July 04, 2002
Harken-gate, coming to a theater near you

Harken-gate, coming to a theater near you Charles Murtaugh writes about the revelations that Dubya may have engaged in some illegal insider trading back in 1989 when he made over $800,000 selling stock at just the right time in the floundering Harken Energy company. Murtaugh notes that the meat of this scandal, if the Democrats want to get traction with it and avoid the mistakes Ken Starr made when he went Clinton-hunting, is not in the technicality of Bush's late report to the SEC or the details of how he made the money, it's his close personal connection to the whole thing:

So here's the beauty part for the Democrats: it doesn't matter whether or not Bush broke the law in his insider trading. The scandal here is moral, rather than legal: Bush was intimately connected with a corporate accounting scandal precisely akin to those now in the headlines, and costing tens of thousands of jobs. If the Democrats focus solely on the legalistic question of how Bush made his eight hundred large, they'll be making a Starr-esque error. It really didn't matter whether or not Clinton lied to the grand jury about his affair, the real Lewinsky scandal was that he'd been having the affair at all. The conservatives were right: character matters.

In Harken-gate, it makes little difference whether Bush broke the law by waiting thirty weeks to alert the SEC of his stock sale, instead of the required two or three (yawn... eyes... glazing... over... must... follow... the money...). What will be harder for Bush to shake off between now and 2004, particularly if the corporate accounting scandals continue to drag down the economy, is his guilt-by-close-association with a book-cooking energy company.

I think Murtaugh is absolutely right about the late filing, which I note that Team Bush is blaming on "clerical error". The bit about how Bush came out of this with nearly a million bucks is probably just a corollary to the moral scandal that Murtaugh talks about. The Chron article lays out the case pretty nicely, with the crucial bit being right here:
During the 1994 gubernatorial campaign, Bush denied knowing Harken was having financial problems at the time of his stock sale even though he was on the board's audit committee.
Where have we heard that defense before? From Kenny Boy and the Enron Ensemble all the way back to Poppy "I was out of the loop" Bush, the standard response is always one of ignorance. Never mind my position of authority, I had no idea that things were going to hell in a handbasket all around me.

Well, forgive my impertinence, but maybe you should have known. As Gregg Easterbrook notes, CEOs have been built up as talented, visionary superheroes, with salaries and perks to match. Yet when performance fails utterly to justify the remuneration, the CEOs still get paid handsomely, often with bonuses, while the people who did the real work get shown the door.

Here's a modest proposal for corporations: Tab any random idiot to be CEO, pay him or her a simple million bucks, and keep doing what you're doing. The cheaper CEO will have as much effect on your long term profitability as any overpriced Jack Welch wannabee, and their cries of ignorance when your earnings inevitably have to be restated will be much more credible. It's a clearcut win-win for all involved. I'm available if you ask nicely, and I bet Larry would be happy for the chance to take a major step closer to his billion-dollar goal.

OK, I'm a bit off track here. Anyway, if the Dems keep it simple and say that whenever you put a Bush in charge, things fall apart while he and his friends make out like bandits, they might be able to get somewhere. We'll see what happens.

Oh, and as an aside to Mickey Kaus: This may not specifically be Enron, but it's close enough. Still think there's no campaign issue here?

Posted by Charles Kuffner on July 04, 2002 to Scandalized!