• FOR STUDENTS
• FOR MEDIA
• FREE NEWSLETTERS

• HOME

• ABOUT

• BLOG

• BOOKSTORE

• CATO INTERNATIONAL

• EVENTS

• EXPERTS

• MULTIMEDIA

• PUBLICATIONS

Books

Reviews & Journals

Public Filings

Policy Studies

Opinion & Commentary

• RESEARCH AREAS

• SPEAKERS BUREAU

• SUPPORT CATO

• CATO UNBOUND

• FREETRADE.ORG

The Scandal that Wasn't

by David Boaz

This article appeared on cato.org on February 15, 2002.

PRINT PAGE

E-MAIL PAGE

  TEXT SIZE

It has all the makings of a juicy political scandal: A big political contributor. Desperate straits. Phone calls to well-placed friends. And a president willing to let his biggest contributor go belly-up without a qualm.

In fact, despite all the headlines -- Enron Asked for Help From Cabinet Officials, Firm's Saga Could Dog Bush in Election Year, White House Moves to Contain Political Damage from Enron Turmoil, Enron Executives Contributed to Ashcroft Campaigns -- the real story here seems to be that an administration that had run the most successful fundraising operation in political history didn't lift a finger to help Enron. The headline could easily have been "Bush Administration Spurns Big Funder's Desperate Pleas."

Given everything we suspect about political fundraising, it's really a remarkable story. But reporters can't seem to get their minds around the reality that a Republican administration let the seventh-largest company in America, its own biggest contributor, go down the drain. That's why the headlines hint at a scandal that the stories don't deliver. No company was more involved in George W. Bush's progress to the White House than Enron. Enron executives contributed more than $600,000 to Bush's political career and another $200,000 for his inauguration. (Inaugural contributions ought to be particularly good investments, since the recipient is obviously going to take office. No need to contribute to both sides, as politically involved companies, including Enron, often feel forced to do during campaigns.)

When hard times came to Enron, its executives did what we would expect big contributors to do. Chairman Kenneth Lay called Secretary of Commerce Donald Evans, who was also Bush's good friend, campaign chairman, and chief fundraiser. No wasting time on channels when the survival of the company is at stake -- Lay went straight to the fundraiser-turned-commerce secretary.

Lay also called Secretary of the Treasury Paul O'Neill several times. Enron's president made "six or eight" calls to Treasury Undersecretary Peter Fisher. Fisher, a Democrat, was also called on Enron's behalf by former President Clinton's treasury secretary, Robert Rubin.

And what did Enron get for all its money and connections? Evans, O'Neill, and Fisher flatly refused to help out. They didn't bother notifying the president of Enron's pickle. They didn't even mention the calls to a White House staff member until a month or so later. O'Neill went on "Fox News Sunday" and said, "Companies come and go. . . . Part of the genius of capitalism is, people get to make good decisions or bad decisions, and they get to pay the consequences or to enjoy the fruits of their decisions."

The fruitless calls to Cabinet officials weren't the first time Enron had been disappointed in its investment in a Bush presidency. Earlier, Enron had encouraged the administration to implement the Kyoto treaty on global warming, but Bush declined. The administration also rejected Enron's recommendation for limits on carbon-dioxide emissions.

It would appear that one of Enron's bad decisions was investing so heavily in politics.

Years ago, the top Texan in Washington was Sam Rayburn, who served as Speaker of the House from 1941 until his death in 1961 (except for two brief periods of Republican control). Legend has it that a young congressman came to him, and asked to be excused from voting with the party on a particular bill on the grounds that his biggest contributors back home opposed it. Rayburn told him, "Son, if you can't take their money, drink their whiskey, screw their women, and then vote against 'em, you don't deserve to be here."

Mr. Sam would be proud of Dubya.