G. Palast Nails Blackout Culprit -- ENRON!

[BushNixon04]

http://www.gregpalast.com/detail.cfm?artid=257&row=0

I can tell you all about the ne're-do-wells that put out our lights tonight. I came up against these characters -- the Niagara Mohawk Power Company -- some years back. You see, before I was a journalist, I worked for a living, as an investigator of corporate racketeers. In the 1980s, "NiMo" built a nuclear plant, Nine Mile Point, a brutally costly piece of hot junk for which NiMo and its partner companies charged billions to New York State's electricity ratepayers.

To pull off this grand theft by kilowatt, the NiMo-led consortium fabricated cost and schedule reports, then performed a Harry Potter job on the account books. In 1988, I showed a jury a memo from an executive from one partner, Long Island Lighting, giving a lesson to a NiMo honcho on how to lie to government regulators. The jury ordered LILCO to pay $4.3 billion and, ultimately, put them out of business.

And that's why, if you're in the Northeast, you're reading this by candlelight tonight. Here's what happened. After LILCO was hammered by the law, after government regulators slammed Niagara Mohawk and dozens of other book-cooking, document-doctoring utility companies all over America with fines and penalties totaling in the tens of billions of dollars, the industry leaders got together to swear never to break the regulations again. Their plan was not to follow the rules, but to ELIMINATE the rules. They called it "deregulation."

It was like a committee of bank robbers figuring out how to make safecracking legal.

But they dare not launch the scheme in the USA. Rather, in 1990, one devious little bunch of operators out of Texas, Houston Natural Gas, operating under the alias "Enron," talked an over-the-edge free-market fanatic, Britain's Prime Minister Margaret Thatcher, into licensing the first completely deregulated power plant in the hemisphere.

And so began an economic disease called "regulatory reform" that spread faster than SARS. Notably, Enron rewarded Thatcher's Energy Minister, one Lord Wakeham, with a bushel of dollar bills for 'consulting' services and a seat on Enron's board of directors. The English experiment proved the viability of Enron's new industrial formula: that the enthusiasm of politicians for deregulation was in direct proportion to the payola provided by power companies.

More....

[Not a robought]

1. this is great

thank you for posting this.

[On the Road]

2. Yes, I Want to Hear More, Though

I didn't know about the history of corruption in electrical utilities Palast mentions. It's just enough to be tantalizing.

I also want to understand better HOW deregulation caused the power failure. Are there specific safeguards that regulated utilites employ that deregulated ones didn't? There may be, but he doesn't go into them.

Relaxing regulations is sometimes the best thing to do, as long as it's done correctly. If deregulation caused the power outage, I would like to know how it went wrong and what a better regulatory mechanism would have been.