These e-mails show that, during the California Energy Crisis, Arnold:
1. Met with Ken Lay.
2. Was lobbied to end the investigation into Enron.
3. Agreed with Ken Lay's solutions.
To find these emails for yourselves,
1. Go to http://fercic.aspensys.com/... and sign in
2. Bubble the "Enron Email (.pst)" option and click "open selected database."
3. The names of the 2 emails to search for are "CEO meeting update" and "Materials Ken Lay Used." Also, click on the attachments links in the emails.
Karen Denne was the Vice President of Public Relations for Enron. Jeff Dasovich was Enron's Director for State Government Affairs. Arnold didn't sign the letter because days after the meeting, a sf gate article came out exposing the meeting. I don't know how to bold so I'll capitalize all the important parts.
THE CEOs WOULD BE WILLING TO SIGN IT_________IT'S IMPORTANT TO KEEP ENRON OUT OF THE PICTURE___________ARNOLD SCHWARZENEGGER - PRESIDENT, OAK PRODUCTIONS ___________ A "BACKGROUNDER" PROVIDED TO THE BUSINESS LEADERS THAT KEN LAY MET WITH LAST WEEK ________DON'T MAKE MATTERS WORSE...COUNTLESS INVESTIGATIONS INTO ALLEGATIONS THAT SUPPLIERS MANIPULATED POWER PRICES ------------------------------------------------------------------------
FROM : Karen Denne
TO : Steven J Kean, Richard Shapiro, James D Steffes, Janel Guerrero, Mark Palmer, Susan J Mara, Sandra McCubbin, Paul Kaufman
CC : Jeff Dasovich
SUBJECT :CEO Meeting Update
DATE = 05/21/2001 00:54:00 GMT
ATTACHMENT =
00000000B0B613B606DAD611826300065B5E8D32448F2400.#1.LACEOMeeting.doc
00000000B0B613B606DAD611826300065B5E8D32448F2400.#2.SFCEOMeeting.doc
MESSAGEID :
00000000B0B613B606DAD611826300065B5E8D32448F2400
BODY :
The CEO meetings on Thursday went very well, and we had great turnout.
Attached is a final list of who Ken met with and a list of who we invited.
The takeaway from both meetings was to draft a letter outlining our
five-point solution proposal, and the CEOs WOULD BE WILLING TO SIGN IT and
send to the governor and legislators. Jeff and I drafted the letter and will
finalize and send it to the CEOs on Monday. I also think we ought to
consider placing full-page ads with the letter and enlisting some of the CEOs
to attend editorial boards. At this point, IT'S IMPORTANT TO KEEP ENRON OUT OF THE PICTURE. We'll route the letter when it's finalized. kd
Los Angeles CEO Meeting
May 17, 2001
Attendees
Mayor Richard Riordan
Eric Moses - Assistant Deputy Mayor
Kevin Sharer - Chairman & CEO, Amgen Inc.
Sarah Jensen - Vice President of Engineering and Operations, Amgen Inc.
Ray Irani - Chairman & CEO, Occidental Petroleum Corp.
Robert Day - Chairman, CEO & Managing Director, The TCW Group
Selim Zilkha - former CEO, Zilkha Energy
Tom Patterson - Partner, Sidley & Austin
Robert Sinnott - Senior Managing Director and Chief Investment Officer, Kayne Anderson Investment Management, LLC
ARNOLD SCHWARZENEGGER - PRESIDENT, OAK PRODUCTIONS
Bruce Karatz - Chairman, President & CEO, Kaufman & Broad
Michael Milken - President, Foundation of the Milken Families
Ken Lombard - President, Magic Johnson Theaters & Johnson Development
FROM: Jeff Dasovich
TO: Sandra McCubbin, Susan J Mara
DATE = 05/21/2001
TIME : 11:00:00 GMT
SUBJECT : Materials Ken Lay Used
ATTACHMENT =
00000000B0B613B606DAD611826300065B5E8D32C4912400.#1.California Electricity Solution 0510.doc
00000000B0B613B606DAD611826300065B5E8D32C4912400.#2.California solution0516.ppt
MESSAGEID :
00000000B0B613B606DAD611826300065B5E8D32C4912400
BODY :
----- Forwarded by Jeff Dasovich/NA/Enron on 05/21/2001 10:56 AM -----
Jeff Dasovich
Sent by: Jeff Dasovich
05/21/2001 10:17 AM
To: Linda Robertson/NA/Enron@ENRON, Richard Shapiro/NA/Enron@Enron,
skean@enron.com, Janel Guerrero/Corp/Enron@Enron, Paul
Kaufman/Enron@EnronXGate, Daniel Allegretti/NA/Enron@Enron, Howard
Fromer/NA/Enron@Enron, Susan M Landwehr/NA/Enron@Enron, mpalmer@enron.com,
James D Steffes/NA/Enron@Enron
cc:
Subject:
On the call on Friday, Linda asked if we could distribute materials
developed/used recently in California regarding the crisis and solutions to
try to resolve it. ATTACHED ARE:
A "BACKGROUNDER" PROVIDED TO THE BUSINESS LEADERS THAT KEN LAY MET WITH LAST WEEK.
A power point presentation that is a "higher level" discussion of the more
detailed "backgrounder."
If I missed anyone, please forward along. If anyone has any questions, give
me a call at 415.782.7822.
Best,
Jeff
Comprehensive Solution for California
The key components:
- Increase supply--California must build more power plants
- Decrease demand--California must get prices right so consumers have financial incentives to conserve
- Make the utilities creditworthy--California's electric rates must cover utility costs, past and future
- Get government out of the power-buying business--California has no expertise, the private sector does
- Get deregulation right this time--California needs a real electricity market, not government takeovers
1. Increase Supply
The Problem--Not enough supply to meet demand
- Unless new generation is built in California, there is no solution.
- Over the past decade, additions to California's stock of power plants have been negligible
Growth in California for the period 1990-1999
Employment 12%
Population 16%
State economy 45%
Electronics and instruments industry 62%
Communications industry 80%
Natural gas use 6%
Electricity use 9%
Peak electric demand 15%
Peak demand in Silicon Valley (1996-2000) 33%
Power Generation Capacity 2%
The Solution--Build more power plants
- The Governor has taken some important first steps by using his executive powers to streamline plant siting
- According to the California Energy Commission, California has approved 13 power plants totaling 8,512 MWs
- California will need every one of those plants--and more--to dig itself out of its energy hole
- The Governor has also appointed a "supply czar" who's sole mission is to ensure that the plants that receive permits don't face unnecessary impediments during the construction phase
- If those plants don't get built on, or ahead of, schedule, California's energy crisis will persist
DON'T MAKE MATTERS WORSE
- Unfortunately, other actions taken by the California's political leaders threaten to seriously discourage power plant investment in California. These actions include:
- Legislation that would 1) impose a "windfall profits" tax on power sold in California and 2) make it a felony to sell power at a price that California finds "unreasonable."
- Continued calls for price controls in wholesale power markets--as every experience with price controls shows, price caps won't lower electricity prices, they will only create shortages ("black outs")
- COUNTLESS INVESTIGATIONS INTO ALLEGATIONS THAT SUPPLIERS MANIPULATED POWER PRICES
- Endless statements by California's political leaders accusing power suppliers of criminal activity--and worse
- In this environment, it may not matter how many power plant approvals California rushes through the process, capital markets may simply refuse to invest
- The problem is exacerbated by the global shortage of turbines on the market. In the competition for scarce turbines, the actions and strong rhetoric of California's political leaders have created a "anywhere but California" attitude among those who possess the turbines
- To get new power plants built, California must do everything it can to attract capital to the state
- The rhetoric and bad legislation--and the signal they both send to the capital markets--must end
Likely retort from advocates of investigations and high-pitched rhetoric
- "These bills (and the rhetoric) aren't serious and likely won't pass. They are merely a tactic to bring the suppliers to the bargaining table and get them to forgive a portion of the utilities' debt."
Response
- We have a legal system and a set of laws to address allegations of price manipulation.
- Allegations of manipulation should be addressed using the means available.
Every rhetorical statement and piece of bad legislation has two effects: 1) they create uncertainty in the markets, and uncertainty makes electricity prices go up; and 2) they incent capital markets to look outside of California to invest
- Both outcomes are hurting California--time and resources are better spent achieving a solution
The rest basically says that California must let rates rise and that it should reinstate direct access and stop purchasing energy for consumers.