Democrats hope greed yields votes

July 08, 2002|By Jules Witcover

WASHINGTON - As more and more corporate giants are caught with their hands in the cookie jar, from Enron to WorldCom and who knows who next, Democratic strategists hope corporate greed will be a winning issue for them in this fall's pivotal congressional elections.

The Republican Party has never shaken its image as the party of big business. This image is in particular vogue in the current administration, with both President Bush and Vice President Dick Cheney having roots in corporate America through their years in the oil and energy business in Texas.

From first kissing off the Enron case as a corporate scandal to be dealt with in the corporate world, the president has been obliged to address the developing epidemic of corporate greed directly. He is expected to do so tomorrow in a speech on Wall Street calling for tighter reporting standards.

Early Democratic attempts to tie Mr. Bush to the Enron fiasco through his friendship with CEO Kenneth Lay were brushed aside by the White House. More recently, when a Securities and Exchange Commission memo came to light reporting that Mr. Bush very tardily filed reports regarding his own corporate deals when he was a business executive, he disdainfully waved off questions about it. "Everything I do is fully disclosed, it's been fully vetted," he said. "Any other questions?"

The SEC memo grew out of an agency investigation of, among other things, Mr. Bush's sale in 1990, before he was governor of Texas, of 212,140 shares in Harken Energy Corp., a Texas gas and oil exploration enterprise, for $848,560. The sale took place only two months before the firm announced it had lost $23.2 million in the previous quarter, causing Harken stock to drop more than 20 percent.

The SEC later looked into the sale, which Mr. Bush did not report until eight months later, to determine whether he had engaged in insider trading. Eventually, the commission dropped the inquiry without charging him but also added that the decision "must in no way be construed that [Mr. Bush] has been exonerated."

Charles Lewis, head of the nonpartisan watchdog Center for Public Integrity, says that in light of this record, when the president expresses shock at what's going on now in the corporate world, "it has a slightly hollow ring to it."

But Mr. Lewis also says the Democrats may have a hard time making an issue of corporate corruption against GOP congressional candidates in November. "Class warfare," pitting the plight of the poor against the shenanigans of the rich, "doesn't resonate anymore with the larger electorate," he says.

He acknowledges that one reason for this attitude may be that so many Americans now invest in the stock market, and "the 100 million who are poor don't vote." At the same time, Mr. Lewis says, the country is witnessing "the deepest distress [toward the business community] I've seen since the '30s, or at least since the '60s and '70s. I don't remember so many CEOs resigning or being indicted as today."

"People are afraid to invest," Mr. Lewis says, "and the Democrats may get traction from Bush not reacting strongly enough. An off-year election is a chance to send a message."

It's not surprising, therefore, that Democratic National Chairman Terry McAuliffe has jumped in, saying Mr. Bush and Mr. Cheney "like to preach CEO responsibility, but when it comes to their own records, their motto is, `The buck stops over there.'"

Mr. Lewis recalls polls earlier this year in which two-thirds of voters surveyed questioned whether the president had been truthful about his relations with Enron, whose executives were heavily involved in administration deliberations shaping its energy policies. "But voters compartmentalized that view and it didn't affect his overall popularity," Mr. Lewis says.

With the president now riding high in the polls as a result of his leadership in the war on terrorism, and calling for election of a Republican Congress to help him wage it, corporate corruption may not be the silver bullet in November that Mr. McAuliffe and the Democrats are looking for.

Jules Witcover writes from The Sun's Washington bureau. His column appears Mondays, Wednesdays and Fridays.

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