More detail: Grey Davis & Cruz Bustamente sued Enron and the other Texas energy companies for $9 billion for the fraudulent energy crisis of 2001, which actually cost CA $40-50 billion. This was as a result of the phony rolling blackouts that Enron engineered and profited from. Schwarznegger and then-LA Mayor Richard Riordan met with Ken Lay of Enron ONE MONTH after lawsuit was filed against Enron, a famous meeting at the Penninsula Hotel in Beverly Hills with Michael Milken and several top GOP operatives.
The stated purpose of the meeting, according to Enron emails later released in an investigation, was for Enron to present its “Comprehensive Solution for California, which called for an end to Federal and state investigations into Enron’s role in the California energy crisis.” Enron emails stated Lay and other Enron execs met with these top CA Republicans for “an insider’s conversation of what’s going on with the energy situation.” Later, during his campaign for governor, Schwarzenegger claimed he was unable to remember anything about the meeting, including whether he even met Ken Lay.
What apparently followed from that meeting was the plan to recall Davis as a way to help Enron avoid paying California for its fraud, and Schwarzenegger and Riordan both ran for governor in the subsequent GOP primary. Schwarzenegger beat Riordan in the primary, and subsequently got a huge amount of financial backing and PR help to run for Gov — using the strategy of trying to blame Davis for California’s energy problems — when of course the Federal government subsequently showed from a huge investigation some years later that the “crisis” was all due to illegal market manipulations by Enron and other Texas energy companies (i.e., Schwarzenegger’s supporters).
Some writers at the time advised that electing Schwarzenegger would put the $9 billion from Enron in jeopardy because of his relationship with and funding from Enron. Enron emails and recorded phone conversations confirming fraud by Enron traders that came out during the discovery phase of the lawsuit meant the suit was rock solid against Enron: CA was in line to recover 9 billion from Enron and the energy companies. But inexplicably, Schwarzenegger instead suddenly settled the suit for a pittance, at a time when CA was deeply in need of cash and would clearly prevail in the suit.
Schwarzenegger’s loyalties were to his scummy corporate buddies and not California taxpayers, which is why Enron and the other Texas energy fraudsters were let off by him and not forced to repay California. When Congress was probing this a couple years later, a former Enron executive (Clifford Baxter) agreed to give testimony to Congress about the various crimes and conspiracies Enron had perpetrated. A lot of republicans got very nervous, I’m sure. But as luck would have it, Baxter “committed suicide” one day before he was to give testimony at the hearings.
How convenient that dead men tell no tales — not to mention odd since Baxter had expressed to a friend two days earlier that he wondered, after agreeing to testify, whether he should get a bodyguard (according to a friend quoted in the NY Times). So it should come as no surprise, if Schwarzenegger helped Enron rip off cash-strapped California for 9 billion dollars set to come our way, that he would screw over his wife, his maid, his family, his illegitimate kids, and anyone else — if there was something in it for him.-jacko