A stunned Enron filed for international arbitration, demanding $300 million in compensation. Maharashtra state hit back with a lawsuit in Bombay to void Dabhol's contract, accusing Enron and its partners of "fraud and misrepresentation" of data and, for the first time, of corruption. The state claimed that Linda Powers, Enron's vice president of global finance, had admitted to corruption by telling the U.S. Congress that Enron had spent $20 million educating Indians. But she was referring to money spent on development costs and legal expenses, a clarification Enron had already given Maharashtra before the suit was filed.
In 1993, Enron official Linda Powers told the US House Appropriation Committee that the company had spent US$ 20 million (Rs. 70 crore at the time) “educating Indians on how capitalist business should work.” This was at a time when Enron – which eventually filed for bankruptcy in 2001 -- was negotiating with the Maharashtra government of current agriculture minister Sharad Pawar for the Dabhol power project. Though the Shiv Sena-BJP combine that came to power in the state in 1995 was opposed to the project, Enron successfully lobbied and convinced the government to renegotiate an agreement.