Enron hires ex-TVA head Hayes, Gore friend Bone

Enron hires ex-TVA head Hayes, Gore friend Bone

By Andy Sher
Washington Bureau

WASHINGTON -- A potential Tennessee Valley Authority competitor has hired former TVA
director Johnny Hayes and another close Tennessee friend of Al Gore as lobbyists.

Congressional lobbyist records show that Mr. Hayes, who was the Gore 2000 presidential
campaign's fund-raising director, registered with the House clerk on May 1 to lobby for
Houston-based Enron Corp.

Nashville attorney Charles W. Bone, another longtime Gore supporter, registered to lobby for
Enron the same day.

Enron is the nation's largest trader of natural gas and electricity. It is headed by Kenneth Lay,
a major financial supporter of President George W. Bush, who defeated Democrat Gore last
year.

Mr. Hayes served on the board of TVA, a federal utility, from 1993 until January 1999, when
he went to work for the Gore campaign.

In an interview, Mr. Hayes said his activities are between himself and his clients.

"I haven't done anything wrong, won't do anything wrong and won't do anything to hurt TVA,"
he said, also noting that it has been more than a year since he left TVA.

Former TVA directors are subject to a one-year ban against seeking to influence TVA on any
matter, according to a summary of post-employment activity laws supplied by the agency.

"I won't have any comment," Mr. Bone said in a phone message. "I never talk about what I'm
doing for clients."

Stephen Smith, executive director of Southern Alliance for Clean Energy, a TVA watchdog and
environmentalist group, said that while he knows Mr. Hayes is an "honorable man," there are
potential problems with a former TVA insider going to work for Enron. Mr. Hayes "knows
where the skeletons are buried," Mr. Smith said.

"It's a classic. You got somebody who's a TVA board member who leaves to go to work for
someone who for all practical purposes is a competitor. I think everybody in the valley should
be a little concerned about it. ... I just think folks need to come out on the record and say
exactly what they're doing. What they may be doing may be completely admirable."

Enron spokesman Eric Thode said Mr. Hayes was hired to lobby on "energy issues,
TVA-related, kind of a host of issues."

"TVA is one group he might work with," Mr. Thode said. He declined to say how much Mr.
Hayes is being paid. Enron spent $800,000 last year on its own Washington lobby
organization and hired other lobbyists as well -- one group for $415,000.

TVA spokesman Gil Francis said he spoke to Mr. Hayes last Friday.

"And what he said was he has talked to some TVA staff on some TVA matters and that is all
he said," Mr. Francis said. He said the conversations were with TVA power division staffers
in Chattanooga.

In his lobbyist registration form for Enron, Mr. Hayes said he was lobbying on "Power Plant Development/Utility deregulation."

The Wall Street Journal reported last week that Enron was using its Democratic contacts to "strengthen ties" to Linda Breathitt, a Kentucky Democrat who serves on the Federal Energy Regulatory Commission.

The Journal reported that Mr. Hayes, who knew Ms. Breathitt through national Democratic politics, invited her to a dinner at a Washington restaurant to meet Enron's managing director for government affairs, Richard Shapiro.

Enron's Mr. Thode confirmed the account but provided little additional information. The Journal said Enron wants FERC to restructure the electric utility industry so that utilities such as TVA, which controls transmission on its lines, will open their lines to everyone.

Mr. Thode said Mr. Hayes was not involved in Enron's recent settlement of a dispute with TVA. It involved allegations that Enron had not lived up to a contract to supply TVA fixed amounts of power during period of heavy demand.

According to Mr. Smith of the Southern Alliance for Clean Energy, TVA received $200 million under the settlement -- an amount Mr. Thode and TVA's Francis both refused to confirm, saying it was confidential.

Mr. Hayes also is registered to lobby for Choctaw Gas Generation, a subsidiary of Tractebel Power Inc. of Houston, which built a lignite coal-fired plant in Mississippi for TVA. He also is registered to lobby with Voith Siemens Hydro Power Generation Inc., which is based in York, Pa., and has a Chattanooga office.

In all three cases, Mr. Hayes registered under the company name of Sideview Partners Inc.

Mr. Bone also is registered to lobby for Voith Siemens. He registered under Wyatt, Tarrant and Combs, a Nashville law firm.

Mr. Hayes remains involved in politics. He is Democratic gubernatorial hopeful Phil Bredesen's lead fund-raiser -- a nonpaid post.