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Arthur Levitt former head

Arthur Levitt, former head of the SEC, tried but failed to prevent accounting firms from being accountants and consultants for a single firm. That might (stress might) have made a difference with Enron. In any case, after Enron, it now looks like a pretty good idea.

In The Hill, Alexander Bolton nicely untangles the web of money contributions and Washington hardball that led thirteen Senators to bully Levitt into backing off.

Most even threatened to cut his funding if he didn't relent.

Dick Cheneys continued refusal

Dick Cheney's continued refusal to hand over the notes, minutes and miscellaneous doo-dads of the White House Energy Task Force (ETF) is very bad news for the White House. All that's unclear is what kind of bad news it is.

Let's run through the possibilities.

Possibility #1: There's really nothing in the ETF notes, the White House has a deep ideological belief in executive branch privilege and thus secrecy (which is clearly true). On principle, on separation of powers grounds, they're resisting encroachments from the Congress.

End Game: The administration is eventually compelled to turn over the notes, either politically or judicially. Nothing bad is revealed, but the period of resistance fuels and continues the Enron cloud over the White House, perhaps even creating the investigative pressure that unearths other things we don't know about. It keeps Enron as an issue deeper into election season. The fact that nothing was found in the notes after all doesn't undo the damage. That's reported in Section L, page 79 of the The New York Times.

Possibility #2: There's really nothing in the ETF notes, but the White House has made a strategic decision to resist ceding the investigative initiative to the Congress and realizes that this is where it has to make its stand.

End Game: See end game for #1 (above).

Possibility #3: There's nothing illegal revealed in the ETF notes, but they describe a hand-in-glove closeness between the administration and energy companies, particularly Enron, that will be deeply embarrassing.

End Game: The administration is eventually compelled to turn over the notes, either politically or judicially. The period of resistance fuels and continues the Enron cloud over the White House, perhaps even creating the investigative pressure that unearths other things we don't know about. Weeks or months of resistance amplify the damage of the embarrassing revelations.

Possibility #4: It's really as bad as you can imagine. The notes reveal either illegal acts (which I find hard to believe) or one of the following: a) foreknowledge of Enron's problems, b) a direct nexus between money contributions and efforts to help Enron, c) various bad stuff that will lead heavyweights to resign.

End Game: The administration is eventually compelled to turn over the notes, either politically or judicially. Various people end up doing time or resigning their appointments. It was a good strategy because they had to keep the information secret if they could. It just didn't work.

My money is on a possibility #3, with #1 and #2 thrown in for good measure.

My how the mighty

My, how the mighty have fallen.

Regulars readers will remember that the first TPM Enron post way back on TPM World Exclusive!  You heard it hear first!  Must Credit.November 29th took aim at the company's fabulously arrogant "ask why" corporate ad campaign. That was the ad campaign featuring the 'metalman' commercial and the annoying computer-voice 'why, why, why, why' trailer. It even had its own website, askwhy.com.

Well, hopefully you took a look at the links while they were available.

The askwhy.com domain is now, surprise surprise, being put on the auction block by an outfit called domaincollection.com.


I guess there's some joke in here about living by the frictionless markets, dying by the frictionless markets.

Why, why, why, why ...

In the wake of

"In the wake of Enron's collapse, it has become apparent that many financial firms — from Enron's lenders to Wall Street bankers who underwrote the company's partnerships to investment houses that bought into them to the accountants who reviewed their books — knew more about Enron's condition than the company publicly disclosed."

That's one of the key grafs in a fascinating article in today's New York Times which describes how Veba, a German utility company considering a merger with Enron, was able to piece together a picture of the company's rickety financial footing with only a relatively cursory investigation based on publicly available documents.

"We were wondering why this wasn't common knowledge, or why it wasn't discovered by those people whose business it was to discover these things," one of the analysts told the Times.

It's starting to seem like Enron's condition was, if not an open secret, then at least a secret that was hidden in something like plain view. Many apparently knew at least some of the key details. And perhaps knew enough to know not to know more.

Who else knew?

Questions one two three

Questions one, two, three and four are each 'who leaked the memo revealing that Colin Powell - alone among the president's top military and judicial advisors - wants the al-Qaida and Taliban prisoners classified as prisoners of war under the Geneva Convention'.

Who got the leak, Bill Gertz and Rowan Scarborough at the Washington Times, gives a pretty clear idea which side of the debate did the deed. But who precisely? The Pentagon, the Counsel's Office, Condi's people at the NSC, or perhaps one of the very key people in the office of Vice President Cheney?

What appears to be

What appears to be unfolding now is not only a political scandal but something on the order of an autopsy of a major corporate exponent of Southwestern wildcatter capitalism and its relationship to political power.

First on Enron's patronage of pundits and opinion leaders. I don't agree with Andrew Sullivan often. But I think he's on to something with Enron and its patronage of pundits and intellectuals. I've already said I think he's been way over the top on Paul Krugman. But on the broader issue of Enron putting a lot of money into the pockets of influential opinion leaders, that's worth looking into.

Some of the people, Bill Kristol for instance, have been pretty up-front about it. Most have been much more cagey.

The real question in my mind is how widespread this practice is. As you can tell from the Online Contribution link over on the left, TPM doesn't have this problem of interested corporations trying to stuff $50,000 checks in his pocket. But it's very hard for me to believe that Enron was the only company doing this. Who else?

Then there's another issue. We now have two apparent cases of Enron's insinuating itself into the Bush White House - this may actually be giving the White House far too much of a pass - by putting the White House's campaign consultants on its payroll.

Yesterday the New York Times reported that Enron put Ralph Reed on the payroll as a favor to Karl Rove, to help keep Reed in the Bush camp. Reed and the White House have both sorta denied the claim. But it's at least consistent with what I learned about Reed while reporting this article two years ago.

(I'll say more about Ralph Reed in a future post.)

Now it also emerges that Ed Gillespie went immediately from the Bush campaign and into the hands of Enron as its man to lobby the Bush administration. Reportedly, on the energy task force and stimulus package.

Now, I think I know how this works.

Let's stipulate first that Enron didn't seem to have much difficulty getting its calls returned at the Bush White House or getting its views understood. The standard good government criticism of this would be that Gillespie didn't have a 'cooling off period' before lobbying his old friends. That misses the point. This sounds a lot more like Gillespie was continuing to work for the Bush White House. He just got put on Enron's payroll.

Top Ten new names

Top Ten new names to be field-tested for inevitable Arthur Andersen Accounting corporate rebranding campaign.

10. AAA

9. Andersen Foods

8. Kmart

7. Andersens Anonymous

6. Slam Duncan

5. H & R. Andersen

4. Fuzzy Math

3. Hans Christian Andersen

2. Andersen Confetti

1. Yo Yo Baby Andersen.com!

There are countless things

There are countless things that can be said about the tragic suicide of former Enron executive J. Clifford Baxter. The only appropriate and correct expression, of course, is empathy.

In the context of the broader Enron scandal, Baxter's suicide pushes the whole affair onto the terrain of bad fiction and the paint-by-numbers made-for-TV mini-series.

It also follows the recent pattern of events in which every day brings news that is not just more ominous and damning than the day before but much more ominous and damning than the day before. Don't mistake me: I'm not talking about the possible political scandal. I'm talking about the corporate and economic one. And on that count, how can anyone deny that this is now one of the greatest business scandals in American history?

What adds a greater element of mystery to Baxter's death is that, if you were writing this as a script, he isn't exactly the one who you'd tap to take such a rash step. Far from being the guilty party at the center of the mess, he seems quite the opposite. While being a high-level Enron executive, who probably knew all the relevant facts, he was apparently one of the in-house Cassandras who knew the place was a house of cards and started ringing the alarm bell, at least on the inside. This provoked his departure last May.

He was one of the people doing the right thing, not the wrong thing. Or at least less of the wrong thing than the rest of the brass.

Baxter's suicide inevitably fits into this puzzle. But he seems to have taken his life not because he knew more or did more, but - as must have been clear when he left the company last May - because his conscience was more delicate than those of his colleagues.

This is a special

This is a special Talking Points Memo screw-up alert. I got the call letters wrong in my earlier announcement. So let me try this again.

Ahem ...

Talking Points will be doing special on-air, pre-State of the Union pointillizing on WMAL in Washington, DC. Specifically, the Victoria Jones Show (TPM's favorite radio personality!) next Tuesday night between 7 PM and 8 PM.

Look at the following

Look at the following paragraph from Larry Lindsey's article from last Friday's Washington Post defending the Bush tax cut against possible repeal. The piece has already been rightly criticized for being wilfully disingenuous in using other peoples' quotes in a misleading fashion. But look at this graf. Is this paragraph as intentionally misleading as it appears? And what precisely does it mean? We'll say more on this latter point later.

Very high personal taxes were clearly one factor that helped choke off the expansion. While personal taxes on average took only 12 percent of personal income in 1993, they consumed almost 24 percent of the growth in personal income between 1999 and 2000.
The point isn't simply that it's misleading. The actual economic reality the statistics point to seems simply enough to understand once you look closely at the structure of the sentence. The point is that it looks intentionally misleading. And if that is so, where were the Post editors?