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January 31 2002: The Enron mess is spreading to Britain. This week, it was revealed that both Labour and the Tories received funding from the collapsed energy giant; while the chairman of the press complaints commission, Lord Wakeham, has today stepped aside to answer questions about his non-executive role. Here is the best online journalism.
Weblog: the latest issues in links
Special report: Enron
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Smoke without fire?
Slate UK's media review on Enron focuses on what it calls 'the low cost of influence in Westminster': while US politicians received approximately $6m (£4m) from Enron from 1996 to 2000, UK contributions amounted to only thousands of pounds. But in Britain, it says, allegations of undue influence tend to stick: 'No one has yet suggested that anyone has broken any British law, but the appearance of wrongdoing does just as much political damage.'
Slate UK
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The drip of sleaze
The public may not know if Enron ever influenced British politicians in any undue way, says the Independent in a leader; but it does know that companies do try to get close to ministers to further their own interests. 'We are tired of being treated with contempt by politicians who think themselves so much cleverer than they really are,' it says; the result is corrosive to our political system.
Independent
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Time for state funding of politics?
Matthew Taylor, director of the Institute of Public Policy Research thinktank, argues in the Scotsman that the Enron affair shows the issue of party political finance in Britain is 'far from settled'. It says it is time to talk again about the state funding of political parties: 'While there may be types of campaigning activity that should not be funded through the public purse, if these activities are not funded by the government, they will be paid for by someone else with their own agenda.'
Scotsman
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Accounting alchemy
In this extract from PBS Online NewsHour, Paul Solman illustrates some of the business practices Enron is said to have employed. One involves entering into a derivatives contract with a subsidiary - a contract which rises in value when the subsidiary's stock falls. Solman explains: 'This is like me claiming my daughters have a separate company, which lost $100m in an internet stock, but I made $100m on the deal because I had a contract with them where they had to pay me a dollar for every dollar they lost ... Bottom line: I lose $100m, but report it as a $100m profit.' (RealPlayer or Windows MediaPlayer required to watch video: there is also a text version).
PBS NewsHour
Enron the incredible - Forbes
What went wrong - NPR audio (RealPlayer required)
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How Enron raised funds
The Washington Post has obtained documents about the way Enron did business - documents that were made available not to Enron shareholders, but to private investors in 'related partnerships'. They allege how Enron established a partner called Whitewing, promising to make good any losses on the sale of certain of its energy assets. 'As of November, that requirement stood at more than $2bn - a $2bn obligation that shareholders didn't know about.'
Washington Post
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Into the shredder
Time magazine was the first to report that workers who audited Enron's books for Arthur Andersen, the accounting firm, were directed to destroy 'all audit material' - thereby obstructing the investigation into the collapse.
Time
Shredding as recently as last week - ABC
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What scandal?
Enron may have made contributions to US election campaigns, says Richard Lowry in the National Review, but that does not mean there is a political scandal. 'Are we supposed to believe,' he asks, 'that Bush would support energy re-regulation if it weren't for Enron?'
National Review
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Enron got its money's worth
Robert Scheer, syndicated in the Los Angeles Times, reckons Enron got its money's worth from all those campaign finance contributions. 'The minority staff of the house committee on government reform has prepared a devastating analysis of 17 major concessions made to Enron that gave Kenneth L Lay, Bush's intimate friend and Enron chief executive, just about everything he wanted. The report concluded that "it is unlikely that any other corporation in America stood to gain as much from the White House plan as Enron".'
LA Times
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Whose scandal?
Despite the ties between Enron and senior members of the Bush administration, says this piece in the Seattle Times, there are few hard facts that show the president is any way culpable. The best Democrats can hope for, it suggests, is that Enron 'can become the symbol of a Bush administration more beholden to corporate interests than those of rank-and-file workers'.
Seattle Times
Enron the tip of the iceberg - AlterNet
Enron's failed power play - Newsweek
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The real scandal
Enron is a different kind of political scandal, say the editors of the New Republic - one in which 'conservatives in Washington systematically rejected a series of safeguards that would have alleviated the damage from Enron's collapse, or even prevented it altogether'. No law, it points out, required the company to disclose its derivatives' investments on balance sheets; such a state of affairs means unsuspecting employees bear the brunt of bosses' malfeasance.
New Republic
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Blame Congress
Congress, accounting academics Michael Granof and Stephen Zeff agree, should share part of the blame. 'Congressional involvement in financial standard-setting has been pure politics, fuelled by a system of campaign financing that distorts the pursuit of the nation's legislative agenda.'
Houston Chronicle
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Domination of politics by money
William Pfaff, syndicated in the International Herald Tribune, puts things simply from the US perspective. 'Enron simply provides another demonstration of the role of corporate money in the American system. It is the system that is rotten.'
International Herald Tribune
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Enron ethics for sale online
Former Enron employees, meanwhile, are getting something back from their company's troubles - by selling off 'memorabilia' on eBay. ZDNet UK reports that the online auction site is advertising more than 500 Enron-related items, including Christmas tree ornaments featuring the company's logo and, gloriously, a copy of its July 2000 ethics handbook.
ZDNet UK
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