War? What war?...
By: Howard Kurtz, Washington Post 1/14/02
<<The only war getting big media play at the moment is the Beltway battle over Enron.
ABC's "This Week" devoted its entire program to Enron, a subject that dominated the other Sunday shows as well. Treasury Secretary Paul O'Neill and Commerce Secretary Donald Evans – who got the we're-in-big-trouble calls from Enron boss and Bush buddy Ken Lay – made the rounds, saying there was nothing unusual or noteworthy about the calls.
Hey, Enron was only on the verge of the biggest bankruptcy in American history.
Much of the press didn't care all that much about Enron when it was only a gigantic corporate collapse that screwed thousands of employees out of their retirement money while top executives cashed in their stock. All that eye-glazing detail about deregulation and derivatives. But now that there's a link to the White House, the scandal machinery is clanking into action.
"Burned!" says the cover of Newsweek, featuring a short-circuiting plug labeled Enron.
A good scandal, though, involves a clear quid pro quo. A company (Enron) gives lots of political money (to Bush and the GOP, mostly) and gets some government favors. But the evidence, as of now, is that the administration didn't do squat for Enron.
Ah – but could the administration have saved the employees' pensions? Could the administration have warned hapless investors? In other words, the scandal-seekers who would have decried any White House move to help Enron (say, by urging the all-powerful folks at Moody's not to downgrade the company's debt) now decry its failure to do anything.
"Should the administration have been more assertive in saying: What about the little guy?" Tim Russert asked Evans on "Meet the Press."
"There seems to be almost a see-no-evil, speak-no-evil atmosphere," Tony Snow told O'Neill on "Fox News Sunday."
"You cannot sit in the Oval Office and say 'I did not have financial relations with that corporation,' because he did," ex-Clinton aide Paul Begala chortled on "Late Edition."
The press picks apart the story from a variety of angles:
"Even though they mounted no formal effort to bail out Enron Corp., Bush administration officials are coming under fire for not publicly disclosing the extent of the company's troubles when they became aware of them," the Los Angeles Times says.
"Some legal experts contend the administration was in a position to sound a warning to the public or the Securities and Exchange Commission after a series of phone calls from Enron executives to Treasury Department officials last fall. The fact that they didn't, while Enron's financial situation grew darker and its stock price declined steadily, raises the specter of special treatment for a powerful corporation, congressional critics say.
"But the Bush administration, despite close ties to Enron, did not help the firm stave off bankruptcy as the federal government had done for failing enterprises such as Long-Term Capital Management, Chrysler Corp. and Lockheed Corp.
"Enron was different. Many experts on government-business relations say the company's relationship with the Bush administration made aiding it a potential political embarrassment. But others say the administration decided not to help the company because its failure did not threaten widespread damage to financial or energy markets and the economy as a whole."
The Boston Globe spotlights the long friendship between the president and the CEO:
"It was a curious bit of scheduling in the midst of a presidential campaign, but George W. Bush broke away from a trip to California on April 7, 2000, because of a pressing bit of business back home.
"The Texas governor had to get to Houston to attend the opening of Enron Field, a baseball park named after the energy-trading firm headed by his friend and biggest individual donor, Kenneth Lay.
"The $248 million stadium had been built by Halliburton Co., the Dallas oil-services and construction company that was run by Dick Cheney, whom Bush later picked as his vice presidential running mate.
"Such connections between Bush and the Houston energy company that last month became the largest US company to file for bankruptcy protection – devastating many of its retirees' pension plans in the process – have given Democrats the first whiff of scandal from an administration that has pledged to restore honor and integrity to the White House."
The New York Times looks at those who cashed in: "While investigators are focusing on how much money investors and employees lost in the Enron Corporation's collapse, some shareholders and lawmakers are now setting their sights on another target: the millions that Enron insiders received by selling their shares while the price was still high.
"As Enron stock climbed and Wall Street was still promoting it, a group of 29 Enron executives and directors began to sell their shares. These insiders received $1.1 billion by selling 17.3 million shares from 1999 through mid-2001, according to court filings based on public records. They continued selling just before Enron's stock started to tumble early last year and the company began its slide into bankruptcy protection.
"One of the biggest sellers was Kenneth L. Lay, who became prominent as the company's chairman and a leading contributor to President Bush. He was among more than a dozen Enron executives who received $30 million or more, including one who sold shares valued at $353.7 million."
The Washington Post says the Dems could be vulnerable as well: "Democrats are savoring the chance to use embattled Enron Corp.'s Republican ties to embarrass the Bush administration at upcoming congressional hearings. But Republicans might turn the tables, to some extent at least, because Enron has courted and supported prominent Democrats as well.
"According to internal Enron documents and the recollections of former employees, Chairman Kenneth L. Lay had the ear of top Democrats in the 1980s and '90s. He and his colleagues used that access to promote the company's interests with the Clinton administration and key congressional Democrats.
"In a White House meeting in August 1997, for example, Lay urged President Clinton and Vice President Gore to back a 'market-based' approach to the problem of global warming – a strategy that a later Enron memo makes clear would be 'good for Enron stock.'
"The following February, Lay met with Energy Secretary Federico Peña to urge White House action on electricity legislation favored by Enron. Peña 'suggested that President Clinton might be motivated [to act] by some key contacts from important constituents,' according to another Enron memo. Taking the cue, Lay, one of 25 business executives on Clinton's Council on Sustainable Development, wrote to the president the same day."
In a followup this morning, The Post reports that "Democratic lawmakers are divided about how aggressively to investigate the White House's relationship to the implosion of Enron Corp., with an increasing number of party officials warning their colleagues against overreaching or showing too much glee in attacking a popular wartime president.
"White House officials said over the weekend that they believe Democrats could provoke a severe backlash by pushing the issue too hard. These officials said they will continue to issue frequent reminders about the ties Enron had to Democrats and that they will argue that if there were regulatory failures, the crucial ones occurred under President Bill Clinton."
What a novel concept: Blame Clinton.
Time uncovers the first smoking gun: "Just four days before Enron disclosed a stunning $618 million loss for the third quarter – its first public disclosure of its financial woes – workers who audited the company's books for Arthur Andersen, the big accounting firm, received an extraordinary instruction from one of the company's lawyers. Congressional investigators tell Time that the Oct. 12 memo directed workers to destroy all audit material, except for the most basic 'work papers.'
"And that's what they did, over a period of several weeks. As a result, FBI investigators, congressional probers and workers suing the company for lost retirement savings will be denied thousands of e-mails and other electronic and paper files that could have helped illuminate the actions and motivations of Enron executives involved in what now is the biggest bankruptcy in U.S. history."
Andrew Sullivan is in the no-big-deal camp: "I'm still trying to figure out what this Enron thing is all about. The key thing with scandals like this, it seems to me, is to ask yourself: what's the worst accusation that could be made? With Whitewater, the worst possibility was that it was a petty, sweetheart deal. It was easy to see that, even if this were true, it wasn't that big a deal.
"Surely, from what we know now, it's even less of a deal with Enron. I haven't seen any argument yet that takes us beyond the line that many in the Bush administration were close to Enron, that Enron helped bankroll Bush's campaigns, and that therefore there is some sort of guilt by association.
"If that's it, it's not pleasant but, like Whitewater, not that damaging either. If it isn't, and some in the administration knew of the improprieties or in any way gave Enron special treatment in concealing them, then they deserve any payback they get. So far, the opposite appears to be the case – that Enron asked for help and none was forthcoming. The golden rule for Bush is to get everything out now. Bush's and Cheney's tendency toward secrecy in these matters is by far the biggest danger."
National Review's Byron York sees no comparison to one Clinton scandal:
"Beyond the strong desire of some Clinton loyalists to suggest equivalencies between the Clinton and Bush administrations, there is scant evidence that Enron equals Whitewater. Yes, they each set off a quickly forming critical mass of Washington media interest, but the same could be said of all sorts of news stories. In contrast to Enron, interest in Whitewater was ignited by events deep inside the White House; the story mushroomed at the end of 1993 and beginning of 1994 after revelations that Clinton aides removed documents from the office of deputy White House counsel Vincent Foster on the night of his suicide.
"That news in turn revived long-dormant press interest in the Whitewater real-estate investment, in which Bill and Hillary Clinton appeared to have received special treatment from their two business partners, both later convicted of felonies. Later, the story involved the investigation of whether the president lied about that special treatment under oath.
"None of that seems to be the case in Enron. Yes, there are reports of missing documents, but the Whitewater comparison would become much more apt if those documents were later discovered in the White House residence. So far, the only real similarity to past Clinton scandals is the almost eerie reappearance of Robert Bennett, the former Clinton lawyer who is now representing Enron."...>> |
