In a surprising coda to the Enron trial, company founder, presidential confidant, and recently convicted felon Ken Lay died this morning of a heart attack. His dubious legacy: “Enron’s bankruptcy filing cost thousands of workers their jobs, spooked investors into doubting the integrity of the stock market and spurred lawmakers to enact the most significant changes to corporate practices in more than 70 years.“
“‘Enron is one of the great frauds in American business history,’ said James Post, a professor of management at Boston University. ‘But it is also a symbol of a particular era of management practice.’” In a strange confluence of ill omens for the current administration, a jury finds finds Enron heads Ken Lay and Jeff Skilling guilty on multiple counts of conspiracy, wire fraud, and securities fraud, with sentencing set for 9/11. For their part, Lay and Skilling immediately began talking appeal, but perhaps that’ll be unnecessary. After all, surely “Kenny-Boy” can wrangle a pardon from his boy Dubya, particularly after he spent all that time crafting Dubya’s energy policy.
“‘We rely on those transactions,’ Mr. Lay said during the September meeting, according to Mr. Glisan. ‘They are imperative for us to hit our numbers and we will continue to do them.‘” Prosecutors begin to wrap up their case in the Enron trial with the testimony of former Enron treasurer Ben Glisan, Jr., who is currently serving a five-year prison term for his part in the fraud. (He created Enron’s “Raptors,” “four fragile financial structures…used to house assets and investments and to hide losses.”) According to the NYT, he “provided some of the strongest testimony against Mr. Lay heard by the jury so far.”
“Fastow, in a nervous but steady voice, spent most of his first six hours on the stand describing quid pro quo deals he arranged with Jeffrey K. Skilling, then Enron’s chief executive. He said Skilling was so obsessed with making the company look good for Wall Street that Skilling approved of sham deals that helped the company meet its earnings targets while Fastow…personally skimmed millions of dollars off the transactions.” Following last week’s damning testimony by Kevin Hannon (“They’re on to us“), former Enron Chief Financial Officer Andrew Fastow took the stand yesterday as part of a plea deal. The prosecution’s star witness in the Enron case, Fastow is “also prosecutors’ most personally tainted witness, a man who admitted to stealing and involving his wife in fraud and who described himself Tuesday as sometimes ‘obnoxious’ and ‘opportunistic.’” Sounds like he was in good company. Update: On Day 2, Fastow implicates Ken Lay, and the defense sharpen their knives.
Well, I guess that explains why the GOP didn’t swear ‘em in. The Post obtains a smoking gun document that proves, contrary to their statements last week, big-time oil executives met with Cheney’s energy task force to determine the nation’s energy policy in 2001. No big surprise there — While Cheney has been trying to hide records of the meetings for years, we’ve known that 62 of 63 members of the task force had ties to the coal, nuclear, or oil industries, with nary an environmental group in sight. Plus, it was clear at the time that the final energy plan was tailored by Enron for Enron, and their ilk. Still, this does mean that Big Oil lied bald-faced to Congress (and specifically Sen. Frank Lautenberg, who asked them about this directly.) And, while perjury’s not on the table, “a person can be fined or imprisoned for up to five years for making ‘any materially false, fictitious or fraudulent statement or representation’ to Congress.”
Monica who? On the eve of Dubya II, Salon‘s Peter Dizikes offers a short but comprehensive list of this administration’s scandals thus far. Thirty-four and counting…not that you’d know it from watching the evening news.
Former Enron chief Ken Lay attempts damage control in the New York Times. “‘If anything, being friends with the Bush family, including the president, has made my situation more difficult,’ Mr. Lay said in a recent interview, ‘because it’s probably a tougher decision not to indict me than to indict me.’” Yeah, ok, buddy.
Transcripts emerge of Enron officials bragging about “stealing money from California…to the tune of a million bucks or two a day.” Whatsmore, it appears that former chairman and Bush buddy Ken Lay, who has not yet been charged with any Enrongate malfeasance, knew full well that his company was extorting millions from the likes of “Grandma Millie from California.” Shady.
There are conservatives and there are conservatives. Is Dubya a free market Friedmanite? Nope, just a stooge for business.
Slate correspondent Daniel Benjamin pokes holes in Condi and Rummy’s recent spurious comparisons between postwar Iraq and Germany. Yep, it’s more revisionist history emanating from Team Dubya. In related news, Jack Beatty laments Dubya’s lack of postwar vision, which now seems ever more constrained to lining the coffers of Halliburton.
After a week of considerable coverage for Dean (due to his second-quarter funding success), John Edwards tries to get back in the game by unveiling his corporate accountability plan. As usual, I think Edwards is playing this smart. The issue shores up his Populist creds while drawing attention to an area where Dubya is dismal. And Edwards still holds a trump card, in that he is the only top-tier candidate with an answer to the Dem’s Southern problem. It’d be nice to see Edwards, Dean, and Kerry go head-to-head-to-head in a real debate, but first the field still needs to be culled, of course.
The Corporate Scandals of 2002. You know, the ones that were all over the news before Saddam began his unchecked aggression again. Wait a tic…when did Saddam…? Now I’m confused.
Oh, and by the way, Harvey Pitt resigned yesterday, right after the polls had closed in the East. After all, we wouldn’t want to remind anyone of how thick the corporate corruption surrounding Dubya and his minions runs until after the election now, would we? As it turns out, the GOP-controlled Congress probably won’t look into SEC malfeasance anymore anyway.
Perhaps content that Saddam’s “resurgence” has snuffed out media coverage of Enrongate for the time being, Dubya tries to gut the SEC’s budget increase, making it impossible for the agency to fulfill the requirements of the recently-signed Sarbanes-Oxley Act. Absolutely shameful. And, as per usual, I think we can guess who’s the brains behind these latest shenanigans.
After winning the Minnesota Democratic primary, incumbent Senator Paul Wellstone runs on corporate responsibility. Hey, he’d get my vote.
Financier and philanthropist George Soros weighs in on the recent spate of corporate malfeasance and the dangers of “market fundamentalism.”
“The era of low standards and false profits is over…No boardroom in America is above or beyond the law.”. And with that, Bush signs the corporate reform bill. He then leaned into the microphone, made the Dubya face, and declared, “You can run but you can’t hide, Dick Cheney. We’re going to hunt you down like the agent of evil you are. You hear me talkin’, Halliburton boy?“
On a day which saw the stock market drop below 8000, Dubya (according to the Standard & Poors index, the worst President in 75 years) declares “the future’s gonna be bright.” Oh, good…I feel better already. As Time noted yesterday, “the President and congress appear to be zealously attacking corporate abuses the way Pilgrims would a dance hall. But get past the reformist posturing, and the proposed new laws add up to half-measures.
The plot thickens…just when the stock market really doesn’t need any more bad news, turns out Citigroup helped Enron evade the law to clear $125 million in debt. Shameful…struggle to get by, and Citibank screws you with exorbitant credit interest rates. Live on the high hog, and they cut you an (illegal) sweetheart deal. Update: J.P. Morgan is in the mix too.
Corporate Scandal Trading Cards…collect them all!
NYT editorialist Frank Rich deftly skewers Dubya yet again. “For [Bush's] first pitch, he appeared against a blue background emblazoned with the repeated legend ‘Corporate Responsibility.’ Next came a red backdrop, with ‘Strengthening Our Economy’ as the double-vision-inducing slogan. What will be strike three – black-and-white stripes and ‘Dick Cheney Is Not a Crook’? Maybe this rah-rah technique helped boost the numbers back when George W. Bush was head cheerleader in prep school. But he’s not at Andover anymore. Where his father’s rhetoric gave us a thousand points of light, his lopped a thousand points off the Dow.”
Much as the Bushes have derided Eastern elitist universities during their presidencies, it turns out Harvard kept Harken afloat during Dubya’s stint there. In related news, George Soros – another big Harken investor at the time – admits to David Corn he was “buying political influence” when he gave money to Harken. So much for Dubya’s business savvy.