Florida, Enron, and Alliance Capital

January 14, 2002

The wealthy and powerful, because they are a small segment of the population, move in the same small circles. They look out for each other, despite their competitiveness, thus ensuring they all retain their riches -- while further enriching themselves off the "little people." The immolation of Enron and the malfeasance of Alliance Capital Management are perfect examples.

As reported in the Sunday, January 13, edition of the Palm Beach Post, Florida lost more than $300 million from it’s state pension fund due to stock losses after Enron’s collapse. The Post reported:

"Last month, the [Florida] state Board of Administration, which Gov. Bush heads, fired Alliance Capital Management Corp., saying it was troubled by the New York financial adviser's decision to continue buying Enron stock even after Enron admitted it had lied about its finances."

http://www.gopbi.com/partners/pbpost/epaper/editions/sunday/
news_c314e1bc268f40b10070.html

Now, why would Alliance Capital continue to buy plummeting Enron stock with state employee pension contributions? For one, there might have been a relationship that the Post didn’t touch upon in its report. According to an October, 29, 1999 press release from Enron:

"The Board of Directors of Enron Corp. announced today the election of . . . Frank Savage to the Board, effective immediately . . . Savage is chairman of Alliance Capital Management International . . . "

http://www.enron.com/corp/pressroom/releases/1999/ene/boarddirector.html

Curiously -- or disingenuously -- Enron announced in late October of 2001 that it was forming a "special committee" to investigate . . . itself! Though Frank Savage was appointed to the Enron board of directors in 1999 (above), in last October’s announcement Enron claimed the special committee would be joined by "independent director Frank Savage, CEO of Savage Holdings LLC."

http://biz.yahoo.com/prnews/011031/daw077_1.html

Furthermore, according to Qualcomm, Mr. Savage is "Chairman of Alliance Capital Management International and is a Director of Alliance Capital Management Corporation."

http://www.qualcomm.com/about/bios/bod.html

And on the Council on Foreign Relations website, his biography states:

"Mr. Savage is Chair of Alliance Capital Management International and director of Alliance Capital Management Corporation. He has had a long career in international banking, corporate finance, and global investment management, serving in the Middle East and Africa for the International Division of Citicorp in earlier years. Mr. Savage serves on the boards of corporations and not-for-profit organizations, including Lockheed, ARCO Chemical Company, Essence Communications, The Johns Hopkins University, Howard University, and the New York Philharmonic."

http://www.cfr.org/Public/resource.cgi?pers!199

However, if you look at Alliance’s websites there is no mention of Mr. Savage, and according to the board of directors page on Enron’s website Mr. Savage is only the CEO of Savage Holdings.

http://www.enron.com/corp/pressroom/board.html

If this cross-pollination of executive direction isn't explanation enough for Alliance’s irresponsible purchase of Enron stock, the other shoe drops with a report by the South Florida Sun-Sentinel, where they write that, "Alliance Capital was the biggest holder of Enron shares on Sept. 30, with 43 million shares or 5.78 percent of the stock."

http://www.sun-sentinel.com/business/local/sfl-
zfunds06dec06.story?coll=sfla-business-headlines

Under those circumstances, Alliance Capital had an obvious interest in protecting its own hefty investment in Enron. Put that together with the apparent high-level relationship between Alliance’s board and Enron’s board; put it together with the fact that the Florida Board of Administration was led by George Bush's brother Jeb; and one must ask the question, "Was Florida's pension fund purposely looted?"

The only logical explanation for the continued waste of Florida's money on Enron stock is that well-connected people in Florida government, Alliance Capital, and Enron tried to funnel money into Enron in an effort to prop it up. And it’s hard to believe that Florida’s pension fund was the only source being tapped for this purpose.

Wealth and power are the ties that bind in politics and corporate America. Are we to believe that Alliance Capital knew nothing about Enron’s woes before it publicly announced its shady bookkeeping? Are we to believe that Jeb Bush, his Board of Administration,
Alliance Capital, Mr. Savage, and the entire Enron board never communicated with one another? That they never discussed ways to assist Enron? That they did not seek ways to bail out George Bush’s benefactor and Bush family friend Kenneth Lay?

From the theft of the presidential election, to West Coast energy market manipulation; from the secret Bush/Cheney energy policy, to the biggest bankruptcy in US history; the same names keep popping up over and over again. They all hold power in the executive
branches of government and in the executive boardrooms of some of America’s largest multi-national corporations.

The only question left to ask is, "What did these people know and when did they know it?"

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Contributed by BuzzFlash Reader Mike Kress, Everett, WA.