Recent revelations about Enron's extensive
political contributions have been portrayed as impugning the
integrity of the Bush administration and bolstering the case for
campaign finance reform. However, upon closer scrutiny, it
is apparent that Enron's bevy of political contributions
provided the company little political power when it most needed
Thus, far from proving the need for campaign
finance reform, the Enron debacle illustrates that political
contributions may be one of the worst investments a business can
make. The real lesson from this fiasco may be that company
shareholder representatives and boards of directors should be
more skeptical of the utility of corporate political
According to the Center for Public Integrity,
Enron and its CEO Ken Lay have donated more than $550,000 to
Bush since 1993, making the company his top career patron.
Additionally, Enron has made $5.8 million in campaign
contributions to members of Congress since 1989.
However, after all this profligacy, we have
now learned Enron could not muster a morsel of assistance from
the Bush administration when Lay called Commerce Secretary Don
Evans to warn that its bankruptcy might be imminent. Contrary to
conventional wisdom, the negative response from the Bush
administration to this plea for help demonstrates the impotence
of campaign contributions, not their overpowering influence.
It is instructive that Enron was rebuffed at
that time. Given the fact that September 11 was still fresh on
people's minds and that the airlines were being bailed out, the
administration surely could have contrived some public
justification for taking action to stave off Enron's bankruptcy
had Enron's contributions been as influential as they are now
Similarly, despite receiving tens of
thousands of dollars from Enron, U.S. Attorney General John
Ashcroft and Texas Attorney General John Cornyn have wasted no
time in holding Enron's feet to the fire.
Unfortunately, both have now recused themselves from their
offices' investigations, giving credence to the claim that
somehow they could not oversee an impartial investigation.
The truth is that, once an issue receives
even a scintilla of the publicity of the Enron scandal,
politicians are much more likely to be swayed by public opinion
than campaign contributions. First, there are countless sources
of campaign funds but only one electorate. Furthermore,
the downside of negative media scrutiny regarding even a
perception of a conflict of interest easily overrides the
benefits of whatever advertising a candidate could purchase with
Finally, in the case of Enron, since it is
bankrupt, there is little possibility of future donations of
anywhere near the magnitude of its past bounty. As its past
political contributions are already safely tucked away, Enron's
inability to make large contributions in the future enormously
diminishes its influence, quite apart form the fact that its
bankruptcy is now a radioactive political issue. After all, if
the phrase "fair-weather friend" was defined in the
dictionary, a picture of politicians might well appear.
To be sure, political contributions can buy a
company access. Ken Lay even got to sleep at the White House.
However, while such royal treatment may do wonders for the ego
of a company's CEO, it is far from clear that it results in
tangible benefits for its bottom line.
A company is most likely to get mileage out
of its campaign
contributions when the issues with which it is concerned are of
little interest to the public and receive no media attention.
The proliferation of alternative media and the Internet has
arguably diminished the number of such low profile issues on
which politicians can side with their contributors without
The fact that Enron could not get any
assistance from a President for whom they were the largest donor
should lead shareholder representatives and corporate boards to
examine more closely the efficacy of political contributions. If
these contributions are merely massaging the ego of executives
by allowing them to rub shoulders with politicians, they ought
to be discontinued.
In fact, many successful large
companies have decided to curtail their political contributions
and are doing quite well without them. Among the companies
that have recently stopped making soft-money contributions to
the political parties are General Motors, Monsanto, Time Warner,
and Allied Signal. "We're not going to contribute 'soft
money' at the federal level any more; we've decided it's not a
beneficial practice," said Linda Fisher, Monsanto's vice
president for government and public affairs.
There are certainly many lessons to be
learned from Enron's implosion, but there is simply no evidence
that either Republican or Democratic officials did anything
improper on behalf of the company. Instead of demonstrating the
need for campaign finance reform, Enron's excessive political
contributions may have only been yet another of its many bad
Levin is President of the Houston-based
American Freedom Center (www.americanfreedomctr.org) and can be
reached at email@example.com.
SellOut: The Inside Story of
President Clinton's Impeachment
by David P. Schippers
Scan your PC for viruses now!
Magazine of the Month
Absolute Power: The Legacy of
Corruption in the Clinton-Reno Justice Department
by David Limbaugh
DVD's Under $10 at buy.com!
Property Matters: How Property
Rights Are Under Assault--And Why You Should Care
by James V. DeLong
Sale (30 to 50% off)
Shop for Your Princess at DisneyStore.com
the Web for:
Free Online Games