Lessons learned from failure

Enron: Done right, investigations of the scandal should pave the way for stronger leadership.

January 16, 2002

KENNETH STARR'S greatest disservice to his nation was to discredit the office of independent counsel, or special prosecutor. Even allies in his vendetta against President Clinton let the legal underpinning of that institution lapse.

Now is when we need it, for the Enron scandal -- though it is too early to say which Enron scandal.

The integrity of company pension plans, the provision of information to the investment and lending communities, auditing, corporate influence on government policy, the possibility of bought protection (which has not been shown to date): All cry out for investigation.

Existing institutions of government are capable of much of it, though potential conflicts of interest are numerous and still to be dealt with.

The likelihood is that before all this is over, the office of independent counsel would be the right agency to investigate something. Attorney General John Ashcroft can still appoint one, but the previous legal standing is not there.

The Enron scandal is threatening to swallow the Bush presidency for the next year, distracting the nation's leadership from problems of war and peace, economic regeneration and fiscal discipline.

Comparisons to the Whitewater scandal of the Clinton administration spring to mind.

The difference is that this one is really about something. Whitewater was about comparatively little, however smelly: a failed small land speculation in one state that had been dealt with and was over. For all the resources that the Starr team invested in digging, virtually nothing more came up.

The Enron scandal involves the seventh-largest corporation in the nation, the exposure of major lending institutions, the integrity of the institutions of capitalism. It is huge by comparison and only now coming fully into view. The business failure happened during this presidency, though seeds were sown long before.

Only now can one assess the significance of Vermont Sen. James M. Jeffords' defection from the Republican Party, throwing control of the Senate to the Democrats. It guarantees that congressional investigations proceed with one set of committees led by the president's allies, the other by the opposition, with some thoughts of payback.

This ought to ensure a thorough exposure of Enron's influence on this administration, and also on the Clinton administration, which was considerable.

The Clintonian nature of President Bush's misleading characterization of his relationship with Enron Chairman Kenneth Lay has already been noted. One would hope that the Bush administration studied the Clinton administration's mistakes and will offer total candor and openness.

Whatever happens to the Enron Corp., the Enron story is not going away. It should be used to make the nation and its market system tougher, more transparent and more just. Otherwise, a great opportunity would be squandered.

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