THE CLINTONIZATION OF ENRON

The beginning of the end for Enron seemed to come innocently enough; there was a small newspaper article which stated that this company was trying to sell the Indian Government on a huge natural gas fired power plant. Unfortunately for Enron and it's employees, this article was seen by then President Clinton. Clinton tore out the article and sent it and a note to one of his minions. I imagine the note read something like; ‘There might be some money here for us."

Enron got a call. They were told that President Clinton wanted to "help" them in this project. Some Enron money appeared in DNC coffers. Some pressure was put on India to approve the project. The plant was not only more than India needed, but more than it could afford; India is not a rich nation. Left on their own, Enron and India would have either not built the plant; or more likely would have built a scaled down version that they could afford. India however, is very susceptible to White House "suggestions". It is very concerned about it's neighbor's intentions (justifiably so as recent events show). A "suggestion" from the White House that a much desired weapon system might be put on a ‘fast track' would carry much weight in New Deli. Some more Enron money found it's way to the DNC, and days later the project was approved.

The Clinton administration appeared to be Enron's best friend. Clinton talked about approving the Kyoto Accord on ‘global warming'. If ratified it would mean lots of business for Enron. Older coal power plants would have to be retired and new natural gas plants built to meet emission standards. This happened to be one of Enron's specialties. The future looked bright for Ken Lay and Enron.

Future prospects dimmed when India finally decided it could no longer afford to make payments on the new power plant; a devastating loss for Enron. But... if they could just hold on until Kyoto was ratified, they could absorb that loss. But what to do? Going public with the loss would anger the share-holders, possibly resulting in top-side restructuring (ie. Ken Lay & his advisers might be looking for new jobs just before the good times began). Mr Lay decided to take the Clinton approach to the problem and use the 4 "D's"; Deny, Deceive, Distract and Delay. These tactics had worked so well for Clinton over the years; and he only had weeks or at the most months to wait for Kyoto. Enron employed "creative accounting" (ie. fraud). Once the Savior (Kyoto ratification) arrived funds would flow into the company coffers and the accounting gimmicks could be corrected. After all, the Savior was just around the corner....

By the time it was obvious that Kyoto would not be ratified; it was too late. To come clean now would be to face not only being fired in disgrace, but also to face jail time. Better to ride it out. Maybe use the 4 "D's" some more....

The final straw came from another Clinton action, seemingly unrelated; the attempted destruction of Microsoft. Enron was staying afloat (barely) because of a boom economy. The economy was sailing along well, it was riding on a ship called the USS Tech Sector. The motor in the Tech Sector was Microsoft. The Clinton/Reno assault on Microsoft added sugar to the fuel tank. Microsoft sputtered and the whole economy capsized. It became obvious to those who knew the truth of Enron accounting that Enron would never make it to shore. Mr Lay and his inner circle (in true Clinton fashion) decided to save themselves by quietly selling off their Enron stock.

Another series of Clinton action sealed Enron's fate; Clinton's soft treatment of terrorists. Not just Been-Ludin's (think Quaalude) bunch, but the PLO, the IRA and Iraq. He sent the message that we really didn't have the stomach to take on the terrorists. He rewarded certain terrorist actions with negotiations and concessions of Israeli land. He showed that terrorism can pay. On those occasions he did act against terrorists, his actions were never serious; a cruse missile at a Sudan Pharmaceutical plant or a few air raids over Iraq, but little more. This gave the terrorists reason to believe a bold attack directly on US soil would bring us to our knees. The attack on 9/11 further weakened our economy, speeding up the demise of Enron.

There are a few observations that can be made here:
1) The 4 "D's" only work if one is dedicated enough to the tactic to see it through to the end. This requires a heart cold enough to destroy the only employer in a large area of a destitute nation killing not only those who are in the building at the time, but condemning hundreds of families to a slow death of starvation (Sudan).
2) Everyone who befriends the Clinton's either ends up in court (bankruptcy, civil or criminal) or dead under "interesting" circumstances (one of the Enron execs, Foster, Brown and Buddy to name just a few).
3) Everything the Clinton's touch is corrupted; they seem to have a reverse ‘Midas Touch'.
4) A Clinton "favor" is not something to be desired.

Do we want this article too?

Enron and the Clintonites The Clintonites may have been more accommodating than the Bushies. by David Brooks 01/21/2002, Volume 007, Issue 18

ON JULY 5, 1995, Enron Corporation donated $100,000 to the Democratic National Committee. Six days later, Enron executives were on a trade mission with Commerce Secretary Mickey Kantor to Bosnia and Croatia. With Kantor's support, Enron signed a $100 million contract to build a 150-megawatt power plant.

Enron, then a growing giant in energy trading, practically had a reserved seat on Clinton administration trade junkets. Commerce Secretary Ron Brown, who egregiously linked political donations to government assistance, accompanied Enron chairman Ken Lay on a mission to India. Enron president Joseph Sutton was on the trip to Bosnia during which Brown lost his life in a plane crash (Sutton was not on Brown's plane at the time). After Brown's death, Enron's Terence Thorn, a $1,000 donor to the Clinton-Gore campaign, traveled with Commerce Secretary William Daley to South Africa. Ken Lay also traveled with Energy Secretary Hazel O'Leary on her trade trips.

There were other contacts between Enron and the Clinton administration. Ken Lay was a close friend of Mack McLarty, Clinton's first chief of staff. In his 1993 disclosure statement, Robert Rubin listed Enron as one of the firms with which he had had "significant contact" while at Goldman Sachs. Enron was represented by the law firm of Akin, Gump, Strauss, Hauer & Feld, the firm where Clinton advisers Robert Strauss and Vernon Jordan worked.

And Enron benefited from its government contacts during the Clinton years. After Lay's trip to India with Ron Brown, Enron received nearly $400 million in U.S. government assistance so that it could build a power plant south of Bombay. According to reports in the Houston Chronicle at the time, the Export-Import Bank kicked in $298 million, while another federal agency, the Overseas Private Investment Corporation, put up $100 million.

In February 1995, David Sanger of the New York Times wrote a fascinating insider account of how the deal had been consummated. Enron had been the lead bidder to build the new power plant. Jeff Garten, then undersecretary of commerce for international trade, created what he called "our economic war room" to push the American firm's interests. The State and Energy departments were enlisted to press Enron's case. According to Sanger, the U.S. ambassador to India, Frank Wisner, "constantly cajoled Indian officials." The CIA performed some risk analysis and investigated rival British companies.

Clinton himself was involved in starting the India effort for Enron. According to Michael Weisskopf of Time, Clinton scrawled a note to McLarty telling him to help with the project.

Support for the Bombay power plant was just a small part of the help Enron received from the Clinton administration. All told, Enron received over $4 billion from OPIC and the Export-Import Bank for projects in Turkey, Bolivia, China, the Philippines, and elsewhere.

Under Clinton, the Commerce Department was proud that it was finally using the might of the U.S. government to assist favored firms. But the enterprise was plagued by constant criticism that somehow it always seemed to be big political donors that got most of the help. According to the Boston Globe, all but three of the recipients of OPIC aid during Brown's tenure were substantial Democratic donors. According to a study by the Center for Public Integrity, Enron, U.S. West, GTE, McDonnell Douglas, and Fluor donated a combined $563,000 to the Democratic party during 1993 and 1994 and received $2.6 billion in foreign contracts secured with government help. The Globe found that during the first Clinton term, 27 firms had donated $2.3 million to the Democrats and received nearly $5.5 billion in federal support.

All of this is not to deny that Enron was primarily a Republican donor. Nor is it to minimize the connections between Enron and the Bush administration. Rather, the connections between the Clintonites and Enron remind us that the scandal is not the donations. The scandal is what gets done by federal officials in return for the donations. And while the Clintonites received less money from Enron than the Republicans, the evidence thus far suggests that Democrats extended more favors to Enron than Republicans. That suggests that the nascent Enron scandal may not end up helping Democrats as much as they now think.

Make no mistake, though: The press corps is in full frenzy over what the Bush administration may or may not have done to help Enron as it was going down the tubes--though there is no evidence the Bush administration did anything beyond take phone calls from desperate Enron executives. But the real story here is not about lawbreaking or extraordinary behavior. It is about what has become standard practice in Washington every day.

When corporations make political donations, the money is generally not used to lobby for free market reforms--although Enron did some of that. Rather, the money is used to encourage French-style dirigisme. It is used to lure government into bed with private commercial interests. That's not an effect conservatives should cheer.

For education only

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