Bailout Watch #46 – May 24, 2001

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BAILOUT WATCH: Keeping an eye on the energy industry and the politicians

Bailout Watch #46 – May 24, 2001

Calling Jerry Maguire. Yesterday evening State Controller Kathleen Connell announced that Governor Davis’s long term power contracts contain a clause requiring that the state pay energy companies before repaying the General Fund (why should anybody come before the taxpayers — wasn’t that the express reason the state recently approved the largest municipal bond issuance in American history?). Governor Davis’s crisis management team immediately decried Connell’s expression of concern as politically motivated and naïve. They acknowledged the prioritization of energy companies over the taxpayers but cast it aside, noting that when the bond money comes in there will be no outstanding debts to power companies…The treasury will be repaid. However, a provision exposed by Connell also forces the state to pay for future power costs before replenishing the treasury. So who is correct? Other than Davis, Controller Connell is the only elected official who has access to the deals with the energy suppliers. All we know is that until the public takes a look at what we’re getting with these contracts, we are in the dark. Show us the contracts!

Meet Joe Dunn. Only one Senate Democrat, Joe Dunn of Santa Ana, voted against the bond legislation SB 31X that is a blank check on the state Treasury for the energy wholesalers. (See BW# 41)

Business Leaders for Tough Action. Yesterday we complained that CEOs of many of the state’s largest businesses are backing the Governor’s utility bailout plan. None of them that we are aware have publicly recognized that the only way out of the energy debacle is to force the energy cartel to lower its prices to fair profit levels or face seizure of their plants under eminent domain. According to the San Diego Union-Tribune, however, members of the San Diego Building Owners and Managers urged Gov. Davis in a private meeting to get tough with the generators, including seizure of the plants if necessary. Davis said he agreed.

Read today’s Bailout Watch cartoon
Disasters in Deregulation #1 — Long Distance Telephone

Judgment Day
530 Days Until November 5, 2002

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