October 28, 2005

Chafee Vote Against Refineries = Higher Gas Prices

Marc Comtois

While Senator Chafee deserves congratulations for opposing pork, he still appears to be tone deaf in matters related to energy policy. In short, if any link, no matter how tenuous, can be made that an energy policy proposal could "hurt" the environment, Senator Chafee will vote against it. Here's the story:

Senate Democrats, sensing what they hope will be an opportunity to blame Republicans for the high price of gasoline, voted in unison Wednesday in the Senate Environment and Public Works Committee to help defeat a bill that would have streamlined the building of new refineries.

The eight committee Democrats won over liberal Sen. Lincoln Chafee (R.-R.I.), whose vote against Chairman Jim Inhofe’s Gas PRICE Act (S 1772) means Republicans will have to take other steps if they want to push a refinery bill through the Senate this year.

Inhofe (R.-Okla.) told HUMAN EVENTS he pleaded with Chafee to vote with the committee’s nine other Republicans on the measure because Democrats were opposing the bill for purely partisan reasons. In the end, however, Chafee sided with Democrats.

“I went to Lincoln Chafee,” Inhofe told HUMAN EVENTS in an exclusive interview, “and I said, ‘Lincoln, I know you’re from Rhode Island, and I know from time to time you have to cave in to these people because you’re in a tight election, but their motivation is to blame Republicans for something the Republicans didn’t do, and you’re a Republican.’”

Inhofe added: “In the next election, high gas prices will be one of the Democrats’ big campaign issues.”

Chafee’s spokesman, Stephen Hourahan, said the senator voted against the bill because he believed it weakened environmental standards, and didn’t address alternative fuels and fuel-economy standards. Despite these objections, Chafee offered no amendments.

Environmentalists opposed Inhofe’s bill for its provisions to expand refinery capacity, streamline refinery permitting and simplify so-called boutique fuel requirements. It also would have provided federal assistance for the construction of refineries on closed military bases, which could have been producing gas in about two years, Inhofe said.

But with Republicans unable to corral Chafee, Inhofe said the GOP reached out to three committee Democrats—Senators Max Baucus (Mont.), Hillary Clinton (N.Y.) and Barack Obama (Ill.)—all of whom faced pressure from home-state industries to vote in favor of the bill. Not one switched sides, however, resulting in a 9-to-9 stalemate on the bill.

Democrats, Inhofe said, are employing a strategy to defeat any measure that might reduce the cost of gasoline.

“The Democrats are all going to vote against it for one reason,” Inhofe said Tuesday as he scrambled to find one more supporter on his committee. “They want to make sure nothing happens to bring the price of gasoline at the pumps down, because that’s the issue they want to use for the elections next year.”

Inhofe said his measure was just one example. In the House, Rep. Joe Barton (R.-Tex.) barely won passage of a bill that encourages refinery construction. Not one House Democrat voted for the bill, which barely passed, 212-210, after arm-twisting several GOP moderates.

Inhofe’s observation about Democrats was confirmed Thursday when Senators Teddy Kennedy (D.-Mass.), Chuck Schumer (D.-N.Y.), Debbie Stabenow (D.-Mich.), Mark Dayton (D.-Minn.) and Ron Wyden (D.-Ore.) engaged in demagoguery, accusing oil companies of raking in huge profits with little regard for the impact on consumers’ wallets. Democrats made the same arguments a day before at the committee meeting.

But regardless of the Democrats’ over-arching political strategy, it was Chafee’s vote that ultimately sank the bill. It was the second time this year Chafee’s opposition to a GOP-backed measure—he voted against President Bush’s “Clear Skies” air-quality bill—resulted in a deadlocked vote.

Hourahan, the senator’s spokesman, said Chafee was balancing the needs of his state when he cast his “no” vote on the Gas PRICE Act. Rhode Island has two shuttered military bases that could be used, although Hourahan said local opposition to such a plan was strong.

Even though Chafee is facing a Republican primary challenge, his opponent, former Cranston Mayor Steve Laffey, has actually been running a populist-themed campaign. Laffey, whose spokeswoman didn’t return calls to HUMAN EVENTS, recently attacked oil companies for their huge profits.

“[Chafee] is a Republican who is running in the most Democrat state in the country,” Hourahan said. “Rhode Island is a very environmentally sensitive state, and we have people there who clearly would not have appreciated it if the senator had voted for this bill, which would have allowed two sites in Rhode Island to potentially have a refinery.”

Inhofe said Chafee had no excuse to oppose the bill.

“He sweats a lot,” Inhofe told HUMAN EVENTS. “He said, ‘I just can’t do that. I have to win that election. Right now I have a perfect record with the environmentalists.’ And I said, ‘This is different. This is Democrat vs. Republican. It has nothing to do with the environmentalists.’”

It appears that it doesn't matter to Senator Chafee if the new refineries would be built under stringent environmental standards. Sen. Chafee is more worried about his interest group rating on the environment then on the effect that the current restrictions on refinery capacity, and thus higher energy costs, have on his constituent's wallets.

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It is hard to see the Dems vote as being for partisan political motives -- the Reps can take this vote and ram it down their throats as energy prices rise. I think that it shows how totally thralled the Dems are to their interest groups. The enviros hate energy generally and oil in particular. Massive price rises are their fondest dream. But the Dems as a part have no capacity to bring the enviros back to reality.

Ditto for the other Dem constituencies - trial lawyers, public employees, MoveOn. The only people left out seem to be the old industrial union members, as the union movement has come to equal public employees.

Posted by: J.V. DeLong at October 30, 2005 8:37 AM

Maybe Inhofe will hold a fundraiser for Laffey. Eh?

I doubt any senators would come out in favor of Laffey, they would take too much heat from the establishment and Chafee is part of their club.

Maybe some Republicans in the House will support Laffey.

Posted by: Sentinel at October 30, 2005 1:14 PM

If Laffey can't even get the support of one Senator, how is he supposed to get the support of 99 of them? The Senate is a deliberative body by Constitutional design. But Laffey doesn't deliberate; his modus operandi is to be a bomb-thrower. And that won't get him OR the state very far.

Posted by: Sarah at November 1, 2005 1:06 PM

Here is another article I found about Laffey leaving his old job.....raises some questions for me........

2001-04-23 - Regions won't comment on Laffey's departure

Officials with Regions Bank have referred all questions about the departure of Morgan Keegan & Co., Inc., President and COO Stephen Laffey to Morgan Keegan spokesman Gail Reimers, who would only confirm Laffey's departure and his replacement by Doug Edwards.

Edwards and Morgan Keegan CEO Allen Morgan could not be reached for comment Thursday.

Laffey resigned from the company Wednesday afternoon and will be replaced by company vice chairman Edwards, Reimers confirmed today. Laffey's departure comes within a month of the close of Morgan Keegan's sale to Regions Bank, and within weeks of the departure of three of the firm's top analysts to Dain Rauscher Wessels. Rumors abound that the firm could lose roughly a dozen more brokers to competitors such as Morgan Stanley Dean Witter, Prudential Bache Securities, Paine Webber and Wunderlich Securities.

Company officials have remained tight-lipped about the sudden departure of the firm's once-powerful and highly visible president.

But current and former Morgan Keegan brokers described Laffey's departure as a "palace coup" in which personality conflicts led a group of longtime producers from the Memphis-based securities firm's investment banking and retail sides to demand Laffey's removal.

Laffey's power extended well beyond his administrative tasks, to oversight of the company's private equity and institutional equity business, its investment banking -- "everything except bond trading," in the words of one former insider. Laffey directly oversaw the firm's boutique of private equity investments and its "knowledge corridors" branch of analyst research.

Appointed president and COO in October 2000, Laffey had been with the firm since 1990 and had been a longtime partner with Morgan.

So extensive was Laffey's presence within the firm that Morgan Keegan will bring in three executives to assume his duties, sources say.

With Edwards taking over as president, sources say they expect vice chairman John Stokes to join managing director and institutional broker Collie Krausnik to oversee the firm's equity capital markets division, which includes sales and trading.

It remains unclear who will oversee the firm's analyst research, sales, investment banking and merger and acquisition business.

Copyright(c) American City Business Journals Inc. All rights reserved.

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Posted by: RIred at November 23, 2005 10:30 AM

There is another article that explains that the official line is that Mayor Laffey left because he was passed over to run the company.

Edwards' annointment by Morgan Keegan CEO Allen Morgan as his heir apparent surprised many of the firm's observers, since Laffey had been Morgan's longtime partner.

Insiders described a "palace coup" in which personality conflicts drove longtime investment bankers and retail producers -- denizens of the Morgan Keegan Tower's 15th floor -- to demand Laffey's removal. But Edwards says the April 25 decision was made six floors up, within the firm's executive corridors.
"I think Steve made the decision to leave based on Allen's decision about his successor," Edwards says. "It's not uncommon for senior executives to pursue their careers elsewhere when it becomes clear they're not the next in line to head the company."
Still, I find it odd that Laffey's own campaign web site would include such information. It points to someone relying on a news aggregator that is a little too generic if you ask me. Unless, of course, he feels there is no reason to hide the whole affair. Anyway, interesting stuff. Posted by: Marc Comtois at November 23, 2005 7:16 PM