AutoRecovery save of White Collar Crime a Form of Occupational Fraud.doc

Once established as a major player in the natural gas

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Once established as a major player in the natural gas market, Enron began utilizing its resources to exert its influence on U.S. political processes. For example, Kenneth Lay was one of George W. Bush’s key backers during Bush’s early political career as the Governor of Texas and this connection continued up through, and beyond, the younger Bush’s run for the presidency in
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WHITE COLLAR CRIME 20 2000. (Hunnicutt, 2007, p. 5). Lay’s connection to Bush’s presidential campaign came in the form of significant campaign donations both to Bush, $113,800, and the Republican Party, $1.2 million in 2000 (Gutman, 2002, pp.1-2). According to Hunnicutt, “Lay, after all, was for a long time one of Bush’s most important political supporters” (p. 2). The Bush administration responded to Lay’s financial support by placing former Enron executives in posts within the federal government (Gutman, p. 5). Lay, himself, was given veto power over the important position of chairman of the FERC as well as a prominent position within the highly secretive, Cheney-led Energy Task Force early on in the Bush presidency (p. 5). When, for example, it became apparent that Lay did not agree with the chairman of the FERC on key energy issues directly impacting Enron, Lay asked that the chairman change his views or run the risk of being replaced. Needless to say, when the chairman’s term expired, he was not reappointed. Lay then provided a short list of new appointees for the FERC to President Bush. Two of Lay’s choices were appointed after Mr. Lay recommended them to Vice-President Cheney. One of them, Pat Wood, was appointed to the post of chairman of the FERC on September 1, 2001, a position he held until his resignation in 2005 (Gutman, 2002, p. 2). Enron’s political machinations were not, however, limited to President Bush and the Republican Party. Apparently, during the Clinton administration of 1992-2000, under which Enron flourished considerably, Enron contributed funds to the Democratic Party in excess of $500,000 in addition to one time contributions of $100,000 and $25,000, respectively, to the 1993 Clinton inauguration and celebration (Smith, 2002). The Clinton administration responded to Enron’s lobbying presence by supporting the deregulation of electricity at the federal level as evidenced by the U.S. Department of Energy’s failed deregulation bill of the mid-1990’s. Some states, like California, bowed to the political pressure created via Enron’s lobbying presence in their state
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WHITE COLLAR CRIME 21 legislature and eventually chose to deregulate, at least partially, their publicly held electric utilities (Hauter and Slocum, 2001). The disastrous consequences of this action, including Enron’s involvement in the, “gaming of the California system,” which led to the Western Energy Crisis of 2000 and 2001, have been well documented (McLean and Elkind, 2003, pp.271-83).
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  • Fall '13
  • white collar, Enron Corporation

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