What Now?

Developments, encouraging and otherwise

THERE IS NOTHING SO COMFORTING as reverting to form. It has been about a year since the day that changed everything, and we are back to normal again.

Senate Majority Leader Thomas A. Daschle, who after September 11 was obliged for some months to pose as a statesman, lunched recently with The Washington Post, and offered some thoughts on President George W. Bush. "Almost on every one of the issues involving domestic policy, he has been a source of great disappointment," Daschle judged. "I think his record on the economy is a disaster. I think his record on fiscal policy is a disaster. I think his position on education has fallen far short of expectations." Daschle added that Bush had failed to "capture the ringleaders of al Qaeda." The Democratic Party leader, who is expected to challenge Bush for the presidency in 2004, also charged the Republican incumbent with being overly confrontational and excessively political.

The Daily Mirror of London celebrated the independence of the former Colonials by pointing out on the front page of its July 4 edition that "the USA is now the world's leading rogue state."

Michael Jackson, who is unhappy over the disappointing market reaction to his simply awful new album, Invincible, explained at a gathering called the Music Industry Initiative Summit, in Harlem, that the poor sales were the result of a "racist conspiracy" by Sony Music to "turn the public against me." Jackson, appearing with the lawyer Johnnie Cochran and the Reverend Al Sharpton, said, "When you fight for me, you're fighting for all black people, dead and alive." He observed, "I know my race. I just look in the mirror. I know I'm black."

From Atlantic Unbound:

Politics & Prose: "The Bumbling Communicator" (September 6, 2001)
Television has finally found a President who speaks its language. By Jack Beatty

President Bush, whose talent for startlingly weak public performances fascinated political observers during his run for the presidency, but who had seemed, as they say, to grow in office, returned to his old self. In only the third formal news conference since September 11 Bush faced thirty-six minutes of mostly hostile questioning on his history as a director of the Harken Energy Corporation—specifically, on suspicions that he had engaged in insider trading in 1989, when he sold some 212,000 shares of Harken stock two months before the company finished a second quarter with disappointing results sure to drive stock prices down. Although Bush's Harken past had been the subject of increasingly breathless press coverage and Democratic attacks for days, and although the story had a near perfect resonance with the larger ongoing story of corporate scandals, the Pres-ident nevertheless appeared surprised by this line of questioning. Asked about the details of his eight-month delay in filing an SEC-required form disclosing his sale of Harken stock, Bush said that he had not "figured it out completely." Asked if he had been involved, as a director, with a 1989 "phantom profit" deal that the SEC later determined had allowed Harken to hide the true magnitude of its losses from investors, Bush said, "You need to look back on the, the directors' minutes," and added that "in the corporate world, sometimes things aren't exactly black and white when it comes to accounting procedures."

Appearing before a congressional investigating committee as Bush spoke were Bernard J. Ebbers and Scott D. Sullivan, the former CEO and former chief financial officer of WorldCom, a former very large company that was on that day worth precisely twenty-three cents per share of common stock (down from a 1999 high of almost $65 per share), following revelations that the company's not exactly black-and-white accounting procedures had hidden the magnitude of its losses—to the tune of $3.9 billion. Joining Ebbers and Sullivan was Melvin Dick, a former partner at the paler-shades-of-gray former very large accounting company Arthur Andersen. Also appearing was the Salomon Smith Barney analyst Jack Grubman, who touted WorldCom's stock during the four years in which, as it happened, Salomon Smith Barney received some $80 million in consulting fees from WorldCom, and in which Grubman himself received an average of $20 million a year in compensation from Salomon Smith Barney, tied in part to the WorldCom fees. Although WorldCom's stock slid steadily during these years, Grubman downgraded it only four days before the company's accounting fraud was revealed.

Veteran congressional observers called the witnesses' performance before the House Financial Services Committee a classic. Ebbers, pleading the Fifth, informed members that he had nothing to hide and said, "I would like, more than you know, to answer the questions that you and your colleagues have about WorldCom." Dick observed that there was no way that he, as an independent auditor, could have been expected to uncover WorldCom's accounting trick, which consisted of subtly pasting "long-term capital expense" stickers on $3.9 billion worth of boxes of "short-term operating expenses"—the sort of black-is-white kind of thing that any lynx-eyed veteran CPA could have missed. "We planned our audit of WorldCom in general reliance on the honesty and integrity of the management of the company," Dick explained. Grubman, who acknowledged that his relationship with WorldCom executives and officers was so close that he had on several occasions joined company board meetings to provide "market color," said that he, too, had been led astray. "Our judgments are only as good as the public information on which they are based," he said, explaining that his four-year lapse of discernment was the sort of mistake that any lynx-eyed market analyst with exclusive inside access could have made. "But for WorldCom's fraud, I would have seen a more dire picture much earlier." Committee members got off a number of good ones at the expense of the witnesses.

The Washington Post reported that Thomas M. Siebel—who has been a major soft-money contributor to the Republican Party, and who is the CEO of the software maker Siebel Systems, which is lobbying hard for its piece of the $38 billion homeland-security pie—has (already!) pioneered a way around the campaign-reform law that will take effect after the November elections. Soon to be barred from writing soft-money checks like the $250,000 whopper he wrote in June for a $30 million party fundraiser, Siebel has overnight created the nation's second largest political action committee (the first belongs to UPS) by the simple strategem of sending e-mail to hundreds of his company's "most fervent" employees and strongly encouraging them to make the maximum allowable contribution of $5,000 to the PAC right away. More than 350 upper-level employees agreed with their boss's logic, and before you could say McCain-Feingold, there was more than $2.1 million in the kitty. Political professionals praised the Siebel initiative ("setting the example"—National Republican Congressional Committee Chairman Thomas M. Davis III), but the company's chief Washington lobbyist modestly gave credit where it was due: "We simply followed the rules step by step," Thomas Gann said.

At a breakfast with supporters in Memphis, Tennessee, Al Gore, discussing his less than fully successful bid for the presidency in 2000, boldly declared, "If I had to do it all over again, I'd just let it rip. To hell with the polls, the tactics, and all the rest." Gore added, yet more boldly, "Let the chips fall where they may."

As I said, it is about a year since the day that changed everything, and we are back to normal. Which, actually, is wonderful.