The United States of Enron
The New York Times
January 19, 2002
By FRANK RICH
Wasn't that the best?" said a
laughing Ann Richards
this week, when I asked her
reaction to President Bush's
effort to hide behind her skirt
when questioned about Enron. "It
was so silly. Why didn't he just
say Ken Lay was a strong supporter and gave him a
half-million dollars and is a good friend, and he's really
sorry Ken's in these terrible circumstances?"
Good question. As the world knows now, George W. Bush
told two lies when first asked about his ties to the top guy
in what may prove the largest corporate flimflam in
history. The president said (1) that he only "got to know"
Mr. Lay in 1994, when in fact their relationship goes back
at least to 1992; and (2) that Mr. Lay "was a supporter" of
Governor Richards, when in fact Mr. Lay told TV's
"Frontline" last year that he "did support" Mr. Bush over
Ms. Richards in their Texas race.
This is the president who promised to usher America into
"a new era of personal responsibility"?
What makes the dissembling so strange is that there is no
evidence of any administration illegality in the Enron
affair. And yet each day brings a new half-truth or
seeming cover-up. Appearing on CNN last Saturday,
Lawrence Lindsey, the top Bush economic adviser and a
former Enron consultant, seconded the president's effort
to pin Ken Lay on Ann Richards, but somehow forgot to
say what would become public four days later - that he
had overseen an administration study of the impact of
Enron's travails in October. Earlier, Mary Matalin had
visited the Imus show to defend her boss, Dick Cheney,
but instead of vowing to open the books on the secret
meetings between Enron and the vice president's
clandestine energy task force, she asserted that Enron got
"not one thing" from the administration's energy plan
(actually it got plenty) and tried desperately to dismiss the
entire ruckus as lacking an intern's "blue dress."
Hard as it is to believe, it was only 10 days ago that Ari
Fleischer declared, "I'm not aware of anybody in the White
House who discussed Enron's financial situation." Now
we're painfully aware that the only White House
inhabitants who may not have discussed it are the
president, Barney and Spot - or so we must believe until
future investigators turn up a smoking pretzel.
Washington, meanwhile, is busy debating whether Enron
the Scandal is as hot as Whitewater. This should be a
no-brainer. While The Wall Street Journal published an
encyclopedic series of tomes to parse a low- rent Arkansas
land scam to a public that never did quite understand it,
everyone instantly gets an epic fraud in which arrogant
high-fliers stacked the deck to fleece thousands of peons
to the tune of zillions.
For a quick cultural index of this story's allure, check out
the hundreds of hotly contested Enron lots on Ebay,
where the bankrupt company's stock certificates have
gone for north of $200 - a multiple of 300 times the last
known value of a share of the stock itself. And, Ms.
Matalin notwithstanding, this scandal is not sex-free. Not
only did Enron approach Penthouse and Playboy to try to
enter the porn business, as The Times has reported, but
we learn in Fortune that "rumors of sexual high jinks" in
Enron's executive suites "ran rampant." A nation that
doted on the soap operatics of "Dallas" may have at long
last found a worthy sequel in "Houston." Once the "sexual
high jinks" kick in, it could play 24/7 on cable, with or
without Paula Zahn.
The Washington wisdom that Enron has no legs - that
it's not a political scandal, merely a financial one - is
based on the premise that the Bush administration didn't
ride to Ken Lay's rescue once disaster struck. But what
about the favors performed for Enron before the
meltdown? That's as political as you can get, particularly
since, unlike Whitewater, this scandal implicates both
parties and the corrupt campaign finance system that
makes them look like interchangeable vending machines
for their often overlapping patrons.
Though the Bush administration has been in office only a
year, Enron's oily fingerprints are all over its actions as
well as its résumés and stock portfolios. Mr. Lay helped
hand-pick the head of the government agency in charge of
regulating his own business and stood to gain a $254
million corporate tax rebate in the administration-blessed
stimulus bill (despite the fact that Enron used almost 900
offshore "subsidiaries" to avoid paying any income taxes at
all in four of the last five years). The Enron old-boy
network may even have played a backdoor role in the
life-and-death matter of stem cell policy. When President
Bush announced his stem cell "compromise" in August,
many top researchers criticized it as an obstacle to
medical progress. But miraculously the administration
was able to produce an instant endorsement from John
Mendelsohn of the M. D. Anderson Cancer Center in
Houston - who we now know is an Enron board member
whose institution received $600,000 in Enron lucre.
The Clinton Democrats had eight years of Enron
exposure, and while never receiving remotely the sums
that the Republicans did, nonetheless had their own
contacts (and presidential golf outing) with Mr. Lay. We
already know, thanks to a 1997 article in Time, that Bill
Clinton nudged Mack McLarty to lend the
administration's weight to an Enron bid on a $3 billion
power-plant project in India, and that the Democrats
received $100,000 from Enron just four days before the
Indian government came through. Will Joe Lieberman,
who (like two-thirds of his committee) took Enron money,
revisit his own party's Enron history as well as that of the
G.O.P.? According to a 1995 report in The Nation, Robert
Rubin's association with Enron didn't start last year at
Citigroup but dates back to his pre-Treasury career at
Goldman, Sachs. Enron's Washington office is currently
headed by another former Clinton Treasury appointee.
Then again, who in either party hasn't cashed an Enron
check? No fewer than 71 senators and 188 congressmen
have been on the Enron gravy train. All but 5 of the 56
members of another investigative committee, House
Energy and Commerce, got Enron or Arthur Andersen
dough. The country's chief law enforcement officer, John
Ashcroft, has recused himself from the case because he
too received Enron cash - though even that ethical
gesture looks suspicious, given his failure to stay out of
Justice matters involving such other contributors as the
N.R.A. and Microsoft. Another Congressional investigator,
Billy Tauzin, Republican of Louisiana, was the single
biggest House recipient of Arthur Andersen campaign
money. Phil Gramm, the ranking Republican on the
Senate Banking Committee, and his wife, Wendy (a
former federal regulator now on Enron's board), could
pass for one of Enron's wholly owned Cayman Island
subsidiaries.
Harvey Pitt, the Bush administration's chief at the S.E.C.,
was actually an Arthur Andersen lawyer. After this week's
revelation that top Andersen executives knew of funny
business at Enron as early as February 2001, you have to
wonder whether Mr. Pitt should be a witness in an S.E.C.
investigation rather than its overlord. Was he representing
Andersen at the time it first detected Enron's
misbehavior? Was he in the loop? The stonewalling may
have already begun, since neither the S.E.C. nor
Andersen, when queried late this week, could say just
when Mr. Pitt was in the accounting firm's employ.
Whom can the country turn to for an honest
investigation? Democrats and Republicans alike are so
beholden to accounting-industry money that they scuttled
an attempt by Arthur Levitt, the former S.E.C. head, to
regulate conflicts of interest in companies like Andersen
two years ago. "If ever there was a case for a special
counsel, this is it," says Governor Richards, but that idea
certainly has no takers in Mr. Ashcroft's Justice
Department or among grandstanding Democrats. "We
haven't come anywhere close to that point yet," said Mr.
Lieberman, never one to surrender a spotlight without a
struggle.
A top aide to Henry Waxman, another Democratic
inquisitor, has called the Enron scandal "the perfect
storm," and a storm this perfect is certain to muddy
Democrats as well. Enron has arisen like the ghost of
over-the-top Christmases past, as a jolting throwback to
the untethered America of the dot-com bubble. The greed
of its perpetrators, and of the enabling politicians of both
parties who took their cut before the wipeout, looks even
uglier against the stark backdrop of those less well-
connected Americans who are fighting our war.
E-mail: frankrich@nytimes.com |
