Tuesday, February 12, 2002

The blogsphere's capacity for rationalization about Enron seems limitless. My fellow pseudonym, Robert Musil, claims on his Blog without Qualities that Enron's financial condition actually was correctly represented on the company's financial statements, and that his financial associates figured it all out just by reading the statements. Which makes them better informed than the company's CEO and Chairman, both of whom have publicly professed blissful ignorance. But consider the alternative:

To conclude that Enron's fraud had the scope its critics now allege, complicity of Arthur Andersen and a conspiratorial intent on the part of Enron's own officers is only the beginning. One must then assume that each member of the board of directors was willing to risk his or her personal fortune, career, reputation and honor - all for compensation reportedly of less than half a million dollars per year.

Less than half a million dollars per year. Chicken feed.

What's more significant, perhaps, is the way some folks rationalize away connections between Enron management and the Bush administration. Which might be a problem if they evaluated Bush by the same standards that Republicans used for Clinton --- the upstanding moral character of his associates. That was the character issue, which he ran on more than anything of substance, remember?

(In that connection, it's tempting to mention some of Bush's other displays of flawed character, like visiting a youth program in Oregon, offering strong words of support, and then gutting its funding. Or his on-again, off-again promise of $20 billion in aid to New York. But that's thin gruel. The first can be written off as not quite a lie, since he never actually uttered a promise to keep funding the program. As to the second --- well, that's a link to a column by Paul Krugman, so it should suffice to completely ignore the argument, and mutter something about fuzzy math. So, for the moment, at least, back to Enron).

Here, too, the rationalizations teem. Bush was campaigning on Enron's corporate jet? Tut, tut, it's just an airplane. Dubya, while governor of Texas, personally lobbies the governor of Pennsylvania on Enron's behalf? He was just supporting a Texas company; any governor would have done as much. Bush père had Lay on an overnight to the White House? But he had lots of guests. Senior Enron executives were ordered by Lay to donate large amounts to Dubya's campaign, as a way around the limits on direct contributions? Heck, it was their money. Enron parks former Christian Coalition director Ralph Reed on its payroll, on the recommendation of Bush political guru Karl Rove? Why then, Reed must have been doing good work for the company. (As an expert on spiritual energy, perhaps). How about a trusteeship for "Kenny Boy" on the board of the Bush presidential library, literally entrusting Ken Lay with the Bush family legacy? Evidently not even worthy of comment.

So, with regard to social connections, and campaign contributions, the blinders are clearly on. And maybe rightly so --- what's really relevant is the degree to which Enron exercised improper influence over policy. Which, in turn, can't be definitively assessed so long as Cheney is playing possum. But we can look for the moment at what we do know.

And what do we find? Rationalizations. Remarkable ones.

Let's start with the strange case of Curt Hébert, the first Chair of the Federal Energy Regulatory Commission under Bush, who resigned under pressure, and was replaced by a good old boy from Texas. The GAO was asked to look into whether Lay had exercised improper influence. Their intriguing report says that:

  • Hébert wanted Lay's political support.
  • That support was contingent on Hébert changing his policy stands to be more favorable, in specific ways, to Lay and Enron.
  • This was understood on both sides of the conversation.
...but that none of this was improper because Lay's political support was not an "intangible ... thing of value" (it was only Hébert's job, after all), and because no one had uttered the magic words "quid pro quo". It's for logic like this that I named this blog for the works of Lewis Carroll.

Or consider the remarkable memo uncovered by the SF Chronicle, which was passed from Lay to Cheney at a private meeting. Almost all of its "advice" instantly became administration policy.

That meeting itself was more than passing strange --- it featured extensive discussions about the then-current California energy crisis at a time when California's elected officials, Governor and Senators alike, were repeatedly denied meetings on the subject. And not only that, Lay was the only corporate executive Cheney met with one-on-one. (But Lay denies knowing that he had any special role. Quelle surprise).

But, the administration's defenders argue, Enron didn't get its way in everything --- Enron supported the Kyoto protocol, for instance, which the administration opposed, thus proving its independant judgment. In other words, Cheney went against Enron when its peripheral concerns butted up hard against the vital interests of the coal and oil industries, thus demonstrating for all that he is not a spineless tool of the energy industries. Or so the argument goes. I'm underwhelmed.

But Enron wasn't just throwing money at Bush --- they were throwing money at anyone who would take it, goes another line. True --- as I've noted elsewhere, the notoriously flawed California deregulation plan was shaped by Enron-channeling Democrats. But, quoth the Washington Post, they were fairly careful about getting value for money; their system for monitoring the influence market featured high tech and elaborate models comparable to anything they used to run their dealings in, say, natural gas. And if their contributions to Republicans, and Bush in particular, were disproportionate, we might reasonably refer that the "influence peddlotron", as Joshua Marshall has memorably dubbed it, was telling them that that's where they could get value for money.

The trump card of the administration's defenders is that when at long last the company was falling apart, the administration wouldn't talk to them about a bailout. So: in spring, when the company still appears to politicians as a well-endowed donor, they get extraordinary access and influence (one-on-one meetings with Cheney, who won't even deign to talk to California's governor or Senators; when FERC policy doesn't align with Ken Lay's, the chairman gets bounced). But, when they place the call that says the gravy train is out of steam, their phone calls are no longer returned. I think we can all agree that that clarifies the nature of the relationship.

If there are innocent explanations for all of this, they are certainly to be found in the records of Cheney's ad hoc energy committee. In which case, he need not concede that Congress has the right to see his papers; he can just let them have a good look out of magnanimity. Just show the records and come clean. Isn't that what they kept telling Hillary?

Instead, he's stonewalling the GAO, and lying about what they're asking for in a vain attempt to give his position a respectability which it doesn't deserve. And as long as he keeps that up, this looks worse than Whitewater ever did, and it goes straight to the heart of government policy-making, which Whitewater did not.


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