Hire the Arthur Andersen Company to audit your books.
Like Humpty Dumpty, Enron's house of cards came crashing down with its stock tumbling from $90 to 25 cents almost overnight. Employees lost their life savings when they were forced to keep the plummeting stock in their retirement plans. Enron big wigs, on the other hand, unloaded their stock. Jeffrey Skilling, the CEO, sold more than $30 million and Ken Lay, Skilling's predecessor, cashed in $23 million. Moreover, while the employees and other investors were devastated, some 500 top executives split $55 million in bonuses.
Ken Lay, known as "Kenny Boy" to the president, used to sleep over at the White House in the elder Bush administration and was a major contributor to the younger Bush's campaign, donating hundreds of thousands of dollars. He could well afford to. One wonders why the president never asked "What is going on at Enron?"
He also could have asked Wendy Gramm, wife of the retiring Senator Phil Gramm. When serving as chair of the Commodity Futures Trading Commission under the elder Bush, Wendy allowed for an exemption in the trading of derivatives (remember those) which became Enron's most lucrative business. It never produced a barrel of oil, a kilowatt of electricity, or any other product. Enron was a high flying trading company.
After her work at the Commission was done, Mrs. Gramm resigned to become a member of the Enron board serving on the audit committee. After looking over Enron's cooked books, she sold some $275,000 of Enron stock. She said she did it to avoid a conflict of interest since her husband was chairman of the Senate Banking Committee. Yet Wendy stayed on the board and was rewarded with future stock options while watching her husband push legislation exempting key elements of Enron's energy business from federal oversight. The exemption passed over the objections of the Clinton administration.
Wendy Gramm also directs the regulatory studies program at George Mason University, which has received $50,000 from Enron since 1996. Her academic institute is highly influential in arguing for deregulation, conveniently merging her academic and corporate interests. The fact is there would be no Enron scandal if it were not for Republican engineered changes in government regulation that permitted Enron its meteoric growth
Remember Dicky Platt, the hard-nosed small businessman in Texas, whom Senator Gramm said he took bills to for approval? Would these shenanigans pass the Dicky Platt test? Could these shenanigans also be the reason for his surprise retirement?
So far, the press has largely ignored this potential scandal probably because of the Afghan War. They also ignored the burglary of the Democratic headquarters in 1972 because Nixon kept the focus on the War in Vietnam. At the time they called it just a "third rate burglary."
The Enron debacle is no "third rate burglary" and the Bush family ties to "Kenny Boy" Lay are just too intimate and lucrative to ignore. There are at least four Enron consultants and executives who hold high positions within the Bush White House.
As John Dean once famously said of the Nixon administration, there is a cancer growing on the presidency, but this time its name is Enron-and it won't go away by being ignored.
Mr. Hays invites your comments.
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