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Enron Pipedreams Buried in Afghanistan

BY RON CALLARI
03.02.2002 | POLITICS

Enron is a scandal so enormous that it's hard to wrap your mind around it. Not just a single financial disaster, it's actually a jigsaw of interlocking scandals, each outrageous in its own right. There's Enron the Wall St. con game, where company bookkeepers used sleight of hand to turn four years of steady losses into stunning profits. There's Enron the reverse Robin Hood, which stole from its own employees even as its executives were hauling millions of dollars out the backdoor. There's Enron's Ken Lay the Kingmaker, who used the corporation's fraudulent wealth to broker elections and skew public policy to his liking. And then there are the Enron cover-ups, as documents are shredded and the White House seeks to conceal details about meetings between Enron and Vice President Cheney.

The cover-ups are still very much a mystery. It is doubtful that anyone will ever know how many documents were fed into the shredder before and after the corporation declared bankruptcy, or what those documents said. It is also difficult to surmise what the White House is fighting so hard to keep secret, even going to the length of redefining executive privilege and inviting the first Congressional lawsuit ever filed against a president. Given that Enron's influence on Dick Cheney's energy plan is already fairly well-established--seven out Ken Lay's eight energy policy recommendations were adopted by the Vice President--it's hard to imagine what else might be so damaging.

The Big Secret might, however, be that the highest levels of the Bush Administration knew during the summer of 2001 that the largest bankruptcy in history was imminent? Or it might be that Enron and the White House were working closely with the Taliban only weeks before the Sept. 11 attack. Was a deal in Afghanistan part of a desperate last-ditch "end run" to bail out Enron? Here's a tip for Congressional investigators and federal prosecutors: Start by looking at the India deal. Closely.

Enron had a $3 billion investment in the Dabhol power plant, near Bombay on India's west coast. The project began in 1992, and the liquefied natural gas- powered plant was supposed to supply energy-hungry India with about one-fifth of its energy needs by 1997. It was one of Enron's largest development projects ever (and the single largest direct foreign investment in India's history). The company owned 65 percent of Dabhol; the other partners were Bechtel, General Electric and State Electricity Board.

The fly in the ointment, however, was that the Indian consumers could not afford the cost of the electricity that was to be produced. The World Bank had warned from the beginning that the energy would be too costly, and Enron proved the Bank right. Power from the plant was 700 percent higher than electricity from other sources.

Enron had promised India that the Dabhol power would be affordable once the next phase of the project was completed. To cut expenses, the company had to find cheap gas to fuel it. So it started burning naphtha, with plans to retrofit the plant to gas once it was available.

Enron's original source of liquefied natural gas (LNG) was to be Qatar, where the company had a joint venture with the state-owned Qatar Gas and Pipeline Company. The Qatar project, in fact, was one of the reasons why Enron selected India to set up Dabhol: it would ensure that the Qatar gas got sold. In April 1999, however, the project was cancelled because of the global oil and gas glut. With Qatar gone, the Indian plant remained a financial deadweight, and Enron was back to square one in trying to find it an inexpensive LNG supply source.

Enter the Afghanistan connection

The "Great Game" in Afghanistan was once about czars and commissars seeking access to the warm water ports of the Persian Gulf. Today it is about laying oil and gas pipelines via the untapped petroleum reserves of Central Asia, a region previously dominated by the former Soviet Union, with strong influence from Iran and Pakistan. Studies have placed the total worth of oil and gas reserves in the Central Asian republics between $3 and $6 trillion.

Who has access to that vast sea of oil? Right now the only existing export routes from the Caspian Basin lead through Russia, but U.S. oil companies have longed dreamed of their own pipeline routes. And the U.S. government wants to dominate Central Asian oil in order to reduce dependency on resources from the Persian/Arabian Gulf, which it cannot control. Thus the U.S. is poised to challenge Russian hegemony in a new version of the "Great Game."

Construction of oil and natural gas export pipelines through Afghanistan was under serious consideration during the Clinton years. In 1996, Unocal -- one of the world's leading energy resource and project development companies -- won a contract to build a 1,005-mile oil pipeline in order to exploit the vast Turkmenistan natural gas fields in Duletabad. The pipeline would extend through Afghanistan and Pakistan, and terminate in Multan, near the Indian border.

Multan was also the end point for another proposed pipeline, this one from Iran. This project never left the drawing boards, however; the pipeline would be much longer (over 1,600 miles) and much more expensive. Still, the route was being seriously considered as of early 2001, and it increased the odds that gas would be flowing into Multan from somewhere. And Unocal wasn't the only energy company laying pipe. In 1997, Enron announced that it was going to spend over $1 billion building and improving the lines between the Dabhol plant and India's network of gas pipelines.

The logic behind of this move is obvious to anyone who looks at a map: a proposed 400-mile extension from Multan, Pakistan to New Delhi, India would allow Caspian Sea gas to flow into New Delhi, on into Bombay, and then essentially into paydirt for Enron. It would be a plentiful source of ultra-cheap LNG that could supply Enron's plant in India for three decades or more. Aside from the route to Multan, another proposed spur of the pipeline would have ended on the Pakistani coast, where an estimated one million barrels of LNG per day could be shipped to Japan and Korea, the largest consumers of LNG in the world. For Enron, there was an upside here as well. Entering the South Eastern Asian markets, which offered vast growth potential, could position the company well in the global marketplace and offset some of their losses in other markets.

There was one gotcha: It looked like the Trans-Afghan section of the pipeline might never be built. Afghanistan was controlled by religious extremists, and they didn't want to cooperate.

Enter the Taliban

From 1997 to as late as August 2001, the U.S. government continued to negotiate with the Taliban, trying to find a stabilizing factor that would allow American oil ventures to proceed with this project without interference. To this end, in December 1997, Unocal invited a Taliban contingency to Texas to negotiate protection while the pipeline was under construction. At the end of their stay, the Afghan visitors were invited to Washington to meet with officials of the Clinton Administration.

But in August, 1998, terrorists linked to Osama bin Laden bombed two U.S. embassies in East Africa. The United States responded by firing cruise missiles into Afghanistan and Sudan, and the state department vocally condemned the Taliban for harboring bin Laden. Fearing the negative PR fallout of working in Afghanistan, Unocal said it was abandoning plans for a route through the country.

But the deal was hardly dead--there was too much potential for too much money. Although Unocal had the largest share, the Central Asian Gas Pipeline (CentGas) consortium had six other partners, including companies in Saudi Arabia's Delta Oil Company -- the next largest shareholder, with 15 percent -- and groups in Japan, Korea, Indonesia, Pakistan, and Turkmenistan. They vowed to continue the project, and had strong national interests in seeing the Afghanistan pipeline built.

The U.S., meanwhile, looked for other options. The federal Trade and Development Agency commissioned a feasibility study for an improbable east- to- west route that would cross the Caspian Mountains and end at a Mediterranean seaport in Turkey. The company hired to perform that study was Enron. The pipeline would run through Turkmenistan, and that nation's government signed an agreement saying that if it were constructed, the builders would be Bechtel and GE Capital Services--the same American companies that were Enron's business partners in the Dabhol power plant.

The company, in other words, had its bases covered. No matter which direction Central Asia's natural gas eventually flowed, Enron would profit. Should it go south towards ships waiting on the Pakistan coast, it would be still only a few hundred miles at sea to Dabhol. The trip from the Mediterranean would be farther (and thus more expensive for Enron to buy gas), but it was also the least likely route to be constructed. Estimated costs were almost $1 billion more than the route through Afghanistan, and engineering plans had not even started. No, the only practical route for the Caspian Sea gas was through Afghanistan and Pakistan to the border of India. All that was lacking was the political will to make it happen.

Enter George W. Bush

George W. Bush's long and personal relationship with Enron's former CEO Kenneth Lay is now well known, as is Lay's generous contribution of over $600,000 to advance the political career of the man who now holds the White House. Not so well known is how Bush has helped Enron.

The Bush-Enron relationship dates back to well before the current crisis. In 1988, Bush allegedly called Argentina's Minister of Public Works to pressure him into awarding Enron a $300 million contract shortly after his father won the presidency. Rodolfo Terragno recalled that the younger George Bush said that giving Enron the project "would be very favorable for Argentina and its relations with the United States." Terragno didn't know whether this message was from the White House or whether Bush was working a business deal on his own.

At the time, the Bush Sr. campaign denied that George W. had made the call, and it is possible that is brother Neil--who would later pursue an oil-drilling deal in Argentina--had been the one to do it. This was, however, the time period when Lay began to cultivate his friendship with George W., and there is no known association between Neil Bush and Lay. In any event, even if it was Neil, the incident still speaks to the family connections with Enron, and its willingness to help the company out.

And by the time George W. became president, Enron certainly needed help. The India project was in serious trouble, and Enron's reputation as a bully in India had become legendary. The Human Rights Watch released a report that indicated human rights violations had occurred as a result of opposition to the Dabhol Power project. Beginning in late 1996 and continuing throughout 1997, leading Indian environmental activists and employee organizations organized to oppose the project and, as a direct result of their opposition, were not paid and subjected to repeated short-term detention. One ghastly report actually states that police stormed the homes of several women in western India who had led a massive protest against Enron's new natural-gas plant near their fishing village. According to Amnesty International, the women were dragged from their homes and beaten by officers paid by Enron.

The situation came to a head just a few months after the Bush inauguration. Contractors walked off the job, saying they hadn't been paid in over a month. The [India state of] Maharashtra Electricity Board stopped paying for Dabhol's power in May 2001, saying it was too expensive. Enron counter-charged that the Board owed them $64 million. The plant was closed, although it was said to be 97 percent complete. The one missing ingredient that hade undone the deal was simple: the absence of cheap, cheap, natural gas.

Enter Dick Cheney

Scarcely a month after Bush moved into the White House, Vice President Cheney had his first secret meeting with Ken Lay and other Enron executives on February 22, 2001. Other meetings followed on March 7 and April 17. It is the details of these meetings that the Bush Administration has sought to keep private.

It's clear the Cheney had his own conflicts of interest with Enron. A chief benefactor in the Trans-Caspian pipeline deal would have been Halliburton, the huge oil pipeline construction firm that the Vice President had previously headed. After Cheney's selection as Bush's Vice Presidential candidate, Halliburton also contributed a huge amount of cash into the Republican ticket's campaign coffers.

So the obvious question: Did Enron lobby Cheney for help in India? It has already been documented that in February of 2001, the Vice President's energy task force changed a draft energy proposal to include a provision to boost oil and natural gas production in India. The amendment was so narrow, in fact, that it apparently was targeted only to help Enron's Dabhol plant in India. Later, Cheney stepped in to try to help Enron collect its $64 million debt during a June 27 meeting with India's opposition leader Sonia Gandhi. But behind the scenes, much more was cooking.

A series of email memos obtained by the Washington Post and New York Daily News in January revealed that the National Security Council led a "Dabhol Working Group" composed of officials from various Cabinet departments, during the summer of 2001. The memos suggest that the Bush Administration was running exactly the sort of "war room" that was a favorite subject of ridicule by Republicans during the Clinton years.

The Working Group prepared "talking points" for both Cheney and Bush and recommended that the Administration "broaden the advocacy" of settling the Enron debt. Every development was closely monitored: "Good news" a NSC staff member wrote in a e-mail memo: "The Veep mentioned Enron in his meeting with Sonia Gandhi." The Post commented that the NSC, in trying to arrange a dinner meeting between Lay and India's national security adviser, Brajesh Mishra, went so far that it "acted as a sort of concierge service for [the] Enron Chairman..."

While lobbying India, it appears that the Bush Administration was also raising the heat on the Taliban to allow the pipeline. The book "Bin Laden: the Forbidden Truth" by Jean-Charles Brisard and Guillaume Dasique, claims that the U.S. tried to negotiate the pipeline deal with the Taliban as late as August, 2001. According to the authors, the Bush Administration attempted to get the Taliban on board and believed they could depend upon the regime to stabilize the country while the pipeline construction was underway. Bush had already indirectly given the Taliban $43 million for its ostensible efforts to stamp out opium-poppy cultivation. Numerous pundits decried this "award" at the time it took place; in light of current circumstances, it's worth considering that the aid was not an award at all, but a bribe.

By this point Enron was unraveling at the seams. Yet in early August Kenneth Lay seemed optimistic, even exuberant. Although it's possible that he was whistling past the graveyard, it also possible that he was privy to inside information, and that based on this information he truly felt his future was not bleak at all. The last meeting between U.S. and Taliban representatives took place five weeks before the attacks on New York and Washington; on that occasion, Christina Rocca, in charge of Central Asian affairs for the U.S. government, met the Taliban ambassador to Pakistan in Islamabad on August 2, 2001. Rocca said the Taliban representative, Mr. Zaeef, was aware of the strong U.S. commitment to help the Afghan people and the fact that the United States had provided $132 million in relief assistance so far that year.

Lay's last documented e-mail was sent on August 27th, about the same time the Taliban allowed the International Red Cross to visit jailed foreign aid workers in Afghanistan. In it, Lay waxes optimistic about the strength and stability of his company, and exhorts his employees to buy into the company's stock program. This exhortation has been portrayed as an act of unmitigated meanspiritedness, sending his employees over the cliff for no good reason. But if Lay was anticipating a new pipeline deal, and an Enron contract, courtesy of George W. Bush, then he had reason to be optimistic about the future. (But not enough reason, of course, to stop him from selling his own stock and parachuting away. The risks would always be borne by others).

Even though the Trans-Caspian pipeline and the extension into India would be years from completion, Enron's conceit of working above the law was a guiding beacon in all of its transactions. The company had played the game of subterfuge for so long that it was all but expert at covering its tracks. Even if Lay knew at this point that bankruptcy was imminent, Enron had always survived major hurdles in the past. The possibility of a total meltdown was most likely not even a consideration--at worst, there might be an 11th hour federal bailout.

Based on the records available, however, it seems that relationships became strained. The Taliban demanded that the U.S. reconstruct Afghanistan's infrastructure in exchange for building the pipeline, and demanded as well that the pipeline be open for local consumption. The U.S. wanted a closed pipeline that pumped gas for export only, and it had no interest in helping rebuild the country. Negotiations devolved into threats: "we'll either carpet you in gold or carpet you in bombs" became a mantra in the press, one that underscored America's new willfulness at the table. Amid these acrimonious circumstances, sometime in late August, it seems, the whole deal went sour. The pipeline became a no-go.

This left Enron badly exposed. The company had one last card to play, and that was selling the Dabhol plant for quick cash--if it could. If the company could get its asking price of $2.3 billion, then Enron could be pulled out of its bankruptcy nosedive.

In late August, Lay appeared to threaten India in an article in the London Financial Times, stating that Enron expected to be paid full price for the plant, and that anything less might elicit a severe backlash. "There are laws that could prevent the U.S. government from providing any aid or assistance to India going forward if, in fact, they expropriate property of U.S. companies," he said. When Indian officials called these statements "strong arm tactics," an Enron statement claimed Lay "was merely referring to U.S. laws." Lay again appeared to threaten India, albeit in more muted tones, in a September 14 letter to the Prime Minister, when he insisted that the $2.3 billion price was reasonable because they had a "legal claim" of up to $5 billion

All of this was made moot on November 8, when whatever ground Enron was standing on drastically gave way. On that day the company disclosed that it had overstated earnings dating back to 1997 by almost $600 million. That same day, an e-mail ("Importance: High"), whose sender and recipient are blacked out, warned, "President Bush cannot talk about Dabhol as was already mentioned." The memo also said that Bush economic adviser Lawrence Lindsey could not discuss Enron either. Lindsey had been an Enron consultant.

The end came in December 2001, as Enron fired the 300 remaining workers at the Indian plant. Enron also filed a $200 million claim with the U.S. government's Overseas Private Investment Corporation, a U.S. taxpayer-funded insurance fund for American companies abroad, in an attempt to recoup losses from the Dabhol Power Corporation.

On the last day of the year, President Bush appointed Zalmay Khalilzad as his special envoy to Afghanistan. Khalilzad is a former Unocal consultant, whose positions on Afghanistan changed in sync with Unocal's own. When it looked like the pipeline would be built in 1996, Khalilzad said the U.S. should work with moderate elements in the Taliban. By 2000, when Unocal was out of the project, Khalilzad was writing that the U.S. must undermine the Taliban.

Now the Taliban is gone, and it's clear that the Great Game is once again afoot. Today, Khalilzad is the Special Assistant to the President and the National Security Council member responsible for setting up the post-Taliban regime in Afghanistan. International oilmen euphemistically call the project the new "Silk Road." On February 8, Afghanistan's interim leader, Hamid Karzai, and Pakistan's president agreed to revive plans for a Trans-Afghanistan route for Iranian gas. The next day, Turkmenistan said it hoped its own Trans-Afghanistan route would soon be built. It's all but certain that gas from somewhere will reach Multan--and the Dabhol plant beyond.

For investors, Dabhol should be a bitter lesson. Enron was a company known for its hubris; one that tried to accomplish too much, too quickly, and by playing too fast and loose with financial realities. In the end, Enron found that its far-reaching global clout could no longer circumvent the rules of basic economics--nor could it count on the players they helped bring into power.

A federal court ruled on February 27 that Cheney would have to turn the records of his energy dealings over to Congress. It is unclear at this point how cooperative the Administration will be in abiding by this order, and equally unclear how many records are left. But what is known already suggests that not only domestic energy policy, but also foreign policy, had been redesigned to suit Enron's needs. It is also entirely possible that in going to such great lengths to help a troubled company, the Administration became aware of how desperate Enron's situation was, and that it therefore had foreknowledge of the largest bankruptcy in American history. The American people are rarely treated to "full investigations"; often a few juicy tidbits re unearthed, a few mid-level hacks are sacrificed, and the posse stops at the gates of the mansion. One hopes that we will see an exception with Enron, no matter if it goes to the current Administration, the previous one, or both. In the pursuit of truth, now is not the time to fire rhetorical volleys across the moat. Now is the time to ransack the castle.

* * *

How Deeply were Bush/Cheney involved?

Was the Bush White House negotiating with the Taliban to help Kenneth Lay and Enron? Were Cabinet members and the National Security Council running a "war room" to save the company that was the closest friend of the president and vice president? As of this writing in February 2002, little is really known.

But if the White House, Enron, and Dabhol timelines are combined, curious details appear. On November 6, 2001, a top official in the Bush Administration tells India that a payoff to Enron had risen "to the highest levels of the United States government." Five days earlier, Bush had signed Executive Order 13233, which limits public access to papers of all presidents since 1980--including George W. Bush.

Read the timeline:

June 5, 1992: Enron sent a group of officials to New Delhi to make arrangements to survey the land around Dabhol for the purpose of building a large power plant.

June 20, 1992: Enron and the government of the state of Maharashtra signed a non-binding memorandum of understanding to build the plant. This led to formation of the Dabhol Power Company (DPC), a joint venture of Enron and two other American corporations, General Electric and Bechtel.

February, 1993: A formal agreement was signed for a plant that could generate about 2450 megawatts at an approximate cost of $3 billion.

April, 1993: Heinz Vergin, World Bank manager for India, rejects Enron's loan application, saying that the Dabhol plant is "not economically viable."

November, 1993: The Central Electricity Authority in New Delhi gave provisional clearance to the project. It was the largest single foreign investment in India.

1994: The Washington-based Export-Import Bank approved a $302 million loan toward a $3 billion Enron-controlled power plant in India. President Clinton took an interest in the deal, asking the U.S. ambassador to that country and his former chief of staff, Thomas F. "Mack" McLarty, then a presidential adviser, to monitor the proposal.

August, 1995: Clinton administration's cabinet members, Treasury Secretary Robert Rubin and Energy Secretary Hazel O'Leary, personally urged India to accept Enron's proposed project.

October, 1995: Indian Prime Minister Rao and Iranian Foreign Minister Ali Akbar Velayati discussed a routing alternatives for a natural gas pipeline, including one which would run through Turkmenistan, Afghanistan, and Pakistan.

1996: "Mack" McLarty, who later became a paid Enron director, spoke with Ken Lay on several occasions about the plant. Four days before India granted approval for Enron's project, the Houston-based firm contributed $100,000 to the Democratic Party.

1996: Enron signed a contract giving it rights to explore 11 gas fields in Uzbekistan, a project costing $1.3 billion. The goal was to sell gas to the Russian markets, and link to Unocal's southern export pipeline crossing Turkmenistan, Uzbekistan and Afghanistan. January 8, 1996: Enron and the state government of Maharashtra reached a new agreement that would shift some of the construction costs and lower the electricity tariffs.

June,1997: As an advisor for Unocal, Zalmay Khalilzad drew up a risk analysis of a proposed gas pipeline from the former Soviet republic of Turkmenistan across Afghanistan and Pakistan to the Indian Ocean. He participated in talks and social meetings between Unocal and Taliban officials in 1997.

June 3, 1997: Police stormed the homes of several women in western India who had led a massive protest against Enron's new natural-gas plant near their fishing village. According to Amnesty International, the women were dragged from their homes and beaten by officers paid by Enron.

November 14, 1997: Enron International's CEO Rebecca Mark unveiled an energy plan that included a $300 million project to build a pipeline from Dabhol to Hazira and to the North to add 1200 km of complimentary pipeline system to the existing HBJ pipeline at a cost of $900 million.

December 7, 1997: Unocal invited a Taliban contingency to visit them in Houston, Texas, housed them in five-star hotels, dined them at the home of Unocal VP and medically treated the former foreign minister, Mullah Mohammed Ghaus before he returned home.

February 12, 1998: Testimony of John J Maresca, vice-president, international relations, Unocal Corporation was heard by the House Committee on International Relations and the Subcommittee on Asia and the Pacific regarding "a proposed extension (of the proposed Trans-Caspian pipeline) would link with the SUI pipeline system, moving gas to near New Delhi, where it would connect with the existing HBJ pipeline..."

June 23, 1998: In a speech to the "Collateral Damage Conference" of the Cato Institute, Cheney said, "the good Lord didn't see fit to put oil and gas only where there are democratically elected regimes friendly to the United States. Occasionally we have to operate in places where, all things considered, one would not normally choose to go. But, we go where the business is."

July 29 ,1998: The Department of State is pleased that Turkmen Minister of Oil and Gas Arazov announced Turkmenistan's selection of the U.S. company Enron to carry out a feasibility study funded by the Trade and Development Agency for a Trans-Caspian gas pipeline.

August 20, 1998: U.S. Tomahawk cruise missiles target Kandahar Afghanistan and sites believed to be Osama bin Laden's training camps. Shortly after, the UN imposes sanctions on Afghanistan that isolate the nation.

January 25, 1999: Human Rights Watch released a report that indicated human right violations had occurred as a result of opposition to the Dabhol Power project. Beginning in late 1996 and continuing throughout 1997, leading Indian environmental activists and representatives of villagers' organizations in the affected area organized to oppose the project and, as a direct result of their opposition, were subjected to beatings, repeated short-term detention and were not paid.

February, 1999: Joint agreement signed by Turkmenistan and two American companies, Bechtel and GE Capital Services to build a $2.5 billion Trans-Caspian pipeline, after Enron conducted a feasibility study.

November, 1999: Enron purchased 5.1 percent of the company that operates the country's sole long-distance gas pipeline, which runs from the offshore gas fields in the Bombay High area to the country's capital, New Delhi.

June-Oct 2000: Maharashtra government allies demand scrapping the project because of the cost of the power it produces.

Early 2001: Vice President Cheney held several secret meetings with top Enron officials, including its Chairman Kenneth Lay. These meetings were presumably part of Cheney's non-public Energy Task Force sessions. A number of Enron stockholders, including Defense Secretary Donald Rumsfeld and Trade Representative Robert Zoellick, became officials in the Bush administration. In addition, Thomas White, a former Vice Chairman of Enron and a multimillionaire in Enron stock, currently serves as the Secretary of the Army.

February, 2001: Vice President Cheney's energy task force changed a draft energy proposal to include a provision to boost oil and natural gas production in India. The amendment was so narrow that it apparently was targeted only to Enron's power plant in India.

March, 2001: Laila Helms, the part Afghan niece of the former CIA director and former U.S. ambassador to Tehran Richard Helms is described as the Mata-Hari of U.S.-Taliban negotiations. Ms Helms brought Sayed Rahmatullah Hashimi, an adviser to Mullah Omar, to Washington after the Taliban had destroyed the ancient Buddhas of Bamiyan. Hashimi met the directorate of Central Intelligence at the CIA and the Bureau of Intelligence and Research at the State Department.

April, 2001: An Enron memo, which Lay gave Cheney during their one-on-one meeting, makes eight energy-policy recommendations. Seven out of eight recommendations were adopted in the administration's final energy plan.

May, 2001: A conference held at the Brookings Institution provides evidence that the exploitation of Caspian Basin and Asian energy markets was an urgent priority for the Bush administration, and the centerpiece of its energy policy

May 17, 2001: The U.S. indirectly gives $43 million to Afghanistan's Taliban government as a reward for its efforts to stamp out opium-poppy cultivation. The same day, White House's energy policy recommended, "the president direct the Secretaries of State and Energy to work with India's Ministry of Petroleum and Natural Gas to help India maximize its domestic oil and gas production."

June, 2001: Construction halted on the Dabhol plant.

June 27, 2001: Cheney stepped in to try to help Enron collect a $64 million debt from Dabhol. Conducted at a Washington meeting between Cheney and the leader of India's opposition, Sonia Gandhi.

June 28, 2001: "Good news" a NSC staff member wrote in a e-mail memo: "The Veep mentioned Enron in his meeting with Sonia Gandhi." An unnamed government staff member wrote that (s)he would "ask the Indians" if Kenneth Lay "is invited to the dinner" with India's national security adviser, Brajesh Mishra. The memo is part of a series uncovered by the Washington Post that revealed that the National Security Council led a "Dabhol Working Group."

June 30, 2001: Another Dabhol Working Group memo states the need to "broaden the advocacy" and recommends diplomatic action by the U.S. Embassy and the Ambassador. The memo also notes that Christina Rocca, in charge of Central Asian affairs for the U.S. government, met with a top aide to the Indian Prime Minister. The memo is marked as a "Confidential Business Communication."

August 2, 2001: The last meeting between U.S. and Taliban representatives took place five weeks before the attacks on New York and Washington, the analysts maintain. On that occasion, Christina Rocca met the Taliban ambassador to Pakistan in Islamabad.

August 27, 2001: Kenneth Lay wrote another email to his employee/stockholders extolling the value of an employee stock option program, describing a "significantly higher price" the stock would bring in the near future.

September 5, 2001: Lay announces that the company will divest itself of $4-$5 billion in assets in the next two years.

September 10, 2001: "Those who control the oil routes out of Central Asia will impact all future direction and quantities of flow and the distribution of revenues from new production," wrote energy expert James Dorian in Oil & Gas Journal, published the day before the terrorist attacks.

September 14, 2001: Unocal issued the following statement: "The company is not supporting the Taliban in Afghanistan in any way whatsoever. Nor do we have any project or involvement in Afghanistan." Lay also writes to the Prime Minister of India, insisting that his $2.3 billion asking price is reasonable "compared to the size of our legal claim," which Enron placed at $5 billion.

September 19, 2001: Enron invokes a clause in its Dabhol power plant contract, claiming that because the Maharashtra State Electricity Board has violated its power purchase agreement, the Maharashtra state government and the government of India are liable for $5 billion.

October 3, 2001: Cheney meets with India External Affairs Minister Jaswant Singh. The NSC sends "Dabhol talking points" to Cheney's staff.

November 1, 2001: Bush signed Executive Order 13233 which limits public access to papers of all presidents since 1980--including George W. Bush. Another memo written this day states that talking points for Bush were prepared for his meeting with the India Prime Minister. Bush did not discuss Enron during the meeting.

November 6, 2001: OPIC President Peter Watson contacts a top aide of the Indian Prime Minister: "The acute lack of progress in this matter has forced Dabhol to rise to the highest levels of the United States government."

November 8, 2001: Enron president Lawrence "Greg" Whalley called Treasury Undersecretary Peter Fisher in late October and disclosed that it had overstated earnings dating back to 1997 by almost $600 million. That same day, an e-mail ("Importance: High"), whose sender and recipient are blacked out, warned, "President Bush cannot talk about Dabhol."

November 9, 2001: An e-mail noted that Lawrence Lindsey, chairman of Bush's National Economic Council, had met India's National Security Adviser Brajesh Mishra on Nov. 7, but it said Lindsey was "advised that he could not discuss Dabhol." Lindsey is a former Enron consultant and had served on its board of advisers.

Late November, 2001: Lay called Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans seeking a last-minute federal bailout and was turned down.

December 2, 2001: Enron files for Chapter 11 bankruptcy.

December 27, 2001: Bush Administration repealed a Clinton-era rule that prevents the government from awarding federal contracts to businesses that have broken environmental, labor, tax, civil rights or other laws.

December 31, 2001: President Bush appointed a former aide to Unocal, Afghan-born Zalmay Khalilzad, as special envoy to Afghanistan. The nomination was announced nine days after the US-backed interim government of Hamid Karzai took office in Kabul.

January 17, 2002: Enron reportedly filed an approximately $200 million claim with the U.S. government's Overseas Private Investment Corporation in an attempt to recoup losses from the Dabhol Power Corporation.

January 18, 2002: According to documents released on this date, it was noted the Bush administration intervened with top Indian officials last year in a bid to salvage the Enron project in India. The White House said the effort, involving Vice President Dick Cheney and other senior officials, was justified because the $2.9 billion Dabhol power project was financed in part through the U.S. government's Overseas Private Investment Corporation (OPIC), a taxpayer-backed agency that provides "political risk" insurance and loans to help U.S. companies invest in developing nations. The White House denied the push was influenced by Enron's political contributions.

January 28, 2002: U.S. Ambassador Robert Blackwell addresses an Indian energy industry meeting and demands India honor the "sanctity of contract" and make good on the Enron debt, warning that India's hopes for "big-time international investment" could be harmed otherwise.

February 8, 2002: Afghanistan's interim leader Hamid Karzai said he and Pakistani President Pervez Musharraf had agreed to revive a plan for a trans-Caspian gas pipeline from Turkmenistan to Pakistan.

February 9, 2002: Turkmenistan hopes the fragile peace in neighboring Afghanistan will allow work to resume on the natural gas pipeline connecting to Pakistan.

February 20, 2002: OPIC reveals that it gave Enron $554 mllion in loans and $204 million in insurance. Congress also learns the Export-Import Bank loaned $675 million o Enron and associated companies.

Proposed pipeline route:

  1. Starting in the mid-1990s, Unocal and its partners planned to build a 1,000 mile gas pipeline from Turkmenistan to Multan, Pakistan. Cost: about $2 billion (all pipeline routes shown are very approximate). Also considered was a more difficult route from Iran to Multan, which is not shown here.

  2. A proposed 400-mile extension from Multan to New Delhi would bring some of the ultra-cheap gas into India's network of gas pipelines. Cost: $600 million 3.

  3. The HBJ pipeline carries most of India's liquid natural gas.

  4. Hazira, north of Bombay, is the end of the HBJ pipeline. But in 1997, Enron announced plans to link Dabhol to the Hazira terminal. Enron also said they were going to add to about 1500 miles to the HBJ pipeline. Costs: $300 million and $900 million, respectively.

  5. Any gas pipeline across Pakistan could have a spur to the seaport of Gwadar, where tankers could take gas to Korea and Japan, largest consumers of liquid gas in the world. A sea route from Gwadar to Dabhol would be even easier.

About the Author
Ron Callari is a freelance journalist and editorial cartoonist whose work has appeared in Alternet, Counterpunch, Sacramento News & Review, Albion Monitor and the World and I. He is author of "Uncle Dubya's Jihad Jamboree," published in 2005, and the creator of kidd millennium's editorial cartoons, www.kiddmillennium.com.
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