A corporate welfare state nightmare

The Enron scandal exposes how the U.S. political system is bought and paid for.

Published January 15, 2002 8:02PM (EST)

The familiar paraphernalia of political scandal are being assembled in Washington. At the last count, two criminal inquiries and six congressional hearings were scheduled on the Enron matter. In the legislature, reduced by the war on terrorism to the role of cheerleader, everyone wants to be a part of it. Both parties know how the rituals of scandal can define a presidency. President Reagan managed to shrug off most of the damage caused by the Iran-Contra affair, while President Clinton was overwhelmed by the Monica Lewinsky saga and is unlikely to have an airport named after him.

Now it is George Bush's turn. Enron, a gigantic Texan energy trading firm and the biggest single sponsor of his political career, collapsed dramatically last month amid allegations of fraud and insider trading. The inquiries will ask familiar questions: What did the administration know and when did it know it? Was there a coverup and did the Bush team help?

These are the staples of Washington scandal, but this time they may be the wrong questions. They focus on whether anyone in the administration broke the rules. The whole point of the Enron affair is that it discredits the rules of the game. It exposes the institutionalized corruption at the heart of U.S. politics -- a casual exchange of money and power that Bush has made his trademark.

The seamy subject of campaign finance briefly captured the attention of the U.S. electorate in the early months of the Bush presidency when it was apparent that big campaign contributors were being paid back one presidential decree at a time. Enron will bring it back into focus. Investigators are poring over Enron's contacts with the administration last autumn, when the company was fighting for its life, looking for signs of illegal meddling in the market. In fact, the big trade-off for the company's campaign contributions was made months earlier. Enron executives had six meetings with the vice president, Dick Cheney, and his staff when he was drawing up the administration's energy plan in the spring, a fact that has surfaced only since the company went bust. The White House has refused to tell Congress which other industrial magnates it consulted in drawing up the plan, which is broadly speaking a polluters' charter. Few, if any, environmentalists were invited.

This is precisely how Bush mixed business and politics when he was governor of Texas. The oil and gas companies that supported his candidacy were given free rein, at secret meetings with Bush officials, to write their own rules when it came to state policy on emissions control. They, not surprisingly, chose a voluntary scheme with equally unsurprising consequences for air quality in Texan cities. Gov. Bush introduced sweeping tort reform, making it harder for ordinary Texans to sue corporations. And he appointed Pat Wood, nominee of Enron's chairman, Ken Lay, as head of the state's Public Utility Commission, where he promptly pushed ahead with the deregulation the energy companies had been asking for. Last year, after Lay failed to persuade the head of the Federal Energy Regulatory Commission to agree to Enron's views, Bush gave Wood the chairman's job.

Of course, this constant barter of cash for influence represents politics as usual. Some Democrats also took serious amounts from Enron, but as a party they are also beholden to other interest groups, like unions and minorities, tempering corporate control. In the president's case, corporate influence appears almost unmitigated. Bush has pushed through the biggest tax cuts in a generation, heavily weighted to the wealthiest 5 percent, and backed an economic stimulus package brimming with corporate tax breaks and amnesties. This was marketed along with the old palliative, the trickle-down effect: tax breaks for corporations and the wealthy create jobs further down the economic food chain.

Bush portrayed his policies as anti-recessionary before Sept. 11, and as downright patriotic afterwards. The message was a familiar one. What's good for Enron (or insert your corporate name here in return for the appropriate campaign donation) is good for America.

The Enron debacle is potentially so dangerous for Bush because it makes it painfully clear that the old equation does not hold. The Enron executives got rich even as their company was plunging into the abyss, taking its employees with it. It is the ultimate nightmare for the corporate welfare state, for which Bush has made himself flag-carrier in chief. The executives in this case have shown themselves to be anything but patriotic. They were revealed instead as rapacious asset-strippers. The Democratic Party has to seize the Enron affair with both hands. With the midterm congressional elections about to take off, it might just shake the nation out of its patriotic trance and revive a debate over how U.S. politics is bought and paid for.

) The Guardian. Used with permission.

By Julian Borger

Julian Borger is a correspondent for the Guardian.

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