The California state senate committee investigating Enron and the other thieves of the electricity crisis, led by Joe Dunn, has been in a squabble with Enron over subpoenaed internal emails. Some that they turned over have been overwritten with zeroes beforehand, and some that were handed over, Enron is now demanding back as covered by attorney-client privilege. Dunn says that ordinarily such a request would be respected, but that "We long ago passed out of the ordinary with this investigation." (This statement about what's ordinary might give you some idea of how well the legislature normally gets along with companies suspected of illegally ripping off the state's consumers.) Dunn also mentioned that the Los Angeles Department of Water and Power might be cited for contempt, because they submitted "inaccurate" transcripts of subpoenaed telephone recordings. And he said that Perot Systems, which (as is becoming increasingly difficult to deny, though Perot claimed under oath that they share no blame for the power crisis) helped all the generating companies plan the market manipulation that squeezed money out of California, got its practice by doing the same thing in England several years earlier. (You will recall that in an earlier entry, I noted that the experience in England was a clear warning of what would happen in California, leaving California's legislature with no excuse for their unanimous vote to approve the deregulation bill.) Remember the market manipulation technique that, as one internal Enron memo put it, "gets [us] paid for moving energy to relieve congestion without actually moving any energy or relieving any congestion"? Well, it looks like that particular trick may have been invented by Perot Systems.
Another place that is suddenly experiencing high prices and shortages after privatizing their electric utilities in the name of competition is New Delhi. The result is angry people in the streets -- something I wish people had done in California before the crisis had progressed so far.
John McCain's effort to put pressure on the Federal Election Commission for gutting his reform bill in implementation is not being supported by the democrats who were supposedly his allies in campaign finance reform. McCain tried to hold some nomination approvals hostage to pressure the White House, but the dems undercut him. Are they going to do anything to save campaign finance reform or not? We will be watching. McCain reached a deal on the FEC matter -- apparently not a very good one -- and agreed to let nomination approvals go forward.
Democrats also joined in killing a McCain proposal to end the use of stock options to avoid taxes. Some dems are backing a weaker proposal.
MCI WorldCom, the bankrupt telecommunications company, is being sued by 25 banks. It has come out that their employees' 401(k) accounts lost $1,100,000,000 from WorldCom's collapse. Molly Ivins makes the case that the collapse of WorldCom, and the sharp drop in the amount of competition in the telecomm industry (leading to higher prices and poorer service) arises directly from the Telecommunications Deregulation Act of 1996, which just like many other recent "deregulation" bills, promised us a more open and competitive market with lower prices, but delivered the opposite. WorldCom's Bernard Ebbers says he is relying on faith in God and fully expects to be vindicated. He also made a stirring statement of innocence before the Senate, just before taking the fifth on all questions.
The New York Times has published an investigation into some of the consequences of the Reagan administration's various deregulations of the financial industry. Besides having obvious connections to all the corporate malfeasance being exposed lately, it also provided a financial haven for organized crime and terrorists. They point out that the September 11 terrorists managed to move hundreds of thousands of dollars into US bank accounts set up with phony IDs.
The IRS released a list of names of public figures who used dubious tax shelters put together by the accounting firm KPMG, from Gary Winnick of Global Crossing to the late Dale Earnhardt of NASCAR. On that list is Bill Simon, the Republican nominee for the governorship of California. After weeks of pressure, he finally allowed reporters a brief glimpse of his tax returns. But now something worse is coming out: the large charitable contributions he put down on his tax forms, it turns out, sometimes ended up leaking back into his personal funds. It's safe to say that his campaign is "troubled".
Duke Energy has joined Reliant in getting subpoenas to dig up the flim-flams they used to manipulate the books with round-trip energy trading. Qwest has now admitted it is under criminal investigation. Bristol-Myers Squibb is now being checked out for profit inflation -- about $1,000,000,000. Now coming under SEC investigation is AOL.
The influence of Merck Pharmaceuticals -- whose CEO Raymond Gilmartin has been an ardent Bush supporter and campaign contributor in the style of Ken Lay -- has apparently not diminished in the White House after their exposure as guilty of cooking their books on a bigger scale than any other company mentioned here. Bush recently urged Congress not to put together the kind of perscription drug coverage that would actually save money, and instead urged that they do some kind of "private" subsidized coverage which would keep Merck's profits intact. In the end, Bush compromised.
MWI Corporation of Florida, in which Jeb Bush was once a partner, is in court over allegations of bribery in selling water pumps in Nigeria. MWI is trying to seal all kinds of records, including many covering Jeb's involvement.
Some in the GOP are, of course, trying to blame all the corporate crime on the bad moral example set by Bill Clinton. Clinton himself is (according to Matt Drudge) saying that he tried to pass financial reforms addressing these matters, and the GOP blocked him. Such clashes are on record.
Bush sent one of his droids to testify before the senate that implementing the Kyoto Protocol would cost five million jobs. This figure does not, of course, come from anyone who has attempted to really study the problem, such as Bush's own EPA. The administration says it will keep studying the global warming problem for years yet before taking any definitive action. They actually said that if Bush gets re-elected, they will take that opportunity to extend the period of inactive study into 2005 and beyond!
The press has continued to make some effort effort to pressure Dubya over the history of his Harken Energy stock trickery. His story about why he didn't file his stock dump with the SEC has had to change a couple of times. It has come out that he, as a member of the Harken audit committee, signed his approval of using the purchase of Aloha Petroleum to put fake profits on the books. He also got a loan from the company to buy stock for himself, a measure now being cracked down on as part of Bush's own call for reforms. And George Soros, of all people -- the man known to some as the world's richest liberal (unless you count Bill Gates) -- said that Harken Energy (which he owned a third of at the time, because they bought out his Soros Oil) bought out George W. Bush's disintegrating Spectrum 7 company in 1986 not because it would make any profit, but because he was buying the political influence of the Bushes. An awful lot of investments in George W. Bush companies have the appearance of being made for that same purpose. Soros said that the influence "didn't come to anything" in the end. A spokesman later said that Soros's statement was taken out of context, making it appear that he was personally involved in the decision when he was not. Soros dumped his Harken stock in 1989, long before it ran into trouble.
Judicial Watch's suit against Dick Cheney for his Halliburton flimflams is progressing, but when they sent a process server to the White House, the server was blocked by White House security and threatened with arrest.
What does Harvey Pitt of the SEC think of the idea that he should resign? "It is an enormous advantage to the public to have somebody who knows about the securities business and the securities law as I do, and it would be unthinkable to deprive people of my expertise." Maybe he's trying to prevent being pushed out the door by making his head too large to fit through. Pitt is also trying to elevate his post to cabinet status, and asking for a raise.
It's recently come out that workers at the SEC have been routinely accepting gifts of plane tickets, hotel rooms, and so on from the companies they are regulating.
Another Bush appointee, Treasury Secretary Paul O'Neill, got caught in a financial fib: "When I was at Alcoa I never sold a single share of Alcoa stock. I wanted my financial success and the company's success inextricably linked. Other executives should do the same." Woops, he ditched $30,000,000 worth in April 1999. He's starting to come under one of those Washington attack cycles where lots of little stories keep pecking at him with minor embarrassments, like excess travel.
Another small bit of sleaze: the $7,000,000 of soft money that the Bush-Cheney campaign spent on the Florida recount hassle just barely escaped illegality by filing disclosure papers on the last day of an amnesty program, according to Public Citizen's Congress Watch.
Gaah -- the House just narrowly passed the fast-track Trade Authority backed by the Bush Administration... at 3 o'clock in the morning. This would be a body for overriding normal legal obstacles to overseas trade... things like environmental and safety regulations that are perceived as "barriers" by companies.
But in better news, democrats trying to reform offshore tax shelters just won an unexpected victory -- they attached an amendment to the Homeland Security cabinet department bill which would forbid the new department from doing business with companies evading taxes that way, and managed to embarrass many house republicans into supporting the measure. This could mean momentum for reform of the tax shelter laws. Philip Angelides, the Treasurer of California, is pushing a similar no-business-with-these-companies rule for the state.
The horrible bankruptcy "reform" bill has been stalled in conference committee, over a pointless wrangle about abortion. Some savvy observers are speculating that both parties were trying to kill the bill without letting their campaign contributors see them kill it. But damn, they just resolved the haggle and the bill is going to be passed. Some democrats are saying the bill is "balanced" now. But it still includes an administration-backed measure to allow the rich to hide assets offshore up to within 45 days of bankruptcy, instead of six months.
Bush's next move appears to be an attack on malpractice suits, trying to limit awards and otherwise protect those who might otherwise be held too accountable for his taste.
What kind of guy is Tom Daschle? He just slipped a special exemption for his home state, South Dakota, into an environmental bill, allegedly as an anti-wildfire measure. Republicans from other western states seemed to be mainly upset that he hadn't included them in the same exemption.
Can you believe that Bush is still trying to privatize Social Security? Yep, it's true! Ari Fleischer is saying that the stock market is still "a sound long-term way to get a higher rate of return," even though the historical scholarship that established this as conventional wisdom has now come under attack as statistically bogus.
There's more, but that's all I can manage.
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