It has come to this: The investigation of Enron as a political scandal appears for now to depend on Senator Joseph Lieberman, an Enron Democrat who bagged Enron campaign contributions and who worked hard to block accounting reforms. Lieberman's committee agreed to issue subpoenas seeking information that could shed light on Enron contacts with the White House, but the question is, How hard is he willing to push?
For months the White House and the Republicans have put out the message that Enron is nothing but a business scandal, a strategy that seems to have paid off, judging by the dwindling media coverage. But the lack of coverage doesn't mean that the political aspects of Enron have been thoroughly probed. Far from it.
In a letter to Dan Burton, the Republican chairman of the House Government Reform Committee, Henry Waxman, the senior Democrat on the panel, noted many episodes that warrant scrutiny. Among them: Enron-friendly appointments to the Federal Energy Regulatory Commission; Vice President Cheney's timely condemning of electricity price caps during the California energy crisis (see John Nichols on page 14); meetings between Enron execs and Clinton officials; and Congressional passage in 2000 of legislation exempting energy derivative contracts from federal oversight. Army Secretary Thomas White, who previously headed an Enron venture that engaged in fraudulent accounting practices, failed to disclose all his financial ties to the company. And just-released documents from the Energy Department, forced out by public-interest-group lawsuits, show that Energy Secretary Spencer Abraham met with dozens of business representatives and Bush contributors--and no consumer or conservation groups--while he was developing the Bush energy plan. But Burton, to no one's surprise, turned down Waxman's proposed investigation, and other House Republicans, again no surprise, have been more eager to jump on Enron's and Arthur Andersen's funny numbers than on those firms' political connections.
In the Senate, the Democrats have not shown much taste for this kind of probe either, at least until recently. On March 21 Lieberman announced that the Governmental Affairs Committee, which he chairs, is issuing twenty-nine subpoenas seeking information on contacts between the companies and the federal government. The subpoenas--addressed to Enron, Arthur Andersen and twenty-seven past and present members of Enron's board--request materials regarding Enron's communications with the White House and eight federal agencies, starting in January 1992. Lieberman also said his committee will send letters (not subpoenas) to the White House and the US Archivist asking for similar information. Those subpoenaed have until April 12 to respond. Lieberman's staff is quick to note that his investigation targets Enron, not the White House. And the subpoenas and letters are limited in their scope: They do not ask for Enron files on its efforts to develop political muscle. But the subpoenas and letters could produce information on how the Bush and Clinton administrations responded to Enron's attempts to gain political influence.
The Enron mess offers a view into a world where policy is increasingly shaped by money. Few members of Congress, of either party, want to run down that rabbit hole. But Enron is a political scandal, and those who want it investigated should press Lieberman to chase this bunny as far as it goes.
A probe of the company's White House ties should begin at his door.
While most of the media focused, with good reason, on the huge increase in military spending and dramatic cuts in domestic programs in President Bush's $2.1 trillion budget proposal for 2003, a fe
Those who place the blame on executive greed may be missing the larger point.
They helped set the stage for the current scandals.
In early March, the Bush Administration adopted a policy that the steel industry as well as the United Steelworkers of America (USWA) have long been agitating for--tariffs on steel imports. The official reason is to give the industry some "breathing space," so it can restructure while shielded from foreign competition. It's more likely that Bush wants to carry some important industrial states in 2004.
Thanks to NAFTA, Canada and Mexico are exempted, as are some poorer countries. Imports from elsewhere will face initial duties ranging from 8 percent to 30 percent, though the levels will decline over the next three years as they are gradually phased out. This is less than what labor and management wanted, but it's still striking coming from a professed free-trader. The Clinton Administration never did anything remotely like it--and if it had, Wall Street, which was unfazed by the Bush announcement, would have panicked about the protectionist threat.
Loud complaints did come from abroad, though. Even British Prime Minister Tony Blair, usually found waving the Stars and Stripes with hysterical glee, denounced the move as "unacceptable and wrong." He urged the industry to restructure rather than hide behind trade barriers--exactly the prescription the United States usually gives other countries (with similar indifference to displaced workers). Blair was joined by politicians, businesspeople, unions and pundits around the world--and by Bush's own frequently indiscreet Treasury Secretary, Paul O'Neill, who told the Council on Foreign Relations that the tariffs would cost more jobs in steel-using industries than they could save in steel.
Indeed the industry is in dire shape. It's lost 35,000 jobs in the past two years. Sixteen producers are operating in bankruptcy. Steel employed 1.5 percent of US workers in 1950, 0.6 percent in 1980 and 0.2 percent in 2000, versus 0.1 percent today. It's hard to believe three years of protection can reverse that long slide.
Clearly the Administration structured its tariffs with an eye on the political map. The kinds of steel offered maximum protection happen to be produced in the electoral battlegrounds of Ohio, Pennsylvania and West Virginia. There's a political pattern to the victims too: Turkey, an important factor in the likely war on Iraq, was spared. Brazil, key to any future hemispheric free-trade agreement, got off relatively lightly, as did Russia, key to many things. The most affected producers are in South Korea, Japan, China, Taiwan and the European Union. Most have filed complaints with the World Trade Organization. The EU is also threatening to retaliate against US steel and textiles, which could limit Bush's political gain in steel country and alienate the textile-intensive South.
Defenders of the tariffs--from US Steel to the union-friendly Economic Policy Institute--argue that everyone subsidizes and protects its steel industry except us. As a result, the US steel industry is getting killed. So the tariffs are necessary to defend it.
Not everyone agrees with this picture of America as victimized innocent. According to the EU's count, the United States has imposed more than 150 measures over the years to protect steel. More than subsidized foreign competition, the US steel industry is suffering from the high value of the dollar, recession, global overcapacity and high pension and healthcare costs.
The United States could have filed a complaint with the WTO, but it would have had a hard time proving its case. Another multilateral route was available too--negotiations to reduce world steel capacity by some 12 percent are well under way. But the Administration and its supporters claim that having the tariffs will strengthen Washington's negotiating hand.
The USWA seems to have no idea of how offensive foreign workers find Bush's big stick policy. Most of the affected countries have higher unemployment rates than ours. The EU, Japan and Latin America haven't seen a boom in decades, and Asia is still recovering from its 1997 financial crisis. Gary Hubbard of the Steelworkers' Washington office conceded that the EU and Japanese unions were annoyed but wasn't sure whether the USWA had consulted at all with its counterparts abroad (no one had ever asked the question before). So much for solidarity.
It's nice to imagine another world, where we protect workers, not their jobs. If we had a good system of income support, retraining, job placement and job creation, we wouldn't have to disemploy foreign workers to fight what's probably a losing battle to save jobs here. Sweden has long had such an active labor market policy, as it's called. Workers wouldn't have to fear innovation if they knew they wouldn't end up on the sidewalk. But that's not the way the world works these days. It's all about market solutions--except when George W. Bush is cruising for votes.
A Mexican migrant acquaintance once told me that he'd love the opportunity to brief Congress on immigration policy. Let us imagine him now, walking into the hallowed chamber, dressed in his typical migrant attire: a fading Oakland Raiders jersey, oversized bright orange painting pants, imitation Air Jordans. He wears a baseball cap with the epigram ¡qué viva México, cabrónes! rendered in red, green and white--the colors of the Mexican flag. He reaches into his well-worn backpack and pulls out some handwritten notes on crumpled sheets of paper, and begins:
First, I would like to tell the distinguished sirs and madams a bit about the migrant life. I'm from a luckless southwestern Mexican town whose timber-based economy is in tatters--no sign of economic development on the horizon, NAFTA or no. I made my first trip to the States at 13, a solo journey that included a few months of indentured servitude to a "coyote," a real cabrón. I paid off what I owed him by picking aluminum cans out of the garbage. When I finally broke free, I took to the road.
I never had a problem getting a job. With a cheap forgery of a green card, the bosses never looked twice. As the years went by, I cruised from state to state. I got married to a girl from home and soon we were on the road together, hopping back and forth across the border that supposedly separates our nations.
Beginning in the latter half of the 1990s, our border-crossings became increasingly difficult. Suddenly, you built walls on the US-Mexico border. Big ones, made of coppery steel. These you have referred to as "interdiction measures," which include programs with names like Gatekeeper, Safeguard and Hold the Line. Since 1995 as many as 1,400 migrants died on that line, pushed by your Border Patrol into the remote, deadly desert and lonely stretches of the Rio Grande.
You recently deployed the first of more than 1,600 National Guard troops along the frontiers with both Canada and Mexico, to provide "tactical" support to the other agencies on the line. The last time you put the military on the line, the result was the shooting of an 18-year-old who was out herding his goats; you did the sensible thing and pulled them out. Now they're back; so far, thankfully, they are unarmed.
I tell you that this is a dangerous situation, and yet, in the wake of September 11--when I grieved as much as if Mexico herself had been attacked--I am mindful of your security concerns. I submit to you that you cannot secure your borders alone. I humbly suggest consultations at the highest levels between the federal law-enforcement agencies of our two countries, a starting point for recognizing that American homeland security is Mexican homeland security and vice versa.
We must re-imagine the border between us. All the money you've poured into "holding the line"--some $4 billion a year for the total INS budget--does nothing of the sort. Yes, it makes it more difficult, and sometimes deadly, to cross. But we still do cross back and forth over that line.
Dear legislators, I watch CNN en Español and have been following your recent debates over immigration policy very carefully. Let us speak frankly here: You've been playing an age-old shell game--appeasing the rabid dogs of nativism but leaving the border open enough to supply labor to big business, which keeps getting you re-elected.
What a great buzz there was in the migrant communities before 9/11! You were speaking (well, some of you) about an amnesty--pardon me, a regularization--of the immigration status of the nearly 9 million estimated "illegals" in your midst. Then for several months you shied away from such discussions. But now your President is on his way to Latin America, and he will meet with my President. It is clear to us, the migrants, that these men want to see some movement on the issue--Bush, to bolster his standing among Latinos and his business cronies, and Fox, to please paisanos like me--but this makes many of you uncomfortable. I know why. It's Al Qaeda and the Taliban. Now, I might look a bit like Caliban (especially in these surroundings), but I'm no Taliban, no terrorist! What are my weapons? Leaf blowers and dishrags?
You must place regularization and some version of a "guestworker" program back on the fast track. Everybody wins with real reform: Your labor-hungry industries will be happy, and you might even get some of that coveted Hispanic vote. But you need to understand one thing: We migrants will not accept any kind of program modeled on the infamous, exploitative Bracero Program. Braceros, my grandfather among them, had no right to leave an abusive boss, had no recourse to better their working conditions and wages, could not join unions. The guestworker program of the new century must give us the rights that all American workers enjoy. And there must be a mechanism for affording those workers who spend, say, six years living and working in your country the opportunity for permanent legal status.
When Vicente Fox rose to power two years ago, he made a statement that caused you much anxiety: He foresaw the border between the United States and Mexico disappearing within a decade. I tell you today that this prophecy will come to pass. There are no lines in nature, dear sirs and madams. The fact that I am here before you today proves that this is so. I thank you for your kind consideration in allowing me to speak before you today. ¡Qué vivan los mojados! Long live the migrants!
Arriving in San Francisco after a ten-hour drive through a snowstorm, Lucas Benitez sounds earnest and exhausted.
"Debacle in Kwangju." Were Washington's cables read as a green light for
the 1980 Korean massacre? (1996)
"Stiglitz Roars Back" (2001)
Tom White, who pocketed millions running Enron Energy Services, one of Enron's more egregious frauds, remains Army Secretary even after lying to the Senate about his Enron holdings. White continues to say he didn't mislead investors about EES's profitability even as his former Enron employees describe how he goaded them to pretend the unit was making money when it was losing money.
Harvey Pitt, lawyer-lobbyist for the big five accounting firms, continues to serve his former clients as head of the Securities and Exchange Commission, where he defends self-regulation. George W. Bush rebuffed Treasury Secretary O'Neill's recommendation that executives and accountants be held personally responsible for misleading investors, relying instead on Pitt's SEC to oversee executives--even as his budget starves the agency of resources needed merely to retain its staff, much less police the Fortune 500.
Enron's Ken Lay and Andrew Fastow remain at large, neither yet having seen the inside of a grand jury room. The secret partners in the off-balance-sheet enterprises remain undisclosed. The Justice Department--in an investigation headed by Larry Thompson, whose former law firm represented both Enron and Arthur Andersen--appears to be joining Pitt's SEC in pushing Arthur Andersen to cop a plea and settle claims before discovery.
The Bush Administration is staffed with more than fifty high-level appointees with ties to Enron, as documented by Steve Pizzo in a study for American Family Voices. It dismisses all Enron inquiries with imperial disdain. The President stonewalls Government Accounting Office efforts to gain access to Dick Cheney's Energy Task Force records while he continues to peddle the Enron energy plan, which lards more subsidies on big oil companies. Republicans held unemployed workers hostage to win passage of the corporate tax giveaways that Ken Lay lobbied for personally. And Bush continues to argue for turning Social Security into 401(k)-type retirement accounts like the ones that evaporated on Enron employees.
Each day brings another revelation of Enron's remarkable penetration of the Bush Administration, but the White House refuses to reveal the contacts its appointees had with Enron officials and executives. One result is that too little attention has been paid to the delay in imposing price controls when energy companies, led by Enron, were gouging California and other Western states in last year's ersatz "energy crisis." Bush brags that his Administration did nothing to help Enron, but holding off on price controls bought enough time for Lay and other executives to unload substantial amounts of stock.
The Administration's attempt to dismiss Enron as a business scandal, the case of a rogue company run by desperado executives, is laughable on its face. After all, Enron's "Kenny Boy" Lay was Bush's most generous financial patron. Enron's business plan, such as it was, depended on political favors. Enron's freedom from regulation was the result of political fixes. And now the fate of Enron's policies and principals depends in large part on political calculations.
Yet the Bush dodge seems to be working. The press has done its job, but Democrats have failed to find their voices or their spines. If Enron had been a Clinton patron and Gore was in the White House, Congressional Republicans would have forced a special counsel and resignations of compromised officials weeks ago.
Concerned citizens--and Democrats with a pulse--should take off the gloves. White and Pitt should be forced to resign. The criminal investigation should be taken out of the hands of compromised Republican appointees and placed under an independent prosecutor. Enron's energy, tax and privatization plans should be exposed and defeated. And fundamental reforms to protect investors, defend retirement accounts, shut down tax havens, and hold corporate executives, accountants and lawyers personally and criminally accountable are long overdue. For that to happen, voters will have to teach a lesson to the Enron conservatives of both parties who continue to betray their trust.