Editorial
Enron and the politics of New Labour
President George Bush may point the finger at Iran, Iraq and North Korea when he makes his warmongering claims of an "axis of evil": but the axis that has done most damage to most working people in America is that which links Bush and the US political establishment with big corporations.
The collapse of Enron, previously listed as the seventh biggest company in the USA, with a stock market valuation of $80 billion, has robbed tens of thousands of Enron staff and many more investors of their savings and pension rights, while top Enron bosses cynically sold off their vast shareholding to pocket millions and safeguard their own position in advance of the firm’s collapse.
But it has also revealed just how widely and deeply the tentacles of big business have reached into Bush’s innermost circle of ministers and advisers, and just how flimsy is the protection for the working class in a fully-fledged free market capitalism.
That a company so large could collapse leaving so little in the way of hard assets tells a good part of the story: accountants and investigators are having first of all to find out just what exactly Enron actually did.
Even if there are some tangible assets left in the name of this "energy trading firm" other than a few office blocks and shredding machines, it is clear that any productive work carried out within the Enron corporation was dwarfed in significance by the vast proliferation of speculative deals and financial jiggery pokery, running up liabilities totalling as much as $60 billion, and which are now under criminal and congressional investigation.
But the huge sums of money sloshing about, and the link to big oil gave Enron a huge and disproportionate political influence in the US, and made it an attractive customer for auditors Arthur Andersen, who picked up $52m for "auditing" (and then shredding) the company’s accounts and for consultancy work.
Although Enron gave money to both main parties in the US, its main link was to Bush’s Republican Party, including direct sponsorship of Bush’s own campaigns.
As the investigations grow in scope, so the network of Enron-linked figures in key positions in the US administration – several of them former Enron employees, others recipients of Enron funds, some seeking Enron’s views on policy issues – is becoming clearer.
They include vice President Dick Cheney, Attorney General John Ashcroft, chief political advisor Karl Rove, Energy secretary Spencer Abraham, Army secretary Thomas White (who as a former Enron vice president had shares in the firm worth $50-$100 million), top economic advisor Lawrence Lindsey, and US trade representative Robert Zoellick.
Through these and other links Enron can be seen as helping to shape a whole raft of Bush’s pro-business policies, including the energy policy widely regarded as a "polluters’ charter".
And while the links to Enron and to the oil industry have been widely touted, this is only one sector of the business world which has successfully pressed Bush, the President they have bought and paid for, to implement policies in their interests.
As this scandal grows in the US, there are at least signs that it may at last revive some political debate and begin to dent the ludicrous 80% plus approval ratings that Bush, this war-mongering stooge for big oil and big business, has held since September 11.
But while at least some sections of the American public and political establishment appear to have learned some lessons from the Enron collapse and other corporate scandals, in Britain, it seems that nothing is capable of forcing any retreat or rethink on Tony Blair’s government.
New Labour remains totally and inflexibly wedded to its dream of a "partnership" with free market capitalism, and to the policies of deregulation and privatisation for which Enron paid good money in the USA.
Revelations that Enron gave small amounts of money both to the Tories and to the Labour Party serve mainly to underline that Blair’s party already has policies so far to the right that no more extravagant bid for influence was required.
New Labour is already prostrate before big business, boasting about the extent of our anti-union laws, offering tax-breaks. It is already committed to handing over large chunks of our public services and their assets to the private sector, and surrounded by a coterie of business "advisors".
It already looks uncritically to firms like Andersen, KPMG, Ernst and Young and PricewaterhouseCoopers – all of them locked in to lucrative consultancy and accountancy contracts with the private sector – as sources of "independent" advice on so-called Public Private Partnerships and the Private Finance Initiative.
Ministers dismiss any criticism of reports from these firms as flowing from "vested interests", apparently oblivious to the vested interests the firms themselves represent.
As ministers set out to antagonise Labour’s traditional trade union supporters – branding as "wreckers" those who question the value of privatisation and campaign to defend public services – their only political friends are the international business community that brought us the Enron scandal, the Marconi collapse, the Barings bank fiasco, the Railtrack rip-off, and a host of dodgy deals and carve-ups around the world.
Those "modernisers" hoping to see New Labour complete the transition from the party of the unions to the party of big business should maybe look more closely at the plight of Lord Wakeham, the most conspicuous British casualty of the Enron collapse.
As a former Tory energy secretary, Wakeham really was a member of the Party of business, and saw no reason not to cash in on what may have seemed like a lucrative sinecure with a thriving US company.
Now after apparently nodding through too many iffy balance sheets he faces legal action from US trade unions and aggrieved shareholders. The unions argue that he was "at best incompetent" in his role as an auditor at Enron.
Public sector unions and campaigners could make exactly the same point about Byers, Milburn, Morris and others who by signing up to PFI deals are buying a pig in a poke, and mortgaging the future of public services to grasping private corporations.
That’s why the fight to democratise the control of the trade unions’ political funds, and break the stranglehold of Millbank over union policy is more important now than ever. The forthcoming conference The Political Fund: where should it go? , called by the Socialist Alliance on March 16, offers an opportunity to draw some practical conclusions.