Business Ethics VII Essay

Human Events ©2006 by Human Events Publishing, LLC The National Conservative Weekly^

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VOL.62 NO. 20 THE WEEK OF JUNE 12, 2006 ESTABLISHED 1944 • WASHINGTON, D.C.

Quote of the Week

"Election Day in California is the start of the process where we elect the next leader of the Mexican people."

—Jay Leno on the California primar- ies, "The Tonight Show." June 6. 2006.

Feds Were Accomplices to Enron Crooks

BY TIMOTHY P. CARNEY

Federal prosecutors have suc- cessfully prosecuted Enron CEOs Jeff Skilling and Kenneth Lay for what the grand jury's indictment described as "a wide-ranging scheme to deceive the investing public ... about the true perform- ance of Etiron's businesses."

While Skilling, Lay. Chief Finan- cial Officer Andrew Fastow. and other Enron "conspirators" have also been found guilty of fraud charges, one key accomplice has gotten a pass; federal and slate government.

Without federal subsidies and complex regulations, a number of Enron's crooked deals never could have happened. Indeed, many of the episodes highlighted in the grand jury's 2004 indictment of Lay and Skilling (which led to last month's conviction) have Wash- ington's fingerprints all over them.

The first specific charge in the federal indictment under which Skilling and Lay were convicted last month relates to the "Use of special purpose entities [SPEs]... to manipulate financial results."

Continued on Page 6

Liberal Media Will Harp on Haditha and Soon Forget Zarqawi's Demise

Remember Baqubah—the Left Won't BY OLIVER NORTH

Cold blood is a "hot" topic. For pontificating politicians and the potentates of the press., it invari- ably trumps good news.

Even the violent demise of ter- ror mastermind Abu Musab al- Zarqawi wasn't enough to push the bad news off the front page for long. At 5:30 a.m. EDT on June 8. the masters of the American media paused their drumbeat of negativity on the global war on terror just long enough to an- nounce that U.S. forces had killed Zarqawi. The barons of bombast allowed President George W. Bush a few minutes of air-time to commend our troops and note that they had administered "a severe blow to A! Qaeda."

Good News Ignored Then it was back to business as

usual—bashing the administra- tion, trashing our troops and mak- ing sure that the words "Haditha" and "atrocity" are firmly branded in the minds of everyone with ac- cess to American media.

Here's a "self-test" to prove

Reutars/Ceerwan Aziz

MAJ. GEN. WILLIAM CALDWELL points to a photo showing the dead face of Abu Musab ai-Zarqawi, who was killed on June 7 when F-16 fighter jets dropped two 500-pound bombs on his hiding place in Baquhah, Iraq. Oliver North anticipates that the liheral media and politicians will soon forget tbe events at Baqubahh as tbey continue to harp on a still-under-lnvesti- gation incident in Haditha, Iraq, wbere a few U.S. Marines may bave been involved in killing civilians.

how well this "branding" works: Clip this article. Put it in your pocket, and a week from now. whip it out and ask a "representa- tive sample" of your family, friends and associates two ques- tions: "What happened at Baqubah?" And then, "What hap-

pened at Haditha?" Tabulate the results. Prediction: Eight of 10 will be able to tell you something about "Marines accused of killing civilians" in Haditha. Fewer than three in 10 will know anything about Baqubah—and only a few will even know that it's in Iraq.

Baqubah. in case you have al- ready forgotten—or never heard— is where Abu Musab al-Zarqawi, one of the most brutal terrorists in history, was tracked down and killed by Joint Task Force 145—a special air-sea-ground unit of the

Continued on Page 8

Death Tax: It Attacks a Village

Tom Williams/Roll Call Photos

THE GRIM REAPER appeared at a rally on Capitol Hill to call for the end of the Death Tax.

BY TERENCE P. JEFFREY

Hannay Reels now grosses $42 million per year and employs 150 people in the little village of West- erlo. N.Y.. but it all started when Clifford Hannay seized an unex- pected opportunity.

It was 1933. Hannay was doing plumbing and electrical work—installing bathrooms—

when he walked into a supply shop in Albany.

The man ahead of him was re- turning some parts. He was a heating-oil dealer tired of hauling ftve-gallon cans. He had tried to build a reel to mount a hose on his truck so he could pump his product directly into customers' tanks. He failed.

The man at the counter agreed

to take the parts back. "But before I do." he said, "why don't you shake hands with Clifford Hannay. He's standing right next to you, and he can build anything."

The heating-oil man handed his bag of parts to Hannay—who had never built a reel in his life. Hannay did a splendid job. Re- ports of his craftsmanship got

Continued on Page 8

(f^DDRESS LPtBEL)

On the Inside * ANN COULTER'S newest book. God- less, was released last week and is al-

ready making waves. Read our

exclusive interview with Ann and find

out what she says is the secret to her

great writing. Se« p«fl« II.

Top Ten * THE 2ND AMENDMENT rights of

Americans are constantly under attack

from the anti-gun left. This week, the

National Rifle Association lists the

"Top 10 Anti-Gun Representatives."

S«e pag* 1*-

On the Web * STAY UP TO DATE on all the news you read about each week in HUMAN

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Hey, You, Browsing Godless—Buy the Book or Get Out!

BY

A N N C O U I T E R

The long-anticipat- ed book Godless: The Church of Liberalism was finally released this week. If the New York Times reviews it at all. they'll talk only about the Ann Coulter action-figure doll, so I think I'll write my own review.

Godless begins with a murder at the Louvre and then takes readers on a roller-coaster ride through the Church of Liberalism in a desper- ate game of cat and mouse in which the hunter becomes the hunted—with a twist at the end you simply won't believe! It's areal page-turn- er—even the book-on-tape version and large- print edition! Who knew a book about politics could make such an ideal gift—especially with Father's Day just two weeks away!

Religion of Liberalism The main problem with Godless is that I

had to walk through the valley of darkness to find it. You will have to push past surly book- store clerks, proceed past the weird people in the "self-help" section, and finally past the stacks and stacks of Hillary Clinton's mem- oirs. If all else fails, ask for the "hate speech" section of your local bookstore. Ironically, if you find Godless without asking for assis- tance, it's considered a minor miracle.

This is not a btwk about liberals. I stress this in anticipation of Alan Colmes' hectoring the author to name names. (For people who resent- ed being asked to "name names" during the 1950s, these liberals sure aren't .shy about de- manding that conservatives do the same today.)

It is a book about liberalism., our official state religion. Liberalism is a doctrine with a specific set of tenets that can be discussed, just like other religions.

The Christian religion, for example, frowns on lying and premarital sex. That is

AP/Thanassis Stavrakis

THE CHURCH OF LIBERALISM holds Darwinism as an unquestionable doctrine of the faith, and believes that men are mere monkeys—only not as pure-hearted as actual monkeys, who don't pollute, make nukes or believe in God.

simply a fact about Christianity. This does not mean no Christian has ever lied or had premarital sex. Indeed, some Christians have committed murder, adultery, thievery, gluttony. That does not mean there's no such thing as Christianity any more than videotape of Rep. William Jefferson's (D.- La.) accepting cash bribes means there's no such thing as congressional ethics rules.

Similarly, the liberal religion supports abor- tion, but that doesn't mean every single liber- al has had an abortion. We can rejoice that liberals do not always practice their religion.

Godless examines a set of beliefs known as "liberalism." It is the doctrine that prompts otherwise seemingly sane people to propose teaching children how to masturbate, allow- ing gays to marry, releasing murderers from prison and teaching children that they share a common ancestor with the earthworm. (They haven't yet found the common ancestor—but

like O.J., the search continues.) Their demand that their religion be dis-

cussed only with reference to specific indi- viduals—Who is godless? Are you saying I'm godless?—is simply an attempt to pre- vent us from talking about their religion. This tactic didn't work with Slander or Treason, and it's not going to work now.

It's not just that liberals ban reform rabbis from saying brief prayers at high school graduations and swoop down on courthouses and town squares across America to cart off Ten Commandments monuments. The liber- al hostility to God-based religions has al- ready been copiously documented by many others. Godless goes far beyond this well-es- tablished liberal hostility to real religions.

The thesis of Godless is: Liberalism IS a religion. The liberal religion has its own cosmology, its own explanation for why we are here, its own gods, its own clergy. The

basic tenet of liberalism is that nature is god and men are monkeys. (Except not as pure- hearted as actual monkeys, who don't pol- lute, make nukes or believe in God.)

Liberals deny, of course, that liberalism is a religion—otherwise, they'd lose their government funding. "Separation of cburch and state" means separation of vow/- church from the state, but total unity between their church and the state.

Two months ago. the 9th Circuit held that a school can prohibit a student from exercising his 1st Amendment rights by wearing a T-shirt that said. "Homosexuali- ty Is Shameful."

Even the left's pretend-adoration of "free speech" (meaning: treason and ptimography) must give way to speech that is contrary to the tenets of the church of liberalism on the sacred grounds of a government school.

How might the ACLU respond if a school attempted to ban a T-shirt that said something like "Creationism Is Shameful"? We'd never hear the end of warnings about the coming theocracy.

In fact, students are actually required to wear "Creationism Is Shameful" T-sbirts in Dover, Pa., where—thanks to a lawsuit by the ACLU—the liberal clergy have declared Darwinism the only true church, immunized from argument. Ye shall put no other God before it. Not one.

Liberals believe in Darwinism as a mat- ter of faith, despite the fact that, at this point, the only thing that can be said for cer- tain about Darwinism is that it would take less time for (1) a single-celled organism to evolve into a human being through mutation and natural selection than for (2) Darwinists to admit they have no proof of (1).

If only Darwinism were true, some day we might evolve public schools with the ability to entertain opposable ideas about the creation of man. •

acoulter^ eaqlepub.com

Feds Were Accomplices to Enron Crooks Continued from Page I

Specifically, the indictment discusses a bun- gled power-and-pipeline project in Cuiaba. Brazil—a deal whereby Enron simultaneous- ly hid large losses while enriching Fastow personally.

While the Cuiaba project was "straining to meet budget targets" in late 1999, the Overseas Private Investment Corporation (OPIC), a federal subsidy agency, extended a $200-million subsidy credit to Enron to help it build a pipeline to the plant.

Enron prosecutors have also focused on an arrangement in which Enron sold Niger- ian barges to Merrill Lynch at the end of 1999 and bought them back a few months later. The prosecutors claim that this deal was

a fraud to conceal debt and inflate as.sets. Enron might never have been in Nigeria if

it were not for the U.S. government. Houston Mayor Lee Brown. President Bill Clinton and Commerce Secretary William Daley all visit- ed Nigeria in the late 1990s to press the cause of American companies, including Enron. Once again, OPIC financed the project.

Odd Accounting An Enron SPE named JEDl also surfaces

in the indictment. JEDI is a reference to Star Wars, but it also stands for Joint Energy De- velopment Initiative. Enron's 50-50 partner in the $500-mUIion JEDI was the Cahfbmia Pub^ lie Employee Retirement System (CalPERS), an agency of the state government.

OPIC's and CalPERS's involvement demonstrate that federal and state government programs were crucial to the Enron projects that the jury found were part of a deliberate scheme to defraud investors. But the govern- ment's role in the Enron bubble runs deeper.

Enron used an accounting method called "mark-to-market," which allowed the com- pany more leeway in determining its profits for any year. Basically, the mark-to-market method allowed Enron to count the entire future worth of a business deal as revenue in the year the deal was signed. For example, if Enron signed a 30-year power-purchase agreement with the government of Brazil in year one. Enron's accountants would esti- mate how much money the company would make over the 30-year agreement, count the contract as an asset, and book the 30-year estimate as a profit in year one.

This was an odd accounting method for an

energy company to use—and investors and an- alysts might have looked askance at it—but the SEC in 1992 explicitly approved Enron's use of mark-to-market. To any analyst who doubt- ed whether mark-to-market was a legitimate way for Enron to do its books Skilling or Lay could simply .say: The SEC says its fine.

In this way, the SEC served one of the functions for which politicians of both par- ties value it: It boosted investor confidence. Ofcour.se, boosting investor confidence was precisely one of Skilling's and Lay's crimes.

Attorneys for Skilling and Lay have promised to appeal. Sentencing will be Sep- tember 11, and both men could effectively be sentenced to life in prison. •

Mr. CaniL->, aL-(inlriIiuIingciJiIi>rt(iHiiM.\N E\1.MS. is ihe au- ihiir III' Ihf fonhcoming book. The Big Ripoff: How Big Busi- ness anil Big Government Steal Your Money, li> be relcused July 7 from John J. Wiley & Sons. He is also iht Warren T. Brookes Journalism Fellow al the Competilivc Enterprise.

6 • HUMANEVENTSONLINE.COM • THE WEEK OF JUNE 12, 2006 486