An Enron End Run

In the shadow of debacle, big-business lobbyists prepare for 2002.


These should be tense times for Washington's high-powered business lobby. Every official in town—elected or appointed–is scrambling to come down on the right side of the political/financial/campaign-finance debacle formerly known as Enron. The political strategy so far has been to admit taking money from the doomed corporation, then crow about how little influence that cash actually purchased. The Bush administration has proudly taken the lead, arguing that the cabinet secretaries who might have been aware of Enron's looming collapse never even mentioned it to the commander-in-chief.

While others may be positioning themselves for the short run of the Enron affair, Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, has his eyes on November. "It's an election year," he declared at a headquarters press conference this Tuesday. "And it's going to be an ugly election year." Judging from a 26-page draft copy of the Chamber's "The State of American Business, 2002," and Donohue's own remarks, "ugly" might be an understatement.

In a prepared statement issued to a smattering of reporters, Donohue ponders how business interests can balance the post-September 11 "need for increased government protection with our traditional demand for less government interference." I asked Donohue how this "traditional demand" meshes with airline bailouts, trade quotas for the steel industry, tariffs on textiles, and other high-profile departures from the Chamber's ideal of free trade.

Apparently, government interference isn't always so bad. "There is every right for business to go to government to look for cooperative ways to resolve problems," Donohue said. "There is no right for business to go to government to take care of their follies and their errors." Solidly in line with the business concern du jour, Donohue averred, "Thank god nobody appears to have gotten on the business of putting politics into helping Enron."

But other cases deserve closer attention. Ensuring Chrysler's survival in the 80s (apparently the K-Car and other embarrassments qualified as neither folly nor error) was a prudent move, according to Donohue. Industries making the cut in today's terror-stricken world include the perennially downtrodden airlines: "There were damn good reasons to go out after a bunch of terrorists basically grounded the airline industry… It was in the nation's interest to do that modest bailout, and we vigorously supported it." Also vital to the economy is the "terrorist insurance thing' because pretty damn sure, and pretty damn soon, the real estate business, which is driven by the bank rules and by the insurance people are going to have a lot of loans coming due because they're not going to have terrorist insurance."

Despite repeated warnings about increased spending, Donohue said the whole economy needs an economic stimulus package. That's odd. In the draft report released Tuesday, Donohue's own team projects that the economy is recovering nicely without it. Page six reveals that "While we are not out of the woods yet, the economy the terrorists set out to destroy on September 11 is already coming back." The predictions: 2 percent growth in the first quarter of 2002, 3 percent in the second quarter, "with recovery picking up substantial steam in the second half of the year."

The contradictions continue with regard to free trade. Donohue argued that this week's World Trade Organization decision to slap sanctions on the U.S. for giving unfair tax advantages to exporters was a victory. While politicos the world over fear a trade war, Donohue waxed, "I couldn't be happier." He said it would be an opportunity to lobby for measures that "put us on an equal foot with the Europeans."

Then there's Donohue's take on Social Security. While a nervous nation grapples with the issue of illegal foreigners in the wake of the attacks, he argues that the way out of Social Security's looming demographic crunch is to increase immigration. Just as politically sensitive is another Donohue favorite: "You can get people to work longer. A lot of people retire early. They're going to live 30, 40 years longer than they used to. They should work longer," he says, "if they want to."

How does Donohue hope to convince reluctant politicians to see things the Chamber's way? In one instance, it's by using the same "get out the vote" techniques long employed by Big Labor—and noisily derided by Big Business. "Hey look," Donohue said, "in Michigan, if they're going to give all the unionized workers the day off to vote—dumb, dumb, and dumbest—then let's give everybody else the day off."

But in the end, it will come down to cash and contacts. According to Donohue, "Organizations like ours, like the Chamber, [know that] if you have the experience, you have the influence, you have the people, you have the resources, you can make something happen." Washington's Enron interlude might have politicians scrambling to sell themselves as impervious to corporate cash. Donohue isn't buying.