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Editorials
The following appeared on the July 15, 2001 Editorial Page of the Waterbury Republican

The following appeared in the January, 2002 Editorial Page of the Journal Inquirer.  The failure of State elected officials to put controls on taxpayer financed State quasi-public agencies resulted in a $220 million dollar loss of taxpayer dollars in the Enron-CRRA debacle. Today, corporate welfare at the state is alive and well.  Our State tax dollars are being given to corporations with no requirement to disclose their financial status to the public.  

 

 

 

POWER BROKERS, SECRET DEALS,

and PUBLIC MONEY!

By:  Susan Kniep, Vice President, FCTO  

 

Few will escape the financial, political and legal consequences of the “cook the books” scheme by Enron and the accounting firm of Arthur Andersen.     Enron’s glitzy campaign money machine blinded many public officials to Enron’s meltdown, while leaving victims in its path.   From Enron employees who have lost their jobs and life savings to the Connecticut taxpayers and ratepayers who will be paying for the Enron – CRRA debacle for years to come, the obvious question is where were government and stock market regulatory agencies charged with protecting the public’s interests.        

Investigators focusing on Enron deals in Connecticut should determine and disclose if power brokers were involved and profited.    With CRRA's President trying to recoup his $220 million loss from Connecticut taxpayers, the ultimate question is who brought Enron to the table with CRRA and CL&P and were finder's fees involved.  If so, the Attorney General should attempt to attach those fees before creating more innocent victims in this high stakes public money game.  

As recently as January, 2001, CRRA President, Robert Wright, offered the following response to questions by the DPUC “Enron came to CRRA with the proposal for a fuel cell facility at CRRA’s South  Meadows Plant.  CRRA did not solicit that proposal. CRRA has no request for proposal.  Correspondence, memos and agreements between CRRA and Enron are the subject of a confidential agreement.  The information contained therein is confidential and proprietary. And is a 'Trade Secret'.”  

Wright further testified that although there was a meeting in August, 2000 at the offices of CRRA between representatives of Enron, Connecticut Innovations, Inc.(CII)/Clean Energy Fund and CRRA, there were no minutes and the handouts were trade secret!   Yet, much of the money under the control of CII and CRRA,  both quasi-public agencies, is raised through a charge on ratepayers’ bills and taxes.   The DPUC is a public agency.

Regrettably, secret deals infused with public money continue to mire the political landscape in Connecticut.   From Colonial Realty to the Silvester scandal to the Enron debacle, lack of government oversight has allowed political insiders to prosper at the expense of the honest, hardworking public.  The fuel of the political engine is a combination of public tax dollars, lobbying fees, employee pension funds, and lucrative campaign contributions from special interests fused by conflicts of interest.   Government business is no longer transacted in the public arena but under a cloak of secrecy among public officials and the power brokers who control them. 

This was never more evident than in the Paul Silvester and Colonial Realty scandals.  Silvester pleaded guilty to racketeering and money laundering charges in September 1999.  He admitted that when he served as State Treasurer he accepted kickbacks from companies in which he invested hundreds of millions of state pension fund dollars.   While the State and Federal government pursued Silvester, the State’s Ethics Commission pursued Peter Kelly, former Democratic National Committee Finance Chairman, and John Droney former Democrat State Chairman,  who characterized themselves as “door openers” when they collected millions of dollars for arranging state pension fund investments.   

 In the mid 1990s, Connecticut witnessed the collapse of Colonial Realty due to unscrupulous business practices which went undetected by government.   Hundreds of millions of investor dollars were lost.  Similar to the Enron debacle, the accounting firm of Arthur Andersen destroyed incriminating documents.    One would have thought that this and other surreptitious dealings by Andersen would have been enough to permanently remove them from the accounting field before they had an opportunity to destroy more lives!    

When the money game involves public funding, government should impose strict conflict of interest and campaign financing laws and enforce strict oversight over quasi-public agencies.   

A recent visit to the web site of Peter Kelley’s lawfirm Updike, Kelly and Spellacy, informs the public that they have been active in the deregulation efforts and initiatives in the telecommunications and electric industries within the State of Connecticut, active as a lobbyist for major electric and telecommunication providers before the General Assembly and within the dockets maintained by the Department of Public Utility Control ("DPUC") to implement these initiatives, closed transactions on behalf of their client Connecticut Innovations (CII), and represented the Clean Energy Fund.   

I believe it is fair to question if a conflict exists with any law firm lobbying for the interests of any electric provider, which could benefit from financing through the client of that law firm, which may have access to and is responsible for disseminating public money.  

The public is entitled to full disclosure of all Enron-CRRA-CII-CL&P documents hidden under the cloak of “Trade Secrets”.   We are further entitled to know who brought Enron to CRRA’s table and if finders fees were involved.  

The Enron deal of today, may be replayed in another workplace tomorrow unless the public, whose money is being stolen from them, demands accountability from their elected officials.