Blair mired in Enron row
Labour digs in: Tories urge Labour to 'come clean' over links to energy firm
Michael White and David Hencke Tuesday January 29, 2002 The Guardian
Downing Street last night launched a vigorous defence of its policy dealings with the disgraced US energy company Enron, as the Conservatives turned their attack on what they termed "a very murky business" for the government.
Number 10 released a list detailing seven ministerial meetings with company representatives between 1998 and 2000, and culminating in a CBE in the 2001 new year's honours list for Ralph Hodge, the former Enron Europe chairman.
Mr Hodge has now ex pressed unease about the US firm's aggressive lobbying stance, triggering claims that Enron paid "cash for access" because it made low-key donations totalling £36,000 to Labour-sponsored events.
The purpose was to explain "the differences in the UK political scene" to his US bosses, he told Channel 4 News last night. "It would be a better world if it was not custom and practice to do that," Mr Hodge said, stressing that he did not believe Enron had bought influence.
The firm also hired a Conservative ex-cabinet minister, Lord Wakeham, who sat as a non-executive director on the Enron board, and may have to testify on Capitol Hill.
Downing Street officials denied that Mr Blair had ever met any executives of Enron to discuss the government's moratorium on gas-fired power stations, which was modified after extensive pressure from the energy sector.
Ministers and ex-ministers admit there was intense pressure to create a more active market, but from many firms. There was also an environmental case for gas. "The change was won by argument, not by pressure from Enron," one backbench expert recalled last night.
But the former Treasury minister, David Davis, now Tory chairman, issued a statement based on a Guardian rev elation in August 1999 that the US embassy in London had reported that "prime minister Blair has recently intervened to water down the moratorium proposals".
The Guardian document, obtained via the US Freedom of Information Act, prompted Mr Davis to back calls from Tory and Liberal Democrat MPs for "further clarification" to test Mr Hodge's claim that giving money was the "most efficient" way to reach ministers.
"The question remains whether Mr Blair was aware of the meetings between his ministers and Enron executives and whether he intervened to secure a change of policy_ The PM now needs to come clean about the whole affair and in particular the role he played," said Mr Davis.
As the deepening implications of Enron's collapse and the complicity of its accountants, Arthur Andersen, spread within the US, MPs in all parties are determined to establish whether Britain has also been tainted by dubious corporate practice.
No 10 and the Department of Trade and Industry, where three secretaries of state, Margaret Beckett, Peter Mandelson and Stephen Byers, were involved in the policy change, are adamant that the moratorium on gas had always been temporary, to help the rival coal industry through a bad patch.
They also insist that ministers acted on the advice of officials, notably the director general of gas and electricity, who urged Mr Byers in April 2000 to ease the block on gas-fired stations. It was finally done that November.
But according to the Guardian report, a former Enron executive, David Lewis, wrote in May 1998: "We have a very clear sign from government that at the moment an extended moratorium is the frontrunner as a means of protecting the coal industry."
The role of Andersen, who won back access to huge government contracts through Labour, after being blackballed by the Tories, is also being questioned. Matthew Taylor, the Liberal Democrat Treasury spokesman, is seeking to know what government contracts the partnership has won since 1997, and how many staff, some very senior, have been seconded to Whitehall.
The MP listed Andersen's help to Labour in opposition, ranging from policy advice to management training and a crucial report supporting the controversial policy of public/private partnerships.
Among the contracts Andersen later won was a £70-130m national insurance computer contract and extensive contracts advising ministers on privatisations and partnerships, including Railtrack, London Underground and schools and hospitals.