WASHINGTON — Jeffrey K. Skilling was visiting Capitol Hill to press the case for energy deregulation. It was September 1999, and Enron Corp. was the darling of Wall Street.
Skilling, then the energy giant's president, had almost single-handedly imprinted his combative style on the company's lobbying culture, and he used it now: We're Enron. We're the economy. Buy it.
But Joe Barton, a Republican congressman from Texas and ordinarily a fan of open markets, wasn't buying it. As chairman of a House Energy and Commerce subcommittee, Barton didn't think Enron had the votes then. Skilling told him he was wrong. So Barton kicked Skilling out of his office.
"There was no foul language, but he got so frustrated that he started telling me how to run my subcommittee," Barton recalls of their meeting.
"I told him I was no CEO of a Fortune 500 company, but I was not an idiot, and I knew he didn't have the votes. He told me I was wrong, that I was just being stubborn. I told him there was no reason to come see me again until things calmed down."
By many accounts, that exchange with Skilling--who subsequently became chief executive of Enron but resigned in August, before the company's collapse--was typical of Enron's lobbying efforts. But while the brash and raw tactics ruffled feathers, Enron was generally successful in getting its way.
"Enron was willing to be very active physically, as well as financially--showing up, testifying, walking the halls of Congress," said Daryl Owen, a partner at the lobbying firm of Palmetto Group, who attributes many of Enron's victories to hard work.
"Most companies focus overwhelmingly on Wall Street to the diminution of Washington," he said. "Enron correctly perceived that what happens in Washington" has a lot to do with "how successful you can be in business."
The priority for Enron was electric power deregulation, winning Washington's approval to open natural gas markets in all the states. When Congress balked, the company turned to the Bush White House, convincing the administration to replace the independent-minded chairman of the Federal Energy Regulatory Commission with a deregulation man--Pat Wood, whose name was on a list vetted by the company's then-chairman, Kenneth L. Lay.
With Enron's collapse, its hardball lobbying tactics are coming under fire. This week, the issue of Enron's lobbying the White House to stay out of California's energy crisis, as well as for changes at FERC, could flare at hearings on Capitol Hill. However, Lay's views will remain a secret since he's expected to invoke the 5th Amendment when he appears before the Senate Commerce Committee.
But Enron's influence wasn't limited to FERC. The company also won permission from Congress to expand its online futures trading operations, which gave it a huge competitive advantage. And its chairman met regularly with Vice President Dick Cheney--a heady level of access by anyone's measure.
Nor was its influence limited to Republicans. When Bill Clinton was president, his Commodities Futures Trading Commission approved rules that exempted energy trading--the heart of Enron's business--from government regulation.
The Clinton administration also pushed for the Kyoto Treaty on global warming, which would have given Enron a chance to sell "credits" to companies that exceeded their carbon dioxide limits, purchased from those that did not.
In its heyday, the Houston company gilded Washington with campaign contributions (during the 2000 presidential election, the company was number 36 on the top 100 list of donors to federal candidates compiled by the Center for Responsive Politics) and employed hundreds of lobbyists, lawyers and other influence peddlers.
"Enron was everywhere, literally everywhere," said a Federal Energy Regulatory Commission staff member, who asked not to be named. "If you walked into an energy meeting anywhere in the world and Enron lobbyists weren't there, you figured you were in the wrong place."
Washington lobbyists are trained to play hardball. What Enron added was arrogance.
"The mentality appeared to be 'We revolutionized the energy industry; enjoy our brilliance,'" said Christopher Horner, who worked briefly as an Enron lobbyist and is now a senior fellow at the Competitive Enterprise Institute, a free-market think tank. "This led to lobbying efforts ranging from the ambitious to the utterly hubristic."
Old-line energy lobbyists, who bristled at Enron's depiction of them as stodgy, take special delight in Enron's fall. Deriding the Houston company as more hype than heft--the doomed "dot-com of the energy world" is a common epithet--they note with pride that old-fashioned lobbying by buttonhole won the day as Enron's flashy demands for deregulation lost.
"This is not selling potatoes," said one high-ranking energy lobbyist who declined to be named because he is a direct competitor to Enron. "Our industry is complex. We were talking substance. They were doing hubris."
