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. Last Updated: 07/27/2016

Enron Gets Zapped by Its Own Greed

If high visibility, vast political connections and a few discreet phone calls to Washington could have saved Enron Corp., it had the Rolodex to bring it off. This was the outfit that planned to become the world's largest corporation, had intimate connections to the Bush family as well as an open line to the vice president of the United States, and Texas connections as ubiquitous as sagebrush. In 1999 it audaciously agreed to pay $100 million to put its name on Houston's new baseball stadium, which became Enron Field.

The question is: How did a company that made energy trading look as easy as falling off a log suddenly threaten to fall off the edge of the Earth? The answer is: very easily.

The secondary and tertiary embarrassments that will flow from its collapse are only now bobbing to the surface, promising an endless stream of litigation and recrimination. Enron's shareholders, who this summer had every right to expect a golden age of influence and earnings in the energy-friendly atmosphere of George W. Bush's Washington, have seen their stock decline from a high near $90 last year to roughly the amount of loose change that can be found under the average sofa cushion. There's so much blame to go around that responsibility for this disaster is likely to be watered down to a level where it is pointless.

Take your pick, beginning, I suppose, with the Securities and Exchange Commission, which must explain how its disclosure provisions failed to detect this fluttering house of cards. Enron has gone in a few weeks from being a poster child for deregulation to being a screeching argument for greater regulation of publicly traded companies that guard the secrets of their competitiveness too closely.

The bond rating houses also have some explaining to do about how the paper they recommend becomes junk in such a short period. Arthur Andersen, one of the greatest names in corporate auditing, will suffer the embarrassment of failing to spot books that had been left on the stove and cooked to mush. The banks that lent to Enron will no longer carry their names with quite the same cockiness, which is all the more reason to be sheepish as they include two of the greatest names in banking, J.P. Morgan Chase and Citigroup.

I suppose it's peevish to keep dragging the Bush name into the Enron train wreck, but candor compels me to report that under the president's stimulus package Enron would get $254 million lopped off its corporate tax bill, according to Citizens for Tax Justice. And dare I mention that Enron and its chairman, Ken Lay, each gave $25,000 last year to Attorney General John Ashcroft's losing candidacy for re-election to the U.S. Senate.

At the risk of being tiresome, I should note that Senator Phil Gramm, ranking Republican on the Banking Committee, is fond of the folks at Enron. His wife, Wendy, was appointed to its board of directors. That gave her something to do after stepping down as chairwoman of the U.S. Commodity Futures Trading Commission, where she was friendly to the deregulation of energy markets.

One thing I'm not going to mention because it's just too obvious is that, according to the Center for Responsive Politics, the helpful people who track these things, Enron and its employees gave $5.4 million in campaign contributions during the 2000 election cycle, 72 percent of it to Republicans. Lay himself was named a Bush "pioneer.'' To get this high honor, all you had to do was have a warm body and raise more than $100,000 for Bush.

These figures suggest that corporations ought to reassess what they think they are buying for such lavish campaign expenditures. If being a pal of the president of the United States counted for so little in Enron's case, then what are such friends for? I'm not suggesting Bush is an ungrateful clod. Maybe he'll appoint Ken Lay ambassador to some agreeable country with a pleasant climate and a comfortable embassy.

Robert Reno is a columnist for Newsday, to which he contributed this comment.