Fortunately for the rest of us, though, Enron didn’t inherit the earth. The company may have promised to deliver greater “transparency” to energy markets, but upon inspection its own affairs turned out to be a tangled mess of lies, nepotism and exaggeration that included the overstatement of profits by some $586 million — a revelation that caused panic among investors and a catastrophic collapse for the mighty energy trader.

Nor will the obvious implications of the Enron affair be suppressed for long. Enron’s failings were in fact directly related to its corporate ideology, to its zealous, cult-like love of free markets. According to Wednesday’s Wall Street Journal, Enron fought fiercely and paid lavishly to limit or abolish federal oversight of its trading business; its trading business then collapsed for lack of oversight and accountability. It isn’t a coincidence when those who run ads mocking government regulators and saluting themselves as colossal rule breakers turn out to be engaged in literal rule breaking and regulation circumvention. Why are we feigning surprise?

Enron was the peerless darling of the all those who believed that free markets were the acme of existence. Its wreckage is as good a place as any to sit down and take stock of the deregulated, privatized state into which we’ve been so rudely hustled over the last decade. And here is what it looks like: Top management walking off with hundreds of millions of dollars while employees lose their jobs, investors lose millions and customers get to look forward to more rolling blackouts. Profiteering. Bought politicians. Stock market bubbles that inevitably burst. Workers thrown out on the streets. Left to its own devices, this is what the free market does.

Yes, Enron hoodwinked the world financially. But ultimately the more remarkable aspect of this tawdry corporate tale is the way Enron tricked us politically, the way its leaders persuaded the world that their passion for free markets, particularly in the field of electricity, was somehow equivalent to “revolution,” to “creativity,” to human freedom itself. That only when the corporations were free to romp the worlds as gods would we truly have achieved popular democracy.

For management gurus, Enron was a particularly hallowed operation. Once a simple natural gas pipeline concern, Enron turned itself into an energy trader with awesome ambitions, buying and selling contracts to deliver power across the country. Who needed pipelines and power plants and other mundane physical assets in the age of the Internet? This was a “new economy,” and in its last years Enron’s starstruck fans took to describing it as a full-blown “market maker,” a near-divine bringer of entrepreneurship and profit-taking to those slow-moving reaches of the economy where before there had only been regulation and an outmoded fixation on public service — water, electricity, “bandwidth.” And — Holy shit! — just look at those profits!

This is why recent years saw such precious expressions of Enronphilia as Gary Hamel’s 2000 book, “Leading the Revolution,” in which Enron is characterized as a “revolutionary” company, the home of “radical ideas” which “come from radical people,” where “new voices have the chance to get heard,” and where top brass say nice populist things like, “People are smarter than we are at the top.” Before Enron’s troubles became a crisis, Hamel and his hero Lay were even scheduled to appear together at a high-profile November guru-fest called the “Revolutionaries’ Ball.” (The event’s logo featured a red flag.) Enron’s own TV commercials exhorted viewers to ask the “confrontational” question, “Why?” — a word that supposedly has the power to “bring years of conventional assumptions to a jarring halt.” The company even equated its quest for free markets with the doings of folks like Gandhi, Lincoln, and the civil rights protesters of 1963 Birmingham. (I guess Jesus wasn’t available when they were filming.)

In April 2000 Fortune magazine imagined Enron as Elvis Presley, the mythical bringer of hipness to the desert of 1950s culture. I still find it hard to believe this passage appeared in a responsible magazine of business, so I reproduce it here in full:

“Imagine a country-club dinner dance, with a bunch of old fogies and their wives shuffling around halfheartedly to the not-so-stirring sounds of Guy Lombardo and his All-Tuxedo Orchestra. Suddenly young Elvis comes crashing through the skylight, complete with gold-lamé suit, shiny guitar, and gyrating hips. Half the waltzers faint; most of the others get angry or pouty. And a very few decide they like what they hear, tap their feet … start grabbing new partners, and suddenly are rocking to a very different tune. In the staid world of regulated utilities and energy companies, Enron Corp. is that gate-crashing Elvis.”

The adulation persisted right up to the end. The cover of the September edition of Business 2.0 carried a photo of Jeff Skilling, then the company’s CEO, giving the reader a big finger-over-lips “Shhhhhhh!” The secret Skilling wanted us to keep was not the devastating truth about Enron’s profits, but that the “Revolution Lives.” Yes, the dot-coms had tragically gone bust, but who cared about that? Enron’s metamorphosis into a “virtually integrated company” offered “glimmers of a possible future.” One trip to Enron’s Houston headquarters and anyone could see that the “revolutionary” truths of the new economy still thrived.

By the time the issue hit newsstands, however, it was Skilling himself who had mysteriously disappeared from the CEO’s office. Soon it was Enron’s legacy, not dot-com hype, that was being dismissed as insignificant by the desperate new-economy faithful. Enron’s scandal and collapse, it is now maintained, has absolutely nothing to do with the company’s worship of markets and its efforts to discredit government oversight and its long-running campaign to push privatization and deregulation. “No linkage!” screams the Wall Street Journal, piling on with no fewer than four editorials variously accusing Enron’s detractors of “schadenfreude,” declaring that Enron’s collapse actually discredited the foes of deregulation, insisting that Enron-style deregulation did too benefit consumers (because free markets always do, nyah-nyah), and smugly declaiming the libertarian line on California’s recent energy disaster: The state simply failed to deregulate enough.

Enron’s P.R. magic was still having an effect even in such critical quarters as NPR’s “Marketplace” program. One segment on the day of Enron’s collapse featured bereft employees declaring their faith in the company’s management (“These guys are brilliant people. They’re really smart. They know what they’re doing”) while another flatly declared that Enron — bless its soul — had worked to keep prices low for consumers and that its demise might lead to a spike in energy costs.

And Fortune, which had fawningly compared the company to Elvis, currently features a cover story headlined “The Enron Disaster.” Fortune now claims the problem was “the company’s critics didn’t throw enough rocks,” and asks, “Given the extent to which financial chicanery appears to have taken place, is someone going to jail?” But hey, even Elvis screwed up in his later years.

Enron’s business was, even in the best of times, difficult to understand. When writing a story about the company last June I could find no one able to explain precisely how Enron made what then seemed to be such impressive amounts of money. Clearly being a “market maker” entailed packaging a lot of innovative derivatives and contracts. It clearly also entailed considerable involvement in politics. As Business Week put it, “One of the biggest risks is that Enron simply can’t create the open markets it needs.” To do that it needed our help.

That’s why P.R. was such a large part of Enron’s mission. Not only did it sell itself as a defiant “revolutionary,” but it sold deregulation as both a great step forward for human freedom as well as an inevitability, something we couldn’t stop no matter what. Anyone who lives in a state where deregulation measures have been proposed knows what I’m talking about: The great tide of commercials and business-magazine stories and newspaper inserts all revolving around the predictable fake-revolutionary slogan, “Power to the People.”

And what voters in those states wouldn’t give Enron at the polls, the company achieved by other means, chief among them a massive — and perfectly legal — shower of boodle on influential political figures. The company and its executives routinely donated vast sums to both political parties, here and in Britain, thus helping the English-speaking world to achieve the free-market consensus that was, until recently, the pride of op-ed writers everywhere.

Enron CEO Kenneth Lay was a donor to the campaigns and a partner in the golf games of President Clinton, whose administration vigorously pushed Enron’s various foreign initiatives. Enron gave generously to House Majority Whip Tom Delay, R-Texas, who thoughtfully introduced an electricity deregulation bill. The company, of course, was largely responsible for the grooming of George W. Bush as a national figure. As governor of Texas Bush used to fly around the country in Enron corporate jets. In later years Enron distinguished itself as the single largest corporate donor to his campaign for the presidency.

The connections don’t stop there: Lay is a business acquaintance of Vice President Dick Cheney and is co-chairman of Barbara Bush’s Foundation for Family Literacy. Such was Enron’s clout with the administration that Lay, alone among electricity executives, was permitted to meet face to face with Cheney while the latter was cooking up the administration’s highly questionable energy plan. He also reportedly had a hand in choosing the personnel of the federal agency responsible for regulating his business. In Britain, where Enron profited nicely from the privatization of a regional water works, the company actually sponsored the 1998 annual meeting of the Labor Party.

An even more potent Enron weapon seems to have been to provide friendly legislators with cushy sinecures after their work on behalf of Enron had been done. The honor roll includes: Wendy Gramm, wife of Phil, who secured for Enron a crucial exemption from regulation in 1993 when she was working for the Commodity Futures Trading Commission, and who then slid comfortably into a seat on Enron’s board; Lord John Wakeham, the British Conservative politician who played a major role both in that country’s disastrous electricity privatization and also in Enron’s British water dealings, and who later received a seat on Enron’s board; Frank Wisner, the U.S. ambassador to India during the first Clinton administration, who helped Enron win the $3 billion contract to build the infamous Dahbol power plant in that country in 1993, and who then applied the necessary pressure when India began to develop cold feet, and who found a nice, warm board seat waiting for him, too, upon his retirement from the Foreign Service.

Former Montana governor and brand-new Republican national chairman Marc Racicot has done a hitch carrying the sacred banner of deregulation for Enron. Former Secretary of State James Baker has also logged time on the Enron payroll. Bush economist Lawrence Lindsay and U.S. Trade Representative Robert Zoellick enjoyed positions on Enron’s advisory board before their official duties commenced. And the generosity is bipartisan (though Republicans have been courted more lavishly): Two of former Vice President Al Gore’s close campaign buddies, Charles Bones and Johnny Hayes, have also swallowed Enron’s golden pills. Recall that the Whitewater investigation focused on just a few hundred thousand dollars, and you begin to understand how devastating to the free-market crowd — New Democrats and old Republicans alike — any investigation of Enron’s mega-million political dealings could turn out to be.

Those who are astonished that the name of Enron could even be uttered in the same sentence as “corruption” or “Whitewater” should know that the company has the peculiar distinction of being possibly the only corporation that is the subject of an Amnesty International report, which details the brutal treatment of protesting villagers near the Dabhol plant by Enron’s hired goons. An equally poignant account of the madly corrupt Enron corporate style was provided by John Kachamila, the natural resources minister for Mozambique, who had the honor of receiving a bid from Enron for a planned natural gas project. Pressure from the U.S. government to accept Enron’s bid soon followed.

Kachamila described the experience to the Houston Chronicle in 1995: “There were outright threats to withhold development funds if we didn’t sign, and sign soon. Their diplomats, especially Mike McKinley [then the charge d'affaires of the U.S. Embassy] pressured me to sign a deal that was not good for Mozambique. He was not a neutral diplomat. It was as if he was working for Enron. We got calls from American senators threatening us with this and that if we didn’t sign. Anthony Lake even called to tell us to sign. They put together a smear campaign against us, Enron was forever playing games with us and the embassy forever threatening to withdraw aid. Everyone was saying that we would not sign the deal because I wanted a percentage, when all I wanted was a better deal for the state.”

This is the sort of thing that is being referred to when Enron eulogists fret that the company’s “legacy” of deregulation is now at risk of being undone. And they are right to fret: Without the muscle behind it that the Enron billions provided, deregulation probably doesn’t stand a chance. If practical business matters — i.e., price and service — are the only factors taken into account, most municipalities would quickly choose local ownership or control over the Enron way.

During the California deregulation disaster, for example, prices for power shot up all across the state, except in the city of Los Angeles, which owns its own generating facilities. “Municipal utilities are more efficient on average and sell cheaper electricity and promote conservation,” says political economist Gar Alperovitz. They “serve the public in all those ways better than the private utilities.” When the priority is public service and not the survival of some well-connected middleman interested only in scoring sufficient profits to build its megalomaniac CEO a 50-room McMansion in suburban Houston, then public ownership fits the bill quite nicely.

But who cared about service when there was money to be made? A cardinal characteristic of the new-economy ’90s was the subjection of such mundane stuff to the ideology of the market. Markets, we were told, are always better and more democratic — by definition, in every industry, and in every age. And the American business press was only too happy to agree that what Enron was about was democracy and creativity, not corruption. Their readers have now learned that business school ideology makes a poor substitute for facts, and we have all learned the hollowness of deregulation’s promise. In return for handing our electricity systems over to the market and to Enron, we were told, we would be paid back with enhanced service and an ever-swelling stock portfolio. The California deregulation disaster should have eliminated all doubts about the first of these promises; Enron’s collapse has now put paid to the other.

Perhaps the real theological lesson to be learned from all this is the simple statement of relief uttered by a California Public Utilities commissioner when he learned of the great conglomerate’s destruction: “There is a God.”

The answer is simple. So simple, in fact, it can be summed up in one word: Enron. Its chairman, Kenneth Lay, is the former 800-pound gorilla of Washington power brokers who is looking more and more like the spiritual offspring of Charles Ponzi.

Enron stands accused of, basically, cooking its books, fraudulently pumping up the company’s value by concealing massive amounts of debt in an array of complex partnerships set up by Enron officers. Nudged into reluctant action by a Securities and Exchange Commission investigation, the company was forced to admit that it had overreported profit by nearly $600 million during the last four years. These disclosures caused Enron’s stock to plummet from a high of $90 to 26 cents, culminating on Sunday in the energy giant’s filing for Chapter 11 protection, the largest corporate bankruptcy in history.

And it gets uglier. Much uglier. While all these financial shenanigans were going on and the stock was flying artificially high, Lay, in his position as CPSO (chief pyramid scheme officer), cashed in stock and options worth $150 million. And former Enron executive Jeff Skilling pocketed $62 million before abruptly abandoning ship this past August.

Shareholders were not so lucky — I mean “market-savvy.” Neither were some 20,000 current and former Enron employees whose retirement accounts evaporated as the company nose-dived. It turns out that these employees were not given the same opportunity as Lay and Skilling to cash out while the cashing was good. The company froze the retirement fund, and employees could only watch helplessly as their nest eggs cracked and turned sunny-side down.

But the little guys weren’t the only ones taken in. Big-boy bankers Citigroup and J.P. Morgan lent Enron a total of $1.6 billion, $540 million of which is unsecured. Starved for a good laugh? Try asking your friendly neighborhood banker for an unsecured loan and watch his reaction.

So what was Enron’s secret? It was the aura of power that glowed around the company and Kenneth Lay — a key shaper of the administration’s energy policy, and an intimate FOG (friend of George).

This aura doesn’t come cheap. Enron and its executives doled out $2.4 million to federal candidates in the 2000 election and were among George W.’s biggest donors. Lay and his wife alone have donated $793,110 to the GOP since W.’s dad was in office.

Enron has also spent big bucks lobbying Congress and the White House: $4 million in the last two years. The money has bought the company a bipartisan who’s who of Washington insiders — including James Baker, Mack McLarty and Gore 2000 fundraising director Johnny Hayes — to help push its corporate agenda.

If the congressional investigations into Enron’s collapse slated to begin this month are to have any political impact, they need to focus on how much clout and protection the energy giant was able to buy through lobbying and donations.

Witness, for example, the unprecedented input Lay and Enron were given on the makeup of the Federal Energy Regulatory Commission (FERC), the agency charged with regulating Enron’s core business. Lay went so far as to brag to one potential nominee about his “friends at the White House.” He also personally put the screws to FERC chairman Curtis Hebert in an effort to change his views on electricity deregulation. Hebert didn’t, and was soon the former chairman of FERC, replaced by an Enron ally.

The Enron debacle has exposed the dark side of capitalism — and the unseemly link between money and political influence. Let’s hope it also sheds a light on the desperate need for fundamental campaign finance reform. Because trust in the fundamental decency of our political system is not a trivial, inside-the-Beltway issue. Just ask the scores of people who were being sold on the virtues of investing their golden years in Enron — right up until the stock crashed.

So what does any of that have to do with Bush? Well, it’s not just that the Houston-based energy trader has been the primary bankroller of Bush’s political aspirations, back to his first run for Texas governor. The current Bush administration is also studded with Enron connections. Secretary of the Army Thomas White is a former high-ranking Enron executive, and Robert Zoellick, the U.S. Trade representative, was a paid member of Enron’s advisory board. The Washington consulting firm run by Lawrence Lindsey, the White House’s top economic advisor, worked for Enron. And other top officials, including Karl Rove, Bush’s chief political strategist and I. Lewis Libby, Vice President Dick Cheney’s chief of staff, both owned huge chunks of Enron stock when they joined the Bush administration. It’s also worth remembering that at the end of the first Bush administration, Enron hired chief of staff James Baker and Commerce Secretary Robert Mosbacher.

Current CEO Ken Lay was also widely rumored to be a possible pick as either Bush’s treasury secretary or energy czar, although in retrospect, given the huge profits Enron was raking in during the California energy crisis just as Bush took office, such an appointment might have been politically problematic.

Given all those links, it’s fair to think Enron’s collapse, at the very least, raises questions about the Bush administration’s energy and economic policies, given that much of the administration shares Ken Lay’s oft-stated views on promoting deregulation and allowing markets to rage unchecked by any government meddling.

But some Bush critics are going one step further, succumbing all too easily to the proposition that Bush is somehow culpable for Enron’s misdeeds, or at least a co-conspirator. The argument appears to be this: If, as it seems increasingly clear, Enron’s executives are guilty of cooking their books, defrauding investors and ruining the lives of thousands of their employees, shouldn’t Bush come in for criticism too, given his close ties to the company? And isn’t it even possible some administration figures, past or present, might be involved in Enron’s misdeeds? Some are even whispering “Teapot Dome” — as if the current situation were analogous to the Warren G. Harding administration scandal in which Secretary of the Interior Albert B. Fall leased oil reserves to private companies in return for kickbacks.

It’s too soon to say, of course, whether any smoking gun linking the Bush administration to Enron’s woes or Enron’s previous actions will ultimately emerge. Given the scope of the company’s meltdown, anything seems possible — though it is worth noting that the irregularities being investigated by the SEC in Enron’s financial filings mostly occurred on Clinton’s watch, not Bush’s. But in any case, to look for Bush culpability is to miss the true significance of Enron’s catastrophic implosion.

The list of guilty parties in the Enron debacle is not limited to Enron executives or Bush administration officials. It includes the fawning business press that lauded Enron as the most “innovative” company in America, the Wall Street analysts who shrugged off Enron’s incomprehensible financial statements, and Arthur Andersen, the accountancy that signed off on those same statements.

But Enron’s roller coaster ride is not as astounding as everyone would like to believe. It is, instead, exactly the way capitalism works when government is asleep at the wheel and greed is allowed — nay, encouraged — to be the primary operator in the marketplace.

Forget about the Teapot Dome. This is more like the South Sea Bubble of the early 18th century, when the failure of the South Sea Trading Company to make good on its promises of huge profits from New World trading led to the ruination of thousands of investors. As a result, unincorporated joint stock corporations were forbidden — a reform that was the legacy of a company whose “negligence, profusion and malversation,” in the words of Adam “invisible hand” Smith, resound down through history as a case study in what governments should not allow companies to get away with.

Will energy trader Enron spark a legacy like its slave-trader forbear, and usher in new regulations? Don’t hold your breath. Instead, just watch as Enron’s failure is placed at the doors of specific Enron officials, while everyone else scurries around noting how “unprecedented” and “unparalleled” the meltdown is. Try to keep your patience as years and years of legal wrangling attempt to sort out the bankruptcy mess and class action accusations that will keep Enron’s name in the papers long after the company itself stops functioning.

But come on. What could possibly be more business as usual than high-ranking executives cashing out at the top of the market, as Lay did, while employees are left holding the bag? What could possibly be more standard practice than jiggering the books to make your numbers look good every quarter? What could possibly be more ordinary than accountants, analysts and investors ignoring what they can’t understand, as long as the profits accumulate?

It would seem fair that the Bush administration pay some sort of political price for Enron’s woes, given its close ties to the company. And this would no doubt be a bigger headache for Bush if there wasn’t the convenient distraction of a war on terrorism right now. After all, it’s just a tad embarrassing when one of your closest allies turns out to be a house of cards operated by wheeler-dealers whose rise and fall will be a staple of economic textbooks and business school seminars for at least the rest of this century, if not the millennium.

Even if it turns out Ken Lay wasn’t primarily responsible for, or even aware of, the shenanigans being conducted by his once-anointed successor Jeffrey Skilling and his cadre of cutthroat traders, it still doesn’t say much for Bush’s judgment that his reputed No. 1 pick for treasury secretary is now a figure who, at best, let the company fall apart on his watch, and at worst bears some responsibility for its legal and economic woes.

But it’s still probably too much to hope that as a result of Enron’s collapse, other companies will come in for closer scrutiny or regulation, or that any systemic changes will result to prevent the future fleecing of the many for the profit of the few. And you don’t have to look for any conspiracy between Bush and his energy buddies to prove that. Enron and Bush are business as usual in the 21st century. You’d think that we might have learned something in the centuries since the South Sea Bubble, but in fact, we actually appear to be headed backwards.

As the world economy sinks ever further into recession, stories of high fliers brought down to earth are hardly unusual. But Enron’s abrupt transformation into dot-com blow-out wannabe deserves special attention — and for those of us who live in California, impels the kind of schadenfreude that you can’t shake, no matter how hard you try.

Enron is the natural gas, electricity, pulp, paper and bandwidth trader named by Fortune Magazine’s readers as the most innovative corporation in the land six years in a row. Enron’s leader, Ken Lay, is a close friend of the Bush family, and was the largest single campaign donor to George W. But even though the business press was anointing Enron’s every move during the late ’90s with capitalism’s finest holy water, the company didn’t penetrate the wider public consciousness until the California energy crisis.

Then, as Enron raked in billions of dollars of profits on its electricity and gas trades nationwide while blackouts plagued Californian citizens, Enron suddenly became the perfect symbol of the new “robber barrons” — the Texas energy companies who were supposedly taking California to the cleaners (although Enron itself played a much smaller role in California’s crisis than other companies). Not everyone saw Enron as villain. Sure, to many Californians, Enron was a greedy price-gouger making hay off environmentally obsessed yuppie SUV drivers; but from a free-market point of view, Enron was the perfect avatar of deregulation — a company that profited by being smart, ruthless and constantly on the lookout for new markets.

Ken Lay, who at one point was considered for the post of “energy czar” in the Bush administration, did take every opportunity to use California’s woes to push his particular political line. The problem with California’s “flawed” deregulation plan, he noted, was that it wasn’t deregulated enough. And not only did California need more deregulation, he said in interviews with the likes of CNBC and Thestreet.com and anyone else who would listen, but it also needed more “transparency” — by which he meant that energy consumers, producers and traders needed clearer information on demand and pricing, and more freedom to move power around wherever it was needed.

Far be it from me to defend California’s electricity deregulation plan in any way, shape or form — “flawed” is a particularly limp word to use to describe a strategy that was cooked up by Republican appointees to the state’s Public Utilities Commission at the behest of California’s own energy utilities but ended up driving those very utilities to bankruptcy and beyond. But it is interesting to contemplate, in light of recent Enron developments, this call for “transparency.”

Because “transparency” is precisely what Enron has long been dead set on preventing with regard to its own operations — not just for competitors and consumers, but also for its investors, Wall Street analysts and now, belatedly, the federal government. When the going was good, and Enron was reporting mind-blowing profits, few people cared that they couldn’t make head nor tail of Enron’s accounting tricks, or that no one outside of the company could figure out exactly how Enron was making its money. But once Enron started to report losses, the emperor’s clothes fell off with impressive quickness.

Although it’s still far from clear precisely what kind of games Enron’s executives were playing with their own numbers, the more we learn suggests that it was precisely the kind of classic three-card-monte hide-the-money finagling that true “transparency” would have prevented. Now the company appears to be in big trouble — on Thursday, it restated its earnings for the last five years, and according to reports in the Wall Street Journal and the New York Times, it may be on the verge of being purchased by a much smaller competitor, Dynegy.

One wonders if Enron could have avoided such an unhappy fate if it had benefited from some stricter government supervision, or, dare we say, regulation?

Rumors of trouble at Enron have been swirling since at least early this spring. One of Enron’s more recent initiatives was an attempt to start trading bandwidth as a commodity, just as it did gas and electricity. But its investments in fiber optic capacity, and other telecommunications forays, proved disastrously expensive when the entire telecom sector crashed.

Then came CEO Jeff Skilling’s sudden resignation barely six months after he was promoted as Lay’s hand-picked successor. As the person most identified with the transformation of Enron from old-economy pipeline owner to new-economy wheeler and dealer, Skilling was the epitome of Enron’s smarter, better, more ruthless corporate culture. His departure shocked Wall Street.

Then came a $618 million third-quarter loss, including a $1.2 billion writeoff of shareholder equity associated with the winding up of some obscure partnerships that were involved in numerous transactions with Enron. And that’s when the vultures started coming home to roost.

Even close readers of the Wall Street Journal’s recent coverage of Enron can be excused for being confused. Enron executives refuse to talk, and the company’s filings with the SEC are infuriatingly obtuse and lacking in detail.

But, in brief, what appears to have been happening is that executives of Enron, including the former CFO (ousted last week) Andrew Fastow, were involved in setting up partnerships that did business with Enron. From outside sources, these partnerships borrowed billions of dollars which were then invested in Enron — in the purchase of assets for Enron or in other ventures. Precisely what kind of assets remains unclear; what is known, however, is that the executives of Enron who were involved in the partnerships made millions of dollars in management fees by brokering and administering the deals.

The potential conflicts of interest are obvious — and have caught the SEC’s attention. Even those of us who are not adept in the ways of high finance can sense that there might be something wrong with a CFO getting a cut out of deals that he brokers with private partnerships, of which he personally is a member. That seems to be why, just a day after a conference call with Wall Street analysts in which Ken Lay defended Fastow, the company unceremoniously dumped its CFO. And on Thursday, two other high executives, including the company’s treasurer, were also dumped, on the heels of the news of Enron’s earnings restatements.

What’s less obvious is how the shenanigans fit into Enron’s overall business strategy. By setting it up so outside partnerships borrowed money that was then used to fuel Enron’s growth, Enron avoided the necessity of carrying that debt on its own books. The sums involved total billions of dollars — a ledger entry that would have had a substantial impact on quarterly profit-and-loss figures. Additionally, carrying that debt on the books would have lowered Enron’s overall credit rating, thus making it more difficult to raise money to fuel further expansion.

Enron, as is well documented in a lengthy Texas Monthly feature on the company this month, has always employed cutting-edge financial accounting strategies. For example, while fuddy-duddy old-school corporations would be inclined to book profits from a deal across the whole course of the deal’s term — periods that could stretch for years — Enron apparently preferred booking all its profits up front, and then moving on to the next speculative market. For Enron, innovation wasn’t confined to creating new markets for gas and electricity, but also for blazing new trails in the arcane world of bookkeeping.

Certainly it comes as no news flash that corporations play games with their quarterly numbers in order to make the bottom line look good and keep the stock price healthy. That’s practically a business model for many companies — including many of our dear departed friends from the dot-com world. What’s depressing, if not surprising, is that the investigations always come after the damage has already been done — after the investors have already been fleeced, and, in the case of Enron, after the executives have already sold off hundreds of millions of dollars worth of stock at the top of the market.

In a truly transparent marketplace, corporations wouldn’t be able to get away with that kind of shady business. If Wall Street’s best analysts can’t understand a financial statement, then warning bells should be going off at the SEC. Prevention is a lot cheaper than a cure.

In the past, Enron has justified its opaque financial statements on the grounds of competition — it would lose its competitive advantage, according to executives, if it told everybody exactly what it was doing. And there is a certain amount of sense to that: It’s hard to compete if you let the world know exactly what you are up to, every step of the way. But just the same, there are responsibilities incurred by becoming a public company, and one of those is that you are, well, public. You are taking the public’s money and you owe it an accounting. Already, class actions suits are mounting.

What Enron’s case proves is that we can’t trust companies to determine what information should fairly be withheld for competitive purposes and what should be revealed to the public. That ought to be the government’s job, which implies tighter scrutiny, stricter regulations and more bite in penalties for violating them.

But don’t hold your breath waiting for the results of the current SEC investigation. This is George W.’s world now. And if his administration is willing to broker a deal for Microsoft that lets the company get off with the mildest of judgments — even after a conservative-dominated federal appeals court ruled that the company illegally abused its monopoly power — then what do we imagine might be likely to happen to one of his best buddies, Ken Lay?

And there, at last, is our true transparency. Because the perks of getting your man elected to the top job in the land are pretty easy to see through.

But this election, many of the glass-house dwellers are throwing stones. John McCain has made reform the centerpiece of his underdog bid for the Republican nomination, and Bill Bradley joined the Arizona senator in his public laments about big money influence on Capitol Hill.

Al Gore, of the “no controlling legal authority” cash calls, says he’s all for that reform stuff, too. Even the rest of the Republican contenders, who stand united against financing changes that would hurt their party, continually criticize the giant sucking sound of the Bush juggernaut inhaling GOP donor dollars.

The Center for Public Integrity has just released “The Buying of the President 2000.” It claims no candidate is quite clean of taking special-interest dollars, or of giving special attention in return. Peter Eisner, the managing director of the center, spoke with Salon News about what the report uncovered.

In what way are the current candidates compromised by their contributors?

Each individual case is different. Say in the case of George W. Bush. [Before becoming governor] he made his money in the oil business, and that relationship with the oil business has been maintained. His top funder is Enron Corporation [an oil and natural gas company] and he has other high-level funders in the oil business. We’re talking about a relationship [with the industry] that has borne fruit.

As governor of Texas, he’s allowed oil companies, including Enron, Marathon and Exxon, to be grandfathered into a slide in implementation of pollution regulations. As a matter of fact, we found that executives from Marathon and Exxon actually co-authored the legislation. Only when it became clear that that was happening did the state finally impose standards for everyone as of 2003. So there’s a definite benefit that took place there.

While Bradley talks about closing tax loopholes, in fact, when he was on the Senate Finance Committee, he was an architect of the largest tax giveaway to businesses in history. He helped author bills that were precisely pointing at tax breaks in the millions of dollars, including one for [campaign contributor] Bear Stearns.

We point out [Gore's] longtime relationship with Occidental Petroleum. His father was very close to Armand Hammer, the former head of Occidental Petroleum, and [Gore] has maintained that relationship. We mention specifically in the book the two strategic oil reserves held by the government for 80 or 90 years, the Teapot Dome reserve in Wyoming and the Elks Hill reserve in California. These were the basis of the Teapot Dome scandal in the 1920s, when the oil companies tried to bribe their way into winning those reserves. They were held by the government all that time, until Al Gore recommended to President Clinton that they be freed up … 47,000 acres of the Elk Hill reserve was then sold to Occidental Petroleum.

Many of John McCain’s large contributors are Baby Bells. U.S. West is his largest career patron. Another large patron is AT&T. Besides the stuff that’s come out recently about his sending a letter to the FCC on behalf of Paxson Communications, we tracked his position on a proposed merger between AT&T and Media One to create a huge cable business. He basically blocked the FCC from ruling on the merger, tacitly threatening that the FCC’s ability to rule on mergers might be taken away in the future. This really paved the way for the AT&T-Media One merger. Within weeks of that happening, all of a sudden AT&T executives and their spouses gave thousands of dollars to [McCain's] campaign.

How common is it for organizations that want to get around bad publicity and campaign-finance regulations to compel or strongly encourage employees or their spouses to make contributions?

It happens fairly often, often enough that there’s a term for it. It’s called “bundling.” The coercion of campaign contributions in that matter is illegal. We’ve seen it with other candidates and it’s very disturbing.

What about reports that John McCain tried to influence the FCC in favor of Paxson, which has supported his campaign?

He’s certainly not the first committee chairman to apply pressure to a government agency for any reason, and — the way Washington works — it often happens because of a special interest. He’s taking special heat for it because he’s standing up saying that he’s in favor of campaign-finance reform.

What are the motivations for donating to an obviously losing candidate?

Sometimes it’s ideology. Take the Republican debates for example. One could argue that only two of the candidates have a possibility of winning the nomination. But sitting on the same stage with them, Alan Keyes is able to espouse political views that are very much in line with his top donor, the National Rifle Association, or his second top donor, the National Right to Life Political Action Committee. It’s free publicity. Try buying an ad on network television for a minute, and you’ve spent more than the amount of a donation to the candidate. These organizations are getting their message across.

Can the challengers — Bill Bradley and John McCain — argue that they need to be more aggressive about fund-raising because they don’t enjoy the support of their parties?

Isn’t it true that everyone needs to raise as much money as possible or they can’t compete in the election? In order to be a viable candidate, you have got to be principally engaged in raising money. George W. Bush, in the first four months of his campaign, raised something like $500,000 an hour. So for Bradley and McCain to be viable options they must do everything possible in this pay-to-play system to raise money. We’re taking a step back to say, “Is this a system that best serves the American people?”

The American people will probably again stay away from the polls in droves this year because they don’t feel like they’re invested in the system. Money is flooding into the system to the tune of billions of dollars, and people need to understand that it is actually buying something.

In light of the American public’s lack of faith in the political system, how likely is it that they will be moved to act against big money politics?

It’s very distressing that there is this tremendous apathy in the public about the whole process and the only thing that we can say is that we remain optimists. We believe that there is a chance for redemption of politicians and that the public will at some point be galvanized by the terrible consequences to democracy that this tidal wave of money is causing.

In some ways, does publishing a book that implies that all the candidates are compromised contribute to an atmosphere of public cynicism?

I hope not. The answer is certainly not sweeping what’s really happening under a rug and saying that the sound-bite television snippets and the handsome, smiling gazes of the candidates are enough. It’s as though they’re holding up a mask and the real action is going on behind them. We don’t believe that ignorance is any solution. Many of the things in our book have never been reported before, and we’re trying to help the news media and the public have a basis for understanding what is really going on in the election. We can’t believe that the lack of information is better than having all the information that anyone can possibly get.