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Non-Tech : The ENRON Scandal

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To: Mephisto who started this subject12/9/2002 12:56:01 PM
From: Mephisto   of 5185
 
Long, winding trail of broken promises

" Political promises serve one main purpose, and that is to win elections.
After a successful election, they often become government's excess baggage."


Dec. 7, 2002, 7:28PM


chron.com

By CLAY ROBISON
Copyright 2002 Houston Chronicle

AUSTIN -- There's nothing like success on Election Day -- particularly the strong success
that Texas Republicans enjoyed last month -- to begin clearing the air.

Any lingering doubts that this year's political promises -- like countless campaign pledges
before them -- were mostly made to be broken are being dispelled. Thanks to the Farmers
Insurance controversy,
we are getting clarity a little earlier than normal this season, but
the cleansing has only begun.

For starters, the lawsuit over high homeowners insurance rates, which the state filed
against Farmers at the beginning of the fall election campaign, didn't do much to help
ratepayers, as voters were led to believe. Instead, it mostly benefited Gov. Rick Perry and
then-Attorney General John Cornyn, and that's what it was designed to do.


The suit and their tough, pro-consumer talk helped Perry and Cornyn deflect Democratic
criticism that they had been too cozy with the corporate world -- including Enron, the
fallen energy trader, and the insurance industry -- at a time of widening corporate abuse.


Each probably would have won his election anyway, but once Perry was safely given a full,
four-year lease on the Governor's Mansion and Cornyn had won his promotion to the U.S.
Senate, the state quickly moved to let Farmers off the hook with a big discount.

Consumers who feel the Farmers settlement was a broken campaign promise have every
right to feel cheated. But the trail of broken promises will be much longer by the end of
next year's legislative session.


Here are a few of the more obvious probabilities:

· With the Farmers case serving as a guide, insurance regulatory "reform" will be spotty.
The influence of consumer anger over rising homeowners' insurance premiums will be
diluted by the strong influence of the insurance lobby and the business-first orientation of
many lawmakers.

The business lobby has traditionally had strong influence over the Legislature, and that
will be enhanced now that Republicans have a majority of both chambers.

· The "Robin Hood" school finance system -- attacked frequently by political candidates all
year -- won't be overhauled,
thanks mainly to the governor's and the Legislature's
unwillingness to raise the state taxes that would be necessary for the state to fix it the right
way by assuming most public education costs.

A legislative committee that has been studying the issue for months hasn't even been able
to agree on a recommendation to use as a starting point for change.

· Despite anti-tax vows by the governor and most legislators, many Texans will pay higher
taxes next year.


Lawmakers may not raise state taxes, despite a multibillion-dollar revenue shortfall,
because Republicans will be in the driver's seat. But local school property taxes will
continue to rise, and legislative inaction on school finance will be partly to blame. And
many of the angriest taxpayers will be in suburban, largely Republican school districts,
who will watch many of their tax dollars continue to flow to poorer districts under the
"Robin Hood" equalization law.

We will never know if Farmers' threat to pull out of the Texas home-owners market was for
real or merely a bluff to force state officials to make concessions. But the $100 million,
post-election settlement that the state negotiated with Farmers was about two-thirds of
what the state had allegedly sought.

And Farmers has indicated that the small rate reduction that will account for $35 million of
the settlement was made possible by an improving revenue outlook and should have
voluntarily been handed to ratepayers, anyway.

The state's chief negotiator said the deal was the best the state could get given Texas' weak
regulatory laws and the uncertainty of litigation.

Maybe so, but wasn't it funny how Perry and Cornyn forgot to mention those problems
when, consumer rhetoric popping, they announced during the campaign season that they
were suing Farmers?

Political promises serve one main purpose, and that is to win elections. After a successful
election, they often become government's excess baggage.


Robison is chief of the Chronicle's Austin Bureau. clay.robison@chron.com
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