the CAMP ENRON Report

... gateway to the next Progressive Era?

Some say it's nothing but a train wreck ... roll in the big cranes, clear the track, see what the crew's been smoking. If I thought so, I'd not be writing this ... and if they thought so, they'd not be drumming so hard.

For a brief orientation, see this
Welcome to Camp Enron

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Camp Enron Archives
01/01/2002 - 02/01/2002 02/01/2002 - 03/01/2002 03/01/2002 - 04/01/2002 04/01/2002 - 05/01/2002 05/01/2002 - 06/01/2002 06/01/2002 - 07/01/2002 07/01/2002 - 08/01/2002 08/01/2002 - 09/01/2002 06/01/2003 - 07/01/2003

(2) All "major" articles of older material have now been imported, some with updates worth perusing. We'll keep it all on the main page for a while, will add a few loose pieces of history, will trim the main page and index the archives for convenience later.


free agent, loose cannon, pointy stick ... taking an imposing analytic toolkit out of the box, over the wall and into the street ... with callous disregard for accepted wisdom and standard English

reading the tea leaves from original angles, we've led with uncannily prescient takes on the federal surplus, the dotcom crash, the "Energy Crisis", the Afghan campaign, the federal deficit.

More where those came from ... stay tuned.

For brief orientation, see this
Welcome to CP

... gateway to the next Progressive Era?

For a brief orientation, see this
Welcome to Camp Enron

Many thanks to Tony Adragna and Will Vehrs, still shouting 'cross the Potomac at QuasiPundit. Early Camp Enron material can be found in QP's Dispatches department.
Tuesday, January 22, 2002

--- Messin' with Texas ---

Clearing the desk as the Enron story lurches erratically toward outright criminality, let's sweep one topic I teased in an earlier post. Enron's collapse is gonna mess with Texas. How? Let us count the ways ...

Enron's hand-picked Ex-Enron-Exec Max Yzaguirre resigns as head of the TX Public Utility Commission. "Hand-picked"? $25K in E-money, C.O.D., to Gov. Rick Perry's war chest. "C.O.D."? Contribution booked the day after the appointment.

Focus on Dereg. TX went live January 1 with their model of "Consumer Choice" retail electric deregulation, crafted by Enron, Yzaguirre, and former PUC chief Pat Wood (now FERC Chairman, replacing Curt Hebert (now chief lobbyist for Entergy (arguably a bag of "PUHCA Pretzels" ... but that's another story))). In light of Enron connections and the California experience, dereg should generate a stream of investigative probes (including its fair share of those annoying false positives).

Justice plausibly denied? The Houston US Atty's Office recuses en bloc. Sitting TX Supreme Court Justices took $134K in E-money ... refund intentions, a mixed bag. A bargain for Enron, saving them $15M in school tax assessments among other valuable considerations. (Polled anonymously, 79% of the Texas Bar say judicial campaign contributions get results.) Will federal bench nominations from TX draw closer scrutiny? Yes. Will TX change the system? No.

E-money burns holes in pol's pockets. Sen. Hutchison will donate to charity any of the $100K "remaining in her campaign account" (huh?). Retiring Phil Gramm will return 2002-cycle contributions (about $12K of a lifetime $97K). Most US House rep's holding theirs. Gov. Perry aims to keep his $200K. TX Attorney General John Cornyn stands nearly $200K deep in E-money (keeping it).

Phil Gramm is out of the game, but not off the hot seat. Any future office of honor, trust or profit -- public or private -- becomes controversial. GOP retention of Gramm's Senate seat once looked to be a safe bet. Gramm's GOP successor still looks to be the above-mentioned A.G. Mr. Cornyn.

Majority Leader Dick Armey -- gone. Tom "The Hammer" DeLay, House GOP Whip, holding fast to his post and his E-money. Enron poses no obvious direct threat, but rep's tired of being Hammered could use it as a pretext in the coming contest for Majority Leader. Martin Frost, House Democratic Caucus Chair, may suffer similar bank-shot repercussions.

Gov. Perry is running for election on his own, after succeeding GWB. A competitive gubernatorial contest would resurface issues from the Bush years, while national press are dumpster diving behind offices all over Texas.

The Texas Education Miracle, the Budget Miracle, the Bipartisanship Miracle and the Environmental, uh, "Compromise" almost got TX Gov. Bush elected President! What else do these "Texas Miracles" have in common? All were miracles of Enron-like creative accounting, creative compartmentalization, creative retelling, and media deference to GWB's "Don't Mess with Texas" dee-fense. Media self-exam, for GWB as for Enron: who casually accepted fuzzy answers to pointy questions, and why?

Other known walking wounded -- civic charities (some with E-funded construction programs, etc., in progress), Enron Field (Enron payments spread over 30 years ... ooops!), local businesses, taxing jurisdictions, and public employee retirement systems (looks like Texas got off light, but no authoritative accounting to date).

TX was a must-have big-state GOP stronghold, an anchor of the Southern Strategy, and a demo platform for the new, inclusive party model. All three could suffer as Enron plus post-9/11 INS vigilance plus other influences inflame a TX GOP Hispanic panic. GOP is doing better with minorities, but it's still on probationary status. It's never one thing that scuttles you, and it's never one thing that bails you out.

OK, now, what about DELL? Well, what about it? Worlds apart, on the surface. DELL sells real stuff you can count going out the door, made of real stuff you can count coming in the door.

Similarities: Texas born and bred, high-flyer, can't-miss enterprise, Rovian aura of inevitability. Management farther right than Enron's, but less politically active. Anything else?

Similarity: Logo features a block-script capital letter 'E', balanced precariously on its southwest corner. What's the theme -- the genius of dynamically unstable equilibrium? No idea, but I'd give that design a make-over.

Similarity: Appeals to Unjust Enrichment. DELL's public face is the Eddie Haskell clone "Steven", whose conspiratorial nudge-and-a-wink pitch suggests "Dude, you're in on a scam ... mum's the word, right?". Investors from Mom & Pop to Chase & CITI heard "Dude, you're gettin' an Enron!" and paid to play ... likewise India for a power plant nobody needs ... and California, for a certain wholesale power exchange model.

Similarity: Favored by institutional investors, citing a neoteric business model -- you wouldn't understand, just buy it -- to support a P/E that seems a bit rich for a margin-shaving commodity business. Especially since that whole market (configurable PC's) is toast if PC designs stabilize, or become more plug'n'playable, or if MSFT's ".NET" strategy really works. Especially since DELL's market-share beanstalk has already grown a long way toward the observable sky. Especially since re-potting that beanstalk to reach any other market entails stratospheric business risks.

Similarity: Dissonant trajectories of reported cash flow, net income, and retained earnings. Fuzzy math? Hard to tell without spelunking the footnotes.

Similarity: Proficient at out-maneuvering competition (case in point, Gateway ... a key employer up there in Tom Daschle country). Are they geniuses of Adam Smith efficiency ... or masters of franchise strategery?

Is this an extreme tangent from the Enron story? Not necessarily. Both claim the ability to profit more than other firms, doing things other firms do. Can they really? Maybe yes, maybe no. Either branch raises hard questions for the champions of, uh, what was our socioeconomic system again? The elegant optima of free-market capitalism? Or the cutthroat gamesmanship of franchise oligarchy? Can't be both. "What holds it up, Momma?"

Looking ahead, I spy, with my little data-geek's eye, a run of numbers that are too neat to be natural. Preliminary inference: not all the FEC disclosable E-money has hit the tote boards yet.

Still on the desk: following the E-money, tax island paradise, Waxman's 17 points (Windfall or Windbag?), leave it to Levitt, ecology of capital, Gresham's Law, Grisham's Law, circling the wagons, SEC chokes on "PUHCA Pretzels", Level Three Diagnostics, "a Culture of Minimal Disclosure", and ... "Not an EWG, Joey, but a FUCO".
==== Messin' with Texas, Updates ====
Among TX US House members donating Enron campaign contributions to one or another charitable fund for Enron employees --
Gene Green (D) to donate all $5,750
Sheila Jackson Lee (D) to donate (some? all 38K?)
John Culbertson (R) to donate all $5,000, reversing earlier position

Prediction: Stampede. Even in Texas, it will take a lot of cojones to smile for the cameras and claim "Hey, I earned it fair and square!".

And as speculated earlier --
TX Supreme Court Justice Priscilla Owen, a Bush nominee to the 5th Circuit Court of Appeals, taking heat over $8,700 in E-money and the $15M pro-Enron school tax decision.

Related Correction: The beneficial effect to Enron was $225K (in tax revenue), not $15M (in taxable inventory) as I reported yesterday -- and as Owen erroneously asserted in the opinion she authored.

Is Owen getting Borked? Very possibly ... one of those annoying false positives. But like I said, this thing is gonna mess with Texas.

Sen. Hutchison pledges $100,000 in charitable contributions to benefit laid-off Enron employees (exceeding Enron's reported $99,500 lifetime total contribution to her federal election campaigns).

Also, best Houston Chronicle link for summary of TX contributions