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Schwarzenegger and Enron

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As other commentators have noted, meeting with Ken Lay at the height of the California energy crisis is a bit like meeting with Osama bin Laden the afternoon of 9-11.

Yet Arnold Schwarzenegger did just that. There has been strong evidence of such a meeting for some time, yet Schwarzenegger says he doesn’t “remember” the meeting. He doesn’t deny it. Just doesn’t “remember.”

Do you believe him?

Greg Palast, a former government investigator of fraud and racketeering, gets some new documents:

It’s not what Arnold Schwarzenegger did to the girls a decade back that should raise an eyebrow.  According to a series of memoranda our office obtained today, it’s his dalliance with the boys in a hotel room just two years ago that’s the real scandal.

The wannabe governor has yet to deny that on May 17, 2001, at the Peninsula Hotel in Los Angeles, he had consensual political intercourse with Enron chieftain Kenneth Lay.  Also frolicking with Arnold and Ken was convicted stock swindler Mike Milken.

Now, thirty-four pages of internal Enron memoranda have just come through this reporter’s fax machine tell all about the tryst between Maria’s husband and the corporate con men.  It turns out that Schwarzenegger knowingly joined the hush-hush encounter as part of a campaign to sabotage a Davis-Bustamante plan to make Enron and other power pirates then ravaging California pay back the $9 billion in illicit profits they carried off.

Here’s the story Arnold doesn’t want you to hear.  The biggest single threat to Ken Lay and the electricity lords is a private lawsuit filed last year under California’s unique Civil Code provision 17200, the “Unfair Business Practices Act.”  This litigation, heading to trial now in Los Angeles, would make the power companies return the $9 billion they filched from California electricity and gas customers.

It takes real cojones to bring such a suit.  Who’s the plaintiff taking on the bad guys?  Cruz Bustamante, Lieutenant Governor and reluctant leading candidate against Schwarzenegger.

Now follow the action.  One month after Cruz brings suit, Enron’s Lay calls an emergency secret meeting in L.A. of his political buck-buddies, including Arnold.  Their plan, to undercut Davis (according to Enron memos) and “solve” the energy crisis — that is, make the Bustamante legal threat go away.

How can that be done?  Follow the trail with me.

Consumer watchdog Doug Heller with the nonpartisan (no position on recall or candidates) Foundation for Taxpayer and Consumer Rights:

Consumer advocate with the Santa Monica-based Foundation for Taxpayer andConsumer Rights, Heller said today: “Internal Enron e-mails we haveobtained confirm that Schwarzenegger was among a small group of executiveswho met with then-Enron head Ken Lay at the posh Peninsula Beverly Hills hotel in May of 2001. The meeting with Enron occurred ten days after rolling blackouts darkened California; Schwarzenegger has previously said that he does not remember such a meeting. You don’t meet with America’s most well-known corporate crook in the middle of California’s biggest financial disaster and not remember. Schwarzenegger should come clean about what happened at that meeting and if he shares Lay’s views on energy regulation.

Is this late in arriving? Yes. Does that suck? Yes.

But blame the recall for that.

Arnold Schwarzenegger has never run for public office before. Unlike Bustamante or McClintock, he hasn’t been subjected to ANY of the close, serious journalistic scrutiny that candidates for public office usually (and rightly) receive for months leading up to a primary election, and then months leading up to a general election. (Sorry, the entertainment “press” doesn’t count.)

Arnold Schwarzenegger took a pass on a gubernatorial election that happened less than one year ago. He could have run in that election. He would have been subjected to scrutiny before the primary, and then even more before the general election. He chose not to do this.

Instead, he chose to jump in at the last minute of this recall election, so reporters had to scramble to do the due dilligence that we expect of them (don’t we?). Is it any wonder that it took 60 days for certain facts to be discovered? Just sixty days? Is it really fair to tell the press that they have to do the full vetting for a candidate for the leader of the world’s sixth-largest economy in about two months?

There are corporate vice presidents who get subjected to a longer vetting process than that.

Calling the revelations about Arnold Schwarzenegger “last-minute dirty politics” is bullshit. Arnold’s strategy has been to keep the press at bay (he’s been one of the least-accessible candidates for CA governor ever), use his star power to get the easy TV coverage (controlled photo ops at campaign-chosen locations and situations), avoid unscripted debates, and take advantage of the short run-up to the election to keep the press one step behind his seriously spotty past.

Let’s say Arnold is elected. And THEN we find out new, horrible stuff about him–such as what really went on in that room with Ken Lay, or what his plans really are for tough decisions about the budget (he’s keeping these plans a secret).

Well, guess what? Recall Arnold!

Isn’t this the same logic used to recall Davis? Well, no. It’s actually much stronger logic.

Davis: We had literally decades to investigate this frequent candidate for (and holder of) statewide public office, including runs for governor in conventional elections.

Schwarzenegger: As opposed to decades, we had two months to investigate this guy as a candidate for office. Before August, he hadn’t run for so much as dogcatcher, as the cliche goes.

If we find out anything new about him after October 7, there will be far more reason to recall him than there was to recall Davis. We can honestly say that we didn’t know what we were getting into.

Because we don’t.

[Cross-posted to Brian Flemming’s Weblog.]

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About Brian Flemming

  • …meeting with Ken Lay at the height of the California energy crisis is a bit like meeting with Osama bin Laden the afternoon of 9-11.

    Only if you accept the ridiculous notion that Enron or Ken Lay is somehow the mastermind behind California’s energy woes. The California legislature bears 98% of the blame for California’s energy problem, the remaining 2% to be split any number of ways. Profiting after the fact is hardly the same as causing something, and I seem to remember California walking away from promises to pay, too.

    This is, of course, slightly off-topic.

  • Scarlett_16

    He doesn’t remember the meeting? This is strikingly similar to the response a former California governor gave when asked about Iran/Contra.

    Arnold Schwarzenegger —-> Get the latest groping news