Dems Let Enron Off the Hook - GOP got the campaign contributions and the Dems play nice ~ WSJ.

By James Freeman. Mr. Freeman is president of Hudson Media Corp., a television production company in Alexandria, Va.

Enron CEO Kenneth Lay has been a major contributor to the GOP. But in an ironic twist, Democrats in Congress may help him beat the rap for his Texas-sized rip-off of investors. How is this possible?

At Wednesday's joint hearing of the House Capital Markets and Oversight Subcommittees, members of both parties ripped Mr. Lay for declining to appear, and for the destruction of some $70 billion in wealth that decimated the retirement savings of Enron employees and punished thousands of small investors. But members split along roughly partisan lines in seeking solutions.

Republicans, led by Capital Markets Chairman Richard Baker (La.), largely treated the Enron disaster as a criminal case. Mr. Baker began a prosecutorial quest for the guilty, promising "consequences for those who abuse the system," and suggesting that insider trading may have been among the offenses committed by senior managers. Said Mr. Baker, "There were apparently indicators of potential difficulty to a few insiders." Referring to one Enron executive who apparently sold more than $300 million of Enron stock in the three years before the collapse, Mr. Baker said, "What did he know? When did he know it? And why didn't we?"

Financial Services Chairman Mike Oxley (R., Ohio) wanted to know which interested parties inside and outside the firm might have participated in misleading investors. Oversight and Investigations Chairman Sue Kelly (R., N.Y.) also focused on specific instances of potentially criminal conduct.

Democrats had a broader focus. They heaped scorn on Mr. Lay and other senior managers, but when assessing blame and suggesting solutions they generally looked elsewhere. Ranking member Paul Kanjorski (D., Pa.) of the Capital Markets Subcommittee questioned whether the rules governing accountants and securities analysts could be to blame. Rep. John LaFalce (D., N.Y.) asked, "How many more Enrons are there?" and suggested that there may be systemic problems in the financial markets. Rep. Luis Gutierrez (D., Ill.) advocated changes in the laws governing worker retirement plans. Rep. Ken Bentsen (D., Texas) zeroed in on America's corporate governance and auditing practices. Rep. Stephanie Tubbs Jones (D., Ohio) asked, "Where did regulation go wrong?"

Democrats may be giving a way out to a few Republican fat cats. If Washington and the major media outlets decide that this is a failure of regulation, then Enron execs have the tools to mount the "Animal House" defense. Brothers of the mythical Delta house claimed that their actions were really a feature of the university system and the United States in general. So an attack on Bluto and the gang was really an attack on America.

So too, if Washington decides that the Enron collapse was caused by flaws in accounting rules, poor government oversight, energy market regulation, analyst conflicts or lax enforcement by the SEC, Mr. Lay and his fellow golden parachutists can start shifting the blame. They can say that they were only working within a flawed system, following the letter of laws that really need to be rewritten. In fact, if Mr. Lay's PR machine is really earning its pay, he might even position himself as the leader of a reform effort among various "stakeholders" in government, academia and the investment community.

Don't let him get away with it. The Wednesday testimony of Joseph Berardino, CEO of Andersen (Enron's accountants), gave prosecutors the cue to begin looking into indictments. In his prepared statement, Mr. Berardino said that Enron did not provide to its auditors "critical information" on its finances and added, "It is not clear why the relevant information was not provided to us. We are still looking into that. On November 2, 2001, we notified Enron's audit committee of possible illegal acts within the Company."

To restore faith among investors, we don't need to restructure the world's greatest capital markets. We just need to make sure that people who break the rules suffer the consequences. In this case, that might include Enron's accountants too. House Commerce Committee Chairman Billy Tauzin (R., La.) is planning more hearings for early next year. He should cancel the hearings and allow prosecutors to do their jobs.

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Democrats love the grim ripper, it's communism oblige and submission to authority of the poor. Anything that will turn this nation closer to the sewage state, they will love. I bet Hillary et al were jumping with joy when the WTC fell appart.

If the Democrats are giving Enron a pass, you can bet it's to cover up Clinton involvement which would surface from a microscopic examination. There are politician fingerprints from both parties all over this scandal (as usual).

The Dems who received donations from Enron are no more to blame than Republicans who received donations. However, the help received from clinton/gore is another matter and this is what will keep the dems silent. While it is now common knowledge that the clinton/gore team was deep into 'helping' Enron for cash donations the dems will try an underground gossip mission against the President and watch too for snide comments about Wendy Graham.......Phil Graham's wife. It will be a cold day in hell before the truth comes out about this disaster and those workers who lost their pensions will not be made whole.

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