BUSINESSWEEK ONLINE : FEBRUARY 12, 2001 ISSUE
COVER STORY Enron's Big Wheel Has a Heavy Tread Texas business has always prided itself on its ''can-do'' attitude. But when it comes to prodding government policymakers to action, nobody comes close to Enron Corp. (ENE) CEO Kenneth L. Lay. ''In recent years, that has become Ken-do,'' says Chase Untermeyer, director of government affairs at Compaq Computer Corp. (CPQ) and chairman of the Texas State Board of Education. So what has Ken done? In Houston, Lay led the fight for a new baseball stadium, which opened last April under the Enron name and with $100 million of its funding. As chairman of the Governor's Business Council under former Governor George W. Bush, Lay pushed for and won state education reform, litigation curbs, and tax cuts. In Washington, Lay's army of lobbyists has sought everything from electricity deregulation to tax breaks. Now, with Bush in the White House, Lay stands to become one of the most influential corporate players in the country. With the public furor over California's power crisis, he'll work to stave off cries for reregulation of electricity. Says Craig McDonald, executive director of Texans for Public Justice, a liberal consumer advocacy group: ''Enron is at the top of the top group of corporations that has the ear of George W. Bush.'' ''PIONEER.'' Indeed, the ties between the Texans run deep. They share a background in the energy business and a free-market worldview. Lay was a big backer of the first President Bush, whose Secretary of State James A. Baker III and Commerce Secretary Robert A. Mosbacher were hired as Enron consultants after Bush's '92 defeat. Enron was the younger Bush's leading patron in Austin, donating more than $550,000 to the governor, according to the Center for Public Integrity, a Washington watchdog group. When Bush set his sights on the White House, Lay was one of 212 ''pioneers'' who raised more than $100,000, and Enron was the campaign's top supplier of corporate jets. Enron donated $250,000 for the Republican national convention. In addition, Lay sent the maximum $5,000 to the Florida recount legal fund, and gave $100,000 to the inaugural committee. Lay, who steps down as Enron's CEO this month but will remain chairman, intends to stay plugged in. During the Presidential campaign, he was a key Bush adviser on energy. He has since been named a ''transition adviser'' to the Energy Dept. High on Enron's list of priorities is federal authority to approve interstate electricity transmission lines. Lay says he was willing to serve in a key Bush Cabinet post but didn't lobby for a job, and no offer came: ''I've got a job, and I can support President Bush in a lot of other ways, just like I did his father.'' Beyond the White House, Enron has a vast lobbying operation that pushes issues such as deregulation, tax breaks, telecom, trade, and environmental quality. While Enron tilts toward Republicans, it gives generously to both parties. In the 2000 election, the company and its top execs funneled $1,095,350 in soft money to Republican Party committees and $519,565 to Democrats, says the nonpartisan Center for Responsive Politics. Those who have been subjected to Enron's lobbying efforts say the company is persistent but not overbearing in pushing its agenda. ''They are forceful and they are persuasive,'' says former Hill staffer David M. Nemtzow, now president of the Alliance to Save Energy, a nonprofit coalition of companies and government officials. With friends in high places, the next few months will determine just how much Houston's Ken-do can do. By Richard S. Dunham and Laura Cohn in Washington _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Enron's Power Play COVER IMAGE: Power Broker CHART: Enron Taps Volatile Energy Markets...To Dominate Power Sales... TABLE: The Enron Way TABLE: Is There Anything They Can't Trade? Enron's Big Wheel Has a Heavy Tread Derring-Do in the Corner Office RESUME: Jeffrey K. Skilling Commentary: Enron Hasn't Made Many Friends in the Third World (int'l edition) ONLINE EXTRA: Q&A with Enron's Skilling INTERACT E-Mail to Business Week Online

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