Who Let the Dogs In? (39 page)

The counter-case was neatly put by David Blunkett, the British Home Secretary: “We can live in a world with airy-fairy civil liberties and believe the best in everybody—and they will destroy us.” Unless, of course, we destroy ourselves first.

Fascism
is not a word I throw around lightly, but what do you think
happened
in Germany in the 1930s? The U.S. Constitution was written by men who had just been through a long, incredibly nasty war. They did not consider the Bill of Rights a frivolous luxury, to be in force only in times of peace and prosperity, put aside when the going gets tough. The Founders knew from tough going. They weren’t airy-fairy guys.

We put away Tim McVeigh and the terrorists who did the 1993 World Trade Center bombing without damaging the Constitution. If the laws break into some apartment full of al-Qaeda literature and plans of airports, absolutely nothing prevents them from hauling in the suspects and having a nice, cozy, coplike chat with them. Because there’s evidence. That’s what they call “due process.”

When there is no evidence, no grounds for suspicion, we do not hold citizens indefinitely and without legal representation. Very airy-fairy of us, to be sure. Foreign citizens have only limited rights in this country, depending on their means of entry—different for refugees, permanent residents, etc. So what’s the problem?

Attorney General John Ashcroft has been so busy busting dying marijuana smokers in California and doctors in Oregon who carry out their terminal patients’ wishes to die in peace, he obviously has no time to consider the Constitution. But he did swear to uphold it.

November 2001

The False War

T
HE
STATE OF
the Union was fairly surreal Tuesday night. We won the war against Afghanistan, but we’re still at war with al-Qaeda, so we have to go attack North Korea.

The big paper-shredders at Enron are finally coming to a halt, so we should go ahead and pass huge corporate tax cuts to help all the other companies that use aggressive accounting practices and need the dough. They especially need the rebates on the taxes they didn’t pay. We’re a better people than we were on September 10, so let’s all donate four thousand hours to the country, except for those who are too busy stashing their loot in offshore banks so they won’t have to pay taxes.

To further this noble scheme, the taxpayers will pony up to fund volunteers with religious groups. Does this mean Mormon missionaries will get paid to knock on our doors and persuade us that Joseph Smith and Brigham Young are the light and the way?

I’m clearly confused, but I think some of my colleagues are, too. During the run-up to the State of the Union speech, I heard apparently sane commentators state that since George W. Bush is reading a biography of Teddy Roosevelt, he would speak out against “the malefactors of great wealth” and possibly even endorse campaign finance reform.

I may be confused by Bush, but these folks have absolutely no idea who he is. Let’s try this again, team. George W. Bush sides with the malefactors of great wealth not because he is a tool of the rich or because Enron bought him with campaign contributions—that’s who he is, that’s what he really believes, that’s his life experience.

Here’s one example from his oilfield career. When Bush was in the oil business, his failing company Spectrum 7 was bought by Harken Energy. Bush and his two partners got $2 million in stock in exchange for a company that had lost $400,000 in the six months prior to the sale. Bush himself got stock worth about $500,000 and an annual consulting fee of $120,000, later reduced to $50,000.

In June 1990, Bush sold two thirds of the Harken stock he had acquired in the Spectrum 7 deal at $4 a share—$318,430 more than it was worth when he got it. A month before Bush sold his stock, the Harken board appointed Bush and another company director, E. Stuart Watson, to a “fairness committee” to determine how restructuring would affect ordinary stockholders.

Smith, Barney, Harris, Upham & Co., the financial consultants hired by Harken, told Bush and Watson only drastic action could save the company. So Bush sold his stock before the news became public. According to
U.S. News & World Report,
there was “substantial evidence to suggest that Bush knew Harken was in dire straits.” Insiders liquidating large blocks of stock are required to notify the Securities and Exchange Commission immediately. Bush reported the sale eight months after the federal deadline. Although the SEC does prosecute flagrant violators of insider-reporting rules, according to
The Wall Street Journal,
first-time violators usually get only a warning letter.

This not-so-ancient history may not strike you as relevant, so let’s move on to a current policy conflict. The Bush administration’s policy on international money-laundering changed after September 11. Bill Clinton, you may recall, was leading the charge by developed countries to go after offshore banks used by terrorists, drug dealers, tax dodgers, and other trash. Bush had called off that effort, but it gained new urgency after the attacks, and part of last fall’s anti-terrorism law contained new provisions against international money-laundering.

The Senate Banking Committee held a hearing Tuesday on how the new law is working. Senator Paul Sarbanes of Maryland, the committee chair, criticized two new regulations concerning “shell banks”—front operations used by people hiding their wealth. Under the anti-terrorism law, American financial institutions are not permitted to have correspondent accounts—that is, deposit accounts that banks have in other banks, with shell banks. According to
The New York Times,
Sarbanes said the new regulation lets American institutions off the hook if their foreign customers certified they were not fronting for shell banks. Another provision permits correspondent accounts from shell banks if a real bank owns 25 percent of the shell bank’s shares. Sarbanes said it was “a broad loophole,” inviting trouble.

Another way to launder money is International Business Companies, or IBCs—shell companies not required to file any public notice of who their officers and directors are. There’s no need to reveal the identity of its shareholders; no need to file any financial statements or keep any accounts. No income, capital gains, or inheritance taxes. One pamphlet touting a Bahamian IBC closes with: “ ‘Pinch me! I’m dreaming,’ you may be saying.”

Indeed you may.

January 2002

I ♥ Enron

A
DMIT
IT, YOU’RE
wallowing in Enron. Aside from the fact that it wrecked a bunch of people’s lives, it is a beautiful scandal. Naturally, there is a special Texas element of looniness. Our governor, Rick (Goodhair) Perry, appointed an Enron executive to the state’s Public Utilities Commission last summer, the better to regulate energy companies. The very next day, Perry got a $25,000 contribution from Ken Lay, which would have raised questions except Governor Perry cleared up the whole matter by explaining the contribution was “totally coincidental.” This news relieved everybody and gave the governor a new nickname, Old Coincidence.

But then it turned out there had been a cover-up, literally, involving Perry’s appointee. When Democrats asked for the public records on the new commissioner, they found a curious blank under the part about brushes with the law: It had been whited out. It was a sophisticated cover-up, but it came unraveled, and we learned the new commissioner had once shot a whooping crane under the impression that it was a goose and had to pay a $15,000 fine under the Endangered Species Act. Kind of thing that could happen to anyone. George W. Bush himself once shot a protected killdeer on the theory that it was a dove. Of course, the whooper is five feet tall, so there was a general sentiment that anyone who can’t tell a whooper from a goose shouldn’t be trying to regulate energy anyway, and the fellow resigned. Totally coincidentally, of course.

Like all historic events, the Enron scandal has already started to affect the language. The stick-up artist goes into the Jiffy Mart to pull a heist. He whips out his rod and says, “Put ’em up, this is an aggressive accounting practice.”

I love the Enron scandal. Did you know that Enron’s board of directors twice voted to suspend its own ethics code in order to create private partnerships? Wasn’t that thoughtful of them? If they hadn’t voted to suspend the ethics code, they would have been in violation of it. Why didn’t we think of that?

The funniest line so far about Enron is, “This is not a political scandal.” It was totally coincidental that they made all those political contributions. Disinterested public service was their only motive, putting high-quality people in public office. And they never got a thing for it. Not natural gas deregulation, or deregulation of the energy futures market when Wendy Gramm was chair of the Commodities Futures Trading Commission, or a new chairman of the Federal Energy Commission, or calling off the pressure on offshore banks, or exemption from oversight on derivatives, or government contracts, or having the governor of Texas (George W.) call the governor of Pennsylvania to report what a fine company Enron is during the fight over energy de-reg in that state, or pressure from Dick Cheney on India to ease up on the disastrous Enron investment there, or input into Bush’s national energy policy, or hundreds of millions in tax rebates under the economic stimulus plan despite not having paid any taxes in four of the last five years. Enron hired James Baker, the former secretary of state, to go to Kuwait to help drum up business there shortly after the Gulf War ended because it didn’t want to have any political influence. It hired Ralph Reed and Bill Kristol and Lawrence Lindsey and lots of other people for the exact same reason. It was all totally coincidental.

Further comedy is to be found in the interviews with Enron’s fired workers, who solemnly report they have been to the unemployment office to apply for the compensation to which they are entitled and the experience was “demeaning” or “humiliating.” Some were even
put on hold!
As we say in Texas, no shit? What we have here is a case of professionals being treated exactly like workers. Gee, do you think that has any political implications? Enron is the gift that keeps on giving. Yes, there is joy in Mudville. Wallow away.

March 2002

Doctor! Doctor!