|
|
The Enron memo says the governor gave his approval for the fuel-cell project at least as early as October 2001 and made several key decisions about it, including whom in his administration would supervise it. According to the memo, the governor also insisted that Enron make the trash authority, the Connecticut Resources Recovery Authority, its "partner."
Lay's call to Rowland "was helpful'
"Some good news," the company's senior vice president for government affairs, Steven J. Kean, wrote in his message to Lay almost exactly two years ago. "Your call to Governor Rowland was helpful. We are not finished yet, but we are on our way.''
Kean's e-mail message, one of thousands of Enron's internal communications made public in a federal investigation of the manipulation of energy markets in California, was sent to Lay on Nov. 5, 2001. It refers to a conference call the e-mails say Kean and Lay had with Rowland on Oct. 12, 2001.
Four days after the call to Rowland, Enron's corporate headquarters in Houston made a $60,000 contribution to the Republican Governors Association, of which Rowland had just become chairman.
In his e-mail message, Kean was congratulating Lay after another Enron lobbyist, Steven Montovano, had reported to Kean that "it appears Governor Rowland is going to move this ball forward as he promised to do.''
Montovano advised his boss that he had had "several meetings'' with Rowland in the month since Lay spoke with the governor in a conference call with Kean, "and the message from him" -- Rowland -- "has been consistent.''
"This is further confirmation," Montovano added.
Rowland's chief of staff and spokesman, Dean Pagani, today denied that the e-mail and its attached memorandum contradicted the governor's protests that he never spoke with Lay and never got involved in CRRA business.
But Pagani added that the governor was "not going to dispute" the Kean memo, which he said "doesn't change anything.''
Pagani also repeated a statement he made last month, saying "we have no record" of any phone call with Lay.
"We don't know if it happened,'' he said, referring to the Rowland-Lay conversation referred to in the Kean message. "The governor doesn't have a memory of it, and again, if it happened, it's not inconsistent with what the governor has said. He said he spoke with people from Enron about fuel- cell technology, and there's no apology necessary for what he did and would continue to do if companies come forward.''
"Both the e-mail and the memo simply reflect what the governor has said all along," Pagani continued. "The memo simply verifies that he was promoting fuel-cell technology, and he makes no apologies for that."
Asked whether there was any connection between the Lay-Rowland conversation and Enron's subsequent contribution to the RGA, Pagani said, "the record speaks for itself.''
"The governor became RGA chairman under extraordinary circumstances, right after Sept. 11,'' he said, referring to the 2001 terrorist attacks on New York and Washington, D.C. "Soon afterwards Enron began to get in trouble, and before they filed for bankruptcy one of the first things the governor did as RGA chairman was order the money returned.''
Kean's e-mail message was titled "Fuel Cell Update," a reference to Enron's proposal to build as many as five fuel-cell "farms" in Connecticut.
Fuel cells operate like batteries and use chemistry rather than combustion to produce electricity and heat. The farms were to be constructed on sites owned or controlled by the CRRA.
Enron stood to receive at least $9.6 million in fees on the project, as well as a share in the profits generated by the Danbury company that was to manufacture the fuel cells, FuelCell Energy, in which Enron had purchased $5 million of stock, with an option to buy 1.5 million more shares.
The Journal Inquirer reported last month that other e-mails show that Enron officials saw the fuel-cell project as a precursor to a bigger and potentially more profitable deal with the CRRA.
They called that $220 million transaction an energy "sales swap" since it had Enron replacing Connecticut Light & Power in a deal to buy electricity generated at the CRRA's trash-burning plants.
But Attorney General Richard Blumenthal has characterized the deal as an illegal $220 million loan by the CRRA to a politically connected corporation.
For example, Montovano wrote in one of the messages that he had successfully maneuvered to "get in front" of the governor regularly to promote the fuel-cell and "monetization" deals.
Officials from at least three state agencies, including Rowland's budget office, had met with Enron officials in the spring of 2000 for the first of two private briefings on the proposed fuel-cell project.
Project had hit roadblock
A month before the documents say Lay and Kean spoke with the governor, the fuel-cell project had hit a roadblock when the state Department of Public Utility Control rejected a plan to pay for the project with money from a special surtax on utility customers.
But Enron's lobbyists, who included Michael J. Martone, a close friend of and former aide to the governor, promptly set their sights on $50 million in a second public fund overseen by Connecticut Development Authority Chairman Arthur H. Diedrick. The fuel-cell project was abandoned only when Enron collapsed financially in December 2001.
The "energy sales swap," which the CRRA had approved a year before Enron went bust, caused the loss of all $220 million and enveloped the agency in a scandal that has yet to subside.
Federal investigators are continuing to review the $220 million deal, as is a state grand jury. The controversy also prompted the resignation of Rowland's co-chief of staff, Peter N. Ellef, from that job and the chairmanship of the CRRA.
Among the Enron e-mails the JI first described last month were several that referred to an hour-long conference call with Rowland that appeared on Lay's schedule. Others referred to a "briefing paper" prepared for Lay prior to the call and a document called "Rowland Overview" drawn up for the company's chief lobbyist in Washington.
But Rowland insisted last month through Pagani that he "never spoke with, never met, and never shook hands with" Lay.
Pagani also said he had no explanation for the "Rowland Overview" document and that the governor's office had no record of any conversation between Rowland and Lay or any other Enron official on Oct. 12, 2001, when the e-mails indicate the conference call occurred.
Plans for the fuel-cell project were spelled out in a memorandum of understanding the CRRA signed with Enron within days of a meeting Rowland had in his office on Dec. 18, 2000. Present were Ellef, Montovano, and two other Enron officials, H. Jeffrey Ader, the company's general counsel in New England, and Daniel Allegretti, its senior director for government affairs, as well as a fund-raiser for the governor, Anthony W. Ravosa Jr.
The latter, a Glastonbury resident and consultant with ties to the energy business, had arranged the meeting and taken an Enron representative on a tour to inspect possible sites for the fuel-cell project, according to the e-mails.
In turn, Enron had offered Ravosa, who was not registered as a lobbyist for the company in Connecticut, an unspecified "success fee" in connection with the deal.
Asked last year about the Enron meeting in his office, Rowland insisted that he did "not get involved in the running of the CRRA or their projects'' and said neither deal Enron pursued with the CRRA had come up.
Pagani repeated the governor's position last month, saying Rowland was "absolutely" not involved in either Enron deal.
But in the newly uncovered "interoffice memorandum" attached to Kean's e-mail message, Allegretti -- one of those who had met with Rowland -- briefed Montovano about a conversation about the fuel-cell project Kean said the governor had on Oct. 29, 2001 with "our lobbyist, Martone.''
Rowland, Allegretti reported, "wants to do the project, which must include our partner the Connecticut Resources Recovery Authority.''
Allegretti added that Rowland didn't want the fuel-cell project to be supervised by Ellef but rather by Diedrick, "who oversees the Renewable Energy Investment Fund.''
The Enron official also wrote that Rowland "wants a Connecticut project and does not want to put it out for an RFP" -- request for proposal -- "for an out-of-state development,'' a reference to the standard competitive-bidding process used by state agencies before awarding contracts.
Similarly, Allegretti said Rowland "wanted to know why United Technologies was excluded from the project." After leaving Congress in 1990 and before being elected governor in 1994, Rowland worked as a consultant to UTC.
"Martone responded that they" -- UTC -- "were considerably more expensive than FuelCell Energy and that CRRA has strong objections to UTC,'' Allegretti wrote. "He also told the governor that Enron would not be adverse to considering their inclusion if the governor wishes it.''
Allegretti also advised Montovano that "Rowland has instructed his staff to set up a meeting with Arthur Diedrick and Peter Ellef."
Finally, Allegretti wrote that the president of the CRRA, then Robert Wright, was willing to "accommodate relocation" of some of the fuel-cell units to satisfy state Sen. Melodie Peters, a Democrat who co-chairs the General Assembly's Energy and Technology Committee.
Allegretti said Peters, whom he described as "essential to getting the funds reallocated," wanted "to see some fuel cells located in the southwest Connecticut load pocket.'' Fairfield County, which is not part of Peters' district, has a lack of electrical transmission capacity.
Fuel cells would power Adriaen's Landing
But Allegretti added that CRRA President Wright wanted "to keep 6 Mw" -- megawatts of electricity -- "in Hartford to provide power to a new urban development project," Adriaen's Landing.
The CRRA had purchased 90 riverfront acres adjacent to the site of the Hartford development project and had entered into a joint lobbying agreement with the Capital City Economic Development Authority to get federal money for Adriaen's Landing.
Among the plans approved by the CRRA as part of the $220 million "energy sales swap" was one for the 90-acre site that included botanical gardens and multi-story commercial and residential buildings, as well as the joint-venture fuel-cell operation with Enron.
Wright quit the CRRA presidency last year as the controversy over the disastrous $220 million deal with Enron intensified.
Enron CEO Lay was a friend of President George W. Bush as well as one of the former Texas governor's "Pioneers,'' the name Bush gave to supporters who raised $100,000 or more for his presidential campaign.
Rowland was chairman of the Republican Governors Association when the Enron e-mails indicate Lay telephoned him, succeeding former Pennsylvania Gov. Tom Ridge, who had become Bush's homeland security chief.
Enron had been a regular contributor to the Republican Governors Association, and a California-based subsidiary of the company made a $20,000 contribution to the group three days before Rowland took over as its chairman on Oct. 5, 2001, when he was vice chairman.
Records show that Enron's Houston headquarters sent $60,000 to the RGA on Oct. 16, 2001 -- 11 days after Rowland officially took charge and four days after Lay's phone call with the governor.
Two months later, when the formerly high-flying energy-trading company had been forced to file for bankruptcy protection and politicians were starting to suffer embarrassment because of the company's political largesse, the RGA refunded Enron contributions.
Rowland ordered the money sent back, directed that no more Enron money be accepted, and returned a $1,500 Enron contribution to his own campaign, the Washington Post reported last year.
Text of Enron Memo:
To: Steve Montovano
From: Dan Allegretti Department: State Government Affairs
Subject: Fuel Cells Date: October 30, 2001
Following your conversation with Governor Rowland last week the Governor met yesterday with our lobbyist, Mike Martone. Mike provided me the following information from that meeting and from other conversations he has had recently.
* Governor Rowland wants to do the project which must include our partner the Connecticut Resource Recovery Authority.
* Governor Rowland does not want the project to be headed by Peter Ellef (his chief of staff and Chairman of CRRA) but by Arthur Deidrick, who oversees the Renewable Energy Investment Fund.
* Governor Rowland wants a Connecticut project and does not want to put it out for an RFP for an out-of-state development.
* Governor Rowland wanted to know why United Technologies was excluded from the project. Martone responded that they were considerably more expensive than Fuel Cell Energy and that CRRA had strong objections to UTC. He also told the Governor that Enron would not be averse to considering their inclusion if the Governor wishes it.
* Mike Martone informed the Governor that the Senate chair of the Joint Committee on Energy is amenable next session to re-allocating funds allocated for conservation to augment the Renewable Energy Investment Fund in order to support the project.
* Governor Rowland instructed his staff to set up a meeting with Arthur Deidrick and Peter Ellef.
* Senator Peters was also contacted by our lobbyist, Dave McQuade. Senator Peters remains supportive of the project and will be essential to getting the funds re-allocated. She is also interested in distributed generation and would like to see some fuel cells located in the southwest Connecticut load pocket.
* Robert Wright, our primary contact at CRRA, was also contacted. He remains supportive of the project and is willing to accommodate relocation of some of the units to southwest Connecticut. He woul like, however, to keep 6 MW in Hartford to provide power to a new urban development project known as Adrian's Landing.
