Re: Davis reaffirms that he can't be trusted.

Glad to have you as an employee of Enron! Mark

Steve C Hall/ENRON@enronXgate
06/01/2001 01:38 PM

To: Mark E Haedicke/HOU/ECT@ECT
cc:
Subject: Davis reaffirms that he can't be trusted.

Mark,
This article confirms your skepticism about the CDWR deal. Davis is already
planning to violate confidentiality provisions of CDWR contracts signed
earlier this year. The State of California simply cannot be trusted to honor
its agreements.
Look at Davis's spin on breaching contract provisions: State negotiators
"worried little about the [confidentiality] clauses" in their haste to sign
the contracts, but now, "administration officials insisted they are
attempting to find a way around the secrecy clauses in long-term contracts."
From here it is a very small step for Davis to justify breaking long-term
contracts once prices go down in a year or two: "We didn't think a lot about
the prices we were paying at the time because we were just trying to keep the
lights on. But now we are attempting to find a way around the payment
clause."
* * *
On another note, thank you for meeting with me on Wednesday. I am thrilled
to be working for Enron. Meeting with you, Jim Derrick, and others in the
legal department reinforced my decision to join your company. I am excited
about our prospects for the future and will work hard to continue to add
value and keep your confidence.

Best regards,
Steve

Davis to divulge details of costly energy buys
By Steve Geissinger
SACRAMENTO BUREAU
SACRAMENTO -- Amid mounting attacks on Gov. Gray Davis' energy-crisis
secrecy, administration officials said Thursday they will soon begin
revealing full details of the state's costly, last-minute power purchases
aimed at thwarting blackouts.
The Davis administration told ANG Newspapers that in the next two weeks it
will start disclosing information on the initial, multimillion-dollar
purchases it made on the volatile spot market in January.
In doing so, the administration will begin honoring Davis' promise to reveal
the details after a period of six months or less. The governor said
disclosing the information any earlier would compromise efforts to hold down
power costs.
But there has been a growing chorus of protest of the secrecy from
open-government advocates, consumer activists, Republican lawmakers and
others.
GOP legislators and news agencies have filed separate lawsuits, under the
state's Public Records Act, seeking disclosure of details on about $8 billion
in emergency, short-term purchases and additional billions on less costly,
years-long contracts.
A San Diego Superior Court judge is scheduled to issue initial rulings on the
lawsuits today in San Diego.
On Thursday, the Foundation for Taxpayer and Consumer Rights called on
Californians to phone the governor's office in protest.
"The public has a right to know how our money is being spent and who is
getting it," said Harvey Rosenfield, the group's director.
The governor "won't let us look at them (contracts) to make sure they won't
cause further rate hikes in future years," Rosenfield said.
"It is also important to know how much power he has negotiated for this
summer so we can determine how much it will cost us to stop the blackouts,"
he said. "We believe the governor is refusing to divulge because the
contracts are inflated and contain damaging provisions."
Administration officials dismissed critics' assertions and said that full
disclosure will eventually come when the data is no longer a sensitive
marketing matter.
Officials acknowledged for the first time, however, that some of the state's
less costly, long-term power contracts with generators contain secrecy
clauses that may prevent public disclosure.
The administration said state negotiators were so intent on securing less
expensive, long-term power supplies that authorities worried little about the
clauses requiring them to keep terms of the contracts secret unless they have
the suppliers' permission to divulge them
Though violating the agreement could void the contracts, industry
representatives said they doubted generators would break existing pacts.
Suppliers might, however, sign no more contracts with the state, the
representatives said.
"Apparently there are some contracts with that (secrecy clause), and our
legal people are looking at it," said Davis spokesman Steve Maviglio. "I
don't know what the end result is going to be, but it's the governor's intent
to release the contracts."
While administration officials insisted they are attempting to find a way
around the secrecy clauses in long-term contracts, they said disclosure of
the initial short-term purchases will soon begin.
Maviglio said the administration will start posting the details of
short-term, spot-market buys made in mid-January within the next two weeks on
the Internet, easing a controversy that has enveloped two of Davis' fellow
Democratic statewide elected officials.
State Controller Kathleen Connell scrapped plans to reveal the costly state
power bills in February during a dramatic, 11th-hour reversal under pressure
from the Davis administration.
The controller, who has emerged as a sharp critic of the administration's
handling of the energy crisis, indefinitely postponed plans to put
information from electricity-purchase invoices on the Internet and canceled a
news conference to announce the disclosures.
In March, Attorney General Bill Lockyer, representing Davis in this instance,
provided Connell with a letter of advice that the governor is not legally
bound to reveal the details of billions of dollars in state power purchases.
Lockyer's letter said the public's interest in maintaining confidentiality in
matters relating to negotiations between the state and prospective power
contractors far outweighed its interest in disclosure.
But Lockyer, a former East Bay politician, said last week he personally
favors making public the details of the purchases.
"In my mind at least, and as a matter of philosophy, the expenditures are so
extraordinary, the issues are so important, that the contracts ... need to be
made public," he said at the annual meeting of the National Freedom of
Information Coalition.
Open-government advocates point to a recent poll conducted for the California
First Amendment Coalition that indicates seven out of 10 Californians believe
they are getting too little information about how state officials are
responding to the power shortage, and a whopping 86 percent want details of
long-term power purchasing contracts made public.
"Californians reject government secrecy as a matter of law in the state's
Open Government Act," said Kent Pollock, the coalition's executive director.
"The poll results are an overwhelming repudiation of state policies that
shield information from public scrutiny."