Third World America - Arianna Huffington [54]
We got an unsettling glimpse of what this kind of cozy setup leads to in the spring of 2009, when the big stimulus bill was being finalized in Congress.77 At the time, there was much public outrage directed at bailed-out companies that continued to pay their executives big bonuses. In response, Senator Chris Dodd inserted a clause in the bill that would have barred bailed-out companies from awarding bonuses. But, somewhere along the way, behind closed doors and without public debate, the Treasury Department insisted that a loophole be added to the bill that would allow AIG to pay out bonuses. Think about that: Even after having been bailed out to the tune of $182 billion, AIG still had the inside juice to get a special favor served up.78
It’s the same kind of inside juice that allowed Goldman Sachs chairman Lloyd Blankfein to have a prime seat at the table during the emergency weekend meetings in September 2008 when Treasury Secretary—and Goldman Sachs alumnus—Hank Paulson was deciding the fate of AIG—a fate that would have a multibillion-dollar impact on Goldman’s bottom line.79, 80
It’s the same kind of juice that allowed Enron to become a major Washington player during the Bush years—before it became synonymous with corporate mendacity and greed. The crooked firm’s chairman, Kenneth Lay, and his senior management doled out $2.4 million to federal candidates in the 2000 elections and were among George W.’s biggest donors.81 Enron also spent $3.45 million lobbying Congress in 1999 and 2000, all of which helped the outfit push its “deregulation” agenda—which really meant creating enough “wiggle room” to get away with wholesale fraud.82
“Kenny Boy” Lay was known to boast about his “friends at the White House”—friends who helped him engineer the replacement of the head of the Federal Energy Regulatory Commission, the agency charged with regulating Enron’s core business.83, 84 He also had a lot of input on energy policy at the Bush White House: Vice President Dick Cheney and his staff had six meetings with Enron representatives—including two with Lay—as part of their energy task force.85, 86 The last of those meetings took place six days before Enron was forced to reveal it had vastly overstated its earnings, starting the energy giant’s slide into bankruptcy.87
Another energy company, Upper Big Branch mine operator Massey Energy, has also realized the investment value of buying friends in high places. Back in 2000, Massey was responsible for a coal slurry spill in Kentucky that was three times larger than the Exxon Valdez oil spill.88 The company very successfully limited the damage—not to the environment, but to its bottom line.89 According to Jack Spadaro, a Mine Safety and Health Administration engineer investigating the spill, once Kentucky senator Mitch McConnell’s wife, Elaine Chao, became secretary of labor—the labor department oversees the MSHA—she put on the brakes.90 Two years after the spill, Massey was assessed a slap-on-the-wrist $5,600 fine. The same year, Massey’s political action committee donated $100,000 to the National Republican Senatorial Committee, which McConnell chaired from 1997 to 2000. Cozy.
And you can’t get any cozier than Linda Daschle, who, while her husband, Tom, was Senate minority leader, was one of the airline industry’s top lobbyists—although I’m sure pillow talk had nothing to do with her clients Northwest and American Airlines raking in one billion dollars from the government’s post-9/11 bailout