By Thomas B. Edsall and Dana Milbank Washington Post Staff Writers Sunday, January 20, 2002; Page A05
AUSTIN -- Those attending the annual Republican National Committee meeting here expressed confidence that the scandal surrounding Enron Corp.'s bankruptcy would not become a political liability -- and outlined defenses in case it does.
Elected officials and party faithful at the GOP gathering made three arguments why the collapse of the well-connected company would not sway voters in November's midterm elections: The controversy is corporate, not political; the Democrats also have uncomfortable ties to the company; and Democratic scandalmongers may face a voter backlash as Republicans did during the impeachment-tinged election of 1998.
"Enron is an issue but not a political issue," Republican National Committee Deputy Chairman Jack Oliver said. "Enron is an issue of trying to solve problems so they never happen again."
That view, expressed by many here in Austin, found some agreement in an unlikely place: the parallel Democratic National Committee meeting in Washington. "At home I have not heard anyone discuss the connection between Enron and politics," said Nassau County (N.Y.) Executive Tom Suozzi. Attending the conference from across the country, Los Angeles City Attorney Rocky Delgadillo concurred: "People in Los Angeles connect Enron with the bad energy companies that jacked up prices and caused blackouts. I don't think they've made the leap to politics yet."
Still, Democrats said the investigation of Enron by Congress and the Justice Department's criminal inquiry can only serve to reinforce an image of Democrats as the party of the little guy and Republicans as the party of big business. Even before the Enron debacle, President Bush was perceived in polls as closer to corporate interests than to those of common citizens. Regardless of GOP complicity, the case of Enron -- in which thousands of workers lost their savings while executives cashed out -- serves as a sort of shorthand for a Democratic class-strife message.
"At the instinctive level, people understand big business is a Republican constituency," Rep. Anthony D. Weiner (D-N.Y.) said at the DNC meeting. "Enron will be the word on the floor of the House and Senate for the next year. It will be a noun, it will be an adjective, it will be a verb. You will see the Enronization of everything. . . . I think Enron will linger like a cloud over this election."
The close margins in the narrowly Republican House and narrowly Democratic Senate make predictions for November's contest inherently unreliable. Many other factors will be at work and could easily overshadow Enron. Democrats will blame Republicans for the loss of budget surpluses and for the recession; Republicans will say Democrats want to raise taxes. Top Bush political adviser Karl Rove even argued on Friday for using Bush's handling of the anti-terrorism campaign to the GOP's electoral benefit.
In the upcoming legislative session, Democrats believe the Enron taint will aid their program. They say they will use Enron to block any new effortto pass the GOP's stimulus package, which would have helped Enron. They will attack the Bush energy proposal as a product of Enron influence. And they will use Enron to push for passage of campaign finance reform, which is close to earning a vote in the House. They may also use Enron hearings to make the case for tougher financial regulations.
"Enron is a metaphor for the Republican administration: cooking the books, covering up, the top guys taking their money off the table and leaving the working folks holding the bag," said DNC Chairman Terence McAuliffe. "I am going to challenge [RNC Chairman Marc] Racicot to join me in lobbying for campaign finance reform."
New RNC communications director Mindy Tucker said the GOP has nothing to fear. "We want to talk about Enron, we want to talk about the investigation, we want the American people to know what happened," she said. "There are a lot of things we are doing on Enron that we will be talking about that will be part of the message."
Racicot, elected RNC chairman in Austin, made the same point: The Enron matter is business, not politics. "There obviously may have been some mistakes made here in terms of management judgment, but my view of it is so far that there is no evidence suggesting there is anything to be concerned about in terms of an abuse of discretion by a public official at any point in time," he said.
Yet, even while offering those confident words, Racicot was forced to spend much of his time at the meeting explaining how he would handle his continued employment with a Texas law firm with a lobbying arm in Washington and a host of corporate and trade association clients that included Enron until recently. Racicot, who has said that he would no longer lobby on behalf of clients and that Enron is no longer a client, said he would embrace the chance to testify to any of the 10 congressional committees investigating Enron: "I don't have the least bit of concern or reticence about that."
A few Republicans, such as Bush strategist Rove, see the possibility for gain if Democrats push too hard on Enron. "If anybody tries to turn this intoa political circus, it's going to backfire on them," he said. "Remember, these deals that are the core of Enron's problems occurred in '97, '98, '99 and 2000. So the people are going to say, 'Why didn't the regulators catch it then?' " when Democrats held the White House.
The RNC has already moved to remind the public that, politically speaking, Enron was an "equal opportunity employer." Enron chief executive Kenneth L. Lay may have been Bush's biggest political patron, and the disgraced company is tied to the White House through former consultants and shareholders, but Democrats have awkward affiliations, too.
Thomas "Mack" McLarty, former chief of staff to President Bill Clinton, lobbied for Enron, as did former Gore aides Jack Quinn and Greg Simon and Clinton treasury and regulatory officials. In 1993, Vice President Al Gore attended a fundraiser chaired by Lay for a Senate candidate, and in 1996 Clinton invited Lay to the White House to honor him as a "corporate citizen."
The RNC also pointed out that six of the top 10 recipients of Enron money in the House are Democrats and that half of Senate Democrats have received Enron contributions. Senate Majority Leader Thomas A. Daschle (D-S.D.) received $7,000. Several of those contemplating investigations of Enron, including Sen. Joseph I. Lieberman (D-Conn.) and Rep. Henry A. Waxman (D-Calif.), have taken contributions from the company, the RNC noted.
But that is not stopping Democrats from attempts to make Enron a political advantage. The Democratic Senate Campaign Committee sent out a news release Friday decrying North Carolina Senate candidate Elizabeth Dole's "too-cozy relationship with Ken Lay," including a September fundraiser. Florida Democrats made noise about Gov. Jeb Bush's appearance for a fundraiser at the home of a former Enron president.
Right here in the president's home state, the Enron scandal has hurt Rick Perry, Bush's GOP successor in the governor's office. On Friday, Perry accepted the resignation of Max Yzaguirre, a former Enron executive Perry had picked to run the state Public Utility Commission. Lay donated $25,000 to the Perry campaign the day after Perry named Yzaguirre to the post. Perry has said he would not return a total of $200,000 he has received from people with ties to Enron.
Republicans can expect to hearmore of the same. "It's not as complicated as we're making it," said Prince George's County Executive Wayne K. Curry, a Democrat. "You just go into the barbershops and beauty parlors and say, 'They're their guys.' "
Staff writer David S. Broder in Washington contributed to this report. Milbank reported from Washington.