Enron mess signals moral decay in U.S.
BY: Dalton Camp
The Toronoto Star
12/18/02
The giant energy corporation, Enron, is now
bankrupt, many of its shareholders have lost their
life savings and the political community is in a
frenzy of buck-passing and a feverish hunt for scapegoats.
The fall of Enron, friend and spoiled child of the Bush administration, its principal
donor and maximum financial supporter, has been described as a systemic failure
in which Murphy's law presided over the flight of management oversight, the due
diligence of corporate directors, the accountability of the high-priced accountants
and the reliability of investment analysts. Perhaps, worst of all, politicians who
had been hopefully bought would not stay bought. To sum up, what former
British prime minister Edward Heath memorably described as "the unpleasant and
unacceptable face of capitalism" is on view in all its inglorious reality in the
corporate boardrooms of America.
This is no trifling matter: corporate executives dumping their shares secretly on
the market, aware of the corporation's imminent collapse while urging their
employees to hold onto their shares - indeed, preventing them from selling, all
the while assured by the corporation's accountants that all was well and knowing
better. The betrayal of trust was a flagrant, deliberate management stratagem and
represented the easy triumph of insider information over the understandable
innocence of employee shareholders.
As Watergate's "Deep Throat" advised seekers of the truth: "Follow the money."
The truth is that Enron's was not the only bankruptcy; there is the moral
bankruptcy of American democracy. Following the money has become the
entrenched first principle of America's political system. In the rhetoric of its
advertisers, the people govern. But they do not. Fewer of them vote, fewer are
heard. It is money that talks. Money buys access. Money is the coin of the realm
in American politics. Those who pay increase their accessibility, their proximity to
power. People answer phone calls from those who pay. The converse is obvious;
if Americans do not pay, they do not have access and lack the privileges
conferred upon those who give money to elected politicians.
Consider the president of Enron. He is the largest donor to George W. Bush.
Since Bush was a gubernatorial candidate in Texas, Enron has been his largest
supporter. Enron is the largest supporter of the Bush presidential campaign. The
corporate media, hastening to the defence of the system, have been gratified to
report Enron has also given to Democrats, as well as Republicans. But Enron has
made 75 per cent of its political contributions to Republicans.
Then Enron's president, Ken Lay, called upon his friends, seeking help. At the
outset, Bush claimed he really didn't know Lay very well and went on to suggest
he thought Lay was a Democrat. No matter what Bush may have thought about
Lay's politics, the Enron president called two Bush cabinet members and the
budget director, seeking help and information. They all took his call. To profound
relief and satisfaction, the Bush administration was of no direct help to the
beleaguered Lay.
But the Bush stimulation tax package did include a three-year corporate tax rebate,
a divine gift to the corporate state. Lay called Bush's budget director to ask about
the likelihood of Enron getting the rebate soon. No small matter to Enron, the
Bush tax rebate represented $250 million (U.S.). Nothing wrong, in this cozy
environment of a steadfast corporate donor, such as Enron, hoping to get some
of its money back.
But then - speaking of the American democracy and the moral standards of
American democracy and the moral standards of American capitalism - who
else but a corporate alms provider and pocket-liner to an entire political
establishment could summon cabinet members to their telephones? Someone who
had their numbers at work, who was a presidential pal and committee member to
the vice-president and, at the same time, a man of evident sharp practice and
seriously deprived of any serious schooling in ethical behaviour.
It helps that Commerce Secretary Paul O'Neill failed to inform the President of
the perils of their mutual friend. Besides, as he was inspired to say that
bankruptcy is an everyday thing in America, a land of losers and winners,
accountants destroying its files and some 100,000 cheated Enron shareholders
who, alas, do not have O'Neill's phone number.
For the past decade, America's economic system has been the biggest game in
town and true heroes were its CEOs. Wealth was a sign of virtue. Investors
bought stocks because stocks were going up and the more they bought, the more
they went up. The Laffer Curve, an economic theorem, had been first drafted on
a café tablecloth. Endorsed by the Wall Street Journal, Arthur Laffer proclaimed
the "new physics," which proved that everything that goes up stays up, given
lower taxes. According to theory, it was programmed to last forever, but it didn't.
No one should ignore these signals of the profound and growing moral decay at
the heart of America's political and economic life. For a presumed leader of the
free world, it is a sorry sight and a disheartening one.
______________________
Dalton Camp is a political commentator. His column appears on Wednesday and
Sunday.
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