The inalienable right to fiddle the books

Why, Americans are finally beginning to ask themselves, are they not universally loved? An answer is usually instantly available: it is because American "values" and "freedoms" make the rest of the world jealous. The war against terrorism, we are being constantly told here, is to preserve just these unique values and freedoms: it is because of them that America is such a wealthy and prosperous country, but also the underlying reason why so many foreigners want to attack the US.

We saw just one such freedom in action at 10.47 last Tuesday morning: Kenneth Lay, the disgraced founder and former chairman of Enron as well as a close pal of Vice-President Cheney and President Bush (whose nickname for him is "Kenny Boy"), lifted his right hand and swore before a Senate committee that he would tell the truth, the whole truth, and nothing but the truth. Then he took the Fifth Amendment, and left.

I need hardly point out that this right to silence is indeed a constitutional right preserved for Americans but which Britain, to its shame, has abandoned. But Lay had no delusions about how his silence in the face of a subpoena - and similar pleadings of the Fifth Amendment by five other former or current Enron executives - would be perceived: "I am deeply troubled by asserting these rights," he said. "It may be perceived by some that I have something to hide."

Indeed, it may: for almost two hours, the balding Lay had stared, stony-faced, his feelings given away only by the occasional involuntary clenching of his jaw muscles, at senator after senator from both parties who denounced him: one Republican, Senator Peter Fitzgerald, even went so far as to describe Bush and Cheney's chum as an "accomplished conman".

In its post-11 September delirium, however, America is confused about its values and freedoms. Lay retains that precious right to silence, but any kind of constitutional rights are denied prisoners of the US in Afghanistan or Guantanamo.

Lay and his cohorts, if they end up being accused of criminal wrongdoing, will be afforded due process and the best lawyers money can buy. But the stupendous banditry of Enron - Lay himself made off with $101.3m by selling Enron stock between October 1998 and November 2001, while one Lou Pai (chairman of a subsidiary called Enron Accelerator) netted a cool $353.7m by selling his shares in a company doomed to topple - also epitomises American values and freedoms, in this case to take money from others. And these are the same values and freedoms in which Bush and Cheney themselves are inextricably embedded.

Indeed, polls show that two-thirds of the American public believe that the Bush administration is hiding something to do with Enron. The General Accounting Office is suing Cheney for details of meetings of his secret energy task force; a federal judge has asked him to explain his refusal to say whom he met, and when. Cheney held at least six meetings with Enron executives last year, some with Lay; last 17 April, Cheney received a memo from Lay explaining why caps on electricity prices would not work, and the very next day he explained to the Los Angeles Times that (you've guessed it) price caps would not work. No less a person than John Dean, Richard Nixon's former counsel, says that Cheney's attitude now reminds him of Nixon's stonewalling over Watergate.

I sat next to a lawyer involved in the Enron fiasco a few days ago, and she told me over dinner that Enron had no fewer than 3,500 subsidiary companies with which it built its house of cards; in the hearings before Lay last Tuesday, Senator John Kerry said that Enron had 2,832 offshore partnerships, presumably as part of a giant tax avoidance scheme. (He added that other US giants such as Exxon Mobil had 140 offshore partnerships, General Motors 316 and Ford 73.) Between the third quarters of 2000 and 2001, $1.7bn of Enron's reported earnings was not, in fact, real; but it did manage to give $1.9m to politicians' campaigns, 98 per cent of which went to the ultimate winners.

But we also heard from Senator Barbara Boxer that, under Enron's stewardship, electricity bills in California had risen 266 per cent in a year. Senator Max Cleland of Georgia reported that $127m had evaporated from teachers' pension plans in his state alone; Senator Ted Stevens of Alaska reported much the same story in his state; Senator Bill Nelson of Florida said that 30 pension funds there had been severely affected. From Senator Olympia Snowe, a Republican from Maine, we heard that $67.3bn of investment money had disappeared with Enron's collapse; senator after senator told Lay that many thousands of lives had been ruined by the implosion of the company over which he presided for its entire 17 years.

This is where we come back to those confusions and contradictions over American freedoms and values. Sixty-five per cent of the US public think Enron did illegal things; another recent poll found half of all Americans believe that the conduct of top Enron executives is the norm for those of some other major companies, while one-quarter say it is normal for most. Thus fiddling the books, using tax shelters, not allowing small-time employees to sell their Enron stock while they hurriedly sold off theirs when it was still worth a lot: to at least a quarter of the US public, this is the norm for top executives of most big-time American companies, as it apparently is to a president and vice-president immersed in the murky energy industry from which the terrible stigma of Enron emerged.

Depressing stuff, indeed. And are these the "values" and "freedoms" of which America is now so proud?

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