By Ernest Dumas
Arkansas Times
January 25, 2002

Every good Republican, television pundit and sympathetic commentator now is obliged to repeat the mantra: Enron is a business scandal, not a political scandal. Investigators are supposed to keep their focus on corporate and accounting practices and not let the inquiries turn into a political witch hunt.

We do not, after all, want another weakened president trying to conduct a war against terrorism. Remember how Republicans and the pundits howled when Bill Clinton sent the military to get Osama bin Laden after the attacks on American embassies and upon the instance of every other retaliation for terrorism. He was trying to distract the public from his troubles, they said, and he deserved no support for it.

No one wants that to happen again and it needn't. But Enron is nothing if it is not a political scandal, and a government that does not examine its own role is failing its duty. If the only lesson to be learned is that the country needs independent auditors and stricter accounting standards, the congressional hearings are a waste of time.

Enron became what it was, a mammoth corporate shell game, with the active complicity of politicians and the government, which enabled it to escape regulation and disclosure and to beat competitors to contracts across the country and around the world. Enron invested gargantuan sums on politicians, even a little with Democrats, and the government became an arm of the company.

Sure, there is no evidence that the Bush administration acted on the company's overtures to help rescue it at the end, but that is not the test. Should Vice President Cheney have been trying to twist the arm of the Indian government last fall to get it to make disputed payments to Enron? The administration said it was routine, and the evidence is that it was in Enron's case.

This is not just George W. Bush's scandal or perhaps even primarily his scandal despite the heavy influence and presence of Enron executives in the administration. It goes way back. The earlier Bush administration was absolutely critical to Enron.

The Energy Policy Act, enacted the last year of Bush I, forced old utilities to carry Enron's electricity sales on their wires.

Wendy Gramm, wife of the Texas senator and chair of the Commodity Futures Trading Commission for the former President Bush, allowed an exemption in the trading of energy derivatives, which became Enron's fattest business. Then she resigned and went on the Enron board and its audit committee. An executive of Arthur Andersen, the Enron independent auditor, said the firm had warned Gramm and other committee members of possible illegal acts in the company. She was still being lavished with future stock options in 2000 when her husband, recipient of $97,350 in Enron campaign gifts, was engineering legislation that exempted parts of Enron's energy business from government oversight.

Although the current President Bush said this month that his contact with Enron was incidental and its CEO a supporter of his enemy, former Gov. Ann Richards, his labors for Enron precede his days as governor of Texas, when the governor's office was Enron's reception room.

The Texas Observer and The Nation reported several years ago that Bush telephoned the Argentine minister of energy a few days after his father's election in 1988 to urge that Enron get a contract to develop a $300 million gas pipeline. Enron had entered the bidding at the last minute with a proposal the minister considered ridiculous. Bush reportedly said giving the contract to Enron "would be very favorable for Argentina and its relations with the United States." Bush aides provided a page from his daily planner that showed no planned call to Argentina that day.

When Bush was governor of Texas, Enron supplied nominees for gubernatorial appointments and sought the governor's help in business matters. The chair of an Enron subsidiary sent Bush a letter in 1998 complaining that the Texas comptroller had increased the subsidiary's taxes by $415,233. "We need to have this handled before there is a big industry backlash," he penned Bush in the margin. "Sorry to bother you with it. Forrest." Mother Jones magazine obtained the letter.

Kenneth Lay, the Enron CEO, nicknamed "Kenny Boy" by Bush, was candidate Bush's energy adviser in the 2000 campaign, and was widely expected to be named secretary of energy before the California energy crisis and Enron's role in it made the appointment inexpedient. Lay's advice: further deregulate the energy business and reduce taxes.

Bush's stimulus package last fall was carefully written so that it would have sent Enron a check for $250 million to reimburse it for alternative minimum taxes that it had paid in the distant past, although the company had escaped any tax payment whatsoever for four of the past five years.

No political scandal? They must be kidding.

Copyright ©2002 Arkansas Times Inc.



-- Cherri (jessam5@home.com), January 26, 2002

Answers

Re: Remember how the Republicans and pundits howled when Clinton sent the military to get bin Laden after the embassy attacks...

The problem with Clinton's response was that it was pitifully ineffectual. "Sending the military" consisted of cruise missiles. The chances of getting any one individual, e.g. bin Laden, were minute, even if he had been in the attacked training camp grounds at the time.

The problem with Clinton's response was that it was basically just for show (and yes, the Monica situation was probably the reason that he had to pretend to do something, and immediately). It was up to Bush (much as I disagree with Bush's domestic policies) to respond with strong substance rather than just show.

-- Peter Errington (petere7@starpower.net), January 26, 2002.