On Thu, 10 Jan 2002 13:12:21 -0500, "Alexandra H. Mulkern"
Pittsburgh Tribune Review
Clinton-Gore sales team eased Enron's path to success
Sunday, December 9, 2001
"Dateline D.C." is written by a Washington, D.C.-based British
journalist and political observer.
WASHINGTON - "Humpty Dumpty sat on a wall, Humpty Dumpty had a great
This week, this old nursery rhyme has taken control of this column.
From Washington to Pittsburgh by way of New York City and Los Angeles
with important detours to China, Japan, India, Mozambique, Croatia,
England, Germany and elsewhere in the world, we have been watching and
reading about the great fall of Enron.
What a fall and from what a great wall! The Enron Corporation's
50-story building had always cast a shadow on Houston's South Street,
and it glittered in the sunlight as Enron began to fall and stockholders
scrambled to dump their shares. And Enron's shares were dumped - the
value of company shares fell $22 billion (yes, that's a "B"!) in the
past six weeks!
"All the King's horses and all the King's men couldn't put Humpty
together again." As in the nursery rhyme, so in fact.
Enron, the Texas-based international energy giant now seeking escape
from bankruptcy, faces huge problems with even attempting to put its
mirror-like combine back together again. And, despite the "King's men"
having help with the heavy lifting from the White House, Congress, the
courts and hundreds of faceless bankers and bean counters, this Dumpty
just won't fit together anymore.
Even the new name of Dumpty reflects on a stricken giant. Shares valued
at $90 each this August are selling for 10 to 26 cents. These once
wonder-shares have been degraded to "junk" as thousands of investors
rapidly dumped 173.6 million shares. Dumpty Enron, facing losses
worldwide that add up to more than $5 billion, now is a monster under
stress - and it is a monster that is both shameless and insatiable.
Dumpty is sniffing around its key creditors (J.P Morgan, Chase and
Citigroup) for what is called "debtor-in-possession" loans of more than $1
billion. This shows the truth behind the adage that if you owe a bank
enough (Enron owes some $3 billion), you own the bank.
The geniuses of the 21st-century marketplace will now learn a sobering
and exceedingly painful truth. The kindly, gentle and truly awful
socialist pediatrician, Dr. Benjamin Spock, was effectively responsible
for Dumpty Enron's collapse and for much else that is wrong with our
Because of the genial old doctor, generations of decent American babies
developed into troll-like kids ready to stamp and scream until they got
what they wanted. Undisciplined, and having forfeited love for
abhorrence, they became gargoyle-like adults, liberally laced with
Prozac, whose creed was, "If you get away with it, it's cool. Getting
caught is bad, so be more careful next time." Dumpty Enron got caught!
The so-called "popular press," in its usual searches for the clay feet
with which they invest every well-known person, will now try to link
Enron's present woes to the White House. Too bad, guys, you should have
started investigating Enron's ties (ties not links) in 1993 and onward
to the sales team of Bill Clinton, Al Gore and Ron Brown.
Congress is to initiate hearings as to what went wrong with Enron. It's
a safe bet to assume that a major part of the investigation will center
on Enron's 5,000 Houston employees who may be jobless within a few days.
Jobless and learning that their pension plan was based on company stock that
has lost 99 percent of its value. As they live on their unemployment and
Social Security pittances, these unfortunate thousands can think about
how their employer and its accountants, Arthur Anderson (paid at $1
million a week), inflated profits on paper and scaled down the company's
debts. To get away with that kind of "little illegality," a close-mouthed
loyal staff is vital. Already prosecutors from the Securities and Exchange
Commission, Internal Revenue Service, San Francisco, Los Angeles, New York
City and Houston are finding voluble and knowledgeable witnesses eager to
cooperate. Subpoenas for individuals and records are now being served.
Yet with so many politicians from both political parties being the
recipients of Enron's political donations in both hard and soft money,
objective justice may not be easy. Moreover, Enron was generous to the
last cent of other people money! Its corporate leaders funded business
schools and scholarships, and gave and gave to the United Way! Even
Houston's giant sports arena, home to the Astros baseball team, carries
the name "Enron Field," a little vanity that cost a mere $100 million
for a 30-year deal.
Enron had the best brains that money could buy, but gave the word
"ethics" a whole new meaning. The cowboys of Dumpty Enron talked up a
storm about ethics; but only a few at the top realized that "ethics" was
an acronym for "Enron thinks how income can (be) stolen."
That's a stretch; but look at their 1994 sales team - Clinton, Gore and
the late Ron Brown - a trio unlimited and uncontrolled in their cunning
In what seems to be eons ago, before Gov. Bill Clinton became
president, the late, much loved and little lamented Ron Brown was
Clinton's good friend and a power broker in the National Democratic
Party. Ron Brown had a friend, a congressman from Houston, the late
Mickey Leland, who died in 1989. Until his passing, Leland was a
shining light in the Congressional Black Caucus and a dedicated
socialist, who was one of the Institute for Policy Studies' delights.
From 1984, when Enron was conceived, Brown and Leland were there
snapping up unconsidered trifles of money for use in their campaigns
against the free market. Mickey was able to ease a lot of Enron's early
problems through the Houston City Council by playing his "equal
opportunity card." He had also become an African expert who initially
took the Enron message to that continent, a chore that was taken on by
Ron Brown, Clinton's secretary of commerce, before the latter met his
untimely death in a highly controversial plane crash in Croatia.
(Untimely, because had Secretary Brown lived, he would have faced
multiple criminal indictments that could have precipitated an even
earlier fall for Bill Clinton and his gang.)
Now we get to that old puzzle about chickens and eggs, and what came
first! Ron Brown, Al Gore and Bill Clinton introduced Enron to market
managers in Russia, China, Indonesia and India. In India, Enron quickly
became involved in one of that country's most massive corruption
investigations, contracts were canceled and Enron was out.
On the other hand, Enron introduced the Clinton team to Lippo Industries
and thence to China's People's Liberation Army (a wonderful source of
political cash), to John Huang, another good provider and to nameless,
numberless Arabs who never arrived with empty pockets. If we look at a
list of those attending coffee klatches at the White House, we can learn
why a storm of doubtful deals enabled Enron to quickly control
one-quarter of the world's electricity and natural gas. But, that
wasn't enough. The ever-so-greedy Dumpty moved in to water deals in
Massachusetts and Europe, paper mills in Canada, gas pipe lines
throughout the world, fiber optics, television, mutual funds and
information gathering. In turn, that led to risk analysis, a name that
those clever Texans quickly changed to "reward realization!"
The rewards were good! Enron, with sales assistance from Tony Lake,
then Clinton's national security adviser, persuaded the impoverished,
war-torn country of Mozambique to sign a $770 million electric power
contract. Mozambique signed because Tony's salesmanship was persuasive. If
the Mozambicans didn't sign, he indicated that their congressionally
approved $44 million U.S. aid payment would never be made.
And there was the Croatian caper. In the days when Franjo Tudjman was
Croatia's dictator and pretending to be both a reformed communist and
best friend of America in the Balkans, poor Franjo had a problem. He
and some of his very best friends were wanted as war criminals by the
Hague's International Court of Justice. Enron wanted a power contract
with Croatia. Enron offered a deal to Tudjman. Sign up with us and we will
use our gang in Washington to make sure you and your friends don't go to
Tudjman signed. Enron made a heap of money. Nobody went to jail.
Everyone was happy - until Tudjman died of cancer. Then the lid was
off, his Croatian Democratic Union was defeated and the new boys in
power in Zagreb could not believe how much of their budget went to pay
the electricity bills from Enron.
Somebody - probably another Dr. Spock child eager to tell on his peers
prattled! Under quiet pressure from the Croats, another deal was made
and a couple of guys were charged as war criminals. Electricity costs
went down (but not to the consumers) and as a part of the deal nobody
talked, except about the wonderful vacations that they were enjoying in
This could be called a "cautionary tale." There are two cautions. The
first: Beware of the Spock babies now that they are nearing retirement and
losing whatever sense they had. The second: Investigators all, beware,
as you look into the depths and shallows of Enron you may, if you are
truly unlucky, find the truth. And, if you do, these truths won't make
you free, just well informed.
Since Sept. 11 and the anthrax outrage, some government departments
have expanded and dispersed around the Washington region. One
department, identified by the usual alphabet soup of letters and much
concerned with gathering and processing intelligence and information
from all over the world, now finds itself in a building where, a few
floors below its official quarters, there is a restaurant and bar.
The deputy director of this government enterprise is a gentleman with a
liver like the soles of an old boot. He sits in the bar from 10 a.m.
until noon. Then he leaves for lunch; but he resumes his bar watch at
2.30 p.m. and leaves with his car pool at 5 p.m.
Our poster boy does not waste his day. Throughout his vigils,
colleagues from other agencies visit him with their reports and
requests. Information is exchanged and even one or two job applicants
have been interviewed. And, of course, every day and every hour, his
flatterers and flunkies, who make sure that his check is paid, surround
the deputy director.
With cold weather forecast, the prospects of stories from warm,
comfortable quarters, while appealing, are canceled out by a hereditary
need for cups of strong tea!
"Dateline D.C." is written by a Washington, D.C.-based British
journalist and political observer.