Lately in the legislature, a slippery Republican from Stevensville by the name of Fred Thomas has become one of the Republicans’ leading voice on major issues, such as whether the state should take or refuse $5 billion in federal funds that will circulate in our economy for Medicaid coverage and jobs.
Who is Fred Thomas? He was the architect of Energy Deregulation, the most disastrous policy ever enacted by the Montana legislature, a program that swiftly led to the bankruptcy of the Montana Power company and with it the savings, pensions and retirement accounts of tens of thousands of Montanans.
Thomas left Helena in disgrace afterwards, but has now slimily slunk back into town.
For those of you who do not know the history, the Montana Power company was the quasi-private, regulated power company for almost all of Montana, for close to a century. Montana Power owned all the dams and power plants and it was as blue chip a company as could be–stable and reliable. The company and its workers were integral parts of every community in the state.
But one day the CEO of Montana Power, Bob Gannon, decided that he wanted more growth, more profits. So he and his lobbyists persuaded the Governor, Marc Racicot, and the Republicans in the legislature (and a small number of democrats too) to “deregulate” the energy business in Montana. Fred Thomas led the effort. “Deregulation” meant that the company could sell off its energy generation equipment and go into other ventures, no matter how speculative. The public, meanwhile, would be left to buy power wherever it could, on the open market.
The deregulation vote was taken in the closing hours of the 1997 session, almost in the dark of night, and was quickly signed by the Governor. Right away, the CEO Gannon began unloading the company’s assets. This was during the dot.com boom, and what the public would soon learn is that the whole scam of deregulation was designed to allow the honchos at Montana Power to try their luck in the tech sector.
Montana Power was renamed Touch America and the CEO Gannon spent all of the company’s money on laying fiber-optic cable in the ground across the state, so that the company would be well-positioned for the technology revolution. Gannon became the new darling of Wall Street, giving speeches around the country about “innovation” and being lauded as a tech visionary. The shareholders of Montana Power, however, were never consulted about this change in direction, which seemed a terribly risky business for employees and retirees of the company, and the many Montanans who were in or nearing retirement, and had a good chunk of their money in Montana Power company stock.
Of course, the tech revolution ended up using cell towers instead of fiber-optic cable. So Touch America went bankrupt almost overnight, but not before Gannon and his pals all took mult-million dollar payouts and fled the state. Company retirees lost everything, their whole pensions. Stockholders were wiped out. Seniors woke up to find their 401(k)s empty. And thousands lost their jobs.
And the price of power went through the roof, because Montana didn’t have dozens of energy companies competing for our business – we had only one. Thomas claimed this would never happen and that those who criticized him were using “scare tactics” and “politicizing the debate.” But it did, and businesses across the state took a big hit. Others, like Columbia Falls Aluminum company, for example, shut down the plant and laid everyone off, not because the aluminum market had changed but because the company suddenly found itself with a huge supply of electricity that was now far more valuable to sell on the energy market than to use in the processing of aluminum.
He was also a central figure in CI-64, the initiative that resulted term limits in Montana. At any given moment, Fred is very inclined to lead the cause for the out-of-state right-wing astroturfers ‘flavor of the day.’
In sum, energy deregulation was the most catastrophic single policy ever enacted in Montana. So when Fred Thomas speaks with the tone of a policy expert on major issues facing the state (like the Medicaid expansion and HELP Act, among others), please keep in mind he is the last person that anyone, anywhere, should ever listen to, about anything.