Like an earthquake or explosion that tears away the façade of man-made structures, the fall of Enron has peeled off cosmetic surfaces to expose what is rotten within certain privileged professions that are supposed to protect the public. By now, no one is shocked to hear that there are crooked politicians and corporate managers, enabled by crooked lawyers, although the extent and brazenness of their chicanery is still remarkable. More surprising is the corruption of the accountants, if only because their dull reputation concealed such colorful activities as shredding evidence and cooking books.
And then, of course, there are the journalists.
When The New York Times published a long article about the failure of American institutions to scrutinize Enron, journalists rated only a few perfunctory closing sentences. The story didn’t note that, like so many other publications, The Times expended much newsprint celebrating Enron and the deregulatory fervor that made Enron’s fraud possible.
Few journalists are publicly examining the difficult questions about media complicity in Enron’s rise–perhaps because to do so might explode the “free market” ideology that warps so much business reporting and commentary. It should be obvious by now that deregulation of industries and markets is not invariably beneficial to investors–particularly not small investors like Enron’s employees–but the cheerleaders aren’t ready to admit that yet.
If ideological bias blinded the press to Enron’s schemes, there are other and worse journalistic problems exposed in the corporate ruins. Now we know that at least four influential pundits took big fat checks from Enron: William Kristol, Paul Krugman, Lawrence Kudlow and Peggy Noonan.
Conservatives have eagerly used his former membership on an Enron advisory board to discredit Mr. Krugman, the liberal Times Op-Ed columnist and Princeton economist. It is indeed dismaying to learn that three years ago he took $50,000, in return for little discernible work, around the time he wrote what amounted to a puff essay about Enron and deregulation for a national magazine. Yet he severed that connection when he joined The Times and never concealed it.
That distinguishes the Times columnist from Mr. Kudlow, a writer for National Review and now the host of a nightly broadcast on MSNBC, who evidently saw no conflict in taking money on the side from various corporations in connection with his private business of publishing a pricey economic newsletter. Who else has paid Mr. Kudlow? And it also distinguishes him from Mr. Kristol, whose flippant attitude about the 100 large ones he admits taking from Enron over a period of two years is truly breathtaking.
Mr. Kristol, editor of The Weekly Standard and ubiquitous television commentator, says he regularly takes large sums from corporate interests for making speeches. His Enron buck-raking was arranged by Irwin Stelzer, a confidant of Weekly Standard owner Rupert Murdoch who doubled as the coordinator (or bagman) of the energy giant’s so-called “advisory board.” During that period, The Weekly Standard led the cheering for energy deregulation and attacked Enron’s critics, but only after the company fell did the magazine (parenthetically) reveal its editor’s lip-lock on the Enron sugar tit.
(Here I should mention that The Weekly Standard has knocked me personally on several occasions. I regard all those criticisms as terribly unfair, although at least one piece–a mock Italian opera about the Clinton scandals–was terribly funny, too. Also, nobody paid me to write this except The New York Observer .)
While Mr. Kristol is hardly alone in taking money on the side from corporate interests–a deplorably common practice among Washington’s celebrity journalists–his role as the editor of a crusading conservative journal raises the most serious ethical issues. He airily dismisses his Enron take as “not much of a ‘gate,’” which only suggests what dismally low standards prevail at the Standard and throughout the Murdoch media empire.
As recently as Jan. 20, Mr. Kristol appeared on Fox News Sunday , another outpost of that empire, to comment on the Enron affair. There he disparaged a “big hyperventilating editorial” on Enron in The Times and went on to defend the Vice President’s refusal to release materials concerning White House contacts with the company. “I do think if you start releasing all executive-branch communications with anyone from any company with whom you deal totally legitimately, where does that go next?” he asked. Nobody, including Mr. Kristol, mentioned his fat consultancy fees from Enron.
In fact, Mr. Kristol’s ethical code apparently applies to everyone but himself. This reflects poorly on someone who built his career on preaching about the liberal evasion of personal responsibility, the decline of public morality and the necessity of full disclosure by the Clinton administration.
But hypocrite and fraud that he is, even Bill Kristol isn’t beyond redemption. The first step would be to disclose all his corporate emoluments. Then he ought to give back that $100,000 to the Enron employees who were cheated.
And then he should fire himself.