The United States of Enron

NY Times ^ | 1/19/02 | Frank Rich

[codeword]

"Wasn't that the best?" said a laughing Ann Richards this week, when I asked her reaction to President Bush's effort to hide behind her skirt when questioned about Enron. "It was so silly. Why didn't he just say Ken Lay was a strong supporter and gave him a half-million dollars and is a good friend, and he's really sorry Ken's in these terrible circumstances?"

Good question. As the world knows now, George W. Bush told two lies when first asked about his ties to the top guy in what may prove the largest corporate flimflam in history. The president said (1) that he only "got to know" Mr. Lay in 1994, when in fact their relationship goes back at least to 1992; and (2) that Mr. Lay "was a supporter" of Governor Richards, when in fact Mr. Lay told TV's "Frontline" last year that he "did support" Mr. Bush over Ms. Richards in their Texas race.

This is the president who promised to usher America into "a new era of personal responsibility"?

What makes the dissembling so strange is that there is no evidence of any administration illegality in the Enron affair. And yet each day brings a new half-truth or seeming cover-up. Appearing on CNN last Saturday, Lawrence Lindsey, the top Bush economic adviser and a former Enron consultant, seconded the president's effort to pin Ken Lay on Ann Richards, but somehow forgot to say what would become public four days later — that he had overseen an administration study of the impact of Enron's travails in October. Earlier, Mary Matalin had visited the Imus show to defend her boss, Dick Cheney, but instead of vowing to open the books on the secret meetings between Enron and the vice president's clandestine energy task force, she asserted that Enron got "not one thing" from the administration's energy plan (actually it got plenty) and tried desperately to dismiss the entire ruckus as lacking an intern's "blue dress."

Hard as it is to believe, it was only 10 days ago that Ari Fleischer declared, "I'm not aware of anybody in the White House who discussed Enron's financial situation." Now we're painfully aware that the only White House inhabitants who may not have discussed it are the president, Barney and Spot — or so we must believe until future investigators turn up a smoking pretzel.

Washington, meanwhile, is busy debating whether Enron the Scandal is as hot as Whitewater. This should be a no-brainer. While The Wall Street Journal published an encyclopedic series of tomes to parse a low-rent Arkansas land scam to a public that never did quite understand it, everyone instantly gets an epic fraud in which arrogant high-fliers stacked the deck to fleece thousands of peons to the tune of zillions.

For a quick cultural index of this story's allure, check out the hundreds of hotly contested Enron lots on Ebay, where the bankrupt company's stock certificates have gone for north of $200 — a multiple of 300 times the last known value of a share of the stock itself. And, Ms. Matalin notwithstanding, this scandal is not sex-free. Not only did Enron approach Penthouse and Playboy to try to enter the porn business, as The Times has reported, but we learn in Fortune that "rumors of sexual high jinks" in Enron's executive suites "ran rampant." A nation that doted on the soap operatics of "Dallas" may have at long last found a worthy sequel in "Houston." Once the "sexual high jinks" kick in, it could play 24/7 on cable, with or without Paula Zahn.

The Washington wisdom that Enron has no legs — that it's not a political scandal, merely a financial one — is based on the premise that the Bush administration didn't ride to Ken Lay's rescue once disaster struck. But what about the favors performed for Enron before the meltdown? That's as political as you can get, particularly since, unlike Whitewater, this scandal implicates both parties and the corrupt campaign finance system that makes them look like interchangeable vending machines for their often overlapping patrons.

Though the Bush administration has been in office only a year, Enron's oily fingerprints are all over its actions as well as its résumés and stock portfolios. Mr. Lay helped hand-pick the head of the government agency in charge of regulating his own business and stood to gain a $254 million corporate tax rebate in the administration-blessed stimulus bill (despite the fact that Enron used almost 900 offshore "subsidiaries" to avoid paying any income taxes at all in four of the last five years). The Enron old-boy network may even have played a backdoor role in the life-and-death matter of stem cell policy. When President Bush announced his stem cell "compromise" in August, many top researchers criticized it as an obstacle to medical progress. But miraculously the administration was able to produce an instant endorsement from John Mendelsohn of the M. D. Anderson Cancer Center in Houston — who we now know is an Enron board member whose institution received $600,000 in Enron lucre.

The Clinton Democrats had eight years of Enron exposure, and while never receiving remotely the sums that the Republicans did, nonetheless had their own contacts (and presidential golf outing) with Mr. Lay. We already know, thanks to a 1997 article in Time, that Bill Clinton nudged Mack McLarty to lend the administration's weight to an Enron bid on a $3 billion power-plant project in India, and that the Democrats received $100,000 from Enron just four days before the Indian government came through. Will Joe Lieberman, who (like two-thirds of his committee) took Enron money, revisit his own party's Enron history as well as that of the G.O.P.? According to a 1995 report in The Nation, Robert Rubin's association with Enron didn't start last year at Citigroup but dates back to his pre-Treasury career at Goldman, Sachs. Enron's Washington office is currently headed by another former Clinton Treasury appointee.

Then again, who in either party hasn't cashed an Enron check? No fewer than 71 senators and 188 congressmen have been on the Enron gravy train. All but 5 of the 56 members of another investigative committee, House Energy and Commerce, got Enron or Arthur Andersen dough. The country's chief law enforcement officer, John Ashcroft, has recused himself from the case because he too received Enron cash — though even that ethical gesture looks suspicious, given his failure to stay out of Justice matters involving such other contributors as the N.R.A. and Microsoft. Another Congressional investigator, Billy Tauzin, Republican of Louisiana, was the single biggest House recipient of Arthur Andersen campaign money. Phil Gramm, the ranking Republican on the Senate Banking Committee, and his wife, Wendy (a former federal regulator now on Enron's board), could pass for one of Enron's wholly owned Cayman Island subsidiaries.

Harvey Pitt, the Bush administration's chief at the S.E.C., was actually an Arthur Andersen lawyer. After this week's revelation that top Andersen executives knew of funny business at Enron as early as February 2001, you have to wonder whether Mr. Pitt should be a witness in an S.E.C. investigation rather than its overlord. Was he representing Andersen at the time it first detected Enron's misbehavior? Was he in the loop? The stonewalling may have already begun, since neither the S.E.C. nor Andersen, when queried late this week, could say just when Mr. Pitt was in the accounting firm's employ.

Whom can the country turn to for an honest investigation? Democrats and Republicans alike are so beholden to accounting-industry money that they scuttled an attempt by Arthur Levitt, the former S.E.C. head, to regulate conflicts of interest in companies like Andersen two years ago. "If ever there was a case for a special counsel, this is it," says Governor Richards, but that idea certainly has no takers in Mr. Ashcroft's Justice Department or among grandstanding Democrats. "We haven't come anywhere close to that point yet," said Mr. Lieberman, never one to surrender a spotlight without a struggle.

A top aide to Henry Waxman, another Democratic inquisitor, has called the Enron scandal "the perfect storm," and a storm this perfect is certain to muddy Democrats as well. Enron has arisen like the ghost of over-the-top Christmases past, as a jolting throwback to the untethered America of the dot-com bubble. The greed of its perpetrators, and of the enabling politicians of both parties who took their cut before the wipeout, looks even uglier against the stark backdrop of those less well- connected Americans who are fighting our war.

[Tuco-bad]

As the world knows now, George W. Bush told two lies when first asked about his ties to the top guy in what may prove the largest corporate flimflam in history.

I guess this is the end of Bush's presidency.

[Ramius]

Frank Rich?? hehehehehe... yeah, right.

Of *course* democrats see a scandal behind every transaction. That's the way they think because that's the way they are.

[dodger]

How does either Rich or Richards know GW was 'lying' when he said he has known Lay since 1994 much less that he believed Lay supported Little Drunken Annie? Sniggery pukes, both.

[spanky_mcfarland]

Hmmm...let see where Newsmax is taking this story

[gcruse]

everyone instantly gets an epic fraud in which
arrogant high-fliers stacked the deck to fleece
thousands of peons to the tune of zillions.

Wow.  This language is more than florid,
it goes all the way to fetid.  Phew.  A corsage of dandy-lyin'.

Dear Frank,
Whitewater was a massive obstruction of justice from
Bill/Hill.  Even you see no evidence of
wrongdoing by the Bush White House
in Enron.  Leave the lute to Dowd; from
her we except a string of spongy non-sequiters.
From you, the usual hatred will suffice, and,
should you ever blunder into integrity,
not come back to haunt your Clintophilia.

 

[Wphile]

No he didn't tell any lies about this. Lay did endorse and support Richards for Governor in 1994. He gave to both but it was Richards that he supported. He jumped on W's bandwagon after he won. Lay was about who was in power at the time. For him to say later, after W had won reelection in a landslide, that he was a GW supporter all along is typical. Sorry, NYT, nothing here.

[set the record straight]

Rich is a demoncrap shill with no honor or respect for anything other than a liberal

[Quicksilver]

Excerpt: Novak's Inside Report: Gephardt vs. Daschle

While President Bush has come under fire for saying that Enron's Kenneth Lay backed Democratic Gov. Ann Richards against him in 1994, in fact, the bankrupt energy company's CEO was close enough to Richards that he refused to be Bush's Houston area finance chairman in that campaign.

In 1993, Lay told Bush he would support him in the Republican primary but was committed to Richards's re-election. Lay and his wife, Linda, contributed $12,500 each to Bush's primary election victory against token opposition. Lay contributed $12,500 to Richards.

Toward the end of the 1994 campaign, Mrs. Lay contributed an additional $12,500 to Bush but expressed hope it would not be disclosed because of her husband's support for Richards. In view of this performance, Bush political adviser Karl Rove urged that Lay not be retained as the Richards-appointed chairman of the Governor's Business Council. However, Gov. Bush kept Lay.

[keithtoo]

Frank Rich is an equal opportunity idiot. To be on the receiving end of his inanities, whether you are a DimoRat or a Republican, is tantamount to being hit viciously and repeatdly by a feather of the most malicious type.

[Roebucks]

Poor Frank Rich. He can't decide whether Presidential behavior is irrrelevant or relevant.

Perhaps he should take some BAYER aspirin for his relative headache.

[headsonpikes]

Your #1 was an ironic comment, I assume.

If not, you have a hysterical view of history, to say the least. ;^)

[xm177e2]

and (2) that Mr. Lay "was a supporter" of Governor Richards, when in fact Mr. Lay told TV's "Frontline" last year that he "did support" Mr. Bush over Ms. Richards in their Texas race.

Lay gave money to Richards, that makes him a "supporter." Maybe he gave more to Bush, but that doesn't change the fact that he supported her.

[AmericanVictory]

Pore Ann, she can't hep it, she was born with a bitter, acid foot in her mouth.

[Vladiator]

Sure. Maybe W was a little tipsy himself at the time.

[codeword]

...can't hep it...

LOL.

[E=MC²]

Well...it's nice to see that the media has not lost its touch to filter and embellish facts to tarnish Republicans that they perfected during the Nixon years...I was afraid that 8 years of gleefully swallowing klinton's dna had irreparably altered their talents.

[dodger]

So, one gathers you like the sniggery pukes, Rich & Richards. GW may as well have said '8 - 10 years ago' ... such is a 'lie' by NYT standards?? And yours??

[dodger]

So, one gathers you like the sniggery pukes, Rich & Richards. GW may as well have said '8 - 10 years ago' ... such is a 'lie' by NYT standards?? And yours??