Smoking Gun in Enrongate
January 24, 2002 11:39 AM Subscribe
Smoking Gun in Enrongate A serious charge that President Bush is open for impeachment, according to this piece, which also dismisses out of hand GOP dismissing all Enron involvement besides the taking of polical donations. The source of this piece is, clearly Liberal, but that does not change matters if true.
I'm about as liberal as they come, but I'll be damned if I'll put much faith in a journal called "liberalslant"... not to mention the massively annoying preponderance of foogates in there.
Yes, Enron clearly got say in energy policy for their money, but that is not surprising, and if you bring Bush down for that, you're gonna have to nail every other politican, because they all do it. That's why we like to dream campaign finance reform is possible. Ah, dreams.
posted by malphigian at 11:48 AM on January 24, 2002
Yes, Enron clearly got say in energy policy for their money, but that is not surprising, and if you bring Bush down for that, you're gonna have to nail every other politican, because they all do it. That's why we like to dream campaign finance reform is possible. Ah, dreams.
posted by malphigian at 11:48 AM on January 24, 2002
Let the vast left-wing conspiracy begin! Mwoohahahaha!
posted by Ty Webb at 12:00 PM on January 24, 2002
posted by Ty Webb at 12:00 PM on January 24, 2002
I keep asking myself, where's the sex? If there is no boinking, that pig won't be oinking.
posted by Slagman at 12:25 PM on January 24, 2002
posted by Slagman at 12:25 PM on January 24, 2002
Nice claims, but I find it impossible to believe that anyone -- Hebert or otherwise -- could ever "prove" that Lay had "hire and fire authority" over the FERC. I'm not rejecting the possibility that Lay had input, but Bush certainly is never going to admit that he turned it over to his buddy Ken.
Anyway, I love the writing style. Propaganda is so funny, whether it comes from the right or left: "We must take it upon ourselves to demand justice and uphold the Rule of Law. Call the media and your elected officials NOW to make sure they understand the real issues in Enrongate, Funeralgate, and Votergate. Let the investigations, perhaps even impeachment begin!". And those dollar signs in front of monetary words crack me up. ooohh, Bush received $millions of $dollars!
posted by pardonyou? at 12:27 PM on January 24, 2002
Anyway, I love the writing style. Propaganda is so funny, whether it comes from the right or left: "We must take it upon ourselves to demand justice and uphold the Rule of Law. Call the media and your elected officials NOW to make sure they understand the real issues in Enrongate, Funeralgate, and Votergate. Let the investigations, perhaps even impeachment begin!". And those dollar signs in front of monetary words crack me up. ooohh, Bush received $millions of $dollars!
posted by pardonyou? at 12:27 PM on January 24, 2002
I'm not exactly the biggest fan of Bush II, but this guy is crazy. I mean, he thinks the Enron scandal has taken over the entire government, and Bush is subverting the entire economy for the benefit of Enron.
This Republican scandal exposes GOP corruption at the highest levels, but more profoundly, it reveals the bankruptcy of the GOP "government is the problem" ideology. It blows the lid off Bush's Enronomics, and his plan to Enronitize Social Security, energy and other policies.
Not to mention the blatant liberal bias at work here. He makes no secret of the fact that he is out to destroy the entire Republican party.
I am currently working on another article concerning these fundamental failures in Republican philosophy. For now, back to the immediate scandal. Already, Armey and Gramm are quitting politics to escape Enrongate, but ending their careers to enjoy tax-paid pensions may not be enough to satisfy justice and the Rule of Law.
Forgive me if I don't jump on your bandwagon just yet.
posted by monju_bosatsu at 12:34 PM on January 24, 2002
This Republican scandal exposes GOP corruption at the highest levels, but more profoundly, it reveals the bankruptcy of the GOP "government is the problem" ideology. It blows the lid off Bush's Enronomics, and his plan to Enronitize Social Security, energy and other policies.
Not to mention the blatant liberal bias at work here. He makes no secret of the fact that he is out to destroy the entire Republican party.
I am currently working on another article concerning these fundamental failures in Republican philosophy. For now, back to the immediate scandal. Already, Armey and Gramm are quitting politics to escape Enrongate, but ending their careers to enjoy tax-paid pensions may not be enough to satisfy justice and the Rule of Law.
Forgive me if I don't jump on your bandwagon just yet.
posted by monju_bosatsu at 12:34 PM on January 24, 2002
Did anyone catch SNL this weekend? On weekend update (by far the best part of the show), one of the anchors (Tina Fey, who is also head writer) gave a veeeery funny and dead-on explanation of the Enron scandal. She also pointed out that Democrats hoping this to be the big W. scandal are setting themselves up for disappointment, as Democrat scandals have words like "intern" and "fondle" and "murder", whereas Republican scandals have words like "fiduciary misappropriation".
I'm not conveying it all that well, but trust me, it was funny.
posted by GriffX at 12:40 PM on January 24, 2002
I'm not conveying it all that well, but trust me, it was funny.
posted by GriffX at 12:40 PM on January 24, 2002
Can we (you, me, and the media) drop "gate"? Enrongate, Travelgate, Irongate, poor Watergate (now available in Swiss flavor).
posted by tomplus2 at 12:49 PM on January 24, 2002
posted by tomplus2 at 12:49 PM on January 24, 2002
Fey's Enron comments, verbatim
Gawd, I've been sick of -gate since, well, at least since Papergate in re the 1980 campaign (blessedly, some called it The Paper Caper). I've been in favor of more appropriate names, e.g. a 1980s NPR suggestion that the Iran-contra scandal (which only became that after incubatory periods as separate Irangate and contragate scandals) be named something befitting its twisty little passages of logic, Iranalamadingdong.
Alas, however, the -gate suffix has passed into the English language as a generic, even used in India (Tehelkagate) and Indonesia (Baligate).
Anyway, is there a niche for Enronalamadingdong?
posted by dhartung at 1:06 PM on January 24, 2002
Gawd, I've been sick of -gate since, well, at least since Papergate in re the 1980 campaign (blessedly, some called it The Paper Caper). I've been in favor of more appropriate names, e.g. a 1980s NPR suggestion that the Iran-contra scandal (which only became that after incubatory periods as separate Irangate and contragate scandals) be named something befitting its twisty little passages of logic, Iranalamadingdong.
Alas, however, the -gate suffix has passed into the English language as a generic, even used in India (Tehelkagate) and Indonesia (Baligate).
Anyway, is there a niche for Enronalamadingdong?
posted by dhartung at 1:06 PM on January 24, 2002
Unfortunately, I don't think any actual laws were broken by politicians in the case of Enron. It is pathetically obvious Enron had exceptional influence in energy policy (at the very least take a look at the California energy crisis of last year). But for a corporation to have influence over governmental policy is the way things are and HAVE been. The Clinton administration hired policy makers from corporations too. I wish it were a crime, but it's not.
posted by dragline at 1:08 PM on January 24, 2002
posted by dragline at 1:08 PM on January 24, 2002
I'm hard pressed to believe anything from a site called "liberalslant". And i'm hoping its not true. I hope there is no scandal. Not because I like GWB a lot or anything, but because i'm tired of almost every politician/administration being involved in some massive scandal.
posted by jbelshaw at 1:11 PM on January 24, 2002
posted by jbelshaw at 1:11 PM on January 24, 2002
This person is not a liberal by any means. If you've ever been active in the left, you'll recognize the rigid gibber of a hard-core Stalinist, masquerading as a sane person. A real liberal wouldn't publish anything called "Liberal Slant." It just doesn't ring true.
posted by Faze at 1:35 PM on January 24, 2002
posted by Faze at 1:35 PM on January 24, 2002
[I don't think any actual laws were broken by politicians in the case of Enron.]
Right, but in my understanding Clinton didn't break any laws receiving oral favors from Monica, either -- it was the perjury that got him, wasn't it? Wouldn't it be enough to trap Shrub & Co. in a lie?
posted by muckster at 1:37 PM on January 24, 2002
Right, but in my understanding Clinton didn't break any laws receiving oral favors from Monica, either -- it was the perjury that got him, wasn't it? Wouldn't it be enough to trap Shrub & Co. in a lie?
posted by muckster at 1:37 PM on January 24, 2002
---"If you've ever been active in the left, you'll recognize the rigid gibber of a hard-core Stalinist."
You may be right, Faze. But if you call someone a Stalinist you should back it up with examples, lest someone label you a Horowitz-ite.
posted by Ty Webb at 1:41 PM on January 24, 2002
You may be right, Faze. But if you call someone a Stalinist you should back it up with examples, lest someone label you a Horowitz-ite.
posted by Ty Webb at 1:41 PM on January 24, 2002
Ever heard the story of the boy who cried wolf? Smoking gun is a more overused term than -gate. Still, I get a laugh over the fact that Hebert who was handpicked for his free market views wasn't as pliable as Lay and Bush thought. The story is true but not that serious according to MSNBC but either way it doesn't matter since outrage went out with the 90s.
posted by euphorb at 1:54 PM on January 24, 2002
posted by euphorb at 1:54 PM on January 24, 2002
Right, but in my understanding Clinton didn't break any laws receiving oral favors from Monica, either -- it was the perjury that got him, wasn't it? Wouldn't it be enough to trap Shrub & Co. in a lie?
Only in sworn testimony - Clinton only really got in trouble because he lied in his deposition in the Paula Jones case. Lying to the American people isn't an impeachable offense - if it were, no President would finish a term.
posted by jaek at 1:58 PM on January 24, 2002
Only in sworn testimony - Clinton only really got in trouble because he lied in his deposition in the Paula Jones case. Lying to the American people isn't an impeachable offense - if it were, no President would finish a term.
posted by jaek at 1:58 PM on January 24, 2002
It's not wrong or illegal for Enron to have a say in energy policy. They were one of the largest players in the energy industry and their demise certainly affects the health of the sector. They also know more about the energy business than any elected official ever will by virtue of the fact that they live it every day. If government officials shouldn't be talking to companies like Enron, who should they be talking to? There appears a large constituency of people that think big business is universally bad (despite the fact that it's probably sending their kids to college) and conveniently forget that representative democracy includes representation of American commercial interests. Pandering to them is one thing, but inviting them over for input on energy policy isn't only legal, it makes *sense.* Do you realize how difficult it would be to get any sort of large scale corporate regulation implemented and enforced without some level of cooperation from those affected? Do you know how long it would take to even pass such regulation if there is no dialogue and policy changes are always, by default, antagonistic? Politicians that don't have any engagement or dialogue with major players in the commercial arena are *not* doing their jobs.
Bush's (or any politician's) meetings with Enron and other energy companies were not designed to let the companies determine energy policy. They were designed to take the industry's "pulse" and find out how the affected would b able to handle changes in such policy and how much good or how much damage would be done if proposed policy were enacted. (You wouldn't, for example, want to enact a policy that would bankrupt a third of the sector and leave the country with a shortage of suppliers.) Like it or not, the government has an obligation to protect the interests of American companies, and while it doesn't supercede obligations to Americans as individuals, it must still be met. A government that is ignorant of corporate America's interests or willfully ignores them will ultimately pay for it in capital flight, fewer American jobs, and less foreign direct investment. No company wants to do business in a hostile regulatory environment.
But for a corporation to have influence over governmental policy is the way things are and HAVE been. The Clinton administration hired policy makers from corporations too. I wish it were a crime, but it's not.
With all due respect, dragline, i don't think you'd be saying that if you were running a large company (or a small company, for that matter.) You'd be thinking "I can't believe these jerks from Washington are trying to regulate my business when they know nothing about it! They want to enact a policy that's going to cut my margins in half and ironically, give them less of my income tax. I'll be forced to lay off 15% of my staff and then people will whine that the layoffs are the result of mismanagement on my part!" i know this may be a stretch for many of you, but put yourself in the shoes of a fortune 500 CEO and think about what you'd expect from the government. i don't think an opportunity to talk about policy regarding the health of your industry would be unreasonable - especially if your company is responsible for a significant portion of that industry.
posted by lizs at 2:24 PM on January 24, 2002
Bush's (or any politician's) meetings with Enron and other energy companies were not designed to let the companies determine energy policy. They were designed to take the industry's "pulse" and find out how the affected would b able to handle changes in such policy and how much good or how much damage would be done if proposed policy were enacted. (You wouldn't, for example, want to enact a policy that would bankrupt a third of the sector and leave the country with a shortage of suppliers.) Like it or not, the government has an obligation to protect the interests of American companies, and while it doesn't supercede obligations to Americans as individuals, it must still be met. A government that is ignorant of corporate America's interests or willfully ignores them will ultimately pay for it in capital flight, fewer American jobs, and less foreign direct investment. No company wants to do business in a hostile regulatory environment.
But for a corporation to have influence over governmental policy is the way things are and HAVE been. The Clinton administration hired policy makers from corporations too. I wish it were a crime, but it's not.
With all due respect, dragline, i don't think you'd be saying that if you were running a large company (or a small company, for that matter.) You'd be thinking "I can't believe these jerks from Washington are trying to regulate my business when they know nothing about it! They want to enact a policy that's going to cut my margins in half and ironically, give them less of my income tax. I'll be forced to lay off 15% of my staff and then people will whine that the layoffs are the result of mismanagement on my part!" i know this may be a stretch for many of you, but put yourself in the shoes of a fortune 500 CEO and think about what you'd expect from the government. i don't think an opportunity to talk about policy regarding the health of your industry would be unreasonable - especially if your company is responsible for a significant portion of that industry.
posted by lizs at 2:24 PM on January 24, 2002
Ty Webb: Thanks for your observation. When I said "Stalinist," I suppose I meant to imply more of a psychological than a political state state of mind. It's suggested by the hysterical energy of the writer's accusations, the seemingly bottomless well of resentment against his target, and the sheer glee he takes in the forcefulness of his accusations that reminds me of the bad old days. He speeds over a multiplicity of charges. He begins one paragraph: "We must demand action now..." That's right out of the old left phrasebook. As I say, he just seems to represent a psychological type that unfortunately too often finds its way into politics. This case stands out, because he so clearly, and falsely, wears the liberal label. You can sniff 'em out on the left, the same way you can tell when a fascist masquerades as a mere conservative.
posted by Faze at 2:28 PM on January 24, 2002
posted by Faze at 2:28 PM on January 24, 2002
lizs, you make some valid points. Maybe I didn't make my point clear enough. I think there is a big difference between including corporate representatives on a policy making board and having secret closed door meetings with those same representatives and then enacting policy. I am all for corporations having a say in government. At the same time however, they do tend to exert an influence much more powerful than the average person or even the average group of persons. All I want is an even representation of both sides. There are other ways of understanding how an industry functions than letting one member of that industry write policy.
posted by dragline at 3:22 PM on January 24, 2002
posted by dragline at 3:22 PM on January 24, 2002
lizs: Bush's (or any politician's) meetings with Enron and other energy companies were not designed to let the companies determine energy policy.
How do you know? Were you party to those closed door meeting between the VP and Ken Lay?
People assuming there was absolutely no wrong doing seem just as deluded as the people assuming there definitely was wrong doing... Both sides are talking with very few facts under their belts.
posted by Neb at 3:41 PM on January 24, 2002
How do you know? Were you party to those closed door meeting between the VP and Ken Lay?
People assuming there was absolutely no wrong doing seem just as deluded as the people assuming there definitely was wrong doing... Both sides are talking with very few facts under their belts.
posted by Neb at 3:41 PM on January 24, 2002
Were you party to those closed door meeting between the VP and Ken Lay?
No, Neb, I obviously can't say i was there, but I have been party to such meetings at the state level, so i can say that my viewpoint is informed at least in part by direct experience. I'm not inferring that the government did nothing wrong in the Enron case; i'm simply saying that meetings with Enron on energy policy are not, by themselves, indicative of wrongdoing.
posted by lizs at 3:54 PM on January 24, 2002
No, Neb, I obviously can't say i was there, but I have been party to such meetings at the state level, so i can say that my viewpoint is informed at least in part by direct experience. I'm not inferring that the government did nothing wrong in the Enron case; i'm simply saying that meetings with Enron on energy policy are not, by themselves, indicative of wrongdoing.
posted by lizs at 3:54 PM on January 24, 2002
Recognizing that the input of industry leaders is proper for any policy initiative, I think we can safely say, at least I hope we can, that the relationship between Enron and Bush was closer than is typical, which is why it bears special scrutiny. I think it's also safe to say that had Enron not had a friend like Bush in the Texas governor's office, their rise would not have been as swift, and they may not have been as arrogant.
posted by Ty Webb at 4:03 PM on January 24, 2002
posted by Ty Webb at 4:03 PM on January 24, 2002
i'm simply saying that meetings with Enron on energy policy are not, by themselves, indicative of wrongdoing.
They may be when they are held in secret and details of the meetings are kept from Congress. See the Federal Advisory Committee Act Legislation and Regulations.
posted by dragline at 4:33 PM on January 24, 2002
They may be when they are held in secret and details of the meetings are kept from Congress. See the Federal Advisory Committee Act Legislation and Regulations.
posted by dragline at 4:33 PM on January 24, 2002
put yourself in the shoes of a fortune 500 ceo and think about what you'd expect from the government.
A great deal more than I would expect right now, to be sure.
posted by y2karl at 4:51 PM on January 24, 2002
A great deal more than I would expect right now, to be sure.
posted by y2karl at 4:51 PM on January 24, 2002
" ... Nice claims, but I find it impossible to believe that anyone -- Hebert or otherwise -- could ever "prove" that Lay had "hire and fire authority" over the FERC ...".
Must absolutely agree. Not because I don't think Lay didn't have influence, but because what Bush is being accused of simply is not the way the influence game is played. Would Bush permit energy industry leaders to have a say in all sorts of matters related to energy policy? Of course! Welcome to politics.
Didn't hear people complaining when the previous administration, for instance, involved big labor unions in the choice of candidates for the NLRB (unions that, by the way, had every bit as many legal problems as Enron does, and were quite nearly as imaginative as Enron when it came to doing creative things with pension funds), or when large environmental groups were invited to help draft environmental law.
The larger issue is that the energy industry is dominated by big, powerful, viciously competitive companies who all contribute to campaigns. It is idiotic to believe Bush let Lay have this much power, not because it is unbelievable that the energy industry would be allowed to have influence, but because the CEO of a single company in the industry would not be given that much influence. Bush - indeed any sharp politician (especially from Texas) - would certainly know that to let Lay have "hire and fire authority over the FERC" would get him (for instance) in deep shit with Lee Raymond at ExxonMobil. Exxon is a much bigger and more powerful fish in that industry (it was ranked number 1 on Fortune mag's last Global 100 list ... it's the biggest company in the world, with 2000 revenues of 210 billion ... Enron, by contrast, is a paltry 16th on the list, with revenues around 100 billion for 2,000 ... less than half of Exxon's). And this guy thinks Bush would permit Lay to have this authority, and not Raymond?
[NOTE: What is probably meant by "hire and fire authority" is not some secret, behind the scenes conspiracy, but rather is the simple fact that Bush quite openly appointed Lay as one of many representatives from a variety of industries on his transition team. Naturally he had a say in appointments and policy. As CEO's from the IT industry had a say in Technology appointments and policy, etc., etc.. It is only now that people want to create some massive "Enrongate" that events are being taken badly out of context and framed as evil.]
The really, REALLY bizarre idiocy about this whole supposed "gate" and everything it implies is that the entire California Democratic party loathed Curtis Hebert. The Governor (Davis) wanted him out. Why? Because he was too Republican ... in fact, he believed in free markets to a theoretical extreme ... refusing, even during the worst of California's energy crisis, to accept any price controls at all. He was appointed largely because of the push by Trent Lott. Pat Wood is widely seen in energy circles as less of an ideologue and much more of a middle of the road pragmatist. He is liked by both energy companies and consumer groups (Public Citizen called a prospective Wood chairmanship "a victory for consumers"). Yes, he is a friend of Bush and Lay - but his appointment was also praised by Davis and Diane Fienstein. He does believe free markets and a largely de-regulated industry attracts investment and will bring down prices for consumers in the long run, but also believes that price controls ... especially to mitigate the sort of severe price spikes that California experienced ... are well within reason.
In short ... the full picture of what took place was that Herbert was being assaulted on all sides ... the energy industry, Democrats, and the liberal members of the FERC badly disagreed with his increasingly ideological stance, and were putting serious pressure on Bush to get rid of him. He was booted because nearly everyone on either side of the fence thought he'd failed badly during the California crisis ... and now he is attempting to say that it was because he refused to do Lay's bidding. He's trying to rescue his own badly damaged credibility by casting blame on the person now perceived as an even worse villian. Way wrong. Fact is, replacing Herbert with Wood may be one of the more sensible, solid, intelligent, bipartisan decisions Bush has made in the last year.
The strange fact is that if Lay did get Herbert booted from the FERC (as Herbert is trying to imply), he accomplished something the most liberal representatives from liberal states wanted.
posted by MidasMulligan at 4:57 PM on January 24, 2002
Must absolutely agree. Not because I don't think Lay didn't have influence, but because what Bush is being accused of simply is not the way the influence game is played. Would Bush permit energy industry leaders to have a say in all sorts of matters related to energy policy? Of course! Welcome to politics.
Didn't hear people complaining when the previous administration, for instance, involved big labor unions in the choice of candidates for the NLRB (unions that, by the way, had every bit as many legal problems as Enron does, and were quite nearly as imaginative as Enron when it came to doing creative things with pension funds), or when large environmental groups were invited to help draft environmental law.
The larger issue is that the energy industry is dominated by big, powerful, viciously competitive companies who all contribute to campaigns. It is idiotic to believe Bush let Lay have this much power, not because it is unbelievable that the energy industry would be allowed to have influence, but because the CEO of a single company in the industry would not be given that much influence. Bush - indeed any sharp politician (especially from Texas) - would certainly know that to let Lay have "hire and fire authority over the FERC" would get him (for instance) in deep shit with Lee Raymond at ExxonMobil. Exxon is a much bigger and more powerful fish in that industry (it was ranked number 1 on Fortune mag's last Global 100 list ... it's the biggest company in the world, with 2000 revenues of 210 billion ... Enron, by contrast, is a paltry 16th on the list, with revenues around 100 billion for 2,000 ... less than half of Exxon's). And this guy thinks Bush would permit Lay to have this authority, and not Raymond?
[NOTE: What is probably meant by "hire and fire authority" is not some secret, behind the scenes conspiracy, but rather is the simple fact that Bush quite openly appointed Lay as one of many representatives from a variety of industries on his transition team. Naturally he had a say in appointments and policy. As CEO's from the IT industry had a say in Technology appointments and policy, etc., etc.. It is only now that people want to create some massive "Enrongate" that events are being taken badly out of context and framed as evil.]
The really, REALLY bizarre idiocy about this whole supposed "gate" and everything it implies is that the entire California Democratic party loathed Curtis Hebert. The Governor (Davis) wanted him out. Why? Because he was too Republican ... in fact, he believed in free markets to a theoretical extreme ... refusing, even during the worst of California's energy crisis, to accept any price controls at all. He was appointed largely because of the push by Trent Lott. Pat Wood is widely seen in energy circles as less of an ideologue and much more of a middle of the road pragmatist. He is liked by both energy companies and consumer groups (Public Citizen called a prospective Wood chairmanship "a victory for consumers"). Yes, he is a friend of Bush and Lay - but his appointment was also praised by Davis and Diane Fienstein. He does believe free markets and a largely de-regulated industry attracts investment and will bring down prices for consumers in the long run, but also believes that price controls ... especially to mitigate the sort of severe price spikes that California experienced ... are well within reason.
In short ... the full picture of what took place was that Herbert was being assaulted on all sides ... the energy industry, Democrats, and the liberal members of the FERC badly disagreed with his increasingly ideological stance, and were putting serious pressure on Bush to get rid of him. He was booted because nearly everyone on either side of the fence thought he'd failed badly during the California crisis ... and now he is attempting to say that it was because he refused to do Lay's bidding. He's trying to rescue his own badly damaged credibility by casting blame on the person now perceived as an even worse villian. Way wrong. Fact is, replacing Herbert with Wood may be one of the more sensible, solid, intelligent, bipartisan decisions Bush has made in the last year.
The strange fact is that if Lay did get Herbert booted from the FERC (as Herbert is trying to imply), he accomplished something the most liberal representatives from liberal states wanted.
posted by MidasMulligan at 4:57 PM on January 24, 2002
Campaign Finance Bill Headed for House Vote? Supporters of campaign finance legislation claimed victory Thursday in their drive to force the issue to the House floor, setting the stage for a vote this year on a bill to reduce the role of money in political campaigns.
(instead of yet another Enron FPP)
posted by muckster at 5:37 PM on January 24, 2002
(instead of yet another Enron FPP)
posted by muckster at 5:37 PM on January 24, 2002
Exxon is a much bigger and more powerful fish in that industry (it was ranked number 1 on Fortune mag's last Global 100 list ... it's the biggest company in the world, with 2000 revenues of 210 billion ... Enron, by contrast, is a paltry 16th on the list, with revenues around 100 billion for 2,000 ... less than half of Exxon's).
Note well that another fishy aspect of Enron's accounting lies in how they calculate revenue. Most trading companies only count their commission (i.e. if you sell $10,000 worth of stock through Schwab and pay them a $30 commission, they only count $30 in revenue). Enron counted the value of what was traded; this made them look much larger than they really were. Priceline did the same thing with airline tickets.
posted by jaek at 5:39 PM on January 24, 2002
Note well that another fishy aspect of Enron's accounting lies in how they calculate revenue. Most trading companies only count their commission (i.e. if you sell $10,000 worth of stock through Schwab and pay them a $30 commission, they only count $30 in revenue). Enron counted the value of what was traded; this made them look much larger than they really were. Priceline did the same thing with airline tickets.
posted by jaek at 5:39 PM on January 24, 2002
Enron counted the value of what was traded; this made them look much larger than they really were.
I think this is a common derivatives accounting practice for companies that trade commodities. i did some consulting for a precious metals company that did the same thing for their division that traded platinum and palladium. the upside is that your top line revenue looks bigger than it is. It also, however, has a significant downside - it kills your margins. Schwab's gross on the trade is the $30 less the cost of goods. Let's assume the cost is $20. GP=$10. GP margin = 33%. now assume Schwab books the "pass through" as revenue. GP margin on the trade is $10/$10,000, or 0.1%
posted by lizs at 6:12 PM on January 24, 2002
I think this is a common derivatives accounting practice for companies that trade commodities. i did some consulting for a precious metals company that did the same thing for their division that traded platinum and palladium. the upside is that your top line revenue looks bigger than it is. It also, however, has a significant downside - it kills your margins. Schwab's gross on the trade is the $30 less the cost of goods. Let's assume the cost is $20. GP=$10. GP margin = 33%. now assume Schwab books the "pass through" as revenue. GP margin on the trade is $10/$10,000, or 0.1%
posted by lizs at 6:12 PM on January 24, 2002
" ... I think this is a common derivatives accounting practice for companies that trade commodities ...".
I think Liz iz right. It's not just energy - it's orange juice, and coffee beans, and even hog futures.
posted by MidasMulligan at 6:57 PM on January 24, 2002
I think Liz iz right. It's not just energy - it's orange juice, and coffee beans, and even hog futures.
posted by MidasMulligan at 6:57 PM on January 24, 2002
For a harsh an eloquent summary of what is fishy about Enron and Bush, I prefer the "Weekly Review" by Harper's:
President Bush told some lies about his relationship with Kenneth Lay, the chairman of Enron, and it was revealed that the company, which had more than 900 subsidiaries in tax-haven countries and is slated to receive a $254 million corporate tax refund under President Bush's economic stimulus plan, paid no income tax at all in four of the last five years. Vice President Dick Cheney, citing executive privilege, was still refusing to release the records of his five meetings with Enron executives to discuss energy policy. People were beginning to use the word "cover-up."
posted by Zurishaddai at 3:20 AM on January 25, 2002
President Bush told some lies about his relationship with Kenneth Lay, the chairman of Enron, and it was revealed that the company, which had more than 900 subsidiaries in tax-haven countries and is slated to receive a $254 million corporate tax refund under President Bush's economic stimulus plan, paid no income tax at all in four of the last five years. Vice President Dick Cheney, citing executive privilege, was still refusing to release the records of his five meetings with Enron executives to discuss energy policy. People were beginning to use the word "cover-up."
posted by Zurishaddai at 3:20 AM on January 25, 2002
>i'm simply saying that meetings with Enron on energy
> policy are not, by themselves, indicative of wrongdoing.
They may be when they are held in secret and details of the meetings are kept from Congress. See the Federal Advisory Committee Act Legislation and Regulations.
The FAC Act is for Presidential Advisory Committees. Was Cheney's meeting with Enron a properly formed Committee under the guidelines? If not, the rules don't apply. Cheney could just as easily refuse to provide details on his meeting with me concerning energy policy.
Ooops.... I never said that. And I don't know where Cheney is.
posted by dwivian at 6:26 AM on January 25, 2002
> policy are not, by themselves, indicative of wrongdoing.
They may be when they are held in secret and details of the meetings are kept from Congress. See the Federal Advisory Committee Act Legislation and Regulations.
The FAC Act is for Presidential Advisory Committees. Was Cheney's meeting with Enron a properly formed Committee under the guidelines? If not, the rules don't apply. Cheney could just as easily refuse to provide details on his meeting with me concerning energy policy.
Ooops.... I never said that. And I don't know where Cheney is.
posted by dwivian at 6:26 AM on January 25, 2002
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posted by aacheson at 11:45 AM on January 24, 2002