January, 2002:

I don’t know what Linda Lay hoped to accomplish with her bid for sympathy on the Today Show recently, but judging by these letters to the editor, she failed pretty miserably.

Vice President Dick Cheney is refusing to turn over documents connected to President Bush’s energy plan. The GAO may file a lawsuit against the White House to force them to give it up.

I don’t know what Cheney is hiding, but I doubt that it’s as bad as the negative press they’re gonna get for all this stonewalling. The latest polls say that 67 percent of Americans think the President is lying in part or in whole over Enron. I know you guys read the polls, Dick. What were you thinking?

In other news, Ken Lay’s wife Linda says they’re trying to avoid personal bankruptcy. That sound you hear is my heart breaking for them. Here’s some free advice, Linda: Get a job. And don’t put all of your 401(k) in company stock.

A former Enron employee is making money by selling T-shirts which bear anti-Enron slogans. Head over to his site if you’d like to buy a shirt that says “My boss got a retention bonus, all I got was this T-shirt.”

Conventional wisdom (scroll to “The Gating Factor”), even in Blogland, appears to be settling on the idea that the Enron mess is a business scandal, not a political scandal. That may be true, but with all of the money that Kenny Boy and Company poured into politics and the access to the high and mighty that they had, it’s way too early to discount the possibility of political laws being skirted or broken. For example, there’s this story, which says that top Bush political advisor Karl Rove helped Republican strategist Ralph Reed land a consulting contract at Enron while Dubya was deciding whether or not to run.

The Rove associates say the recommendation, which Enron accepted, was intended to keep Reed’s allegiance to the Bush campaign without putting him on the Bush payroll. Bush, they say, was then developing his “compassionate conservatism” message and did not want to be linked too closely to Reed, who had just stepped down as executive director of the Christian Coalition, an organization of committed religious conservatives.

At the same time, they say, the contract discouraged Reed, a prominent operative who was being courted by several other campaigns, from backing anyone other than Bush.

Enron paid Reed $10,000 to $20,000 a month, the amount varying by year and the particular work, people familiar with the arrangement say. He was hired in September 1997 and worked intermittently for Enron until the company collapsed.

If this is true – Rove predictably denies it – then what this looks like to me is political accounting Enron-style: Team Bush acquired an asset and hid the debt for it in an off-book partnership. You don’t have to be a Democrat to think that this would be a Bad Thing:

“If Karl Rove was partly responsible for [Reed] getting the job at Enron, it illustrates the close relations between the Bush political world and Enron,” said Trevor Potter, a Republican, who is a former chairman of the Federal Election Commission. “If it was done for the avowed reason to keep Reed satisfied and out of someone else’s political camp, it illustrates what everyone in the Republican world has known for years: Enron has been an important source of political power in the party.”

Potter said Reed’s hiring could have been a violation of federal election law if it turned out that “it was a backdoor way of getting him extra compensation for the time he was spending on Bush activity.”

This may indeed turn out to be nothing. All I’m saying is that it’s too early to dismiss the idea that there’s no potential for a political scandal.

Looks like perhaps Ken Lay won’t walk away from all this with his spoils intact. Pretty much all of the income he got from Enron is apparently fair game in the multitude of civil lawsuits that have been filed by those who lost retirement accounts. This is as it should be. CEOs are bountifully compensated for the greater exposure to risk that they supposedly have, but in real life they tend to all have golden parachute clauses that make them impervious to any damage they cause to their companies. Ken Lay was ultimately responsible for Enron, and if Enron has turned to dust, then that’s what he should get.

If you’re not completely Enroned out by now, listen to this interview from NPR (you need Real Audio) with Erica Bess Duncan. Erica is a friend of mine who is still with Enron. Her unit, Enron Online, has been bought by UBS Warburg, though the deal is not finalized. As you might imagine, things are a bit different now for those who are still there.

UPDATE: Alas, UBS Warburg has pulled out of Houston, and Erica is now unemployed. She wasn’t too unhappy about it when I last spoke to her, though. She was glad to be out of the energy trading business.

This article in Salon claims that the Enron collapse has been a September 11-like shock to Houston.

“Whereas Sept. 11 was a shock for the nation and indeed the world, this is a second shock for Houston, certainly not of equal magnitude, but up there on the Richter scale,” says Peter Bishop, chair of the studies of the future department at the University of Houston-Clear Lake. “Ken Lay. You couldn’t find a fairer person, a person who did more for the community, and just like the World Trade Center, that doesn’t exist anymore.”

It’s a sign of how shocked Houstonians are about Enron’s ignominious demise that Sept. 11 can be invoked — and is frequently — to explain the shock of the company’s collapse.

Umm, maybe I’m just out of touch, but I can’t honestly say that I’ve seen any September 11 references in the local Enron coverage. I certainly hadn’t thought of it that way myself. Yes, this has been a shock, but there’s still a fundamental difference between people losing jobs and money and people being vaporized by flaming jet fuel. Frankly, I think the comparison is overwrought to the point of being further evidence of an excessive sense of self-importance on the part of some folks connected to Enron, to wit:

“They had rock-star status here,” says Carlos Hernandez, a native Houstonian and business consultant of the Enron top dogs. Last year, before Enron’s downfall, when Jeff Skilling was still CEO, he’d be approached in local bars like a celebrity. “Out of nowhere people would come up to him and tell him how great he was. A friend of mine saw him at Volcano unshaven, wearing a leather bomber jacket, a white T-shirt and jeans,” says Hernandez. “He was a god, and Lay was king.”

You’ve got to be kidding me. Even today I wouldn’t know Jeff Skilling if he wiped my windshield for beer money. Don’t ask me what the T-shirt and jeans comment is supposed to mean. Maybe it was laundry day and that’s what was still clean.

I really have no idea where this story came from. Any Houstonians reading this, did I miss something? Do you feel this way? Please let me know.

UPDATE: Ginger beat me to the publishing punch. Her take is a bit different, but we agree that the article didn’t resonate for us.

Brian Linse makes the case that President Bush is tainted by his association with the Enron crowd. Says Brian

Regardless of what illegal shenanigans the Enron boys may or may not have gotten up to in the past, Bush will and should be judged for having such a miserable scumbag as a close friend and supporter.

I’m no fan of Bush or “Kenny Boy” Lay, but I must respectfully disagree with this position. I got into an argument many moons ago with a rabid Clinton-hater who made the same claim. I said then and I’ll say now that it is not a crime to be friends with a shady character. One is rightfully judged by one’s actions, not by one’s company. Or, to put it another way:

[15] And it came to pass, that, as Jesus sat at meat in his house, many publicans and sinners sat also together with Jesus and his disciples: for there were many, and they followed him.
[16] And when the scribes and Pharisees saw him eat with publicans and sinners, they said unto his disciples, How is it that he eateth and drinketh with publicans and sinners?
[17] When Jesus heard it, he saith unto them, They that are whole have no need of the physician, but they that are sick: I came not to call the righteous, but sinners to repentance.

I’m not attempting to draw any parallels here – $deity knows that Dubya gets enough worship from Andrew Sullivan, and I seriously doubt that Bush would have ever tried to get Lay to repent his evil bookkeeping ways. That’s not the point. It’s certainly true that his past actions in regard to Enron and Ken Lay are in many ways objectionable. I won’t be at all surprised if at least some of his future actions regarding them are the same. However, standing by Ken Lay the man, his friend, is not something I will object to. In fact, I consider his attempts to distance himself from Lay to be craven. To be Ken Lay’s friend in the good times but not the bad doesn’t speak well for our president as a human being. It reinforces the notion that he only cared about the money, which is precisely what he should want to dispel.

In short, if I refused to judge Bill Clinton by his disreputable friends, I cannot judge George Bush by his.

UPDATE: Apparently, Brian drew a fair bit of disagreement. I’m never comfortable aligning myself with Clinton-bashers, but I gotta call ’em as I see ’em.

For the record, I quoted the same Bible verses to the Clinton hater I sparred with back then. I suppose that’s a stronger rhetorical device when dueling with Republicans, but oh well. My point in making that citation was that I believe the tactic of attacking a person by attacking that person’s associates can be used against anyone, regardless of their degree of actual guilt.

I do understand the point Brian is making, and perhaps I’m just splitting hairs, since there’s no question that Dubya’s friendship with Lay is closely entwined with their business and political dealings. I still believe that we should be examining Bush’s actions, and that anything else is misdirection.

The Wall Street Journal blames the fall of Enron on Bill Clinton. Well, more specifically, they attempt to blame Enron’s sharp practices on “the moral climate” of the Clinton years:

We’d say it’s also impossible to understand Enron outside of the moral climate in which it flourished. Those were the roaring ’90s, when all of America reveled in the economic boom. They were also the Clinton years, when we learned that “everybody does it.” The culture wanted to believe in Enron’s promises, which helps explain why 16 of 17 Wall Street analysts rated Enron a “buy” as recently as last October.

So what you’re saying is that 94% of Wall Street analysts were so bamboozled by the thought of the president getting a hummer that they lost all critical thinking skills? Wow. Really makes you wanna run out and play the market, doesn’t it? Did these analysts not have mothers who said to them “If everybody jumped off a bridge, would you jump too?” Maybe lax parenting is also to blame for Enron. Did any of these analysts go to school with John Walker Lindh?