Enron's Monkey Business

By J. Barlow Herget
Published: Jan. 21, 2002

RALEIGH - Mark Twain said that God made man because he was disappointed with the monkey. Twain might want to reconsider given the level of monkey business in American campaign financing today. How bad is it?

Earlier this month, federal District Attorney Mary Jo White announced that she would not prosecute Sen. Robert G. Torricelli, D-NJ. Torricelli had been accused of accepting gifts in return for favors from a political supporter named David Chang.

White didn’t explain her action publicly, but in a private memo to the Justice Department, White believed that it would be too difficult to convince a jury that Torricelli had broken the law, according to the New York Times. Some of the evidence reported by the Times included Chang’s testimony that he had given Torricelli more than $50,000 in cash and gifts including Italian suits, a Rolex watch, and a large-screen TV.

In return, Torricelli had done those things for which elected officials are famous: He wrote letters, made introductions, set up meetings and lobbied for Chang in his business dealings.

Despite this, legal experts (and apparently White) believed that it would be too hard distinguishing between bribery and legal campaign gifts. It’s gotten that bad.

White instead sent the information gathered from her investigation to the Senate Ethics Committee. The chair of that committee is Sen. Harry Reid, D-NV, who contributed $500 to Torricelli’s legal defense fund last year. That should make everyone feel more comfortable.

If you missed the Torricelli monkey business, you cannot and should not escape the unfolding Enron scandal. It has touched the lives of thousands of employees and stockholders, and it demonstrates the tragic consequences that come when you there’s no legal line between a bribe and a campaign donation.

If you hear any of the talking-heads on TV trying to tell you that there was no wrongdoing, send them a copy of this episode of the Enron story.

Enron is the Texas based energy company that started in 1985 as a natural gas pipeline company and grew to become the nation’s largest sales broker for energy products. They didn’t drill for oil or gas, but they bought and sold it to and from other companies. They bought and sold electricity and at the end, they were buying and selling all sorts of commodities including telecommunications services and sulfur-dioxide emissions credits. Not the sort of things you can pick up at the Food Lion.

Enron’s boss, Kenneth L. Lay, is one of those big-shot Texas types who believes money can buy him anything ... and it just about did. He became a big fundraiser among Republican circles and was George W. Bush’s largest individual campaign contributor in 2000. He and his company, however, gave to both parties, with about two-thirds going to Republicans and the remainder to Democrats. In the 2000 Election, he and his senior executives gave $1.7 million in soft-money donations.

Those with ties to Enron contributed over $97,000 to Sen. Phil Gramm, R-TX, over the years. During President George Herbert Walker Bush’s term, Gramm’s wife, Wendy L Gramm, served as chairman of the Commodity Futures Trading Commission which regulated trading in energy derivatives. Enron lobbied hard to get an exemption from the Commission for such derivatives and got it. It became one of the company’s most lucrative businesses, according to a Washington Post story.

After Bill Clinton was elected President, Wendy Gramm stepped down from the Commission in 1993. Guess what? She got a job as a board member at Enron.

Senator Gramm himself was chair of the Senate Banking Committee when it approved legislation that contained a provision exempting from federal oversight some of Enron’s trading operations. Do you think that Enron Board Member Gramm ever discussed that legislation with Senator Gramm across the breakfast table? (Amidst Enron’s collapse and impending investigations, Gramm sadly announced that he would not seek re-election.)

There are more stories. Lay and other Enron executives were champions of energy deregulation, and they made well-placed campaign contributions to key energy policy legislators such as Sen. John Breaux, (D-LA). The Federal Energy Regulatory Commission (FERC) provided relief in the 1990s to Enron by reducing federal oversight of the company’s business dealings.

We are now learning why such oversight is necessary. Enron shareholders have seen their stock go from $90 a share to 75 cents. Many pension and mutual funds lost money. Lay and his executive pals even put the knife into the backs of their own employees.

While he cashed out with $100 million only days before the collapse, employees and retirees were not permitted to sell their Enron stock. Some have been put on the street. Shakespeare’s Brutus had nothing on Kenneth L. Lay. Said Brutus after killing his friend: "Not that I loved Caesar less, but that I loved Rome more." Lay just did it for the money.

The one good thing about the Enron and Torricelli stories is that they promise to put campaign finance reform back on the national agenda. Which brings to mind another Mark Twain observation: "Man is the only animal that blushes. Or needs to."