Employees lose as CEO gains

Craig McDonald, director of Texans for Public Justice (TPJ), scoffed at President George W. Bush’s clumsy attempts to distance himself from Enron Corporation.

McDonald pointed out that the bankrupt Houston energy trading corporation poured millions of dollars into Bush campaign coffers since 1994.

TPJ, a non-profit research group that has exposed the role of corporate campaign contributions in buying influence in Texas politics, issued a report on Bush’s gubernatorial elections, titled “The Bush Gusher.”

“President Bush’s explanation of his relationship with Enron is at best a half truth,” McDonald told the World in a Jan. 14 telephone interview. “He was in bed with Enron before he ever held a political office.”

He was referring to Bush’s claim that Enron chief Kenneth Lay had supported Democrat Ann Richards in the 1994 Texas gubernatorial election. Records show that Lay gave twice as much to Bush in that election as he gave to incumbent Richards.

Enron also pumped an estimated $2 million into the Bush-Cheney campaign. Bush regularly flew from one campaign stop to another aboard Enron jets. Enron was so determined to put Bush in the White House that they sent their top lawyer, former Secretary of State James A. Baker III, to Florida to orchestrate the stealing of the 2000 presidential election.

“Baker was on the Enron payroll,” McDonald said. “When Bush senior lost his reelection bid in 1992, Lay scooped up both Baker and Commerce Secretary Robert Mosbacher as Enron ‘consultants.’ Bush senior did a Gulf War victory tour of Kuwait in 1993. Baker, Mosbacher and former Lt. Gen. Thomas Kelly, a Gulf War commander, were on the tour to sell Enron contracts to Kuwait.”

Baker arranged lucrative contracts for Enron to rebuild Kuwaiti power plants destroyed during the war. Baker promoted Enron as a global energy corporation.

Together with Shell Oil, Bechtel and GE Capital, Enron won lucrative contracts to construct natural gas pipelines and electric generating plants in more than 20 countries including India, Indonesia, Turkey, Poland and Italy.

Baker and Lay arranged for former Soviet chiefs Mikhail Gorbachev and Eduard Shevardnadze to receive the Enron Prize for Distinguished Public Service conferred by the James A. Baker III Public Policy Institute at Rice University in Houston. It was part of Enron’s efforts to secure concessions to develop oil and natural gas in Russia, Azerbaijan and Kazakhstan, a key element of the current war policy in Afghanistan, where the Pentagon is already deploying permanent military bases.

“Lay needed politicians at every level to buy his plan for energy deregulation,” McDonald added. Vice President Richard Cheney, himself the former CEO of Halliburton Corporation, the Houston-based oil and gas equipment firm, was a longtime Lay crony. Cheney set up his secretive Energy Policy Task Force to draw up a plan for energy deregulation.

“The vice president might have been talking but it was Ken Lay’s words,” McDonald said of the Cheney plan.

Lay was so powerful that he arranged for the firing of Curt Hebert, the pro-deregulation chairman of the Federal Energy Regulatory Administration, replacing him with Lay’s handpicked choice, Pat Wood. “Hebert was fired because he was not friendly enough to Enron’s deregulation agenda,” McDonald told the World. “You don’t have enough pages to cover all the conflicts of interest between Enron and the Bush administration.”

Other Bush appointees who had been on Enron’s payroll include Secretary of the Army Thomas E. White, vice chairman of Enron Energy Services; Bush’s chief economic adviser, Lawrence Lindsey, paid $50,000 annually as an Enron consultant; and Bush trade representative Robert Zoellick, who served on Enron’s advisory board. Karl Rove, Bush’s chief of staff, owned a block of Enron stock once worth $250,000.

“There is a human tragedy to this bankruptcy,” McDonald said. “At least 5,000 of Enron’s employees have lost their jobs and their Enron 401(k) retirement accounts have vanished.” At the same time, 29 top Enron executives, including Lay, sold $1.1 billion in Enron stock before it collapsed, raising the question of “insider trading,” a scandal that could eclipse the Ivan Boesky and Michael Milken junk bond scandals of the 1980s.

“I think there was criminal activity involved here,” McDonald said. “Someone has to be held accountable. The government must intervene to help the people who have been hit by this debacle. Making people whole is not a bad idea.”

The ripple effect of the scandal is already spreading to other corporations. The New York Times reported Jan. 15 that former President George Bush and Baker are also on the payroll of the Carlyle Group, a Washington-based corporation headed by former Defense Secretary Frank Carlucci.

The Carlyle Group owns United Defense Industries, which has secured a $20 billion contract with the Army to supply the Crusader Advanced Field Artillery System. Eyebrows have been raised about Carlyle Group because the family of Osama bin Laden, the main suspect in the Sept. 11 terrorist attack, was a heavy investor in the company until Sept. 11.

Sen. Russ Feingold (D-Wisc.) said, “Enron’s investors and employees and the American people deserve an investigation that is thorough, far-reaching and free from any hint of political favoritism.” He pointed out that Attorney General John Ashcroft was forced to withdraw from the Enron probe. He received more than $57,000 from Enron in his unsuccessful bid for reelection as Missouri Senator. The entire U.S. Attorney’s office in Houston has also removed itself because it is so tainted by connections with Enron.

Feingold said it “confirms the deep conflicts of interest created by Enron’s enormous soft money contributions” to both Republicans and Democrats over the past several years. Feingold demanded “immediate and complete disclosure and review of all communications between high ranking administration officials and Enron executives.”