STIFFING CULIFORNIA

Here's a story that might as well be satire because, if true, it's so nefarious even Gore Vidal might not believe all the dots it connects among Arnold Schwarzenegger, Enron's former CEO, Kenneth Lay, and the California energy rip-off. It's also based on facts, unlike the tabloid tale in The Weekly World News headlined: "Alien Backs Arnold for Governor."

According to internal Enron memoranda uncovered by the Foundation for Taxpayer and Consumer Rights, Schwarzenegger was among a dozen or so "insiders" who conferred with Lay at a hastily arranged meeting in the midst of the energy crisis in May of 2001. The insider meeting -- Enron's own term for it -- was intended to drum up business support for an Enron "solution" to the crisis a month after California Lt. Gov. Cruz Bustamante filed a civil suit to make various power companies return $9 billion in illicit profits from market manipulation to the state's electric and gas customers.

One reporter who has seen 34 pages of internal Enron memoranda charges that "Schwarzenegger knowingly joined the hush-hush encounter as part of a campaign to sabotage" the litigation. Schwarzenegger has claimed he can't remember the meeting, although an Enron e-mail lists him as an attendee. (Scroll to second memo.) Forty-eight top execs are listed as invitees -- a who's who of power players, among them Michael Eisner, Eli Broad, David Baltimore, Jeffrey Katzenberg, Terry Semel, Donald Bren, Bill Simon and Sherry Lansing -- most of whom were smart enough not to show up. Only 12 attended besides Arnold, including Michael Milken (and none of the above).

If Schwarzenegger becomes governor, proponents of the civil suit fear he'll approve the "sweetheart settlements" cooked up by the toothless Federal Energy Regulatory Commission (now headed by Patrick Wood, III, a Bush appointee recommended to him by -- guess who? -- Ken Lay), which requires Enron, Reliant, Dynegy, Williams Company and other Texas-based corporations to pay back only two cents on the dollar just as the civil suit is about to go to trial -- and that would likely kill the litigation.

Last week the commission signed a settlement agreement with Reliant. The company did not admit any violations of the law, but agreed to pay $15 million, with two more $5 million payments over the next two years and total payments potentially coming to $50 million. That amounts to a slap on the wrist, despite being touted as the comission's "largest ever" settlement agreement. Even the San Diego Tribune, a Republican bastion, contends in an editorial that Californians are being stiffed by the commission.

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