Enron's fingers stretch into Four Corners

Enron's fingers stretch into Four Corners

Jan. 24, 2001

By Tom Vaughan
Mancos Times Editor

From the Four Corners, you can’t see the frenzy inside the Capitol Beltway, caused by the collapse of energy trader Enron Corp.

Allard decides to return Enron, Anderson contributions after all

DENVER (AP) — Sen. Wayne Allard, R-Colo., has decided to give up thousands of dollars in political contributions from Enron and Andersen LLP after all.

Last week, Allard’s spokesman Dick Wadhams said the senator had no plans to return the money from Enron, the failed energy company that donated large sums to members of both parties, and Anderson, the accounting firm under fire for its work in its former partnership with Enron.

But Allard, who faces a strong challenge from Democrat Tom Strickland this year, reversed himself Tuesday.

"We know enough now to know what is the proper thing to do," Allard campaign manager Dick Wadhams said.

Allard will send $13,500 in total campaign contributions from Andersen to a charity for laid-off Enron employees. The $7,500 that Allard received from Andersen’s political action committee was the largest PAC contribution he’d received for his current campaign.

He’ll also send the $1,000 he received in his 1996 campaign from Enron.

Sen. Ben Nighthorse Campbell, R-Ignacio, said he will send $5,300 he got from the companies to an Enron employee charity.

Allard’s and Campbell’s decisions to return the money came after revelations that Andersen accountants shredded documents as regulators closed in and Enron’s top executives had been warned the company’s finances could crumble under scrutiny.

They also came a day after Gov. Bill Owens returned his Enron contributions.

The U.S. Securities and Exchange Commission started looking into Enron’s accounting in mid-October, after the company reported a third-quarter loss of more than $600 million. The SEC’s inquiry eventually included demands for financial documents from Enron and Andersen.

Enron entered the largest bankruptcy in U.S. history on Dec. 2.

You can’t hear the echoes of October’s busy shredding machines in the Houston offices of Enron’s accountant/consultant firm, Arthur Andersen LLP, destroying documents that might reveal who knew what about Enron’s financial troubles and when they knew it.

No, unless you turn on a news program, you can’t see or hear any of that turmoil, but you’re not beyond its impact.

Lawsuits and investigations are sprouting like old potatoes in a dark root cellar.

The congressional probes are of particular interest because they are dragging America’s campaign-finance system into the spotlight. Both Enron and Andersen invested so heavily in the business of elections across the nation that it will be hard to dispel the suspicion that those investigators are beholden to the very people they are investigating.

The Federal Elections Commission offers extensive campaign-finance records on its Web site (www.fec.gov), including records of receipts and distributions by candidate and by committee. The contributions to parties and candidates generally come from individuals or from political action committees (PACs) formed by companies or industries.

A look at the FEC records of contributions by the Enron and Andersen PACs reveals, first of all, huge amounts of money distributed in relatively small dollops across the nation. Seldom does a contribution to a candidate get recorded in five digits.

Second, the amounts tend to be allocated to Republican candidates but, even more, the contributions appear to be related to committee assignments — supporting elected officials who create the rules under which Enron and Andersen were supposed to be operating.

Third, the curious citizen is left looking at many large vats of murky money. It is not possible to trace specific dollars in a PAC contribution from the point where they enter the money vat to the point where they leave to support the campaign of a specific candidate.

Examples would be the Interstate Natural Gas Association of America PAC, which received $18,500 from the Enron PAC over the period 1997-2001, and the Investment Management PAC of the Investment Company Institute (IMPAC), which the Andersen PAC graced with $4,000 in 2001.

Both of these industry PACs, in turn, donated the money from Enron, Andersen and many other donors to candidates sympathetic to the goals of the PAC.

This process comes home to the Four Corners when we read in the FEC records that Friends of Scott McInnis, Inc., the campaign organization of our U.S. representative, Republican Scott McInnis, received $500 from the Interstate Natural Gas Association of America PAC in 1998 and $2,000 from IMPAC in four contributions during 1999 and 2000.

The FEC records for every senator and representative would probably show similar examples of money received from industry PACs that aggregate contributions from corporate PACs and individuals.

Another "vat," or blurry spot in the money trail, occurs when a candidate with a big enough war chest passes money on to the campaigns of other candidates.

The McInnis campaign committee not only sent $1,000 on in 1999 to Bush for President, Inc., but also sent four separate $1,000 contributions on Jan. 19, 2000, to the Shelley Moore Capito for Congress campaign committee. Capito is a Republican representative from the Second District of West Virginia.

The FEC site leaves the average reader with breaks in the money trail — not all individual contributions may be recorded, for instance.

But there are specific records that indicate the pattern, and extent, of Enron and Andersen involvement in campaign financing in the Four Corners.

The data exhibited cover 1997 through 2001 (the 2001 records, however, may be incomplete because of donations not yet recorded).

MOST AREA SENATORS RECEIVED FUNDS

In the U.S. Senate, Colorado Republican Ben Nighthorse Campbell received $2,000 in 1997 from the Andersen PAC, and $1,000 in 1998 from the Enron PAC. Sen. A. Wayne Allard (R-Colo.) received nothing from Enron directly, but did get $1,000 from Andersen in 2000 and three $2,500 contributions from Andersen in 2001.

In New Mexico, veteran Republican Sen. Pete V. Domenici was given $3,500 in two Andersen contributions in 2001, but nothing from Enron.

His colleague on the other side of the aisle, Sen. Jeff Bingaman (D-N.M.), received $3,500 in two gifts from Enron in 1999 and $5,000 in two Enron donations in 2000. Bingaman also received two $1,000 gifts from Andersen in 1999.

Arizona’s two Republican senators, John McCain and Jon Kyl, apparently differed in their relationships with the two PACs. McCain received $4,000 from Enron in 1997 and nothing from Andersen. Kyl, on the other hand, received only $500 from Enron (1999), but was remembered by Andersen for a total of $7,500 in three separate 1999 contributions.

Utah senators Orrin Hatch and Robert Bennett, both Republicans, also show different patterns.

The Andersen PAC reported no contributions directly to Hatch, but gave Bennett’s committee $2,500 in 1997 and another $2,500 in 1998.

Later in 1998, Andersen gave Bennett two more gifts of $1,000 each, followed by $1,500 on March 6, 2000. Hatch also does not show up on the Enron list of recipients, while Bennett got $1,000 in 1997.

Of the eight U.S. Senators in the Four Corners, five have benefited from Enron’s PAC, six from the Andersen PAC. Only Hatch received no money from either PAC, according to FEC records, while Campbell, Allard, Bingaman, Kyl and Bennett took donations from both.

REPRESENTATIVES ALSO BENEFITED

There are more players in the House of Representatives, but the pattern of investment by Enron and Andersen in Four Corners candidates is similar, with a few interesting wrinkles.

Given the overall preference of both PACs for Republican candidates, why would Andersen donate $500 in 1997 and the same amount again in 1998 to Diana DeGette for Congress, Inc.? Was it because Denver Democrat DeGette sits on the House Energy and Commerce Committee?

That committee’s chairman, W.J. "Billy" Tauzin (R-La.) is making headlines right now with an investigation of Enron and, by extension, Andersen.

Tauzin has far bigger conflict-of-interest problems than DeGette, having received $1,000 from Enron in 1998 and $27,000 from Andersen in seven separate contributions over the five-year period 1997-2001.

In contrast, the second-ranking Democrat on the committee, Henry A. Waxman of Calfornia, received no direct donations from either PAC in 1997-2001. One is left to speculate whether it was the "Energy" or the "Commerce" or some totally unrelated reason that led Andersen to support the campaigns of Four Corners committee members.

The rest of the Colorado delegation shakes out this way:

• Rep. Mark Udall (D-Boulder) reported no cash contributions from either the Enron or Andersen PAC.

• Rep. McInnis (R-Grand Junction) received $1,000 from Andersen in 1999 and Enron gave him $500 in 1997 and $1,000 in 1999.

• Rep. Bob Schaffer (R-Fort Collins) reported no contributions from Enron or Andersen.

• Rep. Joel Hefley (R-Colo. Springs) also reported receiving no contributions from Enron or Andersen.

• Rep. Thomas G. Tancredo (R-Littleton) received $500 from Andersen in 1998, $1,500 in 2000 and $500 in 2001. No contributions were reported from Enron.

NEW MEXICO

The New Mexico delegation includes Reps. Heather Wilson (R-Albuquerque), Joe Skeen (R-Roswell) and Tom Udall (D-Santa Fe).

Wilson was clearly the New Mexico darling of the Enron and Andersen PACs; she sits with DeGette on the House Energy and Commerce Committee. Wilson received seven separate contributions from Enron (1998-2000), totalling $4,500. Andersen sent her nine contributions from 1998 to 2001, for a total of $9,500.

Skeen got $1,000 from Enron in 1997, nothing from Andersen.

Udall, like his relative in Colorado, reported no contributions from either PAC.

ARIZONA

Arizona’s growing delegation now numbers six representatives: Jeff Flake (R-Mesa), Jim Kolbe (R-Tucson), J.D. Hayworth (R-Scottsdale), Ed Pastor (D-Phoenix), Bob Stump (R-Tolleson), and John B. Shadegg (R-Phoenix). Shadegg sits on the House Energy and Commerce Committee.

In the period 1997-2001 shown on the FEC Web site, the Enron PAC donated $500 to Flake in 1997 (which was returned in 1998), $1,500 in two donations to Kolbe, $1,500 in two gifts to Hayworth, and nothing to Pastor, Stump, and Shadegg,. The Andersen PAC gave Flake $1,000 in 2001, Pastor $2,000 in two gifts in 2001 and nothing to Stump.

Shadegg, on the other hand, has received seven contributions from Andersen during the period 1998 through 2001, for a total of $12,000.

Kolbe was apparently ignored by Andersen, while Hayworth received five donations totaling $6,000 in the period 1997-2001.

UTAH

Utah has three U.S. Representatives: James Han-sen (R-Farmington), Jim Matheson (D-Salt Lake City) and Chris Cannon (R-Mapleton). Utah must not loom very large in the Andersen world view; Cannon’s $500 in 1998 is the only Andersen PAC donation recorded for the three.

The Enron PAC wasn’t much interested in Utah, either, giving $500 to Hansen in 2000, nothing to Matheson and $500 to Cannon in 1997.

CAMPAIGNS COST LOTS

The 18 U.S. representatives differed only slightly from the senators in their ties with the Enron and Andersen PACs.

Five congressmen — the two Udalls, along with Shaffer and Hefley in Colorado and Matheson in Utah — received nothing from either PAC, perhaps reflecting the lesser political power of representatives compared to senators.

Of the remaining 13 representatives, eight benefitted from Enron’s contributions and nine from Andersen’s, with McInnis, Wilson, Flake, Hayworth and Cannon receiving campaign funds from both PACs.

Modern campaigns cost money — lots of it. Still, the amount of money sent to campaigns in the Four Corners states by just two PACs — representing companies now under investigation by people they helped elect — may add fuel to the fire under campaign-finance reform.