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the former Enronization of Argentina
I am posting these articles on how Argentina had economically
collapsed several years ago, because I believe the Amerikan Empire
is very near this too especially in the next couple of weeks as the
US FED discontinues reporting M3 (March 23) and the Iranians switch
from petrodollars to petroeuros. Ofcourse a US attack on Iran could
add more chaos as corporatists use a nuke or "conventional"
smokescreen to rob more of the masses.
Just as a side note also remember Enron "owns" PGE.
I believe we, Cascadians, need to know how the Argentines pulled
themselves out after the economic collapse. But before we export
the autonomoist movement in Argentina we need to look at what happen
first.
Please circulate (mass spam) the following articles to others people
with URLs ofcourse:
Enron's plundering of Argentina
In 1990, at the height of the neoliberal privatization fever, upon
returning from his visit to George Bush, Sr., Argentine President
Menem received a letter from US Ambassador Terence Todman implying
that eight US companies would walk away from their investment plans
unless Argentina stopped favoring domestic corporations. The first
company on the list was Enron. As reported in the march 2000 edition
of Mother Jones, former Argentine President Carlos Menem, at that
time a golf partner and buddy of the Bushes, signed off on a $300
million deal for a US gas pipeline company in Argentina. The deal
involved a huge tariff and tax cut. Spearheaded by the opposition, a
congressional investigation ensued and a special prosecutor was
appointed to the case. Menem, exercising his supreme powers, fired
the investigator and that was the end of the matter.
A few years earlier, George W. Bush had lobbied heavily on Enronąs
behalf. Former Raul Alfonsinąs minister of public works, Rodolfo
Terragno, recalls G.W.ąs phone call, mentioning his relationship
with his recently-elected dad. Terragno informed him that Enron
wanted to get the gas company for 20% of itąs international
commercial value. The international media attacked him for refusing
to give in to Enronąs demands.
Although the Houston-based corporation ended up abandoning the
project when gas prices fell, an Enron subsidiary later bought into
the pipeline and now owns almost a third of it. Transportadora de
Gas del Sur (TGS), partially owned by Enron, delivers more than 60%
of the natural gas used in Argentina through the nation's largest
pipeline system (4,300 miles). In 1998, 48% of energy used in
Argentina came from natural gas, a fact that tends to explain the
enourmous pressure that this company exerted on the corrupted
Argentine establishment through itąs allies: two US presidents, the
corporate media and a US Ambassador.
Found at www.autonomista.org/enron.htm
Argentina and Enron -- Peas in a Pod
by Paul Krugman
LAST WEEK, the Web site SatireWire.com ran a mock news story: "Enron
Admits It's Really Argentina." It was pretty funny, though quite
unfair -- unfair, that is, to Argentina.
Yet, the satire was more on point than its authors realized. Not
long ago Argentina, like Enron, was a darling of the financial
community. And like Enron, Argentina was held up as a role model, to
a large extent by the same people -- Argentina's monetary system, in
particular, was lauded in the pages of Forbes and the Wall Street
Journal, and feted at libertarian think tanks.
Why did the same people tend to admire Enron and Argentina? Because
in their different ways, both the company and the country tried to
turn back the clock to 1913. Both were experiments testing the
libertarian credo: that the great expansion in government's role
between the two world wars was unwarranted. Both were supposed to
demonstrate that government activism is unnecessary, and that
radical laissez-faire works.
The Enron experiment was, in essence, about doing away with
regulation -- regulation of prices, regulation of financial trading.
Most of these regulations had their origin in fear that consumers,
workers and investors would be exploited by those whom Theodore
Roosevelt called "malefactors of great wealth."
Enron used its political clout to create what one of its own
executives called a "regulatory black hole" in which it could
operate freely.
What Enron's admirers believed was that experience would demonstrate
fears about unregulated markets to be unjustified. Unfortunately,
what disappeared into that black hole was not bureaucratic clutter
but billions of hard-earned dollars, including those of Enron's own
employees. Or maybe it wasn't a black hole, but rather a wormhole,
and those billions of dollars emerged in some other universe -- say,
overseas bank accounts. For it turns out that malefactors of great
wealth do exist, and some of them were running Enron.
If Enron was an experiment in doing away with regulatory activism,
Argentina was an experiment in doing away with monetary activism.
Argentina returned to a colonial-era monetary system, a "currency
board," which took government out of the loop. No more lurching from
crisis to crisis, no more disruptive government interventions:
Argentina would provide sound money, and leave the rest up to the
free market.
Though Argentina attracted the usual opportunists, I'm pretty sure
that both the creators of its monetary system and many of its
admirers sincerely believed that they were working in everyone's
interest. Alas, these particular good intentions paved the road to
hell.
In the last few weeks, the bitter irony of Argentina's situation has
become almost too much to bear. The country's monetary system was
introduced in the name of laissez-faire. Now, in its desperate
efforts to save that system from imminent collapse, the Argentine
government has imposed drastic restrictions on economic freedom.
Now don't get me wrong. I'm not one of those people who think that
markets are evil, that the profit motive is always wrong. On the
contrary, I believe that markets are very good things indeed. But
the great economic lesson of the 20th century was that to work, a
market system needs a little help from the government: regulations
to prevent abuses, active monetary policy to fight recessions. The
twin debacles in Houston and Buenos Aires demonstrate that this
great lesson has not lost its relevance.
©2001 San Francisco Chronicle
Found at www.commondreams.org/views01/1212-06.htm
IV Online magazine : IV338 - March 2002
Argentina
Enron in Argentina
Andrew Pollack
Do a quick search of the Web on the terms Enron and Argentina and
you mostly get either references comparing the two, or a recent
satire in which Kenneth Lay claims immunity by claiming Enron IS
Argentina. You might even stumble on the Mother Jones article
detailing Dubya's lobbying of the Argentine government on behalf of
Enron when he was governor of Texas.
It turns out (not surprisingly given the extent of Enron's global
interests) that Enron is very deeply involved in Argentina. Its
holdings there are in Transportadora de Gas del Sur (TGS), whose
website describes the company as "the leading gas transportation
company in Argentina, operating the most extensive gas pipeline
system in the country and in Latin America." Enron's own website
says "The company serves 4.3 million customers, 3.1 million of which
reside in the greater Buenos Aires area."
To understand the significance of these figures it's worth noting
that in 1998, 48% of energy use in Argentina came from natural gas
(as quoted in a report posted by the Brazilian Embassy in Washington
DC, which tracks such things because of the international pipelines
being laid across countries in the region.)
And here's one from MSN's 'Moneycentral' site: 'Don't cry for
Transportadora de Gas del Sur (TGS), Argentina. The company delivers
more than 60% of natural gas used in Argentina through the nation's
largest pipeline system (4,300 miles). Formerly state-run, TGS holds
exclusive license (until 2027) to transport gas from southern and
western Argentine sources to distributors nearby and in the Buenos
Aires metro area. TGS's gas services include treatment, processing,
and liquefied petroleum gas (LPG) marketing; the company plans to
export energy to neighbouring countries. It is also building a fibre-
optic network in Argentina. The firm is 70%-owned by Compańía de
Inversiones de Energía, which is jointly controlled by Perez Companc
and US energy giant Enron.'
That's right, Enron. TGS's own website spells this out in more
detail, where it says its controlling shareholder is Compańía de
Inversiones de Energía S.A. (CIESA), "which together with Pecom
Energía group and Enron Corp, hold approximately 70% of the
Company's common stock. The remaining 30% ownership in the Company
is currently held by local and foreign investors."
And who is CIESA? Again, from TGS: "CIESA is owned 50% by Pecom
Energía (whose controlling shareholder is the above-mentioned Perez
Companc) and 50% by subsidiaries of Enron. CIESA has the ability to
direct the management of the Company, to control the election of the
majority of the Board of Directors, to determine the dividend policy
and other policies of the Company and to determine the outcome of
any matter put to a vote of the shareholders of the Company.'
TGS arose through a privatisation process of the kind which Enron
has pushed around the globe. (See 'Enron: The Global Gospel of Gas',
www.moles.org/ProjectUnderg...e/enron.html). 'We started
our operations in late 1992, as a result of the privatisation of Gas
del Estado S.E. ("GdE"), the former state-owned company.'
And TGS has a significant investment in telecommunications through
its Telcosur subsidiary, through which it is 'positioning ourselves
as an independent carrier of carriers and also offering services to
large companies within our area of influence.'
'Telcosur,' says TGS, 'was born at the end of 1998 in order to take
advantage of TGS's existing telecommunications assets and
infrastructure, as well as the upcoming deregulation of the
telecommunications market, and the experience of power companies
from other countries that were successful in the telecommunications
business.' The 'experienced' power companies, of course, means
Enron. And their success in that business was, as the Wall Street
Journal recently documented, a bust - and not just because of fraud,
but because of the glut in fibre-optic capacity (that is, a mismatch
in supply and demand which tends under capitalism to lead to
precisely the kind of fraud Enron specialized in.)
But despite Enron's failures in the telecom field elsewhere,
Telcosur is following its 'experience' in avoiding direct sales in
favour of trading access to commodities, services, and financial
instruments: 'An important difference in connection with other
telecommunication operators is its independence, since it serves the
wholesaling market and therefore does not compete with its customers
in retail operations: switching, frame-relay, telephone services,
among others.' It provides 'value added services; in other words,
[it is] a carrier of telephone carriers and of large corporate
users.'
Telcosur is also 'installing a high-capacity fibre optic network
that will link Buenos Aires, Bahía Blanca and Neuquén, the most
active routes in its service area.'
Enron is currently in the process of divesting various subsidiaries
around the globe to raise cash, and at least one potential buyer for
its Argentina subsidiary has been mentioned. That buyer is Sempra
Energy International, which owns a 43-percent interest in two
Argentine natural gas utility holding companies, Sodigas Pampeana,
S.A., and Sodigas Sur, S.A., and which 'serve 1.3 million customers
in central and southern Argentina, delivering approximately one-
third of all the natural gas distributed in the country.' Sempra, a
big operator in Chile and elsewhere in Latin America, also owns
Southern California Gas and San Diego Gas & Electric, and has just
bought Enron's London energy trading operations. It's not clear if
the deal will go through.
In the meantime workers in Argentina are demanding the
renationalisation of firms in a variety of sectors. On February 5th
Argentines marched on the offices of Repsol to demand jobs. Repsol,
according to the Partido Obrero, 'is the 7th largest [oil company]
in the world, which has reaped fabulous profits from privatisation,
and which is responsible for widespread layoffs, pay cuts and
refinery closings.'
If the mobilizations in Argentina continue to deepen we can expect
that calls for renationalisation - this time under workers control -
of the entire energy sector will deepen. And if Enron's Argentine
subsidiaries are targeted that might even encourage some in the US
to think about similar solutions here.
Andrew Pollack is a computer instructor in Brooklyn and author
of "Information Technology and Socialist Self-Management," in
Capitalism and the Information Age: The Political Economy of the
Global Communication Revolution, edited by Robert W. McChesney,
Ellen Meiksins Wood, and John Bellamy Foster, Monthly Review, 1997.
Found at www.internationalviewpoint.org/ar...hp3
id_article=494
Don't Cry for Bush, Argentina
NEWS: George W. may not recall the names of world leaders, but when
it comes to foreign affairs, he knows the value of his own family's
name.
By Louis Dubose and Carmen Coiro
March/April 2000 Issue
Texans watched with interest last winter as Governor George W. Bush
was home-schooled on international affairs by former Secretary of
State George Shultz and other veterans of his father's foreign-
policy team. Even Carl Bildt, the former prime minister of Sweden,
was brought in for a tutorial at the governor's mansion, in the hope
that his recent U.N. experience in the Balkans could help Bush
understand that Kosovars are not "Kosavarians" and that Greeks are
not "Grecians."
But no one had to prepare a prompt card to remind him who stepped
down as president of Argentina in December. Shortly before Bush
announced his own campaign for president, he had received a visit
from Carlos Saul Menem, the right-wing leader of Argentina for the
past decade. The two men retired to an Austin country club, where
they were joined by Bush's father. Governor Bush had the flu, so he
contented himself with riding along as the former president and
Menem played a round of golf.
The capitol press corps trailed along, dutifully recording the
governor's cordial relationship with a visiting head of state.
Unknown to the assembled reporters, however, was the story of how
Bush and his family became immersed in Argentine politics. The
little-known tale begins with George W. making a phone call to
secure a $300-million deal for a U.S. pipeline company -- a deal
that provoked a political firestorm in Argentina, drawing scrutiny
from legislators and a special prosecutor. The episode marked one of
George W.'s first ventures into foreign affairs, demonstrating the
fundamental rule by which the Texas governor and his family conduct
business: Always know that the Bush name is a marketable commodity.
Bush first made his presence felt in Argentina in 1988, shortly
after his father was elected president. At the time, the junior
Bush's political career was just beginning -- and the political
career of Raúl Alfonsín, who was approaching the end of his term as
president of Argentina, was ending. Alfonsín had returned his
country to civilian rule, prosecuted those responsible for human
rights abuses during Argentina's rule by a military junta, and
struggled to manage an economy that seemed to defy management.
Determined to complete one major private-sector industrial program,
he pushed for the development of a "gasoducto" that would connect
Argentine gas fields with domestic and foreign markets. And he
appointed his minister of public works, Rodolfo Terragno, to oversee
the pipeline project.
Unlike Bush, Terragno achieved political prominence the old-
fashioned way: through a life dedicated to public service. A noted
journalist and public official, he was forced into exile for 10
years after the military seized power in Argentina in 1976. Only
after Alfonsín restored civilian rule did Terragno return to his
homeland, where he went on to serve as minister of public works, a
member of congress, and most recently as cabinet chief to the newly
elected president, Fernando de la Rua.
In 1988, Terragno was considering two proposals for the $300-million
pipeline, one from an Italian firm called Ente Nazionale Idrocarburi
and the other from Pérez Companc, an Argentine company working in
partnership with Dow Chemical. After a year of consideration, the
minister was close to making a decision when Enron, the largest
pipeline company in the United States, suddenly entered the bidding.
At the time, the Houston-based Enron had no experience in Argentina.
It had formed a business relationship with Westfield, a small
Argentine firm, but Westfield wasn't much of a player either. El
Boletín Oficial -- the Argentine equivalent of the Federal Register -
- reported that Westfield's only asset in 1988 was $20, its
corporate filing fee. Westfield was a prestanombre, literally
a "borrowed name" used to provide a domestic front for a foreign
firm.
Terragno was concerned that a newly formed corporation with no
resources was attempting to land a contract that companies with
proven track records had been working on for a year. "I had a lot of
reservations about Enron because the company wasn't well established
in Argentina," Terragno told Mother Jones, providing details of the
episode for the first time.
The minister recalls that Enron sent him "a one-page outline"
proposing a price Terragno now describes as "laughable." Enron
wanted to pay "something like 20 percent of the international market
price," he says. "It all seemed so inadequate. Enron asked the
country of Argentina to practically give them the gas."
Terragno was unenthusiastic about the pipeline bid, but Enron
initiated a full-scale campaign to pressure him. Pro-business
newspapers attacked the minister for blocking the proposal, and
Terragno recalls that Ted Gildred, the U.S. ambassador to
Argentina, "called me and visited me constantly" to push the deal.
Terragno wasn't concerned about the ambassador's lobbying -- that
was politics as usual. "It was good that he was representing the
interest of his country's businesses," he says. But Terragno found
that some of the politics surrounding Enron's campaign were anything
but usual.
A few weeks after the U.S. presidential election in 1988, Terragno
received a phone call from a failed Texas oilman named George W.
Bush, who happened to be the son of the president-elect. "He told me
he had recently returned from a campaign tour with his father," the
Argentine minister recalls. The purpose of the call was clear: to
push Terragno to accept the bid from Enron.
"He was taking a moment to call me because he knew that I was
dealing with this," says Terragno, adding that Bush told him that
he "viewed with some concern the slow pace of the Enron project."
According to Terragno, the president-elect's son noted that a deal
with Enron "would be very favorable for Argentina and its relations
with the United States."
When a brief report on the attempt to influence the Argentine deal
appeared in The Nation and the Texas Observer years later, the Bush
team reacted angrily. His staff produced a copy of his day planner
to show that Bush never placed the phone call, and a top-level
adviser personally called reporters to dismiss the story as a
fantasy by "some guy in Argentina." Bush's staff continues to deny
his involvement, and no other media outlet ever reported on the
episode, despite the high-ranking source.
More than a decade later, Terragno still recalls details of the
phone call clearly -- as well as his outrage. "It looked bad and it
surprised me," he says. "There was this political endorsement,
apparently from the White House. I don't know if George Bush the
father was aware of it, or if it was only a business contact by his
son, who hoped that his family name would have some influence."
George W. wasn't the only Bush plying the family name in Argentina.
His brother Neil had tried to funnel $900,000 in loans from
Silverado Savings and Loan, where he served as a director, into a
failed attempt to drill for oil in Argentina. The S&L eventually
collapsed, costing taxpayers nearly $1 billion to bail out, and
federal regulators banned Neil from certain banking activities.
But Terragno was unimpressed by the family connections. He told
George W. the pipeline concession would be awarded according to
Argentine law. It hardly mattered -- Argentine law was about to
change. Time had run out for Raúl Alfonsín. His party lost the
election, and he left office four months early to make way for his
successor, Carlos Menem.
Enron, for its part, couldn't have appointed an Argentine president
more favorable to its interests. A right-wing follower of Juan
Peron, Menem was eager to open his country to American enterprise --
and his own lavish spending. He took to traveling with a huge
entourage aboard Tango-01, his $66- million presidential jet. The
Bushes took an immediate liking to him. The day after the 1989
election, Neil Bush arrived in Buenos Aires for a tennis match with
the president-elect. The following year, President Bush made the
first of eight trips to see Menem, becoming the first U.S. chief
executive since Eisenhower to visit Argentina.
Several days after the president's trip in 1990, Bush's ambassador
to Argentina, Terence Todman, wrote a stern letter to Menem's
minister of the economy to follow up on issues that Bush
had "intended to address, but failed to do so for lack of time."
Todman went on to imply that eight U.S. companies would walk away
from their investment plans unless Argentina stopped favoring
domestic corporations. The first company on the list was Enron,
which the ambassador described as being "poised to invest $250
million" -- as soon as the Argentine government met its demands for
tax breaks. Todman closed his letter by warning that the Enron
decision was "extremely urgent," as the gas company would make a
final decision on its investment in less than a month.
Todman prevailed: Menem agreed to the company's terms, signing a
presidential decree that included Enron in a national program
freeing it from tariffs and valued-added taxes.
Reports of the Enron deal outraged Argentines, who had supported
Alfonsín's struggle to create a democracy out of what remained after
10 years of military dictatorship. Lawmakers demanded a
congressional inquiry, and a special prosecutor launched an
investigation. Menem dealt with the scandal in a forthright manner:
Since his own justice department was looking into the tax giveaway,
he simply fired the investigator.
Enron ultimately abandoned the project when gas prices fell, but an
Enron subsidiary later bought into the pipeline and now owns almost
a third of the gasoducto. Among the subsidiary's board members is
Brent Scowcroft, national security advisor to former President
George Bush.
George W. has certainly benefited from his association with Enron.
Kenneth Lay, the company's chief executive, has personally
contributed $100,000 to Bush's two gubernatorial campaigns. When
Bush announced in 1999 that he was running for president, executives
and political action committees connected to Enron contributed
$89,650 to his campaign in the first three months. Lay signed on as
a "Bush Pioneer," pledging to raise $100,000.
The involvement of George W. and Neil in Argentina has become
something of an m.o. for the Bush brothers in foreign affairs. The
sons of the former president have certainly not been shy about using
their family name to enrich themselves and their friends. Jeb sold
$74 million worth of water pumps to the Nigerian government in 1988.
Marvin tried to sell electronic fences to the defense ministry of
Kuwait two years after the Gulf War, while Neil sought contracts to
provide oil-field antipollution equipment. And George W. lent his
name to tiny Harken Energy to help secure a huge offshore drilling
contract in Bahrain (see "Slick W.," page 48).
Undoubtedly, the family name will continue to open doors
internationally if George W. is elected. Last November, an airplane
with Houston registry numbers landed in Buenos Aires; on board was
former President Bush, who had arrived to spend the night with his
friend, President Menem, 10 days before the end of Menem's final
term. The two men attended a dinner at the home of Argentine banker
José Rohm, where they were joined by the vice president of Chase
Manhattan Bank, the director of Credit Suisse First Boston, the
president-elect of Argentina and the former president of Uruguay.
What was the purpose of President Bush's visit? "Fishing," says
Michael Dannenhauer, a Bush spokesman. But when the Buenos Aires
daily, Pagina 12, asked several of the dinner guests why the
president was in town, they smiled and quietly replied, "Business."
Bush's "real interest," they added, was to learn how the new
government would deal with CEI, an Argentine media company whose
former chief had fled the country under investigation for fraud. One
of CEI's principal investors, the paper noted, is Tom Hicks, "one of
the funders of the presidential campaign of Bush's son, George, the
governor of Texas."
Found at
www.motherjones.com/news/fea...tina.html
USA: Don't Cry for Enron, Argentina
by Paul Krugman, San Francisco Chronicle
December 12th, 2001
Last week, the Web site SatireWire.com ran a mock news story: "Enron
Admits It's Really Argentina." It was pretty funny, though quite
unfair -- unfair, that is, to Argentina.
Yet, the satire was more on point than its authors realized. Not
long ago Argentina, like Enron, was a darling of the financial
community. And like Enron, Argentina was held up as a role model, to
a large extent by the same people -- Argentina's monetary system, in
particular, was lauded in the pages of Forbes and the Wall Street
Journal, and feted at libertarian think tanks.
Why did the same people tend to admire Enron and Argentina? Because
in their different ways, both the company and the country tried to
turn back the clock to 1913. Both were experiments testing the
libertarian credo: that the great expansion in government's role
between the two world wars was unwarranted. Both were supposed to
demonstrate that government activism is unnecessary, and that
radical laissez-faire works.
The Enron experiment was, in essence, about doing away with
regulation -- regulation of prices, regulation of financial trading.
Most of these regulations had their origin in fear that consumers,
workers and investors would be exploited by those whom Theodore
Roosevelt called "malefactors of great wealth."
Enron used its political clout to create what one of its own
executives called a "regulatory black hole" in which it could
operate freely.
What Enron's admirers believed was that experience would demonstrate
fears about unregulated markets to be unjustified. Unfortunately,
what disappeared into that black hole was not bureaucratic clutter
but billions of hard-earned dollars, including those of Enron's own
employees. Or maybe it wasn't a black hole, but rather a wormhole,
and those billions of dollars emerged in some other universe -- say,
overseas bank accounts. For it turns out that malefactors of great
wealth do exist, and some of them were running Enron.
If Enron was an experiment in doing away with regulatory activism,
Argentina was an experiment in doing away with monetary activism.
Argentina returned to a colonial-era monetary system, a "currency
board," which took government out of the loop. No more lurching from
crisis to crisis, no more disruptive government interventions:
Argentina would provide sound money, and leave the rest up to the
free market.
Though Argentina attracted the usual opportunists, I'm pretty sure
that both the creators of its monetary system and many of its
admirers sincerely believed that they were working in everyone's
interest. Alas, these particular good intentions paved the road to
hell.
In the last few weeks, the bitter irony of Argentina's situation has
become almost too much to bear. The country's monetary system was
introduced in the name of laissez-faire. Now, in its desperate
efforts to save that system from imminent collapse, the Argentine
government has imposed drastic restrictions on economic freedom.
Now don't get me wrong. I'm not one of those people who think that
markets are evil, that the profit motive is always wrong. On the
contrary, I believe that markets are very good things indeed. But
the great economic lesson of the 20th century was that to work, a
market system needs a little help from the government: regulations
to prevent abuses, active monetary policy to fight recessions. The
twin debacles in Houston and Buenos Aires demonstrate that this
great lesson has not lost its relevance.
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Found at www.corpwatch.org/article.php
I am posting these articles on how Argentina had economically
collapsed several years ago, because I believe the Amerikan Empire
is very near this too especially in the next couple of weeks as the
US FED discontinues reporting M3 (March 23) and the Iranians switch
from petrodollars to petroeuros. Ofcourse a US attack on Iran could
add more chaos as corporatists use a nuke or "conventional"
smokescreen to rob more of the masses.
Just as a side note also remember Enron "owns" PGE.
I believe we, Cascadians, need to know how the Argentines pulled
themselves out after the economic collapse. But before we export
the autonomoist movement in Argentina we need to look at what happen
first.
Please circulate (mass spam) the following articles to others people
with URLs ofcourse:
Enron's plundering of Argentina
In 1990, at the height of the neoliberal privatization fever, upon
returning from his visit to George Bush, Sr., Argentine President
Menem received a letter from US Ambassador Terence Todman implying
that eight US companies would walk away from their investment plans
unless Argentina stopped favoring domestic corporations. The first
company on the list was Enron. As reported in the march 2000 edition
of Mother Jones, former Argentine President Carlos Menem, at that
time a golf partner and buddy of the Bushes, signed off on a $300
million deal for a US gas pipeline company in Argentina. The deal
involved a huge tariff and tax cut. Spearheaded by the opposition, a
congressional investigation ensued and a special prosecutor was
appointed to the case. Menem, exercising his supreme powers, fired
the investigator and that was the end of the matter.
A few years earlier, George W. Bush had lobbied heavily on Enronąs
behalf. Former Raul Alfonsinąs minister of public works, Rodolfo
Terragno, recalls G.W.ąs phone call, mentioning his relationship
with his recently-elected dad. Terragno informed him that Enron
wanted to get the gas company for 20% of itąs international
commercial value. The international media attacked him for refusing
to give in to Enronąs demands.
Although the Houston-based corporation ended up abandoning the
project when gas prices fell, an Enron subsidiary later bought into
the pipeline and now owns almost a third of it. Transportadora de
Gas del Sur (TGS), partially owned by Enron, delivers more than 60%
of the natural gas used in Argentina through the nation's largest
pipeline system (4,300 miles). In 1998, 48% of energy used in
Argentina came from natural gas, a fact that tends to explain the
enourmous pressure that this company exerted on the corrupted
Argentine establishment through itąs allies: two US presidents, the
corporate media and a US Ambassador.
Found at www.autonomista.org/enron.htm
Argentina and Enron -- Peas in a Pod
by Paul Krugman
LAST WEEK, the Web site SatireWire.com ran a mock news story: "Enron
Admits It's Really Argentina." It was pretty funny, though quite
unfair -- unfair, that is, to Argentina.
Yet, the satire was more on point than its authors realized. Not
long ago Argentina, like Enron, was a darling of the financial
community. And like Enron, Argentina was held up as a role model, to
a large extent by the same people -- Argentina's monetary system, in
particular, was lauded in the pages of Forbes and the Wall Street
Journal, and feted at libertarian think tanks.
Why did the same people tend to admire Enron and Argentina? Because
in their different ways, both the company and the country tried to
turn back the clock to 1913. Both were experiments testing the
libertarian credo: that the great expansion in government's role
between the two world wars was unwarranted. Both were supposed to
demonstrate that government activism is unnecessary, and that
radical laissez-faire works.
The Enron experiment was, in essence, about doing away with
regulation -- regulation of prices, regulation of financial trading.
Most of these regulations had their origin in fear that consumers,
workers and investors would be exploited by those whom Theodore
Roosevelt called "malefactors of great wealth."
Enron used its political clout to create what one of its own
executives called a "regulatory black hole" in which it could
operate freely.
What Enron's admirers believed was that experience would demonstrate
fears about unregulated markets to be unjustified. Unfortunately,
what disappeared into that black hole was not bureaucratic clutter
but billions of hard-earned dollars, including those of Enron's own
employees. Or maybe it wasn't a black hole, but rather a wormhole,
and those billions of dollars emerged in some other universe -- say,
overseas bank accounts. For it turns out that malefactors of great
wealth do exist, and some of them were running Enron.
If Enron was an experiment in doing away with regulatory activism,
Argentina was an experiment in doing away with monetary activism.
Argentina returned to a colonial-era monetary system, a "currency
board," which took government out of the loop. No more lurching from
crisis to crisis, no more disruptive government interventions:
Argentina would provide sound money, and leave the rest up to the
free market.
Though Argentina attracted the usual opportunists, I'm pretty sure
that both the creators of its monetary system and many of its
admirers sincerely believed that they were working in everyone's
interest. Alas, these particular good intentions paved the road to
hell.
In the last few weeks, the bitter irony of Argentina's situation has
become almost too much to bear. The country's monetary system was
introduced in the name of laissez-faire. Now, in its desperate
efforts to save that system from imminent collapse, the Argentine
government has imposed drastic restrictions on economic freedom.
Now don't get me wrong. I'm not one of those people who think that
markets are evil, that the profit motive is always wrong. On the
contrary, I believe that markets are very good things indeed. But
the great economic lesson of the 20th century was that to work, a
market system needs a little help from the government: regulations
to prevent abuses, active monetary policy to fight recessions. The
twin debacles in Houston and Buenos Aires demonstrate that this
great lesson has not lost its relevance.
©2001 San Francisco Chronicle
Found at www.commondreams.org/views01/1212-06.htm
IV Online magazine : IV338 - March 2002
Argentina
Enron in Argentina
Andrew Pollack
Do a quick search of the Web on the terms Enron and Argentina and
you mostly get either references comparing the two, or a recent
satire in which Kenneth Lay claims immunity by claiming Enron IS
Argentina. You might even stumble on the Mother Jones article
detailing Dubya's lobbying of the Argentine government on behalf of
Enron when he was governor of Texas.
It turns out (not surprisingly given the extent of Enron's global
interests) that Enron is very deeply involved in Argentina. Its
holdings there are in Transportadora de Gas del Sur (TGS), whose
website describes the company as "the leading gas transportation
company in Argentina, operating the most extensive gas pipeline
system in the country and in Latin America." Enron's own website
says "The company serves 4.3 million customers, 3.1 million of which
reside in the greater Buenos Aires area."
To understand the significance of these figures it's worth noting
that in 1998, 48% of energy use in Argentina came from natural gas
(as quoted in a report posted by the Brazilian Embassy in Washington
DC, which tracks such things because of the international pipelines
being laid across countries in the region.)
And here's one from MSN's 'Moneycentral' site: 'Don't cry for
Transportadora de Gas del Sur (TGS), Argentina. The company delivers
more than 60% of natural gas used in Argentina through the nation's
largest pipeline system (4,300 miles). Formerly state-run, TGS holds
exclusive license (until 2027) to transport gas from southern and
western Argentine sources to distributors nearby and in the Buenos
Aires metro area. TGS's gas services include treatment, processing,
and liquefied petroleum gas (LPG) marketing; the company plans to
export energy to neighbouring countries. It is also building a fibre-
optic network in Argentina. The firm is 70%-owned by Compańía de
Inversiones de Energía, which is jointly controlled by Perez Companc
and US energy giant Enron.'
That's right, Enron. TGS's own website spells this out in more
detail, where it says its controlling shareholder is Compańía de
Inversiones de Energía S.A. (CIESA), "which together with Pecom
Energía group and Enron Corp, hold approximately 70% of the
Company's common stock. The remaining 30% ownership in the Company
is currently held by local and foreign investors."
And who is CIESA? Again, from TGS: "CIESA is owned 50% by Pecom
Energía (whose controlling shareholder is the above-mentioned Perez
Companc) and 50% by subsidiaries of Enron. CIESA has the ability to
direct the management of the Company, to control the election of the
majority of the Board of Directors, to determine the dividend policy
and other policies of the Company and to determine the outcome of
any matter put to a vote of the shareholders of the Company.'
TGS arose through a privatisation process of the kind which Enron
has pushed around the globe. (See 'Enron: The Global Gospel of Gas',
www.moles.org/ProjectUnderg...e/enron.html). 'We started
our operations in late 1992, as a result of the privatisation of Gas
del Estado S.E. ("GdE"), the former state-owned company.'
And TGS has a significant investment in telecommunications through
its Telcosur subsidiary, through which it is 'positioning ourselves
as an independent carrier of carriers and also offering services to
large companies within our area of influence.'
'Telcosur,' says TGS, 'was born at the end of 1998 in order to take
advantage of TGS's existing telecommunications assets and
infrastructure, as well as the upcoming deregulation of the
telecommunications market, and the experience of power companies
from other countries that were successful in the telecommunications
business.' The 'experienced' power companies, of course, means
Enron. And their success in that business was, as the Wall Street
Journal recently documented, a bust - and not just because of fraud,
but because of the glut in fibre-optic capacity (that is, a mismatch
in supply and demand which tends under capitalism to lead to
precisely the kind of fraud Enron specialized in.)
But despite Enron's failures in the telecom field elsewhere,
Telcosur is following its 'experience' in avoiding direct sales in
favour of trading access to commodities, services, and financial
instruments: 'An important difference in connection with other
telecommunication operators is its independence, since it serves the
wholesaling market and therefore does not compete with its customers
in retail operations: switching, frame-relay, telephone services,
among others.' It provides 'value added services; in other words,
[it is] a carrier of telephone carriers and of large corporate
users.'
Telcosur is also 'installing a high-capacity fibre optic network
that will link Buenos Aires, Bahía Blanca and Neuquén, the most
active routes in its service area.'
Enron is currently in the process of divesting various subsidiaries
around the globe to raise cash, and at least one potential buyer for
its Argentina subsidiary has been mentioned. That buyer is Sempra
Energy International, which owns a 43-percent interest in two
Argentine natural gas utility holding companies, Sodigas Pampeana,
S.A., and Sodigas Sur, S.A., and which 'serve 1.3 million customers
in central and southern Argentina, delivering approximately one-
third of all the natural gas distributed in the country.' Sempra, a
big operator in Chile and elsewhere in Latin America, also owns
Southern California Gas and San Diego Gas & Electric, and has just
bought Enron's London energy trading operations. It's not clear if
the deal will go through.
In the meantime workers in Argentina are demanding the
renationalisation of firms in a variety of sectors. On February 5th
Argentines marched on the offices of Repsol to demand jobs. Repsol,
according to the Partido Obrero, 'is the 7th largest [oil company]
in the world, which has reaped fabulous profits from privatisation,
and which is responsible for widespread layoffs, pay cuts and
refinery closings.'
If the mobilizations in Argentina continue to deepen we can expect
that calls for renationalisation - this time under workers control -
of the entire energy sector will deepen. And if Enron's Argentine
subsidiaries are targeted that might even encourage some in the US
to think about similar solutions here.
Andrew Pollack is a computer instructor in Brooklyn and author
of "Information Technology and Socialist Self-Management," in
Capitalism and the Information Age: The Political Economy of the
Global Communication Revolution, edited by Robert W. McChesney,
Ellen Meiksins Wood, and John Bellamy Foster, Monthly Review, 1997.
Found at www.internationalviewpoint.org/ar...hp3
id_article=494
Don't Cry for Bush, Argentina
NEWS: George W. may not recall the names of world leaders, but when
it comes to foreign affairs, he knows the value of his own family's
name.
By Louis Dubose and Carmen Coiro
March/April 2000 Issue
Texans watched with interest last winter as Governor George W. Bush
was home-schooled on international affairs by former Secretary of
State George Shultz and other veterans of his father's foreign-
policy team. Even Carl Bildt, the former prime minister of Sweden,
was brought in for a tutorial at the governor's mansion, in the hope
that his recent U.N. experience in the Balkans could help Bush
understand that Kosovars are not "Kosavarians" and that Greeks are
not "Grecians."
But no one had to prepare a prompt card to remind him who stepped
down as president of Argentina in December. Shortly before Bush
announced his own campaign for president, he had received a visit
from Carlos Saul Menem, the right-wing leader of Argentina for the
past decade. The two men retired to an Austin country club, where
they were joined by Bush's father. Governor Bush had the flu, so he
contented himself with riding along as the former president and
Menem played a round of golf.
The capitol press corps trailed along, dutifully recording the
governor's cordial relationship with a visiting head of state.
Unknown to the assembled reporters, however, was the story of how
Bush and his family became immersed in Argentine politics. The
little-known tale begins with George W. making a phone call to
secure a $300-million deal for a U.S. pipeline company -- a deal
that provoked a political firestorm in Argentina, drawing scrutiny
from legislators and a special prosecutor. The episode marked one of
George W.'s first ventures into foreign affairs, demonstrating the
fundamental rule by which the Texas governor and his family conduct
business: Always know that the Bush name is a marketable commodity.
Bush first made his presence felt in Argentina in 1988, shortly
after his father was elected president. At the time, the junior
Bush's political career was just beginning -- and the political
career of Raúl Alfonsín, who was approaching the end of his term as
president of Argentina, was ending. Alfonsín had returned his
country to civilian rule, prosecuted those responsible for human
rights abuses during Argentina's rule by a military junta, and
struggled to manage an economy that seemed to defy management.
Determined to complete one major private-sector industrial program,
he pushed for the development of a "gasoducto" that would connect
Argentine gas fields with domestic and foreign markets. And he
appointed his minister of public works, Rodolfo Terragno, to oversee
the pipeline project.
Unlike Bush, Terragno achieved political prominence the old-
fashioned way: through a life dedicated to public service. A noted
journalist and public official, he was forced into exile for 10
years after the military seized power in Argentina in 1976. Only
after Alfonsín restored civilian rule did Terragno return to his
homeland, where he went on to serve as minister of public works, a
member of congress, and most recently as cabinet chief to the newly
elected president, Fernando de la Rua.
In 1988, Terragno was considering two proposals for the $300-million
pipeline, one from an Italian firm called Ente Nazionale Idrocarburi
and the other from Pérez Companc, an Argentine company working in
partnership with Dow Chemical. After a year of consideration, the
minister was close to making a decision when Enron, the largest
pipeline company in the United States, suddenly entered the bidding.
At the time, the Houston-based Enron had no experience in Argentina.
It had formed a business relationship with Westfield, a small
Argentine firm, but Westfield wasn't much of a player either. El
Boletín Oficial -- the Argentine equivalent of the Federal Register -
- reported that Westfield's only asset in 1988 was $20, its
corporate filing fee. Westfield was a prestanombre, literally
a "borrowed name" used to provide a domestic front for a foreign
firm.
Terragno was concerned that a newly formed corporation with no
resources was attempting to land a contract that companies with
proven track records had been working on for a year. "I had a lot of
reservations about Enron because the company wasn't well established
in Argentina," Terragno told Mother Jones, providing details of the
episode for the first time.
The minister recalls that Enron sent him "a one-page outline"
proposing a price Terragno now describes as "laughable." Enron
wanted to pay "something like 20 percent of the international market
price," he says. "It all seemed so inadequate. Enron asked the
country of Argentina to practically give them the gas."
Terragno was unenthusiastic about the pipeline bid, but Enron
initiated a full-scale campaign to pressure him. Pro-business
newspapers attacked the minister for blocking the proposal, and
Terragno recalls that Ted Gildred, the U.S. ambassador to
Argentina, "called me and visited me constantly" to push the deal.
Terragno wasn't concerned about the ambassador's lobbying -- that
was politics as usual. "It was good that he was representing the
interest of his country's businesses," he says. But Terragno found
that some of the politics surrounding Enron's campaign were anything
but usual.
A few weeks after the U.S. presidential election in 1988, Terragno
received a phone call from a failed Texas oilman named George W.
Bush, who happened to be the son of the president-elect. "He told me
he had recently returned from a campaign tour with his father," the
Argentine minister recalls. The purpose of the call was clear: to
push Terragno to accept the bid from Enron.
"He was taking a moment to call me because he knew that I was
dealing with this," says Terragno, adding that Bush told him that
he "viewed with some concern the slow pace of the Enron project."
According to Terragno, the president-elect's son noted that a deal
with Enron "would be very favorable for Argentina and its relations
with the United States."
When a brief report on the attempt to influence the Argentine deal
appeared in The Nation and the Texas Observer years later, the Bush
team reacted angrily. His staff produced a copy of his day planner
to show that Bush never placed the phone call, and a top-level
adviser personally called reporters to dismiss the story as a
fantasy by "some guy in Argentina." Bush's staff continues to deny
his involvement, and no other media outlet ever reported on the
episode, despite the high-ranking source.
More than a decade later, Terragno still recalls details of the
phone call clearly -- as well as his outrage. "It looked bad and it
surprised me," he says. "There was this political endorsement,
apparently from the White House. I don't know if George Bush the
father was aware of it, or if it was only a business contact by his
son, who hoped that his family name would have some influence."
George W. wasn't the only Bush plying the family name in Argentina.
His brother Neil had tried to funnel $900,000 in loans from
Silverado Savings and Loan, where he served as a director, into a
failed attempt to drill for oil in Argentina. The S&L eventually
collapsed, costing taxpayers nearly $1 billion to bail out, and
federal regulators banned Neil from certain banking activities.
But Terragno was unimpressed by the family connections. He told
George W. the pipeline concession would be awarded according to
Argentine law. It hardly mattered -- Argentine law was about to
change. Time had run out for Raúl Alfonsín. His party lost the
election, and he left office four months early to make way for his
successor, Carlos Menem.
Enron, for its part, couldn't have appointed an Argentine president
more favorable to its interests. A right-wing follower of Juan
Peron, Menem was eager to open his country to American enterprise --
and his own lavish spending. He took to traveling with a huge
entourage aboard Tango-01, his $66- million presidential jet. The
Bushes took an immediate liking to him. The day after the 1989
election, Neil Bush arrived in Buenos Aires for a tennis match with
the president-elect. The following year, President Bush made the
first of eight trips to see Menem, becoming the first U.S. chief
executive since Eisenhower to visit Argentina.
Several days after the president's trip in 1990, Bush's ambassador
to Argentina, Terence Todman, wrote a stern letter to Menem's
minister of the economy to follow up on issues that Bush
had "intended to address, but failed to do so for lack of time."
Todman went on to imply that eight U.S. companies would walk away
from their investment plans unless Argentina stopped favoring
domestic corporations. The first company on the list was Enron,
which the ambassador described as being "poised to invest $250
million" -- as soon as the Argentine government met its demands for
tax breaks. Todman closed his letter by warning that the Enron
decision was "extremely urgent," as the gas company would make a
final decision on its investment in less than a month.
Todman prevailed: Menem agreed to the company's terms, signing a
presidential decree that included Enron in a national program
freeing it from tariffs and valued-added taxes.
Reports of the Enron deal outraged Argentines, who had supported
Alfonsín's struggle to create a democracy out of what remained after
10 years of military dictatorship. Lawmakers demanded a
congressional inquiry, and a special prosecutor launched an
investigation. Menem dealt with the scandal in a forthright manner:
Since his own justice department was looking into the tax giveaway,
he simply fired the investigator.
Enron ultimately abandoned the project when gas prices fell, but an
Enron subsidiary later bought into the pipeline and now owns almost
a third of the gasoducto. Among the subsidiary's board members is
Brent Scowcroft, national security advisor to former President
George Bush.
George W. has certainly benefited from his association with Enron.
Kenneth Lay, the company's chief executive, has personally
contributed $100,000 to Bush's two gubernatorial campaigns. When
Bush announced in 1999 that he was running for president, executives
and political action committees connected to Enron contributed
$89,650 to his campaign in the first three months. Lay signed on as
a "Bush Pioneer," pledging to raise $100,000.
The involvement of George W. and Neil in Argentina has become
something of an m.o. for the Bush brothers in foreign affairs. The
sons of the former president have certainly not been shy about using
their family name to enrich themselves and their friends. Jeb sold
$74 million worth of water pumps to the Nigerian government in 1988.
Marvin tried to sell electronic fences to the defense ministry of
Kuwait two years after the Gulf War, while Neil sought contracts to
provide oil-field antipollution equipment. And George W. lent his
name to tiny Harken Energy to help secure a huge offshore drilling
contract in Bahrain (see "Slick W.," page 48).
Undoubtedly, the family name will continue to open doors
internationally if George W. is elected. Last November, an airplane
with Houston registry numbers landed in Buenos Aires; on board was
former President Bush, who had arrived to spend the night with his
friend, President Menem, 10 days before the end of Menem's final
term. The two men attended a dinner at the home of Argentine banker
José Rohm, where they were joined by the vice president of Chase
Manhattan Bank, the director of Credit Suisse First Boston, the
president-elect of Argentina and the former president of Uruguay.
What was the purpose of President Bush's visit? "Fishing," says
Michael Dannenhauer, a Bush spokesman. But when the Buenos Aires
daily, Pagina 12, asked several of the dinner guests why the
president was in town, they smiled and quietly replied, "Business."
Bush's "real interest," they added, was to learn how the new
government would deal with CEI, an Argentine media company whose
former chief had fled the country under investigation for fraud. One
of CEI's principal investors, the paper noted, is Tom Hicks, "one of
the funders of the presidential campaign of Bush's son, George, the
governor of Texas."
Found at
www.motherjones.com/news/fea...tina.html
USA: Don't Cry for Enron, Argentina
by Paul Krugman, San Francisco Chronicle
December 12th, 2001
Last week, the Web site SatireWire.com ran a mock news story: "Enron
Admits It's Really Argentina." It was pretty funny, though quite
unfair -- unfair, that is, to Argentina.
Yet, the satire was more on point than its authors realized. Not
long ago Argentina, like Enron, was a darling of the financial
community. And like Enron, Argentina was held up as a role model, to
a large extent by the same people -- Argentina's monetary system, in
particular, was lauded in the pages of Forbes and the Wall Street
Journal, and feted at libertarian think tanks.
Why did the same people tend to admire Enron and Argentina? Because
in their different ways, both the company and the country tried to
turn back the clock to 1913. Both were experiments testing the
libertarian credo: that the great expansion in government's role
between the two world wars was unwarranted. Both were supposed to
demonstrate that government activism is unnecessary, and that
radical laissez-faire works.
The Enron experiment was, in essence, about doing away with
regulation -- regulation of prices, regulation of financial trading.
Most of these regulations had their origin in fear that consumers,
workers and investors would be exploited by those whom Theodore
Roosevelt called "malefactors of great wealth."
Enron used its political clout to create what one of its own
executives called a "regulatory black hole" in which it could
operate freely.
What Enron's admirers believed was that experience would demonstrate
fears about unregulated markets to be unjustified. Unfortunately,
what disappeared into that black hole was not bureaucratic clutter
but billions of hard-earned dollars, including those of Enron's own
employees. Or maybe it wasn't a black hole, but rather a wormhole,
and those billions of dollars emerged in some other universe -- say,
overseas bank accounts. For it turns out that malefactors of great
wealth do exist, and some of them were running Enron.
If Enron was an experiment in doing away with regulatory activism,
Argentina was an experiment in doing away with monetary activism.
Argentina returned to a colonial-era monetary system, a "currency
board," which took government out of the loop. No more lurching from
crisis to crisis, no more disruptive government interventions:
Argentina would provide sound money, and leave the rest up to the
free market.
Though Argentina attracted the usual opportunists, I'm pretty sure
that both the creators of its monetary system and many of its
admirers sincerely believed that they were working in everyone's
interest. Alas, these particular good intentions paved the road to
hell.
In the last few weeks, the bitter irony of Argentina's situation has
become almost too much to bear. The country's monetary system was
introduced in the name of laissez-faire. Now, in its desperate
efforts to save that system from imminent collapse, the Argentine
government has imposed drastic restrictions on economic freedom.
Now don't get me wrong. I'm not one of those people who think that
markets are evil, that the profit motive is always wrong. On the
contrary, I believe that markets are very good things indeed. But
the great economic lesson of the 20th century was that to work, a
market system needs a little help from the government: regulations
to prevent abuses, active monetary policy to fight recessions. The
twin debacles in Houston and Buenos Aires demonstrate that this
great lesson has not lost its relevance.
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