I felt like blaming someone when, like millions of other Americans, I took a WorldCom bath. How, I asked my wife, could the company that owns MCI, one of the world’s telecommunication giants, declare bankruptcy? In today’s mail, MCI, owned by WorldCom, offers me thousands of frequent flyer miles if I switch to their phone service. Truthfully, until the person who handles my IRA fund phoned and told me I had lost $10,000 in WorldCom bonds, I didn’t even know I had them. I had told this person that I wanted her to put my IRA savings only in very low risk investments. She said, later, that she honestly thought buying bonds in WorldCom, one of the world’s great corporations, was as safe as one could get.
A friend of mine admitted that he had lost far more than me in both Enron and WorldCom stocks and bonds. And, he continued, think of the tens of thousands of laid off workers from those and other companies, people who lost their jobs because of corporate sleaze. Before its July 2002 bankruptcy, WorldCom laid off 17,000 employees and made a $400 million loan to former CEO Bernard Ebbers. Who will collect that one?
The list of major corporations involved in major fraud grows: WorldCom, Enron, AOL-Time Warner etc — oh, and let’s not forget the hanky panky of Martha Stewart, the smiling, motherly TV personality with the “trust me above all” look.
Who can you trust? From Ronald Reagan through George W. Bush we have heard the mantra of how government stinks and corporations are great. The President assures us that the economy is moving forward. Some experts, however, predict that instead of traveling north, as President Bush proudly proclaimed, our economy appears to be heading south. Last week, IBM announced the lay off of 15,000 workers and American Airlines of 7,000. United Airlines, with whom I hold my Visa card that sends me offers of miles if I switch to MCI (WorldCom), warns it might soon declare bankruptcy. Continental Airlines announces major cost-cutting measures like eliminating free parking for its top executives and removing plastic knives from its breakfast service. What’s the world coming to?
Luckily for all Americans, in the midst of his “working vacation” at his Texas ranch, our president got right on the case. In mid-August, he held an “Economic Forum” in Waco, Texas. Even the reclusive Vice President Dick Cheney showed up, albeit he must have been working very hard in the previous days since reports had it that he spent much of the time at the meeting sleeping. “Dick was bored,” one cynic suggested.
The Republican business and government elite that stayed awake sat around the table and assured each other that they would not allow any more hanky panky in the corporate world. This meant that they and their friends would try to cover up their and their colleagues’ past accounting and executive practices that had roamed beyond the windy side of the law. The president blinked several times before saying sincerely that he was shocked by “shady corporate practices.”
A few reporters suggested that he shouldn’t feel too shocked since he also had engaged in some of those very practices himself. But, like many alcoholics, the President may have suffered some memory loss. Or is this convenient amnesia?
He probably forgot that he sold almost $1 million of his shares in Harken Energy just before that company went to the toilet. But that was more than a decade ago and how would such a busy man with so much on his mind remember a trivial detail like making a million dollars instead of losing that amount? Nor do I expect W to remember financial foibles committed by members of his family. Who likes to think about unpleasant events in the past?
Why, for example, would he recall his brother Neil’s role in the painful scandal that arose from the practices of Silverado Banking. Between 1985-1988, brother Neil directed this Denver Savings and Loan operation. Under Neil’s guidance, the bank loaned $200 plus million to Neil's partners to back some oil scheme. The partners did not pay back most of the loan, which put the bank in an awkward financial situation.
Subsequently, Silverado shut its doors, after causing much panic to those who had stashed their savings and pensions in what they thought was a very safe place. Indeed, the Vice President’s son ran the S&L. What could have been safer?
But Vice President Bush had long stopped giving Neil a generous allowance. Instead the Vice President’s son, now supposedly a grown man, obtained his income from his business partners, federal investigators discovered. How would Neil have turned down a loan request from his surrogate Daddies who paid his salary? When Silverado closed in 1988, US taxpayers forked over $1 billion to cover its losses. Neil, a federal expert declared, suffered from a common disease among corporate executives: he called it “ethical disability.” Did the Bush elders forget to teach their kids certain lessons about ethics?
Neil paid a $50,000 — slap on the wrist — fine for his “ethical lapses” at Silverado. But, according to Stephen Pizzo in the Sept/Oct 1992 Mother Jones magazine, “Neil's estimated $250,000 in legal bills generated by the scandal” were “paid for him by a banking-industry lobbyist,” an individual who was struggling to convince Congress to deregulate banks as it had done for Savings and Loans. Pizzo pointed out that Neil suffered from subsequent ethical drifts when he ran Apex Energy, an oil company that he left in deep debt. But why would W remember nasty details about his brother’s business life? That’s not the kind of subject talked about at the dinner table.
Similarly, I wouldn’t be surprised if W had also forgotten about his close relations with Enron Corporation of Houston which, as AP reporter Jonathan Salant reported in the January 25, 2001 Seattle Post-Intelligencer, reaped giant revenue increases from California's power shortages and higher natural gas prices nationwide. The president probably doesn’t recall that he rejected price controls to hold down soaring electricity costs in California that allowed Enron, the largest wholesaler of electricity and largest owner of natural gas pipelines in North America, to make super profits. The company and its employees proved so generous with W’s campaigns for governor of Texas and his previous but unsuccessful House campaign in 1978. And Enron was beyond generous to W in the 2000 race for the White House, according to the watchdog Center for Public Integrity.
Enron and its employees donated $113,800 to Bush's presidential campaign, his 10th most generous contributor. They poured $250,000 into the Republican National Convention host committee coffers and $300,000 to the Presidential Inauguration Committee. Now that kind of donating would make any memory tend to weaken.
Enron Chief Executive Officer Kenneth Lay — Kenny Boy as W used to call him before he discovered Mr. Lay’s “ethical lapse” — raised more than $100,000 for Bush's campaign. W made him a member of the president's energy transition team. It was hardly a secret that “Ken Lay and the Enron Corp. has President Bush's ear on energy matters,” said Craig McDonald, director of Texans for Public Justice, an anti Bush advocacy group.
Did it surprise the analysts that W as president had an energy policy identical to Enron ˆ deregulation at all costs? The deregulation allowed Enron to reap immense profits at the expense of California energy users. Did Enron influence the president on subjects like states rights (except the right of states to count votes for the presidential election of course) and deregulating oil and gas companies? Eric Thode, who worked for Enron’s PR department, said that Bush was “a proponent of states' rights and deregulation “ before Enron gave him his political instruction. “He doesn't need anybody to suggest that to him.” According to the Center for Responsive Politics, a non-partisan research group that studies campaign finance, during the 2000 election, Enron invested almost $2.5 million in the political education of candidates for both house, mostly republicans, considerably more than any other energy company.
The candidates, including W and brother Jeb, declared that deregulation was socialistic. Indeed, California energy users paid for the political education that Enron gave to their eager students. Consider their campaign contributions as the equivalent of scholarship to the school of corrupt practices and easy money.
But why should anyone try to place the blame for our money losses on W and other members of his family. “I met WorldCom employees who no longer have work,” the president said, “who are disillusioned like me and others about the corporate fraud which is taking place in our country.” I believe him; that is, I believe that he has no memory of his or his family members’ own sordid practices that took money from trusting American citizens.
So if you need to blame someone for foolishly trusting in the honesty and ethical rectitude of corporate America’s leading CEOs, don’t look to the President or members of his family. After all, I didn’t remember that I owned $10K worth of WorldCom bonds. Why should we expect the president to remember his own unpleasant business affairs, much less those of his brother? “To thine own self be true,” the Bard said.
“Who steals my purse steals trash,” said Iago, to cover up his treachery to Othello. Let that statement ring in the ears of the corporate executives who stole my and other people’s money and loll on the decks of their luxury yachts while millions of their victims wonder if they can now afford to retire. Corporate treachery and the war against terrorism may be the defining phrases of W’s White House tenure.