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Enron movie misses Hillary's role in scandal

Posted By Jack Cashill On 05/20/2005 @ 1:00 am In Commentary | Comments Disabled

To its credit, Alex Gibney’s good-looking new film, “Enron: The Smartest Guys in the Room,” is more honest than “Fahrenheit 9/11.” At least the film deals with a real scandal.

But, alas, the film descends quickly into gratuitous Bush-bashing Democratic agitprop and, in so doing, misses one very juicy story: Clinton Commerce Secretary Ron Brown’s final trade mission to Croatia.

As Gibney makes clear, Enron made exploitative, if ill-advised, investments in any number of underdeveloped countries, and these proved to be the source of the firm’s financial undoing. And yet despite the fact that almost all of these transactions took place during the Clinton years and with the administration’s active support, the word “Clinton” is not once mentioned in the film.

The Mozambique misadventure was fairly typical. In 1994, U.S. embassy officials lobbied Mozambican President Joaquin Chiassano to secure Enron a major stake in a Mozambique gas field. When Chiassano tried to back out of the deal in 1995, President Clinton’s national security adviser, Anthony Lake, intervened on Enron’s behalf. Reportedly, Lake held up a $13.5 million aid package with the implied threat to that the aid was contingent upon the successful execution of the Enron deal. Chiassano got the message and acquiesced.

This intervention did not shock anyone who was paying attention. In his much praised opus, “Wealth and Democracy,” Kevin Phillips summarizes the brave new Clinton vision thusly: “The U.S. economy, like a major Wall Street investment firm, would be run to make money and attract it from around the world.”

To help articulate this vision, Clinton descended to what the party’s hard core had to see as the ninth circle of capitalist hell, the archetypal Wall Street investment firm Goldman Sachs. There he found its co-chairman, Robert Rubin, and recruited him to be chairman of Clinton’s National Economic Council and later his secretary of the treasury.

Under Clinton, global capitalism would rule as it never had before. The left would chafe but not rebel, its protests devolving to the level of harmless street theater. Argues Phillips, “Market economics might be the claim, but globalized U.S. economic management was the game.” Filmmaker Gibney recruits Phillip to bash the Bushes, which he does gleefully, but if he had anything unkind to say about the Clinton administration, it did not make the final cut.

Ron Brown, whom Clinton appointed secretary of commerce, marketed this new vision internationally. For the three-plus years of his troubled tenure, Brown led American executives on trade missions around the world. Given their international ambitions, Enron execs became frequent flyers. They could not hope to succeed without administration support. After the Democratic drubbing in the mid-term elections of 1994, Brown was compelled to use these missions as fund-raising exercises. Only death spared him exposure – and likely conviction – for this and other mischief.

If the Enron-Mozambique deal were routine, the Enron-Croatia deal was anything but. Brown’s final trade mission in April 1994 took him to Croatia to help negotiate a deal between Enron and the Croatian government. According to its one-sided terms, Enron would build a power station, run it for 20 years and sell electricity to HEP, the state electricity company, at above-market rates.

The man Brown had to deal with was the president of Croatia, Franjo Tudjman. A former communist turned nationalist, if not neo-fascist, Tudjman was also something of an historian. In 1989, the year before he was elected president, he had written a controversial book that included passages like the following: “A Jew is still a Jew. Even in the camps they retained their bad characteristics: selfishness, perfidy, meanness, slyness and treachery.”

Tudjman was as responsible as anyone in the Balkans for the civil wars that broke out in 1991. Having evaded the United Nations arms embargo then in place, he drove the ethnic Serbian populations out of Croatia and attempted to establish a Croatian state within Bosnia.

According to the Financial Times of London, audio tapes made public after Tudjman’s death in 1999 revealed that he linked a possible Enron deal to a variety of political demands, chief among them “avoiding his arrest and that of other senior figures by the Hague-based International Criminal Tribunal.” For all of his concern about a potential trial, Tudjman had a more immediate worry in 1996. And that was his health. He had cancer.

On April 3, a Swiss Air charter carrying the Enron executives landed routinely in Dubrovnik less than an hour before Brown’s plane was scheduled. The rain had ceased, and the sun had begun to poke through the clouds that had blanketed the area for the previous few days.

At 2:54 the U.S. Air Force plane that carried Brown called the tower – “We’re inside the locator, inbound” ? and were then cleared for a landing. The plane never landed. Some four hours later, after an inexplicable diversion over the Adriatic, Croatian search and rescue teams found the plane less than 2 miles from the airport on a hillside that it had sideswiped. After its investigation, the U.S. Air Force would describe the crash itself as “inexplicable.”

There had been 35 people on board, all of whom died. Although Tech Sgt. Shelly Kelly survived for eight hours, the rumors of her having been murdered on the ground are unfounded and easily refuted.

Brown’s death, however, puzzles. The “Report of the Death of an American Citizen Abroad” for Ronald Harmon Brown lists the cause as “blunt force injuries to head.” He is unique in this regard. Every other passenger died from “multiple blunt force injuries.” This discrepancy would cause a furor some 20 months later when three Armed Forces pathologists went public with their concerns about a seeming bullet hole in Brown’s head, a mystery complicated by the lack of an autopsy.

A further complication emerged three days after the crash when the Croat responsible for the airport’s navigation system, Nike Jerkuic, was found with a bullet hole in his chest. Croatian intelligence ruled it a suicide.

Those who have seen “Enron,” the movie, will not read too much into the decision of the Enron executives to take their own plane. That was part of their high-flying corporate style. What does raise eyebrows, however, is the behavior of the company’s liaison with the government of Croatia, a Croatian-born American named Zdenka Gast.

U.S. Ambassador to Croatia Peter Galbraith entered her name into the official record. When questioned by the Air Force, Galbraith observed that Gast had arrived at the Dubrovnik airport with the executives from Enron.

Gast had been scheduled to fly with Brown but thought better of it. Said Galbraith, “There were problems in – in – in this – in concluding this deal where they wanted to sign a letter of intent, and so, rather than – than go on the Brown trip, she stayed with the Inron [sic] people to do the final negotiations.”

“We’ve been looking for her,” volunteered Air Force Capt. John Cairney. The Air Force obviously did not look too hard. Investigators conducted 148 witness interviews, but Gast was not among them. I found her in five minutes of searching. When I reached her contact person, I was told, “Don’t be surprised if she gets back to you in just a few minutes.” I am still waiting.

Inquiring into Gast’s background, I came across a Croatian language magazine named Gloria. The photo that graces this article leaps off the page. In the center of three smiling women, all linked arm in arm, is Zdenka Gast, an attractive, full-figured redhead. On her left is the then-secretary of labor, Alexis Herman. On her right is none other than Hillary Clinton.

The article details a wedding reception for Alexis Herman at the White House, hosted by the Clintons. The reception took place a few weeks after Herman’s wedding in mid-February 2000. Only 40 people were in attendance. Those named include Bill and Hillary Clinton, Al and Tipper Gore, John Podesta, as well as “several governors and senators.”

The article notes that Gast had been “in the media spotlight because of her involvement in the controversial contract between HEP (the Croatian Electric Company) and Enron.” The deal was “controversial” because Croatia was so badly served by it. Still, this exposure did not deter the Clintons from inviting Gast to the wedding. Gast boasted that she was an active supporter of Hillary in her Senate run and that “Hillary paid special attention to me.”

Gast continued to work for Enron at least through the summer of 2000. When the deal between a new Croatian government and Enron began to sour in June of that year, Gast used her influence to mobilize the Clinton White House on Enron’s behalf. The Croatian journal Nacional claimed, in fact, that “the political relations between the United States and Croatia, as well as the upcoming visit by President Mesic and Premier Racan to the White House, [were] connected to the successful signing of the Enron deal with Croatian Electric (HEP).”

Even after the Clintons left office, they kept the pressure on. When the Enron collapse seemed imminent in November 2001, Robert Rubin called a senior Treasury Department official in the Bush administration and asked him to discourage the bond-rating agencies from downgrading Enron’s debt. The Bush Treasury Department refused to intervene on Enron’s behalf, and Rubin backed down.

As to Franjo Tudjman, he must have done something right. In November 1996, just months after Brown’s death and one week after President Clinton’s re-election, Tudjman traveled not to The Hague to be tried as a war criminal, but to Walter Reed Hospital in Washington to have his cancer treated.

Needless to say, none of this – Mozambique, Croatia, Ron Brown, the Hillary connection, the Rubin call, the Bush refusal – makes the Enron movie.

Meanwhile, Gibney chooses instead to implicate both Bush presidents and California Gov. Arnold Schwarzenegger in a series of tortuous plots that defy common sense and basic chronology. Indeed, Gibney somehow blames the California energy debacle on George W. and Schwarzenegger even though W took office six months after it flared up and Schwarzenegger took office three years after that.

The spirit of Leni Riefenstahl is alive and well. Hooray for Hollywood!



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