ENRONGATE: How a corrupt corporation’s collapse could take Bush and Cheney down with it by Louis Rastelli
Vol. 2 No. 3, 2002
(While this title was naively optimistic when this article was written in the summer of 2002, it’s still possible that whatever’s left of Bush/ Cheney’s reputation may go down the drain if the current Enron trials bring out solid evidence of Enron’s role in drafting their energy policy. The little-known fact that maps of Iraqi oil fields were for some reason shown to Enron executives during private meetings with Cheney in 2001 may also get better known. Hopefully we’ll find out more about what the hell they were doing looking at these maps together.
At least, since this was written, Bush has lost more than half of his popular support and Cheney nearly all of it, with both men’s numbers at or below the worst numbers Nixon had. The former Enron employees quoted at the end as strongly supporting Bush most likely don’t anymore.)
The word “Enron” has become synonymous in the past year with corporate greed. But it should also be synonymous with George Bush’s greed as well. After all, if it weren’t for the Bush family’s close friendship with Enron executives, George W. wouldn’t be President today.
Enron was by far Bush’s largest election campaign donor, both in his run for the presidency as well as his run for governorship of Texas. Since we now know that Enron’s billions were made using crooked accounting and massive insider trading, it follows that Bush won his election with large piles of dirty money. What’s more, we now know that both Cheney, as CEO of another energy company, and Bush, as director of a Houston company in the early 90s, used some of the same crooked techniques to amass their own personal fortunes as Enron did.
But despite all this, a recent poll by CBS and the New York Times showed that 61% of Americans blame Bill Clinton (!!!) and his “moral failings” for Enron and the other big business scandals (WorldCom, Arthur Andersen, Martha Stewart etc.) Only 38% blame George Bush. So what gives? Don’t people read the newspapers?
Well, most people don’t. And although the word Enron pops up quite often on TV news, somehow people aren’t connecting it with Bush. Perhaps one reason for this is the sheer scope of the connections with Bush and the complexity of the criminal activity Enron carried out. President Reagan understood very well that the biggest and most complex scandals, like his own Iran-Contra scandal, are very difficult for the average person to understand. Even the massive Watergate scandal, which led to the impeachment of President Nixon, didn’t cost him any popularity with the public until it came down to a simple case of withholding his secret tapes from investigators.
There is still a good chance that the scandal eventually convinces a wider public that Bush was in fact knee deep in Enron’s unethical and illegal activities. Key information regarding White House contacts with Enron will only be released as court cases progress over the next few months. For now, I figured I’d do my part to inform readers of some of what we already know.
Enron was initially a fairly standard oil and oil-services firm, meaning they drilled for oil and ran pipelines and stuff, but they didn’t outright own and sell oil like Exxon or Texaco does. In the 90s, like most other large companies, Enron expanded in a big way, buying some of their rivals, buying companies which built refineries and power plants, and so on.
But the thing that really transformed Enron into a $100 billion behemoth, though, was its energy-trading business. Enron became the world’s largest e-commerce company by pioneering the notion of buying and selling electricity online, through its own special website. The idea behind energy trading is: you buy a whole bunch of electricity when the price is low, then sell it when the price goes higher. Enron’s website was a sort of electronic marketplace on which other energy traders could operate, paying Enron a fee for each trade they did. Often, traders bought and sold electricity dozens of times in a single day, cashing in on even the slightest, most temporary increases in prices– and each time they bought or sold, Enron pocketed a fee.
Within a couple of years, the company was making tens of billions of dollars annually from these commissions alone. This made the business world look up to Enron with enormous respect and awe. Its CEO was considered a genius. They were said to prove that old, boring industries such as electricity could turn the flighty promises of e-commerce into cold, hard cash.
And did they ever pile up the cash! Aside from its energy trades, Enron made billions just on their own stocks. As profits grew, their stock price climbed ever higher, allowing it to take out billions in cheap loans, buy out their rivals, and, in short, fulfill the corporate dream of getting bigger and bigger and bigger. They had it all, growing from an obscure Houston company to one of the world’s largest corporations in less than a decade. Their stock price peaked at around $80, but began to slide after the Internet “bubble” (i.e. all the foolish investments people made in other, untested, internet companies) burst in March, 2001.