The General Accounting Office (GAO) has cleared former FERC Chairman Curt Hebert and Enron Corp. Chairman Kenneth Lay of any criminal charges and ethics violations stemming from a telephone conversation between the two men last February in which Hebert claimed Lay asked him to change his position on a key Commission policy issue in exchange for his endorsing Hebert to continue on as chairman.

“We found no evidence that applicable federal statutes or ethics regulations were violated. There is no evidence that the chairman [in seeking Lay’s endorsement] attempted to use his public office for private gain, acted other than impartially, or offered preferential treatment to Mr. Lay and Enron. Likewise, there is no evidence that Mr. Lay offered a thing of value to Mr. Hebert,” the GAO said in a letter to Sen. Joseph Lieberman (D-CT), chairman of the Governmental Affairs Committee. Hebert stepped down as FERC chairman in late September when President Bush appointed close friend and former Texas regulator Pat Wood III to head up the Commission.

Leiberman asked the GAO to undertake an investigation after the The New York Times last May reported the telephone call between Hebert and Lay.

During the probe, the agency said both men agreed that a telephone conversation occurred in February 2001, that Lay asked Hebert about his views on what FERC’s policy should be on access to the electricity grid, and that they did not discuss any matters relating to pending cases before the Commission involving Enron.

But Hebert and Lay differed in their interpretations of the telephone call, according to GAO. “Mr. Hebert believes that Mr. Lay was attempting to tie his support for [Hebert] continuing as chairman to a change in [Hebert’s] position on this policy issue.” But Lay denied there was any quid pro quo involved. Lay contends that since Hebert “was pressing him for an endorsement,” he simply “took the opportunity to ask him [Hebert] about his position on access, an issue that he and Mr. Hebert did not agree on.”

The GAO cleared Hebert and Lay of potentially violating: 1) a federal bribery statute, which makes it a crime to “give, offer or promise” anything of value with the “intent to influence any official act;” 2) a federal law that makes it a crime for any public official to “demand, seek, receive, accept or agree to receive” anything of value in exchange for being “influenced in performing any official act;” and 3) a federal statute that makes it a crime to “solicit or receive any money or thing of value” in an attempt to obtain public office.

“Regardless of who initiated the discussion concerning open access, it does not appear that any of the criminal statutes…were violated,” said the GAO. “All three statutes require that money or a ‘thing of value’ be offered or solicited in return for something else,” it noted. “Although the courts interpret the term ‘thing of value’ broadly to include both tangibles and intangibles, our review of case law found no support for the proposition that mere political support may be considered a thing of value for purposes of the relevant criminal statutes.”

Moreover, “the offer of a thing of value must be tied to an expectation of a corresponding action by the other party. That is, there must be an expected quid pro quo…Here, there is no evidence that such an exchange was contemplated,” the GAO concluded.

Nor, the agency said was there evidence that Hebert violated federal government ethics regulations, which bar employees from soliciting or accepting any gift or items of monetary value from a person or entity seeking to influence official action. Lastly, it found that the telephone conversation between Hebert and Lay did not violate FERC regulations banning off-the-record communications that could affect the outcome or influence a decision in an on-the-record proceeding.

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