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nomination adhered to the letter of the law. In any case, Perry figured, with the Legislature recessed Yzaguirre would not face the scrutiny of a nominations committee for 18 months. \(The That fall, however, as interest in Enron’s financial troubles increased,Yzaguirre amended his application to reveal that he had served as an executive on several North American subsidiaries of Enron, and things began to unravel. As pressure mounted on Perry in the wake of Enron’s December collapse, the Governor held fast to his appointment, even after the embarrassing revelation that Lay had personally donated $25,000 to Perry on June 14, 2001, the day after theYzaguirre appointment. Perry called the timing a “coincidence.” \(In a bizarre episode, Perry’s bumbling staff also sought to hide Yzaguirre’s criminal recordhe shot a whooping crane in South Texas in 1 ,989from Democrats by redacting portions think we underestimated how firmly they would stand by Yzaguirre,” said Democratic consultant Kelly Fero. “This was a question of a lot of money.This wasn’t just a little payback this was the guy who was going to oversee deregulation and an awful lot of people are going to get rich.” Finally, on January 18,Yzaguirre stepped down. Meanwhile, a second PUC commissioner, Brett Perlman, has come under fire for previously undisclosed Enron connections. Appointed by Bush in 1999, Perlman worked until 1998 for McKinsey & Company, the consultants who helped Enron evolve from a pipeline company to a global energy trading firm. According to documents obtained by the Fort Worth Star-Telegram, Perlman described his work there as assisting “the leading U.S. natural gas and electricity trader to Calling Texas’s average rate of six cents per kilowatt hour “absurdly high,” in 1996 F.nron executive Jeff Skilling said, “There’s nothing in this market that sug gests we won’t see the same savings of 30 to 40 per cent we’ve already seen elsewhere: This was, of course, several years before price spikes and rolling blackouts began hitting California’s deregulated market. develop an industry-wide online electricity trading system.” In just as deep with Enron is Texas Attorney General John Cornyn, who has accepted $193,000 from the company and its executives. Cornyn first declined to recuse himself from the state’s investigation of the Enron collapse. “This is not the time for him to recuse himself from his duty,” his spokesperson told reporters shortly after Enron declared bankruptcy. One day later he switched course, announcing that he would form a task force within his office to determine the state’s strategy and that he personally would take no part in the investigation. \(Cornyn’s announcement accompanied a cascade of recusals by Texas justice officials, including the U.S. Attorney in Houston and several Republican state judges in Compared to the effort launched by other states, Texas’s investigation of Enron has been noticeably lethargic. In Florida, for example, where public pension funds lost $334 million on Enron investments, the Attorney General had already begun issuing subpoenas shortly after the bankruptcy was announced. Florida is now jockeying with California, New York, and several other large states to become the lead plaintiff in a class action suit to be heard in federal court in Houston.Yet Texas also has lost more than $60 million in public pension funds. Texas somewhat belatedly announced it would join the suit on January 31, but the state’s intervention has been far from vigorous. “What he ought to be doing is taking matters before a grand jury” in Houston, said former Attorney General Jim Mattox, a Democrat.The A.G. also has the power to seize corporate records and review them for evidence of illegal activity. Mattox said he would have gone after both Enron’s and Arthur Andersen’s books immediately. “There’s no doubt that the state should have a major role in the investigation and I don’t think that’s happening,” he said. “It raises the greater question of how campaign contributions affect policy,” Public Citizen’s Tom Smith said. “If the Attorney General is acknowledging this as an issue, then you have to question how others can say it doesn’t affect their decision-making.” Among those decision-makers is Chief Justice Tom Phillips of the Texas Supreme Court. Phillips recently told reporters that he would not be returning the $12,250 he took from the company, because to do so would imply that there was something wrong about taking the money in the first place. \(In fairness, Phillips is on record calling for judicial campaign $134,058 from Enron. One of those justices, Priscilla Owen appointment to the Fifth Circuit Federal Court of Appeals. Members of the Senate Judiciary Committee, some of whom were already opposed to the conservative Owen have indicated that Owen will have to answer some tough questions. continued on page 20 2/15102 THE TEXAS OBEENVEll