Enron's Global Crusade | The Nation


Enron's Global Crusade

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No matter what sort of globalization is being debated, Enron has for a decade sought to bend the discourse to its advantage. The company was a leading corporate advocate for Congressional ratification of NAFTA in 1993 and the General Agreement on Tariffs and Trade in 1994, as well as proposals to normalize trade relations with China and to grant Presidents Clinton and Bush fast-track authority to secretly negotiate a Free Trade Area of the Americas. When Houston-area House member Craig Washington rejected the corporate pressure and voted against NAFTA, Enron chief Ken Lay helped recruit a 1994 Democratic primary foe, Sheila Jackson Lee, led Enron employees in contributing $24,000 to Jackson Lee's campaign and helped her collect $600,000 from Houston's business community and other givers. Jackson Lee's spending overwhelmed Washington, who was defeated.

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John Nichols
John Nichols
John Nichols, a pioneering political blogger, has written the Beat since 1999. His posts have been circulated...

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Enron's determination to tip the balance within the Democratic Party on trade issues extended to its generous funding of the New Democrat Network, which advances the pro-free trade line of Senator Joe Lieberman, a key Enron investigator on Capitol Hill. While Enron's contributions to 186 House members and 71 senators increased its influence in Congress, the company is broadly seen as having gotten the biggest bang for its campaign bucks in presidential races. Close ties to the George Herbert Walker Bush, Bill Clinton and George W. Bush administrations--with their parallel ideologies on global trade and economic issues--proved a tremendous boon for Enron as the corporation went global. Former President Bush's close personal connections to former Argentine President Carlos Menem are cited in that country as the explanation for why the Enron pipeline project was approved by Menem in 1989, before economic feasibility studies were completed. The Clinton Administration threatened to cancel development aid to Mozambique if the country did not accept the plan to have Enron construct a pipeline to South Africa. "Their diplomats, especially [US embassy deputy chief] Mike McKinley, pressured me to sign a deal that was not good for Mozambique," says former natural resources minister John Kachamila. "[McKinley] was not a neutral diplomat. It was as if he was working for Enron."

The description of that obscure US diplomat in Maputo could easily be applied to the current Vice President of the United States. The Bush Administration is doing everything in its power to cloak details of Dick Cheney's meetings with Enron executives. But there is no question that the energy task force chaired by Cheney altered its report to recommend that "the President direct the Secretaries of State and Energy to work with India's Ministry of Petroleum and Natural Gas to help India maximize its domestic oil and gas production." Americans might question what Indian natural gas production has to do with US energy policy. Noting that Enron is seeking to force the Maharashtra State Electricity Board to pay it $64 million as part of a buyout deal, Representative Henry Waxman explains that the recommendation "benefited Enron by formally enlisting two Cabinet secretaries in Enron's conflict with the Indian government." It wasn't the only benefit Enron got. An e-mail sent by a National Security Council aide indicates that Cheney raised the issue of the Enron dispute in a meeting last June with Sonia Gandhi, widow of former Prime Minister Rajiv Gandhi and leader of India's opposition Congress Party. Additional e-mails obtained by the New York Daily News indicate that the State and Treasury departments pushed Enron's agenda with their Indian counterparts, as did successive ambassadors to India.

Enron didn't merely use the US government as an agent for its global ambitions; it invested directly. Ralf Schaefer, spokesman for a German competitor, RWE Trading, says that in its international dealings Enron often prevailed because it "knew what to do on the political side and what to do on the economic side." It spent $51,000 sponsoring events for Britain's Labour Party, including a dinner attended by Prime Minister Blair--whose government angered traditional constituencies in Britain's coal-mining regions by backing Enron's request to lift a moratorium on new gas-fired power stations. Blair aides denied a "cash for access" deal but were undermined when former Enron Europe chair Ralph Hodge said it was "custom and practice" to sponsor events to cozy up to political leaders. Elsewhere Enron's behavior was more blatant; it acknowledges spending $20 million on "educational gifts" in India.

If such behavior now has Enron squirming, Bernie Sanders thinks this one corporation's crisis could bring an end to the use of US-backed loan guarantees to finance the sort of corporate globalization that harms US and foreign workers. He is preparing a letter to the chairman of the monetary policy and trade subcommittee, on which he sits, calling for a hearing on the Ex-Im Bank's dealings with Enron. "The Enron debacle gives us a chance to shed light on a whole host of policy failures," says Sanders. "Clearly, Enron is not the only company that should not have received loans backed by US tax dollars. These were difficult issues to get people to pay attention to before, but now there's an opening."

Noting that US law bars foreign corporations and their domestic subsidiaries from contributing to US political campaigns, Colgate University sociology professor Adam Weinberg, a co-founder of the reform group Democracy Matters, asks, "At what point does a firm like Enron cease to be a US firm?" Weinberg contends that the inability to regulate donations by corporations with substantial international interests provides an important new argument for campaign finance reforms more sweeping than those contained in the proposed McCain-Feingold bill.

Surely, these responses to the scandal are welcome. But it's not enough to see Enron, or even its political patrons, called to account here and abroad. The billion-dollar question is whether the lessons of the Enron debacle will lead to a rethinking of the wild ride into the uncharted territory of the global economy, where the rules are written not by regulators but by the corporations that profit from deregulation. "There has to be a concerted effort to understand Enron not as an example of one company that has gone bad but as an example of what happens in a bad system," says Tony Benn. "Globalization as it is being implemented by the corporations provides no protection against future Enrons. It is a recipe for more Enrons, more scandals, more sleaze."

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