Andrew Sullivan’s selective Enron outrage

The failed energy trader didn't just spend money on politicians. It gave handily to journalists, too. But why is Sullivan most angry about the one liberal who cashed in?

Topics: Enron, Paul Krugman,

It took a few months, but the press has finally managed to carve out an angle about itself in the Enron debacle: a controversy-in-a-teapot focusing on conflicts of interest for the so-called Enron pundits.

The pundits include a group of prominent political and economic commentators who in recent years (i.e., before former CEO Kenneth Lay replaced Osama bin Laden as Public Enemy No. 1) made their way onto Enron’s payroll and received big bucks for doing very little work. Now they are being asked: How in good conscience can they comment on Enron’s fall after cashing Lay’s obscenely generous checks?

The Enron sugar daddies include Weekly Standard editor William Kristol ($100,000), CNBC host and National Review Online columnist Lawrence Kudlow ($50,000), New York Times columnist Paul Krugman ($50,000), Weekly Standard contributing editor and Sunday Times of London columnist Irwin Stelzer (approximately $50,000) and Wall Street Journal columnist Peggy Noonan ($25,000-$50,000; apparently she cannot recall the exact sum).

We’re assured this is a very big deal. “The burgeoning scandal [has] replaced the war as the Beltway’s reigning obsession,” the Washington Post reported on Wednesday.

A review of the charges makes clear that none of the Enron media players, who were all slow to cop to their Houston boondoggles, come out looking very good. But that also goes for their chief accuser, conservative columnist Andrew Sullivan. His selective prosecution raises suspicion about whether he is simply trying to right an ethical wrong or, more likely, hoping to damage one of the left’s most effectively critical voices — Paul Krugman, a former MIT economist who has landed punch after solid punch on the Bush administration over the past year.

Right from the outset, Sullivan, using his daily online column, called for an “investigation” into Krugman’s alleged ethical lapse. (By who, the Pundit Police? Is that run out of the Department of Justice?) He suggested Krugman and others “recuse themselves” from the Enron situation, the way Attorney General John Ashcroft did, since as a senator he received Enron contributions. According to Sullivan, the Times columnist should return his Enron money, just as Senator Hillary Clinton had returned the campaign contributions she’d received from Enron. (In Washington, contributions and paychecks are seen as one and the same.)



“Disclosure is a must,” wrote Sullivan. “We demand it of politicians. Why should we not demand it of the journalists who police them? If it’s corrupting for politicians, why is it any less corrupting for pundits, who can exercise as much power as many Congressmen and often have more influence than individual Senators? ”

Yes, both politicians and the press depend on public trust, but the last time we checked pundits did not have the power to pass legislation, prosecute criminals or declare war. Nor were pundits answerable to the voters. Indeed, the level of importance granted by the media to this Enron media tempest is more proof than we need of the warped sense of self-importance such pundits have about themselves and their colleagues.

The absurd levels of self-absorption are reminiscent of the time, early in George Bush’s campaign, a Boston television journalist sprang a pop quiz on a befuddled W. While the cameras rolled, the reporter asked him to name several foreign leaders. Bush stumbled badly. More than a few pundits then rushed forward to defend Bush, suggesting even they wouldn’t have been able to ace such a tough test. Their courage in admitting to just skimming the international news section every morning was commendable, but unlike Bush, those columnists weren’t angling to become the leader of the free world.

So, just what crimes did these pundits commit?

Irwin Stelzer, contributing editor for the Weekly Standard and a columnist for the Sunday Times of London.

To date, Stelzer still has not disclosed to readers how much he was paid to serve on an Enron advisory board that he helped organize. In a Weekly Standard piece about Enron last November, Stelzer defended the company by stressing there was “no indication that the mistakes were other than honest ones, or that investors were deliberately kept in the dark or misled about the company’s finances.”

In that piece, Stelzer told readers about serving on the advisory board, but not that he was paid tens of thousands of dollars. This came after years of writing favorably about Enron without giving readers a hint of his financial ties to the company.

Bill Kristol, editor of the Weekly Standard.

Not much better than Stelzer’s situation. Kristol collected $100,000 for serving two years on the same lightweight Enron advisory board while editing a weekly magazine that routinely covered energy and deregulation, policies Enron was actively trying to shape. It wasn’t until Stelzer’s column last November that readers were told about Kristol’s Enron involvement. Just how much Kristol pocketed was revealed only later, by other publications. If there’s an ethics crime for Sullivan to prosecute, it’s the Weekly Standard’s nonexistent conflict-of-interest guidelines.

Last week, the New York Times reported that Ralph Reed, the former head of the Christian Coalition, was given a plum, $10,000-per-month consulting gig at Enron at the request of Bush strategist Karl Rove. The clear implication being that the Bush camp was trying to win over Reed as an ally by using Enron’s payroll. Was a similar strategy at work with Kristol? Kristol was not known as a Bush booster — he backed Sen. John McCain in the Republican primary. Could the board membership have been designed as a way to quietly lead him to the Bush camp? Only Enron execs know the answer to that question.

Peggy Noonan, columnist for the Wall Street Journal.

The conservative opinion maker outed herself last Friday; in a column critical of Enron and its culture of wealth, she informed her readers that she’d once done speechwriting for the failed Houston energy company. Like almost everyone else involved, however, Noonan had trouble coming right out and telling readers how much she pocketed. Instead, she wrote that “if memory serves,” she earned between $25,000 and $50,000 for her work. But even those numbers were hard to come by — readers had to calculate on their own the number of hours she worked (between “100 to 200 hours”), and multiply that by the rate she charged ($250) in order to get the final eye-popping invoice.

Noonan then admitted the speech she wrote for Enron wasn’t very good and that only portions of it were even used. Yet going by her high-end estimate of 200 hours billed, Noonan spent five weeks straight, working 40-hour work weeks, to deliver contributions that, she conceded, “weren’t helpful.”

After initially criticizing Noonan, Sullivan reversed course, writing that he’d been “a little harsh” on her and that Noonan had been “had” and “used” by the energy giant. Some at Enron might quibble with that assessment.

Lawrence Kudlow, cohost of CNBC’s “America Now” and an editor for National Review Online.

Kudlow earned $50,000 for a year’s consulting and two speaking fees. In his National Review column on Monday, Kudlow claimed he had been “completely forthcoming with respect to my brief consulting role with Enron and the fees I received for this consulting.”

Not quite. Kudlow didn’t reveal his generous fees until Sullivan began his Enron pundit watch. And that was after Kudlow had already written about the company without letting readers in on his Enron finances.

When Kudlow finally did come clean, he explained he had been “attracted by the personable Kenneth Lay.” Not Lay’s checkbook, mind you, his personality. That was odd, because in his previous column Kudlow undressed the “characters” at Enron (presumably including Lay) who had “no moral fiber, no character, no courage and no corporate responsibility.”

Also worth noting is that it took Kudlow several months to even address Enron’s Page 1 debacle. That seems like an odd oversight for somebody with the title of “financial economics editor.” Did the Enron money help keep Kudlow quiet?

Paul Krugman, columnist for the New York Times.

This whole game of gotcha began when the New York Times, deep in a recent Enron news story, reported that Krugman had once received $50,000 to serve on Enron’s now famous advisory board. Months earlier Krugman himself had informed readers about his Enron work but conveniently left out the five-figure number. Same was true when he wrote a puffy Enron piece for Fortune magazine in 1999; the advisory board was mentioned, handsome paychecks were not. (Today, Krugman is among Enron’s harshest critics.)

Sullivan’s probably correct in his surmise that the numbers were originally left out because most Times readers, and even Fortune’s white-collar readers, would probably be stunned to read about that kind of pay for two days’ work.

But Krugman, who cut his Enron ties when he joined the Times in order to comply with the newspaper’s strict conflict-of-interest policy, flagged his association well before Enron cratered, which is more than any of the other pundits can say.

By Sullivan’s standards, though, Krugman’s the worst of the bunch, and that’s where Sullivan’s partisan instincts drive his accountability crusade off the track. Rather than calling all the pundits out for not disclosing their questionable Enron paydays, Sullivan largely gives the other (conservative) commentators a pass, and zeroes in on the only liberal among them.

For instance, assessing Kudlow’s Enron writings, Sullivan concluded, “Since [his] pieces were harshly critical of Enron, there’s no scandal.” Yet no pundit this year has been as harshly critical of Enron as Krugman has, so why is his work a scandal?

Applying a sort of retroactive responsibility, Sullivan accused Krugman of “absconding with $50,000 worth of dirty money from a criminal enterprise.” Of course, Krugman took the money three years ago, long before Enron’s problems were apparent. By contrast, Kudlow was cashing Enron checks for a speech given last August, just as the company was beginning to unravel.

Sullivan patted Kristol on the back for “getting [his $100,000 payment] out in the open.” In the open? Kristol pocketed twice as much as Krugman, yet the Weekly Standard still hasn’t printed any details about Kristol’s cushy Enron payment.

Meanwhile, Sullivan accused Krugman and the New York Times of somehow trying to cover up his Enron affiliation. “Most readers of the Times would think [the $50,000 payment] is relevant,” Sullivan complained. Yet how did he find out about the $50,000? He read it in the New York Times.

Later, Sullivan bemoaned “vast amounts of corporate cash being handed over to journalists,” and how those vast amounts “might actually give an appearance of conflict of interest for a journalist.”

But was Krugman a “journalist” in 1999 when Enron came calling? Over the years the economist has undoubtedly been a prodigious writer, with outlets in Fortune and Slate, among others. But to suggest Krugman was a journalist the way Noonan, Kristol, Kudlow or Stelzer are is disingenuous. In 1999 He was primarily known as a MIT professor of economics who, according to his own explanation, accepted the Enron gig based on a long tradition of high-profile economics professors cashing out at the expense of corporations.

So why, after the fact, does Sullivan try to hold Krugman to a conflict-of-interest standard his future employer would insist upon? Was Krugman supposed to know in 1999 that later in the year he’d be hired by the New York Times, and therefore he shouldn’t have accepted the Enron money?

Krugman answered his critics by claiming he was being smeared by a “broader effort by conservatives to sling Enron muck toward their left, hoping that some of it would stick.”

He’s onto something. Clearly, Krugman’s constant flurry of punches over the last year have hit the White House in the gut a few too many times for some conservatives. And his punches hurt — Krugman is an economist who knows his topic better than the White House does. He’s also untainted by the Clinton sex scandals. (He joined the Times after those bloody battles had been fought.) And he’s unusually blunt in his assessment that President Bush is either a fool or a liar for pushing his tax cut strategy.

Sullivan may have inadvertently revealed his true motivation for targeting Krugman when he immediately launched another media crusade: criticizing the New York Times’ “left-wing lurch” in its aggressive Enron news coverage. (Specifically, Sullivan didn’t think that a poll that found a vast majority of Americans felt Republicans, not Democrats, had close ties to Enron was Page 1 material.)

There is an important lesson about politics, money and power to be learned from the Enron pundit tale, but it’s not necessarily the one that Sullivan is shouting about.

Eric Boehlert, a former senior writer for Salon, is the author of "Lapdogs: How the Press Rolled Over for Bush."

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