Sunday, May 28, 2006

Enron and on

The verdicts against Ken Lay and Jeff Skilling are probably as close to justice as we are realistically likely to get in that Ponzi scheme to end all Ponzi schemes. But we should not forget the part of the story that the press and the Preznit want us to forget: the deep and wide ties between Kenny Boy and the Bush machine. Robert Parry has the whole laundry list.

And of course, when the press talks about how these vermin committed crimes including insider trading, we should be reminding them about another insider trading scandal -- a scandal that was never properly investigated. A sidebar in every discussion of the Enron debacle should be a small Texas oil company named Harken. Dubya was on the board of directors of Harken in 1990, when, in a miniature Enron prequel, he dumped his Harken shares under suspicious cirmcumstances:

The controversy centered around the fact that he sold the stock shortly before the company announced major losses; after that announcement, the stock's value dropped by more than half. Here is the chronology according to various reports:

* June 6, 1990: Bush (who was at the time on Harken's board and a member of its audit committee) received the company's "flash report," which according to the Washington Post, predicted second quarter losses in the neighborhood of $4 million.

* June 8, 1990: According to the Los Angeles Times, Ralph Smith, a stockbroker, placed a "cold call" to Bush offering to purchase his Harken shares. Bush said he would reply within a couple of weeks.

* June 11, 1990: Bush attended a meeting at which a representative of Harken's audit firm, Arthur Andersen, warned of a loss that "could be potentially significant." Although no amount was specified in the meeting, the auditors indicated that the losses would surpass the $4 million forecast in the "flash report." (In fact, Harken would ultimately report a loss of $23 million.)

* June 22, 1990: Shortly after getting the transaction approved by Harken's lawyers, Bush sold 212,140 of his 317,152 Harken shares for $848,560.

* July 10, 1990: Under SEC requirements, this was the deadline for Bush to publicly report his sale of the stock. He failed to file the report until March of 1991. For reasons Bush has not explained, although he signed the form, he did not date it.

* August 20, 1990: Harken publicly announced second quarter losses of just over $23 million. The stock, which had opened at $3 per share, closed at $2.37.

* August 21, 1990: Despite the losses reported the day before, Harken's stock price rebounded to $3 per share. However, the overall trend was downwards, and by the end of 1990 Harken's share price had dropped to $1. (Today, Harken's stock trades for about the price of a candy bar on the American Stock Exchange.)

The SEC "investigated," and cleared him in 1991. Can anyone recall who was President in 1991? If you guessed Dubya's daddy, go to the head of the class. And who was the head of the SEC under Daddy? Richard Breeden. You probably don't know much about him, but here's what Eric Boehlert noted in Salon back in 2002:

Breeden has known the senior George Bush for 20 years, and worked with him for nearly 10 before then-president Bush appointed him as SEC chairman. That choice in 1989 surprised many Wall Street experts since Breeden, just 39 at the time, had virtually no firsthand knowledge of the financial markets. "What do we know about Richard Breeden?" Hardwick Simmons, vice-chairman of Shearson Lehman Hutton Inc., asked Business Week at the time. "Not much," answered the magazine.

A key quality Breeden did possess, however, was Bush loyalty. Breeden was "a devoted admirer of President Bush," according to a New York Law Journal profile at the time of Breeden's nomination. (The Journal noted one of Breeden's three sons shared a Bush family name, Prescott.) One friend told the magazine Breeden's admiration for Bush was "something of a passion for him," adding, "He would have done just about anything for the vice president's chances of becoming president."

At the time of his nomination, one White House official echoed that sentiment to the New York Times, saying Breeden was considered "family" by the Bush administration. Business Week described Breeden as a Bush loyalist.

There really is nothing new under the sun, is there?


Anonymous Anonymous said...

George W. Bush and Kenneth Lay

In April 2001, a month before the Frontline interview and Bush's meeting with Davis, Cheney, who chaired Bush's energy task force, met with Lay to discuss Bush's National Energy Policy.

Lay recommended some energy policy initiatives that would financially benefit his company, and gave Cheney a memo that included eight recommendations for the energy policy. Of the eight, seven were included in the energy policy's final draft. The energy policy was released in late May 2001, after the meeting between Bush and Davis, and after Cheney's Frontline interview.

What many people have failed to realize is that Davis was right in his assessment that energy companies, including Enron, were manipulating the state's wholesale power market. To this day, neither Cheney nor Bush has acknowledged that they got it wrong and that their inaction helped fuel the California energy crisis.

1:43 AM  
Blogger bluememe said...

We left coasters vote blue. Ergo, we deserved it -- such is the Bush-Cheney logic. Reward friends who show loyalty, punish enemies. All else is illusion.

7:46 AM  

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