— Lilian Segura
92
KEN LAY AND ENRON
“Business Ethics” for the New Millennium (1942–2006)
“We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness, and arrogance don't belong here.”
— Enron Corporation Code of Ethics, 2000
We've established that a group of people can be “bastards” collectively, so why not a corporation? Well, if ever there was a “bastard corporate entity,” it was Texan energy giant Enron.
By the year 2000 the name “Enron” became synonymous with fraud and corruption. The company's dramatic rise and stunning fall exposed major faults in America's regulation of the energy and financial services industries.
Enron was founded in the mid-1980s as a power transmission and natural gas company. It later branched out into energy futures and online commodities trading. The company's high stock price and innovative trading methods won it accolades; Forbes dubbed it “America's Most Innovative Company” from 1996 to 2001.
At one point there were even rumors that Enron chairman Ken Lay would be named as energy secretary if his personal friend George W. Bush won the 2000 presidential election. With its stock soaring and the right friends in the right places, there seemed to be no limit on how high the company could fly.
Too bad it was all an illusion.
The truth is that Enron really never made a dime. It lost hundreds of millions of dollars year in, year out, and it shielded those losses from disclosure with various corporate entities and all manner of what many accountants call Cleverly Rigged Accounting Ploys (use your imagination to figure out that acronym!).
Enron's accounting company Arthur Andersen abdicated its role of watchdog. In fact, the firm actively enabled Enron's fraud by allowing it to utilize market to market accounting. Enron was then able to book the future value of an as-yet unfinished deal as current revenue.
Enron bought real power plants with its artificial money. It then sold the power on the open market for what the market would bear. To this end, it orchestrated power plant shutdowns during periods of high demand, like the summer of 2000 in California. This price manipulation drove California's largest utility, Pacific Gas & Electric (PG&E), into bankruptcy. PG&E had to be bailed out by California's taxpayers to regain its solvency.
When Enron finally went bankrupt, tape recordings of phone calls between the company's traders were made public. In numerous profanity-laced conversations, Enron's traders openly bragged about driving energy prices so high that elderly people could not afford to pay their electric bills.
BASTARDS ACTUALLY BROUGHT TO JUSTICE!
Enron's CEO, Jeffrey Skilling (who left the company right before the collapse), was convicted on multiple fraud, conspiracy, and insider trading counts. He was later sentenced to twenty-five years in prison, but that sentence was recently overturned on appeal. The company CFO Andrew Fastow turned state's evidence and received a six-year term. He is presently incarcerated at a minimum security federal prison camp that is, ironically, adjacent to the federal “supermax” prison in Florence, Colorado. And it couldn't happen to a nicer bunch of guys.
Enron's fake dealings had very real-world consequences for many innocent people. Its employees' retirement fund contributions were not matched with cash but with shares of Enron stock. When the company went under, its employees' nest eggs did too.
After it all came crashing down, Enron Chairman Ken Lay was convicted on ten counts of fraud. He was facing over 175 years in prison, but died of a timely heart attack prior to his sentencing.
So this is a case where one of the principal “bastards” in question actually died before he could begin serving his richly deserved life sentence, and the other has been serving a lengthy jail term in prison!
Now that is justice!
93
DAVID VITTER
Sometimes a Senator Just Needs a Diaper (1961– )
“We do not need international help to stop corruption, we need strong Louisiana Leadership.”
— David Vitter
Louisiana born and bred, David Vitter is also a product of Harvard and a Rhodes Scholar. Unlike fellow Southern politician bastard Bill Clinton, Vitter actually finished his course of study at Oxford University; obviously the guy is one smart cookie. And like his Louisiana Senate predecessor and fellow bastard Huey Long, Vitter has demonstrated himself to be both an opportunist and a “reformer.”
And he likes hookers. A lot.
Vitter rose from the Louisiana state legislature to the U.S. House and Senate on the strength of his solid conservative values. He has fought against abortion rights and for gun rights. He opposes expansion of gambling, called for the repeal of the estate tax, and has worked tirelessly to increase government military spending.
First elected to Congress in 1999 in a special election after House Speaker Bob Livingston's resignation in an adultery scandal, Vitter has always been quick to point out the moral shortcomings of others. Apparently in his frequent readings of the Bible he missed that whole “Let he who is without sin cast the first stone” thing. After winning reelection handily in a safe Republican district, Vitter won a Senate seat in 2004.
Allegations that Vitter had repeatedly cheated on his wife with prostitutes began to swirl around him in 2002; they forced him to withdraw from the Louisiana governor's race. These rumors resurfaced in 2007 when the “D.C. Madam” scandal involving Deborah Jeane Palfrey hit the news. Vitter's phone number appeared in records seized by federal agents in connection with the investigation; Vitter acknowledged being Palfrey's customer.
And yet the first time through the list, the Feds actually missed Vitter's number. So who does the public have to thank for catching this sanctimonious bastard in the act?
Hustler publisher, free speech advocate, and all-around vindictive son-of-a-bitch Larry Flynt. Flynt paid private detectives to comb through the reams and reams of phone numbers in Palfrey's records looking for someone exactly like Vitter. In a fitting irony, if Vitter owes both his Congressional career and his ongoing problems with his infidelity to anyone aside from himself, it's Flynt.
Flynt was also the person behind the revelations that Livingston was having an affair back in 1999. He had done much the same thing in Livingston's case as he had in Vitter's; the only difference seemed to be that he paid operatives to cull through the phone records of a Louisiana cat-house instead of those of a D.C. madam.
BABY BASTARD
Vitter paid prostitutes up to $300 to diaper him, among other things. Apparently all that moralizing during his day gig makes him want to go back to a “simpler time” in his life?
Once exposed Vitter copped to his “sin” in the requisite news conference where he asked for forgiveness from everyone, including, of course, his wife. She stood stoically behind him, as have so many other wronged women in the history of modern political sex scandals. Newspapers back in New Orleans began to report that he had once been a client of a since-shut-down New Orleans brothel. Vitter emphatically denies this, but the ex-madam who ran the place insists he did use her services, even recalling him as a nice guy: “Just because people visit a whorehouse doesn't make them a bad person,” she's been quoted as saying. Yeah, and just because someone's a U.S. Senator doesn't make them a good one, either!
“Mr. Vitter is a holier-than-thou family-values panderer. He recruited his preteen children for speaking roles in his campaign ads and, terrorism notwithstanding, declared that there is no ‘more important’ issue facing America than altering the Constitution to defend marriage.”
— Frank Rich
94
SCOOTER LIBBY
When Lying Really Does Have Consequences (1950– )
“[Libby] is intensely partisan … in that if he is your counsel, he'll embrace your case and try to figure a way out of whatever noose you are ensnared in.”
— Jackson Hogan
Irv Lew
is “Scooter” Libby graduated from all the right schools, including Yale Law School, and at one time had a distinguished career both in and out of government as one smart lawyer. His involvement in the George W. Bush administration scandal “Plamegate” has cost him both his reputation and his license to practice law. It likely should have cost him more.
Libby has held positions under several Republican presidents. He first joined the U.S. State Department's policy planning staff in 1981 and later served in the Bureau of East Asian and Pacific Affairs. During the first Bush administration, he served as under-secretary of defense for policy. In 2001, he became Vice President Dick Cheney's chief of staff. A dedicated neoconservative, Libby was one of the signatories to the Project for the New American Century's 2000 report that called for increased defense spending.
He was also the only Bush Administration official indicted and convicted in the Plamegate scandal for exposing the identity of CIA counter-proliferations operative Valerie Plame Wilson.
Libby was one of several sources who leaked Plame's status as a covert agent to reporters including conservative columnist Bob Novak of the Chicago Tribune and Judith Miller of the New York Times. Unlike fellow Bushie Karl Rove and Assistant Secretary of State Richard Armitage though, Libby lied under oath when questioned about Plamegate by federal prosecutors. Convinced of Libby's perjury, U.S. Attorney and Plamegate Special Counsel Patrick Fitzgerald indicted Libby on several counts of obstruction of justice, perjury, and lying under oath to federal investigators.
This effectively ended Libby's career in public service. He resigned when he was indicted in connection with the scandal. Through the trial, it became clear that Armitage, not Libby, was the primary leaker; Libby only passed Armitage's information along to Novak. Even so, Libby was convicted on charges of perjury, obstruction of justice, and lying to investigators.
WHAT'S IN A NAME?
No one has ever seemed to be able to get a straight answer from Libby about his first name, or, for that matter, about his nickname “Scooter.” Ostensibly named after his father, Connecticut banker Irving Lewis Leibowitz, Libby has gone by “Scooter” for most of his life. According to New York Times reporter Eric Schmitt, Libby's elder brother says that “‘I’ stands for Irv. His nickname ‘Scooter’ derives from the day Mr. Libby's father watched him crawling in his crib and joked, ‘He's a Scooter!’” At some point Libby also changed his family name from Leibowitz to the more WASP-y “Libby.”
Throughout his trial, Libby had requested reams upon reams of classified information and documents. Libby's requests raised suspicion that he may have been employing “graymail” — the threat of revealing national secrets — as part of his defense. The fact that Bush commuted his thirty-month prison sentence only strengthened these rumors.
To Bush's credit, he allowed Libby's conviction to stand, even though he voided the jail term portion of it. Effectively disbarred, Libby has since found it difficult to do the sort of work he did while a member of the D.C. bar. This cost Bush plenty of headaches during his remaining months in office. His vice president (and Libby's former boss) Dick Cheney relentlessly lobbied the president to pardon Libby until their last day in office. Bush adamantly refused to do so.
But hey, at least the little bastard didn't have to actually spend a day in jail.
95
ALBERTO GONZALES
Attorney General as Consigliore, Part II (1955– )
“I don't recall.”
— Alberto Gonzales sixty-four times during Senate testimony
If ever there was a political hack that got by on his friendships, it's George W. Bush administration's Attorney General Alberto Gonzales. Involved up to his eyeballs in all of the shady goings-on in the Bush White House, the former Texas state Supreme Court judge and White House Counsel is probably best remembered for being at the heart of the spate of politically motivated firings known as “Attorneygate.”
One of the Attorneygate lawyers was John McKay, U.S. Attorney for the Western District of Washington in Seattle. McKay had been a stalwart Republican and loyal to Bush before his dismissal. He had handled the prosecution of the alleged “Millennium Bomber” Ahmed Ressam to great acclaim. There was even talk of a possible nomination to the federal bench.
All that changed when McKay refused to call a grand jury to look into claims of voter fraud connected to Washington's hotly contested 2004 gubernatorial election. Democrat Christine Gregoire had beaten Republican Dino Rossi and won the state by a few hundred votes; the state Republican Party had blown through its court appeals trying to get the results reversed. Bush couldn't seem to do any better with someone loyal to his cause. The “lawyer” nominated to replace McKay was former Congressman Rick White, an evangelical Christian and member of the 1994 “Freshman Class” of House Republicans. The nomination didn't go far. The Seattle Times later reported that White had let his law license lapse and was thus not even authorized to practice law in Washington!
Other fired U.S. attorneys had wound up on the “wrong side” of high-profile prosecutions of Republicans. One of them was Carol Lam, the U.S. Attorney for the Southern District of California; she convicted Republican Congressman Randy “Duke” Cunningham of fraud and bribery.
During the investigation that followed Gonzales said it was an “overblown personnel matter.” A Department of Justice Inspector General's report, however, blasted Gonzales and other higher-ups. The report said, “The Department's removal of the U.S. attorneys and the controversy it created severely damaged the credibility of the Department and raised doubts about the integrity of Department [prosecution] decisions.” The report further noted that the Bush administration would not hand over any documents for which the inspector general called. Administration officials believed to be involved in the firings — Karl Rove, Harriet Miers, and others — refused to cooperate with the investigation. Gonzales resigned shortly after the report came out; eight other senior officials at the DOJ followed him.
WHAT'S IN A WORD?
During “Attorneygate,” seven U.S. attorneys were fired on December 7, 2006, midway through Bush's second term. The cuts were allegedly made for political reasons. While U.S. attorneys are political appointees and serve at the pleasure of the president, a mass firing midway through a president's term was unheard of. Many viewed the dismissals as proof positive of the political nature of the Justice Department under Gonzales.
As of early 2010, Gonzales has been unable to secure employment as a lawyer; his struggle is completely unprecedented for a former U.S. Attorney General. He is currently working as a diversity recruiter at Texas Tech University.
“Nobody is surprised to learn that the Justice Department was lying when it claimed that recently fired federal prosecutors were dismissed for poor performance. Nor is anyone surprised to learn that White House political operatives were pulling the strings. What is surprising is how fast the truth is emerging about what Alberto Gonzales, the attorney general, dismissed just five days ago as an ‘overblown personnel matter.’”
— Paul Krugman
96
ELIOT SPITZER
Hookergate (1959– )
“I'm a fucking steamroller and I'll roll over you or anybody else.”
— New York Governor Eliot Spitzer to New York State Assembly Minority Leader James Tedisco
The Bronx-born son of an overachieving real estate titan, Eliot Spitzer had great expectations placed on him from an early age. He was tough-talking and hard-driving, a Princeton-educated yuppie who graduated high in his class at Harvard Law School. Spitzer always seemed to know exactly what he was doing and exactly to whom he was doing it.
After a brief turn in private practice, Spitzer worked for the legendary Robert Morgenthau in the Manhattan District Attorney's office. While an assistant DA, Spitzer pursued organized crime's involvement in Manhattan's garment industry with an innovative application of antitrust laws. He was instrumental in bringing down the Gambino crime family; he went after the trucking indu
stry monopolies that brought them the lion's share of their ill-gotten gains. Spitzer also prosecuted other kinds of racketeering including prostitution rings which, as we shall see later, came back to haunt him.
After another stint in private practice Spitzer ran as a Democrat for New York State Attorney General in 1998. He won a close race over Republican incumbent Dennis Faso.
Campaigning on his successes as attorney general, Spitzer was elected to New York's governorship in 2006. The beginning of his term in office was promising; Spitzer had always been someone who knew how to get things done. He promised to balance the state budget and was initially successful. But within a year the state was once again running a deficit, and Spitzer was openly feuding with members of his own party in the legislature over his high-handedness and their well-known stubbornness.
And all this time Elliot Spitzer had a dark secret. He had a thing for high-priced hookers. On several occasions over the course of a decade — all while serving as attorney general and then as governor — Spitzer went to Washington, D.C., to patronize high-priced call girls from the “Emperors Club VIP Service”; he spent upwards of $80,000 on them. Spitzer resigned the governorship when it was revealed that he was Emperors Club's Client No. 9.
The Book of Bastards Page 21