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SAN FRANCISCO (CBS.MW) - The Enron Corp. debacle
won't be President Bush's Whitewater. It will be much
worse.
Unlike the financial sideshow over a twenty-year-old failed land
deal that dogged the Clinton administration, the collapse of the
nation's largest energy trader into the nation's largest bankruptcy
last month is set to go straight to the heart of exposing what is
wrong with the way the Bush administration is conducting itself
these days.
Once a buyer for Enron's (ENE:
news,
chart,
profile)
energy-trading business is announced Thursday in New York, this
story is going to shift in dramatic fashion to Washington D.C.,
where there are already eight separate congressional probes into the
collapse, one Justice Department investigation, and scores of
unanswered questions. Many of them concern the White House.
Don't expect to see either Bush or Vice President Cheney directly
linked to the financial shenanigans that brought Enron down. They
won't be. This is not about finding a smoking gun, as much as some
Democrats might wish it were.
What it is about, and what the public will get to hear and read
about in wrenching detail over the coming months, is how business
gets done down in Texas. How a small group of business leaders exert
enormous clout over Bush and his team in getting the rules changed
to their benefit.
It will explain why Bush has locked up presidential records,
locked out any voices opposed to his pro-business agenda and rammed
through an expensive economic plan that wiped out the budget surplus
but to date hasn't had any positive effect on the economy.
It will explain what influence Enron Chief Executive Ken Lay and
his advisers had with Cheney and his energy taskforce when they met
six times last year while the Vice President was putting together
the administration's energy policy.
And it will explain why Bush is now thinking about acting on a
proposal from that very taskforce that seeks to roll back a key
provision of the Clean Air Act that helps keep factory pollution
down by requiring new controls when old plants are upgraded.
A history of seeking favor
Business leaders have always sought favors from politicians.
That's nothing new. But in the case of Enron and Lay, a night in the
Lincoln Bedroom was never going to be enough.
Enron cultivated Bush from the time he first decided to run for
governor of Texas, with executives donating a total of $623,000 to
his two gubernatorial campaigns and presidential campaign, according
to The Center for Public Integrity.
The company played a major role in Bush's decision to deregulate
the Texas energy markets in 1999. It played a major role in Cheney's
energy taskforce last year, meeting with the Vice President's staff
right up until a week before it stunned Wall Street in October by
slashing its shareholder equity by $1.2 billion to cover losses in
its off-balance sheet partnerships.
And Lay, who donated $100,000 to the Bush Inaugural, remains
mired in a controversy about whether a curious phone conversation he
had with Federal Energy Regulatory Commission head Curtis Hebert
last May had anything to do with Hebert's replacement by Bush last
summer with the head of the Texas Public Utility Commission.
This is just the beginning of what is going to come out once
investigators do a little more digging, and once Lay and his minions
are required to testify before Congress. Expect a steady diet of
revelations about the extent of the energy giant's influence, at
state, national and even international levels.
Enron won't bring down Bush. He remains enormously popular for
his handling of the war and the rebuilding of the country's psyche
after the Sept. 11 terrorist attacks. But it will be a major thorn
in his side through the rest of this presidential term, and may even
play a role in the next election, depending on what comes out.
Enron the company will soon be gone. But Enron, the symbol of how
big business and big politics conspire to sometimes fix the game, is
just starting to dawn on the national conscious.
It's an ugly story. One that explains a lot about what's going on
in our nation's capital right now. And it's only just
beginning. David Callaway is executive editor of
CBS.MarketWatch.com.
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