Government intervention in assuring corporate accountability has been systematically weakened for two decades. And now we see the flaws inherent in this conservative model of cowboy capitalism.
Enron exposes endemic problems, but not – I think – insoluble ones. Here are some thoughts about how government activism that can help protect us.
We’ve heard a good deal about the thousands of Enron employees whose pensions evaporated as their company stock crashed. But something less well known is that one group of employees escaped unharmed. These were unionized sheet metal workers employed by subsidiaries Enron had acquired, whose pensions – maintained separately at their union’s insistence – were not affected by Enron’s crack-up. Greater controls are clearly needed on corporate dominated pension plans to prevent dangerous and callous manipulation.
Another costly chapter in the Enron story is the astonishingly corrupt tale of electricity deregulation in California. With Enron controlling about one-quarter of wholesale trading in electricity, under virtually no regulatory oversight, they lobbied and bullied California’s legislature to deregulate the retail market. Many experts credit Enron with the manipulations that led to last year’s destabilizing energy crisis, costing Californians about fifty billion dollars and ending only when the government imposed price controls. In hindsight we can clearly see that it’s government’s proper role to protect the consumer need against corporate greed in something as critical as public utilities.
Enron’s unchecked arrogance reached everywhere, including federal tax policy. Even as CEO’s were lying about Enron’s growth and cashing in their own fat stock options, they were simultaneously lobbying congress to pass President Bush’s economic stimulus bill, under which the company would have seen a tax rebate of hundreds of millions of dollars.
This at base is really about political corruption – and I don’t mean the backroom buying and bribing of politicians. I mean the saturation and domination of our political system by concentrated corporate wealth. In the 2000 election cycle alone, Enron and its former CEO Ken Lay gave millions of dollars to state level candidates and state party committees. This was fifty five percent to Republicans, and forty-five percent to Democrats. We simply have no choice but to protect the gains we’ve made on campaign finance reform here in Vermont, and to keep pushing for it at the national level. We can regulate the presence of big money in elections…and we must.
I’m Ellen David Friedman in East Montpelier.
–Ellen David Friedman is Vice Chair of the Vermont Progressive Party and has been active in the Labor movement for 25 years.