A lot has been said about the Texas energy giant Enron Corp., about its dubious accounting, its massive campaign contributions, its unrivaled access to the top levels of American government, and finally its spectacular fall.

The problem, at least at this point, is not that Enron did anything illegal. The problem is that what Enron did should have been illegal.

Enron exerted political power through its money, to some extent, but also through its close personal contacts with politicians, carving what has been referred to as a “regulatory black hole” in energy market regulation. Their lobbyists swept through state and federal government offices extolling the benefits of energy deregulation with almost religious fervor.

I don’t claim to understand the pros and cons of energy deregulation, and I doubt many state legislators — notably in California — understand the topic much better than I do. But our leaders must have been convinced by the presence of so many young, idealistic, well-dressed people with fancy PowerPoint presentations talking about energy deregulation as if it would cure cancer, balance the budget, and possibly bring about the second coming.

But at this point, the merits of deregulation are of secondary importance in the Enron debate. In fact, the close links between Enron executives and the very people who were supposed to be watching them make the policy questions irrelevant.

It’s a question of incentives. There were no incentives for those in power to do the right thing about Enron.

Enron’s executives had no incentives to run an honest business; they made untold fortunes overnight through rapidly increasing stock prices.

In the business climate of the Internet bubble, the most important aspect of a company’s reputation was not its business acumen or even its profits, but its “vision.” Enron had plenty of vision, as can be seen by the numerous accolades the business community heaped upon it. But no one had much of an idea of what the company actually did.

It certainly wasn’t in the interests of Arthur Andersen, Enron’s accountant, to pry too carefully into what the company did and what was on its balance sheets. After all, Enron was one of Arthur Andersen’s largest accounts, and if they uncovered anything fishy, they would probably be fired, not congratulated.

Furthermore, there are still no incentives to fix the mess. The politicians have a lot invested in pretending that they weren’t complicit. They have campaign contributions to lose — easy campaign contributions from companies that don’t carry a lot of political baggage, only legislative baggage. The accounting firms have a vested interest in not changing, because becoming more careful can lose them customers.

The executives have no incentive to be more honest because, hey, the board and top Enron executives made out with hundreds of millions of dollars, despite all that happened. Somehow, Kenneth Lay, Enron’s now disgraced former chairman, has burned through $200 million that the company gave him over the past three years. He might be indicted on insider trading violations, but much of what he did was entirely legal.

That’s the problem.

The problem is that, with the collusion of political and economic interests resulting from our lax campaign finance laws, the incentives are no longer what they should be. That’s what government oversight is for, after all: to make sure the incentives are correctly aligned. With the right incentives, deregulation can be great for consumers. But with politicians and prominent business leaders all on the same side, such instances of deregulation rarely happens.

Daniel Goff is a sophomore in Ezra Stiles College.