Joined at the Hip
January 10, 2002
The New York Times
By BOB HERBERT
You'll have to look long and
extremely hard to come up
with an example of corporate
treachery in the United States
that's as horrible as the Enron
debacle. This is a scandal with a
very broad reach and it has some
of the wise guys in the Bush
administration and other top Republicans trembling in
their penny loafers.
Enron was a bonanza for - whom else? - the folks at the
top of the pyramid. They ferociously exploited their
gilt-edged political connections and harvested
breathtaking amounts of cash for themselves, even as the
company was collapsing into the biggest bankruptcy mess
in U.S. history. Left behind were thousands of ordinary
working men and women, people with families and
obligations, who lost jobs, life savings, pensions, the
works. And more carnage is to come.
The fallout is nationwide. A week before Christmas,
Senator Ron Wyden, an Oregon Democrat, spoke about
the gloom that had settled over workers in his state who
watched their retirement funds vanish. "Because of what
happened at Enron," he said, "there are Oregon families
going to grief counseling rather than holiday parties this
year."
No one knows yet the extent of the illegality - if any -
that went on at Enron. The Justice Department
announced yesterday that it was launching a criminal
investigation. But there is no doubt that many of the
company's top officials swam, as a matter of course, in an
ethical sewer. They were pals with, and lavishly greased
the palms of, powerful people who were willing to guide
government policy toward Enron's ends, and who could
help the company escape close scrutiny of its more
sinister activities.
The Center for Public Integrity, a nonpartisan watchdog
agency in Washington, examined the political
contributions of 29 top Enron executives and directors
named in a shareholder lawsuit filed against the company
last month. Twenty-four of the 29 made contributions
from 1999 to 2001 - totaling nearly $800,000 - to
George W. Bush, members of Congress, the two national
political parties (with the bulk of the contributions going
to the Republicans) and a variety of officials who are now
responsible for investigating possible securities fraud by
Enron.
Of the five who did not make contributions, two were
foreign nationals prohibited by law from contributing to
candidates or parties.
"The folks at the top of the company gave lavishly," said
Charles Lewis, the center's executive director. "It just
shows that this is a company inordinately dependent on
government favors."
And how did these generous Enron officials behave as the
apocalypse approached?
The shareholders' suit, as the center noted in its study,
"alleges that the 29 executives and directors dumped $1.1
billion worth of stock while knowing the company was in
danger of collapse."
Defendants in the lawsuit have disputed the charges
against them. But there is no disputing that as Enron
toppled and fell, insiders unloaded hundreds of millions
of dollars' worth of stock while rank-and-file Enron
employees were locked into rules that left many of them
helpless as the stock's value plunged from more than $90
a share to less than $1.
It has long been known that Enron and its chairman,
Kenneth Lay, were close to President Bush. In Mr. Lewis's
book, "The Buying of the President 2000," Enron was
already listed as Mr. Bush's No. 1 career patron.
This week the office of Vice President Dick Cheney
reluctantly disclosed that Enron executives met with Mr.
Cheney or his aides at least six times as the Bush
administration - with Mr. Cheney in charge - was
putting together its national energy policy.
It will be interesting to find out, as this scandal continues
to unfold, how aggressively the Justice Department, the
Securities and Exchange Commission and other
appropriate agencies investigate a company that has been
as generous and as wired and as powerfully influential as
Enron.
There's already talk that Harvey Pitt, the chairman of the
S.E.C., may have to recuse himself because as a lawyer in
private practice he did work for Arthur Andersen, the
company that audited Enron's books with its eyes closed.
Enron is a case study in the dangers that will inevitably
arise when unrestrained corporate greed is joined at the
hip with the legalized bribery and influence-peddling that
passes for government these days.
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