The Overshadowing of Enron [Wash. Post - media]
washingtonpost.com
By Howard Kurtz
Washington Post Staff Writer
Wednesday, December 12, 2001; 9:15 AM
Everywhere you look, it's war, terrorism and big-time angst.
Nine-eleven is not only the biggest story of our lives, it often seems like the only story.
In newsroom after newsroom, reporters have been drafted from other beats to join the war effort.
What about other news? Let's face it: Journalists aren't great at walking and chewing gum at the same time.
If there was no Afghanistan story, for example, the press would be going nuts over Enron.
It's the biggest corporate collapse ever, the firm employed some top administration officials and the CEO was a Dubya pal.
Enron has been a big business story, but hasn't drawn the kind of daily-drumbeat political treatment that often surrounds corporate chicanery with a strong whiff of scandal.
Perhaps it will percolate into a full-fledged media melodrama. But for now, one of the few expressing outrage is Los Angeles Times columnist Robert Scheer:
"Enron is Whitewater in spades. This isn't just some rinky-dink land investment like the one dredged up by right-wing enemies to haunt the Clinton White House – but rather it has the makings of the greatest presidential scandal since the Teapot Dome."
Whew.
"The Bush administration has a long and intimate relationship with Enron, whose much-discredited chairman, Kenneth L. Lay, was a primary financial backer of George W. Bush's rise to the presidency.
"It was Enron that provided the model for the administration's trickle-down attempt to revive an economy that's been in steep decline during Bush's tenure. That model gives the fat-cat corporate hotshots everything they want in return for bankrolling political campaigns. Not to worry about the rest of us because, hey, what's good for Enron is good for America. That it hasn't been is now painfully clear.
"What did Enron get in return for its contributions? It got its way on deregulation, for one thing. . . .
"Bush should be called as a witness in the congressional hearings scheduled to unravel this mess. One thing that should come up in the hearings is then-Gov. Bush's October 1997 telephone call on behalf of Lay to then-Pennsylvania Gov. Tom Ridge to help Enron crack into the tightly regulated Pennsylvania electricity market.
"Political advisor Karl Rove owned as much as $250,000 in Enron stock. And economic advisor Larry Lindsay and Trade Representative Robert B. Zoellick went straight from Enron's payroll to their federal jobs. . . .
"We have a right to know whether the Enron alums in the administration were tipped off in time to bail out with profit the way Lay and the other Enron top execs did."
New York Times columnist Paul Krugman jumps on the case: "Enron used its political clout to create what one of its own executives called a 'regulatory black hole' in which it could operate freely. Just last December Senator Phil Gramm pushed through one-eyed-bearded-man-with-a-limp legislation that essentially exempted Enron (whose board of directors – and audit committee – included one Wendy Gramm) from the rules that govern other commodity traders. Readers may recall that Senator Gramm also helped the banking industry block measures to curb money laundering.
"What Enron's admirers believed was that experience would demonstrate fears about unregulated markets to be unjustified. Unfortunately, what disappeared into that black hole was not bureaucratic clutter but billions of hard-earned dollars, including those of Enron's own employees."
The Wall Street Journal has the latest: "Enron Corp. Chief Executive Officer Kenneth Lay declined to testify at a joint hearing of two House panels today, as Congress begins what promises to be a painstaking investigation into the energy company's financial troubles.
"Another House committee has demanded that Enron provide extensive financial and personnel records, including documents on controversial partnerships that transferred debt off of Enron's balance sheet and inflated the company's earnings. The Houston company filed for Chapter 11 bankruptcy-court protection this month. . . .
"While bipartisanship is evident, some Democrats looking into the Enron failure are more blatantly political. Rep. Henry Waxman of California has fired off letters to Vice President Dick Cheney asking for details of his meetings with Mr. Lay when preparing the administration's energy plan."
Fortune's cover story blares: "The Enron Disaster. Lies. Arrogance. Betrayal. How Ken Lay and his team destroyed America's seventh-largest corporation."
The piece begins with writer Bethany McLean recalling a February interview with the former CEO, Jeff Skilling, who told her that Enron had answers to tough questions "but people want to throw rocks at us."
"I was working on a story that would ultimately raise questions about Enron's valuation, and I'd called with what I considered fairly standard queries in an effort to understand its nearly incomprehensible financial statements. The response from Enron was anything but standard. Skilling quickly became frustrated, said that the line of inquiry was 'unethical,' and hung up the phone. A short time later Enron spokesperson Mark Palmer called and offered to come to FORTUNE's New York City office with then-CFO Andy Fastow and investor-relations head Mark Koenig. 'We want to make sure we've answered your questions completely and accurately,' he said.
"Now, in the wake of Enron's stunning collapse, it looks as if the company's critics didn't throw enough rocks. . . . Until recently Enron would kick and scream at the notion that its business or financial statements were complicated; its attitude, expressed with barely concealed disdain, was that anyone who couldn't understand its business just didn't 'get it.' Many Wall Street analysts who followed the company were content to go along. . . .
"Given the extent to which financial chicanery appears to have take place, is someone going to jail?"
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