relations campaign against Davis. He took ads out in print publications attacking Davis. The ads were paid for by Gillespie's 21st Century Energy Project, which he formed in close coordination with Karl Rove less than a month after the National Energy Policy was released in May 2001, according to former Enron executives who worked closely with Gillespie. Enron funneled at least $75,000 to Gillespie to pay for the ads through Grover Norquist's Americans for Tax Reform, according to documents obtained by Truthout.

Russ Schriefer, who worked with Gillespie on Bush’s presidential campaign and formed Mosaic Media with Quinn Gillespie in February 2001 to produce advocacy ads for Republicans, wrote the Davis ads. The ads aired on ABC, Fox and CNN.

Norquist, a longtime friend of Cheney's, was personally tapped by Rove to assist Gillespie with the ad campaign. Norquist may be best known for his close relationship with disgraced lobbyist Jack Abramoff. One of Abramoff's clients, Raul Garza, chief of the Kickapoo Traditional Tribe of Texas, donated $25,000 to Norquist's organization in order to obtain an invitation to a reception with President Bush on May 9, 2001. Norquist and Abramoff were also in attendance and a photograph of Garza standing alongside Bush with Abramoff in the background was kept from public view when the Abramoff scandal blew up. Bush had denied publicly that he ever met Abramoff.

At the time, Gillespie said the ads were necessary "because Davis put all his time and energy into trying to shift responsibility and President Bush spent all his time and energy trying to accept responsibility. The president is trying to change the tone, but others of us have to point out that the crisis developed on the watch of Governor Davis and President Clinton."

Executive Privilege

Immediately following reports that Cheney relied upon the recommendations of 400 energy industry executives to draft the National Energy Policy, lawmakers began to demand that the vice president turn over documents regarding his task force meetings to Congress. The vice president vehemently refused.

With White House Counsel Alberto Gonzales weighing in on the issue, the administration exerted "executive privilege" as the reason it refused to turn over task force documents to Democratic lawmakers. The issue reached the Supreme Court that ruled in Cheney's favor. As Attorney General, Gonzales still refuses to publicly release audiotapes from 2000 and 2001 in which other energy companies were also found to have discussed ways in which to manipulate the California energy market. Some of the heads of those companies implicated in the crisis also provided Cheney with input on the National Energy Policy.

In 2004, Reliant became the first energy company that was indicted for its role in manufacturing the California energy crisis. A year later, the company refunded California $453 million.

Last month, two power companies agreed to pay California $84 million to settle charges stemming from the 2000-2001 California energy crisis.

PacifiCorp, a unit of MidAmerican Energy Holdings Co., paid the state $27.9 million to resolve claims that it manipulated the California and Pacific Northwest electricity markets in 2000 and 2001. MidAmerican Energy Holdings is a subsidiary of Warren Buffet's Berkshire Hathaway Inc.

In a second case, a subsidiary of Houston-based El Paso Corp. paid California $56 million.

Joseph Kelliher, the chairman of FERC, and the man who, on behalf of Cheney in March 2001, lobbied these very companies to help write the National Energy Policy, helped negotiate the settlements.

Davis feels vindicated in light of the refunds paid to California consumers, which, to date, have totaled about $6 billion. He said that he believes he would likely never have faced a recall if FERC publicly released details of its investigation into Williams in March 2001. But despite what he knows now Davis doesn't hold a grudge against the individuals responsible for using the energy crisis to have him recalled.

"No one ever said life is fair," Davis said.

http://archive.truthout.org/article/jason-leopold-cheney-suppressed-evidence-california-energy-crisis

===

California energy crisis trial looms

By Jason Leopold

The federal Ninth Circuit Court of Appeals is expected to rule soon after press time on a key piece of evidence, kick-starting the long awaited criminal trial involving Houston-based Reliant Energy’s alleged scheme to boost profits by shutting down power plants in California during the height of the state’s energy crisis in 2000.

The criminal trial – the first one related to the state’s energy crisis – was scheduled to begin in November 2005. It was postponed when prosecutors asked the Ninth Circuit to overturn US District Judge Vaughn Walker’s ruling that market rules of the California Independent System Operator could not be used as evidence to establish what constitute normal wholesale power prices.

Prosecutors want to submit as evidence price benchmarks calculated by the ISO. Federal regulators have used these to distribute billions of dollars of refunds to buyers from power sellers accused of price gouging. Walker sided with defense attorneys who objected to that.

Reliant and four of its traders are accused of wire fraud, commodities market manipulation, and conspiracy. Reliant faces millions of dollars in fines, and the traders each face five years in prison and $250,000 in fines.

Despite the last minute delay, the case appears to be a slam dunk for the prosecution based on evidence already submitted, said a Justice Department spokesman.

One piece of evidence the government is using against Reliant is a transcript of a conversation between one of the company’s traders and a power plant operator, in which the two men discuss shutting down some of Reliant’s power plants in California between June 20 and 22, 2000, to create a shortage so the price of power would skyrocket.

The transcript was released by the Federal Energy Regulatory Commission (FERC) in January 2003. The scheme worked: it caused power prices to reach “unjust and unreasonable” levels in California, illegal under the Federal Energy Policy Act.

“[We] started out Monday losing $3 million ... So, then we decided as a group that we were going to make it back up, so we turned like about almost every power plant off. It worked. Prices went back up. Made back about $4 million, actually more than that, $5 million,” the Reliant trader says in a tape-recorded conversation on June 23, 2000.

California’s energy market is still in limbo, with warnings of future blackouts and supply shortages in future summer months, and no mechanism in place to deal with the situation.

As natural gas prices continue to skyrocket nationwide, the power situation in California is dire. Governor Arnold Schwarzenegger, who was elected due in part to voter frustration with the way governor Gray Davis handled the energy crisis, has not fixed the situation.

California’s electricity crisis wreaked havoc on consumers in the state between 2000 and 2001, resulted in rolling blackouts, and forced the state’s largest utility, Pacific Gas & Electric, into bankruptcy. California was the first state in the nation to deregulate its power market nearly 10 years ago. The results have since proved disastrous. The experiment has cost the state more than $70 billion, according to some estimates.

For three years, California officials pleaded with federal regulators, President Bush, and Vice President Dick Cheney to provide the state with some relief from soaring wholesale power prices and investigate energy companies for allegedly manipulating the market. Bush and Cheney responded personally to Gray Davis’s pleas for help in May 2001 by saying the crisis was the result of California’s incomplete deregulation.

It wasn’t until Enron collapsed in October 2001 and evidence of the company’s manipulative trading tactics emerged that FERC began to take a look at the company’s role in California’s electricity crisis. Since then, memos written by former Enron traders were uncovered, with colorful names like “Fat Boy” and “Death Star,” that contained the blueprint for ripping off California.

Enron’s top trader on the West Coast, Timothy Belden, the mastermind behind the scheme, pleaded guilty in 2003 to conspiracy to commit wire fraud and has agreed to cooperate with federal investigators.

California had demanded $8.9 billion from energy companies for overcharging the state for electricity during the crisis. An administrative law judge for the agency released a preliminary decision in December that says California is due no more than $1.2 billion in refunds, since the state owes the companies $1.8 billion in unpaid bills.

Shutting down power plants in California to boost wholesale prices is not a new issue. In 2002, CBS News reported that Williams Companies engaged in identical behavior around the same time as Reliant. The evidence, also a transcript of a recorded conversation between a Williams trader and a power plant operator in California, showed the two conspiring to shut down a power plant for two weeks to boost electricity prices and Williams’s profits. FERC kept the evidence under wraps for a year and cut a secret deal with Williams to refund California $8 million  without admitting guilt.

FERC released the transcripts in late November 2002 after the Wall Street Journal sued the commission to obtain a full copy of its report. Had the evidence been released before Enron collapsed, it might have helped California’s case. But it would have hurt Bush’s National Energy Policy, made public the month Williams and FERC hatched a settlement. Bush visited California and told Davis he could not do anything to help the state.

Memos written by former

Enron traders contained

the blueprint for

ripping off California.

On May 17, 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’s “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.

When asked whether it was possible that 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.”

The Bush administration’s critics have said it’s highly unlikely that the president, Cheney, and members of his energy task force were kept in the dark about the Williams and Reliant scams, 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-CA.), the energy task force “considered and abandoned plans to address California’s energy problems in its report.”

Reliant has also been connected to Cheney’s energy task force, which met between January and March 2001 to work on Bush’s National Energy Policy.

Reliant, along with Entergy and TXU, two other electricity corporations based in Texas, hired Diane Allbaugh as a lobbyist. Allbaugh is the wife of Joe Allbaugh, a trusted Bush cohort who had served on Cheney’s energy task force and a director of the Federal Energy Management Agency.

Reliant, TXU, and Entergy each paid Diane Allbaugh $20,000 for consulting work during the last three months of 2000. It’s unclear whether she lobbied the energy task force on behalf of Reliant, TXU, and Entergy, which would have certainly been a conflict of interest, but her husband, Joe Allbaugh, “has participated in task force talks with a direct bearing on the energy companies’ interests generally, such as environmental rules for power plants and electricity deregulation – a specialty of his wife’s,” the Los Angeles Times reported.

The energy bill signed by Bush in August was a boon to Reliant Energy. House Energy Committee Chairman Joe Barton has for years pushed for legislation to create more competitive electricity markets. Reliant, whose executives enjoy close a relationship with Barton, played a role in shaping the energy bill, and worked side by side with Barton for years in shaping a portion of the energy bill that deals with competitive power markets.

Barton’s staff includes two former Reliant executives, and until recently, Reliant’s lobbying team included two former Barton aides. Reliant employees contributed more than $35,000 to Barton’s political causes between 2001 and 2004. Barton holds about $15,000 in Reliant stock, which has increased nearly tenfold since he bought the shares in 2002.

Jason Leopold is the author of News Junkie, to be released in the spring of 2006 by Process/Feral House Books. Visit his Web site at www.jasonleopold.com for updates.

EIJ

==

American Nuclear Energy Council

Attachments