The Greedy Bastards Who Gave Us Enron (and Bankrupted California)


Enron: The Smartest Guys in the Room

Alex Gibney (2005)

Film Review

The subject of this documentary is the historic Enron collapse in September 2001.

The Enron scandal occurred prior to the blossoming of social media, and the corporate media deliberately minimized the criminal behavior that led to the collapse of the world’s largest energy company.  They blamed Enron’s demise on “bookkeeping irregularities.” This film tells a very different story.

When Enron, which was founded in 1985, went bankrupt it was the largest corporate bankruptcy in history. Its late founder, Ken Lay, was close personal friends with Bush senior, who engineered millions in federal subsidies to help launch the company. Lay subsequently donated heavily to Bush junior’s presidential campaign.

Trading Energy Like Financial Derivatives

A big proponent of corporate deregulation, Lay teamed up with Jeff Skilling in 1990 to transform energy production and delivery (natural gas and electricity) into financial instruments that could be traded like derivatives.

To manipulate their stock prices, Enron employed two novel (and illegal) bookkeeping practices. With the first, mark-to-market accounting, they recorded potential future profits as real time revenue. The second accounting scam involved creating hundreds of “subsidiaries” to hide $30 billion of Enron debt from investors and regulators. Each subsidiary was personally managed by Enron Chief Financial Officer Andy Fastow, who pocketed $45 million from one deeply indebted subsidiary.

These devious accounting schemes allowed Enron to conceal that their company was losing millions of dollars a year. They kept the company afloat via $25 million bank loans from all the major Wall Street investment banks, using their overpriced stock as collateral.

Enron Bankrupts California

Prior to seeing this film I was vaguely aware that Enron was responsible for the California power crisis in 2000-2001 and the $38 billion deficit that led California governor Gray Davis to be recalled and replaced with Arnold Schwarzenegger. I had no idea of the criminal behavior behind the power crisis.

Enron’s purchase of Pacific Gas and Electric in the late nineties gave them total control of most of the state’s power generation and 26,000 miles of power lines. To drive up the cost of power, Enron’s unscrupulous energy traders caused rolling blackouts by “loaning” California power to other states and creating artificial shortages. They jacked the price of power even higher by deliberately shutting down regional power plants for “routine maintenance.” In this way, they succeeded in driving the cost of electricity from $30 per kilowatt to $1,000 per kilowatt.

Governor Davis declared a state of emergency while he pleaded with Bush junior and the Federal Energy Regulatory Commission (FERC) to impose a price cap on California electricity. By the time Congress forced FERC to implement a price cap, California was $38 billion in the hole and the Terminator was the new California governor.

Management Screws Enron Employees

Even more scandalous was the decision by Enron management to freeze trading by employees as the stock price plummeted. This enabled all the top executives to dump their stock while 29,000 employees had their pension plans wiped out.

Andy Fastow pleaded guilty to fraud and embezzlement charges (receiving a $23 million fine and 10 years in jail) in return for testifying against Skilling and Lay.

Skilling would receive a 14 year sentence for insider trading. Ken Lay was also convicted of insider trading but died of a heart attack (2006) prior to sentencing.

Education Spring: Parents, Teachers and Students Fight Back


more than a score

The Education Spring uprising against corporate education reform began in Seattle at Garfield High School (my daughter’s former high school) in January 2013. It started with the entire school (teachers and students) walking out rather than take the Measures of Academic Progress (MAP). The latter is standardized test mandated under Obama’s Race to the Top and Common Core initiatives.

The Obama administration has used this heavy emphasis on high stakes testing (a leftover of Bush’s No Child Left Behind policy) exactly as his predecessor did. Low test scores are frequently used as an excuse to demote or fire teachers, to cut the budgets of low performing schools, and even to even close them and replace them with private charter schools.

As Garfield teachers explained in a January 2013 press conference, the MAP is neither an appropriate or useful tool in measuring progress. For numerous reasons: it’s unaligned to the Seattle high school curriculum, it’s biased against English-language learners and special education students and it’s high margin of error makes it statistically invalid at the high school level. The makers of the test caution not to use it to evaluate teachers, as many school districts have been doing.

Common Core standardized tests like MAP are also racially biased. As Garfield history teacher Jesse Hagiopian, author of More Than a Score: The New Uprising Against High Stakes Testing states, “they’re a better indicator of a student’s zip code than their aptitude.”

All agree the biggest problem with high stakes testing is that it forces teachers to spend so much time teaching kids to regurgitate on multiple choice bubble tests that there’s no time to teach them valuable analytic and decision-making skills.

The Opt-Out Movement Catches Fire

The boycott against standardized testing quickly spread to other Seattle schools. Over the coming months, Portland students initiated their own boycott of the OAKS tests, some 10,000 parents and students marched in Texas against the overuse of high-stakes tests, and kindergartners and their parents staged a “play-in” at the Chicago School District headquarters against the replacement of the arts with high stakes standardized tests. In Rhode Island , members of the Providence Student Union dressed as as guinea pigs and lab rats to march on the State House.

The Seattle School District initially threatened to punish teachers with a 10-day suspension without pay. They eventually backed off owing to the unanimous support of the Garfield High School PTSA and student government, and after hundreds of phone calls and emails from parents and teachers around the country. After months of rallies, teach-ins, call-ins, and opt-outs, Seattle School Superintendent Jose Banda announced Seattle high schools could legally opt out of standardized testing.

The Education Spring has continued to spread. According to the New York Times , 20% of 3rd through eighth graders (more than 200,000) opted out of New York standardized tests this year. In Washington State more than 62,000 (and approximately half of 11th graders) opted out of the SBAC in 2014-2015.

A Broad Spectrum Populist Movement

As a populist movement, the Education Spring seems to be gaining momentum across the political spectrum. Obama Secretary of Education Arne Duncan initially blamed growing opposition to standardized testing to “Tea Party extremists.” When he could no longer deny the phenomenal strength of the opt-out movement, he blamed it on “white suburban moms who—all of a sudden—their child isn’t as brilliant as they thought they were, and their school isn’t quite as good as they thought they were.”

Hagiopian’s book More Than a Score is a collection of essays, poems, speeches and interviews from teachers, grassroots education activists and education researchers. He talks about his book in the following video:

There’s also a great clip of Jesse suggesting a more reasonable and reliable method of assessing students on NBC News

He blogs at I Am an Educator








Blue Gold: World Water Wars

blue gold

Blue-Gold: World Water Wars (Sam Bozzo 2008)

Film Review

inspired by Canadian activists Maud Barlow and Tony Clarke’s book Blue Gold, this film opened my eyes to the reality that water scarcity is a far more serious and imminent problem than either fossil fuel scarcity or climate change. The film outlines three main areas in which public policy around water is urgently needed: run-off management, aquifer destruction and water privatization.

Water Run-Off

I previously believed that chemical and nutrient pollution was the greatest threat to our fresh water supply. However according to Blue Gold, run-off is actually the biggest problem – the loss of fresh water when rainwater winds up in the ocean instead of being trapped as groundwater. Fresh water only comprises  3% of global water (the rest is sea water), and much of it is so badly polluted it’s no longer useable.

The four main ways urbanization and development accelerate run-off include the construction of 50,000 dams worldwide, the paving over of soil with cement and asphalt, deforestation (destroying tree roots that normally trap water), and the destruction of wetlands (the destruction of mangroves and other plants that naturally purify water.

Aquifer Depletion

Aquifer depletion is largely due to industrial agriculture and the unregulated use of water in manufacturing, fracking and bottled water plants. Once the water from the aquifer is gone, it takes thousands of years to replace it. The film depicts several communities where citizens, across the political spectrum, have banded together to block Coca Cola and Nestle from taking their water. Some cases have involved long expensive court battles, with several corporations threatening individual activists with SLAPP (strategic lawsuit against public participation) suits.

Water Privatization, Desalination and Water Wars

The last half of the film focuses on water privatization, water desalination, and water wars. In many developing countries, water privatization is already a life and death issue. In several African countries,  the private corporations that own the public water supply set the price so high that people end up drinking polluted water and die. The decision by Bolivia to sell its fresh water to Bechtel sparked a mass rebellion and ultimately the collapse of the Bolivian government.

In the US, an alarming number of city water have been privatized and sold to corporations.

The worldwide move to construct water desalination plants to reclaim water from sea water is closely linked to the issue of privatization. In addition to being extremely expensive, water desalination greatly increases climate emissions owing to the massive amount of fossil fuel it requires.

Water Wars

Blue Gold gives several examples of historic water wars (in the US) and predicts where the next water wars are most likely to take place. They point to strategic US military bases around the Great Lakes and in Paraguay (across the border from a Brazilian aquifer that is one of the largest in the world). They also offer a possible explanation why the Bush family have acquired massive amounts of property in Paraguay.

The film ends on a positive note with recommendations for citizen activists:

  1. Learn where your water comes from – the name of the watershed and (if privatized) the name of the multinational corporation that controls it. Local communities need to actively fight attempts by local government to allow water extraction or the takeover of local water supplies by multinational corporations.
  2. Kick the bottled water habit. This is a trick advertisers play on you. It is no healthier for you than tap water (and may be less healthy owing to phthalates and bisphenol A from the plastic that may be linked with breast cancer and low sperm counts). The nasty taste of tap water is easily masked with a little lemon juice.
  3. Lobby your local and state leaders to
  • Remove hydroelectric dams and replace with newer, more eco-friendly microturbine technology.
  • Adopt an active run-off management plan in which lost groundwater is measured and minimized through eco-friendly development planning. One example is the Blue Alternative (in which groundwater is replaced by digging small catchment pools in open spaces).
  • Pass local and state resolutions and constitutional amendments recognizing access to fresh water as a basic human right. Uruguay has adopted the right to water in their national Constitution.


My New Expatriate Identity


(the 2nd of 8 posts about my new life in New Zealand)

For people over fifty, starting over in a new country is like dropping a lab rat in a gigantic maze. Like the rat, you suddenly find yourself in an alien environment that constantly confronts you with new decision points and obstacles.

For example, learning to use a new phone system. It took me months to figure out the Christchurch phone book, owing to the unique alphabetization protocol New Zealand uses. I also had to learn to dial 111 for emergencies, 1 for an outside line and 0 for a cellphone or long distance number. And not to waste hours redialing a number when I got a “fast busy” signal. It sounds exactly like the “slow busy” signal but means the number has been disconnected.

It helped a lot to meet other American expatriates struggling with the same problems. It was also extremely gratifying to realize I wasn’t alone in my total repudiation of Bush’s wars crimes in Afghanistan and Iraq.

As I would later learn, tens of thousands of American progressives and liberals left the US during the Bush years. In November 2003, expatriate Americans led the antiwar demonstrations protesting Bush’s visit to London. American expatriates also formed major voting blocks voting blocs for Kerry in 2004 and for Obama in 2008 (I myself didn’t vote for him – I voted for Nader).

My Struggle With American Exceptionalism

Ironically the biggest hurdle I had to overcome was my own lack of objectivity regarding my country of origin. Given that my decision to emigrate was politically motivated, this really surprised me. Somehow it seems no matter how strongly Americans consciously reject America’s immoral and corrupt political system, we all unconsciously buy into the American exceptionalism that the education system and corporate media pound into us. The belief that the US is not only the foremost military and economic power, but also the most productive, efficient, cleanest, healthiest, transparent, just and scientifically advanced.

This is an extremely rude awakening for many Americans. It certainly was for me. In my case, Kiwi colleagues confronted me for my attitude that the US was more advanced in medical research. Looking back, I am both mystified and embarrassed that I took this position. I have known for at least two decades that US medical research is mainly funded by Big Pharma, which has a well-earned reputation for buying and publishing research that promotes profits at the expense of scientific objectivity.

Two of the most common examples are 1) research that promotes fictitious illnesses (such as estrogen “deficiency” disorder in menopausal women) to market marginally effective and frankly harmful drugs and 2) research that grossly minimizes the role preventive medicine and non-pharmaceutical interventions have in promoting and maintaining human health.

The Link Between Exceptionalism and Empire

Over time I came to understand that citizens in all great military empires are under enormous pressure to hold and express patriotic and exceptionalist beliefs. In Nazi Germany, you could be shot on the street for unpatriotic statements. When Britain was the world’s great empire, they gave you a trial first, but you could be imprisoned or even executed for treasonous utterances.

This is the second major awakening for many American expatriates: until we leave, we never fully appreciate that US militarism overshadows all aspects of American life. Again I have known for decades that the US government spends more than half their budget on the Pentagon. I also know that the purpose of the US military isn’t to defend ordinary Americans. The US invades and occupies other countries to guarantee US corporations access to cheap natural resources, sweat shop labor and markets for agricultural exports.

Yet it wasn’t until I left that I fully recognized the enormous personal price Americans pay – in terms of personal liberty, freedom of speech and thought and quality of life – as subjects of a great military empire.

photo credit: mpeake via photopin cc

10/14/02: The Day I Became an Expatriate


(The 1st of 8 posts describing my 2002 decision to emigrate from the US to New Zealand)

When I finally left the US in October 2002, I had been thinking of emigrating for many years. In June 1973, I shipped all my belongings to England, intending to start a new life there. Many Americans of my generation left the US in the early seventies, for Canada, Europe and more remote parts of the world. Most were draft-age men afraid of being sent to Vietnam. A few were women involved in clandestine abortion clinics that sprang up before the 1973 Roe v Wade Supreme Court decision that legalized abortion. Many were artists and intellectuals like me, disillusioned by lies about Vietnam in the Pentagon Papers,  Watergate, CIA domestic spying and Nixon’s use of US intelligence for his own political purposes.

In 1973, I myself was totally apolitical. My own decision to leave the US had very little to do with Vietnam or Watergate. My disillusionment stemmed more from watching rampant consumerism overtake the humanist values I had grown up with – the strong family ties, deep friendships and involvement in neighborhood and community life that were so important to my parents’ and grandparents’ generation.

During my eighteen month stay in England, it was deeply gratifying to meet people in London and Birmingham who had little interest in owning “stuff” they saw advertised on TV. People who still placed much higher value on extended family, close friendships and the sense of belonging they derived from their local pub, their church or union, or neighborhood sports clubs, hobby groups, and community halls. All these civic and community institutions had disappeared in the US. I missed them.

A downturn in the British economy in late 1974 forced me to return to the US to complete my psychiatric training.  I never abandoned my dream of returning overseas and religiously scanned the back pages of medical journals for foreign psychiatric vacancies. Meanwhile I  joined grassroots community organizations seeking to improve political and social conditions in the US. While and

For many years I believed Nixon was an aberration. This made me naively optimistic about the ability of community organizing to thwart the corrupting influence of powerful corporations over federal, state and local government. It never occurred to me the institutions of power themselves were deeply corrupt and had been for many years.

The Murder that Turned My Life Upside Down

As I write in The Most Revolutionary Act: Memoir of an American Refugee, the 1989 intelligence-linked murder of a patient was a rude awakening. It demonstrated, in the most horrific way possible that ultimate power lay outside America’s democratic institutions. It forced me to accept that political control lay in the hands of a wealthy elite who employed an invisible intelligence-security network to terrorize – and sometimes kill – whistleblowers and activists who threatened their interests. This painful discovery lent new urgency to my political work. It simultaneously caused an increasing sense of alienation and isolation from who hadn’t shared these experiences.

There was also the slight problem that I was experiencing the same phone harassment, stalking, break-ins and hit-and-run attempts as my patient.

Most of my liberal and progressive friends were far more knowledgeable than I was about the power multinationals corporations held over elections, lawmakers and the mainstream media. Yet they reacted very differently than I did to this knowledge. My response was to devote every leisure moment to building a grassroots movement to end corporate rule. Their response, in contrast, was to become cynical and withdraw from political activity to focus on their personal lives.

The Patriot Act: Repealing the Bill of Rights

In September 2001, I expected that the Patriot Act, which legalized domestic spying on American citizens, as well as revoking habeas corpus and other important constitutional liberties, would be the turning point that would send progressives into the streets, as the 1999 anti-WTO protests had, to halt rampant corporate fascism.

It never happened. In Seattle, a small 9-11 coalition formed in October 2001 to protest Bush’s invasion of Afghanistan. Over the following year, as Bush prepared to invade Iraq, former weapons inspector Scott Ritter and others spoke to sell-out crowds about the lie the Bush administration was hawking about Saddam Hussein’s non-existent weapons of mass destruction.

Then in February 2002, evidence began to emerge that officials close to the Bush administration had played some role in engineering the 9-11 attacks. By October 2002, like most American intellectuals with access to the international and/or alternative press, were well aware that neither Afghanistan nor Iraq had played any role whatsoever in the 9-11 attacks. There was no longer any question that Bush a war criminal under international law for launching two unprovoked wars of aggression.

So long as I, as a US taxpayer, continued to work and pay taxes in the US, I shared some responsibility for these crimes. It was this knowledge that ultimately forced my hand. I had a psychiatrist friend who had spent a year working in New Zealand. He told me who to contact in the Ministry of Health about psychiatric vacancies. By September 1, 2002, I had signed a job contract to work for the New Zealand National Health Service in Christchurch. I had six weeks to close my Seattle practice, sell my house and ship everything I owned to New Zealand.

To be continued.


Winner 2011 Allbooks Review Editor’s Choice Award
Fifteen years of intense government harassment leads a psychiatrist, single mother and political activist to close her 25-year Seattle practice to begin a new life in New Zealand. What starts as phone harassment, stalking and illegal break-ins quickly progresses to six attempts on her life and an affair with an undercover agent who railroads her into a psychiatric hospital.
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