The Parochial Coverage of Enron
Again, the US media has shown that it is just not up to the task of stal king the corruption of the global economy. Enron collapses and now the media tells us that it is all about Raptors and the connivance of Arthur Andersen (or isn't it now Accenture?).
Certainly the fiscal games played by the Board and the Management provides the conjunctural movement for the fall of Enron, and of course the political-corporate nexus, the United States of Enron as Bob Herbert put it so nicely in the New York Times, enabled Enron to squeeze the maximum fiscal irresponsibility within the letter of the law, especially given that the laws opened up vast areas of accounts to unregulated prospecting for dollars.
Some of this must be laid at the feet of the Gramms, for Wendy Gramm joined the Enron Board in 1993 just after she left the Commodity Futures Trading Commission; this Commission, days after Gramm's resignation, deregulated energy futures, thereby allowing Enron to earn 10% of its profits by adventures on the financial markets. The most boring profession became the margins from where vast profits could be harvested. All this is beyond doubt.
But there is much more to the story on the global stage.
Enron, the beast, was not only innovative in its domestic ventures, but in its international schemes it generally resembled the first joint stock company in world history, the English East Indian Company (founded 1600). The EIC went into India, backed by stakeholders, and while its managers (then called Nabobs) made vast fortunes (and bought themselves into Parliament, so Edmund Burke impeached the most famous Nabob, Warren Hastings), the investors came away with decent returns.
The harsh conditions of rule guaranteed the profits of the EIC, because any dissent or any attempt to prevent the forced entry of EIC needs (such as for opium or for the destruction of the artisans of Bengal) was met with the harshest violence. No student of Indian history can ever forget that the EIC participated in the dethumbing of the weavers of Bengal, the subject of a beautiful poem by the dearly departed Agha Shahid Ali (in his volume The Half-Inch Himalayas).
When the firm collapsed due to the uprising of the subcontinental peoples in 1857, the Crown (this time on Victoria's head) came in and bailed out the undertaking. Whenever the EIC needed state assistance, the Crown was able and willing to offers its services, here just as the Crown colluded with Parliament to crush the democratic Chartist movement within England in the 1840s.
The Enron story is almost identical, and rather than Warren Hastings the main character is none other than Frank Wisner, Jr. I wrote about Mr. Wisner in the Indian Left press in 1997 when news broke that he had left his post as Ambassador to that country to join the board of Enron.
When I say "news broke," I mean I read it in the Wall Street Journal and on the Enron website - most of the world seemed unconcerned that these people, Wisner and Lay, Bush and Clinton, live on that distant continent of sleaze to which you and I only have a fleeting glimpse. For the media in the US, the revolving door is taken for granted.
Frank Wisner, Jr. was a big catch for Enron Corporation. His lineage is impeccable, since his father, Frank Wisner Sr., was a senior CIA official (from 1947 until his suicide in 1965) who was involved in the overthrow of Arbenz of Guatemala (1954) and Mossadeq of Iran (1953).
Wisner Jr. was well-known in the CIA and he worked as Under Secretary of Defense for Policy and Under Secretary of State for International Security Affairs; Kenneth Lay, incidentally, also worked for the Pentagon during the US war in Vietnam. With "economic espionage" as a task for the CIA in the 1990s (have we already forgotten those stories?), there is little doubt that Wisner used this instrument during his long-tenure as Ambassador in Asian nations.
A Wisner staffer told Inter Press Services in 1997, "If anybody asked the CIA to help promote US business in India, it was probably Frank."
When Wisner was US Ambassador to the Philippines (1991-92), Enron was in the midst of negotiations to manage the two Subic Bay power plants. When Wisner left Manila in July 1992, Enron won the deal and began to manage the plant in January 1993. During Wisner tenure in India, he fought long and hard to secure various deals for Enron. He went so far as to boycott the "India Power '96 -- Beyond Dabhol" summit, despite being scheduled to give an address (this was part of a US advisory to companies to avoid India for six-months, a pressure tactic on India during the winter of 1995-96).
Wisner left India in early 1997 only after it seemed like Enron's place was secure, that is, after the August 1996 agreement between Enron and the Government of Maharashtra that allowed Enron a guaranteed sum of $30 billion, with gross profits being in the range of $12 billion to $14 billion, or double what is permitted by Indian law in the power sector.
When the people's delegates tried to appeal this in the courts, the Supreme Court of India, in May 1997, refused to hear the appeal: then Wisner returned to the US, his job completed, and joined the Enron Board on 27 October 1997.
But there is more from the global stage, and this is all just a brief summary: To gain access to a lucrative contract to rebuild the Shuaiba power plant in Kuwait, Enron hired former US Secretary of State James Baker as a consultant who traveled to the oil kingdom to negotiate with his Gulf War allies for his new employer.
The sons of George H. Bush also helped Enron win this contract despite a lower bid from Deutsche Babcock, a German firm. In addition, the Bush brothers helped Enron in their deal to win a contract to build a pipeline from Chile to Argentina in 1988. Despite all this evidence, Rebecca Mark, Chairperson of Enron Development Corporation, told the Indian press in 1997, "Enron's reputation is being attacked, and we do not do business under the table."
One has only to read Human Rights Watch's fabulous 1999 report The Enron Corporation: Corporate Complicity in Human Rights Violations to realize that Mark's speaks for the stock market and not for the truth.
Global Enron benefited vastly from the political muscle, the pay to play policy, of the US government. If its friends did not come to help it on the domestic scene late last year, many fled the sinking ship with the realization that they had been its faulty architects.
But Enron still banks on its allies to bail it out in dribs and drabs: for instance, on 17 January, Enron filed a $200 million claim with the US government's Overseas Private Investment Corporation to recoup its losses from the Dabhol plant. It is likely that it has done so for its other international ventures as well, another global clandestine bailout that we'll only find out after the Mutiny has been put to rest.