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Kenny Boy's Connections | The Nation

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Kenny Boy's Connections

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The Bush Family consistently acted to put Enron and its longtime CEO Ken Lay into a position to rip off investors and taxpayers. Why is the mass media ignoring that fact now that Lay has been convicted in arguably the most egregious example of white-collar fraud in US history?

Robert Scheer is editor of TruthDig, where this essay originally was published.

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Robert Scheer
Robert Scheer, a contributing editor to The Nation, is editor of Truthdig.com and author of The Great American Stickup...

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Until he hooked up with the Bushes, Lay was just another mid-level energy trader complaining endlessly about being hemmed in by onerous government regulations and those terrible consumer lawyers who prevent free market hustlers from doing their thing. But after he and his company became top supporters of the Bushes--eventually giving $3 million combined to various Bush electoral campaigns and the Republican Party--doors opened for them in a big way. In particular, once Bush the father got rid of key energy industry regulations, Lay was a made man and Enron's fortunes soared. This program of corporate welfare led Lay to dub the first President Bush "the energy president" in a column supporting his re-election because "just six months after George Bush became President, he directed...the development of a new energy strategy," which, in effect, compelled local utility companies to carry Enron electricity on their wires. It was, Lay crowed, "the most ambitious and sweeping energy plan ever proposed."

Another huge gift from the first Bush regime came in the form of a ruling by Wendy Gramm, head of the Commodity Futures Trading Commission, that permitted Enron to trade in energy derivatives, making possible the company's exponential growth. Five weeks after that ruling, Gramm resigned and joined the Enron board of directors, serving on its subsequently much-criticized audit committee. Six years later, Gramm's husband, US Sen. Phil Gramm, R-Texas, further enabled Enron greed by pushing through additional anti-regulation legislation.

A long list of George H. W. Bush's Cabinet and inner circle, including Secretary of State James A. Baker III and Commerce Secretary Robert A. Mosbacher, went to work for Enron after his 1992 defeat. An even greater number of Enron officials returned the favor by joining the George W. Bush Administration in 2001 shortly before the Enron scandal exploded.

The close connections between President Bush and Lay began when they both worked on the 1992 Bush père presidential re-election campaign. In fact, a long paper trail of their friendly and collaborative correspondence has been made public through Freedom of Information Act requests. "Dear Ken, one of the sad things about old friends is that they seem to be getting older--just like you!" wrote then-Texas Gov. Bush in April 1997. "Thank goodness you have such a young beautiful wife." In Lay's typed responses--some are handwritten--he sometimes crossed out Bush's formal titles to scrawl a friendly "George," emphasizing their personal history before he urged the governor to, for example, help Enron secure foreign energy contracts with regimes in Romania or Uzbekistan, or for so-called tort reform designed to protect corporations from lawsuits.

Typical was Bush's role in Enron's lobbying Pennsylvania's governor to permit Enron to enter his state's energy market. As Lay wrote in a letter dated Oct. 7, 1997, "I very much appreciated your call to Gov. Tom Ridge a few days ago. I am certain that will have a positive impact on the way he and others in Pennsylvania view our proposal." After the Enron crash, Bush attempted to distance himself from the "Bush pioneer," who had sent more than $2 million in Enron funds George W.'s way, as well as supplying him with the Enron company jet on at least eight occasions. "I have not met with him personally," Bush said after the scandal broke. What Bush left out was not only his hundreds of personal encounters with Lay before he assumed the presidency but, more important, Lay's key role in drafting the Bush Administration's energy policy, meeting with energy task force chairman Dick Cheney at least six times. It was Lay, as well, who submitted a key memo opposing price caps in response to the energy crisis in California that Enron had helped engineer. Lay was also instrumental in the abrupt dismissal of Curtis Hebert Jr. as Federal Energy Regulatory Commission chairman. The neutered FERC later conveniently refused California's loud pleas for help.

So far, California has recouped some of the billions in taxpayer and pension funds it lost, and several of Enron's top dogs are looking at hard time. Perhaps, after this November, if the opposition party can retake at least one branch of government, the connections between these corporate criminals and their buddy in the White House can be more fully investigated as well.

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