The Enron Scandal: Part 3, The Terminator to the Rescue

Arnold Schwarzenegger was accused in 2000 of groping two British female journalists, and in 1977 he gave an interview in which he admitted joining in gangbanging a black women. In addition, there were persistent rumors of an affair with a 16 year-old actress. Yet, the actor managed to "defuse the sexism issue.”( In the last days of the campaign, accusations surfaced that he had groped more than fifteen women. No one cared.

There was great excitement at his rallies and it seemed clear that there was no line dividing politics from entertainment in American politics. Celebrity, particularly in California, had enormous political value. The actor handily won the race to replace Davis, outpacing his nearest opponent by 15%. Though evidence was produced to support the charge that he was a sexual predator, the New Right “unfurled the flag of’family values’ while mocking their participation in the anti-Clinton sex posse” to make him governor of California.

The recall of Davis and election Schwarzenegger illustrated how effective the Republican coalition of old line Republicans, libertarians, and New Right can be. Governor Schwarzenegger had met secretly with about 11 other California Republican leaders and Ken Lay in Beverley Hills in May 2001 to discuss the energy crisis, which played such a large role in his becoming governor. One month before the meeting, Lt. Governor Cruz Bustamante sued under California’s Unfair Business Practices Act to recover the ill-gotten funds from Williams Company, Dynergy, Reliant, Enron and other Texas energy firms. There were a number of other related suites pending before the 9th Court of Appeals at the time of the recall election. Schwarzenneger was arguing that the energy crisis occurred because the state was only partly deregulated and was pressing hard for complete deregulation of electricity. The popular, newly elected governor of California took a position that was favorable to the energy companies. which made it less likely that the judges will award damages to the state because the crisis was produced by the manipulations of energy traders. That is what did happen. The actor/governor settled the cases on terms that were very favorable to the energy companies. Arnold rode to the rescue of the energy companies, while his allies in Washington were to seal the evidence against Enron and the other firms.





Sherman has written African American Baseball: A Brief History, which can be acquired from LuLu Publishing on line.