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Posts Tagged ‘RICO ACT’

DE-REGULATION: LET CRIMINALS BE CRIMINALS

In Bureaucracy, History, Law, Law Enforcement, Politics, Social commentary on November 29, 2018 at 12:05 am

A forgotten anniversary is fast approaching: This December 2 will mark the 17th anniversary of the collapse of Enron Corporation.

Based in Houston, Texas, Enron had employed 22,000 staffers and was one of the world’s leading electricity, natural gas, communications and paper companies.

In 2000, it claimed revenues of nearly $101 billion. Fortune had named Enron “America’s Most Innovative Company” for six consecutive years.

But then the truth emerged in 2001: Enron’s reported profitability was based not on brilliance and innovation but on systematic and creative accounting fraud.

And, on December 2, 2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy  Code.

Enron’s $63.4 billion in assets made it the largest corporate bankruptcy in U.S. history—until WorldCom’s bankruptcy in 2002.

The California electricity crisis (2000-2001) was caused by market manipulations and illegal shutdowns of pipelines by Texas energy companies.

The state suffered from multiple large-scale blackouts. Pacific Gas & Electric, one of the state’s largest energy companies, collapsed, and the economic fall-out greatly harmed Governor Gray Davis’ standing.

The crisis was made possible by Governor Pete Wilson, who had forced the passage of partial de-regulation legislation in 1996. 

Enron seized its opportunity to inflate prices and manipulate energy output in California’s spot markets. The crisis cost the state $40 to $45 billion.

Related image

 

The true scandal of Enron was not that it was eventually destroyed by its own greed.

The true scandal was that its leaders were never Federally prosecuted for almost driving California—and the entire Western United States—into bankruptcy.

Under the pro-oil company administration of George W. Bush, no such prosecutions ever occurred. But Americans had a right to expect such redress under “liberal” President Bill Clinton.

Once the news broke that Enron had filed for bankruptcy, commentators almost universally oozed compassion for its thousands of employees who would lose their salaries and pensions.

No one, however, condemned the “profits at any cost” dedication of those same employees for pushing California to the brink of ruin.

To put this in historical perspective:

  • Imagine a historian writing about the destruction of Hitler’s Schutzstaffel (Guard Detachment), or SS, as a human interest tragedy.
  • Imagine its Reichsfuehrer, Heinrich Himmler, being blamed for failing to prevent its collapse—as CEO Kenneth Lay was blamed for Enron’s demise.
  • Imagine that same historian completely ignoring the horrific role the SS had played throughout Nazi-occupied countries—and its primary role in slaughtering six million Jews in the Holocaust.  

Nor did anyone in the media or government declare that the solution to such extortionate activity lay within the United States Department of Justice via RICO—the Federal Racketeer Influenced Corrupt Organizations Act.

Seal of the United States Department of Justice.svg

Passed by Congress in 1970, this was originally aimed at the kingpins of the Mafia. Since the mid-1980s, however, RICO has been successfully applied against both terrorist groups and legitimate businesses engaged in criminal activity.

Under RICO, people financially injured by a pattern of criminal activity can bring a claim in State or Federal court, and obtain damages at three times the amount of their actual claim, plus reimbursement for their attorneys’ fees and costs.

Such prosecutions would have pitted energy-extortionists against the full investigative might of the FBI and the sweeping legal  authority of the Justice Department.

Consider this selection from the opening of the Act:

(1) “racketeering activity” means (A) any act or threat involving…extortion; (B) any act which is indictable under any of the following provisions of title 18, United States Code: sections 891-894 (relating to extortionate credit transactions), section 1343 (relating to wire fraud)Section 1344 (relating to financial institution fraud), section 1951 (relating to interference with commerce, robbery, or extortion), section 1952 (relating to racketeering)….

With the 17th anniversary of Enron’s demise coming up, the mantra of “de-regulation” should be ruthlessly turned against those who have most ardently championed it.

Republicans have ingeniously dubbed the estate tax—which affects only a tiny minority of ultra-rich—“the death tax.” This makes it appear to affect everyone.

Democrats should thus recast de-regulation in terms that will prove equally popular.  For example:

“Greed Relief” 

“Greed Protection” 

“Legalized Extortion” 

And here are some possible slogans: 

“The Energy Industry: Giving You the Best Congress Money Can Buy.” 

“De-regulation: Let Criminals Be Criminals.”

Today the coal industry is pumping millions into TV ads touting the non-existent wonders of “clean coal.” And Chevron spends millions assuring us that “all those profits” go strictly toward making the world a better place for others. (Presumably not a penny is left for its altruistic executives.)

When faced with such outright lying by the most vested of financial interests, it’s well to recall the warning given by Niccolo Machiavelli more than 500 years ago:

All those who have written upon civil institutions demonstrate…that whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature, whenever they may find occasion for it.  

If their evil disposition remains concealed for a time, it must be attributed to some unknown reason; and we must assume that it lacked occasion to show itself. But time, which has been said to be the father of all truth, does not fail to bring it to light.

THE COSTS OF TIMIDITY: PART TWO (END)

In Bureaucracy, History, Law, Law Enforcement, Military, Politics, Social commentary on June 30, 2017 at 12:03 am

During the summer of 2011, Republicans threatened to destroy the Nation’s credit rating unless Democrats agreed to massively cut social programs for the elderly, poor and disabled.

President Barack Obama could have countered this extortion through the Racketeer Influenced Corrupt Organization (RICO) Act.

RICO opens with a series of definitions of “racketeering activity” which can be prosecuted by Justice Department attorneys. Among those crimes: Extortion.

Extortion is defined as “a criminal offense which occurs when a person unlawfully obtains either money, property or services from a person(s), entity, or institution, through coercion.” 

The RICO Act defines “a pattern of racketeering activity” as “at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years…after the commission of a prior act of racketeering activity.” 

And if President Obama had believed that RICO was not sufficient to counter Republicans’ extortion attempts, he could have relied on the USA Patriot Act of 2001, passed in the wake of 9’11. 

In Section 802, the Act defines domestic terrorism. Among the behavior so defined: “Activities that…appear to be intended…to influence the policy of a government by intimidation or coercion [and]…occur primarily within the territorial jurisdiction of the United States.” 

U.S. Department of Justice

The remedies for punishing such criminal behavior were now legally in place. President Obama needed only to direct the Justice Department to apply them.

Criminally investigating and possibly indicting members of Congress would not violate the separation-of-powers principle.  Congressmen have in the past been investigated, indicted and convicted for various criminal offenses. 

The indictment of large numbers of Republican extortionists would have substantially changed the course of American history while Obama held office.

Instead of raising huge sums of money for re-election battles, those Representatives and Senators would have been forced to raise monies for their legal defense. And while some might have been convicted, others almost certainly would have been.

This would have substantially depleted the ranks of Obama’s sworn enemies—and given him far greater opportunities to enact his legislative agenda.

Such indictments and prosecutions—and especially convictions—would have served notice on current and future members of Congress: The lives and fortunes of American citizens may not be held hostage to gain leverage in a political settlement.

A Cuban Missile Crisis Speech

But Obama could have stood up to Republican extortionists in another way: By urging his fellow Americans to rally to him in a moment of supreme national danger.

President John F. Kennedy did just that—successfully—during the most dangerous crisis of his administration. Addressing the Nation on October 22, 1962, Kennedy shocked his fellow citizens by revealing that the Soviet Union had installed offensive nuclear missiles in Cuba.

John F. Kennedy

Kennedy outlined a series of steps he had taken to end the crisis—most notably, a blockade of Cuba. 

Then he sought to reassure and inspire his audience: “The cost of freedom is always high, but Americans have always paid it. And one path we shall never choose, and that is the path of surrender or submission.”

President Obama could have sent that same message to the extortionists of the Republican Party—by explaining to the American people: 

  • Republicans have adopted the same my-way-or-else “negotiating” stance as Adolf Hitler.
  • Like the Nazis, they are determined to gain absolute power—or destroy the Nation they claim to love.
  • They raised the debt ceiling seven times during the eight-year Presidency of George W. Bush.
  • But now that a Democrat holds the White House, raising the debt ceiling is unacceptable.
  • Despite Republican lies, we cannot revitalize the economy by slashing taxes on the wealthy and on cash-hoarding corporations while cutting benefits for millions of average Americans.
  • We will need both tax increases and sensible entitlement cuts to regain our economic strength.

And he could have ended his speech with a direct call to action by the American people:

Image result for Images of Barack Obama giving a speech in the Oval Office

President Barack Obama addressing the Nation

We stand on the edge of economic disaster. Therefore, I am asking each of you to stand up for America tonight–by demanding the recall of the entire membership of the Republican Party.

“This is the moment when each of us must decide—whether we will survive as a Republic, or allow ruthless political fanatics to destroy what has lasted and thrived for more than 200 years.”

Instead, Obama caved in to Republican extortion demands.

In September, 1939, British Prime Minister Neville Chamberlain and French Prime Minister Edouard Daladier sold out their ally, Czechoslovakia, to Adolf Hitler at the infamous Munich Conference. 

As Winston Churchill aptly predicted: “Britain and France had to choose between war and dishonor. They chose dishonor. They will have war.”

To paraphrase Churchill: President Obama had to choose between confrontation and timidity. He chose timidity. He got contempt and obstruction in return. 

Five years later, the FBI, CIA and National Security Agency informed Obama that Russian Intelligence agents were actively working to ensure Donald Trump’s election as President. 

Obama did not publicly release this information–nor indict Trump campaign staffers who were colluding with those agents. 

Thus, Trump won the election–and gained the power to destroy Obama’s Presidential legacy.

THE COSTS OF TIMIDITY: PART ONE (OF TWO)

In Bureaucracy, History, Law, Law Enforcement, Military, Politics, Social commentary on June 29, 2017 at 11:40 am

“[Barack] Obama needs to find his voice now in ways that, during his time in the Oval Office, he was too often reluctant to do, perhaps fearing the immense power of the bully pulpit.

“But now there is a real bully in the pulpit, and Obama–like the rest of us–has no choice but to speak, and to act.” 

So writes noted author and poet Jay Parini in an Op-Ed piece for CNN. 

“[President Donald] Trump has, in fact, gone out of his way to attack Obama, as in his recent nonsensical reversal wherein he attacked Obama for his lack of response to Russian meddling in the 2016 election: ‘Obama did NOTHING,’ Trump tweeted. He went on to accuse Obama of colluding with the Russians!” 

Parini believes that Obama should have warned the American public that Russia was trying to sway the 2016 election for Trump: “There can be no sound reason for not alerting the people of this country to a major attack on their most cherished right, the right to vote.” 

But Obama didn’t issue any such warning. The findings of the FBI, CIA and National Security Agency were kept strictly confidential until after Trump won the campaign.

Parini also believes that Obama should now forcefully respond to Trump’s attacks on him and his signature legislative achievement: The Affordable Care Act, also known as “Obamacare.”

But Obama has long refused to respond forcefully to Republican attacks. As a result, Republicans now dominate both houses of Congress–and the White House.

During the summer of 2011, Republicans threatened to destroy the Nation’s credit rating unless their budgetary demands were met. They refused to raise the debt ceiling unless Democrats agreed to massively cut social programs for the elderly, poor and disabled.

Sign of the Mafia “Black Hand”

If Congress failed to raise the borrowing limit of the federal government by August 2, the date when the U.S. reached the limit of its borrowing abilities, it would have begun defaulting on its loans.

As Warren Buffett, CEO of Berkshire Hathaway, explained the looming economic catastrophe: “If you don’t send out Social Security checks, I would hate to think about the credit meeting at S&P and Moody’s the next morning.

“If you’re not paying millions and millions and millions of people that range in age from 65 on up, money you promised them, you’re not a AAA,” said Buffett.

A triple-A credit rating is the highest possible rating that can be received.

President Obama offered to make historic cuts in the federal government and the social safety net–on which millions of Americans depend for their most basic needs.

But House Speaker John Boehner rejected that offer. He would not agree to the tax increases that Democrats wanted to impose on the wealthiest 1% as part of the bargain.

John Boehner

To raise taxes on the wealthy, Republicans insisted, would be a “jobs-killer.” It would “discourage” corporate CEOs from creating tens of thousands of jobs they allegedly “wanted” to create.

As the calendar moved ever closer to the fateful date of August 2, Republican leaders continued to insist: Any deal that includes taxes “can’t pass the House.”

One senior Republican said talks would go right up to—and maybe beyond—the brink of default.

“I think we’ll be here in August,” said Republican Representative Pete Sessions, of Texas. “We are not going to leave town until a proper deal gets done.”

President Obama had previously insisted on extending the debt ceiling through 2012. But in mid-July, he simply asked congressional leaders to review three options with their members:

  1. The “Grand Bargain” choice—favored by Obama–would cut deficits by about $4 trillion, including spending cuts and new tax revenues.
  2. A medium-range plan would aim to reduce the deficit by about $2 trillion.
  3. The smallest option would cut between $1 trillion and $1.5 trillion, without increased tax revenues or any medicare and Medicaid cuts.

And the Republican response?  

Said Rep. Darrell Issa, chairman of the Oversight and Government Reform Committee: “Quite frankly, [Republican] members of Congress are getting tired of what the president won’t do and what the president wants.” 

With the United States teetering on the brink of national bankruptcy, President Obama faced three choices:

  1. Counter Republican extortion attempts via RICO—the Racketeer Influenced Corrupt Organization Act.
  2. Make a “Cuban Missile Crisis”-style address to the American people, seeking to rally them against a criminal threat to the fiscal security of the Nation.
  3. Cave in to Republican demands. 

Unfortunately for Obama and the Nation, he chose Number Three.

Here is how he could have applied the other two options.

Racketeer Influenced Corrupt Organizations (RICO) Act

In 1970, Congress passed the Racketeer Influenced and Corrupt Organizations (RICO) Act, Title 18, United States Code, Sections 1961-1968.

Congress’ goal was to eliminate the stranglehold of organized crime on the nation’s economy. To put it bluntly, RICO was intended to destroy the Mafia.

But in United States v. Turkette, 452 U.S. 576 (1981), the Supreme Court held that RICO applied as well to legitimate enterprises being operated in a criminal manner.

After Turkette, RICO could also be used against corporations, political protest groups, labor unions and loosely knit-groups of people.

In short, the stage was set to hold even Congressional extortionists accountable.

SHUT DOWN THE BULLIES

In Bureaucracy, History, Law, Law Enforcement, Politics, Social commentary on September 29, 2015 at 12:17 pm

Fascism is a lie told by bullies.
–Ernest Hemingway

In 2011, Republicans threatened to destroy the Nation’s credit rating unless their budgetary demands were met.

Yet President Barack Obama could have ended that threat via the Racketeer Influenced Corrupt Organizations (RICO) Act.

Had he done so, he would have prevented the 2013 shutdown of the Federal Government over Republican demands that he de-fund “Obamacare.”

He would have also pre-empted current Republican demands to shut down the Government over continued funding for Planned Parenthood.

Passed by Congress in 1970, as Title 18, United States Code, Sections 1961-1968, the goal of the RICO Act was to destroy the Mafia.

Originally, RICO was aimed at the Mafia and other organized crime syndicates.  But in United States v. Turkette, 452 U.S. 576 (1981), the Supreme Court held that RICO applied as well to legitimate enterprises being operated in a criminal manner.

After Turkette, RICO could also be used against corporations, political protest groups, labor unions and loosely knit-groups of people.

RICO opens with a series of definitions of “racketeering activity” which can be prosecuted by Justice Department attorneys.  Among those crimes: Extortion.

Extortion is defined as “a criminal offense which occurs when a person unlawfully obtains either money, property or services from a person(s), entity, or institution, through coercion.”

The RICO Act defines “a pattern of racketeering activity” as “at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years…after the commission of a prior act of racketeering activity.”

And if President Obama had believed that RICO was not sufficient to deal with Republicans’ extortion attempts, he could have relied on the USA Patriot Act of 2001, passed in the wake of 9/11.

In Section 802, the Act defines domestic terrorism.  Among the behavior that is defined as criminal:

“Activities that…appear to be intended…to influence the policy of a government by intimidation or coercion [and]…occur primarily within the territorial jurisdiction of the United States.”

The remedies for punishing such criminal behavior were now legally in place.  President Obama needed only to  direct the Justice Department to apply them.

  • President Obama could have directed Attorney General Eric Holder to investigate whether actions by Republican Congressman—and their Tea Party cohorts—broke Federal anti-racketeering and/or anti-terrorism laws.
  • Holder, in turn, could have ordered the FBI to conduct that investigation.
  • If the FBI found sufficient evidence that these laws had been violated, Holder could have empaneled criminal grand juries to indict those violators.

Criminally investigating and possibly indicting members of Congress would not violate the separation-of-powers principle.  Congressmen have in the past been investigated, indicted and convicted for various criminal offenses.

Such indictments and prosecutions–and especially convictions–would have served notice on current and future members of Congress: The lives and fortunes of American citizens may not be held hostage to gain leverage in a political settlement.

In short: Obama could have replaced the law of fear with the rule of law.

But Obama could have stood up to Republican extortionists in another way: By urging his fellow Americans to rally to him in a moment of supreme national danger.

President John F. Kennedy did just that–successfully–during the most dangerous crisis of his administration.

Addressing the Nation on October 22, 1962, Kennedy shocked his fellow citizens by revealing that the Soviet Union had installed offensive nuclear missiles in Cuba.

John F. Kennedy

Kennedy outlined a series of steps he had taken to end the crisis–most notably, a blockade of Cuba.  Then he sought to reassure and inspire his audience:

“The cost of freedom is always high, but Americans have always paid it. And one path we shall never choose, and that is the path of surrender or submission.”

President Obama could have sent that same message to the extortionists of the Republican Party–by explaining to the American people:

  • Republicans have adopted the same my-way-or-else “negotiating” stance as Adolf Hitler.
  • Like the Nazis, they are determined to gain absolute power–or destroy the Nation they claim to love.
  • They raised the debt ceiling seven times during the eight-year Presidency of George W. Bush.
  • But now that a Democrat holds the White House, raising the debt ceiling is unacceptable.
  • Despite Republican lies, we cannot revitalize the economy by slashing taxes on the wealthy and on cash-hoarding corporations while cutting benefits for millions of average Americans.
  • We will need both tax increases and sensible entitlement cuts to regain our economic strength.

And he could have ended his speech with a direct call for action by the American people:

“We stand on the edge of economic disaster.  Therefore, I am asking each of you to stand up for America tonight–by demanding the recall of the entire membership of the Republican Party.

“This is the moment when each of us must decide–whether we will survive as a Republic, or allow ruthless political fanatics to destroy what has lasted and thrived for more than 200 years.”

To paraphrase Winston Churchill: President Obama had to choose between timidity and confrontation.

He chose timidity.

He would get contempt and obstruction at every turn.

HOW WE REACHED THE “FISCAL CLIFF”: PART THREE (OF FOUR)

In Bureaucracy, History, Politics on December 7, 2012 at 12:13 am

With the United States teetering on the brink of national bankruptcy, President Obama faced three choices:

  1. Counter Republican extortion attempts via RICO–the Racketeer Influenced Corrupt Organizations Act.
  2. Make a “Cuban Missile Crisis”-style address to the American people, seeking to rally them against a criminal threat to the financial security of the Nation.
  3. Cave in to Republican demands.

Unfortunately for Obama and the Nation, he chose Number Three.

Here is how he could have applied the other two options.

Racketeer Influenced Corrupt Organizations (RICO) Act

In 1970, Congress passed the Racketeer Influenced and Corrupt Organizations (RICO) Act, Title 18, United States Code, Sections 1961-1968.

Congress’ goal was to eliminate the ill-affects of organized crime on the nation’s economy. To put it bluntly, RICO was intended to destroy the Mafia.

In the 1980s, however, civil lawyers noticed section 1964(c) of the RICO Act. This allows civil claims to be brought by anyone injured in their business or property by reason of a RICO violation.

RICO has been applied to not only the Mafia but to individuals, businesses, political protest groups, and terrorist organizations.  In short, a RICO claim can arise in almost any context.

Such as the one President Barack Obama faced last summer when Republicans threatened to destroy the credit rating of the United States unless their budgetary demands were met.

RICO opens with a series of definitions of “racketeering activity” which can be prosecuted by Justice Department attorneys.  Among those crimes: Extortion.

U.S. Department of Justice

Extortion is defined as “a criminal offense which occurs when a person unlawfully obtains either money, property or services from a person(s), entity, or institution, through coercion.”

The RICO Act defines “a pattern of racketeering activity” as “at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years…after the commission of a prior act of racketeering activity.”

And if President Obama had believed that RICO was not sufficient to deal with extortionate behavior, he could have relied on the USA Patriot Act of 2001, passed in the wake of 9/11.

In Section 802, the Act defines domestic terrorism.  Among the behavior that is defined as criminal:

“Activities that…appear to be intended…to influence the policy of a government by intimidation or coercion [and]…occur primarily within the territorial jurisdiction of the United States.”

The remedies for punishing such criminal behavior are now legally in place.  President Obama need only direct the Justice Department to apply them.

  • President Obama could have directed Attorney General Eric Holder to investigate whether actions by Republican Congressman—and their Tea Party cohorts—broke Federal anti-racketeering and/or anti-terrorism laws.
  • Holder, in turn, could have ordered the FBI to conduct that investigation.
  • If the FBI found sufficient evidence that these laws had been violated, Holder could have empaneled criminal grand juries to indict those violators.

The fact that members of Congress would be criminally investigated and possibly indicted would not violate the separation-of-powers principle.  Congressmen have in the past been investigated, indicted and convicted for various criminal offenses.

Such indictments and prosecutions–and especially convictions–would serve notice on current and future members of Congress that the lives and fortunes of American citizens may not be held hostage as part of a negotiated settlement.

On August 1, Chris Matthews, host of MSNBC’s “Hardball,”  wrapped up his program with a search for “options” to avoid another round of Republican extortion tactics.

Chris Matthews

“I want to know what steps the president ‘could’ have taken to avoid this hostage-taking.

“…Is there another way than either buckling to the Republicans or letting the government and the country crash?

“How does he use the power of the presidency, the logic, emotion and basic patriotism of the people to thwart those willing to threaten, disrupt, even possibly destroy to get their way?”

The answer to his questions–then and now–is: Replace the law of fear with the rule of law.

But there was another way Obama could have stood up to Republican extortionists: By urging his fellow Americans to rally to him in a moment of supreme national danger.

President John F. Kennedy did just that–successfully–during the most dangerous crisis of his administration.

Addressing the Nation on October 22, 1962, Kennedy shocked his fellow citizens by revealing that the Soviet Union had installed offensive nuclear missiles in Cuba.

John F. Kennedy

After outlining a series of steps he had taken to end the crisis, Kennedy sought to reassure and inspire his audience. His words are worth remembering today:

“The path we have chosen for the present is full of hazards, as all paths are, but it is the one most consistent with our character and courage as a nation and our commitments around the world.

“The cost of freedom is always high, but Americans have always paid it. And one path we shall never choose, and that is the path of surrender or submission.”

President Obama could have sent that same message to the extortionists of the Republican Party.

LET CRIMINALS BE CRIMINALS

In Bureaucracy, Business, History, Politics, Social commentary on November 21, 2011 at 1:11 am

A forgotten anniversary has come and gone: This December 2 marked the thirteenth anniversary of Enron’s bankruptcy.

Based in Houston, Texas, Enron had employed 22,000 staffers and was one of the world’s leading electricity, natural gas, communications and paper companies.

In 2000, it claimed revenues of nearly $101 billion.  Fortune had named Enron “America’s Most Innovative Company” for six consecutive years.

But then the truth emerged in 2001: Enron’s reported profitability was based on systematic and creative accounting fraud.

From that point on, the media behaved as if Enron’s collapse was some great tragedy.

To put this in perspective: Imagine a historian writing about the destruction of Hitler’s Schutzstaffel (Guard Detachment), or SS, as a similar tragedy.

Imagine its Reichsfuehrer, Heinrich Himmler, being blamed for failing to prevent its collapse–as CEO Kenneth Lay was blamed for Enron’s demise.

Imagine that same historian completely ignoring the horrific role the SS had played throughout Nazi-occupied countries–and its prime role in carrying out the Holocaust.

The California electricity crisis (2000-2001) was caused by market manipulations and illegal shutdowns of pipelines by Texas energy consortiums.

The state suffered from multiple large-scale blackouts.  Pacific Gas & Electric, one of the state’s largest energy companies, collapsed, and the economic fall-out greatly harmed Governor Gray Davis’ standing.

The crisis was made possible by Governor Pete Wilson, who forced the passage of partial de-regulation legislation in 1996.  Enron siezed its opportunity to inflate prices and manipulate energy output in California’s spot markets.  The crisis cost the state $40 to $45 billion.

The true scandal of Enron was not that it was eventually destroyed by its own greed.

The true scandal was that its leaders were never prosecuted for almost driving California–and the entire Western United States–into bankruptcy.

Once the news broke of Enron’s filing for bankruptcy, commentators almost universally oozed compassion for its thousands of employees who would lose their salaries and pensions.

No one, however, condemned the “profits at any cost” dedication of those same employees for pushing California to the brink of ruin.

Nor did anyone declare that the solution to such extortionate activity lay within the hands of the United States Department of Justice: RICO—the Federal Racketeer Influenced Corrupt Organizations Act.

Passed by Congress in 1970, this was originally aimed at the kingpins of the Mafia.  Since the mid-1980s, however, RICO has been successfully applied against both terrorist groups and legitimate businesses engaged in criminal activity.

Under RICO, people financially injured by a pattern of criminal activity can bring a claim in State or Federal court, and obtain damages at three times the amount of their actual claim, plus reimbursement for their attorneys’ fees and costs.

Such prosecutions would have pitted energy-extortionists against the full investigative might of the FBI and the sweeping legal  authority of the Justice Department.

Consider this selection from the opening of the Act:

(1) “racketeering activity” means (A) any act or threat involving…extortion; (B) any act which is indictable under any of the following provisions of title 18, United States Code: sections 891-894 (relating to extortionate credit transactions), section 1343 (relating to wire fraud)

Section 1344 (relating to financial institution fraud), section 1951 (relating to interference with commerce, robbery, or extortion), section 1952 (relating to racketeering)….

Needless to say, under the pro-oil company administration of George W. Bush, no such prosecutions ever occurred.

With the tenth anniversary of Enron’s demise coming up, the mantra of “de-regulation” should be ruthlessly turned against those who have most ardently championed it.

Republicans have ingeniously dubbed the estate tax–which affects only a tiny minority–“the death tax.”   This makes it appear to affect everyone.  Democrats should thus recast de-regulation in terms that will prove equally popular.  For example:

“Greed Relief”
“Greed Protection”
“Legalized Extortion”

And here are some possible slogans:

“The Energy Industry: Giving You the Best Congress Money Can Buy.”

“De-regulation: Let Criminals Be Criminals.”

“De-regulating energy companies will reduce energy prices the same way that closing down prisons will reduce crime.” 

The word “Enron” can be turned into an obscenity: “E x t o r t R O N.”  Just as the corporation was in real-life.

Today the coal industry is pumping millions into TV ads touting the non-existant wonders of “clean coal.”

And Chevron spends millions more assuring us that “all those profits” go strictly toward making the world a better place for others. (Presumably not a penny is left for its altruistic executives.)

When faced with such outright lying by the most vested of financial interests, it’s well to recall the warning given by Niccolo Machiavelli more than 500 years ago:

All those who have written upon civil institutions demonstrate…that whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature, whenever they may find occasion for it. 

 If their evil disposition remains concealed for a time, it must be attributed to some unknown reason; and we must assume that it lacked occasion to show itself.  But time, which has been said to be the father of all truth, does not fail to bring it to light.

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