As an aside, I don't think state lotteries should be allowed to advertise.
Actually, I agree. Although given the profitability, it's easy to justify tax dollars being spent on it.
1004. dusty - 2/2/2002 5:21:49 PM
judithathome
But it's easy for someone who understands more about stocks and plans and things like that to think everyone ought to understand that stuff. Sometimes, people have a hard time with things getting it, that's all I'm saying.
I'll immodestly say I am good at it. I don't always have a sense of what is obvious and what is not so obvious to others. That's why I would like to come up with some rules of thumb and promote them. If it turns out everyone understand what they should do, and makes stupid decisions anyway, then there isn't much I can do. But I think if it isn't obvious to me whether a 5% discount on an individual stock makes it more attractive than a diversified fund, maybe some others might have trouble figuring it out.
I think it should be fairly obvious that, within a 401(k), the amount that should go to company stock is usually zero. However, while I feel this is obvious, and Calgal thinks it is obvious, I'm not yet convinced that everyone understands why one should not (in general) buy company stock in a 401(k). Obviously people do it. And it isn't simply Enron executives lying to their employees. the proportion of Coke stock in their 401(k)'s is higher. The proportion of P&G stock in employee plans is even higher.
33.2% of 401(k) balances (not counting the employee match portion), in plans that have employer directed contributions are in company stock. Why so high? Is this solely due to mendacious management? I doubt it.
1005. CalGal - 2/2/2002 5:28:44 PM
But it's easy for someone who understands more about stocks and plans and things like that to think everyone ought to understand that stuff.
But I'm not good at it. I don't think one needs to be "good" at it. There are plenty of people to turn to for advice--much of it free, or close to it.
However, this isn't a matter of being "good" or "bad" at it. This is a simple case of understanding that stock prices can go down to zero. Everyone would get that answer right on a test.
1006. CalGal - 2/2/2002 5:34:22 PM
But I think if it isn't obvious to me whether a 5% discount on an individual stock makes it more attractive than a diversified fund, maybe some others might have trouble figuring it out.
I agree that plenty of people would have trouble figuring it out. I would also say that anyone who doesn't want to take the time to figure it out should stay the hell away from it.
But that's again neither here nor there. Because the issue isn't which of these two options is the more "attractive". The issue is if these are the only two options, and this represents all of your retirement money, is there any question as to which choice you should make?
1007. wonkers2 - 2/2/2002 5:37:51 PM
The taxpayers are subsidizing a private retirement program, not a lottery or a casino. The rules need to be changed. Let people gamble with their after tax dollars.
1008. dusty - 2/2/2002 5:44:19 PM
CalGal
As for the rest of your post, I think we're talking past each other. I don't care what "correct allocations" ought to be. Truly. And in fact, I have no idea.
I'll try again.
You say it is obvious that one should not put 100% of savings into a single stock.
I agree it is obvious to me, and I accept it is obvious to you. I think it should be obvious to most people, but I am open to hearing opinions of others, to determine whether it is or not.
Presumably, if someone asked your advice on retirement funds investment allocations, you could say without hesitation:
"Do not put 100% in any one stock"
So far, we agree.
And I do realize there are anecdotal stories about people that did this. So we can agree that they should have known better.
But a person making a savings decision needs more help than "Do not put 100% in any one stock."
If I wanted to be picky (but think of this in coding terms), that rule would allow 99%. Staying away from rules for a second, and just thinking logically, if 100% is a bad choice, 99% is probably also bad.
But what if the person asks what they should do.
Suppose they say that they have three alternatives, and so they are going to divide the money equally.
Is that a bad decision (Hint: yes)?
Is it an obviously bad decision?
I don't know.
It is obvious to me, but I know how to do the math. Is it obvious to the average person making the decision that a one-third allocation between the equity fund, the individual company stock, and the ESOP choice is a bad decision?
More importantly, even if you can figure out that the right answer is zero per cent for the company stock 401(k) option, I don't see immediately how to decide between the ESOP and the 401(k).
1009. dusty - 2/2/2002 5:44:35 PM
To out it another way - people that put 100% of their savings into Enron stock made an egregiously bad decision. A decision so bad they don't deserve sympathy for being so stupid.
How about the people that put 2% of their six per cent savings into company stock. This is also a bad decision. How obvious is it?
1010. CalGal - 2/2/2002 6:33:29 PM
Dusty,
I would consider it an insult to tell any educated person not to put all of their retirement income in one stock. I'd expect a sarcastic snort--"oh, thanks. I could have gotten that from my five year old."
But I think you are now agreeing that we are talking about different things, so I'll play. (g)
Yes, I agree that we could give people more assistance with their investment decisions. In fact, I certainly could have used some. I don't think we've really begun to experience the downside of the shift from pensions to 401(k)s--even though I think 401(k)s are much safer in the long run.
How about the people that put 2% of their six per cent savings into company stock. This is also a bad decision. How obvious is it?
It is far less obvious, but in most cases, I think it is a manageably bad decision. None of the horror stories have come from people having made that decision, anyway. (Also, if they had the option to sell the stock I don't know that it was a bad decision.)
But while the people who took that option might suffer a significant hit to their portfolio, how much money would they actually have lost?
1011. wonkers2 - 2/2/2002 10:38:38 PM
Cal, Just curious. Why do you think 401ks are safer than defined benefit pension plans? They are more portable which is a big plus, but I don't see how they are safer.
1012. Cellar Door - 2/3/2002 11:13:43 AM
1013. wonkers2 - 2/3/2002 11:34:15 AM
Quite a difference between Ken Lay's values and those of Warren Buffett, Bill Gates, William Clay Ford, Gerard Levin, Richard Parsons, Ted Turner, Sam Walton, Charles Schwab, Michael Bloomberg, Bill Cosby, Oprah Winfrey, David Packard, William Hewlett, Alfred P. Sloan, Charles F. Kettering, et al. My point being that the Ken Lay's of the world are outnumbered by business people whose values are more enduring.
1014. dusty - 2/3/2002 1:26:17 PM
Cellar Door
That article didn't make you barf?
You must have a higher tolerance for unmitigated bullshit than I have.
1015. CalGal - 2/3/2002 2:09:02 PM
Well, paring away the hyperbole, I've read a number of conservatives who agree that Enron's failure is a particularly Republican problem--that is, if they want everyone to believe in the wonders of markets and capitalism, they have to make damn sure it's safe.
Hence Will's great comment: Capitalism is a government program.
1016. robertjayb - 2/3/2002 2:39:21 PM
Dave Barry explains Enron...
Today we're going to explain the Enron story, using simple financial terms that you can understand, such as "dirtballs."
1017. CalGal - 2/3/2002 6:23:30 PM
Oh, that's hysterical. I love Barry.
Q. Doesn't Enron have a board of directors whose members are responsible for overseeing the corporation?
A. Yes. They are paid $300,000 a year.
Q. So how could they have allowed this flagrant deception to go on?
A. They are paid $300,000 a year.
Q. But didn't Enron have outside auditors? Why didn't they discover and report these problems?
A. Yes, Enron had one of the most venerable auditing firms in the nation.
Q. What do you mean by "venerable?"
A. We mean "stupid."
1018. robertjayb - 2/3/2002 6:37:03 PM
Professor Robert Fisher recalls a disquieting conversation with Enron executives:
A few years ago, when I was teaching at the University of Houston, I was invited to participate in a "Great Conversations" fund-raiser for the university's Honors College. People largely from the business community would pay to have dinner and conversation with a faculty expert. At my table, we were to talk about "community in Houston." I was facilitating a discussion with eight midlevel executives from Enron, all affluent, college-educated, pleasant and, as it turned out, the most narrow-minded group I've ever had the chance to talk with about social problems and public issues.
1019. Cellar Door - 2/3/2002 6:52:43 PM
Kenny Boy won't testify!
Hasn't he heard of the 5th Amendment?
1020. concerned - 2/3/2002 9:03:54 PM
Why isn't this the 'Global Crossing and Enron' thread? Isn't the common denominator really business with shoddy accounting practices?
IAC, jexster has been mining Enron for anti-Bush spin like a maniac for months now. What a fizzle the whole exercise has been for Lefties. GWB's popularity is still ranging in the mid '80's, the economy is turning around and spring is (almost) in the air.
1021. arkymalarky - 2/3/2002 9:35:04 PM
Kinda reminiscent of the Clinton impeachment, eh Concerned? Except for the economy turning around. It was just continuing to thrive.
1022. concerned - 2/3/2002 9:58:04 PM
Not at all. No wrongdoing by the Bush Administration has been suggested by investigators, for instance. In fact, it's hard to see how any was possible. Enron was invited, along with other corporations and groups such as the Sierra Club to provide suggestions to the Cheney Energy Task Force as to how the Bush Administration could best formulate energy policy. End of story.
The wrongdoing lies in the machinations and prevarication of the Left in trying to make people believe that things are other than as they are. At most, Bush administration policy would be questioned. Except, the Bush administration has hardly been in office long enough to even implement any energy policy. Besides Enron's internal wrongdoing, the only scandals are in Lefties' attempts to lie to and mislead the public about the essentially nonexistent role of the Bush administration in Enron's rise and fall.
1023. Cellar Door - 2/3/2002 11:12:56 PM
IT'S "HARD TO SEE THAT ANY WAS POSSIBLE" IF YOU'RE BLIND, DEAF, DUMB AND REPUBLICAN!
1024. concerned - 2/3/2002 11:16:50 PM
Sorry, cllrdr, baseless innuendo doesn't cut it wrt Enron and the Bush administration.
But if that's all you Lefties got, go with it, right?
1025. ronski - 2/3/2002 11:32:57 PM
Prediction:
Enron will be forgotten by November, 2002, and neither house of Congress will change hands.
1026. concerned - 2/3/2002 11:45:19 PM
Re. 1025 -
It's ok for me to post something like that, because it gets the resident Southpaws even more fired up, but you, they might actually start to believe it if you post it and they might even cut down on their foaming, and I want the likes of Jexster and cllrdr to be going balls to the wall all the way.
1027. ronski - 2/4/2002 12:08:47 AM
Connie, my friend,
Alas, I fear they will no more believe in my predictions than yours, I think, if only because by agreeing with you I am straying from the PC reservation.
Fortunately, for the sake of the Republic, you and I will be proven prescient, and they wrong, God willing.
1028. Cellar Door - 2/4/2002 12:48:45 AM
Well we've already forgotten September 11th and Osma Bin Ladin --why not ENRON?
1029. concerned - 2/4/2002 1:01:36 AM
cllrdr -
I think Ronnie's suggesting that your ilk won't keep 'outrage' about Enron's connection with the Bush administration alive. Better redouble your efforts just to make sure.
1030. concerned - 2/4/2002 11:08:34 AM
Global Crossing Faces SEC Probe of Accounting Practices on Leases
Hey, someone has to post something about the 'other' bankruptcy.
1031. Cellar Door - 2/4/2002 1:09:10 PM
YAWN!
1032. judithathome - 2/4/2002 1:31:25 PM
I'll bet Kenny Boy is wishing he'd gone ahead and showed up before the committee...they are all on CNN right now having a press conference and roasting him royally while announcing they are going to subpeona him.
One guy said ENRON wasn't a case of "All hat and no cattle...it was BULL." And Hollings just made a funny about Bush and Cheney saying "I did not have political relations with that man Kenny Boy."
1033. judithathome - 2/4/2002 1:36:57 PM
Hollings also threw down the gloves and called Bush, Cheney and Co, the "Cash & Carry White House".
1034. concerned - 2/4/2002 2:59:14 PM
Foghorn Leghorn Hollings is a decrepit fool.
1035. judithathome - 2/4/2002 3:02:29 PM
Maybe so but he had the microphone and gave good sound bites...it will be him on the news tonight giving shape to opinion for the great unwashed instead of Kenny Boy. Whether one agrees with him or not, he will be heard...
1036. Jonesatlaw - 2/4/2002 3:03:11 PM
What does it matter what one's strategy is in selecting stock when the numbers that are used in the selcction turn out to be fabrications? What is the point of having audits, when the auditors are thick as theives with the companies they audit. For all the appearance of rational discussion between Cal and Dusty, the reality is that it is like two marks on the street saying, "it's stupid to bet all your money on the queen being on the right" in a Three Card Monte game, "bet a little on the other two cards too."
1037. thoughtful - 2/4/2002 3:07:03 PM
j@h, Lol on #1032
1038. thoughtful - 2/4/2002 3:43:32 PM
One need only look at the runup in enron stock price from $30/share to $90/share in a little over 18 months to answer the question, why would someone leave all their 401k money in a single stock? One of the results of enron and the dot.com collapse is a wake-up call to many new and young investors who never lived through a crash, never thought stocks did anything but rise and thought risk was just a state of mind for old fogies who weren't clued into the "new economy."
I can remember a conversation I had with a young exec here who was looking for investment advice. I was pushing TIPs...the treasury inflation protected bonds and he said a 4.5% real return was just too low for him, even if it was risk free. He looked at me like I was crazy. 4.5% return ex inflation looks darn good against enron stock going from $90 to 0.65 in 18 months.
1039. CalGal - 2/4/2002 3:46:51 PM
For all the appearance of rational discussion between Cal and Dusty, the reality is that it is like two marks on the street saying, "it's stupid to bet all your money on the queen being on the right" in a Three Card Monte game, "bet a little on the other two cards too."
So you keep all of your money under the mattress?
1040. dusty - 2/4/2002 8:30:07 PM
thoughtful
I was pushing TIPs...the treasury inflation protected bonds
Good advice, although I may be biased, because I bought some myself a few months ago, along with their kissing cousins, I-bonds.
1041. dusty - 2/4/2002 8:38:20 PM
Jonesatlaw
Points for clever imagery, but it is inapt, so your "analogy" is worse than no advice at all.
I wouldn't pretend that all, or even most companies post financials that are pristine, but, in an attempt to use an analogy with some imagery, a woman wearing light makeup and a Bourbon Street drag queen are both using makeup to deceive, but the "deceptions" aren't in the same league.
And I'll echo CG's question: What do you do with unspent money?
1042. dusty - 2/4/2002 8:56:18 PM
The 30-year bond has a coupon of 3 3/8, and is currently priced to yield 3.43% (real). I vaguely recall one issued once with a coupon above 4, but my file is at the office.
I have an on-and-off project to do more homework on the TIPS, so we can decide whether to include them in our recommendations to clients. Right now, there is a concern that they are too thinly traded.
1043. Thoughtful - 2/4/2002 8:57:07 PM
Maybe jones has none? credit card millionaire?
1044. bubbaette - 2/4/2002 9:57:33 PM
So as far as Jone's analogy goes, are you saying "we know it's crooked, but it's the only game in town"?
1045. CalGal - 2/4/2002 10:34:30 PM
No. I'm saying that Jones' assertion that the stockmarket is wholly rigged and irresponsible gambling is idiotic on its face. And if he is invested in anything other than savings bonds, his attack on the rationality of our discussion is completely dishonest.
I will allow for hysterical and overwrought handwringing, if he admits to it. But those are pretty much the sum of his choices, given such an asinine statement.
And your failure to grasp the same thing is equally incomprehensible. Unless you, too, have a fondness for mattress banks.
1046. bubbaette - 2/4/2002 10:37:18 PM
It's the punchline to an old old joke. I should have known it would send you into a tizzy.
1047. arkymalarky - 2/4/2002 10:45:03 PM
At least what you put in a mattress stays there. Unless Ken Lay is in the house.
It's important to take Jones' question at the beginning of his post into account before attacking his analogy. How do you know which stocks you're looking into purchasing are on the up-and-up and which ones are pulling an Enron? It seems to have more to do with the holes Enron ran through, creating a sense of insecurity about stock investment as people see that it's fairly easy to leave the stockholder in ignorance about the reality of the stock value, than saying "all stock values are lies."
1048. CalGal - 2/4/2002 11:21:42 PM
How do you know which stocks you're looking into purchasing are on the up-and-up and which ones are pulling an Enron?
What does this have to do with the discussion? Is it okay to invest 100% of your portfolio in one stock if you are completely secure about the accounting?
1049. Jonesatlaw - 2/5/2002 12:18:53 AM
Cal- The risk of putting your money in any one investment depends on the nature of the investment and the quality and quantity of the information available to discriminate between your choices. There is a risk in all investment, but how do you rationally measure that risk when the information available to you is crap?
Which is the best compromise between risk and rate of return- muni bonds, preferred stock, REIT's, treasury bills, top rated commercial bonds? How can you know if you don't know the reliability of the information you use to make the analysis? You can read Enron's public information all you want, but you don't really have the information necessary to make a rational decision based on facts. No one wants to admit it, but the stock market and most other financial markets are based as much on a leap of faith as Scientology or Catholicism.
1050. CalGal - 2/5/2002 12:41:19 AM
The risk of putting your money in any one investment depends on the nature of the investment and the quality and quantity of the information available to discriminate between your choices.
This is cheap talk, and frankly, it is a disservice to American markets. I find such misrepresentation unseemly. It is possible to find the auditing failure troublesome and support change while not declaring the entire market a fraud and hopeless.
To say nothing of the fact that millions of Americans are living off their investments in one way or another right now.
No one wants to admit it, but the stock market and most other financial markets are based as much on a leap of faith as Scientology or Catholicism.
Again. You are either an idiot or a hypocrite/liar. Which is it? Where's your money, Jones? I don't need specifics. A binary is fine--it's in the stock market, it's under your mattress.
I suspect you don't believe your doom-laden pronouncements any more than I do.
Who's auditing your statements, anyway?
1051. Jonesatlaw - 2/5/2002 12:44:20 AM
For all the self actualizing bullsh#*$% that the brokerage houses and the discount guys spew on TV, its safe to say that not one in a million investors actually makes an investment on first hand knowledge. The top of the food chain makes their decisions largely on third hand information-
Company/auditor (like there's a difference)to SEC- to sector or company specialist analyst, and then finally to the gal or guy making the institutional investment decisions. The rest of us are two or three more transactions removed- trade journalist/analyst to brokerage house to broker to investor; or specialized sector/or stock analyst to business journalist to popular journalist. Now of these layers of people, how many actually can read the damn SEC required disclosures and understand them sufficiently to paint an accurate picture of the financial condition of a company, or to assess the general accuracy and reliability of the opinion wending its way down the information food chain? How much does any one of these levels know of the interests of the ones above it?
1052. Jonesatlaw - 2/5/2002 12:45:00 AM
to Cal cont'd
Enron is a howling example, but there are others out there waiting to blow. Posing the same problem but to a lesser degree are all the corporations that are within the letter of the law, but painting rosy scenarios which are very unlikely to be true. These are legion.
When was the last time you read an annual report that said "we took it in the shorts this year, and next year won't be much better?"
When was the last time you saw one that didn't have significant "happy crap" news sprinkled throughout? IOW we laid off 40% of our workers because demand for the product was lower than ever, and if it goes back up we can never produce enough at current margins to be profitable at the current level of staffing- turns into "weakening demand challenged management to right size our workforce, and management exceeded the cost cutting target by 6% while retaining key employees and maintaining production capacity of 110% of intermediate term needs projections?"
1053. Jonesatlaw - 2/5/2002 12:52:47 AM
So Cal- I have money in "the mattress" and in some stocks. I have regretted every stock purchase I didn't make on having some direct knowledge of the company or the market. As a whole, the stocks I have owned where I've known something of the market or business itself, have been okay.
I've never deluded myself into thinking I really knew with any real precision what some stock was worth based on anything other than accepting arguements from authority on finance and my own self of world events and mass psychology. IOW about on par with betting NFL football. In fact, I would love to see a fair analysis of the quantity, quality and validity of the information available to the average football bettor on the week's games versus the average mutual fund, stock, insurance policy or bond.
1054. wonkers2 - 2/5/2002 12:54:19 AM
Well, it's a mistake for anyone to invest all his savings in a single stock, however pristine the company's accounting and however good the company's prospects appear. Beyond that, it's a mistake for most investors to own individual stocks other than for recreational purposes. Solid no load, low cost mutual funds are by far the smartest alternative for nearly everyone. No load index funds are the best of this group in the long run.
Going to a broker and buying individual stocks is a analogous to going into a casino and expecting to come out a winner. The game of Wall Street is set up to make money for the brokers and company insiders, not for individual investors. Betting on individual stocks is a losing game because the "house take" (commissions and other transaction costs) and income taxes eat up too much of any gains.
1055. Cellar Door - 2/5/2002 12:57:32 AM
Have they found Ken Lay yet?
1056. CalGal - 2/5/2002 12:58:15 AM
Jones--you own no mutual funds? No index funds?
1057. CalGal - 2/5/2002 1:00:24 AM
Beyond that, it's a mistake for most investors to own individual stocks other than for recreational purposes.
I agree. Nothing wrong with buying stocks in small amounts as recreation, but I certainly wouldn't recommend it.
In fact, I read somewhere that many companies provide full-function broker services for 401(k)s. Is that true? If so, that's something I would support changing. I see no reason why we should allow people to do with their primary retirement fund. If they want it bad enough, they can open their own IRA.
1058. CalGal - 2/5/2002 1:01:08 AM
I certainly wouldn't recommend it. ...as an investment strategy.
1059. wonkers2 - 2/5/2002 1:02:41 AM
They'll probably find bin Laden before Lay, and the chances of getting either of them to testify are about the same-zero.
1060. Jonesatlaw - 2/5/2002 1:10:43 AM
Cal- Nope- not a single mutual fund of any significance, nor an index fund etc.
Not to worry, at present my investments are small, and I don't plan on living off of them even in the future. Due to some somewhat unusual family circumstances, my investments are rather tangible, although my wife's are very conventional. SHE has mutual-type funds almost exclusively, save for a few stock fliers that she took on her own knowledge.
1061. Jonesatlaw - 2/5/2002 1:13:48 AM
Cellar- think that Lay's about to do a Robert Vesco? Sounds like a great plot turn...
1062. Cellar Door - 2/5/2002 1:17:02 AM
I think you're right, Jonesy!
1063. CalGal - 2/5/2002 1:21:55 AM
SHE has mutual-type funds almost exclusively, save for a few stock fliers that she took on her own knowledge.
Well, unless you've got one hell of a prenup, those count as your investments, too.
Would you tell a 21-year-old to save for retirement by putting their money in a savings account to draw 2%? Or would you tell them to put it in an index fund?
1064. Jonesatlaw - 2/5/2002 1:54:30 AM
Well, unless you've got one hell of a prenup, those count as your investments, too.
Not in separate property states,like most of the country. Community property is a left coast thing.
Would you tell a 21-year-old to save for retirement by putting their money in a savings account to draw 2%? Or would you tell them to put it in an index fund?
Right now I'd tell them to take a hard look at T-bills, muni bonds-especially tax-free ones, and put whatever money they just had to have in the stock market into Uncle Warren's hands (Buffet, and the "Uncle" is merely a local sobriquet). The best advice I could give is to follow Buffet's advice, and for a 21 year old that really means waiting for a little seasoning and knowledge of what they were buying before plugging any serious money into stocks. An index fund would be fine as an inflation hedge, so long as the costs are absolutely minimal.
1065. CalGal - 2/5/2002 2:07:08 AM
Right now I'd tell them to take a hard look at T-bills, muni bonds-especially tax-free ones, and put whatever money they just had to have in the stock market into Uncle Warren's hands
So you recommend that a 21 year old invest all of their retirement money in t-bills for the next 40 years?
You do realize that you haven't once answered the question without hedging, which essentially confirms the fact that you aren't an idiot, but a hypocrite.
Are there really civilized states where the lower-income spouse isn't allowed to raid the other's assets in a divorce? How wonderful. It gives me hope.
1066. Jonesatlaw - 2/5/2002 3:06:07 AM
CalGal- I'm not saying that the stock market is a confidence game inherently, I am saying that at present there is far too much hiding the ball for an individual investor to make informed decisions for themselves on more than a handful of companies or perhaps a single sector, and that assumes that one has significant financial resources and works at studying those sectors or companies rather hard.
In the short term, there are problems that need to be fixed if there is going to be a healthy amount of investment in Wall Street. Boring investments in bonds etc might be okay if overseas money decides that Wall Street has become too Wild West for their taste.
If the internet and information revolution were to hit capital markets with alternatives to traditional stock markets in the assembly of risk capital, index funds might suck as an investment over the next 40 years.
1067. joezan - 2/5/2002 8:10:06 AM
RUT-RO! Is Kenny swimmin' wit' da fishes?.
1068. thoughtful - 2/5/2002 8:29:58 AM
Dusty, re TIPs thinly traded...that's why they are a good deal. From 1960 to present return on stocks has been 5% per year with all the implied risk...even a 3 1/2% risk free return seems like a deal to me...at least for some portion of my portfolio...and probably a growing portion of my portfolio as I age.
Jones, re muni's for a 21-year old, remember to max out the value from munis one needs to be in the highest income tax bracket which most 21-year olds are not. Regular bonds/government bonds would be better.
1069. thoughtful - 2/5/2002 8:32:46 AM
Personally, I have done very well in stocks. Not all of them, but the total porfolio has done very well and even survived the recent downturn nicely. Whether luck or by accident, I also had the fortune of starting my equity investment in 1984 and riding up the biggest bull market in stock market history. However, as Shiller has so wisely pointed out, from stock market peak to the next peak in the real S&P 500 takes about 25-30 years.
1070. dusty - 2/5/2002 9:38:08 AM
thoughtful
Dusty, re TIPs thinly traded...that's why they are a good deal
Thinly traded means the opportunity for decent returns, at the cost of liquidity.
I should emphasize that I wear two hats when it comes to interest in TIPS. One, as a personal investor, looking for investments in my own portfolio. My liquidity aren't that high, so they make a good choice for my portfolio.
However, I am also looking them as a possible invest for insurance companies, where liquidity needs can be an issue. These companies have to worry about the possibility of selling these securities at a time when others are selling securities (This was a meaningful issue in the London market to pay for 9/11 claims). I still think TIPS make sense, but there are only about 800 million of them in existence, so there may not be enough to justify formally modeling them as an asset class.
1071. Cellar Door - 2/5/2002 9:45:02 AM
Krugman Unbowed.
Incidentally, Sully is clearly off his meds. Check his website notes about how he's been "experimenting" and is tired of suffering the side effects of the cocktail. He attributes a sharp spike in his viral load not to going off his medication but to his being upset over Sept 11th.
At this rate I don't think he's going to make it to Christmas.
1072. thoughtful - 2/5/2002 9:47:54 AM
dusty, I understand. Since you're in insurance, let me ask you a question I was asked which I answered with an economist's usual "it depends". Are insurance companies helped or hurt by lower interest rates? What's your take?
1073. CalGal - 2/5/2002 11:28:14 AM
Jones, the accounting rules have been in place for at least ten years. Are you arguing that you would have been safer putting your money into savings in 1990, rather than investing it?
I'm not saying that the stock market is a confidence game inherently
Actually, you did. You also made no mention of the fact that the rules have been in place for a long time. You are also egregiously overstating the case.
If you can point to a post you made prior to Enron in which you told everyone not to invest in the market because the last 10-15 years it's been nothing more than a confidence game, I'd love to see it.
You declared that a conversation about the relative risks of investing in just one company as opposed to a diversified portfolio was foolish because both were shell games. This is, on its face, accounting rule changes or no, a pretty fucking stupid thing to say. Flail and hyperventilate if it makes you feel better, but try and be more responsible in your equivalencies.
1074. bubbaette - 2/5/2002 12:08:39 PM
Maybe Kenny Boy is hanging out with Cheney at an undisclosed location.
1075. dusty - 2/5/2002 1:27:52 PM
Thoughtful
Are insurance companies helped or hurt by lower interest rates? What's your take?
Your answer, "it depends" is exactly right :)
Of course, you probably can't away with stopping at that point.
I'm going to assume that the question relates to recent events, where we have moved from moderate interest rates to lower interest rates (as opposed to asking - Do insurance companies prefer a long-term low interest rate environment or a high interest rate environment?)
Insurance companies tend to be large holders of fixed income securities.
Obviously, a drop in interest rates increases the market value of these securities so is a good thing. However, insurance companies typically report under two different accounting standards - GAAP and statutory. Stated values of bonds are carried at market for GAAP purposes, but not for statutory.
The drop in interest rates will reduce future investment income as new cash flows are reinvested at lower rates.
Insurance companies (particularly life) tend to be large holders of mortgage-backed products. The attractive yields of these products is mitigated by the negative convexity. I don't know how common the term is, so I'll note that mortgage-backed assets tend to drop in value when interest rates go up (for obvious reasons) but also tend to go down in value for moderately large decreases in interest rates (because of prepayments). So the recent decline in interest rates does has a negative impact on a fair amount of insurance company assets.
1076. dusty - 2/5/2002 1:28:18 PM
continued
I've mentioned the asset side, but there are liability side impacts. For PC companies, it will matter whether rates are dropping because of inflation (which will tend to reduce the liabilities) or reflect a reduction in real yields available (which won't reduce the liabilities). Additionally, insurance specific inflation is correlated with general inflation, but not perfectly correlated. So it is possible that a general reduction in inflation causes a reduction in interest rates, but insurance specific inflation remains higher.
Many life companies include minimum interest rates to credit cash values. Typically, those are set at values like 3% (2% in Japan, 4% in UK). In each place, available yields are below, or dangerously close to dropping below the minimum. In which case the liability doesn't drop, but the income does.
Life insurance companies have to do something called cash flow testing. If they "fail" which is more likely in a low interest rate environment, they have to increase the liability reserve, but cannot take an offsetting change in the asset.
Finally, I haven't addressed whether the duration of the liabilities is longer or shorter than the assets. This will affect whether a reduction in interest rates increases or decreases the surplus.
I'm only scratching the surface, but I'm sure no one else is interested. Please send me an email at freetochoose@yahoo.com if you want to talk further; analyzing the impact of interest rate changes on insurance companies is one of the most important things we do.
1077. rubberducky - 2/5/2002 1:39:17 PM
or, you could discuss it in the Slow Thread...
1078. robertjayb - 2/5/2002 1:41:41 PM
Astros want to dump Enron...
HOUSTON (AP) - The Houston Astros want to shed the name of Enron Field.
The baseball team asked a federal bankruptcy judge in New York on Tuesday whether the team should continue its stadium-naming agreement with Enron Corp ., the energy giant that collapsed in an accounting scandal.
1079. Jonesatlaw - 2/5/2002 2:20:19 PM
Cal- The conversation started with your assertion that the folks who got creamed by Enron deserved it for being foolish enough to put their money in a single stock or concentrating it excessively in their company's stock. You point out that access to financial advisors is easy and that they shouldn't have been caught with their pants down by Enron. Well, hate to break it to you, but Enron employees were not alone. Lots of the financial advisors you tout got creamed as well, in large part because Enron's reports and reality did not match.
You are in full "blame the victim" mode. It isn't enough to say that portfolios should have been more diversified, that just spreads the damage amoungst more investors. You seem comfortable that there aren't a number of other Enron's out there ready to blow up, but given that the publicly available information didn't tell us about the orignial one, I don't share your confidence. I am not sure in the face of information that we now have cause to question, you are. I think the hyperventilation is your denial, not my uncertainty.
It's true that the accounting rules have been in place for 10 years. What does that have to do with the reality of how they have been complied with in spirit? Is it possible that there are actually trends in compliance, or non compliance that do not correspond with the pronouncements of what constitute generally accepted accounting practices? Did soft money in politics take on the importance that it has in the last two election cycles immediately upon the change in campaign finance legislation, or did it evolve? Why wouldn't the audit function do the same?
1080. thoughtful - 2/5/2002 2:34:06 PM
Thanks dusty. Very thorough as usual. I hit some of the answers right especially that it depends on the underlying assets and if/how hedged they are and about how interest rates impact income from equities differently than income from interest-bearing assets, impact of low interest rates on economy and thus demand and consumer incomes, impact on yields on competing investment products and so on. So everything I answered was about right, especially the part where I suggested he talk to someone in the insurance industry! Thanks again.
My apologies to other posters for the temporary derailment.
1081. Cellar Door - 2/5/2002 7:53:50 PM
1082. CalGal - 2/5/2002 8:01:54 PM
The conversation started with your assertion that the folks who got creamed by Enron deserved it for being foolish enough to put their money in a single stock or concentrating it excessively in their company's stock. You point out that access to financial advisors is easy and that they shouldn't have been caught with their pants down by Enron.
This is incorrect. And since it is incorrect, you may as well stop there. Inventing positions that go hand in hand with your rebuttals is convenient, but counterproductive.
Your other paragraphs are equally inaccurate, which makes sense given how far away from reality you began.
1083. Al D - 2/5/2002 9:01:49 PM
Congress has reached an amazing state; over 200 of them took money from Enron and they are now saying how evil Enron was for buying influence. Hey, if they weren't selling, Enron wouldn't have been buying.
1084. CalGal - 2/5/2002 9:08:13 PM
Actually, right now they are saying that Enron was evil for cooking the books.
1085. wonkers2 - 2/5/2002 11:10:54 PM
Good article on Cheney. He's the slickest sleazeball since Nixon.
1086. wonkers2 - 2/5/2002 11:12:13 PM
Rather, Cheney equals Nixon's sleaze but is far to Nixon's right on most issues.
1087. arkymalarky - 2/5/2002 11:21:09 PM
I can't help but jump waaaayyy ahead and wonder if he'll pull an Agnew.
1088. Jonesatlaw - 2/5/2002 11:51:37 PM
Cal- Now why oh why would I think that you were blaming the Enron victims for their plight? Perhaps this is why-
It highlights again that Enron employees had only themselves to blame.
1089. CalGal - 2/5/2002 11:54:24 PM
Jones,
Please describe what "it" refers to in that sentence.
1090. Jonesatlaw - 2/6/2002 12:00:18 AM
Maybe I got the idea here-But other than that narrow instance, the employees dug their own grave. Or perhaps this 988. CalGal - 2/2/02 6:25:18 PM
it is not so glaringly obvious that people can be called idiots for not knowing it.
I disagree. Everyone has access to financial planners. Everyone understands--and is, by law, informed--that stock can go up and down.
You certainly don't need math knowledge or any special training
Or is it something else that you care to deny?
1091. Jonesatlaw - 2/6/2002 12:13:47 AM
Cal here's the "it" referred to-Dusty to judithathome
Or do you mean as employees, they should have know better than to tie up so much of their stock in their own company?
Essentially, that is the question I want to address.
The employees didn't know better. Why not?
My tentative answer is that, while it is fairly obvious to people with some combination of math training and understanding of markets, it is not so glaringly obvious that people can be called idiots for not knowing it.
Which was followed by your post quoted above disputing the Dusty's denial that the people (Enron employees)could be called idiots.
Seems straightforward reading to me.
1092. judithathome - 2/6/2002 12:15:37 AM
It did to me, too.
1093. CalGal - 2/6/2002 12:41:42 AM
Jones,
Message # 972 is the post you quoted from. What is the sentence immediately after the sentence you quote? Here's the whole paragraph:
It highlights again that Enron employees had only themselves to blame. This doesn't mean they don't have the rights of any stockholder, but that's as far as it goes.
If you read the entire post, you'll see that I was discussing a strategy used by Schwab employees to protect their retirement overexposure. The "it" was the example, demonstrating that the Enron employees had remedies for even that portion of their overexposure that they couldn't directly control.
Now, let's look at what your restatement is:
The conversation started with your assertion that the folks who got creamed by Enron deserved it for being foolish enough to put their money in a single stock or concentrating it excessively in their company's stock. (emphasis mine)
So your first reference to my post, in which I only mention Enron employees (which were not all stockholders) is, on its face, proof that you didn't bother to read what I said.
My sole point--that I've said many times--is that Enron employees are responsible for their own 401Ks. That regardless of one's individual stockmarket knowledge, it is entirely realistic to know how foolish it is to invest 100% of one's portfolio in one stock, and that any financial adviser--again, regardless of their specific advice--would state clearly and unequivocally that this is a bad idea.
You instead claim that I say Enron stockholders (not employees, but stockholders) are responsible for their own problems, and then quote from posts where I clearly state that stockholders are due remedies.
I think you should play with Judith and Jex, Jones. They're more your level.
1094. Jonesatlaw - 2/6/2002 12:43:55 AM
Finally, I have not intentionally asserted that the stock market is a confidence game by its nature. Ideally, it is distinguished from a confidence game by these factors: that it is possible to win; that the rules will be consistent and fairly enforced; that the outcomes are not manipulated by the "house", IOW those who operate the market cannot force an outcome to their advantage, but may profit from particular outcomes occurring due to forces contemplated by the "players;" and that the players have an even opportunity at information concerning the play of the game. More akin to a casino than a con job.
Enron is akin to sitting down at the blackjack table, winning a bit, watching someone else win big and walk away and finally getting wiped out as the dealer never busts. Then the players find out that all the jacks have been removed from the shoe, or that its a six deck shoe instead of the one deck advertised.
Just because the above happens doesn't mean that all gambling will stop. It sure might put a dent in the handle for awhile, and maybe craps or slots will pick up some business.
Finally, you said the following to me:Your other paragraphs are equally inaccurate, which makes sense given how far away from reality you began.
However tenuous my grip on reality, I can remember what I wrote in the last twenty-four hours.
I would also note a lead page story in McPaper today which attributes heavy stock losses by Tyco International, Williams Co., 3M, Avaya and United Technologies to "an accounting complexity penalty." It also notes that Tyco International is "long suspected of accounting tomfoolery" and the stock "plundged $6.96 to 29.90, making Tyco the most heavily traded stock on the NYSE.
1095. Jonesatlaw - 2/6/2002 12:52:25 AM
The "it" was the example, demonstrating that the Enron employees had remedies for even that portion of their overexposure that they couldn't directly control.
Pure, unalloyed and unadulterated bullshit.
The Schwab example was about conversion of stock by quitting the job and avoiding an age restriction, but Enron employees had no such out when the chickens started to come home to roost. Their stock was frozen until a date certain, across the board. It ignores the fact that there was no fraud in your example and there clearly is in the Enron case. Finally, it ducks the whole tennor of the previous exchanges with JAH and Dusty asserting that holding company stock in any quantity in a 401k is foolish, the harm is due to their foolishness, and they shouldn't have any sympathy as employees, but should be lumped in with any other shareholder.
Twist as much as you like, but anyone who can read will see through it.
1096. CalGal - 2/6/2002 12:53:53 AM
Incidentally, Moneyline just reported the Enron employees were buying stock heavily in October.
1097. CalGal - 2/6/2002 12:57:03 AM
The Schwab example was about conversion of stock by quitting the job and avoiding an age restriction, but Enron employees had no such out when the chickens started to come home to roost.
Jones. Please. Be honest. They were 100% invested in Enron stock, and you are saying that October was the first time they had any reason to act?
Finally, it ducks the whole tennor of the previous exchanges with JAH and Dusty asserting that holding company stock in any quantity in a 401k is foolish,
This is an out and out lie. Please find the quote in which I said this, or retract. Anyone who can read apparently doesn't include you.
Don't restate my opinions anymore; you have demonstrated an inability to grasp anything that doesn't neatly fit a rebuttal you have handy. Use direct quotes--and complete ones--or go play with people who won't object to your inability to read complete sentences.
1098. Jonesatlaw - 2/6/2002 1:24:23 AM
Cal- I use direct quotes and you deny they say what they say.
It damned tricky of me to get you to post things that fit my rebuttals before I've composed them myself don't you think? The problem is not the completeness of the quotes, its that you wish to disavow what you've previously posted. You attempt to play off your quote by adding that you recognize that they (employees) have the rights of any other stockholder. You fuss about the "it" being a reference to strategies used at Schwab to diversify their portfolios including quitting and hoping to be rehired so they could cash out. The point you are studiously avoiding is that I called you out on blaming the victims and your Schwab example is your example of how they could have protected themselves by cashing out of Enron. So if they could have limited their exposure,as per your example, their losses are their own fault for being overexposed is what you were saying or you were saying nothing comprehensible. Be honest with yourself at least and decide what you meant. Then keep it to yourself, because if you don't mean what you write, there's no point to a response in this forum. I'm not Miss Cleo and I won't try to read your mind, just your words.
1099. jayackroyd - 2/6/2002 3:30:33 AM
I haven't read through the thread, and it's too late for me to do so. But a couple of comments.
1) In Dusty's examples of alternative investments where a) the employer is providing discounts on the stock and b) the investment (and growth, if any) is pretax, there must exist some discount where it is worth buying company stock.
2) There is an important point lurking in thoughtful's three card monte example. If I base my investments on things like price to book and price to earnings ratios, Buffet style, it's really important that those reported values be correct. I know people have ripped the analysts as third in the sinners' line, but to my mind they should be in the front. It's their job to raise doubts about the validity of Enron's earnings and book value. That they did not, at least, discuss the opacity of their financial statements is incredibly negligent. When you combine that with auditors who do not audit, certifying fallacious earnings and asset holdings, then all analyses get polluted,even those done by a hardworking individual investor with an honest financial adviser.
1100. jayackroyd - 2/6/2002 3:40:03 AM
And in response to CalGal's challenge, I almost never buy an individual stock. It's almost always a sucker bet. Once in a great while, I'll believe that I have an idea ahead of the market and look for a pure play. (VISG happens to be a very small current investment, made about a year ago.)
Currently, the retirement portfolio is mostly foreign stocks and bond mutual funds, and a little S&P 500 index. The liquid portfolio is almost all cash, and has been for some time. I missed the peak, but didn't crash. What is not cash is in the S&P 500.
Individual stocks are sucker bets for two reasons.
1) Information reaches individual investors very late. You therefore lose a significant fraction of your investment by getting in higher than the people who talked you into the stock and get out lower--even if you were convinced by peoplr who happened to be right.
2) There's no real way to know what management is doing in anything like a timely fashion. If they are looting the company, you will always find out too late. If they have adopted a butt-headed strategy, you won't know until the stock has fallen.
1101. thoughtful - 2/6/2002 8:27:37 AM
jay, the three-card monte was a good example, but it wasn't mine.
1102. Cellar Door - 2/6/2002 9:38:08 AM
Have they found Ken Lay yet?
1103. judithathome - 2/6/2002 9:40:47 AM
No, but when they do, he will probably have a Caymen's tan...
1104. Cellar Door - 2/6/2002 10:25:34 AM
1105. CalGal - 2/6/2002 12:07:54 PM
And in response to CalGal's challenge, I almost never buy an individual stock.
That wasn't my "challenge". My question to Jones was whether or not he had any holdings in the stock market, based on his assertion that it was completely rigged. Thus, your answer to my "challenge" is that yes, you have holdings in the stock market. I've never asserted that individual stocks are safe--in fact, quite the contrary, I agreed with Wonkers that it wasn't wise.
1106. CalGal - 2/6/2002 12:12:24 PM
I use direct quotes and you deny they say what they say.
No, I agree with what they say. You just don't seem to understand them.
And you haven't retracted this: Finally, it ducks the whole tennor of the previous exchanges with JAH and Dusty asserting that holding company stock in any quantity in a 401k is foolish,
Please do so, or provide a quote where I made this statement. You have not.
The point you are studiously avoiding is that I called you out on blaming the victims
I have never denied "blaming the victims", if by "victims" you mean "Enron employees who lost their 401(k) holdings. They have only themselves to blame for having lost all their retirement funds.
Your mistake was in convoluting "Enron employees" with "stockholders". By doing this, you go beyond distorting my position; it becomes a wholesale fabrication.
1107. CalGal - 2/6/2002 12:33:06 PM
Enron Executives Say They Debated Freeze on Pension
It wasn't a regular window, it was something that could have been postponed. It doesn't appear as if they did it specifically to prevent employees from dumping their stock, but the possibility can't be eliminated. They also clearly sent out conflicting information.
Any employee who can document that he or she tried to sell during the freeze period should be given the amount they would have gotten for dumping stock at the price at the beginning of the freeze.
But I really wonder how many employees there were, given that employees were actively buying during the same time.
1108. Phoenix Rising - 2/6/2002 3:39:51 PM
Enron 401(k) plan is fairly typical. Here are some good facts on plans. In the fine print at the bottom is the real story.
Company -Plan Size - Percent in company stock
Home Depot 2.02 B 84%
Coca Cola 1.4 B 78%
Bell South 8 B 55%
UPS 1.5 B 38%
SunTrust Banks 1.43 B 66%
Southern Co. 2.62 B 53%
Delta Air Lines 4.06 B 13.6%
1109. CalGal - 2/6/2002 3:45:09 PM
Actually, what that article provides is good anecdotal evidence that the employee behavior is common.
1110. wonkers2 - 2/6/2002 3:55:14 PM
Analysts, aside from the problem of conflicts, make mistakes. Abby Cohen was recommending Enron last October, apparently based on how far down it was from its high. She is Goldman Sachs' market guru. Goldman is a premier investment bank and retail broker for wealthy investors. If Goldman didn't have good information or analysis on Enron, who would? One or two tenacious, skeptical bear fund managers/analysts. (Ursus)
1111. CalGal - 2/6/2002 4:05:04 PM
Wasn't Goldman getting deals from Enron in which they were informed of its actual financial opinion? I really hope the investment banks get slapped around, too.
1112. CalGal - 2/6/2002 4:11:14 PM
its actual financial opinion
Ha. actual financial status.
1113. wonkers2 - 2/6/2002 4:18:20 PM
Could well be. I don't know. It's hard to keep track of who has their snout in the trough.
Another comment. Enron employees were screwed on two counts--as stockholders along with all the other stockholders, by Enron, Andersen, the analysts and investment bankers and as employees by Enron's blackout on 401k changes or withdrawals and by apparently deceitful advice on the stock given them by Ken Lay as the titanic was already sinking. However, they weren't screwed as badly as they say they were--their actual savings was much less than the paper profits they had at the peak in their 401k plans. So, their actual losses are less than advertized. I am compelled to confess that I, the advocate of indexing, had worse happen to me in several individual stocks during the past two years--Healtheon, Schwab, EMC, Cisco, Microsoft. Only in two cases have the stocks dropped below what I paid for them, so, in one sense, my gains still exceed my losses. But it still hurts. I can feel their pain.
1114. CalGal - 2/6/2002 4:24:42 PM
their actual savings was much less than the paper profits they had at the peak in their 401k plans
Yes, I've made that point, too. They didn't lose all that much, since the gains they made were based on incorrect information.
My Schwab stock was worth $58,000 last year some time. Now it's worth about $20K. It just kills me--even though the original investment was $600!
1115. dusty - 2/6/2002 4:52:01 PM
Very interesting article, thanks for the link.
P&G is a company where the percentage of company stock in the 401(k) is even higher than Home Depot (IIRC).
The article did mention that some people do get stock at a discount. For those that care, I am still working on a formula to determine how much of a discount is sufficient to make company stock a sensible purchase. However, my employer has noted that, not only would this not help our business, it may be counter-productive to our business, so I have to work on it during "free" time.
1116. dusty - 2/6/2002 4:55:28 PM
wonkers2
However, they weren't screwed as badly as they say they were--their actual savings was much less than the paper profits they had at the peak in their 401k plans. CG (I believe) has been making this point. I'd like to see it quantified.
1117. judithathome - 2/6/2002 5:14:16 PM
One thing they did get screwed out of, though, is time...all the time they were investing in their retirement funds can't be retrieved. So sure, they may not have lost any more than their original investment but if they spent 5 years investing (or however many years) they have that amount of time LESS to build toward retirement now.
For younger people in their 30s that might not be so bad but if someone was near retirement age, it really sucks. I know this could happen in any investment scheme but it is still the pits.
1118. wonkers2 - 2/6/2002 5:18:22 PM
True. The law should be changed to prevent employees from concentrating their 401k savings in their employer's stock and assure their right to sell any stock contributed by their employer within a reasonable time like 6 months or a year at most. Let them invest their after-tax savings in company stock or whatever else they want, unsubsidized by the taxpayers.
1119. Jonesatlaw - 2/6/2002 5:53:57 PM
Cal- There was no convolution at all. Not all Enron employees are stockholders. Those who had no Enron stock in their 401k's haven't lost their retirement. No one was talking about such people. You were talking about Enron employees who held Enron stock in their 401k's. Your distinction between "stockholders" and "employees" is empty air because the only employees you, Dusty, JAH were talking about were the ones who fit both categories, employee and stockholder. You had no sympathies for Enron employee/stockholders losses because they didn't do what your former co-workers at Schwab did and quit their jobs to be able to cash out their profits and broaden their portfolio. See your posts 972, 977, 988 featuring characterizations such as "Enron employees have only themselves to blame" or that they "dug their own grave" and finally "They took the risk. They lost."
How would any of this be different from any other stockholder? In short, it isn't at all different.
1120. Jonesatlaw - 2/6/2002 5:54:34 PM
Cal continued-
Of course, all of this ignores the fact that the decisions of all Enron stockholders (including employees) were distorted by false and misleading informtion based on fraudulent accounting practices by the company itself and its accounting firm, and for employees, there were specific communications from Ken Lay encouraging ownership of the stock to employees long after he knew of the weak financial position of the company.
In short, I cannot find a post that characterizes what you now complain of, because it is a distinction without a difference, a semantic slight of hand. You did mention that employees who lost their retirement would be entitled to whatever remedies stockholders may have. (Oh how generous and full of the milk of human kindness, you'll allow the law to treat stockholders as gasp, stockholders!)
Yet, you never actually assert that any Enron stockholders of any stripe would actually merit a remedy, or indentify what sort of remedy that might be.
Give it up. You're whistling past the graveyard. Bad things happend to these people because, unlike CalGal, they were stupid and so they deserve what they get. It can't happen to you, because you're not like them. Nope, it can't happen here...
1121. CalGal - 2/6/2002 8:38:34 PM
No one was talking about such people.
Um. Yes. We were. That's who we were discussing, Jones. The Enron employees who were upset at having lost their retirement, specifically those who had invested 100% of their retirement fund in Enron's stock. I do not sympathize with people who don't have a retirement fund because they invested in one stock. I do sympathize with any stockholder who lost money in Enron because of the fraud (legal or not) committed by Enron and Andersen.
These are two different issues.
Do you understand that? I think it's kind of important you grasp this before you waste your time pontificating further.
1122. Cellar Door - 2/6/2002 11:11:32 PM
1123. concerned - 2/6/2002 11:43:16 PM
GWB and Kenneth Lay: bare acquaintances, at most
1124. concerned - 2/6/2002 11:47:14 PM
Bloody Parasite McAuliffe Stonewalls Requests for Global Crossing Documents
1125. jayackroyd - 2/7/2002 1:32:52 AM
Saw Tauzin (R) and Dingell (D) (sp^2) on cnn yesterday, and the spin is clear.
"This company's principals violated the law, and will be brought to justice on the laws that defend investors from fraud. The surety and severity of our punishment under current will deter future violations of this kind."
Or, in other words, "We're in the tank, and spinning as hard as we can so you don't notice."
1126. concerned - 2/7/2002 1:51:56 AM
From the WSJ:
Cheney Is Right to Fight the GAO
By DOUGLAS W. KMIEC
The General Accounting Office is threatening to sue the vice president if he doesn't spill the beans about the closed-door sessions of his energy task force -- including, reportedly, meetings with top Enron executives. Despite no evidence of any wrongdoing, Democrats and the press are striving hard to create the dreaded "appearance of impropriety."
But think a moment about what the GAO is demanding. If its demand are met, the executive branch would have to report on conversations held in private. It would mean disclosing the names of everyone Mr. Cheney or the task force talked with, and what they talked about, including market and proprietary information that competitors don't share with one another. How can anyone, whether in government or out, work effectively without being able to hold private meetings?
To those who have balked at the audacity of its request, the GAO has retorted that this is all "routine." Unfortunately, the agency is telling the truth. The GAO has been in the habit of interfering with the constitutional functions of the presidency for the last quarter-century.
By statute, as Congress's auditor, the GAO has specific responsibilities: It is empowered to conduct financial audits that ensure federal dollars are not misspent. And it is empowered to evaluate the effectiveness of government programs created by statute. Nowhere is it authorized to play grand inquisitor, with the right to tell the vice president and the president who they can talk to, or how to formulate policy.
1127. concerned - 2/7/2002 1:52:25 AM
The GAO's mission creep doesn't have to be tolerated. Back in 1988, I had a face-off with GAO over its desire to supervise the National Security Council in its formulation of policy toward Panamanian dictator Manuel Noriega. The Department of Justice's ruling at the time left little wiggle room for GAO overreaching then -- or now. "GAO's investigative authority . . . is limited to auditing the finances of government agencies and is thus inadequate basis for the GAO Noriega investigation, which clearly goes well beyond a financial audit," Justice concluded.
GAO's justification of its actions on the basis of a catch-all authority to "evaluate the results of a program or activity the Government carries out under existing law" was also rejected. The phrase "program or activity under existing law," we noted at the time, only refers to activities that are carried out pursuant to statute -- not to any and every activity carried out by the president in the course of discharging his constitutional responsibilities.
Vice President Cheney would be well advised to make a similar argument. Providing, that is, he doesn't ask the president to summarily dismiss the lawsuit altogether. That course of action, while perhaps politically dicey, would be perfectly justified -- the president is authorized by statute to terminate the GAO's misdirected actions. Judicial enforcement is denied the GAO "whenever the Director of the Office of Management and Budget or the President certify that the information could be withheld," and "disclosure reasonably could be expected to impair substantially the operations of the Government."
1128. concerned - 2/7/2002 1:52:57 AM
Note that in all of this, the president need not even fall back on "executive privilege" to prevent the disclosure of information given to him in confidence.
Executive privilege has never fully recovered from the black eye President Nixon gave it when he misapplied it to cover up executive wrongdoing. But like other legal "privileges" (e.g., attorney-client), it exists for a good reason. As numerous judicial rulings make clear, executive privilege protects information about state secrets, pending law enforcement matters, or the pre-decisional conversations of those helping the president.
To be sure, the privilege is not absolute. Mr. Nixon had to give way to a Supreme Court ruling which forced him to turn over the White House tapes in order to ensure a fair trial for Watergate defendants. But often forgotten is the fact that the federal courts did not require Mr. Nixon's famous tapes be supplied to the Senate Watergate Committee -- only to the courts. That committee's work could be completed with the partial transcripts, the courts ruled, that the president had already delivered.
In our present moment, similar considerations should apply. Congress has already been given a comprehensive task force report by which to evaluate President Bush's energy policy. Aside from the Democrats' desire to cast suspicion on the president by insinuation, neither Congress nor its offshoot, the GAO, needs to know the strategies that were revealed to the vice president under the promise of confidentiality. Government is necessarily dependent upon the informational expertise of regulated industries in fashioning economically efficient and effective regulation. Those who say otherwise are spinning an unhelpful yarn.
1129. concerned - 2/7/2002 2:10:15 AM
What about Hillary Clinton's health-care task force? scream the Democrats. Didn't Republicans (and this editorial page) castigate Mrs. Clinton for not disclosing who her outside advisers were meeting with as they formulated an overhaul of the nation's health-care system? Yes, but there's an important difference.
The energy task force, made up entirely of executive officers, is outside the statutory scope of the open meeting requirements of the Federal Advisory Committee Act. Those requirements only apply when nongovernmental individuals are given direct say over policy making -- a line that Mrs. Clinton's task force (but not Mr. Cheney's) crossed.
Likewise, Congress has long exempted from the Freedom of Information Act the very kind of pre-decisional, consultative material that GAO now seeks. These exemptions are critical to preserving the constitutional balance secured by the separation of powers.
This is what the vice president is fighting for, as Congress, and the GAO, aim to tar a highly popular president with the misdeeds of a failed corporation. Mr. Cheney is not fighting for political advantage; he is fighting for high principle.
Mr. Kmiec, an assistant attorney general in the Reagan and Bush administrations, is dean of the Catholic University of America School of Law.
1130. concerned - 2/7/2002 2:10:34 AM
Kmiec makes very cogent points, which causes me to seriously wonder what control Socialist Henry Waxman has over 'Independent' GAO Comptroller General David Walker to cause him to damage his reputation by threatening such a specious lawsuit.
The meetings, attendees and much of the content of the meetings that the Cheney Energy Task Group held with individuals, groups and corporations are already available to all congressional committees and the GAO. Therefore, the only things that David Walker could be angling for are the internal deliberations of the Bush Administration and confidential information which some of the attendees had reason to believe would not be made public as a result of their deliberations with the Cheney task force. And who would be the recipient of this sensitive information? Why, Henry Waxman, one of the most partisan and politically motivated members of Congress. Not Congress as a whole, which the Bush Administration has already signaled that it would be willing to release such records to.
One reason that Walker's actions bothers me, besides the fact that they are clearly inappropriate and more or less purely politically motivated, is that it threatens the confidentiality of any decisions that an administration could make. Cheney caving to Walker would set a terrible precedent. The door would then be open for corrupt politicians and their GAO lackeys to put pressure on the administration to make public its entire strategy in any policy formulation area, whether relating to the war on terrorism, internal policy, trade policy or whatever. Walker's actions have the potential to be the start of a slippery slope causing incredible damage to the executive branch and the USA as a whole because special interests would be allowed to mine the presidency for information which specifically benefit them to the detriment of the US public.
1131. judithathome - 2/7/2002 8:14:58 AM
Cheney caving to Walker would set a terrible precedent. The door would then be open for corrupt politicians and their GAO lackeys to put pressure on the administration
This is untrue...I've heard several lawyers and professors (CNN, NPR) state that a one time waiver would do away with any "precedent setting".
1132. judithathome - 2/7/2002 8:21:44 AM
Concerned:
In Message # 1123 there is no mention whatsoever of GWB...is this your way of justifying the header on your post or has the link expired?
1133. OhioSTOPAS - 2/7/2002 10:13:10 AM
#1130: "The meetings, attendees and much of the content of the meetings that the Cheney Energy Task Group held with individuals, groups and
corporations are already available to all congressional committees and the GAO."
Really?
1134. jexster - 2/7/2002 3:05:06 PM
Senator Barbara Boxer (D-CA) is a member of the Senate Commerce Committee, and she is VERY disappointed Kenny Boy Lay cancelled his appearance at the last minute. "Deregulation kept the cash flowing while insiders unloaded and unsuspecting employees who worked for Enron lost their jobs, their pensions, and their dreams. Meanwhile, California faced the prospect of old people dying from lack of air conditioning, agriculture businesses losing everything due to loss of refrigeration and families having to choose between soaring energy costs and food for the table. This was a secret market. And Enron's friends in high places let the games continue. Ken Lay has left us in the dark once more, but my colleagues and I will make certain that the facts in this case see the light of day with or without his cooperation." You GO GIRL!
Bu$h and Kenny Boy Leave California in the Dark - Again - SF Chron
1135. Jonesatlaw - 2/7/2002 3:30:05 PM
Compare
Calgal-
[quoting me]No one was talking about such people.
[CalGal]Um. Yes. We were. That's who we were discussing, Jones. The Enron employees who were upset at having lost their retirement, specifically those who had invested 100% of their retirement fund in Enron's stock
and my original post contrastsing "such people" (Enron employees without stock) versus the people discussed, Enron employees with stock:(me:)
There was no convolution at all. Not all Enron employees are stockholders. Those who had no Enron stock in their 401k's haven't lost their retirement. No one was talking about such people. You were talking about Enron employees who held Enron stock in their 401k's. Your distinction between "stockholders" and "employees" is empty air because the only employees you, Dusty, JAH were talking about were the ones who fit both categories, employee and stockholder
1136. judithathome - 2/7/2002 3:30:27 PM
Skilling is answering questions at the hearings right now....
1137. judithathome - 2/7/2002 3:33:59 PM
Jones, that's who I thought she meant when we were first discussing it but I'm sure she recalls it differently.
1138. Jonesatlaw - 2/7/2002 3:37:58 PM
Now we look to the previous position-
CalGal
Message # 972 is the post you quoted from. What is the sentence immediately after the sentence you quote? Here's the whole paragraph:
It highlights again that Enron employees had only themselves to blame. This doesn't mean they don't have the rights of any stockholder, but that's as far as it goes.
If you read the entire post, you'll see that I was discussing a strategy used by Schwab employees to protect their retirement overexposure. The "it" was the example, demonstrating that the Enron employees had remedies for even that portion of their overexposure that they couldn't directly control.
Now, let's look at what your restatement is:
The conversation started with your assertion that the folks who got creamed by Enron deserved it for being foolish enough to put their money in a single stock or concentrating it excessively in their company's stock. (emphasis mine)
So your first reference to my post, in which I only mention Enron employees (which were not all stockholders) is, on its face, proof that you didn't bother to read what I said.
So CalGal is/isn't discussing non-stockholing employees, who did/didn't lose retirement, but she's sure its their own damn fault.
1139. judithathome - 2/7/2002 3:41:59 PM
1140. CalGal - 2/7/2002 3:43:04 PM
Jones,
You seem to think your last two posts made sense?
Can you track this? We were discussing the sympathy for the employees who lost all their retirement because it was in Enron stock.
Answer these questions:
1. Do you agree that there are Enron employees who had their retirement 100% in Enron stock?
2. Do you agree that there is an enormous amount of sympathy for this specific group of people?
3. Do you agree that Enron employees who had 100% in stock have a problem that is separate and distinct from any Enron stockholder?
Yes or no, please.
1141. judithathome - 2/7/2002 3:45:03 PM
Is anyone watching the hearings?
1142. PelleNilsson - 2/7/2002 3:49:23 PM
As a rule I don't find Art Buchwald very funny, but his latest is not bad.
1143. judithathome - 2/7/2002 3:54:35 PM
Skilling just gave an answer that rivals Gore's iced tea excuse...the power was out and the room was dark so he can't recall what he heard!
1144. rubberducky - 2/7/2002 3:55:34 PM
or follow this link to avoid the error message
(Pelle, you left a double quote on the end of your link)
1145. rubberducky - 2/7/2002 3:56:19 PM
maybe his memory is just murky, J@H ...
1146. judithathome - 2/7/2002 3:57:17 PM
Too much tea, I guess.
1147. CalGal - 2/7/2002 3:59:31 PM
Judith--I am watching them. Skilling's pretty brave. Don't know if I believe him or not, but that takes some balls.
1148. judithathome - 2/7/2002 4:01:41 PM
Yeah, he's great...he's not letting them rattle him at all. It's fascinating. I'm watching and hating him but admiring how he's doing it.
1149. PelleNilsson - 2/7/2002 4:02:56 PM
ducky
Sorry.
1150. CalGal - 2/7/2002 4:05:09 PM
He's good enough that it makes me wonder if maybe he wasn't as involved as has been portrayed. Don't know for sure, but to my mind, he's not hurting his cause.
1151. OhioSTOPAS - 2/7/2002 4:13:26 PM
Judith! YOU peddling one of the phony "Gore scandals" from the election? Say it ain't so!
1152. judithathome - 2/7/2002 4:15:04 PM
Ohio:
I was only making the comparison before Concerned or Joezan did...to remove the sting!;-)
1153. OhioSTOPAS - 2/7/2002 4:25:04 PM
I was afraid you'd gone over to the dark side.
1154. judithathome - 2/7/2002 4:31:40 PM
No worries there, believe me.
1155. Toenails - 2/7/2002 5:19:55 PM
Gee, in my experience, both sides are the dark side.
1156. judithathome - 2/7/2002 5:24:33 PM
You're right....it's better to be apolitical.
1157. concerned - 2/7/2002 6:02:38 PM
JAH -
You still have much kowtowing to do to the icon of PC-groupthink before you are forgiven for your (surely inadvertent)blasphemy.
1158. judithathome - 2/7/2002 6:04:05 PM
I'm shaking in my boots!
1159. Jonesatlaw - 2/7/2002 6:15:48 PM
Cal
Jones,
You seem to think your last two posts made sense?
No, they didn't. That was the point Cal. At various points you claimed that you were referring
to "employees" including those with stock and those without; employees that had stock only; and stockholders. I won't wait for the next variation on the theme, as the theme itself has lost its charm.
Now you can have the last word and tell us what you really meant, if it changed and when, or didn't. Then I'll leave the rest up to you and anyone who cares to read back through it.
1160. robertjayb - 2/7/2002 7:08:43 PM
Vote for the Ken Lay role in Enron movie...
LOS ANGELES -- A movie about the unfolding Enron scandal is in development for FX, the cable channel announced today.
FX has joined with Artisan Television on the project promising an "inside look" at the energy corporation that is the focus of congressional hearings.
1161. judithathome - 2/7/2002 7:38:16 PM
Joe Isuzu should play Ken Lay.
1162. robertjayb - 2/7/2002 7:44:09 PM
I remember this movie...it was called The Sting.
LOS ANGELES -(Dow Jones)- Some current and former employees of Enron Energy Services, the retail energy unit of Enron Corp. (ENRNQ, news, msgs), say the company asked them to pose as busy electricity and natural gas sales representatives one day in 1998 so the Enron unit could impress Wall Street analysts visiting its Houston headquarters.
More than a dozen former and current Enron Energy Services staff who spoke to Dow Jones Newswires said Enron executives rushed about 75 employees, including secretaries and actual sales representatives, down to an empty trading floor on the sixth floor and told them to act as if they were trying to sell energy contracts to businesses over the phone.
"When we went down to the sixth floor, I remember we had to take the stairs so the analysts wouldn't see us," said Kim Garcia, who at the time was an administrative assistant for Enron Energy Services and was laid off last December. "We brought some of our personal stuff, like pictures, to make it look like the area was lived in. There were a bunch of trading desks on the sixth floor, but the desks were totally empty. Some of the computers didn't even work, so we worked off of our laptops. When the analysts arrived, we had to make believe we were on the phone buying and selling electricity and natural gas. The whole thing took like 10 minutes."
1163. judithathome - 2/7/2002 7:46:26 PM
Good lord....
1164. robertjayb - 2/7/2002 7:52:33 PM
As CalGal said, these guys got balls!
1165. jexster - 2/7/2002 8:13:01 PM
As CalGal said, these guys got balls!
1166. jexster - 2/7/2002 8:15:44 PM
Teller is the logical choice but GENE HACKMAN?!?!??
Maybe the GH of The Tannenbaums..
1167. jexster - 2/7/2002 8:41:25 PM
"AUSTIN, Feb. 6 -- After President Bush last year decided not to reappoint Curtis Herbert Jr. as chairman of the Federal Energy Regulatory Commission (FERC), he gave the job to Texas lawyer Patrick H. Wood III, a strong advocate of energy deregulation who had the backing of Enron Corp. and the company's then-chairman, Kenneth L. Lay.
It turns out that Wood is a longtime favorite of Lay."
King Krony Kapitalist - What a Surpise!
1168. judithathome - 2/7/2002 11:16:34 PM
So they found a sleeping pill in Baxters stomach...hmmmmm.
1169. Jonesatlaw - 2/7/2002 11:37:40 PM
Cal- Yes,No,No.
1170. TheWizardOfWhimsy - 2/8/2002 12:36:52 PM
1171. Cellar Door - 2/8/2002 3:27:03 PM
1172. robertjayb - 2/8/2002 4:32:19 PM
a bit from the Molly column:
George W. Bush sides with the malefactors of great wealth not because he is a tool of the rich or because Enron bought him with campaign contributions -- that's who he is, that's what he really believes, that's his life experience.
1173. thoughtful - 2/8/2002 4:35:10 PM
I guess if your choice is between looking like an idiot or a criminal, it's better to opt for being an idiot. But somehow, when Harry Helmsley and Ronald Reagan pulled that "I can't remember" it was a tad more believable than Skilling's version. I think it would've sold better if he had another 40 years on him.
I wonder how it would've played if Clinton pulled that. Did you have relations with that woman? ....I can't remember...it was dark....I didn't know what was going on ... a lot of people were coming and going....the lights went out....I just don't know.
Or how 'bout...it was dark...I thought it was Hillary!
1174. concerned - 2/8/2002 4:38:33 PM
I wonder how it would've played if Clinton pulled that.
We know how it played when forgetfulness was affected hundreds of times by x42 and his wife and his administration officials, as a matter of fact.
Just one example:
Nobody 'knows' to this day who hired Craig Livinstone. Right.
1175. OhioSTOPAS - 2/8/2002 5:06:22 PM
"Nobody 'knows' to this day who hired Craig Livinstone"
It's a good thing, then, that nobody cares.
1176. jexster - 2/8/2002 9:47:54 PM
I know who hired Craig Livingstone, but I ain't tellin.
1177. jexster - 2/8/2002 9:49:37 PM
Heard on Letterman
"Did you hear that Congress can't find Ken Lay?
Maybe they oughta check in Dick Cheney's pocket"
1178. jexster - 2/8/2002 9:51:06 PM
If Rosie 'O Jesus ever sachets in here agin....
ENRON - The Thread so fine they made a movie about it
1179. Al D - 2/8/2002 11:44:42 PM
I think it's disgusting that any American citizen would excercise his constitutional right and take the 5th. Who does he think he is? Why that's just as bad as excercising one's right of free speach or other so called rights. It just ain't real American, that's all I say.
1180. joezan - 2/8/2002 11:50:10 PM
Exactly - if it was good enough for the pinkos of the '50s, it's good enough for the capitalists of the New Millennium.
1181. ronski - 2/9/2002 12:16:33 AM
You guys have the emphasis all wrong. The Inquisitors, excuse me, I mean Congresspersons, are only interested in ferreting out the truth to ensure that influence on Capitol Hill continues to be based solely on merit and never on financial contributions or quid-pro-quo politics, and that is why taking the Fifth is such a scurrilous assault on decency.
1182. ronski - 2/9/2002 12:42:36 AM
ENRON and Capitalism
(If jexster reads this post very slowly, he may finally come to understand why Ken Lay's vision of capitalism and laissez-faire capitalism are not the same thing.)
1183. Al D - 2/9/2002 1:12:21 AM
jexter doesn't do anything slowly!
1184. TheWizardOfWhimsy - 2/9/2002 1:12:58 AM
Oh Ronski that argument is ridiculous.
"Quis Custodiet ipsos custodes?" [Who will Guard The Guards?]
Rockwell is saying forget about any guards.
Look, it's about a rigged game for government as well as capitalism.
Whether it's stuffing the Supreme Court with ideologues or flexible accountants who decide new ways to look at money, the state of our national affairs is very much out of balance. And because the scales tip more now in corporate directions, this fool is advocating a more vicious jungle economics that would do away with the scales entirely.
The pyramid scheme continues and the deluded fools who put their faith in god & money will always lay down for the profiteers who exploit them.
1185. Al D - 2/9/2002 1:23:12 AM
What the Wiz is saying is down with Capitalism and up with Communism, but he will tell you not so for he is a Vet and he flys the flag. But be careful about what flag the Wiz is flying.
1186. TheWizardOfWhimsy - 2/9/2002 1:34:42 AM
::glug::
::glug::
::glug::
::glug::
::glug::
::glug::
1187. Al D - 2/9/2002 1:53:19 AM
I'll let others decide who has the better of this little encounter, the commie or the conservetive. What pleases me is that he doesn't deny his affiliations.
1188. jexster - 2/9/2002 11:09:28 AM
As co-moderator, I declare Al D, Al De Dupe of Krony Kapital the winner
1189. jexster - 2/9/2002 11:10:58 AM
The Pentagon's chief lawyer sent a memo Tuesday instructing all Defense Department employees to preserve any documents, correspondence or e-mail related to Enron Corp., drawing the massive agency into the high-profile probe. 1190. jexster - 2/9/2002 11:11:59 AM
Defense Department Included In Effort to Save Enron Data
O what a web we weave...
1191. jexster - 2/9/2002 11:25:53 AM
King Krony Kapital's Man in the Pentagon
What Kenny Boi wants...
The administration's highest-ranking former Enron employee is Army Secretary Thomas E. White, installed last May. At least two other former Enron employees joined the Army secretariat last year.
White, an Enron executive for 11 years, was vice chairman of Enron Energy Services, which provided energy management services. That unit has been under increased scrutiny for allegedly racking up hundreds of millions of dollars in trading losses and essentially hiding them in another Enron division. Geoffrey Prosch, a former Enron Energy Services director, is now the Army's principal deputy assistant secretary for installations and environment. Dominic Izzo, who worked in international engineering at Enron, is principal deputy assistant secretary of the Army.
White, as Army secretary, has been an advocate for privatization of military utilities. Energy Services, before Enron declared bankruptcy last December, had aggressively sought military contracts to manage utilities at bases.
1192. jexster - 2/9/2002 12:40:47 PM
'Who cares if there were a hundred meetings?' sniffed Mary Matalin, chief spokesperson VP Dick Cheney. In one phrase, she summed up the White House arrogance: It's a financial scandal, not a political one. It has nothing to do with the Bush administration. It doesn't matter how much money Enron gave George W. Bush, how many former Enron officials work in the White House, or how many secret meetings Cheney held with Enron executives in putting together his energy plan. Because there's no proof that Enron ever got anything for its money or access. Wrong. Maybe there was no proof before, but there is now; a secret memo -- personally handed to Cheney by Ken Lay, which helps explain why the White House is so skittish about Enron and why Cheney aand Bush stubbornly refuse to release the records of those energy task force meetings... Up until the very end, when it was too late to help, everything Enron asked for from the Bush White House, Enron got."
Panic Attacks Continue
1193. CalGal - 2/9/2002 12:52:37 PM
it was a tad more believable than Skilling's version.
Really? I thought Skilling was great. Michael Duffy caught my sentiments exactly on Washington Week, if you saw it--if not, I'll hook in the transcript whenever it's available.
He mentioned that Ken Lay is thinking of testifying, and he can't figure out if Lay is testifying to set the record straight vis a vis Skilling, or if he's thinking "Wow, Jeff made it look pretty easy. I can do that, too!"
1194. CalGal - 2/9/2002 1:14:41 PM
Jones,
Yes,No,No.
1. So you know that there were Enron employees that had 100% of their retirement fund invested in Enron stock. Check.
2. You disagree that any special sympathy has been shown them.
I fear you haven't been paying attention. Did you perhaps miss the hearings, where some of them were asked to testify about their losses? Did you see any non-Enron employee stockholders there? What about Jesse Jackson and Al Sharpton rushing down to demand justice for the people who lost their retirement money? What about the various congressmen who donated their Enron contributions to a special fund set up specifically for Enron employees who lost their retirement fund?
Of course there has been special attention paid to the employees' losses, Jones. That's why we were discussing them separately.
3. You disagree that their problem of a disappearing retirement fund is separate and distinct from being an Enron stockholder.
Ah, well, that's the problem. These are separate groups, and the discussion was about the first group--employees with 100% stock invested in Enron.
If you can't make that distinction, then argue about that. But your assertion that I feel all stockholders are to blame for their decision in Enron is completely inaccurate, and I expect you to stop caterwauling about it now and forever. You may, if you feel it necessary, begin to bleat about my lack of sympathy for greedy Enron employees. But further misrepresentations about my position need to stop.
1195. Cellar Door - 2/9/2002 1:31:01 PM
If Jesse Jackson and Al Sharpton said Word One about any of this you'd be all over them like a cheap suit.
Or an Ann Coulter dildo.
1196. judithathome - 2/9/2002 1:37:40 PM
They did say word one and more...they both came to Houston and were on the news several times spouting about it.
1197. robertjayb - 2/9/2002 1:45:06 PM
Howling-mad Hollings wants special counsel
WASHINGTON---"This week, when Kenneth Lay, former Enron chairman and George W. Bush's largest campaign contributor, failed to show up to testify before Congress, I became convinced that it is time to appoint a special counsel to investigate Enron. We need to name a special counsel, rather than relying on the Justice Department, because conflicts of interest abound in this case, particularly at the Justice Department. Federal law allows the attorney general to appoint such a counsel when the Justice Department's involvement would present a conflict of interest.
"Attorney General John Ashcroft recused himself from the Enron case because he had taken $57,000 from Enron in his failed bid for the Senate in 2000. His chief of staff also recused himself, since he was Mr. Ashcroft's 2000 campaign manager. That leaves Larry Thompson, deputy attorney general, to oversee the case — or to appoint a special counsel.
"While Mr. Thompson is a capable attorney, his former law firm has represented both Enron and Arthur Andersen, giving a taint of a conflict of interest. Moreover, Mr. Thompson may already be the busiest man in Washington because he is overseeing the Justice Department's counterterrorism activities.
"A special counsel can also be appointed if there are "extraordinary circumstances" that would cause the appointment to be in the public's interest. What could be more extraordinary than the largest bankruptcy in American history? When was the last time a corporate collapse had Wall Street so jittery, with investors questioning the accounting practices of every company and so many ripples spreading out through the economy?"
1198. Cellar Door - 2/9/2002 2:00:13 PM
They did judith? Then surely they should be shot by firing squad at sunrise. Right CG?
1199. judithathome - 2/9/2002 2:21:38 PM
Cellar, they didn't come as a team or anything...Sharpton came first and I felt he was using it for publicity purposes. Jackson came later and I'm not sure what he was doing; seems like he held a panel discussion with the ex-employees or something.
1200. CalGal - 2/9/2002 2:46:22 PM
Then surely they should be shot by firing squad at sunrise. Right CG?
No. But you should really track events before you start your righteous act, don't you think? And thanks for pointing it out, Judith.
Actually, I think it is extremely savvy of Sharpton and Jackson to identify with the Enron employees, even if I personally don't think they deserve any bailing out.
1201. Cellar Door - 2/9/2002 2:56:31 PM
And a lowered thumb is spotted in the grandstand once again.
1202. jexster - 2/9/2002 3:43:23 PM
Explainer: Who's Drilling Enron on the Hill?
1203. jexster - 2/9/2002 3:46:33 PM
Nowhere on the list will you find Dan "WatermelonHead" Burton's House Gov Ops Committee.
And the asswipe was soooooooooooo interested in FosterGate, Whitewater, Pardongate, Wen Ho LeeGate, Buddha Gate, JackOff Gate etc.
1204. jexster - 2/9/2002 3:52:06 PM
More Panic on PA Ave....White Palace caught in yet another lie
"[T]he two-minute phone call with Mr. Lay was solely about the legislative prospects, not the content, of an economic stimulus bill. Contrary to Rep. Waxman and Terry McAuliffe, no lobbying occurred. In fact, the provision to make the corporate alternative minimum tax relief retroactive had not even surfaced then, and neither I nor anyone else to my knowledge had even heard of the idea."
--White House Budget Director Mitch Daniels, describing an October 11 phone call in a letter to The Washington Post, February 1
"A $100 billion economic stimulus plan ... won approval Friday [October 12] by a Republicandominated House committee.... [Included in the package is repeal of the corporate alternative minimum tax, retroactive to Jan. 1 of this year."
--Associated Press, October 12, 2001 (Thanks to Spinsanity.com.)
1205. Cellar Door - 2/9/2002 4:10:29 PM
Let's see: we've got half a dozen former Enron execs on the Bush cabinet; Lay was on the Bush transition team; Lay vetted all appointments to the FERC; Cheney acted as a debt collector for Enron in India; as far back as '88 Bush was acting as a shill for Enron; Enron execs were in charge of the Florida state teacher's pension plan that dumped $335 million into its worthless, plunging stock...but no, it's not a Bush scandal at all.
It's a CLINTON scandal!
1206. jexster - 2/9/2002 6:05:02 PM
Yea that Evildoer Clinton...did you know he was the REAL power in Texas?
AUSTIN – As financial contributors to Texas politicians over the past decade, Houston-based Enron Corp. and its executives were major players, spreading hundreds of thousands of dollars among top state officials, judges and members of Texas's congressional delegation
Those Arkys are a tricky bunch!
Eroned Deep in the Heart of Texas - A Clinton Conspiracy Run from Arkadelphia & Bugtussle
1207. dusty - 2/9/2002 6:39:17 PM
Cellar Door
Of course it should all be laid at Bush's doorstep and not at Clinton's. Everyone knows that Enron was fairly valued during the Clinton administration, and only collapsed when the Bush administration delivered favors to the company (Some favors, huh?)
The help by Clinton for the plant in India is hardly worth mentioning.
The Powers report detailing all the blunders back in the 90's is obviously a Bush cover-up, attempting to portray this mess as starting more than a year ago.
Andersen is in on it. Sure, one the largest accounting firms may get wiped out, but I am sure the partners are willing to lose their seven figure stakes in the firm to pretend that they screwed up before Bush came into office.
You're becoming a caricature of yourself, which is an incredible accomplishment.
1208. Cellar Door - 2/9/2002 7:46:42 PM
Looking in the mirror while posting dear?
1209. CalGal - 2/9/2002 7:57:50 PM
Dusty (and anyone else),
Plan to Put Limits on 401(k) Holdings Draws Fire
There seems to be a lot of opposition to the plan to limit or restrict entirely the amount of company stock that employees can invest in, but I think it is a good idea. Corzine makes the argument well:
Senator Jon S. Corzine, Democrat of New Jersey, an outspoken advocate of caps, said that because the federal government was spending more than $70 billion a year to subsidize 401(k) plans, it should make sure that participants use the most basic of investment principles, diversification.
The subsidies take the form of tax breaks to 401(k) participants and to the companies that contribute both stock and cash to it.
"I believe subsidizing savings to promote retirement security is a good thing," Mr. Corzine said. "But subsidizing risky investments is not. If people want to risk all their investment dollars by placing all their investment in their employer, fine. But they should do it on their own dime, not the taxpayers.' "
It's true. 401(k)s are an employee gimmee. Why should the government fund their lousy investments?
In fact, I think it's arguable that the government should have more oversight of investment in 401(k). Alternately, they can stop subsidizing it.
1210. jexster - 2/9/2002 8:43:48 PM
Davis Enrons Riordan in Latest Attack Ad
When California was suffering at the hands of Texas Evildoers, Riordan was in a position to help. Instead, he chose to gouge Californians charging more than even ENRON!
Say Goodnight Dick
1211. jexster - 2/9/2002 10:43:12 PM
WASHINGTON (Reuters) - Enron Corp.'s close ties with the Bush administration have prompted a call for Federal Energy Regulatory Commission (news - web sites) Chairman Pat Wood to resign because of the alleged influence the failed energy trading company had over his appointment.
1212. jexster - 2/9/2002 10:44:46 PM
Riordan's Riposte to Davis Attack ad on his pro-life history ->
1. I hate abortion but its a matter of choice
and this is what makes it relevant to this Thread
2. Davis took more money from Enron than anyother US politician
1213. jexster - 2/9/2002 10:45:50 PM
And where are those 2 half-wits Cyg and Rosie O Jesus now with their "manufactured scandal" shit?
1214. jexster - 2/9/2002 10:47:12 PM
The Enron Scandal has achieved more traction and killing power in 8 weeks than Paula Jones - Ken Starr - Dan Burton could create in 8 fuckin years
1215. dusty - 2/9/2002 11:06:17 PM
Re Message # 1209
I don't think I'd surprise anyone by saying I'm not thrilled about the idea of the government making rules regarding permissible investments.
Having said that, some of the same issues arise in the context of SS privatization. That doesn't seem to be going anywhere at the moment, but if it does, the issue of what employees should be allowed to do will arise. I had given some thought to setting some guidelines with broad ranges in them. I wouldn't eliminate the option of choosing different allocations, but I would put limits on deductibility, or guarantees, or some other "soft" restrictions on making stupid decisions.
I would be tempted to do something along the same idea. OTTOMH, what if we allowed employees to put the money in anything they want, but employer match would only be allowed on non-company stock selections, or eliminate the company deduction on dividends paid on employee selected company stock, or some other combination of incentives?
As an aside, the Corzine/Boxer proposal to limit the amount of money in one company stock to 20% misses an important point. The maximum in any one stock should probably never get much more than 10%, so 20% may be a reasonable cap, but the employee's company is a special case. The limit should be smaller. If P&G employees want to put a lot of money in, say, K-Mart, they should be limited to some amount like 20%. But the amount they put in P&G should be closer to zero (absent financial incentives).
I'm working (slowly) on a way to quantify the special consideration of one's employer.
1216. CalGal - 2/10/2002 10:42:52 AM
Dusty,
I have no problem with keeping the government out of the 401k plans, but then it should be out of 401(k) plans. No subsidization, either. (Remember, you're talking to someone who is only allowed to deduct 2K in the years she doesn't have a lot of 1099 income.)
But the amount they put in P&G should be closer to zero (absent financial incentives).
I agree--I think the article mentions that at the end.
what if we allowed employees to put the money in anything they want, but employer match would only be allowed on non-company stock selections
Not only employer match, but tax exemption.
1217. jexster - 2/10/2002 11:20:22 AM
They called it "the matrix" -- a computer program that brought a scientific dimension to Enron's effort to seduce politicians and sway bureaucrats.
Bu$h Selection Busted Algorithm
1218. jexster - 2/10/2002 11:57:57 AM
Bush Is Quiet in Campaign Bill Fight
With Eye on Enron, White House Avoids Active Opposition
Face The Nation - Billy Tauzin criticizes Cheney for not turning over Kenny Boi material
1219. jexster - 2/10/2002 11:59:35 AM
administration officials indicated that, while their strategy could change, any intervention would be tempered by concerns that overt opposition to campaign finance reform would focus more attention on its ties to the disgraced Enron Corp., a major political donor.
1220. jexster - 2/10/2002 12:37:46 PM
[L]et the reforms begin.
For more than 20 years, the federal government has given companies fairly free rein, allowing them to operate with less and less regulation. Enron (news/quote )'s collapse may well halt that trend. As Congressional hearings unfolded last week, with some witnesses invoking the Fifth Amendment and others providing new details of chicanery, policy makers were lining up to fix American business. Suddenly, there may be a political price to pay for not acting, and the race to regulate is on.
Enron Ignites Race to Regulate
Poor Ronski.
1221. jexster - 2/10/2002 12:38:41 PM
Not bad for a "manufactured" scandal eh Rosie O Dingbat?
1222. jexster - 2/10/2002 12:40:07 PM
"There is something very broad-based going on, and it's not anything that passing a couple of laws is going to change," said William T. Allen, the director of the Center for Law and Business at New York University. "Enron is a profound shock to the system because the fundamental causes are pervasive in the economy."
1223. dusty - 2/10/2002 3:25:38 PM
CalGal
I have no problem with keeping the government out of the 401k plans, but then it should be out of 401(k) plans. No subsidization, either.
Terminology, but I bristle when a decision by the government not to take some money is call "subsidization". It may be mathematically accurate, but the implication is that all your money belongs to the government, except that which they let you keep. I don't like that approach.
If you want to talk about whether the government ought to defer taxes on money saved for retirement, we can.
(Remember, you're talking to someone who is only allowed to deduct 2K in the years she doesn't have a lot of 1099 income.)
You can put $3,000 into an IRA. You can out 25% of compensation into a Keogh (up to 30K).
I agree--I think the article mentions that at the end.
I reread it and don't see it. There is a reference to the existing 10% limit on db plans, which is in the same spirit, but too high.
Not only employer match, but tax exemption.
What tax exemption are you talking about?
1224. jexster - 2/10/2002 5:12:42 PM
"Only the president has the right to executive privilege, not the vice president. It's never gone that far. It's really a uniquely presidential privilege, and the president himself must invoke it, and there has be no invocation of executive privilege here. What they've said is, we challenge GAO's authority to even ask for this information. That's different than executive privilege. What this appears, Paula, to me to be is the first step of a cover-up. This is the way you start it. You stall, you stall, you stall. You try to get something like this to go on until it is no longer an issue, until something intervenes and replaces it, or the issue becomes moot for some other reason. That's the early signal here... Certainly the way we did during Watergate was to try to stall everything, and this is a stalling action."
John Dean
1225. jexster - 2/10/2002 5:24:13 PM
Arteriosclerosis on the Presiduncy concerned?
1226. jexster - 2/10/2002 5:25:53 PM
"Gov. Jeb Bush spent up to a half-hour on the phone last April with Kenneth Lay, the former chairman of Enron Corp., the now-bankrupt Houston-based energy conglomerate that had an interest in breaking open Florida's energy market to outside companies. The disclosure that Bush talked to Lay was revealed in public records made available to several news organizations Wednesday. Bush said late last month he did not 'recall' meeting or talking with anyone from Enron during his tenure as governor, although he said he had met with representatives of an Enron subsidiary. Lay, who this week refused to voluntarily testify to Congress about the demise of his corporation, and Enron were one of the largest donors in the 2000 election to President George W. Bush, the older brother of Florida's governor. Several Enron officials -- including Lay -- also donated money to Jeb Bush's 1998 campaign for governor."
Sarasota Herald-Tribune
1227. dusty - 2/10/2002 5:42:54 PM
jexster
Thanks for the link.
I realize you didn't write this tripe, but perhaps you have some facts or opinions.
For more than 20 years, the federal government has given companies fairly free rein, allowing them to operate with less and less regulation.
Really? What are the examples of regulations that have been repealed over the last couple decades? I'll bet that there are far more new regulations than repealed regulations.
Politicians recognize that the estimated $1.2 billion in retirement money lost by Enron employees has frightened many of the 42 million Americans with 401(k) plans, and are competing to propose measures to protect the nearly $2 trillion in those plans.
This should frighten some Americans. Especially those that made stupid decisions. Like every single penny contributed by Enron employees that was lost.
President Bush's proposal would let employees sell stock that companies contributed to 401(k) accounts after workers hold it for three years. That responds to complaints that Enron barred workers from selling such stock until they turned 50.
I can't get excited about this one way or the other. I'd probably propose 5 years, if it was up to me. And while the author is undoubtedly correct that there were complaints, those complaints are over-blown. At least 89% of the Enron stock in those plans was unrestricted, even if one assume that not a single employee was over 50. The proportion is higher, but I don't know the proportion of stock held by people over 50.
.
1228. dusty - 2/10/2002 5:43:17 PM
continued
Many companies have filled retirement accounts with their own stock, to receive a tax break, to increase employee loyalty, and to keep shares in friendly hands.
"Filled" is misleading, as the company provides only the matching amount. The "filling" mainly comes from greedy and/or ignorant employees.
Many Enron employees were outraged that top executives were selling Enron shares for several weeks last fall when lower-level workers were prohibited from selling stock in 401(k) plans while the company hired a new plan administrator.
Yes, they were outraged, but a good reporter would point out the error of that outrage. Top executives couldn't sell stock in 401K plans any more than lower paid people. To be sure, the executives had other stock, not in 401(k) plan, that they could sell. Duh.
The freeze on selling is a normal event, whenever plan administrators are changed. It was announced in advance, and only a small portion of the decrease in stock value occurred in this period.
In another proposal with broad support, the president would require companies to give employees quarterly account statements and advice on diversifying.
I already get continuously updated statements. If people are getting statement less often than quarterly, they should complain. One hardly needs federal legislation.
I won't comment on the advice aspect as I may have a vested interest.
The Bush administration says one way to reduce overconcentration would be to educate employees.
I agree.
The article goes on, but I cannot
1229. CalGal - 2/10/2002 7:29:51 PM
Terminology, but I bristle when a decision by the government not to take some money is call "subsidization".
Okay, call it "expenditures". Nonetheless, the government makes money by taxing people. When it decides not to tax people, it is foregoing income. While you might approve of them foregoing income, I think you'd have to agree that if they decide not to tax certain types of income for certain reasons, they also have the right to turn around and start taxing it again.
So if you don't like calling it subsidization, you can still accept the fact that the government can say, "Fine. You have to pay tax on all income put in the 401(k) if you don't invest it by standards we find acceptable" and you're still back at employees having to pay taxes on all their money.
You can put $3,000 into an IRA. You can out 25% of compensation into a Keogh (up to 30K).
$3000 (just recently) as opposed to what--up to 13% in a 401(k)? We're going to pretend that's equivalent? Keogh is 15%, I thought, unless you want to fix it for life. But no matter, since that only works if you can count all your income as self-employed, which I can't. The IRS quite often forces me to work temp W2. Now, there's no question that in my case I'm caught coming and going by the nasty government. But ignore me for a moment, and focus on the fact that lots of temp workers aren't self-employed and don't have the option at all--and can only put $3K in, and that's without employer matching (also tax free). So it's a severe skew towards employees--and whether the government subsidizes it or not, there is no question that taxpayers who don't qualify for 401(k)s are subsidizing it for those who do.
1230. CalGal - 2/10/2002 7:32:18 PM
I reread it and don't see it.
From the article: Alicia H. Munnell, an economics professor at Boston College, has proposed denying employees the option of buying company stock in 401(k) plans in which the companies' matching contribution is in employer stock. She said, "If employees want to make imprudent investments, they should have to do it outside of the subsidized pension system."
What tax exemption are you talking about?
The deduction of the 401(k)contributions from taxable income. In other words, the government could say "sure, buy stock in your 401(k) plan but you'll pay tax on the contribution funds".
1231. jexster - 2/10/2002 7:53:57 PM
The NyT article above is an excellent review of Enron regulatory fallout...
I found this incredible.
Even now, some analysts are still recommending Enron stock. On Friday, when its shares traded for 38 cents, Richard Gross of Lehman Brothers (news/quote) still had a "strong buy," the same rating he has had since January 2001, when the stock sold for $81.
Securities analysts have been remarkably wrong about stocks in recent years. Nearly every company is a buy or strong buy. How then to account for the Standard & Poor's 500-stock index dropping more than 28 percent since its March 2000 peak?
How indeed.
1232. robertjayb - 2/10/2002 9:06:57 PM
Kenny Boy---He aint talkin'
WASHINGTON (AP) - Former Enron chairman Kenneth Lay, scheduled to testify under subpoena before Congress on Tuesday, will assert his right against self-incrimination and refuse to answer questions, his spokeswoman said Sunday night.
1233. dusty - 2/11/2002 11:06:45 AM
CalGal
Okay, call it "expenditures".
Let's not. That's worse. A government chooses to delay taking some money, and calls it an expense? Yes, I am aware that people talk this way within the beltway, but I'd like to discourage that type of talk.
Nonetheless, the government makes money by taxing people.
The government doesn't make money it takes money. I make money. The government does provide services that I need, and I am willing to pay for them. It also provides services I don't need, and I have to pay for those, too.
When it decides not to tax people, it is foregoing income.
Yes.
While you might approve of them foregoing income,
On the contrary, I wish they would do more of it.
...I think you'd have to agree that if they decide not to tax certain types of income for certain reasons, they also have the right to turn around and start taxing it again.
It isn't a matter of right, it is a matter of power. The government has the power to tax just about anything.
So if you don't like calling it subsidization, you can still accept the fact that the government can say, "Fine. You have to pay tax on all income put in the 401(k) if you don't invest it by standards we find acceptable" and you're still back at employees having to pay taxes on all their money.
Accept it? I think I proposed it.
1234. dusty - 2/11/2002 11:06:58 AM
continued
$3000 (just recently) as opposed to what--up to 13% in a 401(k)? We're going to pretend that's equivalent?
You are comparing apples to oranges. Both the employed and the self-employed can take 3k for an IRA (although there are income limits; I can't justify doing it myself.)
The employed put money into a 401(k), if their employer provides one. The limit for most people is 11k. I get to put in 12k. The self-employed can put money into a Keogh. According to This site, the Keogh limit is 25% or 30K. Sounds like self-employed get a better deal than employed. (But I grant that temp employed may get a raw deal.)
1235. PelleNilsson - 2/11/2002 11:12:14 AM
dusty
Since you are around:
It was not until the other day I realized that your previous moniker is the title of a book by Milton Friedman. The bottomless ignorance!
1236. dusty - 2/11/2002 11:14:06 AM
CalGal
From the article: Alicia H. Munnell, an economics professor at Boston College, has proposed denying employees the option of buying company stock in 401(k) plans in which the companies' matching contribution is in employer stock. She said, "If employees want to make imprudent investments, they should have to do it outside of the subsidized pension system."
Good for her!!!
Sorry I missed it. I'd go further and make that rule even if the company match is not in company stock, but it is a start.
The deduction of the 401(k)contributions from taxable income. In other words, the government could say "sure, buy stock in your 401(k) plan but you'll pay tax on the contribution funds".
This isn't a tax exemption, it is a tax deferral. Big difference. 401(k) contributions are fully taxed when withdrawn. (For the anal; some withdrawals won't be fully taxed, but that occurs only if the contributions were already taxed.)
1237. dusty - 2/11/2002 11:15:32 AM
PelleNilsson
Exactly!
Still a good book, even if it is a bit over the top. Did you read it, or just run across it?
1238. jayackroyd - 2/11/2002 11:20:54 AM
It's 15%, including individual contribution and any company match.
The counter argument to caps on percent holding that I find compelling is that as the value of the holding rises, you'd be forced to sell out. Mind you, that would have been a good thing for the Enron folks, but 1) not always a good thing and 2) not generally a good thing for the company, with a built in short interest in the stock.
Requirements to hold until age 50 should go, imo.
1239. dusty - 2/11/2002 11:24:41 AM
jayackroyd
The counter argument to caps on percent holding that I find compelling is that as the value of the holding rises, you'd be forced to sell out.
I thought about this a bit. While I think an argument can be made that this is likely to be a good thing (someone religiously following a n asset allocation percentage will find themselves buying low and selling high, generally a good idea), I would be open to expressing the rule in terms of contributions.
1240. jayackroyd - 2/11/2002 11:32:17 AM
As I've read the more recent Enron and Global Crossing articles, it occurs to me that it is entirely possible that no crimes were committed here.
For example, Ken Lay sold his shares by repeatedly repaying a 7.5 million dollar credit line with shares. This had the advantage of keeping him off the quarterly inside sellers report. The transactions did not have to be reported until 45 days after the end of the fiscal year--Feb 14. These trades are not insider trades--insider trading is defined as making a sale to buyer where you have material information the buyer does not. Certainly the company as an entity was privy to all information Lay was.
The off books trading entities seem to have been created with proper legal review and with auditor oversight. It's entirely possible that everything that was done was legal, if not honest.
If so, this is quite a political scandal--that regulatory and oversight systems have been set up to allow the looting on the scale of Enron and Global Crossing.
There's a reason these Congressmen are shouting about crimes. If these guys committed crimes, then they can claim it's not their fault--that they had laws in place, and the scalliwags violated them.
OTOH, if this kind of behavior is legal, then the folks at fault are in the legislature and the executive branch.
1241. CalGal - 2/11/2002 11:38:41 AM
Dusty,
Libertarian dogma aside, the point is that the government treats the income differently. Thus the grounds for bitching about government interference are non-existent.
Both the employed and the self-employed can take 3k for an IRA
This is either inaccurate or incomplete. You can only take an IRA deduction for $3K if you aren't covered by a 401(k) at work. If you are covered by a 401(k) it is something like 15%, as Jay mentions. If not, it is only $3K. You cannot pretend these are equivalent amounts. Thus employees for a 401(k) employer have a significantly better deal, which is what I was pointing out.
As for the Keogh plans, 15% is what most people use, since otherwise you are locked into an amount. It is up to $30K, but as I said, the problem is that in my case I can't decide when I am employed or self-employed. So I can only put in up to 15% of whatever income I count as self-employed.
Someone who is self-employed, doesn't have the IRS determined to force them into employment, and has some other income stream (a working spouse) can take advantage of the 30K or 25%. But taken as a combination of percentage and flexibility, there is no contest: the 401(k) gives significant advantages and the only thing you need to do is hire onto a company that offers it. Not exactly a shining example of careful government planning, but then no employee bennies are. The favoritism is extreme.
I forget how we went down this path, but I think it links back to "if you want complete freedom, you'll have to pay taxes on the money" and the fact that the 401(k) is just a bennies scam anyway.
401(k) contributions are fully taxed when withdrawn.
Are you sure the contributions are taxed, or just the gains? If the contributions, fine--but the point I was making still holds. The more income you can defer taxation on, the greater the savings.
1242. TheWizardOfWhimsy - 2/11/2002 11:43:51 AM
The post-Enron title for Friedman's book should be Free To Choose, Free To Be Abused
1243. jayackroyd - 2/11/2002 11:47:35 AM
401K contributions and returns are fully taxed on withdrawal, just like an IRA or any other tax-deferred instrument.
1244. CalGal - 2/11/2002 11:49:14 AM
I knew that 401(k) were the same as IRA on that point; I just thought that only returns were taxed on all of them.
1245. dusty - 2/11/2002 11:55:45 AM
jayackroyd
I haven't tried to follow the Global Crossing issues.
I agree that the counter to the insider trading argument is clever.
But I'm not convinced that the Enron off the books entities will survive review. Yes, AA appears to have signed off on them, but it may be that they based their signoff on 'facts" that turned out to be lies.
As I understand it (and I confess my understanding is limited), the outside entities can escape consolidation if they are truly external entities. I think the issue centers on control. There must be at least 3% outside equity, as well as effective control by outsiders. But one of them (CHEWCO?) was managed by an Enron employee. How is this outside control. Some of the equity came from an Enron employee. How is this outside equity. One of them set up a limited partnership (Little River IIRC) to provide outside control, but the only employee of that partnership was the domestic partner of an Enron employee. Outside control? I don't think so.
If all of this was revealed to AA, then they should fry. If it was concealed from AA, then the Enron people involved should fry, but AA should still be subject to a slow boil.
1246. jayackroyd - 2/11/2002 11:56:39 AM
The libertarian argument here is that in the absence of the SEC, a private SEC would have emerged. Companies who had their earnings certified by an independent agency would be better able to raise money in the equity and debt markets, just as people who sell electrical products are more profitable when they get the UL certification.
The trouble with this argument is that the agency didn't arise when it had the opportunity to do so. Instead bucket shops and swindlers undermined the legitimacy of all investments for decades after the 1929 crash. Government regulation and oversight was established to insure that companies were accurately reporting earnings, and regulating publicly held companies.
An interesting sidebar is that becoming a public company is not a matter of choice. Microsoft was required by the SEC to go public when they hit a certain employee population level. Since MS was compensating people with shares, the company eventually had hundreds of share holders. In the SEC view, once you get to certain number of shareholders, you ARE a public company, and subject to oversight.
1247. CalGal - 2/11/2002 11:59:05 AM
That's true about Microsoft; employees were actually selling their shares privately, and the SEC wanted it to stop.
1248. jayackroyd - 2/11/2002 12:09:07 PM
"the outside entities can escape consolidation if they are truly external entities."
I agree it may turn on whether a principal of a company can also be a principal of an external entity. That doesn't seem illegal in principle. There's no reason why an employee couldn't open up a snowplowing business and sell services to his or her company. Likewise, if a principal wants to moonlight, and provide valuable services in addition to his or her employement, that seems okay. There are,in fact at Enron ethical issues of conflict of interest, but the board issued an ethical waiver.
This means that the deal was 'scrutinized' at all the appropriate levels, and found to be legal and not in violation of the spirit of the conflict of issues requirements.
The stock argument is stronger. If Enron stock was the external entities only real asset in practical terms, then I don't see how it can be defined as external. OTOH, as soon as the Enron stock became an entity's only actual asset, the balance sheet of the entity was recognized and writedowns taken. You can make the argument Andersen is making, that the broadband service assets turned out to overvalued. It was an error of business judgment, and as soon as that error became clear, the books were properly adjusted.
Mind you, this is clearly a scam. But it may have been a legal scam.
1249. jayackroyd - 2/11/2002 12:11:14 PM
Oh, and dusty, I still don't see any way that Lay wasn't pumping and dumping. But that's generally not treated as a crime. You generally just make a deal to give the money back.
1250. dusty - 2/11/2002 12:11:53 PM
CalGal
You can only take an IRA deduction for $3K if you aren't covered by a 401(k) at work.
Not true.
There are some income limitations on the deductions, and those limitations depend on whether you qualify for a 401(k). Anyone with 3 K in income can put up to 3K in an IRA. If you are eligible for a 401(k), and earn enough, you will get only a partial deduction or no deduction, depending on your income.
Rules here.
1251. jayackroyd - 2/11/2002 12:16:08 PM
dusty
"I thought about this a bit. While I think an argument can be made that this is likely to be a good thing (someone religiously following a n asset allocation percentage will find themselves buying low and selling high, generally a good idea), I would be open to expressing the rule in terms of contributions."
Yes, it is a good strategy, in my conservative view, to religiously follow an asset allocation percentage. But forcing people to be conservative may not be reasonable. I do take to heart Corzine's postion that if we can require pension funds to be conservative with pre-tax retirement dollars, is it unreasonable to treat individuals the same way? Might individuals need even more protection than professionals with retirement money being subsidized by forgoing general federal revenues? IOW, if you want to engage in risky behavior, then do so with post-tax dollars.
1252. CalGal - 2/11/2002 12:17:38 PM
you will get only a partial deduction or no deduction, depending on your income.
I thought we were talking about the deduction, Dusty. Remember, the segue was on the subject of unequal treatment.
However, to the extent that an employee with a 401(k) can get additional deductions, it's even more unequal.
1253. CalGal - 2/11/2002 12:19:22 PM
IOW, if you want to engage in risky behavior, then do so with post-tax dollars.
Yes, exactly.
1254. dusty - 2/11/2002 12:28:11 PM
jayackroyd
Oh, and dusty, I still don't see any way that Lay wasn't pumping and dumping. But that's generally not treated as a crime.
I'm reasonably sure I heard one of the talk show pundits claiming that there were people in jail for that. But I think people should take responsibility for their actions, so I don't get too interested in pumping and dumping issues.
I realize how some will react to this, but I've tried to learn from the lesson of James Taggart. James, you may recall, decide to invest in d'Anconia Copper, simply because Francisco d'Anconia was investing in d'Anconia Copper, and James knew that Francisco was smarter than he was. Francisco even tried to warn James that he shouldn't assume that Francisco was planning to make money on his investment, but James insisted. And lost everything. He tried to be parasitic, rather than do his own homework.
I've been tempted to invest in some company because, for example, Warren Buffet invests in it. But then I remember the lesson of JT, and make my decision based on my own review of the facts, not on the name of someone else.
Even if you think the book is trash, the lesson is apt.
1255. dusty - 2/11/2002 12:38:24 PM
CG
I'm confused about why you are bring up IRA's
I think we could talk about investment planning for three classes of people:
1256. PelleNilsson - 2/11/2002 12:42:44 PM
dusty
I just came across a reference to the book.
1257. CalGal - 2/11/2002 1:26:40 PM
So the IRA treatment is more favorable for those without 401(k), not less favorable.
The overall treatment by the IRS is more favorable for those covered by a 401(k), not less favorable. In other words, if you are an employee covered by a 401(k), you may also have the ability to deduct income in an IRA. That means the total untaxed income is always going to be more than the employee who is not covered by a 401(k).
The employee in a 401(k) plan would be ahead even if they weren't allowed any IRA deductions, when compared to employees who aren't covered by a 401(k).
Are you sure that a self-employed person can have a Keogh and an IRA? I know that tax software says one or the other, but tax software wasn't counting on people like me anyway, so I might just be freaking the software out.
Remember that many people have self-employment income on top of employed income, and you can deduct the maximum on each.
Class 2 is, as you say, screwed.
class 1 and 3 are roughly comparable, with slightly better treatment for the self-employed.
Self-employed people are only nominally ahead. But I agree that on paper they have a good deal. In reality, they can only take advantage of the deal if they make a lot of money, or have a working spouse. And--key plot point--they are allowed to be self-employed.
1258. CalGal - 2/11/2002 1:27:47 PM
You seem to feel differently. Am I misunderstanding?
I don't think so. We're in basic agreement on the fundamentals, and I've learned a lot about the small print, which is very useful. But I mentioned earlier the fact that there is a whole class of employees who aren't allowed to be self-employed--namely, temp workers. Low-end temp workers just want to be hired, high-end temp workers don't. But in both cases, they are functionally self-employed, in that they must find their own work. However the Justice department and the IRS combine to force us into being employed, rather than self-employed. This means that we can't take advantage of all the tax gimmees for self-employment, but are forced to use "employer" go-betweens that don't offer any of the gimmees of real employment.
So they are forced into class 2--and, given that they don't even have the nominal security of real employment, it's particularly a case of fucking you coming and going.
1259. CalGal - 2/11/2002 2:32:43 PM
Dusty--found this discussion of the president's recommendation for 401(k) "improvements", marginal as they were. It is good reading, but I couldn't resist pulling this piece out:
But the larger issue about how much risk we should have in these plans is one that really does need to be addressed. These are plans that are-- that use a lot of government subsidy in terms of the tax benefit they get and how much risk we have in these huge plans, which, as was mentioned, was $2 trillion, are in these plans. (emphasis mine, of course)
(g)
1260. Jonesatlaw - 2/11/2002 2:35:37 PM
Cal- part of the problem with the "employees" standard is that there is a rich history of employers attempting to avoid the duties owed employees by making them "independent contractors." Much of this was aimed at minimum wage, workers compensation, social security employer contributions and liability issues. Certain industries filled with independant contractors where perviously only employees existed. To push things back into shape on the above issues, the government adopted restrictive regulations on what constituted an "independent contractor" and on temporary workers.
The downsides appear in the tax issues you are talking about, and in bargaining flexibility for workers who are truly more like contractors than employees.
1261. CalGal - 2/11/2002 2:52:58 PM
Jones,
Please, spare me the drivel. The policies you praise are worthless, hurt far more people than they help, and are enforced by those people, generally on the left, who want all goodies to the masses coming through the Big Daddy Job untill they can convince everyone that they need to come from the Big Daddy Government. Every single rule has hurt far more temp employees than it's helped, and this would be self-evident to anyone who didn't believe in Santa Claus.
But as you've proved, there's lots of those sorts around. In any event, try to save your explanations for someone who'll actually swallow them, as opposed to someone who has been working temp or freelance for the better part of 20 years and actually knows what the asinine rules do.
And on top of everything else, it's off-topic.
For the purposes of this discussion, I was just pointing out to Dusty that the 401(k) is blatant IRS favoritism towards one particular class of employee, and that one often doesn't have a choice about self-employment, which he'd offered as the best deal.
1262. dusty - 2/11/2002 4:08:56 PM
As long as no one confuses my position with CG's charaterization of my position, I'll not waste space clarifying what has become a finance and political issue, rather than an Enron issue.
Back to Enron - looks like Lay won't testify. Some people thought he would after seeing Skilling appear to get away with playing the idiot.
1263. CalGal - 2/11/2002 4:45:50 PM
Where did I characterize your position?
I don't think that Skilling played the idiot. If he didn't lie--and that's a big if--I think it was pretty clever of him.
1264. Taboulijones - 2/11/2002 4:58:23 PM
Dusty,
Please feel free to continue your discussion with Calgal re: 401(k) plans and IRAs, etc. As -- admittedly absentee -- thread host, I am fine with any digressions that originate in, or, orbit, around, Enron related matters.
1265. concerned - 2/11/2002 5:00:39 PM
Re. 1261 -
dusty -
I haven't been following. So, what'd Skilling use - the Clowntoonoid full nondisclosure ruse?
1266. CalGal - 2/11/2002 5:07:55 PM
Well, it was a segue, and I thought we both acknowledged it as such. I just wasn't sure why he said I was mischaracterizing his position. I believe that the original dispute was cleared up.
I do think that the fact that the government treats retirement contributions differently gives the government a fair amount of leeway in determining how that money should be invested. I hope this becomes a major consideration in the debate. I recommend the link above, and wanted to quote something else from the retirement historian (Sass):
[if employers match contributions with stock]:Well, they can give you the stock and you can sell it. There could be some diminution of the incentive to -- a financial incentive to company to give you a plan if they couldn't give you stock.
I think the basic problem is that you have two conflicting objectives here. One is retirement income security. And the other is an employer trying to develop a closer bond with the employee, which is something that is legitimate and it's beneficial. Actually, a lot of government law promotes profit sharing, stock bonus plans, because the government thinks this is a good thing.
I think though that in the case of 401(k)s, that they become such a large institution, such a fundamental issue in the support of retirement income, that those interests ought to trump the benefits of improving the relationship between employers and employees. And it should be that goal and good financial planning should rule the regulations of 401(k)'s more than the beneficial effects that an employer might get by giving this benefit in company stock.
1267. TheWizardOfWhimsy - 2/11/2002 5:07:57 PM
Sometimes, "Money Doesn't Talk!"
1268. Jonesatlaw - 2/11/2002 6:38:50 PM
Cal- You are the one bitching- I merely point out where the rules come from, not praise them.
Feel free to enlighten us all with your solutions to the problems which resulted in the rule you decry and its classification disadvantage to temp workers. That is aside from dismissing them all as not problems.
Finally spare me the personal assesments, and I'll spare you mine.
1269. Jonesatlaw - 2/11/2002 7:00:07 PM
Finally, if you are nearly as hot a commodity as you project, you can avoid the "employment" problem with a good enough contract spelling out how you avoid the checklist items. If you can't get clients to bite on what should be favorable to them, maybe you should quit fooling yourself about your status.
1270. Jonesatlaw - 2/11/2002 7:05:08 PM
Finally, if you are nearly as hot a commodity as you project, you can avoid the "employment" problem with a good enough contract spelling out how you avoid the checklist items. If you can't get clients to bite on what should be favorable to them, maybe you should quit fooling yourself about your status.
1271. jayackroyd - 2/12/2002 9:03:14 AM
Does anyone disagree with krugman ?
1272. dusty - 2/12/2002 12:29:28 PM
I'm probably now officially biased, but I think Krugman sold his soul when he joined the NYT, and this article just continued in that vein.
Is split-premium life complicated? Yes, it is. Pre-NYT, Krugman would have reveled in the challenge of taking an abstruse economic issue and explaining it in terms that a lay audience could follow. Now, it is easier to just mutter "you don't want to know" and let the reader assume it is nefarious, as opposed to just terminally boring.
How on earth do you convince readers to care about tax- advantages for a particular form of life insurance? Hell, I'm in the business, and it puts me to sleep. But Krugman succeeds—just darkly note that Enron purchased some of these policies. And if that isn't enough to taint them, let's throw in references to sleazy Russian "biznesmen", to make it sound even more sleazy, even though there is no demonstrated connection between the activities of those people and split premium life.
Let's invoke Enron again by referencing SPE's and relate them to recent legislation making it easier to use them. Leaving that recent legislation made the hanky-panky at Enron possible. Skip over the fact that the Enron SPE's did NOT meet the existing legal requirements, and if they had, they probably wouldn't have caused the problems they did. What a good liberal to do when someone breaks existing laws? Why, propose new laws, of course. It's a knee, so jerk it.
1273. dusty - 2/12/2002 12:29:43 PM
continued
The only credit the article deserves is mentioning that the legislation was passed by both sides of the House. There's nothing of substance to attach to the Bush Administration, so just mention the Bush administration, then vaguely talk about some other issues that are tangentially related to Enron, and the whole package, quickly read, seems to taint Bush with sleazy Russian operatives, scheming to loot the poor, even though there is nothing of substance in the article.
Was it worth it Krugman, to sell your integrity? I hope you got a pretty penny.
1274. TabouliJones - 2/12/2002 1:00:57 PM
Politically, I lean leftwards with Krugman, but I have to agree with Dusty that the quality of Krugman's commentary has gone down considerably since he joined the NYT. As I mentioned earlier in this thread, James Suroweicki of the New Yorker has replaced Krugman as my favourite pundit on economics matters.
1275. CalGal - 2/12/2002 1:21:05 PM
I agree about Krugman. He used to bring up economic issues and explain them meaningfully. Now he just rants. I can't even tell from his piece whether there's anything to be worried about or not.
if you are nearly as hot a commodity as you project, you can avoid the "employment" problem with a good enough contract spelling out how you avoid the checklist items.
Sigh. Insults are always more effective when they don't betray your basic ignorance of the subject matter.
But as I said, it's off-topic in this thread, and I've already discussed this in this forum with people who know more about it. Been there, done that. Read up on it if you feel like discussing it; I'm not in the mood to explain.
1276. thoughtful - 2/12/2002 1:44:27 PM
dusty, I disagree with your assessment of Krugman's piece, but I suppose that's not surprising. When I read the "you don't want to know" I didn't assume nefarious...I did assume boring and convoluted. I also figure that writing for academic venues gives him unlimited space, the op-ed page does not. So rather than bog down in the details of it and not get to his point, he focuses on getting to his point. Is it a biased point? Of course. He's an op-ed writer. He's supposed to be biased. Please note too that he specifically says, "The issue of business versus biznes is not one that divides neatly along party lines."
So that leaves some points of fact which need to be addressed. Do split-premium life insurance policies (whatever they are) offer tax advantages? Are they readily available to everyone or are they especially favorable for highly-compensated execs? Did Enron deploy them? And were they affected by the most recent tax legislation under the bush administration?
Next, the fact is that all public companies that have assets off the books for whatever reason are coming under closer scrutiny by wall st and investors and analysts as a result of the enron thing. The question of fact is, would the changes to the bankruptcy law proposed last year encourage firms to get more assets off the books and make shielding assets from creditors easier, and make determining the actual financial health of a firm more difficult?
1277. thoughtful - 2/12/2002 1:58:00 PM
dusty, finally, what rests squarely on this administrations' shoulders is their reaction to the enron situation. Key questions of fact: has Pitt made substantive suggestions about what the SEC can do to prevent the next enron or root out the current one? The only thing I've seen is some ridiculous comment about firms need to be clearer about their earnings projections! Has the administration done anything or made any proposals, or even made any comments to build confidence in the soundness of the financial reporting system, beyond O'Neill's silly remark about capitalism. The only solid action I've seen them take is cheney's hard line against releasing the energy meeting attendees, and today's NY times cover story about the behind the scenes efforts by the white house to squash campaign finance reform.
1278. jayackroyd - 2/12/2002 2:47:00 PM
Hang on there dusty. Can you point to an inaccurate sentence. And do you really disagree with his overall argument--that the current state of relations between the government (Executive and Congressional branches) and large businesses is profoundly corrupt?
1279. jayackroyd - 2/12/2002 2:59:38 PM
BTW, I do agree that krugman is effective in this venue, and that he has lurched to the left.
OTOH, the way the administration has lied about budget policy and taxes is pretty infuriating. All those articles about the Bush shell game with tax cuts turned out to be true. The tax cuts are leading to deficits and the cracking of the SS lockbox.
1280. thoughtful - 2/12/2002 3:11:50 PM
jay, the one inaccuracy, which isn't really a false statement is a false impression krugman leaves that the bush admin is somehow responsible for the split-dollar insurance loophole. I haven't really investigated, but from what I glean at first glance, it predates the bush admin, so the only responsibility they have is that it continues...or that it continues without appropriate reporting.
1281. CalGal - 2/12/2002 3:14:32 PM
Jay--it's not so much that Krugman isn't right, it's that his antipathy and partisanship makes me wonder about his priorities. Is the issue he's ranting about worth getting fussed over, or is he just venting at the Bush administration again? He is also not nearly as thorough at explicating as he used to be. For example, he used to actually tell you, rather than assume we didn't want to know.
1282. thoughtful - 2/12/2002 3:15:27 PM
I'm not sure krugman has lurched to the left...only relatively so since this admin is so hard right...especially as that "compassionate conservatism" "centrist" veneer falls away. Though why anyone is surprised is beyond me. Cheney's voting record was certainly clear enough and publicized enough during the election.
1283. Raskolnikov - 2/12/2002 3:27:17 PM
I do wonder how much of Krugman's change focus is simply do to the change in the hot economic issues of the day. Clinton had his flaws, but he generally ran an economically tight ship during the period Krugman wrote for Slate. The budget situation kept looking rosier, there were no major deregulation issues on the agenda, and the hot economic stories were international and largely non-partisan (the asian financial meltdown, European integration, globalization). The major domestic economic issue that is an exception to this had to do with the wall street bubble, monetary policy and whether there really was a productivity boom. The budget battles were about specific policy priorities more than they were about broad economic issues. Krugman took some very strong stances on many of these issues, but they were mostly non-partisan issues. Clinton was quite moderate on economic issues, and the Republicans strategy wasn't to attack his policies, but to claim that Clinton had no impact on the economy. The partisan bickering was over other issues.
But what have the big economic issues been for the last two years? The Presidential candidates' budget proposals, energy deregulation, the tax cut, and Enron. These all have been highly politicized issues - and partisan preferences are going to be more likely to crop up.
My main current beef with Krugman is that he has gotten boring, with only two or three topics in changing rotation, and not enough room to adequately explore them.
1284. Raskolnikov - 2/12/2002 3:28:51 PM
"I do wonder how much of Krugman's change IN focus is simply DUE to the change in the hot economic issues of the day."
icky typos.
1285. Raskolnikov - 2/12/2002 3:35:10 PM
I also agree with Thoughtful: Krugman is an economic policy moderate who wrote in the 90s during an economically moderate administration. There wasn't much to bitch about. Bush's policies, however, verge on supply side. I do suspect that if Paul Wellstone were elected President (God forbid), Krugman would find a lot to attack on the left. His track record against the Strategic Traders of the early Clinton Administration is evidence.
1286. thoughtful - 2/12/2002 3:48:24 PM
Rask, we are in agreement on both the nature of the policies to be harped on and the narrow breadth of topics Krugman's chosen recently.
I would like to seem him do to a better quality piece on why the supply siders are still wrong. That needs to be reiterated since like the poltergeists, "they're back". Especially after that op-ed piece in the NY times by Daniel Mitchell of the Heritage Foundation where he said the problem with the bush tax cuts is that they don't come soon enough! He nicely summarizes the supply side raison d'etre as, "Lower tax rates increase incentives to work, save and invest." But the 80s showed that lower taxes reduced national savings, investment share of GDP fell and productivity languished. Further the tax increases of Bush I and Clinton didn't lead to the great depression the supply siders promised. Rather it lead to increased national savings as the deficit shrank, record investment share of GDP, a productivity boom and the lowest unemployment rate in decades.
I'd also like to see Krugman do an examination of the "peace dividend" such as evidence of productivity improvements resulting from a shift out of defense research into other areas seeing as we are again facing the possibility of another defense buildup.
1287. TheWizardOfWhimsy - 2/12/2002 3:55:17 PM
Krugman is coming under the same kind of orchestrated wing nut demonization-attack as Daschle. Krugman is effective (and so is Daschle) in getting out a persuasive perspective.
I think Krugman sees through the Bush shell game and they don't like it. 
1288. dusty - 2/12/2002 4:21:16 PM
Message # 1278 jayackroyd
Hang on there dusty. Can you point to an inaccurate sentence.
I mentally composed a response to your original question, but I was interrupted by that dreaded word "work", and didn't get to provide the timely response.
Belatedly:
jayackroyd
Does anyone disagree with krugman ?
To narrowly answer your question, no I find nothing in the article to disagree with. He is very clever, managing to cast innuendo, and refer to sleaziness, without actually saying that there is any connection between anything.
Those who read closely will realize he said nothing. Those who skim the article will come away with a vague sense of "sleaze and Russian mafia, and complicated accounting messes and Enron and Bush administration—must be some unifying theme somewhere"
Great job Krugman, if your job description is "shill".
Not so great a job if your job description is "economist who can explain economic issues to readers clearly, understandably and fairly".
1289. Phoenix Rising - 2/12/2002 4:32:45 PM
If a movie was made about ERON, 57% of Atlantans feel that Rodney Dangerfield should play Ken Lay.
1290. TheWizardOfWhimsy - 2/12/2002 4:52:12 PM
According to the Powers Report, there were over three thousand unkown partners participating in bogus offshore partnerships . . .of which, most of their financial records have been shredded.
If Powers couldn't explain it after months of investigation to a Senate commitee today, how is Krugman supposed to in a weekly column?
I love the "fair-minded" jujitsu going on around here!
1291. judithathome - 2/12/2002 4:56:19 PM
No no no...David Leisure (Joe Isuzu) is the guy! He looks exactly like Lay! And he's had practice lying to the public...
1292. TheWizardOfWhimsy - 2/12/2002 5:02:49 PM
Powers' Report [PDF format]
1293. dusty - 2/12/2002 5:05:15 PM
thoughtful
Do split-premium life insurance policies (whatever they are) offer tax advantages?
Yes. No more so than ordinary life insurance policies. I'm open to a discussion (in the appropriate thread) whether life insurance ought to get the tax-favored status it has had forever, but the tax advantages of these products (as I understand it) are nothing special - the special part is that someone realized that life policies could be useful for estate planning and compensation.
Are they readily available to everyone or are they especially favorable for highly-compensated execs?
Yes to both. One of the main uses involves family-owned businesses (like hardware stores) and a way to pass the business on. Whether this is fair is a subject for another discussion, but it isn't solely for high paid business execs. That said, it is employed for tax deferral reasons, and the higher the marginal tax rate, the more value it has.
Did Enron deploy them?
Yes.
Enron also employed janitors and contributed to charities. I hope no one assumes that if Enron did X, X must be nefarious.
And were they affected by the most recent tax legislation under the bush administration?
I plead ignorance. I know personal rates went down a bit, and are scheduled to go down more, if not reversed, but I didn't follow corporate changes.
1294. dusty - 2/12/2002 5:13:58 PM
thoughtful
dusty, finally, what rests squarely on this administrations' shoulders is their reaction to the enron situation.
The preliminary reports are pretty positive, although, as i'll note below, let's wait it grade them. The preliminary reports are that, despite moderate amounts of campaign contributions to the administration, and specific requests for favors, they were rebuffed. They asked for help, and were told to take a hike. Good for them.
Key questions of fact: has Pitt made substantive suggestions about what the SEC can do to prevent the next enron or root out the current one?
Maybe it shows why I could never become a politician, but I find it hard to propose remedies before we've even identified the problems. In a broad sense, we know that the accounting industry failed us, but we are just getting at the details. We don't even know whether the SEC failed us; we are far from determining whether they had inadequate powers, or failed to exercise those that they have.
1295. dusty - 2/12/2002 5:18:41 PM
thoughtful
and today's NY times cover story about the behind the scenes efforts by the white house to squash campaign finance reform.
The Enron situation is a poster child for why campaign finance reform is not an important issue. I realize some yipping dogs will take any event and claim it supports their pet cause.
Have people really missed what happened? If Enron had asked for favors and received them, if Enron was a wildly profitable company solely because it was getting favors from the government, then there would be a case to argue that campaign contributions bought a perversion of the system.
It didn't.
A large corporation gave a lot of money to pols, asked for helped, was told to stick it, and went under. The system worked.
1296. dusty - 2/12/2002 5:22:11 PM
CalGal
He is also not nearly as thorough at explicating as he used to be. For example, he used to actually tell you, rather than assume we didn't want to know.
Exactly.
Even when I had mild disagreement with his politics and his remedies, I admired his ability to cut through jargon and explain issues that weren't easy to explain.
1297. Raskolnikov - 2/12/2002 5:24:22 PM
Dusty: What I think Thoughtful (and Krugman), are getting at is that the Administration is taking less of a "let's wait and see" attitude, than a "the system worked" attitude, which seems completely wrong, whereas a rush to judgment is just wrongheaded.
It seems clear to me that the system did *not* work. What isn't clear yet is the extent to which this was due to criminal behavior or bad/lax regulatory law. Given the number of people taking the fifth, I suspect both.
1298. Raskolnikov - 2/12/2002 5:27:08 PM
Dusty: You seem to be ignoring the extent to which Enron's campaign contributions *helped* it rise to the heights it did, focusing instead on the appearance that those contributions couldn't stop its fall. That is a very selective analysis.
1299. CalGal - 2/12/2002 5:31:46 PM
I see merit to both sides of the debate. I agree that the Bush administration's economic policies are more worrisome than Clinton's ever were, and that Krugman might be more agitated because he sees more to be agitated about. But at the same time, Krugman is really hurting his credibility with tone and content.
If he can only achieve a dispassionate objectivity when commenting on economic policies from the secure haven of an administration he agrees with, then he may still be right but he won't be a useful resource on economic analysis for someone like me.
1300. CalGal - 2/12/2002 5:32:49 PM
I completely agree with Dusty about the dearth of CFR issues in the Enron situation. I can't see the connection at all.
1301. dusty - 2/12/2002 5:35:50 PM
Raskolnikov
Dusty: You seem to be ignoring the extent to which Enron's campaign contributions *helped* it rise to the heights it did, focusing instead on the appearance that those contributions couldn't stop its fall. That is a very selective analysis.
If you want to expand upon the fact that the Enron rise, and political favors occurred primarily during the Clinton administration, go for it.
I'd like to see the Enron issue discussed more as an example of the failure of accounting than politics, because I think that's where the bulk of the problem lies.
1302. CalGal - 2/12/2002 5:37:49 PM
How did Enron's campaign contributions help it rise?
I can maybe see Andersen's contributions preventing meaningful accounting reform, but even there I think that most large corporations would have squawked, whether they gave money or not.
1303. CalGal - 2/12/2002 5:38:53 PM
I would say instead that Enron's ability to contribute money was based on its ability to cook its books. After all, it didn't really have a penny to its name for some two or three years.
1304. Raskolnikov - 2/12/2002 5:44:00 PM
"If you want to expand upon the fact that the Enron rise, and political favors occurred primarily during the Clinton administration, go for it."
The disagreement was over campaign finance reform, and now you want to switch it to a boring exercise in partisan finger pointing. Obviously, Enron's contributions were bipartisan, and so was cooperation in giving it political favors. Campaign finance reform is not something that is only needed to stop venal Republicans.
1305. Raskolnikov - 2/12/2002 5:45:53 PM
"How did Enron's campaign contributions help it rise?"
As I understand it, Enron lobbied for and benefited from regulatory changes that occurred a few years ago, involving the types of trading companies were allowed to do and the extent of oversight that they faced. I have seen this described in several sources. If it is a contentious point, I will look into it more, but I had assumed it was common knowledge here.
1306. CalGal - 2/12/2002 5:51:47 PM
Are you talking about things like its ability to declare the entire amount of a trade as profit? I agree that this is part of the problem, but I disagree that CFR would have prevented their efforts from being successful. Never mind all the various pros and cons of CFR itself--what case is there that politicians supported the changes because Enron was a contributor?
I think of CFR as providing special access. I don't think the massive changes that occurred in the 90s constitute special access, but rather a whole belief system in free markets gone a bit haywire.
1307. Raskolnikov - 2/12/2002 5:54:18 PM
From The Economist, January 17.
"The possibility that Enron improperly influenced the administration also exists—not when the company went bust, but before. Did it exercise undue influence when Mr Bush appointed a new chairman of the Federal Energy Regulatory Commission last summer? According to the former chairman, Curtis Hebert, Mr Lay said he would oppose his appointment unless Mr Hebert changed his mind about a regulatory question concerning access to the national electricity grid. Mr Hebert refused, and was replaced. Did Enron unduly influence Mr Cheney's energy task-force? Did it use its connections improperly when Congress passed a bill, one of whose provisions was to exclude energy-derivatives trading from supervision by the Commodities Futures Trading Commission? This raises questions not for the administration but for Senator Phil Gramm, whose committee approved the provision and whose wife was a former head of the CFTC and is now on Enron's audit committee. Mr Gramm denies any improper influence."
And these are just allegations of "improper" actions. Enron's actions can conceivably be legal and still provide evidence of the need for campaign finance reform, if you think legal bribes are just as pernicious as illegal ones.
1308. Raskolnikov - 2/12/2002 5:55:40 PM
"I think of CFR as providing special access. I don't think the massive changes that occurred in the 90s constitute special access, but rather a whole belief system in free markets gone a bit haywire."
You say "To-May-to"...
1309. CalGal - 2/12/2002 6:00:35 PM
Rask--I totally agree with the first two examples. But exactly how did they contribute to Enron's bankruptcy? Enron had been cooking the books for years by that time.
The last one has actually been checked out pretty thoroughly--the NY Times or Post wrote a piece on it. There is nothing to suggest that Phil Gramm changed his position, and even less to suggest that his wife had anything to do with it. Wendy Gramm certainly has a history that suggests she didn't require a board position on Enron to support its goals.
So the Economist provides two solid examples with real questions behind it--but no link to the bankruptcy--and one nebulous example with the right timing but no teeth to speak of.
If you had Teddy Kennedy switching sides to back the lack of government supervision after a big Enron check, that'd be something to think about. But Phil Gramm?
1310. CalGal - 2/12/2002 6:04:46 PM
You say "To-May-to"...
No, that's not just different pronunciation. You'd have to argue a completely different outcome.
For example, I certainly think it possible that Hebert would still be chairman if it weren't for Enron's influence. I think there will be a marked similarity between Enron's wish list and Cheney's energy policy that can't be explained by ideology.
But I don't buy that Enron, or other energy trading companies, would be regulated now if Enron hadn't spread its largesse. There was plenty of support for deregulation.
To say nothing of the fact that Enron's book cooking only began with their ability to report trade volume, not profits. Lots of other energy companies had the same ability and not only didn't go bankrupt, they didn't play games with the books.
1311. Raskolnikov - 2/12/2002 6:08:42 PM
Cal:
1) You are losing the thread of the argument. My claim was that Enron's contributions helped contribute to its meteoric rise. You disputed this. Now that I provide examples, you seem to think I was arguing that these contributed to its meteoric fall.
2) Anyway, you must have missed this one: "Did it use its connections improperly when Congress passed a bill, one of whose provisions was to exclude energy-derivatives trading from supervision by the Commodities Futures Trading Commission?"
You don't think this loss of regulatory oversight, for which Enron successfully lobbied, is a potential link between Enron's collapse and campaign finance reform?
1312. Raskolnikov - 2/12/2002 6:12:59 PM
Cal:
"But I don't buy that Enron, or other energy trading companies, would be regulated now if Enron hadn't spread its largesse. There was plenty of support for deregulation."
Sorry, I won't take arguments by assertion from you on this issue.
My "tomayto" point was that lobbying is a route through which free market advocates can get their case considered by less enthusiastic congressmen.
Your counterargument is basically that Enron was throwing money away through campaign contributions - it would have gotten the same results if it hadn't spent a cent.
1313. Raskolnikov - 2/12/2002 6:18:12 PM
"Lots of other energy companies had the same ability and not only didn't go bankrupt, they didn't play games with the books."
1) This remains to be seen. The Enron case is creating a lot of work for auditors, as I understand it.
2)Having one of the largest companies in the world go belly up over continually missed accounting games warrants more than just a "it is one bad apple" response.
1314. CalGal - 2/12/2002 6:23:13 PM
Your counterargument is basically that Enron was throwing money away through campaign contributions - it would have gotten the same results if it hadn't spent a cent.
No. Saying that one outcome would have been the same doesn't mean that all of them would have been.
My claim was that Enron's contributions helped contribute to its meteoric rise.
Yes. You are saying that its meteoric rise was created by its ability to declare volume as profit. But if this were all, then all trading companies would have been equally meteoric and equally noteworthy. But Enron did any number of other things that made its rise seem even more meteoric than it was. Sure, they were allowed to declare volume as profit. But had they been honest about it, even that would have declined rapidly.
Anyway, you must have missed this one:...
No, I answered it in 1309 and again in this post. Surely you aren't arguing that correlation = causation? (g)
I'm sorry I seemed to shift topics. I consider that their meteoric rise was connected to their bankruptcy. Both were caused by their having cooked the books. So we're still focusing on the same thing--at least as far as I'm concerned.
1315. CalGal - 2/12/2002 6:24:59 PM
Having one of the largest companies in the world go belly up over continually missed accounting games warrants more than just a "it is one bad apple" response.
I wouldn't argue that for a second. You just haven't established that it was due to CFR.
It wasn't ever one of the largest companies in the world, though, since its ability to present itself as such was due to those accounting games.
1316. Raskolnikov - 2/12/2002 6:29:38 PM
"You are saying that its meteoric rise was created by its ability to declare volume as profit."
I never said this. I am already tired of your argument style where one has to go back constantly and remind you of what was said because you are either ineptly interpreting, or deliberately misinterpreting, my arguments. Have a nice day.
1317. CalGal - 2/12/2002 6:41:07 PM
I never said this.
???
You quoted the Economist piece here:
one of whose provisions was to exclude energy-derivatives trading from supervision by the Commodities Futures Trading Commission
From everything I've read, the primary boost that Enron got out of it was their ability to declare trade volume as profits. In fact, whenever I've seen the subject is discussed the two are used almost interchangeably. If that's not what you were talking about, I'm sorry. Feel free to fill me in on how else this allowed them to rise.
But in general, misstated specific or no, you haven't convinced me that Enron's spending purchased them anything other than favors. I don't think that contributions convince Congress to exempt an entire industry from supervision as a "favor". And I don't see how the exemption benefited Enron specifically in a way that contributed to their meteoric rise.
1318. CalGal - 2/12/2002 7:05:55 PM
For example, here's an informative piece about Enron's use of money and strongarming both its employees and politicians.
Hard Money, Strong Arms And 'Matrix'
Enron would use a computer software program to determine how much a particular federal regulation would cost them. They would then wind up the money machine, writing semi-threatening letters to employees for political donations, pushing congressmen, etc.
All very ugly. And very little of it appears to have been effective.
"They were sophisticated enough to hire good people but then not disciplined enough to hide their disdain for policymakers who did not agree with them from the beginning," one lobbyist said. "When Enron executives were advocating a certain policy and a member of Congress tried to explain the votes weren't there, they became very frustrated that he wasn't smart enough to understand the wisdom of their policy."
That doesn't sound like they were very successful at getting what they wanted--unless Congress agreed with them to start with.
Now, more problematic is their focus on the movers and shakers--political pundits, thinkers, lobbyists, and so on. If they were successful at changing how these people think, there's a lot more likelihood that conventional wisdom would change--hence changing Congressional views.
But there isn't any law against paying pundits $50K for showing up at a meeting. And that certainly won't be addressed by finance reform.
1319. jayackroyd - 2/12/2002 7:50:10 PM
1307.
Yes, Enron bought influence in this administration, but dusty is right that it was the purchase of influence in the previous administration --as much in the house/senate as anywehere--was instrumental to their growth. I happen to believe that if Enron hadn't collapsed, the confluence of the Bush administration and the republican house would have led to even more opportunity to lie about their earnings, but I can't prove that.
It remains that Enron taints a lot of senators, a lot of representatives, and a lot of Bush's political appointees.
1320. jayackroyd - 2/12/2002 7:53:23 PM
"Your counterargument is basically that Enron was throwing money away through campaign contributions - it would have gotten the same results if it hadn't spent a cent."
This always breaks me up. We need to respect the ability of businessmen to make wise decisions, or to at least take a well reasoned shot at a profitable strategy, but when they give money to politicians, they do so even though it has no impact on politicians' decisions.
1321. dusty - 2/12/2002 7:54:27 PM
Raskolnikov
Do you think the reporting of volume, rather than profits, on its energy derivatives contributed to the mistaken belief that Enron was much larger than it turned out to be?
Do you think that if the CFTC was regulating energy derivatives, that a different course of action would have ensued?
I asking because I don't know, and potentially interested in doing some research, but only if the issue is relevant.
My gut tells me that the rules for determining profit are determined by the FASB, not the CFTC, but I don't know for sure. before I even look into it, I want to see if it is relevant. I thought it was, but based upon your response to CG, I'm not so sure.
1322. dusty - 2/12/2002 8:01:23 PM
jayackroyd
The American Fedn of St/Cnty/Munic Employees gave more in the 2000 election cycle to candidates than Enron.
Why is there so much interest in who is "tainted" by Enron, but so little discussion of who is tainted by AFSCME?
1323. dusty - 2/12/2002 8:08:16 PM
jayackroyd
We need to respect the ability of businessmen to make wise decisions, or to at least take a well reasoned shot at a profitable strategy, but when they give money to politicians, they do so even though it has no impact on politicians' decisions.
I'm stunned that so little has been identified as quid pro quo for Enron's millions. They should be pissed.
I'll repeat what I've said before.
The surprise isn't how much is contributed by special interest, but how little. Congress has control over the spending of literally trillions, and the collection of corporate taxes amounting to hundreds of billions.
Given that corporations have a vested interest in sending some of the spending their way, or trimming their tax bill a bit, it should be stunning that corporations spend a miserly fractions of one per cent of all the money in play.
Stop taxing corporations, and corporations will stop finding it in their best interest to influence tax laws.
1324. CalGal - 2/12/2002 8:12:50 PM
it should be stunning that corporations spend a miserly fractions of one per cent of all the money in play.
But I don't think they spend money on politicians for direct results, but for influence. I think they use advertising and their employees to achieve actual results--by influencing their votes, priorities, and so on.
I think they also use their economic heft when dealing with states--for example, a corporation may threaten to move their headquarters if they aren't given favorable tax treatment. But none of that is affected by CFR.
1325. CalGal - 2/12/2002 8:34:53 PM
Dusty,
Prepared Statement of Mr. C. Robert Paul, General Counsel, Commodity Futures Trading Commission
The Commission notes that this exemption for energy commodities, particularly as it relates to electronic trading systems that approximate exchange environments, is not governed by the same considerations that formed the basis of the Working Group's recommendations with respect to financial products. While there are some similarities between the trading of financial products and non-financial products, there are also significant differences. Most dealers in the swaps markets are financial institutions subject to supervision by bank regulatory agencies, affiliates of broker-dealers regulated by the SEC, or affiliates of FCMs subject to CFTC oversight. "Accordingly, the activities of most derivatives dealers are already subject to direct or indirect federal oversight." (PWG at 16). The same cannot be said of trading in energy derivatives. The decision to extend the exclusion in H.R. 4541 to energy derivatives would leave these OTC products in a regulatory gap - neither directly regulated as financial products nor indirectly regulated by an agency with jurisdiction over commercial participants in the energy market. Thus, a principal argument warranting the exclusion of financial derivatives from the CEA--the fact that derivatives trading in these products is subject to direct or indirect federal oversight--does not fit OTC energy transactions.
Emphasis mine.
(cont'd)
1326. CalGal - 2/12/2002 8:35:15 PM
My understanding was that their freedom from regulation as a financial product was what allowed them to state volume as profits. This is always the connection I've seen mentioned in discussions as well. But I don't know from FASB, so if I've misunderstood this and am conflating two issues, lemme know.
This exemption began in 1993, though--originally with the CFTC's blessing. It was only in the Commodities Futures Modernization Act that the CFTC objected, specifically to this issue.
1327. Jonesatlaw - 2/12/2002 8:50:56 PM
Cal makes one point about CFR that I agree with, that the general pattern of corporate contribution is not aimed at specific results determined prior to the campaign, but instead access and influence.
Then, the PR machine cranks up, both within a corp and within (sometimes custom made) pressure groups by industry or issue and the pressure is applied. Then the threat is not "remember what we did for you last time" it's "we can do it for whoever runs against you next time."
There isn't a quid pro quo on any given issue, things are intentionally left fuzzy for the benefit of contributor and candidate; but the message is loud and clear. This is where Cal and I part company. While I agree that it is rare for the choices to be starkly spelled out before a candidate-"vote for x, or no dough" and the contributions are not tied directly to any one issue, it is still a CFR issue, because it is the access that is the quid pro quo. You want to bend a senator's ear- being a constituent isn't the key to the door, your contribution status to the candidate, other members of Congress or the party is. You get to provide draft language for proposed legislation or regulations, or knock language out, provide backround papers for your Congressperson to wrap themselves in justification for your desired result, to define the parameters of the debate itself.
To the extent that both unions and corporations do this with other people's money, with the concentration of that power in the hands of a few at the head of these organizations whose agendas imperfectly mirror the interests of the actual owners of the money; the greater the danger.
1328. dusty - 2/12/2002 8:53:28 PM
CalGal
Thanks for the link, but I don't think it answers my question. If the CFTC regulated derivatives, they would be able to do things like require reporting of transactions, insist that contracts contains certain clauses, etc. But, just like the SEC regulation of stock markets has nothing to do with how profits on stocks are defined, I see no reason why the regulation of derivatives by the CFTC would govern how earnings were measured.
The IRS defines taxable income. The FASB defines GAAP, which in turn defines accounting income. Regulatory agencies, to the best of my knowledge, don't have any jurisdiction over GAAP accounting rules.
It just occurred to me that in insurance accounting, the regulatory bodies do define stautory income, and it doesn't exactly match GAAP income (or tax income, for that matter). However, publicly traded insurance companies still report GAAP income as defined by the FASB.
1329. dusty - 2/12/2002 8:59:04 PM
CalGal
My understanding was that their freedom from regulation as a financial product was what allowed them to state volume as profits
One possibility is that we will find that the derivatives fell through the cracks at the FASB. they are exactly a speedy operation - I worked on a discounting project when I worked for a Big Five (then Big Eight) accounting firm in 1982. When I last checked, they still haven't finalized the rule on how insurance company liabilities should be discounted.
Having said that, derivatives aren't new, and they aren't tiny. Trillions are traded daily. It seems hard to believe that the rules on how to handle them isn't settled, but maybe the new energy derivatives fell through a crack.
Sorry for this stream of consciousness.
1330. Jonesatlaw - 2/12/2002 9:07:33 PM
Wasn't a main objective of some of the partnerships to exploit a gap between GAAP and IRS definitions- they were to move the realization of profits from one place to another while at the same time not amounting to realization of profit for IRS purposes?
1331. dusty - 2/12/2002 9:10:14 PM
Jonesatlaw
I think that is very possible. One of the reasons I'm enjoying this thread; good questions are being asked.
1332. Cellar Door - 2/12/2002 9:14:59 PM
ENRON Lobbyist Plotted Against the Democrats.
1333. Jonesatlaw - 2/12/2002 9:26:23 PM
Dusty-
I'm sure I read something about this, and will dig for a source, but must run to a meeting first. Hopefully, I'll have a decent link when I return.
As tempting as it is to point fingers at Enron- there are lots of screwups that allowed this to happen.
1334. CalGal - 2/12/2002 9:40:53 PM
Dusty--I wasn't giving you that link as a specific answer to your question, just because I thought it was interesting and related.
Remember that NewsHour guy's explanation of accounting alchemy?
Or, since I'm back in my family apartment, if we tried this at home, it would be like setting up the brokerage firm Solman and Solman-- that's me and my dad-- get $1 million from you viewers to buy and sell stocks and bonds, then claim we're a multimillion dollar firm. Sadly, the accounting industry's board won't let us do that. Wall Street brokers can't either. But for companies like Enron, in this new industry, new regulations, or deregulations, applied.
Is the accounting industry FASB? This seems to say that FASB and the SEC rules don't apply because of the exemption from regulation. This is the first piece I remember making what I thought was the connection.
1335. CalGal - 2/12/2002 9:49:41 PM
Jones,
I don't disagree that a corporation might threaten to take their money elsewhere if a politician doesn't do what they want them to do. But remember, that threat has to have teeth. What's the re-election rate of incumbents again? Very high, I seem to recall. No company's money will offset the downside of a furious constituency and a opponent who rides the wave of that rage into office--a combination that is probably one of the more common reasons an incumbent isn't re-elected.
So no politician will just do a company's bidding unless there is no downside. What corporations do, for the most part, is buy influence for the times when there is no downside. Now, if there is a situation where it is against a politician's principles or stated position, an evenly split constituency, and a vicious re-election campaign coming up, then yes, I'm sure the politician will go with the company who will otherwise take their money elsewhere. But wouldn't you agree again that that is influence, not a guaranteed result?
The more interesting investments Enron made were those that attempted to change punditry.
1336. concerned - 2/12/2002 11:38:30 PM
Since I had been vehemently told in the Mote by someone who will remain nameless for the nonce that Judicial Watch was suing 'the Bush Administration' over Enron, I thought I'd mosey on over to the Judicial Watch Website and see what their complaint was in reality.
It turns out that Larry Klayman etal had sued the DoJ for administration records dating back to January 21, 1993 that JW argues should be made public by request under the aegis of the FOIA.
So, charges that the Bush Administration is 'covering up' something lose their credibility, unless one is prepared to believe that GWB is covering for the WH Rapist!
1337. Raskolnikov - 2/12/2002 11:47:09 PM
Dusty: "Do you think the reporting of volume, rather than profits, on its energy derivatives contributed to the mistaken belief that Enron was much larger than it turned out to be?"
No clue. I haven't followed the accounting issues closely. I had said that I was paraphrasing some summaries of the criticisms of Enron's campaign contributions that I had read in usually reliable sources. I am willing to consider that those sources are wrong, but I am not just going to take Cal Gal's word for it.
My foray into this discussion had more to do with absolutist statements that there were no campaign finance issues "at all". This surprised me, as I had thought it was common knowledge that Enron's campaign contributions bought influence over trading deregulation, and that this deregulation had an impact on Enron's collapse. Minimally, Enron is at least an example of one more corporation that uses campaign contributions to buy access, which is the whole point of the campaign finance reform movement.
"The American Fedn of St/Cnty/Munic Employees gave more in the 2000 election cycle to candidates than Enron. Why is there so much interest in who is "tainted" by Enron, but so little discussion of who is tainted by AFSCME?"
AFSCME isn't mired in a headline grabbing financial/economic/political scandal? Just a hunch.
1338. Raskolnikov - 2/12/2002 11:47:29 PM
"The surprise isn't how much is contributed by special interest, but how little. Congress has control over the spending of literally trillions, and the collection of corporate taxes amounting to hundreds of billions."
There are several responses to this. One is that price is not determined by value, but by supply and demand. If Congressmen come cheap, businesspeople would be foolish to pay extra.
Another is that if the sums get too big, you risk losing the facade of legality.
Yet another is that contributions are more a purchase of access more than they are bribes. Access can be bought with a few key donations. Bribing half of Congress would get spendy, and risks a backlash. I do agree that politicians aren't going to risk political suicide over a hefty campaign contribution, when most of them are assured of re-election without it.
My observation is that it is a combination of all three.
But those who deny that any influence is bought are really left to explain why supposedly rational and profit-maximizing businessmen continually throw money at both political parties, largely irrespective of ideology.
1339. concerned - 2/12/2002 11:59:38 PM
I believe this thread should not be restricted to discussion of the financial improprieties of and any possible influence on the US legislative and administrative branches by just Enron. Those companies such as Global Crossing, Arthur Andersen and any others in which involved parties are inappropriately affected due to 'creative accounting' should also be on the table for discussion in this thread.
But I've already mentioned this fundamental point.
1340. CalGal - 2/13/2002 12:02:26 AM
as I had thought it was common knowledge that Enron's campaign contributions bought influence over trading deregulation
Actually, the "commonality" of this view splits roughly across party lines. There are plenty of Republicans who don't think this has to do with CFR. Please note that I am not speaking of the politics of the purchased, but of those who deny the influence of CFR.
This is no surprise, of course. But at the same time I'm not sure how you can claim this view as "common". It's only common among Democrats.
AFSCME isn't mired in a headline grabbing financial/economic/political scandal? Just a hunch.
But then how is it you can assert that the money spent causes problems that CFR will fix?
As far as "taking my word for it", I'm not sure what you're referring to. We've been discussing this for a while now, and I've linked in an number of pieces that I used as a basis for my assertions. If you don't know what the accounting issues are, why Enron grew so quickly or why Enron fell apart, then how is it that you can assert that CFR contributed to any of this?
1341. TabouliJones - 2/13/2002 9:18:17 AM
Concerned,
If you wish to discuss accounting shenanigans at companies other than Enron, please do. The issue is clearly pertinent to discussion about the fallout from the Enron bankruptcy.
1342. thoughtful - 2/13/2002 9:53:18 AM
dusty, #1294, The preliminary reports are that, despite moderate amounts of campaign contributions to the administration, and specific requests for favors, they were rebuffed. They asked for help, and were told to take a hike. Good for them.
I disagree with the adjective "moderate" and recognize that Enron was rebuffed at the very end, but as many posts point out here, the question is what was done (or wasn't done) for Enron before and how did its access influence regulatory issues and the formation of the Bush Administrations' national energy policy.
#1294, ...I find it hard to propose remedies before we've even identified the problems. In a broad sense, we know that the accounting industry failed us, but we are just getting at the details. We don't even know whether the SEC failed us; we are far from determining whether they had inadequate powers, or failed to exercise those that they have.
Well, as any counselor will tell you, the first step is to recognize there is a problem. O'neill's "miracle of capitalism" suggests this administration has refused to do that. Also, enron has clearly sent shockwaves through the investment community and confidence in the financial reporting system and its regulation. Pitt doesn't need to propose solutions without understanding the problem, but he could state specific efforts his commission will take to get to understand if and how the system failed and what steps might be taken to see it's not repeated. He could push the admin for more funding to step up enforcement of existing regulations and he could propose working with FASB, credit rating agencies, etc. to take a multi-pronged approach to issues like derivatives, off book accounting and so on. Even without specifics he could bully-pulpit the issue in terms of promising a complete and thorough investigation of all the financial accounting issues raised by enron activities, legal or not.
1343. Raskolnikov - 2/13/2002 10:32:22 AM
"Actually, the "commonality" of this view splits roughly across party lines. There are plenty of Republicans who don't think this has to do
with CFR. Please note that I am not speaking of the politics of the purchased, but of those who deny the influence of CFR. This is no surprise, of course. But at the same time I'm not sure how
you can claim this view as "common". It's only common among Democrats."
That has not been my impression. Many Republican reformers have been using Enron to push for campaign finance reform.
"But then how is it you can assert that the money spent causes problems that CFR will fix?"
Why on earth do you think this question follows from what I said about AFSCME?
1344. Raskolnikov - 2/13/2002 10:32:30 AM
"As far as "taking my word for it", I'm not sure what you're referring to. We've been discussing this for a while now, and I've linked in an
number of pieces that I used as a basis for my assertions. If you don't know what the accounting issues are, why Enron grew so quickly or why Enron fell apart, then how is it that you can assert that CFR contributed to any of this?"
For the third time, I am paraphrasing descriptions of the regulatory reform that I have read in usually reliable mainstream sources, like The Economist, The Washington Post, etc. The impression I get is that the jury is still out on exactly what loopholes, if any, precisely allowed Enron to get away with what it did, but that there is a lot of stink. As such, my point has *not* been that the Enron collapse presents a conclusive case for campaign finance reform. My initial response to Dusty was limited to a criticism that he was too narrow in considering campaign finance issues to relate slowly to Enron's attempts to get a bail out. My point to you has been that your argument that there are no campaign finance reform issues *at all* in Enron's rise and fall is very questionable.
You were the one making the absolutist statements, not me. I tire of constantly having to remind you what you said, and correct what you think I said.
I am always willing to wait and see before passing judgment on a political scandal. But if the stench around Enron serves as a basis to push needed campaign finance reform, reformers would be fools to pass it up.
1345. alistairConnor - 2/13/2002 11:02:05 AM
Dusty, Message # 1323 Stop taxing corporations, and corporations will stop finding it in their best interest to influence tax laws.
mmm yeah. And how about this : Stop passing restrictive environmental protection laws, and corporations will stop finding it in their best interest to influence environmental protection laws. Stop passing workplace safety laws ... etc.
Alternative : Stop legislators from taking money from corporations and businesses, and let them get on with making laws in a transparent, even-handed manner. In theory, they are mandated by their electors, not their paymasters.
1346. Raskolnikov - 2/13/2002 11:08:44 AM
Tax policy is one of the least egregious ways in which contributers manipulate government policy. As I am not a huge fan of corporate income taxes, dusty's solution wouldn't bother me, but it would indeed hardly address the need for campaign finance reform. In addition to your list of environmental and workplace safety regulations, we can also add trade policy, financial regulation, and a host of issues where interest groups have undue sway (such as education and gun control, to grab a bete noire from each end of the political spectrum).
1347. Phoenix Rising - 2/13/2002 11:12:32 AM
After 60 years, SunTrust Banks drop kicks Andersen.
The beginning of a tidal wave?
1348. alistairConnor - 2/13/2002 11:13:51 AM
... by the way, I intended to write "unions and businesses", not "corporations and businesses".
Political activity should be funded by the public purse, end of story.
1349. thoughtful - 2/13/2002 11:55:11 AM
As I said in a post many posts back, the problem is, you don't want to make, say energy policy decisions, without a voice from the people in the industry as they know it best...what works, what doesn't, what's costly, what isn't, how technology might change the industry, etc. That being said, the people in the energy industry are paid to represent their shareholders interests, not the national interest. So to make the optimum energy policy for the nation, other voices need to be heard including those of other industries that may be impacted such as fishing, tourism; large energy consuming industries such as aluminum and food processors; other non-industry voices such as environmentalists and conservationists; other governmental voices such as international trade, defense; state voices such as state energy regulatory bodies, governors; and of course consumers and voters.
Money buys influence and you aren't going to get money out of politics. The best you can hope for is to get a balance of volume among the voices of all the stakeholders in an issue. So, in my view, the Enron scandal has reinforced the flag raised years ago by McCain et al that there is a serious imbalance caused by how campaigns are currently financed. It's certainly not news to any of us in the business world that money drives behavior and that we need to be sure the money in politics drives the elected to behave in the national interest and the interest of their voters, not in the interests of a single, rich constituency.
I don't understand why this is so difficult for some to grasp. Yes, Enron is about illegal activities. Yes, Enron is about accounting irregularities. Yes, Enron is about all of that. But it is not limited to those issues.
1350. CalGal - 2/13/2002 12:33:45 PM
Many Republican reformers have been using Enron to push for campaign finance reform.
If they supported it in the first place. (Actually, that's a better predictor than political party, and I should have mentioned that.) In any event, your assertion that it is "common" is untrue. It is common among those who supported CFR. It's Not Reform, It's Deception --Samuelson, hardly a Republican, points this out as well.
I would guess that more politicians/pundits who support CFR have resisted the Enron/CFR link than the other way round, but that's just a guess.
1351. Raskolnikov - 2/13/2002 12:48:55 PM
"If they supported it in the first place. (Actually, that's a better predictor than political party, and I should have mentioned that.) In any event, your assertion that it is "common" is untrue."
I said that I had "thought it was common knowledge here". It evidently is indeed in dispute, but that doesn't make your absolutism on the lack of CFR issues any less premature or any more true.
1352. CalGal - 2/13/2002 12:49:22 PM
For the third time, I am paraphrasing descriptions of the regulatory reform that I have read in usually reliable mainstream sources, like The Economist, The Washington Post, etc.
But so was I. You have said you aren't aware of what the regulatory reforms actually did. I was. I realize that my restatements weren't familiar to you, and in fact I went back to be sure I was doing so accurately. I've apologized for any confusion. Nonetheless, it was your ignorance that caused much of the problem, and you were "asserting" as much as I was. I made the mistake of assuming that you understood the issues.
I made no "absolutist" statements. I pointed out that the Gramm "link" has not been shown to have any teeth behind it. The same papers you cite have made this point about Gramm--and they have not been able to demonstrate how any of Enron's spending directly affected deregulation policy, or directly related to their rise and fall. Most of the journalists have admitted as much.
Enron lied. They cooked their books. They apparently stole. This is why they rose and fell. They were able to do some of this because they weren't monitored, but there is nothing to suggest that a 1993 exemption had anything to do with their spending--much of which came after 1993 anyway, and a great deal of which was unsuccessful.
So if you want to talk about it, Rask, you should start by knowing what the deregulation exemption did for them, and when you figure out that much of what it did was exempt them from accounting rules, maybe you'll understand that I wasn't restating. I was just making the mistake of assuming you knew the issues. I'll try not to do that again.
1353. CalGal - 2/13/2002 1:03:33 PM
I said that I had "thought it was common knowledge here".
You said, as I had thought it was common knowledge that Enron's campaign contributions bought influence over trading deregulation
I see no "here". You asserted that it was common knowledge, full stop. And that is untrue.
As for my "absolutist" statements, the conversation began at #1302. I made one absolute statement, that you quoted: There was plenty of support for deregulation.
Your response was: Sorry, I won't take arguments by assertion from you on this issue.
You won't take as an assertion that there was strong support for deregulation in 1993? Ooooookay. And I left that alone.
Other than that, I made no absolutist statements, Rask. You just got cranky because you thought I was misstating your arguments.
1354. Raskolnikov - 2/13/2002 1:11:15 PM
I didn't pretend to know what the accounting issues were. I have consistently said that I was paraphrasing mainstream press accounts and that I was completely open to the idea that they could be wrong, but that I wasn't going to take your word for it. If you have a specific link that refutes any connection between Enron's rise and their lobbying efforts, I'll take a look at it.
But in reading through those same mainstream media accounts, here is a catalogue of potential connections with campaign finance reform.
1) The Energy financial deregulation in the early 90s.
2) That Gramm's wife was on the audit panel for Enron, and Gramm took a lot of contributions from Enron. (you keep referring to his personal actions, not the role of his wife).
3) Lobbying by the accounting firms to resist Levitt's attempts at regulation that might have prevented the collapse (you yourself said that this might have prevented the collapse, but expressed skepticism, without support, that campaign financing had anything to do with it).
4) Quashing of recommendations by the Commodity Futures Trading Commission in 1998 for oversight of the type of trades that Enron made.
5) The firing of that FERC chief.
I think we are making different arguments. You seem to be saying that since there is no smoking gun, there is no link to campaign finance reform. But this isn't a court of law, and campaign finance reform does not need a smoking gun to use the Enron situation as a plausible example of the need for reform.
1355. Raskolnikov - 2/13/2002 1:11:23 PM
I am not saying that these events conclusively prove that Enron bought its success from Congress. I am saying that there is enough of a stink around them that they can plausibly be argued to support the need for campaign finance reform. The possibility of corruption alone is sufficient for there to be a connection to campaign finance reform, unless you can conclusively prove that Enron's lobbying had no impact on its success or its eventual failure.
1356. Raskolnikov - 2/13/2002 1:13:15 PM
The "absolutist" statement I was referring to: "I completely agree with Dusty about the dearth of CFR issues in the Enron situation. I can't see the connection at all."
1357. jayackroyd - 2/13/2002 1:16:37 PM
"Stop taxing corporations, and corporations will stop finding it in their best interest to influence tax laws."
This from dusty.
Yes, I agree that would solve the problem, and a myriad of other problems.
1358. Raskolnikov - 2/13/2002 1:23:31 PM
"You won't take as an assertion that there was strong support for deregulation in 1993? Ooooookay. And I left that alone."
You are taking your statement out of context. Your full paragraph, which I quoted completely, was: "But I don't buy that Enron, or other energy trading companies, would be regulated now if Enron hadn't spread its largesse. There was plenty of support for deregulation."
Your assertion was that deregulation would have happened even in the absence of campaign contributions. This is what I was referring to as an unsupported assertion. I am not claiming to know what would have happened, but I think there is enough stink around it to support the need for campaign finance reform.
"I see no "here". You asserted that it was common knowledge, full stop. And that is untrue."
My first statement was in post 1305, when I said "If it is a contentious point, I will look into it more, but I had assumed it was common knowledge here." The second statement you quote was a reference back to this.
This was clearly an expression that I didn't know this was a debated issue, not a blanket assertion that this was common knowledge.
But, once again, I am spending most of my time pointing out what was actually said in previous posts, correcting your misreadings and misinterpretations, instead of getting into substantive discussions. This is how almost every discussion with you ends.
1359. jayackroyd - 2/13/2002 1:24:55 PM
But Alistair's also right. They would still have lobbying interests in regulatory areas.
I still say there's an easy solution. Require contributions to be anonymous. Does anyone doubt that the amounts contributed would plummet?
1360. CalGal - 2/13/2002 1:25:50 PM
"I completely agree with Dusty about the dearth of CFR issues in the Enron situation. I can't see the connection at all."
That's an absolutist statement? Saying I can't see the connection?
I dunno, Rask, I think "There is no connection" is an absolutist statement. I'd even say that "it was common knowledge that Enron's campaign contributions bought influence over trading deregulation was close to an absolutist statement--but softened with "I thought", it saves itself.
Saying that "I don't see the connection" is absolutist? Cmon, Rask.
Answer to the specifics (some of which I'd already made) coming up.
1361. Raskolnikov - 2/13/2002 1:30:02 PM
"That's an absolutist statement? Saying I can't see the connection?"
Jesus, you can't even quote yourself right in the same post. You said "I can't see the connection *at all*."
I am getting tired of playing these games, where you try to redefine what you said through selective quotation and emphasis. This is the second post in a row you have done it.
1362. CalGal - 2/13/2002 1:34:03 PM
Taking the easy one first:
5) I've said as much. On the other hand, you offered this originally as proof of CFR in "Enron's meteoric rise"--I just checked to be sure. I responded by saying that I thought Hebert's firing proved that Enron had purchased influence, but that it happened long after Enron's rise.
You forget to mention Cheney's energy policy meetings, which I also think Enron had a heavy hand in, due to their influence.
Neither of these have anything to do with its rise and fall, and remember, that was my original question to you--after your assertion in Message # 1298: You seem to be ignoring the extent to which Enron's campaign contributions *helped* it rise to the heights it did, focusing instead on the appearance that those contributions couldn't stop its fall.
1363. CalGal - 2/13/2002 1:41:13 PM
"I can't see the connection *at all*."
I can't. But so the fuck what, Rask? That's not absolutism. "I can't see the connection" and "I can't see the connection at all" have exactly the same meaning. One is no more absolutist than the other, and neither is an absolutist assertion of fact, which you've been doing a hell of a lot more of than I have.
Get over yourself. This is asinine.
1364. CalGal - 2/13/2002 2:06:45 PM
Your assertion was that deregulation would have happened even in the absence of campaign contributions. This is what I was referring to as an unsupported assertion.
Yes. Which are you saying is unfounded, my basis of strong deregulation support, or the fact that it would have passed?
California deregulated (so to speak) energy because many corporations made it quite clear to them that they would relocate to other states if their energy costs didn't drop. No CFR was required for the state's politicians to get religion.
This, on top of the strong ideological bias that the Republicans brought to the table already. Most of their voters agreed with deregulation, "getting government out of business", blah blah blah.
What on earth would CFR do that voters wouldn't accomplish far more effectively?
My argument is that there was strong ideological support for deregulation in the late 80s and early 90s, that many politicians at the state and federal level were actively pushing to deregulate. Yours is either that no such support existed, or that despite the support deregulation wouldn't have occurred without CFR.
I'm not going to argue angels on the head of a pin. But your assertion is as unfounded as mine is. I've said that campaign contributions buy influence, not outcome. I don't see that contributions were necessary to influence this decision, given the strong support and actual economic and political risk that politicians faced if they didn't deregulate.
But this isn't a court of law, and campaign finance reform does not need a smoking gun to use the Enron situation as a plausible example of the need for reform.
The issue we were discussing is whether or not the link is plausible. CFR proponents can use the Enron situation whether it's plausible or not.
1365. judithathome - 2/13/2002 2:14:09 PM
What on earth would CFR do that voters wouldn't accomplish far more effectively?
It would hit them all equally and at the same time...voters have to wait for elections to roll around to vote people in or out.
1366. jayackroyd - 2/13/2002 2:39:13 PM
No, judith, it's worse than that. At this point, because contributions are being used to buy access and to influence the content of legislation, the only people worth contributing to are incumbents. And because they get all the money they always get reeelected. When was the last time you heard of a meaningful primary fight against an incumbent Senator or Representative?
How many House seats are actually in play this time 'round? A dozen?
At this point the system is profoundly corrupt, and self-perpetuating. The money that buys the influence keeps the influenced in office. The only person in the house or senate who addresses this issue forthrightly is McCain.
And now watch them gut the next bill. I don't know which I find more offensive--the Republicans talking about free speech or the Democrats pretending to favor something that they want to see fail.
One reason Enron is such a good metaphor is that they didn't give money to people who shared their views. They gave money to people who could affect the future of their business, essentially regardless of ideology. What possible justification can there be for giving money to Ann Richards AND George Bush? For giving money to three quarters of the folks at the Capitol?
1367. Raskolnikov - 2/13/2002 2:39:27 PM
Cal: "I can't. But so the fuck what, Rask? That's not absolutism. "I can't see the connection" and "I can't see the connection at all" have exactly the same meaning."
Only in Cal Gal world. You are just trying to redefine yourself out of another corner. Whatever. It is a pointless argument.
"Yes. Which are you saying is unfounded, my basis of strong deregulation support, or the fact that it would have passed?"
I am getting tired of this, as once again you can't seem to follow the argument. I *didn't* say it was unfounded. I said you had't supported it. Huge difference.
"My argument is that there was strong ideological support for deregulation in the late 80s and early 90s, that many politicians at the state and federal level were actively pushing to deregulate. Yours is either that no such support existed, or that despite the support deregulation wouldn't have occurred without CFR."
You still evidently have no idea what my argument is, despite the fact that I have re-iterated it several times now. I never said that the support for deregulation didn't exist. I said that I wasn't going to take your word for it.
You are seriously misunderstanding me. I am not saying that any of these potential campaign finance scandals are truly scandals. Maybe everything was on the level, Enron was wasting its contribution money, and everyone would have voted the same way regardless of Enron's role.
1368. Raskolnikov - 2/13/2002 2:39:37 PM
But unless you can convincingly show that there is no possibility for Enron to have used the political process to influence its success, you should be able to see that the stink around them is sufficient for there to be a connection between the Enron mess and campaign finance reform.
We don't have to prove that large numbers of congressmen changed their votes because of Enron money in order for the Enron affair to be a legitimate prop for campaign finance reform. The appearance of potential routes for corruption (even if they were legal) is sufficient rationale.
1369. jayackroyd - 2/13/2002 2:44:19 PM
The only faintly plausible explanation for hard-nosed businessmen to spend money like this is that they are fooled by dishonest politicians. But it's hard to believe that they've been fooled for years.
Remember when Microsoft was being criticized for naively refraining from making campaign contributions?
Or what Hollings said "I only got $3500 from Enron. That's not a contribution. That's an insult."
1370. jayackroyd - 2/13/2002 2:44:37 PM
The only faintly plausible explanation for hard-nosed businessmen to spend money like this is that they are fooled by dishonest politicians. But it's hard to believe that they've been fooled for years.
Remember when Microsoft was being criticized for naively refraining from making campaign contributions?
Or what Hollings said "I only got $3500 from Enron. That's not a contribution. That's an insult."
1371. judithathome - 2/13/2002 2:54:16 PM
What possible justification can there be for giving money to Ann Richards AND George Bush? For giving money to three quarters of the folks at the Capitol?
They were trying to assure that no matter who was in power, the had their bases covered...that's the only reason and it is a very sleazy justification.
1372. jayackroyd - 2/13/2002 3:00:30 PM
"bases covered"
By that you mean would be able to influence legislative content and regulatory activity regardless of the political views of the political representatives, right?
How is that not bribery? Only by defining bribery so narrowly that nobody can be convicted. John Corzine and Maria Cantwell are taking campaign contributions and putting them in their personal bank accounts--repaying "loans" they made to their campaigns.
How is this not bribery?
1373. judithathome - 2/13/2002 3:01:50 PM
Hey, I think it IS bribery...I think it stinks.
1374. robertjayb - 2/13/2002 4:49:54 PM
Is the Enron Skilling the brother of TV weatherman Skilling (Tom?) on WGN out of Chicago?
I heard/read somewhere that he is but they certainly don't resemble one another. Anyone know?
1375. Cellar Door - 2/13/2002 4:51:47 PM
FINALLY -- A Gay Angle to ENRON!
1376. alistairConnor - 2/13/2002 6:01:31 PM
They were trying to assure that no matter who was in power, the had their bases covered...
It's not only that, it's hush money. Obviously, there's a danger that anyone who's not on the payroll will get all virtuous and blow the whistle. Make sure they get their share : even if it's only a piddling 10% of what the real power-brokers get, that means you've dirtied their hands, and bought their silence.
1377. jayackroyd - 2/13/2002 6:22:16 PM
It's more like 1 percent.But it can backfire. A few people have noted that Enron may have bought too mucn influence--that they greased so many palms, with so much money that the administration had to back off when called.
1378. Jonesatlaw - 2/13/2002 7:02:59 PM
I read that something like 70 percent of those now in Congress were receipients of Enron contributions, not to mention those who received indirectly through soft money contributions.
Earlier CalGal made a point that I must concede- most money flows to incumbents and that once in, members of congress are in a strong position to resist the pressure of any one company through threats of witholding contributions or supporting the opposition.
That being said, I would also point out that in those cases where incumbents are actually voted out, early contributions are key to the opponants success. Secondly, the influence that large soft money contributors also filters through the party apparatus in as much as funds are earmarked for use on behalf of certain candidates or issues. As such party discipline can be brought to bear on wayward politicians through the influence of campaign contributions to "party building" and issue advocacy funds.
1379. Jonesatlaw - 2/13/2002 7:03:26 PM
I don't think that we can deny the effects of money on the shape of legislation comming out of congress. Can we really believe that the large sums of money poured into ever increasing capaign costs by companies are wasted; or altruistic? The same can be said for the NRA, Sierra Club, Common Cause, Judicial Watch etc.
Further, how is it that in a democracy, key issues never result in legislative expressions of the public will when substantial majorities favor the legislation? Health insurance reform, gun control, campaign finance reform, social security reform, and abortion have had fairly substantial support across the board with voters, and yet Congressional action is perennially at odds with public opinion. Whatever one thinks of the particular issues, there is some evidence that well organized and financed minorities have managed to trump public consesus on several issues. That is not to argue that there is no debtate on the issues, or that there is a matching agreement on how each is to be handled, but one would assume that motivated politicians would be able to craft compromises or float experimental attempts at dealing with the problems.
1380. Jonesatlaw - 2/13/2002 7:12:36 PM
Finally, would the legislation be generally as convoluted and sometimes stupid as it is without the effects of political influence buying?
Sometimes legislation is so contorted in order to pass what is facially not special legislation in favor of a certain company, (but in reality is exactly that) it won't pass the laugh test.
I remember my tax prof showing us a provision in the tax code that was aimed at promoting timbering, and allowed for accelerated depreciation of equipment by companies engaged in logging, incorporated in Alaska, and incorporated on specified dates (like a 30 day period) some twenty years ago, and that the equipment had to be already placed in service at the time of the ennactment of the tax provision. There was only one commpany to the prof's knowledge that would meet the criteria, and they were located in the hometown of the sponsor of the bill and a contributor to his campaign. The total effect of the tax break was probably pretty insignificant when looked at against the total tax to be collected by the government for the years involved. OTOH, there's 535 of those folks with hometowns and valued contributors to hand out the goodies.
1381. judithathome - 2/13/2002 7:15:18 PM
Yep. Lockheed is about 4 miles from my house.
1382. arkymalarky - 2/13/2002 7:59:21 PM
California deregulated (so to speak) energy because many corporations made it quite clear to them that they would relocate to other states if their energy costs didn't drop. No CFR was required for the state's politicians to get religion.
There's a huge difference between regulations that vary state to state, where these same states are competing for corporate business, and federal policies and regulations. Money to the politicians would not be necessary or relevant to energy companies on the state level, since the threat to pack up and move or not locate there in the first place is more than sufficient.
1383. slackjaw - 2/13/2002 8:19:29 PM
scanning real quickly:
1) Tom & Jeff Skilling are brothers
2) I would also point out that in those cases where incumbents are actually voted out, early contributions are key to the opponants success
I'm sorry but it's not that simple. You cannot observe that challengers are more successful when they get early money and then make this inference. Challengers who raise money early are likely to be better campaigners & stronger challengers, which causes them to be able to raise the money in the first place.
By looking at challengers that get early money you are systematically looking at something correlated with the variable of interest --winning the election. The causation is unclear.
1384. slackjaw - 2/13/2002 8:24:07 PM
scanning a little more:
would the legislation be generally as convoluted and sometimes stupid as it is without the effects of political influence buying?...There was only one commpany to the prof's knowledge that would meet the criteria, and they were located in the hometown of the sponsor of the bill and a contributor to his campaign.
Why do you assert that the campaign contribution, rather than the location of the firm, is the lynchpin? It is far from clear the result would be substantially different without campaign donations. Election still has the local basis, and still gives the incentive to reward local interests.
1385. robertjayb - 2/14/2002 12:17:22 AM
Kevin Phillips writes ominously of Warren Harding, Teapot Dome, Enron, and the Bush dynasty...
excerpts...
Both Teapot and Enron involved energy policy, privatization and corruption. And, like Teapot Dome's "Ohio gang" of ethically loose Harding cronies, oilmen and administration officials, energy deregulation during the first Bush administration, through the Clinton years (and George W.'s time as governor of Texas) up to today has been warped and feasted upon by a Texas-led "Enron gang."
In both scandals, some Democrats were involved, but the power-centers of misbehavior were Republican. Yet, there has been nothing quite like the rise and fall of Enron in U.S. history, certainly no plausible comparison since the late 19th-century heyday of railroads and robber barons. The sums in Enron's collapse certainly overshadow those in Teapot, much as a space shuttle does a Model T Ford. More important, not in memory has a single major company grown so big in tandem with a presidential dynasty and a corrupted political system. Indeed, the Bush family has been a prominent and well-rewarded rung in Enron's climb to national political influence.
1386. concerned - 2/14/2002 12:35:00 AM
Re. Kevin Phillip's opinion at the expense of the truth:
In retrospect, it's unclear whether the Bush dynasty built Enron or vice versa. In 1985, when Enron was formed, the Bushes were an important political family.
Typical Lefty obfuscator. Trying to have it both ways.
...and the General Accounting Office, an investigating arm of Congress, is suing the vice president to obtain that information.
No, it isn't.
1387. concerned - 2/14/2002 12:38:01 AM
Sorta gotta hand it to Phillips for thinking his readers will be dense enough not to notice how he's leaving Mr. 'It's the economy, stupid.' out of his little tale about Enron.
1388. Cellar Door - 2/14/2002 12:53:13 AM
In Dubbya's America it just doesn'tpay to give a damn about political corruption.
1389. concerned - 2/14/2002 12:57:08 AM
Guess I need to let the cat out of the bag here, since other Motiers are blowing the lid off the fact that GWB has supported legislation 'backed' by Enron.
Most people don't realize this, but x42 has supported legislation 'backed' by Republicans on numerous occasions. Call the scandal squad!
1390. dusty - 2/14/2002 8:38:25 AM
From Phillips:
Yet, there has been nothing quite like the rise and fall of Enron in U.S. history,
How parochial to talk about the tiny fraction of all history:
There are many parallels to the rise and fall of Enron, some even in the US.
South Sea Bubble
Mississippi Bubble
TULIPMANIA
and more.
Of course, the classic book on the subject is
Extraordinary Popular Delusions & the Madness of Crowds
1391. alistairConnor - 2/14/2002 9:00:57 AM
Among the many who appear to be defending the status quo with respect to the financing of election campaigns, would anyone care to expose succinctly their views as to why it's OK for the US's legislators to owe their livelihood to corporations and/or pressure groups?
Is this situation so ideal, so democratic (and so republican) that it can't bettered?
1392. dusty - 2/14/2002 9:25:47 AM
alistairConnor
I'm not saying it's OK, but when people propose "solutions" that create a worse situation, I object.
The patient may be sick, but "First, do no harm".
1393. ycmeehan - 2/14/2002 9:28:49 AM
Alistair,
Of course, it can be bettered but in American politics, you take what you can get. From a practical stand-point, any improving amendment would bring certain defeat in Conference. You can be certain that DeLay would manage that.
1394. thoughtful - 2/14/2050 10:31:16 AM
Dusty, I view the enron thing as being different from a bubble. With a bubble or a mania, there is no sinister deception. You knew you were just buying a tulip bulb with your life savings or an internet stock with no earnings. No deception. People did make wild mistakes about the future values of those things, but they knew what they were getting.
Enron, however, entailed serious misrepresentations about their assets, their profits, and their debts.
1395. Wombat - 2/14/2050 10:37:51 AM
One could make a case for the 1990s dot.com boom being a "bubble."
1396. CalGal - 2/14/2050 11:07:47 AM
I'd say that the last three years, the ease of getting vc money, the stock market growth, was pretty close to a bubble.
would anyone care to expose succinctly their views as to why it's OK for the US's legislators to owe their livelihood to corporations and/or pressure groups?
But your premise is all wrong. US legislators don't "owe their livelihood" to corporations or pressure groups. State the question properly, for starters.
1397. CalGal - 2/14/2050 11:22:39 AM
I don't think that we can deny the effects of money on the shape of legislation comming out of congress. Can we really believe that the large sums of money poured into ever increasing capaign costs by companies are wasted; or altruistic?
But these are two separate issues.
I don't think they consider the money wasted. But there seems to be disagreement about what they are buying with that money. I thought you mentioned earlier that you agreed with my contention that they didn't purchase results, but influence and access. (unless I misunderstood Message # 1327)
So if we agree that they purchase influence and access, then does that mean they can influence legislation? Sure, it can happen. Very much in the way you describe--some ludicrous amendment or provision that is crafted in way that benefits just that company or industry. So what? It's unpleasant and ugly, sure. But it doesn't impact the outcome itself.
What affects the outcome? Voter interest.
1398. PelleNilsson - 2/14/2050 3:53:15 PM
dusty
A classmate of mine wrote his C-level essay on the various theories and models used to explain the dot-com bubble. He wants to expand on that at the D-level. Should I recommend him Extraordinary Popular Delusions & the Madness of Crowds?
1399. ronski - 2/14/2050 8:26:43 PM
While I don't support the legislation passed by the House, I don't support the status quo either. I think people should be permitted to donate as much as they wish, whenever and to whomever they wish. Probably the same for corporations, though I'm less certain about that.
Campaign finance reform will always end up as another extension of the Incumbency Protection Act.
As long as Congress continues to pass out increasing numbers of favors to petitioners, we will see people, corporations, unions, and all other sorts of interest groups finding a way to influence government to the detriment of others.
Remember, campaign finance reform was first passed in the 70s. Big success, eh?
1400. Cellar Door - 2/14/2050 8:29:42 PM
1401. concerned - 2/14/2050 11:51:26 PM
1402. thoughtful - 2/15/2050 9:43:50 AM
CellarDoor, you should post the trillin link over in poetry too....lots of enron inspired poems there.
1403. Wombat - 2/15/2050 10:18:01 AM
So Ken Lay got to where he did (before now) by being a hands-off, out-of-the-loop, corporate ignoramus? Concerned's belief in the Easter Bunny continues....
1404. thoughtful - 2/15/2050 10:34:08 AM
This enron thing is also a curious window into the world of corporate politics.
At andersen, David Duncan got hung out to dry as the scapegoat. So much for teamwork, supporting your co-workers, etc. Nope. We don't know this guy, he was a rogue employee, no one ever knew what he was doing. Heck we didn't even know he worked for us. Of course, behind the scenes, Duncan probably stabbed a bunch of employees in the back fighting to get that very lucrative enron contract under his control.
Ken Lay is given a pass by his whistle blower as he was probably likeable and a nice guy and shared the wealth with his employees at least on the way up. He wasn't around for the crash until the failed rescue attempt. Hang Skilling and Fastow out to dry as they were the heavies in the organization.
Of course, all this is speculation on my part, but having lived in the corporate world for longer than I care to admit, it all plays for me. If I were scott adams, I'd be drowning in ideas for more dilbert scripts!
1405. ronski - 2/15/2050 10:35:32 AM
It's possible Lay let his eye drift off the ball. The Board of Directors appear to have.
1406. Cellar Door - 2/15/2050 10:42:55 AM
Of course. That's what made the Captains of Industry.
1407. ronski - 2/15/2050 10:45:07 AM
People get older, get tired, get bored, get distracted, and so on.
1408. judithathome - 2/15/2050 11:01:13 AM
I think Ken Lay is an excellent manipulator and he shined on Ms Watkins and made her believe he was out of the loop, just as he probably convinced his ditz of a wife of the same thing. I think he was much smarter than Watkins intimated and he probably was very convincing in steering her toward Skilling, who, don't get me wrong, was in it up to his lying eyebrows. But Ken Lay being "out of the loop"? Please.
And if he is that stupid and unaware, he must be pretty good at convincing people in our current Government that he isn't in order to be consulted about energy policy. Unless, of course, they are all stupid, too....naw, that couldn't possibly be the case. Could it?
1409. Cellar Door - 2/15/2050 11:04:04 AM
These people are criminals and should be tossed into the nearest, deepest pit, ASAP!
1410. thoughtful - 2/15/2050 11:06:10 AM
I'm not saying he was out of the loop or didn't know, but employees will bend over backwards to protect managers they like and will do the opposite for those they hate. That's just the politics of business.
I can't help but remember the loyalty of rosemary woods. Puttin' on the ditz to protect the boss.
1411. CalGal - 2/15/2050 11:26:31 AM
You think Watkins was "puttin on the ditz"?
I agree with Judith that Lay knew what was going on. I don't think he "pointed" her to Skilling; she already suspected Skilling and Fastow, both of whom played bad cop to Lay's genial good guy.
Lay's "investigation" in response to the memo was laughably sketchy, and that smacks of ass covering.
"Yes, I met with her, yes, I had it checked out and everyone told me there was nothing to worry about. Accounting? No, I didn't have them look at the accounting. Oh, is that what concerned her? I'll be damned."
She definitely wanted to think Skilling and Fastow were the bad guys, but even so she didn't go out of her way to lie or protect Lay. A few times she had to admit that Lay was "parroting" someone else's information. So basically she's saying that if she has to choose between stupid and corrupt, she'll opt for stupidity.
She was clever--when asked about Skilling's testimony, she said she could only use his own words in response: "If it doesn't make sense, don't believe it."
1412. jayackroyd - 2/15/2050 11:35:48 AM
1379
Jones, you left out tax simplification and corporate welfare.
I wish I could add agricultural subsidies to the list, but general populace still seems to be snowed by that one.
1413. jayackroyd - 2/15/2050 11:38:36 AM
1392
Okay, I'll say it again. Make contributions anonymous.
1414. CalGal - 2/15/2050 11:40:37 AM
I don't think anonymous would be a good idea. The contributor could always figure out how to let the politician know, and the public would never know.
Agricultural subsidies are incredibly annoying. Is there any data on which states benefit the most from them?
1415. judithathome - 2/15/2050 11:41:13 AM
She was clever--when asked about Skilling's testimony, she said she could only use his own words in response: "If it doesn't make sense, don't believe it."
That was really cool on her part...
1416. jayackroyd - 2/15/2050 11:53:30 AM
1398
Yes. It's the classic. Also worth reading is Charles Kindlebergers Panics Manias and Crashes
1417. jayackroyd - 2/15/2050 11:57:16 AM
"The contributor could always figure out how to let the politician know."
Define that as a bribe, and send them both to jail. IAC, how would someone prove i?. You'd send the money to the FEC, who'd bundle it up and deliver one check on a monthly basis.
There was an interesting note from Thomas Mann of Brookings in yesterday's NYTimes. He said that most of this money is extorted anyway, and that the people giving money would mostly be happy to stop.
There was a piece in the times about that wrt to local politicians about a year ago. Real estate developers were bitching about the frequency of requests for money, and the amounts expected. Publicly. Quoted by name.
1418. CalGal - 2/15/2050 12:01:58 PM
He said that most of this money is extorted anyway, and that the people giving money would mostly be happy to stop.
But haven't you been asserting that the corporations spending the money wouldn't do so if they didn't get the results they wanted?
1419. bubbaette - 2/15/2050 12:04:52 PM
most of this money is extorted anyway, and that the people giving money would mostly be happy to stop.
True. My sister and my dad were both in positions to get memos from the top brass strongly suggesting that they make contributions to certain candidates in certain amounts with such contributions funneled back through the CEO to be bundled before forwarding to the candidates. While the contributions weren't "mandatory" there was certainly a great deal of pressure to comply.
1420. Jonesatlaw - 2/15/2050 1:12:42 PM
I know of a county elected official who continued a long tradition in his office of sending memos to his employees with a statement of their earnings, and a suggested amount of donation for his relection campaign once every election cycle. The implication is that you are not protected by civil service in your job, if I'm out, or you're not a team player, you won't have a job, so cough up. Fortunately for the underpaid government employees, the election was on a four year cycle, so there was a break to the "tax" on their salaries imposed by the office holder.
1421. Jonesatlaw - 2/15/2050 1:25:12 PM
Cal re Message # 1397 I admit have blurred the line between purchasing results on one hand and influence and access on the other.
I guess I see them as not being discrete unconnected points, but part of a continuum. Iff those with influence and access are of a like mind or backround, there is little distinction between the first and the second. I would concede that it is probably rare that there would be a complete lack of influence or access by persons differing with the dominant corporation/special interest/union contributors in a constituency, but there is certainly an imbalance in most. Political interests are not simple matters of diametric opposition, which further complicates the matter. On gun control for example, while the NRA and Handgun Control Inc. might take nearly perfectly opposite positions, other potential heavyweights may be a factor- the local PBA, trial attorneys and prosecutors might have much access and influence, but satisfy neither the NRA or HCI.
I fear I'm nearly babbling here- but in a nutshell, the dominant model is influence and access, while discrete results are a competing model whose ill effects magnify their importance beyond the numbers.
1422. Jonesatlaw - 2/15/2050 1:35:40 PM
I am afraid that it is nearly impossible to remove the power of those with great wealth, or collective interests throwing the same money around, from the realm of politics. Kenny Boy learned his lessons early in his Enron career. When Enron was created, it was Northern Natural Gas that was the strong corporation with the dominant financial position and capable, if stodgy management. The Houston boys were in a far weaker company in a market with shakier prospects. However, in order to cement the deal, (financed by junk bonds by Milliken proteges) NNG management agreed to let Lay have the reins shortly after the merger would be finalized. Plans for a modern, plush and comodious headquarter building in Omaha were drawn up by the NNG folk and the new Enron board dominated by former NNG board members. Entreaties were immediately issued by Lay for tax breaks, subsidies and handouts in general from state and local government, backed by the threat to move the company to another location if they weren't forthcomming. When the politicos balked, Lay announced that the newly completed building would be put up for sale and Enron was going to Houston.
1423. Jonesatlaw - 2/15/2050 1:49:06 PM
He did not mention that although he had entered negotiations for a new condo in Omaha, he immediatly ceased them after he was assured that he would get the CEO position. He admitted to others that he never planned to stay in Omaha, and that the move was more one of the personal preferences of he and his allies on the board than dollars and cents.
The move was a great shock to the cautious and staid Omaha business community. A public hue and cry rose up and generous tax breaks, subsidies etc were enacted to 'prevent another Enron fiasco.'
Even if Lay hadn't donated a dime to a politician, the economic impact of his ability to pack up a major employer to another state won him access, and nearly got his hand in the public cookie jar. However, when the legislation he originally pressed for was enacted, it was salted with provisions that insured that Mom and Pop's Drycleaning didn't get squat for tax breaks and incentives, and WeSaySo Inc. got all the breaks. This is more noteworthy considering the fact the disportportionate amount of small corporations a rural state like Nebraska has, and their greater economic impact.
The move and original proposals are influence and access, while the enacted legislation are direct results.
1424. Jonesatlaw - 2/15/2050 1:50:09 PM
okay, someone else can get a word in edgewise now, I feel much better.
1425. jayackroyd - 2/15/2050 2:19:29 PM
But haven't you been asserting that the corporations spending the money wouldn't do so if they didn't get the results they wanted?
Yes. How is that inconsistent with elected officials calling them up and saying "If you want me to pay attention to your needs, you'd better make a contribution."?
1426. jayackroyd - 2/15/2050 2:21:51 PM
1420. Jonesatlaw - 2/15/2050 1:12:42 PM
Same story in Cleveland's Auditor's office in the 80s. This is very common, imo.
1427. Jonesatlaw - 2/15/2050 2:31:32 PM
Jay- It's too prevalent for my tastes, and I am amazed that these clowns think it is necessary and worth the risk. Most employees who are feeding at the patronage trough would seem to be motivated to cough up to keep their snouts where they are. But I have noticed more of it in offices where the work is more ministerial and less amenable to handing out pork to communities and groups than more visible offices. The impact of a relatively small amount of money must be rather important in those races.
1428. CalGal - 2/15/2050 2:38:31 PM
How is that inconsistent with elected officials calling them up and saying "If you want me to pay attention to your needs, you'd better make a contribution."?
Well, they seem inconsistent. A shakedown implies that the corporation could get the same thing for free, but are forced to pay for it--ie, "protection money". You've presented it before as a rational business decision, which would mean that they are paying for something they wouldn't get otherwise.
In one mode they are helpless victims, the other the aggressive buyers paying for what they want. It just seems inconsistent.
Jones--the enacted legislation didn't get Lay much of anything, since he had already gone. And as you yourself point out, the legislation was not enacted because of contributions, but because of the economic impact of a corporation picking up and leaving town.
1429. jayackroyd - 2/15/2050 3:28:53 PM
I feel like Rask here.
No, there is no inconsistency. The victims get the call, "Pay up, or no results." The rational business decision is to pay up. And they do. If it's like Enron, where they eagerly pursue senators, representatives, governors and presidential candidates, it's still a bad thing.
The original point was making donations anonymous would stop this, regardless of who initiates the bribe.
Your comments don't address this point.
1430. ronski - 2/15/2050 3:31:23 PM
...if Lay hadn't donated a dime to a politician...
...Enron would have been attacked the way Microsoft was, is my guess.
1431. jayackroyd - 2/15/2050 3:32:41 PM
Can you please explain what you mean by that? Microsoft is one of the most conservative companies in existence with respect to financial reporting.
1432. ronski - 2/15/2050 3:40:11 PM
Lay played the politicians' game by freely handing out money, and was everybody's darling. Gates refused to play the game and found himself in the political crosshairs.
1433. CalGal - 2/15/2050 3:40:47 PM
Jay,
I dunno, the metaphors just seem a lot different. But I'll take your word for it. Which is it, btw? Are they helpless scam victims or greedy fat cats arranging the world to their liking?
I think the anonymity idea is pretty silly. It will be easy enough to get around, and the idea that you can put them in jail if they identify themselves creates a whole bunch of legislation and extra hassle.
Besides, to what purpose? I think anonymity is a shitty idea in and of itself, even without the easy workaround. The public would never really trust that the candidate didn't know, and they would never be able to know themselves who supported a candidate. I'd rather the public know.
1434. jayackroyd - 2/15/2050 3:50:32 PM
1432
Ah, I see. So you agree this whole system is deeply corrupt.
1433
I'm not gonna get trapped in the black hole rask was talking about. I'll say it once:
1) Anonymity is easy. Have the FEC bundle the checks. Then we can follow Ronski's notion, and let people give all they want. They won't give much.
2) Extortion and bribery both take place. Anonymity ends both.
1435. CalGal - 2/15/2050 4:09:04 PM
Jay,
1. If they won't give much, it's because they will have found another way to use their money.
2. I disagree that anonymity ends both, but I see now that you want to exploit both of these marvellously effective metaphors. We are to bleed for them while we berate them. Got it.
I agree with Ronski--let people give as much as they want, and let it be known. No politician is going to go against the voters interests. The most anyone is going to buy is influence, and the rich already have plenty of influence. What the middle class have is numbers, and they feed at the government trough plenty.
1436. jayackroyd - 2/15/2050 4:30:54 PM
"No politician is going to go against the voters
interests. "
That's the whole point. They go against voters all the time in pursuit of narrower interests. Agricultural interests. Useless defense projects. Enron. Not simplifying the tax code.
And they do it because they solicit and accept bribes.
1437. CalGal - 2/15/2050 4:37:18 PM
They go against voters all the time in pursuit of narrower interests.
Perhaps I stated this badly. No politician is going to go against the voters' interests as the voter perceives them.
Agricultural interests. Useless defense projects. Enron. Not simplifying the tax code.
These are your notions of projects that are against voter interests. Ask the people working for defense companies and accounting firms about their interests. Ask the people in Houston if they were better off with Enron rich--before the fall, of course. Ask the people in the heartland if they like all that money.
Politicians don't go against their voters' interests. If the voters don't agree with you about their interests, or don't care, who are you to say they are wrong?
1438. CalGal - 2/15/2050 4:46:18 PM
There is, of course, the situation where the politician does something for a contributor that they don't expect to turn out against voter interests and then it turns out to have unexpected repercussions. But if the outcome is unexpected it can hardly be said to have been done against voter interests at the time.
But for the most part, politicians get elected because a majority of their voters agree with the priorities he or she has stated. A contributor could certainly influence how they achieve those priorities, or make sure that a little something is thrown in for them. However, that is done in addition to pleasing the voters, rather than instead of.
In general the companies that provide money are also providing jobs and with those jobs, they are creating voters with interests that often align with the companies. I'm not talking about the rather nasty forced contribution schemes, but just general self-interest. If Chevron says "We're pulling up and leaving town if we don't get our exemption" then there will be a lot of voters in that vicinity who will want Chevron to get that exemption.
1439. Jonesatlaw - 2/15/2050 4:57:03 PM
Cal- The problem with what you posit is that it assumes that the voters have knowledge of the legislation,(or lack of it), and understand fairly how it affects their interests. While for many big issues, I think this maybe a fair presumption (because of attention by the media nd the feeding of the media by competing interests) I think that much flies under the radar, either because it's buried in volumunous legislation as an obscure rider, or the subject is beyond our grasp collectively or even that we can't allow free and fair flow of the information needed to make a decision.
The military, CIA, NSA, Child Welfare agencies, law enforcement etc have lots of their activities shielded from public scrutiny (mostly for valid reasons). How are we to protect our interests with incomplete or erroneous information, and/or understanding? How many times have Congressmen/women claimed to be surprised at the details of legislation that they have enacted because of conference committee skulduggery or a flurry of amendments near a deadline?
1440. CalGal - 2/15/2050 5:05:18 PM
Jones,
No, I don't make that assumption. I agree that it is possible that voters don't know what is in their best interests. But if voters don't know, how can you be convinced that politicians know? You talk about the politicians who are "surprised" at the details of legislation. If their voters are angry, will that politician be re-elected? No. Does the politician know this? Yes. So why would a politician knowingly do something that was against voter interests?
How are we to protect our interests with incomplete or erroneous information, and/or understanding?
This country has somehow been flailing along for over 200 years, Jones. The country has thrived. We the voters have been protecting our interests quite nicely--again, as we perceive them. In fact, we probably have more information available to us now than we've ever had in our history.
What is it exactly that you think would be done differently if everyone "knew" all the issues?
1441. Jonesatlaw - 2/15/2050 5:24:52 PM
Cal- please understand that I'm not becomming a disciple of PT Barnam in all this. I do think that there would be some significant changes in public policy if there were more transparency in government actions and the political process. Do you think that we as a nation really want to hand out the huge sums to small numbers of people in our Ag programs that we do? I don't think so, we want Farmer Brown to be able to survive on the homestead, not make ADM more millions than the market would provide. We want cheap food, not corporate welfare in overalls. But that's what we get. Tons of money to get people not to smoke and at the same time keeping tobbacco artificially cheap with prices supported by acerage limitations and subsidies- there are a bunch of contradictory policies and programs. We talk of economic stimulus packages and focus the tax breaks to people who won't immediately consume with the money and put it into circulation.
We have people whose real business is not farming, or manufacturing etc, but instead is to farm the programs and subsidies, all governed by a tax code that would give a Byzantine courtier a headache.
1442. CalGal - 2/15/2050 5:53:34 PM
Jones,
But see, we don't get a say "as a nation". We get a say district by district, state by state. Do I think that district by district, state by state, the voters who get the money from Ag programs want it? Yes, I think they do.
Do I think that this is kosher with New York? Probably not. But there are New York Congress folk who trade their votes on agricultural subsidies for the central states votes on monies near and dear to their voters' hearts. So if New York politicians started voting against ag subsidies, would they all of a sudden lose in some other area that upset their voters? Does this sound like an unlikely scenario?
So the question isn't "Do we as a nation want agricultural subsidies" it's "Do New Yorkers and the heartland want to make a trade?"
I suspect that if you told New Yorkers about ag subsidies, they'd be cranky. But if you told them the tradeoff for losing ag subsidies was [fill in their favorite government bennie] the answer would be different.
Now, two caveats:
1) I think voters in a perfect world would be able to prioritize their tradeoffs. "No, we don't want to pay for agricultural subsidies in order to get more Medicare, but we are willing to pay for a new Army base in Jackson, Mississippi." I don't think they are made aware of the trades, and I think that would be an interesting discussion for voters to have.
2) In general, I don't think the "blue" states are aware of how much they pay for the "red" states--ie, California and New York get far less government largesse than the heartland. I am surprised that more isn't made of this by politicians from the rich states.
However, I would then note that any such discussion of these issues would rapidly devolve into real regional warfare, and that none of this has anything to do with campaign finance.
1443. Raskolnikov - 2/15/2050 6:01:08 PM
We had a discussion of anonymous donations a year or two ago. There were some guys at Harvard Business School (I think) who had designed what to me seemed like a sound model for making anonymous donations viable.
Step 1: All donations have to be routed through something like a "blind trust" that accepts donations, cashes checks, and disburses funds to the candidates. The FEC is one possibility for manager.
Step 2: All donations are refundable for 30 days, which means that any receipt showing a donation is meaningless, as it could have been refunded.
Step 3: Accepting any donations in any other way is a bribe, and is a criminal offense.
Step 4: Allow everyone to give what they want.
As you can't prove you paid your dues, the bribery aspect vanishes, and people just donate at will.
I don't think this is a perfect system, as it still leaves the "millionaire" loophole, but matching public funds for those who abide by spending limits should help.
1444. Raskolnikov - 2/15/2050 6:03:43 PM
The key aspect is that they can identify themselves, but they cannot *prove* they contributed. As lying about donating will always be cheaper than donating, and politicians will know this, claims of donations won't be taken seriously.
1445. slackjaw - 2/15/2050 6:37:52 PM
At least one of those guys, Jeremy Bulow, is from Stanford Law School, not HBS.
Claims on contributions wouldn't be taken seriously, except by people a legislator knows reasonably well. If that's true it would increase the marginal value of contributions mediated by those people.
That suggests what the anonymous donations would really do is bid up the price of especially well connected lobbyists. Relative to that, the present system may be preferable because it at least spreads "access" and "influence" evenly.
I have never really understood the distinction between buying "access" and buying results. Isn't access just a probability distribution over results anyway, in the end? What else would contributors care about?
1446. CalGal - 2/15/2050 6:53:21 PM
Access and influence can affect results. It could just be semantics--buying results implies a one for one correlation that I don't think is expected.
For example, if Corporation X gives Congressman Y a whole bunch of money, they expect at least to be listened to if they request a particular exemption for Bill Z. If Congressman Y can make it happen without risking his position, he will. He might otherwise come back and say, "Can't do the exemption because..." or maybe it's less of an exemption.
But agricultural subsidies or energy deregulation aren't some little tag-on gimme, they are Bill Z itself. And I don't believe that corporations pay contributions in the expectation that they will get Bill Z passed where it otherwise wouldn't. I don't even think they expect a guarantee of the exemption. What they do expect is the ability to ask about it, and to expect the congressman to want to help them--else they will find one who does.
Isn't that separate and distinct from buying a specific result?
1447. slackjaw - 2/15/2050 10:16:44 PM
That's exactly what I mean -- you get the results if a bunch of other contingencies, which are uncertain at the time of the campaign contribution, come out your way. It's a probability distribution over results.
The main effect is to reduce the value of making a contribution. It is qualitatively different from buying results to the extent that a probability less than 1 is qualitatively different from a probability of 1.
1448. slackjaw - 2/15/2050 10:25:56 PM
But see, we don't get a say "as a nation". We get a say district by district, state by state. Do I think that district by district, state by state, the voters who get the money from Ag programs want it? Yes, I think they do.Do I think that this is kosher with New York? Probably not. But there are New York Congress folk who trade their votes on agricultural subsidies for the central states votes on monies near and dear to their voters' hearts.
That's a good point. The question is not whether public policy will be efficient or adopted only if it is net-benefit enhancing -- it never will be short of a miracle. The question is whether campaign finance makes things worse. Given the local basis of election & representation in this country that is doubtful. And those who receive concentrated benefits get organized, while those who suffer diffuse costs don't. It doesn't matter if the sum of benefits exceeds the sum of costs.
In fact campaign contributions may even alleviate that parochialism, to the extent that a congressman from Idaho internalizes the concerns of people in Pennsylvania as a result of campaign contributions. Someone has probably already made that point here.
On the other hand, if campaign contributions simply serve to redistribute inefficiencies & pieces of the pie that would have been doled out anyway, then the use of resources on campaign contributions (and perhaps lobbying in general) is pure waste. Those resources would have some productive use elsewhere in the economy, and now we can't use them in that way.
1449. Raskolnikov - 2/16/2050 12:14:31 AM
Slack:"That suggests what the anonymous donations would really do is bid up the price of especially well connected lobbyists. Relative to that, the present system may be preferable because it at least spreads "access" and "influence" evenly."
I am skeptical that this would be a serious problem. If funding does become that concentrated, there is still an extremely huge incentive to lie, with no way for the candidate to know whether the supposed donor is telling the truth. If it is a problem, you could reinstitute a cap. A candidate's completely trusted mother could accept donations from a special interest group, deposit them on that group's behalf, and tell her son who the donor was, but if you capped that amount at even something like $10k, a candidate would fast run out of intermediaries whose word he would trust *that* much. There is just too much of an incentive to get an untracable refund on the donation and keep the cash. You could even explicitly exempt these intermediaries from fraud laws for the specific action of pocketing the refund of a previously deposit donation, as part of the reform.
The main problem I see is that you still have the soft money "issue ad" free speech issue, so stopping issue ads on a candidate's behalf may still be possible route for influence purchasing.
1450. Julius Caesar - 2/16/2050 8:38:21 AM
David Broder's Take on the Campaign Reform Bill
Cal revealed the primary fault with jay's to campaign finance reform. Hi problem is more philosophical than technical. Any sort of rules can be effected, but given the Buckley v. Valeo decision, the rules will have to be flexible enough to avoid a constitutional infringement. In that flexibility is merely another hurdle for intelligent donors to overcome.
Still, jay works for a day when the system of "bribery" and "corruption" will be replaced by government so good that not only is campaign finance made redundant, but the voters are forced to realize that by having agricultural interests, interests in "[u]seless defense projects", interests in Enron, interests in a byzantine tax code, they were but dupes.
Campaign finance reform as conversion to ackroydism. Now that is reform.
1451. Julius Caesar - 2/16/2050 8:43:21 AM
On the other hand, I agree with limits on contributions, because I see limitations in anonymity. If I were Ted Turner, I could create my own monster with a single contribution of $100 million.
I realize that the Turners of the world could themselves run on their own dime, but we are fortunate that most moguls -- Forbes, Trump, Perot, Turner -- tend to be grotesque facsimiles of real human beings, and to the extent they can buy their own office, they end up in the Senate.
1452. Cellar Door - 2/16/2050 10:24:20 AM
1453. Julius Caesar - 2/16/2050 10:29:55 AM
It might be that I'm listening to my Hedwig CD at full volume, but Rich's column is actually okay.
1454. CalGal - 2/16/2050 10:33:50 AM
I realize that the Turners of the world could themselves run on their own dime
Random thought: If it is legal for Turner to "buy" himself, why can't he "buy" someone else?
Surely if Turner spends $100 million of his own money to get himself elected, he must expect something for his money. As Jay and Rask say, it's a business decision.
So why is it okay for him to put himself forward to further his own interests, but not pay that same $100 million to someone else to do it for him?
1455. Cellar Door - 2/16/2050 10:43:27 AM
1456. TheWizardOfWhimsy - 2/16/2050 10:48:01 AM
John Ridley — Everybody Loves a Winner
Everybody loves a winner. The case in point is our man in charge: George W. Now here's a guy who was the punchline to every late-night monologue before he even took the oath of office.
And once he had, the press didn't know whether to spill more ink over his malapropisms or his lack of agenda. But that was before September 11th, before the American military did in Afghanistan in a month what the Soviet war machine failed to do in ten years. Now the President is surfing a tsunami of good will. With an approval rating that's topping eighty percent, it's as if the President can do no wrong.
At least, you'd think so according to the picture painted by the major media. While there's no sport in kicking a guy just to give him a kick, it's as if the Fourth Estate has done a one-eighty on the President. They may not exactly be his cheerleaders, but it is seems as though they're afraid to question his policies for fear of inciting his mass of adoring fans. According to a study done by the Columbia University Graduate School of Journalism, during the war in Afghanistan, only one in ten stories done by magazines, televisions or newspapers, quoted anyone who was critical of the war effort. It's as though the press was afraid that any skepticism would make them seem soft for the other side.
1457. TheWizardOfWhimsy - 2/16/2050 10:48:54 AM
[John Ridley
on the Post 9/11 Press cont'd]
Beyond the war, the administration's other policies - which lack a certain amount of sex appeal even in the best of times - gets curious little scrutiny in the media. There's hardly any talk of Bush pulling out of the ABM treaty with Russia, the billions of dollars he's going to spend on a missile defense system, no matter that our newest enemies like to attack us with our own airplanes. The President's proposed budget gets swallowed whole. The deficit that it'll probably ring up seems to go down easier when portrayed as being essential to helping protect American lives.
Now I'm not trying to imply that the press owes the President a pants-down spanking for everything that he says. But the party line I can get from the White House Press Secretary. When did it become un-American to ask tough questions and expect reasonable answers? What's the point of fighting for the values of a free press if nobody's willing to use it?
1458. Julius Caesar - 2/16/2050 10:56:04 AM
Wiz
It's the natural response to the particular brand of hyperbole engaged in by the smart set. When you paint a wild caricature of the bumbling, corrupt, borderline retarded dilletante, you lay the foundation for his resurrection as American Caesar. The press is selling adult diapers; you're selling yuks.
Any big target or heroic figure will do.
1459. TheWizardOfWhimsy - 2/16/2050 11:50:29 AM
Julie-
Cynical as ever, I see. For me, the focus of that piece is that the press is fearful of the Bush popularity juggernaut--coupled with the overriding motive for increased media profits.
Maybe just as cynical a viewpoint, but time will prove one of us correct. I'm somewhat confident that it will be me--unfortunately, for America.
"Why?" you may ask--because a false idol and nationalistic pride are the products of self-doubt, rather than genuine achievement and self-esteem.
Enron is the perfect example of this country's phony and inflated self-worth.
1460. jayackroyd - 2/16/2050 11:52:02 AM
1445
"I have never really understood the distinction between buying "access" and buying results. Isn't access just a probability distribution over results anyway, in the end? What else would contributors care about?"
Slack--
Mann's claim that donations are mostly extorted intrigued me, and struck me as true. Donors don't rush to the doors to give money. Politicians dial for dollars. When you think about the process in the other direction--as politicians selling access to reluctant buyers, anonymity makes even more sense.
1461. jayackroyd - 2/16/2050 11:58:11 AM
"Any sort of rules can be effected, but given the Buckley v. Valeo decision, the rules will have to be flexible enough to avoid a constitutional infringement. In that flexibility is merely another hurdle for intelligent donors to overcome."
Anonymity doesn't violate Buckley. And wrt issues ads the state can (and does) certainly regulate broadcasters' content. Now, if the spectrum had been auctioned off, that would be another story.
1462. jayackroyd - 2/16/2050 12:00:47 PM
JC--
My problem with any of the current rules is that they are constructed by incumbents to protect incumbents. While Enron was Republican biased, and Texas biased, they were primarily buying incumbents.
As with the Broder article, ways will be found to get around any set of complex rules. Anonymity is simple. It's hard to beat simple systems.
1463. jayackroyd - 2/16/2050 12:04:12 PM
"These are your notions of projects that are against voter interests. Ask the people working for defense companies and accounting firms about their interests. Ask the people in Houston if they were better off with Enron rich--before the fall, of course. Ask the people in the heartland if they like all that money. "
The nature of the currently profound corrupt US political system is that concentrated interests, like sugar producers and anti-Castro Miamians, win out over good public policy, and win out over majority views.
1464. CalGal - 2/16/2050 12:26:42 PM
Our "currently corrupt US political system"?
When was it not corrupt, Jay? Back in the 18th century? The 19th? Was it less corrupt when Andrew Johnson was impeached, or when we had the spoils system? Was it less corrupt when politicians were trying to assuage balance the interests of the abolitionists against slaveowners? Was it less corrupt when Jefferson told Hamilton he could implement his economic plans if he agreed to move the capital to Virginia?
When, exactly, was our system a pure implementation of "good public policy"?
Please give some cites of a case where "concentrated interests" defied the will of the people. You will have to demonstrate that it would not have been accomplished without special interests, and did not reflect the will of the constituency of the politicians who supported it. Otherwise, no go.
1465. arkymalarky - 2/16/2050 12:39:56 PM
It's a matter of degrees. It never was and never will be "pure." Has it been both less and more corrupt at other times in history than now, and has the public had different levels of influence compared to monied corporations and special interests? Of course. Are there implementable policies that could address and reduce (not eliminate) the current sources of the problem of excessive corporate access and influence? Yes. To what degree and which ideas would be the most effective no one knows, but that doesn't mean the issue isn't worth tackling any more than any other problem that requires the attention of government and the people, and the arguments in favor of anonymity reducing the influence that money can buy appear sound and valid, which is not the same--nor does it need to be the same--as fool-proof.
1466. jayackroyd - 2/16/2050 1:03:03 PM
1467. jayackroyd - 2/16/2050 1:10:02 PM
CG
Why don't you start with the Cuban embargo and sugar subsidies, as in the post you replied to?
Quid pro quo
The embargo was supposed to take down Castro's regime. He is now the head of state who has been in power longest, in the world, all to serve the interests of cuban americans in Miami who donate heavily.
1468. jayackroyd - 2/16/2050 1:10:33 PM
Vin Weber:
"If nobody else cares about it very much, the special interest will get its way."
1469. jayackroyd - 2/16/2050 1:10:36 PM
Vin Weber:
"If nobody else cares about it very much, the special interest will get its way."
1470. CalGal - 2/16/2050 1:11:12 PM
Are there implementable policies that could address and reduce (not eliminate) the current sources of the problem of excessive corporate access and influence? Yes.
But not everyone answers "Yes". Plenty of good, sound, non-Republicans among them, too.
There are two assumptions inherent in the pro-CFR argument:
1) The outcome of any policy decision is significantly changed by contributer, as opposed to voter, interests.
2) The influence and access that can be purchased can be restricted completely, rather than just redirected.
I don't see solid support for either assumption.
Suppose CFR works completely. In fact, suppose we move to public campaign financing, and no one needs money any more.
Does anyone really believe that politicians will then treat the average ordinary citizen with the same attentiveness that they will treat the CEO of a large corporation in their district?
Does anyone seriously believe that the many voters who benefited from the "corrupt" policy decisions will then meekly accept the lecture that they really didn't deserve this graft and now it's going to go to someone else? Or will they instead vote for the opponent, who promises to bring the money back to the area?
What exactly is it that people think will change?
1471. TheWizardOfWhimsy - 2/16/2050 1:12:17 PM
Bull's Eye, arky!
"It's always been that way" is not a rationale for anything but the status quo--in other words: "Don't rock the boat, while I'm getting rich!"
1472. jayackroyd - 2/16/2050 1:12:42 PM
Enron donors
Maybe this is a political issues, after all.
1473. jayackroyd - 2/16/2050 1:18:10 PM
Then again, maybe the crooks are evenly divided:
Andersen's donees
1474. CalGal - 2/16/2050 1:19:38 PM
"If nobody else cares about it very much, the special interest will get its way."
So? If no one else cares about it very much, what harm is there in the special interest group getting its way? If a politician doesn't care about it, what makes you think he'll turn to "good" public policy? What makes you think everyone agrees on "good" public policy?
As for your sugar policy, that graph gives me nothing to go on. If you give me a link to read up on it, I'll respond to specifics.
But I think it quite likely that the answer is laid out in my post to Jones. Either there are people other than the Cuban-Americans who benefit, which means that the politicians are voting their constituency's will. Or no one much cares about it except the Cuban Americans, and other politicians are horsetrading--you support my embargo, I'll vote for your subsidies.
1475. arkymalarky - 2/16/2050 1:21:22 PM
I don't see solid support for either assumption.
That remark is irrelevant to the argument, since you've yet to show anything that counters either assumption, and the fact alone that the money is considered a good investment by corporations suggests strongly that they perceive a benefit in spending so much of it in such a fashion.
No one has to believe what you suggest in order to believe that the situation could be improved by the right legislation. What supporters of change believe is that with meaningful CFR corporations will have less influence on political actions than before and that legislation will reflect more (not all) of what is to the benefit of the general constituency than to the special interests who funnel in the money.
Also, words like "completely" and "pure" reflect an absolutism about the outcome eliminating the problem that no one is claiming.
1476. arkymalarky - 2/16/2050 1:24:37 PM
I do not want to get into the Cuban embargo issue since I haven't read up on it, but I just heard a group (advocacy or propaganda? You decide.) in Arkansas who is promoting an end to the embargo, saying it costs Arkansas hundreds of millions of dollars a year in potential profits from trade with Cuba. I didn't read up on it, and don't know where they got their figures, but thought it interesting that I just heard this yesterday.
1477. jayackroyd - 2/16/2050 1:34:23 PM
Let's see: zero dollars received, 24 to 6 against.
More than $5,000 received: 46 to 4.
Result: Sugar prices in US are treble world prices.
1478. jayackroyd - 2/16/2050 1:37:15 PM
Arky--
All I know is that Castro was in power when the embargo was imposed, and that he's stayed in power through Kennedy, Johnson, Nixon, Carter, Reagan, Bush, Clinton, and now Bush2.
The policy has clearly failed. It's still in place.
1479. jayackroyd - 2/16/2050 1:37:38 PM
That was 46 to 4 for.
1480. Julius Caesar - 2/16/2050 2:40:39 PM
The notion of the United States' political system somehow being corrupt is fanciful. It also tracks well with the proponent's condescension and lack of faith in the populace, as well as his propensity to look at corporations as voracious enlavement entities.
In fact, most people are of one mind on many issues, and that mind is often selfish, parochial, contradictory, and/or in line with corporate interests. The proof is in the pudding, as the Enrons spread the cash liberally to hedge their bets. They want influence, and the key to having influence is to make contributions to all.
But jay and others insist that the public has been made myopic by the system, rather than vice versa, because the public is the prize in the campaign finance game. You very well can't blame the village in order to save it.
Thus, the people (only about 50% of whom are energized to vote in a presidential electiopn year) are hoodwinked cattle, and anonymity of donors will help them see the light. Once the contributions are limited and doled out by the FEC in unmarked packages, the people will presumably be protected.
Of course, the heart of Buckley will never leave, and with each new reform, we will come closer to an aristocracy, where the process of garnering contributions from individual or corporate sources will become such a monumental pain in the ass that soon, we will have a Senate chock full of rich men (who will do three terms whil they wait for a controlling share in a major league baseball team).
And then, the people will be truly represented.
1481. Cellar Door - 2/16/2050 2:52:13 PM
Maybe someone will perform them, like "Love Letters"
1482. jayackroyd - 2/16/2050 2:53:00 PM
JC-
I don't follow a word you just said.
Buckley can't be violated by anonymity. You can give money to whomever you want.
The public is not made myopic by the system. The system is rigged. In my entire life, with 25 years of opportunity, in Maine, Massachusetts, Minnesota, New Jersey and New York, I have never cast a meaningful vote for Congress, and only twice for Senator (Whitman-Bradley and Schumer-D'Amato).
"The proof is in the pudding, as the Enrons spread the cash liberally to hedge their bets. They want influence, and the key to having influence is to make contributions to all."
TJOP. Enron bought incumbents, and special provisions arose in their favor.
And don't look now, but the Senate is full of rich men, many of whom, like ex-Senator Bob Dole did not enter "public service" rich, but will leave it rich.
1483. Cellar Door - 2/16/2050 2:54:15 PM
"The notion of the United States' political system somehow being corrupt is fanciful."
As is the notion that water is wet.
1484. jayackroyd - 2/16/2050 2:54:56 PM
But I do agree about one thing. The only effective way to fix this is vote these people out. And as long as we keep electing them, they are going to continue to behave in a profoundly corrupt fashion.
1485. Julius Caesar - 2/16/2050 2:58:20 PM
Wiz
Cynical as ever, I see. For me, the focus of that piece is that the press is fearful of the Bush popularity juggernaut--coupled with the overriding motive for increased media profits.
Maybe just as cynical a viewpoint, but time will prove one of us correct. I'm somewhat confident that it will be me--unfortunately, for America.
"Why?" you may ask--because a false idol and nationalistic pride are the products of self-doubt, rather than genuine achievement and self-esteem. Enron is the perfect example of this country's phony and inflated self-worth.
The press are jugglers and carnival barkers selling tampons. To the extent you have any expectation of the press beyond keeping you up to date on the most fashionable non-moving hairdos, you deserve whatever disappointment you garner.
The genuine achievements of this nation are palpable and you can look most anywhere but at your boob tube to find them. Sometimes, you find them on that tube, but mostly, you'll find the press making Bush a moron or a god, convincing us that in the next 10 minutes, we will all die, and saying "Enron, Enron, Enron, Enron" as many times as possible in the 73 second feature thev'ye been allotted (in between the Mighty Dog and Chevy Truck commercials).
Tying the nation's self-esteem to its fourth estate is as valuable as asking a whore "How was I?"
1486. Cellar Door - 2/16/2050 3:01:32 PM
And what did Howard Fineman say in answer to that question?
1487. Julius Caesar - 2/16/2050 3:04:32 PM
Jay
Buckley can't be violated by anonymity. You can give money to whomever you want.
I think you are being naive. Is political contribution is speech, it certainly follows that a public pronouncement as to who you support is also protected. Under your theory, stripping is speech, as long as the dancer is wearing a bag over her head.
The system is rigged. In my entire life, with 25 years of opportunity, in Maine, Massachusetts, Minnesota, New Jersey and New York, I have never cast a meaningful vote for Congress, and only twice for Senator (Whitman-Bradley and Schumer-D'Amato).
That, sadly, is what is known as a personal problem. For the folks who don't share your Birnestock disappointment, similar votes were probably something more meaningful. of course, they might have grubby, corrupt ande even "special" interests.
And don't look now, but the Senate is full of rich men, many of whom, like ex-Senator Bob Dole did not enter "public service" rich, but will leave it rich.
The trend is otherwise. Ask Maria Cantwell.
1488. Julius Caesar - 2/16/2050 3:05:03 PM
Is=If
1489. TheWizardOfWhimsy - 2/16/2050 9:16:36 PM
Julius- My, you are glum!
"Tying the nation's self-esteem to its fourth estate is as valuable as asking a whore "How was I?"
I haven't tied anything to the press. You misread my post. Try a reread.
1490. concerned - 2/17/2050 5:41:03 AM
Enron bought incumbents, and special provisions arose in their favor.
I have a problem with what seems like little but a generalization without context, if not lacking application to the current administration entirely.
Would jayackroyd care to detail these 'special provisions', in a way in which people can refer to them specifically?
And, failing that, are we merely talking about provisions which encourage a competitive energy market? The impression I have gotten is that the Bush administration has been considering the recommedations of two groups who have widely diverging interests: energy companies and environmentalists, but all of the complaints the public is allowed to hear has been coming from the environmentalists for the current administrations lack of total acquiescense to every last one of their commands, er, recommendations, without modification.
Those who claim that the Bush administration excessively favored Enron (without any good substantiation that I've ever seen) fail to justify how more anti energy administration policies (I'm not claiming that the Bush administration, at least, had time to put into practice any new pro-energy Federal policies, btw.) would have kept Enron from failing perhaps more rapidly.
1491. jexster - 2/17/2050 12:00:43 PM
Just before the last presidential election, Bush campaign adviser Ralph Reed offered to help Enron Corp. deregulate the electricity industry by working his "good friends" in Washington and by mobilizing religious leaders and pro-family groups for the cause.
For a $380,000 fee, the conservative political strategist proposed a broad lobbying strategy that included using major campaign contributors, conservative talk shows and nonprofits to press Congress for favorable legislation. Reed said he could place letters from community leaders in the opinion pages of major newspapers, producing clips that Reed would "blast fax" to Capitol Hill.
"We are a loyal member of your team and are prepared to do whatever fits your strategic plan," Reed wrote in an Oct. 23, 2000, memo obtained by The Washington Post.
"In public policy," he wrote, "it matters less who has the best arguments and more who gets heard --and by whom."
Those who claim that the Bush administration excessively favored Enron
1492. jexster - 2/17/2050 12:06:42 PM
Head still stuck little ostrich?
ENRON:A Story Whose Impact Only Gets Bigger
1493. Julius Caesar - 2/17/2050 12:08:13 PM
1494. jexster - 2/17/2050 12:13:43 PM
UC Tapped As Lead Plaintiff in Enron SH Class Action - Meet William Lerach, UC's Counsel
1495. Julius Caesar - 2/17/2050 12:13:51 PM
Wiz
I was responding to your overriding point - For me, the focus of that piece is that the press is fearful of the Bush popularity juggernaut--coupled with the overriding motive for increased media profits.
Your (and Ridley's) reliance on the press and/or media to do the right thing (whatever the hell that is) is misplaced, and the idea that the press is fearful is insupportable. Moreover, your goonish cackling when Bush is portrayed as a monkey begets his later transformation into Superman. Nothing sells soap like a dramatic success story, and to the extent caricatures rule the day for purposes of negative portrayal, it seems only fair that Bush be portrayed as walking on water now.
1496. jexster - 2/17/2050 12:25:12 PM
ONE MORE THING: It's been nearly a month since former Enron Vice Chairman John Clifford Baxter was found dead in his car in a Houston suburb, having succumbed to a gunshot wound to the head. His death was declared a suicide in short order and there has been nary a peep from Houston law enforcement since.
Baxter had warned his colleagues at Enron of accounting malfeasance less than a year ago. He quit the firm shortly thereafter. He was scheduled to testify in congressional hearings, but that was derailed by his untimely death.
A suicide note said to be found in his car, which was parked in the middle of a well-traveled intersection, has not been released.
The extent of inquiry into Baxter's death remains unclear.
I just hope Sherron Watkins, the Enron exec who told Congress on Thursday that improper partnerships were common practice at the firm, has hired a bodyguard. - SF Chron "Money Talks" Column
1497. Julius Caesar - 2/17/2050 12:30:17 PM
Do you think Richard Mellon Scaife killed him?
1498. jexster - 2/17/2050 12:50:38 PM
Of course not.
Cheney did. 
1499. TheWizardOfWhimsy - 2/17/2050 1:05:16 PM
1495. Julius Caesar - 2/17/2050 5:13:51 PM
Your (and Ridley's) reliance on the press and/or media to do the right thing (whatever the hell that is) is misplaced, and the idea that the press is fearful is insupportable.
You certainly do make leaps.
Constitutionally speaking, the function of a "free Press" is to keep the people free from governmental deception rather than it's new overriding function, that is: a corporate profit-based conglomerate, out to influence public opinion for it's own private interests.
You avoid addressing my point, which is that the press is more interested in maximizing profits before anything else--determining the stories and viewpoints of everything expressed.
As to your other ludicrous point, that Bush is a success because he has been lampooned falsely or unfairly, is completely a matter of opinion and much more " insupportable" than anything I've posited. 
1500. Julius Caesar - 2/17/2050 2:32:35 PM
Wiz
I haven't addressed your point with regard to the press because I adopted it. The press/media are not the proper tool to keep the people free from governmental deception, as they are engaged in same. Nor is there any such constitutionally mandated entity. Since we agree that the press is Enron - a corporate entity with an overriding interest in maximizing profits -your disappointment is all the more bewildering.
As for the discussion on hyperbole, let's just say that grotesque caricatures beget grotesque caricatures. Bush may or may not be a success, but when you can only see the black, you'll receive the blinding white in return.
1501. Cellar Door - 2/17/2050 2:38:55 PM
"O Blinding Light,
O Light that Blinds,
I cannot see,
Look out for me!"
1502. jexster - 2/17/2050 3:17:39 PM
THE PRESIDENT: Good morning. Alright, I want to get right down to business. It seems that a few of you liberal intellectuals in the press corps are doing your best to aid and abet terrorism by focusing the searing spotlight of truth on the sordid details of an alleged relationship between myself and a sexy little Houston debutante named Miss Enron.
So before this nonsense goes any further, I want to state a few things for the record:
* I DID NOT HAVE IMPROPER RELATIONS WITH THAT WOMAN: MISS ENRON.
* Over a seven year period, I DID NOT repeatedly moan in indescribable ecstasy as she slithered her agile and velvety tongue deep inside my campaign war chest, depositing $623,000 worth of hot political love juice.
* In 1999, I DID NOT squirm with unimaginable delight as she lowered her exquisite self snugly around my mighty gubernatorial staff, gently coaxing me to deregulate the Texas energy markets ever further, further, further!
* Early in 2001, I DID NOT shriek in superb pleasure as she slapped my inaugural balls with check after check after check, again and again and again, until each one was left utterly spent!
* Finally, just several months ago, as Miss Enron repeatedly arrived at the White House bearing her full complement of eco-political implements of gratification, I DID NOT feverishly satisfy myself upon learning of her energetic servicing of not only my partner Vice President Richard Cheney, but also every last member in his Energy Task Force club!
NO, not ONE of these grotesque assertions is accurate, and to even so much as imply that they are, during this, our nation's hour of peril, is tantamount to giving Osama bin Laden himself the greasy reach-around. And needless to say, any journalist who continues down this road will find himself in a whole world of traitor's trouble. I hope I make myself perfectly clear.
1503. jexster - 2/17/2050 3:38:50 PM
1504. CalGal - 2/17/2050 4:04:05 PM
Has anyone here read "When Genius Failed"? Jay, I think you've mentioned it before. I was just cleaning my bookshelf and came across it. It mentions the strong opposition to regulation of derivative trading, including by Greenspan.
1505. TheWizardOfWhimsy - 2/17/2050 5:44:17 PM
Julius- Not to belabor the point, but:"Your (and Ridley's) reliance on the press and/or media to do the right thing (whatever the hell that is) is misplaced, and the idea that the press is fearful is insupportable." is a far cry from agreeing with me.
Your neo-mannerist preoccupation with overly nuanced discernment is as annoying to me as my lampoons are to you.
With regard to what eastern philosophies term "the mutual arising of opposites," sometimes one is forced to the extreme opposite end of the political teeter-totter to balance the prevailing views.
Stop the pretensions and surrender to your frozen heart -- vote Democrat!!! ;-]
1506. jayackroyd - 2/17/2050 10:50:44 PM
"And don't look now, but the Senate is full of rich men, many of whom, like ex-Senator Bob Dole did not enter "public service" rich, but will leave it rich.
The trend is otherwise. Ask Maria Cantwell."
Maria Cantrell entered broke, and is banking her "campaign contrbutions."
1507. jayackroyd - 2/17/2050 10:56:55 PM
"Would jayackroyd care to detail these 'special provisions', in a way in which people can refer to them specifically? "
Sure. Enron was allowed to pick the head of FERC, and they were allowed to treat revenue as profit, by statute. Ken Lay was allowed to make trades against his loan account that were not reported as insider transactions. Fastow was allowed to take out millions of personal dollars, legally.
As I've said, I think the biggest scandal here
is that Enron management may well have legally gutted the company. Just as Global Crossings may have legally gutted the company.
1508. jayackroyd - 2/17/2050 11:05:08 PM
The system is rigged. In my entire life, with 25 years of opportunity, in Maine, Massachusetts, Minnesota, New Jersey and New York, I have never cast a meaningful vote for Congress, and only twice for Senator (Whitman-Bradley and Schumer-D'Amato).
That, sadly, is what is known as a personal problem. For the folks who don't share your Birnestock disappointment, similar votes were probably something more meaningful. of course, they might have grubby, corrupt ande even "special" interests.
Concerned, can you please list the elections for Congress or Senate where you voted, and margins of victory were less than five percentage points?
1509. CalGal - 2/17/2050 11:12:33 PM
I think that was JC.
But in any event, I don't think that makes your vote any less meaningful. It's just that other people had meaningful votes that went against you. Life's a bitch that way.
they were allowed to treat revenue as profit, by statute
Again, I don't think you can say this happened because of Enron's campaign contributions.
1510. robertjayb - 2/18/2050 12:09:07 AM
1511. concerned - 2/18/2050 2:25:07 AM
Re. 1507 -
Nothing you mentioned amounts to 'special' treatment for Enron which would not also have benefitted Enron's competitors.
Which individual are you referring to wrt FERC and can you do better than to make the highly improbable broad brush claim that Enron 'picked' this person? I strongly suspect you are elevating the fact that Enron approved someone else's choice into something that it isn't.
1512. concerned - 2/18/2050 2:26:48 AM
Re. 1508 -
Sure. I voted for Senator Peter Fitzgerald in '98, where he won 51-47%.
1513. concerned - 2/18/2050 3:14:23 AM
From FERC website:
Patrick Henry Wood III is Chairman of the Federal Energy Regulatory Commission. He was nominated to the Commission by President George W. Bush and confirmed by the Senate in 2001. His term expires June 30, 2005.
Before joining the Commission, Mr. Wood, a Republican, was Chairman of the Public Utility Commission of Texas. He has worked as an engineer with Arco Indonesia and as an attorney with the Baker & Botts law firm in Washington, DC. He also served as legal counsel to the Chairman of the Texas Railroad Commission. In the early 1990s, he was legal advisor to FERC Commissioner Jerry J. Langdon. Throughout his career, he has worked to advance a pro-customer, market-oriented vision of utility regulation.
Born: July 4, 1962, Port Arthur, Texas.
Education: Texas A&M University, BS in Civil Engineering, 1985; Harvard Law School, J.D., 1989.
Profession: Lawyer
Don't see any particular involvement that Enron has had with this individual. Of course, maybe bankrupt Enron is running the administration and the Senate and the whole world has missed it up until now.
1514. Cygnus X-1 - 2/18/2050 9:15:02 AM
You are all hypocrites without a shred of integrity. How do you sleep at night?
DNC chairman has 'two Enrons'
They should have listened to Lanny Davis, right jexster?
1515. OhioSTOPAS - 2/18/2050 10:24:27 AM
One of the companies designated by Cygnus and his cited article as an "Enron" of Terry McAuliffe is a company called Telergy that went bankrupt last fall. From the article:
"He [McAuliffe] was an investor in Telergy, and he lost money on his investment."
Another Enron? It's another WHITEWATER!! Call Ken Starr!!!
1516. ronski - 2/18/2050 10:30:26 AM
And a mere $18 million profit in Global Crossing.
1517. OhioSTOPAS - 2/18/2050 10:33:08 AM
In other words, a little more than what former President George H. W. Bush made. What's your point?
1518. jexster - 2/18/2050 10:44:50 AM
Bu$h and Kenny Boi - A Hootie & the Blowfish Love Affair
1519. jayackroyd - 2/18/2050 11:06:23 AM
Cygnus, what are you talking about? Are you saying that because democrats do this too, it's okay?
1520. jayackroyd - 2/18/2050 11:07:38 AM
One, concerned? Out of how may elections?
1521. ronski - 2/18/2050 11:35:30 AM
The point, which has been made repeatedly, is that the Democrats are as much in the pocket of corporations as the GOP is, despite the continuous attempts of Democrats to try and harm the Bush Administration by tying it to Enron.
1522. jayackroyd - 2/18/2050 12:22:41 PM
But that's not what we're saying here. Or at least not what I'm saying. And the fact both parties are in the tank is even more support for the argument that reform is needed. I don't understand why concerned and Cygnus-1 keep pointing out the democrats are dirty too, in support of an argument against reform.
1523. jexster - 2/18/2050 12:23:52 PM
There's a difference I think between making a point repeatedly and establishing a point once.
1524. jexster - 2/18/2050 12:25:18 PM
Energy Industry in Post Partem Depression
1525. ronski - 2/18/2050 12:32:46 PM
I look forward to evidence that you've learned that, jexster.
Or will you persist in claiming that the Democrats are guilt-free because the GOP tends to get a bit more from big business than the Dems do?
Neither major party is wholesale involved in simple, Tammany Hall-style graft. That is reserved for the local level: towns, counties, small cities, etc.
But both parties in Washington are busy picking winners and losers among corporations, to the tune of about $80 billion in corporate welfare (largely redistributed from the unfavored corporations to the favored ones). People who play the game, like Lay, get goodies; people who don't, like Gates, get investigated.
1526. TheWizardOfWhimsy - 2/18/2050 12:54:33 PM
" . . . GOP tends to get a bit more from big business," Ronski?
"People who play the game, like Lay, get goodies; people who don't, like Gates, get investigated."
You prove the need for change and that . . .
"The best things corrupted--are the worst!"
1527. jayackroyd - 2/18/2050 1:02:29 PM
You can who gets what from whom here:
money for nothing, tricks for free
1528. jayackroyd - 2/18/2050 1:09:02 PM
http://www.cnn.com/ALLPOLITICS/time/2002/02/18/trail.html
In January 2001, Lay wrote to Clay Johnson, the White House personnel director, with a list of some eight candidates to be considered for presidential appointments. And Bush duly named two of Lay's picks to the Federal Energy Regulatory Commission, which oversees the nation's electricity and gas markets. Since they are where Enron made most of its money, this was a win for Lay.
The White House has not disclosed who else was on Lay's list. But there's no question that Lay was focused on the FERC and its influence over Enron's markets. Pat Wood, whose name was on the list Lay gave the White House, is a respected former Texas regulator who has been backed by Enron since the early 1990s.
1529. wonkers2 - 2/18/2050 1:29:50 PM
Anybody catch Frank Rich's column on Enron last week? He pointed out that the lists the names of investors in Fastow's off-the-books partnerships which netted such incredible guaranteed returns for Fastow and the investors and losses for Enron may turn out to be very interesting.
1530. jayackroyd - 2/18/2050 1:34:37 PM
Is that anything other than innuendo?
1531. TheWizardOfWhimsy - 2/18/2050 1:35:11 PM
"No, sir. Let me tell you exactly this: President Bush got 68 percent more money than every Democrat in the Congress combined. And this ludicrous idea, “Oh, they both got it,” no, it was 73 to 27. If you lose the game 73 to 27, that is not a tie."
[-- James Carville on Meet the Press]
1532. TheWizardOfWhimsy - 2/18/2050 1:36:13 PM
3000 partners, Wonk--I can't wait!
1533. jayackroyd - 2/18/2050 1:47:57 PM
Is that anything other than innuendo?
1534. Cygnus X-1 - 2/18/2050 1:49:08 PM
I'm not saying that "Enron" is OK because the Democrats do it, too. By pointing out McAuliffe's problems, I mean to point out that "Enron" must not be so bad if a similar situation occurs but is given no notice by the "campaign police".
What people don't understand, though, is that money is the equalizer in politics. The problem is that it requires an initiated public. Unfortunately for them, couch potatoes aren't very initiated.
I say money is the equalizer because under today's law, who can get their message out to the general public 60 days before an election? Answer: Anyone with the money. Under this new law, who can? Answer: The high-powered media and government officials.
1535. jayackroyd - 2/18/2050 1:50:03 PM
C'mon, it's not Bush's fault that he decided to run outside of the campaign finance system. Is it?
1536. jayackroyd - 2/18/2050 1:53:42 PM
"By pointing out McAuliffe's problems, I mean to point out that "Enron" must not be so bad if a similar situation occurs but is given no notice by the "campaign police". "
That's pretty incoherent. Who are the campaign police? And are you saying that McAuliffe's situation, or Marc Rich or Whitewater or Enron are not evidence for reform?
Money is not the equalizer iac, because incumbents get all the money.
1537. jayackroyd - 2/18/2050 1:56:37 PM
Except Gary Condit, of course.
1538. Cygnus X-1 - 2/18/2050 2:13:31 PM
jay, Bush wasn't running as an incumbent.
1539. jayackroyd - 2/18/2050 2:17:49 PM
I was talking about the congress obviously. The presidential candidates for each of the major parties also receive lots of money regardless of their incumbency status.
In fact, the parties rigged the nomination as well this time, by front loading it so heavily that the money had to back Bush and Gore early or face being shut out.
1540. bubbaette - 2/18/2050 3:00:37 PM
Money is an equalizer for those who have money, assuming that they have equal amounts of money. But it isn't SUPPOSED to be a government of, by and for the money, though that's what the our elected officials seem to work.
Government of the highest bidder, by the highest bidder for the highest bidder. But that seems to be peachy for Cygnus.
1541. bubbaette - 2/18/2050 3:05:37 PM
I seem to recall the principle being "one person - one vote", not one dollar per vote.
Equalizer indeed.
1542. concerned - 2/18/2050 3:48:24 PM
Re. 1528 -
And is your spin that the Bush administration would only be behaving properly if it appointed personnel for administration positions only if they were not endorsed by any corporate interests?
The url you give does point out that Wood opposed Enron's position on California electric price caps, in probably his only significant position affecting Enron as FERC chairman.
1543. dusty - 2/18/2050 4:09:24 PM
Msg num=1523> jexster
There's a difference I think between making a point repeatedly and establishing a point once.
I nominate this for funniest post of the month.
1544. dusty - 2/18/2050 4:10:03 PM
Sorry; retry
Message # 1523 jexster
There's a difference I think between making a point repeatedly and establishing a point once.
I nominate this for funniest post of the month.
1545. jexster - 2/18/2050 4:34:33 PM
Back at ya Dusty
Donor / Total money given / Percentage to Republicans
American Financial Group / $1,110,000 / 100 percent
Philip Morris / $1,093,000 / 90 percent
Bristol Myers Squibb /$1,019,000 / 90 percent
National Rifle Association / $882,000 / 94 percent
Pfizer / $875,000 / 88 percent
Marriott International / $776,000 / 99 percent
MBNA Corporation / $571,000 / 93 percent
Pepsico Inc. / $561,000 / 94 percent
Cigna / $420,000 / 90 percent
RJ Reynolds Tobacco /$407,000 / 88 percent
PhRMA / $394,000 / 85 percent
1546. jexster - 2/18/2050 4:36:07 PM
1547. jexster - 2/18/2050 4:39:07 PM
Enron - TOTAL $5,951,570 (since 1989)
26% Demo
74% GOP
1548. Cygnus X-1 - 2/18/2050 4:52:57 PM
bubbaette, re 1540:
Money is an equalizer for those who have money, assuming that they have equal amounts of money.
What would you prefer, to have our ability to communicate be based on our profession or proportional to our political connections? It seems to me that that would be an aristocracy. It's ironic that the very thing you liberals decry (in order to obtain power, of course) is the very thing that equalizes us all. Money can be spent by anyone.
Do you really think the average NRA member is a jet flying millionaire? They throw around a lot of weight, though, don't they? And why is that? Because it's members are initiated and have banded together in a common cause. They can take out ads despite being a politically incorrect group.
I don't know about you, but I certainly don't want my ability to communicate ideas to be subject to the whims of anyone, let alone an unelected judge.
1549. jexster - 2/18/2050 5:03:18 PM
It isn't about Cyg's ability to communicate his ideas less still his wingnut phantasms of black robed evil...
No its about big bidniss and their fear that unless business groups are allowed to use their money to sway political debate, over the long run, popular opinion will nudge politics toward the Democrats.
GOP policies don't have popular support. 5 black robed judges to 4.
1550. bubbaette - 2/18/2050 6:24:16 PM
Cyg
What the NRA has that strikes fear into the hearts of rural representatives is NUMBERS, not money. The Congress votes the AARP too, but it ain't for the bucks. But that doesn't bother me -- that could arguably called voting as your constitutents would wish.
On the majority of matters relating to the stock market, energy, telecommunications and all those bit money issues, there are not strong organized constitutencies who track the issues and look out for small investors. Nope, there the money talks and the public interest be damned.
1551. bubbaette - 2/18/2050 6:25:17 PM
that's "big" money, not "bit" money.
1552. Cellar Door - 2/18/2050 8:56:32 PM
GOP LIES BIG-TIME ON ABC
Rat Man brazenly spreads base falsehood
Begala corrects him; whores silent
GOP uber-operative Alex "Rat Man" Castellanos has revealed how the Republicans plan to deal with the growing Enron scandal:
LIE THROUGH THEIR TEETH.
Appearing on ABC's "This Week" alongside Paul Begala, Castellanos said that the Enron scandal would not hurt Republicans in the elections this fall mainly because Kenneth L. "Kenny Boy" Lay spent a night in the Lincoln Bedroom while Bill Clinton was president.
This is an outright lie.
The lie appears to have been invented by Fred Barnes of the Weekly Enron Taliban Standard, and spread quickly through the right-wing echo chamber. It has also been exposed as a lie by various sources, including Gene Lyons.
Begala quickly tried to correct the lie, but the ABC "This Week" moderator, George Stephanopoulos, said nothing, lending credence to the falsehoods spread nationally by the GOP operative known in Washington as "Rat Man."
Alex "Rat Man" Castellanos
GOP Liar-For-Hire
Castellanos, a media consultant and producer, got his nickname from his stunt in the 2000 campaign, a TV. ad in which the word "RATS" was subliminally linked with Al Gore.
But with Enron, Castellanos and the GOP cannot afford to go subliminal. They must lie, outright, brazenly, knowing that none of the Whores has the guts to call them out.
1553. Cellar Door - 2/18/2050 8:56:45 PM
Another Republican Liar-For-Hire, Bush aide and Enron lobbyist Ed Gillespie, appeared on Meet the Press -- and got his butt kicked into next week by James Carville. Maybe he'd have done better had he lied with the abandon of his pal "Rat Man," knowing that the Whores would let it stand.
Email George Stephanopoulos, asking him to clarify why he said nothing when Castellanos spread his lie about Lay and his own former employer, Bill Clinton. And ask him to correct the lie on the air. George, if you want to be a grown-up journalist you have to correct misstatements of fact. Remember -- just the facts? That's for starters. That's YOUR job. Now do it.
1554. jayackroyd - 2/18/2050 9:01:12 PM
"And is your spin that the Bush administration would only be behaving properly if it appointed personnel for administration positions only if they were not endorsed by any corporate interests?"
No my spin, as I said long ago, is that if you give money to a politician you should not be able to advise him on regulators of your industry. Certainly it looks bad to give the president a few hundred thousand dollars, and a list of regulators you consider fit to regulate you.
You lost your shit over the president picking his own travel staff an administration ago. And this looks okay to you? Is there any principle you can state here that will hold across the last two adminstrations? Other of course, than R good, D bad.
1555. wonkers2 - 2/18/2050 9:09:12 PM
Jayackroyd: "Is that anything other than innuendo?"
No. It's not innuendo. We already know that Fastow and one of his assistants turned a little bit of money into a lot at the expense of Enron stockholders. Other investors also apparently were allowed access to Fastow's alchemy machine. That is fact, not innuendo. Don't you think it will be interesting to see the names of the favored investors? There may not be a Republican in the bunch, but I wouldn't bet on it. Probably some Democrats, too. Enron was cultivating Democrats in order to hedge against a Bush defeat.
1556. arkymalarky - 2/18/2050 9:26:55 PM
Enron was cultivating Democrats in order to hedge against a Bush defeat.
Hmmm. Sorta makes you wonder if there will be any SC justices on that list.
1557. wonkers2 - 2/18/2050 9:45:20 PM
From Frank Rich's column of 2-16:
Surveying the landscapt this week, John McCain told Larry King that while he'd like to believe Enron was merely a tale of corporate malfeasance, he thought it would prove "a lot more than that' and "lead a lot of places we never htought it would. We'll soon need an Olympics-grade score card t keep track.
For starters, keep your eye on two private lists that hare being held onto for dear life by their keepers. The first, of course is the list of those who met with the Cheney energy task force....
The second list is of the "individual investors" who joined Andrew Fastow and other Enron execs at the trough of the 3,000 off-the-books partnerships that turned nominal investments into fortunes overnight while regular stockholders got stuck with the debt. Enron has told Congress it can't provide the names even though it usually owned 97% of these entities.
1558. wonkers2 - 2/18/2050 9:46:19 PM
Arky, that would be something!
1559. jayackroyd - 2/18/2050 10:31:25 PM
Wonkers--
It's innuendo until it's published. If Rich or McCain know who's on the list they should say so.
I agree the lists will be interesting. But look at Torricelli....
1560. wonkers2 - 2/18/2050 11:09:22 PM
Toricelli is a crook, in my opinion.
1561. Indiana Jones - 2/18/2050 11:53:29 PM
1562. CalGal - 2/18/2050 11:57:03 PM
Indy's link is broken, try this
1563. Indiana Jones - 2/19/2050 12:02:43 AM
Thanks, Cal. Wonder how that <BR> tag got stuck in there?
1564. CalGal - 2/19/2050 12:08:58 AM
Don't know, but I notice that National Journal is members only and I was able to get into that page without being a member. How did that happen?
1565. concerned - 2/19/2050 12:35:46 AM
You lost your shit over the president picking his own travel staff an administration ago. And this looks okay to you? Is there any principle you can state here that will hold across the last two adminstrations?
You want principles that will 'hold across the last two administrations'? Try these, for starters:
1)Mass firing without cause of entire personnel in government office very likely not acceptable.
2)Telling said personnel to clean out their desks on moment's notice not acceptable.
3)Attempting to replace entire staff with that of presidential crony not acceptable.
4)Involving FBI and IRS in attempt to incriminate said personnel not acceptable.
5)Trumping up charges against former head of government department in trial where jury acquitted defendent of all charges within an hour and a half of deliberations, costing him $600,000 in legal fees not acceptable.
I don't believe the above is even remotely comparable to the Senate and Bush approving Pat Wood for the FERC chairmanship. Certainly, Enron was not the only entity who recommended this person, and if Enron hadn't recommended him, it appears quite likely to me that the Bush Administration would still have nominated Wood for the spot. Does the possibility of impropriety exist? Perhaps. Does it seem likely here? Not to me.
1566. concerned - 2/19/2050 12:37:44 AM
1520. jayackroyd - 2/18/2050 4:07:38 PM
One, concerned? Out of how may elections?
Perhaps half a dozen. I wouldn't rule out the possibility that I may have voted in one or two other congressional squeakers, but I frankly haven't bothered checking the poll stats.
1567. TheWizardOfWhimsy - 2/19/2050 12:43:59 AM
My, my--eight years of beating Clinton's penis to a pulp with ink on pulp and now the pigs are squealing: "Unfair!"
Jonathan Rauch should ask Maureen Dowd for a date. 
1568. concerned - 2/19/2050 12:48:31 AM
If Pat Wood had been employed by Enron at any time, or been a member of Enron's Board of Directors, that perhaps should have mitigated against his selection to head up FERC, given the recommendation by Enron. But neither has been the case, and the bipartisan US Senate appears not to have been perturbed by his credentials.
1569. concerned - 2/19/2050 1:17:14 AM
Perhaps jayackroyd might want to reveal his impression the propriety of the x42 administration's actions as described in this material from the Washington Post regarding matters which have never been satisfactorily cleared up re. Travelgate:
White House officials obtained FBI background material on Billy Dale seven months after he was ousted as head of the White House travel
office, incorrectly asserting they were considering giving him access to the
building.
A grand jury, empaneled this week in Washington, will begin hearing evidence on whether administration officials tried to impede investigators looking into the dismissals. Starr's office did not know about the White
House request for background information on Dale, according to a source close to the investigation.
The White House form, sent to the FBI on Dec. 20, 1993, asked for results of routine background investigations of Dale, who had worked at
the White House for 32 years before he was fired and escorted from the White House complex seven months earlier. It said the information was
needed because Dale was being considered for "access." The top of the document says "To: FBI liaison, From Bernard W. Nussbaum."
Nussbaum, who was then White House counsel, said in a statement yesterday he had "absolutely no knowledge of any request being made by
anyone in the White House to the FBI for any report concerning Billy Dale."
The White House relinquished the request form last week to Clinger's Government Reform and Oversight Committee along with about 1,000
other documents, after first asserting the papers should remain confidential under a claim of executive privilege. White House aides said yesterday they did not notice the document request for background information on
Dale.
1570. concerned - 2/19/2050 1:17:31 AM
Then we have the following information which is excerpted from:
The Washington Times - August 17, 1996
Clinton officials altered and withheld subpoened documents from congress in order to cover-up Hillary Clinton's role in the Travel Office firings. For example, Mrs. Clinton's name was deleted on several documents released by the White House in order to separate any participation by the First Lady.
1571. Cellar Door - 2/19/2050 9:20:26 AM
So nice to know that as far as the Republicans are concerned Clinton is still President !
1572. Jonesatlaw - 2/19/2050 10:20:04 AM
Me thinks they protesteth too much- GOP threatens lawsuit to shut down TexasGOP brought to you by Enron website. Trademark vs First Amendment
1573. Ms. No - 2/19/2002 2:09:05 PM
date stamp testing
1574. concerned - 2/19/2002 2:52:15 PM
...finally...
1575. jexster - 2/19/2002 3:28:16 PM
This was Mardi Gras week, so it's fitting that Washington, D.C., pause to appreciate Rep. Billy Tauzin. The Louisiana Republican is a kind of human Mardi Gras, a politician who is having way too much fun making a ruckus.
Greaseball Billy Tauzin -Another GOP Fraud
1576. jexster - 2/19/2002 6:50:48 PM
Now they've nailed Merrill Lynch!
An internal memo boasts of their excellent insider information for investment in Fastow Enron partnerships.
"Only selected investors allowed to play"
God Bless Ronski's Invisible Handjob
1577. ronski - 2/19/2002 8:41:36 PM
What?
1578. wonkers2 - 2/19/2002 10:09:57 PM
Cal, "Indy's link is broken."
Pity. I never heard it called a "link" before. Valley talk? Or did you mean "dink?" Or perhaps "dinky" or "dingus?"
1579. Cellar Door - 2/20/2002 11:23:12 AM
1580. CalGal - 2/20/2002 11:38:37 AM
Conflict of Interest Redefined
I don't know that I agree with the conclusion, but it nicely captures how hard it is to define, much less protect, against conflict of interest these days.
1581. jexster - 2/20/2002 12:13:14 PM
For years, many conservative strategists have hoped that as more workers own shares they would absorb the predominantly small-government attitudes of business owners. That hasn't happened to any significant extent; in the 2000 presidential race, stock owners were only slightly more likely to support George W. Bush, the more conservative candidate, than voters who didn't own stock, exit polls found.
But the Enron furor suggests that the most immediate effect of widening stock ownership may be to increase the constituency for government action to safeguard investments and pensions from fraud. A recent Times poll found that Americans who own 401(k) plans, though broadly pro-business in attitude, were much more likely than non-investors to support new government regulations aimed at accountants and the managers of pension plans.
"As you have more people invest in capitalism, the theory was that that would lead to a hands-off view toward government," said Democratic pollster Stanley B. Greenberg. "In fact the opposite may be true post-Enron. That stake in capitalism has been put in jeopardy by reckless behavior and we are back at the old-time question of
'Who can arbitrate for ordinary people?' It turns out to be government." LAT
1582. jexster - 2/20/2002 12:23:55 PM
1583. ronski - 2/20/2002 12:29:50 PM
1584. jexster - 2/20/2002 12:32:32 PM
1585. jexster - 2/20/2002 5:01:05 PM
In a note of unintended irony and rebuke, Robert Skidelsky's third and final volume on the life and work of John Maynard Keynes, Fighting for Britain: 1937-1946, was released just as the Enron crisis was shoveling the 1990s into the grave where they deservedly belong. As we battle a recession at home and wage a campaign against terror abroad, the Keynesian worldview has fresh, new relevance. Regulation is back: In economics, as in politics, we have been brought down to Earth. As Gretchen Morgenson of The New York Times put it, "For years, the corporate fabulists were in charge. Now it is the realists' turn." The insight goes beyond corporate life: It takes in all the culture that was woven around the triumphalism and delirium of the 1990s.
Fouad Ajami
1586. jexster - 2/20/2002 7:35:31 PM
Enron's collapse teaches us the dangers of excess - The Archbishop of Canterbury
1587. Cellar Door - 2/20/2002 8:10:48 PM
1588. ronski - 2/20/2002 8:46:32 PM
Oh sure, "market fundamentalism." As if we had such a thing in this country.
1589. TheWizardOfWhimsy - 2/20/2002 9:20:26 PM
How about "compulsive exploitation of anything and everything?"
1590. jexster - 2/20/2002 9:41:29 PM
California Democrats have dubbed the Bu$h Enron Coverup
CHENRON
1591. Cygnus X-1 - 2/21/2002 9:36:46 AM
Keep blabbering, jexster, but you should have listened to Lanny Davis.
Clinton helped Enron finance projects abroad
Excerpt:
The Clinton administration provided more than $1 billion in subsidized loans to Enron Corp. projects overseas at a time when Enron was contributing nearly $2 million to Democratic causes.
Oh, I guess that was back when everyone did it, so it was OK.
1592. jexster - 2/21/2002 1:15:00 PM
Enron has never contributed 2 million to any democatic cause or combination of causes you idiot.
Cheney Lies About GAO - Again - The National Review
1593. jexster - 2/21/2002 1:17:05 PM
Enron Total Contributions
to Federal Candidates and Parties, 1989-2001*
Election Cycle
Total Contributions
Soft Money Contributions
Contributions from PACs
Contributions from Individuals
% to Dems
% to Repubs
1990
$163,250
N/A
$130,250
$33,000
42%
58%
1992
$281,009
$75,109
$130,550
$75,350
42%
58%
1994
$520,996
$136,292
$189,565
$195,139
42%
58%
1996
$1,141,016
$687,445
$171,671
$281,900
18%
81%
1998
$1,049,942
$691,950
$212,643
$145,349
21%
79%
2000
$2,441,398
$1,671,555
$280,043
$489,800
28%
72%
2002
$353,959
$304,909
$32,000
$17,050
6%
94%
TOTAL
$5,951,570
$3,567,260
$1,146,722
$1,237,588
26%
74%
1594. Cygnus X-1 - 2/21/2002 1:17:13 PM
All we need to hear now is that Enron paid hookers to service Clinton in return for these loans. That loveable rogue! He screwed the little guy, sure, but at least he was getting some!
BWAHAHAHAHAHAHAHAHA!
1595. jexster - 2/21/2002 2:10:41 PM
Hey cyg...tell me who short dicked the American Wingnut anyway?
1596. Cygnus X-1 - 2/21/2002 2:18:01 PM
Look, jexster, you have no one but yourselves to blame. Lanny Davis warned you, but you wouldn't listen. Now you have all of this shit stuck to you. Are you at least getting some?
BWAHAHAHAHAHAHAHAHAHAHAH!
1597. jexster - 2/21/2002 2:35:27 PM
1598. jexster - 2/21/2002 2:47:47 PM
We've never really subscribed to the adage that "all you really need to know you learned in kindergarten"--but lately, it's become clear that the KidsPost, a daily Washington Post feature for children that runs on the back of the "Style" section, is a lot closer to the mark than the adult pages are. Indeed, judging from the January 31 edition, KidsPost is refreshingly forthright about the Enron scandals--unlike the Post's front page, which continues to use the jargon of undeserved, studied neutrality ("Enron CEO Felt 'Betrayed,' Panel Told") so glumly familiar to American newspaper readers. 
1599. jexster - 2/21/2002 9:26:42 PM
A Point of Information (or Cyg MISinformation)
This is what Lanny Davis **actually** said
We saw the danger to the country and to political self-interest when partisan cheap shots are used. Payback feels good in the short run, but there's greater danger in the long run, and I think the politics of this don't favor getting out in front of the facts.
Cheney and the liberul media are doin just fine all by themselves!
1600. jexster - 2/22/2002 10:48:29 AM
The White House, on the eve of the filing of a congressional lawsuit seeking information about its dealings with energy industry executives, signaled yesterday it is ready to mount a high-level and protracted legal challenge.
Chenron - The Coverup Continues
1601. concerned - 2/22/2002 11:30:46 AM
New Name? How about Jexsteron, in honor of our very own (*cough* *cough*) watchdog? Or Rubinron?
1602. thoughtful - 2/22/2002 11:42:10 AM
Andersen did it again? Andersen audit turns out to be swiss cheese to the tune of $2.8Bil!
1603. jexster - 2/22/2002 12:13:38 PM
While the White House has repeatedly described former Enron chairman Kenneth Lay as simply a "supporter" of George W. Bush, extensive correspondence between the two men paints a far cozier picture of their relationship, according to copies of letters ....
The pages of correspondence, exchanged during the years Bush served as governor of Texas, were released today in Austin by the state archives in response to Freedom of Information requests filed by TSG and other news organizations
We've arranged the Bush-Lay letters into several batches and, where applicable, have followed an original letter with the recipent's reply. TSG will upload the correspondence as quickly as we can scan the documents. You'll find the first 15 letters here
1604. concerned - 2/22/2002 12:31:15 PM
Re. 1603 -
Ha ha ha!
I'm afraid your desperation is showing, jexster. I've personally gotten more correspondence than Ken Lay has from the Bush/Cheney campaign, and a very nice Christmas Card from the White House on top of that, based on what you linked here. So, if you want some real influence with the WH, forget Mr. Lay. Just send me a few G's in coarse, unmarked bills and I'll see what I can do to purchase jexster boy some influence. Howzaboutit?
Let's see: GWB's entire response to the letters Ken Lay sent amount to three form letters and about six words on two handwritten notes.
I'd love to see Lefties try to nail GWB on such matters as Enron promoting wind energy, because it'll show that the 'Rats make up for in hypocrisy what they lack in shame.
1605. concerned - 2/22/2002 12:37:34 PM
Lanny Davis is not one to criticize others about making partisan cheap shots, since he's universally regarded as one of the premier bought and paid for Clowntoon apologists and overall cheap shot artists of the last decade.
1606. Cellar Door - 2/22/2002 12:40:55 PM
Remind us again, connie -- what was it that Bill Clinton do exactly?
Murder Vicne Foster?
Murder Ron Brown?
Run drugs through a secret airline paid for at taxpayers expense?
Travelgate?
Filegate?
Oh I remember -- he got a blow job.
1607. Cellar Door - 2/22/2002 12:41:44 PM
And as we all know that blow-job was so much worse than ENRON.
1608. concerned - 2/22/2002 12:51:12 PM
cllrdr -
The beauty part of all this is that you Lefties who threw away your reputations on this treasonous corrupt impeached swine are busting a gut trying to find even a hint of impropriety wrt the Bush administration. And failing miserably, I might add.
Hypocrisy just doesn't come any purer than what you 'Rats are exhibiting here.
How many of the hundred DNC employees who took the Fifth or fled the country have you beat the truth out of so far, Jexster? And Buddhist Temple Bore? LOL!
I'm loving it.
1609. jexster - 2/22/2002 12:52:48 PM
1610. jexster - 2/22/2002 12:55:55 PM
Gee 100 DNC employees took the 5th?
WOW.
Damned liberal media.
I never heard of that.
Dear George,
I was sorry to hear you went through knee surgery...
Its going to be tough for you to give me one of those weekly blow jobs you are so good at...
MoronI
1611. jexster - 2/22/2002 1:02:14 PM
Once again, the Bush administration has released White House documents - from the CLINTON administration. These documents reveal Ken Lay's efforts to influence Treasury Secretary Robert Rubin and his successor, Larry Summers. Lay offered Rubin a seat on Enron's board; Rubin refused, as he did with 30-40 offers from other companies, and there is no hint that Rubin did Lay's bidding. (Rubin did lobby for Enron in 2001, but that was to protect his current employer - Citibank, which lent billions to Enron - not Clinton.) Lay also complained to Summers after Assistant General Counsel John Yetter suggested the White House might recommend regulation of derivatives. That proposal was never made, but no one has alleged that Lay's lobbying was the cause. Obviously, Bush is AGAIN trying to shift blame to Clinton for his own misdeeds
Busting a Gut - Washington Post 2.20.02
1612. jexster - 2/22/2002 1:06:09 PM
"The Army today gave its reasons for editing nearly out of existence references to Enron in the Army secretary's official homepage biography. The redaction was done to save space on the page and to ensure that Thomas White's history included more words about the future, a spokesman said. Before the edit, White's bio included about 120 words near the top on his 11 years at Enron Energy Services. As of last week, all that verbiage had been trimmed to one small sentence-which was moved to the end of the page."
Defense Week
1613. jexster - 2/22/2002 4:03:20 PM
WASHINGTON (Reuters) - The investigative arm of Congress filed an unprecedented lawsuit against the White House on Friday to learn the role Enron Corp. and other energy companies played in developing the Bush administration's energy policy.
GAO Enters Chenron Coverup With Proud Record
1614. jexster - 2/22/2002 4:05:14 PM
`We couldn't stop them, we could only delay them,'' John Dean said. He said he convinced Nixon that to litigate ``would bring only negative publicity and defeat.''
1615. jexster - 2/22/2002 4:11:24 PM
This is the first time that GAO has filed suit against a federal official in connection with a records access issue," the office said in a written statement. "We take this step reluctantly. Nevertheless, given GAO's responsibility to Congress and the American people, we have no other choice. Our repeated attempts to reach a reasonable accommodation on this matter have not been successful."
1616. jexster - 2/22/2002 4:20:07 PM
curious from Slate UK
"Tony Blair has been accused by his political opponents of undermining British interests by helping Indian billionaire Lakshmi Mittal acquire Sidex, a huge, loss-making Romanian steel company that belches toxic gases all over the Balkans. Is he guilty as charged? The Daily Telegraph columnist Robert Harris says the affair, dismissed by Blair as "Garbagegate", may not be scandalous in itself but illustrates "how influence passes through the [political] system; money courted, favours returned, interests conflated, misinformation spread." But when wasn't politics defined by such practices? And how does Mittal's Ł125,000 donation to the Labour Party last May, and Blair's subsequent letter of hearty congratulations to Romania's President Adrian Nastase for choosing Mittal over a French rival, compromise British interests? What are those British steel interests, and how have they been harmed?"
1617. concerned - 2/22/2002 7:27:07 PM
Re. 1613 -
Looks to me like Cheney is giving the GAO all the rope it wants here.
1618. dusty - 2/22/2002 8:32:01 PM
From Message # 1557
John McCain "We'll soon need an Olympics-grade score card t keep track."
I expect we will get an Olympics grade scorecard. Except I don't mean it as a compliment.
1619. wonkers2 - 2/22/2002 10:42:41 PM
Well, it'll be interesting to see the list of partners. George Bush, pere, I noticed in today's paper made $4.5 million on private pre-public issue Global Crossing stock in 1999 and 2000. Of course that's peanuts compared to Terry McAullife's $18 million or was it $20 million?
1620. concerned - 2/23/2002 4:02:20 AM
Right from www.gao.gov itself, a short professional bio on David M. 'Arthur Andersen' Walker, x42 appointee to Comptroller General of the US
Just amazing how many ties Walker has to Arthur Andersen-goes some way to explain his frivolous lawsuit against Cheney.
1621. wonkers2 - 2/23/2002 7:53:09 AM
I don't get the connection. Walker worked for Anderson and is therefore suing Cheney?? Quite a stretch!
1622. wonkers2 - 2/23/2002 7:53:37 AM
Andersen.
1623. jexster - 2/23/2002 8:38:28 AM
Washington -- Commissioners and senior staff of the nation's top energy regulatory agency had 25 meetings or telephone calls with Enron Corp. officials during California's electricity crisis, according to documents released yesterday by Sen. Barbara Boxer, D-Calif.
Federal Energy Regulatory Commission chairman Patrick Wood III turned over the documents at Boxer's request, even as the General Accounting Office filed an unprecedented lawsuit against the Bush administration to force Vice President Dick Cheney to surrender documents detailing contacts last year between energy lobbyists and the administration's energy policy task force.
1624. jexster - 2/23/2002 8:39:31 AM
1625. jexster - 2/23/2002 10:07:47 AM
1626. jexster - 2/24/2002 12:32:44 PM
John McCain told Larry King that while he'd like to believe Enron was merely a tale of corporate malfeasance, he thought it would prove "a lot more than that" and "lead a lot of places that we never thought it would."
"We'll soon need an Olympics-grade scorecard to keep track.
For starters, keep your eye on two private lists of names that are being held onto for dear life by their keepers. The first, of course, is the list of those who met with the Cheney energy task force last year. Why is the vice president risking a Congressional lawsuit to hide the identities of the Enron executives and their cronies, even though a CNN/USA Today poll says that Americans overwhelmingly support full disclosure?
The second list is of the "individual investors" who joined Andrew Fastow and other Enron executives at the trough of the 3,000 off-the-books partnerships that turned nominal investments into fortunes overnight while regular stockholders got stuck with the debt. Enron has told Congressional investigators it can't provide the names, even though it usually owned 97 percent of each of these entities.
To get to the bottom of such mysteries, Congress has leaned heavily on the Powers report — the in-house Enron investigation hyped by Democrats and Republicans alike as (in the words of the North Dakota senator Byron Dorgan) a "devastating indictment" of the company's misbehavior. But this "devastating" document examined a grand total of 3 of those 3,000 partnerships and provided no names of the individual investors in those either. Nor did it look into Enron Energy Services, a nearly defunct division that may have overstated its profits while hemorrhaging cash under the leadership of Thomas White, who is now the secretary of the Army, entrusted with $81 billion of taxpayers' money during the biggest expansion of the military budget since the Vietnam War.
1627. jexster - 2/24/2002 12:33:09 PM
Mr. White, in fairness, was only vice chairman of Enron Energy; the chairman was Lou Pai, who took more out of the pre-bankrupt Enron than anyone ($270 million) and was last seen trying to duck an ABC News reporter while denying that he had brought dancers from "a top Houston strip club" into Enron headquarters." Frank Rich, NyT
Lanny Davis was right. Let this shit unravel all by itself.
All in due time all in due time
1628. Cellar Door - 2/24/2002 3:00:08 PM
And speaking of unravelling shit. . .
1629. jexster - 2/24/2002 5:09:10 PM
With a thicket of high-profile lawsuits pending against Enron and its henchmen, it’s time to review President Bush and Ken Lay’s ménage a trois with tort reform.
Whatever Kennie Boi Wanted, Little Georgie Gave Him...(TX Citizens for Public Justice)
1630. concerned - 2/25/2002 1:47:22 AM
Speaking of unraveling, Barbara Boxer's reputation (*snicker*) did that with her stupid Enron/FERC tease, as described by the American Prowler:
BOXER SHORTS
California Sen. Barbara Boxer was promising reporters a hot scoop last Friday about Enron's relationship with the Bush administration, only to end up look like the girl who cried wolf.
For several days Boxer and her staff had promising Hill reporters documents from the Federal Energy Regulatory Commission that would have documented meetings and contacts between FERC members and Enron from August 2000 through June 2001.
"They said the documents would show that those contacts spiked after the Clinton administration left office," says one financial reporter covering Capitol Hill. "They thought it was going to be a smoking gun, and really oversold it."
1631. concerned - 2/25/2002 1:48:37 AM
In fact, the meeting logs indicated almost the exact opposite of what Boxer had been selling. While Enron meetings did continue with the Bush administration, Clinton-appointed staff and commissioners were wined and dined much more heavily before the Bush people came in. And even then, it appears the FERC actions were above board. "When they went out with lobbyists, the FERC folks picked up their part of the bill," says the reporter.
Boxer is investigating whether Enron's relationship with the Bush administration exacerbated the California energy cost crisis. "We certainly didn't get what we were expecting," says a Boxer staffer. "We were misled by someone we've been talking to inside FERC. They led us to believe we'd get something a bit different from what we ended up having to release."
The aide says Boxer was convinced that current FERC chairman Pat Wood III, a Bush appointee, would have had a schedule "rife with Enron contacts. But it didn't work out that way. There were more meetings with consumers and consumer advocates. We're kind of embarrassed about all of this."
Not Boxer, though. Her immediate reaction was to go back and demand still more records, until staff persuaded her to stop the insanity.
IOW, Boxer wound up uncovering yet more apparent x42 impropriety regarding FERC, but none from GWB.
1632. thoughtful - 2/25/2002 8:36:33 AM
I've been trying to understand why Cheney has been so reluctant to release attendees at the energy policy meetings. The relative proportion of environmentalists to energy firm representatives simply is not enough. The "principle" of confidential advice is silly given their propensity to release Clinton admin records. It just doesn't play.
Then Michael Moore of "roger & me" fame was on the daily show last week and speculated that what they don't want getting out is that cheney met with the Taliban in negotiations over a caspian sea pipeline to deliver russian oil through afghanistan. Concrete evidence? None yet, but gosh that sure hangs together a lot better than being afraid to reveal that cheney met with lay/skilling which everyone knows anyway.
1633. concerned - 2/25/2002 10:56:58 AM
Well, I read an item which indicated that Mary Matalin has been the point person to the GAO, and that she has been more uncompromising with the GAO than others in the Bush administration might have been.
FWIW.
1634. concerned - 2/25/2002 12:50:22 PM
Which makes me wonder if Carville somehow inveigled her into taking a hard line against the GAO in hopes of possibly damaging the administration's public credibility.
1635. bubbaette - 2/25/2002 12:54:36 PM
Classic connie -- the repub admin damages it's credibility and somehow it's a dem's fault. Per Tommy D, being republican means never having to be responsible for your own actions.
1636. concerned - 2/25/2002 1:06:33 PM
Jes' speculatifying, bubbs. Seems to me that if there isn't a moral regarding pillow talk with snakes with apples in their mouths, there ought to be.
1637. dusty - 2/25/2002 1:42:03 PM
I did a little bit of homework on the Enron issue, and leaned something that was interesting (at least to me). It has often been said that one of the problem with Enron accounting is that they were inventory as revenue, or some such phrase. Analogies to real estate or stock brokers were used, explaining how bogus the accounting would be if a real estate broker counted as revenue the entire purchase price of the house, as opposed to just the commission.
I confess I fell for this analogy until I had more discussions with a colleague.
The comparisons would be apt (and the accounting flawed) if Enron simply set up an energy market place and acted as a broker. In short, it didn't. It made a market in energy. Enron didn't simply offer to bring together buyers and sellers for a fee, they bought energy on their own account and then looked for purchasers.
This is not to say that they didn't play games with accounting in some areas, but the decision by Andersen to allow Enron to book the value of energy sold as revenue was not one of the problems. It was legitimate.
Now, the margins on such transactions ought to be thin. And I think they were. Moving from facts to speculation, my guess is that when the higher revenues didn't seem to have commensurate increases in profits, they started playing games to artificially inflate the profits.
1638. CalGal - 2/25/2002 1:44:20 PM
I don't think anyone ever argued that it wasn't legitimate. It was certainly legal. But the analogy to stock brokers booking the entire cost of the sale is still accurate.
1639. dusty - 2/25/2002 1:53:32 PM
But the analogy to stock brokers booking the entire cost of the sale is still accurate.
That's the whole point. No, it isn't an accurate analogy.
If you decided to sell your home, and a broker came along and offered to buy it, taking on the risk of selling it at a profit, or even selling it at all, then the broker would be able to show the selling price as revenue and the purchase price as an expense.
But brokers don't tend to do that regularly. I sold my house that way, and the broker )or probably a real estate subsidiary of the broker) did book the entire purchase as an expense, and, when sold, the entire sales price as revenue.
1640. concerned - 2/25/2002 1:55:23 PM
But the analogy to stock brokers booking the entire cost of the sale is still accurate.
Not when it's a client's funds he is investing.
1641. jexster - 2/25/2002 10:56:46 PM
But the most precipitous corporate collapse in American history is much more than a financial scandal. It is also a political scandal of historic proportion, with potentially huge public policy ramifications.
No politician in America today is closer to Enron than George W. Bush. As first reported by the Center for Public Integrity in The Buying of the President 2000, Bush's top career patron was Enron.
As respected political analyst and author Kevin Phillips recently wrote in the Los Angeles Times, "not in memory has a single major company grown so big in tandem with a presidential dynasty and a corrupted political system. Indeed, the Bush family has been a prominent and well-rewarded rung in Enron's climb to national political influence." The Bushes have done various government favors for Enron, in Texas and Washington, from the late 1980s to today. And the fact that Cabinet Secretaries Donald Evans and Paul O'Neill did not respond favorably to Enron's entreaties for a federal bailout last October - which politically was unthinkable and thus an easy decision - doesn't diminish the longtime closeness and mutual dependence.
Indeed, despite clumsy and disingenuous statements to obfuscate the true nature of the close Bush-Enron relationship by the President and his White House press secretary, in which a decade of familiarity disappeared and "Kenny Boy" became "Mr. Lay," the public fortunately does recognize the Texas Two-Step when they see it. According to a CBS News/New York Times poll late last month, regarding the Enron matter, 67 percent of the American people believe that members of the Bush administration are "hiding something" or "mostly lying."
Center for Public Integrity
1642. concerned - 2/26/2002 1:22:10 AM
I think the 'Center for Public Integrity' could use a little more of its own.
1644. dusty - 2/26/2002 8:40:41 AM
JonOttawa
Referring to yourself as a CPA before passing the exam (much less even taking the exam) is a violation of the professional ethics. You could find yourself kicked out before even getting in.
The "almost-Andersener" claim isn't actionable, just laughable.
1645. thoughtful - 2/26/2002 8:55:24 AM
dusty, I thought one of the issues with enron was that they were booking a contract to provide energy over the next 10 years as all this years' sales. I don't know enough accounting to know how it should have been booked, but I suspect it should have to be discounted in a mark to market fashion, amortized over the life of a contract or some other handling. There have also been allegations that they were doing something like booking the cash received from a loan as income. Then there's this whole swap issue which had the effect of being just like a loan but due to FASB regs were not required to be reported as loans and instead be reported as derivatives. Very complex but with devastating results nonetheless.
1646. Cygnus X-1 - 2/26/2002 9:29:21 AM
Lanny warned you jexster. You'd better hurry up and resurrect the "everybody does it" defense.
Enron active player in energy crisis talks
Excerpt:
Top Clinton administration officials — including Treasury Secretary Lawrence E. Summers and Federal Energy Regulatory Commission Chairman James Hoecker — sided with Enron in opposing increased regulation of energy markets, including the critical question of capping electricity prices during California's power crisis last year.
Documents just released by the commission show that Enron executives met frequently and dined with Clinton-appointed commissioners and their staff when they were deciding on the price cap and other contentious issues affecting California. They were particularly fervent in courting a key Clinton-appointed commissioner who cast a swing vote against hard price caps in early 2001.
1647. amax - 2/26/2002 3:03:39 PM
1648. jexster - 2/26/2002 4:02:49 PM
Krony Kapitalist Kandidate for Witness Protection Program
Omerta! Enron Stool Pigeon Singing to Feds
1649. jexster - 2/26/2002 4:52:12 PM
Until recently, it seemed unlikely that California would ever get anything back from the energy companies that, in the view of state officials, robbed the state of billions of dollars.
Then came the Enron scandal [Krugman]
12.20.00 - You heard it from Jexster first (war, peace, pants)
1650. jexster - 2/26/2002 4:56:11 PM
Commander Baba Jex, Ruler of the Free World
The key fact about California's crisis is that it peaked not in summer, when air-conditioners gobble electricity, but in the cooler months. Supplies should have been ample. Instead, there were severe shortages, because for some reason a third of the state's capacity stayed off line.
1651. jexster - 2/26/2002 8:40:41 PM
King Moron's Happy Hucksters Get Fried on the Hill
1652. dusty - 2/27/2002 9:19:14 AM
thoughtful
dusty, I thought one of the issues with enron was that they were booking a contract to provide energy over the next 10 years as all this years' sales.
I wouldn't be surprised if they did this. This would be wrong. I was referring to the claim that even one years worth of energy sales should have only including their margin on the sale, rather than the whole sale.
I don't know enough accounting to know how it should have been booked, but I suspect it should have to be discounted in a mark to market fashion, amortized over the life of a contract or some other handling.
This gets murky (as if it weren't already). Despite the fact that Enron was trying to create a market, there wasn't yet a fully liquid market for, say the delivery of X trillion BTU's over a ten year period. One can argue that with a fully developed market for multi-year contracts, that one could record the profit when sold. Of course, with a fully liquid market, the market price would reflect the discounting. However, I suspect that the problem is not that they simply front-ended profit, I think they front-ended revenue without booking the expense of delivering.
There have also been allegations that they were doing something like booking the cash received from a loan as income.
These are the types of scams that dwarf the arguments about whether the total revenue or only the margin should be reported.
1653. dusty - 2/27/2002 9:19:26 AM
continued
Then there's this whole swap issue which had the effect of being just like a loan but due to FASB regs were not required to be reported as loans and instead be reported as derivatives. Very complex but with devastating results nonetheless.
I'm not sure which swap issue you mean. Are you talking about the Barclay's transaction? If so, it was very sleazy. Here is one where Andersen will come out a little better. They approved it only because they were lied to. At least they didn't say it was OK based upon what actually happened, although they probably weren't diligent enough to uncover the truth.
1654. jayackroyd - 2/27/2002 12:55:13 PM
Michael Lewis points out that a scam of this magnitude had to be more widely known than just in the executive suite.
1655. jayackroyd - 2/27/2002 12:58:46 PM
Let's try that again:
Poor enron employees?
He notes an interesting nuance:
Sherron Watkins has been cast in the (whistleblower) role, but all she really did is beg her boss to orchestrate an artful cover-up so she could continue to make lots of money.
1656. jexster - 2/27/2002 1:02:54 PM
Good point Jay but I wonder whether the real knowledge outside the executive suite is to be found not among middle managers at Enron but in upper management of investment bankers etc
Hello JP Morgan!
Having worked in MM (legal) at a Fortune 500 myself, a F500 that collapsed in fact, my bet is that most had an inkling but outside the accounting/Finance depts had any real knowlege
1657. jexster - 2/27/2002 1:03:23 PM
And then there's Cheney, Bush, White, Lindsay
1658. jexster - 2/27/2002 1:05:43 PM
Newsbreak...
Houston Astros pay Enron 2 million to take the Enron name off of stadium
Let's play ball!
1659. thoughtful - 2/27/2002 1:25:41 PM
dusty, I was looking but can't find the article that described the swap deal...something like I pay you a fee to accept the cash flow off of my investment in return for the value of your investment. FASB allowed this to be considered a derivative and reported as such, but in reality it is the same as a loan. This allowed Enron to carry much more credit than was realized by creditors, rating agencies etc, I believe to the tune of a few billion $. I could be recalling incorrectly but I think Morgan and Citi were involved with Enron in this way.
1660. amax - 2/27/2002 1:32:12 PM
Lewis's article is pretty good:
excerpt:
"
Indeed, everything we know so far about Enron suggests that many, many employees were, at the very least, willing accomplices to the schemes dreamed up by their bosses. And now they want their money back! They are like accessories to a failed bank heist who demand restitution because the police confiscated their share of the take.
"
1661. thoughtful - 2/27/2002 1:35:14 PM
I find this stuff so confusing that I'm not sure this is the same deal I was talking about or not. No wonder no one understood it all. Regardless of ethics, skilling/fastow are bright.
Hiding loans
1662. jexster - 2/27/2002 2:08:38 PM
BoXer Grills Skilling
You go girl!
1663. Cellar Door - 2/27/2002 2:13:09 PM
Why all Republicans are lying pieces of shit
1664. amax - 2/27/2002 2:31:12 PM
Re Boxer
Of course, the whole point of this kind of thing is to let Senators and Congressmen pose for the cameras and bash on whomever is unpopular at the moment. Doesn't sound like Boxer was too successful at it:
"
Others were more blunt. "A master's in business administration, and yet you didn't know this simple fact -- is that correct?" Sen. Barbara Boxer (D-Calif) asked in reference to an accounting method central to Enron's financial structure. "Where did you go to school?"
"Harvard Business School," Skilling replied, to chuckles from the audience."
http://www.washingtonpost.com/wp-dyn/articles/A7706-2002Feb26.html
1665. concerned - 2/27/2002 2:35:12 PM
Gee, cllrdr, can you really get that down on a reporter perhaps missing a name (although I'm probably giving little Joey Conason too much credit here) when it seems like every foreign agent or drug runner who ever threw a dollar into the DNC's coffers slept over at Motel 1600?
1666. jayackroyd - 2/27/2002 4:47:31 PM
1659
I guess the best way to test this is to see whether the Morgan booked a loan while Enron booked a derivative.
1667. joezan - 2/27/2002 4:59:06 PM
You actually subscribe to Gene Lyons' column?
Hahahaha!
1668. OhioSTOPAS - 2/27/2002 5:01:41 PM
"A master's in business administration, and yet you didn't know this simple fact -- is that correct? . . . Where did you go to school?"
"Harvard Business School," Skilling replied . . .
Hard to believe - a moron getting an MBA from Harvard.
1669. Julius Caesar - 2/27/2002 5:03:06 PM
Leave it to senators (whinny!) to make Jeff Skilling look good. After listening to the questioning by McCain, Fitzgerald, Wyden, Dorgan and some of Boxer, I'm not sure I've seen any dumber collection of people.
These prima donnas don't have the sense or the intelligence God gave a pooch. If Ollie North can carve up Arthur Lyman and John Nields, how are dopes like Wyden and Fitzgerald -desperate for the soundbite - going to fare against a Skilling?
Not well.
And something is wrong with the whistleblower. She's got middle-manager complex and this is her day in the sun. She'll shine, until the litigation.
Then she's crow meat.
1670. Cellar Door - 2/27/2002 5:13:53 PM
Something wrong with your TV, boy?
1671. OhioSTOPAS - 2/27/2002 5:15:33 PM
"concerned" (Message # 1665): ". .. it seems like every foreign agent or drug runner who ever threw a dollar into the DNC's coffers slept over at Motel 1600 . . ."
Really, Connie?
Show me.
1672. jexster - 2/27/2002 5:29:11 PM
Shortly after Vice President Cheney launched a task force on energy policy last year, he met with two top executives from the oil and gas industry. The men from Shell Oil Co. and Anadarko Petroleum Corp. pressed the new administration to stick to a long-standing plan to open a huge tract in the eastern Gulf of Mexico to oil and gas exploration.
Krony Kapitalist King's Karetaker Kaught - Let's Do the Chenron Again
1673. Julius Caesar - 2/27/2002 5:39:35 PM
Cellar
My TV gets a little fuzzy when mobs of semi-literate senators mangle their talking points in an effort to be Tom Brokaw's lead.
I probably need to get a new TV. One that can make the likes of Fitzgerald, McCain, Boxer and company "courageous."
1674. Cellar Door - 2/27/2002 5:43:27 PM
Who said they were courageous? Not I.
They're merely pointing to the obvious. Skilling an company ought to be tossed into the nearest pit.
1675. concerned - 2/27/2002 6:49:50 PM
Kenny Boy & all time best bosom buddy 'toon Boy on one of their (*wink wink*) business excursions: 
HA! Can't match that with GWB, can you, Lefties?
1676. Cellar Door - 2/27/2002 7:06:39 PM
Sure we can, connie. And you know it.
Here. read all about it.
1677. jexster - 2/27/2002 8:20:59 PM
I've already posted the Georgie/KennieBoi love letter link TD....
So I'll see you and raise you a Tom DeLay
Roll Call has scored a MAJOR investigative coup that could bring down Tom DeLay's top aide. "At the top of the DeLay political hierarchy sits Edwin Alexander Buckham, a 43-year-old ordained evangelical minister with a dense political and legislative resume who rose to become DeLay's chief of staff after Republicans won the majority in 1994... Buckham left DeLay's staff Dec. 20, 1997, but was immediately hired as a consultant for the lawmaker's leadership PAC, Americans for a Republican Majority." BEFORE he left - on 11-12-97 - Buckham was working on a lobbying proposal to Enron that led to a $750,000 contract to promote electricity "deregulation," Enron-style - after DeLay pushed Enron to hire his aide. Buckham says he had nothing to do with the proposal, and that his letterhead was forged.
Enron/DeLay Committee for a Republican Majority - A Racketeer Influenced Corrupt Organization
1678. jexster - 2/27/2002 9:32:19 PM
Dealing a blow to Chenron Administration efforts to stonewall and cover up, A federal judge on Wednesday ordered the Energy Department to release thousands of records on Vice President Dick Cheney's energy task force, criticizing the government for moving at "a glacial pace
Better Start Attacking Krugman Again
1679. jexster - 2/27/2002 9:39:47 PM
In early 1998, Enron Corp. secured a $750,000 contract for political operatives tied to House Majority Whip Tom DeLay (R-Texas) to secretly conduct an aggressive grassroots campaign pushing energy deregulation, according to documents obtained by Roll Call and interviews with individuals involved with the effort.
Make that a Tom DeLay AND a Ralph Read there TD
1680. arkymalarky - 2/27/2002 9:52:50 PM
Message # 1667
What's really sad, Joe, is that it's the only thing in the AR Democrat worth paying for.
Jex,
Make that a Tom DeLay AND a Ralph Read there TD
I always read his name as "Rex Reed." Wonder why that is.
1681. jayackroyd - 2/28/2002 1:20:02 PM
Yesterday's NYTimes described the Morgan deal pretty clearly, Morgan gave an offshore entity, Mahonia, $350 million in return for a variable amount based on the price of natural gas. Mahonia gave Enron $350 million in return for the same natural gas derivative. Enron gave the derivative to Morgan in return for a promise to pay Morgan $356 million on March 26. The derivative has gone full circle, and there is no longer an outstanding derivative. All that's left is that Enron gets $350 million and owes Morgan $356 million, payable March 26.
While each leg may have been legally entered into, this is clearly a loan, especially given that all the transactions took place on the same day.
1682. thoughtful - 2/28/2002 1:33:54 PM
jay, wait a minute. I don't get one link. The way its written it sounds like enron gave the same derivative to morgan and mahonia?
Morgan to Mahonia
Gave $350m rec'd nat gas derivative
Mahonia to Enron
Gave $350m rec'd nat gas derivative
Enron to Morgan
Gave promise to pay $356 mil for ?
1683. thoughtful - 2/28/2002 1:38:54 PM
I see...
Enron to Morgan
Promise to pay $356 mil for nat gas derivative
Got it.
Sorry to be so dense.
1684. jayackroyd - 2/28/2002 1:39:15 PM
Enron agreed to pay Chase 356 million for the same derivative. So Enron owned both ends of the derivative obligation, $350 million dollars, and an obligation to pay Chase $356 million (6 million reflected the contemporaneous rate for a loan of that duration.)
1685. thoughtful - 2/28/2002 2:21:47 PM
Ah...that's the ponzi scheme aspect. They were leveraging a non-existent asset multiple times. Nice work if you can get it.
1686. jayackroyd - 2/28/2002 2:28:16 PM
That appears to be one important role of the subsidiaries. It is remniscent of developers and keating S&Ls flipping properties, and raising appraisals on each flip.
And this kind of flies in the face of dusty's earlier, interesting analysis. Presumably they booked $350 million dollars of revenue for the derivative. Did they book $356 in expense as well? Or the PV of $356, $350? Or did they mark the non-existent derivative to "market," at $395?
It's pretty clear that if you're not interested in sound financial management, you've got a lot of flexibility in how you report this stuff.
1687. thoughtful - 2/28/2002 2:33:04 PM
hahaha ... the best way to do business ... freed up from accounting standards, watch them fly!
Did you see greenspan's testimony yesterday? Had some interesting things to say about the impact of stock buybacks and stock options on corp. governance.
1688. jayackroyd - 2/28/2002 2:38:52 PM
I did not.
I think it was Robert Samuelson, writing about the S&L failures, who said "If you pour a jar of honey onto a picnic table, you should expect ants to arrive."
I mention again, Eat the Rich, where PJ O'Rourke discovered, somewhat to his surprise, that it takes a lot of regulation to keep financial markets free.
1689. thoughtful - 2/28/2002 2:57:55 PM
The interesting stuff usually comes out in the Q&A. One point, which I think I'm reporting correctly is he attributes the reversal of FASB re stock options accounting to accounting for 3% point gain in corporate profits over the 90s (80s? don't remember when it kicked in). He also said that part of the pain of enron relates to the shift in the 80s by corps. to stock buyback vs. dividends where shareowners would have received a chunk of their returns in cash rather than having it all disappear with the stock price.
1690. jexster - 2/28/2002 9:09:20 PM
Andrew Sullivan's Hardon for the NyT (TNR)
1691. wonkers2 - 2/28/2002 11:27:44 PM
Jonathan Chait harpooned Andrew Sullivan nicely, as well as other Bush supply-siders who have been attacking Krugman personally rather than undertaking the impossible task of pointing out innacuracies in his columns on economic policy.
1692. thoughtful - 3/1/2002 10:03:50 AM
Does anyone else find it amusing that Larry King has had on his show Jeff Skilling and Monica Lewinsky? Interesting juxtapositon, no?
1693. jexster - 3/1/2002 10:59:21 AM
Top Energy Donor$ Met With Cheney
Interesting juxtapositon, no?
1694. jexster - 3/1/2002 11:00:42 AM
"Critics of the Bush administration's energy policy have long suspected that many of the corporations that were invited to advise the White House were large energy concerns that had contributed heavily to President Bush's campaign and the Republican Party in 2000"
1695. jexster - 3/1/2002 11:01:13 AM
Yes indeed we have.
1696. wonkers2 - 3/1/2002 11:05:44 AM
The NYT reported today on the revival of a 1970 federal court ruling in the Simon case that held that auditors may be held criminally responsible for misleading practices even though they are consistent with Generally Accepted Accounting Principles (GAAP).
"There are echoes of the Simon case in Enron. A footnote in Continental Vending's annual report disclosed just enough to arguably comly with the accounting rules but left out information crucial to understanding what truly happened. "The jury," Judge Friendly wrote, 'could reasonably have wondered how accountants who were really seeking to tell the truth could have constructed a footnote so well designed to conceal shocking facts.' The same could be said about the Enron footnotes regarding partnerships run by its chief financial officer at the time, Andrew S. 'Curve ball' Fastow.
"Although you wouldn't know it from listening to accountants moan about the Simon revival, there is a rule--Article 203 of the accountant's Code of Professional Conduct--that says auditors may depart from GAAP to prevent financial statements from being misleading. It may be the most ignorred rule in accounting.
"The defendants in the Simon case--Carl J. Simon, Robert H. Kaiser and Melvin S. fishman, all auditors with Lybrand, Ross, a predecessor of PricewaterhouseCoopers--paid small fines and were eventually pardoned by President Richard M. Nixon. But the exhoes of that case now provide a warning to auditors that it is risky to certify misleading financial statements, even if the company has found ways to twist accounting rules."
[From Floyd Norris column in Nyt 3-1-02.]
1697. jexster - 3/1/2002 11:15:17 AM
Haven't heard the "Global Crossing" defense lately.
Wonder why?
Poppy Nails 4.8 Million in GC Stock
1698. jexster - 3/1/2002 5:51:57 PM
Profiles in Krony Kapitalism - Ken Lay
1699. jexster - 3/2/2002 4:31:30 PM
WASHINGTON -- Enron Corp. turned over records to federal regulators investigating whether the company manipulated electricity or natural gas prices during last year's power crisis in California and other western states.
The one-time energy and trading giant sent two boxes of documents and a compact disc to the Federal Energy Regulatory Commission on Friday, providing details on the company's electric power contracts. - Houston Chronicle
TWO Boxes!!!!
Must have shredded the rest.
1700. concerned - 3/3/2002 5:05:45 AM
Something that jexster should really be able to sink his teeth into: Robert Rubin.
Enron and Robert Rubin, from the WT:
Precisely when did Howell Raines — the newly appointed, reputedly hard-charging executive editor of the New York Times — turn the newspaper's front page over to the PR department at Citigroup? Hard to say, but the love affair seems to be real. One recent story in the New York Times began with the observation that Mr. Rubin, a former treasury secretary in the Clinton administration, "has not abandoned his role as globe-traveling statesman." Get it? Statesman. Having established the diplomatic bona fides of Mr. Rubin, who now collects $800,000 per week comment: that high?) as chairman of Citigroup's executive committee, the Times then ever-so-gingerly broached the understandably touchy subject of the tactics deployed by Mr. Rubin late last year in a telephone call to the highest-ranking Democrat in the Bush administration's Treasury Department.
1701. concerned - 3/3/2002 5:07:03 AM
On Nov. 8, Mr. Rubin called Peter Fisher, undersecretary for domestic finance, on behalf of the collapsing Enron Corp, which just happened to owe Citigroup an estimated $1 billion. According to a Treasury Department statement, which Mr. Rubin has confirmed, he beseeched Mr. Fisher to intercede for Enron's benefit with the credit-rating agencies, which were poised to downgrade Enron's debt to junk status. The debt downgrade would have forced the already-teetering Enron to make an immediate payment of hundreds of millions of dollars in debt, a development that would have then forced Enron to file for bankruptcy. To his everlasting credit, Mr. Fisher rejected Mr. Rubin's strong-arm tactics, and Enron's debt was appropriately downgraded.
Once bankrupt, of course, the unsecured debt Enron owed Citigroup would become worthless. But that's not all. At the very moment Mr. Rubin made his improper telephone call, Salomon Smith Barney, Citigroup's investment banking unit, was serving as an adviser to Enron for its proposed merger with Dynergy. Salomon would have shared nearly $100 million in investment-banking fees with J.P. Morgan if the merger were consummated.
1702. concerned - 3/3/2002 5:07:40 AM
In addition to the foregone merger fees, Citigroup stood to lose another $250 million from a very controversial loan it had extended to an increasingly desperate Enron in late October. As the Wall Street Journal reported, Citigroup agreed to contribute $600 million to a $1 billion loan package for Enron if the beleagured energy-trading firm promised to use $250 million of that cash infustion to pay off an unsecured debt for that amount owed to Citigroup and coming due in early December. In most bankruptcy cases, as the Journal noted, unsecured creditors closely examine all lending activity before the filing date to determine if any unsecured loan may have been unfairly given secure standing within 90 days of the bankruptcy. If so, a court challenge would surely follow. Now, if Mr. Rubin could have convinced Mr. Fisher to lobby the credit-rating agencies to delay their expected downgrades, Enron might have survived another 60 days, which would have protected Citigroup's grab for more debt.
1703. concerned - 3/3/2002 5:07:56 AM
Meanwhile, on Oct. 29 — with Enron plunging into the abyss and Citigroup bankers attempting to unfairly secure their unsecured debt — Raymond Niles, Salomon's director of its integrated power/gas research and analytical team, was hawking the merits of Enron stock in an interview with the Wall Street Transcript (TWST.com). Asked if there were any companies on his buy list that he would want to highlight, Mr. Niles responded by immediately naming Enron.
The Times reports that Mr. Rubin's call "inadvertently gave comfort to the White House and to some conservative commentators, who said it was evidence that it was a prominent Democrat, not Republicans, who backed a government rescue" of Enron. "Inadvertently"?What does that mean? Only after Republican cabinet officers told Enron Chairman Ken Lay that there would be no government rescue did Mr. Rubin mysteriously — and utterly unethically — enter the fray.
Had any former Republican treasury secretary done what Mr. Rubin did — imagine former Merrill-Lynch chairman and Reagan administration Treasury Secretary Don Regan making a comparably lobbying contact with a Republican working in the Clinton administration's Treasury Department — the Times would have considered it a scandalous breach of ethics. And rightly so. In his former capacity as editor of the Times' editorial page, where he really was a hard-charging enforcer of ethics, Mr. Raines might well have leveled the Golden Boy with a scathing editorial. Instead, newly implanted as executive editor, Mr. Howell gave Mr. Rubin the most undeserved smooch of the year.
1704. concerned - 3/3/2002 5:13:24 AM
Why is it I'm not too surprised that the NYT is kissing Rubin's ass regarding Enron?
1705. wonkers2 - 3/3/2002 10:16:33 AM
ENRON: The Criminal-less Crime
"How is it that someone is more likely to go to jail for robbing a liquor store than for defrauding the equivalent of the population of a mid-size city?
"The answer goes to the nature of business fraud and the demanding standards of evidence in the criminal justice system. It is not enough to prove there are victims, or that some people got rich from others' suffering. Rules of evidence require the proff of several elements of the crime--some of which can look a lot like STANDARD INDUSTRY PRACTICE."
Kurt Eichenwald NYT 3-3
1706. wonkers2 - 3/3/2002 10:22:33 AM
"In 1985 E.F. Hutton pleaded guilty to 2,000 felonies, admitting that it engaged in a huge check-kiting scheme; the firm paid $2 million in fines and no one went to jail. In 1994, the peychiatric hospital subsidiary of national Medical Enterprises pleaded guilty to paying bribes and kickbacks to doctors; it paid about $375 million and again, no senior officer saw a prison cell. That same year, Prudential Securities admitted committing widespread fraud in the sale of $1.4 billion in investments to 12,000 people; this time $330 million in fines, no jail for anyone. And in 2000 Columiba/HCA Healthcare pleaded guilty to defrauding government health programs through an array of schemes; again, fines for the company, no jail for senior officers."
Old Colombian saying: "La ley es un perro rabioso que no muerde sino a los de ruana." [The law is a mad dog that bites only the poor.]
1707. jexster - 3/3/2002 1:36:08 PM
Thanks for the heads up in AP Wonk...I keep forgeting that this is a REAL scandal...its covered in the Business Sections of reptuable journals not in the National Enquirer and RNC press releases....
Another hypothesis involves Gov. Jeb Bush, one of the three trustees of the Florida fund, officially called the Florida Retirement System. In this highly partisan state, where the presidential vote count in 2000 further inflamed political passions, the question is whether Governor Bush, a Republican, was behind the Enron stock purchases.
1708. concerned - 3/3/2002 7:23:58 PM
Hey, jexster: aren't you tired of chewing on the same old dried out Enron bone, yet? Here's something from NewMax with some real meat on it: Global Crossing, Terry McAuliffe, Clowntoon and their longtime illegal contributors, the Mainland Chinese.
Global Chinese Megacorp Bailing Out Bankrupt U.S. Company
A shipping company closely linked to China's Communist government has agreed to pay $750 million for a 70 to 80 percent stake in Global Crossing, a bankrupt international fiber optic cable company whose chairman had close ties to the Clinton administration and Democrat National Committee chairman Terry McAuliffe.
Hutchison Whampoa, a huge Hong Kong conglomerate with operations in ports all over the world, including the U.S., the Bahamas and Latin America has tentatively agreed to invest in Global Crossing in what that company's officials hope will pull them out of bankruptcy.
The proposed bail out by an investment syndicate headed by Hutchison Whampoa's owner, Hong Kong billionaire Li Ka-shing is reported to be part of the bankruptcy filing which disclosed that Global Crossing was staggering under a whopping $12 billion in debt it could not service.
The planned investment is said to be an effort to save the company but has mystified some observers who say that the two companies are involved in totally unrelated businesses.
Global Crossing is headed by founder Gary Winnick who saw his $6 billion net worth disappear with the collapse of his company. Winnick, a close friend of Democrat boss Terry McAuliffe, was a golfing partner of former president Clinton and contributed $1 million to the Clinton Presidential Library.
1709. concerned - 3/3/2002 7:24:16 PM
Clinton was also instrumental in helping Hutchison Whampoa get control of both ends of the Panama Canal when he gave his OK to the company's long-term leases of the two ports.
As NewsMax.com has reported, Winnick gave McAuliffe an chance to buy Global Crossing stock early on, for $100,000. McAuliffe sold the stock for a reported $18 million.
According to Global Crossing Chief Executive John Legere, the company's bankruptcy filing is only a part of plans designed to save his company. The main ingredient of that plan is the agreement with Hutchison Whampoa and another Asian company, Singapore Technologies Telemedia.
Both already have close ties to Global Crossing and its affiliated companies through overseas ventures, according to the Los Angeles Times which revealed that Hutchison owns half of Hutchison Global Crossing, a communications provider in Hong Kong, while Singapore Technologies owns half of StarHub Crossing, a carrier in Singapore.
Hutchison also owns $400 million worth of Global Crossing stock - an investment analysts say will probably be written off as part of the debt restructuring.
U.S. security experts have warned that Hutchison Whampoa's far-flung port operations, which includes both the Atlantic and Pacific ends of the Panama Canal, could become bases for the Chinese Peoples' Liberation Army in the event of war with the U.S.
1710. wonkers2 - 3/3/2002 7:47:10 PM
I doubt that. The U.S. marines would fix have the Chinese out of there in two days, max.
1711. jexster - 3/3/2002 9:17:02 PM
In this video tape of an October 2000 Enron company meeting obtained by US Representative Henry A. Waxman, chairman Kenneth Lay speaks directly about his support for George W. Bush and Republican candidates, who got 60-65% or Enron's bribes according to Lay - actually 74%, according to opensecrets.org. This tape also features Jeff Skilling defending Enron's "mark to market" accounting. You can even watch thousands of Enron employees doing the wave!
Oh Kenny Boy!
1712. thoughtful - 3/4/2002 9:51:35 AM
jay, re #1684, agreeing to pay the same drivative to Chase....isn't JP Morgan Chase? Didn't they merge?
1713. jexster - 3/4/2002 1:05:54 PM
Enron's Place in the Swindle Cycle
1714. thoughtful - 3/4/2002 3:08:08 PM
Reading Frank Rich in the NYT over the weekend...I didn't realize that Enron was actually running a false trading room for the benefit of wall st. analysts....they actually had a room where they'd deploy employees to look busy at computer screens and shout into phones like there was actually market activity going on while the analysts were there. Amazing!
1715. CalGal - 3/4/2002 3:36:08 PM
Bush Weighs Raising Steel Tariffs but Exempting Most Poor Nations
To achieve Mr. Bush's political objectives while minimizing the impact on some influential industries that use steel, the president's advisers are recommending an array of tariffs, after a careful examination of what countries they would hurt and what companies — and swing states — they might help. Most options fall short of steel makers' demand for 40 percent across-the-board tariffs.
But of course, problems like this will all go away if we have campaign finance reform.
1716. CalGal - 3/4/2002 4:55:36 PM
Wait a Minute. Didn't Enron's Employees Ride That Stock Up?
The phony accounts Enron ginned up for many years allowed it to pay its employees as if they actually were conducting hugely profitable business. Even those who were profitably engaged were probably grossly overpaid for their efforts. In short, they've already made out like bandits. Why give them more money?
1717. jexster - 3/4/2002 5:34:32 PM
Enron: The Bu$h Coverup Continues
Last summer, when Enron was still in clover, the administration announced that its ethics watchdog, the White House counsel Alberto Gonzales, had found Karl Rove innocent of any conflict of interest after it was revealed that Mr. Rove owned thousands of dollars of Enron stock while deliberating on national energy policy with Enron executives. What the White House did not announce was that its ethicist, Mr. Gonzales, was himself a past recipient of serious Enron campaign money in Texas. President Bush has done his best to minimize any further revelations about the history of his team's relations with his biggest backer by depositing his Texas gubernatorial papers not in the Texas State Library and Archives, where they'd be subject to the state's tough Public Information Act, but at his father's presidential library, where they may not be.
Frank Rich
1718. Jonesatlaw - 3/4/2002 6:22:15 PM
The harpoons are being sharpened, and the plaintiff's bar is readying their gear for the search for the Great WhaleSized Wallets in the Enron case. Here's a discussion of additional targets beyond the usual suspsects and the usual M.O.-accountants consultants and lawyers, oh my!
1719. jexster - 3/4/2002 9:01:09 PM
1720. jexster - 3/5/2002 6:06:56 PM
Bu$h and Enron Drilled for Oil Together
1721. Cellar Door - 3/8/2002 12:28:15 PM
What did the Chimp know and when did he know it? More Monkeyshines uncovered!
1722. CalGal - 3/8/2002 3:08:01 PM
Financial Statement Insurance
Instead of appointing and paying auditors, corporations should be able to buy financial-statement insurance. This would protect investors against losses suffered as result of misrepresentations in financial statements.
The amount of insurance coverage that corporations obtain, and the premiums they pay, should be disclosed. Those corporations with higher coverage and lower premiums would distinguish themselves in the eyes of investors. Every company would be eager to get such coverage.
Insurance carriers would be happy to have the new business. But they would need to properly gauge the risk they face, and that's where the auditors would come in. The insurance carriers would appoint — and pay — the auditors to assess the financial statements of their prospective clients. An auditor's opinion, publicized along with the financial statements, would help the carrier decide on the coverage and premium.
1723. Wombat - 3/8/2002 3:50:26 PM
Enron underreported its 2001 political contributions to the by two-thirds. They apparently spent as much money in 2001 as they did in 2000; almost all of it going to the Republican Party.
1724. Wombat - 3/8/2002 3:53:40 PM
Sorry...Enron underreported what it spent on lobbying the Bush administration and Congress by two thirds in the first six months of 2001.
1725. jexster - 3/9/2002 12:58:11 AM
Whatever happened to that "Global Crossing Defense" to the Bu$h/Enron Corruption Scandal?
One key reason for Republican reluctance to hit Democrats harder on Global Crossing, according to GOP operatives, involves the president's father, former president George H. W. Bush. In 1998, the senior Bush received Global Crossing stock instead of $80,000 in cash for a company-sponsored speech in Tokyo. Bush subsequently sold his stock for $4.45 million, Business Week reported.
A second problem for the GOP is that Global Crossing's co-chairman, Lodwrick M. Cook, is a friend of the senior Bush and one of the most prominent Republican donors of the past two decades. Cook and Winnick together persuaded Bush to take the $80,000 speaking fee in stock. Cook, the former chief executive of Atlantic Richfield Co., served until 1999 as chairman of the Ronald Reagan Presidential Foundation.
With a Republican in the White House, Cook has sought executive branch help for Global Crossing. Time magazine reported that Cook met with Commerce Secretary Donald L. Evans last year to try to reduce a $7.2 million federal fee for running a cable through a protected marine sanctuary in the Pacific, and with John Stenbit, assistant defense secretary, in an effort to protect Global's right to bid on a $400 million contract.
Of course that's chicken feed compared to the Enron-led, Bush protected multi-billion dollar swindle of California.
Amd we wouldn't want anyone asking how much Poppy made on GC for the follow on questions could well lead to back to Bu$h's Carlyle Cronism and Poppy's Payola there too.
1726. jexster - 3/9/2002 1:03:21 AM
800,000 for ONE speech?
Look for the GOP Smear Machine to cut its crap re Paul Krugman.
Poor bastard spent 2 days giving a conference presentation for a paltry 50,000.
Maybe if they'd paid him 800K he'd have taken it easy on Bu$h/Enron, and Mornonomics in general.
1727. OhioSTOPAS - 3/9/2002 7:44:19 AM
You mean 80K, right?
Only Ronald Reagan got money like that for an ex-Presidential speaking tour (from a grateful Japan).
1728. Cellar Door - 3/9/2002 10:37:22 AM
Just a minor correction on those lobbying figures.
1729. dusty - 3/9/2002 7:25:09 PM
jayackroyd
I read about the Mahonia transaction. At one level, it was fairly clever, as each leg of the transaction appears to be a legitimate transaction that arm's length entities might enter into. In fact, altogether they represent a legitimate transaction. (I don't follow the references to Ponzi or real estate flipping; this transaction has nothing in common with those types of fraud).
The problem, of course, is that, at the end of the transaction, it constitutes a loan. While the terms are consistent with the market, there were reasons to want to avoid reporting that they had taken out a loan.
I've worked with quite a number of partners of the Big Five, including Andersen (I was employed by one for a time). Before working with them, I had a vague impression that accountants must be dry, not particularly clever bean-counters. After working with them, I came away generally impressed with the sharpness of the profession. I'm having trouble squaring that history with the Enron situation. None of the people I ever worked with would have let that transaction proceed. It isn't even a close call.
For whatever reasons, the Andersen people involved seemed to have sold their souls. I hope they fry.
1730. jexster - 3/9/2002 11:15:06 PM
Ohio...
Raygun pocketed a cool 2 million from Sony.
Good money after bad, as he was practically brain dead at the time.
Nice work if you can get it eh?
1731. jexster - 3/9/2002 11:23:01 PM
Hutchison Whampoa, a huge Hong Kong conglomerate with operations in ports all over the world, including the U.S., the Bahamas and Latin America has tentatively agreed to invest in Global Crossing in what that company's officials hope will pull them out of bankruptcy.
The proposed bail out by an investment syndicate headed by Hutchison Whampoa's owner, Hong Kong billionaire Li Ka-shing is reported to be part of the bankruptcy filing which disclosed that Global Crossing was staggering under a whopping $12 billion in debt it could not service.
Ah Mister Li!
I know the man or at least had a meeting with the slimeball.
War story time.
In 1984 I was sent on a mission to Hong Kong. The company I was representing had joined with Li Kai Shing, Mitsubishi, and the Chicoms in a greenfield plant project in the New Territories. The project depended entirely on the Chicoms buying the product. There was a recession at the time and sales were WAY off but not demand in China.
The joint venture went belly up and I went to HK to keep an eye on the bastards over Christmas time.
It became immediately apparent to me after a couple of meetings with Li and his white boy Friday, a Brit, that Li and the Chicoms were knee deep in the failure, a failure which contributed to the ultimate demise of my US client a year later.
If you have ever read "Taipan" you've read about Li Kaishing. He was the plastic flower maker wiped out in a mudslide.
He is now himself a Taipan.
BTW that is the only REAL communist I have ever wittingly met.
I say REAL....Cllr isn't a REAL commie
1732. jexster - 3/9/2002 11:24:45 PM
You ought to see the conference table in Li's office. I had a hard time focusing on the meetings which was probably by design.
1733. jexster - 3/9/2002 11:26:44 PM
I should add a critical fact.
The plant was sold to new owners and immediately thereafter became profitable
Guess who bought it?
1734. jayackroyd - 3/10/2002 11:57:20 AM
Dusty
The thing that I find most interesting and incredible about this whole thing is that it may turn out the everything enron did was legal.
So much the worse for Andersen, in that case, because their vetting the books contributed to these transactions being legal.
The reference to real estate flipping was to the bank's knowing contribution to creating a transaction that was not what it seemed. Again, in this case, it seems to me that the bank is more at fault than Enron for enabling this. Chase has shareholders too, and they issued an enormous unsecured loan to a company that they knew to be engaging in chicanery.
1735. dusty - 3/11/2002 3:44:34 PM
Looks pretty much like Andersen is history.
1736. thoughtful - 3/11/2002 4:07:53 PM
There was another article in the times recently which blew up the 3-circle mahonia process into something larger, which is what i understand was really how enron worked...doggone if i didn't get completely lost in that one.
1737. thoughtful - 3/11/2002 4:08:51 PM
I was trying to figure out why deloitte-touche would consider buying andersen...what's to buy? the customers seem to be jumping ship anyway, and you certainly couldn't keep the partners in the org without being tainted by the firm...so what's left?
1738. jayackroyd - 3/11/2002 4:12:57 PM
Yeah. Deloit will probably drop the name entirely. I didn't see how they could possibly survive. They aren't stupid people, and they know what it means to shred documents. That means that the documents would have proven more damaging than destroying them was. And that anyone who thinks about it knows that to be true. And, finally, that you really can't cover up things of this magnitude--and they knew that too--and shredded anyway.
1739. jexster - 3/11/2002 5:06:40 PM
California's AG Bill "Kenny Boy Meet Spike" Lockyer today filed suit against Enron and 3 other criminal enterprises for price gouging Californians.
1740. wonkers2 - 3/11/2002 6:26:53 PM
What's left of Andersen?--several thousand competent CPAs and the hope of salvaging some of the clients.
1741. jexster - 3/11/2002 6:51:09 PM
My sis-in-law has lotsa work..for now.
Paul Volcker on CNN Lou "Moneybags" Dobbs made several very strong statements about his investigation of Andersen:
- they have to divest consulting to survive
- they should not merge
- their top officers should be prosecuted
- the Big 5 or Final 4 should not be permitted to retain consulting businesses
- US business needs a heavy dose of regulation to clean up the other Enrons out there.
-Andersen should not be a scapegoat for greater sins in US big bidniss
1742. wonkers2 - 3/11/2002 7:31:58 PM
Volker is an "integrity figure" like Warren Buffet who gets called in to pull the chestnuts out of the fire. Even Cal Gal would consider him principled, I bet.
1743. jexster - 3/11/2002 7:38:24 PM
He sure is.
Without saying so, he in effect said that he released his report early because Andersen was attempting to pull a fast one on him by its merger talks with Deloitte-Touche
1744. CalGal - 3/11/2002 7:39:04 PM
I like Volcker.
Thoughtful--I imagine they can pick up a number of clients who might not leave once it turns out Deloitte is taking over. Also, isn't there a European business?
Jay--I've been thinking much the same thing, but one aspect that stopped me is why would they then leave a paper trail, if they knew how bad it would look anyway? They would be deleting a lot of data that they had every right to delete (technically) so why not just get all the seniors together and wreak havoc?
1745. jexster - 3/11/2002 7:39:55 PM
And speaking of integrity or more precisely its absence...
Bush had business ties with Enron and its predecessor companies, and first met Kenneth Lay, its chairman, sometime in the late 1980s, according to public records and interviews. Previously, the president [sic] had not mentioned his business dealings with Enron and had said that he got to know Lay after he was elected governor of Texas in 1994... [Bush] 'does not recall specifics' of the first time he met Lay, [Dan] Bartlett said. 'He met him through his father and through his father's political activity.' Despite those contacts, Bartlett said, Bush 'didn't get to know him well,' until after Bush was elected governor in 1994. [Bush] also does not recall specifics of his dealings with Enron, Bartlett said, and was unaware his oil company had joint ventures with Enron."
Despite Extensive Business Ties, Bu$h Continues to Lie About His Long Relation with Ken Lay
1746. wonkers2 - 3/11/2002 7:44:55 PM
It's called getting Layed.
1747. jexster - 3/11/2002 11:29:24 PM
I've a romantic streak belive it or not...
A weakness for love letters
On April 14, 1997, Bush wrote to Lay.
Dear Ken,
One of the sad things about old friends is that they seem to be getting older -- just like you! 55 years old. Wow. That is really old. Thank goodness you have such a young, beautiful wife. Laura and I value our friendship with you. Best wishes to Linda, your family, and friends.
Your younger friend,
George W. Bush
So authentic!
1748. jexster - 3/11/2002 11:48:11 PM
Enron's End-Runs
Welcome to the era of conflicts of interest
Appearances of which our All Highest Mullah Moron promised to avoid.
1749. wonkers2 - 3/12/2002 7:13:11 AM
Anybody catch the latest from the Pentagon last night on television. Somebody leaked a secret study on nuclear policy advocating that in addition to Russia and China the U.S. should also target North Korea, Iran, Iraq, Syria and Yemen and be prepared to use nuclear weapons proactively, not just when someone else uses them first. I think we may well have another situation like the pentagon propaganda section proposal that may well cause Rumsfeld to eat his words.
1750. wonkers2 - 3/12/2002 7:14:30 AM
Sorry! The previous was intended for the war on terror thread.
1751. wonkers2 - 3/12/2002 7:38:37 AM
Here's a question for one or more of the Mote's several lawyers.
Headline from today's Detroit Free Press:
CONAWAY'S $9 MILLION EXIT RAISES QUESTIONS
The question is how can it be legal for Chuck Conaway to walk away with a $9 million severance package after running K-Mart into bankruptcy after only two years with the company, the day after announcing that 22,000 K-Mart employees, many with long service, would be laid off with no severance pay. (Despite a company policy which promised severance pay.)
The question in my mind is why would the Board of Directors or bankruptcy court or judge uphold CEO Conaway's severance agreement and not allow payment of the severance package of 22,000 rank and file employees? Of course I recognize that Mr. Conaway has much greater financial obligations than ordinary employees. He's got to keep up his dues at Bloomfiel Hills Country Club and the Birmingham Athletic Club!
1752. jexster - 3/12/2002 12:12:30 PM
When former Enron executive Thomas White became Army Secretary, he promised to bring private-sector "efficiency" to the Army. He sure did - ENRON style. White rigged a $25 million contract to provide power to Fort Hamilton in Brooklyn, NY, so that only Enron would bid. This contract is under investigation by Rumsfeld's Defense Department - but how 'bout Ken Starr!
From the Kourt of the King of Krony Kapital
1753. jexster - 3/12/2002 12:47:31 PM
WASHINGTON (AP) - The Commodity Futures Trading Commission is looking into whether Enron Corp. committed fraud or manipulated markets with improper trading.
``We do have a full investigation under way,'' CFTC Chairman James Newsome said Monday in a telephone interview, noting that the agency is using its anti-fraud and anti-manipulation authority to investigate Enron's trading on commodity exchanges, notably the New York Mercantile Exchange, as well as its own big online trading system.
1754. wonkers2 - 3/12/2002 5:59:48 PM
Here's a question for one or more of the Mote's several lawyers.
Headline from today's Detroit Free Press:
CONAWAY'S $9 MILLION EXIT RAISES QUESTIONS
The question is how can it be legal for Chuck Conaway to walk away with a $9 million severance package after running K-Mart into bankruptcy after only two years with the company, the day after announcing that 22,000 K-Mart employees, many with long service, would be laid off with no severance pay. (Despite a company policy which promised severance pay.)
The question in my mind is why would the Board of Directors or bankruptcy court or judge uphold CEO Conaway's severance agreement and not allow payment of the severance package of 22,000 rank and file employees? Of course I recognize that Mr. Conaway has much greater financial obligations than ordinary employees. He's got to keep up his dues at Bloomfiel Hills Country Club and the Birmingham Athletic Club!
1755. OhioSTOPAS - 3/12/2002 6:06:06 PM
His contract might have provided for his potential severance money to be set up in a separate account (or possibly a letter of credit) separate from K-Mart's corporate assets. In the late 80's I worked for a bank that was in danger of being closed for inadequate capitalization. The bank hired a new CEO to try to turn things around, and he negoiated that his severance pay would be secured by a letter of credit with a different bank.
1756. wonkers2 - 3/12/2002 6:27:29 PM
Thanks. Makes sense.
1757. jexster - 3/13/2002 11:12:03 AM
Army Secretary's Job Hinges on Answers to Enron Queries
1758. jexster - 3/14/2002 10:50:41 AM
"hen the Enron (news/quote) scandal began to mushroom, and Arthur Andersen disclosed that its auditors had shredded documents, Andersen's big competitors shuddered and privately voiced fears that Andersen might not survive."
Now they fear that it might
1759. wonkers2 - 3/14/2002 5:08:04 PM
Arthur Andersen is dead meat. The firm, not a few individuals, has been indicted for obstruction of justice accused of a worldwide document shredding effort directed from the firm's headquarters. (If I got the report on MSNBC correctly.)
1760. CalGal - 3/14/2002 5:13:21 PM
You got it right, wonk.
DOJ Indicts Andersen
Moral of this story: don't hide your wrongdoings, let them hang out like the dirty laundry they are.
Can Andersen partners can just leave?
1761. concerned - 3/14/2002 6:36:36 PM
CalGal got there first, but what the hey...
Arthur Andersen Indicted
Thu Mar 14, 4:09 PM ET
WASHINGTON (AP) - A federal grand jury on Thursday indicted the Arthur Andersen accounting firm in the Enron Corp. scandal, the first criminal charges in the nation's biggest bankruptcy.
The one-count indictment alleging obstruction of justice came after Andersen spurned a 9 a.m. Thursday deadline to plead guilty to charges stemming from its admitted destruction of Enron-related documents. Andersen said criminal proceedings were tantamount to a "death penalty" against the firm, and it accused the Justice Department (news - web sites) of "a gross abuse of governmental power."
For a one-month span in October and early November, "Andersen ... did knowingly, intentionally and corruptly persuade" employees to "alter, destroy, mutilate and conceal" documents, the indictment said.
Jexster will probably be crying into his kool-aid tonite - the GWB administration's lookin' strong here.
1762. concerned - 3/14/2002 6:38:49 PM
No more SEC or Government auditing contracts for AA now, hey?
1763. concerned - 3/14/2002 6:40:36 PM
More awful news for jexster: the GWB administration scandal aspect of Enron is flatlining - time to rename this thread 'Enron/Arthur Andersen/Global Crossing'?
1764. jexster - 3/14/2002 6:45:44 PM
1765. jexster - 3/14/2002 6:46:17 PM
The investigations have just begun!
1766. jexster - 3/14/2002 6:53:00 PM
WASHINGTON, March 13 (Reuters) - A defiant President George W. Bush flatly refused on Wednesday to divulge details of internal energy task force meetings to congressional investigators, calling the information privileged and the request a threat to executive authority.
The General Accounting Office, the investigative arm of Congress, sued the administration in February for records of the task force's meetings. Democratic lawmakers allege Enron Corp. and other energy companies played a disproportionately large role in the taskforce's deliberations, whereas environmentalists were largely shut out.
The task force, headed by Vice President Dick Cheney, produced a policy favoring more oil and gas grilling as well as a revival of nuclear power. Cheney's office has acknowledged that representatives of Enron, Bush's biggest financial backer in the 2000 campaign, were among industry experts the task force consulted.
1767. concerned - 3/14/2002 6:53:59 PM
1764 doesn't even begin to make any sense.
Par for the course from jexster.
1768. jexster - 3/14/2002 7:00:17 PM
Wholly Completely; entirely
ownedpossessed as property
subsidiaryA company having more than half of its stock owned by another company
1769. Jexster - 3/14/2002 9:58:59 PM
Loyalty? Who Will Be the First Bushie to Walk the Enron Plank?
But the Bushie least likely to survive isn't Whitman, O'Neill, or Mineta. And he doesn't fit into any of the problematic categories: He's not a disloyal bureaucratic hack, a freewheeling intellectual, or an out-of-step Cabinet member. In fact, he is a former corporate chieftain: Secretary of the Army Thomas White, the eleven-year Enron executive who joined the administration last June. If he goes, it will have nothing to do with this White House's quirks. Rather, it will be for that timeless Washington reason: scandal.
White has been mired in the Enron scandal since the company went bankrupt. From 1998 to 2001, he was vice-chairman of Enron Energy Services (EES), which seems to have cooked its books as much as the rest of the company. On top of that, he's got serious conflict-of-interest problems. At EES, White lobbied members of Congress to privatize utilities on military bases, which could have helped Enron reap billions in government contracts. And sure enough, in his first weeks on the job as secretary of the Army, White began pushing the privatization plan...
White Out
And such a
GOOD LITTLE SOLDIER TOO!
1770. Jexster - 3/14/2002 10:00:12 PM
now Concerned knows the meaning of Message # 1764, but he knew it all along I bet.
1771. jexster - 3/15/2002 12:03:33 PM
Andersen Employees Fear Fallout-Many already are seeking employment elsewhere as uncertainty about the firm's future mounts
Including my sister in law, the friggin *librarian* in AA Houston office.
So much for democratic values of fair play.
Thousands will lose their jobs but Ken Lay? Bush? Cheney?
1772. jexster - 3/15/2002 12:07:22 PM
I'm tired of people taking shots at us," Matthews said. "Enron did not go bankrupt because we shredded some documents."
The single father of two said he planned to stay with the company, even while many of his co-workers are shipping resumes to rival companies and executive search firms
1773. jexster - 3/15/2002 6:20:44 PM
85,000 people are paying with their livelihoods for the crimes of Bu$h's cronies.
Look for Kenny Boi to be doin some "pioneering" in '04.
Welcome to the court of Krony Kapital's Moron King.
1774. jexster - 3/15/2002 11:38:54 PM
TD Just Wait Til the Chenron Indictments Come Out!
1775. jexster - 3/16/2002 8:34:03 PM
On March 20th, you are invited to the first in a series of debates sponsored
by The American Prospect, the liberal biweekly magazine.
Resolved: The Enron Affair is the Logical Result of Deregulation
Moderated by Al Hunt, The Wall Street Journal
For the liberal team:
- Robert Kuttner, The American Prospect
- Robert Borosage, Campaign for America's Future
For the Conservative team:
- Grover Norquist, Americans for Tax Reform
- Bruce Bartlett, Columnist, The Washington Times
Wednesday, March 20, 2002, from 5:30 until 7:15
National Press Club Ballroom
529 14th Street, NW
13th Floor
Washington, DC
Drinks and hors d'oeuvres will be served
RSVP to Lisa Charbonneau
(202) 776-0730 x103 or reply to lcharbonneau@prospect.org .
1776. jexster - 3/16/2002 8:34:52 PM
Wonder if they'll have a drink limit?
1777. jexster - 3/17/2002 11:06:10 AM
Value chain arbitrage. Pair trades. Seagulls. Restructuring plays. Forget hedge funds. These are the true exotics of the investment world. Chances are you have never heard of them. Chances are better that you will never have access to them.
Why the Rich Get Richer
1778. jexster - 3/17/2002 2:39:02 PM
1779. concerned - 3/18/2002 4:02:49 AM
1780. jayackroyd - 3/18/2002 9:23:56 AM
Today's NYTimes reports that the Andersen "document retention policy" was created after the firm got caught approving misstated earnings for Waste Management company. The document retention policy is pretty clearly designed to make litigation difficult, and to conceal evidence of wrongdoing. That's in general. wrt Enron, they'd let some people go, and fallen behind on their shredding activities.
I can't think of a reason for an accounting firm to shred documents. If the document is material and confidential, it should be retained. If it is neither, you throw it away. I guess there may exist documents that are not material and confidential, like drafts of policies unimplemented. But it would seem to me that you would want to keep the history of your decisionmaking process.
1781. jexster - 3/18/2002 10:13:08 AM
to Terry McAuliffe, et al)
who is the "al"?
Poppy!
1782. jexster - 3/18/2002 11:03:44 AM
W's Corporate-Improvement Plan: Breaking with an Enron-ish Past
1783. jexster - 3/18/2002 11:07:18 AM
Happy at 6 am, Happy at 6 pm - W's the-dog-ate-my-homework excuse
"In his 1994 race for Texas governor, Bush's late notice on the June 1990 stock dump became an issue. Bush said he had filed the required form and maintained the SEC lost it. An SEC spokesman denied that. "
1784. concerned - 3/20/2002 6:41:15 PM
jexster - this threads dying because Enron just ain't enough to carry it.
1785. jexster - 3/20/2002 6:50:35 PM
Why so impatient TD(for Dasshole)?
All in due time, all in due time...the stew needs time to cook...after all MonicaGate wasn't built in a day and there is infinitely more fire waiting for you....
Chenron documents will come. FERC has complaints before it. The California AG is hard at work along with SEC and, now that the hacks have recused themselves, the pros at Justice....
Andersen's indictment spells double trouble for Enron and its cronies...
This is a real scandal. Professionals are hard at work..
Dan Burton, Lucianne Goldberg, et al need not apply
1786. jexster - 3/20/2002 9:24:34 PM
In the few short months since the Enron collapse exposed widespread influence peddling in the GOP, one hugely significant RESULT has now been accomplished.
TD Led Senate OK's Campaign Finance Reform
The Bush Whitehouse, now widely known as having been a wholly owned subsidiary of Enron, announced it will sign the bill, an abrupt about face that the National Review called "scandalous" and "hypocritical".
And what did SmearGates produce?
nothing but tax dollars, millions of them down the toilet, and vast new netherworlds of gutter politics.
Hats off to the Grand Old Pile of Pigshit Principles
1787. jexster - 3/21/2002 11:43:10 AM
This one cuts close to the bone, hit close to home. My sis in law being libarian in Houston office of AA
Andersen Employees Strike Back for Their Jobs
All 85,000 of them.
For those who watch CNN, they have an important ally in Lou Dobbs, an unabashed Republican, who yesterday aired his open letter to Ashcroft which after reciting his loyal support bashed Bush for attacking the company's employees while letting his cronies at Enron get a pass.
Stayed tuned...alll in due time..all in due time Thomas Daschole
1788. jexster - 3/23/2002 10:19:54 AM
We interrupt this program....
Senate Panel Says Enron Must Detail Policy Role
Subpoenas Shift Probe To White House Contacts
1789. joezan - 3/23/2002 10:32:16 AM
...yawn.
1790. jexster - 3/23/2002 11:36:24 AM
Yep yawn on....
Out of the mouths of babes..one word says it all!
That's what I like about kids, either chronologic or politic...
NEW YORK, March 22 -- Almost from the moment Enron Corp. declared bankruptcy in December, the businesses it owed money to have been feuding over how to divvy up the remains of the once-mighty Houston energy company. And now it's getting personal.
Just this week a former Enron energy-trading partner asked the judge in the case to disqualify the law firm for the creditors' committee, saying its attorneys had "myriad conflicts" because Enron and a number of Enron's major banks were clients.
EXCO Resources of Dallas said in court papers filed Tuesday that Milbank, Tweed, Hadley & McCloy was "quite possibly the worst choice" as creditors' counsel, with the possible exception of Vinson & Elkins. The Vinson firm was has been accused of failing to vigorously investigate the accounting issues that eventually led to Enron's collapse.
Now It Gets Personal
Enron's corruption of the GOP was so pervasive its going to go on for a long...long...long time as Justice, the SEC, and 18 congressional committees work to straighten it all out.
1791. jexster - 3/23/2002 1:44:19 PM
FOR IMMEDIATE RELEASE
March 21, 2002
LIEBERMAN ANNOUNCES INTENT TO ISSUE MORE SUBPOENAS
1792. joezan - 3/23/2002 1:51:52 PM
...zzzzzzzzzzzzzzzzzzzz
1793. jexster - 3/23/2002 2:23:45 PM
Don't snore JZ...get fired up...I smell the foul hand of the liberal media conspiracy at work here....
From TODAY"S LA Times, Los Angeles, California (Land of the 55 Electoral Votes)
Generating Pure Profits With Electricity Trading
Energy: Some companies made a killing in state's wide-open market. Consumers pay the price.
1794. jexster - 3/23/2002 2:25:56 PM
Here I'll get you started.
Bullshit! The Washington Post carries news of Lieberman's subpoena the VERY SAME DAY!
Does Lieberman think we all just fell off the turnip truck?
More leftie horse crap.
Take it from there...
Hardee har har....
1795. jexster - 3/23/2002 2:29:00 PM
From the Houston Chronicle
WASHINGTON - California prosecutors say that when they pried open 940 boxes of documents subpoenaed from bankrupt energy giant Enron Corp., they made a surprising discovery.
"What we found were discarded Kleenexes, old pizza boxes, garbage," California Attorney General Bill Lockyer told reporters. On March 11, Lockyer said he and a team of lawyers arrived at the offices of Enron's utility subsidiary in Portland, Ore. Lockyer expected to find subpoenaed documents related to Enron's California electricity sales.
A California judge will rule next week on whether Enron should be held in contempt for its action, he said.
From the 940 boxes, "we got one piece of paper, one document, in response to our subpoena," Lockyer said.
Enron has incensed California politicians by ignoring a subpoena and failing to appear last month at a state Senate panel hearing on document destruction. Lockyer won a court order in January requiring Enron to preserve all paper and electronic documents subpoenaed by state officials.
1796. jexster - 3/23/2002 2:30:06 PM
all in due time..all in due time...Garry South in the water...
CHUMps
1797. jexster - 3/23/2002 2:33:11 PM
From Thursday's LAT....is some nefarious leftie conspiracy afoot to foul the Royal visist to CA for Wingnut Bill Simon?
U betcha!
California officials on Wednesday stepped up their efforts to persuade federal regulators to order refunds for electricity bought during the state's power crisis, intensifying a debate that has political as well as financial overtones.
State Atty. Gen. Bill Lockyer filed a petition with the Federal Energy Regulatory Commission seeking $1.8 billion to $2.8 billion--and perhaps substantially more--in refunds. A state request for $8.9 billion in refunds is already pending before federal regulators. The new demand is the latest twist in an energy crisis that has eased at the light switch but remains a hotly debated subject in California's gubernatorial campaign. The state's troubles last year, along with the collapse of energy giant Enron Corp., have fueled a new investigation to determine whether companies used their market power to drive up electricity prices last year and have intensified a debate in Congress over new rules for energy markets.
all in due time..all in due time
1799. jexster - 3/23/2002 10:12:19 PM
Is Enron Over? It Depends on Lieberman
hehehehe
1800. jexster - 3/24/2002 10:44:31 AM
Bush-Lay Ties Based on Shared Priorities
Tex. Records on Ex-CEO Of Enron Show a Mix Of Lobbying, Friendship
"In his extensive correspondence with then-Texas Gov. George W. Bush, Kenneth L. Lay did not always sound like a family friend. Sometimes, Enron Corp.'s CEO came across like a nudging lobbyist, pressing the governor on the minutiae of pending bills.
"Dear George," Lay handwrote in dozens of letters before launching into a bullet-point description of a tax bill that might save his company millions, or a tort bill that might shield his company from large jury awards, or an electricity deregulation bill that would open new markets for Enron."
1801. jexster - 3/24/2002 10:47:08 AM
Now that the Senate Governmental Affairs Committee has launched an investigation to determine what role Enron had in the creation of the Bush administration's energy policy, the relationship between Bush and Lay is likely to come under increased scrutiny.
If this isn't evidence of a leftist media conspiracy against our Philopher WarLord then I dunno what is
1802. jexster - 3/24/2002 10:54:18 AM
"Linda and I are so proud of both of you and look forward to seeing both of you in the White House," he wrote in a letter dated Dec. 21, 1999, and addressed this time to "George and Laura."
"Hope you have a great Christmas with your family. Warmest regards, Ken."
1803. jexster - 3/24/2002 9:09:57 PM
Energy Dept Doc Production Due This Week...
Rep. Henry Waxman, D-Los Angeles, a frequent critic of the administration's energy policies, said:
"The more we learn about the Cheney task force, the easier it is to understand why the White House is fighting so hard to keep everything secret. The biggest donors didn't just have the best access -- it now appears they were allowed to write specific sections of the administration's energy plan."
Krony Kapital Khronicles - Meet Excelon Corp - $345,000 Gets Cheney Report Rec for Its Nuke Reactor
1804. CalGal - 3/25/2002 1:26:43 PM
Justice didn't indict David Duncan
It was a marked shift from January, when the shredding at Andersen exploded into public view. At that point, the cast of characters seemed quite predictable. Mr. Duncan was portrayed by Andersen as a rogue employee whose decisions deviated so far from the path of acceptable standards that the firm had no choice but to fire him. Through his representatives, Mr. Duncan shot back, saying he had only been reacting to an earlier reminder from an Andersen lawyer about company policy when he arranged the wholesale destruction of Enron documents. Andersen and Mr. Duncan seemed to settle into the standard pose of corporate scandals, with the company and the executive inextricably at odds.
But the government's controversial, and unusual, decision to indict Andersen while leaving Mr. Duncan untouched has upended the usual legal chessboard, bestowing an enormous amount of power onto Mr. Duncan, a former partner from its Houston office. Now, legal experts said, the man who was originally the focus of outrage from both the government and Andersen potentially has the ability to transform either side's case with testimony about what he had intended when he ordered the document shredding.
It seems to me that the Andersen policy they are hiding behind (document retention) can be demonstrated to have a purely illegal intent. Didn't they develop the policy after their previous fiascoes, just to ensure that they didn't have any misleading paper around?
1805. wonkers2 - 3/25/2002 9:07:10 PM
The woman lawyer (Harvard) who testified before a House committee that she emailed a reminder of the document retention policy to instruct them NOT to destroy documents is now taking the fifth on the matter. I saw her testify 2-3 weeks ago and didn't believe her then. She was a little too careful about the way she worded her responses. She kept repeating the same response that appeared to me to have been very carefully worked out ahead of time so that if would mislead without actually being perjury.
1806. jexster - 3/26/2002 6:36:29 PM
WASHINGTON, March 25 — The Bush administration released the first wave of documents related to Vice President Dick Cheney's energy task force today. The papers showed that Energy Secretary Spencer Abraham, a member of the panel, met with three dozen energy industry representatives but with no consumer or conservation groups in preparing the national energy strategy last year.
1807. concerned - 3/27/2002 1:51:33 AM
What Jexster Doesn't Want You to Know: Enron & Global Crossing 'Rats Gephardt, Lieberman, McAuliffe, Daschole, Clowntoon: In It Up To Their Ears
Excerpts:
Clinton pushed through the repeal of the Glass-Steagall Act, enabling Citigroup, J.P. Morgan Chase and others to form the mega-conglomerates that financed Enron and other disasters. Clinton's leadership also insured that financial derivatives remain an unregulated time bomb at the center of the banking system.
So, according to The Nation, we have the fucking WH Rapist to thank for Enron and Global Crossing.
1808. concerned - 3/27/2002 1:52:00 AM
The McAuliffe Problem
Many Democrats are inhibited as reformers by one other factor -- Democratic national chairman Terry McAuliffe. He is their main money guy, an ebullient and fabulously successful fundraiser who's close to both Clintons, Gephardt and Daschle and other potential candidates, AFL-CIO leaders and hundreds of fat-cat contributors.
McAuliffe is also thick with Gary Winnick, chairman of Global Crossing, the failed telecom company that is now in the cross-hairs of SEC and Congressional investigations.
Winnick cut his pal in at the takeoff and McAuliffe reaped up to $18 million on an investment of $100,000. McAuliffe's good fortune was shared by other early investors like the AFL-CIO-affiliated Union Labor Life Insurance Company, which also made spectacular gains from Global Crossing and, according to BusinessWeek, cut in some union officials.
His problem is, Global Crossing looks a lot like Enron: The insiders sold early; the employees, ordinary investors and pension funds got trashed big-time. Global Crossing is the fourth-largest bankruptcy in U.S. history but lacks the sophisticated artistry of Enron's complex financial deceptions.
That distinction doesn't help Democrats much. "People are reluctant to make the arguments that need to be made for the Democratic agenda," one of them said. "They don't want to hurt Terry."
McAuliffe may be more meaningful as symbol of the money culture that engulfs the Democratic Party rather than as suspect financier. "You help me, I'll help you. That's politics," McAuliffe explained.
That's the 'Rats for ya. Money Cultchuh and not much else.
1809. concerned - 3/27/2002 2:04:03 AM
I want to see Jexster just try to paint The Nation as either wrong on this or Right Wing.
C'mon Jex; bring it on!
1810. jexster - 3/27/2002 2:13:22 AM
Wrong...
1. Global Crossing is NOT the same. Its easily distinguished for the following highly significant reasons:
- Unlike Bush, et al, Terry MacAulliffe was never a government official
- TM was never involved in anyway in the management of GC, unlike White and several other Bushies
- Poppy made 14 million bucks on stock options he got for a speech.
- TM did what any good capitalist would do...buy on a tip
- Global Crossing is like any number of IPO's that failed eventually but that made big bucks during the Good Years
2. Clinton initially opposed the Glass-Steagall amendments which enabled Enron....The President did sign the bill but Treasury initially opposed. The prime mover was none other than Phill Gramm (R Tex) when combined with the CFTC exemption wife Wendy pushed through in 1993 Enron was set up and her place reserved at the board table.
1811. jexster - 3/27/2002 2:17:51 AM
And finally I don't see any punches being pulled here....Lieberman is moving on the political aspects of the Chenron scandal and the FOIA plaintiffs are going to haul Bush into court to compel production of redacted material....
Must have something to hide.
After all, Bush is not exactly the fighter for principle his holy roller sermons to the contrary notwithstanding.
1812. jexster - 3/27/2002 2:19:03 AM
WASHINGTON (Reuters) - A legal activist group threatened the Bush administration on Tuesday with a long court battle after receiving thousands of documents, many of them censored, detailing how big business influenced energy policy.
Judicial Watch received 11,000 documents, including many blanked out pages, from the Department of Energy (news - web sites) late on Monday that showed Vice President Dick Cheney (news - web sites)'s energy task force met last year with industry but not with any environmentalists.
1813. concerned - 3/27/2002 2:23:08 AM
jex -
You have it exactly backwards. It's Clowntoon's repeal of the Glass - Steagall Act which allowed Enron, Global Crossing, etc. to happen. Read it again.
1814. jexster - 3/27/2002 2:24:42 AM
But I don't want to discourage you TD...Despite the overheated left-populist stuff, The Nation is a marked improvement over most of the trash you post....Keep it up...
And you won't see the Nation indulging in adolescent smear nor do they waste ink inviting a "redefinition of intelligence" to accomodate Bush or any other politician for that matter.
1815. jexster - 3/27/2002 2:25:08 AM
No they are wrong.
1816. jexster - 3/27/2002 2:25:28 AM
Glass Steagall was Phil Gramm's doing.
1817. concerned - 3/27/2002 2:26:07 AM
jex -
Your boys are dirtier than hell. Just filthy. You've had months to try to dig this much dirt on GWB and you haven't been able to find as much as this single lonesome article from the Nation exposes on the 'Rats.
1818. concerned - 3/27/2002 2:27:47 AM
Re. 1815 -
No, jex. You're wrong. X42's hoofprints are all over the repeal of Glass-Steagall. Guiltier than fucking hell.
1819. jexster - 3/27/2002 2:38:22 AM
From the NyT...sorry TDaschole, facts don't come into being just to suit your addiction to GOP smear machine....(though it did manage a number of Al gore!)
The commodity commission's energy exemption in 1993 became more important to Enron after 1999, when it opened Enron Online, an Internet-based trading platform. Enron, and other companies, wanted the trading exemption put in a law, which would provide more legal certainty to their operations than a regulatory rule.
At the same time, the Clinton administration and Congress were working on a plan to update the statutes governing the commission to take account of developments in the financial markets, especially involving futures, options and over-the-counter financial derivatives.
1820. jexster - 3/27/2002 2:38:56 AM
The broader legislative effort went forward in the House with wide support, though the energy exemption prompted some concerns.
William J. Rainier, the commission chairman, told House members in September 2000 that he was "deeply concerned" about exempting energy trades from regulation because those dealers had no one else regulating them whereas dealers in financial derivatives -- which were also freed of commission regulation by the bill --were still subject to other "federal financial regulation."
1821. jexster - 3/27/2002 2:39:41 AM
But a few weeks later, when the House passed the bill, the Clinton administration voiced no concerns about the energy exemption.
On. Sept. 14, 2000, before the House vote, Mr. Lay wrote to important House members, including Speaker J. Dennis Hastert, urging enactment of the bill. Mr. Lay's letter told lawmakers that "this important legislation provides critical legal certainty for a range of transactions that are a central part of Enron's risk management and commodity trading business."
1822. jexster - 3/27/2002 2:40:30 AM
Enron's interest was twofold, officials said. One was ensuring regulatory freedom for Enron Online, a so-called bilateral platform, in which Enron was the other party at the end of every transaction. Enron also wanted minimal oversight over another trading form that could become part of its future business, multilateral platforms, where many parties traded. In the end, the bill totally exempted bilateral platforms and partially exempted multilateral platforms,
1823. jexster - 3/27/2002 2:40:50 AM
compromise Mr. Lay supported in his letter.
Meanwhile, on a parallel track, the commission was proposing its own rules for modernizing regulation of complex financial products. The rules were abandoned once the law passed, but the bill's fate was still uncertain in August 2000 when Dr. Gramm sent in her comments.
They included a report card for the commission's new regulatory framework: one A, one B, two D's and three F's. Supporters of the legislation, including officials at Enron, felt Dr. Gramm's comments were not helpful, but the effort in the House was moving forward and the overall bill, including the energy exemption, easily passed.
But in the Senate, the bill faced a formidable roadblock in Mr. Gramm. The Banking Committee, of which Mr. Gramm was chairman, was one of the panels with jurisdiction over the bill, but the Agriculture Committee handled the section containing the energy exemption. When Congress went into recess in October for the elections, the bill's supporters thought it was dead.
"Gramm's hold was everything," said one person involved in drafting the bill.
Mr. Neal, Mr. Gramm's press secretary, said, "Senator Gramm held the bill from September through Dec. 13, when an agreement with Treasury Secretary Larry Summers was reached on the banking issues" that had prompted the hold. One of Mr. Gramm's concerns was a clear line of jurisdiction between bank regulators and the commission over financial products that could be developed by banks and other financial institutions.
As for the energy provision, Senator Gramm "did not write, negotiate or modify" it, Mr. Neal said. On the question of Mr. Lay's concerns about the bill, Mr. Neal said Senator Gramm was aware of Mr. Lay's letter to Mr. Hastert.
On Dec. 21, President Bill Clinton signed his last bill, an omnibus spending measure, which contained the futures bill and its exemption for energy trading.
1824. jexster - 3/27/2002 2:47:29 AM
Now I don't know whether this is a GOP fact of convenience such as afflict Bush campaigns and esp tax/budget policies or whether its just fuzzy math from a Moron who gave up econ after his miserable 71
"We've tripled the amount of money—I believe it's from $50 million up to $195 million available."
—Lima, Peru, March 23, 2002
1825. wonkers2 - 3/27/2002 7:46:24 AM
Enron arithmetic.
1826. concerned - 3/27/2002 10:40:03 AM
I called this one, jexster. You've now said the Nation was wrong and also accused it of being part of the GOP 'smear machine', just as I predicted several posts back.
You lose again. But, thanks for playing.
1827. jexster - 3/26/2002 4:56:50 PM
No I didn't claim that the Nation was part of the GOP smear machine TDaschle, in fact, I said just the opposite in urging you to read more Nation articles as that will free your mind from mindlessness and bring you to the place of 
Read The Nation, Don't Fight the Deepness
1828. CalGal - 3/27/2002 2:27:44 PM
Stranglehold on Speech
In truth, "campaign finance reform" violates this constitutional guarantee in ways that transcend McCain-Feingold. Reformers want to limit political contributions and campaign spending, which purportedly "corrupt" government. In Buckley v. Valeo (1976), the Supreme Court approved limits on campaign contributions but not spending. Large contributions might unduly influence politicians, the court said. But limiting campaign spending -- by candidates or outsiders -- would restrict their free speech. In practice, the court's distinction hasn't worked.
Politics is about interest groups -- of both left and right --cooperating with sympathetic candidates and officeholders. But close cooperation erases the distinction between a contribution and campaign spending. If an interest group runs a political ad at a candidate's request, then the money for the ad amounts to a donation to the candidate. Contribution limits become meaningless. The cure is to outlaw cooperation. But that destroys free speech. People can't talk to senators, representatives, candidates or their staffs without flirting with illegal cooperation. Groups can't lobby without running the same risk.
The Federal Election Commission has tried to disarm the dilemma with rules defining permissible "coordination," the legal term for cooperation. But the dilemma can't be disarmed: Lax rules are worthless; strict rules subvert the rights of free speech and association. McCain-Feingold simply compounds the basic contradiction.
Only the Supreme Court can end the charade. When it considers McCain-Feingold, it should declare most campaign finance regulation unconstitutional. The alleged evils of money in politics are now overshadowed by the evils of strangling free speech.
1829. jayackroyd - 3/27/2002 2:38:16 PM
This ban is only on broadcast television advertising, right?
1830. CalGal - 3/27/2002 2:43:17 PM
As I understand it. Which begs the question--if it is okay to run an ad in a newspaper, what justification is there to prevent reading that same ad text in a television commercial?
1831. CalGal - 3/27/2002 2:46:31 PM
Further to my last post: I don't think it makes any difference, anyway. If you can't say it on TV, it is still a violation of free speech.
Everyone expects the ad ban to be struck down by the courts. I agree with Samuelson; I hope the entire law is thrown out.
1832. jayackroyd - 3/27/2002 3:20:50 PM
Because the government grants a license, for free, to television broadcasters. Speech on broadcast television is currently regulated by the FCC because the medium is a public medium. You can't advertise cigarettes on television either. You can produce your own newsletter, your own magazine, your own website, your own public access cable program.
1833. CalGal - 3/27/2002 3:24:07 PM
Are you saying that the ban doesn't apply to cable TV?
1834. CalGal - 3/27/2002 3:29:57 PM
Title II, Section 203, prohibits unions and companies from spending their money on "electioneering communications" -- defined as TV, cable and satellite ads that mention federal candidates -- within 60 days of a general election or 30 days of a primary.
SO you are making a distinction between "public access" and broadcast/cable, I guess.
But the government can ban cigarette advertising because it is harmful to people's health and they have a different government agency that says so. I'm not sure you can make that case with interest groups.
1835. Indiana Jones - 3/27/2002 4:02:36 PM
The most relevant distinction is that cigarette advertising is "commercial" speech, which is subject to much greater government control and regulation than is political speech.
1836. CalGal - 3/27/2002 4:03:33 PM
I was going to mention that, but I figured that someone would announce that campaign advertising is "commercial" speech.
1837. Toenails - 3/27/2002 4:10:24 PM
You're right that probably any effective campaign finance reform statute will be held to be wholly or partially unconstitutional.
But eventually, there will be sufficient public outcry to lead to a constitutional amendment regulating financial contributions to politicians and political campaigns. Too bad, I guess, that free speech needs to be limited, even by a constitutional amendment.
But it does.
1838. CalGal - 3/27/2002 4:14:04 PM
Toe,
My concern is that it will only be held partly unconstitutional, with the ban on advertising thrown out but the rest kept.
I totally disagree that it's necessary. Do you really think people are so incapable of voting in their own self-interest?
1839. jayackroyd - 3/27/2002 4:36:16 PM
They are not offered candidates with policies in the public interest.
1840. Toenails - 3/27/2002 4:45:13 PM
Cal:
Do you really think it's possible to wage an electoral campaign nationally, or even in a single populous state, on a grossly uneven playing field?
And the fact that the two major parties have (usually) roughly equal resources does not even begin to address the problem.
1841. jayackroyd - 3/27/2002 4:51:12 PM
My choice before last for Senator was between two guys in the pockets of the banking industry, Schumer and D'Amato. My last choice was between a candidate in the pocket of trial lawyers and teacher's union and a stooge.
I've never had a chance to make a choice in a Congressional race.
1842. CalGal - 3/27/2002 5:02:06 PM
Toe,
CFR is widely acknowledged to benefit incumbents, so I'm not sure why you're convinced it will be fairer. In fact, this law will make it more difficult to unseat incumbents.
Jay,
I don't see why you are convinced that the people of your state will vote differently because there won't be campaign ads. I'm also not convinced that it is the job of CFR to give you more of a say, or to produce candidates that meet your political sensibilities and priorities.
Behind big money lies a whole bunch of voters who have the same interests. Take away the money and you still have the interested voters. You'll still have regional conflicts over priorities, with tradeoffs. The tradeoffs will almost certainly be the same.
You do have choices. You just don't care for them. That's not at all the same thing.
1843. jexster - 3/27/2002 9:28:58 PM
WASHINGTON (Reuters) - A divided Senate committee on Wednesday asked that the White House detail its contacts with now-bankrupt energy trader Enron Corp., as the ranking Republican on the panel refused to sign the request.
BROAD INQUIRY
"I will not hesitate to ask for anything that helps us to investigate as thoroughly as possible what the federal government might have done to prevent, or at least anticipate, Enron's demise," Lieberman said in a statement.
"A broad inquiry of this sort demands that contacts between the White House and these agencies be reviewed," he added.
The letter asks for contacts between Enron and the White House on actions or regulations by eight agencies.
They are the Securities and Exchange Commission (news - web sites), the Commodity Futures Trading Commission, the Federal Energy Regulatory Commission (news - web sites), the Department of Labor, the Department of Commerce, the Department of Energy (news - web sites), the Overseas Private Investment Corporation, and the U.S. Export-Import Bank.
The letter also asks for communications between Enron and the White House or any member of its energy policy task force from the date of Bush's inauguration to the present, that referred to energy policy issues.
1844. jexster - 3/27/2002 9:31:41 PM
1845. jayackroyd - 3/28/2002 9:23:17 AM
"Behind big money lies a whole bunch of voters who have the same interests. Take away the money and you still have the interested voters."
No, the point is that behind big money are very few voters. How many people are in favor of copyright in place from the time Mickey Mouse was created? How many people are in favor of free licenses to the broadcast spectrum? How many people favor not being allowed to copy their cds?
There are a host of other issues where the government simply gives money to contributors that voters in general don't have an opinion upon because it's too complicated, or the effects are too diffuse. But nobody who understands the issue would support textile tariffs, steel tariffs or farm subsidies who doesn't directly benefit from the intervention.
1846. jayackroyd - 3/28/2002 9:34:13 AM
I forgot. How many people are in favor of a complicated, arcane tax code that requires accountants to prepare a tax return? The big five were lobbying to keep it complicated, last time around.
1847. jexster - 3/28/2002 10:47:55 AM
Ken Lay knew nuthin
Jeff Skilling nada
Krusty the Klown nope
GWB out to lunch
White rien
see no evil, hear no evil...
What a bunch of monkeys...I guess it was all Andersen's and Clinton's fault
1848. CalGal - 3/28/2002 10:51:52 AM
No, the point is that behind big money are very few voters.
I remember you talking earlier about the sugar subsidy, or something. Certainly farm subsidies don't need big money to pressure their elected officials. You mention banking, teachers, and trial lawyers--you think those professions don't have a whole hell of a lot of voters behind them, directly or indirectly?
How many people are in favor of a complicated, arcane tax code that requires accountants to prepare a tax return?
No one. How many people are in favor of doing away with the mortgage deduction, with the child care subsidy? How many people are in favor of doing away with the entertainment deduction? How many people work in the accounting industry, and are actively in favor of keeping the Big Five and the rest of the accounting industry employed?
1849. CalGal - 3/28/2002 10:53:34 AM
where the government simply gives money to contributors that voters in general don't have an opinion upon because it's too complicated, or the effects are too diffuse
You start by mentioning trial lawyers and teachers--two areas where voters clearly do care. Now you switch to the arcane issues. Both exist, but I don't want to get them confused.
I do agree that there are areas where big money has some limited ability to purchase results if the voters don't care. But if they don't care that means that their will isn't being thwarted. I have yet to see voters not get up to speed quickly when they decide they care.
Big money might give a lot to a candidate to achieve a particular result. But that candidate isn't going to get others to support that result without giving something in trade.
So ask the voters in South Dakota if they think broadcasting licenses should be given away free, and they might say no. Ask the voters in South Dakota if they want to do away with corn subsidies, and they will say no. Ask them if they're willing to trade free broadcasting licenses for corn subsidies and I suspect they'd make that trade.
The real issue isn't what Big Money buys. The real issue is what the voters traded in exchange. As I said earlier, I'd rather the voters be completely aware of what they were getting. Would New York trade more welfare block grants for giving Tennessee a new government funded research lab? Or would they rather trade their grants for a subsidy to the California wine industry, which would ensure their many restaurants got better prices?
I'd like to see more media attention paid to the trades. But it's simply not true that big money purchased anything important without the active participation of the voters.
The copyright issue isn't Congress, really, so the voters don't matter. It's a legal right, I believe.
1850. jexster - 3/28/2002 11:28:12 AM
The WP reports this a.m.
"President Bush last year issued an order on energy policy that closely followed a proposed draft given to the administration two months earlier by oil lobbyists, according to documents released by the Energy Department under a court order.
An official from the American Petroleum Institute sent an e-mail on March 20, 2001, to Joseph Kelliher, then a Department of Energy policy adviser, proposing language for a Bush policy on energy regulations. API called it "a suggested executive order to ensure that energy implications are considered and acted on in rule-makings and other executive actions."
"The oil companies seem to be putting words in our president's mouth," said Sharon Buccino, senior attorney for the NRDC.
The claim that industry lobbyists helped to shape part of the administration's energy policy came as Sen. Joseph I. Lieberman (D-Conn.), chairman of the Governmental Affairs Committee, sent a letter to White House Chief of Staff Andrew H. Card Jr. yesterday asking for details of all communications and meetings involving the task force between Enron Corp. and officials at the White House and eight federal agencies."
Joltin Joe Lieberman, ass kicker
1851. concerned - 3/28/2002 11:34:51 AM
That's a really pathetic non-news item by the WP, jexster. Ooooh! Two similar sounding sentences! Puhleeze!
Plus, consider that Buccino and the NRDC are acknowledged liars.
1852. jexster - 3/28/2002 12:24:15 PM
The Company Presidency;
Enron and the Bush family have boosted each other up the ladder of success. But have their ties created a Teapot Dome? -Kevin Phillips, LAT
Enron's spectacular collapse has put scores of politicians on the defensive because of their pro-Enron voting records and their war chests full of Enron dollars. Even some Cabinet officials are squirming over their past relationships with the energy company. It's all an unsettling echo of Teapot Dome, the government-oil-reserve-loan scandal of the Harding presidency, which became a symbol of the financial and political abuses of the 1920s.
In 1921, the U.S. Interior Department rigged the leasing of California's Elk Hills and Wyoming's Teapot Dome naval oil reserves after Interior Secretary Albert B. Fall received "loans" from oilmen Edward L. Doheny and Harry Sinclair. The loans of cash and stock were in the $400,000 range, with a "gift" of $100,000 from Doheny.
1853. jexster - 3/28/2002 12:24:46 PM
Both Teapot and Enron involved energy policy, privatization and corruption. And like Teapot Dome's "Ohio gang" of ethically loose Harding cronies, oilmen and administration officials--energy deregulation during the first Bush administration, through the Clinton years and George W.'s time as governor of Texas on up till today has been warped and feasted upon by a Texas-led "Enron gang." In both scandals, some Democrats were involved, but the power centers of misbehavior were Republican. Yet, there has been nothing quite like the rise and fall of Enron in U.S. history, certainly no plausible comparison since the late-19th-century heyday of railroads and robber barons. The sums in Enron's collapse certainly overshadow those in Teapot, much as a space shuttle does a Model T Ford. More important, not in memory has a single major company grown so big in tandem with a presidential dynasty and a corrupted political system. Indeed, the Bush family has been a prominent and well-rewarded rung in Enron's climb to national political influence.
In retrospect, it's unclear whether the Bush dynasty built Enron or vice versa. In 1985, when Enron was formed, the Bushes were an important political family. George Bush, as vice president, headed the Reagan administration's task force on energy policy. But in terms of Texas oil money and stature, the Bushes were third echelon. When George W. ran for governor of Texas in 1994, Ann Richards, the Democratic incumbent, joked that of the oil companies he had started or been involved with, none had made a profit. Enron's rise, with the Bush family's help, in the 1990s rearranged the energy power structure in Texas and the nation, and put the Bush entourage in clover. The question now is whether what went up together will come down together.
1854. jexster - 3/28/2002 12:25:19 PM
As early as 1988, when his father was president-elect, George W. Bush lobbied the Argentine government on behalf of an Enron pipeline proposal. Bush, through his staff, has denied making a telephone call on Enron's behalf, but Rodolfo Terragno, the Argentine minister of public works and services at the time, insists he did. When newly elected President Carlos Menem made a sweetheart deal with Enron, freeing the corporation of certain Argentine tariffs and taxes when doing business in the country, lawmakers demanded an investigation, and a special prosecutor undertook the task. But since his Justice Department was already "investigating," Menem fired the prosecutor.
From 1988 to 1992, Bush the elder collected hefty political contributions from Enron. When president, it was his ambassador in Buenos Aires who had pushed for favorable tax treatment for Enron in Argentina. Bush asked Enron chief Kenneth L. Lay to co-chair a host committee for the July 1990 G-7 economic summit in Houston and appointed him to his Export Council in late 1990. A year earlier, Bush energy officials began work on the 1992 Energy Policy Act. Its provisions obliged utility companies to carry and transmit Enron-generated electricity, which contributed to the company's subsequent huge growth. In 1992, Lay was named co-chairman of the Bush reelection campaign and chairman of the host committee of the Republican National Convention in Houston.
1855. jexster - 3/28/2002 12:25:47 PM
In December 1992, Bush's Commodity Futures Trading Commission, chaired by Wendy L. Gramm, wife of Texas GOP Sen. Phil Gramm, created a legal exemption that allowed Enron to begin trading energy derivatives--another growth enhancer for the company. When Bush left the White House in 1993, Enron made Wendy Gramm a company director and signed a joint consulting and investing agreement with James A. Baker III, Bush's secretary of State, and Robert A. Mosbacher, his Commerce secretary. The two were to do Enron's global deal-making for natural-gas projects.
How much the Bush family and its close political entourage actually collected from Enron and its executives since the company was organized is a matter of definition--reportable political contributions, soft money for the Republican Party, finders' fees, joint investments, inauguration funding, presidential-library donations, speech money, capital gains, consulting fees, directors' fees or what? If you combine what the multiple Bush generations received with what loyalists Vice President Dick Cheney, Baker, Mosbacher, political advisor Karl Rove, economic advisor Lawrence B. Lindsey and U.S. Trade Representative Robert Zoellick got, you certainly have $6 million to $8 million, and depending on the success of the Baker-Mosbacher-Enron joint investments, perhaps $20 million to $30 million.
1856. jexster - 3/28/2002 12:27:31 PM
On top of which, 29 top Enron executives and board members (and its accounting firm, Andersen), the majority of whom were significant Bush contributors in 2000, are being sued by Enron shareholders to recover $1.1 billion made by the 29 in alleged insider trading of Enron stock.
Enron's roster of advisors and lobbyists became a pay-station for senior Bush campaign strategists and advisors: Lindsey, former Christian Coalition honcho Ralph Reed and Zoellick.
When the 2000 presidential election ended up in the Florida courts, Enron helped fund the Bush campaign's expenses, a fitting gesture because the effort's captain was Baker, the old Enron deal-maker, with Enron advisor Zoellick--known also as Baker's "second brain"--back as first lieutenant. Then when the U.S. Supreme Court decided the election, Lay and his fellow power brokers popped the figurative champagne cork with a $300,000 contribution to the Bush-Cheney inaugural gala.
1857. jexster - 3/28/2002 12:28:05 PM
In Washington, the Enron gang--let's call them the "E team"--also included Sen. Gramm and Texas Reps. Dick Armey, the House majority leader, and Tom DeLay, House majority whip. All received large Enron contributions--Gramm collected $100,000 over 12 years, the second-largest draw in Congress--and their voting records were supportive of Enron causes. Gramm's decision last September to retire from the Senate may have stemmed from his worry that he might be politically vulnerable for being a leading supporter of 2000 legislation that facilitated Enron's entry into commodity derivatives markets and exempted the company from key financial reporting requirements, while his wife was an Enron director with sizable company holdings.
Enron boosters who landed government jobs are Patrick H. Wood III, the former Texas Public Utilities Commission chairman who now heads the Federal Energy Regulatory Commission (FERC), and Nora M. Brownell, a former pro-Enron public-utilities commissioner in deregulated Pennsylvania, who is also a FERC member. White House personnel chief Clay Johnson, a former energy lawyer in Houston; Army Secretary Thomas E. White, a former Enron senior executive; Commerce Department general counsel Ted Kassinger, a former Enron advisor and trade lawyer with Vinson & Elkins; Montana ex-Gov. Marc Racicot, the former Enron lobbyist recently named Republican National Committee chairman by Bush.
1858. jexster - 3/28/2002 12:29:09 PM
Enron boosters who landed government jobs are Patrick H. Wood III, the former Texas Public Utilities Commission chairman who now heads the Federal Energy Regulatory Commission (FERC), and Nora M. Brownell, a former pro-Enron public-utilities commissioner in deregulated Pennsylvania, who is also a FERC member. White House personnel chief Clay Johnson, a former energy lawyer in Houston; Army Secretary Thomas E. White, a former Enron senior executive; Commerce Department general counsel Ted Kassinger, a former Enron advisor and trade lawyer with Vinson & Elkins; Montana ex-Gov. Marc Racicot, the former Enron lobbyist recently named Republican National Committee chairman by Bush.
The drafting of a Bush federal energy policy fell into the vice president's lap. A previous Enron shareholder and a friend of Lay's, Cheney had run the Halliburton Co. One of its divisions built Houston's Enron Field, the new home of the Houston Astros baseball team. Cheney's chief of staff, Lewis Libby, was an Enron stockholder. Cheney, who refuses to say what he and Lay discussed in their private meetings, and the General Accounting Office, an investigating arm of Congress, is suing the vice president to obtain that information.
Enron's largess has even compromised law enforcement. U.S. Atty. Gen. John Ashcroft has recused himself from Enron-related matters because of large Enron political contributions he received while a Missouri senator. Deputy Atty. Gen. Lawrence Thompson, from the Enron-representing Atlanta law firm of King & Spalding, is also under pressure to follow his lead. The office of the U.S. attorney for the Southern District of Texas, which includes Houston, has had to recuse itself en masse.
.
1859. jexster - 3/28/2002 12:29:26 PM
In the months and years ahead, as the congressional and criminal investigations fill in the details of the Enron story, the collapse of Enron may, like Teapot Dome, come to symbolize an era of financial and political excess. If so, there is even some chance that it could do for the memory of Bush what those California and Wyoming oil leases did for the memory of Harding
1860. zojak quafeth - 3/28/2002 12:56:20 PM
Nice wishful thinking by Phillips. Gimme a break. All these big corporations donate massive amounts of cash to everyone who sticks them up for it and everyone who will take it.
People are making this a story simply b/c Enron went out of business. yeah, we need campaign finance reform. Yeah Bush signed a new law. Yeah, it'll be interesting to see the 7,345ways dontributors seeking influence find around the law.
So it's big news that an American politician sought to promote an American business overseas. Shame shame.
I guess when Spielberg donates to DEMS both individually and through his companies he'snot looking for influence.
Bottom line, everybody does it. Jex how much did Enron give to DEMS?
You're not gonna tell usthat are you? Might harm whatever you see as your skewed agenda.
1861. zojak quafeth - 3/28/2002 12:58:13 PM
If you'regonna point the finger at influence peddling, point it at everyone. Just a little example:
SPIELBERG, STEVEN
1/20/95 $1,500.00
LOS ANGELES, CA 90064
PRODUCER -[Contribution]
HOLLYWOOD WOMEN'S POLITICAL COMMITTEE
[View Image]
SPIELBERG, STEVEN
10/31/95 $2,000.00
LOS ANGELES, CA 90064
PRODUCER -[Contribution]
HOLLYWOOD WOMEN'S POLITICAL COMMITTEE
[View Image]
SPIELBERG, STEVEN
2/27/96 $1,500.00
LOS ANGELES, CA 90064
PRODUCER -[Contribution]
HOLLYWOOD WOMEN'S POLITICAL COMMITTEE
[View Image]
SPIELBERG, STEVEN
11/30/95 $5,000.00
LOS ANGELES, CA 90064
DREAM WORKS INC -[Contribution]
DEMOCRATIC CONGRESSIONAL CAMPAIGN COMMITTEE
[View Image]
1862. zojak quafeth - 3/28/2002 12:58:31 PM
SPIELBERG, STEVEN
10/16/96 $1,000.00
UNIVERSAL CITY, CA 91608
DREAM WORKS SKG -[Contribution]
HARVEY GANTT FOR SENATE CAMPAIGN COMMITTEE
Senate Image Not Available from FEC
SPIELBERG, STEVEN
4/10/96 $100,000.00
UNIVERSAL CITY, CA 91608
-[[Receipt--exempt from limits]]
DNC-NON-FEDERAL INDIVIDUAL
SPIELBERG, STEVEN
12/22/95 $1,000.00
UNIVERSAL CITY, CA 91608
DREAM WORKS SKG -[Contribution]
FRIENDS OF BARBARA BOXER
Senate Image Not Available from FEC
SPIELBERG, STEVEN
2/5/96 -$1,000.00
UNIVERSAL CITY, CA 91608
DREAMWORKS SKG -[Contribution]
FRIENDS OF BARBARA BOXER
Senate Image Not Available from FEC
SPIELBERG, STEVEN
2/5/96 $1,000.00
UNIVERSAL CITY, CA 91608
DREAMWORKS SKG -[Contribution]
FRIENDS OF BARBARA BOXER
Senate Image Not Available from FEC
SPIELBERG, STEVEN
1/26/96 $1,000.00
LOS ANGELES, CA 90064
DIRECTOR -[Contribution]
BARRY GORDON FOR CONGRESS
[View Image]
SPIELBERG, STEVEN
1/19/96 $1,000.00
UNIVERSAL CITY, CA 91608
DREAMWORKS SKG -[Contribution]
WYDEN FOR SENATE
Senate Image Not Available from FEC
SPIELBERG, STEVEN
4/8/95 $136,023.00
UNIVERSAL CITY, CA 91608
AMBLIN ENTERTAINMENT INC -[[Receipt--exempt from limits]]
DNC-NON-FEDERAL INDIVIDUAL
SPIELBERG, STEVEN
3/8/95 $100,000.00
UNIVERSAL CITY, CA 91608
FILM PRODUCER/DIRECTOR -[[Receipt--exempt from limits]]
DNC-NON-FEDERAL INDIVIDUAL
SPIELBERG, STEVEN
7/14/95 $1,000.00
LOS ANGELES, CA 90064
DIRECTOR -[Contribution]
WELLSTONE FOR SENATE
Senate Image Not Available from FEC
1863. CalGal - 3/28/2002 12:58:31 PM
Jesus, Jex, don't spam with articles. Your incessant links are annoying enough.
1864. concerned - 3/28/2002 1:01:48 PM
Jexster, you know and I know that if x42 hadn't cancelled Glass-Steagall, there wouldn't have been an Enron collapse.
Any analogy between Teapot Dome & Enron with this administration is laughable. There simply was no quid pro quo. None. Enron didn't even get the fucking time of day from the Bush administration.
All your hyperventilation, obfuscation and general running around and shrieking will never change that, jexster. Your attempts are really rather pathetic, if you ask me.
1865. jexster - 3/28/2002 1:21:34 PM
This is MY thread in case anyone has forgotten. I will post what I please and when I please until such time as the Thread is 86'ed
I would have linked but its a pay for link so I graciously posted the Kevin Phillips article from Lexis-Nexis Academic.
Are we all clear on that?
1866. jexster - 3/28/2002 1:25:11 PM
TD that's no way to talk about former Nixon speechwriter and father of the "New Republican Majority"
Now as for quid pros and quos...Phillips lays it out pretty damned well ... he of course did not have the benefit of the recently released Energy docs showing, among other things, that ENRON and the API wrote the Chenron Energy policy and that Excelon paid 345,000 dollars to get its reactor into the Bush energy plan...
And the other shoes that are going to drop will come from California where the people of the nation's most populous state were ripped off by Cheney and Co to the tune of 7+ Billion bucks
As I said last week...stay tuned
1867. CalGal - 3/28/2002 1:27:02 PM
You're right, it's your thread; I'd forgotten. And if it was pay for link, I suppose there's nothing for it. But it is extremely annoying.
1868. jexster - 3/28/2002 1:27:57 PM
Oh and don't fret boys and girls, you aren't the only victims of "spam" this morning...
I sent all to my dear friend Laura of the Unocal Gov't relations dept....sent to her company address....
1869. jexster - 3/28/2002 1:30:23 PM
TD ... you can't scream and holler that the sun rises in the West til you are blue in the face and it won't change a thing...
1870. jexster - 3/28/2002 1:30:58 PM
Just read and relax Cal...Chill
1871. jexster - 3/28/2002 1:33:15 PM
Its your misfortune that I now have DSL connect..man can I get the facts out fast..why I can even throw in a deputy dawg and no sharks jpg all in less time than one link at 56K
wonder how much for a T3 line?
maybe the Motiers would like to contribute
;)
1872. jexster - 3/28/2002 3:51:30 PM
Where There's Pipe There's Smoke -What Krusty the Korrupt Klown of Krony Kapitialism Is Still Hiding
TD come out come out wherever you are...time for your afternoon pasting
1873. jexster - 3/28/2002 7:19:13 PM
And anwser Lou Dobbs, a man of impeccable Republican credentials, nay obvious GOP bona fides as he wears them on the sleeve of his "respectable Republican cloth coat".
Lou has been on a tear about the Bush indictment of Andersen. Literally every day since the charges were filed, and with each passing program, he gets hotter and hotter under the collar
Today's show, whose guests included the Chairman of the US Chamber of Commerce, Mister Republican asks the question, I ask of you..
"Is Bush/Rove setting Andersen up as a scapegoat to take pressure off of his Texas buddies and perhaps deflect Enron flack past the mid-term elections?"
Inquiring minds need to know this. Lou Dobbs needs to know this....
Responde mihi, Moron
1874. jexster - 3/28/2002 9:03:15 PM
A California Superior Court judge today granted the Attorney General's motion to compel Enron to produce documents relating to California's investigation of Enron's role in the so-called energy crisis.
Sanctions granted. Production of 15,000 pages ordered for 6/20.
1875. jexster - 3/29/2002 12:04:05 AM
WASHINGTON (Reuters) - The Defense Department's inspector general is investigating the travels of Army Secretary Thomas White, under scrutiny for ties to his former employer Enron Corp. , a Pentagon (news - web sites) spokesman said on Thursday.
Spokesman Bryan Whitman declined to discuss details of the investigation except to say that it included a visit this month by White and his wife to Colorado in a government aircraft during which the couple sold a house for $6.5 million.
"The IG's office is looking at Secretary White's travels," Whitman said. "We don't discuss details of such investigations."
1876. jexster - 3/29/2002 12:30:23 AM
the debt of the Bush clan to the oil industry seems like such an a priori political assumption that having API write the federal policy almost looks like an efficiency. Letting the regulated write the regulations may be wrong, but it's kind of a GOP tradition, the Bush administration's homage to Reagan and Gingrich.
If you've paid any attention to the Cheney task force stories, you know that energy executives wrote the administration's policies; the rest is just connecting the dots.
Slate
TD....Didn't they teach you how to connect the dots in yesterdays K-1 class?
What haven't been doin our homework?
Guess the Easter Bunny ain't stoppin by your house this year.
1877. concerned - 3/29/2002 12:03:11 PM
From the WSJ direct to Jexster:
A New Type Of Scandal Fatigue, Enron Scandal Boring
We'd like to lodge a protest against the Bush Administration: It is dragging down scandal standards in Washington. Not too long ago, we journalists could write about affairs with interns, Arkansas land deals, Lincoln Bedroom sleepovers and Presidential pardons for sale. Now, that was fun.
But what do the Bushies give us? Meetings between Energy Secretary Spence Abraham and . . . energy companies! This is the shocking news contained in the 11,000 pages of documents released this week on the drafting of the Bush energy plan. "Investigative" reporters combed through the documents to expose such five-bell scoops as "energy companies met more than 30 times with top officials." All of America is abuzzzzzzz.
There's more, if you can stand the suspense. Mr. Abraham gave more face time to people who backed Mr. Bush for President than he did to environmentalists who supported Al Gore. In drafting a bill to increase oil and coal production, in other words, the Bushies consulted people who know something about oil and coal. Even more amazing, they often took the advice of those very same people!
It goes without saying that these proposals weren't covered up but were presented to the public and Congress. The ideas have all since been debated in the light of day. And nearly all of the most controversial have passed the House or the Senate, or both.
Having to read about all this has given us a whole new appreciation for what James Carville and Lanny Davis called "scandal fatigue." And we empathize with our peers who actually have to report it. The lack of scandal has been so disorienting that the poor souls have begun to quote Larry Klayman of Judicial Watch, who was dismissed during the Clinton years as a right-wing crank. For Beltway journalism, it's going to be a long four years.
Enron-the administration non-scandal.
1878. concerned - 3/29/2002 12:05:08 PM
....you know that energy executives wrote the administration's policies
That's just partisan bullshit, jexster. How about we see these documents side by side, instead of your crap, ok?
1879. jexster - 3/29/2002 12:06:16 PM
Oh my Gawd TD...the WSJ editorial page...you are getting desperate...
"One could waste a lifetime in journalism swatting the flies off the WSJ editorial page" Kinsely
That post seals the fate of the President from Enron
If Lieberman doesn't nail the Imbecile, Lou Dobbs and the US Chamber of Commerce will
1880. concerned - 3/29/2002 12:08:37 PM
jexster -
You're all hat, no cattle; all sizzle, no steak; all fart, no follow through.
1881. jexster - 3/29/2002 12:09:39 PM
The shit has just started to hit the fan as we await the answer to the questions
- whether the Bush dynasty built Enron or vice versa.
- whether what went up together will come down together.
So what are Cheney and Enron so desperate to hide from the Courts of law in DC and California?
1882. jexster - 3/29/2002 12:11:32 PM
Connect the dots, just like Miss Lucille taught you...
Last week after y'all saw that neato Barney video
Remember?
1883. concerned - 3/29/2002 12:11:58 PM
So what are Cheney and Enron so desperate to hide from the Courts of law in DC and California?
Nothing, really. They just like to see the drooling Lefties hoist by their own petards, Mr. All fart no follow thru.
1884. CalGal - 3/29/2002 11:10:23 PM
So as Arthur Andersen fights for its life, Enron Wants to Pay Retention Bonuses
In its filing, the company said compensation opportunities at Enron have greatly diminished since the loss in value of its 401(k) plan, other stock-incentive programs and the depletion of previous retirement plans as the company's stock dropped from a high of about $90 per share to less than a dollar.
"Key employees are not being compensated at competitive market levels," the company said.
In addition to the retention and severance proposals, Enron also requested authorization to pay certain legal expenses for directors and officers still with the company.
Be still, my bleeding heart.
1885. jexster - 3/30/2002 7:50:51 PM
MondoEnron - An Animated E-Toon
a Long animated e-toon...
1886. jexster - 4/1/2002 11:44:00 AM
The editorial in the Wall Street Journal was headlined "Scandal Fatigue." Does that mean the wackily obsessive editorialists at the Journal are finally tired of kicking the bloated and lifeless body of Bill Clinton?
No, the newspaper that ran more than 600 editorials on Whitewater and Monica said Friday that writing about Lincoln Bedroom sleepovers and sex with interns was "fun."
You Could Spend an Entire Journalistic Career Swatting Flies Rising From the WSJ Editorial Page
1887. CalGal - 4/1/2002 3:54:17 PM
TJ, where are youuuuuu? (she wails)
I don't know if anyone has followed the HP soap opera.
1888. jexster - 4/1/2002 8:20:21 PM
CBS Marketwatch's David Galloway wonders what the administration is hiding in its heavily edited energy task force papers but recognizes that the administration's secretiveness is "part of a pattern of holding back information that not only taints the administration with Enron, but leads to skepticism about any of its other motives, such as its messing with the Clean Air Act or its developing a shadow government in case of attacks on Washington." Unlike much of the mainstream media, which prefers to position the Enron debacle as a "business scandal" to protect Bush, Gallaway tells it like it is: "From the very beginning, the Enron story has been much more than a business story about a failed company. It has been a story of greed and corruption on such a scale that both Washington and Wall Street have had to make changes to the way they operate that would have been unthinkable a year ago."
Rove Best Rework the Strategery
Its gonna be one hella summer and fall for the Chenronistas
1889. jexster - 4/1/2002 8:20:55 PM
Iraq invasion perhaps?
1890. wonkers2 - 4/2/2002 1:12:28 PM
XEROX TO RESTATE RESULTS AND PAY A BIG FINE
The Xerox Corp. said yesterday that it would restate its financial results dating back to 1997 and that it had agreed to pay a $10 million fine to settle a fraud complaint that it expects to be filed by the SEC.
The fine would be the largest in an SEC enforcement case (maybe they need bigger fines!) involving financial reporting, and its size indicates that the SEC viewed Xerox's financial misstatements as an important matter.
Thre separate issues are involved: accounting for leases of copiers (recognizing profits too early); inappropriate reserves; accounting for interest income after a favorable tax settlement.
Surprize Xerox's auditor was not Andersen. It was KPMG. The company switched to Price Waterhouse last year.
1891. CalGal - 4/2/2002 2:21:44 PM
Andersen Removed Expert Accountant at Duncan's Request
Then they tried to alter the historical record to pretend he'd bought off on the decisions all along. This may be why they went into full-blown "document retention" mode.
Andersen e-mails and memos obtained by BusinessWeek from investigators in Washington show that members of Andersen's PSG [Professional Standards Group] objected strongly to the Houston energy trader's accounting. Andersen's Enron audit team, led by now-dismissed partner David B. Duncan, overruled those concerns on at least four occasions, siding instead with Enron on controversial accounting that hid debt and pumped up earnings.
That's not all. The documents further allege that to support their decisions, Duncan's team wrote memos in which they falsely stated that PSG partners had signed off on Enron's inventive bookkeeping. And when Enron executives grew angry about PSG's nay-saying, they insisted that one of the group's chief skeptics, partner Carl E. Bass, be barred from advising on Enron issues. Duncan carried the request all the way to Andersen's Chicago headquarters, and Bass was removed from the prestigious PSG, according to congressional and law-enforcement investigators.
I wonder how common it is to alter the records like that?
1892. wonkers2 - 4/2/2002 6:00:58 PM
Yeah, and, on Enron's request, Paine Webber fired an analyst or broker who recommended getting out of Enron ahead of the crash. Yesterday an analyst knocked Ford, but not in my wildest imagination would Ford try to get the guy fired. Enron was something else.
1893. wonkers2 - 4/2/2002 6:18:46 PM
Yeah, and, on Enron's request, Paine Webber fired an analyst or broker who recommended getting out of Enron ahead of the crash. Yesterday an analyst knocked Ford, but not in my wildest imagination would Ford try to get the guy fired. Enron was something else. And the incident didn't raise my estimation of Paine Webber, either.
1894. Erinys - 4/4/2002 1:49:43 AM
wonkers, take my advice not that y0u need it:
don't buy anything you can't afford.
1895. jexster - 4/7/2002 8:42:06 PM
Left High & Dry By Bush, Cheney, Lay and DeLay Enron Workers Fight Stigma Hoping to Find New Jobs
1896. Cygnus X-1 - 4/8/2002 1:17:09 PM
It's a good thing that the media has "lost" interest in Enron. Ignoring Lanny Davis' advice almost cost the Democrats:
Clinton agencies assisted Enron rise
Excerpt:
Documents released by the Treasury Department show that President Clinton's trade representative, Charlene Barshefsky, seized upon the idea, offered to her by a coalition of energy companies headed by Enron, and presented it almost verbatim in World Trade Organization negotiations in May 2000.
More...
With the help of more than $1 billion in subsidized loans and insurance from Clinton agencies, Enron also built dozens of international projects, from a natural gas pipeline in China to clean-burning power facilities in Brazil and the Gaza Strip, according to a top Clinton official.
Oh, crap. I just realized that this is a Washington Times article. That means what I posted are "netherfacts". That is, while they are "facts", they are inconvenient to the cause and therefore should be ignored. I post this merely as an academic excersize.
1897. jexster - 4/8/2002 8:53:49 PM
Whew!
My sis-in-law survived the 7000 Andersen layoff today which is remarkable since, as librarian, she is clearly the "support staff" said to have been targeted.
She did have to tell two assistants and a secretary though....so she's not entirely happy.
The question remains "Is Arthur Andersen a scapegoat for Bush/Cheney/Lay?"
Lou Dobbs continues to think so. He'll probably be asked to surrender his GOP membership card at the next Conintern meeting.
1898. CalGal - 4/8/2002 11:56:18 PM
1899. jexster - 4/9/2002 1:00:04 AM
Its a small, small world...at least for yuppies
“I worked there for 13 years, so I got thirteen weeks and on top of that I got six weeks vacation pay,” said the guy to his bartender friend.
I eavesdropped and immediately joined in this bar conversation not 30 minutes after I spoke with my sister-in-law.
"Andersen"
That's a Swedish name isn't it?
1900. jexster - 4/9/2002 1:02:16 AM
Word among employees is that if Bush/Cheney?rove continue with their plan to make Andersen the scapegoat to take the heat off of Kenny Boi, that there will soon be another wave...
Well that's life in the Shining City on the Hill ain't it?
1901. jexster - 4/11/2002 11:10:17 AM
Signs Enron Bet on Price Increase Before California Power Shortage
"WASHINGTON, April 10 — In the middle of 2000, on the eve of the California energy crisis, Enron (news/quote) was making increasingly large bets that electricity prices in the state would increase, according to Enron records cited by a California state senator leading an investigation into the state's power crisis"
The Company Presidency
1902. wonkers2 - 4/11/2002 11:20:11 AM
Sounds like they are going to let Andersen cop a plea. Somebody had better do some time!
1903. judithathome - 4/11/2002 11:23:59 AM
The people Anderson put on unemploymemt will do the time....
1904. jexster - 4/11/2002 6:16:07 PM
Cheney Murder Victim's "suicide note" Released
1905. jexster - 4/11/2002 7:01:27 PM
Enron Accused of Manipulating CA Energy Prices
1906. jexster - 4/12/2002 10:57:30 PM
Paul Krugman asked a question in his latest that I will pose to TDaschole
So are [the bushies] really good businessmen, or are they just crony capitalists, men who have lived by their connections?
And TD, feel free to say whatever is on your mind.
We don't delete posts here. Not even Caligula's
It ain't American.
1907. jexster - 4/13/2002 12:46:38 PM
WASHINGTON (Reuters) - A top congressional Democrat charged on Saturday that President Bush (news - web sites) and fellow Republicans rejected efforts to close pension loopholes and toughen penalties for fraud because of their friendships with white-collar criminals.
"Republicans just don't get it," Rep. John Conyers of Michigan, ranking Democrat on the U.S. House of Representatives Judiciary Committee (news - web sites), said in delivering his party's weekly radio address.
"The reason the president and the Republicans don't want to get tough with white-collar criminals is because they are their friends, they work together and they go to the same country clubs," Conyers said.
1908. jexster - 4/14/2002 10:24:51 PM
Per 60 Minutes:
In July, 1992, 5 Enron bagmen flew over India and without landing selected a site for their power plant. Five days later, without competitive bidding, India signed a $60 Billion contract, 25% ROR gauranteed. Although India has lotsa cheap coal, Enron designed a natural gas plant. They were going buy their gas from another Enron sub. They sent a babe to charm the Indians.
And Bu$h wants us to believe his boys weren't in on this shit.
Unbelievable.
1909. jexster - 4/14/2002 10:25:47 PM
And get this...they didn't offer money, they did what they did to Ralph Reed et al....they offered him a job.
1910. jexster - 4/18/2002 11:41:54 AM
Caligula the Cow Going in for THE BIG WIN! at a Recent Family Picnic
1911. concerned - 4/18/2002 5:34:34 PM
Now that Jexster is taking an involuntary 'time out', this'll probably be the last post in this thread for days.
Muwahahaha!
Muwahahaha!
Muwahahaha!
1912. concerned - 4/18/2002 5:36:39 PM
On second thought, my last post was just a bit too nasty....I'm not one to take advantage like that.
1913. jexster - 4/29/2002 2:02:25 PM
SACRAMENTO -- Republican legislative leaders solicited tens of thousands of dollars in campaign donations from Enron Corp. even as the state government was investigating the company and other producers suspected of price gouging and market manipulation during last year's energy crisis, according to internal Enron documents.
Muwahahaha!
1914. Cellar Door - 4/30/2002 3:12:19 PM
ENRON goes into the Antique Business!
1915. jexster - 5/4/2002 11:14:14 AM
Bushies Stalling Enron Investigation
1916. jexster - 5/6/2002 11:08:41 PM
Smoking Gun: Enron Memo Describes CA Price Fixing Scheme
1917. jexster - 5/6/2002 11:14:27 PM
Referring to a strategy called "Death Star" by Enron traders, the lawyers wrote, "The net effect of these transactions is that Enron gets paid for moving energy to relieve congestion without actually moving any energy or relieving any congestion
1918. jexster - 5/7/2002 11:31:55 AM
Exactly As Jexster Said Over A Year Ago - Documents Show Bush-Cheney-Enron Manipultated CA Power Crisis
Energy analyst Robert McCullough said the memos indicate that Enron traders deliberately tried to create the appearance of shortages and congestion, prompting declarations of power blackouts that need not have been ordered in some cases
1919. jexster - 5/7/2002 11:40:17 AM
Vice President Cheney said yesterday that California officials waited too long to deal with the state's mushrooming electricity crisis, which first became evident last summer, and as a result won't have enough power plant capacity to avoid blackouts this summer.
"They postponed taking action because all of the action was potentially unpleasant" involving price increases for electricity customers, Cheney said in a speech to the U.S. Chamber of Commerce.
Cheney's comments renewed the verbal barrage between the Bush administration and California Gov. Gray Davis (D), four days before President Bush and Davis are scheduled to