"It's a smoking gun," Davis said, echoing a sentiment expressed a day earlier by California Sen. Barbara Boxer. "It makes clear that Enron was prevailing on the federal government to take a hands-off approach to California."
First reported in this paper, the memo highlighted the clout former Enron Chairman Ken Lay enjoyed in his dealings with Vice President Dick Cheney, who was tasked by President Bush with producing a national energy policy.
The memo, which Lay handed Cheney during one-on-one talks last April, contained a series of steps that "need to be taken" by the administration.
Foremost among Enron's guidelines was something the administration shouldn't do: impose caps on runaway wholesale electricity prices. And S5360 GALAXY Y the administration resisted just such an impulse until an exasperated Congress threatened to act on its own.
Portions of the memo are clearly reflected in Cheney's energy plan -- a fact that the White House is trying to play down but which a close reading of both documents (not an easy task) bears out.
Davis said he believes the memo strengthens California's case for receiving more than $8 billion in compensation for electricity overcharges.
Moreover, the governor said he's going to instruct state Attorney General Bill Lockyer to explore the possibility of a lawsuit in light of the memo.
For her part, Boxer said yesterday that -- also in light of the memo -- she wants the Federal Energy Regulatory Commission to come clean on any meetings or phone calls it had with Enron execs.
Boxer told The Chronicle that she intends to grill Lay on the contents of the memo when he appears before the Senate Commerce Committee on Monday.
And that should be another full day for Lay.
An interesting thing that came out in my chat with the governor is the way Lay kept busy schmoozing public officials to get what he wanted. The memo, of course, places an exclamation mark on his activities at the federal level.
What isn't as well known is that he was pulling pretty much the same stuff at the state level, contacting Davis at regular intervals to coax the governor into toeing the Enron line.
"He would tell me that everything we were doing was screwed Phone Cover up," Davis said.
"He wanted to deregulate everything."
It would be wrong to say that the governor did as Lay told him to. But you have to wonder if he would have waited as long as he did to act if Lay hadn't been whispering sweet nothings in his ear.
"He's a very charming person," Davis recalled. "He felt he knew best about electricity."
So here's what we had: In April of last year, Pacific Gas and Electric Co. had just gone bankrupt, electricity prices were up about 800 percent from a year before, and Lay was laying it on thick with state and federal leaders to prevent anyone from putting out the fire.
At the same time, his own company was quietly teetering toward financial ruin.
How's that for chutzpah?
"Ken Lay was the high priest of deregulation," Davis said. "No one had more to do with shaping deregulation than him."
The governor used to say to anyone who would listen that power companies like Enron were taking advantage of a flawed system to "game" the market.
He has changed his tune just a little. Davis told me he now believes Enron and its posse knew from the start that they would make out like bandits in California, that they in fact rigged the state's power market to allow them to bleed us dry.
If so, the Enron memo smells even worse. It could be seen as a desperate ploy to keep the money flowing until the last cent ended up jingling in the power industry's pockets.
Why didn't Davis say as much to Cheney last year when the vice president was doing all Back Clip Power Bank his fact-finding for the national energy policy?
"I wasn't asked to go to the meeting," Davis replied.
Yeah, why would you want the thoughts of the governor of the state that had turned into the poster child for deregulation-gone-bad? After all, Lay was on hand to tell the veep all he needed to know.
"Ken Lay was a great salesman for his point of view," Davis said. "More than anyone in America, he's responsible for the outcome of deregulation in this country."
And at this point, that's a lot to answer for.
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