Enron End Run

Article excerpt

"Most analysts say" the Enron mess does not yet "rate as a Washington scandal," according to USA Today. Roger Pilon of the Cato Institute, for one, observes, "Enron is a business scandal--an accounting-and-securities fraud of substantial proportions. It's not a political scandal." The no-scandal-yet lobby is essentially relying on the fact that no evidence has emerged so far indicating that any of the company's pals in the Administration came to the firm's rescue untowardly as Enron began to topple. When Congress opened hearings this year on Enron, the political dimensions of the affair--that is, the extensive connections between Washington and Enron officials--were left mostly untouched. A House subcommittee banged up the accountants of Arthur Andersen. The Senate Governmental Affairs Committee, guided by chairman Joe Lieberman, concentrated on the foul-ups and follies of modern market capitalism [see Corn, "Enron on the Hill," at www.thenation.com].

But slowly--drip, drip, drip--the political side of the scandal is rising. Every few days, another political figure is linked to the bamboozlers at Enron. Bush's chief economic adviser, Lawrence Lindsey, was on an Enron advisory board (as was Bush trade-rep-to-be Robert Zoellick), and during the presidential contest Lindsey took a policy proposal from Enron CEO Ken Lay and incorporated it into the Bush campaign platform. Bush's uberstrategist, Karl Rove, according to the New York Times, helped consultant and former Christian Coalition whiz kid Ralph Reed win a big-money contract at Enron when the Bush camp was courting Reed. (Reed denies that Rove arranged the deal.) Edward Gillespie, a top Bush campaign adviser, pocketed more than a half-million dollars lobbying for Enron in 2001. Secretary of the Army Thomas White has gotten flak for having served as vice chairman of Enron Energy Services (allegedly when accounting irregularities occurred) and then, once in office, for having urged the privatization of energy services at military bases. (Other prominent Republicans and conservatives--including pollster Frank Luntz, pundit William Kristol and speechwriter/commentator Peggy Noonan--were on the Enron payroll.)

There is more to the Enron mess than the narrow question of whether Bush or his aides assisted Lay, Bush's all-time most generous contributor, at the eleventh hour. Vice President Cheney called the Los Angeles Times during California's electricity crisis to argue against price caps the day after Lay paid him a visit to push that position. Curtis Hebert Jr., then-chairman of the Federal Energy Regulatory Commission, last year claimed that Lay told him that unless Hebert backed Enron's view on electricity deregulation the company would not support him. Months later, Hebert was replaced as chairman. Cheney and the National Security Council assisted Enron as it tussled with a state government in India over a power plant Enron was trying to unload [see Arundhati Roy, page 16]. …