The money trail wound its way from Enron's hometown of Houston to the Texas capital of Austin to Washington, D.C. Along the way, politicians who could help the energy giant got money for their campaign chests.
But the largesse of the company and its employees extended well beyond George W. Bush, Texas' top elected officials and nearly half of Congress. Enron's charitable donations went to cat shelters and art museums, Christian missionaries and Planned Parenthood.
Former Enron chief executive Kenneth Lay, who resigned this week, was known in Houston as the man to woo for favors and contributions to charitable causes and civic improvement projects.
"Enron operated in a way that was reminiscent of the way tobacco companies historically operated before they came under so much fire," said Bill Miller, a political consultant in Austin who has worked for both Democrats and Republicans. "If you asked for $5,000, they might say, `Well wouldn't $10,000 be better?"'
Some Enron observers insist the company was simply doing an effective job protecting its interests at various political levels while being a good corporate citizen in Houston and beyond. But critics say the strategy was carefully planned to buy influence and improve the company's bottom line.
"The ways they did it weren't unique, but they did it more aggressively than anyone else," said Andrew Wheat, research director for Texans for Public Justice, a group critical of Enron's contributions to state politicians in Texas and national politicians around the country.
The donations are facing more scrutiny after the company's rapid collapse into bankruptcy late last year, following disclosures that it hid billions of dollars of debt in a series of partnerships that benefited some company executives. The furor has raised questions of whether Enron used its clout to avoid closer scrutiny of its operations.
"Maybe they trimmed the edges off of policies that would have been quite objectionable," said Daron Shaw, a government professor at the University of Texas in Austin. "Since they were working both sides of the aisle, they wanted to minimize the chances of maximum regret."
An Enron spokesman said the company, once listed No. 7 on the Fortune 500 list, and its top executives acted no differently than any other top businesses and their leaders.
The political contributions were "something every company does to support like-minded individuals that support the efforts of a particular company," said the spokesman, Eric Thode.
And he said it was a "travesty" that people might criticize Enron's charitable donations. "It's a figment of the imagination that there is anything sinister about being a good corporate citizen," he said.
Of the $5.77 million in contributions to candidates the company has made since 1989, nearly three-fourths went to Republicans. In the 2000 election, it gave $2.4 million to individual candidates, political action committees and political parties, said the Center for Responsive Politics, a watchdog group.
Over those 12 years, according to the center, 71 current senators and 188 House members have benefited from Enron's donations. Topping the list were Texas' Republican senators, Kay Bailey Hutchison and Phil Gramm, each receiving almost $100,000, and seven Texan representatives led by Democrat Ken Bentsen, with $42,750.
Enron was a major contributor to the Bush presidential campaign and donated $100,000 for the Bush-Cheney inaugural gala last a year ago, a sum matched by Lay and his wife.
Gramm's wife, Wendy, is on Enron's board and also served on its audit committee, which is supposed to keep close watch on the company's financial practices. By their own accounting, the Gramms lost nearly $700,000 in stock options when the company went under. Wendy Gramm collected between $915,000 and $1.85 million from Enron in salary, attendance fees, stock options and dividends between 1993 and 2001, according to Public Citizen, a Washington watchdog group.
Wendy Gramm took a seat on Enron's board in 1993, just five weeks after resigning as chairwoman of the Commodity Futures Trading Commission, where she pushed through a key regulatory exemption that benefited Enron.
She heads the regulatory studies program at George Mason University's Mercatus Center, which received $50,000 from Enron since 1996, less than 1 percent of total corporate gifts to Mercatus.
Gramm said he had no warning of the company's bankruptcy or its dire financial situation. And he said his wife had done nothing wrong from her vantage point on Enron's board and audit committee.
Another board member on the audit committee, Lord John Wakeham, a former leader of the British House of Commons, received a $72,000 yearly consulting contract for "services rendered" to Enron's European arm, according to documents filed with the Securities and Exchange Commission. And Enron board member Herbert S. Winokur Jr. is a managing partner of the company that owns the National Tank Co., which had $370,294 in sales to Enron subsidiaries.
The side deals with board members raise serious questions about their ability to perform their duty of making sure top managers were doing their jobs, said Harold Star, a management professor and corporate governance expert at the State University of New York at Buffalo.
"You've got a board that's passive, co-opted and basically corrupted in terms of its role," Star said.
Enron board members also had ties around the country through their charitable contributions. For example, Robert Belfer, the company's largest shareholder, and his wife gave $7.5 million for the Robert and Renee Belfer Center for Science and International Affairs at Harvard University's Kennedy School of Government. He graduated from the school.
Lay and his wife, Linda, gave generously to causes primarily based in Houston through the Linda and Ken Lay Family foundation, which donated $2,546,771 in 2000, according to Internal Revenue Service records.
The foundation also contributed to out-of-state groups, including $10,000 to the American Dance Festival in New York; $28,900 to the Washington-based Barbara Bush Foundation for Family Literacy; $125,000 to the Illinois Institute of Technology in Chicago; $6,700 to Knox Theological Seminary in Fort Lauderdale, Fla.; $60,000 to Louisiana State University's Manship School of Mass Communications; and $6,627 to Ozarks Public TV in Springfield, Mo.
Lay's influence alone was profound in Houston, where he had a sterling reputation as one of the city's most prominent movers and shakers.
Miller, the political consultant, said he and other lobbyists asked for Lay's help several years ago when a problem finding financing for a parking garage threatened a plan to bring a basketball arena to Houston.
"He sent a memo to some CEOs for a meeting in Houston, and it meant forking over a lot of money, millions of dollars," Miller said. "When the meeting was over, the deal was done. You can only do that if you are giving a lot of money or helping a lot of other people make money."
It was Lay's connection to influential black groups in Houston that helped get out the vote in favor of a successful 1996 referendum to build a new baseball stadium that would be named Enron Field, said David Walden, chief of staff to Houston Mayor Bob Lanier from 1992 to 1998.
Walden said he believes Lay worked to improve Houston out of a sense of civic duty.
"He thought it was important for the image of the city to have the stadium downtown," Walden said. "Having pro sports franchises and the ballet was a great recruiting tool and the folks he wanted to attract (as Enron employees) paid attention to those things."
But Enron's generosity was also aimed at impressing influential people with the power to help or hurt the company, said Ralph Estes, accounting professor emeritus at American University and the author of "Tyranny of the Bottom Line: Why Corporations Make Good People Do Bad Things."
"Most of the rationale is that somehow it will pay off on the bottom line," he said. "It's calculated to pay a dividend, and these actions can keep the wolves from the door."