The collapse of Enron has shone the torch into a cellar full of crimes.
Luckily for Bush and Blair, the relentless drone of the B-52s has helped mask the thunderous clatter of the biggest bankruptcy in corporate history. Not only was the Enron corporation the world's biggest energy trader, but it had also emerged over the past decade as the archetypal global corporation, dominating the world's energy markets through online manipulation of supply fluctuations, and constantly changing prices for gas and electricity.
Virtually unknown in Britain until it imploded, the stratospheric rise of Enron had so hypnotised the political and business establishment on both sides of the Atlantic as to make Mr Melmotte of The Way We Live Now purr with admiration. On its way up Enron was voted 'the most innovative company in America' by Fortune magazine for four years in succession. Last year Enron's boss, Jeffrey Skilling, was described in one report as lording it like 'the Sun King' at a conference for bankers and Wall Street analysts.
Not long after this accolade Skilling quietly cashed in $62 million worth of stocks and options - very sensibly, as it turns out. And then in August, just a month or three before the company was forced to file for bankruptcy, Skilling abruptly resigned, citing 'personal reasons'. No prussic acid for him.
As so often appears to happen with corporate nosedives of this magnitude, the general response from City types seems to be one of total bewilderment. After all, what could possibly go wrong with a scheme which managed to generate astronomical levels of profit by the simple device of buying and selling the same commodities many times over to different customers? Or with a chief executive like Skilling, with such forward thinking views on matters such as employee relations that his advice to managers was, 'You must cut jobs ruthlessly by 50 or 60 percent. Depopulate. Get rid of people. They gum up the works'?
Towards the end of November the answer to these questions appeared in the form of a $10 billion black hole in Enron's accounts. It soon became clear that the management of Enron had found ways of applying financial wizardry to its own balance sheet as well as everything else. The company was forced to admit that the levels of profits it claimed between 1997 and 2001 had been over-inflated to the tune of $600 million, and even this figure is highly suspect. Enron's smaller rival, Dynegy - which at one stage looked likely to take over Enron's assets - has since walked away from a deal on the grounds that the real losses 'could prove unquantifiable'.
All of this has already generated huge shockwaves throughout world energy markets and the international banking system. In Britain the Royal Bank of Scotland and Abbey National were the first to admit to losses worth hundreds of millions. And the regulator for the energy industry - Callum McCarthy - was put in the rather embarrassing position of having to phone up administrators at accountancy firm Price Waterhouse to check that the country would not be plunged into darkness the following weekend. This is particularly ironic since, only the week before, the regulator had proudly announced that he was now able to remove price controls from the sale of gas and electricity in Britain on the grounds that the 'liberalisation' of the energy sector had proven to be such a huge success - judging by the number of people who were all getting their gas and electricity from the one firm (usually British Gas, which has the enormous advantage of still being a virtual monopoly).
Now he was having to announce the launch of an official investigation into the potential destabilisation of Britain's markets, within which Enron has become a major player. Apart from owning the gas-fired power station on Teesside where three workers were killed earlier this year, Enron had also moved into Britain's water business through its subsidiary Azurix, and had established an important niche for itself in Britain's energy markets, exploiting its online trading expertise to buy and sell both gas and electricity power from the main generators to the regional electricity companies.
The Enron plant in Teesside is no Mickey Mouse operation, by the way. When it was built, immediately after privatisation of the electricity industry, it was the biggest engineering project in this country after the Channel Tunnel. It is now the largest gas-fired heat and power plant in the world.
In order to establish a bridgehead in Britain, it turns out that Enron had been up to the more traditional business methods. The former Tory energy minister John (now Lord) Wakeham - the chief architect of electricity privatisation in Britain - was appointed as director to both the main board of Enron and that of Azurix. When Enron collapsed, Wakeham was unavailable for comment. The former gas industry regulator, Clare Spottiswoode, was also appointed to the board of Azurix. And substantial donations were given to the Labour Party (roughly £30,000 in 1997 and 1998), in much the same way as they had also been given to Bill Clinton and then George Bush in the US. The chairman of Enron Europe received a CBE in the New Year's Honours list in 2000.
All of this might be totally laughable if Enron's only crime had been to butter up a few politicians and con many more City analysts. It gets much more serious when you find out that, as long ago as 1995, an organisation known as the Multinational Monitor had already named Enron as one of the world's ten worst corporations mainly because of the reign of terror it had imposed on the population of the Indian state of Maharashtra, who had organised opposition to the construction of a massive new natural gas plant (being built with the help of Bechtel and General Electric).
The organisers of the protest at Dabhol were mainly women from the local fishing village opposed to the impact that the gas plant would have on the environment. The next thing they knew their houses were being raided at night by local police, who beat women and children with sticks and dragged them to waiting vans. In January 1999 a report by Human Rights Watch investigators found that Enron had been directly paying police salaries, although it never gave the money direct. The police inspector in charge of the operation owned up that his job was to calculate the number of officers used according to the rates set by the government. He would then submit a report to his superintendent. 'I don't handle any money,' he explained. 'The company pays directly to the government.'