Enron scandal shows need for reform

There has been a lot of talk about campaign finance reform lately. Opponents of such reforms often call them “unjust government restrictions on political expression” and characterize them as a violation of free speech. But this seems like quite a stretch on the concept of justice when you consider that this argument rests on the premise that money equals freedom, and that therefore freedom is for sale. There is no better case to illustrate this point than that of the Enron scandal making headlines daily.

Let’s take a look at what Enron has contributed to and received from our political process. First off, over the past decade 71 senators and 186 House members have reported taking roughly $5 million in Enron money. During the 1999-2000 election cycle alone, Enron and its affiliates gave more than $2 million to both major parties (30 percent to Democrats, 70 percent to Republicans).
High-rolling recipients include Attorney General John Ashcroft, who received $55,000 for his failed Senate campaign, and President George W. Bush, whose inaugural committee received $400,000 of Enron money.

Would you believe such lavish contributions might have bought this company some political favors? It seems Enron’s principal business, commodities trading, took off after receiving a huge boost from the deregulation of the commodities market. And yet, the Commodity Futures Trading Commission that oversaw this deregulation was chaired by a current member of Enron’s board of directors, Wendy Gramm, who ironically is the wife of another Enron beneficiary, Sen. Phil Gramm.

In 2000 Congress further rolled back regulation of electronic trading of futures with the Commodity Futures Modernization Act of 2000, an act that contained a provision so well tailored to the company’s needs that it became known as the “Enron Exclusion.”

In fact, Enron was so adept at creating and jumping through loopholes that it had already gotten out of paying any taxes in four of the last five years and was poised to cash in on a $250 million tax give-back as a part of the post-Sept. 11 “economic stimulus” package our president was pushing for and the House passed.

You can hardly find a person in Washington today without an Enron connection – such as House Majority Whip Tom DeLay, R-Texas, whose extensive financial ties to Enron have recently been disclosed. Look at the current Bush administration members with Enron ties – such as the president’s chief economic adviser Lawrence Lindsey, a former adviser for Enron; Secretary of the Army Timothy White, a former vice-chairman of Enron Energy; Robert Zoellick, federal trade representative, another former Enron adviser.

But of course none seem to have been both as influential and as well connected as Enron’s CEO, Kenneth Lay. He’s the one who Bush used to be fond of calling “Kenny Boy,” and the one who so graciously let Bush use Enron’s corporate jet during his presidential campaign.

Mr. Lay is the one who was apparently so influential around the Bush White House that last May, The New York Times referred to him as the “shadow advisor to the president.” And of course, “Kenny Boy” was a major player on Vice President Dick Cheney’s top-secret National Energy Policy Task Force.

The scope of influence that Enron has purchased goes far beyond the bounds of free speech, instead venturing into a realm of audacious government corruption. While reform opponents claim that Enron’s bought-and-paid-for good political will hasn’t rescued their executives from the consequences of this crisis, it really is far too early to state that for sure.

As of now, it seems Enron’s top executives are for the most part trying to avoid these consequences through the blessings of our Fifth Amendment. For those that can remember Iran-Contra and the savings and loan debacle, it should be apparent this case won’t be closed until long after it has ceased to be front-page news. In the end, some are likely to take highprofile falls, others will get away and we taxpayers will probably foot the bill to bail out those poor souls whose life savings were destroyed by corporate greed.

Could Enron’s historic swindle have been avoided with better campaign finance laws? Perhaps. It is possible the whole thing was set up through the relaxations of government oversight that Enron’s influence brought. It is possible that if there had not been people in the administration with such close ties to Enron, the warning signs might have been taken more seriously and the government might have taken an active role before it was too late.

Of course it’s also possible that even without the access they had, Enron’s executives might still have found enough loopholes to make off with $1 billion-plus anyway. The difference is that if that were the case, our entire political system would not have been dragged into the implications of their fraud.

Perhaps the only silver lining to the Enron cloud is the momentum given to the campaign finance reform movement. The U.S. House has finally passed the Shays-Meehan bill to match the McCain-Feingold measure, which has already passed the Senate. This landmark legislation still faces a battle to final passage, but at least now it is riding a crest of public outrage over a company whose broad political influence was used in the ugliest and most dishonest ways imaginable.

If there is a lesson to be learned here, it is that without reform our system is much closer to a reality of “one dollar, one vote,” than to our democratic ideal of “one person, one vote.”

Phyllis Kahn is a Minnesota state representative for District 59B. Send comments to [email protected]