POLS BARE ENRON'S SMOKING GUN

If Arthur Andersen lied about Enron, who else did they lie about? What other stock on the exchange is really worthless. Unless the stockholders can rely upon an independent audit of accounts, then the whole foundation of trading collapses.

It is vitally important to stop this rot now. The audit companies who have engaged in unethical practices must be given a stark choice between coming clean or sending their partners to a hoosegow.

Suddenly, literally overnight, the 'Enron affair' has transmogrified from 'White House scandal' to Democrat pickle -- major-league pickle, actually. The breakneck turn of the tables, politically, has been nothing short of stunning -- even by Washington standards.
The Democrats, who only days ago could barely contain their glee -- champing at the bit to tar and feather Bush with the ghastly Enron debacle -- are abruptly succumbing to a surprising case of cold feet. The haters are discovering, much to their chagrin, that the Enron affair -- should they pursue it -- could boomerang right back on them, and in more ways than they might imagine -- or want to bargain for.
A Sunday Washington Post piece, "Enron Also Courted Democrats", by senior writer Dan Morgan, told the story. The cryptic message between-the-lines: Dems, be careful what you wish for....
Washington's flagship liberal newspaper was worried, alright -- and for good reason.
From company documents and former employees, the tapestry of influence-peddling and money-for-favors the Post had unearthed, ironically enough, could prove hugely embarrassing to Democrats, including the party's most prominent members.
Indeed, in the last campaign cycle alone, Enron Corp. poured more than a half of million greenbacks into Democrat coffers -- $532,000 to be exact. That's a scant less than the figure the company reportedly gave Republicans: $623,000. One out of 2 members of the House and nearly 3 out of 4 members of the Senate have, at one time or another, received campaign contributions from Enron.
Clearly, this undercuts the basic tenet of the Democrats' "case", namely that Enron and Republicans are merely two heads of the same evil monster. By lavishing both parties with company largess, Enron was wisely hedging its bets. Politically, the bipartisan nature of its "beneficence" means Democrats have no moral leg to stand on: If accepting a donation from Enron 'taints' the recipient somehow, then Senator Joseph Lieberman, who has pocketed Enron* gratuity himself, should immediately recuse his position as chair of one of several committees probing the affair.
It does not suffice when Sen. Lieberman asserts, as he did last Sunday on CBS' Face the Nation, that since the donation in question dates several years back, he sees no conflict-of-interests. Not only is this self-serving excuse wholly inconsistent, it is morally bankrupt.
Sen. Lieberman should not exempt himself from the very standards he sets for others, for what is good for the Goose is good for the Gander. By refusing to recuse himself, he undercuts his already frail credibility -- and that of the committee he chairs. By practicing such double standards, Democrats expose themselves for the partisan hypocrites they are. Their primary intention, obviously enough, isn't to probe Enron, per se, as much as to score cheap political points and, ultimately, bring down the President.
Yet, for reasons aforementioned, they will fulfill neither intent. If anything, their rabid campaign of smear and innuendo contains the seeds of a mighty public backlash.
Thus, neither side on Capitol Hill stands to gain politically from the Enron debacle.
Complicating things further for Democrats, it's been widely reported that former Clinton Treasury Secretary Robert Rubin last November lobbied a senior ranking Treasury official on behalf of Citigroup, whose executive committee he chairs. Enron's debt ratings were about to be slashed, and Mr. Rubin improperly urged Undersecretary Peter Fisher to intercede with credit agencies on Enron's behalf. Citigroup holds approximately $3 billion of Enron's debt.
But beyond opening Democrats up to charges of rancid hypocrisy, some of the shenanigans reported by the Post appear to cross the rubicon of criminality.
The Clinton administration had provided Enron with massive public funding for many of its overseas projects, but one in particular stands out as a clear case of 'quid-pro-quo'. In June of '96, Clinton golfing buddy and Enron chief Kenneth Lay cut a check totaling #100,000 to the DNC just four days prior to winning final approval from India of a major Enron development there -- one which Clinton had moved heaven and earth to secure. In fact, as the Post points out, Clinton took such a keen interest in this one that he even "deputized" as project overseer his own chief-of-staff, Thomas 'Mack' McLarty III. But the sleaziness didn't end there: Enron later hired McLarty as a full time advisor.
Oh, and did I mention what Jack Quinn, Elizabeth Moler and Linda Robertson all share in common? This: All three were Clinton administration big-wigs, and all three went to work for Enron.
Interesting, eh?
Bottom line: Mr. Lay's ties with the Clinton administration, and with Clinton personally, were exceedingly close, and mutally profitable.
Yet, despite generous campaign contributions, Mr Lay has receieved zip-zero-nada from the Bush administration. In fact, Bush officials wisely rebuffed pressure from Enron -- and Enron's main creditor -- to intercede on the troubled company's behalf.
Ironically enough, it is the nexus between the Clinton administration, Enron and campaign contributions which cries out for a thorough investigation. Accordingly, watch the media frenzy over this 'story' disappear after some initial fireworks from Capitol Hill later this month as hearings gear up. The 'hearings' will go no where, it's easy to predict.
The underlying moral of this story is especially interesting, one which, unsurprisingly, totally escapes the attention of a cynical press. From it we learn how, even in politics, good character will trump money -- every time. Ken Lay was able to buy off the Clinton administration lock, stock and barrel (garnering endless favors-for-cash, at taxpayers' expense)-- but Mr. Lay got nothing -- absolutely nothing -- from President George W. Bush, notwithstanding his lavish campaign donations. The reason? It's as simple and clear as it gets: This President is not for sale. Not now, not ever -- not at any price. His administration is a textbook example of good government. All the campaign finance laws in the world will never substitute for exemplary character and moral integrity -- the qualities this President exudes.
Honor, probity, personal rectitude -- these are Bush's defining traits, and give this President his special appeal.
President George W. Bush is living testimony to why we don't need McCain-Feingold to have honest government -- the kind of government Americans can trust.
And that, my friends, is the real moral of the story.
*Raising more thorny 'conflict-of-interests' questions, Sen. Lieberman reportedly accepted lavish campaign contributions from Citigroup, to the tune of $112,546. According to Enron court filings, Citigroup happens to be the company's largest creditor, with outstanding loans totaling $3 billion. In other words, insofar as appearances go, Mr. Rubin may as well chair Lieberman's committee. The notion that Lieberman can lead an "impartial" investigation of a company which burned his top campaign contributor is laughable on its face. I rest my case.
My two cents...
"JohnHuang2"

BTTT

An interesting addition to your Clinton connection list (from John Podhoretz in the NY Post):

...Indeed, it appears that the only major political figure to try to convince administration officials to intervene on Enron's behalf was a Democrat - former Treasury Secretary Robert Rubin. When he called Deputy Treasury Secretary Peter Fisher, Rubin prefaced his remarks by saying the phone call "might not be the best idea."

Not the best idea? That's putting it mildly. Fisher is a Democratic holdover in the Bush administration. Rubin had been his boss in the Clinton administration. Rubin is now one of the head honchos at Citigroup, the mega-bank that had foolishly given Enron an $800 million line of credit. Rubin was attempting to exert influence on a former underling to protect his own narrow mercantile interests...

MI

Oops. I meant to post that to you.

BULLSEYE...!!! WAY TO GO JOHN...!!

You make a good point. It's hard to figure out why the stock markets move the way they do, but I couldn't help wondering about the last few days' slide. Are people becoming more suspicious about stocks because of all the attention to Enron? If they are backing away from the market in general, that could defuse the supposed recovery some see us in. If the game really is rigged, maybe it would be a good move to get out, but the nightmare scenario is a rush to sell similar to the runs on banks in the early Depression.

Thanks -- I will definitely read John Podhoretz's latest.

Thanks =^)

It is not 'wrong' for US government officials to 'help' American business win foreign contracts, Lord knows the governments of our foreign competitors do.

Concur -- the problem is when such quid/assistance is pro-quo/campaign donations.

Bravo!

Do we not shake our heads in amazement at the magnitude of Clinton corruption?

Thanks =^)

I disagree. The whistleblower is referring very specifically to off-balance sheet financing of risky transactions. It appears that Enron may drown in a sea of contingent liabilities. If these transactions were material and were not properly disclosed to the public as they happened, then Enron is inarguably at fault. I also believe that records will be found to substantiate the wrongdoing. Bank accounts, partnership filings, and corporate records can all be used to prove the case.

In a letter last August, an Enron whistleblower complained to Chairman Kenneth Lay that the high-flying energy trader was hiding losses in specially created partnerships shrouded by a "veil of secrecy."

My question is: If these secret partnerships had acquired assets of this magnitude, who got the assets that turned the partnerships into losses? Politicians?