Enron: A Case Study of Why We Need Comprehensive Campaign Finance Reform
What They Gave
- From 1989 to 2002, Enron and its employees gave $5.95 million in individual, PAC and soft money contributions to federal candidates and parties; 74% to Republicans and 26% to Democrats.
- In just the 1999-2000 election cycle, Enron contributed $2.4 million in individuals PAC and soft money contributions to federal candidates and parties, ranking it among the top 50 organizational donors in the 1999-2000 election cycle.
- Since 1989, 259 current members of Congress have received Enron campaign cash. This includes 188 Representatives (117 Republicans, 71 Democrats) and 71 Senators (41 Republicans, 29 Democrats).
- Enron contributed $426,300 to President George Bush for his presidential and two gubernatorial campaigns, and Enron gave $10,500 to the Bush-Cheney Recount Fund and $300,000 to the Bush-Cheney Inaugural Fund.
What They Got
- A whole new unregulated business in energy derivatives: Representatives Larry Combest (R-Texas) and Charles Stenholm (R-Texas) and Senator Phil Gramm (R-Texas) (all top recipients of Enron contributions) played major roles in final negotiations to pass the Enron-supported Commodities Futures Modernization Act of 2000. The legislation, previously approved by the House and President Bill Clinton, exempted energy derivative trading (Enron's main business) from government regulation.
- Extensive input in the writing of the Bush Administration's energy legislation: There were at least six meetings in 2001 with Vice President Dick Cheney and other administration officials who were drafting energy policy. The eventual administration recommendations, focusing on increasing energy supplies at the expense of the environment were very favorable to Enron. Top Enron contribution recipient, Representative Tom Delay (R-Texas), steered Bush's energy bill through the House in August 2001.
- Veto power over regulatory appointees: In winter 2001, Enron Chairman Kenneth Lay supplied President with two names, Pat Wood III and Nora Brownell, to fill two vacancies on the Federal Energy Regulatory Commission (FERC). Lay also offered then FERC chairman Curtis Hebert Jr. with political support if he would change his views on electricity deregulation that disagreed with Enron. He did not and was forced out by the administration. Bush then appointed Wood as FERC chairman.
- Top level calls from Bush and Clinton officials lobbying the Indian government to protect a multi-billion-dollar Enron investment.
- A federal tax system that allowed Enron to avoid paying federal corporate income taxes for four of the last five years despite the fact that until 2001 it was a hugely profitable company. In fact, according to the New York Times they received $382 million in tax refunds.
Enron is not alone:
It may be the most obvious offender, but most of Enron's widely reported abuses of the campaign finance system are only news because of its bankruptcy. Consider the following:
- At the same time that Americans pay the highest prices for prescription drugs of any people in the industrialized world, the pharmaceutical industry spent over $180 million in campaign contributions, advertising and lobbying during the 1999-2000 elections.
- At the same time that some of the largest companies in America including IBM, GE and Chevron were in line for a $25 billion corporate welfare check from the House Republican economic stimulus bill, they spent over $45 million in campaign contributions over the past 10 years.
- At the same time that 44 million Americans do not have health insurance, HMO's, health service providers and the health insurance industry spent over $20 million in campaign contributions, advertising and public relations during the 1999-2000 elections.
- At the same time that the House Republican energy bill would provide $33 billion in tax breaks for energy companies, the energy sector spent nearly $65 million in campaign contributions to both major political parties.