Category: Old Dish

Let’s say these Enron-funded pundits did nothing illegal or unethical. Let’s say they just took $50,000 minimum from this company for legit extra-curricular work. Maybe they didn’t know what a scam Enron was at the time. The point is at some point in the future any big corporation could be a scandal. And what does the pundit do then? He can disclose, sure, as Krugman and Noonan have. But that doesn’t get rid of the problem, unless they actually return the money. Isn’t there some cloud inherently over Krugman’s and Noonan’s subsequent writing about Enron? At least some of their readers now suspect something fishy went on. Haven’t these pundits essentially undermined themselves as independent watch-dogs of the culture? Isn’t the entire point of the press to be independent – observers of problems not part of them? Krugman and Noonan and Kristol cannot now be taken fully seriously whenever they write about Enron. John Ashcroft recused himself from any professional attorney-general dealings with a company he once got money from. Shouldn’t Krugman and Noonan and Kudlow and Stelzer and Kristol now recuse themselves from any further Enron commentary?

AND WHY IS NOONAN SO VAGUE?: Does she really not know how much she got from Enron? She gives a lee-way from $25,000 to $50,000. C’mon, Peggy. You should have a 1099 hanging around somewhere. You didn’t shred it, did you?

SOME LIKE IT HOT: Many people in the magazine business have their Tina stories. Here’s mine. At some point in the Tina era at the New Yorker, I got a call from Tina asking me to write a piece about “religion.” After routine flattery, she got to the point. “We have a fabulous issue coming up on religion and Dick Avedon is photographing several religious figures and icons and I wondered whether you could do an accompanying essay,” she asked in her clipped, breathless tone. “About what?” I asked. “Religion is a pretty big topic.” “Oh, that would be up to you,” Ms. Brown replied. “Anything that’s hot right now in religion. Anything hot.”… continued here.

Am I hallucinating? Peggy Noonan now joins the $50,000 Enron pundit club. At least she discloses the sum in her column (even if you have to do some math to figure it out). Why doesn’t she just say the total? Same reason as Krugman. It’s damning. Then she has the gall to write, with respect to the Enron scam, “How rich do you have to be?” I don’t know, Peggy. You tell me.

It finally happened. Paul Krugman finally realized he has a serious ethical problem on his hands. He won’t concede that, of course. Instead he keeps putting up smokescreens and diversions. The most preposterous is that Krugman – this millionaire pundit with the New York Times at his disposal – is a victim of the “Vast Right Wing Conspiracy.” Hmmm. Where have we heard that before? Is he aware that the paper that broke the news of his $50,000 Enron sinecure was, er, the New York Times, that bastion of conservative bias? Is he aware that this website – “too vile to read” in Krugman’s own words – also exposed conservative Bill Kristol’s $100,000 Enron lucre, conservative Larry Kudlow’s $50,000 and (see below) conservative Irwin Stelzer’s repeated non-disclosures of his own deep involvement. That’s three out of four pundits on the right. That’s some self-hating Vast Right Wing Conspiracy.

THE HAVES AND HAVE-NOTS:You’ll notice one detail missing from Krugman’s apologia – the amount of money he got. Why won’t he mention it? Because it’s the most damning evidence against him. I think the average New York Times reader would be shocked to hear that their economics columnist, whom they expect to be above conflicts of interest, is richer by $50,000 thanks to his ties to Enron and that he has bragged about it. Krugman also knows that. That’s why he won’t mention it. Then he even boasts that it was below his going rate! He then tells us in all seriousness that the criticism of his enmeshment of Enron is a function of the Right’s attempt “to discredit concerns about the gap between haves and have-nots.” Excuse me, Mr. Pundit “Who Gets Money Calls”, don’t you think you have a little credibility problem here? He says criticism of a super-rich pundit is a smokescreen to deflect attention from “a leftist morality play: wealthy executives make off with millions while ordinary workers lose their jobs and their life savings.” Puh-leaze. In fact, scrutiny of Krugman’s buckraking is precisely an attempt to expose the fact that Krugman himself is very much one of the “haves,” a specific example of the gap between haves and have-nots. He is the one absconding with $50,000 worth of dirty money from a criminal enterprise “while ordinary workers lose their jobs and their life savings.” Earth to Krugman: You’ve got a share of those life savings in your wallet. If you don’t have the decency to give your share back, then please have the decency to quit your sermons about others.

NOW, STELZER: As part of the right-wing attempt to nail Enron on liberals, I’ll now report on Enron’s connections with Irwin Stelzer, a prominent conservative writer, a contributor to the Weekly Standard and my own paper, The Sunday Times of London, as well as many other publications, including the Financial Times. Anyway, Mr Stelzer is, by all accounts, a key member of the Enron-financed pundit circle. He was key to encouraging Kristol, Krugman and Kudlow to join the Enron gravy train. He disclosed this fact himself in the Weekly Standard of November 27 2001. Alas, Stelzer wrote many articles about Enron before that date and, unlike Krugman, never disclosed a thing about his ties to Enron, let alone his financial remuneration. I base that on a Nexis search and a search through the archives of the Sunday Times. I emailed Stelzer to ask him if I had somehow missed such a disclosure, but Stelzer does not apparently believe in returning another journalist’s calls or emails – even from a fellow columnist on the same paper. I should add that I agree with much of what Stelzer writes and have no doubt that he is sincere in everything he has written. Nevertheless, disclosure in such a matter is a no-brainer.

THE PAPER TRAIL: Here are some extracts from Stelzer articles over the last few years that mention Enron. On October 11, 1998, in a column in the Sunday Times and the Financial Times, Stelzer wrote:

“Enron is putting money into solar and wind power, claiming that renewable energy can now produce electricity at prices that are almost competitive with coal, when coal’s environmental costs are counted. But those profits, if they are ever to be realised, are unlikely to come soon enough or be big enough to restore the industry’s lustre. The good news is that some companies appear to be well positioned to survive in a low-price, low-demand future … Add Enron to the list of those likely to thrive in the future. An aggressive company, Enron is an efficient operator of gas power plants that has led the way in energy trading and is in the process of adding about 1,000 professionals to its London staff.”

“Add Enron to the list of those likely to thrive in the future.” I don’t know whether he was being paid by Enron at that point in time or not. Either way, he made no disclosure. On December 2, 2001, as the scandal was breaking, he wrote a semi-defense of Enron in the Sunday Times:

“What Enron and Lay deserve to be remembered for is leading the fight for competition. This battle was waged in the halls of Congress, in state legislatures around the country, and in regulatory agencies at federal, state and local levels… [P]erhaps most important, Enron fought to allow customers and suppliers to strike whatever bargains they found mutually advantageous, rather than be required to buy and sell energy through the monopolies that control transmission facilities… [T]here is as yet no indication that the mistakes – among them expensive failures in new ventures and in some overseas projects – were other than honest ones, or that investors were deliberately kept in the dark or misled about the company’s finances.”

Again, there was no disclosure. (This is particularly odd, since the column seems to be an edited or re-worked version of his November 27 2001 piece for the Weekly Standard. The Standard piece included a disclosure. In the Sunday Times piece, in a paragraph of similar wording, it appears to have been removed.) On December 9, 2001, Stelzer revealed that Ken Lay was at one time on the short-list for Bush’s Treasury Secretary:

“Ken Lay, the chief of Enron, at the time one of the country’s success stories, was on the shortlist, but was disinclined to disrupt his cherished family life by moving to Washington, a decision he must now regret.”

Well, if Lay regrets the fact that he ruled himself out for Treasury Secretary, I’m sure Bush is extremely relieved. (If true, isn’t it a big story that Lay was on the short-list?) Again, Stelzer gave no indication of his ties to Enron in this column. On December 16, he mentioned Enron in a routine sentence, and again made no disclosure. Finally, on January 20, of this year, he wrote – again with no disclosure of his ties – that the fleeced Enron shareholders had it coming to them:

“The retreat from efforts to give individuals more say in their affairs, and to reduce government power, has, of course, been accelerated by the collapse of Enron. Many of that company’s 20,000 workers elected to invest their retirement funds in the company’s stock, even though they were offered several other investment plans. They gambled on becoming rich and lost their bets.”

It gives me no pleasure to record these instances. Perhaps there is an innocent explanation for them. I have no clue since Stelzer has not responded to any inquiries. Nor has he said how much money in total he received from Enron, but, given Stelzer’s role, it may well exceed Bill Kristol’s $100,000. So we appear to have a simple case of a journalist writing boosterish columns about Enron, being on a paid Enron advisory board, helping recruit other journalists to it, and only disclosin
g his ties in a single instance after years and several articles in which Enron was mentioned. This was the man who sat on the same board and was big buddies with Lay, Krugman, Kristol and Kudlow. It’s not getting any prettier, is it?

I apologize if you couldn’t get through to the site today, or if it was really slow. Our Internet service company told us this evening that we were subject to a “Denial of Service” attack. What that means is that someone somewhere over-loaded our server with multiple simultaneous requests, shutting down the system. I’m told this couldn’t happen by accident or heavy traffic. I consider it a compliment.

KRUGMAN’S OPINION: Several of you noticed that Paul Krugman’s initial response to the postings on this site about his Enron $50,000 sinecure was subsequently changed. He first said that this site was “too vile to read.” Then he amended it to say that it was “too mean-spirited to read.” I prefer “vile.”

MEDIA BIAS WATCH: “The implications of “Anarchy, State, and Utopia” are strongly libertarian and proved comforting to the right, which was grateful for what it embraced as philosophical justification.” – Christopher Lehman Haupt’s New York Times obituary for the great Robert Nozick (a mentor of mine). Justification for what? The implication here is that conservatives are just greedy, bad people and that Nozick gave them some patina of philosophical justification for their selfishness. How about the daring notion that Nozick gave the right new philosophical depth, nuance and style?

“[The pundits’] reluctance to discuss the matter was typical of the “buckraker” community, which has dug in its heels about suggestions that prominent journalists should disclose sources of their income from special interest groups, much as politicians are required to do. The basis of the argument for disclosure is not that a pundit’s power is identical to a politician’s. Rather, it is that both groups operate in the public eye, rely on public trust, and deeply affect public opinion and public life. Both therefore need to make extra efforts at disclosure because of the consequences when the public suspects the worst of them.” – James Fallows, “Breaking The News,” in a chapter called “The Gravy Train,” page 113.

“A year ago, “unilateral” described the Bushites and “multilateral” the old Clintonites. But we have shown by our willingness to go it alone that we need not go it alone.” This is his best column since 9/11.

IRAN, AGAIN: By far the most ominous development in this war so far have been the Iranian leadership’s shenanigans. First they funneled large amounts of arms to the PLO. Now they’re trying to undermine the fledgling regime in Afghanistan. Why? They’re scared. They know that their own population is restless. They’re worried that a restored monarchy in Kabul would lead to greater pressure for a similar shift in Iran. Above all, as the Washington Post reports, they’re

” alarmed at the presence of Western military forces next door and uneasy at the prospect of Afghanistan entering the fold of pro-Western democracies. “They see this as a threat; they can’t tolerate a liberal presence in the area, and they fear the development of a more liberal, open society here,” [a top aide in Kandahar] said.”

My view is that it’s way past time for them to be scared. It’s time for them to be terrified. We need to funnel more money into the Iranian opposition and prepare for a military intervention to back it up.

MASCULINITY WATCH: Giorgio Armani is on the same wavelength as Tom Ford. “I want to pay homage to the workers, to the dignity of the workers with their simplicity and straightforwardness,” Armani told reporters recently. His latest designs include flat caps, military boots and donkey jackets. Then there’s the new Esquire. Here are the cover-lines: “How to Be Tough; Inside the Rumsfeld-Cheney War Machine; Bill O’Reilly’s Advice for Challenging Times; Jennifer Garner, The Toughest Woman on TV; Special Section: The Lost Art of Hand-to-Hand Combat; Roughing It; Inspiring the Troops; Being a Stand-Up Guy.” Grrrr. These aren’t the ’90s any more, are they?

PBS GIVES THE MONEY BACK: WGBH-TV in Boston has decided to get a sponsor other than Enron for its upcoming series called ”Commanding Heights: The Battle for the World Economy” due for broadcast in April. Keeping the money is a distraction from what they are trying to do. Paul Krugman and Bill Kristol, are you listening?

TALK VERSUS THE NEW YORK SUN: The Boston Phoenix does a match-up.

THE END OF ARAFAT: Hamas is now the only group that matters.

PFIZER’S PFIX: interesting piece by Deroy Murdock in NRO today on a private sector plan by the drug company Pfizer to give needy seniors a flat-fee $15 a prescription card. I hope they gain market-share and some kudos for what might well be a loss-making venture. It sure beats some of the more ambitious plans put out there by Congressional Democrats that would drain government coffers for decades to come. (The piece, by the way, is a good example of full disclosure. On the page, there’s a Pfizer ad. In the piece Murdock says he got paid for two speaking gigs for Pfizer. How much, Deroy?)

JACK’S WHACK: Jack Shafer takes a good-natured whack at yours truly in Slate. Shafer says I’m full of it because last summer, I defended the right of a one-man website to accept advertising. He says that makes my criticism of Paul Krugman incoherent. I don’t agree and here’s why:

a) There’s a difference between getting paid by a major corporation for a shady “brick in the wall” sinecure and then disclosing it some time later – and getting a lone ad for a website and announcing it in advance.

b) There’s a difference between an ad for a year for $7,500 ($20 a day) and a junket for doing next to nothing for a weekend for $50,000. I think the size of the fee is relevant. Why? Because most readers of the Times would think it’s relevant. I think most people understand a hack’s needing a few ad bucks for his website expenses – but a $50,000 “brick in the wall” junket is another thing entirely. Krugman thinks I’m naxefve for being appalled by vast amounts of corporate cash being handed over to journalists. Well, a whole lot of Americans outside the gilded pundit class are naxefve then, and I’m glad for it. If there wasn’t something dubious about it, why is such a practice barred for all New York Times columnists?

c) I disclosed the deal BEFORE I even got the money and told the New York Times. It was after the Times story that all the media watchdogs, who have been silent as the grave on the Krugman-Kristol story, got on my case. (Romenesko? Brill? Fallows? Peters? Are you out there?) My position was that it wasn’t a conflict, that I could see no way to fund a one-man website without the appearance of conflict, but that, if people persisted in seeing a conflict, I didn’t want to defend myself against those charges, especially with a controversial group like drug companies. It would have distracted from my journalism, just as Krugman’s Enron moolah distracts from his. So I gave the money back. Complicated? Yes. Incoherent? Nah. Look what WGBH just did above.

d) I haven’t been blasting Enron “cronies” while being one of them myself.

e) Unlike legit advertizing money, all Enron money, to my mind, is tainted. These people were the equivalent of thieves. They effectively stole from their shareholders in order to pay people like Krugman and Kristol. I think there’s a difference between a legit, disclosed ad and dirty money from the likes of Ken Lay. If he had any sense, Krugman would regain the high-ground by giving the money to the relevant charities, like most pols. In fact, he has more of a reason to do so because the politicians’ money went to campaign expenditures, while his went directly into his extremely fat wallet. And he got more for one sinecure from the Enron crooks than any congressman or Senator got in ten years.

Okay, Jack. Now how are you going to defend Bill Kristol?

DERBYSHIRE AWARD NOMINEE: “There’s more junk than that being marketed by NBC. MTV, a cable network designed for kids, is a filthy, disgusting, decadent, mind and soul stealer. I’m assuming the conscious adults reading this column have already caught on to that. I’m assuming you would never let your kids watch HBO without supervision and screening. And an even better solution for many families may be to throw the TV set where it belongs – in the recycling heap.” – Joseph Farah, WorldNetDaily.

The British tabloid that led the charge against “torture” and “barbarism” at Camp X-Ray actually conducted a poll to see how its readers felt. “Yesterday,” the Mirror wrote, “we asked if you condemn the US treatment of al-Qaeda prisoners at Guantanamo Bay. As more criticism was heaped on Camp X-Ray from around the world, 91% of voters supported America.” The response was from close to 20,000 readers. That’s the real Britain and the media elites in London have no clue how to cater to it sometimes.

“Conventional wisdom in Washington, especially conservative conventional wisdom, is that campaign finance reform doesn’t matter as an issue. Conservatives resolutely refuse to learn any lesson from John McCain’s thumping of George W. Bush in New Hampshire, when he made campaign reform his central theme — or from Mr. McCain’s subsequent defeat after he veered from that message. But campaign reform turns out to have surprising political salience. Conservatives should welcome this fact, since they have no stake in the current system… Is it too much to ask our fellow Republicans and conservatives to rethink their self-defeating defense of the current corrupt campaign finance system, and shape campaign reform legislation that would be good for them and for the country?” – Bill Kristol, New York Times, September 27, 2000, on the doleful influence of large amounts of corporate money in politics. While he wrote this piece, Kristol was in the midst of getting $100,000 from Enron for political advice.

CHOMSKY’S LIES: Noam Chomsky cited Human Rights Watch in his recent Salon interview for his claim that Clinton’s feckless bombing of a pharmaceutical plant in Sudan took tens of thousands of lives. Human Rights Watch denies it ever made such a statement.

According to sources who would know, the Advisory Board had about eight members, not all of whom were pundits. Their most recent meeting, attended by Bill Kristol, was at Enron headquarters in Houston. There tended to be a liberal slot and a conservative slot (Krugman once held the liberal spot). The $50,000 rate was, according to one attendee, “off the charts” in terms of the usual fees paid for speaking. I’d confirm that. A mega-star like Cornel West gets at most $15,000 for a gig. (For talks I’ve given at universities, I get at most half that). $50,000 is Colin Powell moolah. For Kristol, it must have been a big deal. Still no response from Irwin Stelzer, who was the brains behind the enterprise.

FORTUNE’S ENRON PUFFERY: In what must rank as a major embarrassment for Fortune magazine, here’s an Enron press release from last year blaring the news that Fortune christened Enron the most innovative American company for six years in a row. According to the release, “Enron placed No.18 overall on Fortune’s list of the nation’s 535 ‘Most Admired Companies,’ up from No. 36 last year. Enron also ranked among the top five in ‘Quality of Management,’ ‘Quality of Products/Services’ and ‘Employee Talent.'” So as the corruption worsened, a major business magazine actually raised its rating of the place. Go figure. This, recall, was the same magazine in which Paul Krugman wrote his puff piece in 1999. That same year, Fortune named Enron one of the best companies in America to work for. They didn’t mention the 401ks.

Some interesting leads. The first is a source at Enron who communicates that there was indeed a budget set up for ‘opinion leaders.’ I’m told the annual amount was some $1 million to give to various pundits, intellectuals and journalists, in return for “advice” about the world, etc. That suggests there are several other columnists/pundits out there who have been on the Enron gravy train. As to the going rate of $50,000 for a couple of meetings, this is less akin to traditional speaking fees (at the most about a fifth of that) than it is akin to payments to members of a board of directors. Kristol, Krugman and Kudlow (the only recipients of Enron money we now have) were de facto members of a satellite Enron board, just one body in a dizzyingly complex set of corporate arrangements designed to conceal conflicts of interest, tax loopholes, hidden losses, and the like. The sheer scale of their remuneration is the most damning fact about this. Nor were Krugman and Kristol just one-off speakers, they were institutionally part of Enron, on a board that was set up and met year to year. Although this had been going on for some time, Kristol and Krugman only disclosed their Enron remuneration in 2001. What was the point of the board? According to Krugman, who was on it, “This was an advisory panel that had no function that I was aware of. My later interpretation is that it was all part of the way they built an image. All in all, I was just another brick in the wall.” I think that means that Krugman himself acknowledges this was yet another shell institution by which Enron could coopt and schmooze journalists for money. And those journalists took it – eagerly. As to my request for full disclosure from Irwin Stelzer, a journalist, it’s now around noon on Wednesday and no response.

THE WAGONS CIRCLE: Odd thing at the New York Times site this morning. If you try and join an online discussion of Paul Krugman’s columns, you get the following message: “The item ‘.f20ac13/0’ does not exist, it may have been deleted.” Free speech halted at the Times? Say it ain’t so.

PUNDITGATE – YOUR TURN: An email worth sharing in the Dish:

“The tale of Krugman and Enron illustrates an interesting point that isn’t widely known: conflict of interest rules are typically much tougher for journalists than for academic economists. My understanding is that staffwriters for magazines like Business Week are very nearly forbidden from taking any money from anyone for speaking engagements or “advisory” services, and required to put most of their investments into indexed mutual funds. But academics can basically take money from whoever offers it, and during the 1990s, a fairly large number of high-powered economists at top universities sought ways to cash in. Krugman was well within academic standards for conflict of interest, but he is skating the thin edge (at best) of modern journalistic standards. I think the big money available to top academic economists has fractured the old social contract, where a professor viewed lifetime job tenure as a reason to put their ideas in the public realm at low cost, and was willing to get by on a college paycheck, along with maybe a little money from writing books or a $500 speech honorarium here and there. Now there’s a sense among many top professors that the academic salary is just a base, and seeking compensation for everything else is how to play the game. If you could check the tax returns of the economics and B-school faculty at Harvard, MIT, and other places, I suspect that Krugman’s $50,000 payment for the Enron advisory board is just the tiny tip of a very large iceberg.