Buying In

Enron's contributions were chump change.

Washington, being the center of the universe, is still struggling to understand the Enron meltdown, centered as it is in finance, not politics, and in Houston and Wall Street, not D.C. But one lobby has jumped on Enron's collapse to push its cause quicker than John Ashcroft jumped on Osama's terrorism to bug America's phones.

"The Enron scandal has thrust a real human face on campaign finance reform," Rep. Marty Meehan's (D-Mass.) press secretary informs the Cox News Service. "No bones about it," Senator John McCain (R-Ariz.), who like 70 other senators and 188 representatives cashed Enron checks, tells Newsweek. "I'm tainted too."

Enron presents a conceptual problem for the campaign spending police, who nevertheless may soon get their bill to a vote in the House. Unlike the Keating Five, the last scandal that "tainted" McCain, there's no evidence that anyone did Enron any favors at crunch time. The agile Rep. Henry Waxman (D-Calif.) tried to squeeze this lemon into lemonade, claiming that this lack of action was an outrage.

"The facts can take on almost a secondary role in these things," former Clinton press secretary Joe Lockhart told The Washington Post. "For better or worse, this will not ultimately rest on whether someone can prove that someone did something wrong."

Forgive me, if you will, for nevertheless revisiting the facts.

On November 9, the Center for Responsive Politics posted a dossier of Enron's political giving. It seems the company has pumped out $5.8 million in federal campaign contributions since 1988-89. "The federal government's involvement could create a quandary for President Bush," writes the center's Steven Weiss, "who raised nearly $114,000 in PAC and individual contributions from Enron in 1999-2000, making the company one of his biggest donors."

The real story is how small his biggest donors are. $114,000 isn't even a rounding error in the $193 million that Bush raised on his way to the White House. And Enron, it turns out, is not even among the top 20 contributors to the Republican Party. It may seem scandalous that Enron spent $5.8 million on campaigns over the last 12 years—$480,000 a year. Yet such generosity is not even a drop in the D.C. bucket. In the last election cycle alone, House candidates spent $457 million campaigning. Senate candidates spent $558 million more.

It's also important to keep in mind what the proposed campaign finance reform legislation does. It outlaws soft money, and Enron distributed $1.67 million of that in 2000. It doesn't regulate other contributions, and doesn't restrict a company's spending on lobbying or on communicating with legislators.

We don't know what Enron's spending bought. It didn't appear to buy it any help in its time of dire need. But some say it bought policy changes on its way up. The company certainly had access to those formulating the president's energy policy. Yet even here its batting average was far less than perfect. As an article in the New York Times business pages notes, "for all the self-generated hype about its influence, for all the envy of competitors and detractors, Enron, it turns out, failed to score many victories."

In fact, it had more luck with President Clinton's Securities and Exchange Commission than with the Republican Congress. In 1993 Enron secured a decision exempting it from the 1935 Public Utility Holding Company Act. And in 1997 it secured an SEC exemption from the Investment Company Act, allowing it to set up subsidiaries.

Columnist Arianna Huffington frets that Bush, presumably under Enron's spell, "abandoned a campaign promise to regulate carbon dioxide." Enron, however, lobbied hard for Bush to regulate the gas, and put his decision in its loss column. In making a fool out of herself, Huffington nevertheless makes an instructive point: Any change in policy will benefit some interests and hurt others. The carbon dioxide decision wasn't necessarily good because it hurt Enron, and it wouldn't have been obviously bad if it had helped the company. And Enron wasn't operating in a vacuum. Sophisticated forces with plenty of money were working the other side of the argument.

God didn't hand down the U.S. regulatory code at a pristine point in time. Human beings developed it at particular moments in history, responding to particular crises and events. One can't say, on the face of it, whether Enron should be exempted from a Depression-era law, or even if the law still makes sense. That only can be determined by a process that is centered on open debate. Debate requires people, and people, as Marx taught us, must earn enough to show up at work the next day. That takes money.

Meanwhile, keep in mind that while Enron spent $1.9 million of its shareholders' money lobbying politicians in 1999, Uncle Sam spent nearly $1.7 trillion of yours.