Democratic Underground

The Enron Case and Spurious George's Gang
January 15, 2002
by Smokey Sojac

Enron is Teapot Dome on a many times larger scale. A full and impartial investigation into this rottenness, which reaches into the Oval Office, must be launched. As the GOP (Gas, Oil and Plutonium) tries desperately to spin side issues, it's important to keep our eyes and voices focused on the TRUE scandals of the Enron administration.

Enron changed from a $2 billion energy company to a $101 billion a year shell game under Kenneth Lay and his executives, which included two members of the Bush cabinet. The switch was facilitated by a rule change proposed by Wendy (wife of Phil Gramm) while she was commissioner of Poppa Bush's energy commission. Phil, as Senate Banking Committee Chairman, had oversight over what Enron is up to. Wendy Gramm joined the Board of Enron when Bill Clinton took office. Both Bush brothers dumped millions in Florida and Texas public money (now lost) into Enron in return for campaign funds, supplying seed money to keep the swindle going. In their defense they may not have known it WAS a swindle. If they had any hint though... Lay's relationship with the Bush family goes back to at least 1988.

Ken Lay and Enron pumped millions into Bush's campaign, millions more into GOP candidates (like Ashcroft). When Bush was put in office, Enron began openly price-gouging in California, charging $12 a million Btu's for natural gas there vs. $5 a million elsewhere. While Clinton was in office the difference in natural gas prices between California and the rest of the country was NEVER more than 50 cents. Bush refused time and again to impose price caps. In May the Senate goes Democratic, price caps are instituted and the California energy crisis disappears. Enron's recorded profit in those months? $70 billion, which somehow also magically disappeared by August.

The Bush administration unveiled a bogus energy plan that called for $35 billion in subsidies to Enron and other companies. The electrical grid portion was tailored specifically to benefit energy trading companies like Enron. The plan was drawn up illegally in secret by Dick Cheney and Lay and Enron had major input to Cheney, meeting with him and his gang at least six times. The administration is fighting a subpoena of the records of those meetings.

Enron is a brazen swindle. They report income that doesn't exist and fail to report debt, and have done so for at least four years. How could the Board NOT know? Between November 2000 and August 2001, when the first signs of trouble appear, Lay and other executives sold off every share of stock they own, making a collective $1 billion. Meanwhile, Enron employees' stock, which serves as their pensions, is locked in by those executives, as the stock price plummets from $55 a share in August to 65 cents a share by October. At least 31 Bush administration officials held Enron stock in November, 2000. Did they sell their stock? When and why?

Bush financial advisor Larry Lindsey came from high up in Enron. He's listed as a CREDITOR in Enron's bankruptcy papers. He had to know there was a swindle. (If he couldn't figure it out, he's not qualified to be an official.) Bush's Secretary of the Army also headed an Enron subsidiary and had to know.

Bush replaced the Chairman of the FERC because Lay didn't like him. Lay boasted openly of this. SEC Chairman Harvey Pitt was hand-picked by Lay for the position, due to his notorious aversion to governmental regulation of any kind. It took two months after the entire world knew Enron was a swindle for the SEC to suspend trading in Enron shares - why the delay?

Ken Lay and Enron price-gouged in India with their Dabhol power plant. The approval to build it, which was legal, came from Bill Clinton. The blind eye to the price gouge came from Spurious George.

Bush's bogus "economic stimulus" plan called for a $234 million subsidy to Enron in the form of a ten-year income tax refund. They continued to press for this even after it was revealed publicly that Enron was a swindle. Despite this very public bit of diddling, the White House is now trying to claim it took no action for Enron. It is currently actively conducting a smear campaign against the Daschle family because Tom prevented them from giving Enron $234 million.

In May, the administration disrupted an international effort to crack down on tax-cheat and money-laundering havens like the Cayman Islands. This week CBS News reported that there are at least 600 Enron accounts salted away in the Caymans. That's accessory to a felony by Administration officials.

Also in May, a curious executive order, Volume 66, Number 94, Docket No. ER01-1394-000, was issued. It gave Enron a blanket waiver of regulations and approved all of the company's securities issues from that point in time on. It is difficult to see why routine regulatory activities should ever be relaxed or securities issues be rubber-stamped automatically for any legitimate company by the Federal government, which is there to inspect and guard the public. But Enron was, at the time, perpetrating the largest securities fraud in history. Who had input into that order? Why was it issued at all?

It gets even better. Earlier in the week, the Bush White House claimed they had never heard from Enron since the troubles started. Friday the Washington Post reported that Lay spoke personally with Commerce Secretary Evans and Treasury Secretary O'Neill.

Now the White House says, yeah, they spoke to Lay and that they said they would take no action. (Other than that economic stimulus giveaway - I guess in a multi-billion dollar theft, $234 million does seem like nothing to some people.) We are to understand that these two officials heard from the chairman of a company that reported $101 billion in profit last year that it was going belly-up, a company that was connected up the wazoo to the enitre cabinet, and said "no kidding?" and went about their business without mentioning anything to anybody? The Secretary of the Treasury AND the Secretary of Commerce hear that the investing public and thousands and thousands of American workers are about to get a royal screwing and they both sit around with their thumbs up their butt telling no-one and doing nothing?

By the way, did former Treasury Secretary Bob Rubin also call the White House in August? Yes. Rubin was a private citizen employed by Citibank, which thought it had been lending to a legitimate company. The Enron swindle was visible only to company insiders until October. Private citizens can advance private interests - public servants are not supposed to. Rubin called to ask "what would you think of." taking action on the debt rating and ended up telling the Administration it should do nothing about the debt rating. He never suggested they get a $234 million subsidy, as the Administration has been fighting to give Enron - even after the swindle was revealed.

And it gets better still.

Enron's swindle was facilitated by Accounting Giant Arthur Andersen, which did not properly audit and shredded incriminating documents. The guy who headed the Arthur Andersen office where the shredding was deliberately done is D. Stephen Goddard, Jr., a Bush Pioneer (he rounded up $100,000 in hard money for Bush) who also funneled $238,000 in soft money to the GOP last election.

John Ashcroft made a big show of recusing himself from the Justice Department's Enron investigation to prove his "honesty." But the money Ashcroft admits getting from Enron is illegal under campaign finance laws. In fact, the GOP has spent the past two years smearing Senator Robert Torricelli, falsely claiming he took a donation of the sort Ashcroft actually did take.

The guy Ashcroft handed the investigation off to, Deputy Attorney General Larry Thompson, ALSO is in Enron's pocket.

Some idea of the desperation and guilt of this administration can be judged by the fact that the White House has been publicly caught in two lies in two days-one by Spurious George himself, who ludicrously tried to claim that it was Ann Richards who had the ties to Enron, not he.

Funnier still, Monday the Administration was trying desperately to inflate the Pardongate scandal yet again (it had fizzled out for the third time). Friday, asked about Enron, flack Ari Fleisher said that the country was tired of endless investigations. (Remember, GOP hack David Barrett has YET to wrap up the $7.3 million investigation of Henry Cisneros, for no other reason than that Cisneros might be the Democratic candidate for governor of Texas. Cisneros has been out of office for three years and was found to have committed a single misdemeanor.)

Remember, Enron is a swindle that defrauded investors and employees on behalf of a few. The question is not who took money from Enron. It is what did they do in return? Who can point to a single action Charles Schmuer or Sheila Jackson Lee took on behalf of Enron that was in anyway improper?

There is plenty of evidence that the Administration put Enron's interests ahead of the public's time and again, even after the swindle became public knowledge. There must be a reckoning - and it must not be sidetracked into trivia.

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