The Last Tango: Enron and Bush

Report given at board meeting

Enron! Never before, not even during the depths of Teapot Dome and the Watergate, has the scandalous influence of corporate money hung so heavy over Washington. This scandal is exposing in a new way that the Federal Government is "bought and paid for" and serves the interests of the corporate rich. This scandal is going to keep unravelling for the rest of
Bush's term in office. It ranks with the Pentagon Papers, the Watergate, the Iran-Contra conspiracy, and the Savings and Loan debacle in criminality and corporate venality. It could eclipse these previous scandals in its long-term effects on the economy and our monopoly-ruled political system.

Bush choked on a pretzel and fell off his couch a few days ago, but he sobered up quick enough to deliver a loud blast against Enron in West Virginia. He bemoaned the $8,000 his mother-in-law lost in the Enron collapse. Extricating Bush from his crony capitalist entanglement with Enron is now the highest political priority of the White House, the Republican Party and the ultra-right. But there are so many smoking guns in this crisis that the White House looks like the O.K. Corral.

The suffering and misery inflicted on innocent people by the Enron swindle is already emerging as an overriding issue in the 2002 elections. It has pushed the "war on terrorism" off the front pages. That war artificially inflated George W. Bush's approval rating. But the Enron scandal comes in the midst of a deepening economic recession. Enron's bankruptcy is
touching off a domino effect with creditors burned by Enron rejecting appeals for bailout loans from other troubled companies. K-Mart's filing for bankruptcy is blamed on this newfound wariness on Wall Street. The collapse of Enron and K-Mart will add hundreds of
thousands more workers to the ranks of eight million unemployed. As that reality dawns on the people, Bush's popularity could sink as fast as Enron itself.

Today, a Senate hearing opens on the collapse of Enron. There are at least eight hearings scheduled before House and Senate committees. The Securities and Exchange Commission is investigating, the General Accounting Office. There is a blizzard of lawsuits including one by the International Brotherhood of Electrical Workers and another by the labor-backed
Amalgamated Bank of New York on behalf of workers and stockholders whose retirement benefits have been wiped out in the Enron collapse.

The Justice Department has set up a Task Force to investigate headed by Deputy Attorney General Larry D. Thompson. All you need to know about Thompson is that he orchestrated the smear campaign against Anita Hill in securing Senate confirmation of his crony Clarence
Thomas to the U.S. Supreme Court. Thompson belonged to an Atlanta law firm that counted Enron as a client. Thompson was rushed into the breach because Attorney General Ashcroft was forced to recuse himself.

Ashcroft received $57,000 from Enron in his unsuccessful run for Senate reelection in Missouri. The entire U.S. Attorney's office in Houston was forced to remove itself from the Enron probe because they are so tainted by ties to Enron. A striking fact of this scandal is the difficulty of finding elected officials without ties to Enron to conduct the investigation. Half the Senate and one third of the House, both Republicans and Democrats, received
campaign contributions from Enron. Enron clearly favored the most rabid rightwing Republicans like House Majority Leader Tom DeLay, of Houston, who rammed through Enrons energy deregulation agenda. For the most part, the giving to the Democrats was to buy their silence Now, there is a panicky rush by these politicians to donate their Enron cash to funds that benefit those who lost their pensions in the Enron collapse.

The political establishment is so tightly intertwined with Enron that calls for the naming of a special prosecutor are certain to grow -- although we know from the sandbagging of Lawrence Walsh in the Iran-Contra that this is no guarantee of justice. This crisis has
also spurred a renewed effort to push through the Shays-Meehan bill to ban "soft money" to curb the poisonous influence of corporate political action committees.

The crimes are legion: massive corporate fraud; insider trading; influence peddling; obstruction of justice; and tax evasion. Enron paid no taxes in four of the last five years and was approved for $382 million in tax refunds despite reports of hundreds of millions in profits. They carried out this massive tax swindle by hiding the profits in their web of 900
off-shore companies, many of them dummy corporations. Enron was so determined to avoid paying taxes that they filed a lawsuit in Texas to win tax relief.

Justice Priscilla Owen, wrote the majority opinion that reversed a lower court decision and reduced by $15 million Enron's taxes for support of Texas public schools. She had received a generous cash contribution from Enron when she ran for election to the bench. George W. Bush rewarded her by recently naming her to a vacant judgeship. Elliot M. Mincberg, legal director of People for the American Way, a group opposing her Senate confirmation declared, "I think the combination of campaign contributions from Enron and the fact that
she ruled clearly in Enron's favor could be a subject of significant concern for the (Senate Judiciary) Committee."

We are only now beginning to see the inner workings of this corporation that virtually no one had even heard of until the late 1980s. It rode to the top on Bush family coattails. At this time last year it was rated 7th largest corporation among the Fortune 500 with
revenues of $101 billion, its stock selling at its highest for $90.75 a share. It was aggressively expanding from Houston across the nation and around the world with the help of James A. Baker and other Bush insiders. Enron, along with Duke Power, Dynegy
Corporation and other natural gas monopolies generated the fraudulent "energy shortage" in California. Then taking advantage of the deregulation they had rammed through, they jacked rates to California consumers by 400 percent and more.

Enron was also expanding worldwide on every continent, linking its investments closely to Bush's "sole superpower" military adventures in the Middle East and Russia. On the surface, the company seemed strong if not impregnable. Yet read a letter from Enron Vice
President Sherron S. Watkins to CEO Ken Lay last August and it is obvious the entire corporation was built on smoke and mirrors, its double book-keeping and corporate sleight-of-hand ignored by Arthur Andersen, the wealthy accounting firm. "I am incredibly nervous that we will implode in a wave of accounting scandals," she wrote, adding that Enron's
climb to the top was "nothing but an elaborate accounting hoax."

Dummy corporations and "partnerships" were set up with each using the others stock as "collateral" to secure more loans. Enron used expectations of future earnings to secure even more capital for expansion. The deceitful claims of profitability drove Enron stocks
higher and higher. Watkins told Lay her theory of why Enron CEO Jeffrey Skilling suddenly resigned: Skilling "looked down the road and knew this was unfixable and would rather abandon ship now than resign in shame in two years." Lay's only response to this letter --and other similar warnings -- was to unload his Enron stock as quickly as possible.

J. Clifford Baxter, former Enron vice chairman, was found dead in his Mercedes near his mansion in Sugar Land, a wealthy enclave 25 miles outside Houston January 25. Baxter had resigned last May claiming he wanted to spend more time with his family. But he had joined Watkins in sharply protesting the dubious corporate methods of Enron. Many of the Congressional committees planned to summon Baxter as a witness on the Enron collapse. A suicide note was found by the police, the contents so far undisclosed.

Questions are already swirling. Was this really a suicide? Or was he a man who knew too much? Maybe he would blow the lid on the connection the Republican right and the corporate media are struggling to conceal: The ongoing connection between Enron and the Bush Administration. Despite the determined coverup, the connections keep bubbling to the surface. Bush?s top adviser, Karl Rove, telephoned Ken Lay to arrange for Ralph Reed, former top leader of the Christian Coalition to be placed on Enron?s payroll at $20,000 a month during the 2000 Presidential election. Reed?s main assignment was to keep the Christian right fully in support of Bush?s presidential campaign.

The media is also zeroing in on Sec. of the Army White, who held $50 million in Enron stock. He sold most of it off at a profit before it collapsed. Now questions are swirling about his repeated private meetings and telephone calls with Ken Lay after he took up his Pentagon duties in ramrodding privatization of Enron contracts to supply gas and electricity to military bases across the country and around the world.

The systematic nature of this gigantic swindle is coming home with a vengeance, the vile double standard in which the rich are protected while the vast majority of working people are fleeced. This week, two Enron workers in Portland, Oregon, employees of Portland General Electric, wholly owned by Enron, spoke out on the company and its close ties to Bush. They are members of IBEW Local 125 which has filed a lawsuit on behalf of the 1,000 PGE workers who lost millions in the collapse of their Enron 401(k) accounts. Donald Eri told me: "If I stole $100, they would do more than slap my wrist. Enron stole billions. They should get more than a slap on the wrist. This is no time to be meddling with Social
Security after what happened to us."

PGE worker, Al Kaseweter, told me his Enron 401(k) account was worth $350,000 a few months ago. Now it is worth $20,000. He scorned George W. Bush's deceitful attempts to distance himself from Enron. Bush's father served on the Enron Board of Directors.
"Their hands are dirty," he said. Like all other Enron workers, Kaseweter was not permitted to sell his Enron stocks as they began to decline in value. But Lay and 29 other top Enron executives, unloaded $1.1 billion in Enron stocks in their portfolios before the collapse. "This was insider trading," Kaseweter charged. "Lay kept telling us to buy Enron stock while
he was selling his. He knew the ship was sinking. They were siphoning off our retirement funds to keep the ship afloat."

There is a profound ideological dimension to this crisis: It has exposed the big lie at the heart of so-called "Free Market" capitalism. The big lie that justified deregulation, that the "Free Market" would keep business honest, that the government, as Reagan put it, should butt out and let the genius of the market do what it does best. Enron's collapse has
exposed the hoax behind schemes to privatize Social Security. Bush told us, "Its your money! Why not invest it in the market." You might get rich. But in what sense did Enron workers own those stocks if they couldn't sell them? The workers toiled to earn those
stocks in lieu of a real Enron pension. But Enron executives reserved the right to siphon off that money to cover their "golden parachutes" when the hall of mirrors came crashing down. Behind Bush's privatization of Social Security is the plan to loot workers pension funds including both their private accounts and Social Security itself.

Enron's meltdown lays bare the collision of public interest vs. private profit. Since the administration of Ronald Reagan there has been an assault on everything public and a drive to privatize public services or publicly owned industries that could be a source of profits for Wall Street. It has included calls to privatize the public schools, Social Security
and Medicare. There is a drive to privatize publicly owned electric utilities and hospitals, to open up federally owned lands to the timber, mining, and energy monopolies.

Underlying the privatization drive is the ideology of class collaboration, the hoax that workers and their corporate employers have common interests. Enron, Bush, and the ultra-right as a whole lure the people with the siren song that they too can "own a piece of the rock," with a tidy little stock portfolio with their name on it. The Enron collapse proves what a sham this is. The interests of workers and their monopoly employers are irreconcilable.

Enron?s collapse may help tilt the scales against the privatizers and toward public control on many diverse front. Advocates of reforming our electoral system say the only real way to end the corrupting influence of money is to have full public financing of our elections. Secondly, the wiping out of Enron 401 (k) accounts will reinforce the demands to preserve and strengthen Social Security and Medicare and establish a new national health care system modeled on Social Security. Finally, Enron is a gas and electric giant that ripped off energy consumers coast to coast. Already, the grassroots movement that fought this swindle in California are popularizing public ownership of energy and utility companies as the only real solution.

The Enron crisis presents many opportunities to open a national dialogue on the logic and benefits of socialism. The point is, Enron and a thousand other corporations like it, cannot be reformed. No matter how many laws and regulations Congress enacts -- and
they should enact them -- sooner or later these corporations will be back picking our pockets. Bush's incestuous "good-ole-boy" relations with Enron now place him in grave danger. A frenzied cover up is in full gear. The shredders are running full tilt at Enron, at Arthur Anderson, and no doubt in the basement of the White House.

What did Bush know and when did he know it? He knew from the beginning. Enron's Ken Lay was Bush's favorite CEO, so close that Bush called him "Kenny Boy." Enron poured millions into Bush's political career starting from his first run for Texas governor in 1994. As Craig McDonald, director of Texans for Public Justice (TPJ) told me in an interview, "Bush
was in bed with Enron long before he made his first run for political office." McDonald and TPJ wrote a report, "The Bush Gusher," which exposed Enron's support of the Bush family. McDonald pointed out that Enron sent their top lawyer, James A. Baker, who had served as Sec. of State under George Bush senior, on a victory tour of Kuwait in 1993 to line up contracts with the Kuwaiti regime rebuilding after the Gulf War. Lay and Enron executives poured millions into the younger Bush's presidential election campaign, much of it hidden "soft money." Bush flew on Enron jets to campaign rallies.

When Bush lost the popular vote, they rushed James A. Baker to Florida to orchestrate the stealing of the 2000 presidential election using the same underhanded tactics they used to hoodwink Enron stockholders. Baker was on CNN nonstop explaining why the Florida votes should not be counted and why the U.S. Supreme Court should choose the president. As a headline in the PWW said, it was "A very American coup." And the payback was not long in coming. Bush appointed at least 30 Enron executives, consultants, and investors to his administration including Army Sec. Thomas E. White who once owned $50 million in Enron
stock. Like so many other insiders, White dodged the bullet and sold his stock for a handsome profit before it became worthless. Other Enron-connected Bush officials include Def. Sec. Donald Rumsfeld, U.S. Trade Representative Robert B. Zoellick, White House
adviser Karl Rove, and economic adviser Lawrence Lindsey.

When Vice President Richard Cheney set up his energy Policy Task Force, he met with or spoke by telephone at least six times with Lay to make sure that every word in the plan conformed with Enron's drive for total deregulation of the energy monopolies. McDonald
said, "Cheney may have been talking, but the words were Ken Lay's."

In a brazen obstruction of justice, Cheney has refused all requests for documents generated by the secretive meetings of this Energy Task Force. When Enron began to falter, last summer, Lay telephoned Treasury Sec. Paul O'Neill and Commerce Sec. Donald L. Evans to plead for help in securing bank loans to keep the sinking ship afloat. Bill Clinton's Treasury Sec., Robert E. Rubin, now chairman of the executive committee of Citigroup, also telephoned the Treasury to plead Enron's case. Contrary to Administration claims that they refused to help, Lindsey who had served as a $50,000 a year Enron consultant, drafted a report on the danger that the Enron collapse could spread to other corporations creating "global market upheaval" similar to the collapse of Long Term Capital Management, the hedge fund giant in 1998. The Treasury Department also drafted a similar report. (Neither of them have been made public).

Jennifer Palmieri, a Democratic Party spokeswoman said these reports are "a significant conflict of interest" and prove that the Bush White House "did a lot of thinking about the fact that the company was going to collapse but they did absolutely nothing to make surethat 50,000 Enron employees would not lose their life savings."

Enron has been pouring out the money to buy influence in Washington since it was founded in 1985. In the past ten years, Enron has admitted contributing $6 million to Republican and Democratic lawmakers. What did they get in exchange? Tom DeLay rammed through
Cheney's energy deregulation package through soon after the Sept. 11 terrorist attack.

Among the biggest recipients of Enron largesse were former Texas GOP Senator Phil Gramm and his wife Wendy who was chairperson of Reagan's Task Force on Regulatory Relief. In a revealing report, Public Citizen exposed how Sen. Gramm won "stealthlike approval" of legislation exempting energy commodity trading from government regulation and disclosure at the specific bequest of Enron. Wendy Gramm pushed through similar exemptions for energy corporations in 1993 and was rewarded by Enron with a seat on their board of directors. She was paid $915,000 in salary and $1.85 million in stock options and dividends from 1993 to 1998.

Bob Herbert, New York Times columnist wrote, "The kind of madness that went on at Enron could only have flourished in the darkÖIf the deregulation zealots had their way, we'd be left with tainted food, unsafe cars, bridges collapsing into rivers, children's pajamas bursting into flames and a host of corporations far more rapacious than they are now."
Fellow New York Times columnist Paul Krugman compared the Enron crisis to the meltdown of the so-called "Asian tiger" economies four years ago, calling it "crony capitalism." But Krugman revealled in an earlier column that Enron paid him $50,000 to serve on an "advisory committee." Krugman lamely claimed the body "did nothing." He's wrong. This was part of Enron's efforts to infiltrate and silence the corporate media.

Writing in The Nation, William Greider pointed out that "there are more Enrons out there," that the secretive, deceitful double-dealing that brought Enron down is part of the corporate culture of globalized transnational capitalism. This is not a case of one rogue corporation, he wrote, it is the "system." In "Lectures on Fascism" the great Italian Communist, Palmiro Togliatti, points out that the "corporate state" lies at the evil heart of fascism. "We have seen bailouts for faltering banks, interventions in which Mussolini is not afraid to say, 'They have cost us billions.' At this moment, the corporations have
entered the field of legislation--the economic policy of fascism, the organization of the supremacy of finance capital in the country's life, has reached the highest point."

Togliatti goes on to say: "The corporative regime is a regime that is totally inseparable from total political reaction, from the destruction of every democratic liberty." We do not have fascism. But Enron is a model of Mussolini's ideal corporation based on the interpenetration of the corporation and the state, its takeover of a political party to serve as its political instrument, its seizure of power if necessary by coup d'etat.

The collapse of Enron presents both dangers and opportunities. So far, the Democrats have been at best weak and timid in response to this crisis proving that Enron succeeded in largely silencing them. Tom Daschle revealed this timidity when he went hat in hand into
negotiations with the Republicans on a economic stimulus package. His first move was to drop the demand that all unemployed workers receive extended health care coverage. It reflects the Democrats misguided estimate that the recession is already coming to an end.

This political cowardice does not mean that we should write off the liberals and centrists in the House and Senate. There is a core of fighters in Congress, mostly in the Black Caucus, Hispanic Caucus, and Progressive Caucus, that we should build around. Every lawmaker needs to hear our demands that they take a stand, to bring Enron and its executives to justice, to expose and fight Bush, Cheney, Rumsfeld, Ashcroft as well as DeLay, Trent Lott, and other lawmakers in the service of Enron. They need to hear our demands for a real economic stimulus plan starting with a program to save our steel industry. Double the minimum wage. Double the weeks of unemployment compensation to 52 weeks. Put money in the pockets of the needy. Take it from the bank accounts of the greedy! Tax the rich!
And stop Bush's "sole superpower" bully wars around the world.

Clearly, the AFL-CIO led coalition must intervene to mobilize a real fightback. Our Party must be in the middle of this struggle. We need to go all-out to expose the Enron crisis as a crisis of the system in the pages of the PWW and in Political Affairs. We need
to hammer at the Bush connection and not permit Bush, DeLay and the ultra-right escape their ringleader role in the rise and fall of Enron. We should explore issues untouched so far such as the connections of Enron with the Bush war policy and the ripple effect of the bankruptcy in the worsening economic crisis. The fight to expose Enron and defend all those
hard hit by its collapse, could be a determining factor in the 2002 elections, helping defeat the ultra-right. And in 2004, it could be a key factor in making Dubya a one-term president.