Bush supposedly refused to intervene, despite the hundreds of thousands of dollars that Enron had poured into his political coffers. That refusal purportedly showed the high ethical standards that set Bush apart from lesser politicians.
Bush 's defenders will probably reprise that storyline now that former Enron Chairman Lay and former Chief Executive Officer Jeffrey Skilling stand convicted of conspiracy and fraud in the plundering of the onetime energy-trading giant. But the reality is that the Bush-can 't-be-bought spin was never true.
For instance, the documentary evidence is now clear that in summer 2001 at the same time Bush 's National Security Council was ignoring warnings about an impending al-Qaeda terrorist attack NSC adviser Condoleezza Rice was personally overseeing a government-wide task force to pressure India to give Enron as much as $2.3 billion.
Then, even after the Sept. 11, 2001, attacks, when India 's cooperation in the "war on terror " was crucial, the Bush administration kept up its full-court press to get India to pay Enron for a white-elephant power plant that the company had built in Dabhol, India.
The pressure on India went up the chain of command to Vice President Dick Cheney, who personally pushed Enron 's case, and to Bush himself, who planned to lodge a complaint with India 's prime minister. Post-9/11, one senior U.S. bureaucrat warned India that failure to give in to Enron's demands would put into doubt the future functioning of American agencies in India.
The NSC-led Dabhol campaign didn 't end until Nov. 8, 2001, when the Securities and Exchange Commission raided Enron 's offices and protection of Lay 's interests stopped being political tenable. That afternoon, Bush was sent an e-mail advising him not to raise his planned Dabhol protest with India 's prime minister who was visiting Washington. [For details on the Dabhol case, see below.]
Contrary to the official story, the Bush administration did almost whatever it could to help Enron as the company desperately sought cash to cover mounting losses from its off-the-books partnerships, a bookkeeping black hole that was sucking Enron toward bankruptcy and scandal.
As Enron 's crisis worsened through the first nine months of Bush 's presidency, Lay secured Bush 's help in three key ways:
--Bush personally joined the fight against imposing caps on the soaring price of electricity in California at a time when Enron was artificially driving up the price of electricity by manipulating supply. Bush 's resistance to price caps bought Enron extra time to gouge hundreds of millions of dollars from California 's consumers.
--Bush granted Lay broad influence over the development of the administration 's energy policies, including the choice of key regulators to oversee Enron 's businesses. The chairman of the Federal Energy Regulatory Commission was replaced in 2001 after he began to delve into Enron 's complex derivative-financing schemes.
--Bush had his NSC staff organize that administration-wide task force to pressure India to accommodate Enron 's interests in selling the Dabhol generating plant for as much as $2.3 billion.
As Enron 's corporate house of cards collapsed anyway in fall 2001, the toll was devastating. Investors lost tens of billions of dollars; some retirees were financially wiped out; 5,000 Enron employees were laid off. Enron 's accounting tricks also discredited its accounting firm, Arthur Andersen LLP, which was soon closed by government regulators.
But Bush was fortunate that the Enron scandal broke while he was still wrapped in the glow of favorable poll ratings that followed the 9/11 attacks. The Washington news media generally acquiesced to Bush 's insistence that he really wasn 't that close to Enron or Lay, though Lay had earned a Bush nickname: "Kenny Boy. "
The facts, however, suggest a political intimacy between Bush and Enron, especially with the now convicted swindler Ken Lay, dating back at least to Bush's first campaign for Texas governor in 1994.