Enron's Political Contributions:
Another Bad Investment
By Marc Levin
mlevin@politicalusa.com
1/14/2002
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 it.
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 expenditures.
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 alleged.
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 the donations.
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 public notice.
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 investments.
Levin is President of the Houston-based American Freedom Center (www.americanfreedomctr.org)
and can be reached at mrmarclv@aol.com.
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