http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=
FT3UFAV05XC&live=true&tagid=IXLVJTFUICC&subheading=emergingmarkets
Enron's curious Croatian client
By Robert Wright in Budapest
Financial Times
January 31 2002 23:36
"In one meeting, Mr Tudjman asked Joseph Sutton, head
of Enron's international operations, how much
influence his company had with the US state department
and whether it could arrange WTO entry.
"Mr Sutton said he could not promise WTO membership,
but guaranteed that Enron and the US would lobby for
Croatia's entry into the WTO, Partnership for Peace
and Nato."
The Enron collapse may have finally ended a
long-running scandal over relations between the US
energy company and the semi-authoritarian government
of the late Croatian president, Franjo Tudjman.
Mr Tudjman, who led Croatia through independence,
negotiated a controversial memorandum of understanding
with Enron before his death in December 1999. It would
have given Enron rights to build a power station in
Croatia and run it for 20 years, selling electricity
to HEP, the state electricity company, at above-market
rates.
Questions about the deal intensified after Mr
Tudjman's death and the election, in January 2000, of
a democratic government. Tapes of conversations show
that Mr Tudjman hoped giving Enron the contract would
secure political favours, including a state visit to
Washington.
After renegotiation, Enron is thought to have retained
the right to build a power station and sell
electricity to HEP at above-market rates, though lower
than previously. That contract expires this summer,
though details are unclear due to confidentiality
agreements.
Enron's power deliveries to Croatia ended on November
30, when other European deliveries ceased. The power
station has not been built.
The deal's legacy, however, may be the light it sheds
on Mr Tudjman in his later years - and on Enron's
readiness to and play along with his fantasies.
In the weekly magazine Globus, President Tudjman said
that, on top of a visit to Washington, he expected
Croatia to join the World Trade Organisation, Nato's
Partnership for Peace programme and Nato itself if he
signed the deal. He even linked the deal to avoiding
his arrest and that of other senior figures by the
Hague-based International Criminal Tribunal.
Croatia had been isolated politically - particularly
by the European Union - over treatment of Serbs during
the offensive that ended its war of independence.
When challenged on the cost of electricity under the
deal - an estimated $120m-$200m above market prices
over 20 years - he justified it using the political
benefits.
FT3UFAV05XC&live=true&tagid=IXLVJTFUICC&subheading=emergingmarkets
Enron's curious Croatian client
By Robert Wright in Budapest
Financial Times
January 31 2002 23:36
"In one meeting, Mr Tudjman asked Joseph Sutton, head
of Enron's international operations, how much
influence his company had with the US state department
and whether it could arrange WTO entry.
"Mr Sutton said he could not promise WTO membership,
but guaranteed that Enron and the US would lobby for
Croatia's entry into the WTO, Partnership for Peace
and Nato."
The Enron collapse may have finally ended a
long-running scandal over relations between the US
energy company and the semi-authoritarian government
of the late Croatian president, Franjo Tudjman.
Mr Tudjman, who led Croatia through independence,
negotiated a controversial memorandum of understanding
with Enron before his death in December 1999. It would
have given Enron rights to build a power station in
Croatia and run it for 20 years, selling electricity
to HEP, the state electricity company, at above-market
rates.
Questions about the deal intensified after Mr
Tudjman's death and the election, in January 2000, of
a democratic government. Tapes of conversations show
that Mr Tudjman hoped giving Enron the contract would
secure political favours, including a state visit to
Washington.
After renegotiation, Enron is thought to have retained
the right to build a power station and sell
electricity to HEP at above-market rates, though lower
than previously. That contract expires this summer,
though details are unclear due to confidentiality
agreements.
Enron's power deliveries to Croatia ended on November
30, when other European deliveries ceased. The power
station has not been built.
The deal's legacy, however, may be the light it sheds
on Mr Tudjman in his later years - and on Enron's
readiness to and play along with his fantasies.
In the weekly magazine Globus, President Tudjman said
that, on top of a visit to Washington, he expected
Croatia to join the World Trade Organisation, Nato's
Partnership for Peace programme and Nato itself if he
signed the deal. He even linked the deal to avoiding
his arrest and that of other senior figures by the
Hague-based International Criminal Tribunal.
Croatia had been isolated politically - particularly
by the European Union - over treatment of Serbs during
the offensive that ended its war of independence.
When challenged on the cost of electricity under the
deal - an estimated $120m-$200m above market prices
over 20 years - he justified it using the political
benefits.