Lay opts to lay off

Updated: Jan 28 2002, 05:30am hrs
Kenneth Lay’s resignation as chairman and CEO of Enron Corporation is by no means the endgame for Enron. If anything, with Enron’s employees baying for blood, it could just be the beginning of a new chapter in a long story. Interestingly, the last has certainly not been heard on the ‘politics’ of Enron’s engagement with India, with US ambassador Robert Blackwill once again bringing diplomatic pressure to bear on Enron’s fate in India. Even as many in Washington DC now feel embarrassed by the statement of the state department official, Christina Rocca, who said that Enron is the only “five letter word” marring Indo-US relations, ambassador Blackwill has once again drawn attention to legal aspects of the Enron deal in India. It is ironic that legality is being pressed at a time when Enron’s executives have been caught shredding paper back home!

More to the point, Mr Lay’s exit brings attention back to the nexus between Enron’s top management and politicians both in India and the US. There is a multi-party culpability. Beginning with the Republican administration of George Bush Sr to President Clinton’s energy and other secretaries to White House officials and diplomats and down to President Bush Jr, Washington DC has been actively engaged in lobbying for Enron. Not to be left behind, India’s politicians have been consensual too. They may differ on whether or not a temple should be built in Ayodhya, but on Enron’s Dabhol Power project all of them, from former Prime Minister Narasimha Rao and his cabinet colleagues like Sharad Pawar and N K P Salve, to Bal Thackeray, Gopinath Munde, Pramod Mahajan and many others, to eminent economists, energy specialists and key government officials, down to the present government in Maharashtra — everyone has chanted the Dabhol mantra. It is important to note, though, that no other US power company attracted as much criticism as the Dabhol project did. The opposition was to the fuel and the size of the project, which did not suit Indian conditions. The cost of the project was secondary. All this was overlooked thanks to aggressive lobbying. No other US company was as politically aggressive. Instead of being cowed down by Enron’s experience, US companies must learn from the controversy-free success stories of their brethren active in India.