Ken Lay finally took the "perp walk" down in Houston with his hands cuffed behind his back--an inconvenience for him and also for his old Texas buddy, George W. Bush. Lay is the former Enron chairman who built the house of cards. He is now indicted on eleven criminal counts of securities fraud in the 2001 collapse of his funny-money empire. The scandal was spectacular but lost its front-page glow long ago. Too bad for the President that this had to happen just now, when Bush is desperate for a few "good news" stories.
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Why Not Tax Wall Street?
Corporate Responsibility & Accountability
William Greider: In Washington, big ideas for financial reform are suddenly gaining momentum.
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Charitable Capitalism
William Greider: Goldman and the other big dogs of Wall Street are afflicted with the stink of greed, having harvested swollen fortunes from the calamity they caused for the rest of the country.
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The Money Man's Best Friend
William Greider: Blue Dog Democrats are undermining prospects for financial-industry regulation and reform.
The event should provide refreshing fodder for Democratic oratory at their upcoming convention. The Enron leader did not spend the night in jail, but was released on $500,000 bond (a pittance even though his wealth has diminished greatly). One can already hear Veep candidate John Edwards incorporating these facts in his "two Americas" theme: Some Americans get thrown in the slammer, some Americans get to go home. The President will probably say this case proves that the wheels of justice are turning properly, but the processes are likely to turn slowly. Ken Lay says he wants an early trial, starting in September, to clear his name. I doubt the federal prosecutors will oblige. That would keep the Enron story on the front pages through the heat of the President's fall campaign.
Above all, Lay's belated indictment reminds one of the limp response of Washington politics--Democrats included--to this historic financial crime. Enron, WorldCom and scores of other busted corporations, aided and abetted by Wall Street's leading bankers, represent the largest, most fraudulent assemblage of corrupted practices since the epic meltdown that followed 1929. Trillions were lost and the economy was deeply wounded, not to mention the families who lost jobs and savings. The federal establishment responded to all this with alarmed rhetoric but did very little to reform the fundamentals of corporate law or financial regulation. The swamp of insider conflicts of interest and semilegal double-dealing continue in the system, despite some modest changes. Maybe Lay's indictment will put the subject back on the table, but don't count on it. Ken Lay faces trial, but most of his co-conspirators, especially from Wall Street, got away and remain at large, doing new deals and counting their blessings.
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