Focus: Business and Politics - the Enron Scandal ; Companies Want Influence and Tax Breaks. Ministers Need Inside Advice. No Wonder They Do Business. and Get Burnt. Martin Vander Weyer on a Vicious Circle
Weyer, Martin Vander, The Independent (London, England)
The sleaze-hunters were moving fast last week. Amid the rubble of the Enron bankruptcy, they detected whiffs of political scandal on both sides of the Atlantic. The search will go on for years, as courts and congressional investigators provide new revelations and open new trails of suspicion. As the whole sorry tale gathers momentum, it will raise questions about the rules of engagement between politics and business.
The week began with the question of whether Enron's pounds 36,000 contribution to Labour funds persuaded ministers to lift a ban on new gas-fired power stations or influenced a decision not to refer Enron's pounds 1.4bn bid for Wessex Water to the competition authorities. "Overheated nonsense" said Downing Street: there had been no significant contact between Enron and Tony Blair or his advisers. And frankly - cynics added - pounds 36,000 is small beer: what minister would give away major commercial advantages for such a paltry sum? Since Enron had also given pounds 20,000 to the Tories, this sub- plot of the saga did not look set for a long run.
It was soon overtaken by what the Daily Mail dubbed "Andersengate". The accountancy group Arthur Andersen, Enron's auditor, is alleged to have overlooked bizarre accounting practices that hid the extent of the company's financial peril, and to have shredded documents. Andersen's British arm also turned out to be a close friend of New Labour.
By Thursday, the spotlight had moved on. Now it was former Tory energy minister Lord Wakeham who was the centre of attention: as an pounds 80,000- a-year non-executive director of Enron and member of its audit committee, he is co-operating in US investigations and has stepped aside temporarily as chairman of the Press Complaints Commission. So both major parties have now been embarrassed by Enron, and both have provided fuel for the argument that the cosy relationship between modern politics and business creates too many moral ambiguities.
But neither is implicated in the scandal to anything like the extent that it threatens to taint George Bush's administration. Enron chairman Kenneth Lay is an old Bush crony and was the largest individual contributor to his presidential campaign. Several senior White House officials were once on Enron's payroll, and two federal energy regulators were proposed for their jobs by Lay. Vice- president Dick Cheney is under pressure to reveal the extent of his links after revelations that he had meetings with Enron before unveiling a new energy policy, parts of which, according to Time magazine, seem to have "sprung directly from Enron's wish list".
Set against this American perspective, the British Enron story is still no more than a sideshow, in which public indignation will subside as soon as the next NHS scandal comes along. But the three British strands of the web - the connections between New Labour and Enron, New Labour and Andersen, and Enron and Wakeham, each raise moral issues which need to be analysed. Some are more troubling than others, but all are symptomatic of the way politics and money have become intertwined over the past two decades, creating pitfalls for the naive and opportunities for the unscrupulous.
Wakeham's case is perhaps the most straightforward. He left active politics in 1994, before he joined the Enron board. Thre was nothing unusual in the fact that he took on a portfolio of directorships - he has 16 of them - to provide comfort for his old age, while continuing to play a non-party role in public life as chairman of the Press Complaints Commission. Nor is there anything surprising in Lords-on-the-board such as Wakeham introducing companies that pay them to the politicians who make policies which affect those companies; that is why Lords are invited on to boards in the first place. …