Rowland
Retreats On Enron Denial
November 7, 2003
By JON LENDER, Courant Staff Writer
Gov. John G. Rowland retreated Thursday from his long-held
denial that he spoke with former Enron Chairman Kenneth Lay - acknowledging for
the first time that Lay may have participated in "numerous" phone
conference calls with him and his staff.
"Ken Lay may have been involved in numerous conference calls that have
taken place either with officials in my office or with me," Rowland said
in answer to questions at a press conference in Hartford about new development
plans at the Colt factory site.
That statement was made in response to newly surfaced internal Enron memos that
said Rowland talked to Lay and was much different from the governor's flat
statement in February 2002 that he never had spoken to top Enron executives
such as Lay.
When Rowland issued his blanket denial - which his staff has repeated in the 20
months since - he was facing his 2002 re-election campaign and wanted to
dissociate himself from the state trash authority's loss of $220 million in an
energy-sales transaction with Enron. That deal, branded an illegal loan by the
state attorney general, is being investigated by state and federal grand
juries.
Rowland survived the Enron issue during his re-election campaign - but now, a
year into his third term as governor, the issue is haunting him again.
Thursday's retreat from his past denial came after The Journal Inquirer of
Manchester published internal Enron e-mails and a memo that have been made public
through a federal investigation into manipulation of California's energy
markets.
In one e-mail, on Nov. 5, 2001, Enron's senior vice president for government
affairs, Steven J. Kean, wrote to Lay: "Some good news. Your call to
Governor Rowland was helpful. We are not finished yet, but we are on our
way."
The e-mail was headed "Fuel Cell Update" - a reference to an
ultimately unsuccessful Enron fuel-cell development initiative separate from
the $220 million deal that had been approved in December 2000 by the state's
trash agency, the Connecticut Resources Recovery Authority. The CRRA's chairman
at the time was Rowland's then-chief of staff, Peter Ellef.
A day earlier, Enron lobbyist Steven Montovano wrote an e-mail to Kean and
others saying: "It appears that Gov. Rowland is going to move this ball
forward as he promised to do. I have had several meetings since the Kean/Lay
call with Rowland and the message from him has been consistent."
When Rowland issued his denial in early 2002, it had just been disclosed that a
local consultant, who had arranged a Dec. 18, 2000, meeting between Rowland,
Ellef and Enron executives, later threw a $50,000 fund-raiser for Rowland's
re-election campaign.
Rowland had characterized that 2000 meeting as a casual, get-to-know-you
encounter and has minimized his knowledge of, and involvement with, the
company's local efforts. However, the newly available Enron e-mails suggest
that Rowland had a deeper knowledge and involvement with the now-bankrupt
company's efforts.
An example is an Oct. 30, 2001, memo to Montovano from Daniel Allegretti,
Enron's then-public affairs director, who reported on a meeting about fuel
cells that he said Rowland had with another Enron lobbyist and longtime Rowland
friend, Mike Martone. (Allegretti incorrectly identified the CRRA name).
"Mike provided me the following information," Allegretti wrote.
"Governor Rowland wants to do the project which must include our partner,
the Connecticut Resource Recovery Authority. Governor Rowland does not want the
project to be headed by Peter Ellef ... but by Arthur Diedrick [Rowland's
development chief] who oversees the Renewable Energy Investment Fund. Governor
Rowland wants a Connecticut project and does not want to put it out for an RFP
[request for proposals] for an out-of-state development ..."
Copies of the Enron memos were distributed to reporters Thursday by Democratic
State Chairman George Jepsen, who said: "It is now painfully clear that
Gov. Rowland deceived the people of Connecticut as to the full scope of his
relationship with the now-bankrupt Enron Corp. His repeated denials of anything
more than limited, mostly social contact with Enron employees, including CEO
Kenneth Lay, are simply not reliable given multiple internal corporate e-mails
and documents linking Gov. Rowland to Enron's Connecticut business,"
Jepsen said.
"If you can't believe Rowland on his Ken Lay denial, how do you believe
him in his denial of knowledge of the $220 million illegal loan?" Jepsen
said.
He said it is "not plausible" that Rowland would not remember clearly
whether or not he had talked - individually or in a conference call - with Lay,
"who at the time was the head of the sixth-largest corporation in America
and one of the top Republicans in the nation, having chaired a Republican
national convention."
Rowland, at the press conference, sounded at times annoyed and impatient on the
subject.
"The question is have I ever met Ken Lay, and the answer is no. The
question is have I ever talked to him about CRRA proposals; the answer is
no," he said. "The memo infers that he was involved in some kind of a
conference call. There could have been 10 people on a conference call that I
may have had three or four years ago. So if you want to say, `gee, I didn't
explain about a discussion that I had with an official' - I have more
conference calls and discussions with officials on any given day than you could
shake a stick at."
He said it is difficult to "to try to re-create something that happened
two or three years ago that's not on the [official record of the governor's]
schedule."
Rowland said that even if Lay was on a conference call with him, it would have
been about fuel cells, not the $220 million CRRA deal - so, he insisted,
"it still has nothing to do with the CRRA and the whole other disaster
that took place."