Austin American-Statesman

The Bush administration’s response to the Abu Ghraib prisoner abuse scandal has brought on a case of Enronesque deja vu.

On Oct. 23, 2001, Enron CEO Ken Lay was under siege. His company was staggering under a trainload of bad news. For days, the biggest media outlets in America, including the Wall Street Journal, had been publishing embarrassing details about the company’s chief financial officer, Andy Fastow, and his insider deals with the company. Every day brought new revelations about Fastow’s misconduct, further undermining confidence in the corporation. Enron’s stock price was in free fall, down 30 percent in just four days. Federal officials had begun an investigation. Indictments were certain.

Lay, a leader who didn’t like to be bothered with too many details, gathered his cronies on the Enron board. They would launch their own investigation. But in the meantime, they would put on a brave face. They would stick together. To prove their unity, Lay, backed by Enron’s top financial officials, held a conference call with Wall Street analysts and investors. During the call, Lay admitted that the news about Fastow’s dealings had generated a “lot of speculation. It’s done a lot of damage to us over the last few days. We want to get the facts out.”

Lay shouldn’t have said much more. But he couldn’t help himself. “I and Enron’s board of directors continue to have the highest faith and confidence in Andy and think he’s doing an outstanding job as CFO.”

The analysts weren’t convinced. They hammered Lay with questions. Why wasn’t he more informed about Fastow’s financial shenanigans? How bad was the problem? Who else was involved? When did they learn about them? Lay wasn’t interested in answering questions. When pressed, he told the analysts, “Let’s move on.”

On May 10, President Bush, flanked by his closest advisers, gave a speech at the Pentagon during which he expressed his faith in Defense Secretary Donald Rumsfeld. Bush didn’t mention that Pentagon officials had worked to suppress the information about the Abu Ghraib scandal for at least two weeks. He ignored the calls for Rumsfeld to resign. Instead, Bush and his pals showed that they would stick together.

Bush — accompanied by Rumsfeld, Secretary of State Colin Powell, Vice President Dick Cheney and Gen. Richard Myers, chairman of the Joint Chiefs of Staff –told the throng of reporters that Rumsfeld was “doing a superb job.” Speaking to Rumsfeld, who was standing a few feet away, the president said, “You’re a strong secretary of defense, and our nation owes you a debt of gratitude.”


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