"The Green Seal" or "The Scam You Never Knew Existed"
In 2001, Alexander Cockburn, in true muckraking style, exposed the “green seal” being used by Enron to pass deregulation. The “green seal,” of course, was Ralph Cavanagh and the NRDC. A snippet from the article (the full text of which you can get here):
“The fall of Enron sounds the death knell for one of the great rackets of the past decade: green seals of approval, whereby some outfit like the Natural Resources Defense Council (NRDC) or Environmental Defense (ED) would issue testimonials to the enviro-conscience and selfless devotion to the public weal of corporations like Enron.These green seals of approval were part of the neoliberal pitch: that fuddy-duddy regulation should yield to modern, "market-oriented solutions" to environmental problems, which essentially means bribing corporations in the hope they'll stop their polluting malpractices. Indeed, NRDC and ED were always the prime salesfolk of neoliberal remedies for environmental problems. In fact, NRDC was socked into the Enron lobby machine so deep you couldn't see the soles of its feet.”
Why, what do you mean?
In 1997, high-flying Enron found itself in a pitched battle in Oregon, where it planned to acquire Portland General Electric (PGE), Oregon's largest public utility. Warning that Enron's motives were of a highly predatory nature, the staff of the state's Public Utility Commission (PUC) opposed the merger. They warned that an Enron takeover would mean less ability to protect the environment, increased insecurity for PGE's workers and, in all likelihood, soaring prices. Other critics argued that Enron's actual plan was to cannibalize PGE, in particular its hydropower, which Enron would sell into California's energy market.
But at the very moment when such protests threatened to rob Enron of its prize, into town rode NRDC's top energy commissar, Ralph Cavanagh, Heinz environmental genius award pinned to his armor and flaunting ties to the Energy Foundation, a San Francisco-based outfit providing financial wattage for many citizen and environmental groups that work on utility and enviro issues.Cavanagh lost no time whipping the refractory Oregon greens into line. In concert with Enron, the NRDC man put together a memo of understanding, pledging that the company would lend financial support to some of these groups' pet projects.
Cavanagh also got the PUC to have a change of heart:
Addressing the three PUC commissioners, Cavanagh averred that this was "the first time I've ever spoken in support of a utility merger." If so, it was the quickest transition from virginity to seasoned service in the history of intellectual prostitution. Cavanagh flaunted the delights of an Enron embrace: "What we've put before you with this company is, we believe, a robust assortment of public benefits for the citizens of Oregon which would not emerge, Mr. Chairman, without the merger."With a warble in his throat, Cavanagh moved into rhetorical high gear: "The Oregonian asks the question, 'Can you trust Enron?' On stewardship issues and public benefit issues I've dealt with this company for a decade, often in the most contentious circumstances, and the answer is, yes."Cavanagh won the day for the Houston-based energy giant.
Oh dear, what happened then?
“…it wasn't long before the darkest suspicions of Enron's plans were vindicated. The company raised rates, tried to soak the ratepayers with the cost of its failed Trojan nuclear reactor, and moved to put some of PGE's most valuable assets on the block. Enron's motive had indeed been to get access to the hydropower of the Northwest, the cheapest in the country, and sell it into the California market, the priciest, and — in part because of Cavanagh's campaigning for deregulation — a ripe energy prize awaiting exploitation.”
Apparently blinded by his own sense of invincibility, Cavanagh actually wrote a letter to Cockburn accusing him of misrepresenting what happened in Oregon. Says our darling Ralph:
I'm still scratching my head after reading Alexander Cockburn's attack on my support for Enron's merger with the Portland General Electric Company (PGE) almost five years ago ["Beat the Devil," Jan. 7/14]. His baffling conclusion that "the role of that green seal of approval [in Enron's collapse] should not be forgotten" is a non sequitur of the highest order.
Natural Resources Defense Council was part of a coalition of environmental and consumer groups that negotiated an agreement with the merging companies on future investment in energy efficiency, renewable energy, watershed restoration and low-income energy services. Cockburn is indignant that I said I trusted Enron to execute the agreement. But Cockburn, who never called me before publishing his diatribe, evidently didn't check to find out what actually happened. Enron and PGE did indeed meet their merger obligations, and environmental and consumer interests were among the winners. Enron left in place a hometown management group with a commitment to improved performance on both environmental and equity issues. Its subsequent decision to leave the utility business, long before its collapse, had no adverse environmental consequences at PGE or elsewhere.
There is no connection between Enron's current calamity and the merger that NRDC and many others supported conditionally nearly five years ago. Only Cockburn's overactive imagination could suggest otherwise.
RALPH CAVANAGH Natural Resources Defense Council
Happily, Cockburn replies:
Just to inject one tiny sliver of reality into Ralph Cavanagh's bland tissue of self-exculpation, which will be read with hilarity in Oregon. Portland General Electric sought and received $340 million in rate hikes on PGE customers for federal income taxes over the past three years. It shipped the money to Enron HQ in Houston. Over that period, Enron paid only $17 million in taxes in 1998, nothing in 1999 or in 2000. In fact, the company got a big tax rebate.
Now, Cavanagh is serving as the face and name for the Big Utility-funded campaign against Prop 7, which would require utilities to procure 50% of their electricity from renewable resources by 2025, increase penalties for non-compliance, make those penalties mandatory, and prohibit utilities from passing those fines onto the ratepayers. Just like Enron did in the 90’s, PG&E, Sempra and Edison are now using NRDC to get the green seal on opposing the Solar and Clean Energy Act so that they can keep ripping off consumers. Way to go, Ralph.