Crimes Against Nature (13 page)

The fossil fuel crew was among the first to benefit from the Inauguration Day freeze on environmental regulations. Many of Graham’s early moves to emasculate the country’s environmental laws seem motivated by his desire to fill up the coffers of the oil, gas, mining, and other utility companies. No industry gained more from the administration’s massaged data. But the first wave of looting was nothing compared to the spoils to come from rewriting the nation’s energy policy.

Days after his inauguration, President Bush launched the National Energy Policy Development Group, chaired by Dick Cheney.
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Commonly known as the energy task force, the group was convened ostensibly to analyze America’s energy needs and to develop recommendations for meeting those needs. But it behaved more like a band of pirates divvying up the booty.

Cheney was determined to operate his task force in total secrecy. His problem was the Federal Advisory Committee Act (FACA), which requires that the activities of groups that combine governmental and nongovernmental officials be fully disclosed to the public. Cheney decided to make an end run around FACA by limiting it to government officials.
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Other than being on Bush’s staff, the only qualification for membership on the task force seemed to be an energy-industry pedigree. Energy Secretary Spencer Abraham, a former one-term senator from Michigan who received $700,000 from the auto industry in his losing 2000 campaign, was Cheney’s number two.
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He would lead the fight to kill auto fuel efficiency. Joe Allbaugh, director of the Federal Energy Regulatory Commission, was a member of Bush’s “iron triangle” of trusted Texas cohorts.
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Allbaugh’s wife, Diane, was an energy-industry lobbyist for three firms — Reliant Energy, Entergy, and TXU — each of which paid her $20,000 during the last three months of 2000, just prior to the start of the task force’s deliberation.
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Joe Allbaugh participated in task force meetings on issues directly affecting those companies, including debates over environmental rules for power plants and — his wife’s specialty — electricity deregulation.

Other task force members included Commerce Secretary Don Evans, an old friend of the president’s from their early days in the oil business and former CEO of Tom Brown Inc., a Denver oil and gas company; Interior Secretary Gale Norton, who received more than a third of the $800,000 raised for her Senate campaign from the energy industry;
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and Treasury Secretary Paul O’Neill, former CEO of Alcoa.
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Recognizing that aluminum-industry profits are directly tied to energy prices, O’Neill promised to immediately sell his extensive stock holdings in his former company (worth more than $100 million) to avoid conflicts of interest, but despite his reputation for integrity, he delayed the sale until after the energy plan was released. By then, thanks partly to the administration’s energy policies, Alcoa’s stock had risen 30 percent.
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For three months, despite insistent protests from the press and environmental groups, the task force held closed-door meetings. Practically the only outsiders invited to share their views on energy policy were energy-industry representatives. Exactly who, of course, was a mystery to everyone outside the proceedings, as the task force refused to disclose names.

Finally, on May 17, 2001, the task force released the fruits of its labor, the Report of the National Energy Policy Development Group, which became the basis for the Republican-sponsored energy bill. The report was an orgy of industry plunder, transferring billions of dollars of public wealth to the oil, coal, and nuclear industries, which were already swimming in record revenues. (A few weeks earlier ExxonMobil had announced record profits, with earnings up 50 percent from a year earlier.
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) Paying lip service to conservation and environmental concerns, the report focused almost exclusively on deregulation, giant subsidies, and tax breaks that would benefit virtually every major polluter in the energy industry.
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For the first time in history, the nonpartisan General Accounting Office sued the executive branch, demanding access to the records of the task force.
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(A recent Bush appointee, federal judge John Bates, dismissed the case,
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and the GAO elected not to challenge the ruling.
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) Judicial Watch and the Sierra Club prevailed in another suit against Cheney under FACA.
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The U.S. Supreme Court accepted the case for review in December 2003.
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Three weeks later, Supreme Court Justice Antonin Scalia accepted a ride from Cheney on Air Force Two to a duck-hunting outing in Louisiana hosted by Diamond Services Corporation, an oil services company and major Republican Party donor.
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Scalia then famously refused to recuse himself from the case when the Supreme Court heard arguments in April, despite the clamor to do so by the plaintiffs, the Senate’s Democratic leadership, and editorial boards across the country, including those of the
New York Times,
the
Washington Post,
and even the conservative
Salt Lake Tribune,
which wrote, “Scalia’s prickly insistence that no reasonable person could question his impartiality in the matter suggests that the rarified air of the Supreme Court has addled the justice’s faculties somewhat.”
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In June 2004 the Supreme Court issued its decision, effectively foreclosing the release of the pages prior to the November election. Scalia’s concurring opinion urged dismissal of the case based upon executive privilege.

At the same time that the Sierra Club and Judicial Watch had filed their FACA case, the NRDC had also filed a Freedom of Information Act request with the Department of Energy, and when the department did not respond, we sued the DOE. On February 21, 2002, U.S. District Judge Gladys Kessler ordered Energy Secretary Spencer Abraham and other agency officials to turn over records relating to their participation in the work of the energy task force.
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Under this court order, the NRDC has obtained some 20,000 documents. Although the pages are heavily censored and none of the logs from Vice President Cheney’s meetings are included, the documents still allow glimpses into the sausage making.

Cheney, who had run Halliburton for five years in the 1990s, regarded himself an energy expert and considered public hearings or input from opposing factions mere interference.
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Paul O’Neill, who discussed his dissatisfaction with the energy task force in Ron Suskind’s
The Price of Loyalty,
told me he was initially optimistic that he could have a positive influence on the energy debate. But he quickly realized that sensible energy policy was not the committee’s agenda.

At its first official meeting, according to Suskind, the task force briefly discussed the California energy crisis and then Cheney took the helm, making clear that his first priorities were tax breaks and deregulation — both things that would enrich the energy industry at public expense without necessarily creating more energy. Cheney’s persistent theme was that the nation was facing catastrophic energy shortages, and that these so-called shortages could be used to justify billions in corporate subsidies to his energy cronies and the scuttling of health and environmental safeguards. Experts at the time were scoffing at the notion of an alleged energy crisis, but as Californians had learned, the perception of shortages, even when false, creates a huge bonanza for industry.

“I was against tax incentives that eventually were steam-rolled into the task force recommendation,” O’Neill told me. “Good business people don’t do things based upon tax code inducements. Tax cuts don’t increase industry’s appetite for more research or development, but they transfer the costs of what they are already doing to the public.”
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Cheney wasn’t terribly interested in what O’Neill had to say. Instead, he opened his door to industry titans, soliciting a wish list of recommendations from lobbying associations such as the American Petroleum Institute, the American Gas Association, the National Mining Association, and the Edison Electric Institute.
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To lobby for congressional passage of the Cheney energy plan, more than 400 industry groups enlisted in the Alliance for Energy and Economic Growth, a coalition created by oil, mining, and nuclear interests and guided by the White House.
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It cost $5,000 to join, “a very low price,” Wayne Valis, a lobbyist for the Nuclear Energy Institute, wrote in a fundraising letter.
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The prerequisite for joining, he noted, was that members “must agree to support the Bush energy proposal in its entirety and not lobby for changes.” Within two months, members had contributed more than $1 million. The price for disloyalty was expulsion from the coalition and possible reprisals by the administration, according to Valis. “I have been advised,” he wrote, “that this White House will have a long memory.”
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Task force members began each meeting with industry lobbyists by announcing that the session was off the record and that participants were to share no documents. A National Mining Association official told reporters that the industry managed to control the energy plan by keeping the process secret. “We’ve probably had as much input as anybody else in town,” he said. “I have to take my hat off to them — they’ve been able to keep a lid on it.”
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Through the winter and spring of 2001, executives and lobbyists from the oil, coal, electric-utility, and nuclear power industries tramped in and out of the cabinet room and Cheney’s office. Many of the lobbyists had just left posts inside Bush’s presidential campaign to work for companies that had donated lavishly to that effort. The National Mining Association, which contributed $575,496 to Republicans, had at least nine contacts with the task force, as did Westinghouse, which contributed $65,060. The American Gas Association, which contributed $480,478 to Republicans from 1999 to 2002, had at least eight contacts, as did CMS Energy, which contributed $357,715. The American Petroleum Institute, which contributed $44,301 to Republicans from 1999 to 2002, had contact with the task force at least six times, as did Exelon Corporation, which contributed $910,886.
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Executives from Enron, which contributed $2.5 million to the GOP from 1999 to 2002, had contact with the task force at least 10 times, including six face-to-face meetings between top officials and Cheney.
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After one meeting with Enron CEO Kenneth Lay, Cheney dismissed the request of California’s Governor Gray Davis to cap the state’s energy prices. According to evidence obtained by Congressman Henry Waxman of California, the task force “considered and abandoned plans to address California’s energy problems in its report.”
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Davis told me he’d met with Bush three times and with Spencer Abraham “many, many times” during that period to implore them to exercise federal authority to cap California energy prices. Bush refused, telling Davis that he believed in free markets.
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That denial would enrich companies like Enron and Diane Allbaugh’s client, Reliant Energy Services (which has since been indicted for orchestrating the California energy scam) and nearly bankrupt California.

Energy companies that had not ponied up remained under pressure to give to Republicans. When Westar Energy’s chief executive was indicted for fraud in December 2003, investigators found an e-mail written by Westar executives describing solicitations by Republican politicians for a political action committee controlled by Tom DeLay as the price for a “seat at the table” with the task force.
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When it was suggested that access to the administration was for sale, Cheney hardly apologized. “Just because somebody makes a campaign contribution doesn’t mean that they should be denied the opportunity to express their view to government officials,” he said in an interview with the Associated Press.
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Cheney’s ironfisted control of information extended to his relationship with the president. In one of the most frightening passages in Suskind’s book, O’Neill describes how Cheney directed testimony by cabinet officials to persuade President Bush of a looming national energy crisis that would justify giant tax breaks for big oil and big coal, new subsidies for the nuclear industry, and relief from environmental regulations for everyone. At the meeting, each cabinet official made a pre-arranged statement cleared by Cheney’s office and intended to add to the drumbeat of urgency. Cabinet officials were forbidden from engaging in free-ranging discussion in front of the president and were told that he would not read their reports or memos.

According to O’Neill, the president accepted Cheney’s recommendations without apparent curiosity or question. By the end of the meeting, having persuaded the president that the nation was facing a crisis, Cheney had a blank check for the obscene subsidies and deregulation that would be his gift to the energy industry.

Of course, although they met with hundreds of industry officials, Cheney and Abraham refused to meet with any environmental groups. But Cheney did make one exception to his policy of secrecy. On May 15, 2001, the day before the task force sent its plan to the president, CEOs from wind, solar, and geothermal energy companies were granted a short meeting with Cheney. Afterward, they were led into the Rose Garden for a press conference and a photo op.
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Comparing the final report with documents obtained by the NRDC, it’s clear that the big energy companies all but held the pencil as the task force crafted its report.
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The plan included several provisions authored by Chevron, including one that would make it much easier for certain companies to get EPA permits. A March 20, 2001, e-mail from the American Petroleum Institute to task force staffers contained a draft for an executive order that would require agencies to weaken environmental safeguards that might impact energy supplies, distribution, or use. Two months later, President Bush issued Executive Order 13211, which adopts the American Petroleum Institute’s recommendations verbatim.