Take a Bow, Mr. Marshall
"Talking Points Memo" Guy Gets It Right About Enron's "Partnerships"
by Tamara Baker

March 21, 2002 -- SAINT PAUL, MINNESOTA (APJP) -- While the mainstream press has been pleasing the Bush Junta by allowing itself to be distracted from the meat of the Enron scandal by the Arthur Andersen sideshow, one journalist has managed to keep his eyes on the prize.

That fellow is none other than Joshua Micah Marshall, formerly of The American Prospect and the proprietor of his own politically-oriented website, TalkingPointsMemo.com.

Back early last month, Marshall started asking pointed questions about the identities of the people in Enron's 3000-plus "partnerships".  Using certain tidbits that had come his way, he had formulated the theory that these partnerships were used not just to hide debt, but to reward certain of Enron's buddies -- such as certain prominent political figures.

And guess what?  It looks like Mr. M. hit it right on the money.

Consider, if you will, this Wall Street Journal story published on MSNBC.com:

Enron got partnership warning in '99
Top company official began sounding alarm, was rebuffed

By John R. Emshwiller
THE WALL STREET JOURNAL

March 18 -- Nearly three years ago, a top Enron Corp. risk-management official began warning top executives of the improprieties of some of the company's off-balance-sheet partnerships. By last September, the official, Vince Kaminski, was arguing that the partnership arrangements had gone from being merely "stupid" for Enron and its shareholders to being fraudulent.

This contradicts Lay's and Skilling's and Fastow's "we didn't have any idea that people didn't like what we were doing" shtick.  And  it certainly seems to show that Lay and Skilling lied under oath before Congress last month.

[...]

Dr. Kaminski said other Enron officials agreed with his concerns about the executive-run partnerships as early as 1999. He told of how his own mounting worries last fall caused him to refuse to let his research team do further work on partnership-related transactions. Dr. Kaminski said that when he tried to pass along his concerns last October to Enron's outside auditor, Arthur Andersen LLP, he was told by a senior Enron official to stop such communications, according to the memorandum.

The special board committee prepared dozens of interview memoranda in the course of its investigation. Many, such as Dr. Kaminski's, haven't previously been available. Over the weekend The Wall Street Journal reviewed those memos. One  recounted an Enron in-house lawyer telling of the existence of a group of individual investors, known as the "friends of Enron," who had been available to quickly invest in outside projects, such as power plants, when the company needed funds to complete transactions. The size of this group and identity of its members wasn't disclosed, though it appeared to include some prominent Houstonians.

The article continues:

A question that hangs over the Enron scandal is whether outsiders, including possibly public officials, were given investment opportunities in company-related entities, some of which produced extremely large returns.

It looks as if Joshua Micah Marshall has been vindicated.  The Potemkin partnerships weren't just to hide debt, but to reward certain people -- particularly certain Houston high-rollers -- in a less-than-legal way.

The Bush Junta has been fighting like mad to distance itself from the Enron scandal, trying to claim that Enron didn't have an inordinate -- not to say illegal and unethical -- amount of influence on Bush and Co.'s policies.  But with each new day bringing more revelations like Dr. Kaminski's, that desired appearance of purity is getting harder and harder to achieve.