Bush feeds the scandal

The president's claim that Enron's chief supported his Texas opponent -- at best an evasion, at worst a lie -- drags the White House a step deeper into Enrongate.

Topics: Enron,

Bush feeds the scandal

As Washington became engulfed in the Enron firestorm Thursday, President Bush made what may be the biggest misstep of his year-old presidency — attempting to distance himself from Enron and its former chairman and CEO, Ken Lay, even though the company and its executives have given more than $550,000 to Bush during his short political career.

“He was a supporter of Ann Richards in my run in 1994,” Bush said of Lay, “and she named him the head of the Governor’s Business Council. And I decided to leave him in place, just for the sake of continuity. And that’s when I first got to know Ken, and worked with Ken, and he supported my candidacy.”

That sound you hear is the collective guffaw of the American press corps. Given the president’s long, well-documented history with Enron and Lay, his comments Thursday seemed strangely desperate — and destined to fail. At best, the quote gave the appearance that Bush indeed has something to hide; at worst, it was a straight-out lie.

According to records provided by Texans for Public Justice, a political watchdog group that monitors political giving in Texas, Bush received $25,000 from Lay by the end of 1993. Throughout his run for governor in 1994, Bush received more than $146,000 from the Lay family and other Enron execs. Ken and Linda Lay contributed $47,500 to the Bush campaign ($10,000 of that money came on Dec. 1, 1994, after Bush was already elected); the Enron political action committee (PAC) chipped in another $20,000, and other Enron executives gave Bush $79,000.

Texans for Public Justice spokesman Andrew Wheat said the organization did not have a full breakdown of Gov. Ann Richards’ contributions from Lay and other Enron execs. In fact, the only organization that has a computerized database of Texas political dollars pre-1998 is the Dallas Morning News. According to public records compiled by that paper, the Lays did give Richards $12,500 during that same period. The Enron PAC contributed an additional $5,000 to the Richards campaign.

So perhaps, on a Clintonian level, Bush was right. Lay was “a supporter” of Richards’ campaign. He was just a much bigger supporter of the Bush campaign. The White House refused to clarify Bush’s remarks, but a technical parsing of those comments would hardly serve a president who has mocked his predecessor for hair-splitting over the meaning of the word “is.”



In an interview with the Houston Chronicle Thursday, Richards’ former chief of staff, John Fainter, said (in the paper’s words), “It was always assumed that Lay was supporting Bush against Richards because of his longtime support for the president’s father.” Lay was a longtime supporter of the former president, and was even named as a co-chairman for the Republican National Convention in Houston in 1992.

“I don’t have any recollection of him supporting Governor Richards,” Fainter told the paper.

Clearly, the violence with which the Enron scandal has wiped the war on terrorism off the front pages has taken the Bush administration by surprise. In another feeble attempt to distance the administration from Enron, White House spokesman Ari Fleischer said both parties are linked to the energy giant.

“If this were to become what people have become so used to in watching Washington, which is a politically charged, politically motivated effort to blame one party or to look only at one party, when clearly Enron is a corporation that has given hundreds of thousands of dollars to both parties, then I think people would think that the Congress is not on the right path.”

Lay was in fact a golfing partner of former President Clinton, and reports from the Center for Responsive Politics dating back to 1989 show both parties have benefited from the $5.8 million Enron has spent on political contributions over the years. But while the company has given extensively to both parties, its money has overwhelmingly gone to Republicans. Overall, 73 percent of all Enron’s political giving has gone to Republicans, according to CRP reports.

The company’s links to the current administration are extensive. Attorney General John Ashcroft was forced to recuse himself from the Enron investigation because of contributions the company made to Ashcroft’s reelection campaign. Enron was also among the largest donors to President Bush’s 2000 campaign, and Bush’s appointee as secretary of the Army, Thomas White, is a former Enron vice chairman. Bush advisor Karl Rove owned more than 100,000 shares of Enron stock until he was forced to sell last year. And Lay has long been a personal friend both of Bush’s father, and Don Evans, the current president’s campaign chairman who is now Commerce Secretary.

Enron also had the ear of Vice President Dick Cheney and his energy task force as they assembled the administration’s energy plan last year. Last week, Cheney wrote a letter to Rep. Henry Waxman, D-Calif., the ranking Democrat on the House Committee on Government Reform, who has taken the lead in Congress for criticizing the White House’s Enron ties. In that letter, Cheney said he and his energy task force met with Enron executives six times, but that “Enron did not communicate information about its financial position in any of the meetings with the Vice President or with the National Energy Policy Development’s support staff.”

Bush had also gone to bat for Enron when he was governor of Texas. In 1997, then-Gov. Bush placed a call to then-Gov. Tom Ridge of Pennsylvania in an effort to help Enron gain a toehold in the state’s plan to deregulate its energy market. Whether the call had any effect was unclear. Later that year, Enron got a split decision of sorts from the state’s Public Utility Commission: Enron’s plan, which aimed at replacing Pennsylvania Electric Company (Peco) as Philadelphia’s default electricity provider, was rejected; but the PUC also rejected a Peco proposal that the commission said would have delayed competition in the state’s newly deregulated energy market.

After the commission’s vote in December 1997, Enron executive Jeff Skilling said he was “extremely pleased” by the PUC’s decision, even though his company’s proposal was rejected. He called the rejection of the Peco proposal “a courageous step” that would substantially increase the incentives for competition in Pennsylvania.

Fleischer said that nobody in the current administration acted inappropriately on Enron’s behalf. On Wednesday, Fleischer told reporters he was unaware of “anybody in the White House who discussed Enron’s financial situation.” But by the next day, he said members of the administration “had repeated contacts with Enron through the company’s plunge into bankruptcy.” That included direct conversations between Lay and both Commerce Secretary Don Evans and Treasury Secretary Paul O’Neill late last year.

The call to Evans came in October, as Enron was on the brink of having its credit rating downgraded by Moody’s Investors Services. While Lay’s attorney, Robert Bennett, said Lay “didn’t ask for anything” from Evans, a Commerce official said Lay told Evans “we would welcome any support you think is appropriate.”

In addition, Enron COO Lawrence Whalley spoke with the Treasury Department’s undersecretary for domestic finance, Peter Fisher, “six or eight times” in late October and early November, and asked the government to intervene on the company’s behalf.

“As Enron’s negotiations with its bankers for an extension of credit neared a decision point, the president of Enron asked undersecretary Fisher to call the banks,” Treasury spokeswoman Michele Davis told reporters.

Eventually, according to Fleischer, Evans and O’Neill decided amongst themselves that no action should be taken, but never told Bush they had talked to Lay. “The president thinks they acted properly and at all times did the right thing,” Fleischer said Thursday.

But Waxman said the phone calls show the administration could have done more for Enron employees who had their life savings trapped in Enron stock and were unable to sell. “It is now clear the White House had knowledge that Enron was likely to collapse but did nothing to try to protect innocent employees and shareholders who ultimately lost their life savings,” Waxman said Thursday.

Nothing that we currently know implicates anyone in the administration in any criminal behavior in connection with Enron. But the White House is clearly worried that Enron might become the symbol of a concern that many Americans had about Bush before the war on terrorism took over the headlines — that he cared more about his big corporate donors than average citizens.

“The reason this is so potentially devastating to Bush is that it brings to life in very real terms the notion that when push comes to shove, he’s for the big business special interests and not for the little guy,” former Clinton press secretary Joe Lockhart told the Associated Press Thursday.

But Cheney advisor Mary Matalin struck back at Democrats in an interview with MSNBC’s Don Imus, with a slap at the many Clinton-era scandals: “They act like there’s some billing records or some cattle scam or some fired travel aides or some blue dress,” a worked-up Matalin complained.

Still, the administration’s handling of the Enron bankruptcy has greased the wheels of scandal, not slowed them. The White House has been unwilling to make the work of Cheney’s energy commission public, and Bush’s disavowal of one of his chief political backers has only piqued the curiosity of the media.

If we have learned anything from Washington scandals over the last 30 years, it is that the coverup is almost always deemed worse than the crime. Bush’s failing to talk straight about his relationship with Lay, and his strange attempts to distance himself from the man he calls “Kenny Boy,” will only feed the media scandal beast.

Anthony York is Salon's Washington correspondent.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    Ten spectacular graphic novels from 2014

    Beautiful Darkness by Fabien Vehlmann & Kerascoët
    Kerascoët's lovely, delicate pen-and-watercolor art -- all intricate botanicals, big eyes and flowing hair -- gives this fairy story a deceptively pretty finish. You find out quickly, however, that these are the heartless and heedless fairies of folk legend, not the sentimental sprites beloved by the Victorians and Disney fans. A host of tiny hominid creatures must learn to survive in the forest after fleeing their former home -- a little girl who lies dead in the woods. The main character, Aurora, tries to organize the group into a community, but most of her cohort is too capricious, lazy and selfish to participate for long. There's no real moral to this story, which is refreshing in itself, beyond the perpetual lessons that life is hard and you have to be careful whom you trust. Never has ugly truth been given a prettier face.

    Ten spectacular graphic novels from 2014

    Climate Changed: A Personal Journey Through the Science by Philippe Squarzoni
    Squarzoni is a French cartoonist who makes nonfiction graphic novels about contemporary issues and politics. While finishing up a book about France under Jacques Chirac, he realized that when it came to environmental policy, he didn't know what he was talking about. "Climate Changed" is the result of his efforts to understand what has been happening to the planet, a striking combination of memoir and data that ruminates on a notoriously elusive, difficult and even imponderable subject. Panels of talking heads dispensing information (or Squarzoni discussing the issues with his partner) are juxtaposed with detailed and meticulous yet lyrical scenes from the author's childhood, the countryside where he takes a holiday and a visit to New York. He uses his own unreachable past as a way to grasp the imminent transformation of the Earth. The result is both enlightening and unexpectedly moving.

    Ten spectacular graphic novels from 2014

    Here by Richard McGuire
    A six-page version of this innovative work by a regular contributor to the New Yorker first appeared in RAW magazine 25 years ago. Each two-page spread depicts a single place, sometimes occupied by a corner of a room, over the course of 4 billion years. The oldest image is a blur of pink and purple gases; others depict hazmat-suited explorers from 300 years in the future. Inset images show the changing decor and inhabitants of the house throughout its existence: family photos, quarrels, kids in Halloween costumes, a woman reading a book, a cat walking across the floor. The cumulative effect is serene and ravishing, an intimation of the immensity of time and the wonder embodied in the humblest things.

    Ten spectacular graphic novels from 2014

    Kill My Mother by Jules Feiffer
    The legendary Pulitzer Prize-winning cartoonist delivers his debut graphic novel at 85, a deliriously over-the-top blend of classic movie noir and melodrama that roams from chiaroscuro Bay City to Hollywood to a USO gig in the Pacific theater of World War II. There's a burnt-out drunk of a private eye, but the story is soon commandeered by a multigenerational collection of ferocious women, including a mysterious chanteuse who never speaks, a radio comedy writer who makes a childhood friend the butt of a hit series and a ruthless dame intent on making her whiny coward of a husband into a star. There are disguises, musical numbers and plenty of gunfights, but the drawing is the main attraction. Nobody convey's bodies in motion more thrillingly than Feiffer, whether they're dancing, running or duking it out. The kid has promise.

    Ten spectacular graphic novels from 2014

    The Motherless Oven by Rob Davis
    This is a weird one, but in the nervy surreal way that word-playful novels like "A Clockwork Orange" or "Ulysses" are weird. The main character, a teenage schoolboy named Scarper Lee, lives in a world where it rains knives and people make their own parents, contraptions that can be anything from a tiny figurine stashable in a pocket to biomorphic boiler-like entities that seem to have escaped from Dr. Seuss' nightmares. Their homes are crammed with gadgets they call gods and instead of TV they watch a hulu-hoop-size wheel of repeating images that changes with the day of the week. They also know their own "death day," and Scarper's is coming up fast. Maybe that's why he runs off with the new girl at school, a real troublemaker, and the obscurely dysfunctional Castro, whose mother is a cageful of talking parakeets. A solid towline of teenage angst holds this manically inventive vision together, and proves that some graphic novels can rival the text-only kind at their own game.

    Ten spectacular graphic novels from 2014

    NOBROW 9: It's Oh So Quiet
    For each issue, the anthology magazine put out by this adventurous U.K.-based publisher of independent graphic design, illustration and comics gives 45 artists a four-color palette and a theme. In the ninth issue, the theme is silence, and the results are magnificent and full of surprises. The comics, each told in images only, range from atmospheric to trippy to jokey to melancholy to epic to creepy. But the two-page illustrations are even more powerful, even if it's not always easy to see how they pertain to the overall concept of silence. Well, except perhaps for the fact that so many of them left me utterly dumbstruck with visual delight.

    Ten spectacular graphic novels from 2014

    Over Easy by Mimi Pond
    When Pond was a broke art student in the 1970s, she took a job at a neighborhood breakfast spot in Oakland, a place with good food, splendid coffee and an endlessly entertaining crew of short-order cooks, waitresses, dishwashers and regular customers. This graphic memoir, influenced by the work of Pond's friend, Alison Bechdel, captures the funky ethos of the time, when hippies, punks and disco aficionados mingled in a Bay Area at the height of its eccentricity. The staff of the Imperial Cafe were forever swapping wisecracks and hopping in and out of each other's beds, which makes them more or less like every restaurant team in history. There's an intoxicating esprit de corps to a well-run everyday joint like the Imperial Cafe, and never has the delight in being part of it been more winningly portrayed.

    Ten spectacular graphic novels from 2014

    The Shadow Hero by Gene Luen Yang and Sonny Liew
    You don't have to be a superhero fan to be utterly charmed by Yang and Liew's revival of a little-known character created in the 1940s by the cartoonist Chu Hing. This version of the Green Turtle, however, is rich in characterization, comedy and luscious period detail from the Chinatown of "San Incendio" (a ringer for San Francisco). Hank, son of a mild-mannered grocer, would like to follow in his father's footsteps, but his restless mother (the book's best character and drawn with masterful nuance by Liew) has other ideas after her thrilling encounter with a superhero. Yang's story effortlessly folds pathos into humor without stooping to either slapstick or cheap "darkness." This is that rare tribute that far surpasses the thing it celebrates.

    Ten spectacular graphic novels from 2014

    Shoplifter by Michael Cho
    Corinna Park, former English major, works, unhappily, in a Toronto advertising agency. When the dissatisfaction of the past five years begins to oppress her, she lets off steam by pilfering magazines from a local convenience store. Cho's moody character study is as much about city life as it is about Corinna. He depicts her falling asleep in front of the TV in her condo, brooding on the subway, roaming the crowded streets after a budding romance goes awry. Like a great short story, this is a simple tale of a young woman figuring out how to get her life back, but if feels as if it contains so much of contemporary existence -- its comforts, its loneliness, its self-deceptions -- suspended in wintery amber.

    Ten spectacular graphic novels from 2014

    Through the Woods by Emily Carroll
    This collection of archetypal horror, fairy and ghost stories, all about young girls, comes lushly decked in Carroll's inky black, snowy white and blood-scarlet art. A young bride hears her predecessor's bones singing from under the floorboards, two friends make the mistake of pretending to summon the spirits of the dead, a family of orphaned siblings disappears one by one into the winter nights. Carroll's color-saturated images can be jagged, ornate and gruesome, but she also knows how to chill with absence, shadows and a single staring eye. Literary readers who cherish the work of Kelly Link or the late Angela Carter's collection, "The Bloody Chamber," will adore the violent beauty on these pages.

  • Recent Slide Shows

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>