Cheney Richard B. - Vice

By mid-April 2001, Dick Cheney had been vice president of the United States for less than three months. But he was already deeply involved in a series of secret meetings in his West Wing office. When more space was needed for these energy task force meetings, an employee on loan from the would schedule the ornate Vice President's Ceremonial Office in the Eisenhower Executive Office Building. The aide would also send out an e-mail designating precisely who would be allowed to attend the meetings the vice president was chairing. The April 17 list was a short one. Dick Cheney had quietly cleared his schedule to meet with a friend from Texas.

It's not likely that Dick Cheney knew at the time that was pleading for rate caps that would provide relief for the state's devastated utility companies and the consumers enduring rolling brownouts and soaring utility bills. And Enron CEO Ken Lay was flying to Washington to talk to Dick Cheney.

The vice president was waiting. Lay handed him a three-page memo outlining Enron's recommendations for the new national ."

The following day, had swept in 2000. But Cheney wanted to talk energy. That was fine with Skelton, because at that time energy was the biggest story in the state. Cheney wasn't the least bit tentative. "Price caps provide short-term relief for politicians," he said. "But they do nothing to deal with the basic, fundamental problem." Skelton pushed a little. Would the administration support temporary price caps to get the state through the summer?

"Six months? Six years?" Cheney said. "Once politicians can no longer resist the temptation to go with price caps, they usually are unable to even muster the courage to end them... I don't see that as a possibility."

California's governor, both U.S. senators, even Republicans in California's House delegation were begging the administration for price caps, or for some relief for utility rates that were forcing small-business owners to close their doors. But Cheney had already told Senator that one of the lessons he learned in the Nixon administration was that price caps don't work. Now he was calling a reporter to defend a position Ken Lay had laid out for him a day earlier. "Frankly," Cheney said, "California is looked on by many folks as a classic example of the kinds of problems that arise when you do use price caps." The vice president was such a free market zealot that he saw no government role in a utilities market that was savaging consumers. This was policy advocacy so fast and efficient that it seemed reflexive. Cheney heard from Ken Lay on Monday and called George Skelton on Tuesday, and Lay's position on price caps was laid out under the vice president's name in the Los Angeles Times on Wednesday.

The public was not aware of Lay's visit to the White House. It's not known whether Lay told Cheney that Enron was in trouble, although it seems improbable. The vice president refuses to answer the question, and Lay's death in July 2006 while awaiting sentencing for bank and securities fraud suggests we'll never know. But Cheney knew that in less than a year the wholesale cost of one megawatt-hour of electricity in California had jumped from $30 to $300up to $1,500 at peak demand times. It was also widely reported that profits earned by power producers and marketers like Enron were up 400 to 600 percent.