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N4 ibt -01 nt. / ..>:”;,.. . . 61> “Yr e . , \\ FEATURE Naked Emperors and Wet Rats As Enron Goes Under, Texas Pols Scramble for Cover BY NATE BLAKESLEE n the spring of 1991 Texas state representative Kevin IBailey killed an Enron bill. The freshman Democrat from Houston had been advised by his veteran campaign manager to play ball with the company, which at that point was still just a natural gas pipeline concern. But Bailey didn’t listen, and it very nearly ended his career. In 1992, he found himself in a primary fight against an Enron-recruited candidate, who promptly used Enron cash to hire away Bailey’s own campaign manager. When he narrowly won that contest, Enron tried to unseat him again in 1994. Bailey survived, but he was chastened. Even then, “Ken Lay had a lot of influence,” he said. “People were afraid to mess with him, because they always knew he’d come and try to get you.” In the years since, Enron has grown steadily more powerful in Texas.The company has risen in tandem with the state Republican Party, which has been lavishly bankrolled by Enron executives and PACs. By 1999, when the Republicans, led by George W. Bush, had swept every statewide Democratic official out of office and seized control of the state Senate for the first time since Reconstruction, Enron was sitting at the top of the heap, the king of the lobby. That was the year Enron pushed their holy grail, deregulation of retail electricity, through the Texas Legislature. Through their joint venture, The New Power Company, Enron stood to make a bundle when competition officially began in January of this yearif only they had been around to see it. Instead Lay and his wife are fighting for liquidity, and the state’s top Republican officials are heading into an election year with a Texas-sized albatross around their necks. Governor Rick Perry has taken $227,075 from the company, including a $25,000 check from Ken Lay delivered the day after Perry appointed a former Enron executive, Max Yzaguirre, to head the Texas Public Utility Commission. Yzaguirre resigned under pressure on January 18, but Perry says he will not be returning the money. Neither will Republican Attorney General John Cornyn, who has taken $193,000 from the company. Cornyn recused himself from the state’s investigation of the meltdown, though to date there has been little activity on that front. The state comptroller, Carole Keeton Rylander, the elected official who oversees the collection of taxes from companies like Enron, has taken $63,000 in contributions. Enron is also the largest corporate contributor to the current membership of the Texas Supreme Court, where justices are elected in expensive partisan races, and where some portion of the coming Enron litigation may very well wind up. Already some veteran politicos are invoking the dreaded name of Sharpstown, the Texas banking scandal of the early 1970s. In the wake of that disaster, voters replaced virtually all incumbent statewide elected officials, as well as half of the sitting legislators. As the election season gets underway, each new revelation in the morning paper has campaign consultants scrambling to uncover who got what from Enron over the last decade, and what Enron got in return. In Houston, Enron’s money went to art museums, opera houses, and hospitals; in Austin it went to politicians. “Lay and the big executives were absolutely everywhere in political circles,” Democratic lobbyist Patrick Woodson said. “I mean Enron’s influence was just enormous.” For the better part of a decade, they applied that influence with sin gle-minded purpose toward one goal: cracking open the lock 4 THE TEXAS OBSERVER 2/15/02