the CAMP ENRON Report


CAMP ENRON:
... 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

NOTE to READERS:
(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.


OUR DEPARTMENTS:

the COGENT PROVOCATEUR:
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


CAMP ENRON:
... gateway to the next Progressive Era?

For a brief orientation, see this
Welcome to Camp Enron

OTHER GOOD STUFF:
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.
Wednesday, February 13, 2002

 
--- Campaign Enron Finance Report ---

FLASHBACK: 2002-01-10 This writer predicted "McCain-Feingold by St Val's Day ... In the wake of Enron".

We're not quite there, and action in the Senate is no slam dunk. But close.

Shays-Meehan campaign finance reform wins in the House, pre-conferenced with McCain-Feingold in the Senate. When it came to Armageddon, at least 40 Republicans lined up on the side opposite Speaker Denny Hastert; at least 30 lined up opposite Hastert and the NRA combined. Thanks, Enron!

I'm a First Amendment zealot. In my opinion, Shays-Meehan encroaches on freedom of speech. I further believe it will be pecked to death by a well-plotted campaign of precision-guided litigation, or circumvented by the natural power of money to find one or another channel of expression. Even if it stands against these forces, I do not believe it will turn the tide of negative, vacuous and disinformative ads. All these things considered, I strongly support the legislation and urge its passage. Our system of government of, by and for the people is in more serious jeopardy than most commentators realize, and extreme measures are called for.

In the spirit of these developments, a few campaign finance hits off the old Enron/Azurix waterpipe ...


There is a recurring noise in the blogosphere about Enron getting nothing for the big bucks they spent on political operations. The "Paid For But Not Bought" thesis has been shot down over and over, but still it gets up and walks. We'll run the drill ourselves in a later dispatch, if necessary, but I expect the noise will die down as investigation and exposure proceeds.

Enron was a major player in multiple political arenas. At the federal level it mostly played defense -- creating "regulatory black holes" and other blind spots. At state level -- where most utility regulation is developed and applied -- it went on offense, exploiting these lacunae to write the rules for games it had designed to be rigged. Abroad, a wider range of strategies had one thing in common -- Enron was good at talking important people into things that made no sense.


Enron provides evidence against every good faith "good citizenship" argument for corporate money in politics.

Argument #1: Corporations spend money to elect like-minded public officials. Rebuttal: In 702 state-level races, 98% of Enron's money went to winning candidates. You don't win 98 out of 100 races by trying to get the right people elected. If your aim was to tip electoral outcomes, most of your money would go to competitive races, and the occasion promising upstart. (followthemoney.org)

Argument #2: Corporations spend money to assure a lively public debate. At 98% they're not spending money on both sides of one race (though the partisan split was 45% to 55%), and they're spending most of it in walk-over's where there's no active debate or attentive audience.

Argument #3: Contribution is a form of speech, as in "raising issues in the public square". Rebuttal: Enron would be horrified -- heads might even roll -- if its name or pet concerns became topics of attention in these races. The big open secret is that money buys privileged access, and the resulting communications occur as far from the public square as possible. A smaller, dirtier open secret is that "issue" money is used most effectively in sponsoring attack ads against uncooperative candidates, featuring issues completely unrelated to the sponsor's interests.


The money game is another instance of our reciprocal patronage theme -- pols squeeze economic interests for contributions, economic interests squeeze pols for favors, and they end up producing results that are mutually self-serving but systemically irrational. This exchange is rarely as clumsy as an obvious quid pro quo, as in Enron's $25K contribution to Texas Gov. Perry's coffers the day after Perry appointed an Enron exec to head the Texas PUC. Or Enron's $100K ante into Democratic coffers as soon as Clinton put in the good word on the energy deal in India.

They -- politicians and donors -- don't do it because they like doing it. They do it for the same reason CEO's squeeze CFO's to stretch the truth in financial reports ... because if they don't do it, somebody else will, and somebody will beat them to the head of the pack. Funding is an arms race, and there's no reward for unilateral disarmament.


Enron's political operations are bigger than they look in the rearview mirror, certainly bigger than the reported FEC total of $133,800 for Bush2000. Let's look at some particulars.

First, peer professionals in the beltway "government relations" game admired Enron as among the most effective and efficient at getting its way. Some big spenders ramp up their efforts in response to a single urgent development, spending lavishly and clumsily. (Microsoft, going from non-player to Top 10 in a single cycle, might be a case in point). Enron took political operations seriously. It used sophisticated quantitative models to help it pick the right fights. It got more for the dollar ... so its political impact was bigger than the raw dollar budget would suggest.

Second, Enron used every imaginable alley and back street and shortcut ... every form of spending outside the FEC totals. Convention sponsorship (Philly $250K), parties at conventions ($???), inaugural balls (yup, Enron had big balls ... at least $350K worth). The Florida Recount Fund. Laura's pet charity ($400K). The corporate aircraft loophole ($60K in reimbursed fare equivalent, saving the campaign maybe $300K out-of-pocket). Friendly swaps with beholden charity-ball dance partners ("I'm thinking about chipping in ... by the way I've given all the law allows over here ... say, you'd like to help remove the restraints on human potential, wouldn't you? Great!") and business partners (Andersen's importance -- Houston office excepted -- is overstated, but Vinson & Elkins included at least three $100K Bush "Pioneer" arm-twisters). Grants to policy/advocacy think tanks for campaign-friendly "research" pieces. "Fact-finding" trips for elected officials and staff. "Friendly" hunting trips. Alleged parking campaign staff off-budget, on corporate staff positions or consulting engagements.

At the level of state and local utility districts, where Enron's bread is really buttered, reporting is less consistent and less transparent, rules are often looser and more easily skirted.

Third, we know Enron under-reported its formal lobbying expenditures at federal level. "A dozen premier lobbying firms with Washington offices were hired by Enron and reported spending more than $1.6 million for the first six months of last year. Enron reported it spent about half that -- $825,000." (Houston Chronicle) [UPDATE: Make that at least $2.5M]
And we know Enron was extremely active in lobbying at state level ($3-5M in Texas alone, over several years).

Finally, consider those thousands of sub-subsidiaries and off-balance-sheet, off-shore Special Purpose Vehicles. Who's been cruising around in those vehicles, and where have they been parking, and with whom? Some of the named names made instant millions on token investments required to satisfy the 3% rule. These structures are excellent vehicles for unearned, undocumented transfer of wealth. Who were the unnamed names, and where did these slush-fund pipelines discharge their effluent?
[originally authored 2002-02-13, posted in The Fray 02-17]