Enron End Run

"Most analysts say" the Enron mess does not yet "rate as a Washington scandal," according to USA Today. Roger Pilon of the Cato Institute, for one, observes, "Enron is a business scandal--an accounting-and-securities fraud of substantial proportions. It's not a political scandal." The no-scandal-yet lobby is essentially relying on the fact that no evidence has emerged so far indicating that any of the company's pals in the Administration came to the firm's rescue untowardly as Enron began to topple. When Congress opened hearings this year on Enron, the political dimensions of the affair--that is, the extensive connections between Washington and Enron officials--were left mostly untouched. A House subcommittee banged up the accountants of Arthur Andersen. The Senate Governmental Affairs Committee, guided by chairman Joe Lieberman, concentrated on the foul-ups and follies of modern market capitalism [see Corn, "Enron on the Hill," at www.thenation.com].

But slowly--drip, drip, drip--the political side of the scandal is rising. Every few days, another political figure is linked to the bamboozlers at Enron. Bush's chief economic adviser, Lawrence Lindsey, was on an Enron advisory board (as was Bush trade-rep-to-be Robert Zoellick), and during the presidential contest Lindsey took a policy proposal from Enron CEO Ken Lay and incorporated it into the Bush campaign platform. Bush's überstrategist, Karl Rove, according to the New York Times, helped consultant and former Christian Coalition whiz kid Ralph Reed win a big-money contract at Enron when the Bush camp was courting Reed. (Reed denies that Rove arranged the deal.) Edward Gillespie, a top Bush campaign adviser, pocketed more than a half-million dollars lobbying for Enron in 2001. Secretary of the Army Thomas White has gotten flak for having served as vice chairman of Enron Energy Services (allegedly when accounting irregularities occurred) and then, once in office, for having urged the privatization of energy services at military bases. (Other prominent Republicans and conservatives--including pollster Frank Luntz, pundit William Kristol and speechwriter/commentator Peggy Noonan--were on the Enron payroll.)

There is more to the Enron mess than the narrow question of whether Bush or his aides assisted Lay, Bush's all-time most generous contributor, at the eleventh hour. Vice President Cheney called the Los Angeles Times during California's electricity crisis to argue against price caps the day after Lay paid him a visit to push that position. Curtis Hebert Jr., then-chairman of the Federal Energy Regulatory Commission, last year claimed that Lay told him that unless Hebert backed Enron's view on electricity deregulation the company would not support him. Months later, Hebert was replaced as chairman. Cheney and the National Security Council assisted Enron as it tussled with a state government in India over a power plant Enron was trying to unload [see Arundhati Roy, page 16]. And, as is well-known, Enron officials won highly coveted meetings with the Veep's task force when it was drawing up the Administration's energy plan.

The General Accounting Office, backed by Democratic senators and representatives, keeps battling for the release of records related to the Enron-Cheney tête-à-têtes. But Congress, and others, ought to be pushing in other sensitive areas. There could appropriately be hearings on Enron's years-long crusade to win influence in Washington, even if none of the unbecoming activity was illegal. How did a major (and teetering) energy and securities firm seek to affect the policies of a presidential campaign and an administration? Did it use connections (and contributions) to shape regulations? Did the National Security Council offer the company special consideration? Did the Bush campaign and Enron violate federal election laws by placing a Bush supporter on the Enron payroll? (The Federal Election Commission or a US Attorney could take a swing at that one.)

By all means let's keep it bipartisan. A thorough inquiry would examine how Enron came to be provided seats on high-level US trade missions during the Clinton years and good deals at the Overseas Private Investment Corporation and the US Export-Import Bank. Clue: Enron was a donor to Democrats too. Clinton's former Treasury Secretary Robert Rubin could be asked why he made calls to the Bush Administration on behalf of Enron this past fall. Now, a dose of reality: Few Democrats on the Hill are eager to see a full-throttle investigation. Such an inquiry may snag Democrats as well as Republicans, it could give Bushies an opening to blast Democrats as scandalmongers in wartime and it would raise uncomfortable questions about how things are done in Washington.

The Enron scam has prompted some legislators to act. With Enron in the news, enough House members signed a discharge petition to force a modest campaign finance reform bill to a vote over the objections of GOP leaders. Various measures to protect retirement accounts from corporate malfeasance have been introduced. And pre-existing deregulation legislation is currently as dead as Enron stock. But while Congress may confront the financial conflicts of interest in the Enron case, it probably won't be rushing to examine those in its neighborhood--or those within the executive branch. Business Week suggests Bush order "an internal review of Enron's lobbying of the Bush Administration," which would cover "one, what Enron sought, and, two, the end-result of the policymaking process." Don't hold your breath. In the absence of Bush action, Congress should assume the task. The politics of Enron, though, give lawmakers and others plenty of (self-serving) reason to deny it the status of a true political scandal.

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