Daniel Schorr

from the January 18, 2002 edition - Christian Science Moniter

The real Enron scandal

By Daniel Schorr

WASHINGTON - The deeper Enron scandal lies not in the nervous
contacts with cabinet members when the giant corporation was
sliding down the tube, but in its ability to manipulate a government
awash in campaign contributions in the days when the company was
flying high.

That President Bush called CEO Kenneth
Lay "Kenny Boy" was not a scandal. What
was a scandal was that Enron profited from
a climate of regulatory laxity that it helped to
dictate. Mr. Lay and other Enron executives
met several times last year with Vice
President Dick Cheney, who was heading
the president's energy task force. Mr.
Cheney is still stonewalling congressional
efforts to find out what happened in those

But the task force recommendations for
"reforming" the utility regulation law to
provide "greater regulatory certainty" (read:
deregulation) could have been written by
Enron. Enron helped create what some
called a regulatory "black hole."

The Bush White House was deeply
penetrated by a company that became the
nation's seventh-biggest corporation not by
making energy but by making deals.
Economic counselor Lawrence Lindsey had
been a paid adviser. Political strategist Karl
Rove had been a big investor. Republican
national chairman Mark Racicot had been a
paid lobbyist. Lay himself had been on an
early list of possible cabinet appointments.





So much influence did Enron wield with the Bush administration that
Lay could tell Curtis Herbert Jr., chairman of the Federal Energy
Regulatory Commission, that he would be reappointed if he changed
his views on electricity regulation. Mr. Herbert didn't, and he wasn't.

Congress was not left untainted. More than two-thirds of the Senate
and 40 percent of the House benefited - if that's the word - from Enron
money, some of which is now being returned by embarrassed
lawmakers of both parties.

The $5.8 million in campaign donations from Enron sources since
1989 appear to have been a good investment. The tax rebate
provision of the House-passed economic stimulus package alone
would give Enron $254 million.

The consequences of Enron's penetration of the United States
government remain to be investigated by anyone left in government
who doesn't have to recuse himself. Some day we may know whether
Enron would have been able to bilk employees, investors, and a
nation, were it not for that regulatory black hole that it bought for

Enron is not unique in the annals of lobbyist interests prevailing over
the public interest. From contracts for unneeded weapons to a
banana trade war, the decisions tend to come out in favor of the big
contributors. What makes the Enron story different is the drama of
the huge implosion in full view of thousands of victimized employees
and investors.

Daniel Schorr is a senior news analyst at NPR.