Today, class, we're going to examine the Enron and Global Crossing situations in the context of big
time politics, as opposed to the Securities and Exchange Commission or the Financial Accounting Standards Board.
The Democrats have been waiting for a chance to hang the word "scandal" next to the phrase "Bush Administration" for approximately 377 days - since George W. Bush took the oath of office last January 20.
Enron appeared to be their chance. It had all the elements:
A company from the President's home state;
A bigger-than-life CEO in Ken Lay;
Money, money everywhere and all the corporate boards did shrink from their responsibilities;
Every single living person in Washington, DC on the Enron payroll;
Big shots making hundreds of millions;
Little shots losing their life savings;
Phone calls placed to the highest members of the Administration;
A White House unprepared for the onslaught;
Democrats in the House and Senate salivating for some heavy get-even time.
If it gets any better than this, you have to tell me how.
Well. It might have been a LITTLE better if the President or anyone in his administration were in any way involved in some skullduggery. Which, as of this date, no one has been able to show that they were.
The White House was a little slow on the uptake when Enron broke. I got a call from a national reporter asking me what I thought about that. I said it was refreshing to have a White House which was not skilled in handling scandals.
The previous Administration had a fully staffed Scandal Control Center. As soon as the first subpoena from the first Congressional Committee showed up, or the first call from the first reporter was received, the Clinton White House Scandal Control Center swung into action. Lawyers, press people, political operatives, Congressional liaison experts all knew their roles - so well practiced over so long a time.
The Democrats - properly - went after the White House with everything they had. You couldn't turn on a Sunday show without a Senior Congressional Democrat wearing sackcloth and ashes in solidarity with the people who had lost all in their 401(k) plans.
First, it was the phone calls from Enron to the Commerce and Treasury Secretaries asking for bail-out help.
See? Ken Lay could simply pick up a phone and get Don Evans and Paul O'Neill to dance to his tune.
Didn't work. Both Evans and O'Neill turned him down.
Drat.
Next try. If the Bush Administration knew this was going on they should have told the stockholders.
Um. That doesn't appear to be the Administration's job so much as it appears to have been Arthur Andersen's job.
Ok. Can't get the President? Go after people around the President. What about that Karl Rove? Reports had it that he helped Ralph Reed get a contract with Enron. Both have denied it, but even if it were true, so what?
I know what let's do. We'll go after Ed Gillespie. Here's the guy. Now we're onto something. Gillespie, it was reported, was Enron's "go-to guy" in Washington. Gillespie worked for Haley Barbour. He was a big hitter at the Republican Convention. He went to Austin to work on the campaign. He's the Man!
It is not likely that Ralph Reed and Ed Gillespie were the last two people to review the quarterly financial statements before they went out. And, promoting the interests of a company - or, for that matter a labor union - is not illegal.
Oops. Look at this! It seems that the head of the Enron lobbying office in Washington was - a Democrat.
Add to all that, Global Crossing goes belly up and Democratic National Committee chairman Terry McAuliffe invested $100,000 and made $18 million. So what if it was perfectly legit? It muddies the waters and makes the national eyes glaze over.
That sound you hear is the wheels of the Democratic spinners.
In spite of all the elements of a scandal, they just can't seem to get any traction.
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