Agnostic's what he was, had always been.
He'd never prayed a prayer, confessed a sin.
He's thinking, though, if Martha goes to jail,
On Sundays henceforth he will never fail
To be in church. In fact, forevermore,
He'll be in synagogue the day before.
It's not as if this man's the sort of pill
Who wishes fellow human beings ill.
But he's convinced: If Martha takes the fall,
There is a God in heaven after all.

Dead ends, new beginnings--the industry's twenty-five-year crisis
continues.

With the Bush Administration too often feeling the pain of its corporate
sponsors, and with the Enron scandal (so far) producing little political
fallout or legislative change on Capitol Hill, advocates of corporate
accountability have cause for frustration. (Martha Stewart is not much
consolation.) But in one area corporate critics can feel encouraged. For
several years, a small group of lawyers and labor advocates has been
trying to hold transnational companies responsible for their actions by
suing them in the United States for abetting and/or benefiting from
human rights abuses overseas. Finally, these corporation-chasers are
beginning to see signs of possible success.

In about a dozen cases, attorneys in the United States, on behalf of
villagers, indigenous people and labor leaders overseas, have filed
legal action against large corporations under the Alien Tort Claims Act
(ATCA), a law passed in 1789 that allowed foreigners to sue one another
in US courts. The law was not much used until 1979, when the family of a
17-year-old boy tortured and killed by a Paraguayan policeman
successfully employed it to sue the officer. Afterward, human rights
lawyers turned to the act as a way to address human rights violations
conducted or enabled by multinational firms.

In 1996, for instance, the Washington-based International Labor Rights
Fund (ILRF) filed an ATCA suit against Unocal, an oil and gas firm,
charging that it knowingly used slave labor to build a pipeline in
Burma. The plaintiffs included villagers who said they were forced at
gunpoint to work on the project. A federal judge dismissed the ATCA
lawsuit, arguing that Unocal did not have direct control over the
Burmese military regime, a partner in the pipeline project. That
decision is under appeal, but, in a legal first, in June a California
state judge ordered Unocal to stand trial. In that trial, in September,
the plaintiffs will argue under state law that partners in a joint
venture can be held responsible for each other's actions. That would be
a blow to Unocal. Evidence in the federal case showed it was well aware
that human rights abuses were committed by the military regime in
relation to the pipeline.

ATCA-wielding lawyers and activists have been going after corporate
malfeasance around the globe. Earlier this year, a case filed against
Shell by EarthRights International and the Center for Constitutional
Rights got a major boost. This lawsuit claims the oil company is liable
for human rights abuses committed by the Nigerian military against the
Ogoni people, who opposed a Shell pipeline. Shell repeatedly filed
motions to dismiss the case, but in February a federal judge denied
these motions and permitted the case to move into the discovery phase.
Now the plaintiffs can take depositions of Shell officials and review
Shell documents.

Texaco was sued in New York by indigenous people of Ecuador, who charged
it with destroying their local environment by dumping a million gallons
of toxic waste into the ecosystem for two decades. The company's
actions, they claim, devastated rainforest areas, caused an increase in
cancer and other diseases and brought several tribes to the brink of
extinction. In March the two sides argued about whether the case should
be dismissed on jurisdictional grounds. The court has not yet ruled. Two
years ago, residents of Bougainville Island in Papua New Guinea filed a
lawsuit in San Francisco against the London-based Rio Tinto mining firm.
The plaintiffs maintained that the corporation, which took over a
company that developed a mine on the island, was in cahoots with a
government that engaged in human rights abuses and destroyed entire
villages in wiping out local resistance to the project. In March a
federal judge dismissed the lawsuit after the State Department argued
that the case could interfere with an ongoing peace process in Papua New
Guinea. But the judge said the Papua New Guinea government would have to
agree to permit the plaintiffs to file a case there.

In addition to the Unocal case, the ILRF is handling ATCA lawsuits
against Coca-Cola (for allegedly using paramilitary forces to
suppress--violently--union activity in Colombia), Del Monte (for
allegedly employing thugs who tortured union leaders in Guatemala),
DynCorp (for allegedly spraying Ecuadorean farmers and villagers with
toxic chemicals that were supposed to be dumped on coca plants in
Colombia) and the Drummond Company, a mining firm (for allegedly hiring
gunmen to torture, kidnap and murder labor leaders in Colombia). In a
case against ExxonMobil, ILRF contends that Mobil, which formed a
joint-venture natural gas project with the Indonesian government, paid
the Indonesian military for security and that these troops committed
human rights atrocities--including murder and torture--against villagers
in the Aceh province.

As these ATCA lawsuits creep forward, corporations here and abroad have
to take notice. A plaintiff's win would compel transnationals to
consider bringing their activities overseas into sync with international
human rights standards. As the Wall Street Journal noted, a
ruling against Unocal--if upheld--"could subject a long list of US
companies to lawsuits in American courts as human rights groups seek to
expand the reach of American tort law to foreign soil." Already the
Street is paying attention. "I've started getting calls from mutual fund
managers," says Terry Collingsworth, ILRF's executive director. "They
tell me that they cannot base stock recommendations on moral
considerations. But if there is a chance a company could be damaged by a
big award in a trial, its business practices overseas become quite
relevant." That is, "the markets" are watching and waiting--to see if
Third World locals screwed by transnationals can find justice in courts
far from their villages.

Attempts to organize are squelched by a flying column of
unionbusters.

Would it be too early to sense a sudden, uncovenanted shift against the corporate ethic, if ethic is the word? I can barely turn the page of a newspaper or magazine without striking across either some damaging admission, or at least some damage-control statement, from the boardroom classes.

The camera pans across the room
To see what she has made:
An omelette or a spring bouquet
Or just an inside trade.

"How many times can you say 'unbelievable'?" my wife asked the other
morning, as I was rattling the newspaper and again exclaiming over the
latest outrageous news from American capitalism. Maybe it was the story
about the CEO of Tyco International, a very wealthy and much admired
titan, being indicted for evading the New York State sales tax on his
art purchases. Perhaps it was the disclosure that the soaring market in
energy trading, a jewel of the new economy, was largely a fabrication
built on phony round-trip trades. Or the accusation that Perot Systems,
after designing California's deregulated energy-trading system, turned
around and showed the energy companies how to blow holes in it (and
generate those soaring electric bills for Californians).

It is unbelievable--what we've learned in the past six or eight
months about the financial system and corporate management. The
systematic deceit and imaginative greed--the sheer chintziness of
personal finagling for more loot--go well beyond the darkest hunches
harbored by resident skeptics like myself. Indeed, the Wall Street
system is now being flayed in the media almost daily by its own leading
tribunes. Listen to this summary of the scandals: "The failures of Wall
Street's compliance efforts are coming under intense scrutiny--part of a
growing awareness of how deeply flawed the US financial markets really
are. The watchdogs charged with keeping the financial world honest have
all lost credibility themselves: outside auditors who bend the rules to
please corporate clients, analysts who shape stock recommendations to
woo investment-banking customers and government regulators too timid or
overwhelmed to keep track of the frenzy." You might have read those
points in The Nation, but these words appeared on the front page
of the Wall Street Journal. A week later, another page-one
Journal story crisply explained the implications for global
investors: "Boasts about world-class corporate disclosure, bookkeeping
and regulation of American financial markets have become laughable in
the wake of Enron and Arthur Andersen scandals."

When radical critique becomes mainstream observation, change may be in
the air. In my view, this is a rare historical moment--conditions are
ripe for reforming and reordering the system, an opportunity unmatched
since World War II. How things really work is on the table, visible to
all in shocking detail, authoritatively documented by the torrent of
disclosures, with more to come. The libertarian ideology that colonized
economic affairs and politics during the past two decades (markets know
best, government is an obstacle, greed is good) has been pulled up
short. The conservative orthodoxy is vulnerable--actually breaking
down--because it has no good explanations for what we now understand to
be routine malpractice in business and finance. Political tinder is
spread all around the landscape, but who will strike the match?

The potential downside of this moment is also palpable and quite
ominous: Nothing will happen, nothing will change--nobody goes to jail,
no significant reforms are enacted. If so, the main result will be
confirmation of an already endemic public cynicism and the further
poisoning of American values. The revelations, instead of provoking a
sea change in political thinking, may be smothered by the alignments of
corporate-financial power, diverted into false reforms and complexified
to the point that media attention and public anger are exhausted. In
that event, the consequences for the country will be less obvious but
profoundly corrosive. The system would go forward in roughly the same
fashion (perhaps tarted up with public-relations rouge), and everyone
would understand that corruption is the system. In markets and in
the popular culture, the message would be: Forget that crap about
ethics--might as well take the low road, since that's how the big boys
get theirs.

The stakes are enormous, and it's much too early to predict the outcome.
But there's already abundant evidence that the business establishment
expects to ride out this storm and is working the usual political levers
to insure it. The politics resemble the S&L debacle in the late
1980s, when Congressional Republocrats put out lots of noise and smoke
but left the high-priced suits unruffled and stuck the public with the
bill. Our current galaxy of scandals is far more grave because it is
systemic. Anyone with courage among the Democratic presidential hopefuls
could seize this moment and reorder the agenda for 2004, but no one so
far has found the guts to break ranks with corporate power. Smoldering
public anger, however, may yet find a way to express itself, perhaps in
the fall elections, and rouse the reluctant politicians.

For now, the best hope seems to be that the bankers and business guys
will react to the fact that financial markets have been severely damaged
by the scandalous revelations, as have the high-flying moguls of
corporate America. Who can trust them? Who wants to pour more good money
after bad? In other words, this scandal stuff is bad for business,
especially bad for the faltering stock market. Henry Paulson Jr., chair
of Goldman Sachs, delivered that message recently in a sober speech
before the National Press Club and endorsed a number of useful reforms.
His remedies are insufficient (even the Journal editorial page
was happy to bless them) but are a fair start. A chorus of high-minded
anguish from elite circles might persuade Washington that this problem
does need fixing.

The scandals of Enron et al., unfortunately, must compete with another
story--the war on terrorism--that's more exciting, and threatening, than
dirty bookkeeping or the looted billions. The two crises are intertwined
in perverse ways. The smug triumphalism of Bush's unilateralist war
policy could be abruptly deflated by economic events--which probably
would be a good thing for world affairs, since Washington couldn't run
roughshod over others, but terrible for US prosperity. The financial
scandals have provided yet another chilling reason to be wary of the US
stock market, and if overseas investors decide to take their money home
in volume, the already declining dollar will fall sharply. Credit would
thus become suddenly scarce, since our debtor-nation economy relies
heavily on capital borrowed from abroad, and such a convergence would
trigger an ugly downdraft in the US economy. In that event, the
fashionable boastfulness about America, the only superpower, would
implode as swiftly as Enron's stock price.

Speech to The Democratic National Committee--Western Caucus
Saturday, May 25, 2002
Seattle, Washington

"Death Star," "Get Shorty," "Fat Boy"--the revelation of Enron's trading
schemes in California have turned the Enron scandals virulent again.
Just when the White House thought the disease was in remission and
relegated to the business pages, the California scams exposed more of a
still-metastasizing cancer of corporate corruption.

Internal Enron memos reveal that it and other companies preyed on
California's energy crisis, helping to manufacture shortages and using
sham trades to drive up prices. The somnambulant Federal Energy
Regulatory Commission (FERC)--headed by Pat Wood III, "Kenny Boy" Lay's
handpicked chairman--decided that its initial finding of no market
manipulation in California was inoperable and opened a broader
investigation. With stocks plummeting and lawsuits piling up, CEOs at
Dynegy and CMS Energy resigned, as did heads of trading at Reliant
Resources and CMS.

The Bush Administration was directly implicated as the White House's
Enron stonewall began to collapse. A reluctant Joseph Lieberman,
chairman of the Senate Governmental Affairs Committee, finally got
sufficient spine to issue subpoenas, stimulating the White House to
release more documents about its contacts with Enron. These showed that
the White House had lied to House investigators when it reported only
six contacts between Enron officials and the White House energy task
force. The incomplete White House submissions now admit four times that
number, with more surely to come.

Lay and the Enron executives were pressing Vice President Cheney not
only to influence the President's energy policy but also to oppose price
controls on electricity in California, even as they were gaming the
market. Cheney and Bush responded to their leading contributor by
publicly scorning price controls, while White House aides encouraged the
energy industry to organize an ad campaign in California against
controls. Cheney surely felt comfortable with Enron's shady side: As we
recently learned, when he was CEO of Halliburton and its profits were
declining, his accountants--the ubiquitous Arthur Andersen--suddenly
started counting as revenue a portion of payments that were in dispute,
without informing investors of the change.

The Administration has painted Enron as a business, not a political,
scandal. Now it is apparent that the scandal is political and
economic, showing the problems of a system with too little
accountability and too much corporate influence both in the White House
and on Capitol Hill. And with the United States having to import more
than $1 billion a day in capital to cover trade deficits, the scandals
are already a drag on investment, growth and jobs.

Neither the Administration, Congress nor the business lobby has yet
awakened to the perils. Bush retains as Army Secretary former Enron
executive Tom White, who claims no knowledge that his subsidiary was
involved in the sham trading schemes (although his own bonuses were
undoubtedly based in part on the inflated revenues that resulted). Big
Five accounting firms lobbyist Harvey Pitt remains head of the SEC, even
after repeatedly traducing elementary ethics by meeting privately with
representatives of companies under investigation by his agency. Wood
remains the head of FERC, even as legislators call on him to recuse
himself from the California investigation. Bush and House Republicans
continue to resist sensible reforms. The business and accounting lobby,
in a victory of ideology over common sense, has mobilized against
anything with teeth.

Beltway conventional wisdom dismisses the political fallout of the Enron
scandals. But Americans are furious at executives who betray their
workers and mislead small investors while plundering their companies.
Thus far their anger hasn't fixed on Washington, but it may if no one is
held accountable. It's long past time for Senate Democrats to rouse
themselves, demand the heads of White and Pitt and launch a scorching
public investigation of the Administration's complicity with Enron in
California and elsewhere. Any real reform will require displacing Enron
conservatives, with their mantra of "self-regulation" and their corrupt
politics of money. With the revelations continuing and elections coming
up, progressives should be mobilizing independently to name names,
exposing those who shield the powerful. If voters learn who the culprits
are, Enron may end up reflecting the "genius" not of capitalism but of
democracy--the people's ability to clean out the stables when the stench
gets too foul.

Now that the Enron culprits have been caught red-handed, might not the media inquire of the President whether he takes any responsibility for nearly bankrupting California by refusing to come to