It is St Valentine’s Day. Of all foreign investors, the one everybody remembers is Rebecca Mark, the Enron lady who clinched the Dabhol deal with the Maharashtra government. She is remembered not for her business acumen, but her looks, clothes, and legs. Many Indians dreamed of being her Valentine. Gossip columnists claimed she won the Dabhol contract due to her sex appeal.
I usually dismiss such talk as the blabber of sex-starved Indians. But apparently Indians are not alone in hanging their tongues out. Consider an Internet article on Mark by American journalist Jeff Stein.
“Sometime in the mid-1990s, Rebecca Mark, a striking, 30-something honey blonde who was running Enron Development, summoned her employees to a meeting on the top floor of the company’s glass-and-sandstone headquarters in Houston.
“She felt she had to explain her wardrobe style, a colleague recalls. The mini-skirts and spike heels that were her trademark on three continents, she told assembled hands, had a purpose. Day in and day out, she said, she called on a foreign official who typically spent most of his time with other conservative men, her competitors. He will not remember most of them, she said, but he will remember me.
“And sure enough, recalls a former Enron V-P, she rode it for all she was worth. Not to say she was stupid, and only had a body. Hardly. But, as she explained to us, you use what you got.” Mark also had “a Harvard-honed brain, powerful mentors, cut-throat office instincts. Fortune magazine listed her as among the 50 most powerful women in America in 1998.
Yet she sank into obscurity rapidly after that. Why? Because, after Dabhol, Ken Lay put her in charge of Azurix, an Enron subsidiary which hoped to make fabulous profits by grabbing water supply contracts being opened up to the private sector in different parts of the world. This failed dismally. She struck a poor deal in Britain and a disastrous one in Argentina. Other deals in Chile and Ecuador evaporated, and she lost a veritable fortune in two years. Enron sacked her.
Financially, her sacking in 2000 proved a blessing in disguise. She sold her Enron stock at a time when it was soaring on Wall Street, and escaped the crash a year later.
Why, on St Valentine’s Day, am I writing about a fallen has-been? Because Dabhol remains in the news, and Indian journalists still recall Mark in star-struck terms. She took India for a ride using her sex appeal, they say. Sex-starved politicians and bureaucrats drooled over her.
Now, I complain louder than anyone about the vices of our politicians. But I think it is ridiculous to view the Dabhol deal through Mark’s sex appeal. If politicians and bureaucrats were suckers for a good-looking woman, the neta-babu raj would have been subverted long ago. Instead it reigned supreme for decades, and is still a powerful force. It is proof against every sort of inducement offered by businessmen—money, wine or women.
Businessmen are not saints or moral reformers. They try to maximise business opportunities and profits within the values of the existing social and political systems. If they hear that a bureaucrat listens to legal arguments, they will use legal arguments. If a politician wants a percentage of every deal, they will offer that percentage. If they think a decision can be influenced by free trips to Hawaii, they will offer that. If a politician or bureaucrat wants sex, they will provide it in any size, shape or gender required.
Mark was not the most good-looking woman India has seen. The notion that sex-starved Indian politicians fell for her is a figment of the imagination of the media.
She stood out not because of her sensuality, but because she was a woman in a business world of middle-aged men. This gave her a name-recognition advantage, but little more. Dabhol was a testimony to her negotiating skills, not her legs.
At the end of it all, her legendary negotiating skills proved as illusory in Dabhol as in Azurix. A good negotiator seeks a high price. But if the price is so high as to bankrupt the customer, the gains are illusory.
Maharashtra defaulted on the Dabhol contract, and suffered a serious loss of global image. But soon afterwards, Enron lost all credibility when it went bust amidst much acrimony. Lucky Maharashtra is more or less off the hook. Indeed, Indian companies are going to feed off the carcass of Enron by acquiring its Dabhol assets at a fraction of the original price. Despite being plied with money and women, Indian politicians have always skinned businessmen alive. Enron too. Even if Enron paid bribes (there is evidence of this), just look at the matter in perspective.
First, crooked India took Enron’s money. Then it reneged on the favour it was supposed to grant. Then it drove Dabhol to closure. And now it will acquire the foreign holdings at a tiny fraction of the original price. While complaining all the time that Enron is the profiteer.
What a performance! Mark you did not take India for a ride. India took you for a ride.