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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss Europe’s potential political merger, the ten year anniversary of Enron’s collapse, and evidence the American private sector has been dying since the 1960’s.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

“Merkozy” under pressure to agree to budget masterplan
Has US learned the lesson of Enron 10 years later?
Enron’s fall foreshadowed 2008 crash
Why We Are In Political Gridlock: The Private Sector Is Dying
Deloitte: The Shift Index

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“EU Carbon Trading Rocked By Mass Killings”, “Armed Troops Burn Down Homes, Kill Children To Evict Ugandans In Name Of Global Warming”

These two headlines from today’s Global Warming Policy Foundation update ought to finally shake some sense into any of the many US companies pushing for our involvement in the Kyoto debacle. That’s a demand invented by Enron (greenies, I was in the room, don’t bother), and I particularly recall DuPont’s rep whining like a child to the US representative about their being denied the right to cash in, at a State Department briefing at one global confab I attended in 2002.

This is particularly true on the heels of the experience of Coca Cola and Unocal with the 1789 Alien Tort Claims Act, under which they were sued to pay for the actions of a government in whose country they operated.

Specifically, news reports indicate that:

“Armed troops acting on behalf of a British carbon trading company backed by the World Bank burned houses to the ground and killed children to evict Ugandans from their homes in the name of seizing land to protect against ‘global warming,’ a shocking illustration of how the climate change con is a barbarian form of neo-colonialism.

The evictions were ordered by New Forests Company, an outfit that seizes land in Africa to grow trees then sells the ‘carbon credits’ on to transnational corporations. The company is backed by the World Bank and HSBC. Its Board of Directors includes HSBC Managing Director Sajjad Sabur, as well as other former Goldman Sachs investment bankers…

Villagers told of how armed ‘security forces’ stormed their village and torched houses, burning an eight-year-child to death as they threatened to murder anyone who resisted while beating others.

‘We were in church,’ recalled Jean-Marie Tushabe, 26, a father of two. ‘I heard bullets being shot into the air.’

‘Cars were coming with police,’ Mr. Tushabe said, sitting among the ruins of his old home. ‘They headed straight to the houses. They took our plates, cups, mattresses, bed, pillows. Then we saw them getting a matchbox out of their pockets.’

‘But in this case, the government and the company said the settlers were illegal and evicted for a good cause: to protect the environment and help fight global warming,’ reports the New York Times.”

To beat some too-typical greens to their punch, no, this is not what happens when one introduces “market mechanisms” into environmental schemes.

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Ever since these two interviews in Forbes Magazine, in which CEOs of rent-seeking utilities blurted out that that of course they were behind the cap-and-trade/global warming legislative agenda, because they receive a large wealth transfer in return for helping the statists grow the state, I have maintained the following very basic principle: crony capitalists, when engaged in behavior the public would be less than pleased with were it brought to their attention, ought to not allow their CEOs to give interviews.

But here we go again. Today, T. Boone Pickens went on the air with Bloomberg and proved way too much about his latest great idea — on the heels of also pushing the global warming agenda, specifically a national windmill mandate — to mandate a market for his huge natural gas investments (windmills generally don’t work so require a gas plant to be built for ‘backup’. Windmill mandates failed, politically, but he had a backup ready there, too).

This is, naturally, a backdoor for the climate agenda. As Christine Todd Whitman recently and precisely admitted about the whole ‘clean energy’ Plan B, incidentally, in defending President Obama from Al Gore’s barbs.

His next Pickens Plan is at root a cash or clunkers scheme gone stark raving mad.  And remember, this was considered less appealing than a windmill mandate. It seeks to force the transport sector onto natural gas where that is not in fact economic. Hence the big ol’, new government scheme a la ethanol and wind and solar subsidies and preferences, and the mélange of ethanol subsidies and mandates which it more closely resembles.  Requiring, e.g., auto dealers to float not five grand or so but up to $64,000 per vehicle, to ultimately be paid back by you and I, it is little wonder Pickens thought a windmill mandate was the less-bad bet.

T. Boone is of course not alone among gas interests to have bet big and come up short on the global warming agenda, seeking to scare people into allowing the state to for all intents and purposes regulate coal, our most abundant energy supply, out of existence.

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The Wall Street Journal has a long piece about the prospect of using the state to move part of the U.S. transportation fleet from oil-derived fuels to natural gas. It gives prominent voice to the massive public affairs campaign of T. Boone Pickens, undertaken in the apparent quest for a legacy, locking in subsidized billions for his natural gas fortune as a swansong to a prosperous career.

This campaign takes the form of a bill embraced by ostensible fiscal hawks, causing an uproar and enabling the media to describe the Republicans ‘circular firing squad’, of a base taking umbrage at Members abandoning their pledges of fiscal sobriety at the drop of a billionaire’s phone call. Well played, gentlemen.

The vehicle was not Pickens’ first choice. His first choice was a windmill mandate, transparently pushed by a handful of gas interests, including Chesapeake Energy’s Aubrey McClendon, to put a green hat on their efforts to use the state to displace coal’s market (one of McClendon’s group’s first television ads stated up front, “more wind means more gas”: windmills don’t work that often, so they need ‘backup’ to run wastefully all the time, cycling up and down, and for various reasons inevitably this means gas-fired electricity).

Coal was difficult to budge, what with centuries of it domestically, so some gas folks have been helping the greens’ war against coal for about two decades. This is their latest foray.

And, astroturfers, please hold the mail. I happened to be in the room in 1997 with the American Gas Association, BP, and Enron as they worked with green pressure groups, as radical as the Union of Concerned Scientists as well as more mainstream, anti-coal activists like NRDC, to get a global warming treaty and a domestic cap-and-trade scheme. I couldn’t believe my ears and said so, which in a matter of weeks led to us parting ways.

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A joke making the rounds during my brief, late 1990s stint with General Electric’s ideological and political forerunner, Enron, keyed off of that company’s disastrous energy venture in India and its fabled arrogance. It went, in short, who else would believe they could sell turbines to Indians?

Give it a minute. Then hold that thought.

Last week, to optically set the stage for Tuesday night’s rhetorical pitch for more big government to prop up certain favored losers called the ‘clean energy economy’, President Obama teamed with his BFF — and big-time lobbyist for/vendor to massively increased government mandates — CEO Jeff Immelt of GE for a photo-op at a GE plant in Schenectady, NY.

GE makes a gas turbine there, several of which it has signed a contract for sale to India. So that made a very good backdrop, if for a very confused message.

The logic goes something like this: GE makes renewable energy gizmos, manufacturing jobs for which Obama wants to create here by mandating markets for and otherwise propping them up with taxpayer dollars. Therefore, GE’s economic, non-mandated, efficiency-enhancing fossil fuel turbine is evidence that energy technology innovations are possible and therefore the federal government ought to mandate all sorts of uneconomic ‘renewable’ efficiency killers.

Which reminds us of Enron-style arrogance.

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Enron, joined by BP, invented the global warming industry. I know because I was in the room. This was during my storied three-week or so stint as Director of Federal Government Relations for Enron in the Spring of 1997, back when Enron was everyone’s darling in Washington. It proved to be an eye-opening experience that didn’t last much beyond my expressing concern about this agenda of using the state to rob Peter, paying Paul, drawing Paul’s enthusiastic support.

In fact, this case was not entirely uncommon in that the entire enterprise was Paul’s idea to begin with. Which left me as the guy on the street corner muttering about this evil company cooking up money-making charades, to nothing but rolled eyes until the, ah, unpleasantness and the opportunity it afforded to take a few gratuitous swings at George W. Bush. Buy me a beer and I will regale you with tales of reporters from Newsweek and the Washington Post desperately seeking assistance to spin, respectively, Enron as having urged Bush away from the Kyoto agenda as opposed to having crafted it, and Enron’s global warming activism as its one redeeming feature.

The basic truth is that Enron, joined by other ‘rent-seeking’ industries — making one’s fortune from policy favors from buddies in government, the cultivation of whom was a key business strategy — cobbled their business plan around ‘global warming’. Enron bought, on the cheap of course, the world’s largest windmill company (now GE Wind), the world’s second-largest solar panel interest (now BP), to join their world’s second-largest natural gas pipeline network. The former two will only make money under a system of massive mandates and subsidies (and taxes to pay for them); the latter would prosper spectacularly if this war on coal succeeded.

It then engaged green groups to scare people toward accepting those policies. That is what is known as a Baptist and Bootlegger coalition. I sat in on such meetings. Disgraceful.

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My eye-opening experience with Enron revealed to my surprise just how it is that certain interests actually drive Big Green, and make otherwise inconceivable policy ideas into threats and often even reality. The revelation was such that it left me shaking my head in wonder as to how the (now suddenly) obvious, at least seeing how it escapes the interest of at least the establishment press cheerleading the same agenda: when you rob Peter to pay Paul, you are guaranteed the enthusiastic support of Paul.

In fact — as I learned regarding Enron’s and BP’s pet projects, “carbon cap-and-trade” and related ‘green jobs’ schemes all designed to make uneconomic investments in windmills etc. pay off — sometimes the entire enterprise is Paul’s idea.

So it is that we see with deep pocketed gents now scrambling to protect their bets on uneconomic investments and rent-seeking schemes, by supporting the campaign to defeat Proposition 23 in California. Prop 23 would delay California’s climatically meaningless but economically suicidal state-level adoption of Kyoto agenda, called AB 32. Oddly, there is no condemnation of these bags of money being thrown at killing a ballot initiative, despite the opprobrium heaped upon those few who have dared venture in to help the “Yes” campaign.

This is a shame, for the question Cui bono? is so readily answered simply by scanning the growing list of those digging deep to make sure the ‘green’ gravy train of wealth transfers isn’t derailed (regardless of the fairly obvious economic consequences if they are successful, which in a rational world would be of great interest to a watchdog press).

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So President Obama is meeting in the White House tomorrow with BP’s chairman. The focus of public discussion of this event has been on it taking until the 57th day or so since the Deepwater Horizon rig caught fire following a well explosion, precipitating the ongoing oil leak.

The more relevant figure is 4,700. If my quick calculation has it right, that’s the number of days since the last time a BP CEO was in the Oval Office.

On that day, August 4, 1997, then-CEO, (then-Sir) John Browne, joined by Ken Lay, met in the Oval with President Clinton and Vice President Gore.

Their mission that day? As revealed in the August 1, 1997 Lay briefing memo whiih I was later provided — having left a brief dance with Enron after raising questions about this very issue — it was to demand that the White House ignore unanimous Senate instruction pursuant to Art. II, Sec. 2 of the Constitution (“advice”, of “advice and consent” fame), and to go to Kyoto and agree to the “global warming” treaty.

Oh, and to enact a cap-and-trade scheme.

Oddly, President Obama tonite will telegraph that he’s really going to stick it to BP tomorrow and give ‘em…the cap-and-trade scheme they concocted with Enron (spare me the hysterics, comrades, as I have detailed and explained in various ways here, here and here, I was in the room).

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Before the most recent report on Lehman Brothers’ use of Enron-like methods to hide debt from its balance sheet, Greece had recently been accused of similar shenangians.  The sovereign was under scrutiny for swaps it had set up with Goldman Sachs that allowed the nation to mask its real debt load, effectively cooking its books in order to meet the fiscal standards required for admittance into the Eurozone in 2001.  This was not the first time this type of deceptive transaction had been consummated.

The joyfully iconoclastic financial blog Zero Hedge had uncovered a little-known 2001 report by a little-known Italian Economist named Gustavo Piga which showed that Italy had used almost the exact same transactions as those used by the Greeks to mask their finances and gain entrance to the Eurozone in 1997.  For his courageous exposé, most disturbingly Piga’s life was threatened.  Why was this the case?

Piga had been the first to find “…a real-world example of how sovereign borrowers can use derivatives to window-dress public accounts as a means of achieving short-term political goals.”  As the Council on Foreign Relations which collaborated with Piga on the report noted, Italy was able to do this by “taking a cash advance in 1997 against an expected foreign exchange profit in 1998.  Under accounting rules, this is simply impermissible.  Borrowers cannot use loans to anticipate capital gains on a bond.”  The transactions allowed Italy to artifically reduce their deficit in 1997 by increasing their deficit in 1998.

And according to the CFR, what was the significance of this Enron-like Italian book-cooking?

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Today E&E News reports (subscription required) green group faux-rage that industry reps were consulted on drafting an amendment by Sen. Lisa Murkowski to (IMO, rather unwisely) grant the Democrats a one-year reprieve from their looming political nightmare of EPA threatening to actually try and regulate greenhouse gas emissions from stationary sources by regulation under a Clean Air Act never designed for such foolishness.

Such unseemly whimpering is about as credible as the greens’ phony “hacked emails!” outrage, over what was from all appearances a whistleblower releasing “ClimateGate” email evidence of dirty green tricks. These are the same crowd whose slimy green tactics include stealing my trash on a weekly basis and working with, e.g., the Guardian to dishonestly cobble together unrelated, out-of-context (unlike ClimateGate) excerpts from emails to paint a false picture. (“Greens involved in journalism process!”; sadly, the Guardian never called me for their “story” about, well, me, so I must confess I wasn’t involved).

Specifically, E&E notes how:

“the Washington Post reported yesterday that [Bracewell & Giuliani's Jeff Holmstead] and another former EPA official, Roger Martella, ‘helped craft the original amendment Murkowski planned to offer on the floor last fall.’…

Environmentalists pounced on the reports as evidence that coal and oil interests are behind Murkowski’s efforts. ‘We now have proof that lobbyists for Big Oil, dirty coal and other special interests are directly involved in recent attempts to bail out big polluters and gut the Clean Air Act,’ said a Sierra Club press release. ‘What’s more, these big polluter lobbyists are the same former Bush administration officials who completely disregarded the Clean Air Act and even disobeyed the Supreme Court for years.’

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Here’s something to consider for those who wondered why the usual suspects flew up in arms earlier this week over reports that ‘Circle of Commitment’, countries including the U.S., were seeking to wrest control of the Kyoto revenue mechanism to the World Bank (there’s no such move afoot, incidentally; that was merely an overwrought reaction to said suspects finding something that they hadn’t been allowed to write).

That of course would have implications for the “global carbon offset market” if Kyoto II ropes us in and finally begins chugging down the tracks, next stop “Oil for Food on Steroids”.

Today’s Open Europe press briefing includes the following item (in bold in original):

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The Sarbanes-Oxley Law was rushed through Congress in the wake of an enormous corporate accounting scandal that shook Wall Street and investors across the country. CEO’s and officers at several large companies were found to have “cooked the books”; i.e. knowingly falsified earnings statements to maintain stock prices or propel them higher. The practice came to be known as, Enron-Style Accounting.

The new law had many provisions, but one of its more sweeping was the requirement that corporate officers and executives assume personal responsibility for the accuracy and completeness of financial reports. In some cases, corporate officers could face civil or even criminal penalties if the numbers they reported to the public turned out to be inaccurate.

If only the law applied to politicians.

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The Democratic majority objected to my appearing at a House hearing this morning addressing AstroTurfing in the global warming advocacy industry. The majority were not amused by the prospect of a discordant note being struck. As such, the Republicans will have no witnesses. They have agreed to this after being challenged. In Washington, we call times such as these “weekdays”.

The hearing actually has devolved into something of an effort to rehabilitate certain Members who are now imperiled by their vote for the Waxman-Markey cap-and-trade bill, particularly Tom Periello of Central Virginia (my Congressman, who has been hoodwinked by someone into stating, in defense of his vote, that the reason we are losing jobs to India and China is because they’ve already passed Waxman-Markey-type laws. Really. I agree we need to find out who is spreading such scurrilous tales to our lawmakers).

So, Rep. Periello will open the proceedings with a statement. The hearing was already delayed once because he refused to let anyone see what he was going to say in advance. They might ask questions. I don’t think that’s much of a threat.

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Imagine: In the days following the public revelations of the accounting scandal at Enron, then-CEO Ken Lay convened a news conference. He forcefully expressed his disgust with the actions of his subordinates and vowed to begin “cleaning house” at the company. Taking a few turns to slam the company’s critics and the reporters who had uncovered the scandal, he stressed that, this time, there would be a thorough revamp of the company. He even said that people would be fired! Reassured, reporters, lawmakers and regulators shrugged and went back to their daily lives.

ACORN CEO Bertha Lewis and Former Enron CEO Ken Lay

Substitute Bertha Lewis for Ken Lay and ACORN for Enron, in this hypothetical situation, and you’ll have a pretty good idea of what was asked of us at Lewis’ tour-de-force theatrical performance at the National Press Club earlier this week. She alternated between attacking her critics, expressing disgust with the actions of her employees caught on tape by James O’Keefe and Hannah Giles and vowing to pursue a lawsuit against the filmmakers for capturing on film her employees’ misdeeds. Oh, and by the way, she really, really—she means it this time—intends to “clean house” at ACORN.

Washington Post columnist Dana Milbank captured the surreal tableau best:

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The activities of the radical, corrupt to the core, left-wing Association of Community Organizations for Reform Now, which has tangled itself up in an infinitely complex web of deceit, thuggery, and questionable financial dealings, are long overdue for a RICO probe.

Recent well-publicized events that I need not recount here show ACORN’s criminal propensities. In a moment I’ll explain how ACORN’s financial affairs ought to raise a red flag for investigators at the U.S. Department of Justice, but first some background.

The Racketeer Influenced and Corrupt Organizations (RICO) Act, which was created to prosecute organized crime, allows the federal government to go after individuals who commit any two RICO-related crimes over a decade. The law allows courts to convict persons if it can be shown that they committed those crimes as part of an illegal enterprise and can order disgorgement of their ill-gotten gains from the enterprise.

RICO is the right tool for the job.

Perhaps it’s the only tool for the job because the ACORN network is deliberately structured to deter scrutiny. Its nebulous legal status and opaque corporate structure allow it to keep its activities largely hidden from public view.

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