Free Kenny boy

Posted: Jul 12, 2004 12:00 AM

Yes, that headline is a joke. I just wanted to get your attention amid all the misinformation about 1) former Enron CEO Kenneth Lay and 2) how his ties with President Bush hurt Californians.

 Note Sen. Barbara Boxer's statement Wednesday: "While we don't know specifically what is in the indictment, I think if there is enough evidence to indict Ken Lay, then there is enough evidence to get California our money back."

 Democratic National Committee spokesman Jano Cabrero went one step further in this statement, which appeared on line in National Journal's The Hotline: "We know that most of the Enron executives were indicted over a year ago. And we know that the top CEO, Ken Lay, has close ties, both personal and professional, to the Bush White House that are well documented. This string of facts begs the simple question -- did Ken Lay's relationship with George W. Bush cause the lengthy delay in the Lay indictment?"

 Think about it. The Dems are implying that Bush used his clout to stall the Lay indictment so that it could happen in the middle of his re-election campaign.

 It's true, Lay was an outside adviser to Veep Dick Cheney's energy task force -- a political booboo considering California's problems. And Enron biggies gave big money to Bush. According to a 2003 Center for Public Integrity report, Bush received $736,800 from Enron from the time he ran for governor in 1994 -- "by far the largest amount Enron has given to any one politician."

 To judge by punditry, the most damning fact of all is that Dubya had a nickname for Lay, "Kenny Boy." Ooooo. A nickname. That should make Bush as tight with Lay as he is with -- what? -- 20 reporters.

 On the other hand, President Clinton played golf with Kenny Boy. And Enron gave $1.5 million to Democrats from 1990 to 2003, according to the 2003 Center for Public Integrity report, which lists a number of pro-Enron missions performed by Clintonia across the globe.

 That is the reason I don't understand why Bush walked away from a question about Lay last week. He could have hit it out of the ballpark.

 Bush could have noted that his Justice Department filed these charges against Lay. Not only that, Justice is going after other corporate crooks. The Corporate Fraud Task Force he created has charged some 700 defendants with alleged fraud, according to Forbes magazine. The task force has been so tough that The Economist ran a piece last month that asked, "Are bosses getting overly harsh sentences?"

 More important: When Lay called then Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans to help him avoid filing bankruptcy (as happened in December 2001), Kenny Boy won no favors. When Robert Rubin -- Bill Clinton's Treasury secretary, then head of Citigroup, an Enron creditor -- called a top Treasury official to suggest that the administration take steps to prevent Enron's credit rating from being downgraded, the official refused.

 Asked about Sen. Boxer's remark, criminal attorney Victoria Toensing noted, "This is a criminal case. So that's not going to bring money to the people of California." What's more, the charges against Lay allege a conspiracy to defraud investors; they have nothing to do with California consumers.

 Boxer spokesman David Sandretti didn't disagree but added, "The reality is, there's enough evidence clearly to demonstrate that California was ripped off by Enron. She's just making the parallel."


 More likely, this is a way to pin the tail of the energy crisis on a non-Donkey. There was no Republican in charge when blackouts hit Northern California in June 2000, but if the Dems can tie Lay to Bush, voters may forget.

 In fact, when the blackouts began, Gray Davis was governor. Bill Clinton was president. Clinton played golf with Lay. Clinton's Federal Energy Regulatory Commission wouldn't agree to price caps even though Davis desperately sought them. Perhaps, as Cabrero put it, it begs the question.

 Don't get me wrong. I believe Enron traders engaged in cheesy market manipulations that drove up electricity prices in the West, and I'd like to see them pay for whatever costs they drove up illegally.

 Californians, nonetheless, should understand that state politicians and voters helped Enron bilk the state. Cities blocked the building of new power plants. State law forced utilities to buy electricity for more than it allowed them to charge. Davis refused to raise energy rates early on when market responses might have eased the problem.

 For writing this, I expect a few e-mails asking me how much Enron is paying me. I would be tempted to answer that no reputable journalist would take money from Enron. But I forget the columnist who, before joining The New York Times, received $50,000 to serve on an Enron advisory board. He later gushed about Enron in a Fortune magazine piece, without disclosing his Kenny Boy connection. His name is Paul Krugman.