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Arnold’s Enron Connection Worse Than Weed, Steroids

Friday August 15, 2003

In the film “The Sum of All Fears,” last year's Ben Affleck nuclear terrorism flick, actor James Cromwell plays a president up for reelection who in one scene recounts his political assets in a humorous speech to the press. That he admitted to smoking a little weed while serving in Vietnam, he jokes, should help his reelection campaign to carry California. 

If that’s true, chalk up one more electoral plus for Austrian native Arnold Schwarzenegger, the headline-writer’s bane; the actor who would be California governor shouldn’t have a problem with his appearance toking up on a big fat doobie as the star of the career-making 1977 documentary “Pumping Iron.” 

Nor should the hefty doses of steroids he admits taking back in his heyday as a world champion body-builder. That’s all behind him, he said when word of his former indulgence leaked out during his tenure as chair of the President’s Council on Physical Fitness and Sports under the first President Bush. 

Californians will probably tolerate his full frontal beefcake, too—another legacy from his doobie-puffing, ‘roid-popping days. 

Voters even seem indulgent when it comes to his widely reported grab-and-grope behavior and what some pundits are calling his “Nazi problem”—his Austrian policeman-father’s membership in Hitler’s party and Arnold’s own never-disavowed friendship with former Wehrmacht officer and Austrian president Kurt Waldheim. Comedian Bill Maher put his own spin on the issue by turning it into a joke: “Arnold Schwarzenegger—finally, a candidate who can explain the administration’s positions on civil liberties in the original German.” 

So the real question is: Will voters’ indulgence endure after they spend some time chewing on the fact that he was one of the state’s political elite sought out for support by Enron’s Kenneth Lay in the midst of his firm’s electricity rate manipulations—the same ones that landed the state in the fiscal crisis that prompted the recall drive that’s landed Schwarzenegger on the gubernatorial ballot? 

The Enron albatross isn’t unique to the actor. Richard Riordan, then another prominent GOP gubernatorial hopeful, attended the same Lay-led Beverly Hills hotel room strategy session as did Schwarzenegger and felonious former junk bond king Michael Milken, Lay’s mentor. 

According to multiple accounts, Lay called the May 11, 2001, meeting to shore up support for electrical rate deregulation from California Republican powerhouses. The meeting came three days after the Golden State suffered its third round of manufactured electrical blackouts, which only ended when the state agreed to finance continued power purchases through the country’s largest-ever bond issue. 

According to later press accounts, Lay had sought Schwarzenegger’s and Riordan’s support for his deregulation campaign since both men were widely perceived as probable Republican gubernatorial candidates. 

Enron and sundry other energy traders picked the pockets of California consumers and looted the California treasury through artificial price-inflating schemes carrying such sonorous handles as “Death Star” and “Get Shorty.” 

The media have also been notably reluctant to report on the simple fact that the state’s fiscal crisis was largely caused by folks like Schwarzenegger’s host at that private Beverly Hills confab two years ago. Huge electrical bills brought by state and federal deregulation of the utility industry were the main culprit—the fruits of laws pushed through by an acting governor-turned-president named Reagan and a non-acting governor named Pete Wilson, both members of Arnold’s own party. 

Until Enron imploded, Lay was a favorite of Republican politicians in search of cash. He was a close friend and major supporter of another Republican governor-turned-president, George W. Bush, who affectionately called the Enron boss “Kenny Boy.” 

Of course, ‘Ah-nuld’ isn’t the first actor to run for office in the Golden State. At one time the state had both a president and a U.S. senator who came to politics from the silver screen. 

Like another prominent GOP member, the beefy entertainer has been noticeably shy when it comes to candid interviews with the press. He announced his candidacy not at a press conference but on the “Tonight Show,” and the only interview he gave any reporter in the week afterwards appeared in a small Austrian paper. 

Most of the press coverage so far has been gushing, though noted uberconservative talk show host Rush Limbaugh has been cautioning his listeners that Schwarzenegger may be a liberal in Republican drag. 

And speaking of drag, Californians probably won’t be bothered by persistent rumors about the candidate’s sexual preferences—rumors ridiculed by his press agent and many who know the man. 

But Enron could be another story. 

Richard Brenneman is the incoming Managing Editor of the Berkeley Daily Planet.