Why Enron Chief Was Better Than "Philanthropists"
Bill Gates, Warren Buffett and Ken Lay--all thieves. Compared to the
world's two richest men, however, Lay was small potatoes. So why are we praising
them, and kicking Lay while he's down--six feet down?
Yeah, yeah, I watched the documentary ("Enron: The Smartest Guys in the
Room"). Lay and his sidekick CEO Jeffrey Skilling, used bluster, lies,
a bunch of fictional Excel spreadsheets and an updated Ponzi scheme to create
what appeared to be the nation's seventh largest energy company. Even when the
truth--that Enron had negative net assets--was about to come out, Lay continued
to talk up his BS company and its fraudulently inflated stock. Shareholders,
many of them employees whose retirement savings were invested entirely in Enron,
believed his reports that the company's finances were solid. Meanwhile, while
he lied through his teeth to thousands of men and women who would be ruined
because they believed him, he secretly cashed out millions of dollars of his
Federal prosecutors say that Lay and Skilling illegally bilked Enron out of
$183 million, including company bonuses paid during their conspiracy to pump
up the company's stock and Lay's use of its line of credit to pay off millions
in personal debt for such items as a $200,000 yacht for his wife Linda's 2001
birthday party. When Lay died last week of a heart attack, having been found
guilty of a fraud that led to the 2001 collapse of Enron, he had been awaiting
sentencing. The New York Post, noting that Texas law may protect Lay's estate
from forking over the $43.5 million the Securities and Exchange Commission had
sought as restitution, published one of its instant classic front pages: pictures
of the deceased executive and a coffin, under the headline "Before They
Put Cheato Lay's Coffin in the Grave, CHECK HE'S IN IT."
True, Lay was scum. But the "I Spit On Your Grave" act is a new phenomenon.
Cruel and avaricious titans of industry typically receive the kid gloves treatment
when they pass on to the Great Equities Desk. In 1989 Steven J. Ross, chairman
and chief executive of Time Warner, paid himself a record $78.2 million--more
than 9,000 times the average salary of his employees, thousands of whom he had
cheerfully laid off the year before. When some cynics mentioned that Ross' victims
might be jumping for joy at the news of his 1992 death from prostate cancer,
they were universally and loudly denounced as rude and unfeeling.
Lay stole $43.5 million. Ross overpaid himself at least $78.2 million (worth
$121.9 million today). Now consider investor Warren Buffett and Microsoft chairman
Bill Gates, worth $44 billion and $50 billion, respectively, according to Forbes.
Each one has accumulated one thousand times more cash than Ken "#1 Bush
Campaign Donor" Lay. But we're supposed to like, and even admire, these
Buffett and Gates may not have broken any laws--although, in Gates' case, the
Clinton-era Justice Department thought he'd cheated millions of American consumers
by violating anti-trust laws--but it's hard to see how their billions are more
ethically legit than Lay's misbegotten millions. Sorry, but "working hard"
doesn't cut it. I don't care if you stay late at the office every night, work
weekends and holidays, or you never go on vacation. It doesn't matter
how smart, imaginative or lucky you are. It just isn't possible to earn $44
billion in a single lifetime.
Not honestly, anyway.
Gates and Buffett have created a lot of pain and misery on their way to "earning"
their combined $94 billion. (Bear in mind, that's what they're worth. That doesn't
include what they've spent.) Gates scammed his dough the old-fashioned way:
overcharging his customers and underpaying his employees. Somewhere along the
way to accumulating $50 billion, doesn't it occur to a guy that he could charge
a little less than $200 for buggy, instantly obsolete, software? Or that it's
time for a company-wide raise? He could even hire (gasp) unionized American
workers instead of building plants in the Third World and relying on the slave
labor of prison inmates!
It's harder to draw a direct line between Buffett's convoluted arbitrage machinations
and the reduced incomes of thousands of other people, but anyone who has been
downsized by a shareholder-terrorized managing board has experienced the impoverishing
of the workers whose employers he targets.
Now we're supposed to be shocked and awed by Buffett's decision to give $37
billion--about 85 percent of his assets--to Bill Gates' foundation. "Stunning
in its generosity," raved the Christian Science Monitor. "The scale
of Mr. Buffett's philanthropy is matched by its good sense," chimed the
Washington Post. Recent grants paid out by the Gates Foundation include $100,000
for the museum at Pearl Harbor, $241,500 "to provide sustainable public
access computer hardware and software upgrades" to libraries in Los Angeles,
and $21 million "to provide curriculum and support for teachers as a part
of a transformation that aims to prepare...Chicago public school students for
success in post-secondary education."
Good causes all, but maintaining Pearl Harbor is one of the reasons
we pay federal taxes. Why does a national war memorial need help from Gates?
One can't help wonder whether L.A. libraries and Chicago schools might be less
cash-strapped in the first place if so much of our society's wealth hadn't been
monopolized by America's tiny, increasingly powerful oligarchy, rather than
going to city taxpayers in the form of fair wages and affordable computers.
Factoid: the average member of the Forbes 400 list of the richest Americans
has seen his income rise 3.5 times--from $800 million (adjusted to 2006 dollars)
to $2.8 billion--in the last 20 years. Meanwhile, real income for more than
half the population increased...zero. Nada. Zip.
To his credit, Buffett acknowledges the rising income disparity. "What
has gone on in this country in recent years is a huge benefit to the very rich
and not much that relief to those below," he told Fortune in 2005. But
philanthropy won't slow the United States' slide into Third Worlddom. And it
doesn't help the philanthropists' victims. All things considered, a $45 million
lout like Ken Lay hurts America less than a $44 billion one like Bill Gates.
Consider a burglar who boosts your TV and then, thinking better of
it, donates it to an orphanage. His act of generosity beats the alternative--keeping
it for himself. But you'd probably prefer that he'd returned it to you, or better
yet, never stolen it at all.
Ted Rall is the author of "Silk Road to Ruin: Is
Central Asia the New Middle East?," an analysis of America's next big foreign
Read from Looking Glass News
Buffett, and the Corporatization of Children
philanthropy of Warren Buffett
donates $30 billion to the Gateses’ "Charity"
Mr. and Mrs. Gates Should Dispense Warren Buffett's Billions
for the Bush Crime Family: Ken Lay took many secrets to the grave
& Enron: The Takeover is Complete