By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
By Albert Samaha
That's a setback but hardly a deathblow for the battle-hungry, who are intent on taking out Saddam Hussein. Recently the U.S. aircraft carrier Kitty Hawk was dispatched from its command post in the Arabian Sea to Kuwait, where 70,000 troops were being transferred. Meanwhile, elements of the 82nd and 101st airborne divisions were reported moving to a big U.S. base in Egypt's Sinai peninsula.
The fiasco of Enron, that model for new-world energy corps now mired in lawsuits and bankruptcy filings, is the natural outcome of having no federal regulation of the energy business.
The Houston company's top executives were celebrated as go-ahead businessmen because they didn't believe in owning old-fashioned assets. Instead, litigants charge they began running a kind of magical trading game, overstating profits and inflating the price of shares in the debt-ridden company, thereby making the firm attractive to the outside world and to investors in particular, even as the kingdom was about to implode. What's more, the people who were supposed to be monitoring the company may not have been doing their jobs. Outside auditors charged with overseeing the accuracy and honesty of its books were allegedly drawn into conflicts of interest by the prospect of making more money selling Enron other consulting services.
Wall Street traders continued pushing the firm's sinking stock because they were making money and didn't want to upset the apple cart. Days before filing for bankruptcy, Enron reportedly skimmed $55 million off what little was left in order to give its 500 top employees incentives. Next, the company fired 4000 workers outright and put another 3000 on leave. Its employees have lost between 70 and 90 percent of the value of their 401(k) retirement plans because, of course, these are totally unprotected and unregulated. The entire affair is to be completed with one of those useless, go-nowhere "investigations" by Congress.
But the public hasn't heard the last of Enron. Its largest and most lucrative single assetthe Northern Natural Gas Company pipeline system, which carries gas from the Texas Permian Basinmay go to the smaller firm Dynegy, which with this move would suddenly become the nation's largest vertically integrated energy company. Dynegy wanted to take over Enron, and while that move was called off, its acquisition of the $2.5 billion pipelines, representing two-thirds of Enron's 25,000 miles, would expose millions of consumers to the vicissitudes of monopoly pricing, a/k/a the free market. The power behind the scenes in all this is Dynegy's part owner ChevronTexaco, itself the product of a merger between two of the world's largest oil and gas corporations.
A takeover like this would continue the recent trend toward private monopoly in energy. During the 1930s, when lawmakers sought to regulate the industry, they tried to separate the companies that produce oil and gas from those owning pipelines so there would be at least a modicum of independence and the appearance of competition. With regulation out the window, the reverse trend has set in. Dynegy's acquisition of the pipelines would connect ChevronTexaco's huge production capability to customers. ChevronTexaco already controls 15 percent of the nation's natural gas.
And that's not all. Through Dynegy's ownership of electric power production in such states as California, ChevronTexaco will get a jump on the big new electric production markets, which increasingly depend on gas. In the end, the bankruptcy of Enron amounts to one more step backward, toward monopoly.
Additional reporting: Meritxell Mir and Sarah Park