Enron: New Scandal, Old Story

In her latest Political Points commentary, CBS News Senior Political Editor Dotty Lynch looks at the early fallout from the Enron scandal.

Enron, the world's largest energy trader, filed for bankruptcy on Dec. 2. The fact that Enron CEO Ken Lay was a Bush "pioneer" and one of the biggest donors to the Republican Party has been known for years. But something happened last week that made the story reach critical mass. Maybe it was the letter sent by Vice President Cheney to Rep. Henry Waxman, D-Calif., finally detailing all the meetings he and his staff had with Lay and Enron staff, that kicked things into gear. But whatever caused it, the story and its political overtones, which had been lurking in the background all through the holidays, have burst onto center stage.

Attorney General John Ashcroft, who received a total of $64,499 from Enron for his political campaigns, recused himself from the investigation. So did the entire U.S. Attorney's office in Houston, which said it had too many employees with family ties to the company. The White House admitted that its officials had taken calls from Enron executives, but its spinmeisters, led by Mary Matalin, cried foul. "What's the charge? … If you take a contribution from somebody does that mean if they fail, you're guilty?" she told radio host Don Imus. "There's no connection. They're trying to make a connection where none exists because they're scandal addicts."

But the White House knows there's a public relations problem, if not a legal one, and has started full-scale damage control – beginning with full disclosure. "If somebody's cousin played tennis with someone at Enron, let's get that out too," said one Bush source to the New York Daily News. Treasury Secretary Paul O'Neill went out on the Sunday talk shows to defend his actions, though in an unfortunate phrase he suggested that the collapse of Enron was part of the "genius of capitalism."

Former Clinton administration officials, who for years were stung by hyped scandal stories they never considered really scandalous, could hardly control their glee. But the White House quickly put out the fact that Democrats as well as Republicans had received money from Enron, and that former Clinton Treasury Secretary Robert Rubin had placed a call to a current Treasury Department official to see if the Bush administration would intervene.

But even if there is no illegality here, the personal and financial connecions of Enron executives with the nation's highest-ranking government officials cause people to wonder if something is amiss. This is exactly the climate of mistrust that Sen. John McCain has warned about for years. Crusading against big money in politics, he has claimed that big contributions were "legalized bribery" which caused the American people to doubt their elected officials. Sunday, on CBS News' "Face the Nation," McCain continued on this theme.

"This whole thing is tainted by the huge amounts of soft money that was washing around political campaigns, both Republicans and Democrats," McCain said. "It taints all of us. It creates the impression that improprieties are being carried out because of the influence of huge amounts of money. And it's another compelling argument for campaign finance reform."

The return of political scandal and questioning of the influence of big money in politics comes as a new research center was formed to study the civic engagement of young people. CIRCLE (The Center for Information and Research on Civic Learning and Engagement), with funding from the PEW Charitable Trusts, released several studies showing that while the period following Sept. 11 found an increase in attention to news by young people, "interest and knowledge still lag (and) fewer than one-third of young citizens voted in 2000."

The 2000 election marked a "new record low" for youth turnout even though the campaign was closely contested. The post-Sept. 11 period did increase public (and youth) trust in government, but not trust in other people. And despite the increase after Sept.11, "they are still paying far less attention to civic affairs than did people a generation ago. These are troubling signs for the future of our democracy," said CIRCLE director William Galston, a former Clinton administration official.

CIRCLE also presented an excellent research paper by Donald Green and Alan Gerber from Yale validating the theory that contacting voters by phone, or especially in person, makes a huge difference in voter turnout. They demonstrated that "chatty phone calls" or, better yet, face-to-face visits merely asking people to vote increased turnout by 5 to 8.5 percent. But this type of voter contact costs between $12 to $20 per person and is clearly not the answer to getting young people involved in civic life.

In the aftermath of Sept.11, many people said that life would never be the same again. Judging from the events of last week, life was starting to look very much the same. Experts have predicted that it would take another big scandal, like Watergate, to motivate people to truly reform campaign finance. That might just be the silver lining behind the Enron debacle.

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