Ex-TVA director lobbied agency for Enron

Ex-TVA director lobbied agency for Enron
By Richard Powelson
News-Sentinel Washington bureau

WASHINGTON - A firm headed by a former TVA director was paid $200,000 by Enron Corp. last year to lobby the federal agency, records show.

Johnny Hayes, who left the Tennessee Valley Authority's governing board in January 1999, said he would not discuss his lobbying efforts except to say he ended his contract with Enron before the company filed for bankruptcy in December.

"Anything you need on that you're going to have to go to Enron," Hayes said by telephone from his firm, Sideview Partners Inc. of Gallatin, Tenn. "I don't talk on what I talk to clients about. You don't ask a lawyer who all their clients are."

Two Enron spokesmen did not return calls for comment.

Hayes met in Knoxville and Chattanooga in the May-June period last year with the top manager of TVA's transmission group, Terry Boston, Hayes was paid $200,000 by ailing company

TVA spokesman John Moulton said. The discussion was about Enron's plan to build a power plant in West Tennessee in Haywood County, its pending request to transmit the power on TVA lines to another part of the country and its intention to sell the plant to a company called AES.

Moulton said Hayes and Enron wanted to know if AES would be able to keep Enron's place in line for TVA's complete study of transmission capacity and any connection cost. At the time, many independent power producers had requested access to TVA transmission lines, which already faced capacity concerns in some sections.

TVA assured Hayes that was the case, but Moulton said that was standard procedure because TVA voluntarily follows the policy of the Federal Energy Regulatory Commission.

Federal rules bar TVA board members from lobbying the federal agency on certain matters for up to two years after leaving. Hayes appeared to comply with that rule, TVA's lawyers determined.

An initial check of TVA contracts with Enron last year showed that TVA's board in June approved a seven-year contract, worth up to $175 million, for a special type of coal-fired plant emissions control equipment, TVA spokesman Gil Francis said.

The technology was co-owned by Enron and another company, he said. But TVA's air pollution managers were interested in the technology before Hayes became an Enron lobbyist, Francis said.

TVA's office of inspector general routinely reviewed the proposed contract and did not find any evidence that Hayes was connected to it, said G. Donald Hickman, TVA's interim inspector general.

Lobbyists are required to file semiannual reports with Congress listing their clients, which federal agency they lobbied regarding which issue or bill and how much they were paid. The $200,000 paid to Hayes' firm was for the first half of 2001. Records for the second half of 2001 will be made public in the next one to two months.

When asked if he was paid other funds by Enron to lobby TVA in the second half of last year, Hayes said: "I'm not sure."

Why did he end his work with Enron? "Just did. Just did. Other opportunities. No big deal," he said.

He said that he continues to do consulting work, and is handling finances for Democratic businessman Phil Bredesen's gubernatorial campaign. Hayes left TVA's three-member governing board to become the top fund-raiser for Al Gore's 2000 presidential campaign. His presidential appointment at TVA, where he was paid $118,000 annually, would have lasted until May 2005.

Stephen Smith, spokesman for the Southern Alliance for Clean Energy, a Knoxville environmental group that regularly monitors TVA operations, said Enron was a potential future competitor for TVA before its bankruptcy filing.

Hayes' contract with Enron raises the question of whether Congress should extend the length of the ban on federal executives lobbying their former employer, he said.

"My fear was what intelligence did Hayes have that he may have been giving to Enron for a fee that could have potentially been detrimental to TVA's well being?" Smith asked.

"It is kind of scary that you would have somebody with that kind of knowledge base potentially working for someone like Enron, which clearly does not have consumers or the (Tennessee) Valley's best interest in mind."

Richard Powelson may be reached at 202-408-2727 or PowelsonR@shns.com.