A Scandal Centerpiece: Enron's Political Connections
By Al Hunt
The Wall Street Journal
Friday, January 17, 2002
At an American Enterprise Institute-sponsored seminar on energy last summer in Vail, participants, including Federal Reserve Chairman Alan Greenspan, White House counselor Larry Lindsey and some prominent corporate CEOs, were appropriately deferential to Vice President Cheney.
They all referred to him as "Mr. Vice President" with one exception: Kenneth Lay. To the Enron executive, he was "Dick."
There no longer are Enron apologists. But there are plenty of Bush apologists on this mushrooming scandal: Not bailing out the now-bankrupt company, they assert, was a "tribute to American capitalism." Enron was a non-partisan briber, they say, or this is a private industry scandal, not a political one. Not quite.
Treasury Secretary Paul O'Neill is right when he says the government shouldn't have rescued this deceitful company, though arguably he might have alerted the regulators sooner. But that in no way lessens the shame of a scandal in which top corporate executives lie to the investing public and bail out to the tune of more than a billion dollars of their own equity, while thousands of lower-level employees see their life savings plummet. Government is necessary to protect against such abuses.
If the press, Congress and prosecutors are vigilant, more exposes are inevitable: Who was cut in on some of Enron's illicit partnerships, what other governmental favors were given? Let's examine critical connections:
The Cheney Connection: Enron's generosity to this administration paid off in the Bush/Cheney energy plan. The Vice President has largely kept mum on the details of this connection and the press has been remarkably acquiescent.
The General Accounting Office wants to know the role played by vested interests in the Cheney Task Force. The White House has refused: Only under pressure recently did Mr. Cheney acknowledge that Ken Lay or Enron had met with him and his task force on six separate occasions.
The principle here is no different than Hillary Clinton's refusal to reveal the private deliberations involving special interests in assembling her 1993 health-care proposal. The political right justifiably criticized and brought legal action against her. Mr. Cheney's stonewalling is likewise an attempt to avoid embarrassing revelations.
Yesterday Democratic Rep. Henry Waxman released a report detailing sixteen provisions of Mr. Cheney's energy recommendations that had been advocated by Enron. Many, no doubt, would have been included without Enron's input. But when the details of the secret deliberations emerge -- the only question is when -- it'll be instructive to see what role the Texas company had in proposals for electricity restructuring, boosting energy production in India or the glowing description of trading derivatives as "sophisticated and customizable."
The Bush Connection: Last Thursday, the President of the United States broke a campaign pledge to restore integrity to the White House. Seeking to distance himself from Mr. Lay -- whom he'd affectionately called "Kenny Boy" and sent an effusive birthday greeting a few years ago -- he declared the Enron CEO had supported his opponent Ann Richards in his first gubernatorial run in 1994.
The company did give money to both political parties in that race. But as Mr. Bush knows, Mr. and Mrs. Lay gave three times more to him, and Mr. Lay endorsed him.
Indeed, over the last eight years, Enron has given over $700,000 dollars to George W. Bush -- more than any other donor -- and more than it's given to anyone else. Mr. Lay was one of the "Pioneers," raising more than $100,000 for the Bush presidential quest. The company contributed to the Florida recount fund and the Bush inaugural festivities as well. And Mr. Bush has been appreciative. While governor, his regulators were Enron-friendly. He even lobbied his friend, then-Pennsylvania governor Tom Ridge, on behalf of Enron.
These close ties continued in the Bush presidency. Curtis Hebert Jr., then chairman of the Federal Energy Regulatory Commission, said Mr. Lay told him he could stay on as chairman if he changed his views on electricity deregulation. He didn't, and not too long afterwards President Bush replaced him with an old Enron ally from Texas. Sen. Joe Lieberman should put Messrs. Herbert and Lay under oath about this conversation when he holds hearings next week.
The Contribution Connection: The greatest canard in the miserable saga is that because the government didn't bail out Enron in October, it proves the company's massive campaign contributions didn't work. Actually, some of this sleazy scam might not have occurred if not for the special favors Enron got from its connections and 6 million in contributions over the past 12 years -- to Democrats as well as Republicans.
Sen. Phil Gramm and his wife Wendy are the Enron "poster couple." She took care of the company's interests as head of the Commodity Futures Training Commission then was handsomely rewarded as a director and member of its so-called audit committee. As a senator, he raked in big campaign bucks and produced legislation like the Commodity Futures Modernization Act, which deregulated financial derivatives and relaxed oversight of commodity exchanges.
One of the worst perpetrators is Arthur Andersen, which not only was asleep at the switch but shredded Enron documents. Andersen was Enron's auditor and consultant to the company, a sweetheart deal arrangement that would never have been if former Securities and Exchange Chairman Arthur Levitt had had his way.
Mr. Levitt, who says there are a "multitude of villains" -- rating agencies, investment bankers, company and board officials as well as accountants -- sees a clear conflict of interest: "When a firm is paid a million dollars a week, half of which comes from consulting, when it comes down to making a subjective judgment -- and there were probably hundreds of subjective judgments in an Enron audit -- it's obvious who they're going to side with, management or shareholders."
But when Mr. Levitt tried to end such conflicts, accounting firms, armed with $24 million in campaign contributions the past two elections, persuaded Congress to threaten the SEC budget and make him retreat. One lawmaker who sided with the accountants was Sen. Lieberman.
Mr. Levitt is right, there are numerous private sector culprits; this should lead to some serious reforms. But let's not let the politicians off the hook; they're culpable too.
and the blind rwe "oh yeah...you're an idiot!" types on this thread still have not given ANY justification for dubya. It's still just "Clinton's penis is to blame!!" or other nonsequitur deflections...including name-calling (ooh, ouch...lol) and inventing neologisms like "duhmocrat".
"The speech of some schizophrenics is permeated by neologisms, words formed by condensing and combining several words."
theallengroup.com
When the rwe's on this thread resort to neologistic namecalling the evidence would suggest they're in danger of being diagnosed as schizophrenic. A factor to be weighed toward whatever they post. |
