Sounds like a great Old Testament saga, doesn't it?the sin of Enron. Well, this may be a more biblical tale than we think. Before going to church a few weekends ago, I heard Treasury Secretary Paul O'Neill on Fox News Sunday. "Part of the genius of capitalism," he said, is that "people get to make good decisions or bad decisions. And they get to pay the consequences or to enjoy the fruits of their decisions." O'Neill was doing the Sunday morning news circuit to talk about Enron, the huge energy company that just went bankrupt, destroying both the jobs and life savings of thousands of Enron employees, yet enriching the corporation's top executives.
O'Neill got it wrong. In fact, the emerging Enron scandal teaches a different lesson than O'Neill'sthe people on the top of the American economy get rich no matter whether they make good or bad decisions, while workers and consumers are the ones who suffer from all the bad ones. In the Enron case, the company executives overestimated the company value, ran it into the ground, lied to their employees about the company's stability, encouraged Enron's workers to invest their pension funds in company stock and then imposed rules against selling that stock while, at the same time, arranging an executive bailout for themselves worth a fortune. Shortly before the collapse, Enron CEO Ken Lay quietly sold his company stock for $101 million. Timing is everything.
We now know the basics. Enron stock went from $85 per share to 26 cents a share, and the company went from number seven on the Fortune 500 list to declaring bankruptcy on Dec. 2. As the value was plummeting, 29 top executives cashed in their stock options for $1.1 billion dollars while blocking employees from doing the same. While the top few made out like bandits, thousands of employees saw their entire life savings, their pension funds, and their jobs disappear. The audit firm that reviewed Enron's books, Arthur Andersen, shredded its documents.
We also know the allegations. In August, Lay was reassuring employees and investors that stock would recover and that he was restoring investor confidence. At the same time, a senior financial employee sent him a letter warning that "I am incredibly nervous that we will implode in a wave of accounting scandals" and describing a "veil of secrecy" inside the company.
Enron was one of the best-connected corporations in the country. The Houston company had been long-time contributors and old friends to the Bush family, both father and son, and had extensive access to Washington, D.C. politics. Attorney Gen. John Ashcroft has recused himself from the investigation due to the nearly $60,000 in campaign contributions he received from Enron. Enron executives met six times with Vice President Dick Cheney and his staff on the administration's Energy Task Force, and the oil giant helped shape (some say virtually dictated) a policy based on deregulation and the marginalizing of both conservation and alternative energy sources. Of course, such influence is being downplayed because, it is argued, Bush and Cheney already agreed with the oil company's view of America's energy future. What a surprise.
A BIG POLITICAL topic in Washington is a couple of urgent phone calls made from Ken Lay to O'Neill at Treasury and Donald Evans at the Commerce Department, perhaps hoping for some last minute administration help for old friend Enron. The Bush administration points to the fact that no help was offered, another testimony to its belief in capitalism's survival of the fittest. But again, this episode demonstrates the survival of the richest, with all the ordinary employees losing their livelihoods and life savings.
No one seems to worry about the fact that Ken Lay's calls instantly got through to Cabinet secretaries. The relationship between money and access is a given nobody in Washington even questions anymore. Democrats will be careful about critiquing too strongly since Enron was so bipartisan in its buying of influencethree-fourths of the Senate and half of the House benefited from Enron cash. A Center for Responsive Politics/ Washington Post study shows that from 1992 to 2001, Enron's corporate "soft money" contributions totaled $1.4 million to Republicans and $850,000 to Democrats. As for those Cabinet calls, rest assured that faith-based organizations and advocacy groups fighting child poverty don't get through nearly so easily.
Scott Harshbarger of Common Cause has spoken eloquently about how the Enron scandal dramatically demonstrates the need for campaign finance reform. The situation once again makes it painfully obvious the extent to which money controls our political process; it's not hyperbole to say that our political system is for sale to the highest bidder. Bill Moyers, my favorite broadcaster, has explained how events like this point out that the very nature of democracy in America is under threat. The system of big corporations, big accounting firms, big law firms, and big politicians scratching each other's backs while millions of Americans struggle to get by is again coming to light.
The Justice Department has begun a criminal investigation into external partnerships controlled by executives that were apparently used to hide debt and allow Enron to overstate its profits by nearly $600 million. No less than 10 congressional committees (as well as the Securities and Exchange Commission, the Labor Department, and the IRS) are scheduled to hold hearings. Maybe this time we will not accept what Dorothy Day called "this filthy, rotten system." Maybe this time we will demand that stronger stock trading regulations, accounting regulations, and a complete campaign finance reform overhaul be at the top of the political agenda. Maybe....
BUT I WANT to get back to where I was headed before listening to O'Neill's Sunday morning homily. I wonder if he and his administration's friends at Enron made it to church or synagogue this weekend. If they made it, what did they hear about their business and political dealings?
Let me be blunt. The behavior of Enron executives is a direct violation of biblical ethics; the teachings of both Christian and Jewish faith excoriate the greed, selfishness, and cheating of Enron's corporate leaders and condemn, in the harshest terms, their callous and cruel mistreatment of employees. Read your Bibles.
The strongest media critics of Enron call it putting self-interest above the public interest; the Bible would just call it a sin. I don't know about the church- or synagogue-going habits of Enron's top executives but, if they do attend services, I wonder if they will hear a religious word about the practices of arranging huge personal bonuses and escape hatches while destroying the lives of people who work for you.
It's time for the pulpit to speakto bring the Word of God to bear on the moral issues of the American economy. The Bible speaks of such things from beginning to end, so why not our pastors and preachers? After doing the Sunday morning news shows, O'Neill and the others should have to hear about all this in church.
Jim Wallis is editor-in-chief of Sojourners.