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Abramoff Scandal Just Another Enron?

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The Jack Abramoff lobbying scandal spans the globe, from Washington to Scotland to Puerto Rico and Guam. "Persons of interest" include members of Congress, federal agency officials, a candidate for Lt. Governor of Georgia and, of course, individuals at the White House. The web is vast and the relationships politically incestuous and many wonder just how wide and deep the probe will reach.

As the investigation unfolds, we glean tidbits that suggest there is much more to this story than a few Congressional pay offs to help Jack's Indian tribes expand their casinos. There is the Gambino crime family and murder in the SunCruz fraud case and lavish boondoggles to the Northern Mariana Islands. Thanks to Ralph Reed, the religious right and James Dobson pop up in the casino fights, and then we're off for a relaxing eighteen with Tom DeLay and friends on the links at St. Andrews. One minute Susan Ralston works for Abramoff, the next she is Karl Rove's executive assistant. Government aides become Jack's lobbyists who then put their wives on political payrolls who--well, you get the picture. It sounds like a Robert Altman movie...or maybe the Marx Brothers on steroids.

What it really sounds like is a replay of the Enron fiasco, a national disgrace that permeated our political system but is winding down to a few targeted trials. Several banks have paid fines, Arthur Anderson met its demise and a few company honchos will do jail time. The corporate principals, Ken Lay and Jeff Skilling, are now facing off with the Enron Task Force in a Houston Federal Courtroom, charged with assorted fraud and conspiracy with a bit of insider trading thrown in. The Feds have a good tale to tell, but they arel coloring inside the lines, leaving out much of the real story. What is not be a part of the case is the really big picture; how over many years our government officials played key roles in facilitating the events that led to the grand and tragic fall of the "world's largest energy company".

As early as 1988, George W. Bush was calling Argentina on Enron's behalf. In 1992, Bush administration officials were helping out with an Energy Policy Act that would require utilities to accommodate Enron-generated electricity. Well-respected leaders like former secretary of state and treasury James Baker and former Commerce secretary Robert Mosbacher threw their weight behind the high-flying company to help with international deals.

Ken Lay worked both sides of the aisle. By 1993 he was golfing with President Clinton and cozying up to Commerce Secretary Ron Brown. He was handsomely rewarded. Enron was exempted from tough regulations imposed by the Public Utility Holding Company Act of 1935. By 1997, he'd hired the former boss of the very man at the SEC who could (and would) approve a critical exemption that Congress had denied the year before, due in part to SEC objections that now miraculously disappeared. Relief from the Investment Company Act of 1940 pave the way for the off-the-books partnerships and debt shifting overseas that disguised its financial downfall while enriching a lot of people.

Internationally, Ambassador Frank Wisner was aiding Enron's efforts to push its disastrous Dabhol project in India. When he resigned the appointment, he went to work for an Enron-controlled company. The project cost investors millions of dollars, and the Overseas Private Investment Corporation, (the American taxpayer), was on the hook for several hundred million more, while a few Enron executives collected seven-figure profits.

Over at Treasury, Linda Robertson was being courted by the company. She was the department's liaison with Congress. Lo and behold, when the Commodity Futures Modernization Act of 2000 emerged, energy trading was exempt from the very regulation covering other traders, and Ms. Robertson was heading up Enron's Washington office.

Enron became then Governor Bush's largest corporate contribution, and its law firm, Vince & Elkins, wasn't far behind. When Bush won the White House, the parade of Enron employees, advisors and lobbyists who joined the administration was astounding. Larry Lindsay, Robert Zoellick, Thomas White, Clay Johnson, Ted Kassinger and Laurence Thompson were all placed in senior positions. The former head of the Texas Public Utility Commission was Lay's pick to head the Federal Regulatory Energy Commission.

In the spring of 2001, Ken Lay was at the first of Enron's six meetings with Vice President Cheney as part of the Energy Task Force. Not surprisingly, almost all of Enron's proposals were incorporated into the final recommendations. The GAO, for the first time in eighty-eight years, filed suit to inquire about these meetings. It was rebuffed by a Supreme Court that included Justice Antonin Scalia, who refused to recuse himself despite his recent duck hunting trip with defendant, Dick Cheney.

But others did recuse themselves when the inquiries began. Attorney General John Ashcroft bowed out, although his assistant Larry Thompson, whose former law firm represented Enron, did not. Thompson in fact led the investigation that followed. The entire U.S. Attorney's Office for the Southern District of Texas stepped aside as did many of the judges in Houston. The Enron Task Force was created to investigate, with mixed results thus far.

The current trial is seen as the ultimate test. Will the big guys go down? The answer to that question can be delivered before any verdict is reached in Houston. It is a resounding "No". The Enron chiefs executed the game plan that wreaked such havoc, but Washington officials made it all possible. They welcomed the contributions and lobbyists, hired and appointed the corporate players and passed the rules or exempted the regulations that gave the green light to the game.

Remember all the cries for reform as Enron crumbled? Accounting measures were passed, CEOs and board members lost some of their immunity, even corporate counsel were put on notice that they might have to rat out malfeasance if their clients wouldn't correct bad practices. But what happened to all those government players? Nothing. They kept their profits, kept their jobs, and kept their power. Not surprisingly, many are cropping back up in the Abramoff scandal.

Should the White House be worried about possible Abramoff revelations? Given how easily it avoided the Enron taint, I wouldn't be too worried right now. After a relationship Texans might call 'tighter than Dick's hatband", the President had the nerve to simply deny the man he'd nicknamed 'Kenny Boy". And we let him. Now he similarly dismisses Jack Abramoff, saying he can't remember posing for pictures or even meeting the man in the black hat.

If the investigation gets too uncomfortable, maybe the administration can just shut it down. After all, that's what seems to have occurred in Guam. When the lead prosecutor Fredrick A. Black got his grand jury to issue subpoenas for government records about Abramoff's shady lobbying deal with the Guam Superior Court, Black was demoted and removed from the office he'd held for eleven years -- literally overnight. The case was closed with no action taken. A year ago, the White House approached Abramoff lead prosecutor, Noel Hillman, to offer him a federal bench. For a year, Hillman has worked with this prospect dangling before him. Now officially nominated, he is off a case that clearly reaches into the administration and the Republican Congressional leadership just weeks after Abramoff agreed to cooperate with the investigation.

If Enron is any indication, these tactics will be successful. A few pieces of low hanging fruit may be sacrificed to satisfy the public and press. Reforms dealing with serious matters like the cost of a Congressional meal may get passed, but I'm not betting on any substantive changes from Congress. It is unlikely we will see important measures to slow the revolving door between government service and lobbying activities or eliminate the sleazy practice of legislative earmarks, or establish a much needed independent ethics board to review Congressional conduct.

Pundits will argue things have always been this way in Washington. Such relationships are just the cost of doing business. Any restrictions on lobbying would be an unconstitutional limitation on the right to petition our government. Balderdash. What is going on inside the beltway is payola, nothing more, nothing less. It debases the process, destroys our democracy, and ultimately, produces bad law. We get rolling black outs in California, a costly health care system only the drug companies can afford, and countless bridges to nowhere. Beyond unethical, this is wholesale criminal conduct thinly disguised as politics. Even if we do not prosecute the offenders, at least let us dispense with the twisted semantics. It is bribery. It is criminal. It is outrageous.