IPS Press Release | March 22, 2002
WASHINGTON - The Institute for Policy Studies today released an exhaustive study of public financing toward Enron's overseas expansion. IPS' new report, Enron's Pawns: How Public Institutions Bankrolled Enron's Globalization Game, explores how the now-fallen giant's rise to global prominence absolutely depended upon close financial relationships with U.S. agencies, the World Bank, and other government institutions. "It should be a national disgrace that the U.S. government was subsidizing Enron's far-flung and often harmful global operations," said John Cavanagh, Director of IPS.
Researchers from the Sustainable Energy and Economy Network (SEEN), a project of IPS, have discovered that over the past decade, 21 agencies representing the U.S. government, multilateral development banks, and other national governments helped leverage Enron's global reach with $7.2 billion in public financing approved for 38 projects in 29 countries.
In addition to detailing exactly who funded which Enron projects, the study reveals that long before Enron's tricks came to light in the United States, the company was infamous for even more egregious practices in the developing world. Armed with taxpayer financing from agencies like the Overseas Private Investment Corporation and the World Bank, Enron marched into developing countries' energy sectors.
The global strategy of privatizing these countries' energy sectors has its origins in the Reagan Administration, and became a major priority of international financial institutions in the 1990s. The end results were not reliable energy at an affordable price, but rather, price hikes, blackouts, shady deals cut by government officials, and street riots in which people died. Enron's infamous partner in crime, accounting firm Arthur Andersen, also played a role in this global drama: It assessed a utility in the Dominican Republic that Enron ended up buying at almost $1 billion less than its actual value, reaping enormous profits for the company.
"When Enron exacted its modus operandi abroad, U.S. public officials considered it good for U.S. business. Only when Enron's scandals began to affect Americans did these officials and institutions hold the corporation at arm's length," said Daphne Wysham, director of SEEN, and co-author of the report. "And only when Enron's leadership revealed their greed on home turf did it become the biggest corporate scandal in recent U.S. history."
Enron's Pawns is available on SEEN's website, http://www.seen.org.IPS Press Release:
