Halliburton's Destructive Engagement
How Dick Cheney and USA-Engage Subvert Democracy at Home and Abroad
By Kenny Bruno
Special to CorpWatch
October 11, 2000
This article is extracted from a report written by Mr. Bruno and Jim Vallette for Earth Rights International. For information on obtaining a full version of the report, please see the bottom of this page.
Since Dick Cheney became a candidate for Vice President, many journalists have focused on his mixed financial record as CEO of Halliburton, and his enormous retirement package. Few have investigated Dick Cheney's role in influencing foreign policy for the benefit of the company. Nor have they looked into Halliburton's role in undermining democracy Burma.
But for years Dick Cheney and Halliburton have been stirring a toxic mixture of oil, politics and business. Dick Cheney the politician opposes sanctions against almost all countries; Dick Cheney the businessman profits from working in many of those same countries. Dick Cheney the Secretary of Defense wages war on Iraq; Dick Cheney the businessman gets contracts to cleanup the damages and turns Halliburton into a giant defense contractor. Dick Cheney the government official makes high-level bank contacts; Dick Cheney the businessman obtains huge government loans for his company.
We found that while Cheney was CEO, Halliburton did business with the notorious Yadana pipeline project in Burma -- an environmentally damaging project on behalf of which, according to a U.S. federal court, egregious human rights abuses were committed, including murder, torture, rape, forced labor and forced relocation.
Halliburton's public relations department says simply, "We don't do business in Burma," and has declined to clarify or justify the company's involvement with these notorious pipelines.
Halliburton is also one of the driving forces behind USA-Engage, a corporate coalition which, along with the National Foreign Trade Council (NFTC), has become a serious obstacle to the Burma democracy movement. They oppose Burma sanctions. They opposed the Massachusetts Burma law, a selective purchasing measure modeled after laws that helped bring down apartheid in the 1980's. They believed only in "engagement," even for Burma, where the leader of the democratically elected ruling party, Aung San Suu Kyi, has called for sanctions to isolate and weaken the brutal military dictatorship.
They had also tried to undermine some positive expressions of democracy in the U.S., by attacking laws that helped citizens control how their state and local tax dollars were spent.
The work of these powerful corporate groups came to fruition last June, when the Supreme Court struck down the Massachusetts Burma law. The corporations' winning argument was that states should not be able to steer money away from the Burma dictatorship, because the federal government has already enacted sanctions against Burma that preempt state laws. But the same corporations also vigorously lobby Congress not to impose those federal sanctions.
Cheney's views on sanctions are consistent, and they are also remarkably beneficial to the oil business. That Dick Cheney built up Halliburton and got rich cashing in on connections from a long political career is obvious. That his policies and influence are serving commercial interests at the expense of human rights and the environment is less understood. It is hidden behind the doctrine of "constructive engagement," which holds that what's good for U.S. business is good for democracy, anywhere and everywhere.
The fallacy of the engagement doctrine is illustrated perfectly by Halliburton's destructive engagement with the Burmese military dictatorship, one of the most repressive in the world. In the course of providing security for this project, the Burmese military killed, raped, tortured and employed slave-like working conditions for thousands of villagers. Western companies, Unocal and Total, knew about these practices, accepted them, and benefited from them.
As did Halliburton. Halliburton worked on the pipeline at least twice; once during the early 1990's as part of pre-commissioning of the pipeline, and once in 1997 when it helped lay the offshore portion of the pipeline. In addition, Dresser Industries, while in the process of being purchased by Halliburton in 1998, manufactured the coating for the Yetagun pipeline, which runs parallel to the Yadana and is associated with the same sorts of abuses. Their involvement with the Yadana pipeline, though not as intimate as Unocal's, is clear. At a time when the Burmese government routinely and brutally violated basic human rights, Halliburton worked for them in a unnecessary but profitable boondoggle that will help support the dictatorship for years, and profited from the misery of villagers targeted by the military.
This is the real face of "engagement" with Burma. And while it is an especially ugly case, it is not an isolated instance. Halliburton does business in many other controversial places -- including Azerbaijan, Indonesia, Iran, Iraq, Libya and Nigeria -- asserting that engagement helps bring American values and democracy. Many human rights groups do not believe sanctions are appropriate against all dictators. Sanctions must be evaluated on a case-by-case basis. Apartheid-era South Africa is the classic case in which sanctions were an appropriate tool for pressuring, isolating, and weakening an illegitimate regime. Burma is another.
For all the rhetoric of democracy and American values, the real agenda of Halliburton and USA-Engage is to remove any and all obstacles, including moral compunction, from doing business. As Dick Cheney says, "You've got to go where the oil is. I don't think about it [political volatility] very much." For Halliburton, "not thinking very much" about political instability, human rights or environmental protection has been a financially successful strategy.
In the vice presidential debate against Joe Lieberman, when Lieberman quipped that Dick Cheney was much better off (financially) under a Democratic Administration than he had been eight years before, Cheney retorted that "it had nothing to do with the government." In fact it had everything to do with the government, because Halliburton is a Welfare King, having benefitted from portions of some $6 billion in financial packages from multilateral and bilateral aid to countries where they work.
It is important for members of all three branches of the U.S. government -- at the federal, state and local levels -- and for all citizens, to understand what is really behind the assault on democracy by Dick Cheney, Halliburton and USA-Engage. This understanding is a first step toward resisting their undue influence on our foreign policy and maintaining our ability to practice solidarity with democracy movements in other countries. The next step is to place commitment to human rights above the commercial interests of these companies.
To view the entire report Halliburton's Destructive Engagement: How Dick Cheney and USA-Engage Subvert Democracy At Home And Abroad, visit the Earth Rights International website, www.earthrights.org
Saturday, February 02, 2002
http://writ.findlaw.com/dean/20020201.html
----
GAO V. CHENEY IS BIG-TIME STALLING:
The Vice President Can Win Only If We Have Another Bush v. Gore -like Ruling
By JOHN W. DEAN
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Friday, Feb. 01, 2002
This is Part Two of a two-part series by Mr. Dean on Enron. Part One is archived on this site. - Ed.
Vice President Dick Cheney has thrown down the gauntlet. He has refused to give the General Accounting Office the very limited information they have requested about the work of his energy task force. (GAO, created in 1921 during the Harding Administration, has from its inception been an independent and nonpartisan agency of the Congress, charged with studying the programs and expenditures of the federal government.)
Cheney says he is refusing to provide information to the Congress as a matter of principle. He told the Today Show that he wants to "protect the ability of the president and the vice president to get unvarnished advice from any source we want." That sounds all too familiar to me. I worked for Richard Nixon.
In fact, not since Richard Nixon stiffed the Congress during Watergate has a White House so openly, and arrogantly, defied Congress's investigative authority. Nor has any activity by the Bush Administration more strongly suggested they are hiding the incriminating information about their relationship with the now-moribund Enron, or other heavy-hitting campaign contributors from the energy business.
After nine months of shilly-shallying, the Vice President and his operatives have failed to bluff the General Account Office. The issues are being ratcheted up a few quantum notches. On January 30, 2002, GAO informed Congress, the President, and the Vice President that it was going to court. GAO noted that this will be the first time it "has filed suit to enforce our access rights against a federal official" in its fourscore history.
To quote Mr. Cheney (from another context) - this is a "big time" lawsuit.
GAO's Historic Lawsuit
The first important thing to understand about the GAO suit is that it is not a political lawsuit. GAO's current Comptroller General, David Walker, is not from the ranks of Bush-Cheney bashers. In fact, he was a member of the Reagan Administration and the first Bush Administration. And when he was appointed in 1998 to his fifteen-year term by President Clinton, it was at the urging of top Republicans. Filing this historic lawsuit will not be pleasant for Walker.
But the Comptroller has no choice; Cheney and the White House have forced the issue. Litigation is necessary, unless Cheney reneges. Cheney has not claimed "Executive Privilege," for the Vice President has no such power. Rather, Cheney has claimed - and Bush has backed up his claim - that GAO (and therefore the Congress, too) has no authority to seek the information they have requested. Thus, for the Comptroller not to go to court would be tantamount to a declaration of Congressional impotence, not to mention a concession impairing GAO's basic mission.
Indeed, if the Vice President's position should prevail, it will change the very nature of our government's system of checks and balances. If GAO is held to be as restricted at Cheney would have it, such a ruling will create a black hole in the Federal firmament - a no man's land where only the President and Vice President can go, unobserved by their Constitutional co-equals on Capitol Hill.
Background Of the GAO Lawsuit
For those who've not followed this evolving turmoil, a brief recap of the background of the GAO lawsuit is in order.
On January 29, 2001, President Bush established the National Energy Policy Development Group ("Energy Group"), which was chaired by Vice President Dick Cheney. Cheney's Energy Group consisted of six cabinet officers (Treasury, Interior, Agriculture, Commerce, Transportation and Energy), plus other government officials he was authorized to include. (For example, he could include the Secretary of State, if international issues were involved.) The staff was made up of full time government employees.
Clearly, the Energy Group was constituted to avoid the Federal Advisory Committee Act (FACA). That 1972 law applies if any group of two or more persons utilized by a president for advice includes a non-government employee or official. If this occurs, FACA requires that the group must make all of its proceedings open to the public, keep records of the proceedings, and accommodate a broad spectrum of views.
Cheney's Energy Group sought to avoid the FACA requirements by including only government employees, and no outside persons, and it appears they did so successfully. But we don't really know, because the Vice President refuses to provide the information necessary to make a determination. For all we know, non-government persons, perhaps from industry, may effectively have become part of the Energy Group in that they became involved in the advice given to the President.
By April 19, 2001, the buzz in Washington had it that Cheney's Energy Group was meeting with Bush's big contributors in the energy business, and that the heavy hitters from the oil patches and gas fields were looking for a return on their investment in Bush's campaign. The bottom line: energy was going to win; environmentalism would lose.
Congressman Henry Waxman (D. CA), the ranking member on the Committee On Government Reform, and John Dingell (D. MI), the ranking member on the Energy and Commerce Committee, were sufficiently concerned about this prospect to write to both the Energy Group and the Comptroller General requesting information about the composition of the Group, and its activities. But all their inquiries have been to no avail.
The Vice President's Stonewalling
Counsel to the Vice President David Addington responded to the Congressional request. He explained that the Energy Group was not subject to the Federal Advisory Committee Act, but as a matter of comity - a more accurate word might be "comedy," given his response -- he would provide some answers about the Energy Group's members, staff and activities. Unfortunately, these "answers" were extremely vague. As for the General Accounting Office, Addington told them (nicely) to get lost.
Addington declared that GAO was seeking "to intrude into the heart of Executive deliberations, including deliberations among the President, the Vice President, members of the President's Cabinet, and the President's immediate assistants, which the law protects to ensure the candor in Executive deliberation necessary to effective government." While this was a gross overstatement - the answers GAO was seeking were much more modest, and did not really intrude into the "heart" of executive deliberations - GAO persuasively argued that even assuming this claim was accurate, it still had the authority to make the requests it had made.
GAO's General Counsel, Anthony Gamboa, advised Addington that, as a matter of law, GAO had full authority to "intrude into the heart of Executive deliberations." Gamboa cited the GAO law, chapter and verse, setting forth its legislative history which addresses this very point by making clear that: "[The] mere fact that materials sought are subject to ... [deliberative process] and therefore exempt from public disclosure does not justify withholding them from the Comptroller General."
More to the point, GAO stated that it was "not inquiring into the deliberative process but are focused on gathering factual information regarding the process of developing President Bush's National Energy Policy." Thus, to the extent that Addington's letter had misinterpreted what was being sought, the GAO corrected any misinterpretation, and made clear that there was no longer any good reason for Cheney not to respond.
But Vice President Cheney did - and still does - not want to be troubled with what GAO is actually seeking. Accordingly, he has continued to claim in almost all his public statements that GAO is seeking to intrude into the deliberate process, when GAO itself has made clear that is not the case.
On January 30, 2002, the Controller, in announcing his contemplated lawsuit once again made clear what he was and was not seeking: "[C]ontrary to recent assertions," he stressed, "we are not seeking the minutes of [the Energy Group's] meetings or related notes of the Vice President's staff."
Cheney is hoping that if you repeat a lie enough, people will believe it. If the public knew how little GAO is seeking, it would be difficult for the Vice President to make his case publicly that GAO is being unreasonable. In fact, GAO seeks only "certain narrowly defined, factual information concerning the development of the National Energy Policy [which was publicly announced on May 18, 2001]."
More precisely, GAO seeks to answer one question: "What process did [the Cheney Energy Group] use to develop the National Energy Policy?" To answer that question they have asked who was present at the Group's meetings, what are the names of the professional staff, from whom did the Group members or staff gather information (dates, subjects, and locations), and what direct and indirect costs were incurred in developing the National Energy Policy. That is it. This information could be embarrassing - and could even cause the group to lose FACA protection if there was too much industry influence (such as an industry representative who became a de factor member). But it does not intrude into executive deliberations.
Still, Speaker Dennis Hastert, emerging from a meeting at the White House, told reporters that he does not believe it is right and fair that GAO should have access to private conversations of the President or Vice President, nor the deliberative processes of the White House. The Speaker has either been misled or has joined the effort at disinformation about what is being requested. That is simply not the information GAO is actually seeking.
While the public duplicity about what is and is not at issue is shameful, the how-dare-you-ask-me refusal of the Vice President to give GAO anything is bold, if nothing else. It's caused me to dust off my copy of The Imperial Presidency, Arthur Schlesinger, Jr.'s seminal work on Executive hubris.
The Vice President Contests GAO's Authority
It was during Watergate that I first became aware of GAO's authority. I received a call from then White House Chief of Staff H.R. "Bob" Haldeman. He said that GAO wanted to examine the White House books and records. Haldeman said the President did not want them sniffing and snorting around the White House. How could we stop them?
The short answer was they couldn't be stopped, only delayed. While I was not sure what concerned Haldeman and the President, based on my own earlier experiences with GAO's professionalism, I convinced Haldeman that these auditors were not partisans looking for dirt. He relented when I told him that it was unheard of to litigate their authority, and it would generate a lot of unwanted negative publicity to force them to sue. Nothing untoward came from the GAO audit of the Nixon White House. To the contrary, all was found in order.
Cheney has spent enough years on Capitol Hill, and in the Executive Branch, to know that GAO auditors and examiners play it straight. Indeed, that must be what concerns him.
It is difficult for anyone familiar with GAO's history, which has long included investigations of both Republican and Democratic administrations, to look upon Cheney's challenge as anything but a stalling tactic. Given the fact the President has not also invoked executive privilege, I cannot but wonder if the stall strategy is this: First, the Administration will fight the lawsuit over GAO's authority; second, when the Administration loses that suit (as it likely will), the Administration will mount another fight over executive privilege. That should get them past the 2004 presidential election.
Much of the Watergate cover-up actually involved stalling - delaying everything until the last minute, and then looking for a way to delay further. The goal was to push the potential problems past the elections, which we did. Everyone who is familiar with the ways of Washington scandals will understand the stalling strategy. Among its other virtues, delay creates an opportunity for an intervening event to change the dynamic of an unfolding scandal.
The tragedy of September 11th is a perfect example. It caused GAO to pull back from pursuing its lawsuit at an earlier date, not wishing to distract the White House. Now another terrorist strike could similarly dwarf even the Enron debacle, and certainly the GAO suit, in the headlines, and create even more momentum for even unreasonable assertions of executive power like this one.
Bush-Cheney Versus GAO
The Cheney position that GAO cannot pursue an investigation of the Energy Group is based upon three basic fallacious arguments. First, Cheney claims that GAO's authorizing statute (found at 31 U.S.C. sections 712, 716 and 717) limits it to reviewing only financial matters and end results, not the underlying government activities.
Second, Cheney claims that under the same statute, GAO has no authority to examine Executive activities undertaken by reason of Constitutional, rather than statutory, and the Energy Group was acting pursuant to the Constitutional powers of the President and Vice President.
Third, and finally, Cheney claims that, again under the authorizing statute, GAO has no power to undertake an investigation based on requests of ranking minority members of a committee (such as Representatives Waxman and Dingell); rather, such an investigation can only be initiated at the request of a full committee, and no such request has been made.
GAO has addressed and thoroughly refuted each point - in letters of June 22, 2002, and August 17, 2001.
What is fascinating about Cheney's position is that it appears to be exactly the kind of argument that Enron officials made, internally and with their Arthur Andersen auditor, to keep the offshore partnerships off the balance sheet. The Vice President wants the GAO auditors to keep out of his "off the books" Energy Group's dealings with industry contributors, too - even though, as with the Enron offshore partnerships, these dealings may be the most relevant information of all to those reviewing the work of this Group.
Raising Smoke And Throwing Sand
Those readers who are attorneys will immediately recognize what the Vice President and his counsel are doing. They don't care if their arguments are baseless; they are simply trying to cloud the air with smoke to obscure what would otherwise be a clear-cut legal answer: GAO has the legal right to information it seeks, period, full stop. They have already succeeded in clouding the picture, and tossing sand in the gears slows down the process.
As someone who knows a White House cover-up from first-hand experience, I must say that if the Vice President forces the Comptroller to file his lawsuit, it will certainly appear that a cover-up is in the works. Whether the cover-up relates to Enron, or to his Energy Group's relationship with Halliburton (the energy company he ran before running for his present office), or to a dubious relationship with some other contributor that has received some benefit, or all of the above, I cannot say. But something is amiss.
Cheney's contentions about GAO are meritless, and he should give them up. Having worked both ends of Pennsylvania Avenue, I appreciate that it is difficult to govern in a fishbowl. Yet I also know that the genius of our system is that the White House is responsible not only to the people, but to their representatives on Capitol Hill. Congressional oversight of the executive is as important as, maybe more so than, lawmaking.
Dick Cheney, like Dick Nixon, is too smart and shrewd to take a stand on a makeshift principle for no reason. There is a reason Cheney has decided to take the heat and political fallout from resisting GAO's request; the reason is that the alternative, of giving GAO access to the information it wants, would, from Cheney's perspective, be worse. As fine and dedicated a public servant as he is - he is stonewalling. This is how a cover-up begins.
What If The GAO Lawsuit Reaches the Supreme Court?
But maybe there is another explanation. It has occurred to me that Cheney may know something about the Supreme Court that the rest of don't. Ultimately, the issues of the GAO lawsuit will have to be resolved by the Supreme Court - although the suit will begin in the lower federal courts and take time to work its way up (thus playing into the stalling strategy that could push all of this past the 2004 election).
For the Vice President to prevail would only require the support of the same five conservative justices who put the Vice President in his current job with their ruling in Bush v. Gore. But should these justices decide to hold in favor of Cheney in the GAO lawsuit, and thus neuter the Congress's authority to investigate the Executive Branch, the ramifications will be much more serious and far-reaching than the results of their aberrant holding in Bush v. Gore - which they themselves limited even as they handed it down.
Osama bin Laden himself could not concoct a more hurtful blow to our democracy. For the Court to resolving the case against GAO (and the Congress) and in favor of the Vice President would diminish the role of Congress as drastically as a reveral of Marbury v. Madison would diminish the judiciary's role.
If Vice President Cheney were to prevail in such a suit, the high Court will have decided that Congressional oversight of the Executive Branch is limited to only what the President and Vice President are willing to permit. This would be an awesome realignment of power in Washington.
Before Bush v. Gore, I would have said such a ruling would be impossible. Today, all I can say is it is a time for vigilance. This lawsuit, should it proceed, calls for close watching.
--------------------------------------------------------------------------------
John Dean, a FindLaw columnist, is a former Counsel to the President of the United States.
Company | Privacy Policy | Disclaimer Copyright © 1994-2001 FindLaw
Published on Monday, January 28, 2002 in the Guardian of London
Fall of the Arrogant
Enron's Demise has Discredited a Vicious Market Ideology and Given a Boost to the Anti-Corporate Cause
by Madeline Bunting
It's hard to overstate the enormity of the impact of Enron's implosion. The biggest corporate collapse in US history is now dragging politicians, banks, accounting firms, other corporations, pension funds, investment analysts, the reputations of so-called business experts and millions of investors into an astonishing vortex where they risk losing billions of dollars and some of the most trusted reputations in corporate America.
It claimed its first death last week - a multimillionaire former Enron executive was found dead in his Mercedes beside an "explosive" suicide note. John Baxter was facing a class action from former Enron employees whose share certificates, once worth millions, are now being traded on the internet as souvenirs of the catastrophe. Baxter stood to lose his Mercedes, his Enron mansion, and everything.
With at least 10 investigations beginning work on Enron, we have glimpsed only a fraction of what will be the repercussions of this corporate disaster. The main focus of interest so far has been the stench of political corruption: can anything be pinned on the Republican administration? For the first time in history, Congress is suing the White House to find out the exact details of the cozy relationship between "Kenny boy" (Kenneth Lay, CEO of Enron) and Vice-President Dick Cheney, which had been bankrolled by $326m to the Republican party over three years.
Enron provides a textbook case of how corporate power subverts the political process in whatever country it operates (the US, the UK or India) through donations to political parties combined with intensive lobbying. It's mucky stuff, and heads will roll, but it's also a very familiar theme. What makes Enron such an extraordinary story is that it spells the end not just to some nasty pork-barrel politics but to an ideologically driven, vicious corporate model which was rippling from its Houston base across the globe.
This vision of a Darwinian dog-eat-dog market, which could be applied to everything from gas supplies and fiber-optic capacity to hedging against the weather, drove Enron's political campaign for privatization and deregulation. Its pitch rested on a near-fundamentalist faith in the self-regulating efficiency of the market; true believers claimed there were simply no limits to its application. To Enron's legion of admirers on Wall Street, in Harvard Business School and elsewhere, it epitomized the free-market philosophy which emerged in the US and shaped the Thatcher-Reagan era before being exported to the developing world under the aegis of World Bank and IMF's deregulation and privatization programs ever since.
The anti-corporate movement's struggle to assert that the world is not for sale - and certainly not to the casino gambler types of Enron - has had a massive shot in the arm from Enron's demise. Plenty will drive that point home at the World Economic Forum in New York this week and at its alternative counterpart in Porto Alegre, Brazil. Just how much of that free-market fundamentalism, if any, will survive Enron will be a key theme. The tide began to turn against deregulated free markets after the Californian black-outs, in which Enron played a notorious role. Now it's in full flood. Re-regulation is back on the agenda and in the US its remit will run from accounting procedures, power supplies and all other public utilities to pension provision.
Let's be optimistic and predict that Enron will come to be seen as the high-water mark of the state's retreat before deregulated corporate power. There are plenty of Ohio teachers who've lost their pensions to drum home the point, not to mention Enron pensioners now dependent on social security. But these hard-luck stories are just one part of a spectacle of unprecedented corporate humiliation: egg on famous faces all round the US. The list is long of management experts, business school professors, journalists and Wall Street analysts who fell over themselves to lavish praise on the radicalism and innovatory brilliance of Enron. These are allegedly some of the cleverest people in the US and almost all were duped by the emperor's new clothes.
Only a year ago, Fortune, which ranked Enron as the most innovatory company in the US for six consecutive years, described Enron as "It stock" even while admitting that it was "largely impenetrable" to outsiders and it was impossible to answer even a basic question such as how it made its money. Fortune brushed aside its reservations, blithely concluding that "in the end it boils down to a question of faith".
Most intriguingly, Enron fooled the vast majority of its employees. Alleged whistle blowers came very late in the day. It boasted of hiring the brightest MBAs in America - 250 a year. It generated a corporate culture which was intensely competitive (10% were weeded out every year in a "rank and yank" performance review process) and fanatically loyal to Jeffrey Skilling, then CEO. A turbo-charged workaholism left no room for dissent or even doubt. One former executive likened Enron to the Taliban. Another admitted that every time Skilling spoke, "I'd believe everything he'd say." The result was "cult-like", admitted the Economist before the crash. Skilling favorites got to go glacier hiking in Patagonia or off-road motorcycling in Mexico with him.
Enron prided itself on the daredevil entrepreneurial freedom it cultivated among its youthful employees who could rise at dizzying speed. Andrew Fastow, architect of the off-balance-sheet debts, was 36 when he was made chief financial officer.
Enron became the example par excellence of how, in the late 90s, US corporate culture hijacked and inverted 60s' radicalism. Business guru Gary Hamel praised Enron's "activists" who saw themselves as "revolutionaries". They lived the rule of "creative destruction" in which all conventional assumptions were to be challenged. In their adverts, they had the cheek to liken themselves to Gandhi and Martin Luther King. It bred a culture of breathtaking arrogance that Enron could do the impossible.
The most astonishing piece of the puzzle is why the Enron "activists" were believed by everyone even when their balance sheet was no longer under stood. In part, it was presumably greed as the share price soared 1,700% in 16 years. In part, it is down to the bizarre millennial fever of the late 90s, and which bamboozled many into believing that the internet had revolutionized all business and that nothing was going to be the same again. As such, Enron was the biggest of the dot bomb explosions.
With any luck, Enron has finished off a pernicious ideology that markets with minimal regulation are an effective way to organize and deliver the public interest and that they develop organically the self-correcting mechanisms to ensure its smooth functioning. Instead, we have witnessed how market capitalism can throw up an astonishing charade of greed, ambition, stupidity of even the cleverest, and irrationality.
© Guardian Newspapers Limited 2002
Fall of the Arrogant
Enron's Demise has Discredited a Vicious Market Ideology and Given a Boost to the Anti-Corporate Cause
by Madeline Bunting
It's hard to overstate the enormity of the impact of Enron's implosion. The biggest corporate collapse in US history is now dragging politicians, banks, accounting firms, other corporations, pension funds, investment analysts, the reputations of so-called business experts and millions of investors into an astonishing vortex where they risk losing billions of dollars and some of the most trusted reputations in corporate America.
It claimed its first death last week - a multimillionaire former Enron executive was found dead in his Mercedes beside an "explosive" suicide note. John Baxter was facing a class action from former Enron employees whose share certificates, once worth millions, are now being traded on the internet as souvenirs of the catastrophe. Baxter stood to lose his Mercedes, his Enron mansion, and everything.
With at least 10 investigations beginning work on Enron, we have glimpsed only a fraction of what will be the repercussions of this corporate disaster. The main focus of interest so far has been the stench of political corruption: can anything be pinned on the Republican administration? For the first time in history, Congress is suing the White House to find out the exact details of the cozy relationship between "Kenny boy" (Kenneth Lay, CEO of Enron) and Vice-President Dick Cheney, which had been bankrolled by $326m to the Republican party over three years.
Enron provides a textbook case of how corporate power subverts the political process in whatever country it operates (the US, the UK or India) through donations to political parties combined with intensive lobbying. It's mucky stuff, and heads will roll, but it's also a very familiar theme. What makes Enron such an extraordinary story is that it spells the end not just to some nasty pork-barrel politics but to an ideologically driven, vicious corporate model which was rippling from its Houston base across the globe.
This vision of a Darwinian dog-eat-dog market, which could be applied to everything from gas supplies and fiber-optic capacity to hedging against the weather, drove Enron's political campaign for privatization and deregulation. Its pitch rested on a near-fundamentalist faith in the self-regulating efficiency of the market; true believers claimed there were simply no limits to its application. To Enron's legion of admirers on Wall Street, in Harvard Business School and elsewhere, it epitomized the free-market philosophy which emerged in the US and shaped the Thatcher-Reagan era before being exported to the developing world under the aegis of World Bank and IMF's deregulation and privatization programs ever since.
The anti-corporate movement's struggle to assert that the world is not for sale - and certainly not to the casino gambler types of Enron - has had a massive shot in the arm from Enron's demise. Plenty will drive that point home at the World Economic Forum in New York this week and at its alternative counterpart in Porto Alegre, Brazil. Just how much of that free-market fundamentalism, if any, will survive Enron will be a key theme. The tide began to turn against deregulated free markets after the Californian black-outs, in which Enron played a notorious role. Now it's in full flood. Re-regulation is back on the agenda and in the US its remit will run from accounting procedures, power supplies and all other public utilities to pension provision.
Let's be optimistic and predict that Enron will come to be seen as the high-water mark of the state's retreat before deregulated corporate power. There are plenty of Ohio teachers who've lost their pensions to drum home the point, not to mention Enron pensioners now dependent on social security. But these hard-luck stories are just one part of a spectacle of unprecedented corporate humiliation: egg on famous faces all round the US. The list is long of management experts, business school professors, journalists and Wall Street analysts who fell over themselves to lavish praise on the radicalism and innovatory brilliance of Enron. These are allegedly some of the cleverest people in the US and almost all were duped by the emperor's new clothes.
Only a year ago, Fortune, which ranked Enron as the most innovatory company in the US for six consecutive years, described Enron as "It stock" even while admitting that it was "largely impenetrable" to outsiders and it was impossible to answer even a basic question such as how it made its money. Fortune brushed aside its reservations, blithely concluding that "in the end it boils down to a question of faith".
Most intriguingly, Enron fooled the vast majority of its employees. Alleged whistle blowers came very late in the day. It boasted of hiring the brightest MBAs in America - 250 a year. It generated a corporate culture which was intensely competitive (10% were weeded out every year in a "rank and yank" performance review process) and fanatically loyal to Jeffrey Skilling, then CEO. A turbo-charged workaholism left no room for dissent or even doubt. One former executive likened Enron to the Taliban. Another admitted that every time Skilling spoke, "I'd believe everything he'd say." The result was "cult-like", admitted the Economist before the crash. Skilling favorites got to go glacier hiking in Patagonia or off-road motorcycling in Mexico with him.
Enron prided itself on the daredevil entrepreneurial freedom it cultivated among its youthful employees who could rise at dizzying speed. Andrew Fastow, architect of the off-balance-sheet debts, was 36 when he was made chief financial officer.
Enron became the example par excellence of how, in the late 90s, US corporate culture hijacked and inverted 60s' radicalism. Business guru Gary Hamel praised Enron's "activists" who saw themselves as "revolutionaries". They lived the rule of "creative destruction" in which all conventional assumptions were to be challenged. In their adverts, they had the cheek to liken themselves to Gandhi and Martin Luther King. It bred a culture of breathtaking arrogance that Enron could do the impossible.
The most astonishing piece of the puzzle is why the Enron "activists" were believed by everyone even when their balance sheet was no longer under stood. In part, it was presumably greed as the share price soared 1,700% in 16 years. In part, it is down to the bizarre millennial fever of the late 90s, and which bamboozled many into believing that the internet had revolutionized all business and that nothing was going to be the same again. As such, Enron was the biggest of the dot bomb explosions.
With any luck, Enron has finished off a pernicious ideology that markets with minimal regulation are an effective way to organize and deliver the public interest and that they develop organically the self-correcting mechanisms to ensure its smooth functioning. Instead, we have witnessed how market capitalism can throw up an astonishing charade of greed, ambition, stupidity of even the cleverest, and irrationality.
© Guardian Newspapers Limited 2002
Online Journal
"Marin hot tubbers," Iran-Contra ghosts, and other fears of the Bush clan
By Larry Chin
January 29, 2002—In a rare television appearance last Friday, former (or some say still current) President George Herbert Walker Bush lashed out personally at John Walker Lindh. Shaking with rage, the elder Bush spit venomously about how he has "absolutely no sympathy" for the Taliboy teenager, and how sick he was of "liberal Marin County hot tubbers."
The senior Bush, also a former CIA director, veered like a hijacked jetliner into ramblings about "liberal" critics alleging prisoner mistreatment (we can assume he was referring to "liberals" like the Red Cross and European government leaders who have a problem with Guantanamo), and the need to "get tough and get behind the military" (as if the mass goose stepping isn't quite "getting" enough for his tastes).
Pure vindictiveness may explain some of the Carlyle Group senior adviser's lust to see the young Taliboy's neck in a noose. More likely, Poppy Bush is angry that his son, White House Occupant W., is being confronted by a nemesis from his own dark Iran-Contra past: James Brosnahan.
James Brosnahan, former federal prosecutor, and former member of the Lawrence Walsh Independent Counsel team is John Walker Lindh's attorney.
Recall that the elder Bush hated no one on earth more than Walsh. In his book "Shadow," Bob Woodward describes how, during the height of the Walsh inquiry, Bush received a "Lawrence Walsh" doll as a gag Christmas gift from a member of his staff. Bush slammed the doll repeatedly against his desk, shouting, "Take that, Walsh!"
Recall that Bush and his minions did everything possible to obstruct Walsh's investigation. Walsh's team had discovered notes written by Caspar Weinberger which disproved Bush's claim that he had been "out of the loop". These notes proved that Weinberger had knowledge of $25 million in Saudi Arabian contributions to the Nicaraguan contras.
Recall that it was Brosnahan who spoke out against White House attacks on Walsh as blatant obstruction of justice. In a piece written by Robert Parry (from Mother Jones, January 1993):
"It was all so transparent that I was disappointed more people didn't pick up on the fact that all they were really trying to do was obstruct the trial of Weinberger. It was going to be a hell of a trial," Brosnahan said." The full story would have been told, as it pertained to the [obstruction] counts of the indictment. They [senior Reagan-Bush officials] couldn't have a trial. The cross- examination of Caspar Weinberger was going to be an event."
According to Brosnahan, the trial would have shown that Weinberger knew as early as summer 1985 that President Ronald Reagan had personally authorized missile shipments to Iran in violation of the Arms Control Export Act, and that this potentially impeachable act was concealed by constructing a false record. "The August [1985] meeting [of Reagan's National Security Council] discussed having Israel send the missiles to Iran and replenishing them out of U.S. stocks," says Brosnahan. "Weinberger is responsible for all missiles. The secretary of defense is the guy."
Another guy who stood to lose his exalted standing in Washington if the trial took place was General Colin Powell, who was Weinberger's principal aide in 1985. In an affidavit, Powell said he "saw virtually all the papers that went in and out of [Weinberger's] office" and thus would have had direct access to the evidence of missile replenishment. Early in the investigation, Powell gave conflicting accounts of his knowledge of Weinberger's extensive personal notes, denying knowledge of their existence (when Weinberger was claiming he didn't take any), and then saying in 1992 that the notes were no secret and describing them in detail (after Weinberger was forced to cough them up).
One of the prosecution's star witnesses would have been White House Chief of Staff Donald Regan, who finally would have recounted the frantic Oval Office scrambling to contain the scandal in November 1986, Brosnahan says. "Regan would say that when it broke, he denied things. But there came a point when he knew it was out of control. At some point, in December [1985] or January [1986], he wanted to get the whole thing out."
In his notorious final act as president, George H.W. Bush pardoned Caspar Weinberger. He also pardoned the rest of his Iran-Contra gang: Elliott Abrams, his former assistant secretary of state for Inter-American affairs; former National Security Adviser Robert McFarlane; and CIA agents and friends Dewey Clarridge, Alan Fiers, and Clair George.
In defending John Walker, Brosnahan has vowed to fight the current Bush administration every step of the way. Brosnahan has many points to raise. For example, Walker Lindh joined the Taliban during a period in which the Bush (and Clinton) administration considered the Taliban to be an ally. And that the Bush administration handed over $100 million in aid to the Taliban, including a $43 million check in May 2001.
All of which, by objective reason, makes George W. Bush and his entire administration guilty of the same charges leveled against Lindh, including "providing material support" and "willfully and knowingly contributing goods and servies to, and for the benefit of, the Taliban" and "supplying directly and indirectly goods and services to the territory of Afghanistan controlled by the Taliban."
When faced with stress, scandal and opposition, Bush family members don't like it. They wind up vomiting on the laps of Japanese officials, or having bruising Pretzel-gate fainting spells. And starting wars.
It is time for all of us to sit back, in our "liberal Marin County" hot tubs, and witness the spectacle of Bush vs. Brosnahan: The Sequel. And look out for dirty tricks.
Larry Chin is a freelance journalist.
"Marin hot tubbers," Iran-Contra ghosts, and other fears of the Bush clan
By Larry Chin
January 29, 2002—In a rare television appearance last Friday, former (or some say still current) President George Herbert Walker Bush lashed out personally at John Walker Lindh. Shaking with rage, the elder Bush spit venomously about how he has "absolutely no sympathy" for the Taliboy teenager, and how sick he was of "liberal Marin County hot tubbers."
The senior Bush, also a former CIA director, veered like a hijacked jetliner into ramblings about "liberal" critics alleging prisoner mistreatment (we can assume he was referring to "liberals" like the Red Cross and European government leaders who have a problem with Guantanamo), and the need to "get tough and get behind the military" (as if the mass goose stepping isn't quite "getting" enough for his tastes).
Pure vindictiveness may explain some of the Carlyle Group senior adviser's lust to see the young Taliboy's neck in a noose. More likely, Poppy Bush is angry that his son, White House Occupant W., is being confronted by a nemesis from his own dark Iran-Contra past: James Brosnahan.
James Brosnahan, former federal prosecutor, and former member of the Lawrence Walsh Independent Counsel team is John Walker Lindh's attorney.
Recall that the elder Bush hated no one on earth more than Walsh. In his book "Shadow," Bob Woodward describes how, during the height of the Walsh inquiry, Bush received a "Lawrence Walsh" doll as a gag Christmas gift from a member of his staff. Bush slammed the doll repeatedly against his desk, shouting, "Take that, Walsh!"
Recall that Bush and his minions did everything possible to obstruct Walsh's investigation. Walsh's team had discovered notes written by Caspar Weinberger which disproved Bush's claim that he had been "out of the loop". These notes proved that Weinberger had knowledge of $25 million in Saudi Arabian contributions to the Nicaraguan contras.
Recall that it was Brosnahan who spoke out against White House attacks on Walsh as blatant obstruction of justice. In a piece written by Robert Parry (from Mother Jones, January 1993):
"It was all so transparent that I was disappointed more people didn't pick up on the fact that all they were really trying to do was obstruct the trial of Weinberger. It was going to be a hell of a trial," Brosnahan said." The full story would have been told, as it pertained to the [obstruction] counts of the indictment. They [senior Reagan-Bush officials] couldn't have a trial. The cross- examination of Caspar Weinberger was going to be an event."
According to Brosnahan, the trial would have shown that Weinberger knew as early as summer 1985 that President Ronald Reagan had personally authorized missile shipments to Iran in violation of the Arms Control Export Act, and that this potentially impeachable act was concealed by constructing a false record. "The August [1985] meeting [of Reagan's National Security Council] discussed having Israel send the missiles to Iran and replenishing them out of U.S. stocks," says Brosnahan. "Weinberger is responsible for all missiles. The secretary of defense is the guy."
Another guy who stood to lose his exalted standing in Washington if the trial took place was General Colin Powell, who was Weinberger's principal aide in 1985. In an affidavit, Powell said he "saw virtually all the papers that went in and out of [Weinberger's] office" and thus would have had direct access to the evidence of missile replenishment. Early in the investigation, Powell gave conflicting accounts of his knowledge of Weinberger's extensive personal notes, denying knowledge of their existence (when Weinberger was claiming he didn't take any), and then saying in 1992 that the notes were no secret and describing them in detail (after Weinberger was forced to cough them up).
One of the prosecution's star witnesses would have been White House Chief of Staff Donald Regan, who finally would have recounted the frantic Oval Office scrambling to contain the scandal in November 1986, Brosnahan says. "Regan would say that when it broke, he denied things. But there came a point when he knew it was out of control. At some point, in December [1985] or January [1986], he wanted to get the whole thing out."
In his notorious final act as president, George H.W. Bush pardoned Caspar Weinberger. He also pardoned the rest of his Iran-Contra gang: Elliott Abrams, his former assistant secretary of state for Inter-American affairs; former National Security Adviser Robert McFarlane; and CIA agents and friends Dewey Clarridge, Alan Fiers, and Clair George.
In defending John Walker, Brosnahan has vowed to fight the current Bush administration every step of the way. Brosnahan has many points to raise. For example, Walker Lindh joined the Taliban during a period in which the Bush (and Clinton) administration considered the Taliban to be an ally. And that the Bush administration handed over $100 million in aid to the Taliban, including a $43 million check in May 2001.
All of which, by objective reason, makes George W. Bush and his entire administration guilty of the same charges leveled against Lindh, including "providing material support" and "willfully and knowingly contributing goods and servies to, and for the benefit of, the Taliban" and "supplying directly and indirectly goods and services to the territory of Afghanistan controlled by the Taliban."
When faced with stress, scandal and opposition, Bush family members don't like it. They wind up vomiting on the laps of Japanese officials, or having bruising Pretzel-gate fainting spells. And starting wars.
It is time for all of us to sit back, in our "liberal Marin County" hot tubs, and witness the spectacle of Bush vs. Brosnahan: The Sequel. And look out for dirty tricks.
Larry Chin is a freelance journalist.
Enron: Ultimate agent of the American empire
Part I: Money to get power, power to protect money.—Motto of the Medici family
By Larry Chin
Online Journal Contributing Editor
February 1, 2002—In portraying Enron as a "scandal," and as an isolated case of overheated capitalism and "unusual political influence," the American corporate media and congressional investigators are studiously avoiding the truth: Enron, like many multinational corporations, has functioned as an operational arm of the US government, and as a weapon of economic, political, and territorial hegemony. The case exposes an almost unspeakable and terminal malignancy at the heart of world politics, and global capitalism itself.
Cold Warriors in Suits
In a "free market world" in which (1) the goals of the state, corporations, and the national security apparatus (intelligence agencies and military) are indistinguishable, (2) these three groups plan and conduct operations cooperatively, and (3) government and business elites (linked by longtime social ties) move seamlessly between public and private sectors, the hydra that is Enron is nightmarishly uncontroversial—-and quintessentially American.
Enron CEO Kenneth Lay was a Pentagon official during the Vietnam War. Another Enron board member who facilitated Enron's most egregious violations overseas, Frank Wisner, Jr., has intimate CIA ties and is the son of former CIA Deputy Director Frank Wisner, Sr., who was present at the creation of the CIA.
Enron's symbiotic relationship to the CIA/Pentagon-based Bush/Cheney oligarchy is well documented. As a pioneer of energy deregulation during his administration, George H.W. Bush virtually created Enron, and paved the way for its meteoric growth. And, as David Walsh (www.wsws.org) wrote, "to speak of "connections" or "intimate ties" between Enron and the Bush regime nearly misses the point. To a large extent, the present administration is an extension of the Enron board of directors. This government, one might say, is Enron in office, not simply because numerous Bush cabinet members and other appointees (and other leading Republicans) have been employed in one capacity or another by Enron, but more profoundly in the sense that the social types found in Enron's boardroom and in leading government posts in Washington are interchangeable."
As a corporate agent and beneficiary of US and western military and intelligence operations, Enron is also no more an aberration than the United Fruit and Standard Fruit companies, whose dominance of Central America during the 1960s depended on cooperative operations with the CIA, the Pentagon and organized crime.
More modern examples abound.
American International Group, the insurance giant, has long been tied to the CIA and the military, and its board (not coincidentally) also includes Enron director Frank Wisner Jr.
Citigroup over the years has been repeatedly charged with money laundering. Citigroup's board includes John Deutch, former CIA Director, Robert Rubin, former Treasury secretary and intimate friend to Ken Lay (who personally and financially intervened to bail out the collapsing Enron), and retired Executive Director of the CIA Nora Slatkin.
Then there is Enron's corporate cousin, Halliburton, which was headed by Dick Cheney from 1995 until he became vice president. The company provides "support services" to the military and oil industries, living off of US wars and "counter-insurgency" operations in Algeria, Angola, Bosnia, Burma, Croatia, Haiti, Kuwait, Nigeria, Russia, Rwanda, and Somalia and elsewhere.
Corporate quasi-agents like Enron are effective fronts in implementing the policies of the ruling elite. Among the goals are (1) securing and controlling of natural resources (oil, natural gas, electricity), (2) maintaining economic, geopolitical, and military advantage, and (3) controlling populations through the stifling of dissent, the elimination of political opposition, and the destruction of democratic reform movements.
Seen within this broad framework, Enron's activities are not only inherent manifestations of the ruling order, but official policy.
Enron at Home: Extortion and Racketeering for Bush and Gang
While media coverage and congressional inquiries have dwelled on the fraud, accounting irregularities, swindled mutual fund managers and stock jockeys, and ripped off pension fund owners, the most sinister aspects of Enron's operations remain cloaked.
Through manipulation of energy distribution, Enron was effective in subverting and controlling the politics and pocketbooks of entire populations within the US and overseas.
One of Enron's first acts on behalf of the present Bush administration was the manipulation of the California energy grid, which essentially blackmailed the state. California is a Democratic stronghold and "hotbed of liberal dissent" that opposed the installation of George W. Bush in the White House. California's once burgeoning economy was derailed, and its damaged Democratic political leadership was sent scrambling into months of damage control. So emasculated were the Democrats that they were unable to oppose Bush on the rest of his extreme right wing agenda. This delighted Bush and Cheney, who (on Ken Lay's advice) not only refused to assist, but also blamed California for "its own failures" and blocked the Federal Energy Regulatory Commision (FERC) from intervening. Enron made a fortune.
Today, California remains a hostage to the Enron/Bush scam, locked into expensive long-term energy contracts that will sap its resources and fleece consumers for years to come. Democrats throughout the state appear vulnerable to losing seats to Republicans in 2002.
As reported by David Lazarus in the San Francisco Chronicle (1/30/02), memos of conversations between Lay and Dick Cheney provide ample evidence of Lay's insider status in the Bush White House: he essentially dictated the administration's ruthless response to California—-and perhaps the rest of the energy policy.
The California "energy shortage" became George Bush's national rallying cry for more deregulation, drilling, building new power plants and systematically gutting environmental regulations. The Alaska National Wildlife Refuge and other protected lands, and the California coast, have been targeted for drilling.
There is evidence that the California "crisis" was entirely manufactured. Several investigations into the scam have begun.
Not content simply to deregulate energy markets, Enron deregulated futures markets, making itself exempt from government oversight and from fraud laws. This maneuver, headed by Wendy Gramm (who moved back and forth between the Chicago Board of Trade and the Enron board) and assisted by Phil Gramm (who pushed Enron-friendly changes in legislation in Congress), was tantamount to the company giving itself permission to launder massive amounts of money. Which it did.
Enron, Bush administration officials and Enron-funded right-wing "think tanks" such as the American Enterprise Institute, the American Council for Capital Formation (where Ken Lay is a director), the Institute for Policy Innovation (founded by Dick Armey) collaborated to lift restrictions on offshore tax havens. This blocked a multi-year 30-nation crackdown on the abuse of offshore tax havens led by the Organization of Economic Cooperation and Development.
Today, thanks to Enron, billions of dollars of mystery money are sheltered in thousands of phantom offshore accounts, in 874 Enron subsidiaries.
Enron's Past Overseas Adventures: Collusion and Exploitation
Where there has been warfare (led or funded by the US), there have been capitalists ready to profit from it, regardless of the cost in human lives. Where there is oppression, corporations are there to cut deals with dictators and corrupt finance ministers. Enron was a master at this game, working alongside operatives of the Bush and Clinton administrations.
In 1988, George W. Bush pressured Argentina's public works minister to award Enron a contract to build a natural gas pipeline by invoking the name of his father, president George H.W. Bush. The contract was eventually awarded to Enron when Carlos Menem, a friend of the Bush family, became president.
Operation Desert Storm secured the Iraqi oil field of Rumaila for western interests, expanding the boundaries of Kuwait, doubling Kuwaiti oil output for American and British oil companies. In 1993, with James Baker, Robert Mosbacher and former operations director of the Joint Chiefs Thomas Kelly on the Enron payroll, the three former Bush administration officials, along with George H.W., Neil and Marvin Bush pressured Kuwaiti officials to award Enron a contract to rebuild the Shuaiba power plant, which was destroyed during the war. The contract was awarded to Enron, even though Enron's price for supplying power was significantly higher than that of other bidders.
Enron hired former US Ambassador to India Frank Wisner, who subsequently used CIA influence to help Enron win a $2.8 billion contract for the Dabhol power plant, the biggest international investment since India opened its economy in 1991. When thousands of local residents, including acclaimed journalist Arundhati Roy, protested the plant, Enron hired Indian police to beat and arrest opponents of the project. A detailed Human Rights Watch analysis of the human rights violations of Enron and the US government can be found at www.hrw.org/reports/1999/enron/enron9-0.htm.
According to Enron's web site, as of January 2002, the company is in the early stages of developing a natural gas pipeline on India's west coast in Maharashtra.
In 2001, as vice president, Dick Cheney spoke to Indian government officials about the Dabhol project. His justification: the plant was financed in part through the US government's Overseas Private Investment Corporation (OPIC).
According to an investigative series on the notes of the late Ron Brown by WorldNetDaily.com, Enron became a major contributor to the Democratic National Committee (after the heavily Enron-financed George H.W. Bush re-election effort failed in 1992). Members of the Clinton administration, particularly Commerce Secretary Ron Brown, routinely negotiated deals for Enron and other big donors.
In 1994, Brown participated in a US business trade mission in Indonesia. Documents obtained using the Freedom of Information Act shows that Brown assisted Indonesian dictator Suharto and his son in a kickback scheme involving US tax money and the construction of the Paiton Power Plant. Enron was awarded a contract. This project was funded in part by the Export-Import Bank (EXIM), which also financed $4 billion in gas deals for Enron. EXIM has ties to Robert Rubin, a longtime friend of Kenneth Lay and Enron from his Goldman Sachs days.
Also in part from generous DNC contributions, Enron received Clinton administration help in the marketing of Russian gas in Europe. Ken Lay and Boris Brevnov of Unified Electricity Systems of Russia signed a 10-year strategic alliance during the 1998 World Economic Summit in Davos, Switzerland. The press release quotes Lay: "We are very optimistic that the rapidly liberalizing markets in Russia, Europe, and Central Asia will create new electricity trading and marketing opportunities for both our companies."
When Frank Wisner was the US Ambassador to the Philippines (1991-92), Enron was negotiating to manage the two Subic Bay power plants. Wisner helped Enron win the deal and began to manage the plant in January 1993. The plants cost the Philippine National Power Corporation (NPC) eight cents a kilowatt-hour—-20 percent more than NPC charged customers. The entire NPC board resigned in protest.
In 1995, Enron signed an agreement to build a gas pipeline from Mozambique to South Africa, to develop a gas field in southern Mozambique. Anthony Lake, president Bill Clinton's National Security Advisor, and the US Agency for International Development pressured the Mozambican government to sign with Enron.
Next, Part II: Enron, the Bush administration, and the Central Asian war
Larry Chin is a freelance journalist and an Online Journal Contributing Editor.
Part I: Money to get power, power to protect money.—Motto of the Medici family
By Larry Chin
Online Journal Contributing Editor
February 1, 2002—In portraying Enron as a "scandal," and as an isolated case of overheated capitalism and "unusual political influence," the American corporate media and congressional investigators are studiously avoiding the truth: Enron, like many multinational corporations, has functioned as an operational arm of the US government, and as a weapon of economic, political, and territorial hegemony. The case exposes an almost unspeakable and terminal malignancy at the heart of world politics, and global capitalism itself.
Cold Warriors in Suits
In a "free market world" in which (1) the goals of the state, corporations, and the national security apparatus (intelligence agencies and military) are indistinguishable, (2) these three groups plan and conduct operations cooperatively, and (3) government and business elites (linked by longtime social ties) move seamlessly between public and private sectors, the hydra that is Enron is nightmarishly uncontroversial—-and quintessentially American.
Enron CEO Kenneth Lay was a Pentagon official during the Vietnam War. Another Enron board member who facilitated Enron's most egregious violations overseas, Frank Wisner, Jr., has intimate CIA ties and is the son of former CIA Deputy Director Frank Wisner, Sr., who was present at the creation of the CIA.
Enron's symbiotic relationship to the CIA/Pentagon-based Bush/Cheney oligarchy is well documented. As a pioneer of energy deregulation during his administration, George H.W. Bush virtually created Enron, and paved the way for its meteoric growth. And, as David Walsh (www.wsws.org) wrote, "to speak of "connections" or "intimate ties" between Enron and the Bush regime nearly misses the point. To a large extent, the present administration is an extension of the Enron board of directors. This government, one might say, is Enron in office, not simply because numerous Bush cabinet members and other appointees (and other leading Republicans) have been employed in one capacity or another by Enron, but more profoundly in the sense that the social types found in Enron's boardroom and in leading government posts in Washington are interchangeable."
As a corporate agent and beneficiary of US and western military and intelligence operations, Enron is also no more an aberration than the United Fruit and Standard Fruit companies, whose dominance of Central America during the 1960s depended on cooperative operations with the CIA, the Pentagon and organized crime.
More modern examples abound.
American International Group, the insurance giant, has long been tied to the CIA and the military, and its board (not coincidentally) also includes Enron director Frank Wisner Jr.
Citigroup over the years has been repeatedly charged with money laundering. Citigroup's board includes John Deutch, former CIA Director, Robert Rubin, former Treasury secretary and intimate friend to Ken Lay (who personally and financially intervened to bail out the collapsing Enron), and retired Executive Director of the CIA Nora Slatkin.
Then there is Enron's corporate cousin, Halliburton, which was headed by Dick Cheney from 1995 until he became vice president. The company provides "support services" to the military and oil industries, living off of US wars and "counter-insurgency" operations in Algeria, Angola, Bosnia, Burma, Croatia, Haiti, Kuwait, Nigeria, Russia, Rwanda, and Somalia and elsewhere.
Corporate quasi-agents like Enron are effective fronts in implementing the policies of the ruling elite. Among the goals are (1) securing and controlling of natural resources (oil, natural gas, electricity), (2) maintaining economic, geopolitical, and military advantage, and (3) controlling populations through the stifling of dissent, the elimination of political opposition, and the destruction of democratic reform movements.
Seen within this broad framework, Enron's activities are not only inherent manifestations of the ruling order, but official policy.
Enron at Home: Extortion and Racketeering for Bush and Gang
While media coverage and congressional inquiries have dwelled on the fraud, accounting irregularities, swindled mutual fund managers and stock jockeys, and ripped off pension fund owners, the most sinister aspects of Enron's operations remain cloaked.
Through manipulation of energy distribution, Enron was effective in subverting and controlling the politics and pocketbooks of entire populations within the US and overseas.
One of Enron's first acts on behalf of the present Bush administration was the manipulation of the California energy grid, which essentially blackmailed the state. California is a Democratic stronghold and "hotbed of liberal dissent" that opposed the installation of George W. Bush in the White House. California's once burgeoning economy was derailed, and its damaged Democratic political leadership was sent scrambling into months of damage control. So emasculated were the Democrats that they were unable to oppose Bush on the rest of his extreme right wing agenda. This delighted Bush and Cheney, who (on Ken Lay's advice) not only refused to assist, but also blamed California for "its own failures" and blocked the Federal Energy Regulatory Commision (FERC) from intervening. Enron made a fortune.
Today, California remains a hostage to the Enron/Bush scam, locked into expensive long-term energy contracts that will sap its resources and fleece consumers for years to come. Democrats throughout the state appear vulnerable to losing seats to Republicans in 2002.
As reported by David Lazarus in the San Francisco Chronicle (1/30/02), memos of conversations between Lay and Dick Cheney provide ample evidence of Lay's insider status in the Bush White House: he essentially dictated the administration's ruthless response to California—-and perhaps the rest of the energy policy.
The California "energy shortage" became George Bush's national rallying cry for more deregulation, drilling, building new power plants and systematically gutting environmental regulations. The Alaska National Wildlife Refuge and other protected lands, and the California coast, have been targeted for drilling.
There is evidence that the California "crisis" was entirely manufactured. Several investigations into the scam have begun.
Not content simply to deregulate energy markets, Enron deregulated futures markets, making itself exempt from government oversight and from fraud laws. This maneuver, headed by Wendy Gramm (who moved back and forth between the Chicago Board of Trade and the Enron board) and assisted by Phil Gramm (who pushed Enron-friendly changes in legislation in Congress), was tantamount to the company giving itself permission to launder massive amounts of money. Which it did.
Enron, Bush administration officials and Enron-funded right-wing "think tanks" such as the American Enterprise Institute, the American Council for Capital Formation (where Ken Lay is a director), the Institute for Policy Innovation (founded by Dick Armey) collaborated to lift restrictions on offshore tax havens. This blocked a multi-year 30-nation crackdown on the abuse of offshore tax havens led by the Organization of Economic Cooperation and Development.
Today, thanks to Enron, billions of dollars of mystery money are sheltered in thousands of phantom offshore accounts, in 874 Enron subsidiaries.
Enron's Past Overseas Adventures: Collusion and Exploitation
Where there has been warfare (led or funded by the US), there have been capitalists ready to profit from it, regardless of the cost in human lives. Where there is oppression, corporations are there to cut deals with dictators and corrupt finance ministers. Enron was a master at this game, working alongside operatives of the Bush and Clinton administrations.
In 1988, George W. Bush pressured Argentina's public works minister to award Enron a contract to build a natural gas pipeline by invoking the name of his father, president George H.W. Bush. The contract was eventually awarded to Enron when Carlos Menem, a friend of the Bush family, became president.
Operation Desert Storm secured the Iraqi oil field of Rumaila for western interests, expanding the boundaries of Kuwait, doubling Kuwaiti oil output for American and British oil companies. In 1993, with James Baker, Robert Mosbacher and former operations director of the Joint Chiefs Thomas Kelly on the Enron payroll, the three former Bush administration officials, along with George H.W., Neil and Marvin Bush pressured Kuwaiti officials to award Enron a contract to rebuild the Shuaiba power plant, which was destroyed during the war. The contract was awarded to Enron, even though Enron's price for supplying power was significantly higher than that of other bidders.
Enron hired former US Ambassador to India Frank Wisner, who subsequently used CIA influence to help Enron win a $2.8 billion contract for the Dabhol power plant, the biggest international investment since India opened its economy in 1991. When thousands of local residents, including acclaimed journalist Arundhati Roy, protested the plant, Enron hired Indian police to beat and arrest opponents of the project. A detailed Human Rights Watch analysis of the human rights violations of Enron and the US government can be found at www.hrw.org/reports/1999/enron/enron9-0.htm.
According to Enron's web site, as of January 2002, the company is in the early stages of developing a natural gas pipeline on India's west coast in Maharashtra.
In 2001, as vice president, Dick Cheney spoke to Indian government officials about the Dabhol project. His justification: the plant was financed in part through the US government's Overseas Private Investment Corporation (OPIC).
According to an investigative series on the notes of the late Ron Brown by WorldNetDaily.com, Enron became a major contributor to the Democratic National Committee (after the heavily Enron-financed George H.W. Bush re-election effort failed in 1992). Members of the Clinton administration, particularly Commerce Secretary Ron Brown, routinely negotiated deals for Enron and other big donors.
In 1994, Brown participated in a US business trade mission in Indonesia. Documents obtained using the Freedom of Information Act shows that Brown assisted Indonesian dictator Suharto and his son in a kickback scheme involving US tax money and the construction of the Paiton Power Plant. Enron was awarded a contract. This project was funded in part by the Export-Import Bank (EXIM), which also financed $4 billion in gas deals for Enron. EXIM has ties to Robert Rubin, a longtime friend of Kenneth Lay and Enron from his Goldman Sachs days.
Also in part from generous DNC contributions, Enron received Clinton administration help in the marketing of Russian gas in Europe. Ken Lay and Boris Brevnov of Unified Electricity Systems of Russia signed a 10-year strategic alliance during the 1998 World Economic Summit in Davos, Switzerland. The press release quotes Lay: "We are very optimistic that the rapidly liberalizing markets in Russia, Europe, and Central Asia will create new electricity trading and marketing opportunities for both our companies."
When Frank Wisner was the US Ambassador to the Philippines (1991-92), Enron was negotiating to manage the two Subic Bay power plants. Wisner helped Enron win the deal and began to manage the plant in January 1993. The plants cost the Philippine National Power Corporation (NPC) eight cents a kilowatt-hour—-20 percent more than NPC charged customers. The entire NPC board resigned in protest.
In 1995, Enron signed an agreement to build a gas pipeline from Mozambique to South Africa, to develop a gas field in southern Mozambique. Anthony Lake, president Bill Clinton's National Security Advisor, and the US Agency for International Development pressured the Mozambican government to sign with Enron.
Next, Part II: Enron, the Bush administration, and the Central Asian war
Larry Chin is a freelance journalist and an Online Journal Contributing Editor.
Sources: Reuters | AP | ABCNEWS.com
Wednesday January 30 5:31 PM ET
Permanent Tax Cut Seen Costing $627B
By ALAN FRAM, Associated Press Writer
WASHINGTON (AP) - President Bush's call to make last year's tax cut permanent would cost $627 billion over the next decade, congressional budget analysts estimate, further draining projected surpluses.
The figures, obtained by The Associated Press, mean that the $2.26 trillion surplus that the Congressional Budget Office has projected for the decade beginning in 2003 would shrink by 28 percent.
That would still leave nearly $1.64 trillion in projected federal surpluses for that period. But much of that would be needed to pay for increases both parties want for defense, homeland security, health and other programs.
Bush called for the extension of the tax cut in his State of the Union address to Congress Tuesday evening, prompting thunderous cheers from Republicans and mostly silence from Democrats.
``For the sake of long-term growth and to help Americans plan for the future, let's make these tax cuts permanent,'' Bush said.
The cost estimates come from projections that the CBO has provided to others on Capitol Hill. CBO is Congress' nonpartisan fiscal analysis group.
For the decade beginning in 2002, the CBO estimated it would cost $333 billion to make the tax cut permanent. That would reduce the $1.6 trillion surplus CBO currently projects for that period by 21 percent to nearly $1.27 trillion.
Just last week, CBO lowered its projected surplus for that decade from a $5.6 trillion surplus it estimated a year ago.
The $1.35 trillion, 10-year tax cut that Bush pushed through Congress last spring was his paramount priority at the time. The package, which reduces income tax rates, phases out the inheritance tax and makes other changes, was a major victory for the new president and congressional Republicans and came over the opposition of most Democrats.
It is scheduled to expire after 2010, a device its authors used to control its price tag and win support from moderate lawmakers. Its supporters have always assumed it would be made permanent, since tax rates would otherwise automatically snap back up in 2011 - a prospect many lawmakers hope to avoid.
Senate Budget Committee Chairman Kent Conrad, D-N.D., said he opposes making the tax cut permanent. He said that when added to his own staff's estimates of the costs of other proposals Bush made in his speech - such as for defense boosts and providing prescription drug coverage - projected surpluses would be virtually gobbled up.
``It's going to leave our country in a deep hole,'' Conrad said of Bush's plan. ``Maybe his thought is he gets out of town before the roof caves in,'' he said, referring to the end of Bush's term as president.
House Republican leaders are expected to discuss when to schedule a vote on making the tax cut permanent at a retreat for GOP lawmakers in West Virginia this week.
``Fixing the economy will certainly be a top priority early this year, and making the tax cut permanent will fit nicely into that,'' said Greg Crist, spokesman for House Majority Leader Dick Armey, R-Texas.
Ranit Schmelzer, spokeswoman for Senate Majority Leader Tom Daschle, D-S.D., said Senate Democrats ``fully expect there will be a vote on making the tax cut permanent.'' Republican senators have discussed forcing such a vote, which could be a tough one for Democrats facing close re-election races this November.
The fiscal 2003 budget Bush introduces next week will assume that the tax cut is made permanent, White House budget chief Mitchell Daniels has said. The new fiscal year begins next Oct. 1.
The bulk of CBO's estimated costs of making the tax cut permanent come from its projection that the cut would cost the government $175 billion in 2011 and $294 billion in 2012. Under current law, the tax cut would have expired in 2010. A small portion of the costs would come from keeping a handful of tax cutting provisions permanent that are currently scheduled to end in 2004 and 2005. These include some tax breaks for education and for people and corporations that pay the alternative minimum tax.
From 2003 through 2012, making the tax cut permanent would cost the government $569 billion in lost revenue, CBO estimated. In addition, it would cost the government an added $58 billion in extra interest payments on the national debt, according to the estimate.
Wednesday January 30 5:31 PM ET
Permanent Tax Cut Seen Costing $627B
By ALAN FRAM, Associated Press Writer
WASHINGTON (AP) - President Bush's call to make last year's tax cut permanent would cost $627 billion over the next decade, congressional budget analysts estimate, further draining projected surpluses.
The figures, obtained by The Associated Press, mean that the $2.26 trillion surplus that the Congressional Budget Office has projected for the decade beginning in 2003 would shrink by 28 percent.
That would still leave nearly $1.64 trillion in projected federal surpluses for that period. But much of that would be needed to pay for increases both parties want for defense, homeland security, health and other programs.
Bush called for the extension of the tax cut in his State of the Union address to Congress Tuesday evening, prompting thunderous cheers from Republicans and mostly silence from Democrats.
``For the sake of long-term growth and to help Americans plan for the future, let's make these tax cuts permanent,'' Bush said.
The cost estimates come from projections that the CBO has provided to others on Capitol Hill. CBO is Congress' nonpartisan fiscal analysis group.
For the decade beginning in 2002, the CBO estimated it would cost $333 billion to make the tax cut permanent. That would reduce the $1.6 trillion surplus CBO currently projects for that period by 21 percent to nearly $1.27 trillion.
Just last week, CBO lowered its projected surplus for that decade from a $5.6 trillion surplus it estimated a year ago.
The $1.35 trillion, 10-year tax cut that Bush pushed through Congress last spring was his paramount priority at the time. The package, which reduces income tax rates, phases out the inheritance tax and makes other changes, was a major victory for the new president and congressional Republicans and came over the opposition of most Democrats.
It is scheduled to expire after 2010, a device its authors used to control its price tag and win support from moderate lawmakers. Its supporters have always assumed it would be made permanent, since tax rates would otherwise automatically snap back up in 2011 - a prospect many lawmakers hope to avoid.
Senate Budget Committee Chairman Kent Conrad, D-N.D., said he opposes making the tax cut permanent. He said that when added to his own staff's estimates of the costs of other proposals Bush made in his speech - such as for defense boosts and providing prescription drug coverage - projected surpluses would be virtually gobbled up.
``It's going to leave our country in a deep hole,'' Conrad said of Bush's plan. ``Maybe his thought is he gets out of town before the roof caves in,'' he said, referring to the end of Bush's term as president.
House Republican leaders are expected to discuss when to schedule a vote on making the tax cut permanent at a retreat for GOP lawmakers in West Virginia this week.
``Fixing the economy will certainly be a top priority early this year, and making the tax cut permanent will fit nicely into that,'' said Greg Crist, spokesman for House Majority Leader Dick Armey, R-Texas.
Ranit Schmelzer, spokeswoman for Senate Majority Leader Tom Daschle, D-S.D., said Senate Democrats ``fully expect there will be a vote on making the tax cut permanent.'' Republican senators have discussed forcing such a vote, which could be a tough one for Democrats facing close re-election races this November.
The fiscal 2003 budget Bush introduces next week will assume that the tax cut is made permanent, White House budget chief Mitchell Daniels has said. The new fiscal year begins next Oct. 1.
The bulk of CBO's estimated costs of making the tax cut permanent come from its projection that the cut would cost the government $175 billion in 2011 and $294 billion in 2012. Under current law, the tax cut would have expired in 2010. A small portion of the costs would come from keeping a handful of tax cutting provisions permanent that are currently scheduled to end in 2004 and 2005. These include some tax breaks for education and for people and corporations that pay the alternative minimum tax.
From 2003 through 2012, making the tax cut permanent would cost the government $569 billion in lost revenue, CBO estimated. In addition, it would cost the government an added $58 billion in extra interest payments on the national debt, according to the estimate.
Big talk from the small-minded
Bush's 'axis of evil' war rhetoric crumbles under scrutiny
By Michael T. Klare / Pacific News Service
02.01.02 | In one of the most dramatic moments of his State of the Union address, President George W. Bush asserted that Iran, Iraq and North Korea jointly constitute "an axis of evil" that threatens world peace. Simply by uttering this phrase -- so suggestive of the "Axis powers" (Germany, Italy and Japan) of World War II -- seemed to put the United States on a higher level of war preparation. And, while insisting that the United States is not on the verge of invasion, senior Pentagon officials suggested that they were gearing up for a possible military engagement with these countries.
Given that any such encounter would be far more costly and dangerous than the current war in Afghanistan, Americans need to ask: How real is this threat? Do we really face an "axis of evil"?
Consider first the concept of an "axis." The term suggests an alliance or confederation of states that pose a significant danger precisely because of their common alignment -- a menace greater than the sum of the parts.
There is no doubt that the leaders of Iran, Iraq and North Korea -- as with leaders from many other nations -- share a certain fear of and hostility toward the United States. But there is absolutely no indication that the three states in question have conspired together to fight the United States or to cooperate militarily. Indeed, President Bush reportedly was obliged to eliminate language from his speech suggesting such ties because U.S. intelligence agencies were unable to find any proof of a connection.
If anything, the three states are more divided than they are united. Iran and Iraq, in particular, have a long history of mutual hostility. Between 1980 and 1988 they fought a bloody war with one another, attacking each other's cities with ballistic missiles and poisoning each other's troops with chemical weapons. They remain bitter enemies today. Iran even has armed anti-government forces inside Iraq. The very idea of an "axis" between these two states is preposterous.
North Korea is no ally to Iran or Iraq. So far as is known, North Korea's only contact with the two has been as a purveyor of ballistic missile components. This is troubling, to be sure, but most American experts believe that the North Koreans' principal motive here is the pursuit of hard cash (it has no other exports to sell) rather than political solidarity. Besides, Pyongyang is believed to have sold more missile technology to our ally Pakistan than to either Iran or Iraq.
What about the threat the three pose as individual actors, outside of any alliance?
Here, Bush can make a stronger case. All three have been known to pursue the manufacture of nuclear weapons and ballistic missiles, and all three possess chemical weapons. This threat requires U.S. attention. However, there is considerable debate in Washington as to the magnitude of the threat and the best way to counter it.
Iraq was once the furthest along of the three in its development of weapons of mass destruction (WMD), pursuing nuclear, chemical and biological munitions and ballistic missile delivery systems. But the 1991 Persian Gulf conflict, along with post-conflict arms destruction by the United Nations, eradicated all major Iraqi facilities for the production of these systems. All that remains, so far as can be surmised in the absence of U.N. inspections (which were suspended in 1998), are very small pilot facilities for continuing research in these areas. Any effort by Iraq to build anything larger -- that is, anything capable of producing WMD on a large scale -- would be detected by U.S. satellites and surveillance aircraft and then destroyed by bombs and missiles.
So long as the United States continues its overflights of Iraq, the threat posed by Iraqi WMD can be kept relatively small. And the best way to eliminate this diminished threat, in the view of many experts, is to impose "smart sanctions" of the sort proposed by Secretary of State Colin Powell to compel Iraq to allow the re-entry of U.N. weapons inspectors.
North Korea has the next largest WMD capability. It, too, had sought nuclear weapons in the past, but its nuclear program was dismantled in 1994 under an agreement with the United States -- an agreement that has been faithfully observed by the North Koreans, according to all U.S. reports. Our biggest current worry is North Korea's ballistic missile program, which had been making slow but steady progress in the 1990s.
Under pressure from Russia and China, however, Pyongyang agreed in 1999 to suspend flight testing of its long-range missiles -- a necessary prerequisite for their operational deployment -- so long as the United States engaged in negotiations with North Korea on issues of mutual concern. Continuing these negotiations is thus seen by many in Washington and by most U.S. allies (including South Korea) as the best way to contain the North Korean missile threat.
Iran has the least-developed WMD program. Economic hardship has forced the government to cut back on weapons spending, and its desire for foreign trade and investment has spurred it to open its major nuclear facilities to international inspection. This has not stopped Teheran from pursuing nuclear weapons on a limited, clandestine basis, but most experts believe that it will be many years (if ever) before Iran can acquire the wherewithal to mass-produce nuclear arms.
Fewer constraints stand in the way of Iran's ballistic missile program, but here, too, a lack of funds slows its efforts. Iran is also deeply divided between pro- and anti-reform forces. Many observers (particularly in Europe) believe that the best way to diminish the Iranian threat is to support President Mohammed Khatami and other reformers in their drive to liberalize the country.
What we really face are three very isolated countries with significant problems and many constraints -- hardly an "axis of evil." Certainly the three pose a threat of WMD proliferation -- as do other countries not mentioned by the president, such as India and Pakistan -- and so the United States must take steps to diminish the threat.
But there are many ways to accomplish this without going to war. In fact, merely by threatening to go to war, the president may undermine current efforts to curb their WMD activities, such as unification talks between North and South Korea and the U.S. drive to impose smart sanctions on Iraq. The president's rousing words will hinder rather than help American efforts to make the world a safer place.
--------------------------------------------------------------------------------
Michael T. Klare (mklare@hampshire.edu) is a professor of peace and world security studies at Hampshire College in Amherst, Mass., and author of "Rogue States and Nuclear Outlaws" (Hill and Wang, 1995).
Copyright © Pacific News Service
Bush's 'axis of evil' war rhetoric crumbles under scrutiny
By Michael T. Klare / Pacific News Service
02.01.02 | In one of the most dramatic moments of his State of the Union address, President George W. Bush asserted that Iran, Iraq and North Korea jointly constitute "an axis of evil" that threatens world peace. Simply by uttering this phrase -- so suggestive of the "Axis powers" (Germany, Italy and Japan) of World War II -- seemed to put the United States on a higher level of war preparation. And, while insisting that the United States is not on the verge of invasion, senior Pentagon officials suggested that they were gearing up for a possible military engagement with these countries.
Given that any such encounter would be far more costly and dangerous than the current war in Afghanistan, Americans need to ask: How real is this threat? Do we really face an "axis of evil"?
Consider first the concept of an "axis." The term suggests an alliance or confederation of states that pose a significant danger precisely because of their common alignment -- a menace greater than the sum of the parts.
There is no doubt that the leaders of Iran, Iraq and North Korea -- as with leaders from many other nations -- share a certain fear of and hostility toward the United States. But there is absolutely no indication that the three states in question have conspired together to fight the United States or to cooperate militarily. Indeed, President Bush reportedly was obliged to eliminate language from his speech suggesting such ties because U.S. intelligence agencies were unable to find any proof of a connection.
If anything, the three states are more divided than they are united. Iran and Iraq, in particular, have a long history of mutual hostility. Between 1980 and 1988 they fought a bloody war with one another, attacking each other's cities with ballistic missiles and poisoning each other's troops with chemical weapons. They remain bitter enemies today. Iran even has armed anti-government forces inside Iraq. The very idea of an "axis" between these two states is preposterous.
North Korea is no ally to Iran or Iraq. So far as is known, North Korea's only contact with the two has been as a purveyor of ballistic missile components. This is troubling, to be sure, but most American experts believe that the North Koreans' principal motive here is the pursuit of hard cash (it has no other exports to sell) rather than political solidarity. Besides, Pyongyang is believed to have sold more missile technology to our ally Pakistan than to either Iran or Iraq.
What about the threat the three pose as individual actors, outside of any alliance?
Here, Bush can make a stronger case. All three have been known to pursue the manufacture of nuclear weapons and ballistic missiles, and all three possess chemical weapons. This threat requires U.S. attention. However, there is considerable debate in Washington as to the magnitude of the threat and the best way to counter it.
Iraq was once the furthest along of the three in its development of weapons of mass destruction (WMD), pursuing nuclear, chemical and biological munitions and ballistic missile delivery systems. But the 1991 Persian Gulf conflict, along with post-conflict arms destruction by the United Nations, eradicated all major Iraqi facilities for the production of these systems. All that remains, so far as can be surmised in the absence of U.N. inspections (which were suspended in 1998), are very small pilot facilities for continuing research in these areas. Any effort by Iraq to build anything larger -- that is, anything capable of producing WMD on a large scale -- would be detected by U.S. satellites and surveillance aircraft and then destroyed by bombs and missiles.
So long as the United States continues its overflights of Iraq, the threat posed by Iraqi WMD can be kept relatively small. And the best way to eliminate this diminished threat, in the view of many experts, is to impose "smart sanctions" of the sort proposed by Secretary of State Colin Powell to compel Iraq to allow the re-entry of U.N. weapons inspectors.
North Korea has the next largest WMD capability. It, too, had sought nuclear weapons in the past, but its nuclear program was dismantled in 1994 under an agreement with the United States -- an agreement that has been faithfully observed by the North Koreans, according to all U.S. reports. Our biggest current worry is North Korea's ballistic missile program, which had been making slow but steady progress in the 1990s.
Under pressure from Russia and China, however, Pyongyang agreed in 1999 to suspend flight testing of its long-range missiles -- a necessary prerequisite for their operational deployment -- so long as the United States engaged in negotiations with North Korea on issues of mutual concern. Continuing these negotiations is thus seen by many in Washington and by most U.S. allies (including South Korea) as the best way to contain the North Korean missile threat.
Iran has the least-developed WMD program. Economic hardship has forced the government to cut back on weapons spending, and its desire for foreign trade and investment has spurred it to open its major nuclear facilities to international inspection. This has not stopped Teheran from pursuing nuclear weapons on a limited, clandestine basis, but most experts believe that it will be many years (if ever) before Iran can acquire the wherewithal to mass-produce nuclear arms.
Fewer constraints stand in the way of Iran's ballistic missile program, but here, too, a lack of funds slows its efforts. Iran is also deeply divided between pro- and anti-reform forces. Many observers (particularly in Europe) believe that the best way to diminish the Iranian threat is to support President Mohammed Khatami and other reformers in their drive to liberalize the country.
What we really face are three very isolated countries with significant problems and many constraints -- hardly an "axis of evil." Certainly the three pose a threat of WMD proliferation -- as do other countries not mentioned by the president, such as India and Pakistan -- and so the United States must take steps to diminish the threat.
But there are many ways to accomplish this without going to war. In fact, merely by threatening to go to war, the president may undermine current efforts to curb their WMD activities, such as unification talks between North and South Korea and the U.S. drive to impose smart sanctions on Iraq. The president's rousing words will hinder rather than help American efforts to make the world a safer place.
--------------------------------------------------------------------------------
Michael T. Klare (mklare@hampshire.edu) is a professor of peace and world security studies at Hampshire College in Amherst, Mass., and author of "Rogue States and Nuclear Outlaws" (Hill and Wang, 1995).
Copyright © Pacific News Service
Energy regulators launch latest investigation of Enron pricing
Reuters News Service
NEW YORK - Federal energy regulators said they launched an investigation today into allegations that bankrupt Enron Corp. unfairly boosted wholesale power prices during California's electricity crisis last year.
The probe was sought by West Coast Democrats, including California Sen. Barbara Boxer. Boxer also demanded that the Federal Energy Regulatory Commission provide a list of meetings and telephone calls between the agency and Enron executives.
The lawmakers contend the Houston-based firm manipulated wholesale prices last year to boost its profits at the expense of California residents. The power crisis unleashed a series of blackouts and forced the state to spend billions of dollars to buy power when utilities could no longer afford to do so.
Enron, until recently the world's biggest energy trader, has denied any wrongdoing.
Pat Wood, FERC chairman, told Reuters that his staff today began examining the allegations of price manipulation by Enron.
"Staff is looking at it today," Wood said after addressing a FERC-sponsored conference in New York on power supplies in Northeastern states.
The investigation is a "joint effort" between FERC's office of general counsel and office of market tariffs and rates, he said. He declined to elaborate on the scope of the probe.
Wood, a Texas Republican, was appointed FERC chairman last summer by President George W. Bush with the support of Enron.
Democrats have raised questions about Bush's close ties to Enron and its top executives, who were big contributors to his presidential campaign. They also have asked if Enron used influence in secret meetings with Vice President Richard Cheney or FERC officials to encourage a "do-nothing" approach to the state's soaring prices.
Enron was among a dozen power generators which were major players in California's wholesale electricity market.
Prices for power sold on the state's spot market rose tenfold in the autumn of 2000 and continued at high levels through spring of 2001. The sharp increase was blamed on California's failed deregulation law, which failed to encourage the construction of new power plants and barred utilities from passing through higher wholesale costs to consumers.
The state of California is demanding some $9 billion in refunds for alleged overcharges by Enron and other marketers during the crisis. The case is pending before a FERC administrative judge with no decision due for several months.
Boxer demanded that FERC provide a list of all meetings and telephone calls between agency commissioners and Enron executives from August 2000 through June 2001. Soon after Wood joined the commission in May 2001, the agency voted to impose caps on electricity sold in the California spot market.
Wood became chairman of FERC three months later.
"Every day more and more alarming information is revealed concerning Enron's role in prolonging the California electricity crisis," Boxer said in a letter to Wood.
Boxer cited news reports that former Enron chairman Ken Lay -- who opposed any federal caps to control runaway electricity prices -- met with Vice President Dick Cheney on April 17, 2001 and discussed the California power crisis. One day later, Cheney said he opposed price caps, the senator said.
Democratic Senators Dianne Feinstein of California and Maria Cantwell of Washington prodded Wood at a Senate Energy panel hearing this week to look into any wrongdoing by Enron.
The lawmakers pointed to a study by an independent consultant showing that California prices fell by 30 percent immediately after Enron declared bankruptcy in December.
Feinstein said a "key factor" in higher power prices was Enron's ability to deal in unregulated financial derivatives in the natural gas market while controlling a large share of the market. Natural gas is widely used in California to fuel electricity generating plants.
The FERC probe into Enron's role in California power prices joins more than a half-dozen other investigations into various aspects of the company's spectacular collapse.
Several House and Senate panels are looking at Enron's complex financial accounting practices, its relationship with accounting firm Andersen, and potential securities fraud. The Securities and Exchange Commission, the Labor Department and the Justice Department also have separate probes.
There was a consensus among the three other FERC commissioners, who were also at the New York power meeting, that an investigation of Enron was warranted.
"I am perfectly happy to do a California investigation," said Nora Brownell, a Republican appointed to FERC last year. Her nomination was endorsed by Enron, which supported her open market approach as a Pennsyvlania utilities regulator.
Democrats William Massey and Linda Breathitt, commissioners named by the Clinton administration, told Reuters they also supported a probe. "I think that when there is evidence of increased volatility that arises in correlation with particular events in the market, we ought to take a look," Massey said.
Reuters News Service
NEW YORK - Federal energy regulators said they launched an investigation today into allegations that bankrupt Enron Corp. unfairly boosted wholesale power prices during California's electricity crisis last year.
The probe was sought by West Coast Democrats, including California Sen. Barbara Boxer. Boxer also demanded that the Federal Energy Regulatory Commission provide a list of meetings and telephone calls between the agency and Enron executives.
The lawmakers contend the Houston-based firm manipulated wholesale prices last year to boost its profits at the expense of California residents. The power crisis unleashed a series of blackouts and forced the state to spend billions of dollars to buy power when utilities could no longer afford to do so.
Enron, until recently the world's biggest energy trader, has denied any wrongdoing.
Pat Wood, FERC chairman, told Reuters that his staff today began examining the allegations of price manipulation by Enron.
"Staff is looking at it today," Wood said after addressing a FERC-sponsored conference in New York on power supplies in Northeastern states.
The investigation is a "joint effort" between FERC's office of general counsel and office of market tariffs and rates, he said. He declined to elaborate on the scope of the probe.
Wood, a Texas Republican, was appointed FERC chairman last summer by President George W. Bush with the support of Enron.
Democrats have raised questions about Bush's close ties to Enron and its top executives, who were big contributors to his presidential campaign. They also have asked if Enron used influence in secret meetings with Vice President Richard Cheney or FERC officials to encourage a "do-nothing" approach to the state's soaring prices.
Enron was among a dozen power generators which were major players in California's wholesale electricity market.
Prices for power sold on the state's spot market rose tenfold in the autumn of 2000 and continued at high levels through spring of 2001. The sharp increase was blamed on California's failed deregulation law, which failed to encourage the construction of new power plants and barred utilities from passing through higher wholesale costs to consumers.
The state of California is demanding some $9 billion in refunds for alleged overcharges by Enron and other marketers during the crisis. The case is pending before a FERC administrative judge with no decision due for several months.
Boxer demanded that FERC provide a list of all meetings and telephone calls between agency commissioners and Enron executives from August 2000 through June 2001. Soon after Wood joined the commission in May 2001, the agency voted to impose caps on electricity sold in the California spot market.
Wood became chairman of FERC three months later.
"Every day more and more alarming information is revealed concerning Enron's role in prolonging the California electricity crisis," Boxer said in a letter to Wood.
Boxer cited news reports that former Enron chairman Ken Lay -- who opposed any federal caps to control runaway electricity prices -- met with Vice President Dick Cheney on April 17, 2001 and discussed the California power crisis. One day later, Cheney said he opposed price caps, the senator said.
Democratic Senators Dianne Feinstein of California and Maria Cantwell of Washington prodded Wood at a Senate Energy panel hearing this week to look into any wrongdoing by Enron.
The lawmakers pointed to a study by an independent consultant showing that California prices fell by 30 percent immediately after Enron declared bankruptcy in December.
Feinstein said a "key factor" in higher power prices was Enron's ability to deal in unregulated financial derivatives in the natural gas market while controlling a large share of the market. Natural gas is widely used in California to fuel electricity generating plants.
The FERC probe into Enron's role in California power prices joins more than a half-dozen other investigations into various aspects of the company's spectacular collapse.
Several House and Senate panels are looking at Enron's complex financial accounting practices, its relationship with accounting firm Andersen, and potential securities fraud. The Securities and Exchange Commission, the Labor Department and the Justice Department also have separate probes.
There was a consensus among the three other FERC commissioners, who were also at the New York power meeting, that an investigation of Enron was warranted.
"I am perfectly happy to do a California investigation," said Nora Brownell, a Republican appointed to FERC last year. Her nomination was endorsed by Enron, which supported her open market approach as a Pennsyvlania utilities regulator.
Democrats William Massey and Linda Breathitt, commissioners named by the Clinton administration, told Reuters they also supported a probe. "I think that when there is evidence of increased volatility that arises in correlation with particular events in the market, we ought to take a look," Massey said.
Bush's fraudulent economic plan
By Robert Kuttner, 1/31/2002
AIT-AND-SWITCH is almost too kind a description for the economic portion of President Bush's State of the Union address Tuesday night. Much as he did in the 2000 presidential campaign, Bush put forth an economic message that sounded like the work of a liberal Democrat.
The centerpiece of his program, he declared, would be good jobs. But look at the fine print and hardly anything in it provides jobs, let alone good ones. Meanwhile, unemployment is nearly 6 percent and rising.
Bush's misnamed ''stimulus'' package is mostly a tax giveaway to large corporations, on the premise that corporate tax cuts encourage companies to build new factories. But as most economists will tell you, companies expand when they see customers, not when people are losing jobs in a recession.
The so-called stimulus is mainly a deferred political reward to corporate allies who loyally supported Bush's previous cut in high-bracket personal taxes last year. It has little to do with getting us out of this recession, much less with creating jobs.
Bush also talked about health security, prescription drug benefits, and patients' rights - all popular issues put forward by liberals and Democrats. The poll-tested speech rhetoric was great. But the actual proposals insult the rhetoric.
Bush's proposed ''drug benefit under Medicare'' would be limited to the poor and near-poor elderly, with a maximum of $17,000 income for a couple. Although final details of the Bush proposal have not been released, a previous draft required people to spend $6,000 on drugs out of pocket first. So very few would actually qualify for benefits.
His proposed health insurance benefit is a tax credit that would cover only part of the cost of a stripped-down HMO plan - the kind of coverage that denies people medically necessary treatments.
And his proposed patients' rights bill is the version that the HMO industry supports, not the one that gives patients the right to sue if an HMO wrongfully overrides the medical judgment of a doctor.
Bush also talked about early-childhood development. But the administration opposes more funding for daycare, much less universal pre-kindergarten and childhood enrichment programs. All these have been sacrificed on the altar of last year's tax cut and the resulting fiscal alarm. But you wouldn't know that from the rhetoric either.
Bush emphasized jobs and health security and children for the simple reason that voters are concerned about them. He tried to steal the Democrats' clothes because Democrats' position on all these issues is far closer to what voters want. But his program does little for any of these concerns.
You might think that Democrats would be screaming from the rafters at this deception and partisan larceny.
But Democrats in general are intimidated by opinion polls, confused about deficits, and reluctant to criticize a president who is popular on the war. Democrats also have other fish to fry.
House Democratic leader Dick Gephardt plans to run for president. His speech blandly declared, ''Now is not the time for finger-pointing or politics as usual'' (as if Bush's address were anything else). Gephardt spoke mainly about ''values'' and trod very carefully around criticisms of the Bush economic program.
In the Senate, leader Tom Daschle, making the best of difficult circumstances, is hobbled by a caucus that is split three ways. Some Democrats, like Ted Kennedy, actually challenge Bush's priorities and offer alternatives. Kennedy works with Bush on selective areas of common ground like education, but is quite prepared to do battle elsewhere.
Other Democrats are still obsessed with the idea of fiscal virtue. So it falls to a Republican, George Bush, to defend deficit spending in a recession, while many Democrats make the deficit, rather than the government's priorities, the main issue.
Still other Democrats are de facto Republicans on most tax and budget issues.
In other wars, the opposition party has rallied behind the wartime commander in chief - while fiercely debating domestic and economic issues. Why not now?
In fact, there is a tacit opposition program that a great many voters value - defer tax cuts for the rich, use deficits in a recession, spend the money on things people need, and produce an economic recovery this year. All that the program lacks is fewer pollsters and more leaders.
Robert Kuttner is co-editor of The American Prospect. His column appears regularly in the Globe.
By Robert Kuttner, 1/31/2002
AIT-AND-SWITCH is almost too kind a description for the economic portion of President Bush's State of the Union address Tuesday night. Much as he did in the 2000 presidential campaign, Bush put forth an economic message that sounded like the work of a liberal Democrat.
The centerpiece of his program, he declared, would be good jobs. But look at the fine print and hardly anything in it provides jobs, let alone good ones. Meanwhile, unemployment is nearly 6 percent and rising.
Bush's misnamed ''stimulus'' package is mostly a tax giveaway to large corporations, on the premise that corporate tax cuts encourage companies to build new factories. But as most economists will tell you, companies expand when they see customers, not when people are losing jobs in a recession.
The so-called stimulus is mainly a deferred political reward to corporate allies who loyally supported Bush's previous cut in high-bracket personal taxes last year. It has little to do with getting us out of this recession, much less with creating jobs.
Bush also talked about health security, prescription drug benefits, and patients' rights - all popular issues put forward by liberals and Democrats. The poll-tested speech rhetoric was great. But the actual proposals insult the rhetoric.
Bush's proposed ''drug benefit under Medicare'' would be limited to the poor and near-poor elderly, with a maximum of $17,000 income for a couple. Although final details of the Bush proposal have not been released, a previous draft required people to spend $6,000 on drugs out of pocket first. So very few would actually qualify for benefits.
His proposed health insurance benefit is a tax credit that would cover only part of the cost of a stripped-down HMO plan - the kind of coverage that denies people medically necessary treatments.
And his proposed patients' rights bill is the version that the HMO industry supports, not the one that gives patients the right to sue if an HMO wrongfully overrides the medical judgment of a doctor.
Bush also talked about early-childhood development. But the administration opposes more funding for daycare, much less universal pre-kindergarten and childhood enrichment programs. All these have been sacrificed on the altar of last year's tax cut and the resulting fiscal alarm. But you wouldn't know that from the rhetoric either.
Bush emphasized jobs and health security and children for the simple reason that voters are concerned about them. He tried to steal the Democrats' clothes because Democrats' position on all these issues is far closer to what voters want. But his program does little for any of these concerns.
You might think that Democrats would be screaming from the rafters at this deception and partisan larceny.
But Democrats in general are intimidated by opinion polls, confused about deficits, and reluctant to criticize a president who is popular on the war. Democrats also have other fish to fry.
House Democratic leader Dick Gephardt plans to run for president. His speech blandly declared, ''Now is not the time for finger-pointing or politics as usual'' (as if Bush's address were anything else). Gephardt spoke mainly about ''values'' and trod very carefully around criticisms of the Bush economic program.
In the Senate, leader Tom Daschle, making the best of difficult circumstances, is hobbled by a caucus that is split three ways. Some Democrats, like Ted Kennedy, actually challenge Bush's priorities and offer alternatives. Kennedy works with Bush on selective areas of common ground like education, but is quite prepared to do battle elsewhere.
Other Democrats are still obsessed with the idea of fiscal virtue. So it falls to a Republican, George Bush, to defend deficit spending in a recession, while many Democrats make the deficit, rather than the government's priorities, the main issue.
Still other Democrats are de facto Republicans on most tax and budget issues.
In other wars, the opposition party has rallied behind the wartime commander in chief - while fiercely debating domestic and economic issues. Why not now?
In fact, there is a tacit opposition program that a great many voters value - defer tax cuts for the rich, use deficits in a recession, spend the money on things people need, and produce an economic recovery this year. All that the program lacks is fewer pollsters and more leaders.
Robert Kuttner is co-editor of The American Prospect. His column appears regularly in the Globe.
Ace in the Hole
© January 31, 2002
The Daily Brew
Enron might be getting all the press, but there is another Congressional investigation revving up that promises to be far more treacherous for the Bush Administration. Over the course of the past several weeks, heads of both the House and Senate intelligence committees have been meeting to plan a bipartisan House-Senate investigation into the events of September 11. While revelations from the Enron probe could be embarrassing to the White House, revelations concerning the terrorist attack could prove to be devastating.
Thanks to the saturation coverage by the corporate media, the public is already well versed in the basic facts likely to be uncovered in the various Enron hearings. Will anyone really be surprised to learn that Enron executives had unprecedented access to White House officials as they formulated their energy plan? Will anyone be shocked if it turns out that the energy plan was heavily tilted towards the interests of corporate energy concerns, or that it favored the unregulated markets that made energy companies rich over the public power that kept the lights on in LA, while blackouts rolled across the rest of California?
The fact is, the Enron cat is already out of the bag. The public already understands that the Bush administration was letting the crooks at Enron write federal energy policy, right up until the time they ran Enron into the ground. The public also understands that when Enron's own criminal conduct eventually caught up to it, the Bush administration realized their good friends had become toxic waste, cut their ties, and let the implosion run its course. Given what is already known, the Enron hearings aren't likely to cause any damage to the Bush administration that hasn't already happened. So why are Bush and Cheney both so eager to fight the lawsuit looming with the GAO, seeking records of their contacts with Enron?
It can't be because they perceive some political benefit. They read the polls. They understand that the American public believes they are hiding something. They know that the longer they fight to keep their records secret, the more guilty they look. They understand that in the long run, the "principle" they are pushing on the Sunday talk shows; that congressional oversight is an unwarranted intrusion into their right to make public policy unfettered by any accountability to the public, isn't going to hold water. So why is the White House so willing to take the slings and arrows for Enron, when the damage from the scandal has already been done?
Perhaps they are simply laying the groundwork for fighting off a larger scandal.
The American public remains blissfully unaware the Bush administration's policies concerning Afghanistan and Osama bin Laden just prior to September 11. Few Americans understand the organizational effort to fight Osama bin Laden and his Al Queda network that was put in place under Clinton, and how changes by the incoming Bush administration impacted that effort. At the same time, a series of very serious allegations concerning changes to these policies have been widely reported in Europe. With a few exceptions, the US corporate media has so far provided very little coverage of these reports. Hearings into these events could change that coverage dramatically.
The reports indicate that, prior to September 11, the Bush administration was eager to do business with the Taliban. Specifically, the Bush administration wanted to see an oil pipeline built across Afghanistan, unlocking the vast oil and gas reserves surrounding the Caspian Sea. In their zeal to open these reserves, reports indicate that the Bush administration impeded the ongoing FBI manhunt for Osama bin Laden, who the US had been agressively targeting in the wake of the attacks on the USS Cole. The reports further indicate that just prior to the attacks, the Taliban were given an ultimatum; the US was either going to give them a "carpet of gold, or a carpet of bombs." Shortly thereafter, the talks are said to have broken down, and the events of September 11 unfolded.
If these allegations are aired in Congressional hearings on CSPAN, the Bush administration will have a much bigger scandal on its hands than Enron. If these allegations are proven to be true, the Bush energy policy was much more than crony capitalism and a massive payback to the multi-national corporations that paid for Bush's ascension to the White House. If true, these allegations would show that Bush's energy policy led directly and predictably to the most devastating terrorist attack in history, an attack that caused billions in property damage and cost thousands of innocent Americans their lives.
So when President Bush personally asked Senate Majority Leader Tom Daschle Tuesday to limit the congressional investigation into the events of September 11, there was a lot more at stake than a corrupt company that ripped off its employees. And when Senator Robert Torricelli of New Jersey called for a broad and far reaching investigation, saying "We do not meet our responsibilities to the American people if we do not take an honest look at the federal government and all of its agencies and let the country know what went wrong. The best assurance that there's not another terrorist attack on the United States is not simply to hire more federal agents or spend more money. It's to take an honest look at what went wrong. Who or what failed? There's an explanation owed to the American people;" the stakes became astronomical.
In the end, the Bush administration's decision to fight the GAO ensures that the limits of Congress' power to investigate both the Enron debacle, and the events leading up to September 11, will be decided by the Supreme Court. At a minimum, this will buy the Bush administration time. It also means that the ultimate arbiters of what information, if any, the Bush administration must make public will be decided by the same five jurists who put Bush in the White House, holding that the very act of counting American ballots would have caused Bush "irreparable harm." Perhaps this Court, the Bush administration's ace in the hole, is what makes them think the fight is worth it.
© January 31, 2002
The Daily Brew
Enron might be getting all the press, but there is another Congressional investigation revving up that promises to be far more treacherous for the Bush Administration. Over the course of the past several weeks, heads of both the House and Senate intelligence committees have been meeting to plan a bipartisan House-Senate investigation into the events of September 11. While revelations from the Enron probe could be embarrassing to the White House, revelations concerning the terrorist attack could prove to be devastating.
Thanks to the saturation coverage by the corporate media, the public is already well versed in the basic facts likely to be uncovered in the various Enron hearings. Will anyone really be surprised to learn that Enron executives had unprecedented access to White House officials as they formulated their energy plan? Will anyone be shocked if it turns out that the energy plan was heavily tilted towards the interests of corporate energy concerns, or that it favored the unregulated markets that made energy companies rich over the public power that kept the lights on in LA, while blackouts rolled across the rest of California?
The fact is, the Enron cat is already out of the bag. The public already understands that the Bush administration was letting the crooks at Enron write federal energy policy, right up until the time they ran Enron into the ground. The public also understands that when Enron's own criminal conduct eventually caught up to it, the Bush administration realized their good friends had become toxic waste, cut their ties, and let the implosion run its course. Given what is already known, the Enron hearings aren't likely to cause any damage to the Bush administration that hasn't already happened. So why are Bush and Cheney both so eager to fight the lawsuit looming with the GAO, seeking records of their contacts with Enron?
It can't be because they perceive some political benefit. They read the polls. They understand that the American public believes they are hiding something. They know that the longer they fight to keep their records secret, the more guilty they look. They understand that in the long run, the "principle" they are pushing on the Sunday talk shows; that congressional oversight is an unwarranted intrusion into their right to make public policy unfettered by any accountability to the public, isn't going to hold water. So why is the White House so willing to take the slings and arrows for Enron, when the damage from the scandal has already been done?
Perhaps they are simply laying the groundwork for fighting off a larger scandal.
The American public remains blissfully unaware the Bush administration's policies concerning Afghanistan and Osama bin Laden just prior to September 11. Few Americans understand the organizational effort to fight Osama bin Laden and his Al Queda network that was put in place under Clinton, and how changes by the incoming Bush administration impacted that effort. At the same time, a series of very serious allegations concerning changes to these policies have been widely reported in Europe. With a few exceptions, the US corporate media has so far provided very little coverage of these reports. Hearings into these events could change that coverage dramatically.
The reports indicate that, prior to September 11, the Bush administration was eager to do business with the Taliban. Specifically, the Bush administration wanted to see an oil pipeline built across Afghanistan, unlocking the vast oil and gas reserves surrounding the Caspian Sea. In their zeal to open these reserves, reports indicate that the Bush administration impeded the ongoing FBI manhunt for Osama bin Laden, who the US had been agressively targeting in the wake of the attacks on the USS Cole. The reports further indicate that just prior to the attacks, the Taliban were given an ultimatum; the US was either going to give them a "carpet of gold, or a carpet of bombs." Shortly thereafter, the talks are said to have broken down, and the events of September 11 unfolded.
If these allegations are aired in Congressional hearings on CSPAN, the Bush administration will have a much bigger scandal on its hands than Enron. If these allegations are proven to be true, the Bush energy policy was much more than crony capitalism and a massive payback to the multi-national corporations that paid for Bush's ascension to the White House. If true, these allegations would show that Bush's energy policy led directly and predictably to the most devastating terrorist attack in history, an attack that caused billions in property damage and cost thousands of innocent Americans their lives.
So when President Bush personally asked Senate Majority Leader Tom Daschle Tuesday to limit the congressional investigation into the events of September 11, there was a lot more at stake than a corrupt company that ripped off its employees. And when Senator Robert Torricelli of New Jersey called for a broad and far reaching investigation, saying "We do not meet our responsibilities to the American people if we do not take an honest look at the federal government and all of its agencies and let the country know what went wrong. The best assurance that there's not another terrorist attack on the United States is not simply to hire more federal agents or spend more money. It's to take an honest look at what went wrong. Who or what failed? There's an explanation owed to the American people;" the stakes became astronomical.
In the end, the Bush administration's decision to fight the GAO ensures that the limits of Congress' power to investigate both the Enron debacle, and the events leading up to September 11, will be decided by the Supreme Court. At a minimum, this will buy the Bush administration time. It also means that the ultimate arbiters of what information, if any, the Bush administration must make public will be decided by the same five jurists who put Bush in the White House, holding that the very act of counting American ballots would have caused Bush "irreparable harm." Perhaps this Court, the Bush administration's ace in the hole, is what makes them think the fight is worth it.
The perils of economic fundamentalism
By Robert Fisher
February 1, 2002
I AM LESS sympathetic than most people as to the pain Enron executives have foisted on their employees. The Enron middle managers I met one night prided themselves on keeping at bay the very government regulators who might have saved their pensions.
A few years ago, when I was teaching at the University of Houston, I was invited to participate in a "Great Conversations" fund-raiser. 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.
They believed and uttered the most conservative clichés. Their roots spanned from Utah to the United Kingdom, but they put forward what seemed an inflexible party line: On the subject of poverty, they asserted that poor people were poor because of their own failings. What distinguished the poor from the affluent was that the latter were risk-takers. If the poor were risk-takers, they wouldn't be poor.
Oh, really? What risks do the upper middle class take that compare to living in a slum, or to strategizing each day about making ends meet, protecting children, battling illness without health care?
These Enron executives also argued that there was no role for the public sector except in national defense. Look at the U.S. Postal Service, they said, and the public schools, public libraries and public parks: The public sector was corrupt, inefficient and without incentive. An unimpeded private sector could do everything better, from running prisons to delivering mail, from schooling children to making national parks profitable.
I was stunned - not by the conservative arguments, which I'd heard before, but by the uniformity of the managers' voices. Their narrow view of the world left no room for other ideas, even moderate ones, about the need in capitalist societies for even a modest role for the public sector, not to mention public regulation of the private sector.
I was sitting at a table with economic fundamentalists, adherents to a single-minded ideology of libertarian economics, worshipers in the church of the free market, readers of the gospel according to economist Milton Friedman and then-Enron CEO Ken Lay.
With daily revelations on the continuing debacle at Enron, not to mention the external threat we face from fanatical religious fundamentalism abroad, that evening seems even more haunting in retrospect.
I am horrified by the economic disaster perpetrated by Enron on the people of Houston and on the world. I am horrified that what seems like an offshore pyramiding scheme financed and influenced so much of American politics.
But I am not surprised it all started in Houston.
Houston is the classic free-enterprise city. The fourth-largest city in the nation, it sees itself as a zoning-free Mecca for developers.
It has the worst air pollution in the United States - in response to which local business executives and former Gov. George W. Bush proposed letting oil companies self-regulate their worst sources of pollution.
Of course, free enterprise also means trying to cut business costs and risks.
So Houston owes much of its economic success to big government projects, such as the Houston Ship Channel, one of the busiest waterways in the United States; NASA's Johnson Space Center; and most recently, the baseball (Enron Field) and football-rodeo (Reliant) stadiums.
But economic fundamentalism is not limited to Houston. Economic fundamentalism - contemporary laissez-faire economics - is seen worldwide as common sense ever since the Reagan/Thatcher era. Like any fundamentalism, the concept is dangerous because it is too simplistic.
You don't have to be John Maynard Keynes to understand the essential place in our economic life for public regulation and initiatives. You don't have to be Karl Marx to understand the need in our post-Sept. 11 world for a vision of public life more complex than simply serving the bottom line.
Best-case scenario? Enron's collapse will break the economic fundamentalist stranglehold on our cities and nation. Now, that would be a great conversation.
Robert Fisher is professor and director of the urban and community studies program at the University of Connecticut. This article first appeared in The Hartford Courant, a Tribune Publishing company.
Copyright © 2002, The Baltimore Sun
By Robert Fisher
February 1, 2002
I AM LESS sympathetic than most people as to the pain Enron executives have foisted on their employees. The Enron middle managers I met one night prided themselves on keeping at bay the very government regulators who might have saved their pensions.
A few years ago, when I was teaching at the University of Houston, I was invited to participate in a "Great Conversations" fund-raiser. 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.
They believed and uttered the most conservative clichés. Their roots spanned from Utah to the United Kingdom, but they put forward what seemed an inflexible party line: On the subject of poverty, they asserted that poor people were poor because of their own failings. What distinguished the poor from the affluent was that the latter were risk-takers. If the poor were risk-takers, they wouldn't be poor.
Oh, really? What risks do the upper middle class take that compare to living in a slum, or to strategizing each day about making ends meet, protecting children, battling illness without health care?
These Enron executives also argued that there was no role for the public sector except in national defense. Look at the U.S. Postal Service, they said, and the public schools, public libraries and public parks: The public sector was corrupt, inefficient and without incentive. An unimpeded private sector could do everything better, from running prisons to delivering mail, from schooling children to making national parks profitable.
I was stunned - not by the conservative arguments, which I'd heard before, but by the uniformity of the managers' voices. Their narrow view of the world left no room for other ideas, even moderate ones, about the need in capitalist societies for even a modest role for the public sector, not to mention public regulation of the private sector.
I was sitting at a table with economic fundamentalists, adherents to a single-minded ideology of libertarian economics, worshipers in the church of the free market, readers of the gospel according to economist Milton Friedman and then-Enron CEO Ken Lay.
With daily revelations on the continuing debacle at Enron, not to mention the external threat we face from fanatical religious fundamentalism abroad, that evening seems even more haunting in retrospect.
I am horrified by the economic disaster perpetrated by Enron on the people of Houston and on the world. I am horrified that what seems like an offshore pyramiding scheme financed and influenced so much of American politics.
But I am not surprised it all started in Houston.
Houston is the classic free-enterprise city. The fourth-largest city in the nation, it sees itself as a zoning-free Mecca for developers.
It has the worst air pollution in the United States - in response to which local business executives and former Gov. George W. Bush proposed letting oil companies self-regulate their worst sources of pollution.
Of course, free enterprise also means trying to cut business costs and risks.
So Houston owes much of its economic success to big government projects, such as the Houston Ship Channel, one of the busiest waterways in the United States; NASA's Johnson Space Center; and most recently, the baseball (Enron Field) and football-rodeo (Reliant) stadiums.
But economic fundamentalism is not limited to Houston. Economic fundamentalism - contemporary laissez-faire economics - is seen worldwide as common sense ever since the Reagan/Thatcher era. Like any fundamentalism, the concept is dangerous because it is too simplistic.
You don't have to be John Maynard Keynes to understand the essential place in our economic life for public regulation and initiatives. You don't have to be Karl Marx to understand the need in our post-Sept. 11 world for a vision of public life more complex than simply serving the bottom line.
Best-case scenario? Enron's collapse will break the economic fundamentalist stranglehold on our cities and nation. Now, that would be a great conversation.
Robert Fisher is professor and director of the urban and community studies program at the University of Connecticut. This article first appeared in The Hartford Courant, a Tribune Publishing company.
Copyright © 2002, The Baltimore Sun
--------------------------------------------------------------------------------
HoustonChronicle.com -- http://www.HoustonChronicle.com | Section: Business
Feb. 1, 2002, 12:12PM
Lay gave list of favored names to White House for energy panel By MARCY GORDON
Associated Press
WASHINGTON -- A few months after the White House got a list of recommended candidates from former Enron Chairman Kenneth Lay, a friend and backer of President Bush, two of them were appointed to a federal energy commission.
Lay gave the list of names to Clay Johnson, Bush's personnel director, White House spokeswoman Anne Womack said Thursday. Among the eight or so names were Pat Wood, now chairman of the Federal Energy Regulatory Commission, and Nora Brownell, a member of the commission.
"It was one of many, many recommendations that he (Johnson) received" from industry executives, members of Congress and state officials, Womack said in an interview.
Confirmation of Lay's recommendations to the White House last spring comes as congressional panels investigate the relationship between Houston-based Enron Corp., which filed for bankruptcy Dec. 2, and the Bush administration.
Bush will ask Congress to revamp pension laws to give workers greater flexibility to diversify their company savings accounts, a response to the Enron failure that cost workers their life's savings and created a political problem for the White House.
The Justice Department and the Securities and Exchange Commission are investigating Enron's complex accounting and what role its auditor, Arthur Andersen, played in the company's collapse. Andersen has acknowledged destroying Enron-related documents.
A senator leading an investigation said Thursday that Enron had not cooperated in providing important information on the complex web of partnerships used by the company to conceal massive debts. The company's attorney said it doesn't have the documents sought.
As head of a major campaign donor, Enron, wielding significant influence in Washington, Lay enjoyed access to top government officials of both parties. The White House has acknowledged that Lay met once privately last year with Vice President Dick Cheney, who headed a task force that formulated the administration's national energy policy.
Lay disclosed the existence of the list of Enron favorites in an interview being broadcast today on PBS' "NOW with Bill Moyers."
"I brought a list, we certainly presented a list. ... As I recall, I signed a letter which in fact had some recommendations as to people that we thought would be good (FERC) commissioners," Lay said in the interview, which was taped in May but never aired.
Bush, as Texas governor, had appointed Wood in 1995 as head of the state's Public Utilities Commission. Wood has been an advocate of market-oriented regulation of utilities, a position espoused by Enron, a big, aggressive energy trader that had become a favorite of Wall Street.
Bush appointed Wood as FERC chairman in August, replacing Curt Hebert.
Hebert said in the PBS interview that Lay "has asked me to take certain positions but I've had those conversations with Ken Lay for a long time. And have disagreed with him for a long time."
Brownell, a member of Pennsylvania's Public Utility Commission, was nominated by Bush in March. During her time on the state commission, Brownell helped oversee Pennsylvania's electricity deregulation.
Lay will be the star witness next week as a blizzard of hearings by several congressional panels put the Enron collapse under intense public scrutiny.
Enron officials "just simply have not cooperated" in providing the documents sought, said Sen. Byron Dorgan, D-N.D., chairman of a Senate Commerce subcommittee. "We again renew our request."
An estimated 3,000 partnerships, some with names of "Star Wars" characters such as Jedi, were created by Enron, which took a 97 percent stake in each of them and brought in outside investors for the remainder. The partnerships were kept off Enron's books and helped create the accounting debacle that pushed the company into the biggest U.S. corporate bankruptcy filing ever.
Dorgan said the committee had no immediate plan to subpoena the documents from the company.
Robert Bennett, a Washington attorney representing Enron, said, "We have been fully cooperating with them."
Bennett said the committee has asked Enron for documents that the company doesn't have and must be obtained from the partnerships or people representing them.
"We are exercising enormous good faith in cooperating with that committee," the attorney said in a telephone interview.
In a related dispute between Congress and the Bush administration, investigators at the General Accounting Office told the White House on Wednesday they would sue to make officials identify the industry executives, including some from Enron, who met last year with Cheney's energy task force.
Associated Press White House Correspondent Ron Fournier contributed to this report.
--------------------------------------------------------------------------------
HoustonChronicle.com -- http://www.HoustonChronicle.com | Section: Business
This article is: http://www.chron.com/cs/CDA/story.hts/topstory2/1235498
MSN / Slate
politics
Cheney Channels Clinton
The veep's lectures, legalisms, and lies.
By Chris Suellentrop
Posted Wednesday, January 30, 2002, at 3:35 PM PT
When Dick Cheney accepted the GOP nomination for vice president, he vowed that the Bush administration would be more forthright than its predecessor: "They will offer more lectures, and legalisms, and carefully worded denials. We offer another way—a better way—and a stiff dose of truth." It's a promise worth remembering as Cheney confronts the first-ever lawsuit filed against the executive branch by the General Accounting Office, the investigative arm of Congress. So far, Cheney's response has been to hide behind a stiff dose of lectures, legalisms, and lies.
First, the big-time, major-league whopper: When Cheney made the talk show rounds this past Sunday, he asserted not once but twice that the GAO had abandoned its quest to acquire information about Cheney's secretive Energy Policy Development Group in August. Cheney implied that the GAO was wowed by his provocative legal strategy.
Here's Cheney on ABC's This Week: "When we took this position last August, the GAO sort of backed off. They, in effect, then said, 'Well, maybe we're not going to pursue it at this point.' " He repeated the assertion on Fox News Sunday: "As of last August, we made that decision to go to court. We'd come to an ultimate showdown, and we concluded that, in fact, we were prepared to go to court if that's what was necessary. At that point, the GAO backed off, and they, in effect, sort of put everything in abeyance."
But the GAO was spoiling for a fight well into September, and Cheney knew it. U.S. Comptroller Gen. David Walker, the head of the GAO, has been consistent: The terrorist attacks on the World Trade Center and the Pentagon, not the power of Cheney's legal arguments, swayed the GAO to put its lawsuit on hold. In case Cheney didn't understand, Walker spelled it out for him on Nov. 9 when he told the Washington Post, "On Sept. 10, there was virtually no question we were headed to court."
Now, the lectures: The White House says that turning over the information would imperil "the right of the people in our country to petition their government, to talk to their government," as White House spokesman Ari Fleischer told the press. Cheney himself protests that disclosing such conversations would threaten the administration's ability to receive "unvarnished advice."
But it strains credulity to believe that this administration prizes the confidentiality of policy recommendations from private individuals as a matter of highest principle. When Robert Rubin gave the Treasury Department advice that made Democrats look bad, the Bush administration felt no qualms about exposing it to the sunshine. And when Ken Lay gave advice to Don Evans and Paul O'Neill—advice that Evans and O'Neill ignored, making Bush look good—the administration disclosed that, too. Why didn't those leaks threaten the administration's capacity to receive the bluntest advice possible? And what's different about the advice that Lay or other energy execs gave Cheney and his task force? (In case you're still not suspicious, Cheney threw in a "carefully worded denial" for good measure. When Fox News' Tony Snow asked Cheney if anything in the energy plan "was done specifically for or at the behest of Enron," Cheney responded, "I can't say. I'm sure [Enron] supported many parts of it.")
Even many conservatives aren't buying the veep's line. Republicans such as Robert Novak have urged Cheney to come clean. The lone stalwart in the vast right-wing conspiracy has been the Wall Street Journal op-ed page, which Tuesday defended the administration's principled stand to preserve "the power of the executive branch to deliberate in confidence." True, the Journal has long stood up for executive power against what it considers unconstitutional statutes. But when it was Hillary Clinton and her health-care task force who wanted to deliberate in confidence, the Journal shrieked that the executive branch couldn't ignore the laws of the land as merely "inconvenient details." (The Washington Post compared the Clinton and Cheney lawsuits today.)
Finally, Cheney's legalisms: Cheney plans to object to the GAO suit on a technicality, CNN reports. The GAO's formal "demand letter" in July that kicked this controversy into high gear asked Cheney for his energy task force's minutes and notes, among other things. But the GAO dropped its request for minutes and notes in August when it sent its follow-up "non-compliance" report to Congress and the president. Now the White House says the GAO needs to issue an entirely different demand letter and non-compliance report if it wants to sue for everything but the minutes and notes. But all that would do is delay the lawsuit by 40 days. Why not just get it over with?
All of this evading and obfuscating is made stranger by the fact that Cheney all but asked for this lawsuit. The Bush administration could have rebuffed the GAO simply by issuing what's known as a "certification letter," informing Walker that turning over the information would substantially impair the operations of government. Goodbye, GAO lawsuit. That's what Cheney did in 1990, when he was faced with a similar dispute as secretary of defense. The White House sent the certification letter, and the GAO had to go home empty-handed. That's the law. (Click here for an "Explainer" that describes the process.)
This time, by missing the deadline for issuing the letter, Cheney looked like he wanted to get sued. He even told Fox News Sunday as much when he said, "As of last August, we made that decision to go to court." And Cheney spokeswoman Juleanne Glover Weiss hinted to me in September that the administration's refusal to issue a certification letter was part of a larger legal strategy. "Sending a letter of certification would concede that they have the authority to request that information," she said.
Why invite an unprecedented lawsuit? Hard to say. Maybe Cheney thinks the legal return justifies the political risk. Winning a court battle would wall off a host of congressional inquiries. Or maybe Cheney thinks it's the best way to lose. Assuming the information will eventually come out, Cheney may prefer to have his hand forced by the relatively anonymous GAO than by a congressional subpoena.
Right now, Cheney isn't telling. Why isn't that a surprise?
politics
Cheney Channels Clinton
The veep's lectures, legalisms, and lies.
By Chris Suellentrop
Posted Wednesday, January 30, 2002, at 3:35 PM PT
When Dick Cheney accepted the GOP nomination for vice president, he vowed that the Bush administration would be more forthright than its predecessor: "They will offer more lectures, and legalisms, and carefully worded denials. We offer another way—a better way—and a stiff dose of truth." It's a promise worth remembering as Cheney confronts the first-ever lawsuit filed against the executive branch by the General Accounting Office, the investigative arm of Congress. So far, Cheney's response has been to hide behind a stiff dose of lectures, legalisms, and lies.
First, the big-time, major-league whopper: When Cheney made the talk show rounds this past Sunday, he asserted not once but twice that the GAO had abandoned its quest to acquire information about Cheney's secretive Energy Policy Development Group in August. Cheney implied that the GAO was wowed by his provocative legal strategy.
Here's Cheney on ABC's This Week: "When we took this position last August, the GAO sort of backed off. They, in effect, then said, 'Well, maybe we're not going to pursue it at this point.' " He repeated the assertion on Fox News Sunday: "As of last August, we made that decision to go to court. We'd come to an ultimate showdown, and we concluded that, in fact, we were prepared to go to court if that's what was necessary. At that point, the GAO backed off, and they, in effect, sort of put everything in abeyance."
But the GAO was spoiling for a fight well into September, and Cheney knew it. U.S. Comptroller Gen. David Walker, the head of the GAO, has been consistent: The terrorist attacks on the World Trade Center and the Pentagon, not the power of Cheney's legal arguments, swayed the GAO to put its lawsuit on hold. In case Cheney didn't understand, Walker spelled it out for him on Nov. 9 when he told the Washington Post, "On Sept. 10, there was virtually no question we were headed to court."
Now, the lectures: The White House says that turning over the information would imperil "the right of the people in our country to petition their government, to talk to their government," as White House spokesman Ari Fleischer told the press. Cheney himself protests that disclosing such conversations would threaten the administration's ability to receive "unvarnished advice."
But it strains credulity to believe that this administration prizes the confidentiality of policy recommendations from private individuals as a matter of highest principle. When Robert Rubin gave the Treasury Department advice that made Democrats look bad, the Bush administration felt no qualms about exposing it to the sunshine. And when Ken Lay gave advice to Don Evans and Paul O'Neill—advice that Evans and O'Neill ignored, making Bush look good—the administration disclosed that, too. Why didn't those leaks threaten the administration's capacity to receive the bluntest advice possible? And what's different about the advice that Lay or other energy execs gave Cheney and his task force? (In case you're still not suspicious, Cheney threw in a "carefully worded denial" for good measure. When Fox News' Tony Snow asked Cheney if anything in the energy plan "was done specifically for or at the behest of Enron," Cheney responded, "I can't say. I'm sure [Enron] supported many parts of it.")
Even many conservatives aren't buying the veep's line. Republicans such as Robert Novak have urged Cheney to come clean. The lone stalwart in the vast right-wing conspiracy has been the Wall Street Journal op-ed page, which Tuesday defended the administration's principled stand to preserve "the power of the executive branch to deliberate in confidence." True, the Journal has long stood up for executive power against what it considers unconstitutional statutes. But when it was Hillary Clinton and her health-care task force who wanted to deliberate in confidence, the Journal shrieked that the executive branch couldn't ignore the laws of the land as merely "inconvenient details." (The Washington Post compared the Clinton and Cheney lawsuits today.)
Finally, Cheney's legalisms: Cheney plans to object to the GAO suit on a technicality, CNN reports. The GAO's formal "demand letter" in July that kicked this controversy into high gear asked Cheney for his energy task force's minutes and notes, among other things. But the GAO dropped its request for minutes and notes in August when it sent its follow-up "non-compliance" report to Congress and the president. Now the White House says the GAO needs to issue an entirely different demand letter and non-compliance report if it wants to sue for everything but the minutes and notes. But all that would do is delay the lawsuit by 40 days. Why not just get it over with?
All of this evading and obfuscating is made stranger by the fact that Cheney all but asked for this lawsuit. The Bush administration could have rebuffed the GAO simply by issuing what's known as a "certification letter," informing Walker that turning over the information would substantially impair the operations of government. Goodbye, GAO lawsuit. That's what Cheney did in 1990, when he was faced with a similar dispute as secretary of defense. The White House sent the certification letter, and the GAO had to go home empty-handed. That's the law. (Click here for an "Explainer" that describes the process.)
This time, by missing the deadline for issuing the letter, Cheney looked like he wanted to get sued. He even told Fox News Sunday as much when he said, "As of last August, we made that decision to go to court." And Cheney spokeswoman Juleanne Glover Weiss hinted to me in September that the administration's refusal to issue a certification letter was part of a larger legal strategy. "Sending a letter of certification would concede that they have the authority to request that information," she said.
Why invite an unprecedented lawsuit? Hard to say. Maybe Cheney thinks the legal return justifies the political risk. Winning a court battle would wall off a host of congressional inquiries. Or maybe Cheney thinks it's the best way to lose. Assuming the information will eventually come out, Cheney may prefer to have his hand forced by the relatively anonymous GAO than by a congressional subpoena.
Right now, Cheney isn't telling. Why isn't that a surprise?
MSN / Slate
the earthling
The Axis of Incoherence
By Robert Wright
Posted Friday, February 1, 2002, at 8:46 AM PT
In the days since President Bush's State of the Union address, observers have struggled to make sense of the phrase "axis of evil." Did Bush, in applying it to Iran, Iraq, and North Korea, mean to compare them to the Axis powers of World War II? No, explained Ari Fleischer, the phrase was "more rhetorical than historical." Well, then, did Bush at least mean to imply what the word "axis" generically means—that there is some kind of coordination among these three nations in their evildoing? No, admitted even Bush cheerleader Daniel Pipes, there is no such relationship among Iran, Iraq, and North Korea.
So what does the phrase "axis of evil" mean? I can think of three interpretations.
1) It means Bush is on a mission from God. Not long after Sept. 11, it was reported that Bush had found new "clarity" about his calling in life and was interpreting his place in history in religious terms. It wouldn't surprise me if he thinks that part of his mission is to teach a Godless society about moral absolutes—to re-inject the words "good" and "evil" into serious discourse. And, of course, if you take the word "evil" really seriously, the "axis" part follows; the various manifestations of evil are inherently coordinated, since they all have the same source. Iran and Iraq may hate each other, but they're both on Satan's team.
2) It means Bush is drunk on serotonin. People, like other animals, tend to do more of what they get rewarded for. In September, Bush gave a ringing, bellicose speech, which was lauded for its moral clarity, and then launched a war that was lauded for its brevity. Naturally, the thing to do next is give a more ringing, more bellicose speech. In this interpretation, the phrase "axis of evil" had a resonance that overrode its seeming incoherence—it was like what we in journalism refer to as "a fact too good to check."
3) It means Donald Rumsfeld and his deputy, Paul Wolfowitz, have masterfully thwarted logic and poetic justice.
Before 9/11, Rumsfeld and Wolfowitz were overwhelmingly concerned with threats coming from nation-states, in particular "rogue states." To combat these threats, they wanted to build a missile-defense system. Some critics thought that, actually, the real nuclear threat would come from terrorists, not nation-states. To pick one such critic out of a hat: I wrote in this space last May, "I live in the Washington, D.C., area, a few miles from ground zero. So I'm all for spending money to reduce the chances that the United States will be subject to nuclear attack. But missile defense is just not the smart way to spend that money."
Sept. 11 underscored the threat of attacks from terrorists, as opposed to nation-states. So you might think it would have undermined Rumsfeld's and Wolfowitz's credibility. It didn't—partly for reasons that still mystify me, but mainly for reasons that don't. Namely: We were now at war, and war naturally puts wind in the sails of the secretary of defense, especially when it results in early victory. So Rumsfeld and Wolfowitz now have great influence, and they've used it to resurrect their pre-9/11 agenda. Thus did "rogue states" become the "axis of evil."
Of course, the focus on "rogue states" isn't completely bogus. It's true that 9/11 underscored the dangers of leaving nuclear and biological weapons in the hands of states that might give them to terrorists who could sneak them into the United States. But Bush's "axis of evil" speech went beyond that legitimate logic; it included a prominent plug for missile defense—evidence of the nefarious Rumsfeld-Wolfowitz axis at work.
This interpretation of the "axis of evil" remark raises a conundrum: If Bush's ultimatum is for real—if we are one way or another going to strip the world's three menacing "rogue states" of any weapons of mass destruction—then why will we still need missile defense in the end? But people who ask questions like that are the kind of people who waste their time asking why you would call something an "axis" if it isn't one.
Which of these three interpretations do I buy? I actually think all three factors play a role, and together constitute an "axis of incoherence." (In my metaphysics, all incoherence has a common, primordial source, and is hence connected—and humankind's mission is to rid the world of it, a project that is, um, still underway.) Yet it isn't the incoherence that most bothers me. And it isn't really the possibility of war that bothers me. (I could live with attacking Iraq if, as I've urged, we did it in a particular way.) What bothers me is the evidence that Bush is ill-suited to this moment in history.
Do you remember the days right after Sept. 11? When liberal internationalist journalists hopefully asserted that the Bush administration could no longer ignore America's inherent involvement with the world, could no longer afford unilateralism, could no longer disdain world opinion? They even scrounged around and found evidence that Bush was getting the picture. For example: He was "consulting with allies." (Imagine!)
So much for that story line. "Axis of evil" was a phrase manufactured for domestic consumption, with disregard for the existence of a) our allies; b) those particular allies that have to deal with these "rogue states" up close and personal, such as South Korea; c) any terrorist recruiters who can turn Bush's more florid turns of phrase into effective propaganda. Bush could have delivered a warning to Iran, Iraq, and North Korea just as forcefully without using a phrase so incendiary. That the world's opinion of America matters—certainly one of the top few lessons of 9/11—continues to elude our leader.
Bush said in his State of the Union address, "We are protected from attack only by vigorous action abroad, and increased vigilance at home." Actually, the truth is much more complicated than that. But I suppose this is no time to split hairs.
the earthling
The Axis of Incoherence
By Robert Wright
Posted Friday, February 1, 2002, at 8:46 AM PT
In the days since President Bush's State of the Union address, observers have struggled to make sense of the phrase "axis of evil." Did Bush, in applying it to Iran, Iraq, and North Korea, mean to compare them to the Axis powers of World War II? No, explained Ari Fleischer, the phrase was "more rhetorical than historical." Well, then, did Bush at least mean to imply what the word "axis" generically means—that there is some kind of coordination among these three nations in their evildoing? No, admitted even Bush cheerleader Daniel Pipes, there is no such relationship among Iran, Iraq, and North Korea.
So what does the phrase "axis of evil" mean? I can think of three interpretations.
1) It means Bush is on a mission from God. Not long after Sept. 11, it was reported that Bush had found new "clarity" about his calling in life and was interpreting his place in history in religious terms. It wouldn't surprise me if he thinks that part of his mission is to teach a Godless society about moral absolutes—to re-inject the words "good" and "evil" into serious discourse. And, of course, if you take the word "evil" really seriously, the "axis" part follows; the various manifestations of evil are inherently coordinated, since they all have the same source. Iran and Iraq may hate each other, but they're both on Satan's team.
2) It means Bush is drunk on serotonin. People, like other animals, tend to do more of what they get rewarded for. In September, Bush gave a ringing, bellicose speech, which was lauded for its moral clarity, and then launched a war that was lauded for its brevity. Naturally, the thing to do next is give a more ringing, more bellicose speech. In this interpretation, the phrase "axis of evil" had a resonance that overrode its seeming incoherence—it was like what we in journalism refer to as "a fact too good to check."
3) It means Donald Rumsfeld and his deputy, Paul Wolfowitz, have masterfully thwarted logic and poetic justice.
Before 9/11, Rumsfeld and Wolfowitz were overwhelmingly concerned with threats coming from nation-states, in particular "rogue states." To combat these threats, they wanted to build a missile-defense system. Some critics thought that, actually, the real nuclear threat would come from terrorists, not nation-states. To pick one such critic out of a hat: I wrote in this space last May, "I live in the Washington, D.C., area, a few miles from ground zero. So I'm all for spending money to reduce the chances that the United States will be subject to nuclear attack. But missile defense is just not the smart way to spend that money."
Sept. 11 underscored the threat of attacks from terrorists, as opposed to nation-states. So you might think it would have undermined Rumsfeld's and Wolfowitz's credibility. It didn't—partly for reasons that still mystify me, but mainly for reasons that don't. Namely: We were now at war, and war naturally puts wind in the sails of the secretary of defense, especially when it results in early victory. So Rumsfeld and Wolfowitz now have great influence, and they've used it to resurrect their pre-9/11 agenda. Thus did "rogue states" become the "axis of evil."
Of course, the focus on "rogue states" isn't completely bogus. It's true that 9/11 underscored the dangers of leaving nuclear and biological weapons in the hands of states that might give them to terrorists who could sneak them into the United States. But Bush's "axis of evil" speech went beyond that legitimate logic; it included a prominent plug for missile defense—evidence of the nefarious Rumsfeld-Wolfowitz axis at work.
This interpretation of the "axis of evil" remark raises a conundrum: If Bush's ultimatum is for real—if we are one way or another going to strip the world's three menacing "rogue states" of any weapons of mass destruction—then why will we still need missile defense in the end? But people who ask questions like that are the kind of people who waste their time asking why you would call something an "axis" if it isn't one.
Which of these three interpretations do I buy? I actually think all three factors play a role, and together constitute an "axis of incoherence." (In my metaphysics, all incoherence has a common, primordial source, and is hence connected—and humankind's mission is to rid the world of it, a project that is, um, still underway.) Yet it isn't the incoherence that most bothers me. And it isn't really the possibility of war that bothers me. (I could live with attacking Iraq if, as I've urged, we did it in a particular way.) What bothers me is the evidence that Bush is ill-suited to this moment in history.
Do you remember the days right after Sept. 11? When liberal internationalist journalists hopefully asserted that the Bush administration could no longer ignore America's inherent involvement with the world, could no longer afford unilateralism, could no longer disdain world opinion? They even scrounged around and found evidence that Bush was getting the picture. For example: He was "consulting with allies." (Imagine!)
So much for that story line. "Axis of evil" was a phrase manufactured for domestic consumption, with disregard for the existence of a) our allies; b) those particular allies that have to deal with these "rogue states" up close and personal, such as South Korea; c) any terrorist recruiters who can turn Bush's more florid turns of phrase into effective propaganda. Bush could have delivered a warning to Iran, Iraq, and North Korea just as forcefully without using a phrase so incendiary. That the world's opinion of America matters—certainly one of the top few lessons of 9/11—continues to elude our leader.
Bush said in his State of the Union address, "We are protected from attack only by vigorous action abroad, and increased vigilance at home." Actually, the truth is much more complicated than that. But I suppose this is no time to split hairs.
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