How Enron Got Cozy With Bush and Company
Following the money is the key to understanding the Bush administration. Once you figure out who gave how much, look for the quid pro quo. Take, for example, Enron, the big Texas natural gas and trading company, and its current chairman Ken Lay. He’s friends with, and was a backer of, the president’s father. As Business Week sets it out, Lay stepped in after Bush Sr. got beaten by Clinton in 1992, arranging a stopover at Enron for ex-secretary of state James Baker and former commerce secretary Robert Mosbacher, who became consultants.
Enron ponied up $500,000 for Dubya’s Texas gubernatorial campaigns, making it his largest single contributor. During last year’s presidential campaign, the firm contributed corporate jets to the Republicans and gave $250,000 for their convention in Philadelphia, Business Week reports, while Lay himself plunked down $100,000 for the inaugural committee and was Bush’s adviser on energy during the campaign. Enron’s total listed contributions to the Republicans during last year’s presidential race ran to $1.8 million, according to Public Citizen.
Lay currently is a prominent adviser to Spencer Abraham, the free-trade maniac who is secretary of energy. From Enron’s point of view, this puts Lay in the catbird seat. Abraham is the member of the Bush team who deals with the energy crisis in California, where Enron is a major supplier. Recently, Abraham infuriated Western governors—some of them Republicans—by refusing to consider government price controls to halt runaway energy prices.
Denise Rich, the latest Clinton-era mystery woman, is a godsend to scandal buffs who have dogged the ex-president into retirement. The former wife of fugitive commodities kingpin Marc Rich, the songwriter-socialite is sometimes depicted as the new Pamela Harriman of the Democratic Party. Newsweek reports that over the last eight years her political contributions to Bill and Hillary totaled $1.3 million, including $450,000 for the Clinton Presidential Library in Arkansas. (U.S. News says the Clintons asked her for $4 million.)
In New York, U.S. Attorney Mary Jo White is said to be considering investigating Rich’s financial records as Dan Burton’s House Reform subcommittee mulls plans to grant her immunity to testify. Last week she avoided testifying by invoking the Fifth Amendment. On Sunday, Pennsylvania Republican senator Arlen Specter raised the far-out possibility that “President Clinton could still be impeached” because of his string of unusual pardons, including the one for Rich.
The daughter of wealthy New England shoe manufacturer Emil Eisenberg, Denise married Marc Rich in 1966. Reportedly her family provided the seed capital to set Rich up in business. In 1979 Marc Rich set up trusts for the couple’s three daughters. In 1983 Denise and the children accompanied him when he fled to Switzerland. But by the early ’90s she was involved in what was depicted in the press as an acrimonious divorce battle over money. Rich was then estimated to be worth $800 million. According to Forbes, Denise accused one of Rich’s associates of manipulating the children’s trusts. She asked for $500 million, but according to one press account, was offered $3.6 million. What she finally settled for is unclear.
In October 1993, with markets depressed for Rich’s biggest commodities, aluminum and oil, Forbes reported that the Riches and three other retiring partners “cashed in shares, taking an estimated $900 million or more in capital out of Rich’s companies.” At the time, Rich enterprises were estimated to do $20 billion in business annually.
Burton and other investigators would love to trace Denise’s political contributions to Clinton back to her former husband. Tying Clinton to the fugitive could open the door to untold conspiracies. To get an idea of where the imbroglio might lead, consider this brief summary of the commodities trader’s reported business dealing, which, depending on who’s doing the reporting, have included: running the South African oil blockade in the 1980s; helping the Communist Party loot Russia’s gold supplies, and sending them to Switzerland; breaking the Iraq boycott to sell its oil; selling oil to Serbia during the war in Kosovo; trading weaponry and oil to Iran; doing business with the U.S. Mint as a fugitive; collecting U.S. grain subsidies while on the run; and ripping off Russian oil.
Rich owns oil refineries in Romania, office buildings in Spain, and smelters in Australia, Iran, Sardinia, and West Virginia, Playboy reported in 1993, adding, “He has 40 offices and 1300 employees throughout the world and is simultaneously the uncontested emperor of aluminum, a prince of sugar, a shogun of soy, a mover and shaker of the world’s markets in nickel, lead, zinc, tin, chrome, magnesium, copper, and coal.”
And that’s just for starters. While adorning the FBI’s “10 Most Wanted” list, Rich was whispered to be working for American intelligence, and was a behind-the-scenes negotiator who helped arrange for East German chief Erich Honecker to flee to Chile. He created the spot market in oil, sidestepping the seven sisters cartel, and has invested the late Romanian despot Ceausescu’s stolen fortune. A Senate committee even investigated his role in the murky mother of all conspiracy scandals, the powerful, shadowy BCCI financial network.
All this time, Denise had been building her own reputation as a songwriter, most prominently in 1986 as the author of “Frankie” for Sister Sledge. But her compositions have been performed by others, including Aretha Franklin and Mary J. Blige (their hit duet “Don’t Waste Your Time”), Celine Dion, Marc Anthony, Patti LaBelle, Mandy Moore, Diana Ross, Donna Summer, and Chaka Khan. Rich’s Web site (www.richsong.com) reports, “Her writing talents are not reserved for the music business alone. Her songs have been featured in movie soundtracks.” They include The First Wives Club, To Wong Foo, Thanks For Everything! Julie Newmar, Kiss Me Guido, and Meteor Man. She also wrote “Next American Hero,” recorded by Richie Havens, which served as the closing anthem for the 1988 Olympics, and the theme for the National Civil Rights Museum (“All I Wanna Be Is Understood”).
The Bush White House says the president’s $1.6 trillion 10-year tax cut will mean a $1600 break for a family of four. Critics calculate the actual benefits at anything from nothing for low- and working-income people to $227 for some in the middle class. By the way, the real cost is a staggering $2.1 trillion.
Best alternative to Bush’s giveaway to the rich is the 50-member Congressional Progressive Caucus’s plan called “American People’s Dividend,” which offers $300 for every man, woman, and child. A married couple with three children would get $1500. “Unlike the Bush proposal, which reserves 40 percent of the tax benefits for the wealthiest 1 percent of the population, our proposal gives the wealthiest 1 percent exactly 1 percent of the tax relief,” according to the Caucus.
“I think we’ve demonstrated as a people that we don’t think some form of socialism is the way to run a society,” Treasury Secretary Paul O’Neill declared last week. “I think it’s really corrosive to have this argument about the rich and the poor.” And why should he worry? O’Neill received $59 million in salary and perks last year, reports The Washington Post.
Additional reporting: Rouven Gueissaz and Adam Gray