Recuse Me! Congress Bought Off by Enron [WWW.STOPNATO.ORG.UK]

[Miroslav Antic]

Title: Message

HTTP://WWW.STOPNATO.ORG.UK
---------------------------

Recuse Me! Congress Bought Off by Enron
John Moyers, TomPaine.com
January 23, 2002

Enron-omics at a Glance Compiled by Theresa Amato, President of Citizen Works * In 2001, Enron, a 15 year-old energy-trading corporation, was ranked number seven of the Fortune 500. * In December 2001, Enron laid off 4,000 employees and filed for bankruptcy, the largest such filing ever. * Many employees lost 70 to 90 percent of their retirement savings as they were forced to hold their shares from October 16 to November 13 while Enron's value plummeted to pennies per share. * As late as September 2001, Enron employees and other shareholders were consistently reassured by top management that the stock was stable -- "a bargain" -- and that future prospects were good, while executives sold off $1.1 billion in company shares and amassed personal fortunes. * Enron accumulated more than $1 billion in debt since 1997, debt that top executives hid off the books. * Arthur Andersen doubled as an auditor and as a management advisory services firm for Enron, making more than $50 million in fees in a single year. * When criticism began to surface about its accounting practices, Enron management ordered its law firm to run a limited investigation, not to include "second-guessing," which resulted in an October report finding no wrong doing at Enron or Andersen. * Andersen stood by its reports until shortly before Enron failed, when Enron decided that four years of earnings had to be restated and $600 million - or 20 percent -- of reported profits had to be erased. * Andersen shredded thousands of paper and email documents pertaining to Enron audits. * Of the securities analysts following Enron, only one put a sell recommendation on the stock prior to the date of bankruptcy. * Enron had 3500 subsidiaries and partnerships, and paid no income taxes in four of the past five years because it was able to transfer assets among 881 subsidiaries that were set up abroad in tax-sheltered countries. * According to Public Citizen, from 1989 to 2002, Enron and its employees gave $5.95 million in individual, political action committee and soft money contributions to federal candidates and parties, 74 percent to Republicans and 26 percent to Democrats. * Enron employees were the single largest funding source of George W. Bush's presidential campaign, and gave $623,000 directly to President Bush throughout his career. * According to the Center for Responsive Politics, Arthur Andersen ranked 5th on President Bush campaign's list of corporate donors. Since 1989, Andersen has contributed nearly $5 million in soft money, PAC and individual contributions to federal candidates and parties. * Enron officials were invited to participate in six meetings of Vice-President Cheney's energy task force, which endorsed many Enron proposals. Enron chairman Kenneth Lay made calls throughout the fall to the Treasury Department, the Federal Reserve, and the White House "providing information" about the company's situation to top officials at each, though reportedly no assistance was granted. Citizen Works is a non-profit, non-partisan organization working to strengthen citizen participation in power. Katie Selenski contributed to this article.

Congress will take a look at crooked Enron. The Washington Post reports that three House and seven Senate committees intend to hold hearings on the scandal -- better late than never.

The White House isn't happy about the hearings. On January 17, Press Secretary Ari Fleischer had the temerity to suggest that congressional curiosity is uncalled for. An incredulous reporter replied, "We should just trust you on that?"

The incident affirms the obvious -- the White House is wired to Enron. But it's not the only place in Washington that is. The company shared its fleeting wealth with some 250 friends on Capitol Hill. Many of them sit on committees now launching investigations.

You don't have to be Ralph Nader to ask: Who in Congress should recuse themselves from the investigations?

In fact, on January 20, The New York Times called for Senator Phil Gramm to disqualify himself. He sits on two important committees, Finance and Banking, that will look into the scandal; on the latter he is the ranking Republican. He's taken $97,350 from Enron, and his wife has a long association with the company, including service as a paid director.

If Gramm should recuse himself, then why not Senator Kay Bailey Hutchinson, Enron's biggest friend in the Senate, who sits on Commerce. She has received $99,500 -- Gramm is ranked second. How about Senator Jeff Bingaman, chairman of the Energy and Natural Resource Committee? He's seventh in the top ten at $14,124, a relatively cheap investment for Enron, but a nice boost to anyone's political career.

When it comes to recusal, the question is not: How much money does it take to buy a politician? A better question is: How much does it take to undermine public confidence that a politician is acting in the public interest? That's a question citizens must answer for themselves, but a little number crunching adds some helpful perspective. Compare committee assignments against the handy nonpartisan contribution data at OpenSecrets.org and the result is eye-opening.

Enron's reach goes far and deep. The company's top 10 friends in the Senate benefited from contributions ranging in size from Pete Domenici's $12,000 to Hutchinson's $99,500. Each of the top 10 sits on at least one of the investigating committees, and seven out of 10 sit on two or more.

Take another look at Senator Bingaman. Besides his chairmanship, Bingaman sits on two other committees -- Finance; and Health, Education, Labor and Pensions. Former Enron employees whose retirement accounts were dashed when the company's stock crashed might reasonably ask if Bingaman should recuse himself from hearings in the latter committee.

Now look at Bingaman's Energy and Natural Resources Committee. It's packed with Enron's friends -- Conrad Burns ($23,200), Chuck Schumer ($21,933), and Gordon Smith ($18,000) among them. If Enron's top 10 Senate friends disqualified themselves, the committee would lose six of its 23 members; if Enron's top 20 Senate friends recused, the committee would lose 10 of its 23 members. If a $1,000 Enron contribution warranted recusal, no Republicans and just four Democrats would remain on Bingaman's panel. And we haven't even mentioned contributions from Enron's sidekick in this calamity, Arthur Andersen, which is nearly as big a donor as Enron.

All but two of the Banking Committee's 21 members would be eliminated if a $1,000 contribution from either Enron or Arthur Andersen triggered recusal -- senators Thomas Carper and Daniel Akaka would have the hearing room to themselves. Looked at another way, eight members of the committee are among the top 20 recipients of Enron or Anderson contributions, and six are among the top 10.

The conflict of interest is clear -- both Enron and Andersen have invested heavily in the political careers of many members of Congress who will now investigate them. Are we supposed to have confidence that there's enough independence left in the capital to protect the public interest? Washington is wired -- our public servants are privately funded by the people they're meant to oversee. They promise to get to the bottom of this mess, but an ordinary American might reasonably wonder: We should just trust them on that?

When he was a senator running for re-election in 2000, John Ashcroft took $57,000 from Enron. Now as U.S. Attorney General, he's recused himself from looking into the mess.

Who among his former congressional colleagues should follow suit? The real question is: Who shouldn't?

John Moyers is the editor and publisher of TomPaine.com. Laura Ephraim provided research for this article.

---------------------------
ANTI-NATO INFORMATION LIST
==^================================================================
This email was sent to: archive@jab.org

EASY UNSUBSCRIBE click here: http://topica.com/u/?a84x2u.a9WB2D
Or send an email to: [EMAIL PROTECTED]

T O P I C A -- Register now to manage your mail!
http://www.topica.com/partner/tag02/register
==^================================================================

internal-roxen-unit
Description: Binary data

a_tiny.gif
Description: GIF image

printer.gif
Description: GIF image