Enron, the S&L Scandal, and the Bush Gang
The Enron collapse is a major political and economic scandal, one of the defining events of the epoch. In fact, it is amazing that George W. Bush has been caught up in three defining spectacles of the Third Millennium, events that are among the most stunning in U.S. history and that happened within a single year: the stealing of a presidential election in Grand Theft 2000, September 11 and subsequent Terror War, and the collapse of Enron and uncovering of its scandalous history. The Enron scandals are especially important since they reveal the complete failure and catastrophic effects of Bushonomics, the amazingly scandalous history of Bush and his partners in corruption and crime, and the systemic failures of a system that would allow Enron and Bush and his cronies to flourish, loot the system in startling ways, and assume the very pinnacle of economic and political power.
It is clear that the Enron scandals reveal the utter unworkability and dangerous consequences of the Reagan-Bush conservative pro-market economic policy that deregulates the economy, allows a Wild West capitalism to flourish, and that eliminates regulation, law, and accountability in the economic realm, while placing the state in the service of the most corrupt and greedy corporations. As Governor of Texas and President of the United States, George W. Bush and his associates had done everything possible to deregulate oil and energy corporations and to provide windfall tax benefits and other financial favors to his corporate and wealthy supporters. Hence, Enron, for instance, not only did not have to pay taxes, but also got back millions in rebates. Laws and regulations governing banking and accountability of corporations were thrown out the window and the way was open for Enron and Wild West capital to loot the system and undermine the economy with substantial payoffs to the Bush administration and other politicians to look the other way and aid and abet the corporate theft.
A similar looting of the system had taken place earlier and the same cast of characters had been involved in a previous scandal: I am referring to the Savings and Loan scam of the 1980s Reagan and Bush administrations where banking, savings and loan, and other financial institutions had been deregulated and multitudes of corporate crooks stepped in and robbed the financial system, costing taxpayers, according to some estimates, over $500 billion (Lewis 1990) to over $1 3 trillion (Day 1993). In a way, this systematic corporate crime bonanza was bigger than the Enron robbery and the perpetrators largely got away with it. The S&L thievery surely should have alerted government and corporate officials that deregulation and laissez-faire policy is extremely dangerous and opens the doors to large-scale corruption and crime.
The S&L scandal should have also alerted politicians, the media, and the public to the sort of scam and corruption that the Bush family has engaged in for generations. Architects of the S&L deregulation policy included former Vice-President George H. W. Bush and James Baker who had served as Reagan’s chief of staff and Treasury Secretary, among other offices in an astounding career that has so far escaped wide-spread public scrutiny. A book by former Houston Post reporter Pete Brewton (1992), however, documents how friends and family members of the Bush and Baker family, as well as the Mafia and CIA, took over S&L institutions, looted them, and left the public with the bill.
The slime, scandal, and crimes of the S&L looting and Enron debacle are in some ways similar. After Bush family deregulation carried out by the father and son, the scammers of the S&Ls and Enron crooks went on an orgy of corruption, taking out funds from the S&Ls, for example, and investing them in a variety of schemes and scams that enabled the S&L managers, such as Neil Bush, to skim off big bucks for themselves and their cronies. Enron, as we are now seeing, set up dummy businesses for their con operations, to hide money, to avoid taxes, to use the firms to hide debt, and to inflate the value of their stock prices. As the scandal unfolds, no doubt other inventive business maneuvers will come to light.
Both the S&L institutions and Enron threw money at politicians as they scammed the system, making sure that they had political friends in high places. The corporate players in the respective crimes spent money outrageously to buy friends and supporters, ranging from lavish entertainment, often including prostitutes, booze, and drugs, to purchases of a wide range of goods and services that bought good-will and kept money flowing (many Enron creditors, as were shown nightly on television for some weeks, were left with outstanding bills for products and services rendered, that could bankrupt many small businesses). And Enron even bought journalists and intellectuals, paying them outrageously high fees to speak or consult with the corporation.
Not only does the Enron debacle show that the kind of Wild West capitalism that George W. Bush and his cronies advocate does not work, but it also reveals the appalling connections and histories of the Bush family, especially if seen in connection with the S&L scandal. Enron-Bush connections are multiple, beginning with a history of favors to the Texas-based energy corporation from successive Bush administrations, in George H. W. Bush’s presidency, in George W. Bush’s two terms as governor of Texas, and in his short but eventful term as President. While in Texas, Bush pushed through the Enron agenda by creating the most deregulatory environment imaginable, where the energy companies had almost no state regulation or requirements, to the detriment of the state’s environment, economy, and eventually to the people of Texas who had to pay for the Bush-Enron excesses –- indeed, given the collapse of Enron stock and the large number of investors who lost billions, the entire country had to pay for Bushonomics and the shenanigans of his supporters, friends, and cronies.
The epic story of Dick Cheney, oil, and Enron is similarly mind-boggling. Cheney admittedly met with Enron executives six times while developing energy, tax, and economic policy. Moreover, there are allegations that Cheney replaced the head of the energy department regulation, FERC, Curtis Hubert with Patrick H. Wood, a crony of George W. Bush’s from Texas who was previously had of the Texas Public Utilities Commission and who would be more pliable to Enron’s demands. For months now, there have been demands that Cheney hand over notes and documents pertaining to his Enron meetings, but so far he has stone-walled these requests, opening the way to potential Senate Hearings or Trials that will perhaps provide a media spectacle equivalent to Watergate, or maybe even better.
The entire Bush administration is, in fact, saturated with oil and energy connections and ties to Enron. Cheney, national security advisor Condoleezza Rice, Commerce Secretary and former Bush campaign manager Don Evans, Bush administration economic advisor Lawrence Lindsay, and many others in the Bush administration come straight from the oil and energy industries. Moreover, Cheney, Evans, Lindsay and others have close Enron connections and were engaged in conversations with Lay and other top Enron officials during its collapse. John Ashcroft, U.S. Attorney General, has had to recuse himself from the Enron investigations because of campaign contributions from Enron and close connections with the corporation, as have other top Justice Department officials. Texas Senator Phil Gramm helped write the rules that deregulated energy production and enabled Enron to create its off-shore entities, avoiding public scrutiny and tax liabilities, Gramm’s wife Wendy had served on Enron’s corporate board, and both Gramms received bundles from Enron (perhaps leading Phil Gramm to decide not to run for re-election, knowing that he’d excessively scammed the tainted Enron money box).
Bush’s top policy advisor, Karl Rove, always on the take and on the make, had major stock investments in Enron, which he was forced to sell when reports leaked out that Rove owned large blocks of stock in Enron, Dell computers, tobacco firms, and other corporations which had pending government business and demands. Rove reportedly sold the stock but continued to provide lavish favors to those who contributed to Bush campaigns. It was also leaked to the press on January 26 that Rove had recommended to Enron Christian fundamentalist leader Ralph Reed, who was employed for years with the corporation. Rove wanted Reed’s support, which he got, for Bush’s run for the presidency in the year 2000, but did not want Reed directly on Bush’s staff as the plan was to package Bush as a moderate “compassionate conservative,” and not a hardright Christian fundamentalist a la Reed.
Top Enron lobbyists had close connections with the Bush administration and the Army Secretary, Thomas E. White, who Bush appointed to bring corporate management skills to the military, came from Enron. White is a typical representative of the “revolving door” from the public to the private sector and back, and a posterboy for Bush-Enron connections. While Army Secretary, White had been pushing privatizing energy production for military bases, a move that would immensely benefit Enron. He also held onto his Enron stocks, although he was supposed to divest, and was getting caught up in a web of scandal that would probably force his resignation.
And so the Bush administration is caught up from head to toe in an economic scandal that could be bigger than Teapot Dome in the 1920s and a political scandal larger than Watergate. The Bush administration strategy has been to claim that Enron is an economic affair and not a political one, but in terms of policies and players the economic and political overlap with Bush administration policies and personnel front and center. While millions of people will be seriously harmed by the Enron/Bush scandals, and perhaps the economy will be weakened, one gazes in amazement at the scale of the corruption and crime. The Enron-Bush scandals bog the imagination in immensity and scale and no doubt we’ve only seen the tip of the iceberg. It will be interesting to see if, once again, George W. Bush will escape the taint of scandal and political destruction. Or will the Bushgate flood open in a spectacle that will keep the public entertained and the media chattering class, lawyers, and judges busy for years to come?
