Dare We Call It Enrongate?
By Mario Giardiello
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.
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.
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
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.
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.
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.
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.
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.
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.
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.Back to column