USA: Enron Got Its Money's Worth
One of the major falsehoods being bandied about by apologists for the Bush administration is that while Enron may have bankrolled much of the president's
political career it got nothing for those bucks once George W. occupied the White House.
That is nonsense.
The administration's energy program, developed by Vice President Dick Cheney in secret meetings -- six of them with Enron officials -- could have been written by lobbyists for the now failed company. At the behest of Rep. Henry Waxman (D-Los Angeles), the minority staff of the House Committee on Government Reform has prepared a devastating analysis of 17 major concessions made to Enron that gave Kenneth L. Lay, Bush's intimate friend and Enron chief executive, just about everything he wanted. The report concluded that "it is unlikely that any other corporation in America stood to gain as much from the White House plan as Enron."
Those Bush administration concessions to Enron included finishing the job of deregulating the electricity market begun by Bush's father. The senior Bush's
actions had paved the way for the company's meteoric growth.
George W.'s energy plan also made it even easier for Enron to sell energy derivatives in the commodity market and pursue other financial shenanigans that had been a major source of profit. The unregulated selling of energy derivatives, an Enron specialty, was celebrated in the Bush energy plan as "sophisticated and customizable." We now know that practice was so
sophisticated that it was the major source of Enron's paper profits.
Oddly, given that Republicans are presumed to favor leaving power with the states, the Bush energy plan emphasized increased federal power over utility
pipelines that forced local utilities to carry Enron's product. This was an expansion of the "open access" powers granted in the 1992 Energy Policy Act, passed in the first Bush administration. That law undermined the power of local authorities and regional utility companies for the benefit of Enron. In 1999, Enron had defined "open access" as the company's "single-most important initiative."
Two years later, George W. delivered. Fortunately this subversion of the political process had a short life because Enron went belly up before Bush could save the company from itself.
But the question remains why Bush, as governor and president, wanted to foist the example of such a despicable corporate player upon the American people as a model for business behavior.
Surely the Enron alums who occupy key positions in the administration knew that the president's model corporation had avoided paying federal income taxes for four out of the past five years.
Enron even claimed $382 million in government refunds. How dare this president collect taxes from ordinary Americans after touting a company that created 881 offshore dodges to avoid taxes. Few taxpayers can open subsidiaries in the Cayman Islands pretending to do business, but Enron had more than 700 there.
The IRS and Treasury Department under the Clinton administration had attacked the use of such tax dodges and attempted to eliminate them. Bush, however, sought to reward a company that, far more than any of its competitors, took advantage of offshore loopholes. Dynegy, Enron's lead competitor, had no offshore tax havens, suggesting that it is possible to do business honestly.
But how would Bush know of his pet company's chicanery, his apologists howl -- particularly the talk radio right-wingers who spent eight years skewering Bill Clinton over the most minor transgressions? Bush should have known because his top economic advisor, Lawrence B. Lindsey, who was paid $50,000 in 2000 for consulting work for Enron, went straight from that gig to being head of the White House's National Economic Council. In the latter capacity, Lindsey wrote a rosy report on Enron's emerging problems and presented it to the president shortly before the company's collapse.
Were he and the other Enron alum who hold high positions in the administration lying to the president, or did Bush not want to hear any bad news about his once-favorite company? Either way it smells.
Robert Scheer writes a syndicated column.
- 106 Money & Politics
- 185 Corruption