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Date Posted: 11:09:13 02/11/02 Mon
Author: Larsen E.
Author Host/IP: NoHost / 199.80.13.70
Subject: The Clinton Factor, Enron, and India

THE CLINTON FACTOR

By PAUL SPERRY
------------------------------------------------------------

February 9, 2002 -- AT Tuesday's Enron hearing, Sen. Fritz Hollings (D-S.C.) blamed the energy giant's death spiral on not just a "culture of corporate corruption," but also "political corruption." But the crusty Commerce Committee Chairman pointed his finger one way - at Republicans.
After Hollings noted that President Bush appointed Enron people to key regulatory posts, while Vice President Dick Cheney lobbied California and India on Enron's behalf, a Republican on the panel tried to tie President Clinton to the scandal.

"I don't know how you get Clinton into it," Hollings growled. Here's how:

In 1994, after meeting with India's then prime minister, Clinton ordered his energy secretary to take U.S. executives on a trade junket to India. Enron execs got seats on the trip and came back with an agreement to build a $3 billion power plant near Bombay.

To help finance the deal, Clinton turned to the federally-funded Export-Import Bank. (One bank director was Maria Haley, Gov. Clinton's trade contact at the Arkansas Industrial Development Commission. Her husband was convicted in the Whitewater probe.)

The Ex-Im Bank loaned the Enron-led India project a total of $302 million. The Overseas Private Investment Corp. (also federally-funded) kicked in another $160 million in loan guarantees, while underwriting the deal with $180 million in political-risk insurance.

The risky deal would never have got off the ground if not for the taxpayer backing. Commercial banks rarely make big loans for long-term projects in unstable markets like India.

Clinton shepherded the project through for his golfing partner, Enron's then-CEO Ken Lay. The president even penned at least one note with a related article to his chief of staff, Mack McLarty, to make sure he was up to speed on the project's development. McLarty and Clinton's ambassador to India, Frank Wisner, rode herd on the project until the final contract was inked.

Four days before Phase 2 of the project was finalized in June 1996, Enron gave $100,000 to Clinton's "funny money" re-election effort. What's more, Lay found jobs for McLarty and Wisner after they left the administration. He also hired Clinton Treasury official Linda Robertson and a deputy energy secretary, Betsy Moler.

Hollings take note: All these Enron employees and consultants were Democrats, not Republicans; Clintonistas, not Bushies.

The India deal, meanwhile, turned into a costly boondoggle that sped the company's collapse last year, when Indian officials stopped paying their power bills.

Even after he left the White House, Clinton followed up on Enron's snake-bitten India project by lobbying local officials for back payments during his trip to India last April. Bush, in contrast, refused to bring up the project during his visit with India's leader last year.

Hollings claims the Bush administration did favors for Enron, which donated more than $1 million to the Bush campaign. But there's no evidence to support his charge.

But there is clear evidence that the Clinton administration showered Enron with favors. In fact, the sequence of events seems to show a quid pro quo involving Enron donations.

Under Clinton, Enron became one of OPIC's and Ex-Im Bank's biggest customers. All told, the two overseas economic-development agencies backed some 18 foreign projects for Enron with a whopping $1.7 billion in loans and insurance.

Under Bush, Enron got not a dime in new funding from these agencies. In fact, last March Bush proposed slashing funding for the agencies - a major blow to Enron, which was trying to plant itself in a lot of overseas emerging markets.

Enron didn't even score any seats on the Commerce Department's trade trip to Russia last year, the Bush administration's only trade mission so far. But it was a regular on Clinton's shady trade junkets, which documents show were coordinated with the Democratic National Committee. Enron executives landed seats on at least 11 overseas trips sponsored by the Energy and Commerce departments.

Yes, Lay is an equal-opportunity crony, who tried to trade on favors with both Republican and Democratic administrations.

But in terms of the fruits of the cronyism, it's apples and oranges. Lay got more fruit under Clinton - and it turned rotten, as most deals borne of crony capitalism do.

Paul Sperry, a Hoover Institution media fellow, is Washington bureau chief for WorldNetDaily.com Inc.

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