Dick Cheney argued that the system California set up may have contained loopholes allowing Enron to do what it did. If that was the case, he said, then what happened wasn’t criminal, it was just Capitalism. This comment was later echoed by a former risk assessor for the energy trading industry, R. Martin Chavez, who told the New York Times, “I lived through this: if you didn’t manipulate the market and manipulation was accessible to you, that’s when you were yelled at.” Such cut-throat logic might be fine and dandy for businesses such as, say, the clothing industry, since we wouldn’t have to go naked if the whole clothing industry collapsed from scandals. But when such behaviour is permitted in essential industries like electricity, there is a very real risk that everyone might suddenly lose power. This would have a domino effect on everything else, and could quickly bring a country to a standstill—which reminds us why things like electricity, water, postal systems and (in some cases) health care are kept in PUBLIC hands, not private.
As much as we were told in the 90s that governments are more inefficient and wasteful than private industry, at least they can’t pull half the kinds of tricks Enron did. Also, governments can’t quite flee to Bermuda with our tax money if they get caught. The argument against the privatisation of essential services is simple: if you allow companies to sell people things they have NO choice but to buy, then pretty soon the companies have cut quality to the bone and milked public assets dry.
That the privatisation of essential services is bad is a lesson not worth learning several times. But it must be learned, because there will always be businessmen pressuring governments to privatise everything. Even if they know it’ll end in failure, such businessmen are more than willing to hitch on for the brief ride, and like Enron, take off with their millions just before it crashes. Even worse, there are politicians quite willing to be run out of town after disastrously privatising everything, because they’ll have many rich friends in Bermuda to take care of them when their careers are over. (I certainly don’t have to tell our Ontario readers that privatising electricity is a bad idea: since privatisation a year ago, their bills have nearly tripled. They can expect to see the politicians responsible lounging on a beach somewhere immediately after the next election…)

LIKE CAMPAIGN DONOR, LIKE PRESIDENT

It appears that George W. Bush engaged in corporate crime when he was a director of the Houston oil firm Harken in 1990. The record shows he sold about a million dollars worth of its stock just before the stock took a dive. It looks like he sold the stock because he’d received some privileged insider information that it would go down. This is called insider trading, and it’s a crime. People go to jail for that. He was investigated about it, but for unknown reasons the investigation was closed before all the pertinent facts came to light. (This may have been because his dad was President at the time, and didn’t want his son involved in a scandal.)
When pressed for details about this stock sale last summer, Bush told journalists they just had to go and dig up the relevant papers from that time, and they’d see he did nothing wrong. “You’ll have to look up the minutes,” he said. However, the journalists discovered that none of these papers were available, and that, in fact, most of Bush’s personal papers from his time as Governor and before, unlike any Texas Governor before him, are inaccessible to the public because of agreements he made while Governor. Which means he can smile and say “check the record” all he wants—as long as that’s what people see on TV, they’ll believe (as an incredible majority of Americans do) that he’s an honest, straight-talking guy with nothing to hide. Whereas, the unprecedented measures this man has taken to keep as much as possible about him and his friends secret can lead to only one conclusion: he has one HELL of a lot of stuff to hide. He only appears honest and straight-talking when he’s damn sure no one is able to verify the truth.
What makes this one stock sale of Bush’s especially relevant is that without it, he would not have become President. He wasn’t very rich before he made that sale. In fact, he wasn’t even qualified to obtain that stock in the first place: when Harken first hired him as a director, he had no prior experience, and many questioned why he was hired at all. At the time, Harken’s founder responsed bluntly: “It helps to be the son of the President. He’s worth $120 000 a year just for that.” Bush invested the profits from this sale into the Texas Rangers baseball team. Through a variety of other deals, Bush later sold his stake in the Rangers at enormous profit, becoming an instant multi-millionaire. He immediately used these millions to begin his run for Texas Governor. The rest, of course, is history.
As for Dick Cheney, aside from being sued by his own government, he’s now being sued by the shareholders of the oil-services company Halliburton, of which he was CEO before becoming Vice-President. The shareholders allege that the crooked accounting Cheney innovated while he was CEO resulted in massive losses for them. The accounting in question worked as follows: when a client paid Halliburton to build, say, a pipeline for them, and it would take three years to build it, Cheney would assume that in reality it will probably take, say, six months longer to build it. So whenever Halliburton had trouble meeting their profit expectations, Cheney would take that six months of overtime he assumed would happen, and assume the client would pay extra for it, then take that hypothetical extra income—which they’d only get three years from now, if ever— and book it as profit for the current year. This is not the right thing to do for obvious reasons, but especially because most clients never even pay for such extra work if the company they hired runs so far behind schedule.
The amount of such fictional revenue Cheney booked in just one year at Halliburton amounted to $100 million, without which Halliburton would have lost money that year. That’s why the shareholders are now sueing him—the stock price ended up artificially high, and it dove quite low when the truth about this came out. And just as with Enron, the shareholders all lost a lot of money, but Cheney, when he left the company to become Vice President, walked away with… get this… $100 million in his pocket.

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