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CounterPunch
February
14, 2003
"Who Steals My Purse Steals Trash"
Bush and Corporate
Fraud
By SAUL LANDAU
I felt like blaming someone when, like millions
of other Americans, I took a WorldCom bath. How, I asked my wife,
could the company that owns MCI, one of the world's telecommunication
giants, declare bankruptcy? In today's mail, MCI, owned by WorldCom,
offers me thousands of frequent flyer miles if I switch to their
phone service. Truthfully, until the person who handles my IRA
fund phoned and told me I had lost $10,000 in WorldCom bonds,
I didn't even know I had them. I had told this person that I
wanted her to put my IRA savings only in very low risk investments.
She said, later, that she honestly thought buying bonds in WorldCom,
one of the worlds great corporations, was as safe as one could
get.
A friend of mine admitted that he had
lost far more than me in both Enron and WorldCom stocks and bonds.
And, he continued, think of the tens of thousands of laid off
workers from those and other companies, people who lost their
jobs because of corporate sleaze. Before its July 2002 bankruptcy,
WorldCom laid off 17,000 employees and made a $400 million loan
to former CEO Bernard Ebbers. Who will collect that one?
The list of major corporations involved
in major fraud grows: WorldCom, Enron, AOL-Time Warner etc...oh,
and let's not forget the hanky panky of Martha Stewart, the smiling,
motherly TV personality with the "trust me above all"
look.
Who can you trust? From Ronald Reagan
through George W. Bush we have heard the mantra of how government
stinks and corporations are great. The President assures us that
the economy is moving forward. Some experts, however, predict
that instead of traveling north, as President Bush proudly proclaimed,
our economy appears to be heading south. Last week, IBM announced
the lay off of 15,000 workers and American Airlines of 7,000.
United Airlines, with whom I hold my Visa card that sends me
offers of miles if I switch to MCI (WorldCom), warns it might
soon declare bankruptcy. Continental Airlines announces major
cost-cutting measures like eliminating free parking for its top
executives and removing plastic knives from its breakfast service.
What's the world coming to?
Luckily for all Americans, in the midst
of his "working vacation" at his Texas ranch, our president
got right on the case. In mid-August, he held an economic meeting
Economic Forum" held in Waco, Texas. Even the reclusive
Vice President Dick Cheney showed up, albeit he must have been
working very hard in the previous days since reports had it that
he spent much of the time at the meeting sleeping. "Dick
was bored," one cynic suggested.
The Republican business and government
elite that stayed awake sat around the table and assured each
other that they would not allow any more hanky panky in the corporate
world. This meant that they and their friends would try to cover
up their and their colleagues' past accounting and executive
practices that had roamed beyond the windy side of the law. The
president blinked several times before saying sincerely that
he was shocked by "shady corporate practices.
A few reporters suggested that he shouldn't
feel too shocked since he also had engaged in some of those very
practices himself. But, like many alcoholics, the President may
have suffered some memory loss. Or is this convenient amnesia?
He probably forgot that he sold almost
$1 million of his shares in Harken Energy just before that company
went to the toilet. But that was more than a decade ago and how
would such a busy man with so much on his mind remember a trivial
detail like making a million dollars instead of losing that amount?
Nor do I expect W to remember financial foibles committed by
members of his family. Who likes to think about unpleasant events
in the past?
Why, for example, would he recall his
brother Neil's role in the painful scandal that arose from the
practices of Silverado Banking. Between 1985-1988, brother Neil
directed this Denver Savings and Loan operation. Under Neil's
guidance, the bank loaned $200 plus million to Neil's partners
to back some oil scheme. The partners did not pay back most of
the loan, which put the bank in an awkward financial situation.
Subsequently, Silverado shut its doors,
after causing much panic to those who had stashed their savings
and pensions in what they thought was a very safe place. Indeed,
the Vice President's son ran the S and L. What could have been
safer?
But Vice President Bush had long stopped
giving Neil a generous allowance. Instead the Vice President's
son, now supposedly a grown man, obtained his income from his
business partners, federal investigators discovered. How would
Neil have turned down a loan request from his surrogate Daddies
who paid his salary? When Silverado closed in 1988, US taxpayers
forked over $1 billion to cover its losses. Neil, a federal expert
declared, suffered from a common disease among corporate executives:
he called it "ethical disability." Did the Bush elders
forget to teach their kids certain lessons about ethics?
Neil paid a $50,000--slap on the wrist
-- fine for his "ethical lapses" at Silverado. But,
according to Stephen Pizzo in the Sept/Oct 1992 Mother Jones,
"Neil's estimated $250,000 in legal bills generated by the
scandal" were "paid for him by a banking-industry lobbyist,"
an individual who was struggling to convince Congress to deregulate
banks as it had done for Savings and Loans. Pizzo pointed out
that Neil suffered from subsequent ethical drifts when he ran
Apex Energy, an oil company that he left in deep debt. But why
would W remember nasty details about his brother's business life?
That's not the kind of subject talked about at the dinner table.
Similarly, I wouldn't be surprised if
W had also forgotten about his close relations with Enron Corporation
of Houston which, as AP reporter Jonathan Salant reported in
the Jan 25, 2001 Seattle Post-Intelligencer, reaped giant revenue
increases from California's power shortages and higher natural
gas prices nationwide. The president probably doesn't recall
that he rejected price controls to hold down soaring electricity
costs in California that allowed Enron, the largest wholesaler
of electricity and largest owner of natural gas pipelines in
North America, to make super profits. The company and its employees
proved so generous with W's campaigns for governor of Texas and
his previous but unsuccessful House campaign in 1978. And Enron
was beyond generous to W in the 2000 race for the White House,
according to the watchdog Center for Public Integrity.
Enron and its employees donated $113,800
to Bush's presidential campaign, his10th most generous contributor.
They poured $250,000 into the Republican National Convention
host committee coffers and $300,000 to the Presidential Inauguration
Committee. Now that kind of donating would make any memory tend
to weaken.
Enron Chief Executive Officer Kenneth
Lay -- Kenny Boy as W used to call him before he discovered Mr.
Lay's "ethical lapse" -- raised more than $100,000
for Bush's campaign. W made him a member of the president's energy
transition team. It was hardly a secret that "Ken Lay and
the Enron Corp. has President Bush's ear on energy matters,"
said Craig McDonald, director of Texans for Public Justice, an
anti Bush advocacy group.
Did it surprise the analysts that W as
president had an energy policy identical to Enron--deregulation
at all costs? The deregulation allowed Enron to reap immense
profits at the expense of California energy users. Did Enron
influence the president on subjects like states rights (except
the right of states to count votes for the presidential election
of course) and deregulating oil and gas companies? Eric Thode,
who worked for Enron's PR department, said that Bush was "a
proponent of states' rights and deregulation " before Enron
gave him his political instruction. "He doesn't need anybody
to suggest that to him." According to the Center for Responsive
Politics, a non-partisan research group that studies campaign
finance, during the 2000 election, Enron invested almost $2.5
million in the political education of candidates for both house,
mostly republicans, considerably more than any other energy company.
The candidates, including W and brother
Jeb, declared that regulation was socialistic. Indeed, California
energy users paid for the political education that Enron gave
to their eager students. Consider their campaign contributions
as the equivalent of scholarship to the school of corrupt practices
and easy money.
But why should anyone try to place the
blame for our money losses on W and other members of his family.
"I met WorldCom employees who no longer have work,"
the president said, "who are disillusioned like me and others
about the corporate fraud which is taking place in our country."
I believe him; that is, I believe that he has no memory of his
or his family members' own sordid practices that took money from
trusting American citizens.
So if you need to blame someone for foolishly
trusting in the honesty and ethical rectitude of corporate America's
leading CEOs, don't look to the President or members of his family.
After all, I didn't remember that I owned $10K worthy of WorldCom
bonds. Why should we expect the president to remember his own
unpleasant business affairs, much less those of his brother?
"To thine own self be true," the Bard said. "Who
steals my purse steals trash" said Iago, to cover up his
treachery to Othello.
Let that statement ring in the ears of
the corporate executives who stole my and other people's money
and loll on the decks of their luxury yachts while millions of
their victims wonder if they can now afford to retire. Corporate
treachery and the war against terrorism may be the defining phrases
of W's White House tenure.
Saul Landau
directs the Digital Media program at Cal Poly Pomona and is a
fellow at the Institute for Policy Studies. His latest film,
IRAQ: VOICES FROM THE STREETS, is distributed by The Cinema Guild
in New York City.
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