Thursday, May 25, 2006
Kenny Boy, We Hardly Knew Ye
So Kenny Boy Lay went down today. Let's hear if for the justice system.
But let's also hear it for the White House press corps who after eight long years of invetigating every transaction that members of the Clinton administration ever made, never really gave a damn about Kenny Boy's very intimate connection to George W. Bush and apparently still don't.
Now that we have the guilty verdict, let's revisit what we know of that relationship, shall we? From Consortium News, 2002:
George W. Bush is trying to rewrite the history of his and his family’s relationship with Enron Corp.’s disgraced former Chairman Kenneth Lay. So far, Bush has enjoyed fairly good success as the U.S. news media has largely accepted the White House spin.
But the reality, as established by a wealth of historical record and recent disclosures, is that Lay and Enron were instrumental in Bush’s rise to power – and Bush played an important behind-the-scenes role in advancing Enron’s aggressive deregulation agenda, which helped the energy trader ascend to its lofty perch as the seventh-biggest U.S. company.
The Bush-Lay coziness earned the Enron chief a nickname from Bush as "Kenny Boy." But more importantly for Enron, Bush pitched in as governor and president whenever the energy trader wanted easier regulations within the U.S. or to have U.S. taxpayers foot the bill for loan guarantees or risk insurance for Enron's overseas ventures.
The Bush-Lay relationship helped Enron extend its reach across the globe, with the appearance of a successful company, as it pulled in billions of dollars in investment money from tens of thousands of unwary investors.
Now, in trying to insulate Bush from the spreading Enron scandal, White House aides have emphasized that administration officials rebuffed Lay and other Enron executives who sought a federal bailout to save their corporate skin. But the documentary record paints a different picture, showing that the administration did what it could last year to help Enron, until the Houston energy trader's collapse was so far advanced that its deceptive bookkeeping could no longer be kept out of public view.
With Enron’s ignominious collapse over deceptive accounting, Bush began to act as if he barely knew Lay. On Jan. 11, Bush told reporters that Lay "was a supporter of Ann Richards in my run in 1994." Bush implied that he had gotten to know Lay as a Richards holdover appointee to a Texas business council. The impression Bush sought to create was untrue.
The Bush-Lay relationship can be traced back at least a half decade before the 1994 race. It grew out of the Houston social circle where oil tycoons have long rubbed shoulders with political players – and where Ken and Linda Lay had grown close to George H.W. and Barbara Bush in the 1980s. Since 1988, when Lay backed the elder George Bush in his run for the White House, Enron and its executives have written big checks for one Bush initiative after another.
Besides the political financing, Lay has supported private and charitable activities of the Bush family. Lay joined one of Barbara Bush's charities to promote literacy as he served as the honorary chairman of the Celebration of Reading at Houston Wortham Theatre Center. [The Guardian, Jan. 30, 2002]
A trustee of the George Bush Presidential Library Foundation, Lay has donated $50,000 as a patron as well, the New York Daily News reported. In 1999, the Lays chipped in $100,000 for the Andersen Cancer Center at Texas A&M University in a fundraising drive led by then-Gov. George W. Bush and his wife, Laura.
During the Republican presidential primaries in 2000, Enron corporate jets were made available eight times to Bush's campaign staff and his parents, with the future president sometimes personally arranging the flights. [New York Daily News, Feb. 3, 2002]
In 1985, Lay created Enron by merging his company, Houston Natural Gas, with one of the largest pipeline companies in the world, Nebraska-based InterNorth. Lay named the new company, Enron, and set its sights high. Political allies would be critical to Enron’s growth.
In his first major venture into politics, Lay went to work raising money and organizing support for then-Vice President George H.W. Bush’s campaign for the Presidency. Bush, who built his own fortune in the Texas oil fields, was appreciative as he battled through a tough Republican primary and then defeated Democratic nominee Michael Dukakis.
In the weeks after the 1988 election, Lay may have gotten his first dividend on his investment in the Bush family. Enron had joined the bidding for a contract to build a $300 million pipeline in Argentina. The government appeared close to choosing between two other companies -- one from Italy, Ente Nazionale Idrocarburi, and the other a partnership between Argentine firm Pérez and America’s Dow Chemical.
Argentina’s Minister of Public Works, Rodolfo Terragno, later told Mother Jones that he considered Enron’s one-page project outline "laughable." He also noted that Enron "wasn't well established in Argentina." [Mother Jones, March/April 2000]
But Enron apparently was getting well established in the power corridors of the U.S. A few weeks after the 1988 elections, Terragno said the president-elect’s eldest son, George W. Bush, called to check up on "the slow pace of the Enron project."
George Bush ran a hard-hitting campaign, suggesting that Richards was soft on crime. Critical to the campaign was getting his message out, and critical to that effort was money. Bush turned to his father’s old political benefactor, Ken Lay. Enron and Lay contributed $146,500 to the Bush campaign, seven and a half times more than they contributed to the Richards campaign. Lay also publicly endorsed Bush. [Texans for Public Justice]
n the 2000 campaign, Lay was a Pioneer for Bush, raising $100,000. Enron also gave the Republicans $250,000 for the convention in Philadelphia and contributed $1.1 million in soft money to the Republican Party, more than twice what it contributed to Democrats. [www.opensecrets.org]
Lay and his wife then donated $10,000 to Bush’s Florida recount fund that paid for Republican lawyers and operatives to ensure that a full recount of Florida’s ballots never occurred. To this day, Bush has refused to release an accounting of how that recount fund money was spent.
After Bush took the White House in January 2001, Enron Corp., Enron’s President and Chief Operating Officer Jeffrey Skilling, and Ken Lay contributed $100,000 each for a total of $300,000 to the Bush-Cheney Inaugural Fund.
These contributions cemented Lay’s standing with the White House. From the beginning of the administration, Lay advised on policy and personnel. The Enron chief was on the short list for two Cabinet posts, Energy and Treasury, though he ultimately stayed in the private sector.
Starting in late February 2001, Lay and other Enron officials took part in at least a half dozen secret meetings to develop the Bush's energy plan. After one of the Enron meetings, Vice President Cheney's energy task force changed a draft energy proposal to include a provision to boost oil and natural gas production in India. The amendment was so narrow that it apparently was targeted only to help Enron's troubled Dabhol power plant in India. [Washington Post, Jan. 26, 2002]
Other parts of the Bush energy plan tracked closely to recommendations from Enron officials. Seventeen of the energy plan’s proposals were sought by and benefited Enron, according to Rep. Henry Waxman, D-Calif., ranking minority member on the House Government Reform Committee. One proposal called for repeal of the Public Utility Holding Company Act of 1935, which limits the activities of utilities and hindered Enron’s potential for acquisitions.
Besides listening to Lay's advice, Bush put the corporation's allies inside the federal government. Two top administration officials, Lawrence Lindsey, the White House’s chief economic adviser, and Robert Zoellick, the U.S. Trade Representative, both worked for Enron, Lindsey as a consultant and Zoellick as a paid member of Enron's advisory board. [http://www.public-i.org/story_01_011102.htm]
Bush also named Thomas E. White Jr., an 11-year veteran of Enron's corporate suites, secretary of the Army. White had run a key subsidiary, Enron Energy Services, which is now the focus of allegations about accounting irregularities. After taking office in May, White vowed to apply his Enron experience to privatizing utility services at military bases. White's subsidiary had been responsible for selling energy services and Enron was eager for contracts with the U.S. military.
Public Citizen, a liberal watchdog group, has demanded that White fully explain 29 meetings and phone calls with senior Enron officials after White became Army secretary. White says the conversations were with "personal friends" about "Enron's deteriorating financial conditions." [Washington Post, Jan. 27, 2002]
At least 14 administration officials owned stock in Enron, with Undersecretary of State Charlotte Beers and chief political adviser Karl Rove each reporting up to $250,000 worth of Enron stock when they joined the administration.
Those are just a few of the many highlights. Bush's career had in many ways been enabled by his relationship with Kenny Boy --- and Enron's scams had been helped along by Kenny' Boy's relationship with George W. Bush.
That story was never of any interest to the press corps. (Perhaps if Kenny Boy had worn a striking yellow pantsuit things would have been different.) The fact that the biggest campaign contributor to the occupant of the white house was in charge of the biggest corporate ponzi scheme in history should have been news. It wasn't.
Kenny Boy's going to jail. Let's hope he ends up rooming with Karl Rove. There would be a very nice symmetry to that.
Update: Here's a first person account from one of the many tens of thousands of people whose lives were adversely affected by Lay, Skilling and Bush in the Enron debacle. It's journlaistic malpractice that the press never made this clear.
digby 5/25/2006 09:16:00 AM