Bushwhacked Life in George W. Bush's America

1. Aloha, Harken In the long run, there is no capitalism without conscience; there is no wealth without character. George W. Bush on Wall Street, July 9, 2001 In the long run, we are all dead. John Maynard Keynes on the long run, 1924 There he was. On the Tuesday after a long Fourth of July weekend. In the ballroom of an ornate Wall Street hotel that once housed the New York Merchants Exchange. Standing in front of a blue-and-white backdrop with the words corporate responsibility printed over and over on it, in case you should miss the point. Promising us "a new ethic" for American business. Our president, Scourge of Corporate Misbehavior. It was like watching a whore pretend to be dean of Southern Methodist University's School of Theology. But as Luther said, hypocrisy has ample wages. "Harken," said the Bush camp over and over, "was nothing like Enron." Interestingly enough, it was exactly like Enron in each and every feature of corporate misbehavior, except a lot smaller. A perfect miniature Enron. By the summer of 2002, it had long been known that twelve years earlier Bush made a pile by selling his stock in Harken Energy Corporation just before it tanked. At the time, he was serving both on Harken's board and on a special audit committee looking at the company's financial health. As he spoke on Wall Street, stories were surfacing about Harken's sham sale of a subsidiary to a group of company insiders. The acquisition was financed by an $11 million loan guaranteed by the seller, Harken Energy. In other words, a fake asset swap to punch up Harken's annual profit-and-loss statement. The "sale" of Aloha Petroleum, from Harken to Harken, was again Enron writ small and so outrageous that the SEC stepped in, declared the accounting unacceptable, and forced the company to restate its earnings. Bush unquestionably knew about the deal. Even if he had convinced the public that earlier stories about his $848,560 insider trade, his failure to report it to the SEC, his low-interest loans from Harken to buy company stock (a practice he particularly denounced in his Wall Street speech, as though he had never heard of such an unseemly scam before), and the Enron-esque sale of Aloha Petroleum were all what he described as "recycled stuff," he was still surrounded by bad stories about to break. Enron was ripe for federal prosecution; Bush and Enron's CEO, Ken Lay, his single largest campaign contributor, had been tight for years. Halliburton was being investigated by the feds for fraudulent accounting practices put in place when Dick Cheney was CEO. Congress was investigating the secretary of the Army for his role in the collapse of Enron, in the fleecing of electricity customers in California, and for his failure to divest himself of Enron stock in a timely manner. SEC chief Harvey Pitt had so many previous business connections with the firms he was now regulating, he had already had to recuse himself in twenty-nine cases being pursued by the SEC. Bush's hard-nosed, hard-assed political adviser, Karl Rove, had owned $108,000 in Enron stock and, more important, knew the Enron CEO because he was Bush's biggest funder. Two of Bush's economic advisers had worked as consultants for Enron. And the newly disgraced Ken Lay had convinced Bush to dump the chairman of the Federal Energy Regulatory Commission, Curtis Hebert, and to replace him with the candidate of Lay's choice, a Port Arthur, Texas, homeboy. Before giving Bush the word to dump Hebert, Lay had a come-to-Jesus session with Hebert himself, telling him to embrace free markets and deregulation or, Lay said, things would end badly for Hebert. They did. Considering the circumsIvins, Molly is the author of 'Bushwhacked Life in George W. Bush's America', published 2003 under ISBN 9780375507526 and ISBN 0375507523.