Supplementing FTR 280 , this program highlights the cynical, conspiratorial machinations of major energy companies, the Bush administration and the California Republican establishment in effecting California’s “energy crisis” of 2000–2001. Highlighting the interplay of Bush crony Ken Lay’s now disgraced Enron firm, an advisory task force headed up by Bush associate James Baker and the Bush administration energy commission headed by Dick Cheney, the program accesses a very important paper authored by Katherine Yurica. Be sure to check out this work at her web site. There are strong indications that California’s “energy crisis” was deliberately engineered in order to undermine Democratic governor Gray Davis, enrich the energy industry, and provide the rationale for the Bush administration’s foreign policy.
Program Highlights Include: Former governor Pete Wilson’s chairmanship of Arnold Schwarzenegger’s campaign; a very suspicious (probable) test of the California electricity-brokering infrastructure; the Baker advisory group’s citing of the California “crisis” as the basis for domestic and foreign policy recommendations; the Cheney group’s suspicious citing of the California energy crisis; highly suspicious and contradictory wording of the “National Energy Policy” drawn up by the Cheney commission; the Project for a New American Century’s discussion of the potential usefulness of “a new Pearl Harbor”; the destabilization of Jimmy Carter’s presidency by the oil industry, George H.W. Bush’s CIA and the Saudis.
1. A major contributing factor to incumbent governor Gray Davis’ unpopularity is the enormous increase in electricity prices due to the deregulation legislation effected by former governor Pete Wilson. Wilson is “outsider” Arnold Schwarzenegger’s campaign manager, giving the lie to Schwarzenegger’s claim that he will kick the special interests out of Sacramento. He is, in fact, a tool of those very same special interests.
“Admonished by his advisers not to make news out of the box, Mr. Schwarzenegger left his campaign chairman, Pete Wilson, the former California governor, to attack Mr. Davis as an incompetent spendthrift, and lesser political minions to explain his personal finances to a press corps demanding details, any details.”
(“In Full Field, It’s All About Schwarzenegger” by Charlie LeDuff and Alan Feuer; The New York Times; 8/11/2003;.)
2. Bush’s Svengali Karl Rove was apparently among those who helped to anoint Schwarzenegger as the standard bearer for California.
“. . . From what we’ve heard, the Republican hierarchy—especially those close to former Gov. Pete Wilson—would favor Schwarzenegger. At least that’s the word that came out of the Bohemian Grove this past weekend, where a number of state and national GOPers, including presidential adviser Karl Rove, happened to have gathered at a club getaway . . .”
(“Matier & Ross: Schwarzenegger to Decide”; San Francisco Chronicle; 7/23/2003; p. A21.)
3. Beginning the discussion of the deliberate manipulation of California’s deregulated electricity market, the program chronicles a startling fluctuation of rates in 1998. The author of this important, incisive article observes that this was apparently a test of the “power lifting” that destabilized Davis and boosted Schwarzenegger in a position to move to Sacramento. “This story begins with the California energy crisis, which started in 2000 and continued through the early months of 2001, when electricity prices spiked to their highest levels. Prices went from $12 per megawatt hour in 1998 to $2000 in December 2000 to $250 in January 2001, and at times a megawatt cost $1,000.” (“Fraud Traced to the White House: How California’s Energy Scam Was Inextricably Linked to a War” by Katherine Yurica; The Yurica Report; p. 1; available online at www.yuricareport.com/PoliticalAnalysis/FraudinWhiteHouse.htm .)
“One event occurred earlier. On July 13, 1998, employees of one of the two power-marketing centers in California watched incredulously as the wholesale price of 41 a megawatt hour spiked to $9,999, stayed at that price for four hours, then dropped to a penny. Someone was testing the system to find the limits of market exploitation. This incident was the earliest indication that the people and the state could become victims of fraud. The Sacramento Bee broke the story three years later, on May 6, 2001. Today, Californians are still paying the costs of the debacle while according to state officials the power companies who manipulated the energy markets reaped more than $7.5 billion in unfair profits.”
5. California’s “energy crisis” apparently served as a foundation for disgraced Enron chairman Kenneth Lay’s pivotal recommendations to Vice-President Dick Cheney’s energy policy task force.
“In April of 2001, Ken Lay handed Dick Cheney a two-page memorandum recommending national energy policy changes. The memo contained Enron’s positions on specific, rather technical issues, which were presented as a ‘fix’ for the California crisis. (Enron brazenly advised the administration not to place price caps on energy, which would be precisely the request California officials made to the president, and which the President and the Vice President would just as brazenly deny until public pressure forced them to capitulate.)”
(Ibid.; p. 2.)
6. Former Bush (Senior) secretary of state James Baker presided over an advisory report that also appears to have been central to Cheney’s energy directives.
“On October 6, 2002, a newspaper in the UK published a little known article about Mr. Cheney’s advisers. According to Neil MacKay, an award-winning journalist, writing for Scotland’s Sunday Herald, Dick Cheney commissioned an energy report from ex-Secretary of State James Baker III. The time of this ‘commission’ is not reported, but since the members of the appointed task force held three videoconferences and teleconferences in December, January, and February 2000–2001, Cheney therefore logically contacted Baker some time prior to the December 2000 meeting—during the presidential transition period.”
(Ibid.; p. 3.)
7. Baker’s law firm is the legal counsel for the Bin Laden-connected Carlyle Group. In addition, the firm is representing Saudi Prince Sultan in a trillion-dollar suit filed by the survivors of the victims of 9/11.
“James Baker was uniquely situated to fulfill Cheney’s commission, for among the many hats he wears, he is legal counsel to the Carlyle Group, one of the nation’s largest defense investment firms whose board consists of former high level government officials, including George Bush, Sr. Baker was also the ‘hired gun’ for George W. Bush’s campaign in Florida, along with Karl Rove. But among the hats he wears, none is more valuable than his ability to become invisible and leave no fingerprints behind. James Baker courts the press and is hailed a statesman; he also serves as the honorary chairman of the James Baker III Institute for Public Policy at Rice University, a think tank that was involved in aiding the George W. Bush presidential transition teams.”
“Equally intriguing is the fact that Baker has ties with both the Bushes and Ken Lay. Years earlier, in 1993, after Baker stepped down from his stint as Secretary of State, he and Robert A. Mosbacher—Bush senior’s commerce secretary—signed a joint consulting and investing agreement with Enron. The two men began a lucrative career making joint global investments with Enron on natural gas projects. Baker Botts LLC, James Baker’s law firm, flourished in its specialty of international oil and gas counseling.”
9. Ken Lay was not the only energy-industry high roller to participate in the Baker task force.
“Since Baker walked in their circles, when he set out to select an energy team to advise the White House, he filled it with leaders of the oil, gas, and power industries. Three appointees stand out: Kenneth Lay from Enron, who was working on the Bush energy Transition team under Dick Cheney at the time; Chuck Watson, the then Chairman and CEO of Houston’s Dynegy Inc., and Dynegy’s General Counsel and Secretary, Kenneth Randolf. Both firms were deeply involved in illegally manipulating the California energy market at the time and eventually faced criminal investigations.”
(Ibid.; pp. 3–4.)
10. The California “energy crisis” appears to have played a key part in the recommendations of the Baker energy advisory group.
“The Baker energy task force produced a report titled, Strategic Energy Policy Challenges for the 21st Century, dated April 2001. There is no mistaking the fact that reasonable, detailed and important expert advice is meted out to the new president. However, this amazing 107-page report strikes a drumbeat for action that grabs the reader as it propels a picture of a naked, energy-scarce nation, subject to energy shortages and price fluctuations, across its pages. Contrasting the state of what is, against what should be, and mercifully making powerful recommendations that will ‘save our economy,’ it offers warnings such as: a sharp rise ‘in oil prices preceded every American recession since the late 1940’s.’ ”
(Ibid.; p. 4.)
“The California energy crisis is raised again and again, along with the prophecy that America can expect ‘more California-like incidents’ in the future. There’s even a connection made between the California crisis and the Middle East, which according to the report, ‘will remain the world’s base-load supplier and least expensive source of oil for the foreseeable future.’ With that prophetic utterance, the stage is now set for a new actor, a new villain, and a new energy policy. . . .”
12. Although it is not covered in detail in the broadcast, the Bush energy policy also had profound foreign policy recommendations, focusing on Iraq, among other issues. The broadcast reviews the disturbing observations about the potential usefulness of “A New Pearl Harbor” in a paper by the Bush-connected Project for a New American Century.
“ ‘The history of the 20th Century should have taught us that it is important to shape circumstances before crises emerge and to meet threats before they become dire.’ In fact, on pages 51 and 67 of the institution’s intellectual centerpiece, Rebuilding America’s Defenses, the authors lament that the process of transforming the military would most likely be a long one, ‘absent some catastrophic and catalyzing event—like a new Pearl Harbor.’ (How unfortunate for Americans, they got their needed event on September 11, 2001.)”
(Ibid.; p. 5.)
“One of the most striking facts about the national report is that it makes 110 references to California’s energy crisis, which was ninety-nine more than the Baker report makes. Clearly, someone in the White House needed an impressive energy crisis to tout. How unfortunate that the crisis cited was fraudulently induced. Like the Baker report, the national report states, ‘The California experience demonstrates the crippling effect that electricity shortages and black outs can have on a state or region.’ Warnings abound: ‘America in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970’s.’ The 110 repetitions of the word ‘California’ linked with words like ‘energy crisis,’ and ‘energy shortages and price spikes,’ could turn the national energy report into an ad man’s prized primer.”
(Ibid.; p. 6.)
14. Reversing direction, the author (s) of one of the passages in the report reveals the he (or she) is aware of the true nature of California’s manufactured energy crisis.
“Notwithstanding its importance as an example of what could happen to other states, the author of a passage (at page 5–12) of the national report suddenly yields to an impulse to relate what really happened in California. In doing so, he completely contradicts at least 105 references to California throughout the report. The significance of this contradictory entry into the National Energy Policy must not be underestimated.”
“In the process of reversing the carefully construed ‘California experience,’ the author’s grasp exceeds his knowledge in that his understanding of the events in California go beyond what he should have reasonably known at the time of its writing. For he wrote, ‘The risk that the California experience will repeat itself is low, since other states have not modeled their retail competition plans on California’s plan.’ This is an astounding statement. If the California crisis was caused by a supply shortage as the author claims a line above this sentence, surely other states could suffer similar shortages. But no, the author is actually making an admission here: he is admitting the energy crisis in California can’t be replicated in other states because certain market means do not exist in the other states. How could the author know this? The writer of that sentence would have to be someone intimately involved in the California system; know the real cause of the state’s crisis; and be familiar with all the other state rules and market infrastructures.”
16. Ms. Yurica discusses yet another revealing reversal of direction by the author of the report.
“But our knowledgeable author is not done. In trying to amplify what he just revealed, he tried to hide the true actors in the next sentence by misdirecting the reader away from the culprits to blame the state. This is a formula for incoherence. Nonetheless, the writer’s sentence found its way into the national energy report where it spoke for the Bush administration: “California’s failure to amend its rules, along with the flawed rules themselves, somehow had an independent power to ‘drive up wholesale prices,’ without an intervening acting agent. The only sensible reading left to us is that the flawed rules allowed power brokers to manipulate the system. But how could our author and his administration editors know this to be true without being in collusion with the wrongdoers? If they were not in collusion they would have reported the crime. But if they remained silent when they had a duty to report or stop the commission of a crime, they became accessories.”
(Ibid.; pp. 6–7.)
“Continuing his unexpected analysis, the author tells us, ‘Actions such as forcing utilities to purchase all their power through volatile spot markets, imposing a single-price auction system, and barring bilateral contracts all contributed to the problems that California now faces.’ This is nothing more than the author, and through him the White House, attempting to throw responsibility for any wrongdoing by energy companies in California squarely at the feet of the state.”
(Ibid.; p. 7.)
18. Philosopher George Santayana stated that, “Those who forget the past are condemned to repeat it.” Foreshadowing the actions of George W. Bush’s energy-industry cronies in California, the petroleum industry, the Saudis and George H.W. Bush’s CIA helped to destabilize Jimmy Carter’s Presidency.
“The sources we interviewed for this chapter say that the oil industry had a well thought out scheme to deceive the president and control U.S. policy in the Middle East. The first part involved intelligence falsification on a grand scale. This was no small-time Angleton Vessel forgery. This time, our sources insist, the president of the United States was to have his ‘pants scared right off him.’ The CIA was used to produce phony oil data to show that the world’s two greatest oil producers, the Soviet Union and Saudi Arabia, were running out of oil. The Soviets would be forced to fight the United States for control of Middle Eastern oil.”
“It is hard to recall why he [Jimmy Carter] was so despised when he ws in office. Much of it has to do with the secret history of oil politics. Even during the 1976 election campaign, the oil companies viewed the Democratic candidate as Public Enemy Number One. Carter certainly had some radical ides about energy policy, which made the oil companies fearful for the future and their profit levels.”
(Ibid.; p. 333.)
“ ‘The whole phony scheme—the oil shortages, the predictions about Soviet troops in the Middle East, the Saudi arms buildup—all of that crap started coming out of the agency back in ’76. The CIA told their boss what he wanted to hear, and in those days, the head of the CIA was an oil man.’ ”
(Ibid.; p. 334.)
“According to several of our sources, the scheme to manufacture phony CIA estimates and push them on Carter began in the last days of Gerald Ford’s term. They claim that a cabal within the CIA realized that Carter would be the new president, produced the first phony report, and then promptly gave it to Carter as soon as he won, knowing how it would affect his view of the energy crisis. It should be recalled that George Bush was the director of the CIA at the time the oil scam was put in place in 1976. There is some evidence to suggest that it was Bush himself who passed the fake oil estimates to Carter. In the immediate aftermath of Carter’s win, Bush traveled to Plains, Georgia, to brief the incoming president.”
(Ibid.; pp. 334–335.)
“ ‘Don’t you get it?” asked one of our sources. ‘The gas shortage during the Carter administration was as phony as the CIA’s prediction about the Soviet oil shortage. The god damn Middle East was swimming in oil during the Carter administration, but less and less of it ws shipped to America. For chrissakes, there was so much oil in South America that they had to shut down refineries I the Caribbean to keep it away from the U.S.”
(Ibid.; p. 353.)
“Under the Republicans, lucrative arms factories sprouted in what had previously been rural democratic states. The votes went where the jobs were. In the course of the Reagan-Bush administrations, the defense budget was increased to a point where more money was spent on arms than in all the wars in U.S. history combined. To accomplish this massive defense buildup, the Reagan-Bush administrations borrowed three times more money than all U.S. presidents combined The largest debt in American history was based on the faulty premise that the Soviet Union was going to attack the Middle East.”
(Ibid.; p. 355.)