Ever wonder how the states pension fund got to be such a mess? Thank Jeb. nytimes/2002/01/27/us/enron-s-many-strands-fallout-the-enron-scandal-grazes-another-bush-in-florida.html ENRONS MANY STRANDS: FALLOUT ENRONS MANY STRANDS: FALLOUT; The Enron Scandal Grazes Another Bush in Florida By LESLIE WAYNE Published: January 27, 2002 The Enron scandal, which has become the consuming interest in Washington and around the country, is starting to have a particular resonance in Florida, where it is touching another Bush: Governor Jeb Bush. Floridas state pension fund lost $335 million from its Enron holdings. Enron has spread lavish campaign donations on local politicians, including Mr. Bush. Earlier this month, Mr. Bush startled some by holding a fundraiser at the Houston home of a former Enron executive. Florida is also home to thousands of Enron investors and retired employees, who have seen their Enron shares become worthless. Yet as these events unfold, Mr. Bush has deftly sidestepped this political minefield, avoiding, at least for the moment, any negative association with Enron. Both parties are holding their breath right now, said Susan MacManus, a political science professor at the University of South Florida at Tampa. Both are scared as rabbits that Enron really has the potential to affect things here -- the Democrats are worried it wont have an impact and the Republicans are worried it will. Mr. Bush particularly has been able to steer clear so far of the enormous damage to the state employees pension fund, which lost more than any other public pension fund. Almost until Enron collapsed, the Florida fund continued to pour money into Enron stock. As governor, Mr. Bush is one of the funds three trustees, although the fund has said that Mr. Bush never ordered the purchase of Enron shares or the hiring of the money manager who did. Youve got to credit Jeb Bush, said Richard Scher, professor of political science at the University of Florida at Gainesville. Hes been wonderful in keeping the issue quiet. Nothing has been coming out. Hes been very shrewd in how hes handled it politically and lucky the legislature is in session and drawing attention away. The Enron Florida angle has not come home to roost yet. Even Mr. Bushs decision to travel to Houston and raise money on Jan. 17 at the home of Richard Kinder, a former Enron president, has yielded no political advantage for Democrats. Jeb Bush showed complete insensitivity and arrogance by doing the fundraiser at the former Enron presidents home last week, said Bob Poe, chairman of the Florida Democratic party. It raises questions as to what links he might have with Enron. Hes drawn attention to himself with it. But if any of this sticks to him, who knows? To some extent, how Enron affects Mr. Bush may also depend on whether the scandal taints President Bush. He is the presidents brother and, to some, they are always stuck together at the hip with glue, said Ms. MacManus, the political science professor. Democrats would love to link the two together if something bad happens to one of them. In his recent state of the state address, Governor Bush avoided any mention of Enron, and Karen Unger, his 2002 gubernatorial campaign manager, says the intention is to keep it that way. Enron is not a partisan issue, she said. Its not much of a campaign story. Ms. Unger said Mr. Bush would focus on his record of accomplishments and on issues that Floridians are concerned about. Ms. Unger also said Mr. Bush saw no problem in the Houston fundraiser since the events host, Mr. Kinder, was no longer an Enron employee, having left in 1996 to form his own energy company. But the way Enron spread money around the state to gain support in the legislature for its plan -- never enacted -- to deregulate the local electricity market and build more power plants is beginning to gain attention. Starting in 1995, Enron began to give the maximum $500 donation to many candidates, giving a total of $154,425 in the key 1996 and 1998 state house races, with over 80 percent of the money going to Republicans. Mr. Bushs 1998 gubernatorial campaign received $6,500 from Enron, including $1,000 from the former chief executive, Kenneth L. Lay, and his wife. Enron was a big behind-the-scenes player in the push to deregulate Floridas electrical markets, said Holly Binns, a spokeswoman for the Florida Public Interest Research Group, an environmental organization. Were there any specific connections between Enron and Governor Bush? You cannot tell for sure. But I would be extremely surprised if the level of contributions by Enron to the national Republican party and to President Bush did not provide access to Governor Bush. For many Floridians, Enrons most disturbing impact has been the massive losses suffered by the Florida State Board of Administrations $123 billion pension fund, one of the largest public employee funds. The fund lost $325 million from its 9.1 million Enron shares, and $9 million from Enron bonds. It is one of several public pension funds that suffered multimillion-dollar losses from their Enron holdings. As Enrons problems surfaced, the state fund, under the advice of one of its money managers, Alliance Capital Management, continued to buy the companys shares. Last October, after Enron announced $1.2 billion in losses and the Securities and Exchange Commission opened its investigation, the fund bought $7.1 million more of Enron stock. After Enrons chief financial officer, Andrew S. Fastow, was ousted on Oct. 24, the fund bought $16.1 million. When Enron announced last November that it had overstated its profits, the fund bought still another $11.7 million. Having bought shares for as much as about $80 in the past, the fund, as it continued buying, rode the stock down from $43 to 28 cents a share in the two months before Enrons bankruptcy filing. On Nov. 30, just days before Enrons bankruptcy filing, the Florida fund sold 7.6 million shares for 28 cents each -- getting just $2.1 million for its investments. Alliance Capital was one of 60 outside money managers handling portions of the fund. Each money manager has broad discretion, under the supervision of the funds Tallahassee staff. Currently the Florida pension fund is suing Enron over the losses and has said it might sue Alliance as well. Fund managers say they are troubled that they were never told that a top Alliance executive, Frank Savage, is a member of Enrons board. Floridas pension fund managers say that Alliance, the funds manager of large-capitalization growth stocks, was repeatedly questioned by the funds staff about Enron as its shares continued to slide. A spokesman for Alliance Capital, John Meyer, declined to comment on the matter yesterday. At no time, however, was Governor Bush a part of these discussions: as a trustee, Mr. Bush does not get into the details of specific investments, but instead oversees the funds general policies and direction, said Coleman Stipanovich, deputy executive director of the fund. We had a fair amount of discussions with Alliance about what was happening with our Enron shares, Mr. Stipanovich said. There were plenty of red flags and we would talk about them. But Alliance ignored the red flags and relied way too much on the accountants and their auditors reports. In the end, he said, the fund fired Alliance as one of its money managers. Whether these financial losses will cost Mr. Bush some political capital remains to be seen. The Enron issue is right out there to be seized on, said Mr. Scher, the political science professor. But no one has done anything with it yet. Photo: Governor Jeb Bush of Florida faces a gubernatorial race this year, and so far, the Enron troubles have had little effect on his campaign. (Gary I. Rothstein) Chart: They Gave at the Office Here are some of the pension funds that invested in Enron stock and bonds and how much they lost. Florida state board of administration TOTAL LOST (IN MILLIONS): $335 University of California regents TOTAL LOST (IN MILLIONS): 144 Georgia state pension fund TOTAL LOST (IN MILLIONS): 127 Ohio state pension fund TOTAL LOST (IN MILLIONS): 114 New York City pension fund TOTAL LOST (IN MILLIONS): 109 Washington state employees TOTAL LOST (IN MILLIONS): 103 Oregon state pension fund TOTAL LOST (IN MILLIONS): 77 New Jersey state pension fund TOTAL LOST (IN MILLIONS): 61 New York state pension fund TOTAL LOST (IN MILLIONS): 58 California teachers TOTAL LOST (IN MILLIONS): 49 Alabama retirement system TOTAL LOST (IN MILLIONS): 47 California public employees TOTAL LOST (IN MILLIONS): 40 Texas teachers retirement system TOTAL LOST (IN MILLIONS): 36 Alaska state pension fund TOTAL LOST (IN MILLIONS): 26 Texas employees retirement system TOTAL LOST (IN MILLIONS): 24 Missouri public schools retirement system TOTAL LOST (IN MILLIONS): 23 Nevada state pension fund TOTAL LOST (IN MILLIONS): 22 Minnesota state pension fund TOTAL LOST (IN MILLIONS): 20 Connecticut state pension fund TOTAL LOST (IN MILLIONS): 15 Massachusetts state pension fund TOTAL LOST (IN MILLIONS): 15 North Carolina pension fund for state and local employees TOTAL LOST (IN MILLIONS): 15 Illinois teachers retirement fund TOTAL LOST (IN MILLIONS): 14 Illinois state employees retirement system TOTAL LOST (IN MILLIONS): 11-12 Los Angeles pension fund TOTAL LOST (IN MILLIONS): 11 Missouri state pension fund TOTAL LOST (IN MILLIONS): 9 Illinois universities retirement fund TOTAL LOST (IN MILLIONS): 8 Rhode Island state pension fund TOTAL LOST (IN MILLIONS): 5 South Carolina state pension fund TOTAL LOST (IN MILLIONS): 4 Idaho state endowment fund TOTAL LOST (IN MILLIONS): 4 Idaho state employees retirement fund TOTAL LOST (IN MILLIONS): 2 San Francisco pension fund TOTAL LOST (IN MILLIONS): 2 (Source: Published reports) counterpunch.org/2002/02/13/dear-jeb-bush-about-you-and-enron/ FEBRUARY 13, 2002 SHARE ON FACEBOOKSHARE ON TWITTERSHARE ON GOOGLEMORE SHARING SERVICES12 The Honorable Jeb Bush Office of the Governor The Capitol Tallahassee, Florida 32399-0001 Dear Governor Bush: Florida’s pension fund –for which you chair the oversight board –lost $334 million on Enron stocks and bonds in the wake of the company’s collapse. Many of the pension fund’s investments were made as Enron’s stock was plummeting in […] Dear Jeb Bush, About You and Enron by Joan Claybrook The Honorable Jeb Bush Office of the Governor The Capitol Tallahassee, Florida 32399-0001 Dear Governor Bush: Florida’s pension fund –for which you chair the oversight board –lost $334 million on Enron stocks and bonds in the wake of the company’s collapse. Many of the pension fund’s investments were made as Enron’s stock was plummeting in value and financial problems at the company were being publicly revealed. Investigations into the fund’s losses are now being conducted by the Florida attorney general, the Florida State Board of Administration and a committee appointed by the state House of Representatives. Because of the conflicts of interest resulting from your strong ties to Enron and your extensive entanglements with the company, we call for you to recuse yourself from making any decisions or taking any actions relating to these investigations, and from taking an active role in any lawsuits against Enron, Arthur Andersen or other entities related to the Enron collapse. We also call on you to refrain from taking any actions on behalf of the Board of Administration that relate to Enron. Your longstanding relationship with the company and its executives requires that you step down from any potential involvement in bringing Enron to justice. It is a state and national imperative that any wrongdoing be fully and independently investigated and that these investigations avoid even the appearance of conflict of interest. We make our request because: You have been a business partner with Enron. In 1995, you invested nearly $92,000 in an Enron affiliate, Enron Liquids Pipeline, and sold your interest 10 months later for a $7,100 profit; You appointed Walter Revell to be chairman of the Florida 2020 Energy Study Commission, which was established to develop energy strategies for the state. Mr. Revell is a 25-year friend of Ken Lay. The policies set forth by the commission could have greatly benefited Enron; In 1999, Enron subsidiary Azurix proposed a scheme under which it would help pay for Everglades restoration in exchange for water rights. Approximately two weeks after Enron’s plan was proposed, you appointed James Garner III, an Azurix lobbyist, to the Governor’s Commission for the Everglades; Enron has been a generous contributor to your campaign and to Florida Republicans. Enron, its subsidiaries and its employees contributed $420,000 to Florida political campaigns between 1995 and 2001, more than 80 percent of that going to Republicans, according to the St. Petersburg Times. And the Florida Republican Party received at least $76,500 from Enron towards your election in 1998, state records show; According to Florida Department of State records, you accepted nearly $20,000 from Enron, its subsidiaries, and the company’s accounting and law firms, during your 1998 campaign, including $6,500 directly from Enron executives; Ken Lay reportedly gave money to the Foundation for Florida’s Future, a think tank you founded (the foundation refuses to reveal its funders or the amount of their gifts); The Board of Administration’s deputy executive director is Coleman Stipanovich, brother of J.M. “Mac” Stipanovich, a Republican political consultant and lobbyist who ran your gubernatorial campaign in 1994; In January of this year, Richard Kinder, former Enron president and large donor to your brother, George W. Bush, and the Republican Party, held a fundraising event for you at his Houston home, which you attended; Enron and its employees contributed $312,500 to your brother’s 1994 and 1998 Texas gubernatorial campaigns, and another $113,800 to his presidential campaign. Enron also gave $10,500 to the Bush-Cheney Recount Fund and $300,000 to the Bush-Cheney 2001 Inaugural Fund, according to the Center for Responsive Politics. Other prominent officials have recused themselves from involvement in any investigation or litigation involving the company. U.S. Attorney General John Ashcroft did so, as did John Cornyn, attorney general for Texas. Three federal judges have recused themselves, as has the entire U.S. Attorney’s office in Houston. In light of the fact that other public officials have acknowledged their conflicts and reacted accordingly, we believe that you owe the people of Florida a complete explanation of the extent of your ties with Enron. We ask you to: Disclose all contacts you have had with Enron executives or agents since you have been governor and explain the nature of those contacts; Tell the public when you knew Enron was in financial trouble, particularly whether you had knowledge of Enron’s shaky financial condition as the state pension fund was buying shares that were rapidly declining in value; Explain what safeguards you put in place, or attempted to put in place when you became governor to ensure that such dramatic pension fund losses would not happen; and, Tell Floridians what measures you plan to enact to ensure that such losses do not occur again. We look forward to your making this information available to the public. Sincerely, Joan Claybrook President Public Citizen articles.sun-sentinel/2002-02-09/news/0202080786_1_azurix-enron-officials-jeb-bush Enron Unit Lobbied Bush To Privatize Florida Water February 9, 2002|By Michael Grunwald The Washington Post West Palm Beach — In 1999, while Florida was planning the most ambitious environmental restoration in history, leaders of an Enron Corp. subsidiary called Azurix Corp. made Gov. Jeb Bush an extraordinary offer: They would help pay Floridas multibillion-dollar share of the effort to replumb and revive the Everglades -- if they could then sell water captured by the project. But while Azurixs well-connected officials did get a meeting with the governor and his aides, their bid to start privatizing Floridas most precious resource went nowhere. The just-started $7.8 billion effort to restore the Everglades to its former glory has not been entrusted to a deeply troubled company. Water still belongs to the public. Boy, that was a near disaster, said Fred Rapach, a top water official in Palm Beach County. Azurix had the ear of everyone in the state, from the governor on down. Whew. In many ways, though, the saga of Azurix in Florida may mirror the larger saga of Enron in America: bold ideas, lousy finances, enviable access to government officials -- but few apparent results from those contacts. While the Enron scandal has failed to dent President Bushs sky-high approval ratings, it has become a major headache for his brother. Floridas pension fund lost $325 million on its Enron investments, more than any other public entity. Then Gov. Bush held an embarrassing fund-raiser last month at the Houston home of a former Enron president. And on Wednesday, just a week after Bush publicly denied having discussed his push for energy deregulation with Enron officials, his spokeswoman disclosed he had forgotten about a half-hour phone conversation with then-Enron Chairman Kenneth Lay. Enron contributed generously to Bush and many other state politicians. Yet energy deregulation has progressed no further in Florida than water deregulation. J. Allison DeFoor II, Bushs former Everglades policy coordinator, calls that the man-bites-dog aspect of the Azurix story. The amazing thing here is that you can be that influential and get absolutely nothing, said DeFoor, who attended the Azurix meeting on Sept. 21, 1999. The government took a look at their ideas and said, `Nah, I dont think so. They came. They met. They left. Nothing happened, said Bush spokeswoman Katie Baur. Bush is running for re-election this year, and Democrats were quick to put a nastier spin on his Azurix flirtation. They noted that Bush and his aides have expressed sympathy for the concept of privatizing water. In fact, the think tank Bush started after losing the 1994 gubernatorial race, the Foundation for Floridas Future, published a paper endorsing the idea in 1997, and the author later went to work for Azurix. This just shows again how the Enron connection goes back to the infancy of Floridas Bush administration, said Ryan Banfill, a Florida Democratic spokesman. Azurix was proposing a scheme to sell Floridas water back to Floridians. Jeb should have told them, `Dont let the door hit you where the good Lord split you. He didnt do that. Enron launched Azurix in 1998, vowing to transform the $400 billion global water industry just as it had transformed natural gas and electricity industries, by buying water infrastructure and selling water in deregulated markets. The name came from azure, a clear blue, and radix, a point of origin. The unit quickly purchased a slew of water and sewer utilities from California to Georgia, from Britain to Brazil. It created an online water-trading market called Water2Water. It sold a third of its shares to the public in June 1999 and its IPO debuted at $19 a share. Its brash CEO, Rebecca Mark, a Lay protege, predicted a 20 percent profit margin in the short term. With the federal government preparing to pour billions of dollars into the construction of storage reservoirs, water treatment plants, high-tech injection wells and the rest of the Everglades restoration, Florida soon emerged as a prime target for Azurix. It pitched private water markets at two Florida Chamber of Commerce workshops. It hired John Wodraska, a former executive director of the South Florida Water Management District, the states lead agency on the Everglades project, to be its managing director. It hired James Garner, the districts former chairman, as its Florida lobbyist, aided by Cathleen Vogel, a former communications director for the district who had written the water-marketing paper for Bushs foundation. E-mails from Bush aides obtained by the Florida Democratic Party show that in February 1999, Garner, a well-wired Republican lobbyist from Fort Myers, began angling for a meeting with Bush, mostly to discuss his recommendations for the districts board but also to discuss Public/Private partnership with ENRON in which he has an interest-specific to water development. The Azurix meeting did not take place until the fall. The meeting with Mark, Wodraska and Garner was scheduled for a half-hour, and Bush recalled in a later e-mail that it ran for an hour. But it was apparently a bust. https://books.google/books?id=zAmgOl5YT2QC&pg=PA229&lpg=PA229&dq=jeb+bush+water+enron&source=bl&ots=24U2G9EIOg&sig=qI75jqCOXzTquFzb_iSGIlM8RhU&hl=en&sa=X&ei=Z1C8VLvFL8HYgwSj7IOoDw&ved=0CD0Q6AEwBjgK#v=onepage&q=jeb%20bush%20water%20enron&f=false
Posted on: Mon, 19 Jan 2015 02:42:13 +0000
Trending Topics
Recently Viewed Topics
© 2015