ENRON & FRIENDS

September 15, 2002:  The issue of possible war with Iraq has largely driven the topics of interest to this page out of the news lately.  For much of this year, George W. Bush seems to have been hoping we wouldn't remember the most solemn and earnest political promise he ever made -- that we would bring those who committed the World Trade Center attack to justice -- and instead tried to refocus anger over 9/11 into a mandate for an unprovoked war against a country that hardly had anything to do with the attack, sometimes stretching the truth to do so.  It's supposed to be a response to 9/11, yet now a leaked document seems to show that Bush's team was planning a "regime change" in Iraq before he was even elected.  The document outlines a right-wing fantasy of how the US could control the entire world.  But I don't want to get carried away into the subject of war here.  My intention is to discuss the Iraq war campaign only when it involves corruption and/or the energy industry.

And yes, there are some corruption stories connected to the effort to drum up a war against Iraq.  Bush's main perceived problem at the moment is the lack of any allies who will support us in starting a war.  So what is he going to do about it?  He's going to, as they used to say in the Reagan White House, "open up the soup kitchen", and start passing out goodies and favors to foreign governments that will agree to support us.  The government of Turkey wants debt relief?  Then debt relief you will have, gentlemen.  Qatar wants an airbase?  It shall happen, insh'allah.  Even Russia could be lining up for a share of goodies.  "This is a great time to step forward and get something you want from the United States," says one aide.  "Once they know we want to buy... the sky's the limit," says another. Our tax money is being used to buy political support for a war that most of us didn't ask for -- and we could end up buying it at very expensive rates.

But things are still not going very well for the effort, either internationally or domestically.  Mexico just pulled out of a mutual defense treaty with the USA, and Chrétien of Canada just made remarks that "western arrogance" is partly to blame for creating anti-American terrorism -- a sentiment that is blasphemy to all good Bushies.  Their idea of patriotism, like that of George H.W. Bush fourteen years ago, is to never admit that the US or its leaders' choices could ever be part of the problem.  And domestically, Congress is divided on whether to support a war.  Not only between parties, but within each party.  This is one reason why Bush is trying to end-run Congress and claim authority to start a war with no public debate at all... something that the framers of the constitution very specifically set out to prevent.  Tony Blair in the UK is having similar trouble and is similarly trying to keep Parliament out of the decision.  Yet a congressional vote for war would probably pass, with elections so close.

Judicial Watch, not busy enough with their lawsuits against Dick Cheney, is now publicizing the allegations of FBI special agent Robert G. Wright Jr. that people in the FBI have not only deliberately overlooked and covered up for certain known anti-American terrorists in the past, but are, in effect, still doing so now in order to cover up their past failures.  Wright has signed up Larry Klayman, the chairman of Judicial Watch, as his official legal counsel.

With that, I'll return to the comparatively cheerful and relaxing subject of domestic corruption.  As the state of Florida once again makes headlines for election snafus, we learn that after governor Jeb Bush® got campaign contributions from the Bacardi-Martini liquor company, he intervened for them with the federal government, asking the head of the trademark office to make a "quick and decisive" favorable ruling in a case that Bacardi was pursuing against a Cuban-French joint venture called Havana Club Holdings SA (which promptly filed a legal complaint about Jeb's action).  Since Jeb is not involved with the federal government, the only basis for his word carrying any meaning at the trademark office is the family connection to the president.  The head of the trademark office, to whom Jeb made his appeal, is former congressman James E. Rogan (R-CA).  Jeb's spokesman says he intervened for the company just because it's in Florida, not because of the campaign contribution, and also insisted that such intervention is legal and appropriate for a governor, despite normal rules against ex parte interference with judicial proceedings.

But this case is small potatoes -- the large scale money and influence is now moving in the other direction.  Greg Palast, probably the best muckraker in journalism nowadays, recently described a series of expensive favors that the federal government is doing for the state of Florida, in areas that will help Jeb Bush look like a better governor.  The biggest, probably, is the federal buyback of oil drilling leases.  Preventing oil drilling off the Florida coast is a hot issue with Florida voters, and if drilling goes ahead it will work against Jeb Bush at the polls.  So what happens?  The federal government buys back a whole passel of drilling leases from the oil companies, at about nine times the price the oil companies paid for them.  Drilling is shifted from Florida to California, at taxpayer expense.  Also, they're promoting a measure to "clean up" the Everglades... but the measure is also a privatization of water from the Everglades, which will be handed over for free to a company called Azurix, which used to be part of Enron.   As it happens, Enron executives -- even while the company was dying -- raised $2,000,000 for Jeb Bush with one dinner.  (More than a month earlier, Florida's pension fund lost $330,000,000 on Enron stock; no other state had invested nearly so much in it.)  The Everglades cleanup itself consists mostly of mopping up after the Fanjul family sugar plantation (a major Bush donor), which gets excused from having to take any responsibility for its own pollution.  The US taxpayer gets to spend $800,000,000 per year cleaning it up for them.

In one last tidbit involving Bushes in Florida, Jeb's daughter Noelle was recently caught sneaking a chunk of crack into the drug rehab center she's attending by court order... but for some reason, the official on the spot tore up the report of the incident.

There are a few areas where we are now seeing that the corporate crime wave of 2001, and the ongoing Bush administration efforts to grease the path for yet more greed and theft, are now backfiring.  For one thing, the Republican party is backpedaling on their plan to privatize social security -- or rather, they're still favoring the policy, but now they want it to be euphemized, and supported only in a properly circumspect way.  They're even trying to get the media to stop using the term "social security privatization".  What this all means is that the plan has lost an awful lot of steam pressure.  One embarrassing and outrageous political ad that was made to attack the current social security system, which was aimed at African Americans and called social security "reverse reparations", has been yanked, hard, and disavowed by its creator, GOPAC.  In much better news (or worse, if you're a major Bush campaign donor), the IRS has suddenly promised that it will shift its enforcement efforts away from middle class tax audits and sharply toward enforcing tax laws on the rich, deploying new informational tools to catch white collar crooks avoiding taxes with the kind of crooked financial games that Enron used so heavily.  This reverses a trend in the other direction that the IRS has been following for twenty years.  The bankruptcy "reform" bill now in congress may well be killed by the house, ostensibly because the right might not feel willing to stomach the compromise that was reached on the ridiculous abortion flap that embroiled the bill, but I suspect the real reason is just that so many Republicans are aware that the bill will smell really bad at the polls.  Finally, the Republican effort to pass yet another tax cut for the rich is now foundering as many in the GOP desert the plan.  Alan Greenspan, after all, is telling the president and congress that they had better balance the goddamn budget.  And one of Greenspan's deputies at the Fed used a 9/11 memorial as a platform from which to tell corporate executives to stop granting themselves such huge paychecks.  Even Harvey Pitt at the SEC is promising more executive criminal indictments -- the same guy who once fought to keep the SEC off companies' backs.

Speaking of taxes, this has got to be one of the more disgusting privileged tax breaks I've ever seen:  a way to avoid all taxes on selling one stock to buy another, for which only those with holdings over $5,000,000 are eligible.  This is done through entities called exchange funds or swap funds.  Somehow, Congress passed a series of laws that excluded those of lower income from being able to use the technique.  The brokerages that sell these funds make their customers promise not to say anything about what they're investing in... this makes it much easier for participants to flat-out lie on their tax returns.  We can't blame a Bush for this one; the current rules were apparently signed into law by Bill Clinton.  One brokerage, questioned about the practice, argued that the best remedy is just to open the funds to everyone.  Perhaps so.

The sleazebags at KPMG accounting are warning that we shouldn't go to far in pursuing stricter business ethics rules... it might smother economic growth.  It would certainly smother the growth of their brand of tax cheating services.

Here's an odd story.  Remember Dubya's "No Child Left Behind Act"?  It turns out that this program has such a stringent definition of how elementary schools are supposed to teach reading in grades K-3 that it's essentially enforcing that school districts use phonics instruction instead of any other approach to teaching reading, despite findings that many students learn better with other approaches.  Such narrow mandates tied to federal funding are supposed to be illegal now.  For some pointless reason, the GOP and the Christian right have attached themselves to the phonics side of the debate on how to teach reading -- a debate that has no reason to be turned into a left vs. right partisan issue -- and now that agenda is being enforced through school funding.  The biggest beneficiary is the McGraw-Hill publishing company, which sells the two leading phonics instruction products.  Department of Education presenters used these two products extensively in demonstrating to educators how they should carry out the new mandates.  Says one education professor, "The current administration is doing two things: one, it is stripping teachers, schools and districts of the tools they need to teach reading, and two, it is promoting corporate control of the education of our children."  Is this a case of corruption?  That can't be said yet, I suppose, but the familiar Bush odor lingers over the whole business.

Finally, a note on campaign finance reform.  The Christian Coalition had filed a suit against the new McCain-Feingold law, but they have now dropped it.  But meanwhile, the Federal Election Commission is taking it upon itself to not only disregard important parts of the new law, but to unilaterally jettison some of the existing restrictions dating back to the 1970s.  They are setting out to use the new law as a way to loosen all presidential campaign spending limits on those who accept federal matching funds.  How they can imagine that this would be legal, I can't guess.  They seem to think they can now override congressional statutes at will... and are doing so consistently in ways favored by the GOP.

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