Cheney suppressed evidence of market manipulation in California power crisis

New investigative report 14

Don't miss Jason Leopold's crack investigative reporting on Truthout today:

This story is based on a two-month investigation into Cheney's energy task force; how the vice president pressured cabinet officials to conceal clear-cut evidence of market manipulation during California's energy crisis, and how that subsequently led Cheney to exert executive privilege when lawmakers called on him to turn over documents related to his meetings with energy industry officials who helped draft the National Energy Policy and also gamed California's power market. Truthout spoke with more than a dozen former officials from the Energy Department and FERC as well as current and former energy industry executives all of whom were involved in personal discussions with Cheney relating to the National Energy Policy.

Say what you will about Cheney -- the dude is industrious. Has any other elected figure in a democratic government accomplished so much evil, on so many fronts, in so little time? He's like the Energizer Bunny of evil.

Update [2007-7-25 22:49:50 by David Roberts]: I've been warned by a friend that Leopold's reporting is generally not to be trusted in the absence of outside corroboration. Some of the details are here. So caveat lector.

David Roberts is staff writer for Grist. You can follow his Twitter feed at twitter.com/drgrist.

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  1. Green Granny's avatar

    Green Granny Posted 9:26 am
    25 Jul 2007

    Yes,I like your analogy -- his evil keeps going, and going, and going. . .
    So what are we the American people going to do about this?  Are we just going to throw our hands up and wait for 2008?

    "We must be the change we wish to see in the world." -- Mahatma Ghandi
  2. gmunger Posted 10:26 am
    25 Jul 2007

    suggestionsI think we're all open to suggestions gg....
  3. yoder's avatar

    yoder Posted 12:05 pm
    25 Jul 2007

    Tip of the iceburg.Our grandchildren will be hearing about the escapades of the current administration as classified documents are finally declassified.
    Cheney and AWOL will certainly go down in US history as the most despised nutjobs ever to infect the hallowed halls of our White House.

    "In a time of universal deceit, telling the truth is a revolutionary act!"

    -- George Orwell (Eric Arthur Blair)
  4. Colin Wright Posted 4:37 pm
    25 Jul 2007

    Great post! Essential reading!One wonders why the national media is not all over this story. It looks like it could easily be corrobaorated:

    Truthout spoke with more than a dozen former officials from the Energy Department and FERC as well as current and former energy industry executives all of whom were involved in personal discussions with Cheney relating to the National Energy Policy.
    Here we have a prime example of what energy deregulation can do. Private greed (and collusion and an enabling administration) leads a power company to shut down a power station to cause artificial shortages and escalating energy prices.
    When the crisis hits, the administration uses the opportunity to go after a Democratic governor (Gray Davis) and get him replaced with a Republican. Not only do Rove and Norquist get to enrich their friends, but they also get another Democrat out of power!
    Only in the Greatest Country on God's Green Earth!

  5. Pangolin's avatar

    Pangolin Posted 5:20 pm
    25 Jul 2007

    This is NOT news in CaliforniaSome of us have known for years that the "power crisis" was a big scam. They were turning the power off in March for chrissakes which is just pure greed. March is usually one of the lowest power useage months of the year here. For big stretches you may not have to heat or cool the house.
    Enron is a curse word in this state. Mind you Arnie was colluding with Enron in order to blame Davis for the power crisis and force the recall election. Another part of this whole game was playing games with the power output of the Diablo Canyon nuclear reactor.
    One major reason that I am opposed to nuclear power is that the people who control the reactor own the people who are dependent upon the power. They can flip the big switch off anytime they don't like your politics and wait for you to elect a republican who will support the building of more prison spaces.
    It worked on us, it can work on you too.

    Put the Carbon Back
  6. Sean Casten's avatar

    Sean Casten Posted 11:44 pm
    25 Jul 2007

    Don't blame deregulationNotwithstanding Cheney's manipulations (or the author's accuracy, per David's update), we ought be very careful not to confuse deregulation with market manipulation.  The opposite of regulation isn't anarchy, California notwithstanding.
    One of the most thoughtful pieces I've come across on deregulation is Alfred Kahn's book that he penned on telecoms and airline deregulation.  Kahn headed the Civil Aviation Administration under Reagan when airlines were deregulated, then later headed up the New York State Public Service Commission when telecommunications were deregulated.  His book is a reflection on those experiences, lessons learned and - while not even mentioning the word electricity - is absolutely essential to understanding the California power crisis.  His two key points are that:


    Regulation exists to subsidize.  Deregulation exposes those subsidies.  In the name of economic efficiency, the worst thing one can do is deregulate slowly, since this only creates arbitrage opportunities where companies can make profits that are artificially propped up by those remaining artifacts of subsidization.  (For example in telecoms, when long distance was dereg'd but local was not, one could buy access on local wires at below-market, subsidized rates and use it for long-distance service.  This creates temporary shareholder value, but no long term value - and essentially abuses the remaining regulated enterprise.)
    In a regulated industry, the role of the regulator is to protect the monopoly franchise of the regulated business in the name of the public interest.  In a deregulated industry, the primary role of the regulator is to ensure that monopoly concentration doesn't exist, since the benefits of competitive markets require that no single business can use their clout to set price.  Quoting Kahn, "Deregulation shifts the major burden of consumer protection to the competitive market, and therefore, in important measure, to the enforcement of antitrust laws".


    Apply these to California, and they failed both tests.  They deregulated a small piece of the grid, (no deregulation downstream of the transmission system, thus creating exactly the same arbitrage problems as in telecoms), left massive subsidies in place through retail price caps and then provided no anti-trust oversight to protect the consumers from the machinations of the Enrons of the world.
    To appreciate the tragedy of this situation, consider that if you lived in a state that ultimately deregulated, your power prices have risen 30% more slowly than they have risen in the states that remained regulated from 1992 - today.  And yet we blame deregulation for current price increases!  California definitely proved that a regulated industry is more trustworthy than an anarchy - but it didn't prove anything about deregulation.
  7. JMG's avatar

    JMG Posted 2:27 am
    26 Jul 2007

    "Deregulation" is a phony facadeThe root of the problem is the pirates promote "deregulation" as if that mean deregulating.  The term "restructuring" is much more accurate, because it makes clear that, as with the utilities, nobody deregulated anything -- they changed the mode of regulation greatly.  In CA, the selected a mode of regulation that made it possible for the criminals to turn the state into an ATM machine.
    Whenever you hear someone promoting "deregulation," hang onto your wallet.  If they won't admit that they merely want different regulation, then they are not being honest.  (The 0.0001% libertarians who claim to be interested in actual "deregulation" aside.)

    Save the world: Reduce greenhouse gas emissions 5% annually.
  8. Sean Casten's avatar

    Sean Casten Posted 4:41 am
    26 Jul 2007

    JMG - not sure I agreeBut it may simply be a disagreement of semantics.  In a functioning society, regulations shape every industry, from zoning regulations to criminal codes.  Deregulation does not suggest an abandonment of these principles.  Furthermore, most industries in present society would be classified as "deregulated", even while they are bound by societal rules.  (e.g., the presence of a drinking age and alcohol distribution laws does not make Budweiser "regulated", at least not in the sense of this discussion).  The contrast is that there are a handful of industries where - for historic reasons - governments decided that the social benefits created were too important to be left to the vagaries of public markets.  Today, the list of industries that are dominated by regulated, for-profit monopolies (that are thus not only exempt from antitrust rules, but also are subject to government-oversight of prices and competitive pressure) is rather small, but they are huge industries.  Electricity is the biggest one left, but in the last decade we have deregulated airlines, natural gas, etc.  Not because they are no longer regulated, but because competitors can now enter and leave the space, and  a failing company will be allowed to go bankrupt.  (Yes, the old legacy airline carriers make a mockery of this particular provision, but this is done through specific legislative proceedings, not by a government-sanctioned commission, such as was the case with PG&E in California.)  
    Framed this way, many ask for deregulation.  What is interesting - and where I think we agree - is that no existing business asks regulators to make the world safer for their competitors.  In this vein, yes, there is no real political constituency for efficiency (of the economic or energy variety) - but this is not to say that there is no constituency to get rid of government-protected, for-profit monopolies.  
  9. SustainableGreen Posted 2:38 pm
    26 Jul 2007

    Gee, Guess What Came in the EmailHey, all:
    The item below came in my personal email:
    David,
    Quit insulting people in Gristmill comments. Quit accusing any and everyone who disagrees with you of being a greedy tool of the "corporate oligarchy." Dial back the perpetual, exhausting tone of aggrieved umbrage, with the all-caps and the exclamation points.
    Keep discussion respectful, substantive, and calm, or you'll be banned from commenting further.
    Thank you.
    --

    david roberts

    staff writer

    grist.org

    P 206.876.2020 x220

    F 253.423.6487
    Roberts:
    And I suggest to you that you should apply the same rules of respectfulness, substantiveness, and calm to yourself.
    Here are some examples of your own language:
    "Given the surge of interest in climate and energy, it's no surprise that a lot of BS -- rainforest-screwing biodiesel, everyone-screwing liquid coal, etc. -- is getting passed off as "green" and bellying up to the public trough."
    "Hey Jack, do me a favor, don't compare my skepticism to that of the capitalist press, which already in our young century has cozied up to power and consequently helped systematically misinform the American people about war, terrorism, climate change, tax policy, government corruption, and health care, among many, many other subjects, while ineffectual enablers like you sat by kvetching about inanities. You live and work every day among dolts and propagandists, and you are complicit in the horrors they've wrought, yet even at this late date you wouldn't know one if it bit you in the ass.
    My skepticism's just fine, and unlike you, I bring it with me when I read the work of your pals.
    I want nothing to do with your corrupt, dying press establishment, you desiccated old fart. Let's agree to go back to ignoring each other, ok?"

    "Hey, Murray, screw you, and screw your corrupt, vicious, law-breaking, public-teat-sucking, mountain-blowing-up, working-poor-killing, planet-destroying dinosaur of an industry. The sooner the world is rid of you the better. Crawl back under your rock."
    And then you should stop the gross over-generalizations you apply to others:
    "...any and everyone who disagrees with you...";  "...perpetual, exhausting tone of aggrieved umbrage...".
    You really should learn to think and write better, especially when accusing others.  Especially, focus on not being so hypocritical and just plain two-faced.
    And is this acting and writing responsibly as a Grist staffer?

      "Perhaps you should pour yourself a White Russian, light one up, and take a moment to chill out."
    "...[R]espectful, substantive, and calm...", indeed.
    My comments on Grist need no defense.  I have written about ecology, habitat restoration, organic farming, the value and practicality of wind and photovoltaic, Hydrogen, history, prescribed burning, sustainability, environmental principles, environmental literature, and several other subjects.  Take the time to look at them and you will see--that is, if you have the honesty and willingness for self-examination.  Otherwise, your tendency or desire to select things you don't like and ignoring things that are at least neutral, suggests your pettiness.
    Most importantly, as I have said before (and here's some all caps fer ya), I DO NOT WRITE FOR YOUR APPROVAL.
    Lastly, it is about the Corporate Oligarchy, regardless of your High School attempts to cover it up, and in the stumbling way you refer to it in this very thread.  Oh, and Roberts can go fuck himself.
    David

    Sustainability For Life
    Messages done with sustainable energy, with Wind and Sun!
  10. Colin Wright Posted 4:31 pm
    26 Jul 2007

    Saving the Earth is an EMOTIONAL business!SustainableDave, remember "sustainable" means being around forever! We wouldn't want to lose you. It's suicidal around here to go breaking the posting rules about personal attacks. Never mind, telling the chief honcho to go F! himself, or posting private emails.
    To be sure, DR's email was hardly polite, and I don't know who you insulted to draw his wrath(I doubt they were offended?) You could have written him privately or written to others of us separately for advice. But if I were you, I'd apologize to DR and ask humbly to be allowed to keep on posting. We need your perspective and insights! We need the ability to live together and to respect each other if we have any chance at all of saving the planet. If we can't do it at Grist, what hope is there for the wider world?

     
  11. Jon Rynn's avatar

    Jon Rynn Posted 12:10 am
    27 Jul 2007

    Yo Dave,now I feel bad, I was going to suggest something similar to Colin some time ago.  You have very good ideas.  This particular space has its own "culture", if you will, and one of them is that there is a very broad diversity.  There are some very corporate people here, some very centrist people, and particularly among commenters, some radical people.  This works, I think, because people don't (generally) question someone else's motivations.  I think the Corporate Oligarchy, for instance, is an important concept to bring up, but it should be done in a general way -- not that someone who just posted is a part of it.  I was initially skeptical that I could participate constructively in this space, but I have been very pleased that I have been able to undertake some good discussions, as frustrating as it can be -- for my discussees as well, I'm sure.
    If you want to discuss this off-line, please don't hesitate, (JavaScript must be enabled to view this email address)

    //
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  12. SustainableGreen Posted 12:44 am
    27 Jul 2007

    A Lot of Agreement, and More

    Hey, all:
    Hey, Colin:  Yes, it is emotional, although some seem to have that portion of the brain surgically excised, or just beaten out of them by experience or education.   And you certainly do define "sustainable" in an essential way.  To many people the term is either too fuzzy to comprehend or has already been distorted by the marketing stooges.  
    Thanks for the words of advice and encouragement.  I appreciate the sentiment about losing me, and about suicide, however overstated.  I may not be here, but I have been around for a long time fighting the fight, speaking truth to power, and I won't back down before an egotistical overbearing two-faced punk.  The exact same tone and content of the email I received has been here in the threads, so the 'private' issue is moot.  I did also respond to his email and  cc-ed other Grist staff, since his policy is so glaringly selective and hypocritical.
    This thread is highly appropriate, since I have been 'warned' by the 3rd-grade hall monitor Roberts about referring to the Corporate Oligarchy.  Who does he think we are opposing?  Or is he so callow as to not recognize reality?  Or is he a shill?  
    The destructive partnership between government and business is on parade all day every day, but is the new 'emperor with no clothes', being tacitly accepted and even supported, out of fear or ignorance or greed or a misplaced, ignorant view of coexistence.  It is just that simple.
    Cheney and Bush and the entire administration, plus practically all the members of the Congress and Senate have sold their souls and ethics to business.  As one simple example, we have all heard now that the Presidential candidate who tried to pass National Health Care legislation in '93-'94 now is among the leading recipients of campaign money from the health insurance industry.  
    As Roberts stumbled into in his two-faced way, Cheney and the rest are part of the same problem.  Whether it is health care, energy, agriculture, or war, they are part of the problem.  It is called the Corporate Oligarchy and its shills need to be exposed.  I refer to it often, while many others refer to other issues they focus on.  As an example, Roberts seems to love referring to Carbon offsets like they were crack.  He is two-faced.
    I will humbly suggest he get some sense of self-examination.  If he dodges that, I will take my leave without regret.
    David

    Sustainability For Life
    Messages done with sustainable energy, with Wind and Sun!
  13. Jon Rynn's avatar

    Jon Rynn Posted 12:52 am
    27 Jul 2007

    In my experience......it's very easy to accuse somebody of being the tool of something (even the CIA, etc.).  What's much more useful, however, is to go into some detail about the corporate-governmental nexus in an informative way so that people can be educated on the subject.  Most people probably do not have your level of understanding of this problem.  It's much more important to talk about oil companies, utilities, ag companies, their supporters in government, the links, etc.
  14. Colin Wright Posted 6:47 pm
    27 Jul 2007

    It;s not all about the corporate oligarchyDave, I think you need to take a break and read what you have written above when your body is not coursing with hormones. Who are you helping by turning the fight to save the environment into a personal fight with a dedicated enviro like DR? Further, the macho tone you exude and the labeling you use sends up warning signals to those of us more attuned to the destructive potential of male violence. Think of all the nutcases who take a gun to work and murder co-workers. Now think how DR has to interpret your crude remarks implicating him in a vast conspiracy. Do you not see why you need to show that you are a level-headed and compassionate person?

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