Scandals made easy

Details as distractions: It’s easy to confuse and bore people with endless numbers and details. The more arcane an economic scandal sounds, the more likely Joe Voter is to glaze over amid talk of gaming markets and fixing prices.

When Joe gets glazed, he usually changes the channel from NewsHour to Survivor, or flips the dial from Morning Edition to Howard Stern, or sets down the daily newspaper to read that article in Maxim about what she really wants and how to give it to her.

Luckily, Bites is here to break down for you the many complex scandals now unfolding in the Capitol, just so you don’t lose the big picture lessons amid the voluminous, distracting details.

Delphi it ain’t: Here’s the Oracle scandal in a nutshell: a state audit found that a software contract with Oracle that was pushed through by the Davis administration would cost the state $42 million more than if it hadn’t signed the contract. Appearing to influence said approval was the fact that Oracle’s lobbyist handed Davis’ tech guy a $25,000 check to Davis’ re-election campaign.

And that’s pretty much all you have to know, because Gray Davis is a smart enough guy not to touch the smoking gun, so everything else now coming out is just icing on an all-too-familiar cake.

Bad? You betcha. An example of money influencing government action? It certainly appears so. Shocking, or even unusual? Not to anyone who has read this column, where Bites has been shouting for years about the legal bribery that takes place in the Capitol.

The connection between cash and government action has been voluminously reported by SN&R (see “Gray & Green,” August 9, 2001) and many other publications. The only mystery here is why the pay-to-play system continues unaltered, and why people keep feigning surprise when its grosser abuses are exposed.

Crooked E: The same holds true with the fallout from the energy crisis, where market manipulations of a deliberately flawed system were apparent at the outset, so nobody should be shocked at the profit-driven behaviors of Enron and others.

Confusing by design, Enron’s only function seemed to be to game markets and shuffle papers, so it’s easy to short-hand this scandal: greedy CEO-types tried to make money without actually creating anything other than stock-market hype and middle-man manipulations, paying off auditors and politicians in the process so nobody would stop them.

But if you’re looking for an unfolding scandal with real juice, there’s no beating how Californians paid Perot Systems to design our energy-trading program, only to have them turn around and teach companies like Reliant how to abuse the loopholes it created.

Simple simplified: When Ross Perot ran for president in 1992, it was on the platform that every complex problem could be simplified and solved with good old countrified common sense. “It’s simple” was his favorite phrase.

On television spots he’d use the phrase in combination with big charts, showing that he understood the many complexities, but could easily simplify it for y’all.

His company used a fairly similar approach in the PowerPoint presentation it used back in 1998 to teach energy companies how to manipulate the just-deregulated California energy markets, for which it had designed the trading programs under a state contract.

For example, “a relatively small PX participant could purposely congest a small interzonal path,” company officials wrote, identifying the Silverpeak line running to Nevada as one a generator could flood in order to be paid for reducing congestion.

You can almost picture Perot using a pointer to show how the money flowed back into corporate coffers, telling clients “it’s simple” in his condescending Texas twang .

It was simple if you designed the system, and it’s simply illegal to misuse privileged information like this, something for which the Reform Party founder’s company should follow Enron into corporate ignominy. And the rest of us should learn this simple lesson: don’t trust markets, or the people who profit from those markets, to act in the public good.