ENRON. Capitalism in a nutshell (Part 2)

by Anna Pha

"Bush was in bed with Enron before he ever held political office", Craig 
McDonald, director of Texans for Public Justice told the People's Weekly 
World. And when Bush got into office, first as governor of Texas for 
two terms, and then as the President of the USA, he never let Enron (and no 
doubt many of his other corporate backers) down for one minute.

The Centre for Responsive Politics estimates that Enron, the now bankrupt 
energy-investment banker, and its auditor Arthur Andersen have together 
spent US$26 million since 1995 to influence Congress, the White House and 
government agencies.

Enron and its senior executives gave a total of US$5 million to federal 
candidates and party committees in that time, and spent US$7.6 million on 
Washington DC lobbyists since 1997.

Arthur Andersen and its employees contributed US$3.7 million to federal 
candidates and committees and spent US$9.6 million on Washington DC 
lobbyists since 1997.

Two hundred and fifty-nine current members of Congress have accepted Enron 
campaign cash. Just over 60 per cent were Republicans, the remainder 
Democrats. Enron's largesse is so extensive that it is questionable which 
if any of the dozen or so current investigations into the company can be 
considered to be impartial.

"Kenny Boy"

Kenny Boy, as Enron's Chairman Kenneth Lay was called by his close friend 
George W Bush, was one of the largest contributors to Republican election 
campaigns.

Lay was named as one of the top 25 managers in the world for 1999 by 
Business Week. Rather ironically, his many accolades include 
membership of the Texas Business Hall of Fame.

Before founding Enron, Lay worked in the Pentagon for the Nixon 
administration during the Vietnam War. He was energy policy maker for Nixon 
and it appears has made policy for the Bush and Clinton administrations.

Enron and its senior executives spent millions on professional lobbyists 
and rewarding government officials, accountants, lawyers and others with 
share offerings, directorships and other positions.

The list of those on Enron's books or holding an interest in Enron reads 
like a "who's who" of the White House, the Pentagon, Congress, judicial 
bodies and other government agencies. It is a story of open doors and 
revolving doors. See examples opposite.

While it was Republican through and through, Enron left nothing to chance 
when the then Vice President Al Gore won nomination as the Democrats 
presidential candidate. Enron set about establishing stronger ties with the 
Gore camp.

There were dinners with Gore associates and campaign donations flowed to 
the Democrats.

Money well spent

Once Bush was in office, "The payback was not long in coming. Bush 
appointed at least 30 Enron executives, consultants and investors to his 
administration", noted Tim Wheeler, writing in People's Weekly 
World.

Soon after taking office, George W Bush scrapped former President Bill 
Clinton's plans to restrict the use of offshore corporate tax havens and 
secret bank accounts. Enron had around 800 subsidiaries in tax havens such 
as the Hayman Islands where they could operate beyond the scrutiny of 
public authorities and shareholders.

The Centre for Public Integrity, analysing the top 100 Bush officials, 
found that 22 of them had significant share holdings in 33 companies that 
lobbied their departments.

For example, Deputy Environmental Protection Authority Administrator Linda 
Fisher served as vice president of government affairs for Monsanto prior to 
her appointment. She oversaw the chemical and agricultural products firm's 
lobbying effort to win approval for the use of genetically modified foods, 
of which Monsanto is a major producer.

Policy maker

Enron officials had at least six meetings in 2001 with Vice President Dick 
Cheney and other officials who were drafting an energy policy for the US 
Government.

The Securities Exchange Commission (SEC) chairman was handpicked by Ken Lay 
for his opposition to government regulation.

The Federal Energy Regulatory Commission's chairman Chris Hebert, whose 
views on deregulation were not in line with Enron's, was quickly replaced 
by Enron's choice, Pat Wood of Texas.

Republican representative Tom Delay (another recipient of Enron donations) 
steered a bill through the House and Senator Phil Gramm helped it through 
the Senate. It contained much of what Enron had asked for.

The end result of the bill and new appointees to the Commission was the 
exemption of energy and energy derivative trading (Enron's main business) 
from government regulation (including price controls).

This means companies like Enron can operate unregulated power auctions in 
electricity, natural gas and other energy commodities in huge volumes 
without being required to report details to any government regulator.

Enron funded courts

Research by Texans for Public Justice found that the single largest source 
of corporate donations to the election campaigns of Texas Supreme Court 
justices was from Enron. (In the US judges are elected.)

"Texas High Court justices have taken $134,058 from Enron's PAC [political 
action committee] and executives since 1993", the Texans for Public Justice 
said.

"During this time, Enron was a party to six petitions for review. The court 
accepted two of the three petitions brought by Enron (66 percent) and 
denied all three petitions brought by its adversaries (100 percent). This 
is an incredible record in a court that accepts 11 percent of all 
petitions."

Privatisation of military utilities

Questions are now being asked about (Army Secretary) White's private 
meetings and telephone calls with Lay and his role in the privatisation of 
US$60 million worth of contracts to supply gas and electricity to military 
bases.

In his first major speech in his new Pentagon post, White vowed to step up 
the privatisation of utility services at military bases. Enron's subsidiary 
Enron Energy Services (White had been its vice chairman) was seeking the 
contract with the military.

The then chairman of the Joint Chiefs of Staff, General Colin Powell, 
picked White in 1989 to be his executive assistant. White was lured by 
dollar signs in 1990 to Enron where he focused on winning government energy 
management contracts.

In December 1998, under Clinton, the Pentagon issued a directive to shift 
control of utilities and military bases to private hands.

Overseas investments

Enron made quite hefty investments in foreign politicians as well. 
According to the Independent (London), Enron funnelled Labour 30,000 
pounds (A$85,000) in two years and won approval from the British (Labour) 
Government to purchase one of Britain's largest public water utilities.

There are accusations that US Government representatives stood over state 
companies and governments in Panama, Argentina, Mozambique, South Africa, 
and India to gain contracts and purchase utilities for Enron.

"Gas giant Enron Corp's plan to develop Mozambique's Pande natural gas 
field appears to have been saved from cancellation last month by a blunt 
threat from the US National Security Council to cut off future US aid to 
the country." ("The Oil Daily", 1-12-95)

Argentina

It appears that Enron played a role in Argentina's economic collapse. The 
daily La Nacion, reports that George W Bush was operating in 
Argentina as an Enron lobbyist in 1988. At the time his father was US Vice 
President.

The Bush family had invested heavily in Argentina and cultivated crony ties 
to Carlos Saul Menem. When Menem became President in 1989, he ran with 
Enron 's push for privatisation and deregulation. Enron was "granted the 
first power marketer license in Argentina".

Enron and Shell jointly acquired 50 per cent of the transportation assets 
of the 1655 mile pipeline owned by a nationalised energy company and 50 per 
cent of the 1438 mile long pipeline that will reach from Bolivia to Brazil. 
Enron also owns a pipeline in Colombia.

The Associated Press reported on February 6 that "A top level Bush 
administration delegation unveiled plans yesterday to widen US involvement 
in Colombia's civil war, including training, arming and providing air 
support to Colombian troops to protect a pipeline carrying US oil."

Spoils of war

"When Bush senior lost his re-election bid in 1992, Lay scooped up both 
Baker and Commerce Secretary Robert Mosbacher as Enron 'consultants';

Bush did a Gulf War victory tour of Kuwait in 1993. Baker, Mosbacher and 
former Lt Gen Thomas Kelly, a Gulf War commander were on the tour to sell 
Enron contracts to Kuwait", said Mr McDonald.

This raises questions about the targets of US bombing, the blatant 
targeting of utilities and basic infrastructure as seen in Yugoslavia, 
Afghanistan and Iraq.

In the most recent case of Afghanistan the US Government is offering aid-
much of which will fund the rebuilding of utilities, roads, etc, by US 
corporations.

It also raises questions about how Shell Oil, Bechtel, GE Capital and Enron 
won lucrative contracts to construct natural gas pipelines and electric 
generating plants in more than 20 countries including India, Indonesia, 
Turkey, Poland and Italy.

People's Weekly World reports that Enron has made efforts to secure 
concessions to develop oil and natural gas in Russia, Azerbaijan and 
Kazakhstan, "a key element of the current war policy in Afghanistan, where 
the Pentagon is already deploying permanent military bases".

Cheney has done a great deal for US corporations throughout the Caspian Sea 
region. Along with the heads of Chevron and Texaco, Cheney sits on 
Kazakhstan's Oil Advisory Board to the country's President.

India, the Philippines

Frank Wisner Jnr (see list opposite), former US Ambassador to India, played 
an important role in Enron gaining contracts in India and the Philippines.

The Philippine contract was to manage a power plant in Subic Bay, where the 
former US military were located.

Wisner raised a few eyebrows when he joined the board of an Enron-
controlled company after retiring from the Foreign Service in 1997.

Wisner's father worked for the CIA from 1947 until 1965, and is believed to 
have been involved in toppling governments in Guatemala, Iran and in 
Indonesia on secret operations against President Sukarno.

Amnesty International and Human Rights Watch have both blamed Enron for 
police brutality against local people in a fishing village who opposed 
Enron 's development there. Their investigations revealed that the police 
were directly on the Enron payroll.

Corporate take over

Enron is not the only corporation writing policies and buying governments 
and state administrations.

Not only does the corporate sector put governments in place but it actually 
writes the laws of the land and has had removed the many of the mechanisms 
that might offer some public oversight or protection for the community.

There are many other corporations in the pharmaceutical, tobacco, health 
insurance, auto, military, food, finance, and other sectors, who no doubt 
have strong representation in the White House, Congress and on other state 
bodies.

When Bush guts the Clean Air Act, withdraws from the Kyoto agreement, 
proposes withdrawing from the Anti-Ballistic Missile Treaty, declares war 
on people around the world, cuts corporate taxes, deregulates and 
privatises-each of these actions and policies is on behalf of corporate 
patrons.

The direct representatives of the corporations now comprise the government 
and its administration in the US.

Of the top 100 Bush appointees in the present administration, 50 came from 
for-profit businesses or lobbying firms and law firms with significant 
lobbying operations.

The massive donations to politicians, political parties, justices, 
commissioners, etc, are being used not just to win favours, but to put 
their own men (and a few women) at the helm. That is, direct dictatorship 
of capital in the form of transnational corporations.

We are moving in that direction in Australia, but it is no where near as 
advanced as in the USA.

We are supposed to believe that the Bush administration's adoption of 
policies that could have been written by Enron was just a coincidence.

"When I make contributions to a candidate, it is not for some special 
favour, it's not even for access-although I'll be the first to admit it 
probably helps access. It is because I'm supporting candidates I strongly 
believe in personally", Lay told the New York Times.

The reality is, however, that we now see the establishment of the open 
dictatorship of government by the transnational corporations making a 
mockery of democratic processes such as elections and parliamentary 
government.

* * *

Next week: deregulation, self-regulation and public ownership.