Enron Corp. failure: Political chickens come home to roost

Posted: Tuesday, January 22, 2002

As the Enron political pot starts to boil, the Bush administration needs counseling summed up in one word: candor. The investigations of Enron's historic collapse and slide into bankruptcy are gathering steam on three fronts: an unprecedented Justice Department criminal task force, half a dozen congressional inquiries and numerous regulatory audits and reviews.

A year ago, Enron was flying high with $90-per-share stock prices.

By October, Enron reported a third-quarter loss of $638 million and disclosed a $1.2-billion reduction in shareholder equity. In December, the company sought bankruptcy protection and tried to explain how billions in debt were kept off the books. Profits had been misstated by $586 million over the past four years.

Accounting irregularities, insider trading and pension-law violations are being examined by the Securities and Exchange Commission, and the Justice and Labor departments.

The core of this story is the mugging of the nation's investment system and the failure to protect shareholders and thousands of Enron employees, who lost their savings in now worthless stock in the company 401(k). ...

The White House sat on information for months about meetings between Vice President Dick Cheney and his staff and Enron's CEO and officers. ...

Never, we are told for now, did anyone in the White House discuss Enron or talk to the president about the fate of a friend and major political backer and significant employer in his home state.

This same administration began with several senior appointees angry they had to sell their Enron stock. ...

Political caution in the White House about appearances will be a disservice to the president. To avoid confusion and speculation, get the facts out early. Otherwise, the daily drumbeat is all anyone hears.

The Seattle Times - Jan. 11

Some have attributed President George W. Bush's fainting episode to ''Enron related stress.'' This reasoning is unjustified. It has become clear that the Enron scandal has tainted both Republicans and Democrats. During former President Bill Clinton's administration, Enron financed the Democrats; when the company realized that the White House would pass to Bush, it embraced the Republicans. The investigation under way could implicate both parties.

When discussing Enron, the media have evoked images of both Watergate and Whitewater. These parallels do not hold. Those scandals involved only one political party and both had presidents at their center. ''Enrongate'' involves two political parties and has the Texas-based company as its protagonist.

Ralph Nader wonders whether the bipartisan nature of the scandal will impede justice from being done. Certainly, Enron will pay dearly for the false accounting and illegal insider trading profits. As will its auditors Arthur Andersen for destroying documents.

The White House may be called to account for any favors granted to Enron in exchange for election campaign donations. But the American public will announce the true verdict on the matter during next fall's Congressional elections. In the meantime to show some credibility Bush should promote campaign financing reform.

Corriere della Sera, Milan, Italy - Jan. 15

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