The rise and fall of the house of Enron should trigger comprehensive investigations--civil, criminal and Congressional. The full scope of relations between Enron and its cronies in the Bush Administration must be dragged out into the sunlight. Miscreants should be prosecuted, and fundamental reforms enacted to bring corporations back to public accountability.
Desperately trying to put a lid on the cascading scandals, White House spokesmen have insisted that since Bush officials did nothing when Enron chairman Ken Lay warned them about its impending collapse, there is no political scandal, only a financial one. Don't fall for that.
The largest scandal, as Robert Borosage suggests on page 4, is not just what was done illegally but what was done legally--for example, the failure of Bush Cabinet members to warn small investors and employees that Enron was going down and that its executives were bailing out. Or the slick way Enron gouged billions from Western energy consumers while its planted head of the Federal Energy Regulatory Commission, Pat Wood, ignored the pleas of Western governors for price controls. Or Treasury Secretary Paul O'Neill's torpedoing of the Clinton Administration's attempt to regulate offshore tax havens, a direct benefit to Enron, among others. Or Enron officials' six meetings with Vice President Cheney to help shape Bush's energy plan. What is Cheney hiding by refusing to reveal the names of those FERC met with?
Clearly, the full range of Administration contacts with Enron should be probed. This will reveal how crony capitalism works and what must be done to curb it. Congress must begin the hard task of rebuilding the legal framework for corporate accountability. As William Greider writes on page 11, Enron's demise reveals that all the supposed checks on executive plunder--accountants, stock analysts, independent board members, regulatory agencies--were either short-circuited or inactive. We need bold reform now. And Congress should take a close look at pensions, boosting defined-benefit plans and returning 401(k) plans to the supplement they were intended to be. And of course Enron once again illustrates the corrosive corruption of big-money politics.
With the House and the White House in Republican hands, Democrats in the Senate, sadly, will have to take the lead in ferreting out the facts and defining the necessary reforms. "Sadly" because too many Senate Democrats mirror Republicans in pocketing corporate bucks and parroting the deregulation/privatization line that comes with them. The chairman of the Governmental Affairs Committee, Joseph Lieberman, was leader of the corporate-funded Democratic Leadership Council and a founder of New Democrat Network, the proud recipient of Enron contributions. Last year Lieberman blew off the probe of Enron's connections to the California energy crisis. He now has another chance to show if he stands with his voters or his contributors.
Enron's bankruptcy is the largest in US history, but it is not unique. It is a product of the conservative offensive to unfetter corporations by dismantling hard-won public protections. Given that freedom, Enron's executives--and their brethren--gouged consumers, fleeced investors, even betrayed their own employees. It's time for Congress and the people to put an end to Enronomics and call corporate marauders to account.
Last spring Richard Pollak asked in these pages, "Is GE Mightier Than the Hudson?" (May 28, 2001). Given the Environmental Protection Agency's December 4 decision to dredge the PCB-contaminated river, it is tempting to ring in the new year with a resounding No. Despite the company's multimillion-dollar blitz of lawyering, lobbying and PR, the Bush Administration, in the person of its EPA Administrator, Christine Todd Whitman, has come down squarely on the side of those in New York's historic Hudson River Valley who have been agitating for years to make GE clean up the lethal mess it created by dumping more than a million pounds of polychlorinated biphenyls in the river from the 1940s into the 1970s. This pollution has turned 200 miles of the Hudson, from just above Albany south to New York Harbor, into the biggest Superfund site in the nation; EPA law requires that GE pay the cost of removing the toxic chemicals, which the agency estimates at $460 million. More than once, the company has told its stockholders it can well afford this sum, as a multinational with a market value of some $500 billion surely can.
Still, it may be premature to pop the champagne corks. This past fall, fearing that Whitman might follow the lead of her Clinton Administration predecessor, Carol Browner, and endorse the cleanup, GE filed a federal suit attacking as unconstitutional a Superfund provision that allows the EPA, if the company refuses to dredge, to do the job itself and bill GE for three times the final cost plus penalties of $27,500 a day. GE has plenty of time (and cash) to pursue this and other maneuvers against dredging, which is needed to remove some 150,000 pounds of PCBs still in the Hudson. The EPA estimates it will take at least three years to work out the project's engineering and other details--e.g., what kind of equipment is needed, how much stirred-up sediment is acceptable and what landfills can safely handle the contaminated mud. Many residents along the banks of the river are divided--sometimes angrily--on these and several other issues. During the EPA's 127-day comment period in 2001 it received about thirty-eight boxes of letters and 35,000 e-mails, many spurred by GE's scare campaign--on billboards, in newspaper ads and on TV infomercials--warning that dredging will destroy the river.
The EPA has pledged that the public will have even more of a voice in the project's design decisions over the coming months--a welcome process but one that GE is likely to exploit with more propaganda. At its enviro-friendly-sounding website (hudsonwatch.com), for example, the company continues to insist, on no hard evidence, that the citizens of the Hudson River Valley oppose dredging "overwhelmingly." Some residents do resist dredging and the inevitable inconvenience it will bring to their communities, and not all have arrived at their view because of GE's PR tactics. But after almost two decades of review by the EPA, the burden of scientific evidence shows that the remaining PCBs, which cause cancer in laboratory animals and probably in humans, continue to poison the river a quarter-century after their use was banned and GE stopped dumping them.
The EPA's December 4 order could be the precedent that requires the company to clean up forty other sites where it has dumped PCBs. This would cost several billion dollars, a hit not so easy to reassure shareholders about. Even with GE master-builder Jack Welch retired and busy flogging his bestselling How-I-Did-It book, don't look for the company to roll over anytime soon.
Right-wing climate-change deniers worked hand-in-glove with John Stossel to portray schoolchild as being 'scared green' on a recent ABC special.
The Department of Energy has hit upon a new idea for nuclear waste clean-up: just leave it there and declare the area a wildlife preserve. The animals won't complain.
Allied 'surgical strikes' in Kosovo in 1999 created environmental hotspots yet to cleaned up; the same might happen in Afghanistan.
It's time for the United States to show as much commitment in the battle against global warming as it does in the "war on terror."
The current uproar
over the posture of the Bush Administration on global warming and,
most recently, on power-plant emissions vividly illustrates the
political hypocrisy and opportunism imbuing debates on environmental
issues. Take first global warming. The charge that the current phase
of global warming can be attributed to greenhouse gases generated by
humans and their livestock is an article of faith among liberals as
sturdy as is missile defense among the conservative crowd. The
Democrats have seized on the issue of global warming as indicative of
President Bush's willful refusal to confront a global crisis that
properly agitates all of America's major allies. Almost daily, the
major green groups reap rich political capital (and donations) on the
Yet the so-called anthropogenic origin of global
warming remains entirely nonproven. Back in the spring of this year,
even the Intergovernmental Panel on Climate Change, which now has a
huge stake in arguing the "caused by humans" thesis, admitted in its
summary that there could be a one-in-three chance its multitude of
experts are wrong. A subsequent report, issued under the auspices of
the National Academy of Sciences, is ambivalent to the point of
absurdity. An initial paragraph boldly asserting the caused-by-humans
line is confounded a few pages later by far more cautious paragraphs
admitting that the thesis is speculative and that major uncertainty
rules on the role played in climate equations by water vapor and
It's nothing new to say the earth is getting
warmer. I myself think it is, and has been for a long, long time. On
my shelf is an excellent volume put out in 1941 by the Department of
Agriculture called Climate and Man, which contains a chapter
acknowledging "global warming" (that same phrase) and hailing it as a
benign trend that will return the earth to the normalcy in climate it
enjoyed several hundred thousand years ago.
than a glance at the computer models favored by the caused-by-humans
crowd will show that the role of carbon dioxide is grotesquely
exaggerated. Indeed, the models are incapable of handling the role of
the prime greenhouse gas, water vapor (clouds, etc), which accounts
for twenty-five to thirty times as much heat absorption as carbon
Similarly, the Intergovernmental Panel on Climate
Change admits to a "very low" level of scientific understanding on an
"aerosol indirect effect" that the panel acknowledges is cooling the
climate system at a hefty rate (aerosols are particles so fine they
float in air).
In a particularly elegant paper published in
May in Chemical Innovation, journal of the American Chemical
Society, Professor Robert Essenhigh of Ohio State reminds us that for
the past 850,000 years, global temperature and carbon dioxide have
been moving up and down in lockstep. Since 849,700 of these years
were ones preceding any possible human effect on carbon dioxide, this
raises the question of whether global warming caused swings in carbon
dioxide or vice versa. Essenhigh argues convincingly that the former
is the case. As global temperatures warm, a huge reservoir of carbon
dioxide absorbed in the oceans is released into the atmosphere.
Clearly, this is a much more potent input than the relatively puny
human contribution to global carbon dioxide. Thus natural warming is
driving the raised level of carbon dioxide, and not the other way
But science can barely squeeze in the door with a
serious debate about what is prompting global warming. Instead, the
Europeans, the greens and the Democrats eagerly seize on the issue as
a club with which to beat President Bush and kindred targets of
Now take the latest brouhaha over emissions
from coal-fired plants. The industry wants what is coyly called
"flexibility" in emissions standards. EPA chief Christine Whitman is
talking about "voluntary incentives" and market-based pollution
credits as the proper way to go. Aware of the political pitfalls, the
Bush Administration has recently been saying that it is not quite
ready to issue new rules.
Now, there's no uncertainty about
the effects of the stuff that comes out of a power-plant chimney.
These heavy metals and fine particles kill people or make them sick.
There are also cleaning devices, some of them expensive, that can
remove these toxic substances. Ever since the 1970s the energy
industry has fought mandatory imposition of such cleaners. If Bush
and Whitman enforce this flexibility they will be condemning people
to death, as have previous foot-dragging administrations, Democratic
as well as Republican.
Both political parties have danced
to the industry's tunes. It was with the propagandizing of Stephen
Breyer (now on the Supreme Court, then a top aide to Senator Ted
Kennedy) that the trend toward pollution credits began. And after the
glorious regulatory laxity of the Reagan/Bush years, the industry was
not seriously discommoded in Clinton Time. Ask the inhabitants of
West Virginia and Tennessee whether they think the coal industry lost
clout in those years.
The sad truth of the matter is that
many "big picture" environmental theses, such as human-caused global
warming, afford marvelously inviting ways of avoiding specific and
mostly difficult political decisions. You can bellow for "global
responsibility" without seriously offending powerful corporate
interests, some of which, for reasons material, cynical or both, now
have a big stake (the nuclear industry, for example) in promoting the
caused-by-humans thesis. Treasury Secretary Paul O'Neill loves it,
and so does the aluminum industry, in which he has been a prime
player. On the other side we can soon expect to hear that powerful
Democrat, Senator Robert Byrd, arguing that the coal industry is in
the vanguard of the war on global warming, because the more you shade
the earth, perhaps the more rain you cause. So burn dirty coal and
protect the earth by cooling it.
The logic of the
caused-by-humans models installs the coal industry as the savior of
"global warming"--you want to live by a computer model that does
A Democratic Congressman relates what happened when a large California city rebelled against privatization of its electricity.
Mexico's Zapatista community is protesting the commercial exploitation of the country's ecological riches.
For years, environmental advocates in and out of government have labored to construct a connecting arch between opposing interests that could lead to the first real legislative action on global warming. Last year the elements for a breakthrough deal seemed in place. Both major presidential nominees said they were on board. Then George W. Bush came into office and removed the keystone from the arch.
The keystone is the bundle of federal lawsuits that the Environmental Protection Agency and the Justice Department have filed against electric utility polluters, plus the active investigations of a hundred or more other power plants and refineries for similar gross violations. The President has ordered a "review" of these legal actions--in effect freezing enforcement and perhaps halting it entirely. Without the threat of these lawsuits, electric utilities have no incentive to accept new federal regulation of their carbon dioxide emissions--a crucial first step in the long-delayed imperative to reduce global warming.
Bush's action may sound like inside-the-Beltway intrigue--and it is--but the consequences could be momentous if not challenged by a public outcry. His action should also inspire a careful Congressional investigation. Who exactly put the fix in at the White House? The defendants, appears to be the answer, joined by old reliables like ExxonMobil. The companies threatened by the EPA's multibillion-dollar lawsuits--coal, oil and the big-time scofflaws in electricity generation--evidently went through a back door labeled Rove-Cheney Office of Political Environmentalism. Their achievement illustrates another bipartisan scandal--our torturously slow-acting and incomplete environmental laws. The government is, in fact, still struggling to get this crowd to comply with clean-air standards put in place thirty years ago.
To appreciate the contradictions, start with the Clean Air Act of 1970, which grandfathered in, as exempt from the new pollution standards, hundreds of outmoded power plants. Regarded at the time as necessary for passage of the act, this trade-off allowed the plants to keep operating--but not to expand their output--on the assumption that they would gradually be phased out. Instead, more than 300 of the grandfathered power plants are still going and produce more than half the country's electricity, as well as the bulk of its mercury, nitrogen and sulfur air pollution (electric utilities are also the largest source of carbon dioxide pollution). And, in defiance of the law, a lot of the exempted plants expanded. Those violations, after decades of regulatory debate and failed persuasion, led to the first batch of EPA lawsuits filed against seven companies in 1999, with many more promised. They involve serious lawbreaking and huge liabilities--and potentially expose companies to public-health damage suits as well.
Several of the more enlightened companies began looking for a deal: In exchange for relief from the lawsuits, they'd accept a new regulatory law curbingtheir pollution. That's when enviro groups like the Natural Resources Defense Council (NRDC) put global warming on the table too. If Congress enacted legislation covering the other three pollutants, it made sense to include carbon dioxide, never before subject to regulatory curbs. Some utility executives, recognizing its inevitability, accepted the trade-off. Why modernize plants for the three established pollutants, then have to come back to retrofit for carbon emissions? That promising confluence of interests inspired the four-pollutant legislation now pending in Congress.
But the Bushies are proceeding to let industry off the hook. First, Bush canceled his campaign promise to support mandatory carbon dioxide reductions (his policies will likely be hammered at the United Nations conference on global warming in Bonn this month). Then Dick Cheney's secretive energy task force proposed the "review," virtually suspending compliance agreements that some companies had already negotiated with the EPA. The NRDC has identified the National Coal Council, a supposedly nonpolitical federal advisory committee, as a central meeting place where defendant firms and their lawyers collaborate with coal and oil reps on devising the counterattack. Lois Schiffer, head of the Justice Department's environmental enforcement under Clinton, told the Wall Street Journal: "It's sort of like going to the White House to get your parking tickets fixed."
White House tampering with law enforcement on behalf of accused lawbreakers who are the President's patrons ought to be treated as a big deal, even in scandal-jaded Washington. Senate Democrats do not need to engage in bipartisan niceties on this-- they must make a full-throated commitment to legislate and to make global warming a decisive election issue for 2002 and especially 2004, if Bush persists in pandering to the most retrograde industrial interests. Democrats, quite by accident, have a running start here. The new chairman of the Senate environment committee--former Republican Jim Jeffords--is the co-sponsor of the four-pollutant legislation (with Democrat Joe Lieberman). If Jeffords couldn't rally his old party to the cause of global warming, maybe he can convince his new friends on the other side of the aisle to take it seriously.