The Real Enron Scandal

Charles R. Smith Monday, Jan. 28, 2002

Documents Link Enron's Fall to Clinton 'Corruption'

In 1992, Enron was one of the most popular contributors to Bill Clinton and the DNC. Enron was right next to Bill Clinton from his first days in the White House. In 1992, Enron donated $100,000 to Clinton's inauguration, and Enron's top exec, Ken Lay, stayed at the White House 11 times.

If the FBI, GAO or Congress wants to investigate billions of dollars lost to "corruption, collusion and nepotism," they need look no further than Bill Clinton.

Enron executives traveled with Secretary of Commerce Ron Brown in 1994 on trade missions to Russia, India, Indonesia and China, cutting U.S. taxpayer-financed deals in each country. In fact, Brown paid a great deal of attention to Enron. Indonesia was pressed by Clinton's secretary of commerce to accept Enron deals laced with corruption.

Enron's most twisted activities involve a 1994 trade trip to Indonesia with then-Commerce Secretary Brown. Immediately after traveling to Indonesia, Brown personally sought approval for Enron electric power plants sponsored by U.S. funding. The documents show that the Clinton administration knew the deals were also filled with kickbacks for Indonesian president Suharto.

According to a personal letter directed to the Indonesian minister for trade and industry, Brown assisted Enron by endorsing deals with the corrupt Suharto regime for two gas-fired power plants.

According to Enron, the natural gas for the project was to be provided through Pertamina, Indonesia's state-owned oil and gas company. Pertamina, however, stalled the project with excessive demands for higher gas prices.

"Enron power, a world-renowned private power developer, is in the final stages of negotiating two combined cycle, gas turbine power projects," wrote Brown in his 1995 letter.

"The first, a 500 MW plant in East Java, should begin commercial power generation by the end of 1997 if it can promptly negotiate a gas supply Memorandum of Understanding with Pertamina. The other project, a smaller plant in East Kalimantan, also awaits a gas supply agreement.

"I urge you to give full consideration to the proposals," concluded Brown to the Indonesian minister.

Clinton State Department Support for Enron

In addition, the Clinton administration enlisted the State Department to strong-arm the Indonesians to accept the power plant deal. In a March 1995 memo from the American Embassy in Jakarta, U.S. officials pressed the Indonesians to conclude the contracts for Enron.

"Enron Corp. continues to negotiate with the relevant authorities regarding availability and price of gas supply," states the Embassy memo. "Embassy continues to raise the issue of deregulation of the gas supply system with Pertamina."

In October 1995, Brown wrote Hartarto Sastrosurarto, Indonesia's coordinating minister for trade and industry, urging him to conclude the Enron power plant deal.

"I would like to bring to your attention a number of projects involving American companies which seem to be stalled, including several independent power projects. These projects include the Tarahan power project, which involves Southern Electric; the gas powered projects in East Java and East Kalimantan, which involves Enron," wrote Brown.

"Your support for prompt resolution of the remaining issues associated with each of these projects would be most appreciated," concluded Brown.

Press Ignores Enron Links to Clinton

Perhaps one reason why the mainstream press has not paid much attention to this critical 1995 letter written by Ron Brown is the fact that Brown also lobbied hard on behalf of a major contract for Time-Warner with the corrupt Suharto regime.

On Nov. 18, 1996, Enron finally announced that the deal with Suharto was complete. According to Enron's public statement, the U.S.-led energy company had finally won the East Java power project.

"Enron is extremely pleased to reach this crucial step in this project," stated Enron chairman and CEO Kenneth L. Lay on the successful conclusion of the Java power deal.

"Enron's strong experience in developing natural gas-fired plants makes this project ideal for Enron, our partners and our customer."

All was not as it seemed inside the Indonesian power industry, however. In fact, U.S. government officials were keenly aware of the rampant corruption inside Indonesia's electric power producers and, in particular, the Enron power project.

Documented 'Corruption, Collusion and Nepotism'

In October 1998, U.S. Ambassador J. Stapleton Roy wrote a diplomatic cable that he had recently met with Indonesian Director General of Electricity Endro Utomo Notodisoerjo. According to the cable, the Indonesians were more than honest about the ongoing criminal activity.

"Commenting on corruption, collusion and nepotism (KKN), Endro said that in the past there was no separation between 'power' (not electric but former first family power) and business. 'All the IPP's have a relation with power, and it is still going on,' added Endro."

According to State Department documents, Enron was subject to corruption in the two power plant deals with the Suharto government. One State Department cable included an entire section titled "Dealing with Unwanted Partners."

"Unocal executives told resources officer that the firm is close to reaching a deal with its partner, PT Nusamba (controlled by former President Soeharto crony Bob Hasan) to sever ties in two production sharing contracts (PSC) in East Kalimantan and East Java," noted a State Department cable.

Curiously, many secrets still surround the Enron power plants. The U.S. State Department maintains that some information on the Indonesian power deals must remain classified. One partly blacked out cable from the State Department is titled "on power projects, corruption, draft laws."

The December 1998 cable, a discussion between U.S. Ambassador Roy and an individual whose name was withheld, states that the highly placed individual in the Indonesian government "stressed that solutions to the problem must be simple to convince 'the people' that corruption, collusion and nepotism ('KKN') are being dealt with properly.

"The draft oil and gas law is currently with the State Secretariat (Sekeng)," states the cable from Ambassador Roy.

"He expects it to be finalized this month and go before the Indonesian parliament (DPR) in January. He said that those that are not happy with the new law – including Pertamina, the Army and some members of the Indonesian parliament (DPR) – have 'vested interests' in the current system."

'First Family Involvement'

According to dozens of documents, the "vested" interest included bribes and kickbacks allocated to the Suharto family and its "crony" friends. In fact, the Department of Commerce allocated an entire category in its documentation called "first family involvement" to describe the bribes paid to Suharto.

By 1997 the Indonesian power plant deals collapsed due to the rampant corruption. As a result of the collapse, the U.S. government had to pay off millions in insurance claims by the U.S. corporations that lost money.

In 2000, the Multilateral Investment Guarantee Agency of the World Bank Group, another U.S. taxpayer-financed organization, noted that it had to pay insurance money to Enron for its Indonesian power plant failure.

"In June of this year, MIGA paid $15 million to Enron Java Power Co. for its investment in P.T. East Java Power Corporation in Indonesia," states the official release from the MIG World Bank.

"The venture was one of many suspended by the presidential decree of September 20, 1997, issued in response to the country's economic crisis."

Robert Rubin and Enron

There are several direct connections between Enron and Bill Clinton. A major part of U.S. taxpayer financing for Enron's Indonesian projects was obtained through the Export-Import bank (EXIM).

Several of the Indonesian projects listed in Commerce documents note that EXIM head Ken Brody worked closely with Commerce Secretary Brown on the U.S. government financing. The EXIM bank under Brody financed over $4 billion worth of gas deals for Enron.

Ken Brody is also a close friend of Clinton Treasury Secretary Robert Rubin. Rubin worked with Brody during his years at the investment firm Goldman Sachs. Enron is listed as one of 44 such companies with which Rubin had "significant contact" during his years at Goldman Sachs.

Contributions for Favors

Despite the GAO requests for Bush documents, there are plenty of questions that need to be answered about the Clinton years. A study by the Center for Public Integrity shows that 187 companies participated in 14 Clinton-sponsored trade missions. Of those, 67 are known to have contributed money to the Democrats.

Between 1993 and 1994, 26 companies received support from the Overseas Private Investment Corp. and the Export-Import Bank totaling about $5 billion. According to the center's study, five corporations – Enron, U.S. West, GTE, McDonnell Douglas and Fluor – donated $563,000 to the Democrats and received at least $2.6 billion in contracts.

Moreover, the U.S. government was aware that insuring the false contracts inside Indonesia could push the Overseas Private Investment Corporation into bankruptcy.

"OPIC's combined exposure in Indonesia is close to USD 1 billion, or 5 percent of OPIC's global exposure, all in the electric power sector. As such, resolution of potential insurance claims and/or actions could result in 'an adverse material impact' on OPIC finances," notes a cable from the U.S. ambassador to Indonesia.

Yet, despite being faced with total financial failure due to huge losses, OPIC continued to back more power deals inside Indonesia. The Commerce documents note that during the Clinton years, Indonesian dictator Suharto contracted for 26 U.S. taxpayer-sponsored power projects while his impoverished nation could afford only one such plant.

More Cash for Enron

Still, Enron did not limit its activities to the Export-Import Bank or OPIC. Enron also profited from the Clinton Department of Transportation through a corrupt Maritime finance program. Two power barges for export to Indonesia made by Enron Corp. were built through the DOT Maritime-funding program and backed by $50 million in taxpayer financing.

During the Clinton years the same taxpayer-sponsored Maritime program also tried to finance two dual-use cargo ships for the Chinese navy. The financing fell through only after it was revealed that the Chinese navy could also use the ships as part of an invasion armada pointed at Taiwan.

However, the Department of Transportation Maritime financing did manage to lend over $60 million to build a paddle-wheel steam boat/casino. Still another DOT Maritime deal landed millions in taxpayer-supported loans for two floating combination hotel-casino barges.

Trade Trips for DNC Donations

In August 1994, Brown led a trade mission to China and Hong Kong that included Enron. The mission also included major million-dollar DNC donors such as Loral CEO Bernard Schwartz and investment banker Sanford Robertson. Robertson admitted to the New York Post that he was invited solely because he supported Clinton with campaign money.

The telltale Post article was discovered in the files of Ron Brown along with a tight list of exclusive DNC donors. Another document that Ron Brown kept in his personal files listed Enron, Edison Mission Energy, California Energy, Hughes, AT&T, Federal Express, Sprint and Chrysler as donating money to the DNC.

The direct donation of money in exchange for favors is clearly documented. The Indonesian scam took the U.S. taxpayers and corporate investors for billions of dollars in lost funds. Company execs and U.S. government officials ignored the "corruption."

Documented Crime but No Investigation

Documents obtained from the Clinton administration are filled with direct quotes and hard numbers detailing taxpayer monies that were paid as illegal bribes to a corrupt regime. The citizens of Indonesia and the United States were the victims of a massive crime. That crime has received no press attention and no investigation.

It may shock and surprise you that the demise of Enron started long before George W. Bush was elected. Enron's fall was due to "corruption" that started during the Clinton administration.

-- Cherri's Alter-Ego (alternate@mirrorview.net), February 02, 2002

Answers

-- Cherri's Alter-Ego (alternate@mirrorview.net), February 02, 2002.

If Clinton was cheating the people because he allowed himself to be influenced by Enron, he must have been way smarter than Dick and Dubya, because he never got busted for it. Maybe the repugs should have been looking somewhere besides his underwear! LOL!

The fact of the matter is, millions of people just got screwed, and Dick and Dubya are busted, "big time". These clowns were so tight with Enron that you couldn't split them apart with a jackhammer. I'll say one thing, it sure is a riot watching all the different ways they are trying to slither out of this!!

As Maria would say.. "pass the popcorn"!! And "thanks for the chuckle"!

-- ROTFL! (ROTFL!@ROTFL!.ROTFL!), February 02, 2002.

ROTFL, Tell me what Bush and Cheney did that was *illegal.*

You know, I think it's time for me to requote this little article from Mother Jones:

So much attention is being paid to Enron, in fact, that Global Crossing's filing for Chapter 11 protection this week passed with relatively little notice -- despite that fact that, at $25.5 billion, it is the fourth-largest in US history.

Like Enron, Global Crossing was a loyal and generous contributor to politicians on both sides of the aisle. In fact, only 28 individuals managed to contribute more to political candidates leading into the 2000 elections than former Global Crossing CEO Leo Hindery Jr. -- and Enron chairman Kenneth Lay wasn't one of them.

Altogether, Global Crossing's employees and the company's political action committee gave $2.8 million leading up to the 2000 elections, nearly $400,000 more than Enron contributed in the same period. The company continued its tradition of largesse through 2001, contributing over $600,000 towards the mid-term elections being held this year. Most of that money is filtered through soft money contributions to the political parties.

Company executives have also extended helping hands to politicians through substantial individual donations. Gary Winnick, Global Crossing's founder, gave over $120,000 in the last two years, and Lodwrick Cook, the company's co-chairman, gave over $230,000 in the same period. Hindery outdistanced them both, contributing nearly $600,000 in the last election cycle.

"If we're going to compete," Cook once told reporters, "we've got to be heard." Apparently, Global Crossing's message came through loud and clear on Capitol Hill.

What Mother fails to note (a mystery, that[g]) is that Gary Winnick is Bill Clinton's big buddy, even gave $1,000,000 so that Clinton could finish building his library. :)

Verrrry interesting.

-- Stephen M. Poole (smpoole7@bellsouth.net), February 02, 2002.

"Tell me what Bush and Cheney did that was *illegal.* "

Conspiracy to defraud consumers, for starters. Remember the California "energy crisis"? I knew that scam was going to come back to haunt these crooked bastards. Not to mention Cheney's Energy Plan, which was custom designed to meet the requirements of a known fraudulent organization.

Don't worry Poole, it's probably impossible for anyone to find ALL the illegal shit these scoundrels were into, but they'll definitely get enough to kick their sorry asses out of office. Thank God, our great nation will be saved before these Fascists completely eliminate any semblance of true Democracy.

-- (Hasta La Vista @ Fascist. Pigs), February 03, 2002.

You still haven't stated one substantive example of an illegal act. You are full of examples and I think it has been well-established that you would cheer if Bush and Cheney were ridden from the White House covered with tar and feathers.

OK, granted. But it's a simple question, and you should be able to answer it if you're so certain that they're being fitting for down coats.

Name one thing that Bush and Cheney have done that is illegal. "Conspiracy to defraud consumers" is an accusation. Give me some evidence.

Show me the beef. Show me one thing that they've done that was against US law.

-- Stephen M. Poole (smpoole7@bellsouth.net), February 03, 2002.

""Conspiracy to defraud consumers" is an accusation. Give me some evidence."

LOL, nice try! You know damn well, Cheney refuses to turn over the evidence, and has probably shredded anything incriminating. No matter, there will be a thorough investigation, and he is the type that cracks very easily under pressure. It will take time, but rest assured, the Dubya and Dick Show will be history before they finish their term.

-- (It will be @ slow. painful death), February 03, 2002.

Stephen, let me translate our wordy friend's reply into a more concise format. "No I don't have an evidence."

-- bogsworth (running@on.8cylinders), February 03, 2002.

Static,

In other words, you have no evidence. Thank you. :)

-- Stephen M. Poole (smpoole7@bellsouth.net), February 03, 2002.

LOL, it's really cute that you think concealing evidence is a legitimate defense for your criminal friends Poole, very touching. ;-)

As I stated before, but you seem to be having some trouble getting it through your thick head, these matters are now in the hands of the proper legal authorities, and even though Cheney has destroyed the evidence, there is still a very good chance they will find the truth.

-- hee hee hee (Poole and Dubya, sittin in a tree @ K - I - S - S - I - N - G!.), February 03, 2002.

Boy, Stephen, take THAT!

-- Peter Errington (petere7@starpower.net), February 03, 2002.

Take what? He has produced no evidence whatsoever. As I expected.

It's all guilt by association. Assuming that just because I came from a region of NC near Whiteville that I am a Klansman would be almost as logical.

Almost, but not quite.

-- Stephen M. Poole (smpoole7@bellsouth.net), February 03, 2002.

Peter,

And besides, I thought my point was a bit obvious: if these guys are guilty of so much stuff that it'll "bring them down," how come he can't produce one shred of evidence that they broke the law? Especially considering that the Washington Post went into full-blown "Watergate/Woodward/Bernstein" mode, DIGGING for any evidence of same, as soon as the scandal erupted ... and have found NOTHING to date?

Enron asked the White House for help when they were falling apart, the White House said NO. End of story.

... which is why I pointed out elsewhere that most responsible media have begun treating this as it SHOULD have been treated all along: an investigation of ENRON, not the White House.

-- Stephen M. Poole (smpoole7@bellsouth.net), February 03, 2002.

"if these guys are guilty of so much stuff that it'll "bring them down," how come he can't produce one shred of evidence that they broke the law?"

LOL, You STILL seem to be having a bit of trouble getting the facts into that THICK head of yours Poole!

This investigation has barely even started, there are many months, maybe even years to go, before it is over and done.

-- (wait@and.see), February 03, 2002.

One more (as usual, I'm busy, even though it's Sunday, so I'm doing these all in the same thread!).

As proof that the truth will always come out (hint: in this case, that means that if there was a huge smoking gun -- such as Bush or Cheney capitalizing on Enron stocks during the collapse, as the top executives did), T ime Magazine very easily uncovered the very details on the meetings that Cheney refuses to hand over to the GAO.

As it turns out, the biggest donor after the meetings appears to be my the owner of my utility, the Southern Companies. Go figure. :)

-- Stephen M. Poole (smpoole7@bellsouth.net), February 03, 2002.

static,

We posted at about the same time. If there was evidence of wrongdoing, it would have come out by now, at least in barest outline.

Because I'm a generous fellow (even with morons), I'll help you out. Hey, here's an easy one: find me some evidence that Bush or Cheney were part of Enron's faulty accounting and benefited from selling stock at about the same time as Enron's top execs did.

Remember, now, the important thing is, you've got to show me something that they did that was (a) clearly illegal and (b) not done by the Democrats as well.

Surely you have at least *ONE* example? The only thing you've given me, "conspiracy to defraud the public" (or whatever it was) is so vague that it's meaningless; and further, I could make the same charge of every administration back to Washington's, if I wanted to.

But there you go: I have wasted enough time on an obvious troll who is merely baiting me out of boredom. Go play with someone else.

-- Stephen M. Poole (smpoole7@bellsouth.net), February 03, 2002.

Stephen,

What if we are dealing with a situation where no actual illegalities occurred, but which would be very embarrassing to the Administration, and which the public should know about.

Cheney has claimed that his Task Force got input from all over, from consumer groups, from environmentalists, etc. What if it turns out that whatever he heard from groups other than the energy industry was 100% ignored (which I suspect is close to what happened).

-- Peter Errington (petere7@starpower.net), February 03, 2002.

I already told you above MEATHEAD, that the area of suspicion for Dick and Dubya is not the collapse of Enron or securities fraud, it is the design of the Energy Plan, and the Californis "energy crisis". Consumers were and are being defrauded, and there was a good deal of conspiring between Cheney and Enron. Since your criminal friend has chosen to destroy the evidence (a crime in itself), we are going to have to WAIT until the investigation uncovers the truth.

THIS IS YOUR LAST CHANCE TO GET THIS THROUGH YOUR THICK SHIT-FILLED HEAD, DUMBASS!

-- (HASTA LA VISTA @ POOLE-FOOL. LOSER), February 03, 2002.

static,

I would have thought that by now you would have realized that you were being illogical, but that's to much to hope. I'll try this very carefully. Read slowly. (It's OK if your lips move; no one's watching.)

1. You say that you don't have the evidence yet.

2. But in the same breath, you say that Bush and Cheney WILL go down.

3. Now (here's the logical part! Watch this closely!) ... how can you *KNOW* something with no evidence?

Stop me if I'm going too fast ...

-- Stephen M. Poole (smpoole7@bellsouth.net), February 03, 2002.

Peter,

Cheney has claimed that his Task Force got input from all over, from consumer groups, from environmentalists, etc. What if it turns out that whatever he heard from groups other than the energy industry was 100% ignored (which I suspect is close to what happened).

See the Time Magazine article that I linked to. The details ARE coming out, and in the energy arena, at least, it appears that other energy companies got more of what they wanted than Enron did.

Remember, Enron really wanted the Kyoto Protocol. Bush said, "no."

Now: it is entirely possible that the administration, being Republican (and thus pro-free-market and anti-government, in general) voted for things that would have made the energy people far more happy than, say, environmentalists.

So, if it's uncovered that the energy companies got more of what they wanted than did the environmentalists, that would probably appear as more of a "well, duh" than any great revelation.

Clinton's administration was more filled with surprises, in (for example) his support for welfare reform. THAT was acting against type. For Bush to support, say, the exploitation of the Alaskan wilderness (which I wholeheartedly support, by the way) over the objections of enviromentalists is NOT acting against type.

I just don't think there'll be a big scandal there. Sure, those who lean toward environmentalism (and leftism in general) will try to make hay out of it, but they've been trying on the Alaskan thing since Bush took office with very little success.

-- Stephen M. Poole (smpoole7@bellsouth.net), February 03, 2002.

My feeling is that environmentalists, conservationists, got some lip service maybe, but nothing, zero point zero %, of anything of substance.

-- Peter Errington (petere7@starpower.net), February 03, 2002.

"My feeling is that environmentalists...got...nothing" I heard Cheney say that he adopted 11 of the 12 recommendations from the greenies. Now I can't find a link or anything behind it, so it may not be fact. BUT, the point is the administration didn't have to meet the environmentalists on this issue. I assume for political reasons they at least met half way. The other point is Enron didn't benefit from anything, no behind closed doors agreements for profit for either side.

It'd be nice if the scandal seekers here could at least show a smoking gun.

-- Maria (anon@ymous.com), February 04, 2002.

Well, Maria, let us hope that we can find out whether Cheney's claim has any truth to it.

-- Peter Errington (petere7@starpower.net), February 04, 2002.

"The other point is Enron didn't benefit from anything, no behind closed doors agreements for profit for either side."

LMAO! That has got to be the most obvious case of someone deluding themselves into total denial that I have ever seen!

Where is your evidence that Enron did not benefit? Perhaps you should let the investigators know about your new theory, because everything they are finding indicates that Enron did benefit! LOL!

-- (thanks for @ the. chuckle!), February 04, 2002.

Toga, Toga, Toga, Toga....

-- (Bluto@feeding.frenzy), February 05, 2002.

Kenny Boy better not bend over to pick up the soap when he gets to prison, a lot of those boys would love to make him their bitch!

-- Bwaaahaaaa (pass@the.popcorn!), February 05, 2002.