Where I Stand — Mike O’Callaghan: Tear down this wall

Friday, Oct. 25, 2002 | 4:48 a.m.

ONE MORE BRICK has crumbled from the wall protecting the schemers who put profit ahead of decency and the needs of consumers. A California state senator called it the "first domino to fall." At the same time a federal judge is attempting to pierce the dark curtains surrounding Vice President Dick Cheney's secret meetings that produced the energy policy of the Bush administration.

In Washington, D.C., U.S. District Judge Emmet Sullivan has again ordered the release of the names of Cheney's select group that contributed to the development of a policy overly friendly to energy corporations. The first time he issued a similar order it was appealed by Cheney's lawyers and they were given another hour-long hearing, and last week Sullivan repeated his demand. Next month they will probably claim executive privilege to keep the names secret.

Across the country in San Francisco the former chief of Enron Corp.'s Western energy-trading desk admitted conspiring to manipulate the energy market in California during 2000-2001. This follows on the heels of another federal judge finding El Paso Pipeline, during that same time frame, withheld large amounts of natural gas from California. These actions, and most likely those of other energy corporations, resulted in rolling blackouts and high costs for California consumers. This unsavory activity most likely contributed to a large amount of pain felt by Nevada consumers.

The Wall Street Journal of Oct. 18 reported: "Timothy Norris Belden, 35 years old, pleaded guilty to a single count of wire fraud. He told U.S. District Judge Martin Jenkins in San Francisco that he helped devise 'schemes' to manipulate the California wholesale-electricity market from when it was first deregulated in 1998 until Enron's collapse in December 2001, 'because I was trying to maximize profit for Enron.' In doing so, he said he deliberately submitted false data to the state's electric grid operator and to the organization that ran the daily power auction. The meltdown of California's power market in 2000 and 2001 and its cleanup could end up costing the state's consumers $80 billion or more.

"Prosecutors say that Mr. Belden, who has agreed to cooperate, can potentially provide them with a road map on how big energy firms sought to extract illicit profits from the California market, as well as to clarify the role allegedly played by top Enron executives in executing the strategy."

During those months the California consumers were suffering, the state's Gov. Gray Davis, a Democrat, became an easy target for Republican politicians -- including Cheney -- in that state and in Washington, D.C. He was forced to use state funds to keep the economy buzzing and constituents comfortable. Davis and his Public Utilities Commission knew that they were being cheated and have, because of recent revelations, been vindicated. In less than three weeks he will be elected to a second term.

The investigations of the scam foisted upon Californians and other consumers are just beginning and eventually, after several minor actors are jailed, some problems could land on Kenneth L. Lay's Enron doorstep. You know him as the close friend of our president and his father. Close enough to the son to make recommendations for important government positions.

In the meantime, the insider activity goes on as outgoing Republican Sen. Phil Gramm of Texas becomes vice president of the UBS Warburg investment bank. Warburg took over Enron's energy trading business after it filed for bankruptcy. Prior to that, Gramm's wife, Wendy, served on the Enron board of directors.

It will be interesting to watch this entire scenario unfold and see whether or not it gets into the gut issues affecting our entire economy.