Bush to Lay: What Was Your Name Again?

by Robert Scheer

But, as the good ol' boys in Texas -- and now Bush spokesman Ari Fleisher -- like to say, "That dog won't hunt."

On Friday, Bush attempted to distance himself from the Enron scandal by stating that CEO Lay "was a supporter of Ann Richards in my run in 1994," obscuring the fact that Lay gave Bush three times as much money as he did the Democratic gubernatorial incumbent whom Bush was trying to unseat. Bush added that he really did not get to "know" Lay -- the man he nicknamed "Kenny Boy" -- until after he won the governor's race. I can't speak to the varying levels of intimacy of their relationship, but Bush had considerable contact with Lay two years earlier when the Enron leader served as the chair of the host committee for the 1992 Republican convention in Houston, where Bush the senior was nominated for his second term as president.

At that time, Investor's Daily reported that "recently, Lay has turned Enron into a corporate bastion for the GOP." After the elder Bush's defeat, the Bush family switched its political ambitions to George W.'s prospects for governor, and Lay came up with the first of many contributions to that effort.

Lay's loyal support of the Bushes may have been gratitude for the decisive role that the first Bush administration played in Enron's meteoric rise. Building on the Republican-engineered deregulation of the electricity industry that began in the 1980s, Enron got a huge boost during the first Bush administration with passage of the 1992 Energy Act, which forced utility companies to carry Enron's electricity on their wires.

In fact, Lay publicly thanked Bush with a column in the Dallas Morning News a week before the 1992 election. Calling Bush "the energy president," Lay wrote that "just six months after George Bush became president, he directed Energy Secretary James Watkins to lead the development of a new energy strategy." That resulted in the legislation making Enron's exponential growth possible.

Lay was effusive in expressing his gratitude, writing that the Bush "strategy is the most ambitious and sweeping energy plan ever proposed."

That gift to Enron was coupled with a major exemption granted by Wendy Gramm, then chair of the Commodities Futures Trading Commission in the Bush administration, an exemption that permitted Enron to begin lucratively trading energy derivatives. Gramm then joined the board of directors of Enron and served on its auditors committee, where much of the false reporting now being exposed seems to be centered. Her powerful role in the company did not stop her husband, Sen. Phil Gramm (R-Texas), from pushing through legislation that further weakened government oversight of Enron's activities.

After Bush the elder's defeat in 1992, the ties between Enron and the Bush camp grew even stronger. In March 1993, Enron hired Bush's Commerce secretary, Robert A. Mosbacher, and his secretary of State, James A. Baker III, to line up contracts for Enron around the world. As Enron's representative, Baker -- later George W.'s Florida election strategist -- even went on a trip accompanying the ex-president to Kuwait to do big business in the nation Bush had fought the Gulf War to save.

The trip was criticized by Gen. Norman Schwarzkopf, who said that he had turned down millions in proffered deals to do business in Kuwait after the war.

"I represent 540,000 American men and women, not some private company," said Schwarzkopf. "They were willing to die in Kuwait. Why should I profit from their sacrifice?"

A decade later, the new Bush administration turned immediately to Lay to get his bearings on an energy policy. Lay met with Vice President Dick Cheney's energy group six times. This was no surprise, given the close ties between Lay and Bush during the latter's days as Texas governor. Consider, for example, that as governor, Bush did not hesitate to call then-Pennsylvania Gov. Tom Ridge and assure him that Lay -- then eager to deregulate Pennsylvania's electricity market -- was the finest of men, representing the most worthy of companies.

Keeping true to family traditions, the president has always aggressively supported far-reaching deregulation of utilities -- it is, in fact, his political mantra -- and Enron appears to be the biggest benefactor of that philosophy. Whether the contacts between them were actually illegal and not merely an egregious betrayal of Enron's employees, shareholders and consumers, it remains for the eight investigations planned or underway to reveal what Bush and White House insiders knew, and when they knew it.