August 19, 2002
The Bush administration, promiscuously invoking the war against terrorism, is using its influence inappropriately to assist an American oil company that has been sued for misconduct overseas. The intervention reinforces the impression that the administration is too cozy with the oil industry.
The case involves Exxon Mobil and its activities in the Indonesian province of Aceh. The Bush administration weighed in to discourage a lawsuit against the company filed on behalf of 11 Acehnese by the International Labor Rights Fund, a Washington group. The suit alleges that the company knew about and did nothing to stop murder, torture and other crimes by security forces guarding its gas fields in Indonesia. Exxon Mobil says Indonesia is responsible for security at the facilities. At Exxon Mobil's request, the judge in the case asked the State Department whether the case could adversely affect American interests. The administration implausibly said the case could endanger Indonesia's cooperation in fighting terrorism.
Coming the same week that Secretary of State Colin Powell traveled to Indonesia to promise a partial resumption of military aid — which had been cut off because of the military's brutality — the administration's statement was an invitation to more abuse, a sign that human rights could become a needless casualty of the antiterror campaign.
The suit concerns the behavior of Indonesia's military in Aceh, site of a longstanding guerrilla war that continues in part because of local anger over the military's brutal rampages. The Bush administration argues that the lawsuit would alienate Indonesia — even though the State Department has long been a sharp public critic of the military's abuses in Aceh. It also argues, improbably, that the suit could injure Indonesia economically.
The administration's opinion would be more credible if it had not given a similar reply to a judge considering a suit against the mining company Rio Tinto for alleged environmental and human rights abuses in Papua New Guinea, not a nation normally considered a front-line American ally. In March, a federal judge in California dismissed the lawsuit, citing a State Department opinion that the case could interfere with the ongoing peace process and so adversely affect American foreign policy.
In the wake of the Exxon Mobil opinion, another oil company, Unocal, has won a five-month postponement of its trial involving alleged misconduct in Myanmar. The delay will allow the judge to consult the State Department. The Clinton administration had already told a judge in the case that the lawsuit would not adversely affect American foreign-policy interests — a logical view, given that Washington already enforces an economic embargo against Myanmar. Unocal clearly has reason to believe that the Bush administration may see things differently.
The TomPaine.com Staff
February 26, 2002
Congressman Waxman's Letter
Editor's Note : Following is a summary of Rep. Henry Waxman's letter to the Chairman of the Committee on Government Reform, Rep. Dan Burton.
Ten Congressional committees are currently investigating Enron's collapse, but none are focused on events that preceded the company's demise -- the larger political scandal that neither party seems eager to explore. Representative Henry Waxman, the ranking Democrat on the House Committee on Government Reform, says his committee is "uniquely qualified" to examine Enron's political influence. "Given the extraordinary success Enron had in influencing policy, it seems appropriate to learn as much as we can," Waxman wrote in a letter to Representative Dan Burton, Chairman of the committee, on February 11, 2002. Waxman is urging Burton to put the power of the committee behind such an inquiry -- the better to gain cooperation from the company and from the White House. Waxman has sent a raft of letters to administration officials seeking answers to his questions, but the result has been only "polite replies that provide no information."
Waxman carefully builds the case that there is a precedent for the Government Reform Committee to make such requests of the White House: Burton issued 1,048 subpoenas and received 1.3 million pages of documents from the White House when the committee investigated the Clinton administration.
Some excerpts from Waxman's letter :
White House Energy Plan : There are at least 17 policies in the White House energy plan that Enron advocated, including deregulation initiatives, trading in energy derivatives, and project proposals.
Opposition to Price Caps : On April 17, 2001, Kenneth Lay met with Dick Cheney and discussed opposition to electricity price caps in California. The next day Cheney told the Los Angeles Times that he strongly opposed price caps.
Dabhol Power Plant : Enron had a dispute over the sale of a $2.9 billion natural gas-fueled power plant with the government of India. On June 27, 2001, Vice President Cheney inquired about the status of the plant in a meeting with the head of India's Congress Party. Enron is now the majority owner of the plant.
Corporate Alternative Minimum Tax : Enron lobbied harder than anyone for repeal of the Alternative Minimum Tax. Kenneth Lay talked to the director of the president's Office of Management and Budget, Mitch Daniels, to inquire about legislation to repeal the tax. The president later endorsed the House-passed stimulus bill that would have repealed the tax and given Enron a $254 million windfall.
FERC Appointments : President Bush nominated two people to the Federal Energy Regulatory Commission that appeared on a list of 'suggestions' Kenneth Lay gave to Clay Johnson, the White House director of personnel.
Offshore Tax Havens : The Clinton administration made an agreement with the Organization for Economic Cooperation and Development that would increase disclosure of offshore financial transactions. In the spring of 2001, the Bush administration notified the OECD they would not support such agreements.
Enron benefited from the Clinton administration too :
Utilities Deregulation :In April 1996, FERC issued order 888, the Open Access Rule, which helped Enron gain access to transmission lines under terms and conditions comparable to those under which owners obtain access themselves.
Global Warming : On August 4, 1997, Ken Lay met with president Clinton, Vice President Gore, and Treasury Secretary Rubin to discuss the U.S. position on the Kyoto conference on global warming. Enron supported agreements that would create an emissions trading system. The United States supported this concept and signed the Kyoto Protocol. An internal Enron memo said the Protocol would "do more to promote Enron's business than almost any other regulatory initiative outside restructuring the energy and natural gas industries in Europe and the United States."
Enron also benefited from actions taken by Congress :
Accounting Rules : In June 2000, Securities Exchange Commission Chairman Arthur Levitt tried to enact a rule that would stop accounting firms from consulting and auditing the same company. With strong opposition from the accounting industry, Levitt said the final product "reflects, to a great extent, their concerns."
Deregulation of Energy Derivatives and Swaps : Congress passed the Commodity Futures Modernization Act in December 2000. Referred to on Capitol Hill as the "Enron Point," the legislation created a loophole that exempted Enron's energy derivative contracts and significant trading activities from agency oversight.
Enron's interest in every policy, from globalization to deregulation was satisfied by the actions of our elected officials. Maybe it's time for an independent investigator.