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US FERC admits 25 contacts with Enron officials

Under fire from US lawmakers for being too cozy with Enron Corp, the Federal Energy Regulatory Commission said in a letter released on Friday that its commissioners and senior staff members had contact 25 times with the bankrupt company's executives between August 2000 and June 2001.

The meetings did not include new FERC chairman Pat Wood, who is facing criticism that he was too close to the bankrupt energy giant.

Deflecting criticism, Wood denied that Enron "has had any undue influence on the decision-making process" at FERC.

"The agency's decisions have not been compromised or otherwise improperly shaped" by Enron contacts, he wrote in a letter to California Senator Barbara Boxer made available on Friday.

Enron, once the seventh-largest US corporation whose stock was a Wall Street darling, spent lavishly on lobbyists who championed restructuring legislation.

Former Enron chairman Ken Lay urged President George W. Bush to appoint Wood to his current position. Enron also backed Wood's previous appointment as the head of the Public Utility Commission of Texas.

Rep Henry Waxman of California has also asked Wood to disclose his Enron contacts. Last week, Democratic Rep Bill Pascrell wrote to urge Wood to resign.

The time period of Boxer's inquiry "effectively predates my tenure," Wood wrote, pegging his arrival at the agency on June 5, 2001. Wood became chairman in September.

Wood's letter was in response to a request Boxer made on January 31. In a response to Wood's letter, Boxer said: "decision makers at FERC were wined and dined by Enron both in Washington and Texas in an obvious effort to control all aspects of America's energy policy."

As evidence, Boxer pointed to numerous meetings between Enron officials and FERC staff, including FERC commissioners Linda Breathitt and William Massey, both Democratic nominees to the commission, and senior FERC officials.

Republican Nora Brownell, also a target of criticism for her support of electricity deregulation while a Pennsylvania utility commissioner, reported no Enron contact.

In the letter, Wood described various meetings with Enron officials to discuss electricity deregulation and other issues, and some FERC officials toured Enron's trading floor in Houston.

During the period in question, Boxer accused FERC of sitting idly by while power shortages swept the state, leading to blackouts and soaring power bills for consumers.

Ironically, Wood and Brownell voted to support price limits on the California market, a position opposed by Enron and Curt Hebert, the previous FERC chairman.

Boxer also said FERC officials could have violated the Administrative Procedure Act and its own ethics guidelines which restrict contact between federal officials and industry representatives involved in contentious issues.

Wood said that one of his first acts as chairman was to order ethics training for all FERC staff, and said he has "stressed strict compliance with the Federal government's ethics rules," including the Administrative Procedure Act.

Responding to Boxer's statement, a FERC spokesman denied any improper actions by any agency officials. "What is not permitted is to talk to a company about a contested or on-the-record proceeding and to my knowledge we have played by the rules," he said.

"We would be remiss in our duties if from time to time the regulators didn't talk to one of the largest owners of gas pipelines in the United States," he said.

Wood has had three contacts with Enron officials while at FERC, including a call from Enron's Lay on November 11, which he did not return, the spokesman said. Lay made the call two days after Enron agreed to be acquired by Dynegy Inc for $9 billion, a deal Dynegy later scuttled.

FERC said its contact with Enron included:

• Linda K Breathitt, commissioner: met five times with Enron executives including Rick Shapiro, Enron's managing director of government affairs. Discussion included general electricity deregulation, regional transmission organisations, transmission access issues and tariff reform.

• Daniel L Larcamp, director of markets, tariffs and rates: met five times with FERC officials, including former Enron chief executive Jeff Skilling; toured Enron trading floor twice in July and December 2000, met with Stan Horton of Enron Pipeline Group, Shapiro.

• William Massey, commissioner: met six times with Enron officials, including Stan Horton (then also serving as chair of the Gas Industry Standards Board), and Eugene Lockhart, president of Enron unit New Power Co; "perhaps" had telephone call with Skilling.

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