Enron’s Far-Reaching Web
The Enron debacle is long past being a story about the fall of a corporation. Enron’s tentacles stretch far and wide, to accounting firms, the Securities and Exchange Commission, Congress, the White House, the Justice Department, even journalists. The question is becoming not who was tainted by Enron but who wasn’t. It is an object lesson in why the SEC, the campaign finance system, the government culture itself need reform. With so few left untainted, who is trustworthy to clean up the mess?
Consider the Bush administration, which has 35 officials who have held Enron stock. Top political advisor Karl Rove’s stock was worth six figures. President Bush, despite his lame attempt to associate Enron head Kenneth L. Lay with former Texas Gov. Ann Richards, has long enjoyed a close relationship with him. Presidential economic advisor Lawrence B. Lindsey received $50,000 as an Enron “advisor.” Atty. Gen. John Ashcroft recused himself from the criminal investigation because he had received a hefty Enron contribution to his 2000 senatorial campaign.
Given these and many more links, it is ever more disturbing that Vice President Dick Cheney obstinately refuses to divulge detailed information about his energy task force’s numerous meetings with Enron executives.
Rep. Henry A. Waxman (D-Los Angeles) has released another study showing that numerous policies in the White House energy plan were virtually identical to those espoused by Enron; no fewer than 17 policies, including deregulation initiatives and support for trading in energy derivatives, would have benefited the corporation.
By no means did Enron confine its efforts to the White House. On the contrary, Capitol Hill lawmakers eagerly partook of Enron’s booty. Power couple Sen. Phil Gramm (R-Texas) and Wendy Gramm constitute a study in conflicts of interest in themselves. Wendy Gramm is a member of Enron’s board; her husband was pivotal in permitting Enron to receive an energy trading exemption.
As The Times’ Mark Fineman revealed Friday, none of the key congressional committees investigating Enron or its former auditor, the Andersen company, would be able to summon a majority if they excluded members who had received campaign contributions from either company. Sen. Joseph I. Lieberman (D-Conn.), one of the chief investigators, accepted thousands of dollars from both. Rep. W.J. “Billy” Tauzin (R-La.), who is aggressively investigating, raked in contributions from the two companies. Lieberman and Tauzin are running away from Enron as fast as they can, but the contributions will always distort public perception of their actions.
Few have been more fervent in denouncing the culture of greed that led to debacles such as Enron than New York Times economics columnist Paul Krugman. Yet it now turns out that Krugman himself was paid $50,000 as an Enron consultant in 1999, even though his position had “no function” that he was aware of.
After Sept. 11, polls showed that the American public had greater confidence in government and other institutions. The Enron scandal threatens to swiftly reverse that trend. There could be no better argument for political and regulatory reforms.
