Posted on 12/10/2001 7:47:51 AM PST by BluH2o
W A S H I N G T O N, Dec. 12 — When the energy-trading firm Enron collapsed recently after disclosing financial irregularities, thousands of employees lost their jobs and investors lost billions. Enron's fall also crippled one of President Bush's most loyal corporate supporters.
The Houston-based company was among the first to back Bush when he ran for governor of Texas. Enron and its executives went on to become the largest source of financial support for Bush's gubernatorial campaigns, giving more than $500,000, according to a study by the Center for Public Integrity.
"Enron was the number one career patron for George W. Bush," said center director Charles Lewis. "There was no company in America closer to George W. Bush than Enron." Lewis says the company's goal in backing Bush and other politicians was to encourage further deregulation of the energy industry.
"Enron made a decision that they needed government to go their way and they put the money out to make sure that happened," he said.
Loyalty and Access
Congressional hearings open this week into Enron's financial implosion, which culminated in a Dec. 2. bankruptcy filing. The Labor Department, the Justice Department and the Securities and Exchange Commission are all investigating Enron. It's unclear to what extent the inquiries are examining the longstanding ties between administration officials and the company, which was once the seventh-largest U.S. corporation in terms of revenue.
Enron CEO Kenneth Lay has been a friend of Bush and the Bush family for years. When Gov. Bush ran for president, Enron gave him access to a company jet. (The Bush campaign reimbursed the company roughly $25,000 for the flights.)
In April 2000, when Enron opened a new baseball stadium named for the firm, then-candidate Bush sat right in front of Lay in the Enron box.
Since 1999, Enron and its executives have given more than $2 million to the Bush campaign and other GOP causes. Democrats got about a quarter of that amount.
As Bush assumed the presidency, Enron had unusual access to the new administration's deliberations about energy policy and appointments to important posts. Lay served on the Bush transition team and helped interview candidates for the Federal Energy Regulatory Commission, which oversees the gas pipelines and electricity grids that are key to Enron's business. Earlier this year, the commission's chairman, Curtis Hebert, who was being considered for reappointment by the White House, declared himself "offended" by Lay's lobbying efforts. Hebert later quit the panel.
When Vice President Dick Cheney drafted a new energy policy, he met with Lay and other Enron executives. Enron was reportedly the only company to be granted such a meeting.
Lay declined to be interviewed for this story.
Washington Posts
Enron alumni also fill prominent slots in the Bush administration. The president's chief economic adviser, Larry Lindsey, and the top trade negotiator, Robert Zoellick, both served as advisers to the company. Secretary of the Army Thomas White was an Enron executive before joining the administration. When he assumed the Army post, White was forced to sell more than $25 million in Enron stock, according to a financial disclosure form he filed.
Rep. Henry Waxman, D.-Calif., has been pressing Cheney to detail his contacts with the troubled company.
"There is a very intimate connection between Enron and the Bush administration. How could they not have known what was happening?" Waxman said in an interview last week. "I think we need to find out what people in the administration knew, many of whom used to work for Enron. We ought to find out whether they ignored warning signs."
In the past, the White House has resisted requests for information about its dealings with the energy industry. The General Accounting Office, the investigative and auditing arm of Congress, threatened to sue Cheney earlier this year after he declined to turn over documents about his meetings with Enron and others interested in the energy policy he was developing. After the Sept. 11 attacks, GAO said the effort to get Cheney's records was no longer a priority.
Despite the administration's numerous ties to Enron, the White House has deflected questions about the company's failure. Reporters who asked White House Press Secretary Ari Fleischer about Enron were referred to the Treasury Department.
However, Fleischer said last week that Congress has grounds to investigate how Enron fell so far so fast.
"It's very understandable why people in Congress… charged with oversight of any implications of Enron's bankruptcy would seek hearings," he said.
The Bush people need to put this fire out immediately.
This 21-year employee is a moron. Nobody with any financial sense would have almost their entire 401(k) account invested in one company. In fact, a good financial planner will tell you that you should NEVER invest more than a token amount of money in your employer if it is a publicly-traded company.
What good did all the connections do them?
Nada.
Sure, the golden parachutes get theirs, but that's true in any corporation.
The solution is to get your own corporation, rather than relying on someone else to give you a 401K.
Why wasn't this guy complaining about high energy prices when his 401K was at 500,000?
The company I work for limits the amount of 401(k) that you can invest in the company. If memory serves me right, we are not allowed to invest more than 25% of our 401(k) in company stock. Might even be a lower %.
Oh, and now a bunch of the employees who lost everything because they put everything in Enron are suing Enron and want their money back. Unless they were illegally and fraudulantly advised to invest that way, tough shit.
The democrats will use this unmercifully against the Bush administration. This is what the democ"rats" push all the time ... the little guy against the big guy ... labor against management, etc.. Now they have the goods on Bush ... or, at least think they do.
Well, at least Bush and Co. have not made it their goal to bankrupt "big tobacco", "big firearms", "big medicine", "big Microsoft", etc. As the Dems. have. And by doing so the Dems. actively try to put Americans out of their jobs. Heck, the Dems. should be happy, since Enron was in the energy business and so must have been part of "big oil". And they hate big oil.
The Dems. take in huge amounts of money from trial lawyers who take money right out of the public's pockets. Trial lawyers like John O'Quinn, etc. They shake down the companies mentioned above and then fund the Dems. But ABC does not say a thing about that. Pissants!
Waxman's giant black nostrils are flaring over the secret Enron-Cheney meeting..wonder what advantage he thinks Enron got?
As for our nation's oil shortage, I suggest drilling in Nostril Waxman's two hairy black holes. No telling what we're likely to find.
Don't expect to hear this version in the liberal mainstream media. Charlie Gibson, host on GMA, was having a near orgasim with this story ... tomorrow will be Katie Courics turn at NBC.
You're right, the fact he was duped by his own 21 year company then wasn't allowed to sell his shares when the upper mangement was bailing out is all his fault...
But I wonder if your response would have been the same if the article was about Clinton/Enron rather than Bush/Enron....just wondering.
The Enron employee interviewed on GMA had 21 years with the company. He appeared to be in his mid-fifties. He had tried to cash out a large portion of his 401K earlier this year and wasn't permitted to do so.
Then maybe the lesson for future corporations/CEO's is don't give Bush any money.
Good point.
Your question about Bush/Enron vs. Clinton/Enron is an idiotic one. If this were a Clinton/Enron story then it never would have been investigated by ABC News.
Someone needs to explain to me how the allegation in this story makes any sense. Enron has wielded tremendous influence over George W. Bush since he was governor of Texas, and has used that influence recently to push for energy deregulation. As a result of energy deregulation (as well as an oil agreement that Bush reached with Vladimir Putin last month), Enron is now bankrupt. It sounds to me as if: 1.) Enron had absolutely no influence in the Bush Administration, or 2.) Enron had lots of influence but had no idea what the f#ck they were supposed to do with that influence.
If they are going to start throwing blame around, I'd have have look at the auditors.
Public corporations must subimit independently audited financial statements to the SEC. This requirement grew out of the 1930's stock market crash, when companies regularly "cooked" the books. The false information that investors were relying on was a major factor in the stock market crash.
Either the audiors were very bad or they weren't very independent. By the way, "independent" auditors are paid by the company they are auditing.
I say investigate the company management and the auditors.
That story comes to mind on a regular basis these days.
Remember, these liars know the Nazi mantra of "tell a lie often enough and it becomes the truth".
We need to nip these lies in the bud!
by those in a position to know,
by shorting Enron? Which family members benefited?
That's true. However, since most companies don't match more than dollar for dollar on the first 6% (and that is at the very top end - most offer more in the way of $.50/$1 up to 3% or 4%), the worst it could be was a 50/50 split if one invested only enough to receive the company match and then diversified the remaining assets elsewhere. I have no sympathy for someone who put ALL their retirement assets into one company.
As for the issues regarding employees not being able to sell the stock, it is very common for assets to be "frozen" when a retirement plan is going through a significant change, and plan changes are not unusual. However, the timing of this particular change is very questionable.
Maybe, maybe not. I don't know what Enron's policies were, but it is increasingly common for companies that subsidize 401(k) plans to REQUIRE that a significant portion of the money be invested in the stock of their own companies. This is an artificial way of bolstering stock prices, and what happened at Enron may be an example of why this is such an intellectually (and morally) bankrupt idea.
I followed your link to the self-proclaimed non-partisan, non-profit policy organization Texans for Public Justice. They have a list of donors to Bush's presidential bid, with their allegged faults [icons for pollution, corporate CEO, lobbyist, beneficiary of corporate welfare, etc]. They do not have a similar list for either Al Gore or Ann Richards.
They complain about the quality of life: here are a few excerpts:
Texas education has improved over the past decade but remains mired in mediocrity. Texas ranks No. 36 in teacher salaries, with more than a quarter of Texas teachers holding down second jobs. We are No. 32 in spending per student. ...
(No mention of test scores, percentage of graduates who go on to college, ...)
Just six states have a wider income disparity separating the richest from the poorest fifth of their populations.
With no state income tax, Texas ranks No. 2 in its dependency on sales taxes, which shift a heavy share of the burden to the working poor.
The Lone Star state is the nation’s leading host of gun shows, which exempt gun buyers from the normal rules requiring criminal background checks.
In other words, that source is raving lunatic liberal, and should not be relied on for any information about an alleged connection between Enron and Bush.
You type weird
I think.
Maybe Rep.Waxman should comment on the Belfer family.
[Houston Chronicle, "Enron loyalty costs N.Y. family billions,-Director held on to stock to bitter end," by Leslie Eaton and Geraldine Fabrikant, New York Times , Sunday, Dec 8, 2001, page 2D]
If you can prove otherwise instead of looking for apologies or shooting the messenger, have at it.
How about the self proclaimed conservative opinions at etherzone.com...Power Scam: THE ENRON BUSH CONNECTION
You are completely correct.
The Democrats are just trying to find an 'issue' to ride back into the White House and whittle away some of Bush's high numbers. Class warfare spins well for them.
They are trying an 'enron' around the truth.
Correct. The valid point that Enron's connections with the Bush family did it no good at all (bankruptcy) needs to be stated over and over on the TV news shows that seek to use this business failure as a lever to make Bush look bad, somehow, some way.
The Bush administration should not stand in the way of any Congressional investigation. To the general public, perception is everything and stonewalling or attempting to thwart investigations of Enron's financial dealings that caused the collapse simply look bad for Bush. Let it all hang out, but never stop pointing out that the 'connections' didn't pay off and there was no corruption going on between the Bush White House and Enron.
Thank you for the link from the Buchanin supporters. It was very entertaining to read how Bush's refusal to involve the federal government in California's energy woes was deliberately intended to create an artificial energy crisis and "ensure Enron's unconscionable profit".
Unfortunately, there is no evidence that Enron's contributions gave them any benefit. I find the quote below laughable
One of the global energy cartel's most visible players, Enron saw its corporate profits rise 34 percent in the fourth quarter of 2000. Enron shareholders should ask -- did dividends come from price gouging US citizens?
While it may be acceptable for the company to dictate the terms of the company match, this sounds blatantly illegal if it involves the employee's 401(k) contributions. If it is only the company's matching funds that were lost, then the employees really have nothing to complain about since it wasn't their money to begin with.
I thought that "political payoffs" were when you gave money to a politicians and then recieved some benefit. There is no quid pro quo when the donor goes bankrupt.
I've heard this categorizaton a lot, and I have to take issue with it.
If a company gives me stock options as part of my compensation, it's my money. Not the company's money. Mine. And why should the company have the right to prevent me from using that money as I see fit? I don't understand how FReepers can get so insensed about wanting the government to allow them to do whatever they want with their social security funds, and yet have no problem at all with a private company doing even more harm to their employees by both denying them control, and failing to provide any security.
I'm not advocating that companies should be required to guarantee returns on stock, because that goes against the market. However, it seems wrong for a company to pretend to offer a form of compensation that seems to be used only to keep the stock price artificially high and protect the wealth of the executives.
I agree, but what we are talking about here is distinctly different than stock options. The company offered to match the contributions that employees made to their 401(k) plans, on the condition that the money the company contributes was used to purchase company stock. Companies are not required to provide matching contributions (Ford, in fact, just announced that it would not provide matching funds next year), so anything they do provide can be treated as "found money."
Also, it should be noted that the company's requirement to purchase company stock with these matching funds does not absolve the employees of their responsibility to watch their own contributions carefully. It sounds to me like many of them failed in this regard.
If these were real stock options, the employees would have been truly screwed. They would have owed taxes on stock that was given to them at $50 per share (as an example), even though the stock is now worth less than $1 per share.
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