Enron courts prominent Californians at secret meeting

Saturday, May 26, 2001, ©2001 Associated Press

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/26/state1541EDT0171.DTL&type=news

(05-26) 13:20 PDT SAN FRANCISCO (AP) --

In a move to garner support from prominent California Republicans, a Texas energy executive held a secret meeting to push for the preservation of the state's deregulated power market, a newspaper reported Saturday.

Houston-based Enron Corp. Chairman Kenneth Lay met with such names as movie star Arnold Schwarzenegger, Los Angeles Mayor Richard Riordan and Michael Milken, who pleaded guilty to fraud charges in 1990 as head of the Drexel Burnham Lambert investment banking firm, the San Francisco Chronicle reported. The 90-minute private meeting took place Thursday in a Beverly Hills hotel.

Schwarzenegger and Riordan have been courted as Republican candidates for governor. Enron distributed a four-page plan at the meeting calling for ratepayers to pay the billions in debt racked up by the state's public utilities and that state and contending federal investigations of price gouging are hindering the situation, the Chronicle reported after obtaining a copy of the paper.

Others attending the meeting included chief executives Ray Irani of Occidental Petroleum, Kevin Sharer of biotech giant Amgen, and Bruce Karatz of home builder Kaufman & Broad, the Chronicle reported, citing unidentified sources.

Lay, who is a friend and one of President Bush's largest campaign contributors, has built the world's largest energy trader by buying electricity from generators and selling it to consumers. During the first quarter of this year, Enron's revenues increased 281 percent to $50.1 billion.

Lay and Gov. Gray Davis have disagreed about how California's power crisis should be handled, and Lay says his company is being used as a scapegoat.

Enron spokeswoman Karen Denne did not immediately return a call seeking comment Saturday.

On the Net: www.enron.com/corp/

©2001 Associated Press

-- Swissrose (cellier3@mindspring.com), May 26, 2001