Enron makes Whitewater look like peanuts
CNN

BILL PRESS

December 12, 2001

Bill Press is a syndicated columnist, the co-host of CNN's Crossfire, which airs Monday-Friday at 7:30 p.m., and author of the newly-published book Spin This!

Something smells rotten in Houston. Energy giant Enron, which used to brag about becoming the world's biggest company, now holds the record for the country's biggest ever bankruptcy filing.

The human impact is staggering. Some 4500 employees are out of work. Tens of thousands of investors watched their Enron stock sink suddenly from $83 per share to 26 cents, wiping out $60 billion of stockholder value. And those 11,000 employees whose 401K funds were invested exclusively in Enron -- and who were forbidden by Enron's own rules from diversifying -- today have no retirement plan at all.

But Enron may be more than the world's biggest corporate disaster. It could also be the world's biggest case of corporate criminality.

Enron's demise wasn't due to business factors like strong competition, a shrinking market or a lagging economy. It was due to deceitful, and perhaps illegal, games played by corporate executives : diverting funds into secret partnerships, cooking the books to keep those deals secret, lying to investors and employees about the financial health of the company, while selling their own stock to make sure they wouldn't be hurt when the whole house of cards collapsed.

Unlike thousands of employees, for example, Enron Chairman Kenneth Lay isn't crying the blues. He cashed out on $123 million worth of stock options in 2000 alone, and this year pocketed another $25 million.

Even as the company started falling apart, other executives were rewarded. Just days before filing for bankruptcy, Enron handed $55 million out to some 500 senior officials: an average $110,000 bonus for screwing up.

Yes, something smells rotten in Houston. But something smells rotten in Washington, too -- because both the rise and fall of Enron are closely linked to the political fortunes of George W. Bush.

For years, Ken Lay and George Bush have been joined at the hip, two free-wheeling Texas buddies. One helped the other succeed in "bidness;" the other helped his pal make it big in politics.

Consider the Bush-Enron connections. Enron could never have happened anywhere but Texas . It was only able to grow so big, so fast, because of the deregulation of energy companies instituted by then-Gov. George W. Bush.

And Ken Lay rewarded his friend. He and Enron together were Bush's biggest contributor, giving $2 million to his campaigns for governor and president. Lay also loaned Bush his corporate jet. In 2000, Lay sent a memo to company employees, suggesting that they contribute personal funds to Bush through the company's political action committee: $500 for low-level managers; $5000 for senior executives.

Once in the White House, Bush responded generously.

Ken Lay was the only energy executive to meet privately with Vice President Dick Cheney to help shape the administration's new energy policy -- which included a recommendation to break up monopoly control of electricity transmission networks, a longtime Enron goal.

For a while, Bush even considered naming Lay his Commerce Secretary. Fortuitously, that appointment never happened. But he did surround himself with Enron partisans. Lawrence B. Lindsey, Bush's top economic adviser, was an Enron consultant.

Robert Zoellick, U.S. Trade Representative, served on Enron's advisory council. I. Lewis Libby, Cheney's Chief of Staff, was a major Enron stockholder. Thomas White, Secretary of the Army, was an Enron executive for over 10 years and held millions of dollars in stocks and options when appointed.

Karl Rove, chief White House political adviser, owned between $100,000 and $250,000 worth of Enron stock when he met with Ken Lay in the White House to discuss Enron's problems with federal regulators. And, until he was named Republican National Chairman last week, Marc Racicot was Enron's Washington lobbyist.

No wonder the Bush White House refused to help California solve its energy crisis last Spring. California's problems were caused by Enron's suddenly inflating the price of electricity, forcing blackouts throughout the state. But Bush refused to intervene to help consumers. He wouldn't do anything to hurt his pal's big business.

Indeed, the Bush-Enron connections are so close, it's hard to tell whether Enron is the house that Bush built or Bush is the house that Enron built. We know George Bush and friends were major players in Enron's corporate success. Were they also major facilitators of Enron's corporate wrongdoing?

Either way -- and war or no war -- the whole mess demands a congressional investigation.

If Congress and Ken Starr could spend two years investigating a 20-year old $100,000 real estate investment in Arkansas, they can and must examine a multi-billion dollar energy scam in Texas, where millions lost their shirts.

Enron makes Whitewater look like peanuts.

Saint George
New York Magazine

MICHAEL WOLFF

December 10, 2001

this media life
Saint George
Rallying around a wartime president is one thing. But why does Dubya remain entirely untouchable even as we question his lieutenants -- and his increasingly disturbing policies?

To get the willies from George W. Bush, to distrust the man, to have your stomach roll a bit when you hear him speak, is to feel like the most churlish and sullen of adolescents. He's the unappealing uncle -- with his cold eye on you -- whose house you're stuck at this holiday season. While you're trying to shut out his existence, everybody else is sucking up to him.

If you knew it was just pretend, just a holiday bit -- everybody being phony and polite -- you could handle it; the problem is in thinking that all this affability, this undisaffected appreciation for the guy, is honest feeling on everyone else's part. What if 85 percent of the American people actually, deep in their hearts, approve of him -- dig him? What does that say about you and where you fit in?

Certainly the wash of Bush boosterism is broad enough -- and backed by a militant core -- for most cautious citizens not to want to tangle with it. Criticism is as bottled up as perhaps it's ever been about an American president (Bush is more sacrosanct three months after September 11 than FDR was three months after Pearl Harbor).

His natural antagonists are treading carefully, proceeding gingerly, going out of the way to praise him -- even while trying to criticize him. For instance, Frank Rich's scraping bow to "George W. Bush's nuanced and so far effective prosecution of the war" on the Times op-ed page as he criticized John Ashcroft's sweeping new legal approach to the war, as though Bush and Ashcroft were separate parts of government.

To question George W. Bush, or doubt him, or take him on, is not only to put yourself on the wrong side of the war effort -- a winning one -- but, it seems more and more, to run against the grain of a new, tidal, transforming, tonal shift. Buck Bush and you buck the era, buddy.

He may still seem like a cipher -- that inexpressiveness of his must trouble even his greatest admirers -- but it is hard not to face the fact that he occupies an amazing amount of psychic space. And he gets larger and larger. The less expressive he is, or the simpler that expression becomes -- the aggrieved man; Osama has offended him -- the larger he gets.

The space he occupies is far greater than just policy or politics (Clinton, for instance, may never have transcended either). He's casting a new kind of Stepford spell, which nobody wants to try to break. He's rising to Republican-archetype stature -- as potentially large as Reagan and Eisenhower. If you took on Reagan, you were taking on optimism; if you took on Eisenhower, you were taking on prosperity, serenity even. If you take on Bush, you take on ... well, we don't exactly know what yet. He's large and ever-expanding, but still a muddle.

Reagan and Eisenhower were immediate, palpable. In each case, there was the smile. The message was clear : Lie back, feel good, be well, don't worry. Bush, however, seems much the opposite. Not least of all, he has no smile -- or the smile is so furtive and twitching and scary that it's clearly sending a different message. Instead of that special sort of Republican father-figure embrace, there's a remoteness, an absence, something strict and ungenerous (war has given us the flip side of his boyish inattention).

Who is he?

What is he feeling, or trying to tell us he's feeling?

What does he want us to feel? What's the message?

So far his message is limited to vigilance. Evil is what we're up against -- we must do what we must do.

Vigilance is a good mode for Bush. It doesn't require a smile. Nor does it require much of an explanation. In this mode, you don't have to begin to contemplate the equivocal nature of different sorts of threats, or the relative costs of defending against each variety of threat, or even the failures of vigilance that might have exposed us to attack. You are either with us or against us. (He embodies the threat. He doesn't even have to specify what might happen to a recalcitrant Saddam : "He'll find out.") Implacability, determination, total grit, and homeland security are the coin of the realm. It doesn't take a genius to be vigilant, only a righteous man. The world is a dangerous, but not a complicated, place.

His affect is unrelieved grimness.

Grimness is not a standard, or popular , affect in the political bag of tricks. The usual political tactic is to try to relieve grimness, to suggest reasons for optimism. There are, however, various reasons why grimness works for Bush -- why it's an effective melding of man and countenance.

You have, behind the grimness, the moral force of the 5,000 or 4,000 or 3,000 who have died. If you are not naturally a sentimentalist -- as, for instance, Giuliani turns out to be -- then grimness is a good fallback. Bush is a certain type at a funeral. Whereas Clinton would have gone for the inspirational, Bush is the stone-faced Protestant (which plays nationally -- Rudy may be too Catholic in his mourning to play in the South and West). His bereftness is rigid, hard, stoic. This gives weight to his lightweightness. He's a playground bully cleaned up for church. Indeed, when he shifts out of his grim character, he returns to his fecklessness (inappropriate body language , weird discomfort, verbal tics).

There are other advantages to grimness : It cuts off petty squabbles, underlying antagonisms, and cleverer points of view. Grimness, in its suggestion of a dire situation, of even a hopeless one, makes it pretty difficult to take issue. What's more, grim is kind of noble. He's Churchill Lite (very Lite).

He's found a groove.

What is said is that he has stepped up to the role. The circumstances have made him. Adversity has transformed him.

Where before he was coming undone in all but the most scripted public settings -- he wasn't just verbally maladroit but emotionally way off the mark -- the need for constant vigilance in an age of unrelieved grimness flatters his limited emotional and verbal range. He's at ease in this posture. He is good at being resolute, unwavering -- indeed, the less he says, the better. The world is a bad place -- no surprise that good and evil are at it again. It is a comfortable, even natural, role for a reformed alcoholic and born-again man.

As he grows into his new role, the policy manifestations of vigilance and grimness become clearer: mass detentions, interrogation sweeps, suspension of due process, military tribunals.

The mounting discomfort with all this dire reaction, or overreaction, has not rubbed off on the president.

It is a striking triumph of affect. It's not fear -- you can feel that abate. It's deeper than that: We are changed people accepting the world's changed conditions. Life is different now. Fuck 'em.

There is, possibly, no more advantageous condition for a politician than a changed world. The opportunity here is that you, the politician, can come to represent the change. This is "before and after" stuff. There's no going back. The new reality is yours to fashion.

The world is as it is -- deal with it.

This will require -- constant vigilance requires -- broader controls, stricter authority, Rummy, Cheney, and this Reich-sounding homeland business.

What's more, it forces a personality mutation . We are all suddenly nice. We are all solid citizens. We are all cowed. We are all for unity now -- disharmony itself is a sin. And unity is necessarily something that embraces all symbols of unity, including the president. The norm may have never been so strong.

This could be big. This could be the culture shift.

It's possible that Bush -- the strong, implacable, unremitting Bush, canonized in public opinion -- can accomplish the kind of vast, ungenerous, white-bread, retro, wagons-circled, near-Orwellian agenda the Republicans have been dreaming about for years.

The trick here for the Bush people is to stifle not the objections -- let the lefties and the Europeans object -- but the jokes. He is, with the slightest deconstruction, quite a comic-book figure. The line between courageous sentinel and big dork is a relatively thin one.

The worst thing for the Republican agenda would be for George W. to go back to being the butt boy of late-night television.

Surely it must be disconcerting that the son is at exactly the same place the father was : enormous popularity at the end of a nearly casualty-less war. The thing is, a warrior type tends to look ludicrous when the war is over -- especially these modern air wars, which are over as fast as they have started. It's hard to straddle being a strict, button-down war guy and an expansive, let-the-good-times-roll peace guy.

Plus, war leaves you with recession. War, which gets you big-time approval numbers, sucks when it comes to consumer confidence. Or worse, the formula could be a BUSH + WAR = RECESSION. Both father and son, in their crabbedness, their old-shoeness, their lack of big-picture grandness, may be recessionary personalities.

Let's assume this is what the best minds at the White House are thinking, too : We are where the old man was, so how do we not go where he went? It would sound overly cynical (even to me) to say that the secret lies in creating a permanent state of vigilance and grimness. Or to claim that Bush might even have his own agenda for pursuing this new generational, saga-like, phase-after-phase war.

And yet it doesn't have to be cynical. This belief in a general state of perpetual peril -- of evil and goodness in a never-ending dust-up -- can be heartfelt. Not only because it works so well for him but because the dystopian view fits him and a lot of Republicans -- they loved that Cold War, after all. The Bush grimace comes from the heart.

We are going deeper into bad times, in a hostile world, under rigid laws. It will get grimmer yet, until somebody starts making fun of this stiff. Fortunately, we're a nation with a lot of sniggering adolescents.

E-mail : michael@burnrate.com

Enron Is a Cancer on the Presidency
Los Angeles Times

ROBERT SCHEER

January 2, 2002

Robert Scheer's Recent Columns

Finally, a reporter had the temerity to question Bush on Friday regarding the ignominious collapse of Enron Corp. run by Kenneth L. Lay, a Bush family intimate and top campaign contributor. Bush expressed concern "for the citizens of Houston who worked for Enron who lost life savings" and added : "It's very important for us to fully understand the 'whys' of Enron."

Sure is, but did Bush never ask "Kenny Boy" -- his nickname for Enron's chairman--what was going on?

After all, not only was Kenny Boy one of Bush's major contributors, but it was Lay and Enron that Bush turned to for critical advice on how to further exploit U.S. natural resources. The media, which had hounded Bill Clinton on his Whitewater connections, have allowed Bush to maintain the fiction that his -- and his father's -- administration had nothing to do with the debacle that is Enron.

Given the intense interest in the list of those who slept over in the Clinton White House, it's odd that no attention has been paid to Kenny Boy's sleepover in the early years of the senior Bush's White House.

Those early Bush years were crucial for Enron, beginning with the passage of the 1992 Energy Policy Act, which forced the established utility companies to carry Enron's electricity sales on their wires.

At the same time, Wendy Gramm, who served under the elder Bush as chair of the Commodity Futures Trading Commission, allowed for an exemption in the trading of energy derivatives, which, as the Washington Post reported, "later became Enron's most lucrative business."

Once that was accomplished, Gramm, wife of Texas GOP Sen. Phil Gramm, resigned from her government post to take a position on the Enron board. As one of the members of the board's audit committee, she now is expected to be a key figure in the lawsuits and federal investigation revolving around Enron's collapse. Recently, the chief executive of Arthur Andersen, Enron's outside auditor, told a congressional committee that the accounting firm had warned the Enron audit committee of what he termed "possible illegal acts within the company."

Wendy Gramm is also mentioned in a bank lawsuit alleging insider trading as having sold $276,912 in Enron stock in November 1998. Her response is that she sold the stock to avoid the appearance of a conflict of interest, given that her husband was chairman of the Senate Banking Committee.

Yet she was still very much on the Enron board and being rewarded with future stock options when her husband last year pushed through legislation that exempted key elements of Enron's energy business from oversight by the federal government. Phil Gramm had obtained $97,350 in political contributions from Enron over the years, so perhaps he was acting on his own instincts and not his wife's urgings. The exemption was passed over the objection of the Clinton administration.

Wendy Gramm also directs the regulatory studies program at George Mason University, which has received $50,000 from Enron since 1996. Her academic institute is highly influential in arguing for deregulation, conveniently joining her corporate and academic interests.

Unfortunately for true-believer deregulators, the Enron collapse shreds their panacea. Surely no one, least of all Wendy Gramm, who has said she was kept unaware of the company's chicanery in hiding debt and conducting secret private deals to the detriment of stockholders, could argue today with a straight face that Enron was in need of less government oversight.

The fact is that there would be no Enron as we know it were it not for Republican-engineered changes in government regulation that permitted Enron its meteoric growth.

It's true that the corporation had its allies among the Democrats; campaign finance corruption and influence peddling are generally a cover-all-your-bets bipartisan activity. But in this case, the amounts given to Democrats were puny and late, and there's no doubt that Enron rode to power primarily on the strength of Lay's influence with the Bush family. This fact is not mitigated by Enron now hiring Clinton's former lawyer and various top Democratic lobbying groups, except to note that these hired guns have no shame.

The Bush family ties to Kenny Boy Lay are just too intimate and lucrative to ignore.

There also are at least four Enron consultants and executives who hold high positions within the Bush White House, and some of them may be drawn into the investigations that cannot be avoided, despite the distractions of the war on terror.

As John Dean once famously said of the Nixon administration, there is a cancer growing on the presidency, but in this case it's name is Enron, and it won't go away by being ignored.

Unilateral approach revisited
SunSpot.net

MARK MATTHEWS

December 11, 2001

Bush reverts to style used before Sept. 11

As it scrambled to mount a global anti-terror coalition in the tense aftermath of the Sept. 11 attacks, the Bush administration seemed to be a sudden convert to the religion of international cooperation. But not anymore.

Flush with military success in Afghanistan, the White House has taken a series of steps that mark a return to what critics in the United States and Europe call its "unilateralist," go-it-alone approach to world affairs.

The most significant step is President Bush's decision, which might be officially announced today, to scrap the 1972 Anti-Ballistic Missile Treaty with Moscow. The treaty bars the development of a system to defend the United States against missile attack, a system that is one of Bush's most important foreign policy goals.

As recently as last month, even as Bush continued to call the ABM pact a "relic of the Cold War," Secretary of State Colin L. Powell hinted that he was trying to reach an accommodation with Moscow that would allow robust testing but avoid pulling out of the treaty.

Russia has proved to be a valuable ally in crushing the Taliban and al-Qaida terrorist network in Afghanistan, allowing use of its airspace and bases in nations that were formerly part of the Soviet Union. This marked a reversal not only of its decades-long hostility to the West under the communist Soviet regime but also of Russia's post-Soviet drive to maintain a shrinking sphere of influence.

Despite an increasingly close relationship with Bush, however, Russian President Vladimir V. Putin has consistently refused to acquiesce in abandoning the ABM treaty, which he has called a key foundation block of international security.

In meetings last week with arms-control specialists in Washington, high-ranking Russian military officers said a U.S. withdrawal from the treaty would not seriously damage the new relationship.

But the Russians "also warned that their likely response would be to withdraw from other arms-control agreements," including pacts that limit the number of long-range nuclear weapons, eliminate medium-range nuclear missiles and conventional forces in Europe, according to Wade Boese of the Arms Control Association.

Bioweapons discussion

Bush's decision was the second setback in a week for international arms-control advocates. On Friday, administration officials maneuvered to break off discussion at an international conference aimed at enforcing a worldwide ban on biological weapons, causing the convention to collapse.

U.S. officials argued that had it not acted, the convention might have approved enforcement measures that were ineffective. In July, the United States, acting alone, opposed enforcement measures that were the result of years of negotiation, but it was trying at last week's conference to get a number of its own proposals adopted by other countries.

Both the ABM Treaty and the so-called enforcement protocol for bio-weapons are widely supported by America's European allies, who this year were openly critical of what they view as the Bush administration's disdain for international agreements and institutions such as the United Nations.

Europeans were cheered by Bush's early reaction to the Sept. 11 terror attacks, when he instructed Powell to assemble a broad coalition to fight al-Qaida and welcomed European offers of support for the U.S. military campaign in Afghanistan.

But leaders of several European countries, including Britain, France and Germany, were later chagrined to find the United States conducting the war virtually on its own while their forces sat on the sidelines.

No peacekeeping role

Meanwhile, the United States has refused to participate in a subsequent and less visible peacekeeping role, calling on the allies to share the burden. At the same time, it wants the allies to share the cost of rebuilding Pakistan.

The Pentagon says it has been difficult for its commanders to find appropriate roles for the allies, whose armed forces have fallen behind the United States technologically. During the war over Kosovo in 1999, U.S. commanders grew impatient with a cumbersome allied decision-making process.

"What we have seen in the last two months is an implementation of the Rice doctrine," said Ivo Daalder of the Brookings Institution, referring to proposals during the 2000 campaign by Condoleezza Rice, Bush's national security adviser. Rice spoke at the time of a division of labor in which the United States fought the wars and Europeans followed up with peacekeeping.

In the Middle East, the United States has also veered away from a "multilateralist" approach adopted in the aftermath of Sept. 11 as it tried to assuage Arab critics of its anti-terror campaign. Angered by Yasser Arafat's reluctance to crack down on Palestinian terrorists who in the past two weeks have killed more than 40 Israelis, the administration dropped the "even-handed" tone favored by its Arab allies and made counter-terrorism the centerpiece of its Mideast policy.

Most or all of these moves are widely viewed as internal administration victories by hard-liners , most often identified with the Pentagon leadership, who are deeply wary of international agreements that constrain American freedom of action in the world and impatient with the sticky process of gaining a consensus among allies.

They are also perceived as defeats for Powell and State Department officials, who have tried to restrain the administration's "unilateralist" tendencies and work more cooperatively with other countries .

Defense Secretary Donald H. Rumsfeld, an opponent of the ABM treaty, has gained new influence in the administration because of the U.S. military success in Afghanistan, says Catherine Kelleher, an international policy specialist at the Naval War College.

China factor

The ABM treaty decision will have reverberations beyond the U.S.-Russia relationship and dismay in Europe. With China, which in the foreseeable future is less likely than Russia to be able to penetrate an American missile-defense system, it could prove to be a double-edged sword.

China is likely to use Bush's ABM decision as an excuse for a military buildup it was planning anyway, according to James R. Lilley, a former U.S. ambassador to Beijing. But development of a missile-defense system gives the United States a bargaining chip to use in getting China to curb its development of missiles , he said.

Administration critics and some Europeans see the American go-it-alone trend as possibly counterproductive in the war on terrorism and other struggles that require international support for the United States.

"We don't want to fight wars ourselves. It's not politically doable over the long term," says Daalder.

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