Republicans return Enron cheques to sender

 

ON WALL STREET:In November the Senate Republican Committee, a Washington group dedicated to electing Republican Senators, received two cheques of $50,000 (€56,104) each from the Enron energy company in Houston, Texas. There was nothing unusual in that, writes Conor O'Clery.

Enron and its chairman, Kenneth Lay, had over the last five years directed a flow of bank drafts to Republican causes, amounting to $3 million. The chief single beneficiary had been George W Bush, though 71 senators and more than 200 Congressmen, about a quarter of them Democrats, had also benefited from Enron's largesse.

Mr Lay personally financed Mr Bush's 1996 gubernatorial campaign in Texas, and the 58-year- old billionaire was the single biggest contributor to the 2000 Bush presidential election campaign, pumping in $980,615 along with other executives and employees, and lending his pal the Enron corporate jet.

But this time, the two cheques were put in an envelope and marked "return to sender". Once the most influential corporate voice in Washington, Enron has become a pariah on Capitol Hill, its money unwanted, its executives shunned. "Kenny Boy" as George W calls the Enron chief executive, is no longer the presidential best buddy; the two have not spoken for weeks, the White House said. Nor is Mr Lay welcomed any more into the Massachusetts Avenue mansion of Vice-President Dick Cheney, whose willing ear he bent on the need for government to stop regulating energy.

Since Enron collapsed in November, the Houston-based energy company - which had boasted revenues of $200 billion a year - faces no fewer than 10 congressional and executive agency probes that could become the Bush presidency's Whitewater.

Congress members want to know how the one-time darling of Wall Street whose stock traded at $90 (today it is 60 cents) collapsed so suddenly, leaving $17 billion in debts.

THEY want answers to questions about shady Enron "partnerships" with shell companies like Chewco (as in Chewbacca, the Wookie), which, between 1997 and 2000, kept hundreds of millions of debt off Enron's books. They want to ask why Enron's executives enriched themselves by selling blocks of inflated Enron stock while knowing the earnings figures to be incorrect.

"Kenny Boy" cashed in $123 million in 2000 and another $25 million last year, while urging employees not to do so. In October and November, as the share price dived, Enron staff were prevented from getting rid of the company shares that underpinned their pension fund. Thousands of former Enron employees - like Charles Prestwood, 33, who told a Senate hearing in December that he was "a very broke person" after his stock fell in value from $1.3 million to $20,000 - have been put on the street and ruined.

Of the House and Senate inquiries, the most dramatic is likely to be that announced on Wednesday by Senator Joseph Lieberman, whose government affairs committee will next month investigate the fall of what until recently was the United States' seventh largest company.

Kenneth Lay and other Enron executives will be summoned to testify, documents will be subpoenaed and company accountants Arthur Andersen will be asked to explain how they signed off on so much corporate chicanery.

Many top Republicans will also most likely be called to testify on their cosy and financially profitable relationships with Enron. Larry Lindsay, Mr Bush's economic adviser, for example received $50,000 from the energy company in consultancy fees. Texas Senators Phil Gramm and Kay Bailey Hutchinson were major individual beneficiaries of campaign contributions (Mr Gramm's wife Wendy is an Enron board member). Army Secretary Thomas White is a former Enron vice-chairman, who sold $50- $100 million in the company's stock before assuming his post. Trade representative Robert Zoellick was also on the Enron payroll before taking up his present job. White House adviser Karl Rove once had up to $250,000 in Enron stock.

No wonder Washington Republicans are running scared. Mr Lieberman, who was Al Gore's running mate in a presidential election many Democrats believe was stolen, said there were questions to be raised about Enron's "close relationships with people who are now in the Bush Administration".

This scandal has simmered beneath the media radar screen since it broke, mainly because of the nation's preoccupation with the September 11th aftermath and the Afghanistan war, which has pushed Mr Bush's approval ratings up to 90 per cent. If it had been President Clinton, a special prosecutor would have been on the case by now, Democrats say.

Now with a mid-term election looming in November and control over the House and Senate at stake, the Democrats are gearing up delightedly for what Senator Lieberman said, with a straight face, would be a "search for the truth, not a witch hunt", (which is what Whitewater prosecutor Kenneth Starr once said).

Incidentally, in November, Enron also sent cheques for $100,000 to the Democratic Senatorial Campaign Committee. The Democrats didn't send the money back. They gave it to charity.