love-in at 1600 Penn

["Ian Murray" <seamus2001@xxxxxxxxx>]

White House love-in under pressure

The relationship between the White House and Enron, the doomed
energy company, focuses attention on the very ways in which the US
is run, writes Julian Borger

Wednesday February 6, 2002

Washington this week is staging its own version of Kabuki theatre,
otherwise known as congressional hearings. Like the highly-stylised
Japanese dramas, the sets will be familiar, the characters will
wear fixed expressions and the plot will follow rigidly traditional
lines. But beneath the masks, themes of universal significance will
unfold.

It does not take a seer to predict that the Enron hearings will
become emblems of the Bush administration. The themes explored in
the cut and thrust of the multi-pronged enquiries go to the very
heart of how the US is being run: the function and dysfunction of
twenty-first century capitalism, the interplay between big business
and government, and the executive's prerogative to conduct its
dealings in secret.

All those issues intersect in the Bush-Cheney White House. In
drawing up its flagship energy plan, a task force run by Dick
Cheney, the vice-president, consulted an array of experts and
interested parties. Enron executives are believed to have played a
significant role in drafting the plan which favoured the energy
trader in general. The plan emphasised production over conservation
and deregulation over control. In particular, the final version
included language which boosted an Enron project in India.

Furthermore, it has emerged that Enron was allowed to suggest
candidates for the Federal Energy Regulatory Commission, the
government body that was supposed to police companies like Enron,
and two of those candidates, including the chairman, were
ultimately selected by the Bush administration.

Just how intimate Enron and Cheney were in those early months of
the year remains unclear, because the White House has refused to
disclose any details of the meetings, despite calls from both
Democrats and Republicans to come clean.

As a result of the impasse, congressional auditors in the General
Accounting Office, are taking the administration to court for the
first time in GAO history.

As both Cheney and Bush have accurately pointed out, the battle is
about much more than the energy plan. It addresses the
constitutional balance of power between executive and legislative
in the US political system. The current administration has made a
fetish of secrecy and portrayed it as an overdue attempt to reverse
the steady erosion of executive power which began during he Vietnam
era, continued through the Iran-Contra affair and culminated in
Bill Clinton's multiple embarrassments.

The heart of the administration's argument is as follows: if it
cannot seek outside guidance in confidence, then it can never hope
to receive unvarnished, truly honest advice, to the detriment of
good governance. That argument may play well in the courts,
particularly if the matter reaches the conservative-dominated
Supreme Court, which was after all instrumental in resolving the
2000 election in Bush's favour.

The backdrop also favours the administration. It is a time of war
when most Americans would like to see a strong executive. The
opinion polls show that the voters make a distinction between
management of war and management of the economy, with the president
receiving much better marks for the former. But there is still a
spill-over effect. Bush's ratings on domestic issues have been
buoyed by the fervently patriotic mood since September 11.

Nevertheless, the Enron scandal is likely to inflict more damage
before it is finished. The Bush administration could afford to be
so cosy with big business as long as most Americans shared their
view of corporate titans. Kenneth Lay was seen as a hero of the
free market, who had gone into battle against the slings and arrows
of supply and demand and emerged victorious. They were as wise as
they were battle-hardened, and their advice would considerably
outweigh schoolbook suggestions offered by civil servants.

But it turns out that "Kenny Boy," as Bush used to call Lay when
they were still chums, was not such a genius after all. The
administration had put its faith in a corporation that was little
more than a pyramid scheme, riding on hot air on the boundaries of
fraud. Lay now insists he did not really know what was being done
in his name, but the fact is he has single-handedly made it far
more difficult for Bush, his former protege from Texas, to appear
to be on the side of the both the fat cats and the regular Joes at
the same time. A majority of Americans, asked in a recent Time/CNN
poll, agreed that "George W Bush cares more about big business"
than "people like you".

Even if the White House thinks it can win the battle over secrecy
in court, and call it a triumph for the institution of the
presidency, the administration will sustain political wounds in
combat. In almost every presidential scandal in recent history, the
cover-up has been worse than the original misdemeanour. Even if the
two have little in common, Cheney's refusal to hand over the energy
taskforce documents will begin to echo Richard Nixon's refusal to
surrender the Watergate tapes.

A clear sign that the Bush team cannot remain aloof from the affair
emerged last week when the justice department officially ordered
White House staff to preserve records of contacts between
government officials and Enron executives over the past three years

One possible outcome is that the administration will lose its
struggle to fend off campaign finance reform. Since the Enron
scandal broke, the sponsors of a bill designed to curb unregulated,
or "soft", corporate money in politics won enough signatures to
force a vote in the House of Representatives.

Other possible casualties include Republican legislators facing
election in November, and all the consequences that entails for a
precariously balanced Congress. There are many other factors in
that equation however. Democratic congressmen and senators accepted
Enron money too, and much will depend on what the economy is doing
by the end of the year, and on whether US forces have tracked down
Osama bin Laden by then.

By stonewalling the GAO the White House is taking a huge political
risk. The tactic is aimed at strengthening the presidency, but, by
providing his adversaries with a rallying point, it may end up
weakening the president.

Email
julian.borger@xxxxxxxxxxxxxx