Links between Bush campaign donors and Enron: An Analysis

An essay by Huck Gutman published on the Common Dreams News Center, February 15, 2002, available on the web at Bush's Biggest Donors Had Links to Enron

" Bush's Biggest Donors Had Links to Enron"
   February 15, 2002

Huck Gutman

        Enron contributed $736,800 to George W. Bush over the past eight years, his single largest contributor. Many are looking for a smoking gun that will link Enron, directly, to specific favors. They want to see what specific decisions Enron bought. It is possible that such decisions will be uncovered, the evidence supplied.

        But there are different ways in which influence manifests itself, and not all are direct. Influence can create a community of interest in which the priorities are unspoken but nonetheless shared. Whether by shaping goals and determining what should be undertaken to achieve them, or by establishing that various parties jointly desire a particular outcome, a community of interest can be a powerful thing.

        It appears that there was a corporate community of interest which was strongly linked to Enron. The community included, through obvious linkages that are detailed below, the current President of the United States, George W. Bush.

        Consider the old analogy of ducks, but in another manifestation. If a school of birds float like a flock of ducks, feed like a flock of ducks, quack like a flock of ducks, there is a high likelihood that it is a flock of ducks.

        Of the twenty largest contributors to George W. Bush's Presidential campaign, fully half had major links to Enron; indeed, five of his seven largest seven contributors were connected to Enron. No matter what they did or did not do on the record, that sure looks like a flock of ducks, with George W. Bush in their midst, paddling toward and into the presidency.

        On the list of heaviest contributors, Enron is number 10. It would rank far higher if its bundled contributions, and the Enron Corporation's contributions to the inauguration, to the recount fund, to various PACs, and to the Republican Party, were counted in the figures.

        Vinson & Elkins, a Texas law firm, is number two. Vinson & Elkins is Enron's law firm. The firm prepared the partnership documents for Enron's apparently fraudulent operations, which moved debt off book, falsely inflated profit statements, and enriched several top executives of Enron (as well as several investment firms which were also among Bush's major contributors). It was this law firm which, when the first whistles were blown, did an 'outside' review of Enron's partnerships and subsidiaries and found their operations acceptable.

        Number four among big donors is Anderson Worldwide, corporate parent of Enron's accounting firm, Arthur Anderson. No one needs to be reminded that Arthur Anderson oversaw Enron's books and gave their seal of approval to the validity of Enron's corporate reports. Nor that Anderson's consulting branch help Enron shape its devious dealings.

        Morgan, Stanley, Dean Witter & Co. is number five. Morgan Stanley was a major investor in Enron's LJM2 subsidiary. The chicanery of LJM2, of course, played a truly major role in necessitating Enron's $1.2 billion in restatement of shareholder equity and its overstatement of earnings by nearly $600 million - the proximate causes of its implosion and bankruptcy.

        Three of the big-name Wall Street firms worked on complex deals for either Enron or its many related entities: Credit Suisse First Boston, Citigroup's Salomon Smith Barney, and Bank of America. They were, respectively, George W. Bush's second, ninth and eleventh largest contributors.

        Bank of America had other dealings with Enron. It and ABN Amro led the group of foreign investors who provided approximately $150 million to Enron's Dabhol power project in India. If there is any area in which direct political intervention is likely to surface, it is in regard to this investment. Vice President Cheney brought up the necessity to repay debt to Enron in talks with Indian Congress Party leader Sonia Gandhi. The Dabhol project obtained extensive political risk insurance and loan guarantees came from the U.S. government's Overseas Private Investment Corporation (OPIC) and Export-Import Bank (Ex-Im Bank)-institutions financed by US taxpayers.

        Rep. Billy Tauzin, R-La., chair of the House Energy and Commerce Committee investigating Enron, revealed that Enron had promised bond-sale business to Merrill Lynch & Co. in exchange for its investments in some of Enron's questionable partnerships. Merrill Lynch, the nation's biggest brokerage firm, also helped Enron raise nearly $400 million from pension funds and other big investors for one of the partnerships. Merrill Lynch was the sixth largest donor to Bush's presidential campaign.

        Seventeenth-largest donor American General no longer exists as an independent entity: It was merged into American International Group Inc. last year. AIG held surety bonds -- which guaranteed gas delivery deals signed by Enron. When Enron tanked, AIG had to write down the value of its investments in Houston-based Enron.

        The AXA Group, Bush's twentieth largest donor, estimated its gross exposure to the US energy trader ENRON at approximately 200 million Euros, or slightly under $200 million..

        That's the flock of ducks, the biggest and fattest in the land. When they quacked, was it conceivable that George W. Bush didn't listen? When they decided to swim down a particular stream, was it conceivable that George W. Bush didn't float along?

Huck Gutman is a columnist for The Statesman (Calcutta, India) and a regular contributor to Dawn (Karachi, Pakistan).