The meltdown of Enron is a politician's delight because there are so many devils to parade before the public. But by Labor Day, it is likely that the state of the union will be about what it was when the bankrupt firm's stock was $90 a share instead of 45 cents.
To say this is to minimize in no way the significance of a financial collapse the size of Enron's. It is only to point out the difficulties of moving from the particulars in this fiasco to specific changes in law or public policy.
Consider the hot issues of the moment: campaign finance reform, 401(k) rules, energy deregulation, tighter standards for auditors.
Taking these subjects in reverse order: The shredding of documents and the apparent inability of Arthur Andersen to distance itself from its client, Enron, make this area the most propitious for change. But for all the talk at congressional hearings about the need for better control, there have been few concrete correctives brought forward.
Complicating the picture further is Harvey Pitt, the chairman of the Securities and Exchange Commission, who was a lobbyist for the accounting industry for 20 years. He wants any new oversight regulations to be the province of the industry and not the federal government. This does not mean that he will have his way or that Arthur Andersen will survive, but it is unlikely that much beyond tightening rules on auditing and consulting for the same client will occur.
If the Democrats are successful in getting Vice President Dick Cheney to reveal whom he consulted before the administration promulgated its energy policy, it is almost sure that Enron officials will be among the Texans who had his ear.
However, that will not derail the Bush administration's determination to press for drilling in the Arctic National Wildlife Refuge nor force abandonment of its priorities: Increased energy production first, conservation second. Theirs is the gospel of the energy business, of which they are products, not merely Enron.
As for turning away from deregulation, if the California fiasco didn't give the administration pause, and it did not, then there is no reason any disclosures at this point about Enron position papers will change anything. The sympathy in most states and Congress is also for more deregulation, not less.
Appearances to the contrary notwithstanding, the 401(k) case is not cut and dried, either. Some 15,000 Enron employees, like 42 million Americans, participate in what is called a defined contribution (DC) plan. They had a number of investments from which to choose depending on their retirement needs. They also could invest in Enron stock under certain conditions and many chose to do so because it looked like a "can't lose investment" to them.
It was Enron's contribution that was limited to company stock that could not be converted to another investment before age 50. As with all 401(k) plans, there also were rules and penalties for taking money out of the plan before retirement or rolling it over into another financial instrument.
The employees have pointed out that Enron's officers were selling large blocks of stock in the company at the same time that they were locked into Enron stock. They also have argued that the officers had a responsibility to warn them that financial disaster lurked just around the corner.
The president announced Thursday that he favors a three-year limit on the time a company could lock employees into its stock as part of a 401(k) plan. He also favors stiffer reporting rules for employers when it comes to alerting employees about the risks of investing in the company's stock, as well as quarterly reports to employees on the company's condition.
However, there are limits on what can be done to protect either managers or workers who choose to make a heavy financial commitment to their employer. Complicating the situation further is the wide use of company stock option programs and ESOPs, Employee Stock Ownership Plans, both of which involve much more extensive financial commitments to the employer than did the Enron 401(k) plan.
As for warnings of disaster: Because of insider trading rules, Wall Street knew for months last year that Enron officers -- including chairman Kenneth Lay -- were selling large blocks of stock, but it did not react. Sometimes you have to hit investors in the head with a two-by-four before they see trouble, a reality that no number of regulations will eliminate.
The current debate on campaign finance reform is centered on tighter rules on soft money, i.e. limits on contributions by individuals and PACs to political parties and single-issue campaigns. Enron gave out soft money, but its big political contributions went directly to senators (71) and representatives (187).
If you favor federal funding of elections and the abolition of even the $1,000 individual political contributions now permitted under federal law, you are going to continue to be disappointed -- there is no sympathy in Washington for that. The best Congress is likely to do is finally get soft money under control by passing a modified version of the House finance reform bill.
E-mail this story 
