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The End of Civilization?

Wednesday, March 6, 2002

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From The John F. Kennedy School of Government
Harvard University
Cambridge, Massachusetts
• Yesterday, I joined Newsweek investigative reporter Michael Isikoff speaking to a class at the Kennedy School about politics and the press at the request of former Cheney press secretary Juliana Glover-Weiss.

• Isikoff was very, very smart. The students were very, very smart. I held my own.

• If civilization ends soon, you will be able to mark yesterday as the date the end began.

• There was an article in the Washington Post business section yesterday which may, in fact, lead to criminal charges against Ken Lay and the boys. We all know that if you are classified at a certain level in a corporation, you have to report every time you buy or sell stock in your company. This is called, Insider Trading. Insider Trading is not, in any way, illegal, but not reporting those trades is.

• According to the piece by Allan Sloan, if an insider sells his stock to his own corporation, then that transaction does not have to be reported with the same immediacy as a sale on the open market.

• Ken Lay sold about 20 MILLION Dollars worth of Enron stock to Enron between August and October while the stock was tanking so he wouldn't have to report it. And he didn't.

• At the front end of this activity, Lay DID report he was buying two million dollars worth of Enron stock which clearly was designed to give a false impression of his faith in the stock.

• In the middle of this action - on September 24, according to Sloan's piece - Lay told his employees that at $27 per share, Enron was a great bargain so they should, to coin a phrase, stock up.

• The great bargain is now at about 26 cents a share.

• Someone ought to haul all of them before a grand jury and find out what discussions were held when Mr. Lay was bailing out. Did anyone mention the notion of having the company purchase Lay's shares, which the company was then stuck with, to avoid spooking the markets? If so, might that be considered perpetrating a fraud upon investors? Was this, in fact, a conspiracy to commit fraud?

• In California, as of about midnight Eastern time, it appears that Conservative Republican Bill Simon will have defeated former LA Mayor Richard Riordan pretty handily. In a midnight conversation with a nationally-respected (but non-partisan) political analyst we agreed that if Simon can maintain acceptability, he can beat incumbent Gray Davis.

• We disagreed, however, as to whether Simon will be able to do that. I said I thought he could. Watch for the Davis campaign, in an effort to define Simon, to engage in high intensity campaign operations over the next few weeks to push Simon into a "right wing extremist" box and then, if they are successful, spend the rest of the campaign year in keeping him there.

• Pollster Steve Kinney (Public Opinion Strategies), who did the polling for Simon, called this race in an e-mail to Mullings over the weekend.

• In the continuing Saga of the Secret Government, Democratic Senate Leader Tom Daschle hasn't exactly backed down, but he has moved sort of sideways from his Sergeant Shultz act. Daschle said, of the shadow government plan:

  "The point is not who knew and who didn't. I think the point is that the facts are accurately stated and that we have an appreciation of what this effort is."

• This kind of statement sounds like code for "Someone over here knew, but they didn't tell me."

• Those "someones" were, according to White House records, the Sergeant-at-arms of the House and the Secretary of the Senate. "Administration officials," according to the Washington Post, "said the briefing included a tour of one of the facilities."

• Oops.

• Several of you wrote in to ask a question I wish I had thought of: If only 150 people have been assigned to continue the business of government in case of a catastrophe, why do we need the other 2.8 million?
  --END --
  Copyright © 2002 Richard A. Galen

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