Why The Bang Turned Into A Whimper
To the list of recent Next Big Things that fell far short of expectations -- an ignominious inventory that includes the Y2K bug, killer bees, New Coke and the Segway scooter -- we can now add the Enron scandal.
Remember when it was all the rage, provoking lots of righteous indignation, and vows to reform the system? Talk about sound and fury signifying nothing. The post-Enron momentum has dissipated to such an extent that one salivating banking industry lobbyist crowed: "Enron is over."
As is so often the case in Washington, the official spinmeisters have been circling the carcass, offering all the reasons why nothing ever came of all the promises to change the sleazy status quo. This bunch has more rationalizations than a catered Overeaters Anonymous meeting.
Here's a Beltway sampler of the most popular excuses currently making the rounds:
"The Chicken Little" Excuse. This is a favorite of business lobbyists who are fond of running around Washington yelling, "The Dow is falling, the Dow is falling!" -- warning that any legislation that limits the unfettered practices of corporate America would send the already sputtering economy into an irreversible death spiral. This is like suggesting that a dying cancer patient not have surgery to remove a malignant tumor because the procedure might leave a scar.
"The We Shall Pass No Law Before Its Time" Excuse. In this moldy oldie lawmakers claim they're for reform -- it's just that they want to "be careful" and "do it right." So they hem and haw and appear ever so grave and thoughtful. And then just wait out the public's attention span, thereby letting the actual reform die a slow, quiet death. A textbook example was recently delivered by Mike Siegel, spokesman for the Senate Finance Committee: "We are more interested in getting it done right than getting it done fast." Isn't that noble? Unfortunately, post-Enron reform legislation continues to languish in the Senate. Shouldn't "getting it done right" involve, at some point, actually getting it done?
"The Buck Stops There" Excuse. In this venerable dodge, any hard-nosed inquiry is sabotaged by suggesting that someone -- anyone -- other than the entity doing the investigating is better suited to the task. For instance, if Congress is holding hearings on Wall Street malfeasance, you quickly suggest that this is a matter better suited to the regulators at the Securities and Exchange Commission. If the SEC is leading the probe, you suggest it could be better handled by the Justice Department. And as soon as those Justice Department subpoenas start flying, you immediately say that this, really, is a job for Congress. It's just a question of filling in the blanks and shuffling the players. Think of it as three-card monty for the K Street crowd. It's quick. It's easy. It's fun for the whole corporate family.
An interesting post-Enron twist on the "right idea, wrong venue" shell game has seen Republicans, those diehard champions of states' rights, deriding the rights of states like New York and California to try and curtail corporate abuses. Suddenly, those laminated cards of the 10th Amendment that so many GOP candidates carry in their breast pockets have been replaced by crib notes on the virtues of the federal government which alone, as SEC chairman Harvey Pitt told crusading New York Attorney General Eliot Spitzer, "can set nationwide standards".
"The Reformers are Just a Bunch of Grandstanding Politicians Looking to Grab the Spotlight" Excuse. Well, even a stopped watch is right twice a day.
And the latest, freshly minted justification: "The Not Enough Oxygen in the Room" Excuse which holds that the president's new Homeland Security proposal -- referred to by "Not Enough Oxygen" devotees as "the most massive reorganization of the federal government since the New Deal" -- is so, well, massive that there will be no room on the legislative calendar for anything else in the foreseeable future.
Of course, the real reason is the one we're not hearing: There is no Enron-inspired reform because the big donors are determined there will be no Enron-inspired reform. And they are willing to pay through the nose to guarantee it.
A case in point has been the feeble Congressional response to the now daily litany of abuses seeping out of Wall Street. Back in March, it looked like the House Energy and Commerce Committee, fresh off its public flogging of Enron execs, had set its investigative sights on Wall Street, sending letters out to the big securities firms seeking information about their involvement with Enron's shadier practices.
Some of them responded by threatening to turn off the campaign contribution spigot unless reformers on the Hill cooled their jets. The Chairman of the National Republican Congressional Committee Tom Davis confirmed the donor uprising: "They were very free with their complaints." As one House GOP staffer admitted: "We're getting questions about why the NRCC is calling us up for money while the other guys are investigating us."
The bankers' blackmail had the desired effect: The Energy and Commerce Committee has yet to hold hearings on Wall Street, and the CEOs of Merrill Lynch, Citigroup, Goldman Sachs, Lehman Bros., and J.P. Morgan have been spared their time in the Congressional hot seat -- which is still smoldering with the remains of Jeff Skilling's singed rear end.
With apologies to T.S. Eliot: So this is how Enron ends, not with a bang but a whimper -- and a donation.