Calif. governor recounts talks with Lay

LOS ANGELES, Feb. 2 (UPI) -- Gov. Gray Davis confirmed that he met with Enron Chairman Kenneth Lay during the height of last winter's California electricity crisis, at the urgings of two White House administrations, and described the consultations as unproductive.

Although Lay's expertise in the energy industry was highly valued by the Clinton and Bush administrations, Davis told the Los Angeles Times that Lay's advice to California boiled down to simply paying the soaring prices that power producers and marketers such as Enron were charging for wholesale electricity.


"They just wanted to bilk us for every dollar they could get," Davis told the Times in an interview published Saturday. "They're just a bunch of wildcatters. They want your money; they want it now, and they want your first-born and they want it now."

Lay said on PBS's "Now with Bill Moyers" Friday night that he consulted not only with the Bush administration about energy matters but also with President Clinton and with Davis.

"Gray Davis will put me in that same list as one of the biggest snakes on the globe," Lay opined. "Yet, he very much wants to meet with me, and he can call me up from time to time and ask ... my advice on things, which is just a little bit incongruous."


Davis made no apologies for his contacts with Enron even though he is running for re-election and his handling of the energy crunch is a key campaign issue.

"Every government official in the Clinton and Bush administrations said, 'Have you talked to Ken Lay?'" Davis told the newspaper. "I did learn a good deal talking to Ken Lay. I learned his view was quite different than mine. ... I did ask him for advice on a number of things, and he generally gave me advice that I did not take. In fact, I can't remember any advice I took."

Davis earlier this week asked the Federal Energy Regulatory Commission to investigate the possibility that Enron manipulated the California electricity market in order to keep wholesale prices at all-time highs.

FERC's refusal to clamp a cap on wholesale power prices in the West has been vilified by Davis as being a major reason California's utility companies and the state treasury were buried in huge and often unpaid bills for electricity.

The regulatory agency has the sole power to regulate wholesale prices, but the commissioners resisted price caps on the grounds they would discourage the construction of new power plants. Energy industry leaders fretted that delinquent payments were also likely to hamstring plans for new power plants, however Davis voiced growing suspicions that FERC was staying on the sidelines in order to benefit Enron and other politically influential energy companies.


Energy prices in California have deflated in the past year, but the debate over Enron's access to Vice President Dick Cheney's energy policy task force remains a controversial question.

The White House has said that it made sense for Cheney to consult with Lay and other energy industry leaders when dealing with energy policy, however Lay was a major benefactor of the Bush-Cheney campaign and Cheney has resisted efforts by Congress to find out how closely Lay and Enron were involved in the energy task force.

The General Accounting Office, the investigative arm of Congress, said Wednesday that it would sue the White House to gain more information on the task force's consultations with the energy industry.

Sen. Dianne Feinstein, D-Calif., complained publicly this week that she wasn't granted the opportunity to meet privately with Cheney to press her state's case.

"Not once did the Bush administration agree to meet privately with the senior senator from California, a state with 35 million people," Feinstein's spokesman, Howard Gantman, told the Sacramento Bee. "Meanwhile, it appears that the Bush administration had an open-door policy to Ken Lay."

Gantman added that Feinstein's attempt to express her views at a meeting at the Capitol between Cheney and a group of 10-12 senators resulted in the vice president "delivering a lecture on how we needed nuclear power."


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