Enron and the Clintonites

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.

A couple of things regarding Bentsen... He's now running for the Democrat nominee to be their candidate to fill the Senate seat being vacated by Sen. Gramm. Also he is a nephew of Lloyd Bentsen, not his son. Enron has passed money to many politicans..... Democrat and Republican.....

Open Secrets

Name	Overall Total	89-90	91-92	93-94	95-96	97-98	99-00	01-02
Ken Bentsen (D-Texas)	$42,750	$0	$0	$12,000	$13,250	$6,000	$9,500	$2,000
Sheila Jackson Lee (D-Texas)	$38,000	$0	$0	$24,000	$4,000	$3,000	$6,000	$1,000
Joe L. Barton (R-Texas)	$28,909	$1,900	$5,000	$8,050	$5,262	$4,697	$4,000	$0
Tom DeLay (R-Texas)	$28,900	$1,000	$500	$3,750	$12,000	$3,250	$8,400	$0
Martin Frost (D-Texas)	$24,250	$1,750	$6,250	$4,000	$2,750	$2,500	$6,000	$1,000
Charles W. Stenholm (D-Texas)	$14,439	$0	$500	$800	$500	$2,000	$9,639	$1,000
Chet Edwards (D-Texas)	$10,000	$500	$500	$1,500	$1,500	$500	$4,500	$1,000
Doug Bereuter (R-Neb)	$10,000	$750	$1,250	$1,500	$1,500	$2,500	$2,500	$0
Larry Combest (R-Texas)	$9,820	$350	$0	$500	$0	$1,000	$7,970	$

"Corporations are already FAR more represented than you or I are."

You have hit the nail right on the head with that statement. Here is yet another fine example of how Enron won federal approval to have the government look the other way while consumers are raped.

WASHINGTON, D.C. — After Enron Corp. used its vast web of political connections to win December 2000 passage of commodities trading legislation that helped the company shield its energy trading activities from government scrutiny, California’s energy crisis suddenly took a dramatic turn for the worse as artificial supply shortages led to frequent rolling blackouts, according to a new Public Citizen report released Friday.

The legislation reducing government oversight of energy trading was muscled through Congress — without a Senate committee hearing — with the aid of U.S. Sen. Phil Gramm of Texas. Gramm was chairman of the Senate Banking Committee, which had jurisdiction over the legislation he co-sponsored, but he chose to bypass his committee, and the bill was quietly tacked onto a "must-pass" appropriations bill late in the session. Gramm’s wife, Wendy Gramm, also aided Enron’s rise to power. As chairwoman of the Commodity Futures Trading Commission, she pushed through a key regulatory exemption on Jan. 14, 1993, just as she was about to leave office. Five weeks later, she joined Enron’s board of directors, where she served on the board’s audit committee and had access to key financial information about the company.

On Sept. 4 of this year, Sen. Gramm announced that he would not run for re-election in 2002. Then in November, shareholders and federal regulators learned the extent of Enron’s financial troubles. Since the revelations, the company has filed the largest corporate bankruptcy in history, and shareholders, lenders and Enron employees have lost billions of dollars.

"Millions of people in California paid outrageously inflated prices for electricity because of Enron’s ability to manipulate the markets for electricity and natural gas, and thousands of Enron employees and shareholders have been devastated because of insider dealing and financial trickery," said Public Citizen President Joan Claybrook. "Republicans in Congress investigated Whitewater for years and spent millions of dollars. But that pales in comparison to Enron-gate. Congress needs to turn over every rock and see what crawls out from underneath. They should ask, who knew what and when did they know it? Investigations into any criminal conduct should extend to the political players who aided and abetted this company’s rapacious rampage across America. We should make no distinction between the officers who committed these acts and the politicians who enabled them."

Public Citizen called on Congress to force Wendy and Phil Gramm and Treasury Secretary Paul O’Neill to testify under oath about their knowledge of Enron’s alleged accounting fraud and use of offshore tax and bank regulation havens. Public Citizen also said that President Bush, Vice President Dick Cheney and political adviser Karl Rove should also be required to answer questions about whether administration officials discussed policies involving energy price controls, other energy regulations or tax havens with Enron representatives. Bush adamantly resisted price controls even though California’s wholesale energy costs had almost quadrupled in 2000; at the same time, Enron’s trading revenues nearly tripled.

The Public Citizen report — Blind Faith: How Deregulation and Enron’s Influence Over Government Looted Billions from Americans — details the political connections and government actions that helped Enron become the most prominent energy trader in the world before its recent collapse. The report found that: From June through December 2000, California experienced only one Stage 3 electricity emergency (which requires rolling blackouts). But following passage of the Commodity Futures Modernization Act, which shielded Enron’s and others’ trading activities from regulators, the state had 38 Stage 3 emergencies — ending only when federal regulators finally imposed price controls in June 2001.

Enron took advantage of lax government oversight and formed a complex web of more than 2,800 subsidiaries — 874 of which were located in offshore tax and banking regulation havens, mostly in the Cayman Islands. Upon assuming office in 2001, Bush — who has accepted $2 million from Enron during his political career and counts Enron chief executive Kenneth Lay as a close personal friend — scrapped plans put into place by former President Bill Clinton to limit the ability of corporations to effectively use these offshore havens. The action came at the height of high West Coast energy prices, which would have allowed Enron to funnel billions in excess profits to offshore accounts.

As a lame-duck chairwoman of the Commodity Futures Trading Commission, Wendy Gramm exempted Enron and other energy futures traders from oversight in response to a request by Enron. At the time, Enron was a significant source of political funding for her husband. Five weeks later, she joined the company’s board and served on the board’s audit committee, where she would have had access to the company’s financial details. The chief executive of Arthur Andersen, Enron’s outside auditor, testified before congressional investigators in December that "illegal acts" may have been committed at the company.

"Buried amid the rubble of Enron’s fallen house of cards are the political ties that allowed this greedy company to rip off the public and its own employees, who saw their retirement accounts vanish overnight — even as top executives were bailing out and walking away with hundreds of millions of dollars," said report author Tyson Slocum, research director for Public Citizen’s Critical Mass Energy and Environment Program. "There’s an object lesson here for those who decry government regulation: Absent a strong regulatory presence, greed prevails and consumers get the shaft. We’ve seen it time and time again."

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