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Enron-gate has all the elements of a Hollywood
blockbuster-type scandal. Shredded documents, shady
political-business ties, White House phone calls to and from big
political contributors, and damage-control efforts by the
administration - reminds one of the Nixon White House all over
again. Also, the
attorney-general, his top aide, and the entire Houston (hometown
of Enron) attorney’s staff recused themselves from the Justice
Department investigation. If
this isn’t arousing suspicions of scandal then maybe a small,
but telling lie from President Bush will give us more insight
into this soon-to-be-scandal.
In
a speech last week, Bush said that it was after the 1994
governors race that he “first got to know Ken,” more
intimately referred to as Kenny Boy by Bush.
It is apparent now that their relationship goes back much
further.
Ken Lay, Bush’s largest financial benefactor, has
admitted to knowing him long before this time.
Lay tried to get the former Bush’s presidential library
to locate at the University of Houston, whose Board of Regents
Lay served on in the late 1980’s.
During this time, Lay admits to spending “quality time
with George W.” Bush,
however, denies that their relationship was ever on the level of
personal friends. Also,
Lay contributed $122,500 as the CEO of Enron to Bush’s
governor race before the 1994 election.
Another $200,000 came from employees of Enron.
In fact, Enron’s CEO, its employees and their relatives
have contributed $836,800 over Bush’s political career -- the
most from any other source. Would just an acquaintance give you almost a million
dollars for your campaigns?
Only if there is reason to believe there will be some
benefit. And Enron
saw benefits.
It is insulting for George W. to insist he hardly knew
Lay before 1994 when Lay was co-chairman of the former Bush’s
1990 economic summit for industrialized nations, which was held
in Houston. Lay was also co-chairman of the host committee for
the Republican National Convention when it was held in Houston
in 1992. It is a fact that George W. was actively involved in the
campaign, which makes it impossible for them not to know each
other. The more one
looks into the relationships of all the key players, the more
one realizes that this has the potential to grow into a scandal
as big as any other.
It
is important to realize that 15 high-ranking officials in the
Bush administration owned stock in Enron last year with a
combined value of almost one million dollars.
The contacts between Enron, the once-biggest energy
company in the world, and the most powerful government in the
world are vast. Defense
Secretary Donald Rumsfield, senior Bush adviser Karl Rove,
deputy EPA administrator Linda Fisher, Treasury Undersecretary
Peter Fisher and U.S. Trade Rep. Robert Zoellick all had stock
in Enron. The
biggest connection is Army Secretary Thomas White who was
Enron’s vice chairman before he got his Pentagon job and owned
up to $100 million worth of Enron stock.
Two other Bush officials had professional ties with
Enron. Lawrence
Lindsey, White House economic adviser who was a managing
director of Economic Strategies, Inc, served as a consultant
firm to Enron. Zoellick
also served on the advisory council of Enron.
It is important to remember that Bush and Cheney once
headed an energy production company and many of his top aides
came from oil companies including Rumsfield, Condoleeza Rice,
and many others.
Just before Enron’s bankruptcy, its top officials
were lobbying the administration for help.
Calls were made from Lay to Treasury Secretary Paul
O’Neil, Commerce Secretary Don Evans, and Federal Reserve
Chairman Alan Greenspan right before the bankruptcy.
O’Neil and Evans say they did not notify Bush until
January 10th of their contacts with Lay and Enron’s
trouble. There is
even proof that Enron executives called Fisher several times in
the fall asking him to help the company secure a bank loan.
Also, Energy Secretary Spencer Abraham called the
Enron chairman on November 2.
We need to know what was said and decided during all
these phone calls. The
reasons for these calls are unknown, but the Bush Administration
promises that they did nothing to help the company.
We cannot take his word on this, and probes need to be
made. The President
said on January 10th that he “never discussed with
Mr. Lay the financial problems of the company.”
It is, of course, possible that none of the officials who
acknowledge contacts from Enron much earlier than the fall told
Bush or took any action. But it's not very likely.
The White House has admitted that the energy task
force had met six to eight times with Enron officials and deny
that finances were discussed.
These then-secret meetings were held behind closed doors
with Enron executives while drafting Bush’s energy plan last
year. Many of the
deregulation laws fit with Enron’s desire to expand into the
giant company it had become. Officials must explain how much
influence Enron executives had on administration policies after
contributing over a half a million dollars to the Bush
campaigns. Energy
experts say Enron helped create the new laws that enabled the
energy giant to become the most powerful in the market.
As late as August 14, Lay knew his company was
sinking. Is it
possible that Bush had no idea that the demise of Enron was
imminent? There is
certainly proof of wrong doings on the part of Lay.
He sent e-mails to employees that said “…I have never
felt better about the prospects for the company.”
This was on the same day of Skilling’s abrupt
resignation as company president. A group of 29 Enron executives
and directors began to sell their shares near the top of the
market. Those
insiders received $1.1 billion by selling 17.3 million shares
from 1999 to mid-2001. Lay received over $30 million, with another executive
receiving as much as $353.7 million.
In all, Lay sold 1.8 million Enron shares between early
1999 and July 2001, five months before Enron’s crash.
Rep. Henry A. Waxman of California, ranking Democrat on
the House Committee on Government Reform who released the
damaging e-mails said in a letter to Lay “It appears you
misled your employees into believing that Enron was prospering
and that its stock price would rise.” The question remains if
Bush had any idea that Enron was going down and what he did to
try to prevent it.
Enron’s story is not too alien from Bush’s recent
dealings with the energy industry.
In fact, Enron could have learned their tricks from the
President. While he
was a high ranking official of Harken Oil he sold its stock and
made $850,000, an almost 200 percent profit.
Guess what happened only one week later? The company
reported a quarterly loss of $23.2 million.
Over the next six months it lost 60 percent of its value.
Was Bush privy to inside information that led to this
most lucrative business dealing?
I would venture to say the chances of him knowing the
stock would take a dive is as likely that he knew something
about the Enron collapse before it was made public.
What is Bush hiding? If he is lying about his relationship with Kenneth Lay, how
far does his involvement go into the $90 billion Enron debacle?
How close were these two parallel stories of success?
How deeply involved does the Bush administration go into
the illegality of the Enron scandal?
Between 1989 and 2001, Enron executives contributed an
estimated $5.8 million to the campaigns of political officials
with 75% going to Republicans.
Arthur Andersen contributed even more than Enron.
Citigroup Inc., the nation’s largest bank, lent
hundreds of millions of dollars to Enron trying to keep it
going. They are now
owed $800 million. The
largest energy company, the largest bank, the largest consulting
companie, and the most powerful government in the world are
engaged in a complex scandal that will take years to unfold. How much of it will unfold before the next Presidential
election, and how much will it hurt Bush?
One thing is for sure, Bush cannot hide behind the
success of war to cover this potentially fatal problem.
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