Why We Dare Call It Enrongate

By Mario Giardiello, AlterNet. Posted February 13, 2002.

Enron-gate has all the elements of a Hollywood blockbuster-type scandal.  Shredded documents, shady political-business ties, and scores of once-powerful businessmen taking the Fifth in front of Congress. White House phone calls to and from big political contributors, and damage-control efforts by the administration - it all reminds one of the Nixon White House.  Plus, the attorney-general, his top aide, and the entire Houston (hometown of Enron) attorney’s staff recused themselves from the Justice Department investigation.  If this isn’t arousing suspicions of scandal then maybe a small, but telling lie from President Bush will give us more insight into this nascent scandal.

In a speech in January, Bush said that it was after the 1994 governors race that he “first got to know Ken,” the man he once more intimately referred to as "Kenny Boy." It is apparent now that their relationship goes back much further. 

Ken Lay, Bush’s largest financial benefactor, has admitted to knowing him long before this time.  Lay tried to get the former Bush’s presidential library to locate at the University of Houston, whose Board of Regents Lay served on in the late 1980’s.   During this time, Lay admits to spending “quality time with George W.”  Bush, however, denies that their relationship was ever on the level of personal friends.  Also, Lay contributed $122,500 as the CEO of Enron to Bush’s governor race before the 1994 election.  Another $200,000 came from employees of Enron.  In fact, Enron’s CEO, its employees and their relatives have contributed $836,800 over Bush’s political career -- more than from any other source.   Would just an acquaintance give you almost a million dollars for your campaigns?  Only if there is reason to believe there will be some benefit.  And Enron saw benefits.

It is insulting for George W. to insist he hardly knew Lay before 1994 when Lay was co-chairman of the former Bush’s 1990 economic summit for industrialized nations, which was held in Houston. Lay was also co-chairman of the host committee for the Republican National Convention when it was held in Houston in 1992.  It is a fact that George W. was actively involved in the campaign, which makes it impossible for them not to have known each other.  The more one looks into the relationships of all the key players, the more one realizes that this has the potential to grow into a scandal as big as any other.

It is important to realize that 15 high-ranking officials in the Bush administration owned stock in Enron last year with a combined value of almost one million dollars.  The contacts between Enron, the once-biggest energy company in the world, and the most powerful government in the world are vast.  Defense Secretary Donald Rumsfield, senior Bush adviser Karl Rove, deputy EPA administrator Linda Fisher, Treasury Undersecretary Peter Fisher and U.S. Trade Rep. Robert Zoellick all had stock in Enron.  The biggest connection is Army Secretary Thomas White, who was Enron’s vice chairman before he got his Pentagon job and owned up to $100 million worth of Enron stock. 

Two other Bush officials had professional ties with Enron.  Lawrence Lindsey, White House economic advisor, was a managing director of Economic Strategies, Inc., who served as a consultant firm to Enron.  Zoellick also served on the advisory council of Enron.  It is important to remember that Bush and Cheney once headed an energy production company and many of his top aides came from oil companies including Rumsfield, Condoleeza Rice, and many others.

Just before Enron’s bankruptcy, its top officials were lobbying the administration for help.  Calls were made from Lay to Treasury Secretary Paul O’Neil, Commerce Secretary Don Evans, and Federal Reserve Chairman Alan Greenspan right before the bankruptcy.  O’Neil and Evans say they did not notify Bush until January 10th of their contacts with Lay and Enron’s trouble.  There is even proof that Enron executives called Fisher several times in the fall asking him to help the company secure a bank loan. 

Also, Energy Secretary Spencer Abraham called the Enron chairman on November 2.  We need to know what was said and decided during all these phone calls.  The reasons for these calls are unknown, but the Bush Administration promises that they did nothing to help the company.  We cannot take his word on this, and probes need to be made.  The President said on January 10th that he “never discussed with Mr. Lay the financial problems of the company.”  It is, of course, possible that none of the officials who acknowledge contacts from Enron much earlier than the fall told Bush or took any action. But it's not very likely.  

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