The Attack on 'Enron Conservatives'
By Howard Kurtz
Washington Post Staff Writer
Wednesday, January 23, 2002; 9:00 AM
Even Laura Bush's mom!
The list of Enron victims keeps on growing.
We're sure it was just a coincidence that
the president happened to casually mention
that his mother-in-law had bought Enron
stock and got hosed. Jenna Welch bought
the stock for $8,180 and sold it for $84.
Any chance Bush was sending the message that
even his own relatives lost a bundle while his administration courageously
refused to bail out Kenny Boy's company?
We had the money shot on television
yesterday – a lawyer for Enron shareholders
bringing a box of shredded documents to court.
The confetti paper was the perfect visual for
a corporation whose reputation has been thoroughly
shredded.
(Speaking of shredding, Kmart filed for bankruptcy yesterday, having simply run out of money. The stock had plunged 80 percent in three months. Its fate apparently hangs on Martha Stewart. So much for investing in BlueLight specials. And anyone see the CEO insisting this was good news that would speed the company's turnaround? Sheesh.)
A fired Enron executive, Maureen Castaneda,
was all over the tube as well, having taken home
a boatload of shredded documents with
Star Wars code names like Jedi on them.
This, of course, is on top of the Arthur Andersen shredding. Anyone
think this Houston company's got
something to hide?
The ideological debate is raging as well.
First the lefties accused the administration
of corruption. Then the righties noted that
the Bushies hadn't done anything for Enron
and accused the lefties of scandal-mongering.
Then the lefties said the real scandal
was how Enron got to shape federal energy
policy and vet appointees. Then the righties
said the lefties were just exaggerating so
they could whine for campaign finance reform.
Now the lefties have a new line of attack against
"Enron conservatives," which
you'll read in a moment.
Another pundit, meanwhile, turns out to have been
taking in Enron cash. Larry Kudlow, co-host of CNBC's "America Now," says the company hired him as an economic consultant and subscribed to his research firm. Nonetheless, Kudlow has been bashing
Enron nightly and doesn't intend to stop. "I feel betrayed in my business relationship with Enron," he says.
The New York Times has Bush, in West Virginia, getting more exercised about what was
America's seventh-largest corporation:
"In a sharp change of tone, President Bush
said today he was 'outraged' that the Enron Corporation, which heavily contributed to his campaigns over the last decade, misled its employees and investors, including his mother-in-law, who apparently lost more
than $8,000 in an ill-timed investment in the energy company's stock. For the first time, Mr. Bush
called for government action to force greater corporate disclosure of financial information.
"In comments to reporters here before he toured
a machinery shop and called on Congress to pass his economic agenda, Mr.Bush also strongly defended
how members of his cabinet handled calls for aid from Enron's top executives, summarizing their
message to Enron's leadership as 'no help here.'
"With Congress ready to begin a series of hearings
into the Enron collapse this week, Mr. Bush argued t
that his administration began the first investigations
into the effects of Enron's collapse in December,
when the Labor Department begin investigating
how the now-bankrupt energy concern undercut
the pensions and 401(k) plans of its employees.
"In his comments today, the president never
mentioned Enron's chief executive, Kenneth L. Lay,
a once-close friend who he used to call 'Kenny Boy'
and who was the largest single contributor
to Mr. Bush's campaigns since he entered politics.
Nonetheless, by implication he cut the cord with the embattled Mr. Lay today, saying, 'What I'm outraged about is that shareholders and employees didn't know all the facts about Enron.'"
The Wall Street Journal (subscription required) finds a certain disparity in the way the company treated its workers: "At a time when Enron Corp. was cutting back on its employee retirement plans to save money, executive benefits at the energy company
kept getting richer.
"Beginning in the 1990s, Enron joined many other U.S. companies in trimming its employee-pension and savings-plan benefits to cut costs. But throughout the same period, Enron also was continuing to offer a lavish set of pension and retirement plans for its top executives.
"Those benefits, including a lifelong pension
and company-paid insurance premiums for
Chief Executive Kenneth Lay, are likely
to come under more scrutiny, given the effect
of Enron's collapse on the company's employees. . . .
"According to company filings, Enron will pay
Mr. Lay a pension estimated at $475,042 a year for life.
In addition, as part of an agreement Mr. Lay signed with the company in 1996, it agreed to pay a total of $1.25 million in insurance premiums through
2001 on a $12 million life insurance policy. Other executives have similar pension or insurance agreements with Enron."
Now for the liberal offensive.
The Nation's Robert Borosage hangs Enron's sins on the right:
"What is the Enron saga about? Enron's bankruptcy, the largest in history, exposes the decay of corporate accountability in the new Gilded Age. No-account accountants, see-no-evil stock analysts, subservient 'independent' board members, gelded
regulators, purchased politicians – every supposed check on executive plunder and piracy has been shredded. Enron transformed itself from a gas pipeline company to an unregulated financial investment house willing and able to buy and sell anything –energy futures, weather changes, bandwidth, state legislatures, regulators, senators, even Presidents. . . .
"Enron conservatives prefer plunder to production. Enron's twenty-nine top executives cashed in a staggering $1.1 billion in stock in the three years before the firm went belly up. Small investors got soaked, and faithful employees got stiffed. In August, after
Lay and CEO Jeffrey Skilling had cashed in more than $160 million in Enron stock, Skilling abruptly resigned. Lay personally e-mailed his employees to assure them that 'our growth has never been more certain.' Enron then maneuvered to ban its employees from selling the Enron stock in their retirement accounts as its value plummeted, leaving thousands stripped of their
life savings. . . .
"It is Enron's rise that lays bare the hypocrisy of modern conservatives – call them Enron conservatives. Enron conservatives fly the flag of free markets but actually use political and financial clout to free themselves from accountability, rig the market and then use their position to ravage consumers, investors and employees.
These are not the small-is-beautiful compassionate
conservatives George Bush advertised in the election campaign, or the tory conservatives who protect flag, family and honor.
Enron conservatives make the rules to benefit themselves. . . .
"But the leading Enron conservative is W. himself.
After all, Bush made his own fortune with inside connections while other investors in his
company were getting soaked."
Slate's Tim Noah ridicules the arguments on the
right:
"The more entrepreneurial conservative commentators
have begun to argue that liberalism itself created the Frankenstein monster known as Enron. . . .
"The 1960s created Enron. Social conservatives have long argued that the Woodstock generation's If-It-Feels-Good-Do-It ethic destroyed the nation's moral fiber. It was a useful tack against homosexuality, abortion, and various other Christian-right bugaboos, but not really
helpful when the cause was greater latitude for
the free market to wreak creative destruction.
In a Jan. 21 column, though, the Wall Street
Journal's Robert Bartley attempts a bold
synthesis:
"'The systemic failure is not a matter of
economic arrangements, but of the societal
collapse of standards and morality over the
last three decades or so. As a society we
seem increasingly incapable of sitting in
judgment of each other – certainly not on the
behavior of prominent entertainers, sports
figures or presidents. We have a legal
profession that tolerates and even promotes
abuse of the legal system in class action
suits – in the current Microsoft claims settlement enriching lawyers while not even
trying to give a cent to supposedly
injured plaintiffs. What kind of behavior
can an "I'm OK, you're OK" society expect from its
professionals or business leaders?
"'Presidents' is of course a sly reference to
Bill Clinton, the pre-eminent political poster
child for 1960s self-indulgence. A Jan.
18 editorial in the Journal blamed Clinton
more explicitly:
"'We'd say it's also impossible to understand
Enron outside of the moral climate in which
it flourished. Those were the roaring
'90s, when all of America reveled in the economic
boom. They were also the Clinton years, when we
learned that 'everybody does it.' The culture wanted
to believe in Enron's promises, which helps explain
why 16 of 17 Wall Street analysts rated Enron a 'buy'
as recently as last October.'
"Not only was Clinton bad, but his economic boom was bad, too! The obvious problem here is that railing against prosperity is a liberal thing to do. Worse, it's a dumb liberal thing to do. Back to the drawing board."
Columnist James Pinkerton, a veteran of Bush I, says the medium is the message:
"Is Enron a big story? The media sure think so.
The Washington Post, for example, has run 119
stories using the word 'Enron'
just in the last two weeks.
"But will the collapse of a company in Houston
damage the man in the White House? The president
doesn't seem worried, and
his arrogant and careless attitude
toward disclosure and appointments proves it.
"The Post, which turned Watergate from a
third-rate burglary into a first-rate impeachment,
should not be underestimated. And
the rest of the press corps wants its
pound of George W. Bush, too. So maybe
the president should reassess.
"Let's consider disclosure first.
Reporters naturally want the White House to
hand over any document with an 'e' in it,
but press secretary Ari Fleischer demurs, citing constitutional doctrine. 'There is a very important principle involved here,' he said last week.
"But sometimes the principle must yield to the
practical; as Ellen Ratner, a White House
reporter who makes no secret of her liberal sympathies, argues, 'The Clinton White House had to fork over all
its records on Hillary's health care task force and Bill's
China coffees, and so now it's Bush's turn to fully disclose.'
"Indeed, the problem for the Bush people is that as
long as they're holding anything back, their critics
are free to assert the worst. And so here's a prediction. . . . The White House will eventually
reveal everything and, when everything is revealed,
it won't look so bad."
The Philadelphia Inquirer says the
Enron-inspired hopes of campaign finance
reformers may be inflated:
"The last decade has not been kind to those
who want to take big money out of politics.
They have been defeated, repeatedly, by
lawmakers who thrive on special-interest lucre.
They have been told that their issue is too abstract,
and that the average citizen
simply doesn't care.
"No wonder they feel that Enron is the answer
to their most fervent prayers. As they see it,
there's nothing remotely abstract
about a corporation buying government access,
influence and a deregulatory climate – then
going belly up, leaving thousands of
average citizens without a cent toward
retirement. So, with Congress back today,
they want to push anew for a ban on soft
money, the unregulated lump sums donated to
political parties – despite opposition from House Republican leaders, tepid support
from labor and some liberal groups, and scant
evidence that such a ban would cleanse the political process.
"Norman Ornstein, a Washington analyst
who supports a soft-money ban, said yesterday:
'The story line is, "Enron lavished its
money all over the place, to both parties,
and in the end the fat cats got rich and the
people got screwed." If [House] members
vote against reform now, they'd be defending the indefensible. They'd get migraine headaches in their home districts.'
"Perhaps. But there's no evidence that Enron
has propelled campaign-finance legislation to
the top of the public agenda. In a poll
last week by the nonpartisan Pew Research Center,
in which people were asked about the issues they
most care about, it
ranked 12 out of 12." |
