All the companies that hired Michael Cohen have an Enron problem

  • Thinking patterns at all the companies that hired Michael Cohen, President Donald Trump’s lawyer, smack of those at Enron before it became one of the biggest bankruptcies in recent history.
  • Basically, they hide behind the fact that they’re following the law on paper while obviously violating the spirit of the law in practice.

If your company hired Michael Cohen, it has an Enron problem.

Specifically, it is a company that understands how to push the letter of the law while ignoring the spirit of the law. It is a company where people only care if things are right on paper but couldn’t care less if they’re wrong in practice.

In this state, every deed is done in the name of “solving a problem,” and every way of “solving a problem” is excusable as long as it’s legal by a hair.

In the cases of AT&T, Novartis, and Korea Airspace Industries, that problem was Donald Trump’s unpredictable presidency. The companies all had their reasons for handing Cohen over hundreds of thousands of dollars. AT&T, for one, has a merger with Time Warner pending approval and wanted to end net neutrality. (It got the latter.)

Trump was supposed to go in and disrupt the normal swamp channels of power in Washington, complicating their path to achieving their goals. To solve that problem, companies simply went with the new flow – and that flow poured all manner of sludge directly to Cohen and his man Trump.

If you can’t tell *Mrs. Banghart…

I’ve heard former Enron executives – people who presided over one of the biggest corporate scandals and bankruptcies in recent history – talk about this problem-solving spirit before. They blame a win-at-all-costs culture. Skirting around the law to accomplish their goals was standard, if unseemly.

Here’s how, in hindsight, they knew what they were doing was wrong: They wouldn’t feel comfortable telling, say, their first-grade teacher what they were doing. They couldn’t say it out loud to anyone outside the circle of trust because it would sound wrong – and they would have to hear themselves describe something that was obviously wrong.

Clearly, this distinction between what’s legal on paper and what’s right in practice matters. If it didn’t, we wouldn’t be so horrified, and we wouldn’t be rolling our eyes at the following:

“To be clear, everything we did was done according to the law and entirely legitimate,” AT&T CEO Randall Stephenson wrote in the memo. “But the fact is our past association with Cohen was a serious misjudgment.”

Stephenson is getting his reckoning because all of us found out about what his company did, and we know that even if everything was “done according to law and entirely legitimate,” it was wrong.

It is important that we know who Cohen approached at each company. At AT&T, Cohen managed to deal with the head of lobbying in a town that is basically all about lobbying. I’ll remind you that a fish rots from the head down.

Enron docPBSEnron execs — they thought they were the smartest people alive. Until they went down.

Expect better and do better

I’m proud that, despite all of the shameless things happening right now, Americans are still ashamed of what is happening with Cohen and the corporates.

But there are some who are not ashamed, and they – most horrifically – are everywhere. These are the people who tell us that corruption is just the “real world,” that it’s just a fact of life. They forget that people have agency and that if we don’t like something we can change it.

On Wall Street, some of these “savvy” people are the ones who got caught up in the 1MDB scandal, helping a corrupt regime spend and hide what were obviously ill-gotten gains. Right now, this same type of person is setting up an initial coin offering to scam money from gullible people. They still think Jordan Belfort, the “Wolf of Wall Street,” got a bad rap.

In DC, some of these “savvy” people are the political journalists who are taking this Cohen story as an opportunity to gleefully school the American people on themselves, saying things like “Newsflash: $US1.2 million is not even a rounding error.”

That is irrelevant. If we don’t expect any better, we won’t get any better.

The American people are naive. I cover Wall Street. I know that. But there are levels to this stuff. Not every consulting contract signed in the Beltway looks like Cohen’s. Let’s not try to pretend this is business as usual.

Everything about Cohen’s dealing is shady – start with the fact that Novartis paid Cohen an exorbitant amount for someone doing the work he took on, and go from there. It doesn’t require much thinking. Michael Cohen is not a professional lobbyist or politician. He has no idea how anything in DC works.

He’s a D-class lawyer who spent his entire adult life aspiring to be a fixer for a debt billionaire with spurious mob ties. The only thing he knows is how Donald Trump works. You can dress that up on paper, but anyone on the outside can read between the legalese and see that paying Cohen is a twisted way to get to the man he serves.

Every day, in their private and public lives, people are forced to make judgment calls about doing things that might seem right on paper but that they know are wrong in practice. If your company has a culture that stops at paper, you have an Enron problem.

And God help you if you have an Enron problem.

*Shout out to my first-grade teacher.

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