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Josh Marshall

Josh Marshall is editor and publisher of TalkingPointsMemo.com.

Articles by Josh

Okay, one more TPM scoop for the day.

As TPM reported back on December 6th, there was always major controversy within the law firm of Morrison & Foerster over its decision to represent TPM World Exclusive!  You heard it hear first!  Must Credit.American Taliban fighter John Walker Lindh. Now, according to this article, the firm has removed its name from the representation and the case is being conducted under the names of the attorneys handling Walker's defense. (The lead attorney is MoFo partner James J. Brosnahan.)

Now, however, TPM can reveal a heretofore unreported element of the controversy -- a fact, at first at least, not even revealed to many partners in the firm.

Morrison & Foerster not only agreed to take Walker's case. From the beginning, they agreed to do so pro bono.

Ya heard it here first.

For all the stuff I've seen about Enron, nothing has shocked me more than what I'm about to describe.

You may already had read that the Florida state pension fund took a bath on Enron stock. The fund owned 7.6 million shares of Enron stock totalling roughly $300 million.

But according to this editorial in the St. Petersburg Times, "nearly a third of the state's 7.6-million shares were bought after Oct. 22."

That's shocking.

If you look at this chart of Enron's stock decline last year, you'll see that October was the month that Enron stock went into complete free-fall. On October 16th, Enron announced a $1.2 billion decrease in company value. On October 22nd, the SEC announced an investigation of the company. And the next day, October 23rd (unbeknownst to the public, at least) Andersen kicked the document shredding into overdrive. Though the formal bankruptcy came later, October was the month that Enron fell through the floor.

Ok, sure, they say 'buy on the dips.' But is there any reasonable explanation why a pension fund would invest $100 million in Enron as it was heading into its death spiral? I can't imagine what that explanation would be.

This AP article portrays it as a case of hindsight being 20/20 and the persistent power of misplaced trust in Enron. But I'm not sure that's credible. Nor does the Florida AG, who is considering filing a RICO suit.

Who's responsible? That's not clear. But there are some intriguing clues.

One of the three trustees of the Florida pension fund is Governor Jeb Bush. But there is as yet no evidence that he acted as anything more than a passive overseer. The actual decision-making was coming from the private company managing the state's money.

That company was Alliance Capital, the biggest institutional holder of Enron stock. Until last August a member of Enron's Board, Frank Savage, was a high-level Alliance executive. (Specifically, he was the chairman of Alliance Capital International, a division of Alliance Capital Management.) Savage left Alliance Capital on August 8th, a week before Jeff Skilling resigned as CEO of Enron.

(Savage's political contributions heavily favor Democrats.)

U.S.-based institutional client sales and marketing for Alliance Capital is directed by Roger Hertog, a major funder of conservative causes, a major contributor to the Republican party, and apparently also a friend of Ken Lay.

If you go look at the just-released updated list of administration appointees who owned Enron, you'll notice that George Argyros' name is at the top of the list.

Now, I'll grant you, that's mainly because his name starts with 'A'. Even so, let's talk for a moment about George Argyros, Ambassador Extraordinary and Plenipotentiary of the United States of America to Spain and Andorra.

It's not just that Argyros owned between $100,000 and $250,000 of Enron stock, which in itself isn't a bad thing. Nor that he bought his ambassadorship for $130,000. Not even that he's considered a notorious slumlord in his haunts in Southern California.

No, what's really bad about George Argyros is that he's apparently an incorrigible egomaniac and pitiful self-promoter who's probably making us look bad to most Spaniards.

If you look at Argyros' biography on the US Embassy in Madrid website, you'll see a "Partial List of Awards Received" numbering twenty-five in all. These include, and I quote, such honors as ...

"Heart Award", presented by the Costa Mesa Chamber of Commerce, in recognition of all his years of community service and philanthropic contributions. (1987)

"Paul Harris Fellow Award", presented by the Orange Rotary Club on behalf of the Rotary Foundation of Rotary International, in appreciation of tangible and significant assistance given for the furtherance of better understanding and friendly relations between peoples of the world. (1990)

Inducted into the Horatio Alger Association of Distinguished Americans, perhaps the single most coveted award given in American (sic) to non-military, non-show business individuals. (1993)

Recipient of the American Academy of Achievement Golden Plate Award, honoring him as a representative of the many who excel in his chosen profession. (1996)

Inducted as Chairman of the Horatio Alger Association of Distinguished Americans. (1998)

Recipient of Manager of the Year Award presented by Society for Advancement of Management, California Chapter. (2001)

Glad he didn't have to scrape the bottom of the barrel or anything.

What American can hold his or her head high in Spain if this goofball is our Ambassador?

Here's your updated list of administration appointees (Senate-confirmed and otherwise) who either owned Enron stock or hadTPM World Exclusive!  You Heard It Hear First!  Must Credit. some other relationship with the company. It supercedes the earlier list we published on January 2nd and has eight new names.

Let's stipulate again that most of these folks disclosed Enron assets in the one-thousand to fifteen-thousand dollar range and probably just had Enron as some obscure line-item in their investment portfolios. Others had much more. (Remember: the employees who lost their shirts because they had Enron-heavy 401(k)s had a piece of the 'ron too. And they're victims, not perps.)

In any case, the data speaks for itself and is provided as such.

Appointee: George L. Argyros
Title: Ambassador Extraordinary and Plenipotentiary of the United States of America to Spain and Andorra
Department: State
Relationship: Enron Stock $100,000 - $250,000; $1,000 - $15,000

Appointee: Grant D. Aldonas
Position: Under Secretary for International Trade
Department: Commerce
Relationship: Enron stock value $15,001-$50,000, dividends and capital gains $2,501-$5,000

Appointee: Vicky A. Bailey
Title: Assistant Secretary, International Affairs & Domestic Policy
Department: State
Relationship: Enron stock $1,001-$15,000

Appointee: Charlotte L. Beers (Beadleston - married name)
Title: Under Secretary of State for Public Diplomacy
Department: State
Relationship: Enron Stock $100,000 - $250,000

Appointee: Stephen F. Brauer
Title: Ambassador Extraordinary and Plenipotentiary of the United States of America to Belgium
Department: State
Relationship: Enron Common Stock $50,000 - $100,000

Appointee: Nicholas Calio
Position: Assistant to the President, Director of Legislative Affairs
Department: White House
Relationship: Enron stock value $1,000-$15,000, dividends and capital gains $1,000-$2,500

Appointee: Bruce Carnes
Title: CFO
Department: Energy
Relationship: Enron Stock $1,000 - $15,000

Appointee: Steven M. Colloton
Title: US Attorney (S.D. Iowa)
Department: Justice
Relationship: Enron stock $1,001-$15,000

Appointee: Kathleen B. Cooper
Title: Under Secretary for Economic Affairs
Department: Commerce
Relationship: Enron stock $1,001-$15,001

Appointee: Harry Cummins
Title: U.S. Attorney, Eastern District of Arkansas
Department: Justice
Relationship: Enron Stock $1,001-$15,001

Appointee: Linnet Deily
Title: Deputy
Department: Office of the Trade Representative
Relationship: Enron Stock $15,000 - $50,000

Appointee: Nils J. Diaz
Title: Commissioner
Department: US Nuclear Regulatory Commission
Relationship: Enron Stock $1,000 - $15,000

Appointee: Thomas C. Dorr
Title: Under Secretary for Rural Development
Department: USDA
Relationship: (1) Enron stock $1,001-$15,001 (MG Dorr IFT), (2) Enron stock $1,001-$15,001 (Roth IRA)

Appointee: Richard J. Egan
Title: Ambassador to Ireland
Department: State
Relationship: Enron Partial Sale
Value: $250,000-500,000
Dividends: $5,001-15,000
Capital Gains: $100,001-1,000,000

Enron Corporation (SOLD)
Value: Less than $1,001
Dividends: $201-1,000

Egan's spouse: The following is owned through his wife's Lawhill Capital fund for the year 2000:

Enron Gas & Oil
15,679 US G/L

Enron Corp.
Lost 12,429 US G/L

Appointee: Linda J. Fisher
Position: Deputy Administrator
Department: EPA
Relationship: (Two separate direct holdings) 1. Enron Corp. Oregon NPV stock value $1,000-$15,000 2. Enron Corp. Oregon NPV stock value $15,001-$50,000, dividends $201-$1,000

Appointee: Peter R. Fisher
Position: Undersecretary for Domestic Finance
Department: Treasury
Relationship: Enron stock value $1,000-$15,000

Appointee: Emil H. Frankel
Title: Assistant Secretary for Transportation Policy
Department: Transportation
Relationship: Enron stock $1,001-$15,000

Appointee: Eugene Hickok Jr.
Title: Undersecretary
Department: Education
Relationship: (1) Spouse Katherine Hickok Rev. Trust: Enron stock $15,001-$50,000 value, $5,001-$15,000 dividends/capital gains; (2) Son Adam Eugene Hickok Trust: Enron stock $15,000-$50,000 value, $5,001-$15,000 dividends/capital gains; (3) Daughter Katherine C. Hickok Trust: Enron stock $15,001-$50,000 value, $5,001-$15,000 dividends/capital gains.

Appointee: Allen F. Johnson
Title: Chief Agriculture Negotiator
Department: US Trade Representative
Relationship: Enron stock $1,001-$15,000

Appointee: Hansford T. Johnson
Title: Assistant Secretary
Department: Navy
Relationship: Enron stock $1,001-$15,000

Appointee: I. Lewis Libby
Position: Chief of Staff
Department: Office of the Vice-President
Relationship: Sold Enron stock value $1,001-$15,000

Appointee: John H. Marburger
Title: Director
Department: Office of Science and Technology
Relationship: Enron stock $1,001-$15,000 value, $201-$1,000 dividends

Appointee: Alice H. Martin
Title: US Attorney, Northern District of Alabama
Department: Justice
Relationship: Enron stock $1,001-$15,000

Appointee: Sandra L. Pack
Title: Assistant Secretary
Department: Army
Relationship: Enron stock less than $1,001 value, $5,001-$15,000 capital gains.

Appointee: John Price
Title: Ambassador to Mauritius, Comoros, Seychelles
Department: State
Relationship: Enron stock through four direct/indirect sources: (1) less than $1,000; (2) $15,001-$50,000; (3) $1,001-$15,000; (4) $15,001-$50,000.

Appointee: John E. Robson
Title: Chairman/President
Department: Export Import Bank
Relationship: Enron stock $1,001-$15,000

Appointee: Karl C. Rove
Position: Senior Advisor to the President
Department: White House
Relationship: Notation on SF-278: "All individual stock holdings to be sold (dated) 5/18/01." Enron stock value $100,001-$250,000, dividends $201-$1,000

Appointee: Donald H. Rumsfeld
Title: Secretary
Department: Defense
Relationship: Enron stock $1,001-$15,000
(Click here for more on the Rumsfeld holdings, now apparently sold.

Appointee: William Schubert
Title: Administrator, Maritime Administration
Department: Transportation
Relationship: Project Consulting Services for Enron, paid over $5,000

Appointee: Thomas Scully
Title: Administrator
Department: HCFA
Relationship: Enron stock $15,001-$50,000

Appointee: Martin J. Silverstein
Title: Ambassador to Uruguay
Department: State
Relationship: Enron stock $15,001-$50,000

Appointee: Margaret Tutwiler
Position: Advisor to the President
Department: White House
Relationship: Enron stock value $15,001-$50,000

Appointee: Alexander Vershbow
Title: Ambassador to Russia
Department: State
Relationship: Enron stock $50,001-$100,000 value, $201-1,000 dividends

Appointee: Marcelle M. Wahba
Title: Ambassador to the UAE
Department: State
Relationship: Enron stock $1,001-$15,000

Appointee: Donald W. Washington
Title: US Attorney (W.D. Louisiana)
Department: Justice
Relationship: Enron stock $1,001-$15,000

Appointee: Thomas E. White
Title: Secretary of the Army
Department: Defense
Relationship: Former Vice-Chairman of Enron Energy Service; Enron Corp-common stock worth $25,000,001-50,000,000 that paid over $5,000,000 in dividends and capital gains; Enron Corp-stock options worth $25,000,001-50,000,000 that paid $100,001-1,000,000 in capital gains; Enron Corp Cash Balance Retirement Acct (Enron Stock will rollover into permissible property) worth $100,001-250,000 that paid less than $201 in dividends; Enron Corp-DLJ Private Equity Partners Fund II that paid $5,516,131.08 in salary; Enron Employee Stock Ownership Plan, Defined Contribution Plan Managed by Enron worth $1,000,001-5,000,000 that paid less than $201 dividends; Enron Phantom Stock Award worth $5,000,000-25,000,000 that paid less than $201 dividends; Enron Retirement Account (Enron Stock) worth less than $1,001 that paid less than $201 dividends; Agreements: Pursuant to provisions of employment agreement and routine practice of Enron Corp, given $1,000,000 in severance pay; The Phantom Stock Award in Enron (approximately 240,000 shares) were accelerated and paid out when he left Enron.

Appointee: Mark Weinberger
Title: Assistant Secretary for Tax Policy
Department: Treasury
Relationship: Enron stock $1,001-$15,000 value, $201-1,000 dividends

Appointee: William Winkenwerder
Title: Assistant Secretary
Department: Defense
Relationship: Enron stock $1,001-$15,000

Appointee: John S. Wolf
Title: Assistant Secretary for Nonproliferation
Department: State
Relationship: Enron Stock $50,000 - $100,000

Appointee: Robert Zoellick
Title: US Trade Representative
Department: USTR
Relationship: Enron stock $15,001-$50,000, Enron advisory fees $50,000

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 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 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.

Ouch!

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 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 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 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.

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