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
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
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
- 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.
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
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
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
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.