OLEAN -- My world outlook as an aging curmudgeon journalist grows more skeptical week by week. I notice one trend more disturbing than most others. News stories I think should be on the front pages of major newspapers are relegated to the inside. Waaaay inside. Sometimes they're not even in the news section.
I know, I know. Iraqi fighting and fledgling democracy has to go out front. Dubya's devise-it-as-you-go Social Security reform has to be on Page One. But big developments in stories that only recently smacked you right in the kisser when you picked up the paper are missing in action or dumped in the back sections next to hotel and appliance advertisements.
Here's an example. For four years now, I've been waiting for details on how stock market traders for Enron, the mega-greed company, triggered artificial power shortages in California and other western states by arranging to shut off vital electricity flow just as consumer demand was peaking.
In the middle of last week, such details appeared in The New York Times in a well-written story by Timothy Egan -- not on the cover, but back around Page 15 or somewhere, at the very bottom.
Conversations that have surfaced in one of the many ensuing lawsuits against Enron -- tapes seized by FBI agents three years ago -- show stone-cold market manipulation, as Enron ran up prices by creating needless blackouts and hiking the price of energy both before and after California's incredibly boneheaded deregulation of power around the turn of the millennium.
In one call during mid-January of 2001 -- according to writer Egan -- an Enron trader convinces an obviously cooperative Nevada energy official to shut down a power plant providing electricity to neighboring California on the pretense of having to do maintenance. This, despite all western states being under clear federal emergency orders to keep power plants running, no matter what, until the widespread shortages eased.
"We want you guys to get a little creative and come up with a reason to go down," suggests the Enron futures trader. The Nevada "public servant" agrees. Next day, the plant goes down, California announces a power emergency, and the costly rolling blackouts sweep through the western power grid.
That fits my definition of red-handed. Enron flacks, of course, would not comment.
Other tapes released earlier reflected jocular Enron officials boasting about "stealing" more than a million dollars a day by mulcting an all-inclusive utility user they called "Grandma Millie" with the fake shortage schemes. They knew what they were doing was wrong. Last week's tapes also include Enron executives prattling on about their anxiety over possible jail terms if they're caught manipulating power markets with fake shortages. They actually made several practice runs at these deceptions so they'd get the charade perfect without getting caught.
But they did get caught. Some Enron traders already have pleaded guilty to federal fraud charges of criminally manipulating the power markets. Former Enron president Jeffrey Skilling and the firm's former chairman and friend-of-Dubya, Kenneth Lay -- in a case moving with all the speed of an Alaskan glacier -- have both been indicted by the feds for fraud. Lay calls the market manipulation nothing more than "conspiracy theories." Riiiight.
If you have trouble believing the blatant nature of this theft and chicanery, don't take my word for it, or that of The New York Times. Check out the Federal Energy Regulatory Commission, where the tapes have been filed.
There have been few details released in the last half-decade about this fake power shortage angle concocted by Enron officials. This story -- about a subject vital to all of us, a story which once commanded the front pages -- belonged up front. One reason it wasn't is because white-collar crime doesn't photograph well. It is boring to most television viewers to see highlighted passages on incriminating documents, or even to watch tape reels rolling as a disembodied voice is played back saying furtive and self-incriminating things. Television, despite the incursion of Internet news sources, still influences the thinking of newspaper editors, even if they don't realize it.
I once had an editor at USA Today blithely tell me she didn't like to disseminate to print outlets any news story she had not seen on TV first. She was soon gone, but her wrong-headed trepidation is the little-discussed secret of the newspaper business. Television now rules almost every print newsroom.
When newspaper editors put a story on the front page, they are telling the reader it is among the most important news developments they should read about that day. Readers -- and reporters -- sometimes get bored with stories of a continuing theme, but a lack of prominent follow-up on stories hard to cover and understand is one reason the public becomes inured to outrages that should send us all screaming into the streets.
My own criminal justice fantasies tend toward the eye-for-an-eye type retribution. I think greedballs who are convicted of depriving regular citizens of electricity and income through intricate schemes should be sentenced to several years in the dark -- no power at all. Not for reading, not for eating, not for watching TV, not for bathing, not for anything. Keep 'em in a cell with no lights. Poetic justice.
This particular story has a cautionary synergy with the aforementioned Social Security reform.
President George Bush's fond intention is to convince Congress that American workers should be allowed to redirect much of their future paycheck deduction for Social Security toward private investment funds -- something along the lines of self-directed IRA decisions, or 401(k) allocations.
I'm not necessarily against this (at least not until a long period of study), but fruition of this idea would mean an immense windfall of literally trillions of dollars for Wall Street -- and we've already seen how trustworthy Wall Street is in advising Americans how to invest hard-earned dollars. Enron is a perfect example of the foibles of trusting Wall Street to run the country's retirement system.
Half a decade ago, contemplating retirement, I recall receiving numerous calls from investment advisers -- some trusted and some not -- who touted Enron as a stock I must buy because it was going up, up, up, and probably wouldn't come down. It was their all-time favorite. It was a can't-miss, golden, never-fail equity and it belonged in everyone's retirement portfolio.
Enron, of course, these days is operating under bankruptcy protection and faces multiple civil and criminal court proceedings. It once traded for more than $90 a share. Now, memento certificates of the company stock sell on eBay for about 20 times the value of an Enron share. It was the leading stock investment of many union and institutional retirement funds -- the International Brotherhood of Electrical Workers comes to mind. Prospective retirees lost hundreds of millions when Enron tanked -- the biggest bankruptcy in U.S. history at the time.
Imagine what could happen if we can all put our Social Security money -- a pittance, I admit -- into any fly-by-night stock that is popular among commission traders who don't have a clue about what this or that company is really doing. Future Enrons -- and, given human nature, they will occur -- could send millions of Americans into a retirement of tattered clothing and dog-food diets. What a proud legacy for this administration.
Here's another story from the same edition of The New York Times that appeared a few pages away from the Enron story and belonged -- I think -- on the front page.
It involves another recognizable corporate name: the Halliburton Company, once headed by Vice President Dick Cheney. Halliburton, through one of its subsidiaries (Kellogg Brown and Root), holds a logistics contract to -- among other services -- house, feed and fuel the American military in Iraq.
By the time this big mess is over, Halliburton will probably receive up to $10 billion (yes, with a B) in taxpayer funds for this no-bid, open-ended contract. It should be noted the Army used to provide these services itself. Now they are outsourced, as the modern phrase has it.
I am not in Iraq. I have no first-hand knowledge of Halliburton's performance, but many of the troops returning to the United States complain it is dismal. For instance, promised hot meals are likely to be stale cereal or cold biscuits or much cheaper food that soldiers used to call K-rations, now called MREs or meals-ready-to-eat.
Don't take their word for it. Take the Pentagon's.
According to a tidy little story by Erik Eckholm, military auditors report Halliburton's initial invoices in 2003 -- taking advantage of poorly written scope-of-work clauses -- totaled almost $2 billion without proper backup.
It is normal procedure in such disputes for the federal government to withhold 15 percent or more of such expense payments to the contractor (in this case about $300 million) until final proof of cost comes in.
Both the Defense Contract Audit Agency and the Army Materiel Command have recommended that procedure in the Halliburton case. But last week the military office that oversees the provision of such troop services, the Army Field Support Command, refused to withhold the percentage and said full payment would be made. So, do you think Halliburton is wired beyond belief with the Bush administration? I do.
This story belonged on Page One. I suspect it will be there again, soon.
| Niagara Falls Reporter | www.niagarafallsreporter.com | Feb. 8 2005 |