A Political "Little Enron"
While investigators sort through records of imploded Enron, a new energy trading outfit has hatched in the shadows of City Hall. PowerSol Energy Marketing, a partnership with close ties to the Orlando Sanchez mayoral campaign, has quietly snagged a 12 percent share of a city contract with Reliant Energy to provide electricity to city facilities.
PowerSol incorporated only weeks before City Council approved the contract on December 12. It got its share of the Reliant pact as a minority contractor under the city's affirmative action program. But it has yet to be certified by the program. Affirmative action acting director Velma Laws says a background investigation of the company is continuing.
Two PowerSol officials, Hector Carreno and Frank McCune, also operate the CMGV World Wide consulting group that worked the campaigns of Sanchez and Al Flores, who lost a race for the District I council seat. McCune is also a former chief of staff for District H Councilman Gabe Vasquez. Two weeks after Vasquez voted for the contract, he paid McCune $14,000 out of his campaign fund for "consulting."
Another unlikely PowerSol participant is attorney Jay Aiyer, a Houston Community College trustee who was Mayor Lee Brown's chief of staff during the mayor's first term. For energy expertise, PowerSol recruited J. Kevin McConville, the former managing director of Enron North America, and John Scoblick, who had ten years with Enron.
According to Carreno, his idea for starting an energy company came while sitting through deregulation hearings in Austin several years ago. Initial conversations with Enron left the group with a sour taste. Instead, Carreno and crew cut a deal with Reliant.
PowerSol will serve as a middleman. It can purchase a minimum of $22 million in kilowatt-hours over a 30-month period from independent suppliers, then sell it to Reliant for use by the city. The group also has a service contract with Reliant to preselect and manage other minority firms for 25 percent of the contracts under the pact.
Consultant Marc Campos, Brown's Hispanic outreach director, claims PowerSol is a blatant attempt by political operatives to cash in on their connections.
"Now they're energy saving experts?" laughs Campos. "I don't think being able to find the light bulb section of a Fiesta makes you much of an expert."
At the time it was approved, Councilman Mark Goldberg questioned the contract because PowerSol was not a certified minority vendor. He says he was unaware of the owners' political connections and is shocked by McCune's and Aiyer's involvement. Goldberg says he favors reopening the matter if it will not cost the city more money.
It appears the next energy fight at City Hall will be over which minorities get to tap into the Reliant power lines.
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