The Stench From Enron's Crash-And-Burn

Fort Worth Star-Telegam ^ | December 11, 2001 | Molly Ivins

[bigdog]

AUSTIN - Hail and farewell, O Enron! What a flameout. The Establishment media, sucking its collective thumb with unwonted solemnity, is treating us to meditations on two themes: AUSTIN - Hail and farewell, O Enron! What a flameout.

The Establishment media, sucking its collective thumb with unwonted solemnity, is treating us to meditations on two themes: "How the mighty have fallen" and "Who would have thunk it?" Pardon me while I snort, in lieu of ruder noises, and offer two themes of my own: "What took so long?" and "Anyone with an ounce of common sense."

If you want to know what this story is about, pretend that Bill Clinton is still president. Pretend that Clinton's long-time, all-time biggest campaign contributor - a guy for whom Clinton has carried water for over the years, a guy with unparalleled "access," a shaper of policy, a man with a veto on regulatory appointments affecting his business, with connections at every level of the administration, a political fixer beyond the wildest dreams of James Riady - imagine that this guy's worldwide empire has tumbled into bankruptcy in just three months amid cascading reports of lies, monumental accounting errors, evasions, iffy financial statements, insider deals, a board of directors rife with conflicts of interest, top executives bailing out with millions while regular employees see their life savings shrink to nothing. Imagine all this back in the day of Bill Clinton.

Holy moley, we'd have four congressional investigations, three special prosecutors, two impeachment inquiries and a partridge in a pear tree by now. The Republicans would all be drumming their heels on the floor in full tantrum.

But this is not President Clinton; it is President Bush - so of course different standards must apply. The fact that Ken Lay, Enron's chairman, has been Bush's chief money man and key backer since he first went into politics is mentioned only in passing. The media don't want to be impolite. They have been credulously swallowing Enron's PR and overlooking the obvious for years.

The main problem with Enron is that it has never produced much of anything in the way of either goods or services; it has not added a single widget to the world widget supply. Enron is in the business of "financializing," making markets, trading in wholesale electricity, water, data storage, fiber optics - just about anything. One Enron executive told The New York Times that the company's achievement was to create "a regulatory black hole" to suit its "core management philosophy, which was to be the first mover into a market and to make money in the initial chaos and lack of transparency."

Enron started as a gas pipeline company that went into trading natural gas, and even then the company's critics claimed that Enron was making profits by stoking volatility in gas prices. The same charge showed up again in spades with the newly deregulated electricity markets. Enron had lobbied for utility deregulation relentlessly, formidably and very expensively at both the state and national levels.

The company seemed to spend more time influencing government than doing business. Like Long Term Capital Management, the hedge fund that went awry, it seemed to have only a parasitic relationship to actual economic activity. The problem with deregulating utilities is the reason that they were regulated in the first place: Monopoly power and the threat of market manipulation are a set-up for unholy price-gouging. How many times do we have to relearn that lesson?

Just a few spiffy eye-openers on Enron's connections:

• Lay and Enron together donated $2 million to Bush. In 2000, a company memo that was an open strong-arm recommended that employees give campaign checks for Bush to the political action committee; low-level managers were urged to contribute $500 and senior executives at least $5,000. Another $1 million was given to mostly Republican congressional candidates. It gave more money last cycle than any other energy company.

• Lawrence B. Lindsey, Bush's top economic adviser, got $50,000 from Enron in 2000 for consulting, presumably giving the company the same excellent economic advice now proving so healthy for the nation's economy.

• Karl Rove, Bush's top political strategist, sold between $100,000 and $250,000 worth of Enron stock earlier this year after being accused of conflict of interest.

• The California Legislature passed a contempt motion against Enron for failure to respond to a June 11 subpoena. The Legislature is investigating whether power-generating companies willfully manipulated the electricity supply in order to drive up prices last year.

• Lay was the only energy executive to meet alone with Vice President Dick Cheney while Cheney was drawing up a new national energy policy in secret.

• Enron influenced public policy time and again while Bush was governor here, including the infamous "grandfathered plants" deal. In 1997, Lay asked Bush to contact every member of the Texas delegation to explain how "export credit agencies of the United States are critical to U.S. developers like Enron, pursuing international projects in developing countries." These agencies provide political risk coverage and financial support to U.S. companies abroad. It's called corporate welfare.

• In Texas, Enron was a major player during the utilities deregulation debate, for which Bush lobbied actively, and, of course, in "tort reform," making it harder to sue corporations for the damage they do.

  Molly Ivins writes for Creators Syndicate. 5777 W. Century Blvd., Suite 700, Los Angeles, CA 90045

[bigdog]

Molly's off her meds again.

[Mr. Bird]

Yes, Molly, let's imagine this is Bill Clinton's term. Kindly allow me to post the following excerpt from CorpWatch, certainly no Republican water carrier:

"Enron's political luck did not run out after Bush's (Sr.) departure. Lloyd Bentsen, another Texan, and Clinton's first treasury secretary, was already a recipient of Enron's largesse.

In one Senate election campaign, the Democrat received more than 14,000 dollars from Enron. According to data provided to IPS by the research group, Centre for Responsive Politics, the amount is the second highest paid out by Eron to a political campaign.

Bentsen quit his job as secretary of the treasury at the end of 1994 and was succeeded by Robert Rubin, a business associate of Enron's when he was at the investment bankers, Goldman Sachs.

Clinton first hired Rubin to head his National Economic Council. Soon afterwards, Rubin wrote on Goldman Sachs stationery to former clients, including Enron, in which he ''looked forward to continuing to work with you in my new capacity.''

In the meantime Lay has wasted no time in cultivating friends with the new Clinton administration.

In Aug. 1993, McLarty arranged an invitation for Lay to play golf with Clinton in Vail, Colorado. This date irritated Oscar White, chief executive of Coastal, another natural gas company that had helped the Clinton election campaign raise funding.

These connections to the Democratic administration have helped Enron considerably, says Ken Silverstein, who publishes Counterpunch, a fortnightly newsletter here.

Clinton officials publicly helped Enron win the contract in India as well as in Indonesia. And in the last two years, Enron has received U.S. government funds to build power plants in China, the Philippines and Turkey. Enron also won contracts in Pakistan and Russia while accompanying senior U.S. government officials on state trips."

In your words Molly: Holy Moley!

[ahmedtousay1]

The scandal that is Enron will grow big time. The greed and avarice of the top executives at Enron is deplorable and their criminality will be their undoing.

Eldar Pompov
Topeka, KS

[Mind-numbed Robot]

.....pretend that Bill Clinton is still president.

I couldn't get past this. If Clinton were still president we would be so up-to-our-ears in terrorists that we would not have even noticed Enron's collapse.

[wideawake]

This is hilarious.

Just a few observations:

The main problem with Enron is that it has never produced much of anything in the way of either goods or services; it has not added a single widget to the world widget supply. Enron is in the business of "financializing," making markets, trading in wholesale electricity, water, data storage, fiber optics - just about anything.

Molly therefore is an adherent of the "labor theory of value" - a preposterous notion which not only places Molly firmly in the Marxist camp, but which also places all Marxists in the Flat Earth Society.

Like Long Term Capital Management, the hedge fund that went awry, it seemed to have only a parasitic relationship to actual economic activity.

This kind of Stalinist rhetoric is laughable. Why doesn't she just make an outright call for the abolition of banks and money?

Enron started as a gas pipeline company that went into trading natural gas, and even then the company's critics claimed that Enron was making profits by stoking volatility in gas prices. The same charge showed up again in spades with the newly deregulated electricity markets.

Hmmm . . . "stoking volatility". Let's have a little experiment, shall we? Now that Enron is bankrupt, let's check up on the gas and electric commodity markets a year from now and see if volatility has been eliminated from them. Let's also check up on the same market data from the years preceding Enron's debut as a commodities market maker and see if volatility was lacking in those days.

I can't believe that this passes for economic analysis among hundreds of thousands of this country's most well-to-do morons.

[Mind-numbed Robot]

Thanks for the information, Mr. Bird. Will you kindly forward that little bit of information to our dear sweet Molly, as well as the publiations who printed her column?

[spectre]

Right on! And from the same source:

"In 1995, the CLINTON Administration threatened to cut off development aid to Mozambique if it did not sign a deal with ENRON to construct a pipeline from Mozambique to South Africa. Declared Mozambique's natural resources minister, John Kachamla: "Their diplomats, especially Mike Mckinley (deputy chief of the U.S. Embassy), pressured me to sign a deal that was not good for Mozambique. He was not a neutral diplomat. It was as if he was working for ENRON."

Clinton has his share of mud on him, Molly...start digging.

sw

[Phantom Lord]

Karl Rove, Bush's top political strategist, sold between $100,000 and $250,000 worth of Enron stock earlier this year after being accused of conflict of interest.

A a good thing for Rove in the end. Today that stock would be worth $1.50

[deport]

Enron, the equal party opportunist.......

TIME, September 1) -- For a man who had supposedly vanished from the corridors of power, MACK MCLARTY was the man to see in 1996. BILL CLINTON's former chief of staff, now a White House counselor tucked away in the basement, provided assistance to businessmen who ponied up $1.5 million for the Democrats in the last election. On Nov. 22, 1995, for example, Clinton scrawled an FYI note to McLarty, enclosing a newspaper article on Enron Corp. and the vicissitudes of its $3 billion power-plant project in India. McLarty then reached out to Enron's chairman, KEN LAY, and over the next nine months closely monitored the project with the U.S. ambassador to New Delhi, keeping Lay informed of the Administration's efforts, according to White House documents reviewed by TIME. In June 1996, four days before India granted final approval to Enron's project, Lay's company gave $100,000 to the President's party. Enron denies that its gift was repayment for Clinton's attention, and White House special counsel LANNY DAVIS says McLarty acted out of concern for a major U.S. investment overseas.

[ArGee]

Monopoly power and the threat of market manipulation are a set-up for unholy price-gouging. How many times do we have to relearn that lesson?

One would expect that, with a question like this followed by a list of bullet items, that the list would attempt to give examples of how the Enron situation meets this criteria or how market manipulation is a set-up for price-gouging. Why was I not surprised that Molly gave no examples? There aren't any, of course. California's power crisis was caused by California's energy policy, not Enron's power trading.

And Enron's fall is caused by Enron's financial misdealings, not by it's relationship with (or lack thereof) the President of the United States.

By the way, if this were the Clinton presidency there would be no Congressional demands for a hearing, because nobody would have known about the trouble. Enron would still be flying high. The SEC would have been told to keep their noses out of it and nobody would have investigated Enron until Bill Clinton was worth at least $1 billion more than before the problem started. (Hillary would have made the billion trading natural gas futures, dontcha know.)

It's too bad about the employees who lost their life savings. I hurt for them. But you won't solve their problems by trying to convince people that President Bush is as bad as X42 was.

Shalom.

[Southack]

I'd sure hate for Molly to actually view the freaking campaign contributions. Here's a first pass from just one of Enron's zip codes...

Individual Donors Search

23 records found in .03 seconds. SEARCH CRITERIA: Donor name: ENRON Donor zip code: 20006 Election cycle(s): 2002 2000 Start another search

Sort by Name Sort by Date Sort by Amount

Contributor	Occupation	Date	Amount	Recipient
ENRON CORP WASHINGTON, DC 20006		3/27/2000	$100,000	NRCC/Non-Federal Account
ENRON CORP WASHINGTON, DC 20006		3/26/1999	$60,000	NRCC/Non-Federal Account
ENRON CORP WASHINGTON, DC 20006		6/15/2000	$25,000	DNC/Non-Federal Corporate
ENRON CORP WASHINGTON, DC 20006		3/26/1999	$25,000	NRCC/Non-Federal Account
ENRON CORP WASHINGTON, DC 20006		6/23/2000	$700	NRCC/Non-Federal Account
ENRON CORP WASHINGTON, DC 20006		2/4/2000	$700	NRCC/Non-Federal Account
ENRON CORP WASHINGTON, DC 20006		7/14/2000	$5,000	NRCC/Non-Federal Account
ENRON CORP WASHINGTON, DC 20006		9/5/2000	$50,000	DNC/Non-Federal Corporate
ENRON CORP WASHINGTON, DC 20006		9/5/2000	$50,000	DNC/Non-Federal Corporate
ENRON CORP WASHINGTON, DC 20006		9/5/2000	$50,000	DNC/Non-Federal Corporate
ENRON CORP WASHINGTON, DC 20006		8/16/2000	$15,000	NRCC/Non-Federal Account
ENRON CORP WASHINGTON, DC 20006		8/21/2000	$15,000	NRCC/Non-Federal Account
ENRON CORPORATION WASHINGTON, DC 20006		9/29/2000	$10,000	DCCC/Non-Federal Account 1
ENRON CORPORATION WASHINGTON, DC 20006		6/30/2000	$10,000	DCCC/Non-Federal Account 1
ENRON CORPORATION WASHINGTON, DC 20006		6/30/2000	$25,000	DCCC/Non-Federal Account 1
ENRON CORPORATION WASHINGTON, DC 20006		7/19/2000	$10,000	RNC/Repub National State Elections Cmte
ENRON CORPORATION WASHINGTON, DC 20006		10/23/2000	$2,500	DCCC/Non-Federal Account 1
ENRON CORPORATION WASHINGTON, DC 20006		4/20/2001	$2,050	DCCC/Non-Federal Account 1
ENRON CORPORATION WASHINGTON, DC 20006		4/25/2000	$1,565	DCCC/Non-Federal Account 1
ENRON CORPORATION WASHINGTON, DC 20006		6/29/2000	$50,000	DSCC/Non-Federal Corporate
ENRON CORPORATION WASHINGTON, DC 20006		10/25/2000	$1,000	NRCC/Non-Federal Account
ENRON CORPORATION WASHINGTON, DC 20006		11/2/2000	$1,000	NRCC/Non-Federal Account
ENRON WASHINGTON INC WASHINGTON, DC 20006		1/25/2001	$2,500	RNC/Repub National State Elections Cmte

2000 cycle data downloaded from FEC on November 1, 2001.

2002 cycle data downloaded from FEC on November 1, 2001. Date of request: December 11, 2001

[Eric in the Ozarks]

More mush from the plagiarist.

[Bommer]

RNC Donations = $235,900
DNC Donations = $276,115 - $40,215 MORE than Republican Donations!!!!

Hey Molly! Come up from Ann Richards rug and lookie here! Looks like your party benefited from Enron more than the RNC!

[Southack]

"The main problem with Enron is that it has never produced much of anything in the way of either goods or services"

Molly is clearly no businesswoman. Enron's main problem was that it had too much debt. That problem was able to be hidden via off-balance-sheet deals facilitated by Big-5 Arthur Andersen, but after a while the truth finally came out.

Molly's bizarre claim that Enron manipulated energy markets sounds as though she's been frequenting Democratic Underground. For one thing, Enron claimed profits of only $600 Million on $101 Billion in sales, for a net margin of less than 0.6%, hardly the stuff of monopoly manipulation. To get that $600 Million, Enron borrowed at least $23 Billion, most of it on the sly due to hidden transactions via 3rd party corporations and unethical accounting by a big-5 firm that clearly had a conflict of interest via their sister firm's (Andersen Consulting/Accenture) lucrative "consulting" fees at Enron.

The kicker, however, is that Molly is clearly willing to put on her partisan kneepads to avoid any mention of Enron's $250,000 in donations to put in place Houston's mayor Lee Brown, or any mention of Enron's contributions to ANY Democratic candidate for that matter, such as Shiela Jackson Lee and Lloyd Bentson (Clinton's Treasury Secretary).

But hey, since when has poor Molly ever let facts stand in the way of her mindless Socialistic, anti-Western rants?

[Tacis]

Why do you people even READ this aging has been? She is just like Geraldo, Rather, and Maher, leftist propagandists who care nothing for the facts. Their job is to progress soscilaism and knock anything that is not ultra-liberal. Molly is part of the Disney left wing, fairy conspiracy. There is very little that explains her employment by the Startlegram. Her column ALWAYS is propaganda and ALWAYS says nothing more than "the Republicans did it." If you are an ultra-left wing, flaming extremist liberal, then I guess you's like her. For anyone else, she's just another reason to spend less time with your newspaper.

[cibco]

Molly and Helen Thomas need to get together and share a good shrink.

BTW Over the years, in catching an occasional rant of hers, I have never seen her offer any type of solution, remedy or or alternate course. She is a good commie though.

[bigdog]

Why do you people even READ this aging has been?

Laughs

[longleaf]

Enron bought influence on both sides of the aisle and overseas as well. There's no use trying to defend them. Chairman Lay seems like a snake to me. Always has.

What chaps me is that they have cast utilities deregulation in such a bad light that a $250 million natural gas-fired generating plant in my area may never be built because of the fallout from this scandal.

It would have created hundreds of jobs during the construction phase and at least 40 permanent jobs.

[gfactor]

this enron mess will make whitewater seem like a picnic. I'm sure that the good folks concerned with influence peddling and financial impropriety that gave us that piece of history can't wait to get their teeth on this one.

[eyesofTexas]

So far only one post that directly addresses Molly's charge that Congressional Republicans would be up in arms if the situation were reversed and the Enron meltdown had happened while Clinton was in the White House with the same dollars and access going to Clinton as have gone to Bush. ArGee writes: "By the way, if this were the Clinton presidency there would be no Congressional demands for a hearing, because nobody would have known about the trouble. Enron would still be flying high. The SEC would have been told to keep their noses out of it and nobody would have investigated Enron until Bill Clinton was worth at least $1 billion more than before the problem started. (Hillary would have made the billion trading natural gas futures, dontcha know.)" ArGee, Enron would not be "flying high" if their stock went from $80 to $.80, which it did. The SEC, or even the devil Clinton himself could not cover that up.