Bush's Biggest Donors Gain From High Prices in California Crunch
WASHINGTON, D.C., FEBRUARY 7Three big Texas energy producers, all of which made lavish contributions to George W. Bush's presidential campaign, stand to gain from soaring electricity prices in California. That's one reason the watchdog group Public Citizen says Bush has no interest in promoting price caps, even though such caps are recommended by Republican as well as Democratic governors and members of Congress.
Prices for energy coming into California are going through the roof, threatening to bankrupt utilities and hurt the state's businesses, which already are struggling with the gathering recession. In the final days of his administration, Bill Clinton ordered power plants tied into the California grid system to sell excess juice to the state. When Bush took office, he extended the order for two weeks, but strongly indicated he would not offer such help in the future.
After looking through financial documents, Public Citizen says it's no wonder the president defers to the corporations.
Seven major out-of-state power producers and power marketers posted $6.5 billion in after-tax profits in 2000, according to Public Citizen, which argues they stand to make even more with California's new bailout bill calling for floating $10 billion worth of bonds.
The key company here is Enron, with a gross income of $777 million, triple that of a year ago. CEO Ken Lay is friends with and a backer of George Bush Sr., Business Week reports in a lengthy piece this month on the firm. After Clinton's victory in 1992, the company hired as consultants two heavies from the first Bush administration, Secretary of State James Baker and Commerce Secretary Robert Mosbacher Sr.
Enron was also the single biggest booster of George W. while he was Texas governor, giving him over $550,000. In last year's presidential race, Enron provided corporate jets and gave $250,000 for the GOP convention in Philadelphia, the magazine goes on to say. Lay served as the campaign's energy advisor. According to Public Citizen, Enron gave $1.8 million to Bush and the Republican National Committee in last year's presidential race.
After Bush won the White House, the exec personally put up $100,000 for the inauguration, then signed on as a main advisor to the new administration's Energy Department.
Enron made two other Texas energy firms that sell into the California market look like pikers. According to the Center for Responsive Politics, Dynegy contributed $361,000 to all candidates last time around, with 83 percent going to Republicans. Reliant Energy contributed over $700,000 to all candidates through political action committees and in soft money donations. Eighty-five percent of that soft money and 60 percent of the PAC funds went to the Republicans.
Now Bush finds himself caught between his donors and his party, as the call to help California grows. In a clear sign that the Republicans on Capitol Hill favor their constituents back home over big-time donors to the national party, Duncan Hunter, a conservative from San Diego, is cosponsoring legislation that would expand the secretary of interior's authority to impose price caps on electricity going to California.
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