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Enron lobbying for $500 million in fees
Enron returns lobbyists to Capitol Hill in search of $500 million break.
August 1, 2005: 3:56 PM EDT

NEW YORK (CNN/Money) - Disgraced former energy giant Enron is once again flexing its lobbying muscle in Washington, trying to convince lawmakers to strike a provision that would allow a group of Western utility companies to get out of paying Enron big fees for terminating their contracts with the bankrupt firm, according to a report in the Houston Chronicle.

But the furor over Enron returning a lobbyist to Washington soon dwarfed the debate about the bill's language.

Utilities in Washington State, California and Nevada had negotiated long-term contracts with Enron before the company filed for bankruptcy in 2001 after investigators uncovered a massive accounting fraud at the firm. Terms of those contracts included a provision that required the utilities to pay Enron termination fees for getting out of the contracts, according to the report.

Lobbyists for Enron took to Capitol Hill this week, where lawmakers are writing an energy bill that they hope to hold votes on next week. The lobbyists want the lawmakers to dump a provision introduced by Sen. Maria Cantwell, D-Wash., that would require the Federal Energy Regulatory Commission to review those contracts and see if they were "just, reasonable and in the public interest," according to the story.

The provision stipulated that if Enron's contracts did not meet those tests, the U.S. bankruptcy court could not force the utility companies to pay the contract termination fees.

Robert Odle Jr., an attorney at Washington, D.C.-based law firm Weil, Gotschal & Manges, which is representing Enron in its bankruptcy proceedings, called Cantwell's provision "pork, not policy" and said Congress should let bankruptcy court proceedings settle the issue, according to the report.

Cantwell shot back, saying, "Somehow this corrupt corporation can find the money to hire a lobbyist...and go after even more money from Washington state consumers," the report stated.

At its peak, the company had one of the most powerful lobbying arms in Washington, employing former Secretary of State James Baker III and spending $2.1 million to lobby Congress in 2000, according to the story, which cited the Center for Responsive Politics. (See correction.)

Before the scandal, former Enron chairman Ken Lay was cozy with President Bush, who warmly referred to him as "Kenny Boy," according to the story.

If the terms of the utility contracts are upheld, utilities would be forced to pay Enron millions, which would ultimately go to the company's creditors. For example, Washington's Snohomish County Public Utility District would owe $122 million in fees. The utility claims Enron defrauded it during the contract negotiations, and therefore should not be held to those terms, according to the report.

House Energy and Commerce Committee Chairman Joe Barton, R-Texas, objected to adding language to the bill that specifically targeted Enron. The Texas Congressman proposed broadening the language; lawmakers hope to reach an agreement this weekend, according to the Chronicle.


Correction: An earlier version of this story incorrectly described Thomas "Mack" McLarty's involvement with Enron. McLarty served on an international advisory board for the company. CNN/Money regrets the error. (Return to story.)

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