Corporate Utopianism

By: Gene Lyons

Now that the New York Times, courtesy of Texas freedom of information laws, has obtained some 350 pages of letters, Christmas cards, birthday and anniversary greetings exchanged between former Enron CEO Ken Lay and then-Gov. George W. Bush, a modest question: Up until the balloon burst last fall, did "Kenny Boy" ever ask Bush for anything he DIDN'T get?

Just the other day somebody on e-Bay.com was peddling a back issue of the Enron corporate magazine. Gov. Bush was the cover boy, proudly signing Texas's Enron-backed electric deregulation bill into law. How long before TV networks start broadcasting endless replays of Bush's falsehood that Lay was somebody he hardly knew who backed Democrat Ann Richards in 1994? When will they dig up file footage of Daddy George, Dubya, and Kenny Boy at the opening ceremonies of Houston's soon-to-be-renamed Enron Field back in April 2000?

Despite endless iterations of the GOP party line that Enron is a business, not a political scandal, the reality is otherwise. Whether or not Bush administration functionaries broke the law is almost beside the point. By the time Enron executives started begging cabinet members for help, the company was so deeply entwined with the White House it was hard to tell where it ended and the Bush administration began. No, the real scandal is what's legal, and what Enron's collapse reveals about GOP willingness to sacrifice its core constituency of small business and individual investors to ruthless corporate buccaneers.

Having learned nothing from the fiscal meltdown caused by "deregulation" of savings and loan banks twenty years ago, supposedly conservative Republican ideologues continue to espouse what's actually a form of radical corporate utopianism. Based upon a near-religious faith in the sacramental power of money, GOP dogma holds that hyper-rich corporate executives and board members are free of what traditional theology calls original sin, and above temptation.

Classic conservatism mistrusts concentrations of power on the grounds that human nature is inherently prone to corruption. Today's Republican savants, however, assure us that only government is wicked, and that unchecked, unregulated corporate acquisitiveness produces purely benign results. Their genius and spiritual worthiness proven by the astronomical salaries and perks they award themselves, demigods like Kenny Boy and his associates should be given near-total freedom to create for their fellow Americans the best of all possible worlds. Bush himself, who's earned nearly every dime he's got on one form of crony capitalism or insider-trading or another, may or may not actually believe this rubbish. But his political ascendancy depends entirely on his willingness to mouth it.

Ironically, as the New Republic has shown, Democrats proposed at least four arguably conservative reforms duing the Clinton years that could have prevented or greatly diminished the impact of the Enron collapse. Congressional Republicans prevented them all from taking effect. In 1997, Sen. Barbara Boxer (D-CA), proposed a law forbidding employee's 401(k) retirement pensions from investing more than 10% of their funds in the employer's stock. Inconvenient to companies like Enron, which inflated stock prices and padded pension funds by encouraging workers to put all their eggs in one basket, Boxer's bill was gutted by GOP true believers. Had it been enacted, it would have saved Enron employees from being ruined when the company went under.

Also in 1997, Brooksley Born, head of the Commodity Futures Trading Commission, proposed that corporations be required to disclose far more information to investors regarding energy derivative trading. (Risky speculation in oil and natural gas futures that helped bring Enron down.) Born's predecessor Wendy Gramm, wife of Texas GOP Sen. Phil Gramm, had made a ruling exempting Enron from scrutiny in 1993, then joined the company's board of directors a few days later. Born's proposal was scuttled by House Republicans after Iowa Rep. Jim Leach gave her a prolonged public scolding. Partly as a result investors had no way of knowing that Enron had turned itself into a giant casino.

In 1998, Arthur Leavitt, Clinton's chairman of the Securities and Exchange Commission (SEC) wanted to prohibit accounting firms like Arthur Andersen from serving as both consultants and auditors of the same company - a blatant conflict of interest roughly equivalent to college biology teachers taking consulting fees for helping their own students get into medical school. Leavitt too was shot down after the Big Five accounting firms led an indignant campaign against him. Bush has since appointed one Harvey Pitt, the K Street lobbyist who ran the campaign, to head a "kinder, gentler" SEC.

In 1999, Clinton Treasury Secretary Larry Summers proposed a crack-down on offshore tax havens of the exact kind used by Enron to conceal its massive losses and hide its true financial condition from Wall Street analysts. That, too, was rejected by dogmatic GOP believers in corporate utopianism seemingly incapable of learning from experience.