THE LAST few weeks have seen more than the falling of fresh snow upon the ground. Something more scintillating, more thrilling and more scandalous than any beret-wearing intern has walked into our nation's capital. It's Enron-gate! Can you feel the excitement?
Well, neither can most non-Beltway Americans. Nor should they care a great deal about the political ramifications of the Enron scandals. Instead, they should focus on more important things, like trying to figure out where B.B. King left his dignity - apparently in a Whopper wrapper in New York.
Starting with the obvious, Enron has engaged in some ridiculously evil actions. During a time when its liabilities exceeded its assets, it appears that the company found creative ways to make its books look remarkably solvent. Even though the company's corporate offices seemed to consist mainly of a Carl's Jr. and a Bojangles, it regularly released press releases that said "Enron worth 500 billion-jillion-zillion dollars!" Meanwhile, corporate internal documents discussed the company's cutting-edge future plans - like developing the energy potential of dilithium crystals. Not surprisingly, the company's share price was a bit inflated.
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Later, the company's auditor, Arthur Andersen, noticed that the company might collapse. Upper-level management, in an effort to recreate the sinking of the Titanic, responded immediately by issuing itself $100 million in bonuses, selling all of its Enron stock, and forbidding employees from selling their 401(k) Enron stock. The auditors, who also conveniently acted as financial consultants for Enron, responded by shredding all documents that might contain truth.
Eventually, Enron did collapse, and the employees - and regular shareholders - found themselves considerably poorer.
The things that apparently took place at the house-of-mirrors known as Enron are horrible, disgraceful acts. The individuals who engaged in such apparent fraud and selfishness will find themselves subject to some criminal and numerous civil actions.
The natural question that follows, however, is whether anything that happened at Enron should impact substantially the Bush administration. The answer, provided some form of reason is followed, is no.
A major question is whether Enron's substantial contributions to the Bush campaign influenced the administration to help the company improperly.
Any possible influence Enron might have tried to purchase didn't help when it mattered. Ultimately, when Enron demanded a cashing-in of its contributions - asking the White House to intervene on behalf of Enron with a private credit rating bureau to stave off bankruptcy - the administration did nothing. It allowed a poorly-run company to collapse under its own weight. The contributions did not help Enron when the help was most needed.
Bush-haters next point to the general connections that exist between the administration and Enron. Surely something dishonest happened between the president and this evil company.
Without a doubt, many members of the Bush administration are former Enron officials. The Republican Party, generally, is more pro-energy development than the Democratic Party. Its candidates' philosophies are more in line with companies like Enron than with Earth First.
Thus, the administration's policy decisions might run in favor of an allegedly energy trading company. Nothing, however, has appeared to show any kind of ethical violations involving an exchange of favors. If anything, the Clinton administration seems to have fallen victim to heavy big-business lobbying. Then-SEC Chairman Arthur Levitt gave in to heavy pressure from Arthur Andersen and its lobbyists (a slew of former Democratic office-holders) by not enacting a strict rule against conflicts of interest between auditors and financial consultants ("Administration Ties to Arthur Andersen Nearly as Tight as Those to Enron," Center for Public Integrity, Jan. 16). The strict rule likely would have prevented the deceptive behavior in which Arthur Anderson engaged.
Furthermore, the Bush administration has answered questions and admitted when Enron officials tried to influence them. It has released transcripts of meetings involving the company.
This is not to say that the White House couldn't do a better job of distancing itself from Enron. It should openly expose the relevant Enron and Arthur Andersen officials as frauds and felons. It should insult them publicly. Heck, it could justifiably employ some kind of public stockade idea.
Regardless of these shortcomings, the Bush administration is clean on the Enron issue. It engaged in nothing illegal or unethical. It has been satisfactorily forthcoming on the matter. The scandals of Enron begin with and should lie with Enron.
(Seth Wood's column appears Wednesdays in The Cavalier Daily. He can be reached at swood@cavalierdaily.com.)
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