A BuzzFlash Interview with BBC Investigative Reporter GREG PALAST

Greg Palast

Greg Palast, an investigative reporter for the BBC and the Observer (sister paper of the Guardian), is well-known among BuzzFlash readers for his expose on how Jeb Bush and Katherine Harris disenfranchised black voters in Florida.

Based in London (because tenacious investigative reporters are not valued in the U.S. media, he says) Greg is thorough, cynical and fearless. In March, BuzzFlash.com will be featuring Greg’s new investigative reporting book, “The Best Democracy Money Can Buy.” Greg Palast takes no prisoners. Here’s Greg as quoted in news release by the Institute for Public Accuracy:

“The California blackouts are a simple case of greed run amok. The big winners in this monstrosity are Enron — the largest career contributor to George W. Bush — and other energy companies who have strangled the market. ‘Deregulation’ is a lie — it is simply moving regulation from democratic government agencies to an unelected circle of market manipulators.”

Palast said today:

“There’s a whole band of power pirates out there fiddling the books, rigging the markets, and buying and selling politicians like bags of sugar — from Argentina to Houston to Washington to New York. In fact, you simply can’t divide the collapse of Enron from the collapse of Argentina. Enron wasn’t a bad apple — the entire system of deregulating electricity is rotten, root and branch. Arthur Andersen didn’t have a few bad boys. As an investigator, I’ve watched their financial finagling run amok — all under the name of ‘innovation.’ They just don’t get it: one, two, a hundred Enrons are charging down on us, and a dozen Argentinas — unless we restore the right to put the reins on these let-the-markets-rule pirates. That’s why kids were in the streets of Seattle, and are now protesting the World Economic Forum. It’s more than a protest, it’s a wake-up call…”

Greg Palast bears down on Republicans, Democrats, and Independents alike, if they’ve got something unsavory to hide. His specialty is in exposing corruption: financial and political alike (although, they generally present themselves as a package deal).He’s a one-man journalistic sleuth ferreting out fools, knaves and hypocrites.BuzzFlash was glad to interview him on Enron, globalization, corporate and political corruption, political backbone and … Oh, well, just read it already!

BUZZFLASH: If you were a member of Congress, what would you be looking for right now in terms of Enron and its connection with the White House?

GREG PALAST: Well first of all, I’d be looking for all the meetings, not only the ones between Ken Lay and Dick Cheney, because those meetings are really schmooze operations. The dangerous fixes are done after the big boys meet, and their staffs take over at the lower levels. It’s that discussion between the minions of Ken Lay and the underlings in the White House where Dick Cheney basically says “do whatever these guys want.”

Let me give you an example, just so you know what I’m talking about.In December 2000, Bill Clinton was about to take his bow and leave office. In response to Enron’s laying siege to California, Clinton issued through the Energy Department, an order which effectively barred Enron from trading into California. It effectively put Enron out of business for a while on their biggest trades. The day after George Bush took office, which means, he was still hung over and, you know, sweeping out the confetti out of the Oval Office, he had the Energy Department issue an order overturning Clinton’s order, putting Enron back into the speculation game in power. I’d like to know how that happened. How did they make that decision in hours of taking office? Who set that up and when? That’s one of the first questions. I’d also like to go way back into the records. You can’t just start with the White House connection. Enron was the largest contributor to George W. Bush’s career.

And it goes way back even to Argentina. We know that one of the Bush boys, and according to some sources it was George W. Bush, spoke with an Argentine senator who was very conservative by the way, and a friend of the Bush family. One of the Bush boys called him in 1988, saying, “Since Argentina is privatizing the gas pipes, the incoming administration would appreciate if you would give it to Enron.” The Argentine Senator was incensed because Enron was bidding one tenth of what the competitors were offering. By the way, Enron got the pipeline in Argentina. They also got the water system, which is something else people should know and talk about. So you have to go further back than January 20th, 2001 or even the campaign contributions by Ken Lay, to begin an investigation.

As an investigator, you start with one document and it leads to another, and that leads to another document. And that’s what the Bush administration is afraid of. They’re afraid of the Democrats, and it looks like Henry Waxman is actually beginning to act like a real opposition. And I think that’s scaring the daylights out of these guys. Keep in mind, we do not have secret government. When Bill Clinton tried to hide records about meetings to start putting together the health care plan, the Republicans sued him to get the information. Judges were about to hold the White House in contempt, and make Clinton pay hundreds of thousands of dollars in fines for not divulging documents. That’s why we have the Freedom of Information Act. It’s not even about giving documents to Congress. Every citizen is entitled to open government. The White House is your house, and I’m pretty goddamn resentful when some guy who didn’t get elected tries to take it away.

BUZZFLASH: We can only imagine what was in the documents that were shredded by Enron. What type of information might have been in those documents that scared the hell out of Enron and the Bush administration?

GREG PALAST: There is absolutely one document I don’t have to speculate about. Ken Lay gave a list of twelve names to Cheney. I want to see those twelve names. Those twelve names, were appointments to the regulatory agencies that would oversee Ken Lay. Now, that is nasty stuff. Now we also know that Ken Lay took it on himself to interview candidates for the Federal Energy Regulatory Commission. That’s real serious business. The smoking guns are out there. The problem is, someone’s got to say, this can’t stand. And we’ll see if the Democrats will do that.

BUZZFLASH: How much more of the specific information, the back door dealing, will get to the American people, in terms of how the American people perceive this administration?

GREG PALAST: First of all, I think it’s important that someone explain exactly how these guys ripped us off. One of the big points I just made in a Guardian article is that we’re crying too much for the stockholders. Mr. Baxter, goodbye and good riddance. I don’t care about the stockholders. Yes, the employees, for sure. But the stockholders didn’t cry when the stock was shooting through the roof, when they were skinning the people of California, the people of India, the people of Argentina. The stockholders didn’t complain.

I’m concerned about what they’ve done to the employees, the public, their customers, the people who pay light bills and water bills and gas bills. They have to know exactly how they did it. I’m writing a study for the United Nations on how to control these guys. I know the particulars. Because I know the little details, I’m trying to encourage, through the United Nations, governments to have a little backbone, and not give in to this free market philosophy.

So it’s a bit of tension between the United Nations and the World Bank on this. But let me give you some particulars so you know how they did it. One day, Enron traders sold 500 megawatts of power to California. The power that they were going to deliver was over a power line that could only handle 15 megawatts of power. And if you put 500 clicks of juice into that wire, it’s going to vaporize. As soon as the people who actually keep the lights on and have to get power into Los Angeles realized that the power was just on paper and could never physically arrive, there was panic. The price of electricity jumped in an hour up to a thousand percent higher. And who was there to sell them, and who knew that the market was going to be jerked, but Enron.

Now that one was caught by the Federal Energy Regulatory Commission. And that’s why Lay got rid of the Chairman. That’s the problem with deregulation, is that whenever you catch them at one trick, they’ve got seven others. Enron had guys who were paid five million dollars a year, to sit behind massive computers, drinking Red Bull, staying up for 92 hours at a crack, until they figure out how to break the new system on the power market. The Enron people just overwhelm state regulators, so they can skin you alive. They didn’t do this first in California. They first took it to Britain, then Brazil, and Argentina, and to India. And then Enron, this kind of global marauder, which didn’t bother the American press, and didn’t bother the American stockholders, came home. And Enron started bleeding California.

BUZZFLASH: Right now Henry Waxman (CA) is in the minority in the House. Although he’s fighting back, he cannot issue subpoenas. Deputy Attorney General Thompson has been asked by Congressman Conyers (MI), to recuse himself of leading the investigation into Enron’s collapse because his old law firm represented Enron. Thompson has refused, despite his conflict of interest. What will it take? Do the Democrats need to win the House in this election year to unleash a full-scale inquiry into Enron?

GREG PALAST: You have to have the House, otherwise you’re doomed. You know, the question is, how tough will the Democrats will be. Well I’ll guarantee you, whatever complaints you might have, you’re not going to get the investigation from the Republicans. What’s very important though is that Waxman not limit the investigation to Enron or to a couple bad apples in Arthur Anderson.

Let me give you an example. In 1989, I was doing some investigating. There’s about six big power companies out there that are worldwide power pirates. And this one company called Southern, was caught with two sets of books. This is a company as big as Enron by the way. They kept one set of books, and they kept another set of books in the trunk of a vice president’s car that was keeping track of 117 million dollars in phantom spare parts that they were charging to the public. Now I was involved in the investigation. The grand jury moved to indict this company. Daddy Bush was President, and using the power of the Justice Department; the Justice Department has the right to veto any racketeering indictment brought by a grand jury, and Bush’s Department vetoed the criminal indictment.

And why? What was the excuse? They said “well, it’s really a complex accounting issue.” They were audited, and their methods were approved by Arthur Anderson. So there it was. That was twelve years ago. That’s when it began. That was the signal, okay boys, do whatever you want. You can literally steal hundreds of millions of dollars. You can create phantom parts, you can have hidden accounts. And it’s just okay. And that started with daddy Bush.

BUZZFLASH: You said that you warned the British government about what was going on in 1995. Could you speak about that?

GREG PALAST: Tony Blair asked me to do some investigating before he was elected as Prime Minister. In Britain the opposition has a cabinet, or a shadow government. They knew I was an expert on energy companies and regulation, so they called me in. They said American power companies are coming into Britain.

Are there any problems here we should look for? What should we look out for, what should we do? I sat down on October 18th, 1995 with the Trade and Industry Minister, and gave him six company names to look out for and they included Enron near the top. I also said, look out for Arthur Anderson’s funny bookkeeping, because it’s a magic show, it’s not really bookkeeping, and they’re gonna skin you alive because you guys have no system. You’re not prepared for these characters.

And I showed them some of Arthur Anderson’s magic accounting tricks. I said get ready. Now they took me seriously. But once Blair got into power, Enron put Lord Wakeham on their board of directors on the audit committee. This is the guy who’s supposed to protect the planet from Enron’s depredations. This is the guy that privatized the electric companies for Margaret Thatcher. Pretty soon it was Lord Wakeham and a couple of other characters, a super lobbyist called Erwin Stelzer, a guy who works for Ruport Murdoch and the other U.S. big power companies.

These guys were the ones who had the influence. And my warnings just got a pat on the head and it went up in smoke. I started investigating and I found out that all the good government plans that we put together were falling apart because of inside lobbying fixes. And that story was a huge story in Britain. In fact today I was just looking at some of the tapes about how Enron was manipulating the British government once Tony Blair got into office It can really make you sick. I hate to say it, but part of the pressure was from the White House under Bill Clinton. Bill Daley, the Commerce Secretary, asked special favors for Enron and for Entergy Corporation. Entergy International is out of Little Rock, Arkansas. So it was kind of taking care of one of ours and one of theirs and no one complains.

BUZZFLASH: The Republicans are playing this off as “Enron was just as much in the Clinton and Democrats camp as ours.” It is reported that Bush received nine times the amount of contributions to his political campaign as Bill Clinton, but clearly the Clinton administration did work with Enron.

GREG PALAST: Let’s make it clear. Bill Clinton did get his hands dirty with Enron, but George W. Bush is made out of the mud. There’s a huge difference. I mean Bush is a creation of Ken Lay. He is Lay’s glove puppet. And as one businessman says, this is a quote, “when you hear George W. talk about energy, it’s Ken Lay coming out of his mouth.” So it’s a huge difference. The entire weight of the United States Government has been put behind this corporation. I can tell you one thing. Clinton may have done some favors for Enron and there’s no question about it. It doesn’t smell good because we have the former chairman of the Democratic party on Enron’s board too, Bob Strauss. However, you can’t compare that to handing the President of the United States a list of twelve people and saying “here’s the people I want to regulate me.” That’s the different between something that’s a little bit creepy and something which is basically a corporate coup d’etat.

BUZZFLASH: Greg, it’s been a pleasure to speak with you.

GREG PALAST: Thanks for all you do Buzz.

Remember, in early March, BuzzFlash will be offering,”The Best Democracy Money Can Buy” as a premium selection.