Texas based energy conglomerate Enron”s bankruptcy reveals the immense power and influence this corporation wielded before its demise. Enron”s executives lied and overstated earnings in order to increase their personal wealth. At the head of the pack is Enron CEO Ken Lay who along with other top executives cashed in $1.1 billion in stock during a time when they overstated Enron”s profits by about $600 million.
Not seeing any of these profits were the 4,000-plus employees who were forced to hold their own Enron stocks while the stock price dropped to under a dollar per share. A free market is supposed to hold entrepreneurs accountable to the performance of their companies. In Enron”s case it was the employees who took the risk of working while the corporate owners made enormous profit with no chance of financial loss.
Enron”s executives used their inflated profits to buy political influence. As the company was failing, Enron executives once champions of deregulation had the temerity to call Commerce Sec. Don Evans and Treasury Sec. Paul O”Neill and demand governmental assistance. That Lay “Kenny Boy” as George W. Bush calls him thought the government would bail him out should come as no surprise. Enron”s political donations place it at the top of the money list in the Bush White House.
While there is no proof that that the Bush administration aided Enron during its present fiasco, what is noteworthy is what the government did not do. It did not investigate Enron as it should have during the California energy crisis. It did not look into the influence of Enron in the drafting of Cheney”s energy policy. The federal government has a responsibility to U.S. citizens to ensure that a company does not exploit a deregulated market for profit. In Enron”s case the Bush administration did not even ask a few questions.
Presently the Securities and Exchange Commission, two House committees, six Senate committees and the Department of Justice are all investigating Enron. However, if Enron had been investigated at all a year ago, its creative accounting might have been discovered in its infancy and thousands of employees would still have their life-savings.
Enron flexed its corporate muscle and the White House obeyed. Enron and other contributors should not be able to buy the kind of access that gave Lay six closed-door meetings with Vice President Dick Cheney and resulted in an energy bill that may as well have been written by energy companies.
In all likelihood, Bush technically did nothing illegal. The money Enron contributed all fell within legal boundaries. Since it was legal, there is a tendency to believe that the administration acted justly. This is a case where the law is wrong and Enron bought too much power in an administration obviously open to buyouts. Clearly it is the law that needs to be changed. Campaign finance reform would aid in reigning in big business. Congress should look at the case of Enron as further evidence of the need for controls on the huge amounts of money flowing into politics.
Even in partially deregulated markets such as energy, the federal government has a responsibly to protect employees and consumers from the greedy desires of a few individuals who willfully manipulate markets for their own benefit.