The Guardian March 20, 2002

Enron Prize: Russian, Central Asian power

When former Enron CEO Kenneth Lay and former Secretary of State James 
Baker welcomed Mikhail Gorbachev to Houston in 1997 to receive the Enron 
Prize for Distinguished Public Service, more was at stake than toasting 
corporate America's victory in the Cold War.

Russia and the Central Asian Republics of the former USSR have the world's 
second largest proven reserves of oil and gas. Russia also has the world's 
largest electric power grid.

All of it was socialised, owned and developed by the skill and toil of 
Soviet oil and gas workers, miners, hydroelectric and power station 

Grabbing those energy resources would be theft on a scale that exceeds all 
Enron's global privatisation scams rolled together.

On hand, at Rice University's James A Baker III Institute for Public Policy 
for the three-day celebration, were Henry Kissinger, Warren Christopher, 
Cyrus Vance and Baker  all former Secretaries of State.

Baker told the crowd that Gorbachev had "demonstrated incredible personal 
and political courage" in his role in the downfall of the Soviet Union.

Lay was equally fulsome. Gorbachev is "one of a handful of people alive 
today who literally changed the world." He handed Gorbachev a check for 
US$250,000, as if to say, "cheap at the price".

Four months later, February 2, 1998, Lay flew to Davos, Switzerland, to 
attend the World Economic Forum. He met there with Boris Brevnov, chairman 
of Russia's Unified Electricity Systems (UES).

They signed a "10-year strategic alliance" and agreed on terms of a US$55 
million joint financing project "as the first transaction under the 

Said Brevnov, "This alliance with Enron will enable UES to combine our 
experience in power generation, transmission, marketing and distribution to 
identify joint projects in Russia, Europe and Central Asia."

Lay called the agreement "an important step in Enron's relationship with 

UES is the world's largest electric power utility, generating nearly 20 per 
cent of Russia's electricity. It owns majority equity in 52 of Russia's 
regional electrical companies.

On April 15, 1999, Lay and Baker conferred the Enron Prize on Eduard 
Shevardnadze, President of the Republic of Georgia.

Again, the cliches poured out. The former Soviet Foreign Minister was a 
"leader of the democratic reform movements" in the Soviet Union.

"He directed the policies that led to the withdrawal of Soviet troops from 
Afghanistan" and the "reunification of Germany", said Baker. Now he has 
"launched democratic and economic reforms that restored political 
stability, economic growth and increased cooperation throughout the 

Georgia is one possible route for an oil and gas pipeline from the Caspian 
Sea and the Central Asian Republics to western Europe. This is a project 
dear to the hearts of oil and gas corporations, the real motive for the 
flattery that rained down on Shevardnadze.

George W Bush was governor of Texas while these celebrations gushed forth.

Some of the Lay-Bush correspondence during those years has just been 
released in Austin. In one April 1997 letter, Lay reminds Bush of a 
scheduled reception at the governor's mansion for a dignitary from 

Lay noted that Enron has just signed a US$2 billion deal to develop and 
transport natural gas in Uzbekistan. "I know you and Ambassador Safaev will 
have a productive meeting which will result in a friendship between Texas 
and Uzbekistan", said Lay's note.

Two years later, Lay wrote asking Gov. Bush to meet with the Prime Minister 
of Romania during his visit to Houston. Lay noted that Enron had recently 
finalised a joint venture to market natural gas in Romania with its rich 
Ploesti oil fields.

Founded in 1985, Enron was a "new kid on the block" compared with behind-
the-scenes partners, such as Citicorp, JP Morgan Chase, Chevron, General 
Electric Capital Services and the Bechtel Group, that provided the main 
capital backing for Enron's global ventures.

Enron also required the full political, financial, diplomatic and military 
muscle of the Pentagon, the State Department and Department of Justice to 
carry out their global dealmaking.

Thus Secretary of State Colin Powell, the first winner of the Enron Prize, 
twisted the arm of Russian President Vladimir Putin to endorse the building 
of permanent US military bases in Uzbekistan, Kazakhstan and other Central 
Asian countries.

Hiding the "oil-gas-electricity" connection in these diplomatic and 
military manoeuvres in Central Asia is one of the reasons Bush and Vice 
President Dick Cheney are claiming "executive privilege" and refusing to 
turn over to the General Accounting Office records of Cheney's Energy 
Policy Task Force.

It is also one reason Lay has "taken the Fifth" in refusing to testify on 
the Enron debacle. Neither Lay nor Bush and Cheney want the people to see 
oil and gas profits in Bush's foray into Afghanistan and his "war on 

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People's Weekly World paper of Communist Party, USA>

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