Sunday, March 20, 2005

Enron: Patron Saint of Bush's Fake News

The New York Times
March 20, 2005
Enron: Patron Saint of Bush's Fake News

JUST when Americans are being told it's safe to hand over their savings to Wall Street again, he's baaaack! Looking not unlike Chucky, the demented doll of perennial B-horror-movie renown, Ken Lay has crawled out of Houston's shadows for a media curtain call.

His trial is still months away, but there he was last Sunday on "60 Minutes," saying he knew nothin' 'bout nothin' that went down at Enron. This week he is heading toward the best-seller list, as an involuntary star of "Conspiracy of Fools," the New York Times reporter Kurt Eichenwald's epic account of the multibillion-dollar Ponzi scheme anointed America's "most innovative company" (six years in a row by Fortune magazine). Coming soon, the feature film: Alex Gibney's "Enron: The Smartest Guys in the Room," a documentary seen at Sundance, goes into national release next month. As long as you're not among those whose 401(k)'s and pensions were wiped out, it's morbidly entertaining. In one surreal high point, Mr. Lay likens investigations of Enron to terrorist attacks on America. For farce, there's the sight of a beaming Alan Greenspan as he accepts the "Enron Award for Distinguished Public Service" only days after Enron has confessed to filing five years of bogus financial reports. Then again, given the implicit quid pro quo in this smarmy tableau, maybe that's the Enron drama's answer to a sex scene.

The Bush administration, eager to sell the country on "personal" Social Security accounts, cannot be all that pleased to see Kenny Boy again. He's the poster boy for how big guys can rip off suckers in the stock market. He also dredges up some inconvenient pre-9/11 memories of Bush family business. Enron was the biggest Bush-Cheney campaign contributor in the 2000 election. Kenny Boy and his lovely wife Linda flew the first President Bush and Barbara Bush to the ensuing Inauguration on the Enron jet. Even as Enron was presiding over rolling blackouts in California, Dick Cheney or his aides had at least six meetings with the company's executives to carve up government energy policy in 2001. Even now what exactly transpired at those meetings remains a secret.

But never mind. The president himself gave his word when the Enron scandal broke that Kenny Boy was really more of a supporter of Ann Richards anyway. Feeling our pain, Mr. Bush told us of his own personal tragedy: his mother-in-law lost $8,000 she had invested in Enron. Soon stuff was happening in Iraq, and the case was closed, or at least forgotten.

Yet the larger shadows linger. Revisiting the Enron story as it re-emerges in 2005 is to be reminded of just how much the Enron culture has continued to shape the Bush administration long after the company itself imploded and the Lays were eighty-sixed from the White House Christmas card list.

The enduring legacy of Enron can be summed up in one word: propaganda. Here was a corporate house of cards whose business few could explain and whose source of profits was an utter mystery - and yet it thrived, unquestioned, for years. How? As the narrator says in "The Smartest Guys in the Room," Enron "was fixated on its public relations campaigns." It churned out slick PR videos as if it were a Hollywood studio. It browbeat the press (until a young Fortune reporter, Bethany McLean, asked one question too many). In a typical ruse in 1998, a gaggle of employees was rushed onto an empty trading floor at the company's Houston headquarters to put on a fictional show of busy trading for visiting Wall Street analysts being escorted by Mr. Lay. "We brought some of our personal stuff, like pictures, to make it look like the area was lived in," a laid-off Enron employee told The Wall Street Journal in 2002. "We had to make believe we were on the phone buying and selling" even though "some of the computers didn't even work."

If this Potemkin village sounds familiar, take a look at the ongoing 60-stop "presidential roadshow" in which Mr. Bush has "conversations on Social Security" with "ordinary citizens" for the consumption of local and national newscasts. As in the president's "town meeting" campaign appearances last year, the audiences are stacked with prescreened fans; any dissenters who somehow get in are quickly hustled away by security goons. But as The Washington Post reported last weekend, the preparations are even more elaborate than the finished product suggests; the seeming reality of the event is tweaked as elaborately as that of a television reality show. Not only are the panelists for these conversations recruited from administration supporters, but they are rehearsed the night before, with a White House official playing Mr. Bush. One participant told The Post, "We ran through it five times before the president got there." Finalists who vary just slightly from the administration's pitch are banished from the cast at the last minute, "American Idol"-style.

Like Enron's stockholders, American taxpayers pay for the production of such propaganda, even if its message, like that of the Enron show put on for visiting analysts, misrepresents and distorts the bottom line of the scheme that is being sold. We paid for last year's phony television news reports in which the faux reporter Karen Ryan "interviewed" administration officials who gave partially deceptive information hyping the Medicare prescription-drug program. We paid Armstrong Williams his $240,000 for delivering faux-journalistic analysis of the No Child Left Behind act.

The administration cycled the Ryan and Williams paychecks through the PR giant Ketchum Communications. Ketchum was also one of the companies hired to flack for Andersen, the now-defunct Enron accounting firm that shredded a ton of documents. We don't know what, if any, role Ketchum is playing in the White House's Social Security propaganda push, though we do know the company has received at least $97 million from the government, according to a Congressional report.

That $97 million may yet prove a mere down payment. The Times reported last weekend that the administration told executive-branch agencies simply to ignore a stern directive by the Congressional Government Accountability Office discouraging the use of "covert propaganda" like the Karen Ryan "news reports." In other words, the brakes are off, and before long, the government could have a larger budget for fake news than actual television news divisions have for real news. At last weekend's Gridiron dinner, Mr. Bush made a joke about how "most" of his good press on Social Security came from Armstrong Williams, and the Washington press corps yukked it up. The joke, however, is on them - and us.

USA Today reported this month that the Department of Homeland Security, having failed miserably to secure American ports and air transportation from potential Al Qaeda attacks, has nonetheless shelled out $100,000-plus to hire "a Hollywood liaison": Bobbie Faye Ferguson, an actress whose credits include the movie "The Bermuda Triangle" and guest shots on television schlock like "Designing Women" and "The Dukes of Hazzard." She will "work with moviemakers and scriptwriters" to give us homeland security infotainment - which is to actual homeland security what the movie "Independence Day" is to an actual terrorist attack.

Another propagandist with a rising profile is Susan Molinari, the onetime CBS News personality who appears regularly on news shows like "Hardball" and "Capitol Report." As she bloviates from the right about Social Security or the fake newsman Jeff Gannon, she is invariably described as "a former Republican Congresswoman" or a "CNBC political analyst." But her actual current jobs remain mysteriously unmentioned: C.E.O. of the Washington Group, Ketchum's lobbying firm, and president of Ketchum Public Affairs. Were the Ketchum link disclosed, perhaps some real NBC reporter might find the nerve to ask her what other Karen Ryans and Armstrong Williamses might be on the Ketchum payroll. Or not.

The Bush propagandists have been successful at many tasks, from fomenting the canard that Iraqis attacked on 9/11 to deflecting moral outrage from Abu Ghraib and toward indecency as defined by its Federal Communications Commission. But Social Security may be a bridge too far even for propaganda machinery of this heft. Polls find that an ever-increasing majority of the country rejects the idea of letting Wall Street get its hands on its retirement savings.

Americans do have short memories, but it's the administration's bad luck that not just Kenny Boy but a whole brigade of bubble plutocrats have lately been yanked back into the spotlight by their legal travails: WorldCom's Bernard J. Ebbers, Tyco's L. Dennis Kozlowski, HealthSouth's Richard M. Scrushy, Global Crossing's Gary Winnick. No one is glad to see them. The public knows that the economy has not fully mended, and that there remain different economic rules for insiders than for the panelists drafted for the presidential Social Security roadshow. The new bankruptcy bill embraced this month by Republicans and Democrats alike throws Americans paying usurious credit-card interest to the wolves even as wealthy debtors remain protected.

You can catch the public mood in the reaction to Martha Stewart's homecoming. Despite the news media's heavy-breathing efforts to hype her emergence from jail as the heartwarming comeback of a born-again humanitarian, the bottom line shows that few in the audience are buying it. The Martha Stewart Omnimedia stock price started tumbling the moment she was back on camera, in line with the cratered circulation and ad sales of her magazine. Handing out hot cocoa to reporters at her Bedford, N.Y., estate did not turn the tide, and her spinoff of "The Apprentice" may be arriving just as the country is getting sick of C.E.O.'s again. Coincidentally or not, ratings for the existing "Apprentice" are off in tandem with the filing for bankruptcy protection by Donald Trump's casino empire, the saturation coverage of his lavish nuptials and the introduction of a Trump fragrance.

It's against this backdrop that the returning Mr. Lay - completely unrepentant, still purporting on "60 Minutes" that he's an innocent victim of others - could be the Democrats' new best friend. A Texas tycoon who helped create the political career of George W. Bush only to be discarded when scandal struck has re-emerged at just the precise moment when he might do his old buddy the most harm.