Glenn Reynolds is a very smart guy, but he can't be paying attention to the Enron case if he can say with a straight face, "Enron didn't get anything for its money, as best anyone can tell."
Enron got to reshape government policy, which is supposed to protect the public interest, to its taste.
Charles Dodgson puts it very well, and I can't resist quoting him at length:
“Let's start with the strange case of Curt Hébert, the first Chair of the Federal Energy Regulatory Commission under Bush, who resigned under pressure, and was replaced by a good old boy from Texas. The GAO was asked to look into whether Lay had exercised improper influence. Their intriguing report says that:
• Hébert wanted Lay's political support.
• That support was contingent on Hébert changing his policy stands to be more favorable, in specific ways, to Lay and Enron.
• This was understood on both sides of the conversation.
...but that none of this was improper because Lay's political support was not an "intangible ... thing of value" (it was only Hébert's job, after all), and because no one had uttered the magic words "quid pro quo". It's for logic like this that I named this blog for the works of Lewis Carroll.
Or consider the remarkable memo uncovered by the SF Chronicle, which was passed from Lay to Cheney at a private meeting. Almost all of its "advice" instantly became administration policy.
That meeting itself was more than passing strange --- it featured extensive discussions about the then-current California energy crisis at a time when California's elected officials, Governor and Senators alike, were repeatedly denied meetings on the subject. And not only that, Lay was the only corporate executive Cheney met with one-on-one. (But Lay denies knowing that he had any special role. Quelle surprise).
But, the administration's defenders argue, Enron didn't get its way in everything --- Enron supported the Kyoto protocol, for instance, which the administration opposed, thus proving its independant judgment. In other words, Cheney went against Enron when its peripheral concerns butted up hard against the vital interests of the coal and oil industries, thus demonstrating for all that he is not a spineless tool of the energy industries. Or so the argument goes. I'm underwhelmed.
But Enron wasn't just throwing money at Bush --- they were throwing money at anyone who would take it, goes another line. True --- as I've noted elsewhere, the notoriously flawed California deregulation plan was shaped by Enron-channeling Democrats. But, quoth the Washington Post, they were fairly careful about getting value for money; their system for monitoring the influence market featured high tech and elaborate models comparable to anything they used to run their dealings in, say, natural gas. And if their contributions to Republicans, and Bush in particular, were disproportionate, we might reasonably refer that the "influence peddlotron", as Joshua Marshall has memorably dubbed it, was telling them that that's where they could get value for money."
Here's more cases where government policy was changed to benefit Enron,
from the New Republic:
“Lawrence Summers, the previous Treasury secretary, sought to crack down on tax shelters but was stymied by congressional Republicans. His successor Paul O'Neill has renounced even the modest steps to discourage tax havens proposed by the Organization for Economic Co-operation and Development.
The previous chairman of the Securities and Exchange Commission, Arthur Levitt, tried to ban accounting firms from soliciting other business from their audit clients. But the accounting lobby beat back his efforts. And the lobbyist who represented the accounting firms, Harvey Pitt, was appointed last year by President Bush to serve as the chairman of the very commission he helped to defang.
No law required Enron to disclose its derivatives' investments on its balance sheets at all. Some regulators found this alarming--in 1997 Brooksley Born, head of the Commodity Futures Trading Commission, proposed more stringent disclosure requirements for derivatives. But financial interests, including Enron, vigorously resisted. At one point, according to The Wall Street Journal, House Banking Committee Chairman Jim Leach scolded Born for two hours for her pro-reform leanings.”
Let's not forget that until
last week, Bush was pushing for the Republican stimulus package that would write a check for a quarter of a billion tax dollars straight to Enron. The guys at Enron weren't stupid. They made an investment in politics that paid off, big time.