It looks like we were on to something last week when we pointed out the importance of revealing who invested in Enron's outside partnerships. This article at SmartMoney.com publishes some of the first documentary evidence on the investors in LJM2.
(Hint: they're big Wall Street firms, though it's not immediately clear whose money they were investing.)
But on CNN's Capital Gang last night Senator Kent Conrad implied that the search for the partners might get more explosive still. Asked by Mark Shields whether Enron was a political scandal, the Senator replied...
CONRAD: I don't think we know yet. I think in fairness, what we know is this is corporate scandal of enormous dimension. It may become a full blown political scandal. Goodness knows there's tremendous amounts of money that Bush -- the administration got the greatest level of financial support from Enron people.
So what's going on here? I think that what Conrad is saying is likely absolutely true. He doesn't know who the investors are. But he's hearing that the lists include some very high-profile names. Believe me, a lot of people are hearing that.
We see an involvement of Enron and the replacement of the FERC chairman. I think that's going to lead to a lot of serious questioning. But I'll tell you the real bottom line. The thing that I think is going to turn this into a scandal of even greater dimension is when the partners are revealed. Who was at the trough? Who had the advantage of these partnership agreements that enriched themselves at the expense, its shareholders and its creditors?
SHIELDS: Do we know any major figures you think were partners or?
CONRAD: Those names have not yet been revealed, but I've been told by those who are hot on the trail, that there's going to be some very, very embarrassed major figures in the days ahead.
There are investigators on the Hill, ones working in private lawsuits against Enron, and presumably many in the Justice Department who are piecing together this information. And given that investments in one of Fastow's particularly lucrative sweetheart deals would likely be politically fatal and perhaps even worse, the rumor mill is bubbling with names. Names high up the political ladder. Really high up the political ladder.
A good bit of this is probably just wishful thinking on the part of Democratic politicos in Washington. But not all of it, I'd bet. In any case, we'll know soon enough.
Special thanks to TPM reader A. for the Kent Conrad catch.