Questions of Collusion Raised

Power Struggle

The Bush administration is facing its first serious challenge in the out-of-control energy crisis that is spreading across the nation. Consumers in the East are reeling from home heating gas bills that are more than double what they were last year at this time and running over $600 per month for a single-family house. Prices for propane, which heats many homes across the upper Midwest and in the Carolinas, have doubled and even tripled this year.

In California, criticism of the new $10 billion bond rescue plan is growing, with the state treasurer claiming that revenue from the bonds will only cover losses — not buy electricity — and that actually it may cost as much as $20 billion over 10 years for the power. Last Friday’s hurriedly organized bailout to keep the state’s electric supply net from collapsing just shifts the costs — and risks — to taxpayers at a time when there are suspicions the big utilities and their energy suppliers are colluding to raise rates.

The city of San Francisco last month filed suit against energy companies, charging market manipulation. Public Citizen released a study suggesting the companies have cooked the books, holding large blocks of electricity off the market when demand is less than it was a year ago — all part of a grand scheme to rig the market. Peter Navarro, an economics professor at the University of California at Irvine who follows deregulation, wrote in the Los Angeles Times that California utilities had been bled to death by conspiring energy producers based in Texas. With Pacific Gas & Electric and Southern California Edison facing growing liabilities, he argued, the big utilities decided to force the state into a quick bailout. “To achieve this, Edison paid a huge dividend to its shareholders, thus ridding itself of any excess cash to buy power. Edison and PG&E also moved assets over to their unregulated subsidiaries so that these assets couldn’t be used as credit to purchase electricity.”

Bush shows no inclination to use the Federal Energy Regulatory Commission’s authority to order the rest of the country to sell wholesale electricity to California at fair and reasonable prices. That would instantly solve the crisis, but in the eyes of the deregulation fanatics at the commission it would injure their standing and the future of dereg.

GOP Set to Realize Dream of Gutting Eco Rules

Free at Last

John Passacantando, director of Greenpeace, thinks Bush’s oft stated promise to let the oil companies loose in the Arctic National Wildlife Refuge is a feint, masking other designs on gutting environmental protection. Last week, the Wilderness Society released an eight-page letter to Bush and Cheney from Utah GOP congressman James Hansen, chair of the Resources Committee, setting out a prodevelopment agenda.

Having been “frustrated” by the Democratic White House, Hansen writes, “I am elated at finally having the opportunity to work with your administration to correct the misguided direction the Clinton administration has taken in their attempt to manage our natural resources.” His agenda includes emphasizing “user enjoyment” (Congress-speak for development) in national parks; bringing back jet skis and snowmobiles in federal lands; deep-sixing rules that make mining companies, which pay no royalties, clean up after themselves; and getting rid of the national monuments Clinton set up just before he left office by subjecting them to “public process and the legislative process,” i.e., overview by his committee of let-it-rip Republicans.

A key proposal would nix new rules aimed at putting a stop to sweetheart contracts between big oil companies and the feds under which the government has been selling publicly owned oil and gas at below-market prices. After exposing these deals, the Clinton administration, prodded by whistle-blowers, published new regulations specifying that the government sell oil at market prices.

Before leaving office, the Clintonistas wanted to go one step further, backing a handful of new false-claims suits that seek to do the same thing for natural gas, the production of which far exceeds oil in the public domain. Hansen wants to kill new rules that allow the Department of the Interior to collect $70 million more per year from oil companies. But gas has annual revenues of $2.3 billion — twice as much as oil. In all, oil and gas royalty settlements nationwide total $11.2 billion.

Hansen also wants to replace the current market-value rules with the oil industry’s pet idea of “royalty in kind.” This is just another gimmick the industry invented to avoid paying more money to the government. The industry argues that instead of going through a complex accounting procedure to rectify the rate structure, it would be simpler for the oilmen just to pay the government in oil. Since the basic thrust of the suits has been to rout out fraud, royalty in kind would never get at the collusion that’s been going on for years. In the case of natural gas, the charges involve underreporting and disappearing valuable natural gas liquids.

Stealing Away With the Clintons

Gift Whores

The never-ending saga of Bill and Hillary Clinton’s White House gifts took an unexpected twist on Monday morning with The Washington Post‘s report that furnishings worth $28,000 that the Clintons are keeping were in fact given to the National Park Service in 1993 to be part of the White House collection. That makes the Clintons look like common thieves. On Monday night, the Clintons blamed their staff, claiming that certain gifts were “improperly catalogued,” and promised to give them back.

When the Clintons left Washington, they took with them gifts from two furniture makers who claim they actually had given furnishings to help redecorate the White House — an endeavor that cost $396,000. Among other gifts the Clintons left town with are a kitchen table and four chairs ($3650), a sofa ($2843), lamps ($1170), and a needlepoint rug ($1000). All of these gifts were slated for the redecoration project.

Despite the Clintons’ promise to pay for half of the controversial gifts they removed from the White House and the ex-president’s assertion that he would use funds from his library project to pay for half of the $650,000 yearly lease for an office on Manhattan’s West Side, the fallout from their departure continues to rain down on the capital.

Last Friday, The Washington Post revealed that Clinton had pulled a trick to keep his friend Ronald I. Dozoretz, the health-care magnate, on as a member of the Kennedy Center board. First, Dozoretz, whose term had one year to run, quit the board, and then he was reappointed for a six-year stint by Clinton — a maneuver that raised eyebrows even in Washington’s world of small-time socialites. Dozoretz and his wife, Beth, are big Clinton supporters. Last weekend the Clintons announced they would repay $7000 — the value of a dining table, server, and golf club, which the Dozoretzes had given them. The Dozoretzes gave about $13,000 to Hillary’s Senate campaign, and ponied up $10,000 for the Clinton Legal Defense Fund and $30,000 to Democratic candidates and committees. Beth Dozoretz served as finance chair of the DNC for nine months. Clinton is the godfather of the couple’s daughter, and the Dozoretzes have been the Clintons’ hosts on Martha’s Vineyard.

Meanwhile, U.S. News reported Glenn Braswell, one of the people Clinton pardoned — who had been convicted in 1983 of mail fraud, perjury, and tax evasion — was under investigation for possible new illegalities. Braswell initially was convicted in connection with the sale of herbal supplements that, among other things, purportedly helped bald men grow hair and increased the size of women’s breasts. He served seven months in jail. The Justice Department was not consulted before the president pardoned Braswell. He is currently under investigation by the Food and Drug Administration, the Federal Trade Commission, the IRS, and several state attorneys general. U.S. News claims that sources “say he is also the target of a federal grand jury in Los Angeles investigating what a former Justice Department official called ‘massive money laundering’ and tax evasion.”

The Clintons’ decision to repay about half the gift list included gifts valued at $9683 from Walter Kaye and his wife. Kaye had originally introduced Monica Lewinsky to the White House. Among the gifts: a travel humidor, china cabinet, chandelier, and a copy of President Lincoln’s Cooper Union speech. Not included in the repayment list was a pair of boxing gloves from Sylvester Stallone valued at $300. (For a full list of gifts see The $190,027 Haul)


Sometime this year President Bush may be forced to testify in the Texas funeralgate influence-buying scandal. A whistle-blower suit claims that after Bush got campaign contributions from a big Texas undertaking outfit, he sought to block an investigation of the company, which was charged with ducking accepted standards and hiring improperly licensed embalmers, reports the Austin Chronicle.

Additional reporting: Rouven Gueissaz and Adam Gray

See Also:

The $190,027 Haul: What the Clintons Got by James Ridgeway

This article from the Village Voice Archive was posted on February 6, 2001

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