Getting to the bottom of Enron

Sure, we need a special prosecutor -- but only campaign finance reform can clean up Washington's addiction to corporate cash and lift our government out of the muck.

By Andrew Leonard

Jan 12, 2002 | Teapot Dome, Watergate, Whitewater: It's boom time for the specters of scandals past, now that Enron is suddenly a bigger story than even "where in the world is Osama bin Laden?"

There's the mind-boggling news that Big Five accounting firm Arthur Andersen has admitted to destroying Enron-related documents. There's Enron CEO Ken Lay, poster boy for deregulation, calling the secretaries of Commerce and the Treasury and the Federal Reserve chairman like a desperate telemarketer, looking for a little help with his company's sagging credit ratings. And there's the classic gross inequity: Enron executives earning hundreds of millions of dollars from selling off their stock, while thousands of employees end up losing both their jobs and their retirement funds.

Is it any surprise that Democrats are on the warpath? The Department of Justice has already announced the formation of a task force for a criminal investigation of Enron, but that won't satisfy partisans yearning for some payback. The call is out: Bring back the special prosecutor! The hunger must be tangible on Capitol Hill -- finally it's the opposition's turn to get medieval on the Republicans, Ken Starr-style.

It's only a matter of time. The connections between Enron and the White House are so numerous and so intimate that it's inconceivable a special prosecutor will not be appointed to look at abuses that may have occurred both during this administration and the last. How did Enron influence administration energy policy? How did it get laws on derivatives trading changed to benefit itself? How is it possible that for years it could hide so much debt off its books without regulators or analysts making a peep?

We've yet to see any administration officials taking kickbacks, as in the Teapot Dome, or breaking and entering, à la Watergate, or embarrassing themselves with interns -- but this scandal has hardly started. The ludicrous sight of President Bush feebly attempting to distance himself from Ken Lay is all the proof needed that the bottom is still a long way off.

There's no doubt that a special prosecutor should be named. But will it make any difference? The real outrages committed here don't fit well into a special prosecutor's purview. The mutual embrace between the entire political system and Enron goes so deep that to ask whether the government could have (or should have) prevented Enron's collapse is pointless. Enron's woes aren't really a scandal at all -- instead, they're a magnifying glass allowing us to see clearly exactly how government and business operate today. You spend enough money on campaign contributions and lobbyists to buy influence and get the laws changed on your behalf, and then you sit back and count your stock options. Enron did it on a bigger scale than anybody else in recent memory, and ultimately, on a more incompetent scale than everybody else, but that doesn't make it exceptional.

Instead of calling for a special prosecutor, Democrats should be fast-tracking campaign finance reform -- so as to prevent further Enron-wannabes from buying swaths of politicians. (And if they don't, then Sen. John McCain should re-launch his crusade for such reform.) They should be rolling back the deregulation of accounting rules that permit corporations to get away with the financial equivalent of murder. And they should be focusing on ways to ensure that regulatory bodies are not dominated by the companies they are supposed to oversee.

Forget about trying to play "gotcha" with George W. Bush. The whole system needs an overhaul.

Next Page: Who doesn't have a confict of interest in this scandal?

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