Big GOP contributor advised administration’s energy task force

Introduction

When a generous patron of President Bush and the Republican Party sought political backing for his company’s multi-billion dollar Alaskan pipeline project, he turned to Vice President Dick Cheney, head of the administration’s energy policy task force, known formally as the National Energy Policy Development Group. The Bush administration has refused to disclose the names of the outside advisers to its energy policy task force. Members of Congress have unsuccessfully sought a complete list of those who helped the administration draw up its National Energy Policy report.

In a meeting with Cheney last year, Hoglund told the Center for Public Integrity, he asked Cheney to support Arctic Resources’ Alaskan pipeline project. The company wants to build a 1,700-mile-long natural gas pipeline from Alaska’s North Slope, traveling near the Arctic National Wildlife Refuge, into Canada and, ultimately to the continental United States. The task force, in its final recommendations to President Bush, did not include the specific pipeline route from Alaska that Arctic Resources sought. But it did endorse expediting the necessary permits to build a pipeline along an unspecified route from Alaska to the lower 48 states. The Center placed calls Thursday to the Vice President’s press office for comment. No calls were returned. The administration’s refusal to release records of the task force’s meetings with executives like Hoglund has triggered a showdown between the Bush administration and the investigative arm of Congress, the General Accounting Office. The GAO announced on January 30, 2002, that it would sue the administration to gain access to the records. President Bush on Tuesday said that the congressional request was “an encroachment on the executive branch’s ability to conduct business.” Vice President Cheney and others in the administration have also taken a hard line against releasing the information. The GAO has tried for the past nine months to get access to the records. Members of Congress who have requested the information want to determine whether campaign contributors had disproportionate influence on the energy proposal drafted by the task force. U.S. Comptroller General David M. Walker, the head of the GAO, announced that he will file a lawsuit to force the administration to give congressional investigators records from the group. Demand for access to meeting records took on new dimensions with the collapse of Enron, America’s seventh-largest company, and the loss of billions of dollars in investments by Enron employees and stockholders. Enron was among Bush’s top campaign contributors, giving him $623,000 over the course of his political career. The administration released the dates of six meetings between Cheney, members of the energy task force, and Enron executives. The meeting dates were disclosed in a letter from Cheney’s legal counsel, David Addington, to Rep. Henry A. Waxman on January 3, 2002. Waxman is the ranking Democrat on the House Government Reform Committee, one of 11 congressional committees and federal agencies investigating the stunning collapse of Enron, and the activities of company executives leading up to the bankruptcy filing. The administration has refused to release the names of other energy executives who met with the task force. Hoglund is the first to be identified.

“Standard business practice”

Hoglund spoke to the Center for Public Integrity from his office in Houston. His remarks to the Center are among the first public comments by a participant in meetings during which the National Energy Policy Development Group talked specific plans. “This was an apolitical issue,” he said. But political contributions played a role in Hoglund’s relationship to the Bush administration and the Republican Party. Since 1997, he has given $209,572 in soft money contributions to the Republican National Committee. Hoglund made $34,572 in soft money contributions to the RNC last year, with one $25,000 check paid at the time the task force considered his proposal. The timing, Hoglund told the Center, was coincidental. “I’ve been a supporter for some time,” Hoglund said. “There is no new pattern to this. This is standard business practice.” Hoglund ran Enron’s oil and gas subsidiary for more than a decade until he left the company in 1999 to head up Arctic Resources, a private partnership seeking to build natural gas pipeline estimated to cost between $6 billion and $13 billion. According to Hoglund, when he met with Cheney he represented the interests of Arctic Resources, and not Enron. He said his professional ties to Enron had been severed when he retired and sold his stock in the company over the past 18 months. While Enron was not a partner in Arctic Resources, the company was courted, along with other major players in the oil and gas industry, to invest in the pipeline project, said Bob Murphy, president of Arctic Resources. Though he had left Enron’s employ, the Republican National Party continued through 2000 and 2001 to identify Hoglund as an employee of Enron in Federal Elections Commission filings, including his $25,000 soft money contribution to the RNC on March 8, 2001. Records from Cheney’s office show unnamed Enron representatives and task force members met one day earlier, March 7. Hoglund said he does not recall the date of his meeting with the task force. But he does remember his contribution had nothing to do with specific task force proposals.

“A strong association”

The Center also examined the timing of Enron’s soft-money contributions to the national political parties last year. The Center reviewed Federal Elections Commission records for the period between January and October 16 — the day Enron announced the $1.2 billion reduction in shareholder equity that helped trigger its demise. On that same day, the Republican National Committee recorded a $60,000 contribution from Enron, one of the larger single contributions from the company last year. The analysis did not include some $200,000 in soft money contributions that was divided evenly between the RNC and the Democratic National Committee on November 26 — when the company’s demise was almost certain. It filed for Chapter 11 bankruptcy on December 3, 2001. Hoglund’s contributions to the party in 2001 were counted in the analysis, largely because the RNC continued to identify the Houston resident as an Enron executive on Federal Elections Commission filings. The Center’s research found that most of Enron’s soft money contributions were made to the RNC or GOP congressional campaign committees during a narrow window of time surrounding six confirmed meetings between the task force and Enron representatives. Of the $292,884 in soft money that Enron doled out during that time period reviewed, some $130,350 was paid to the Republican Party within a week of the private meetings between its executives and members of the energy policy task force. The money went to various state election and non-federal — soft money — accounts of the RNC and the Republican House and Senate fund raising committees, through which corporations can give unlimited amounts of money. James A. Thurber, director of the Center for Congressional and Presidential Studies at American University, called the timing of contributions troubling. “It doesn’t prove anything, but it shows a strong association between money and policy that would be very important to Enron,” Thurber said. Repeated calls were made to Enron attorney Robert Bennett for comment. None were returned. An RNC spokesperson said there were no sinister motives behind the payments. “Donations come in throughout the year,” said Kevin Sheridan. “It would be a stretch to make any kind of link between these meeting dates spread throughout the year and contributions.” Nonetheless, the timing of some of the soft money contributions coincides with the secret meetings at which Enron executives met with administration officials to share their views on such issues as electric utility deregulation, natural gas exploration, and carbon emissions caps, among other things.

Among the Center’s findings:

• Seven days before a February 22, 2001 meeting between Enron executives and Andrew D. Lundquist, the executive director of the task force, the corporation gave $40,000 to the RNC State Elections Committee.
• Lundquist met again with unidentified Enron representatives on March 7. The next day, Hoglund gave $25,000 to the RNC State Elections Committee. Twelve days after that — March 20 — Enron donated another $10,000 to the RNC state committee.
• On April 9, the task force staff met with unidentified Enron representatives. Two days later, Kenneth Karas, head of the Enron Wind Corp. subsidiary, chipped in $5,000 to the National Republican Senatorial Committee. (Enron Wind designs wind turbines in California and Germany. A meeting in August included unnamed representatives of Enron’s German operation.)
• The largest single soft money donation from Enron last year was a $100,000 contribution given to an RNC congressional election committee on June 7. Two weeks later, Vice President Cheney and Lay, the Enron CEO, met when the two served on a panel at the American Enterprise Institute (AEI) World Forum in Beaver Creek, Colo.
• On October 10, after the task force had completed its work, Lundquist met with Enron executives, again to talk energy policy, according to Cheney’s office. A week earlier, on Oct. 2, Enron gave $20,000 to the RNC state committee. Then on Oct. 16 the company donated another $60,000 to the RNC state committee.
• Though the company was connected to both Democratic and GOP lawmakers, the bulk of Enron’s soft money contributions were given to Republican Party committees. Between January and October, the Democratic National Committee received $2,050 from Enron. Enron made a $100,000 contribution to the DNC on Nov. 26, the week before company filed for bankruptcy, and the same day it contributed $100,000 to the RNC.

President Bush established the energy task force almost immediately after taking office. The task force was in part a response to the electricity crisis in California, rooted in the deregulation of the electric utility industry, and devised the administration’s energy policies. These included proposals to drill for oil in the Arctic National Wildlife Refuge, to encourage the development of new nuclear power plants, and to create a national electric grid, which would facilitate deregulation by allowing electricity producers access to markets around the country. For more than a decade, deregulation of the industry has been a key initiative in Enron’s business. The task force included top administration officials, virtually all of whom had strong connections to the industry, including Cheney, the former chief executive officer of Halliburton, the oil services giant, and executive director Lundquist, who served as a top aide to Alaskan Sen. Frank Murkowski. Murkowski is a staunch advocate of gas and oil drilling in the Alaskan National Wildlife Reserve.

Off-the-record sessions

After five months of talks with energy industry representatives, including those from Enron, and with environmental interests, the task force made recommendations to Bush. While the final document was public, conversations that went on during the task force meetings were closely guarded by the White House. “At the start of each meeting with outside groups, task-force members request that the session be off the record. They say they will share no documents, to prevent information from leaking. The members are expected not to talk to the media, and the few who do are not able to talk about policy,” the Washington Post reported in one story about the veil of secrecy surrounding the task force. While the bulk of those who met with task force remain secret, Cheney’s office disclosed the dates of six meetings involving Enron representatives under mounting pressure from Congressional Democrats. Since the disclosure, administration officials have acknowledged contacts with Enron executives that go well beyond the task force. Lay, then Enron’s CEO, made calls to the treasury and commerce secretaries to inform them of Enron’s impending financial collapse, and to hint at a government bailout. The financial bailout never materialized. But the administration’s energy task force, some critics charged, offered Enron substantial help. Last week, a report written for Rep. Waxman by the minority staff of the House Government Reform Committee said that key recommendations by the National Energy Policy Development Group mirrored the policies sought by Enron. The company did not get every policy it wanted, the report makes clear. “Nevertheless, it is unlikely that any other corporation in America stood to gain as much from the White House energy plan as Enron.” Sheridan of the RNC disagreed. “Enron didn’t get anything they wanted out of these meetings,” he told the Center. “Obviously they [the task force members] are going to want to talk to the seventh largest company in the world, an energy company.” He added, “The task force acted independently, on their own.” Whether Enron’s contributions resulted in specific policies or not, some experts believe the dates of the company’s giving suggest it was attempting to influence the process. “It is true that soft money fundraising is going around the clock,” said John Green, director of the Bliss Institute for Applied Politics at the University of Akron. “But the timing is an issue. These gifts tend to peak around the time that important legislation is being processed.” A Democratic investigator told the Center that they would continue to examine political contributions by the company. “We are looking at campaign contributions by Enron executives and lobbyists,” one committee investigator told the Center. “Any temporal connections between contributions and access could be potentially significant.”

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Update: Both Forrest Hoglund and Bob Murphy, the chairman and president, respectively, of Arctic Resources Co., contacted the Center to express their objections to this report. Hoglund stated that his meeting with Vice President Dick Cheney in Washington, D.C., which he says occurred in July 2001, had nothing to do with the deliberations of the National Energy Policy Development Working Group, which issued its report in May 2001. While Hoglund acknowledged that the purpose of his meeting with Cheney was to inform the administration of the progress of its pipeline project, he stressed that these meetings were in no way connected with the work of Cheneys energy task force. He went on to say that the pipeline project is “the single most important energy project in the United States and Canada,” and that his company had had similar meetings with members of the Clinton administration. He also said that staff members of Cheneys task force had met with officials of Arctic Resources in Houston. He maintains, however, that these contacts were informal and unrelated to the development of the National Energy Policy. Hoglund also objected to the Centers mentioning his prior employment by Enron, and stated that there is no connection between Enron and Arctic Resources. We believe we made that clear in the original report, and noted that it was the Republican National Committee that continued to identify Hoglund as an employee of Enron even though he no longer worked for the company. Murphy contends that the meeting between Hoglund and Cheney was neither secret nor part of the task force deliberations. He further stated that the Center’s report suggests that they met with the full task force. “We didnt meet with a task force.” he said. “We met with one or two guys.” To the extent that the Center gave the impression that Mr. Hoglund met with the full energy task force, we stand corrected. For the record, the Center stands by its report. The National Energy Policy Development Working Group was active from its establishment on January 29, 2001, to September 30, 2001, according to the letter that David Addington, counsel to the Vice President, sent to Rep. Henry Waxman. Cheney was the chairman of the group during that period, which included the July meeting with Hoglund. Hoglund contends that his meeting with Cheney was unrelated to the work of the Energy Task Force. He added, however, that when staff members from the task force visited Houston in 2001, they met with representatives of Arctic Resources. The General Accounting Office has requested records of such meetings from the White House. In an August 17, 2001 report to House Speaker Dennis Hastert, David M. Walker, the comptroller general, wrote, “We are simply asking for facts that the Vice President, as chair of the NEPDG, or others representing the group, would be in a position to provide the GAO. These include the names of attendees, dates and locations, and the subjects of the meetings.” (Emphasis added.)