WW News Service Digest #374
1) Enron scandal: The real crime
by WW
2) Milosevic defies his NATO captors
by WW
From: <[EMAIL PROTECTED]> (WW)
Date: tiistai 22. tammikuu 2002 04:56
Subject: [WW] Enron scandal: The real crime
-------------------------
Via Workers World News Service
Reprinted from the Jan. 24, 2002
issue of Workers World newspaper
-------------------------
ENRON SCANDAL: THE *REAL* CRIME
By Leslie Feinberg
Virtually the entire capitalist political and economic
establishment are decrying the captains of Enron as pirates
and are ready to throw them overboard. The problem is, the
ship has already sunk.
Enron was more of an ocean liner, actually. Just a month
before the Houston-based energy colossus took on water like
the Titanic and filed for Chapter 11 bankruptcy protection
on Dec. 2, it ranked seventh on the Fortune 500 list. The
transnational corporation marketed electricity and natural
gas, delivered energy and other physical commodities, and--
ironically--supplied financial and risk management services
to customers around the world.
Since its founding in 1985, Enron's holdings had become a
worldwide network, including 25,000 miles of natural gas
pipeline in the United States and 8,000 miles more in South
America, water treatment plants in Britain, power plants in
Italy, Poland, Turkey, Guatemala, Nicaragua, Puerto Rico and
the Philippines, a 65-percent stake in a giant power plant
in India and much more.
The 40-story new glass skyscraper housing company
headquarters towered over Houston. In 1999, Enron agreed to
spend $100 million over three decades to put its name on the
city's major league ballpark.
But after the company went under, it would have taken more
than 15 shares of its stock to buy one hot dog at Enron
Field.
Now Enron is infamous for being by far the most enormous
bankruptcy this country has yet seen, and its bosses are
being denounced far and wide as villains.
Villains they are. Some 4,500 workers are out on the
streets. And 11,000 employees watched Enron shares plunge
from $90.75 in August 2000 to a close of 26 cents on Nov.
31. Their 401K pension funds--savings from their life's work-
-were invested in the stock. They saw their retirement funds
wiped out.
Company executives refused to let the workers dump the stock
as it took a nosedive. But these upper echelons of Enron
didn't get hurt in the crash. Company Chair Kenneth Lay
gently floated to earth with a golden parachute. He
reportedly cashed in $123 million worth of stock options in
2000 and got his hands on another $25 million last year. And
only a storm of censure forced Lay to surrender his demand
for $60 million in severance pay following Enron's ruin.
Other executives also made out like bandits. Enron handed
out more than $100 million in bonuses in November to some
600 top company heads. (CNN.com, Jan. 12)
William Lerach, a lawyer for shareholders suing Enron,
charged that 29 top executives and directors of the
corporation dumped about $1.1 billion in stock during a
period when "they have now admitted they were overstating
the reported profits of Enron by $600 million and the
stockholder equity of the company by $1.1 billion.
"Let's be direct here," he stressed. "These books were
cooked by Lay and the other top executives who put hundreds
of millions of dollars in their pockets, while the employees
of Enron were victimized and hundreds of other investors
lost billions of dollars." (CNN, Jan. 14)
HOUSTON, WE HAVE A PROBLEM
Now the Enron financial fiasco is really hitting the fan,
stirred up by Democrats hoping to create a "Watergate" as a
political and investigative undertow against the Bush
administration momentum--or at least a "Whitewater."
The particulars certainly are odiferous. A congressional
subcommittee released a letter written by Sherron Watkins to
Lay last August. Watkins was an Enron vice-president for
corporate development.
In the correspondence she warned about the vulnerability of
Enron to auditing exposure, in particular regarding three
off-the-books subsidiaries reportedly used as fronts to pump
up profits that may have enriched Enron executives while
camouflaging the parent company's losses. "I am incredibly
nervous that we will implode in a wave of accounting
scandals," she purportedly wrote.
Now, in retrospect, Watkins is being widely hailed as an
icon of business ethics. It's hard to think of those two
words connected to each other. Just how much morality is
involved in the cutthroat culture of big business is
revealed by the widening scope of the Enron scandal.
The Arthur Andersen firm--one of the Big Five monopoly
accounting giants--is taking so much flak that it was forced
on Jan. 15 to fire its partner in charge of the Enron audit.
The partner, David Duncan, had ordered auditors to shred
Enron's electronic and paper accounting documents on Oct.
23, the day after the energy corporation disclosed that the
Securities and Exchange Commission had begun an inquiry.
This bombshell information, now headlines in all the media,
was revealed in the Jan. 13 issue of Time magazine.
The move to fire Duncan, notes the Jan. 16 Wall Street
Journal, "was seen as an effort by Andersen to isolate the
Enron affair to its Houston office and shield itself from
more serious charges. New evidence emerged that Anderson's
Chicago headquarters knew details about controversial Enron
financial arrangements that contributed to the energy
company's downfall."
The order to hurriedly wipe out the email and paper trail
was issued just four days before Enron made its first public
disclosure about its financial problems, a staggering $618
million loss for last year's third quarter.
Thousands of e-mails and other electronic and paper trails
reportedly vanished, lost to investigators and former
employees hoping to sue to recover part of their lost
retirement savings. There are currently some 47 class
actions against Enron, its executives and directors filed by
shareholders and employees.
Sherron Watkins, by the way--like many other Enron
executives, including its treasurer and general counsel--
came to Enron after working at Arthur Anderson. (New York
Times, Jan. 16)
The law firm of Vinson & Elkins is also being hit with
shrapnel in the blowup surrounding its client Enron. The
prestigious law firm, with an army of 860 attorneys and nine
offices worldwide, ranks as one of the 25 largest in the
United States.
Vinson & Elkins, says the Jan. 16 New York Times, "is often
described much like its client: hugely powerful,
international in scope and rich with connections from the
statehouse to the White House." The firm showed great
generosity in its contributions to the 2000 Bush run for the
Oval Office: almost half its 341 partners doled out for W.
(Wall Street Journal, Jan. 16).
Enron reportedly asked the firm to look into the issues
Watkins raised in her letter to Lay. In a nine-page response
dated Oct. 15, Vinson & Elkins attorneys concluded that
Enron's efforts to keep debt off its books was "creative and
aggressive," but that the energy conglomerate had done
nothing wrong. But within weeks, Enron had to divulge that
improper accounting--much of it revolving around its secret
partnerships--had resulted in overstating its earnings by
almost $600 million over five years. (New York Times, Jan.
16)
All these exposures are being generated directly or
indirectly by six Senate committees, two House committees
and the Securities and Exchange Commission--all of which are
investigating different facets of the economic disaster--and
a criminal inquiry by the Justice Department.
Partisan wrangling and finger pointing is dominating the
news. Who knew what, when? The real question is: Is there an
impartial one in the bunch?
THE BEST POLITICIANS MONEY CAN BUY
Enron gave lavishly to candidates on the hustings. And one
good turn deserves another.
The energy trading transnational prospered from deregulation
of the energy industry when George Bush was governor of
Texas. In turn, Ken Lay and his corporation gave $2 million
to Bush's campaigns for governor and president. Lay even
lent Bush his corporate jet. (CNN, Dec. 12)
After his 2000 election, Bush made Lay, then CEO of Enron,
his chief energy advisor. With the foxes in charge of the
chicken coop, in the winter of 2000-2001 Enron and other
energy traders took advantage of recent electricity
deregulation in California and forced prices up more than
1,000 percent.
Bush's top economic advisor Lawrence Lindsey was an Enron
consultant. Chief White House political advisor Karl Rove
owned between $100,000 and $250,000 in Enron stock. And
until he was named Republican National Chair last December,
Marc Racicot was Enron's Washington lobbyist.
Two of Enron's lobbyists were influential members of the
informal kitchen cabinet of Tom DeLay, the majority whip
leader of the House Republicans. Wendy Gramm, wife of Sen.
Phil Gramm, R-Texas, was a member of Enron's board of
directors. (CNN, Dec. 12)
Atty. Gen. John Ashcroft, his chief of staff David Ayres and
the U.S. attorney's office in Houston had to withdraw
publicly from the Justice Department investigation because
of "possible conflict of interest." Between 1999 and 2001,
Ashcroft's race for office and political committees received
$60,999 in hard and soft contributions from 29 Enron
executives, Enron Corp., and the company's political action
committee, according to the Center for Public Integrity.
The center, which tracks political campaign contributions,
said Enron executives and board members chipped in almost
$800,000 to Bush, the national political parties and members
of Congress between 1999 and 2001. And in the same time
frame Enron forked over $1.9 million in soft-money
contributions.
So now the fraud inquiry is under the direction of Dep.
Atty. Gen. Larry Thompson. Thompson, it seems, was a lawyer
at King & Spaulding. Yes, it represented Enron.
And while three quarters of Enron's $5.8 million in
political gives since 1990 went to Republicans, the rest
enriched the hope chests of the Democrats. (The Independent,
Jan. 13) Tom DeLay's spokesperson Stuart Roy describes Enron
as "an equal-opportunity political donor and an equal-
opportunity employer, as well, hiring lobbyists who were
both Republicans and Democrats and giving money to both
sides, including a third of House Democrats and half of the
Senate Democrats." (New York Times, Jan. 16)
So forgive the incredulous when they express deep skepticism
about what the White House and Congress and the Attorney
General's office did or did not try to do to help bail out
their munificent friends at Enron.
WHAT CAPITALISM IS ALL ABOUT
Sen. Joe Lieberman, a Connecticut Democrat who heads the
Senate Governmental Affairs Committee investigating Enron,
said recently on CBS's Face the Nation that "the death Enron
experienced was not a natural death." After denouncing
Enron's alleged skullduggery and fraud, he concluded, "This
is not capitalism as we want it to be."
Wake up and smell the overpriced cappuccino. Corruption,
graft, fraud--these are the fetid waste products capitalism
excretes.
Karl Marx identified the source of that foul stench in the
third volume of his germinal work titled succinctly
"Capital." As if he were writing today, Marx observed that
financial corruption is revealed when the financial bubble
bursts. But Marx, unlike Lieberman and his associates in the
Loop, could also explain why the bubble bursts, emitting
such a stink.
Enron did die a natural death--if you can call "natural" the
relentless capitalist competition for mega-profits and
people be damned. It was the victim of the world crisis of
excess that results when galloping production for profit
outraces consumption.
In February 2001, President Bush followed the counsel of his
energy advisor Kenneth Lay and refused to place any cap on
California's skyrocketing electricity prices. But even that
massive handout couldn't save Enron. All the king's horses
and all the king's men either didn't or couldn't save this huge
transnational from ultimately failing financially.
The glut in the energy market has driven down prices all
over the planet. And as the recession has extended its reach
from Japan to Argentina--to Houston--demand for energy has
fallen, further affecting prices. Enron wasn't the first and
it won't be the last to drown in a sea of abundance.
What does it leave in its wake? Lost jobs, unemployed
workers, wiped out dreams of comfortable retirement after a
lifetime of work, rolling power outages based on greed,
tripled home heating and electric bills.
CEOs can be lawless? That's not a news flash. The real crime
is the underlying laws of the capitalist economy.
- END -
(Copyright Workers World Service: Everyone is permitted to
copy and distribute verbatim copies of this document, but
changing it is not allowed. For more information contact
Workers World, 55 W. 17 St., NY, NY 10011; via e-mail:
[EMAIL PROTECTED] For subscription info send message to:
[EMAIL PROTECTED] Web: http://www.workers.org)
From: <[EMAIL PROTECTED]> (WW)
Date: tiistai 22. tammikuu 2002 04:56
Subject: [WW] Milosevic defies his NATO captors
-------------------------
Via Workers World News Service
Reprinted from the Jan. 24, 2002
issue of Workers World newspaper
-------------------------
"JUDGE IS ENGLISH, PROSECUTOR IS ENGLISH..."
MILOSEVIC DEFIES HIS NATO CAPTORS
By John Catalinotto
Former Yugoslav President Slobodan Milosevic continued his
defiant stand in an appearance before the NATO-backed
International Criminal Tribunal for the Former Yugoslavia
(ICTY) in The Hague Jan. 9.
The court reacted as it has in the past. It censored
Milosevic's statements.
The Yugoslav leader has from the beginning refused to
recognize the authority of the ICTY and has said he will
represent himself during the proceedings.
Under pressure from Washington and other NATO powers, the
United Nations created the ICTY in 1993. It has jurisdiction
only over crimes carried out in Yugoslavia by people from
that region. It refuses to try U.S. or other NATO officials
for ordering the bombing of civilian targets during the 1999
war.
The great majority of charges have been brought against
Serbian people, either those who lived in Bosnia-Herzegovina
or officials in the Yugoslav or Serbian governments. The
tribunal barely addresses the many horrific acts committed
against Serbs during the decade-long civil wars that
fragmented what had been a multinational, socialist country
based on a federation of six republics. The dismembering of
Yugoslavia was long a goal of European and U.S. capital,
which now have the upper hand in the area.
The trial on a set of charges against Milosevic relating to
Kosovo is scheduled to begin on Feb. 12.
At the Jan. 9 hearing, Judge Richard May restricted sharply
what Milosevic was allowed to say, repeatedly cutting him
off.
Milosevic began, "To be precise, concerning what has been
said today: almost everything we've heard shows that, in the
guise of having a trial, what is planned here is to carry
out an operation to reverse scene and culprit. This is aimed
at producing a fabricated justification for the crimes
committed during the NATO aggression against my country and
my people.
"Indeed, this 'indictment' itself constitutes one of the
proofs that what I affirm is true. Because all the so-called
misdeeds supposedly committed by the armed forces of
Yugoslavia, which I had the honor to command, are, according
to the 'indictment,' supposed to have occurred during
precisely the time of the NATO aggression against my
country.
"The intention is obviously to portray those who defended
their families, children, thresholds, homes and homeland as
villains, criminals, evil people. Whereas those who traveled
thousands of kilometers to destroy those homes in the night,
to kill innocent people, to destroy maternity wards,
hospitals, bridges, railways, trains, who collaborated with
the Albanian terrorists-that those people, responsible for a
huge number of victims and enormous material damage, are
good, are correct, and should have the support of
international public opinion.
"To compound this absurdity..."
At this point the court interrupted Milosevic, turning off
his microphone. Judge May insisted that Milosevic limit his
comments to trial procedure. In the coverage of the trial,
however, the big-business media applied their own twist to
the news, dredging up all the old political charges against
the Yugoslav leader and the Serbian people.
Milosevic tried to continue. "I want to confirm that you
have not offered a single argument in response to the very
clear legal facts I have presented regarding the illegality
of this 'court,' established by a resolution of a Security
Council that has no legislative nor judiciary power and that
could hardly transfer prerogatives it does not have, since
as lawyers you very well know that a right which one does
not posses cannot be transferred.
"In any case...." Here the court again turned off his
microphone and Judge May demanded the former president
censor his comments.
President Milosevic tried once more: "Well, if you're going
to limit the questions I can raise, then regarding the
procedure I would say the following: according to the
natural definition, which applies to any court, it must be
neutral and impartial. And look at this 'court': the
indictment is based on allegations provided by the English
intelligence service; the judge is English; the prosecutor
is English; the Amicus Curiae is English; and I ..."
Here the court again cut off his microphone and adjourned
the hearing.
BACK IN YUGOSLAVIA, LAYOFFS AND STRIKES
Back in Yugoslavia, living conditions for the working class
and for most of the population have continued to worsen
since the U.S.-manipulated September 2000 election and the
October 2000 coup that followed pushed Milosevic's Socialist
Party of Serbia out of office.
Anyone who believed that the new Yugoslav government would
receive more aid and economic help from the imperialist
powers if it arrested Milosevic and turned him over to NATO
has by now been sorely disillusioned. Even the puppet
Serbian Premier Zoran Djindjic has complained publicly that
the Western leaders have reneged on their promises of aid.
Unemployment is now up above 50 percent. In the first week
of January, the announcement that four big Yugoslav banks
would close threatened 8,500 more workers with layoffs. The
news that Beogradska Banka, Jugobanka, Investbanka and
Beobanka would close provoked workers' protests, with more
than 1,000 employees locking themselves in the banks'
offices in Belgrade, Krusevac, Nis and Vranje.
Trade unions say that for every 1,000 employees laid off,
another 5,000 jobs are in jeopardy.
The Yugoslav government forced the closure of the four
banking giants to mark the launch of broad, World Bank-
sponsored changes to the country's financial sector that
will allow deeper U.S. and West European penetration of the
Yugoslav economy.
- END -
(Copyright Workers World Service: Everyone is permitted to
copy and distribute verbatim copies of this document, but
changing it is not allowed. For more information contact
Workers World, 55 W. 17 St., NY, NY 10011; via e-mail:
[EMAIL PROTECTED] For subscription info send message to:
[EMAIL PROTECTED] Web: http://www.workers.org)
