Bob Barr

Order Is in; It'll Help Execs Cook Books
The Atlanta Journal-Constitution

June 7, 2006

One of the things I've always enjoyed about Washington, D.C., is that it is a city of innumerable ironies:

A Congress willing to go to war with a president because the FBI raided an office of one of its members under investigation for bribery.

A president who asserted shortly after being sworn in for a second term that he would no longer press for a constitutional amendment prohibiting same-sex marriage. Then, when faced with plummeting poll numbers, he holds a news conference to announce the gravest threat to the empire is same-sex marriage and that the only way to avoid catastrophe is to enact a constitutional amendment prohibiting same-sex marriage.

In focusing on National Security Agency spying, Patriot Act snooping, Iraqi bombings, the high price of gasoline, bird flu fears, and the re-election of New Orleans Mayor Ray Nagin, perhaps you've missed another irony:

On May 5, less than three weeks before former Enron executives Kenneth Lay and Jeffrey Skilling were convicted in federal court of hiding information from investors and auditors, President Bush signed a directive authorizing the director of national intelligence to exempt any publicly traded corporation from maintaining accurate books and following proper auditing procedures.

Of course, if you read the Federal Register instead of counting sheep at night, you might have noticed the May 12 appearance of the president's direction to Director John Negroponte in that best-selling publication. In one fell swoop — a "stroke of the pen, law of the land" as former President Bill Clinton's adviser Paul Begala once quipped — Bush gave the intelligence director absolute power to decide which large corporations do not have to abide by accounting and auditing principles to which the rest of corporate America is subject.

Actually, to say that the director of national intelligence has absolute power in this regard may be a slight exaggeration. The memorandum signed by the "commander in chief" requires that, in exercising the power granted him pursuant thereto, the director "should consult with the heads of departments and agencies, as appropriate" (emphasis added). In other words, if the director of national intelligence thinks maybe he should let some other agency or department head know that he is relieving a corporation of the need to report accurately where it is spending shareholders' money or for what purpose, because he decides it is in the national security interests to do so, then he can decide to do so ... or not.

The title of the May 5 memorandum was nearly as long as the directive itself: "Memorandum for the Director of National Intelligence: Assignment of Function Relating to Granting of Authority for Issuance of Certain Directives." Its potential impact is far broader. Moreover, the timing could not have been better for the administration, which was just then facing growing public concern over reports of extensive monitoring of the phone and e-mail activities of millions of American citizens by the NSA.

For the telecommunications companies, including Verizon and BellSouth, facing embarrassing and legally troubling questions over their complicity in furnishing private customer records to the NSA without requisite court orders, the president's directive must have been viewed as a godsend. Now, rather than answer difficult questions about why they failed to follow the law, the corporate spokespeople could issue a simple statement: "We're so sorry, but we've been authorized by the director of national intelligence not to discuss with you or anyone else why or to what extent we compromised our customers' private phone records." Then, they can move on to more pleasant topics.

At a time when the federal government is spending so many billions of dollars conducting a war in Iraq that its own auditors can't keep track of the many zeroes, the job of public and congressional watchdogs — yes, there are a few still around — has been made immeasurably more difficult as a result of the president's May 5 secrecy directive. Future corporate officers could henceforth be exempted from pesky accounting and auditing requirements, the avoidance of which ensnared then-Enron executives Lay and Skilling, by urging the head of our foreign intelligence apparatus to label their work "in the national security interest."

With a snap of the government fingers, the massive federal framework designed to ensure openness and accuracy in corporate bookkeeping can be made to disappear.

Hmm, has anyone brought this to the attention of the lawyers preparing the appeals for the two recently convicted Enron executives?

Mr. Barr occupies the 21st Century Liberties Chair for Freedom and Privacy at the American Conservative Union Foundation.