FYI.  Note toward end of story, mention of email from lawyer in class action suit to Davis advisor asking for help in "getting information out."

Best,
Jeff
----- Forwarded by Jeff Dasovich/NA/Enron on 07/24/2001 02:05 PM -----


	"Ken Smith" <ken@kdscommunications.com> 07/24/2001 01:51 PM Please respond to "Ken Smith" 	   To: "Scott Govenar" <sgovenar@govadv.com>, "Susan J Mara" <smara@enron.com>, <Paul.Kaufman@enron.com>, "Karen Denne" <kdenne@enron.com>, <Jeff.Dasovich@enron.com>  cc:   Subject: Dan Walters	



Dan Walters: Blame game over California's energy crisis will continue for years


(Published July 24, 2001) 
The wrestling match between politicians and Enron Corp. moved into a more intense arena over the weekend when a state Senate investigating committee sought contempt penalties because the huge energy company has refused to turn over internal documents. 
Although Houston-based Enron owns no major power plants in California, it has adopted the toughest stance of all energy companies against the multiple investigations of why wholesale energy prices spiked so high. And it has become, in turn, a whipping boy for California politicians. 
At one point last spring, state Attorney General Bill Lockyer said he wanted criminal charges against Enron and its chairman, Kenneth Lay. "I would love to personally escort Lay to an 8-by-10 cell that he could share with a tattooed dude who says, 'Hi, my name is Spike, honey,' " Lockyer said. With less colorful language, Gov. Gray Davis has often castigated Texas-based companies as price gougers -- even though Texas firms have been fairly minor suppliers to California. 
Some of it is just buzzword politics. Lockyer and Davis know that Californians dislike anything associated with Texas, and Lay has been one of President Bush's major political supporters. Enron, meanwhile, cites the rhetoric as evidence that Lockyer, Davis and legislative investigators are interested less in finding the truth than in seeking scapegoats. Enron also filed a lawsuit challenging the legality of the Senate's subpoenas of trading data. 
Most other energy companies have complied with the demands, creating Sacramento repositories of the data under elaborate confidentiality agreements worked out with the special Senate committee headed by Sen. Joseph Dunn, D-Santa Ana. But Enron has refused, and on Saturday, Dunn submitted a report asking the Senate for "an appropriate coercive sanction." 
Does Enron have something to hide? Or does it sincerely believe that what's happening in California is political scapegoating? Are the companies' fears about the confidentiality of the data sought by the Senate justified? Would data be selectively leaked to show the firms in the worst light? Would data be used by competitors? Or could the information find its way into the hands of class-action attorneys? 
Dunn, a prominent trial attorney himself, insists that confidentiality will be protected and that the information being sought is only for legislative purposes. But Enron and the other companies have some reason to be wary of turning over confidential information to politicians. Similar information was leaked -- without penalty -- in last year's investigation of former state Insurance Commissioner Chuck Quackenbush. And there are indications that private lawyers are working closely with investigators. 
Mike Aguirre, the San Diego attorney seeking a "smoking gun" to prove collusion among energy companies, supplied Dunn's committee with a few dissident Duke Energy workers who alleged, in highly publicized hearings, that the firm had manipulated production at its San Diego plant to create artificial shortages and drive up spot market power prices. Duke then refuted the charges by releasing some excerpts from the records of the Independent System Operator, the controller of California's power grid, indicating that ISO had ordered the plant operational changes. 
Aguirre subsequently asked the governor's office to pressure the ISO -- now under Davis' direct control -- to release all of the Duke-related documents that would show, he says, that the firm actually manipulated the situation. Duke and other companies insist that the ISO-held documents are proprietary. Aguirre pleaded with one Davis adviser in an e-mail that "we need your help in properly getting this information out." But Aguirre, in an interview, said he had not yet obtained cooperation from Davis aides. 
The political and legal struggle to affix blame for California's energy woes will continue for months, perhaps years. The crisis will cost ratepayers at least $50 billion, and they'll want to know why as they make out their utility bill checks. 

The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.com .