Josh Marshall

Josh Marshall is editor and publisher of

Articles by Josh

Hear that creaking sound? That's the conventional wisdom about the Bush administration being in the clear on Enron starting to shift.

The early questions about whether the Treasury or Commerce Secretaries did anything for Enron when they got desperate calls late last Fall really miss the point. Once it became clear that Enron had been losing money hand over fist and that the company was -- as Enron Exec Sherron Watkins had told Ken Lay -- "an elaborate accounting hoax," what exactly was it they could have done?

So long as the President didn't issue an executive order freezing trading in Enron stock or take some other unimaginable action, there was really nothing that could be done. Enron's goose was cooked.

The questions about what favors got done are going to be ones that did or didn't get done earlier.

And as Byron York correctly notes in this article in National Review Online, the White House's growing unwillingness to answer questions is beginning to worry administration supporters.

For my money, I think the allegations stemming from Ken Lay's apparent axing of the former head of the Federal Energy Regulatory Commission, Curtis Hebert, are the first ones I've heard that really could stick.

Hebert, a Republican, got cross-wise with Ken Lay during the California energy crisis. And Lay made it clear to him that if he didn't play ball he "could no longer support [Hebert] as chairman." Hebert didn't play ball and pretty soon after that he was gone.

Hebert goes to pretty great lengths not to draw a direct connection between Lay and his being pushed aside at FERC. But his argument, frankly, strains credibility.

In any case, decide for yourself. Here's a transcript from CNN from the 15th ...

MARCHINI: What did Ken Lay want from you?

HEBERT: Well, actually Ken Lay wanted me to mandate regional transmission organizations, which I had told him there was no legal basis for under the Federal Power Act, not to mention it was not in the best interest of America. As you remember, at this same time last year, we had high prices in California and in the West. We even had the lights going out from time to time.


HEBERT: It certainly was not the time to do something like that when, quite frankly, you're worried about Americans having the lights on and having lower prices and reasonable energy.

MARCHINI: You didn't agree with Mr. Lay. What was the fallout?

HEBERT: Well, I didn't agree with him. Then he informed me that quite frankly, he and his company, Enron, could no longer support me as chairman. So, you know, have it as you will, that was his wish. But, you know, so many people want to give Ken Lay such great weight. I never gave him the amount of weight I think some people did. He certainly tried to wield a big stick as did a lot of his executives in Washington and in states throughout America.

But Enron, I never really saw as someone who could give me expertise as to where we should be going energy in America. I thought they were always looking after the best interest of Enron and never, quite frankly, the best interest of the electrical industry.

MARCHINI: Do you feel that a lack of Ken Lay's support cost you your job as the head of the FERC?

HEBERT: I never had any reason to believe that the White House was influenced by Ken Lay. I know he has a lot of friends, certainly, in the administration. Because he is-throughout Texas and has done a lot of work there. But the reason I had left the FERC was because the administration brought in two appointees, quite frankly, that agreed with Mr. Lay on mandating the regional transmission organizes. And they disagreed with me. There was already one member at FERC that agreed with them. So, I no longer had the balance, if you will, of the FERC. What good was it to be chairman?

What good, indeed?

Ready for your TPM intelligence briefing? Excellent.

The news today is that Chinese intelligence found a couple dozen bugs on an American-manufactured airplane which was to serve as Chinese President Jiang Zemin's equivalent of Air Force One. Given where the plane was manufactured and refitted, the origin of the listening devices - which were apparently highly sophisticated - seemed rather obvious.

Jiang was furious at the findings, according to the Financial Times.

But this story isn't exactly what it appears.

Look closely at when the bugs were allegedly found: last Fall. So this isn't really news. The fact that Chinese officials went to the press is news. And the reason is fairly straightforward and self-explanatory. President Bush is making a major trip to China late next month. And much rides on it for both sides -- which we'll be saying more about soon.

This is an effort on the part of the Chinese to throw the US side off-balance in the lead-up to the summit. It's a Chinese attempt to get the upper hand on the US by making it seem that an apology is required or that Beijing is being generous by not demanding one. It's standard operating procedure from the PRC.

So are the bugs really American? Who knows? I'd certainly assume so. But this doesn't have anything to do with spying. It's pure international politics.

In life, Enron may not have produced much of value. But in death the company is turning out some extremely high quality comedic product. Maybe there's hope for the company yet.

Today Enron fired accounting firm Andersen. "We're very troubled about the destruction of the documents, and we're very concerned about the accounting advice we got," said Enron lawyer Bob Bennett.

But Bennett's just a hired gun.

The real choice material is coming from the big man himself, Ken Lay:

While we had been willing to give Andersen the benefit of the doubt until the completion of that investigation, we can't afford to wait any longer in light of recent events, including the reported destruction of documents by Andersen personnel and the disciplinary actions taken against several of Andersen's partners working in its Houston office ...
In other news, Bill Clinton is now suing former White House secretary Betty Currie for insufficient supervision of Monica Lewinsky.

If you haven't seen enough craven smarminess from politicians lately, then by all means take a look at this new Washington Post article by Tom Edsall.

Enron cash has become Washington's newest hot potato. And politicians who until just recently couldn't grab enough of the stuff are now trying to 'divest' themselves of it as quickly as possible.

You take it. No, you take it. No, YOU take it ... and so on.

I guess one can't give the stuff back since Enron is now in a bankruptcy-induced state of suspended animation. So most of these jokers are finding charities to give the contaminated cash to.

Now, this is a pretty sad situation. So to help out we're announcing the new Enron Talking Points Memo-Capitalization Fund.

If you're an elected official who is sitting uncomfortably on some Enron contributions, you can donate the money to the ETPMCF. This will not only get the money out of your hands. It will also help support on-going muckracking into the Enron fiasco and humor at the expense of Enron evildoers, which should in some degree expiate guilt owing to haven taken the money in the first place.

Now, it's true. The payment system can only accept donations of up to $50. And Enron seemed to like giving checks in substantially higher amounts. But this can be worked around pretty easily by returning repeated times to remit the full amount of the Enron donation. It's like when you have your contributors' spouses and kids pony up money to evade the campaign finance laws.

Trust me, it'll work like a charm.

What a breath of fresh air. For some time now I've wondered why the US doesn't pursue what I call an 'Arabian fringes' strategy in the Persian Gulf. And now Senator Carl Levin seems to be arguing for something similar.

Here's the idea.

By now we all know we've got serious problems with Saudi Arabia. The question is, do we have any better options?

And the answer, it seems to me, would seem to be a surprisingly clear 'yes'.

As you can see on this map, the southern and eastern fringes of the Arabian Peninsula are ringed by a series of emirates and sultanates. Some like Oman are actually rather large, while others like Bahrain are tiny little islands in the Persian Gulf.

With the exception of Yemen, though, the one thing that unites pretty much all of them is that they have more progressive political systems than Saudi Arabia and they're more friendly to the United States and even, in some cases, Israel. Here's a good, recent article from Slate about how tight we are with the Sultan of Oman. And here's a transcript of Larry King spending some quality time with the Crown Prince of Bahrain. And that doesn't even get you to the United Arab Emirates.

So if the Saudis have such a beef with us, why do we need to be there?

It seems to me that our geostrategic needs can be met elsewhere.

A number of readers have written in to argue that there's nothing wrong or out of the ordinary with the document shredding Arthur Andersen's accountants did over at Enron. One even tells me it's standard operating procedure over at Ernst & Young where his sister works.

Be that as it may, I feel pretty vindicated by today's announcement that Arthur Andersen has summarily fired David B. Duncan, the lead partner on the Enron account.

Another reader points out yet another interesting fact. It turns out that David B. Duncan and Kenneth L. Lay are both on the board of directors of the American Council for Capital Formation.

Now it's important to note, the ACCF is neither part of nor connected with the United States Institute for Economic Efficiencies, the Academy of Trickle-Down Sciences, the Center for Deregulation and Frictionless Markets, or the Club for Growth. (Actually, here's where the joke breaks down, because there really is a Club for Growth - it's a supply-side pressure group that gangs up on normal Republicans in the Northeast ... )

In all seriousness, I'm really all for markets, capitalism, and capital formation. (In a round about way it's one of the reasons I'm now freelancing rather than at my old job.) And to prove it, I'll even make a direct pitch to support Talking Points Memo with an easy online donation!!!

And if that's not enough, to fill the void left in the frictionless commodity market world by the Enron collapse, tomorrow we'll debuting our new online market in Ken Lay and David Duncan prison term years.

If you're down in the dumps or need something to pick you up I really can't recommend enough that you stop by the Enron website and browse through the sections of the site that predate the bankruptcy.

I've commented previously on the dopiness of Enron's glammy, wise-guy Schumpeterian ad campaign. But most of their website now reads like a cacophony of gag lines and double meanings.

Like this beaut from their 'Who We Are' Page ...

It's difficult to define Enron in a sentence, but the closest we come is this: we make commodity markets so that we can deliver physical commodities to our customers at a predictable price. It's difficult, too, to talk about Enron without using the word "innovative." Most of the things we do have never been done before ...
Some posts just pretty much write themselves.

Top ten innocent explanations for Arthur Andersen's end-of-Enron document shredding party.

10. Arthur Andersen company simply making a quick transition to fabled "paperless" office.

9. Collateral damage in effort to destroy all circa-1998 George W. Bush 'I wanna be president' coloring books.

8. Enron kept books in pre-2002 European currencies now supplanted by the Euro.

7. Cool new portable paper-shredder from OfficeMax just too big a temptation.

6. Who doesn't throw away receipts?

5. Documents mistaken for mail and disposed of in a fit of Anthrax-scare hysteria.

4. Compassion for over-worked, grunt congressional staffers who will be running the investigation.

3. Incinerated paper is surprisingly efficient new energy source!

2. Just a mistake. Thought they were records of Cheney Energy Taskforce.

1. Accountants just love doing time.

I think you can safely say that this new Enron article in the Washington Post is profoundly damning.

Here's Enron attorney Bob Bennett explaining why Enron ordered an intentionally superficial and non-probing internal investigation into its own accounting methods.

Bennett said Enron told the lawyers not to second-guess Andersen's accounting and not to make a detailed analysis of particular transactions because he thought speed was essential and had no reason to question Andersen's work.
Like they say, when the facts are on your side, you pound the facts.

When the law's on your side, you pound the law.

When you got neither, as would seem to be the case with Bennett's new client, apparently you give your own credibility a pounding.