Enron
In Putsch’s America, When Trash Takes a Dive, It Comes Up Smelling Like a Rose

By: Bryan Zepp Jamieson

Enron is dead.

That, in itself, is no loss whatsoever. Enron, in its not-brief-enough existence, came to symbolize the utterly ruthless and vicious willingness of corporations to crucify Americans in a never-sated lust for ever more profit. In an honest society, the CEO and other board officers would be in jail right now, facing charges of felony fraud.

But that's in an honest society. In the hopelessly corrupt system that Putsch represents, the worst they face is a toothless congressional investigation, and they get to skate, with the hundreds of millions in salaries and bonuses they grabbed before the bottom fell out intact.

Enron makes a pretty good poster child for what has gone so catastrophically wrong in America. While not actually contributing anything to the economy, it became a $60 billion colossus that bought itself a President and a goodly chunk of the Republican-controlled House and Senate. When, for a few months, the Republicans had control of all three branches of government, including both legislative bodies, the impetus in Enron policy shifted from voracious acquisition to flat out rape. Through direct manipulation of natural gas prices and indirect manipulation of electric sales, it was the primary cause of the so-called California power crisis that hit in the spring of 2001.

Then Senator James Jeffords switched his party affiliation to Independent, and control of the Senate fell into Democratic hands. Immediately, there was talk of Senate committee investigations into the power crisis in California – this at a time when Enron was contributing to PACs and "think tanks" that were busily assuring the nation that California's woes resulted from profligate waste by Californians, and systematic mismanagement caused by government control of utilities. Most Californians, who ranked 46th in the nation in per capita power usage and who had enjoyed 90 years of inexpensive and unfailingly reliable power while being the fastest-growing state in American history, thought this was utter crap.

And of course, it was utter crap – self-serving smears from the same people who were making a fortune gouging California. Californians were told to expect rolling blackouts to get substantially worse during the summer, and to expect to see gasoline hit $3 a gallon.

But that all ended the day Jeffords switched: California never had another rolling blackout, and indeed, now has a power surplus. Gasoline in our remote area was going for $2.29 a gallon on that day, and today it is down to $1.43.

Oddly enough, things began to unravel for Enron at just about that time. Enron's stock was selling for nearly $85 a share, and the company was ranked #7 on the Fortune 500. According to Don Van Natta of the New York Times, Enron chairman Kenneth Lay not only donated $2 million toward Putsch's "election", but engaged in the unethical and probably illegal practice of coercing his management employees into donating to the company PAC, in amounts ranging from $500 to $5000. He would meet secretly with Vice President Dick Cheney in order to establish government policy, a felony on Cheney's part, and reportedly went so far as to propose members of FERC, the agency meant to oversee entities like Enron!

Lay, of course, fought the good fight for deregulation, pressing hard on his new administration to strip the energy industry of as much government and public oversight as possible. With Republicans controlling the House, Senate, White House and Supreme Court, it seemed only a formality that laws creating deregulation be created, but Lay probably saw the Putsch administration as nothing more than a 24 month window of opportunity before the House and Senate fell to the Democrats.

Now, when captains of industry and Republicans argue for deregulation, they always make the assumption that industry will always be honest. Certainly, the very nature of deregulation not only removes standards making dishonesty more difficult to accomplish, but often eliminates any mechanism for addressing it when it does occur. Never mind that the laws against corporate malfeasance are pretty toothless already; Lay would have been happier if there were no laws that could apply at all.

Enron behaved like the halcyon days of anarcho-capitalism for large corporations had already arrived, and it combined the rape of California with ambitious but often ill-advised forays into unrelated fields (Californians were alarmed by reports that Enron was trying to muscle in on the state's water supply) and accounting practices that were categorically illegal. It failed to notify stockholders of $500 million in expenses incurred during takeovers, and you don't have to be a member of the Securities and Exchange Commission to know that is a big time no-no.

But Jeffords switched, and the Democrats suddenly had power to investigate such malfeasances, and suddenly there was talk of calling Dick Cheney in front of a court to explain his little secret sessions with Energy Companies, and a full investigation into power and natural gas manipulation in California, and the legality of some of Enron's business maneuvers.

The bottom fell out. Most of the other companies scurried for shelter, and the huge price increases in oil and power suddenly were scaled way back. For Enron, it was too late to hide: their excesses couldn't be hidden by a sudden shift to moderate and honest business practices.

Commentators have described the fall of Enron as one of the most sudden and surprising in history. In reality, there's plenty of examples of such falls: all pyramid schemes end in such a manner, as do most other con games. I suspect that if the truth comes out, we'll find that Enron, in its most basic mode, was just an elaborate scam to relieve people of their money.

The leaders of Enron paid themselves termination bonuses totaling over a billion dollars for a job well done. This was financed, in part, by a cold and callous decision by upper management based on the realization that their stock would soon be worthless, of forbidding their employees from selling their stock options, thus keeping the value artificially inflated whilst putting the royal shaft to their workers. The most sickening and disgusting thing is that under the incredibly lax laws we already have regarding corporations, none of the thieves who ran the Enron scam will ever face charges. Corporations in 21st century America often exist for nothing else then to turn fraud and theft from criminal violations that can carry jail sentences to civil violations in which only the corporate entity stands to be fined.

Enron is dead, but there are hundreds of other companies out there just as crooked, just as voracious, just as destructive. Like Enron, they are pushing hard for deregulation, "tort reform" (which would make corporations essentially immune to all personal and class-action lawsuits) and mounting a wave of propaganda assuring Americans that government is their enemy, and that it only makes business inefficient and slow.

Indeed, for all the damage they did to America's power supply, and no matter what happens to the investors and customers they screwed, the gang running Enron will be allowed to keep their millions of dollars, and come 2004, Kenneth Lay and his ilk will be more than willing to lay out millions of dollars in hopes of restoring a Republican super-majority, so that once again they can go about their business of gutting America while loudly proclaiming that they are the pinnacle of the American dream.

The BBC reported:

"Top executives at the huge American energy company Enron are being sued for $25bn. One of the company's shareholders, the New York based Amalgamated Bank, alleges that the executives sold millions of shares when they knew the plight of the company. Enron is a grotesque fraud - a financial monstrosity of manipulation and falsification - Amalgamated Bank's lawsuit states. The Amalgamated Bank of New York is a big shareholder in Enron and so lost many millions of dollars when the share price collapsed on the revelation of previously unknown debts of $13bn. The bank alleges that executives at the top of Enron knew the true state of affairs and sold their shares before the price collapsed. The bank is suing 29 current and former top Enron executives and board members, including Ken Lay, Enron chairman and chief executive, and Texas Senator Phil Gramm's wife, Wendy Gramm. The former UK Minister, Lord Wakeham, is one of the non-executive directors of Enron, though there is no suggestion he acted improperly."

It won't go anywhere: not in George Putsch's America. Enron wanted a President and a government that was weak, cold, cowardly and ruthless, and that's exactly what they bought.

The LA Times noted:

"A federal judge heard but did not rule Friday on a request by a New York bank to freeze more than $1 billion allegedly gained by top Enron Corp. officials who sold millions of shares before the former energy giant collapsed. U.S. District Judge Lee Rosenthal gave lawyers for the defendants a week to respond. Amalgamated Bank has sued 29 current and former Enron executives and board members, including Chairman Ken Lay and Texas Sen. Phil Gramm's wife, Wendy Gramm, an Enron board member. Gramm is also the former chairwoman of the Commodity Futures Trading Commission, a federal agency that oversees commodity and options trading to protect markets from fraud and manipulation. The lawsuit, filed in federal court in Houston on behalf of people who bought Enron securities from October 1998 through November this year, alleges that the named executives and board members engaged in a three-year pattern of fraud and deception that caused Enron share prices to fall from a high of about $90 a year ago to less than a dollar."

Gee, if someone told me my funds would be frozen in a week, and I had hundreds of millions, I think I would open a bank account someplace where we don't have a treaty, like one of those little island "bank republics". Wouldn't you? Talk about a crooked judge giving his buddy, the defendant, a nod and a wink. And of course, the fact that the Gramms are involved right up to their scales makes this following item equally meaningless:

"The Justice Department has launched an inquiry to determine whether there are grounds for a criminal investigation into the collapse of energy_trading giant Enron, sources said. In taking on the Enron matter, the department joins the Labor Department, the Securities and Exchange Commission, and two congressional committees. Four investigators with the House Committee on Energy and Commerce spent yesterday interviewing several Enron officials. "We're going to follow this as far as it goes," said Ken Johnson, spokesman for the committee chairman, Rep. W.J. "Billy" Tauzin (R_La.). The investigators began what Johnson said would be a lengthy review of Enron's trading and recordkeeping, with hearings likely next year. Also yesterday, Enron confirmed that it paid $55.7 million in bonuses to retain 500 key employees it said are critical for keeping the company operating. It made the payments two days before filing for bankruptcy protection and three days before laying off 4,000 employees, who received severance pay of $4,500."

Ashcroft and the Republican House are going to get to the bottom of this. Oh, yeah. That'll happen. Republicans don't mind wasting $50 million dollars investigating a failed land deal that cost several hundred thousand dollars a decade earlier, but they'll never investigate a billion dollar theft by their corporate buddies.

Kenneth Lay will never have to go without heat or air-conditioning because he can't afford a big electric bill. Unlike many Californians and employees he ripped off and screwed over.

In any other country, that would be considered shocking. Here, we're told by our "leaders" that it's what our brave captains of industry deserve.