You can’t fault Enron Oil & Gas chief executive Forrest E. Hoglund for lack of enthusiasm about recently elected Railroad Commissioner Tony Garza, the Republican secretary of state under Governor George W. Bush. In his zest for raising late-train cash for Garza, who will now serve as a state regulator for the energy industry, Hoglund apparently violated at least the letter of state campaign laws.
In a December 3 memorandum issued on Enron stationery to other energy executives, Hoglund described Garza as “a wonderful addition to the Railroad Commission.” He urged his colleagues to contribute one final spurt of campaign contributions to Garza’s Railroad Commission officeholder account before the state-mandated deadline.
As the memo notes, Texas law prohibits elected officials from raising money from 30 days prior to the beginning of the legislative session until 30 days after the May 31 adjournment. The front end of the deadline passed last Saturday.
“This account is crucial in allowing Tony to participate in activities that benefit the industry but are not covered by the state,” explained Hoglund. “It is extremely important that we make these contributions to enable him to pursue industry and political activities not covered by the state.”
A Houston political consultant who asked not to be identified calls the Enron appeal on behalf of an ostensibly impartial regulator “ham-handed” but not all that unusual in substance. According to this source, political action committees for industries regulated by the Railroad Commission routinely pony up contributions to officeholders so they can attend conferences and educational forums. There, they can get to know energy executives and get indoctrinated in industry goals. Consumer advocate groups rarely have the money to pad regulator officeholder accounts in the same fashion.
Hoglund went over the legal line, however, in using corporate resources to send out the fundraising appeal. According to Texas Ethics Commission lawyer Natalia Ashley, the law prohibits corporations from making political expenditures to support a candidate or to raise money for a candidate. Ashley said the law makes no allowance for even small expenditures like postage or stationery. The Garza campaign did not return an Insider call for comment.
Asked about the apparently illegal use of Enron corporate resources on Garza’s behalf, Hoglund’s secretary, who identified herself only as Betty, responded, “Ewhhhh. Well, dadgummit, I bet they did send that on Enron stationery. We know better!”
At least, they do now.
— Tim Fleck
This article appears in Dec 17-23, 1998.