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.

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