Last Sunday night, ex-Governor Gray Davis and a few of his former appointees filled out the crowd for the screening of a new documentary, Enron:TheSmartestGuysintheRoom.The story of greed run amok and ruthlessness amply rewarded, Enronhas the goods on how the now-bankrupt Houston company manipulated the rules during the electricity crisis in 2000 to bilk California out of billions. And how Davis became, as he mildly put it after the movie, “a political casualty.” Toast would be a more appropriate epitaph.
You’d think Davis would be keeping as far away from the Enron story as the company’s founder, Ken Lay, is from the Justice Department. After all, while energy prices skyrocketed in the summer of 2000, then-Governor Davis tiptoed off to private meetings where he concentrated on keeping the state’s investor-owned utilities solvent by devising ways to stick consumers with Enron’s exorbitant tab. Amid rolling blackouts, consumer groups screamed that Enron, and its corporate brethren in the energy business, were blackmailing California, but the governor refused to attack the economic vampires. His dithering, famously, set in motion his eventual recall. Who would want to be reminded of that story?
Well, the ex-guv for one, so long as he is permitted to peddle a bit of revisionism. Which is exactly what he was up to — in the film, and onstage afterward.
Davis came forward, after watching the film seated next to Annette Bening, who was seated next to Warren Beatty. Thin, practically to the point of being gaunt, Davis appeared downright casual for a man who’d spent three decades being, as Gary Hart once remarked, “the most calculating politician” he’d ever met. Davis left his blue blazer unbuttoned — an indication that his synapses were losing some of their reflexive conditioning — and he went tieless. His shoes even appeared soft-soled.
But Davis, whose conspicuous detachment from any issue that was not funded by a campaign contribution, whether from a union or a casino, was practically incandescent when he began talking. He was eager to talk to an audience. “Seeing this movie now,” Davis intoned, “armed with all this information after Enron’s collapse, it is easy to make the connections. But living it? It was not so easy to immediately conclude that one company in America could be so completely guilty of fraud, chicanery and manipulation.”
About two-thirds of the way into Enron,writer-director Alex Gibney had turned to the debacle in California. Enron’s traders, the men and women who, with the tap of a mouse, bought and sold kilowatts, and thereby controlled the market, are overheard (on SEC-mandated tapes) as they withhold the flow of energy to California, long enough to drive $35 worth of electricity into the $1,000 range. As one trader says, “We’re the future of Enron and we’re fucking making a half a billion dollars for Enron. Can you believe that? We’ll definitely retire by the time we’re 30.”
Now it made perfect sense why Davis was trawling on a Sunday night. He was drafting his memoirs. Here was the incriminating proof that Enron gamed the system. Ken Lay stole millions while a helpless Davis was powerless to do anything about it. As he claimed on film, and repeated after, the legislature, “when it passed the energy deregulation law in 1996, shifted all the power to the Federal Energy Regulatory Commission. They let this agency in Washington run the show. It was easy for FERC to do Enron’s bidding because all they had to do was do nothing, which is what they did. The problem got thrown at my feet when I didn’t have the power to act.”
In truth, Davis had inordinate power. He could have swooped in and temporarily taken over privately owned power-generating plants, in effect, switching the lights back on at a reasonable price. And, as Doug Heller, of the Foundation for Taxpayer and Consumer Rights, says, “where he didn’t have power, he had the pulpit, and he used neither.” For months, as consumer groups heckled and nagged the governor to go on the warpath against Enron, and a brood of other raptors, Davis was focused on a bailout for Southern California Edison. While hundreds of millions of dollars were being bled out of Californians every week, Davis jockeyed to prop up the very utility that had pushed deregulation in the first place. Only under the whip of public disapproval — by then, Davis was viewed unfavorably by 60 percent of the electorate — did the governor begin to growl at the culprits. In his 2001 State of the State speech he threatened to seize power plants — but didn’t. (He also never refunded the $120,000 Enron had given his campaign.)
This is not the version of events Davis is selling. In the film he is asked, “Did Ken Lay and George Bush have a political agenda to blame the energy crisis on Gray Davis?” “Oh, hello,” the ex-governor snaps, exonerating himself of complicity in the energy crisis and in his own undoing.
This evening, however, Davis wasn’t going to get off easy. The formal discussion had just ended when a middle-aged man approached Davis. The man wanted to know why Davis hadn’t called the national guard to run the power plants. “Wouldn’t that have been popular? Wouldn’t that have won public confidence in you?” He seemed troubled that Davis hadn’t shown an instinct for self-preservation.
“No,” Davis answered quietly. “I think the public just wanted to see prices go down.”
“Yes,” the man insisted, now addressing the former governor as if they shared the same stake in rethinking Davis’ downfall, “but you could have kept the plants open.”
“I couldn’t just order employees to run the plants.”
“Because there are laws in this country against servitude.”
“Couldn’t you have used eminent domain?” the man persisted.
“With energy prices at $1,000 a megawatt, even if we’d seized the property we wouldn’t have been able to set the price unless a court agreed, and we didn’t have an extra $4 billion laying around.”
Davis never lost his composure. His silver hair, as white and silky as moonlight, never twitched. His hands rested calmly at his sides. He said: “All interesting theories in retrospect.”
Someone else asked if he felt vindicated by the facts Gibney had unearthed.
“I won’t feel vindicated until the $40 billion stolen from consumers is given back to California. I’m working with the governor and the state legislature to get that money back.” A soundbite. The old Davis — the one who earlier in the evening had reminded us that “I won 17 elections, I lost the recall” — was reasserting itself. The comment was a cue: The conversation was over. The ex-governor politely excused himself. “I want to say hello to some friends.” He glided off.