• Enron Chairman Kenneth Lay called two of the Bush administration's cabinet officers, the secretaries of treasury and commerce, seeking federal support, just before the company filed for bankruptcy. President Clinton's former secretary of the treasury also called a high ranking Treasury official around this time to seek support for the company.
• Enron officials had at least six meetings in 2001 with Vice President Dick Cheney and other administration officials who were drafting energy policy. The eventual administration recommendations, focusing on increasing energy supplies at the expense of the environment, were very favorable to Enron.
• Last winter, Enron Chairman Kenneth Lay supplied President Bush's chief personnel adviser with a list of preferred candidates for the Federal Energy Regulatory Commission (FERC). Lay also offered FERC member Curtis Hebert Jr., who disagreed with Enron on certain issues, political support to retain his position if he changed his views. He did not and was forced out by the administration.
• Enron supporter U.S. Rep. Tom Delay (R-Texas) successfully steered a bill based on the above-referenced White House energy program through the House in August 2001.
• In December 2000, Sen. Phil Gramm co-sponsored legislation with Enron's support that exempted energy derivative trading (Enron's main business) from government regulation. The bill passed and was signed by President Clinton.

Pending Campaign Finance Reform Legislation and Its Impact on Enron

• The Senate-passed McCain-Feingold and House companion Shays-Meehan bill would ban all soft money contributions and stop corporate and union treasury financing of TV and radio sham issue ads that are really campaign ads. The McCain-Feingold bill would raise the individual hard money contribution limit from $1,000 to $2,000 per election, as would the Shays-Meehan bill except for House elections.
• Under the legislation, Enron and its top executives would no longer be able to donate large chunks of soft money to parties (70% of Enron's recent political contributions) or contribute to Section 527 committees established or controlled by candidates or officeholders (nearly three-quarters of their 527 contributions). However, individual contributions from Enron employees, 20% of total Enron donations, could theoretically double under McCain-Feingold, though a lesser increase, perhaps 50% is more likely.
• If pending reform legislation succeeds, it would cut off the preponderance of Enron's contributions: soft money coming in large chunks from the corporate treasury or top executives. Enron executives and employees would remain free to contribute hard money individually and through company-supported PACs, giving respectively up to $2,000 or $5,000 per candidate per election. In the 1999-2000 election cycle, Enron's contributions included $490,000 from individuals and $280,000 from PACs out of a total $2.444 million in donations. And, as noted above, under the pending reforms the scope for individual contributions would increase.

Current Status of Pending Legislation

• A House discharge petition to force consideration of the Shays-Meehan bill has 214 signatures, and two additional members have promised to sign after the House reconvenes. If two more signatures can be garnered, Speaker Dennis Hastert will have to reverse his position, bring up the bill expeditiously under a fair procedure, and hold a vote. The House has approved similar legislation in 1998 and 1999 and is likely to vote for it again if it is considered.
• The Senate is very likely to approve the bill when it passes the House since it has been cleared with Senators McCain and Feingold -- though a last minute filibuster effort is possible. President Bush has indicated he will sign a bill sent to him by Congress.

Further Campaign Finance Reforms Will Be Needed

• Full public financing of federal elections is necessary to curb the influence - and appearance of influence - of wealthy special interests like Enron over public policy and broaden the opportunity for individuals to run for office. Since 1976, the U.S. has had a system of voluntary public financing, including candidate spending limits, for the presidential general election, though this has been subverted in recent years by party soft money spent on behalf of presidential candidates and the proliferation of broadcast sham issue ads that are really campaign ads. The pending reform legislation would eliminate these loopholes, upholding the presidential public financing system. We also have a partially publicly financed presidential primary system. We need to move toward full public financing (including free TV advertising for candidates which will lower costs) for presidential primaries, congressional primaries and general elections.
• In the past few years, four states (Arizona, Maine, Massachusetts and Vermont) have enacted wide-ranging public financing laws, and others are expected to consider such legislation in 2002 and subsequent years. While state reform for state elections is no substitute for federal action, state innovation provides a good model and precedent for moving forward in Washington.