Democratic Underground

Enron, why?
January 22, 2002
by Drudge Jr.

The home of the Houston Astros isn't called "Enron" just because it sounds like "ten run." Energy giant Enron Corp., bought the rights to the name of the field when it was built, however they may not hold the name for long.

In late November Enron was out of money, their executives were preparing for a buyout from rival corporation Dynegy, however when Dynegy backed out of the merger, Enron was left penniless and disorganized (this was among many problems that caused Enron's collapse). After filing for Chapter 11, a motion that protects a company against potential actions from creditors, it seemed like it was over. Stock that was once worth $80 a share dropped to 21 cents. 4,000 former employees of Enron lost their life savings, Enron had toppled with hard hitting economic repercussions.

Oh well, the larger they are the harder they fall, right? Well there's much more going on here then a name of a stadium in jeopardy.

Enron's executives knew about the approaching bankruptcy months before it became apparent. Their goal was clear, to squeeze as much money out of Enron before they went from filthy, stupid rich to only slightly dirty rich. Two months before the collapse an E-mail from Enron's CEO Kenneth Lay circulated to its employees. The message was clearly misleading, "Our performance has never been stronger; our business model has never been more robust. We have the finest organization in American business today," Lay says.

Why would Lay want to mislead his employees so? Because if morale stays strong and stock stays up he will have enough time to dump his stock, and that's exactly what he, and several other executives, did. The end result, Enron execs escaped with around $1 billion. Okay, so 4,000 lives are ruined and Ken Lay can afford another Caribbean island, case closed.

Sadly that's not the whole story. Enron is the one of the chief contributors to political campaigns, mostly for republican candidates. Fifteen members of Bush's cabinet have, or had, a significant amount of stock in Enron. Also, Enron practically funded Bush's campaign, giving him piles of soft money and even a personal jet. Bush's Economic advisor Larry Lindsey went straight from a job at Enron to Bush's cabinet. Federal Trade Representative Robert B. Zoellick did the same, and presidential advisor Karl Rove and Secretary of the army Thomas E. White both owned millions in Enron stock.

So when Enron is in the dumps where does it turn for a favor? Washington. Kenneth Lay met with Vice President Cheney three times and other Enron execs placed calls to the White House and key Bush cabinet members. At this point, it is unclear whether Bush took steps to prevent Enron's collapse.

It's not hard to see what was going on here. Lay wanted help from the government to escape chapter 11 and to prevent the exposure he's getting now as a heartless thief. When that didn't work, Lay's lawyers ordered all Enron employees to destroy any audit documents in their possession. That's called a cover up kids. Now Lay's last hope is to get his buddies on Capitol Hill to keep him out from behind bars.

Bush will probably try to stay out of the mess and allow an indictment of Kenneth Lay, but that doesn't put the twisted corruption of politicians to rest. Third parties are literally buying candidates and now we are seeing what it could do. The solution is difficult but reachable - campaign finance reform, the kind advocated by Senator John McCain of Arizona, that would put a limit on soft money and eventually curtail the favors large corporations receive in exchange for campaign funding.

Kenneth Lay and anyone who took advantage of Enron's collapse is as much a criminal as any thief or con man. Kenneth Lay is an extortionist and his cover up is only further proof of his guilt. We have now publicly seen the greed of the heartless bureaucracy of big business.

Drudge Jr. is 14, and used to do radio on WABC and WNEW, until he was fired. These articles also appear in his school paper.

Printer-friendly version
Tell a friend about this article Tell a friend about this article
Discuss this article