When Tony met Enron I was there to witness love at first sight. New Labour was warned about Enron and its number crunchers, Arthur Andersen, after the office of Jack Cunningham, then Tony Blair’s Shadow Trade and Industry Secretary, rang me in New York at 5am on 21 September 1995.
Someone in London didn’t know the time difference though, from the urgency of the call, they didn’t care. An American power company had launched a bid for Sweb, the former South West Electricity Board, and Cunningham had read that I had investigated the would-be buyer’s funny accounting. Cunningham wanted me in London pronto.
The US seizure of the British electricity industry was the embarrassing endgame of the Tory privatisation of Britain’s power industry, and Labour hoped to exploit by promising to block the US marauders and regulate the market. I was enlisted.
On 18 October, I took Cunningham a photocopied summary of secret accounts set up by the US power firm with the approval of their auditors, Arthur Andersen. I was illustrating a point: ‘This isn’t accounting, it’s a magic show. Britain has no system of control over power plant accounting. You’ll get skinned alive.’
Which companies should the UK beware of? I mentioned six, including Enron. During our chat, Cunningham learnt he’d lost his front-bench post so I explained again to his successor, Margaret Beckett. Over the next two years, I went over the details of utility accounting with Beckett and her team. They pledged to regulate the US power buccaneers.
Once in office, the pledge vanished. After lobbying by Enron and others Blair intervened to dilute a ban on new gas-fired power stations, helping Enron expand its UK operations. Some thought its executives would offend him with their Texas swaggering. In fact, he seems infatuated with hormonal US commercialism. Enron won at every turn.
Greg Palast is an investigative journalist who writes a column called “Inside Corporate America” for the Observer, Britain’s most respected Sunday newspaper. View all of Greg’s columns at http://gregpalast.com