#8 Enron: Bush's First Scandal

t r u t h o u t - Jason Leopold | Enron: The Bush Administration's First Scandal: " But perhaps the most egregious crime is how President Bush and Vice President Cheney sat by and allowed Enron to rip off California.

On May 29, 2001, when the California energy crisis reached its peak, resulting in nearly a week of rolling blackouts, bankruptcies, and several deaths, Gov. Gray Davis met with Bush at the Century Plaza Hotel in West Los Angeles, and pleaded with him to enact much-needed price controls on electricity sold in the state, which had skyrocketed to more than $200 per megawatt-hour.

Davis asked Bush for federal assistance, such as imposing federally mandated price caps, to rein in soaring energy prices. But Bush refused, saying California legislators had designed an electricity market that left too many regulatory restrictions in place and that it was that which had caused electricity prices in the state to skyrocket.

It was up to the governor to fix the problem, Bush said, adding that the crisis had nothing to do with energy companies manipulating the market.

But Bush's response, in hindsight, appeared to be part of a coordinated effort launched by Lay to have Davis shoulder the blame for the crisis, which ultimately led to an unprecedented recall of the governor and Republican-funded attack ads on Davis' handling of the energy crisis.

A couple of weeks before the Davis and Bush meeting, the PBS news program Frontline interviewed Cheney. Cheney was asked by a correspondent from Frontline whether energy companies were acting like a cartel and using manipulative tactics to cause electricity prices to spike in California.

'No,' Cheney said. 'The problem you had in California was caused by a combination of things - an unwise regulatory scheme, because they didn't really deregulate. Now they're trapped from unwise regulatory schemes, plus not having addressed the supply side of the issue. They've obviously created major prob"