stock & other options

securities indemnity drugs spooks crooks armorers more PMCs local links R.Grossman Comverse Infosys energy nature brownwash Davy Crockett   §

corporate welfare   º       ARCHIVE SUPPLEMENT

An Arizona judge last month approved a $217 million settlement from Andersen to resolve lawsuits stemming from the Baptist Foundation of Arizona's 1999 bankruptcy. Plaintiffs claimed Andersen ignored or poorly investigated accounting problems that fueled the largest bankruptcy by a nonprofit agency in U.S. history.
Arthur Bowman, editor of Bowman's Accounting Report, said Andersen's downfall means the remaining Big 4 accounting firms have to be more scrupulous and more skeptical of clients, particularly if accounting practices are questionable. "Last year, we had no clue that one of the Big 5 would disappear by now and that is shocking,'' Bowman said. "This is a wake-up call to the other firms that they should be doing their work properly or they, too, could go down.''

KPMG tied to subprime lender's fall   Auditors' practices flagged in probe of New Century
3.27.08   Vikas Bajaj NY Times

E-mails uncovered in the investigation showed that some KPMG auditors raised red flags about the accounting practices at New Century, but that the KPMG partners overseeing the audits rejected those concerns because they feared losing a client.
From its headquarters in Irvine, New Century ruled as one of the nation's leading subprime lenders. But its dominance ended when it was forced into bankruptcy last April because of a surge in defaults and a loss of confidence among its lenders.

The report lays bare the aggressive business practices at the heart of the mortgage crisis.
“I would call it an incredibly thorough analysis,” said RiskMetrics analyst Zach Gast, who raised concerns about accounting practices at New Century and other lenders in December 2006. “This is certainly the most in-depth review we have seen of one of the mortgage lenders that we have seen go bust.”
A spokeswoman for KPMG, Kathleen Fitzgerald, took exception with the report's allegations. “We strongly disagree with the report's conclusions concerning KPMG,” she said. “We believe an objective review of the facts and circumstances will affirm our position.”

The report zeros in on how New Century accounted for losses on troubled loans that it was forced to buy back from investors such as Wall Street banks and hedge funds. Had it not changed its accounting, the company would have reported a loss instead of a profit in the second half of 2006.
The report said investigators “did not find sufficient evidence to conclude that New Century engaged in earnings management or manipulation, although its accounting irregularities almost always resulted in increased earnings.”
Even so, the profits were the basis for significant executive bonuses and helped convince Wall Street that the company was in fine health even as it was coming apart, the report contends.
  [ Then why aren't 'KPMG partners' in custody on fraud charges ?]

In bankruptcy court, creditors of New Century claim they are owed $35 billion. The company's stock peaked at $65.95 in late 2004 and was trading at a penny yesterday. A spokesman for New Century, which is being managed by a restructuring firm under the supervision of the bankruptcy court, said the company was pleased that the report had been published.
The investigation was led by Michael Missal, a lawyer and former investigator in the enforcement division of the Securities and Exchange Commission who was hired by the U.S. trustee overseeing the bankruptcy. Missal, who also worked on an investigation of WorldCom's accounting misstatements, concluded that KPMG and some former New Century executives could be legally liable for millions of dollars in damages because of their conduct.

In the aftermath of the Enron collapse, Arthur Andersen was indicted and convicted on obstruction-of-justice charges. The conviction was overturned by the Supreme Court in 2005, long after the company had ceased doing business.
Missal drew an analogy to Enron and said there was evidence that KPMG auditors had deferred excessively to New Century.
“I saw e-mails from the engaged partner saying we are at the risk of being replaced,” Missal said about a KPMG partner working on the audit of New Century. “They acquiesced overly to the client, which in the post-Enron era seems mind-boggling.”

In one exchange in the report, a KPMG partner who was leading the New Century audit responded testily to a specialist, John Klinge, at the accounting firm's national offices who was pressing him on a contentious accounting practice used by the company.
“I am very disappointed we are still discussing this,” the partner, John Donovan, wrote in the spring of 2006. “As far as I am concerned, we are done. The client thinks we are done.”
A national standards committee at the firm signed off on the company's approach. The accounting irregularities became apparent when a new chief financial officer, Taj Bindra, started asking New Century's accounting dept and KPMG to justify their approach beginning in November 2006.

Most of the mortgage company's executives from that period have resigned or been laid off. A spokesman for two of the company's three founders and top executives, Edward Gotschall and Robert Cole, said both cooperated with the investigation but did not have a chance to review the report. An attorney for Bradley Morrice, the third founder who was president and chief executive in 2006 and part of 2007, did not return a call seeking comment.
The three founders together made more than $40.5 million in profits from selling shares in the company from 2004 to 2006, according to an analysis by Thomson Financial. They collected millions of dollars more in dividends, salaries, bonuses and perks.

KPMG had a three-year relationship with the city of San Diego that had soured by the time they parted ways in 2007. The firm audited the city's long-delayed 2003 financial statements when San Diego faced federal probes and widespread criticism over the handling of its deficit-ridden pension system.
KPMG waited until two investigations, along with an internal inquiry, had been completed before concluding its audit. The work cost $6.6 million; the firm had been hired on a $250,000 contract.

SEC reaffirms independent fund oversight A week after a court told it to reconsider the rule, the agency again says chairmen and 75% of the directors must be free of ties to the companies. 6.30.05   Jonathan Peterson L.A. Times Wash.D.C.   Refusing to back down, a divided SEC 6.29.05 passed for the second time a rule requiring independent stewardship of the nation's mutual funds, just one week after an appeals court had ordered the agency to reconsider the measure. The SEC's swift answer to the court came over the objections of business groups and was among the final official actions of Chairman William H. Donaldson, who is leaving the commission today after a tenure that earned respect from shareholder activists but angered industry lobbyists who viewed him as an overly zealous regulator. "I think at this point, after 2 1/2 years, we've accomplished a lot," Donaldson told reporters after the sometimes heated session. "There's a lot that still needs to be done." Donaldson called the rule approved on a 3-2 vote Wednesday "the capstone" in a series of mutual fund reforms prompted by revelations of widespread trading abuses in 2003. The rule requires mutual funds to have chairmen who are free of business ties to the fund company, and 75% of a fund's directors must be similarly independent. It was originally approved last year over the objections of the U.S. Chamber of Commerce and other groups. On June 21, the U.S. Court of Appeals for the District of Columbia Circuit affirmed that the SEC had the authority to pass the rule, but ordered regulators to review its potential costs and to consider the alternative measure of disclosing a fund chairman's potential conflicts of interest. The Chamber of Commerce asserted Wednesday that the SEC had defied the appellate court by failing to seriously examine the financial ramifications of the rule. The group vowed to continue its legal challenge. "After a 7 day secret process, the SEC has recklessly readopted its flawed rule," Chamber president Thomas Donohue said in a statement. "This attempt to circumvent our legal and regulatory process will not stand up in court." Donaldson, however, maintained that the SEC had already gathered the required information before it first passed the rule last year. "I have the greatest respect for the court," Donaldson said after the meeting. "Without question, we had the facts." The flap comes at a pivotal moment for the commission, which oversees the nation's securities markets. The White House has nominated Rep. Christopher Cox (R-Newport Beach) to succeed Donaldson, although his confirmation hearing has not yet been scheduled. Meanwhile, Democrat Harvey J. Goldschmid plans to leave the SEC this summer, and the term of Democrat Roel C. Campos is ending. The Bush administration has not revealed whether it will go along with Democrats' wishes to renominate Campos and name SEC staffer Annette Nazareth, a Goldschmid protege, to fill his seat. Donaldson, a Republican appointee of President Bush, became controversial in some GOP and business circles for siding with Goldschmid and Campos on several high-profile votes, including the mutual fund independence rule. The outgoing chairman said he had "no concern about Congressman Cox." Donaldson said his goal for the mutual fund rules was to take "a 90-million-person investment vehicle and make it so it can grow as it should grow. Clearly, I would hope that Congressman Cox will agree with that." Critics of the mutual fund rule Wednesday accused Donaldson of rushing it through while the 3 member majority remained in place. GOP Commissioner Paul S. Atkins held up a multicolored poster of a timeline starting with the 6.21.05 court ruling, mockingly titled "SEC's Race to Beat the Clock." "The ink on the court's opinion was not even dry when the die was cast for today's preordained result," Atkins said. Critics also said the SEC should have solicited more public comment and further evidence to adequately meet the court's demand. "Today's action is nothing more than window dressing," GOP Commissioner Cynthia A. Glassman said. She added, "It strains all credibility to believe that the commission has mystically within the past week been able to conclusively estimate costs associated with the rule." When the SEC first passed the rule in July, Donaldson and others maintained that it would help reduce a conflict of interest now faced by board members of fund companies, that is, the pressure to put the profits of the fund company ahead of the best interests of fund shareholders. Making the fund company chairman independent was considered especially important because the chairman has the power to set the agenda at board meetings. The U.S. Chamber of Commerce filed suit soon after the measure was passed, alleging that the SEC had overreached its regulatory authority and failed to consider sufficiently the costs and consequences of such a requirement. The recent appeals court decision seemed to offer something to both sides, remanding the rule on certain technical grounds but affirming the SEC's authority. After a quick review, the SEC determined that it had all the cost information it needed on hand because of the initial rule-making effort. In addition, its staff once again considered and rejected the notion that disclosure of potential conflicts of interest was a strong enough measure to safeguard the interests of mutual fund shareholders. Eight in 10 of the nation's mutual funds use insiders as chairmen and would have to replace them under the SEC rule. The requirement that 75% of board members be independent is an increase from the current 50%. "The judgment was that costs were infinitesimal" in the context of an $8-trillion industry, Donaldson told reporters. "Costs were not important." But critics disputed that conclusion. U.S. Chamber of Commerce sr vp and general counsel Stephen Bokat said it made no sense to compare compliance costs with the amount of money in mutual funds because that approach told nothing about the effect on particular funds. "To me, it's like comparing apples and oranges," he said. Atkins said the SEC should have conducted a survey of investment companies to learn about the real world costs of adding independent directors and sought further evidence. But Donaldson maintained that action was preferable to further delay. "Our failure to act would, I fear, throw the future of this rule making into an uncertain limbo until a new chairman is confirmed," he said. "Today, however, we have intact the full complement of commissioners who have spent the last year and a half thinking about the issues raised in this rule making." Goldschmid accused GOP dissidents of "crocodile tears" in their complaints about the SEC rule making. "If we are wrong about being fully responsive, the court will certainly tell us so," he said. "But if we are right, we will have ensured an enormously better day for mutual fund shareholders."

Suit tests SEC rule on hedge funds   A money manager leads an effort to curb the agency's oversight of the trillion-dollar business. 1.2.06   Walter Hamilton L.A. Times New York   Phillip Goldstein is an unlikely torchbearer for the swashbuckling hedge-fund industry. He was a New York civil engineer for 25 years before launching his fund from his basement in Brooklyn, and he drives a Toyota Camry. "Before that, I had a Corolla," Goldstein said. But the 60-year-old Goldstein is leading a closely watched effort to prevent the Securities and Exchange Commission from greatly expanding regulation of the trillion-dollar hedge-fund business. He is suing to overturn a new rule that would force hedge funds managing more than $25 million to be registered with the agency by Feb. 1 and undergo periodic audits. He appeared to gain traction last month when a federal appeals panel peppered SEC attorneys with tough questions about the legal justification for the rule. The SEC says it must get a handle on the freewheeling investment pools that are mushrooming in popularity among pension funds, endowments and wealthy individuals. The agency points to a spate of recent hedge-fund frauds, as well as the collective force the funds have on financial markets. "Sometimes we learn about someone managing $1 billion when we read about them in the newspaper," said, SEC's investment management div. assoc. dir. Robert Plaze ision. "We're talking about a trillion-dollar industry whose activities have a broad impact on the markets and investors." Opponents counter that the rule would do nothing to combat fraud but would raise investor costs and sap some of the nimbleness that has made hedge funds successful. "They are a big part of what's keeping the economy growing and you don't want to hobble that," said Washington think tank Competitive Enterprise Institute economic-policy fellow John Berlau. Big-picture issues aside, Goldstein's case may be decided on narrow legal grounds. He contends that the SEC lacks authority to extend its regulatory reach, and is intentionally misinterpreting a 1940 law that has, until now, largely exempted hedge funds from oversight. The 3 federal appellate-court judges who heard the case in Washington on 12.9.05 focused on that issue. A ruling is expected this month. "It is clearly a means to get at their end, which is to regulate hedge funds," Goldstein said. "And that offends me. It's intellectually dishonest." There's little doubt that hedge funds have become a dominant presence in global securities markets and are taking a larger profile in the economy as a whole. Hedge funds are known for taking large risks in pursuit of market-beating returns and, thanks to the staid performance of equity markets, institutions and wealthy individuals are clamoring to get in. More than 8,000 hedge funds manage $1 trillion, accounting for as much as one-fifth of U.S. stock-trading volume. They're an increasing force in such areas as arranging mergers and lending money to companies. About 40% of hedge-fund managers already are registered with the SEC, either voluntarily or because of other requirements. However, some fund managers are going out of their way to avoid the agency. Funds must be registered if they allow investors to redeem their holdings within two years. Therefore, many funds' lock-ups have been extended to two years instead of one. The SEC rule generated significant controversy when the commission approved it by a 3-to-2 vote in late 2004. 2 GOP commissioners excoriated then-Chairman William H. Donaldson for backing the plan. Donaldson's successor, former Rep. Christopher Cox, R-Newport Beach CA, surprised Wall Street by promising to let the rule stand. But the plan has also divided consumer activists. Public Citizen energy research dir. Tyson Slocum says oversight is needed because of the funds' enormous economic effect. In the energy sector, for example, some of the surge in oil and gas prices is because of speculative hedge-fund trading, he said. "This is a very modest proposal, and the fact that the industry and its sympathizers are predicting so much gloom and doom is pretty crazy," Slocum said. "This is not heavy-handed regulation." But other consumer advocates question whether the SEC should devote limited resources to funds catering to the wealthy. The SEC is "there to protect investors," said University of Mississippi law professor Mercer Bullard. "They're not there to protect sophisticated investors." Goldstein doubts his investors will benefit from the rule. "I don't think it's going to do my investors any good, and it's going to be costly," he said. During an interview in his kitchen in suburban Westchester County, Goldstein, dressed in khakis, a green sweater and old sneakers, hardly fits the image of a hedge-fund manager, much less one with the temerity to take on the SEC. Goldstein specializes in value investing, often buying stakes in closed-end mutual funds or troubled companies and agitating for changes to boost stock values. He left Brooklyn for Pleasantville 8 years ago but boasts about how he still clings to frugality. "I still save returnable bottles," he said. "I've got a big bag of them in my garage." With prodding from a partner, Goldstein began his first fund, Opportunity Partners, in December 1992 with 10 investors and $700,000. He's never had a losing year, he said, and averages 16% annual returns. He oversees more than $250 million. Goldstein graduated from USC, and many of his investors live in the Southland. At the core of Goldstein's case is his belief that only Congress can extend regulation of hedge funds. "It offends me when agencies act like they're the king," he said. Although he's received moral support and a bit of financial help, no one has publicly joined Goldstein's effort. "Most people are afraid to sue the SEC," he said. "They're afraid of retribution." But Goldstein says he's not worried. "If you haven't done anything wrong, and I haven't, you shouldn't have anything to fear by speaking out," he said.

insurance Aetna posts loss on big charge 4.25.02   Susan Kelly Reuters CHICAGO   Aetna Inc. 4.25.02 posted large Q1 loss after charge of nearly $3 billion, but operating results improved as nation's second-largest health insurer raised premiums and shed unprofitable customers. ¹   Profit before special items rose to $64.9 million, or 44¢ a share, from $15 million, or 10¢ a share, a year ago. Revenue fell to $5.26 billion from $6.43 billion. Analysts' forecasts had ranged from a profit of 26¢ a share to a loss of 24¢ a share, with the median forecast for a profit of 3¢ a share. Shares of Aetna, which are at their highest level in more than a year, rose $6.62, or 15%, to $50.60 Thu. morning on NYSE. The 149-year-old insurance co., focused on returning to profitability after losing nearly $267 million last year before one-time items, has sharply increased premiums to catch up with rising medical costs. It has also culled its health plan enrollment to exclude unprofitable members. The company said the number of people covered by its health plans dropped to 15 million from 15.6 million in January and 18.3 million a year earlier, larger decline than some investors and analysts had expected. "They lost members, obviously, by raising prices, but revenues fell by less than medical costs," said Aetna investor Richard Pzena of Pzena Investment Management, which oversees $3.3 billion in assets. Aetna also gave its first earnings guidance for 2002 on an investor call, projecting operating earnings of about $200 million, or $1.25 to $1.35 per share, for the year. Excluding amortization of intangibles, Aetna forecast cash operating earnings of $285 million, or $1.80 to $1.90 per share, in 2002. The company predicted Q2 results would be below Q1 profit due in part to seasonal increases in medical costs, but Q3 & Q4 health business earnings would increase from Q2 levels. Including $2.97 billion noncash charge, mostly for the writedown of the value of past acquisitions, Hartford, CT based Aetna posted a net loss of $2.83 billion, or $19 per share. Last year's Q1 operating earnings were shown on an adjusted basis to reflect this year's change in accounting for goodwill. Before the change, Aetna reported Q1 operating loss last year of $36.6 million, or 26¢ per share. Aetna's commercial medical cost ratio, or medical costs as a percentage of revenues, fell to 86.2% from 90% a year ago. A lower figure leads to higher operating margins. At the company's health care division, operating earnings were $44.7 million in the quarter, compared with a loss of $72.7 million. Aetna's group insurance segment, which sells life, disability and long-term care insurance products to employers, generated operating earnings of $33 million, compared with $45.2 million a year earlier.

New US laws target terror funding 4.25.02   David Schepp BBC … Some argue the new regulations bring parity to a system that focused previously mainly on the banking industry. Only the insurance industry is exempt from the new requirements. … House passes terrorism insurance bill Senate to take up measure called vital to economy 11.15.02   Edward Walsh; H.Dewar & D.Milbank Wash.Post pA01 The House passed legislation last night to provide up to $100 billion to help the insurance industry cover claims from future terrorist attacks, sending the measure to the Senate, where majority leader Daschle D-SD has promised prompt action. The voice vote was a victory for Pres.Bush, who made the legislation's passage a priority in recent weeks, and for the insurance industry & developers of major, high-profile real estate projects. They have said the difficulty in obtaining affordable terrorism insurance has threatened many of their projects and undermined the overall economy. Racing to wind up its lame-duck session after the Nov. 5 midterm elections, the House derailed another major bill, to overhaul the nation's bankruptcy laws. On a procedural vote, lawmakers blocked consideration of the measure, effectively killing it for this Congress. Early today, in a parliamentary maneuver that critics likened to "the legislative equivalent of a fraternity stunt," the House reversed itself, dropped a controversial provision dealing with abortion clinics and sent the bill to the Senate, where foes said it would die. The House agreed to a 5 week extension of unemployment benefits for laid-off workers, over protests from Democrats that it was too little in light of high jobless rates in many areas. The Senate last night passed a more generous unemployment package that would extend benefits through March, raising the possibility of an end-of-the-session snag between the two houses. Meanwhile last night, White House & Senate negotiators agreed on legislation to create an independent commission to investigate 9.11.01 terrorist attacks. But an effort to revive a scaled-back version of Bush's proposal to bolster faith-based charities fizzled in the Senate when Democrats tried to add provisions, prompting a partisan deadlock. The key issue in the terrorism insurance debate centered not on the bill's insurance provisions but on Republicans' longstanding efforts to curb large jury awards in liability lawsuits. The House earlier passed a version of the bill that would have prohibited victims of terrorist attacks from seeking punitive damages from companies & real estate owners. Courts sometimes assess punitive damages on top of awards for monetary loss or pain and suffering to punish a company, manufacturer or other party deemed to have recklessly caused injuries or death. The Senate omitted the proposed ban, and the White House last month backed down from insisting on a ban on punitive damages. But the compromise bill that House & Senate negotiators agreed to did not satisfy House GOP leaders, who strongly supported the ban on punitive damages. They held up consideration of the measure by the full House until last night. In the end, virtually all opposition to the compromise bill evaporated as the House passed the measure by voice vote. The bill would provide as much as $100 billion over 3 years to cover 90% of future terrorism- related insurance claims. Govt aid would kick in when terrorism-related losses exceed minimum levels of an insurance company's premiums. Threshold levels to qualify for the aid would be 7% of premiums in the first year, 10% in the second year and 15% in the third year. The measure would consolidate civil lawsuits stemming from a terrorist attack in a single federal court for trial under the laws of the state where the attack took place. That provision, supported by Republicans, is designed to prevent defendants such as property owners & insurance companies from facing multiple claims in several jurisdictions from the same event. House Financial Services Committee chair Michael G. Oxley R-OH portrayed the bill as vital for economic development. He said a recent survey estimated that real estate projects worth more than $15 billion have been canceled or are being delayed because of a lack of terrorism insurance coverage. "This bill is absolutely necessary to the well-being of the American economy," Oxley said. "We need this backstop now." The only criticism of the bill was voiced by House majority whip Tom DeLay R-TX, reflecting disappointment that the punitive-damages provision had been dropped. He said the measure will provide "no protection from predatory trial lawyers." He said Bush agreed that this was a shortcoming in the bill and had promised to work to correct it. "We're going to lock the door to the federal treasury against trial lawyers," said DeLay, who will be House majority leader in the next Congress. There has been considerable debate over the need for the govt to intervene in the insurance market to help companies & real estate developers obtain coverage for acts of terrorism. After 9.11.01, many insurance companies stopped offering such coverage, while others steeply increased premiums. But in recent months, more terrorism coverage has become available. Some consumer groups charged that the federal legislation was little more than an insurance industry bailout. "It's a handout and it's way too generous," J. Robert Hunter, director of insurance for the Consumer Federation of America, said when House & Senate negotiators announced a compromise. Earlier this week, NYC Comptroller Wm C. Thompson Jr. issued a report detailing a steep increase in insurance premiums and a sharp drop in the availability of insurance coverage there after 9.11.01. He said premiums on some expensive Manhattan properties rose by 73%. "Insurance companies are taking advantage of New Yorkers," Thompson said. "They are not helping the city right now, and this is undermining our ability to retain and attract new business. Once again, New Yorkers are being penalized." In other congressional action yesterday, the Senate approved a bill meant to deter terrorism at the nation's 361 seaports. The House extended a law to prevent automatic cuts in Medicare and other entitlement programs and extended the 1996 welfare law through March.

Congressional pork

The pork game     perpetrators & profiteers
Even after 9/11, Congress's priorities are unchanged
5.13.02   Peter Cary & Ann M. Wakefield U.S. News&World Rpt

There was plenty in that bill and 2 bigger defense-spending measures approved by Congress that would seem to qualify. There was $8.4 million for a celestial observatory in New Mexico, $3 million for a new public-health laboratory in Las Vegas, and the acceptance of an estimated $50 million in liability for pollution caused by the Homestake Mine in Lead, S.D. The Army was also forced to spend $2 million to buy nitrocellulose from a New Jersey company in danger of going bust. All told, congressional watchdog group Citizens Against Govt Waste toted up $8.8 billion of congressional add-ons to the $318 billion defense bill. "You don't have to be a pork expert," says Citizens' vp David Williams, "to realize that this stuff is not crucial to the nation's defense needs." With the massive Pentagon budget augmented by $17 billion more in supplemental war funding this year, the opportunities for lawmakers to bring home the bacon were greater than ever.

The old saw about the making of sausage and the making of legislation is apt: It ain't pretty, but it's not that complicated either. Members of Congress, besieged with requests from constituents, formalize the ones they like into something called "member request" letters. These then go to a series of subcommittees & committees, whose members are continually lobbied by colleagues & their staffers to get items included in legislation. In both House & Senate, 3 separate defense bills, military construction, defense authorization, and appropriations, work their way toward approval at the same time. For some lawmakers, even the authorization bills, which are supposed to deal with policy & programs, hold opportunity. A fair amount of dollar-specific pork gets inserted into them. It's easier to get money for a project if it has previously been "authorized."

The projects get paid for in all sorts of ways. Sometimes they get added on to the president's requested budget, in the hope he will live with it. (Last year's military construction bill, for example, was increased from $9.971 billion to $10.5 billion.) In other cases, Congress steals a bit here & there from the president's proposed projects. Then Congress can just get cute: It arbitrarily decided, one insider says, that the value of the dollar would rise vis-à-vis foreign currencies for spending on overseas projects. That freed up a cool $60 million. The process also works the other way, with the Pentagon coming to Congress with its own wish lists. These, in the parlance of appropriations, are called "UFRs," or unfunded requirements. Translation: Pentagon brass couldn't get certain items into the president's defense bill, so they ask Congress to do it. Every year, at least a few UFRs make it into the bills reported out of committee to be voted on by House & Senate.

The bills then go to a conference committee to be reconciled by lawmakers from the 2 chambers. The conference is composed of the chairs of the subcommittees and several senior members from both sides of the aisle. In the Capitol, the chairs are known as "cardinals." Only they can perform a feat known among congressional theologians as an "immaculate conception." That's when a brand-new item is added into a bill, one that has not previously been seen or heard of in House or Senate. Just before they voted to approve the tanker-lease deal between Boeing & the USAF last year, House conferees added 4 Boeing 737s for VIP transportation, Pentagon brass & themselves. Typical of most immaculate conceptions, it's difficult to figure out who added the 737s, because the whole process happened behind closed doors.
After the conference committee concludes its work, a single copy of its report is delivered to Senate & House cloakrooms. Then, before anyone has time to study it, it's time to vote. This time, the process didn't end with passage of the defense bills. On 3.21.02, the White House sent Congress a brand-new $27 billion supplemental spending plan, of which $14 billion was for defense. Already, lawmakers are plotting to add numerous items of their own. Then it's on to next year's bills. Last week, a subcommittee of the House Armed Services Committee added $3.2 billion in items to the $70.2 billion procurement part of the 2003 defense budget. "I would have liked to have added more," subcommittee Chairman Rep. Curt Weldon R-PA told reporters. But first he had to deal with the Pentagon's UFR lists and $14 billion of additional requests by lawmakers.

marketing

Also 2.14.02, Transredes chief exec. Steven Hooper said the pipeline co. planned to place $155 million bond for an expansion program.⁶² Brazilian state oil co. Petrobras is boosting its presence in Bolivia, building pipelines incl gas pipeline from Yacuiba to Rio Grande. This would run near the planned route of the Transredes pipeline under IDB consideration. Guarani & Weenhayek indigenous tribes have raised environmental concerns about pipeline proposals in this region. ⁶³
Petrobras also is considering buying Enron's stakes in Transredes and in Argentina. Shell, however, reportedly holds a right of first refusal on Enron's Transredes interests and does not welcome Petrobras' interest. ⁶⁴

Bolivia/Brazil	Gas Oriente Boliviano pipeline 340MW power plant (Ipias, Bolivia to Cuiaba, Brazil) OPIC, U.S.   $200 million credit approved 1999-03-09 Kreditanstalt für Wiederaufbau (KfW, Germany)   $150 million loan approved 1997
Enron's role: Lead sponsor and 50% shareholder in pipeline project. Despite protests by environmental groups 65, OPIC approved $200 million credit for Enron to build a 390 mile pipeline to supply natural gas from Ipias, Bolivia, to Cuiaba, Brazil, where the co. is building 480MW thermal power plant. In Feb. 2002, however, OPIC withdrew support for project. In addition to OPIC $200 million credit, German ECA KfW provided the balance of foreign aid for Enron's Cuiaba power station. Brazilian development bank BNDES also subsidized the Cuiaba plant. 66
"Enron" pipeline to Cuiaba is an off-shoot of a sprawling Bolivia-Brazil pipeline network backed by World Bank and many other MDBs & ECAs. 430MW Cuiaba plant has been operating since 2001 at 240MW and Enron just recently began (3.7.02) $570 million expansion of Cuiaba integrated electricity project incl Cuiaba plant). 67
Enron's role: Involvement in this $1.7 billion, 3,150 km Bolivia-Brazil pipeline project was two-fold. It had a stake in Gas Transboliviano (GTB), consortium owning Bolivian portions of the pipeline, as well as in Transportadora Brasileira Gasoduto Bolívia (TGB), consortium owning Brazilian portions. 68 Enron reportedly owned 30% of GTB & 7% of TBG in 1998. 69 Industrial, not household, markets consume the vast majority of the pipeline's gas. According to study by Brazilian Ministry of Mines & Energy, in 2001 there were 20 million people living in mostly rural areas of Brazil, without access to basic electricity. Not only does the pipeline encroach upon ecologically sensitive areas incl world's largest wetland (the Pantanal), the Gran Chaco subtropical dry forest, and Mata Atlantica Rainforest, but the pipeline & associated access roads reach isolated, indigenous communities.	Bolivia-Brazil pipeline (Santa Cruz, Bolivia to Porto Alegre, Brazil) Intl Bank for Reconstruction & Development (IBRD)   $130 million approved 1997-12-17   $180 million approved 2000-12-20 Multilateral Investment Guarantee Agency (MIGA)   $14.8 million approved 1999 Inter-American Development Bank (IDB)   $240 million approved 12.17.97 Japan & Italy Export Credit Agencies   $346 million approved 1997 European Investment Bank (EIB)   $60 million approved 1997 Andean Development Corp. (Corp. Andina de Fomento, CAF)   $165 million approved 1997

Though the Bank was supposed to conduct a comprehensive Ecological Assessment and an Indigenous People's Development Plan, consultations with affected communities and concerned civil society groups took place only after construction began and after it was demanded.
As far as can be determined, even though no U.S. agency provided direct support, this pipeline attracted more IFI & ECA (over $1.1 billion) financing than any Enron-related project except Dabhol. Export credit agencies, led by Japan Export-Import Bank and Italy's SACE & Mediocredito Centrale, combined for $346 million in assistance.

4 multilateral development banks (World Bank, IADB, CAF and EIB combined for $765 million in support. 70 Brazilian national development bank BNDES funded hundreds of millions of dollars in subsidies toward the project, much of which was related to the foreign ECA support.

Brazil	Elektro power privatization OPIC, U.S.   $200 million insurance approved 1998
Enron's role: July 1998, advised by J.P. Morgan Chase, 71 Enron acquired majority voting rights in Sao Paolo utility Elektro Electricidade e Servios for $1.273 billion, outbidding 17 other companies & consortia for the newly privatized company.
Early 1999, it announced that it would double its stake in Elektro, now Enron's largest investment in Brazil. 1997, this unit had net sales of $720 million and 10,300GW hours. Enron was also interested in the to-be-privatized Brazilian gas utility, Comgas, and in building 2 thermal power plants with a combined capacity of 1350MW. 72
Enron's role: 2001, OPIC approved $190 million for loan guarantee to proposed Enron project Sociedade Fluminense de Energia to construct & operate 379MW gas-fired power plant near Rio de Janeiro. 73 According to OPIC, "Sociedade Fluminense de Energia is building the plant pursuant to an agreement with Brazilian state-controlled oil & gas co. Petrobras"; "Enron Commercializadora de Energia, Enron Corp. subsidiary oration, will sell the plant's output." 74	Rio 379MW gas-fired power plant OPIC, U.S.   $190 million insurance approved 6.19.01

Citing the Rio power plant & other investments, Oil Daily noted in a recent article, "Some analysts question why Enron spent so much money in Brazil, particularly considering that many of the investments such as 7 of 9 gas distributors made no money." The daily newsletter added that "many of these Enron-backed projects in Latin America never amounted to much, prompting accusations that they too were used as tools for Enron's shadowy accounting practices." 75
Project Finance article had a different take on Enron's Brazilian power plant investments: "Word at the beginning of the year [2001] was that in the middle of the rationing crisis & electricity shortages, Enron made money hand over fist." ⁷⁶

Bulgaria	Bulgargaz feasibility study U.S. Trade & Development Agency (TDA)   $0.3 million grant approved 1.20.00
Enron's role: 1.20.00 TDA made a $276,000 grant to Bulgargaz EAD for a "feasibility study on the expansion of the Chiren underground gas storage and establishment of a natural gas information system in Bulgaria." 77 According to the TDA, Bulgargaz itself "will be restructured, beginning with a period of deregulation in 2002 that will culminate in full privatization by 2005." 78

Total cost of this study ($548,000) will be shared by Enron as well as Sarkeys Energy Ctr at Univ.Oklahoma & other consultants.

Caspian Region (Turkmenistan-Azerbaijan-Georgia-Turkey)	Trans-Caspian Gas Pipeline U.S. Trade & Development Agency (TDA)   $0.75 million grant approved 7.29.98   $0.43 million grant approved 10.26.99
Enron's role: July 1998, Turkmenistan govt hired Enron to conduct TDA-financed feasibility study for proposed Trans-Caspian Gas Pipeline (TCP), 1,680 km pipeline crossing Caspian Sea from Shatlyk deposit in eastern Turkmenistan to Azerbaijan, then through Georgia, to the port of Erzurum, Turkey. Proposal submitted by Enron 6 months later in Jan. 1999, with est. cost of $2.4 to $2.8 billion.

Later that year, TDA awarded Enron another grant to conduct natural gas master plan study in Azerbaijan. At contract signing ceremony in Washington, D.C., with Azerbaijan State Oil Co. (SOCAR) pres. Natiq Aliyev, TDA dir. J. Joseph Grandmaison announced TDA was "pleased to provide this assistance … reinforc[ing] the Administration's commitment to the Trans-Caspian Gas Pipeline project." Although these 2 TDA contracts were designed to spur the pipeline's development, U.S. Export-Import Bank is supposedly the "main hope of the Trans- Caspian participants." In addition to the TDA funding, Enron reportedly contributed $325,000 in resources & expertise to the effort. 79

Human Rights Watch's global overview for 1999 deemed U.S. Govt policy towards Turkmenistan the year's "most blatant example" of how govts subordinate "human rights to the promotion of commercial & strategic interest." According to the report, in spite of Turkmen govt under Saparmurad Niyazov "continuing to deny its citizens their civil & political rights, … rely[ing] on a powerful, Soviet-style secret police to do so, pipeline politics continued to dominate bilateral relations between Turkmenistan and U.S. govt." The report is clear to state that the U.S. was "the most forceful proponent" of the proposed pipeline, in spite of the reports of human rights abuses, an approach that implied, the authors wrote, that U.S. "commitment to intl human rights protection [could] be set aside where geopolitical & energy interests [were] concerned."

While U.S. Energy Sec. Bill Richardson touted trans-Caspian pipeline, Dr. Pirguli Tangrikuliev, who opposed the project, "was sentenced to 8 years imprisonment … for purported 'abuse of office.' Only a few days after sentencing, Richardson, accompanied by special advisor to the president and Sec.State for Caspian Basin Energy Diplomacy John Wolf, as well as U.S. TDA dir. Grandmaison, met with Pres. Niyazov to discuss proposed pipeline and make $150,000 U.S. TDA grant so "Turkmen govt could 'formulate documents' related to the project." Though the U.S. govt did issue a condemnation of Tangrikuliev's sentencing & imprisonment, they did not do so until 3 days after Richardson left Turkmenistan 8.23.98 ⁸⁰

According to Energy Dept, "the future of the project is uncertain" because "negotiations between Turkmenistan and the intl consortium backing the project have stalled over payment & price issues, and PSG, co-operator of the project with Royal Dutch/Shell, closed its office in Turkmenistan in Oct. 2000." ⁸¹
Also, Azerbaijan & Turkmenistan have been unable to reach agreement on their respective allocations for shares of the pipeline. Turkmenistan offered Azerbaijan 30% but Azerbaijan wants at least 50%, and may proceed with an independent pipeline deal with Turkey.

China	Hainan Island 150MW diesel power plant Multilateral Investment Guarantee Agency (MIGA)   $16.7 million guarantee approved 1996
Enron's role: $16.7 million guarantee made to Netherlands's Atlantic Commercial Finance, B.V., wholly owned subsidiary of Enron, "for its equity investment in 160MW combined cycle diesel power plant on east coast of Hainan Island, China." 82 In 1996, after the plant became operational, Singapore Power signed an agreement with Enron for 50% stake in the plant. This power plant was the first built, own operate, transfer deal for a power plant in China. Feb. 2002, Enron announced it was selling all of its assets in China, but did not specify how its shares in the Hainan Island plant would be handled.
Enron's role: June 1996, Ex-Im approved 3 loans, $3.7 million each, to 3 wind power projects in China to be supplied by Zond Systems, then-independent California wind developer. Enron Wind bought Zond Jan. 1997. Later in 1997, Ex-Im increased these loans to a range of $5 to $20 million each. The project backed the supply of wind turbines for use in wind farms in Inner Mongolia, Liaoning Province, and Nan-Ao Island in Guangdong Province. 83	Wind-turbine projects U.S. Export-Import Bank (Ex-Im)   $15 million+ loans approved 1996,1997

Though the projects in China were relatively small in scale, Enron Wind has invested extensively in other countries incl Turkey, China and Venezuela84 and played a role in projects in N.America, Germany, N.Ireland, Greece, Mexico, as well as Korea. ⁸⁵
Enron Wind filed for Chapter 11 bankruptcy protection 2.22.02 and announced it would sell its wind turbine manufacturing assets to General Electric. This sale does not affect Enron owned or -operated wind farms. ⁸⁶

Colombia Centragas gas pipeline International Finance Corporation (IFC) $30 million loan/syndication approved 1994 International Finance Corporation (IFC) $35 million loan/syndication approved 1996 Enron's role: In December 2001, Enron owned 50% of Centragas, with the balance held by Tomen Corp. (Japan, 25%) and Promigas (Colombia, 25%).8 7 Centragas' asset is a 357-mile gas pipeline that carries gas from the offshore Ballena gas field to a petrochemical complex in Barrancabermeja, central Colombia. Ecopetrol, the Colombian state oil company, is its sole client. To ensure the security of its Colombian assets, Enron has lobbied in Washington to increase military aid to Colombia.8 8 In a recent Oil Daily article, an unnamed source described as someone "involved with Enron's project negotiations in Colombia and Venezuela" charged: "They abused the mechanism [of setting up special-purpose entities] to hide debt, generate income, and pay commissions that were not always ethical."8 9 For further details, see Case Studies. Croatia Jertovec 240MW power plant European Bank for Reconstruction & Development (EBRD) (financing never approved) (1999) Enron's role: In 1997, Enron & the Croatian govt, under the late president Franjo Tudjman, agreed to an inde- ENRON'S PAWNS 3 0 pendent power project in Jertovec, Croatia. Originally, the Croatian energy utility Hrvatska Elektropriveda (HEP) agreed to buy the output at a fixed price for 20 years, a contract that was valued at $1.6 billion. Tudjman apparently "had hoped [the contract] would help persuade the U.S. govt to be friendlier to his policies" and, more significantly, "to take the pressure off Croatia at the war crimes tribunal in The Hague."9 0 Though the European Bank for Reconstruction & Development considered financing the project in 1999, it never met with approval.9 1 After the contract between Enron and HEP turned out to be economically infeasible, a new agreement was drawn up in August 2000 that allowed "Enron to build the [power plant], but at their own risk, without any guarantee of purchase from HEP."9 2 Dominican Republic Haina 660MW power plants Commonwealth Development Corporation (CDC, UK) $74 million equity approved 2000 Enron's role: Enron, in a consortium with Seaboard & UK govt's Commonwealth Development Corp. (CDC, UK agency), bought out the newly-privatized Empresa Genadora de Electricidad (Haina) in 1999. The CDC played a leading role in the consortium, "moun[ting] a successful $145 million bid to acquire 50% of the shares in the generation company Empresa Genadora de Electricidad Haina (Haina), . . . subsequently tak[ing] management control," and "adding further generating capacity in anticipation of being able to sell power into a UK-style power pool."9 4 In 2000, CDC's stake in Haina Investment Company was raised by $74 million, making them "the largest shareholder in the consortium with 13% of total equity."9 5 In 2000, 100MW of new generating capacity was added to the power plant, followed by a proposal of 225MW more in 2001.9 6 Dominican Republic Puerto Plata 185MW oil-fired power plant International Finance Corporation (IFC) $132.3 million approved 1994-07-22 International Finance Corporation (IFC) $1.5 million approved 1995-06-12 U.S. Maritime Administration (MARAD) $34.3 million guarantee approved 1994-08-08 U.S. Maritime Administration (MARAD) $50 million guarantee approved 1996-12-22 Commonwealth Development Corp. (CDC, UK) Investor since at least 1999 Enron's role: The Smith-Enron Cogeneration Limited Partnership owns this power project which is mounted on three barges. The U.S. Maritime Administration approved guarantees toward the barges' construction in 1994 & 1996.9 7 The U.K. overseas investment agency, Commonwealth Development Corporation holds a investment stake in this power project. No information is known about the size of CDC's investment.9 8 For further information, see Case Studies section. Gaza Strip Gaza 136MW diesel/gas-fired power plant Overseas Private Investment Corporation (OPIC, U.S.) $22.5 million insurance approved 1999-07-12 International Development Association (IDA) $15 million loan approved 1999-08-31 Enron's role: In 1999, OPIC & the World Bank backed power sector privatization in Gaza Strip, including an Enron proposal to build a 136MW diesel/gas-fired plant. OPIC approved $22.5 million in insurance for procurement of turbines & other equipt from Asea Brown Boveri for the power plant. IDA, the World Bank agency, approved a $15 million loan to the Palestine Electric Co. and the Palestine Liberation Organization for energy sectoral reforms. Members of the consortium of the Gaza power plant include Enron (33.3%), Palestine Electric Co (33.3%), and a consortium of Palestinian commercial & institutional investors (33.3%).9 9 Although U.S. officials learned that a key investor in the plant had links to the Saudi bin Ladin Group, the Saudi Arabia construction company founded by the father of the international terrorist, Osama bin Laden, they were not deterred.100The project moved forward until late 2000, when violence in the region forced the halt of construction. There is no target date set for completion. Guatemala Puerto Quetzal 110MW diesel, 125MW gas-fired power plant Overseas Private Investment Corporation (OPIC, U.S.) $73.8 million insurance approved 1992-07-05 Overseas Private Investment Corporation (OPIC, U.S.) $50 million insurance approved 2000-03-21 International Finance Corporation (IFC) $0.7 million approved 1996 3 1 ENRON'S PAWNS U.S. Maritime Administration (MARAD) $25 million guarantee approved 1994-05-11 U.S. Maritime Administration (MARAD) $73 million guarantees approved 2000-09-21 Commonwealth Development Corporation (CDC, UK) 25% equity stake approved 2000-10 Enron's role: Enron held 37.5% stake in this power plant, with the balance held by Centrans Energy Services (37.5%) and the UK govt's Commonwealth Development Corporation (25%).101 Not long after the plant began operation, in 1993, the Guatemalan govt accused Enron of not paying back the $14 million it owed the govt. Despite this accusation, in 1994 the U.S. Maritime Administration (MARAD) approved a guarantee for the construction of two power barges by McDermott. Six years later, in 2000, MARAD funded another guarantee – to build one power barge by Cascade General (Portland, Oregon) – for Puerto Quetzal Power LLC (PQP).102For further information see Case Studies section. India Dabhol 2,184MW gas-fired power plant Overseas Private Investment Corporation (OPIC, U.S.) $300 million insurance approved 1994 Export-Import Bank of the U.S. (Ex-Im) $302 million loans approved 1994 Overseas Private Investment Corporation (OPIC, U.S.) $91.8 million insurance approved 1999 Japanese Export-Import Bank $258.2 million finance approved 1999 Ministry of intl Trade & Industry (MITI, Japan) $175.2 million finance approved 1999 Office National du Ducroire (OND, Belgium) $90.8 million export credit approved 1999 Enron's role: The Dabhol plant, a liquefied natural gas-fired power plant in the coastal region of Maharasthra state, was constructed in two phases.103Though the project was originally signed in 1993,104Phase I construction began much later, in late 1996, after being stalled by what the World Bank called "a difficult beginning."105When Phase II construction finally began in 1999, Enron increased its ownership of the project from 80% (Phase I) to 100%. Though Phase II was "due to be commissioned in 2001," in June 2001  after Enron failed to pay the main contractors on the project (General Electric & Bechtel) for two months worth of work  both contractors stopped working.106 The plant is presently idle.107 Such trouble perhaps should not have come as a great surprise. For even at the beginning, there were concerns about "the high cost of power which was to be purchased by the state, allegations of corruption in the setting up of the project, the procedure regarding granting official clearance for the project, lack of consultation of affected people, the allocation & distribution of compensation for those displaced, [and] environmental destruction."108 A 1998 investigation by Human Rights Watch indicated that there were grave cases of human rights violations "carried out on behalf of the state's & the company's interests" though the majority of protests by villagers were peaceful.109 Not only were there major environmental & social repercussions, but the contract for the project was "considered to be [perhaps overly] generous to Enron, . . . the company promis[ing] to invest $3 billion which would be repaid with a tariff on electricity charges that was set at such a high level the company would receive $26 billion in return."110 Enron overcame the World Bank's reticence to support the Dabhol project. National export credit agencies approved over $1.2 billion in financing, more than any other Enronrelated project. The largesse began in 1994, when OPIC & U.S. Ex-Im boards approved $602 million toward Phase I construction. OPIC executive vice president Christopher Finn, in 1995 testimony before a U.S. House of Representatives committee, hailed the Dabhol power projects: "Enron Corporation... is improving the port & road facilities to help bring in its heavy equipt, as well as building a school & a hospital for its workers." For Phase II, OPIC approved an additional $91.8 million. Japan weighed in more heavily. When financing closed in May 1999, Japanese agencies committed $433.4 million. Belgium's Office National du Ducroire added a $90.8 million export credit for commercial banks involved in the arrangement. 111 Four Indian govt institutions (the Industrial Development Bank of India, the State Bank of India, the Industrial Finance Corp., and ICICI) guaranteed the various ECA packages, and now, U.S. & Japanese govt officials are demanding that they provide compensation for the collapsed project. India Enron India oil & gas developments Overseas Private Investment Corporation (OPIC, U.S.) $200 million insurance approved 1996 ENRON'S PAWNS Enron's role: In Feb. 1994, the consortium of Enron Oil & Gas India Ltd. & Reliance Industries Ltd. (RIL) won a 25 year lease on the Mukta-Panna oil & gas fields formerly held by the national Oil & Natural Gas Commission (ONGC). Enron & Reliance both took 30% stakes in the fields, with ONGC holding a minority 40% share. This privatization, noted one Indian article, "was in response to the wishes of the World Bank  which the Govt & the ONGC approached for loans in 1991  that India decided to open up oilfields for development through indigenous & foreign private sector participation."112 Another observer called "the privatization & subsequent sale of oil & gas fields in India to big business houses & transnational corporations" an "oily scam…. a classic example of privatization of profits & nationaliation of losses."113 The circumstances of this deal were investigated by the govt of India's Comptroller & Attorney General (CAG), and were the subject of a Center for Public Interest Litigation (CIPL) petition for a criminal investigation. In 1996  the same year that OPIC approved $200 million in risk insurance toward Enron's oil & gas investments in India114— the country's Comptroller & Attorney General (CAG) released a report detailing "infirmities" or "irregularities" in the bidding process and how the terms were skewed to the benefit of Enron & Reliance.115 CIPL, in its petition, called for a criminal investigation into the Enron-Reliance takeover. The suit alleged that in 1995 & 1996, anti-corruption investigators for the Central Bureau of Intelligence (CBI) tried to get their supervisors to look into the deal. One CBI employee is quoted as calling for quick action to investigate "RIL & Enron and unknown public servants. This seems necessary that any delay may lead to loss of evidence & searches may prove to be futile." CIPL alleged that the employee was "prematurely repatriated to his State cadre." CIPL said it filed suit after learning of "efforts at the level of the Joint Director, Anti-Corruption Unit, Bombay, for scuttling this enquiry" and becoming "convinced about the powerful force of Reliance & Enron at work, to scuttle any possible investigation into the matter." 116 While admonishing the CBI for losing some key documents, the Indian Supreme Court dismissed the CIPL petition in late 2000. On Oct. 3, 2001, BG Group plc (formerly known as British Gas) announced that it expected to purchase the entire capital of Enron Oil & Gas India Limited for $388 million by the end of the year. Enron's bankruptcy, however, threw the deal into question. "Although progress has been made to close the transaction," reported a Dec. 24, 2001, BG press release, "it has been slower than anticipated and further complicated by Enron's recent Chapter 11 Bankruptcy Protection Filing in the U.S.A. The original agreement has now expired. BG Group is continuing discussions with Enron & local partners in the assets to bring about a satisfactory close to the transaction. BG Group will make an announcement on the outcome in due course."117 India Solar Thermal Power (100MW fossil fuels, 35MW solar) Global Environment Facility (GEF) $0.75 million spent (additional $49 million proposed) 2002 Kreditanstat für Wiederaufbau (KfW, Germany) $114 million cofinancing proposed (2002) Enron's role: The proposed Solar Thermal Power Plant, located in Rajasthan, India, and jointly owned by Enron-Amoco, is not as clean an energy source as its name may imply. Though a World Bank "prototype renewable energy project," the plant actually would "generate roughly three times more energy from fossil fuels than from the sun," merely 35 to 40 megawatts of capacity for solar energy versus 100 to 105 megawatts of capacity for oil, coal, or gas-fired power.118 Claiming that the venture would not be economically viable without the fossil fuel component, the World Bank declared that this was "the first step of a long term program for promoting solar thermal power in India & around the world that would lead to a phased deployment of similar systems in the country & in other developing nations."119 However, it is worth noting that the World Bank was considering "backing the smaller-scale fossil fuel/solar hybrid plan" rather than "purely solar ventures" that were being proposed at roughly the same time by companies like Sun Source Ltd. (which was planning "to build a 50 megawatt photovoltaic solar power plant") and Energen (which was "committed to building a 200 megawatt solar chimney").120 Germany's KfW has agreed to extend $114 million in cofinancing for the Enron/Amoco "Solar Thermal" power project. In Feb. 2002, the World Bank stated that project preparation is underway, financed by $750,000 from the World Bank's GEF.121 Indonesia Enron Java Power Co. 500MW gas-fired power plant Multilateral Investment Guarantee Agency (MIGA) $60 million guarantee approved 1997 Enron's role: In the early 1990s, Enron was one of several companies jostling to establish power plants in Indonesia.122 Enron (Enron Java Power Co.) acquired stakes in a 500MW power plant near Surabaya, Indonesia. However, in 1997, 3 2 3 3 ENRON'S PAWNS after the Rupiah's collapse, activities of the power plant were suspended.123 According to a report in the Japanese newspaper Nikkei, Enron, along with 26 other transnational corporations, signed power pacts with former President Suharto in which "the prices were set some 30 percent higher than the international market," exacerbating already shaky economic conditions.124 Not only were prices higher, but there was a well-established complicity between Suharto & the independent power producers, including Enron. According to the former president of the state-owned utility, Perusahaan Listrik Negara (PLN), Djiteng Marsudi, "most of the private power plants rely on their connections with Suharto's family & cronies," saying, "only one of the 27 private power plant projects won a contract through a competitive bid." Enron has tried its best to be compensated for the situation in Indonesia. After Suharto's overthrow, Enron apparently "insist[ed] that the Indonesian people [had] to honor the guarantees that Enron negotiated with the overthrown dictator." 125And in March 2001, Enron received $15 million from the World Bank's Multilateral Investment Guarantee Agency (MIGA), a sum of money that came out of the pocket of the Indonesian govt, for the cancellation of a power project. 126 Apparently "MIGA officials made it clear that the govt was correct to cancel the contracts given the subsequent economic downturn, but because of intl law, Enron had to be compensated."127 Italy Sarlux (Saras) 551MW oil/gas power plant European Investment Bank $493 million guarantee approved 1996-12 Mediocredito Centrale (Italy) co-financier of syndicated loans 1996-12 Enron's role: The Sarlux plant is a typical example of how Enron leveraged public finance into market penetration overseas. Enron's 1998 annual report explained, partially, "As new markets open across Europe, Enron's strategy is to 'be first' in these deregulating markets and to establish competitive advantages for the future."128This strategy, backed by public intl finance, gave Enron purchase on foreign territory. In December 1996, Enron achieved financial closure on a joint venture project to develop the Saras, also known as Sarlux, power plant, a 551MW oil/gas power plant within the Saras S.p.A. refinery on the island of Sardinia. Saras, which owns a 55% share, and Enron, a 45% share, built the plant to help power the oil refinery, the second largest in Europe.129 The European Investment Bank keyed the deal with approximately $493 million of guarantees toward the project.130A financial arm of the Italian govt, Mediocredito Centrale (often used to subsidize overseas projects), was a co-arranger, along with ABN Amro & CIS, of syndicated loans totalling $1.2 billion.131 Macedonia Bulgaria to Albania electricity transmission U.S. Trade & Development Agency (TDA) $0.3 million grant approved 2000 European Investment Bank (EIB) $35 million financing proposed 2001 Kreditanstat für Wiederaufbau (KfW, Germany) $21 million financing proposed 2001 Enron's role: In 2000, the U.S. Trade & Development agency granted $302,700 to ESM, the national electricity company of Macedonia, which in turn hired Enron subsidiary ECT Europe to conduct a feasibility study on an electric transmission corridor from Bulgaria, through Macedonia, to Albania.132Enron has expressed an interest in building a transmission line from Dubrovo to Radomir, valued at $40 million. According to an April 2000 Power East Europe report, "Enron has confirmed its interest in participating in the regional network projects funded by intl donor countries, and would consider providing capital itself where donor funds were scarce."133 Enron submitted its feasibility study in February 2001. ESM then announced that it was seeking European Investment Bank & KfW support for the Dubrovo-Radomir project.134 An EIB delegation planned to appraise the project in March 2001. Financing of the 70 million Euro project would be split between the EIB (50%, that is $35 million), KfW (35%, roughly $21 million).135No financial package has been announced to date from either the EIB or KfW. Mexico Vitro 245MW gas-fired co-generation plant Inter-American Development Bank (IDB) $136.5 million loan approved 2000-12 Enron's role: The Inter-American Development Bank keyed Enron's development of the Vitro 245MW gas-fired power plant near Monterrey, Mexico. Power & steam produced by the plant will be purchased exclusively for industrial use by local facilities of Vitro (glass), IMSA (steel), and Apasco (cement). The deal was sealed in December 2000, when IDB approved two loans, a $45.5 million A-Loan & a $91 million B-Loan, toward the project.136 Construction began in 2001. In November 2001, Enron sold ENRON'S PAWNS about 80% of its stake in Vitro to Tractabel of Belgium. Tractabel reportedly is interested in purchasing the remaining balance held by Enron. The plant is scheduled to be completed by the end of 2002.137 According to Power Markets Week, "The plant is the only power project Enron was developing in Mexico, although in recent years it had competed unsuccessfully for several independent power projects put out for bid by govt-owned utility Comision Federal de Electricidad."138 Mozambique Pande gas field International Development Association (IDA) $30 million loan approved 1994 Enron's role: In October 1994, Enron beat out Sasol (S.Africa) & PlusPetrol (Argentina) for control of the Pande gas field, which holds trillions of cubic feet of gas. That same year, the World Bank's IDA approved a loan toward "all predevelopment work necessary to enable the govt & the private sector to make a firm decision to develop the Pande gas field to enable gas to be exported (mainly to South Africa) and used domestically."139The Bank noted that "now that the armed attacks have ceased it should be possible for Mozambique to achieve success in gaining private investment." 140 For further details, see Case Studies. Nicaragua Margarita II (Corinto) 70.5MW diesel-fired power plant U.S. Maritime Administration $50 million guarantee approved 1997-12-28 Commonwealth Development Corporation (CDC, UK) $30 million investment, 35% owner 1999 Enron's role: Enron introduced a 70.5MW barge-mounted power plant, located in the Pacific port of Puerto Corinto in 1999. Empresa Energetica Corinto (EEC), a company in which Enron has a 35 percent interest, currently owns the power plant. The plant was built in the U.S.,141whereas the mooring facility, pier and fuel storage were constructed in Nicaragua.142 The 15-year power purchase agreement with Nicaragua's state utility, Empresa Nicaragüense de Electricidad, for 50 megawatts, with the remaining 20.5 percent reserved for merchant sales in the region, was signed in September 1999. The plant was built in the U.S. and the mooring facility, pier and fuel storage were built in Nicaragua. Commercial operation began in late 1999. Enron owns a 35 percent interest in the project, with 35 percent owned by its Guatemalan partner, Centrans, and the remaining shares owned by the Commonwealth Development Corporation.143 However, the project ran into problems when Enron was told that Empresa's transmission lines would run into state-owned right of way roadblocks. So the U.S. Govt intervened, with advocacy on Enron's behalf coordinated between the U.S. embassy in Managua, and the Departments of Commerce & Energy. The advocacy "extended to the highest levels of the Govt of Nicaragua," the U.S. export advocacy center bragged.144The Ambassador spoke twice with Nicaragua's President Aleman and Secretaries Daley & Richardson wrote letters. Nigeria Nigeria power privatization (incl. 270MW gas-fired power plant) International Development Association (IDA) $100 million approved 2001-07-31 Overseas Private Investment Corporation (OPIC) $200 million approved 2001-06-19 Enron's role: Nigeria is privatizing its power sector at the World Bank's behest. As the World Bank's IDA approvingly noted in a power privatization project "Appraisal Document," an Enron/AES venture in Nigeria recently reached a power purchase agreement between Enron, the state govt of Lagos, and NEPA "to provide 270MW of power to Lagos."145 This power project, called the Lagos Independent Power Project (IPP), mounted on nine barges near Lagos, began limited operation in May 2001, and neared capacity production as the year continued. The Lagos IPP scheme was launched in Dec. 1999, when Enron reached a power purchase agreement with the Nigerian govt. Progress languished through late 2000 while the World Bank raised concerns about terms it called too favorable for Enron. The Bank, according to PSIRU, pointed to a clause stipulating that, in the event that the contracts were to be terminated by any party other than Enron, the federal govt would be obliged to settle Enron's entire financial commitment. The Bank also said the contract had not been put out to competitive tendering, gave "generous" payment terms and included no penalty clause for poor performance from the company.146 In June 2001, Nigerian President (General) Olusegun Obasanjo railed against Enron on CNN. "Enron has played a dirty game on us. Dirty game in two ways. The price at which they have tried to sell power to us has been very exorbitant. Two, what they told us they would do, they have not done," he asserted.147 3 4 3 5 ENRON'S PAWNS In the end, PSIRU notes, "As with so many Enron projects, the Nigerian govt was anxious for this project to succeed so that it sends a positive signal to other investors."148 Enron developed the Lagos power project, and then sold its interests to AES (a global IPP developer based in Virginia) in January 2001 for $255 million. Enron, however, maintained management ties to the Lagos IPP through its subsidiary, Nigeria Power Holdings Ltd.149 Enron also has held other economic connections to Nigeria's oil & gas sector. In late 2001, it reportedly lost a contract with Nigeria LNG Ltd. to purchase one billion cubic feet of gas per year.150 In 1995, poet & Ogoni activist Ken Saro Wiwa, together with eight other Ogoni men accused of murder, were hanged. Dictator Sani Abacha ignored pleas for their clemency from President Clinton & other world leaders. Saro Wiwa & his Ogoni people were outspoken critics of Shell Oil Company's complicity in human rights abuses & environmental destruction of the Niger Delta. Citing economic not human rights considerations, the World Bank quietly withdrew from the country in 1995. But in 2001, it was back in the country, despite widespread evidence that the current regime of General Obasanjo is just as corrupt & complicit in serious human rights abuses. For example, on November 20, 1999, the Nigerian armed forces on direct orders from President Obasanjo, ravaged the town of Odi in the oil-rich but poverty-stricken Bayelsa State. The military had been sent to Odi, a stronghold of the ethnic Ijaw people, to apprehend those responsible for the killing of 12 police officers. Odi, once a town of 50,000, was levelled. Thousands of innocent men, women & children were massacred in what has been described as the worst human rights violation of the govt. With billions of dollars in govt funds still allegedly squirreled away in Swiss bank accounts by previous regimes, Nigeria's govt continues to demand debt forgiveness of the IMF. The IMF has made its own conditions for debt forgiveness an economic program of fiscal discipline, with particular attention to how Nigeria managed its oil & gas revenues. Although Nigeria engaged in this program in 2000, on March 5, 2002, Nigeria formally withdrew from the IMF's economic monitoring program, citing its concern that the program would destabilize the country. Despite endemic corruption & human rights abuse, the World Bank's IDA & the U.S. OPIC approved support for energy privatization and the AES/Enron power project last July & June, respectively. In June 2001, OPIC president/CEO Peter S. Watson announced the approval of a $200 million political risk insurance package for the AES/Enron power plant. "This project will help Nigeria meet a critical demand for electrical power generation, and at the same time enable the Nigerian govt to demonstrate to U.S. investors its commitment to provide investment opportunities," he said. "OPIC is pleased to make this important contribution to Nigeria's first independent private power project and to Nigeria's ongoing economic development." OPIC's press release emphasized the involvement of AES, not Enron.1 5 1 After news of Enron's bankruptcy broke in early December 2001, Lagos State Governor Bola Ahmed Tinubu reportedly called the company to voice his concerns. Enron tried to allay his fears. Africa News quoted a letter from Enron / Nigeria Power Holding Ltd. executive Yao Apsau to Gov. Tinubu: "Following our discussions, Enron Corp. & its affiliate have in fact sought Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York… Contrary to popular belief, the Chapter 11 filing does not mean that Enron is out of business, but that it has entered into a court-supervised process by which it can continue to operate most of its businesses, reorganise its finances and explore various strategic, operational & financial alternatives in an orderly manner… Enron Nigeria Power Limited & its affiliate involved in the development of the Nigeria project are not included in the bankruptcy filing and are free to pursue the development of the Lagos IPP in the ordinary course of business… As you are aware, we are working feverishly with you, Lagos State, ministry of power & steel, and NEPA [the soon-to-be-privatized National Electric Power Authority] to ensure the successful development of the IPP. In addition, the Enron barge project at Egbin is already being successfully operated by AES and is unlikely to be affected by Enron Corp.'s filings. Many of Enron's plants & projects overseas are also continuing their operations in the ordinary course of business."152 Pakistan Enpak 782MW power plant International Finance Corporation (IFC) ($60 million financing proposed, not approved) (1996-06-27) Enron's role: Enron owned 100% of Enpak, a project that never came into fruition.153 Panama Bahia las Minas 355MW gas-fired power plant Export-Import Bank of the U.S. (Ex-Im) $60 million loan approved 1996-09-25 Multilateral Investment Guarantee Agency (MIGA) $3.3 million guarantee approved 2001-01-01 ENRON'S PAWNS International Finance Corporation (IFC) (advised Panamanian govt) 1998 Enron's role: In Jan. 1999, Enron intl acquired a majority stake (51%) in the Bahia las Minas power plant, as part of the govt of Panama's privatization of its power generation & distribution assets. Enron won the company with a bid of $91.7 million. The IFC helped to arrange the conditions for this sale, and boasted of it in a Nov. 18, 1998 press release. The project has also been financed by Ex-Im in 1996, and MIGA in 2001.154The Bahia las Minas plant produces 30% of Panama's power. For more information, see Case Studies section of this report. Philippines155 Batangas 110MW oil-fired power plant Asian Development Bank (ADB) $26.4 million loan approved 1994 Overseas Private Investment Corporation (OPIC, U.S.) $62.9 million insurance approved 1994-07-06 Overseas Private Investment Corporation (OPIC, U.S.) $50 million insurance approved 1993 Enron's role: Owner & operator of this plant since it opened in 1993. Originally shared ownership 50-50 with Philippines power company, increased to 100% by 2000. According to Enron, this "is a 110-megawatt, Bunker C-fired facility located on the island of Luzon, south of Manila in Batangas City. Enron holds a Fast-Track Build, Operate and Transfer Project Agreement with the state-owned National Power Corporation (NPC) and owns & operates the plant. The project sells power to the NPC, which supplies fuel for the project."156 OPIC described its package as "necessary to the success of the Batangas Power Corporation.... making Enron's bid more competitive."157 Enron received financing from a wide array of private & public banks for this project.158 Philippines Subic Bay 116MW oil-fired power plant Overseas Private Investment Corporation (OPIC, U.S.) $16.3 million insurance approved 1998 Enron's role: Enron is a 50% equity partner in this fuel oilfired power plant that started operation in February 1994. NPC will assume ownership of the plant after 15 years. Enron was the only successful contender among the U.S. companies that vied for ownership of two power facilities in the Philippines: one in Subic Bay, north of Manila; the other south of Manila, in Batangas. Enron was given the contract for both projects under a Build, Own, Transfer deal with the govt. Enron describes its Subic Bay plant as "a Bunker C fuel-fired plant with a capacity of 116 megawatts... (which) began commercial operation in February 1994. The project sells power to the National Power Corporation [NPC, Philippines], which supplies fuel for the project. Enron is a 50 percent equity partner in the project."159 OPIC backed Enron's Subic Bay project with $16.3 million in insurance in 1996.160 Under an agreement between the NPC & Subic Power Corp., ownership of the plant was to be transferred to NPC in March 2009. However, following Enron's filing of bankruptcy, in February 2002, Mid-American Energy Holdings Co. had expressed interest in acquiring Enron's assets in the Philippines by as early as March of 2003. Russia Volgograd gas pipeline study U.S. Trade & Development Agency (TDA) $0.25 million grant approved date unknown Enron's role: According to a U.S. TDA website, the agency provided partial funding for a study conducted by Enron Corp. on rehabilitation of compressor stations on the Volgograd gas pipeline.161 Trinidad & Tobago Ibis, Oilbird and Kiskedee oil/gas fields Overseas Private Investment Corporation (OPIC) $100 million insurance approved (no contract issued) 1993 Enron's role: Owner (95%). The area assigned to Enron covers a combined 97,000 acres on the South East Coast Consortium (SECC) block off Southeast Trinidad. More development would be allowed under the plan, depending on results of the first three wells. In 1998, Enron announced a major strike directly adjacent to the SECC block that will realize between 600 billion & 1 trillion cubic feet of additional reserves. These three wells will also produce 10,000 barrels/day of crude oil & condensate. All of Trinidad's oil & gas activities formerly controlled by Enron were transferred to its former subsidiary, which is now an independent company, Enron Oil & Gas (EOG), in 1999. Although EOG is now an independent company, owning all the former Enron activities in Trinidad, the U.S. & Canada, Enron retains a 10 percent stake in the company.162 Turkey Marmara 480MW gas-fired power plant Overseas Private Investment Corporation (OPIC, U.S.) 3 6 3 7 ENRON'S PAWNS $295 million insurance approved 1994-1996 Export-Import Bank of the U.S. (Ex-Im) $251.5 million loans approved 1995-1996 U.S. Trade & Development Agency (TDA): Technical symposium and follow-up conference1 6 3 Enron's role: Enron held a 50% interest in the Marmara power plant operating consortium called UNIMAR; other members of consortium include Midlands Electric (U.K., 31%), Wing Int'l (Enron subsidiary, 9%, lead developer); and, Turkey's Gama Endustri, Montaj and Pazarlama. This power plant received deep assistance from U.S. agencies. OPIC approved $85 million in finance in 1994, $200 million in insurance in 1995, and $10 million in additional finance in 1996. Ex-Im backed Marmara with an initial $228.2 million guarantee in 1995 and an additional $22.7 million guarantee in 1996.164 Uzbekistan Gas developments Overseas Private Investment Corporation (OPIC, U.S.) ($400 million insurance proposed) (1996) U.S. Trade & Development Agency (TDA) $0.5 million grant approved1 6 5 date unknown Enron's role: Gaining support from the highest levels of govt, along with OPIC promises of up to $400 million in financing in 1996, Enron had ambitious plans to develop several gas fields in Uzbekistan. Enron would have benefited from the largest-ever investment by OPIC in Central Asia, but it never became reality. After Uzbekistan gave Enron the rights to explore eleven fields in the Surkhandariya and Bukhara region, then-president of OPIC Ruth Harkin expressed her delight. "It is certainly the Clinton Administration's priority to support continued economic reforms in the Republic of Uzbekistan, and for OPIC's part…, I'm delighted that OPIC will be able to sign protocols & agreements with the Enron Corporation as well as with the Texaco Corporation."166 On June 25, 1996, one day after the tentative $400 million OPIC deal was announced, President Bill Clinton met for the first time with Uzbekistan's President Islam Karimov, the president of the largest republic of the former Soviet Union. While Clinton reportedly expressed concern about the human rights situation in Uzbekistan, he emphasized his desire for greater economic integration of the country with the West. One day later, President Karimov appeared at a June 27 conference on Uzbekistan's oil & gas industry in Houston, where he noted that officials of Enron Oil & Gas and the state's natural gas company, Uzbekneftegaz, agreed to "extend & enhance their existing Memorandum of Understanding (MoU) to pursue the joint venture development & marketing of proven hydrocarbon reserves in Uzbekistan." Then, in 1997, the EBRD pledged $90 million in financing, together with $100 million from Japan's Export-Import Bank, toward a refinery rehabilitation project, which both Enron & Texaco were to use. When the EBRD approved the project, it stated that, in addition to rehabilitating the refinery, a twin objective is "supporting commercialization of the sector and Uzbekneftegas [the national gas company]."167 In April 1997, according to AP, Enron CEO Ken Lay wrote a letter to George W. Bush, then governor of Texas, "about Enron's negotiations for a $2 billion joint venture to develop Uzbekistan's natural gas fields. According to the letter, Bush was scheduled to meet with Uzbekistan's ambassador to the U.S. just a few days later."168 Exports of gas from Uzbekistan must be routed through two gas pipeline monopolies  Gazprom in Russia & Tractebel in Kazakhstan. Although Enron had been in discussions with Gazprom for two years, in late 1998, Enron quietly withdrew from its investments in Uzbekistan, citing its inability to secure a hard currency market from Gazprom for the gas it hoped to produce jointly with Uzbekneftegaz. Venezuela Accro III & IV natural gas liquids extraction plants Overseas Private Investment Corporation (OPIC, U.S.) $400 million insurance approved 1998 Export-Import Bank of the U.S. (Ex-Im) $132.3 million loan approved 2000-09-13 Export-Import Bank of the U.S. (Ex-Im) $65 million loan approved 1993 COFACE (France) $90 million finance approved 1993 SACE (Italy) $40 million finance approved 1993 Enron's role: In 1998, Enron (50% owner) led a winning consortium on a bid to build, own, & operate the Accro III & IV natural gas extraction facilities in Venezuela. Other members of the consortium included TransCanada Pipelines and Tecnoconsult S.A. Before the Enron-led consortium won the ENRON'S PAWNS $450 million Accro gas-plant project, many bidders "retreated from bidding... over several issues, including political, pricing, product specifications, and market-territory exclusions."169 Enron also benefited from export credit agency support for an earlier phase of the Accroven development. In a deal that closed in July 1993, Enron Liquid & Dow Hyrdrocarbons were the customers for "one the largest project financing in Latin America since the 1980s debt crisis." The $550 million Accrogas LNG project was supported by at least three export credit agencies, including U.S. Ex-Im ($65 million), COFACE (France, $90 million) and SACE (Italy, $40 million).170 Vietnam Craft Corp iron project U.S. Trade & Development Agency (TDA) $0.4 million grant approved 1997 Enron's role: For years, Vietnam was off limits for OPIC, Ex- Im and other U.S. govt financing for businesses because of its communist govt. However, that changed in 1997 after Linda F. Powers, senior vice president for global finance at Enron International, told a House Subcommittee: "If we have no Ex-Im Bank, it would literally force us to open up a foreign location and move our manufacturing jobs overseas in sufficient size & scope so that we have the interest of the export credit agency of that country — for example, Canada." Powers said that Enron was trying to obtain French financing for an unspecified project in Vietnam, because OPIC projects were unavailable.171 Within months of Ms. Powers' statement to Congress, President Bill Clinton revoked a provision barring U.S. agency assistance to projects in Vietnam. The U.S. TDA responded with grants toward a now-dormant Enron initiative to build a 675MW power plant in Soc Trang province (see below) and a grant toward an iron project in which Enron was a consortium partner. The latter project, being developed by Craft Corp., obtained a TDA grant, and sought OPIC & Ex-Im financing, for a $300 million direct reduced iron plant it hoped to build in Vietnam. In 1997, the U.S. TDA approved a $390,125 grant "to partially fund a feasibility study on a Direct Reduced Iron project in the southern part of Vietnam. The study was conducted by Raytheon." After sanctions were lifted, a Craft official explained the consortium's intentions. "We're ecstatic (about the waiver) because this will enable us to pursue OPIC financing," said Greg Craft, managing director of Craft Corp. He said his company would apply for $150 million in support from OPIC.172In congressional testimony, Craft explained, "Our American consortium, including partners Raytheon, Enron and Midrex, will utilize U.S. technology, U.S. services, and U.S. equipt in the implementation of this strategically important project. We were awarded the first TDA grant to Vietnam last September and have recently submitted an application to OPIC for financing of $150 million. Advanced discussions with Ex-Im regarding additional financing & insurance are also underway. However, without access to these govt programs there would be no alternative but to turn to foreign financial & equipt sources."173 Vietnam Soc Trang 675MW gas-fired power plant U.S. Trade & Development Agency (TDA) $0.54 million grants approved 1998, 2000 Enron's role: In 2000, TDA provided a $92,609 grant toward Enron's proposed Soc Trang power plant "to further support the Ministry of Industry & Electricity Vietnam in their efforts to move forward with the Power Purchase, Site Lease, two Fuel Supply, and Build, Operate & Transfer Agreements." This followed a $450,000 technical assistance program with the identical mandate.174According to its 1998 annual report, "TDA invested in three independent power projects (IPPs) in Vietnam in 1998. In these projects, a private company invests its own money to construct & operate a power plant and then sells the electricity to the national grid. One of TDA's IPP investments included a technical assistance grant in support of efforts by Enron of Houston, Texas, to develop a gas fired power plant." 175

¹⁸   6.1.00 ImpactResearch: A Program of the Data Ctr

¹⁹   2.21.02 Bloomberg

²⁰   Amoco purchased a 50% share in the Chaco unit for $307 million, which was named Empresa Petrolera Chaco. Chaco is an oil exploration & production co., which owns one of the YPFBs two big oil & gas fields. According to Amoco, the new company will intensify natural gas production to feed the Rio Grande, Bolivia to Sao Paolo and Porto Alegre, Brazil pipeline. A mostly Argentine consortium (including Pluspetrol Bolivia, Perez Companc, and YPF) won a bid for Adina Sam, which owns & operates the other big oil & gas field ($264.8 million). Andina SAM's oil fields produced about one-third of Bolivia's oil and one-quarter of its gas in 1996.

²¹   The other half of the company is owned by Bolivian pension funds (34%) and current & former YPFB employees (16%), who also hold a combined 50% share in the other two spin-offs.

²²   2.23.02 Bloomberg; 2.11.02 "Analysis; Pipeline Survey," Petroleum Economist

²³   World Bank MOS, February 4, 1998.

^23a   Kate Bayliss and David Hall, "Enron: A corporate contribution to global inequality", PSIRU, University of Greenwich, June 2001. http://www.psiru.org/reports/2001-12-enronpro.doc. Also, The Public I, Corporate Lobbying on Latin America: January 1, 1996 through December 31, 2000. http://www.public-i.org/Latam_Wash_tables.htm#Corporate Lobbying.

^23b   The Public I, Corporate Lobbying on Latin America: January 1, 1996 through December 31, 2000. http://www.publici.org/Latam_Wash_tables.htm#Corporate Lobbying.

^23c   Departamento Nacional de Planeación, Privatización de los servicios públicos: en busca de mayor eficiencia y beneficio social. http://www.dnp.gov.co/ArchivosWeb/Direccion_Infraestructura_Energia/Publicaciones/PRIVATIZACIONES.doc.

^23d   Noboa, Rafael. "Pastrana Touts Peace Plan to U.S. Oil Executives", Agence France Presse, October 20, 1999.

^23e   "Levin Shows How U.S. Banks Are Used to Launder Drug Money and Fraud Proceeds; Findings of Year-Long Staff Investigation Into High Risk Foreign Banks Released Today," Sen. Levin press release, Feb. 5, 2001.

^23f   Minority Staff of the Permanant Subcommittee on Investigations, "Correspondent Banking: A Gateway for Money Laundering," U.S. Senate, February 5, 2001, available at http://www.senate.gov/~gov_affairs/psi_finalreport. pdf.

^23g   Latin America Energy Alert, "Enron Accused of Seeking Sweetheart Gas Export Deal", December 8, 1999. The Oil Daily, "Enron Still Seeking Colombia-Panama Line Despite its Central Role in Political Drama", February 24, 2000.

²⁴   For further details on the ownership struggle at the Puerto Plata plant, see court case: Smith/Enron Cogeneration Ltd Partnership, Enron International, et al., vs. Smith Cogeneration intl Inc., U.S. Court of Appeals for the Second Circuit, Docket No. 99-7101, Argued Sept. 15, 1999, Decided Dec. 8, 1999.

²⁵   MARAD approved guarantees to build three power barges for this project. In 1994, MARAD approved a $34.3 million guarantee for McDermott's construction of one barge mounted power plant for the Puerto Plata project. In 1996, MARAD approved a $50 million guarantee toward the construction of two Smith-Enron barge mounted power barges constructed by Trinity Marine of Beaumont, Texas.

²⁶   Iturbides, Matías, "Deuda Eléctrica es de U.S.$217 millones". Listín Diario, Edición Digital, October 24, 2001.

^26a   "Policia mata adolescente de 14 anos en protesta contra apagones." Agence France Presse, August 25, 2001.

²⁷   PSIRU Enron Report, June 2001.

²⁸   "Increased Blackouts and higher prices follow electricity privitization in Dominican Republic," PSIRU News Item 4113, http://www.psiru.org/news/4113.htm.

²⁹   Informe del Grupo Investigador de la Comisión Especial del Senado que Analizó el Proceso de Capitalización de la CDE. http://www.senado.gov.do/asesores/privatizacioncde/privatizacioncde.htm.

³⁰   Ortiz, Emilio, "Empresa Aclara Nexus con Emporio Enron", El Nacional, January 31, 2002.

³¹   From Cerigua Weekly Briefs, Jan. 20, 1993.

³²   Lee M. Goodwin, Central American Development, Independent Energy, 1995.

³³   New York Times, Dec. 27, 1995.

³⁴   Intl Gas Report, February 19, 1993; Africa Review World of Information, February 1997; Africa Energy & Mining, Nov. 15, 1995, Feb. 28 and July 10, 1996, Jan. 22, 1997; Oil Daily, Oct. 18, 1994; U.S. Embassy report in intl Market Insight Reports, April 8, 1997.

³⁵   See http://www.usmission.hn/english/mission/sections/wwwhce15.html.

³⁶   Enron press release, Jan. 15, 1999.

³⁷   Tim Shorrock, "Enron's Asian misadventure," Asia Times, Jan. 29, 2002, available at http://www.atimes.com/global-econ/DA29Dj01.html.

³⁸   "…Our exposure is, as you know, sir, we don't provide corporate finance, we provide finance to a project. So in fact it's the project that OPIC was lending to, not Enron," OPIC President Peter Watson, in testimony before House Appropriations Foreign Operations Subcommittee, March 7, 2002, referring to Dabhol power project in India.

³⁹   In a Dec. 10, 2001, internal memorandum obtained by the Washington Post, an OPIC staffer cites a lower figure: "Combined maximum OPIC exposure to projects sponsored by Enron is $1.059 billion of OPIC's $15.2 billion portfolio. (as of Sept. 30, 2001)" But this number grows more varied as the staffer continues: "OPIC Finance committed exposure is $855 million…. The maximum contingent liability of the 10 political risk insurance projects is $750 million." See: http://www.washingtonpost.com/wp-dyn/articles/A19800-2002Jan22.html for the actual OPIC documents.

⁴⁰   Tom Connors, "Exporters fear loss of Ex-Im Bank & OPIC," Journal of Commerce, May 21, 1997.

⁴¹   "Conference Report: Enron chief criticizes U.S. Congress & World Bank," International Trade Finance, October 11, 1996.

⁴²   Kenneth Lay, "Prepared testimony of Kenneth L. Lay, chairman, Enron Corp. before the Committee on Appropriations, Subcommittee on Foreign Operations, U.S. House of Representatives," March 23, 1995.

⁴³   Ex-Im press releases, March 12, 2001 and March 17, 2000.

⁴⁴   See MARAD spread sheet "Maritime Loan Guarantee Program" (FY1994- 2000) available at http://www.marad.dot.gov.

⁴⁵   See http://www.talkingpointsmemo.com/jan0204.html.

⁴⁶   White House press release, "Bush names former State, Treasury Official as U.S.TR," Jan. 11, 2001, see: http://usembassy.state.gov/tokyo/wwwhs083.html.

⁴⁷   Pratap Chatterjee, "Covert Action & Political Clout help Enron win Contracts," Inter Press Service, July 31, 1995; Vijay Prashad, "The Power Elite: Enron & Frank Wisner," People's Democracy, Nov. 16, 1997.

⁴⁸   David Aaron, Under Secretary of Commerce for intl Trade, "Foreign Press Center briefing; Subject: Upcoming trip to West & Southeast Europe," National Press Building, Washington, DC, Sept. 9, 1999, available at http://www.usembassy.it/file9909/alia/99090921.htm.

⁴⁹   From Financial Times Surveys (Croatia 2000), available at http://specials.ft.com/ln/ftsurveys/country/sce57e.htm: "In a recently-published transcript of secretly-taped conversations from the late president Tudjman's offices, the president discusses the granting of a contract to build a power station to Enron, the U.S. energy company. The president believed that by granting the contract - which the present govt believes is highly disadvantageous to Croatia - he could curry favour with the U.S.. Enron executives carefully give non-committal answers to his questions in the transcript. But Mr Tudjman hoped that the contract - which tied the govt to buying electricity at a fixed price for 20 years - would bring him a visit to the White House. He also thought that it would persuade the U.S. to push for Croatia's membership of the World Trade Organisation and to ask The Hague war crimes tribunal to take pressure off Croatia. 'Every one of us in this room could end up in The Hague,' he is recorded as telling his advisers."

⁵⁰   Transcript of Frontline interview with Kenneth Lay, May 22, 2001, available at http://www.pbs.org/wgbh/pages/frontline/shows/blackout/interviews/lay.html.

⁵¹   In a Frontline interview on May 17, 2001, Vice President Cheney was asked, "But you did meet with [Enron chairman] Ken Lay." He replied, "Ken's been a friend. I once was involved doing a baseball stadium for Ken Lay, which didn't have anything to do with energy. This time around, when he came in to see me, he did want to talk about energy." (Transcript of Frontline interview with Vice President Dick Cheney, May 17, 2001, available at http://www.pbs.org/wgbh/pages/frontline/shows/blackout/interviews/cheney.ht ml.)

⁵²   For further information, visit the website: http://www.eca-watch.org.

⁵³   CDC annual report 1999, available at: http://www.cdcgroup.com/investor/content/ annual_report/pdf/br_power.pdf.

⁵⁴   COFACE press release, Dec. 4, 2001, available at: http://www.coface.com/anglais/rub2/pres/041201gb.htm..

⁵⁵   For MDBs, this figure is based on U.S. Govt voting shares held at these institutions.

⁵⁶   CNN Countrywatch (Argentina-Energy 2000); OPIC Annual Reports 1992-95; PR Newswire, Dec. 3, 1992; Latin American Law & Business Report, May 31, 1995; Euroweek, Aug. 9 and Sept. 27, 1996; Reuters, Aug 1, 1996; Xinhua News Agency, Oct. 14, 1998.

⁵⁷   Enron Global Power & Pipelines (EGPP) LLC, Form 10-Q for the Quarterly Period ended September 30, 1997, Securities & Exchange Commission file no. 1-13584.

⁵⁸   World Bank Annual Report FY1996; LatinFinance, March 1996; Platt's Oilgram News, Sept. 15, 1992; Pipe Line & Gas Industry, January 1997; Inter Press Service, May 20, 1997; PR Newswire, December 5 & 6, 1996, May 19, 1997; Facts on File World News Digest, Dec. 19, 1996; Houston Chronicle, Dec. 6, 1996.

⁵⁹   Petro-Canada, "International Management Bolivia Project," website available at http://www.petro-canada.ca/eng/global/int-sec.html.

⁶⁰   "Project Abstract, Bolivia, Transredes S.A. 2001-2004 Capital Expenditures," Inter-American Development Bank, Feb. 14, 2002 available at: http://www.iadb.org/exr/doc98/pro/abo0192.pdf.

⁶¹   Ibid.

⁶²   "News summary," EFE News Service, Feb. 14, 2002.

⁶³   Juliette Kerr, "Construction of Yacuiba-Rio Grande Pipeline Launched," World Markets Analysis, Feb. 7, 2002.

⁶⁴   "Analysis; Pipeline Survey," Petroleum Economist, Feb. 11, 2002.

⁶⁵   Some examples of environmental opposition to this project can be found in: Atossa Soltani, Derrick Hindery, A World Class Disaster: The Case of the Bolivia-Cuiaba Pipeline, Amazon Watch, December 8, 1999, available at: http://www.amazonwatch.org/enroncuiaba.html; "Enron's Bolivia Pipeline Called a World Class Disaster," Friends of the Earth (press release), Dec. 10, 1999; and, "Bolivia: tropical dry forests in danger," World Rainforest Movement, February 1999.

⁶⁶   Zsusanna Pató, Piping the Forest: The Bolivia-Brasil Gas Pipeline, CEE Bankwatch Network, December 2000; "U.S.: Chaim Wachsberger," International Financial Law Review, 2001; Vera Saavedra Durao, "Enron to raise $350 million, with OPIC guarantee," Gazeta Mercantil Online, November 4, 1999; Ines Landeira, "Enron intends to borrow $500M in first quarter of 1999," Gazeta Mercantil Invest News, Dec. 11, 1998.

⁶⁷   Alejandro Tumayan, "Bankrupt Enron starts U.S.$570mn Cuiaba expansion – Brazil," Business News Americas, March 7, 2002.

⁶⁸   "Brazil's President inaugurates final leg of Bolivia-Brazil gas pipeline," Alexander's Gas & Oil, May 12, 2000, available at http://www.gasandoil.com/goc/company/cnl01969.htm..

⁶⁹   "Bolivia-Brazil Gas Pipeline," Economy & Energy, September/October 1998, available at: http://ecen.com/eee10/gas.htm. This site includes an excellent map of the pipeline's route.

⁷⁰   Figures based on consensus of several sources, including Economy & Energy, September/October 1998; Etienne Kvassay, "Pipeline with Bolivia with Bolivia Completed," intl Market Insight (U.S. Department of State), Feb. 22, 1999; "Brazil's President inaugurates final leg of Bolivia-Brazil gas pipeline, Alexander's Gas & Oil, May 12, 2000; "Financing" on Petrobras web page: http://www.petrobras.com.br/ingles/revista/not02.htm; World Bank press release, Dec. 18, 1997; IDB press release, Dec. 17, 1997; "Senza al cuna considerazione etica: investimenti privati, driritti umani ed amiente," GNG Initiative, available at: http://www.gnginitiative.net/Documentazione%5CISSUES%5CPrs%5CNGOs%5 C10_NGOs.doc ; World Bank Loans & Credits Index (Dec. 20, 2000).

^{71 Patrick McGeehan, "2 Early Enron Investors Didn't See the End Coming," New York Times, Jan. 22, 2002.}

^{72 Enron press release, July 16, 1998; Latin Finance, 1998; Gazeta Mercantil Invest News, July 16 & Dec. 1, 1998; Power Economics, Sept. 30, 1998; Fitch IBCA press release, Feb. 23, 1999; OPIC press release, Sept, 23, 1998.}

^{73 OPIC press release, June 19, 2001.}

^{74 Ibid.}

^{75 "Latin America: Enron Fallout is a Hot Issue," Oil Daily, March 4, 2002.}

^{76 "Enwrong: The victims of the Enron collapse are piling up by the day," Project Finance, Jan. 1, 2002.}

^{77 TDA press release, January 20, 2000: http://www.tda.gov/trade/press/jan20_00.html.}

^{78 Ibid.}

^{79 "U.S. TDA announces follow-on technical assistance for Trans-Caspian pipeline," U.S. Trade & Development Agency press release, Dec. 17, 1998; James P. Rubin, "TDA-funded Caspian Gas Study winner announced," U.S. State Department press statement, July 31, 1998; "TDA to support Azerbaijan's involvement in Trans-Caspian Gas Pipeline Project," U.S. TDA press release, October 26, 1999.}

^{80 ." World Report 2000, "Human Rights Watch, 2000, "Corporations & Human Rights" chapter, available at http://www.hrw.org/wr2k/Issues-03.htm.}

^{81 U.S. Energy Information Agency, "Caspian Sea Region: Natural Gas Export Options," U.S. Department of Energy, February 2002, available at: http://www.eia.doe.gov/emeu/cabs/caspgase.html.}

^{82 MIGA Annual Report 1996.}

^{83 "Ex-Im Bank helps California Small Business to Export Wind Energy Technology to China," U.S. Export- Import Bank, press release, June 20, 1996; Minutes of the Board of Directors, U.S. Export-Import Bank, May 28, 1996, June 14, 1996, & Sept. 30, 1997; "Enron acquires Zond, launches Enron Renewable Energy Corp.," American Wind Energy Association press release, Jan. 6, 1997.}

^{84 According to a January 18, 2002 article by the Philadelphia Inquirer, "the Export Import Bank lent Enron $225 million for an energy plant in Turkey and $135 million for a plant in Venezuela," both loans had payments "that were guaranteed by revenues from the sale of power at those plants."}

^{85 A description of Enron's wind projects can be seen at the corporate website: http://www.wind.enron.com/inside/casestudies/.}

^{86 See http://www.enron.com/corp/pressroom/releases/2002/ene/022002ReleaseWindL tr.html.}

^{87 "Centragas 'BB' FC rating affirmed; removed from CreditWatch," Standard & Poor's press release, December 13, 2001, available at http://www.standardandpoors. com/RatingsActions/RatingsNews/CorporateFinance/Articles/121401_ce ntragas.html.}

^{88 Legal Times, February 21, 2000.}

^{89 Oil Daily, March 4, 2002.}

^{90 David Hall & Kate Bayliss, Energy restructuring in Albania, Bosnia, Croatia, Slovenia, former Yugoslavia, and surrounding region, Public Services International Research Unit, July 2000.}

^{91 An EIA dated November 8, 1999, for the Jertovec 240 MW power plant is available at the EBRD's website: http://www.ebrd.com/english/enviro/eias/croatia/jertovec.pdf.}

^{92 David Hall & Kate Bayliss, Energy restructuring in Albania, Bosnia, Croatia, Slovenia, former Yugoslavia, and surrounding region, Public Services International Research Unit, July 2000.}

^{93 The Commonwealth Development Corporation, recently renamed CDC Capital Group, is a foreign investment arm of the UK govt. It boasted of growing ties to Enron in its 1999 annual report, noting its expansion into numerous power plants in the Caribbean basin: "This expansion has widened the range of our close business relationships to include a number of players in the power sector such as Enron, Coastal, Duke, CMS and Cogentrix of the U.S.A, Ormat of Israel & Ireland's ESBI." (CDC annual report 1999, available at: http://www.cdcgroup.com/investor/content/annual_report/pdf/br_power.pdf).}

^{94 CDC Annual Report, 1999: http://www.cdcgroup.com/investor/content/annual_ report/pdf/br_power.pdf).}

^{95 CDC Annual Report, 2001: http://www.cdcgroup.com/annualreport/2001/report_busreview_americas2.html and http://www.cdcgroup.com/annualreport/2001/pdf/businessreviewsector.pdf.}

^{96 Ibid.}

^{97 U.S. Dept. of Transportation, Maritime Administration, Title XI Program, "Approved Applications FY1996," available at http://www.marad.dot.gov/TitleXI/PDF/fy1996.pdf.}

^{98 From CDC (1999 annual report): "Our stake in Haina, alongside our investments in San Pedro de Macoris & Compania de Electricidad de Puerto Plata gives us a very significant role in the electricity industry of the Dominican Republic." CDCs 2000 annual report says essentially the same thing, with no details on the size of CDC's investment.}

^{99 World Bank Loans & Credits Index, August 31, 1999; OPIC annual report 1999; and Ashok Dutta, "Enron close to finalizing deal for Gaza power plant," Gulf News, June 22, 2000.}

^{100 James V. Grimaldi, "Stalled venture in Gaza shows Enron's daring power project ran into Middle East realities," Washington Post, March 2, 2002.}

^{101 CDC's total investments in Guatemala, including Puerto Quetzal, the 24MW Orzunil plant, and the 20MW CAIGSA plant, were valued at $50 million in 2001. See "CDC: ilumina Guatemala," Actualidad Economica, 2001, available at http://www.miactualidad.com/234-235/12-cdc.html.}

^{102 U.S. Dept. of Transportation, Maritime Administration, Title XI Program, "Maritime Loan Guarantee Program," speadsheet available at www.marad.dot.gov/budget/2002/Approve.XLS. 103 World Bank, http://www.worldbank.org/html/fpd/privatesector/Descriptions/power3.htm. 104 Kate Bayliss & David Hall, PSIRU, University of Greenwich, "Enron: A Corporate Contribution to Global Inequity," June 2001: http://www.psiru.org/reports/2001-12-enronpro.doc. 105 World Bank, http://www.worldbank.org/html/fpd/privatesector/Descriptions/power3.htm. 106 Kate Bayliss & David Hall, PSIRU. 107 Pete Yost. "Enron Asks Feds for Insurance Help," February 25, 2002. 108 Kate Bayliss & David Hall, PSIRU. 109 The 1998 Human Rights Watch investigation was conducted over six weeks and "details the development of the Dabhol Power project from its inception in 1992 through 1998 in order to illustrate an unbroken continuum: the immense influence that Enron exercised over the central & Maharashtra govts; to describe the company's interaction with villagers—whose legitimate concerns for their livelihood and environment were ignored or dismissed—leading them eventually to oppose the project; to make clear that various avenues to address their concerns about the project—judicial proceedings & direct dialogue with the company—had been exhausted in ways that raised questions rather than answering them. The local opposition that formed to protest the project's lack of transparency, its human impact, its threat to villagers' livelihoods, and its potential to do environmental damage was the affected population's last recourse. Except in one case of stone throwing and another incident where a water pipeline was broken, the opposition did not resort to violence; villagers' groups did not endorse sabotage, and their methods were peaceful. Yet they were met with serious, sometimes brutal human rights violations carried out on behalf of the state's & the company's interests. The relationship between the controversies surrounding implementation of the project, the efforts to challenge its development, and violations of human rights are all described in detail here because each is an integral part of a complex, disturbing situation." From the Human Rights Watch's website: http://www.hrw.org/hrw/reports/1999/enron. 110 Kate Bayliss & David Hall, PSIRU. 111 OPIC annual report 1994; Ex-Im annual report 1994; Enron press releases, Dec. 10, 1996 & May 6, 1999; S Ravindran, "Dabhol lenders plan forbearance pact with export credit agencies," rediff.com, Dec. 2001, at: http://www.rediff.com/money/2001/dec/05enron1.htm; "Enron team persuades JBIC to give more time to DPC," Economic Times (India), October 25, 2001; "Dabhol LNG-Fired Power Plant - Phase II," World Bank web site: http://www.worldbank.org/html/fpd/privatesector/Descriptions/power3.htm. 112 R. Padmanabhan, "A deal questioned," Frontline (magazine of The Hindu (India), Mar. 7-20, 1998, available at: http://www.flonnet.com/fl1505/15050950.htm. 113 Nilanjan Mukhopadhyay, "An Oily Scam: Privatisation in the Petroleum Sector in India," Public Interest Research Group (India), November 1997. 114 OPIC annual report, 1996. 115 "Union Govt (Commercial) Participation of private parties with Oil & Natural Gas Corporation Limited in production of crude oil & natural gas," Comptroller & Auditor General of India, May 1996, available at http://www.cagindia.org/reports/commercial/1996_book5/. 116 Limitation report, In the matter of Center for Public Interest Litigation & Anr. versus Union of India & Others, filed Feb. 17, 1999, in the Supreme Court of India, available at: http://www.altindia.net/pil/word6_95/mukta.doc. 117 "Statement from BG Group on the purchase of Enron Oil & Gas India Limited," BG Group press release, Dec. 24, 2001. 118 Sustainable Energy & Economy Network (Institute for Policy Studies, U.S.A) and the intl Trade Information Service (U.S.A), The World Bank and the G-7: Still Changing the Earth's Climate for Business, 1997-98, available at http://www.seen.org. 119 World Bank project information document, "India-Solar Thermal Power Project Region South Asia Sector Energy Project ID INGE43021," undated, available at http://www.worldbank.org/pics/gef/in43021.txt. 120 Sustainable Energy & Economy Network (Institute for Policy Studies, U.S.A) and the intl Trade Information Service (U.S.A), "The World Bank & the G-7: Still Changing the Earth's Climate for Business, 1997-98." Version 1.3, December 1998. 121 World Bank Monthly Operational Summary, February 2001 & February 2002, available at http://www.worldbank.org/html/opr/procure/MOS/sasia.html. 122 Kate Bayliss & David Hall, PSIRU. 123 Ibid. 124 As cited in Tim Shorrock, "Enron's Asian misadventure," Asia Times, Jan. 29, 2002, available at http://www.atimes.com/global-econ/DA29Dj01.html. 125 Ibid. 126 Kate Bayliss & David Hall, PSIRU. 4 2 4 3 ENRON'S PAWNS 127 Ibid. 128 Enron annual report 1998, at: http://www.enron.com/corp/investors/annuals/annual98/wholesale.html. 129 "Enron consortium completes financing of Italian power project, Enron press release, Dec. 3, 1996, available at: http://www.enron.com/corp/pressroom/releases/1996/142saras.html. 130 ibid.; see also, "EIB advances loans in Italy in 1996 totalling ITL 8 000 billion," European Investment Bank press release, Dec. 17, 1996, at: http://www.eib.org/pub/press/1996/prpm6096.html. 131 "Sarlux IGCC power plant, Italy," power-technology.com, at: http://www.power-technology.com/projects/sarlux/index.html. 132 U.S. Trade & Development Agency website, http://www.tda.gov/region/europe.html. 133 "Macedonia: Enron to study grid projects," Power East Europe, April 19, 2000. 134 "ESM hopeful of early start on Bulgaria link," FT Energy Newsletters – Power in East Europe, March 19, 2001. 135 "Basic Infrastructure Projects in South-Eastern Europe," European Investment Bank (Balkans & Turkey Division), April 30, 2001, available at: http://www.eib.org/lending/balkan/bii_apr.pdf. 136 Inter-American Development Bank annual report, 2000, available at: http://www.iadb.org/pri/documents/PRI%20-%20Highlights%202000.pdf. 137 "Tractabel shows interest in Enron's remaining 20% of 245-MW Mexico cogen," Global Power Report, Feb. 1, 2002. 138 "Enron abandons Mexican plant," Power Markets Week, Jan. 21, 2002. 139 World Bank Annual Report FY1994. 140 World Bank Project Information Document, Project ID MZPA1780, June 16, 1994. 141 In 1997, the U.S. Maritime Administration approved a $50 million loan guarantee for construction of one power barge by Todd Shipyard (Seattle, Wash.) for the Corinto power project (total cost $68.7 million). See MARAD spreadsheet cited above. 142 From Enron website http://www.ei.enron.com/presence/caribbean.html. 143 See http://www.cdcgroup.com/investor/content/annual_report/pdf/cdc_report.pdf. 144 See http://www.ita.doc.gov/td/advocacy/Enron-nc2.htm. 145 World Bank Project Appraisal Document Energy Team, Infrastructure Group, Africa Region, "Project appraisal document on a proposed credit in the amount of SDR 78.60 million (U.S.$100 million equivalent) to the Federal Republic of Nigeria for a Transmission Development Project," June 15, 2001. 146 Hall & Bayliss, PSIRU, June 2001. 147 "Obasanjo Chides Enron On Lagos Power Project," Africa News, June 4, 2001. 148 Hall & Bayliss, PSIRU, June 2001. 149 "U.S. Enron Writes Tinubu, Allays Fear On Independent Power Project," Africa News, Dec. 6, 2001; Natasha Calvert, "New mindset," Project Finance, Aug. 1, 2001. 150 "Bankrupt Enron Sells Off Assets to Pay $40bn Debt," Africa News, Jan. 24, 2002. 151 OPIC Board approves $200 million in insurance for Nigeria's first private power project," OPIC press release, June 19, 200. 152 Africa News, Dec. 6, 2001. 153 intl Finance Corp.: "… the Govt of Pakistan has introduced a Power Policy Guideline (March 1994) to increase the participation of independent power producers on its system. Enpak will be implemented under the new guidelines. The project, to be located in Khanewal in the Punjab Province, is to build, own & operate a power plant with a net capacity of 782 MW. The technology used in the project is conventional steam electric generation, and the turnkey contractor is a consortium of Enron & Bechtel. The date-certain EPC contract with the Enron/Bechtel consortium will enable this power plant to commence commercial operations by mid-1999." From World Bank project information document at: http://www.worldbank.org/pics/ifcspi/pks07531.txt. 154 "Panama completes privatization of electricity companies," International Finance Corp. press release, Nov. 18, 1998; "Ex-Im Bank supports U.S. exports to Panama power project," U.S. Export-Import Bank press release, Sept. 25, 1996; MIGA annual report 2000; "Lloyds TSB Bank plc," MIGA project description, available at: http://www.miga.org/screens/projects/guarant/regions/lac/Lloyds.htm. 155 In addition to these two Philippine power plants (Batangas, Subic Bay) in which Enron holds 50% or more equity, Enron has been contracted to supply fuel to two power plants led by First Philippines Holding Co. (FPHC): Santa Rita and San Lorenzo. The Santa Rita plant is a 1,000MW power project owned by FPHC (51%), BG plc (40%) and Meralco Pension Fund (9%). In 1997, J.P. Morgan announced the financial closure on this venture, in which ECAs were heavily involved. KfW (Germany) extended a $190 million loan under a comprehensive guarantee by the German export credit agency, HERMES Kreditversicherungs-AG, and the European Investment Bank (EIB) extended $78 million in financing. This was "the first independent power project in Asia financed by the EIB," according to J.P. Morgan. Also, "FGPC has entered into a Liquid Fuel Purchase Contract with Enron Capital & Trade Resources intl Corp. for the purchase of liquid fuel [oil]." ("First Gas Power Corporation signs financing for Philippine power project," JP Morgan press release, Sept. 4, 1997, available at http://www2.jpmorgan.com/CorpInfo/PressReleases/1997/FIrstGasPower.htm) In March 2000, BG intl (a/k/a British Gas) announced that it had concluded financing for the adjacent 500MW San Lorenzo power plant The U.S.$ 500 million project financing comprises four loan facilities of up to 16 years totalling U.S.$ 375 million, and equity investments of U.S.$ 125 million. In addition to private finance, export credit financing was provided by Hermes Kreditverischerungs AG (HERMES), while political risk insurance was provided by the UK's Export Credits Guarantee Department (ECGD), and by Bundesgarantie für Kapitalanlagen im Ausland (GKA), under the German govt's insurance programme. The insurance provided by the ECGD was its largest ever for a power project. 156 Enron website, "Enron Global Services, International" at http://www.enron.com/corp/pressroom/factsheets/egs/egsi.html. 157 OPIC annual report 1993. 158 In a 1997 filing with the Securities & Exchange Commission, Enron noted, "In 1994, Batangas Power Corp. borrowed an aggregate principal amount of $95 million under term loan agreements with the Overseas Private Investment Corporation in the amount of $50 million, the Asian Development Bank in the amount of $26.5 million, and Citibank, N.A., as agent for Citibank, N.A. and The First National Bank of Boston in the amount of $18.5 million …As of December 31, 1996, the principal amounts outstanding on the OPIC, ADB and Citibank Loans were $34.5 million, $18.5 million & $8.4 million, respectively. Enron Corp. and Chemholding Corp., a Philippine corporation, have jointly and severally guaranteed 25% of the outstanding principal and interest due under the OPIC Loan in the event NPC fails to pay amounts due under the Batangas BOT Agreement." (Enron Global Power & Pipelines (EGPP) LLC, Form 10-Q for the Quarterly Period ended September 30, 1997, Securities & Exchange Commission file no. 1-13584). 159 "Enron Global Services – International" website. 160 OPIC annual report 1998; Climate Change: Assessing Our Actions, OPIC, Appendix 1, October 2000. 161 http://www.tda.gov/region/nisproj.html. 162 Enron formed Enron Oil & Gas in 1987. It spun off 16 percent of the unit to the public in 1989 and later further reduced its stake to just above 50 percent. In 1999, Enron traded all but 9.5 percent of its interest in Enron Oil & Gas in exchange for operations in China & India, and the unit changed its name to EOG Resources. Enron Oil & Gas India was acquired by a British firm, British Gas, in January 2002. 163 Enron won a turnkey contract to construct a 500 MW power plant in Turkey with the help of an earlier TDA technical symposium & follow-on conference, according to the U.S. TDA annual report, 1999. 164 OPIC annual reports 1994-1996; Ex-Im annual reports 1995 & 1996; Enron press release, Oct. 8, 1996; Independent Energy, Oct. 1996; OPIC press releases, Oct. 17, 1994 & June 11, 1996; Independent Power Report, Nov. 4, 1994, June 28, 1996; Power Economics, Dec. 31, 1998; Middle East Economic Digest, Nov. 15 & Dec. 31, 1996. 165 According to a U.S. Trade & Development Agency website, the agency is providing partial funding ($500,000) for a study on development of two gas fields. Enron is conducting the study." See http://www.tda.gov/region/nisproj.html. 166 Maxim Kniazkov, "Uzbekistan," the Voice of America (radio broadcast transcript), June 24, 1996. 167 IPS/SEEN review of EBRD portfolio, 1997. 168 "New letters hint at Bush-Lay friendship," Associated Press, Feb. 16, 2002. 169 Oil & Gas Journal, May 18, 1998. ENRON'S PAWNS 170 Directory of Innovative Financing, Inter-American Development Bank, see page: http://www.iadb.org/sds/publication/publication_67_c.htm; additional sources on this project: Ex-Im board minutes, Aug. 1, 2000 & Sept. 13, 2000; OPIC press release, Sept. 22, 1998; ESP-Business Opportunities in Latin America & the Caribbean, August 1, 1998; TransCanada Pipelines press release, July 14, 1998. 171 Tom Connors, "Exporters fear loss of Ex-Im Bank & OPIC," Journal of Commerce, May 21, 1997. 172 Andy Soloman, "U.S. firms in Vietnam welcome Jackson-Vanik waiver," Reuters, March 11, 1998. 173 Statement of Greig Craft, Vice Chairman Asia-Pacific Council of American Chambers of Commerce, Hanoi, Vietnam, "Testimony Before the Subcommittee on Trade of the House Committee on Ways & Means Hearing on U.S.-Vietnam Trade Relations," June 18, 1998. 174 U.S. TDA website, Regions: Asia Pacific at http://www.tda.gov/region/asiapac. html. 175 U.S. TDA annual report 1998 at http://www.tda.gov/abouttda/report98/highlightsasiapacific. html.}

§ite map courtesy of FreeFind

presented by §

OCIAL JUSTICE