Invasion of Iraq Trumps War on Terror

The struggle against terrorism was substantially weakened because the Bush administration decided to redirect to the Persian Gulf many intelligence units that had been focused on Al Qaeda and other terrorists in Afghanistan. To this day, there is no certain knowledge about why the US decided to invade Iraq.


The the drive for war with Iraq brought to an end day-to-day intelligence cooperation with Syria, which had strong reasons to work with Washington against Al Qaeda. The US demanded Syrian help with the preparations for war and threatened that country after the successful Second Gulf War. Syria possessed vital information about how Saudi Arabia used the Muslim Brotherhood to assist terrorists. European intelligence experts acknowledged that the US was successful in rounding up many Al Qaeda leaders, but they suggested that US policy had increased the number of Al Qaeda recruits: “There are fewer leaders but more followers.” Al Qaeda and other Muslim terrorist groups were clearly gaining much more support throughout the Islamic world. In a memo leaked in 2003, even Donald Rumsfeld admitted that the US war on terrorism was producing more terrorists than it was killing or rounding up.

The Bush administration did almost nothing to stop the terrorists from “distorting Islam into a new ideology of hate.” The attack on Muslim Iraq fueled the argument that America was launching a crusade against Islam, making Bush and the US effective recruiters for Al Qaeda. In return for Russian support of the American attack on Afghanistan, George W. Bush supported the Russian efforts in Chechnya, calling the Chechens “the killers who came to America.” This pronouncement strengthened Al Qaeda’s case that the US consistently pursued anti-Islamic policies. The US also endorsed China’s long campaign to reduce in numbers the Islamic Uighur ethnic group in western China. Moreover, the US essentially gave Israel a free hand in dealing with Palestinians, particularly in Jenin, Bethlehem, and Rafah. A 2003 Pew poll showed that Moslem hostility to the US was based on US policies rather than on disapproval of US values. Yet the Administration continually insisted that Islamic opposition was based on hatred for the way we live, which discouraged a mature reconsideration of our foreign policies. Hostility to the US became so great in the Islamic world that President Pervez Musharraf, an American ally, told the UN on September 23, 2004, “Action has to be taken before an iron curtain finally descends between the West and the Islamic world.” A pro-Taliban Pakistani senator explained, “The hatred has increased because of the continued anti-Muslim policies of the US leadership.” He claimed, “The basic reason for this growing gap is US policies. The US wants to grab natural resources of the Muslim world by brute power, and the Muslims have become aware of its design.”

First Steps in Going After Saddam
Early in the morning of September 12, 2001, NSC counter terrorism expert Richard Clarke returned to the White House after showering and changing clothes at home. He was surprised to walk “into a series of discussions about Iraq.” He had expected to hear talk about retaliating against Al Qaeda in Afghanistan. Paul Wolfowitz and Donald Rumsfeld saw the attack as an excuse to attack Iraq. Secretary Rumsfeld was ready to go against Iraq, saying, “Sweep it all up. Things related, things not.” Wolfowitz did not believe such an act of terror could be without a state sponsor and had previously stated that he adhered to the discredited conspiracy theory that Iraq was behind the first attack on the World Trade Center. Laurie Mylroie of the American Enterprise Institute, who wrote Study of Revenge: Saddam Hussein’s Unfinished War Against America, propounded it. The author noted that Wolfowitz and his then wife “provided crucial support.” It was claimed that Iraq was behind almost all the attacks on America in the 90s, and held that the crash of flight 800 in 1996 was the work of Iraqi agents. Likewise, the 1998 attacks on two U.S. embassies in Africa were “the work of Bin Laden and Iraq.” After the attacks on 9/11, which involved skilled Iraqi pilots, the remaining Iraqi plotters left the United States. Richard Perle, an important architect of Neo Conservative foreign policy, said the book was “splendid and wholly convincing.” Acceptance of this book by Neo Conservative advisors might explain why President Bush told assistants after 9/11, “I believe that Iraq was involved, but I’m not going to strike them now.” Dr.Mylroie, a Middle East expert, insisted that the real Ramzi Yousef was not being held by federal authorities but was with Saddam Hussein in Baghdad. She charged that Khalid Shaikh Mohammed, the acknowledged designer of the terrorist attacks, was also a secret Iraqi agent. Yousef was really the mastermind of the Muhabarat, Iraqi intelligence, which was considered as competent as the Keystone Cops. His real name was Abdul Rahman Yasin. James Woolsey, former head of the CIA, was dispatched by Wolfowitz to Great Britain where he was to obtain proof that Mohammed Atta, the lead terrorist on 9/11, was working with Iraqi intelligence and involved in the mailing of anthrax to journalists and politicians. To prove his theory, Wolfowitz tried to get Ramzi Ahmed Yousef declared retroactively an “enemy combatant” as late as February 2003. He wanted the prisoner removed to someplace where he could be persuaded to reveal how Saddam Hussein and Al Qaeda were linked. In 2004, Mylroie complained that Bush was unable to get any intelligence people to investigate the validity of her claims “because of bureaucratic obstructionism.” Secretary of Defense Donald Rumsfeld was proclaiming that he had “bullet proof” evidence that Al Quada was linked to Iraq in the 9/11 attacks.

Later, on September 12, President Bush instructed Clarke to Ago back over everything, everything. See if Saddam did this. See if he’s linked in any way....” He added AI want to know any shred....” During the campaign of 2000, George W. Bush criticized Clinton’s efforts at “nation building “ and said his foreign policy would show considerable humility. He repeatedly talked about removing Saddam Hussein from power, but his words did not convince many that he would soon want to go to war against However, former Secretary of Treasury Paul O’Neill, who had also been a member of the National Security Council, noted that from the first days of the Bush administration, it was clear that the president and his inner circle were determined to bring about regime change in Iraq. In January 2001, the Bush administration was discussing the postwar occupation of Iraq and looking over very specific proposals for dividing up Iraq’s fields. The U.S. had become dangerously dependent upon Saudi oil, and it was necessary to find a suitable counterweight. The Saudis faced serious opposition from Shia opposition in their Eastern Province, and it was suspected that many in its their government were not loyal. Another reason was that America’s allies had become disenchanted with sanctions against Iraq. They were less and less effective, and the time was coming when they would collapse altogether. Invasion made unnecessary a losing fight to prop them up.

Days after 9/11, the Defense Policy Board was convened to consider attacking Iraq. Notice of the meeting was not given to the NSC, CIA, or State Department. James Woolsey’s trip to London was undertaken as part of his responsibilities as a member of the DPB, and the other agencies were not informed about the nature of his mission. Even the Defense Intelligence Agency was left out in the cold, perhaps due to its close ties to the CIA. This would be the beginning of a circle of Neo Conservatives and their allies in the Bush government to see that their policies were followed. It is likely that it was this group that was behind efforts to persuade Chinese military brass to engineer a coup against Kim Jong II. John Bolton, a NeoCon in the Pentagon, openly ridiculed the two Koreas peace process even though his department supported it. Michael Ledeen, friend of NSC chair Richard Perle, renewed ties with Manichur Ghorbanifer to drive a wedge between Iran and Syria even though other elements in the US government wanted to encourage those ties in part because both were working together against Al Qaeda. Douglas Feith, Under Secretary of Defense for Policy appears to have been behind these moves. Feith and Wolfowitz worked closely with the Vice President’s office, which was filled with Neo Conservatives who shared their views. Lt. Colonel Karen Kwiatkowsky noted that she witnessed several incidents in which officers were told not to work with their counterparts in other departments and agencies. It is certainly not beyond the realm of possibility, that this tight circle of people shaped policy and brought along President Bush through his ties with Dick Cheney. There is no way to know what role Condoleezza Rice had, other than as an apologist for Bush policies. After the second Iraq war was won, soon became obvious that the Shiites would control the South and that it would be necessary for the US to deal with their sponsor Iran. However, that door had been largely closed.

Oil
There is no certain information about why the United States went to war. One important fact is that there was general agreement that Saddam Hussein could not be relied upon to produce predictable flows of oil. The State Department, interested in controlling Iraq’s OPEC seat, proposed to remedy that with its Walnut Creek strategy. It proposed briefly inserting troops and using force to produce a coup and install a different government under a General Nazir Khazraji then living in Denmark. The Neo Conservatives, centered in the Vice President’s office and the Pentagon insisted on occupying Iraq so that they could privatize Iraqi oil and other business interests. They thought privatization would drive down oil prices, and they expected the new owners to pump far more oil. Their working plan was a document entitled, “Moving the Iraqi Economy from Recovery to Sustainable Growth.” In the end they privatized much of the Iraqi economy, but US petroleum interests insisted that the new Iraqi government nominally control the oil. Their rationale was that this would keep OPEC prices high. It was also their intention to curtail Iraqi production in order to boost oil prices.

A Republican columnist remarked that Bush’s circle is " more inbred, secretive, and vindictive than the Mafia.” The testimony of former Treasury Secretary Paul O’Neill and Richard Clarke makes it clear the administration was talking about grabbing Iraq’s oil long before 9/11. The so-called Downing Street Memo could also be seen as making this case. It did eventually become clear that either intelligence was misused to sell the war or the intelligence the administration had was just plain wrong. Almost three years after the invasion, a high-ranking CIA official went on the record. Soon after retiring, Paul L. Pilar, formerly national intelligence officer for the Near East and South Asia, said the administration misused the intelligence it had been given. The whole body of intelligence suggested there would be a “messy aftermath” and that going to war was not in the national interest. He dismissed the findings of the Silverman-Robb Commission on whether intelligence had been cooked and the interim report of the Senate Intelligence Committee. Those documents only were concerned with whether there had been the crudest attempts at politicization. There were many subtle pressures, and the administration continually framed questions to get answers it wanted to confirm a policy already decided upon.

The CIA was estimating then that by 2015, 75% of Middle Eastern oil would go to Asia, mainly China. However, Donald Rumsfeld later said, that the war had “nothing to do with oil, literally nothing to do with oil.” Even before the war, the Neo Conservatives had a plan in place to sell off Iraq’s oil fields, but that plan ran into problems, including the fears of American firms that it could damage the OPEC price structure. Vice President Cheney’s office came up with a 323-page plan B on behalf of the big oil interests, which is now being implemented. However, in 2003, the American-dominated oil ministry said that almost none of its previous contracts with foreign firms would be honored. In 2005 and 2006, the Iraqis worked out Production Sharing Agreements (PSAs) with American firms. Most oil countries avoid PSAs because they hold down the producer’s share of the profits.
Selling the Second Iraq War


Sherman has written African American Baseball: A Brief History, which can be acquired from LuLu Publishing on line.http://www.lulu.com/browse/search.php?search_forum

The Reagan Revolution, Part 3

Ronald Reagan was aptly called “The Great Communicator.” With his affable, easy-going, likeable demeanor, he was the perfect person to sell hope and market economics. He had unparalleled talent as a visionary leader, seizing the public imagination with broad brush pictures of big themes, most rooted in traditional values. Since his days as spokesman for General Electric, he had been doing so. Even before running for governor of California, his handlers had taught him how to get around difficult topics and avoid revealing his lack of understanding about important matters. The public grasped that he was not good with details but sensed his sincerity. He represented the kind of hope people had before the fifties, to which many desperately wanted to return. Reagan promised to balance the budget by 1984, to restore prayer in the schools, end abortions, downsize government, establish free trade, and restore vigor to the Detroit automobile industry. He was unable to deliver on most of these promises, but the voters still considered him a great success. Superb public relations managers improved on Reagan’s natural talents to the point that even his failures came to appear as triumphs. Alexander Haig was to complain that they ran policy, and political operative Lee Atwater said, “I can’t think of a single meeting I was at for more than an hour when someone didn’t say, ‘How will this play in the media?’”

Reagan received very favorable coverage from the press because he was personally likeable and because media executives knew the public would not accept much criticism of this popular president. CBS management ordered its Washington Bureau and Lesley Stahl to tone down coverage of Reagan that could be considered critical because the public would not accept it. Reagan’s favorable press coverage was also due to the reluctance of Democrats to criticize him because he was so popular. The press might have aired Democratic criticisms had there been many.

One of Reagan’s greatest skills was to connect with Americans’ basic optimism. Over time, Americans had moved away from their original belief in original sin and pessimism about the human condition. They wanted to believe that people begin with a clean slate and that America is the place where this happens. The religious awakenings of the Nineteenth Century had moved people toward a much more optimistic mind set. People--at least those who were born again-- he believed to be perfectible and inherently good. William James, America’s most important philosopher, thought our greatest contribution to western thought was the belief that the mind could cure evil and heal the sick soul. He predicted that the belief in mind-cure would “play a part almost as great in the evolution of the popular religion of the future. This mind set prepared the way for the therapeutic culture of the late 20th century. The doctrine of the market required only strong belief, and it would work its magic in the same way that people could rely upon the good hearts and volunteerism of good people to work out social problems. The Democrats had not gotten the faith and were guilty of the great sin of pessimism. Not relying upon the benevolence of the market or redeemed human nature, they looked to government to do what people and natural forces should accomplish.

This sunny optimism and belief in mind-cure laid the foundation for the general acceptance therapeutic culture of the late 20th Century; although, it is doubtful that many psychiatrists would warm to this observation. Similarly, it laid the groundwork for the revival and acceptance of a laissez faire market philosophy that postulated the benevolent workings of natural economic forces. The same optimism and belief in human perfectibility underpinned its companion social philosophy, Social Darwinism. Anyone who put his mind to it can prosper in a society where economic forces are permitted to operate without government interference. Conversely, those unwilling to exert themselves and become productive citizens had no moral claims on society.

The Reagan Revolution, Part 2

Reagan repeatedly said that the nation’s difficulties could be blamed on the federal government: “Government is not the solution to our problem. Government is the problem.” He praised repeatedly praised the American people, indicating that it was the Democrats, not the voters, who were responsible for government getting out of control. People responded positively to his optimistic gospel and to his contrasting of the absolute goodness of the American people with the pure evil of the Soviet empire. The Republicans had marketed themselves as the party of morality and traditional American principles, and they were fortunate in having a candidate who was thoroughly likeable and easy to portray as a man of character. Peggy Noonan, a Reagan speechwriter, was to spearhead the effort to convince the public that he was uniquely a man of character who exemplified American values. It did not matter that his relationships with his own children were not very good or that some of their close friends did not fit this pattern. He clearly possessed great personal charm, was unfailingly courteous, and he constantly spoke in moralistic terms. Americans learned to ignore any information that did not fit the myth.

A man of principles, he consistently cut taxes; they did not notice tax increases on his watch. As a man of principle, he was not expected to offer careful and detailed explanations for policy. Marshall Mc Luhan, the media philosopher, had warned, “Politics will eventually be replaced by imagery. The politician will be only too happy to abdicate in favor of his image because the image will be much more powerful than he could ever be.” Within the actor-president, persona triumphed over policy. Ronald Reagan was avuncular, charming, and charismatic. It was almost impossible for many to believe that such a man could make serious mistakes. Reagan and his handlers understood that especially in postmodern culture there was no difference between what was true and what was rhetorically seductive.

People in postmodern culture responded positively to what sounded good and were aesthetically pleasing. A charismatic storyteller, Ronald Reagan succeeded in persuading most of the voting public to accept positions they normally opposed, when presented in other terms. Postmodern culture places a high premium on electronic images. People who view someone on the silver screen or on television somehow can accurately discern that person’s character and inner being. If they approve of what they see, they develop an emotional tie with that person. Reagan and his handlers understood this, and it gave them an enormous advantage over his Democratic opponents, who saw him only as a “B” grade movie actor. In 1984, Lesley Stahl provided CBS television with a four-minute pictorial story about how Reagan visited institutions for the handicapped and old age homes, while simultaneously slashing the funding of programs for these people. Knowing that the pictures were worth far more than her commentary, the White House handlers thanked CBS for the favorable publicity.

Reagan began his campaign in Mississippi, defending states rights in language whites understood as being very critical of the civil rights revolution. While Richard Nixon and Gerald Ford courted the black middle class, Reagan went even farther than Nixon in wooing white conservatives and deliberately cut their ties to the African American middle class. As Michael Dawson of Harvard recalled, “Black elites were shocked to find that with Reagan and his advisers, there were no longer ‘good Negroes’ and ‘bad Negroes.’” Reagan’s hostility to the civil rights revolution also played well among white workers in the North. The Democrats had failed to win new voters or retain many old supporters with their ideas, while Reagan offered alternatives that won over some former Democrats.

In 1980, the Democrats lost many seats in the House and saw more than a few liberals support to liberal Republican John Anderson, who ran for the presidency in as an independent. Moderate Republicans who were uncomfortable in a party dominated by conservatives fueled the Anderson candidacy. By then, their numbers in Congress had dwindled to between fifteen and twenty “Gypsy Moths,” who fed off the leaves of the Republican tree but frequently voted with the Democrats. The Republican Senate victory was largely due to the organizational efforts of Terry Dolan’s National Conservative Political Action Committee. It had spent $4.5 million, $1.2 million of which went to purging liberal senators.

The Unification Church: Major Financial Supporter of the Christian Right

The Unification Church has spent great sums supporting conservative causes. Since the 1970s, Unification Church founder Rev. Sun Myung Moon has been involved in right-wing politics in the United States. He has been critical of democracy and calls America ”Satan’s Harvest.” Moon’s name first became associated with American politics when he was accused of funneling South Korean money to 115 members of Congress in a scandal called “Koreagate.” A House committee found he was spreading around KCIA money among members of Congress in order to influence U.S. policy. Even Reverend Moon has admitted to declining church membership, but he still has somehow found billions to invest in various ventures, many of them political in nature. Other funds were used to win allies in the American Religious Right.

It is known that the KCIA has close ties with him and that much of his money comes from Japanese yakuza gangsters Ryoichi Sasakawa and Yoshio Kodama and from various operations in Latin America. Some have suggested his organization could be involved in drug running and money laundering

Ironically, Reverend Moon was also tied to the South Korean dissident Kim Dae Jung who had long battled authoritarian regimes and had even spent time in prison for his political views. Despite Moon’s problems with South Korea’s autocratic rulers, he had ties to the Korean equivalent of the CIA, which helped the Unification Church expand elsewhere in Asia. According to the Ripon Society, a moderate Republican organization, the Unification Church gave money to the College Young Republicans in 1981 and provided cheap labor for Accuracy in Media in 1983. In 1983, Grover Norquist, then head of the College Republican National Committee, interrupted Ripon Chairman, Rep. Jim Leach at a press conference, claiming Leach was a liar in asserting that Moon money had reached the College Republicans.

In the Reagan-Bush years, Moon poured money into his Washington Times , founded in 1982, and conservative causes. Reagan called the Times his favorite paper. Moon hired conservative fund-raiser Richard Viguerie to run a slick campaign to attract subscribers. Moon solidified his ties with Viguerie by having one of his subsidiary corporations purchase a Viguerie property for $10 million. Despite these efforts, it was necessary for Moon to subsidize the paper with tens of millions of dollars in the eighties. It was a fierce defender of the Reagan administration during the Iran-Contra controversy, Moon’s American Freedom Coalition ran a video in praise of Oliver North 600 times on 100 TV stations during the Iran-Contra Controversy.

The Times, in 1988, circulated rumors about Michael Dukakis’s mental health. Reverend Moon’s lieutenants bragged that their operatives circulated 30,000,000 pro-Bush pamphlets in that year. In 1992, it suggested that Bill Clinton betrayed his country while visiting Moscow, implying the KGB had recruited him. President George W. Bush invited its editor to the White House to praise him for his contribution the conservative cause. Moon's Women's Federation for World Peace was later to pay George H. W. Bush large fees for speeches. Moon has also acquired United Press International. The paper lost huge amounts of money in the 1980s, sometimes as much as $50 million a year By 2004, Moon’s Unification Church poured $1 billion into the paper to cover its losses. George W. Bush appointed David Caprara, head of Moon’s American Family Coalition, to be director of Volunteers in Service to America.

Moon claimed that God has designated him as the second messiah, to complete the work of Jesus Christ who failed because he did not marry and have children. Though claiming to be a Christian, Moon believes Christ was not divine. In 1984, Moon began to serve thirteen months in a federal prison for a 1982 mail fraud conviction. After his release, his former daughter-in-law charged that the organization was still playing fast and loose with the law, moving cash across the borders. Though a known womanizer and despite theological views that were clearly heretical to conservative American Christians, Moon developed close ties with some Protestant fundamentalists. In 1995, a Moon front called the Christian Heritage Foundation, bailed out Jerry Falwell’s Liberty University by purchasing half of its $73 million debt for $3.5 million. In 1996, a Moon organization made a $400,000 unsecured loan to Liberty. In return for financial assistance, Falwell, who may have received as much as $76 million in assistance from Moon, appeared at Moon functions. In 1998, Elliot Abrams, an official in the administrations of both Bushs, gave spoke at three Moon rallies

Reverend Moon’s high status in Republican circles was signaled 2001 when President George W. Bush permitted onetime aid Doug Wead to arrange an Inaugural Prayer Luncheon sponsored by Moon. In 2005, his Unification Church contributed $250,000 to George H.W. Bush’s second inauguration. At Moon’s 1996 Family Federation for World Peace event, evangelists Robert H. Schuller, Beverley LaHaye appeared, as did right-wing strategist Ralph Reed and conservative politician Gary Bauer. Reed insisted that Moon’s followers were counter revolutionaries, simply intent on resisting liberal culture and values.
Direct Mail Communications, a firm owned by two Moon operatives, built a mailing list for Colonel North and worked for the National Rifle Association. It has also worked for the Republican National Committee and George W. Bush. The firm has done solicitations at less than cost for Falwell’s Old Time Gospel Hour, Liberty Alliance, and Liberty University. On July 26, 1994, Falwell was on hand when Moon created his Youth Federation for World Peace. Maureen Reagan was photographed at Falwell’s side. In 2002, Moon hosted a gala anniversary party for his self-proclaimed “unbiased” outlet. Conservative therapist Dr. Laura Schlesinger addressed the crowd and Moon treated them to an hour-long sermon

There can be little doubt that Reverend Moon has made a substantial contribution to the success of the Republican Party. His growing influence within the New Right is of interest in part because he has expressed disapproval of American institutions and democracy. Speaking of himself, he once said: “That is Father's tactic, the natural subjugation of the American government and population." There is almost no possibility he can accomplish this goal. He attracted some conservative American converts with his fierce anti-Communism during the Cold War, but he no longer has that tool at his disposal.




Sherman has written African American Baseball: A brief History, which can be acquired from LuLu Publishing on line.http://www.lulu.com/browse/search.php?search_forum

Is the Media Liberal?

The New Right rhetoric appealed to populist sentiments, through its fear of elites, and the indictment of an imaginary cultural elite. It was intended to retain the loyalty of cultural conservatives. Central to this position were complaints about the alleged bias of the so-called liberal media. Conservatives consider the New York Times an ultra-liberal paper even though a 2004 survey of journalists found that only 20% of them thought the Times even “takes a decidedly liberal point of view.” Although these loud complaints were heard for more than three decades, very little evidence was adduced to support these claims. In the sixties and seventies, when a liberal outlook was common in America, there may have been a liberal bias in the media. By the 1990s, the complaint could not be sustained by solid evidence, but lodging the complaint continued to inflame the New Right faithful. These complaints were designed mainly to convince people they were opposed by plotting and arrogant elitists, but the liberal media argument also persuaded people to reject information they did not like and accept whatever was said by the emerging right-wing information network

The press in the 1970s was blamed for the loss of the Vietnam War and for driving Richard Nixon from office. Of course, liberals thought that most of the media took too long in reporting what was really happening in Vietnam. It could also be noted that there were very few reports about Watergate developments in 1972. Bernard Goldberg, a CBS correspondent, claimed in 2002 that the media was biased against conservatives because it labeled them more often than it labeled liberals. This set off a debate about labeling that seemed to result in findings that politicians on both sides were labeled about the same number of times. He complained that the media spent too much time reporting on the homeless. Goldberg claimed that the census only recorded 600,000 of them and that they were largely responsible for their own plight. They were largely mentally ill, drug addicts, or drunks. Another complaint was about the coverage of Palestinian grievances. The fact that there were no Jewish suicide bombers, he argued, should have persuaded media people that Palestinian grievances did not require extensive coverage. The AIDs epidemic, he argued, was blown out of proportion. The media exaggerated the chances of straights contacting the deadly disease.

Ann Coulter complained that the press never mentions “the atheist left” or “atheist liberals” but frequently refers to “Christian conservatives” and the “Religious Right.” She claimed the latter two terms were used to smear people. However, an analysis of the conservative Washington Times for the year 2000 did not turn up either “atheist liberals” or “the atheist left, “ probably because there is no significant political force that could be identified this way. Stanford research scholar Geoffrey Nunberg looked into the matter of labeling and was surprised to discover that the average liberal had “a better than 30 percent greater likelihood of being given a political label than the average conservative does.” Some have complained that the term “right wing” is used more often than “left wing, ” but a study of Washington Times usage suggested that this leading conservative paper had a liberal bias because it used the term “left wing” more frequently than “right wing.”
A study of the use of labels by the several newspapers, including The Los Angeles Times, The Washington Post, and The New York Times found that liberal politicians had “a better than 30 percent greater likelihood of being given a political label” than conservatives. When commentary and editorials were eliminated, neither side was labeled more frequently. David Cotreau of Virginia Commonwealth University found that most journalists consider themselves centrists. Those who do not identify themselves this way were more likely to be conservative than liberal on economic issues and liberal on social issues. In general, the press tended to be somewhat more conservative than the general public. A more important test would be to keep track of how frequently the media reports information that is potentially damaging to conservative and liberal interests. A twenty-five year study conducted at Sonoma State University focused on important stories that received very little coverage. It concluded that the press sided with established economic, political, and social power bases by not paying attention to these matters.

Next to labeling, conservatives seem to be most unhappy about the way stories related to culture are reported. John Leo, a respected and very capable conservative journalist, complains that those who write news stories about gay marriage, the death penalty, cloning, benefits for illegal immigrants, racial preferences, and gay marriage make it clear that their personal views are different from those of most Americans. Presumably they do this by choice of words, such as affirmative action rather than racial preferences, or the facts they that they choose to include in their stories. Leo wrote, “Whether you call it a political bias or the class bias of a similarly educated elite, it amounts to the same thing. And it calls for the same reforms.” Of the seven syndicated columnists whose columns appeared in a hundred or more papers in 1990, four were conservatives, and only one-- Ellen Goodman-- was liberal, and few would consider her to be anything other than a very moderate liberal. Later, Leo admitted that two out of three political commentators are conservative and had no problem with that.

Decades before, Kevin Phillips wrote in Human Events that it appeared that government lacked the power to deal with “Big Media power” and that the First Amendment was “obsolescent” in this case. He thought “we need a new socioprudential approach that can solve the problem before the government throws the baby of a free press out with the bathwater of Liberal Establishment bunk.”
By and large, media people are neutral about religious matters, which means that they are essentially more at home with secularist than with the Religious Right. Their lack of familiarity with conservative religion is revealed by means of the adjectives that news writers use in reporting about it.

William McGowan offered a better critique of the media in Coloring the News: How Crusading for Diversity Has Corrupted American Journalism. He thought the problem was that most media people come from the well educated the sectors of middle and upper middle class. These people are essentially centrists. While on social questions, they may veer to the left, they tend to be centrists on economic questions.. Anything to the right of them seems very conservative and hard to comprehend. For that reason, they characterize unfamiliar views view to the right of them as very conservative or rightist. Anything that seems far out to the left of them they call “liberal, ” but the truth is that there are not that many liberals these days. By the nineties, right-wing criticisms of the press had made the media very sensitive to how it framed coverage on social, political, and economic matters and sought to avoid appearing to be liberal.
However, there is probably still some bias against conservative Protestants and critics of abortion and homosexuality. There also remains strong media bias against Roman Catholicism that reflects both the education of most journalists and a long-standing American tradition, but anti-Catholicism should not be confused with an anti-conservative bias.

It may well be true that most national journalists are Democrats, but this could work to the disadvantage of Democratic politicians. Journalists might understand Democrats better because they are people very similar to themselves, and the scribes are able to more quickly notice when things go awry for liberals. Journalists may also register much greater disappointment when Democrats disappoint them, as Bill Clinton did in many ways. Joshua Micah Marshall suggested that this was “ a large part of what made the media's relationship with the Clintonites so toxic.” On the other hand, the journalists had less in common with the MBAs and former CEO’s who staffed the second Bush administration and may have been confused or buffaloed by their claims to competence. They not notice that Vice President Cheney, while leading Haliburton, was snookered into a disastrous merger that eventually cost the firm billions in asbestos claims. The Bushies start meetings on time, and no one leaked information to the press, which the scribes seemed to accept as evidence to support the claim that the administration was competent and efficient.

Since the Reagan years, there have been more indications that the press could actually be tilting toward the right, but conservative spokesmen have not noticed this. John Pilger, the noted Australian and British journalist, argues that most English-speaking journalist think they are objective, and do not sit down and think, “I’m now going to speak for the establishment.” The problem is that they have internalized so many middle class and middle of the road assumptions that they cannot avoid speaking for the powers that be.” It would seem that the so-called “right” and “left” are labeled with about equal frequency. In most cases, it probably reflects mental laziness rather than ideological bias. Those who object to using these labels have a point; they are seldom accurate or very useful.

In the eighties, the electronic media allowed itself to be manipulated by the popular Reagan administration. Reagan had fewer press conferences than any other modern president except George W. Bush. It was obsessed with secrecy and tightly controlled access to information. When White House officials appeared on television, the networks were forced to agree that they be given unequal time. When Senator Christopher Dodd appeared on David Brinkley’s Sunday program in 1984, the White House required that he be shown between two Reagan spokesmen and that he be given less time than either of them. Secretary of State George Schultz would not appear on Face the Nation unless he was given two-thirds the air time allotted to political spokesmen.

It is almost an article of faith for conservatives that the media is biased toward liberalism. An analysis of media output in 1992 found that even when media accounts were balanced and unbiased, Republicans perceived the media as hostile to their candidates. It did not matter that journalists, perhaps influenced by the bandwagon effect, often picked up stories from the Republican National Committee and printed them with no effort at verification. For example, the story that Al Gore held a fundraiser at the Hsi Lai Buddhist temple in 2000 was repeated so often that Roger Parloff’s thorough rebuttal in the American Lawyer did not stop its spread or lead to corrections.

Similarly, there was no effort to examine the veracity of the GOP-inspired story that Gore said he invented the Internet. Even though television presented more balanced coverage, but Republicans saw it as more “hostile” than the newspapers. The study also showed that the media was biased toward Clinton that year perhaps as part of a bandwagon effect rather than out of agreement with a particular outlook. Many customarily Republican outlets were supporting Bill Clinton. Although the above study found that newspaper content tilted toward Clinton in 1992, a huge majority of the nation’s newspapers endorsed the reelection of George H.W. Bush, and in 1996 that majority backed Bob Dole against Bill Clinton.

Four years later, a majority of the big metropolitan dailies backed the election of George W. Bush against Al Gore. Despite these facts, conservatives continue to complain about a liberal press. The claim of media bias also arises when the media reports something conservatives think should not be reported. Rush Limbaugh, who complains daily about a so-called liberal bias, becomes enraged when the press reports Democratic comments that are critical of Republicans. He denounced the New England press for reporting a speech of Ted Kennedy in which he complained that President George W. Bush had offered very incomplete plans on what the US would do in Iraq after the Second Gulf War.

In another example of alleged media bias, the conservative Media Research Center, before the beginning of the Second Gulf War, criticized ABC News because Peter Jennings asked soldiers “inappropriate” questions. He had asked if they felt any anxiety about the prospect of fighting. At the same time, Republican Congressmen were asking Secretary of Defense Rumsfeld why he had not imposed censorship on the media.

In 1996, when Republican Steve Forbes advocated a flat tax, the press pointed out that it would most benefit the rich. Conservatives argued that printing this claim showed that the press had a bias against conservative ideas. Showing the effect of the proposal may have helped Bob Dole, a man who has never been accused of being a liberal, in the Republican primaries, . Speaking about the coverage of his presidential campaigns, Patrick Buchanan admitted:, “I’ve gotten balanced coverage, and broad coverage --all we could have asked. For heaven sakes, we kid about the “liberal media.’ “ Conservative journalist Bill Kristol acknowledged in 2000 “The press isn't quite as biased and liberal. They're actually conservative sometimes,” and told someone else that “The whole idea of the 'liberal media' was often used as an excuse by conservatives for conservative failures.”

There was even considerable evidence that conservative complaints about a liberal media had intimidated the print and electronic press sufficiently to assure conservatives favorable coverage. Screaming about “liberal bias” has been likened to “working the ref” in basketball and football. It has persuaded the established media that it must sometimes “bend over backward to prove they weren’t liberal after all. “ Former GOP national chairman Rich Bond admitted in 1992 that complaints about the liberal media was a strategy similar how a Little League coach would “work the refs” because “Maybe the ref will cut you a little slack on the next one.”

The strategy of working the ref was implemented by three conservative organizations that screened media output. Accuracy in Media, founded in the 1970s, was founded by Reed Irvine, who looked for items that were favorable to big government or supposedly hostile to business, the family or religion. He later developed the theory that Kenneth Starr had covered up evidence that Clintons were responsible for the death of Vincent Foster. The Media Research Center, operated by William F. Buckley’s nephew L. Brent Bozell, III, is well financed and operates the most highly developed media monitoring operation. It makes no secret of the fact that it is a Republican operation. People from MRC are frequently featured on talk shows, and the press pays close attention to its complaints of unfairness. The Center for Media and Public Affairs is smaller and sometimes more objective than the two larger operations. All these complaints about the media run counter to the fact that huge corporations own the electronic media and that the print media is overwhelmingly in the hands of Republicans. In 2000, twice as many newspapers endorsed George W. Bush as those that gave Al Gore the nod.

These complaints and the impression that the nation is moving to the right has given media content a much more conservative coloration. Media outlets have been rushing to hire conservative commentators since the 1980s. In 2003, an ABC spokesman explained why John Stossel was made an anchor on the program “2 0/20” by noting that the country had become conservative. He said,” the network wanted somebody to match the times.” If this explanation has validity, it would help account for why the press appeared friendly to liberal policies in the years of liberal ascendancy.

No matter how much the media modifies its coverage to answer Republican criticisms, it is doubtful if the complaints about a liberal media will diminish. Such criticisms are very effective in fueling right-wing populism with its sense of victimhood at the hands of an evil elite. People on the New Right feel ennobled by persecution and are energized by just rage. In time, New Right political philosophy would assume, for many of its adherents, the form of a religion for many of its adherents. They blended with it an intense professed patriotism, but often these people who spoke so often of their love of America made it clear that they could not stand many other Americans, particularly liberals who made them fearful for the nation’s survival because these people were to blame for most that ailed the nation. Goldwater and the new conservatives inspired many to enter the political arena, and over three decades they became Republican Congressmen and senators and filled important places in state parties and governments. Some would become staffers in Republican administrations.

American right-wing populism it is very attractive to small entrepreneurs and ordinary Americans, often members of the white working class. In both Europe and America white males from the working class were particularly attracted to populism. They faced job insecurity and declining standards of living, and, especially in the United States, they resented the loss of privileges that had traditionally flowed from their status as white males. Yearning for the restoration of their roles as defenders and providers, some American men even joined militias, extremist organizations that display the repressive dimensions of right-wing populism when it is carried too far.

The New Right fed on the resentments of both conservative church people and the economic frustrations of many working Americans. Very often both forces were at work in attracting people to this new political force, which claimed the banner of true conservatism. Since the early 1970s, more and more workers faced economic insecurity and declining benefits and real wages. Over time a collective emotional state fear and anger emerged and grew among many in Middle America; it was generated largely by economic forces but was most easily expressed in cultural and religious terms. The emergence of the New Right also benefited from more concrete and identifiable factors. There were numerous, well heeled secular backers of the New Right. Some of them were the John Randolph Club, the Progress and Freedom Foundation, and the Council for National Policy. Yet, most of the New Right’s support came from church people. The views of the New Right appealed to religious conservatives because they seemed to be calling for a return to traditional moral and economic principles.

Neoliberal thought, by applying “rational choice” economic models to social policy questions, has preempted areas where religiously based theories of morality once prevailed. There was initially a problem in convincing some religious conservatives that they should see greed as productive and that the unrestrained pursuit of wealth was not necessarily a betrayal of Biblical values. In time they seem to have concluded that the market was a God-ordained force and that greed was a natural force designed to drive economic operations. However, there was also the evangelical Christian view that economics and religion were separate spheres. This made it easier for these believers to ally with the Republicans, and, for a time, overlook policies not to their liking. In time, however, they were to become true believers in new conservative economics. Perhaps the appeal of neoliberalism to conservative Christians is that their God is the historical American Protestant deity who is “the narrowed Lord of persons, not of hosts; he is conspicuously not the Lord of history.”

After 9/11, this traditional Protestant God was enlisted in the war against terrorism but his scope otherwise seems to remain rather narrow. Disappointed by the identification of Christianity with imperialism, militarism, homophobia, and some of the least desirable features of capitalism, a British observer wrote in 2004,”Too many [Americans] who profess to be Christians hold values that I see as inimical to the faith. In fact, America could do with an infusion of godly values.” It may be that the new Republican base can only deal with its fears by attacking foreign enemies. Their insecurities are seemingly of a primordial nature and can only be exorcized if the United States acts as an agent of divine redemption to spread democratic institutions to other places in the world.


Sherman has written African American Baseball: A Brief History, which can be acquired from LuLu Publishing on line at http://www.lulu.com/browse/search

Enron and the California Energy Crisis

Gaming the California Market
Enron’s power-selling subsidiary, Enron Energy Services, expected to make substantial profits in California in the year 2000. General Thomas White was its CEO and pursued a policy of encouraging traders to give substantial up-front discounts to acquire contracts and customers. The discounts often involved losses for the firm, but White was certain that they would easily be covered by profits generated in the California spot market in 2000. The Golden State did face an energy crisis in that year which followed into 2002, but it is unclear how much Enron netted during the crisis. The four-star general, who seemed to have been more a front man than an actual manager, tired of job by 2001. Enron CEO Kenneth Lay, who was briefly under consideration for Secretary of Energy, persuaded his friend George W. Bush as Secretary of the Army. ( )
The deregulation of wholesale electricity exposed California to a severe energy crisis in 2000-2001. Enron CEO Jeff Skilling had predicted that energy deregulation in California would save customers there $9 billion a year. Instead deregulation resulted in hiked costs from $7 billion to $27 in a year. California energy prices began to soar in 2001 and continued to do so until mid-2002. During the California energy crisis, the federal government did very little to protect California from price gauging or to look into charges that Enron and other large providers were creating artificial power shortages to drive up prices. On December 20, 2000, Bill Clinton, who had believed in deregulation, imposed price caps on energy going into the state and ended the crisis for the moment. Three days after George W. Bush occupied the white House, the price caps were removed and the Golden State again faced an energy crisis. Enron’s Ken Lay told Cheney, “The administration should reject any attempt to regulate wholesale power markets by adopting price caps or returning to archaic methods of determining the cost-basis of wholesale power.” Enron controlled 30% of the energy in California and three other western states, but it traded ten times as much energy as the other firms during the crisis. It did this by trading with itself and the others, thus putting itself in a position keep forcing prices to rise It was also able to charge from 63 to 185% more for energy than its competitors.

In the last days of the administration of George H.W. Bush, Congress passed legislation in 1993 permitting the states to deregulate energy. The same bill repealed the prohibition on energy companies donating to political campaigns, and the power companies thereafter donated $16 million to the Republican Party. In 1996, Governor Pete Wilson pushed through the California legislature a measure drafted Southern California Edison that partly deregulated electricity and permitting the utilities to collect a $ 28 billion bailout from ratepayers as a compensation for supporting deregulation. A portion of this money was used to cover stranded assets. This was the same ploy used to win approval in Texas under Governor George W. Bush. In 1998, the electric utilities invested $39 million to defeat Ralph Nader’s referendum to end deregulation.

Some California utilities sold off their generating plants to Duke Energy of North Carolina, Enron of Texas, and other out-of-state providers. During the crisis, PG&E and Edison paid heavily for this blunder facing bankruptcy because they had to pay ten times more for energy than when regulations were in force. Edison had assets that could have been sold off, and PG &E’s energy producing subsidiary was raking in record profits while its retailing arm was demanding relief. Credit Suisse First Boston told its customers that the California blackouts were created by the utilities in order to persuade the legislature to vote for rate increases. The utilities demanded and received another rate hike. A state investigation later revealed that key California generators withheld 30 to 50% of their energy to create shortages and at the worst times as much as 55 to 76% was withheld. Federal regulators obtained Williams energy power control room audiotapes of people receiving orders to drastically cut back on power output. Then federal regulators sealed the tapes and refused to loan them to California authorities. Williams had given $500,000 to the Republican Party and had participated in the Cheney energy task force.

By May 2001, California energy bills had increased 1,000% since the beginning of the crisis. At one point A megawatt hour cost $250, in comparison to about $12 in 1998. President Bill Clinton tried to address the problem on December 14, 2000 by ordering an end to uncontrolled speculation in energy going to California. That order was rescinded three days after George W. Bush was inaugurated. The Republican-controlled FERC did not do anything about California energy prices until late June, when caps were again applied. Perhaps, the new appointees, who owed their jobs partly to Ken Lay, thought there were legitimate questions about whether legislation passed in 1993 gave the agency power to act. ( )

Enron was also given a major voice in selecting Patrick Wood as the head of the agency that regulates interstate energy prices. Curtis Hebert, Jr., former head of the Federal Energy Regulatory Commission, was appointed to a Republican seat on the FERC by President Bill Clinton. His friend Senate Majority Leader Majority Leader Trent Lott had sponsored him. When George W. Bush became president, Hebert became chairman of the commission. However, Hebert would soon have to be reappointed to the commission by President Bush. Kenneth L. Lay, president of ENRON, was made a member of Bush’s transition force and entrusted with the task of interviewing candidates for the FERC chairmanship. Lay had been considered for a slot on the first Bush’s cabinet. According to Herbert, Lay interviewed him and later telephoned to outline conditions for his support. The New York Times reported that Lay wrote to Hebert promising support if the chairman accepted Enron’s view of deregulation. Chairman Hebert said he refused to accept Lay’s conditions, but it is also clear that FERA did nothing to interfere in the California energy crisis at this time.

Hebert was blocking implementation of Lay’s plan to divide the nation into four regional energy transmission organizations (RTOs) and had begun an investigation of the derivative financing instruments that Enron and others used for energy trades. Ken Lay was not only permitted to interview candidates for the FERC and allowed to submit a list of recommended candidates. When it became clear that he would not retain the chairmanship, Hebert resigned in august even though he had two more years to serve as a commissioner. Two of those he recommended were appointed, including the chairman Pat Wood. According to Republican columnist Robert D. Novak, Enron wanted Pat Wood to become FERA chairman because its expected to profit by learning how to use FERA restrictions of the free flow of energy for its benefit. For six months, Chairman Wood did nothing to limit energy prices in California, while Enron revenues for that period increased by billion dollars.

The White House ridiculed the idea that a price cap would bring relief to California customers, and Vice President Cheney joined the chorus one-day after meeting with Ken Lay. On November 20, 2001, Wood’s FERC divided the country into transmission zones but did not take a firm position against letting firms like Enron manipulate prices of energy flowing through all the zones. Though the agency reluctantly imposed a price cap, it left the door open to Enron’s suggestion that there be no barrier to trading energy that flows through zones. The possibility of creating an energy crisis for the entire nation remained.Wood also assured listeners that Enron’s collapse “doesn’t seem to be tied too much to deregulated energy markets,” making it clear he had no intention of fixing the damaged structure that permitted the spiking of energy prices in California and Utah.

Senator Diane Feinstein requested a meeting with President Bush to discuss the crisis in her state but was refused an audience in a perfunctory note that even misspelled her name. In opposing any price caps during the crisis, both President Bush and Vice President Cheney employed arguments supplied by Kenneth Lay in a letter warning of the dire consequences that would follow any effort to regulate prices. A price cap was not imposed until June, after California Republicans had warned the white House that opposition to regulation was endangering their situation in the Golden State.( )

Five big energy companies, TXU, Reliant of Houston, Dynergy, el Paso, and Enron, had donated $4.1 million to the Republican party. Governor Gray Davis was to call Reliant Corporation a bunch of “pirates.” The out-of-state providers of wholesale energy were doubling and tripling their profits, and there was evidence that they created artificial shortages in order to spike prices. California Edison notified the FERC that it believed that Enron and other providers were manipulating the power system to create interruptions of supplies and false shortages. Enron and other providers reaped $30 billion in profits from sales in that state. Enron’s share proved very difficult to trace, but $1.5 billion turned up in a reserve account. The money was hidden there because it was feared that Congress and the California legislature would investigate the activities and profits of energy providers during the crisis.

A portion of Vice President Dick Cheney’s National Energy Policy suggests that deregulation had made possible the gaming of the California market: “The risk that the California experience will repeat itself is low, since other states have not modeled their retail competition plans on California’s plan.” The FERC report on the crisis referred to “market manipulations” made possible by California’s legislation. David Fabian, a former Enron computer programmer, disclosed in a letter to Senator Barbara Boxer that Enron traders bragged to him about how they could electronically manipulate information on the California wholesale electricity market to create spikes in energy prices.

The FERC released documents it had received from Enron in early May 2002. They revealed that the energy giant had strategies called “Fat Boy,” “Get Shorty,” “”Shift.” “Ricochet,” and “Load Shift” to maximize prices, create congestion on transmission, lines, and generally maximize profits. A strategy known as “Death Star” resulted in receiving payment for moving energy that had never been provided. There was also evidence that Enron gave false information to state energy regulators. Though the evidence suggested that Enron could have manipulated prices in the California crisis, the FERC spokesmen claimed there was no conclusive evidence. These documents also included memos from Enron lawyers indicating they thought other energy firms were using fake trades to bid up energy prices. Several days after this material was released Reliant Resources, a large energy trader, admitted that it had engaged in wash trades with four other firms to boost energy prices. Investigators for the California legislature in June, 2002 turned up documents that proved that Perot Systems Corp. demonstrated for Reliant Energy and other providers software that would create the impression of congestion on transmission lines as a way of driving up prices. Transmission lines would appear to be massively overbooked, which would create blackouts and higher wholesale prices. The strategy was identical to one used by Enron. There were many Congressional investigations Enron, but none of them seemed interested in seriously probing this matter. In October 2002, Timothy Norris Belden, a key Enron energy trader, pleaded guilty to manipulating energy supplies to create a crisis and to moving energy out of state so as to avoid state regulations. That energy was then sold to California at sky-high rates. Belden also demonstrated how Enron created the impression that its transmission lines were congested so that other providers using them paid higher prices.

The California legislature and state justice department was most successful in discovering what had happened during the energy crisis. The congressional investigations accomplished nothing more than giving politicians opportunities to denounce corporate corruption, and the US Justice Department’s record was mixed at best--nailing a few executives for securities fraud but taking steps that actually impeded the California investigation of how electricity prices had been manipulated during the crisis.


After the “Fat Boy” memos were released, a aid to Representative Billy Tauzin ( R. La.) was asked if the House would look into the phony trades. Re replied, "What are you going to accomplish? Enron for all practical purposes is dead. Unfortunately, for political reasons, some people want to drag the bodies through the streets." Tauzin, a major recipient of Enron funds, had earlier conducted hearings of Enron’s bankruptcy, which revealed little but provided himself and others with opportunities to denounce Enron practices. Senator Dianne Feinstein of California was still unsuccessfully demanding a thorough probe of the matter. More than a year after the California energy crisis, some senators tried to amend the law so it would be more difficult to hide wholesale electricity prices. Senator Philip Gramm, who had been Enron’s succeeded in killing the measure. The fact that senators from both parties helped Gramm speaks volumes about the power of money in politics. Phil Gramm and his wife were called by Barron’s Financial Weekly “Mr. And Mrs. Enron” ( ) Feinstein’s efforts to restore some regulations on energy trading were also unsuccessful. ( )

The federal government did little to explore how the energy industries gamed electricity prices in California, and the state’s Democratic Governor Gray Davis was to eventually bear the blame. The FERC investigated the crisis, levied small fines, but did not conclude that energy traders created the crisis. It released almost two-dozen Enron e-mail that proved that Enron officials advised the FERC on what its findings should be. By its own rules, the FERC is not permitted to discuss such issues with people outside the commission.”( )

To cope with the crisis, the state incurred heavy debt which became much greater as a result of the recession of the first George W. Bush administration. California’s government was hamstrung in how it raised and spent money by a series of popular initiatives that marked its recent history. In the summer of 2003, well-financed conservative activists acquired enough signatures to force a recall election on October 7, which was likely to force Davis from office and replace him with actor Arnold Schwarzenegger. ( )




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

The Enron Scandal Revisited: Part 1

The Enron scandal is old news, except for the thousands of employees and investors who were damaged by it. A handful of executives were sent to federal prison, and a big accounting form was forced out of business. The extent of the damage it did to our institutions and even the full extent of what was going on are not known.


Enron Energy Services Corporation declared bankruptcy on December 2, 2001. It was the seventh largest firm in the world, and this was the largest bankruptcy in history. Its collapse was spectacular because it had consistently reported very high earnings, and its stock was a high flyer. There is no way of knowing if the Bush administration knew this was coming.

The evidence is clear that there was a great deal of activity in the administration designed to make Enron more profitable. Some of the activity was unprecedented, as in the case of a special task force to persuade India to bail out the Enron power plant in Dabhol. The full story of the symbiotic relationship between the Bush administration and Enron will never be known. The Justice Department drug its feat for a long time before requesting Enron documents, leaving much time for shredding. Yet there was enough information on the record to indicate that Bush appointees moved heaven and earth to help Enron and others game California energy prices, and then they took multiple actions to prevent a thorough investigation. Congress did little to explore the scandal, with the House under Republican control and corporation-friendly Joseph Lieberman leading a superficial probe.

For five years, the firm massaged its stock price by maintaining a fake trading floor on the sixth level of its Houston headquarters. Meanwhile it was incurring and hiding great losses. Among 22 major losses were $2 billion in broadband communications, $2 billion in a Brazilian utility, 1 billion in water development, and potentially 3 billion in an electric generating plant in India. Once a year, when outside energy analysts visited it was a beehive of activity. Former Enron energy analyst said that there were really no transactions taking place; it was an “elaborate Hollywood production.”

The first signs of Enron wrong-doing turned up in October, 1987, when the SEC brought charges against two officials of Enron Oil Corporation, an Enron subsidiary. These officials, Louis Borget and Thomas Mastroeni, were conducting the firm like a huge pyramid scheme and apparently even writing checks to themselves. The subsidiary kept two sets of books and sometimes used private bank accounts for huge trades. The firm eventually showed a $142 million loss for the subsidiary, but many of its records were destroyed and that figure could not be verified. Their office in Valhalla, N.Y. was closed and they went to prison for sham oil trades and dummy offshore companies to disguise their illicit operations and evade taxes.


Enron chief financial officer Andrew Fastow sat on the board of the Houston Federal Reserve Bank. Fastow developed various means of moving assets and losses off the books. Today, it is assumed that the losses were parked abroad but few liquid assets are hidden in tax havens. But there is no way to know if this is true. Assets and liabilities were mainly placed in subsidiaries and partnerships. The point was to hide losses and inflate earnings data by making profits essentially a function of trading operations. Enron losses were huge and losses included $2 billion in a Brazilian utility, $1 billion water development, another billion n an electricity plant, and $2 billion in supporting broadband communications. Enron’s collapse came when it disclosed it had hidden a billion dollars in losses by not showing them on its financial statements. Profits were inflated by this amount through the use of spin-offs called “special purpose entities” (SPE’s), where assets, transactions, and losses could be hidden. Included in that amount was $340,000,000 on an Indian power plant, where potential losses were far greater. The firm managed to hide more than $1,000,000 in losses over a several year period.

Enron bought good publicity in the press by putting journalists and others on retainer as consultants. The firm “collected visible people,” such as politicians, journalists, and pundits, and placed them on retainer. These individuals were brought to Houston to spend a few days talking with executives in return for checks that were in the five figures. Some of the retainers amounted to $50,000 a year. Among those who received Enron money were Paul Krugman of Fortune, William Kristol of the Weekly Standard, Standard Contributor, Irwin Steltzer, and Lawrence Kidlow of NBC. Kristol was paid a $100,000 a year. They provided favorable press; however, Krugman reversed course when his salary became public. Robert Grady, vice chairman of Resources for the Future wrote a piece for Time in 2001 advocating the trading of greenhouse gas emissions rights. His foundation received $45,000 and the promise of $2,000,000 from the Lay’s foundation to establish a research chair.


Most members of the media required no payments to give Enron glowing reports in the years immediately preceding its collapse. For six consecutive years, Fortune named Enron “America’s most innovative company.” They were as wrong about Enron as they were about the dot.com boom of 1995-2000A few analysts such as Jon Olson of the Sanders Morris Harris Group posted regular warnings about Enron but were ignored. Its many political ties and rosy, but clearly misleading financial statements should have alerted many others. When the firm considered getting into electronic pornography via broadband Internet in 2001, few took notice.

Michael Milken, who went to prison for fraudulent junk bond operations, admitted in 1987 that he had advised Enron on how to structure its debt. After he was released from prison, Ken Lay had Milken address Enron executives. There was also a pattern of using losses to reduce tax obligations while making certain they did not appear on statements that investors and market analysts would see. Much of the debt was hidden in subsidiaries based in places abroad where the US could not get a look at their books.


In the three years before the firm went belly up, twenty-nine top executives exchanged stock for $1.1 billion in cash. Enron executives were unloading stock while preventing employees from doing the same with shares in their tax sheltered retirement plans. It turned out that it had concealed huge losses and that the Arthur Andersen accounting firm had given its blessing to the firms shoddy bookkeeping practices. In addition to auditing, Andersen was receiving large payments for offering financial advice. In March 2002, Andersen was indicted by a federal grand jury for violations of securities legislation. The firm had shredded many documents relating to the case and had approved dishonest bookkeeping practices. The Justice Department had no choice but to ask for an indictment because Andersen had been involved in a case involving Waste Management, Inc. in which dubious accounting practices had led to inflated statements of profits. Andersen had signed to avoid wrongdoing.

The collapse of Enron was covered more as a financial than a political scandal. One observer suggested there was a media “smoke screen to keep the political leaders web of Enron connections from scrutiny. They overwhelmed the footage on nightly news shows of former Enron employees in T-shirts dragging focus trees from their offices down the steps of the two gleaming corporate skyscrapers on Houston’ Smith Street.” Andersen was found guilty of obstructing justice.

There was also a political side to the story as Enron had unusual access to politicians and people in the Bush administration. Chairman Ken Lay had called Secretary of the Treasury Paul O’ Neill and Commerce Secretary Don Evans in October, asking for help. They offered none. By that time, the energy giant’s fate was sealed; nothing could be done to help. The Bush administration emphasized that it did not respond positively to these two calls, suggesting that large campaign contributions had purchased nothing.


Enron executives made huge donations to politicians, and the vast majority of its contributions went to Republicans. George W. Bush was a major recipient of their largess. Kenneth Lay, Enron board chairman, was a close friend of George W. Bush, who called him “Kenny Baby” and his largest political contributor. His firm, through individual executives, gave 73% of their contributions to Republicans and 27% to Democrats. In return for that largess, Congress and the administration placed a provision in the Bankruptcy Act of 2002 that would bar creditors from pursuing offshore accounts. Enron had almost 900 off the books operations. Many of these partnership arrangements were centered in off shore accounts, most of which were in the Cayman Islands and Caribbean. Other corporations had joined Enron in obtaining protection for their offshore bank accounts. It has been suggested that many of Enron’s concealed losses were associated with these off-the book partnerships handled through off shore accounts. Some Enron executives made huge profits on these operations, while it was eventually reported that the same operations incurred the losses that brought bankruptcy to Enron. Clifford Baxter, a ranking Enron executive, was found dead due to a gun shot wound one week before he had agreed to testify before Congress. Baxter had shown interest in hiring a bodyguard, but the death was ruled a suicide by a coroner with a checkered past. Police said they were continuing the investigation.


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President George W. Bush attempted to distance himself from Ken Lay, claiming he only got to know him in 1994. The president claimed that Lay supported Governor Ann Richards in the 1994 race even though records demonstrated that Lay contributed far more to Bush than to the Democratic incumbent. Lay was close to the younger Bush’s father in the 1980s, and it is likely they were well acquainted then. In March, 2002, an article in The Nation forced Bush strategist to admit that George W. bush was involved in an oil deal with Enron in 1986, but Rove added that the president had “no recollection of this specific deal.” At the time, Bush was operating Spectrum 7, a company that was not doing well until the joint venture paid off. It was soon be acquired by Harken Oil. Ken Lay was then head of Enron Oil and Gas, but Bush has claimed that he did not come to know Lay until 1994. Later, evidence turned up that Bush had been a partner of Enron in 1985 well-drilling project in Martin County, Texas. ( ) In 1997, then-Governor Bush attempted to persuade his friend Governor Tom Ridge of Pennsylvania that Enron was a solid company and that the Keystone State would do well to adopt the kind of electricity deregulation advocated by Enron. ( )

While Bush was claiming he had no special ties to Lay and Enron, it was revealed that Bush aid Karl Rove arranged for Enron to put Christian Right consultant Ralph Reed on its payroll . The conservative Judicial Watch announced it was going to court to learn if this was a method of concealing a campaign expense. The Nation Magazine resurrected a story reporting that George W. Bush had pressured the Argentine government to give Enron a contract in the late 1980s, but the story received no play elsewhere. Young Bush was then running for governor of Texas when the story came out. His campaign denied that he had discussed a pipeline contract with an influential former energy minister in Argentina. Enron built that line when Carlos Menem, president of the senior Bush, became president of Argentina. After George Bush, Sr’s successful Gulf War, Enron was employed by Kuwait to rebuild its Shuaiba power plant even though the cost of Enron-supplied power was projected to exceed those associated with other bids.
Karl Rove, the president’s friend and assistant, met with officers of several corporations in which he held stock. The meeting was a possible violation of federal law. It was reported briefly in the press and dropped. Had that been a Clinton assistant, it would have received much greater play in the press and Congressional Republicans would have demanded at least a Justice Department investigation. At little later, it came to light that Rove had lied about ownership of a political consulting firm. This was only reported in a few papers.( ) Alberto R. Gonzales, White House counsel, found it necessary to admit that Rove had also participated in formulating Bush administration energy policy while he still held Enron shares and stock in other energy firms.


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