McLane Layton, Administrative Assistant to Senator Don Nickles R-OK; Drue Pearce, former GOP Alaska State Senator; Joe Garcia, a former Florida energy regulator all have something in common. They all made George Bush's short list for nomination to the Federal Energy Commission. Something else. According to Kevin McCoy writing in the February 7 edition of USA Today each of them were interviewed by Enron Executives as part of the Whitehouse vetting process. None of them were appointed to the $130,000 a year position.

It raises grave questions when a private corporation subject to regulation by the Commission is part of the process for selecting the regulators. It is especially troubling when the corporation has been a major contributor to the Presidential campaign. It is even more troubling when it is the only energy company playing a part in the official nomination process. Here is the quo that Enron got for the quid!

We have all read how Chairman Herbert crossed Ken Lay and was replaced. We have all read that two of the Commission nominees came from Ken Lay's list. Now we have confirmation that the nominee vetting process ran through Enron Towers.

Enron gave the quid. They were real pros. Now they are regulated by a bunch of the quos.

Meanwhile, at the other pole of the Axis of Avarice…

Four high executives of the Enron Corporation took the 5th repeatedly refusing to answer questions about the company's questionable partnerships on the ground that their answers might tend to incriminate them. It is their right. And it is the listener's right to infer that their truthful answers would probably incriminate them. Meanwhile, echoing Mrs. Ken Lay's tearful defense of her husband Former Enron CEO exercised the "Sgt. Shultz" defense claiming that no one told him about the questionable financial manipulations in the company he was operating.

REP. GREENWOOD: How would you explain, then, the corporate secretary asked at that board meeting, hand-writing in, "does not transfer economic risk but transfers profit and loss volatility"?

MR. SKILLING: I think you would probably have to ask --

REP. GREENWOOD: You were there, I believe.

MR. SKILLING: Well, there's an issue as to whether I was actually at a -- the particular meeting that you're talking about was in Florida, Palm Beach, Florida. And on the day of the meeting the power had gone out at 3:00 in the morning, and we were scrambling to get it fixed. No, I'm sorry, that was the May meeting. Never mind. (Laughs.) That's incorrect. I take it back.

REP. GREENWOOD: So were you at this meeting, in fact, this board meeting?

MR. SKILLING: I don't know. I don't recall. But I -- I don't recall.

REP. GREENWOOD: You've not -- you've not checked records that you might have as to your whereabouts?

MR. SKILLING: I would have been in at least a portion of the meeting. Was I there for the entire meeting, I just don't recall.
Think of it - the top two officers in the company did not know what was going on in their company, even though they got memos and reports from their staff warning them that the financial wizards in their company weren't dealing from the top of the deck. That's how they built Enron into the biggest bankruptcy in American history.

Here is how the go-go executives skimmed millions out of Enron. It was a two-pronged operation. Just before the end of an accounting period, when the reports on which investors would make decisions were being prepared one of Andy Fastow's partnerships would "buy" an asset - say an underperforming Brazilian power generator subsidiary - from ENRON That would inflate the revenue for the period showing the obligation of the partnership as real money. It also took the subsidiary's liabilities off the books. The report looked good and ENRON stock went up.

Then, following the close of the accounting period ENRON would buy the asset back for a higher price. That brought the underperforming asset back on the books at a higher value while its debt remained the same. That showed a better asset-debt ratio on the books and the next report would reflect that. Meanwhile Fastow and the folks he let in on the transaction got paid cash for the inflated value. At the end of the next period the process was repeated with another partnership, another asset, and another set of investors. Not all of the partners were ENRON insiders. We don't yet know who the favored outside "investors" were.

Each transaction inflated the revenue reported; each transaction "improved" the asset-debt ratio and each transaction ramped up the stock price to inflate the value of the executives' stock-option compensation. More ominously each transaction sucked cash out of the company and deposited it in the pockets of Fastow and Friends.

When this house of cards reached the height of ENRON TOWERS it couldn't be sustained any longer. The asset values had to be written down, the debts came due and the cash was gone. How did the regulators miss this scam? The real question is still unasked and unanswered.