Enron Received Many Loans From U.S. for Foreign Projects
By RICHARD W. STEVENSON
ASHINGTON, Feb. 20 — Two government agencies that promote American business interests abroad gave the Enron Corporation (news/quote) hundreds of millions of dollars in loans and other assistance over the last decade, the agencies and Congressional investigators said today.
The Overseas Private Investment Corporation, which helps American companies win business against foreign competitors in developing nations, gave Enron $544 million in loans for five projects, starting in 1993. It also provided $204 million in political risk insurance for 10 Enron projects, starting in 1992.
The Export-Import Bank of the United States, a government agency that makes loans to foreign companies to help them buy goods and services from American companies, lent $675 million to companies affiliated with Enron, starting in 1993.
Republicans said the figures showed that Enron had sought and received help from Washington long before President Bush took office and that the Clinton administration had enthusiastically helped Enron as the company undertook an ambitious global expansion in the 1990's.
Enron sought to cultivate ties to the Clinton administration in other ways. As he was about to step down as Mr. Clinton's Treasury secretary in 1999, Robert E. Rubin received a letter from Kenneth L. Lay, who was then Enron's chairman, offering Mr. Rubin a seat on Enron's board, documents released tonight by the Treasury Department show.
The offer was contained in a letter Mr. Lay sent to Mr. Rubin on May 14, 1999, two days after Mr. Rubin announced his intention to resign. The offer was reported by The Associated Press, which obtained the documents from the Treasury Department through a Freedom of Information Act request. Mr. Rubin did not accept the offer, and after leaving the government went to work for Citigroup (news/quote), which was one of Enron's biggest lenders.
Mr. Rubin "had no interest" in Enron's offer and declined it, said Michael Schlein, a Citigroup spokesman.
Last fall, as Enron was approaching bankruptcy, Mr. Rubin called the Treasury Department on Citigroup's behalf to raise the idea of the Bush administration's intervening with the credit-rating agencies. Mr. Rubin ultimately agreed that such an intervention would not be appropriate.
The Treasury Department documents also show that Mr. Lay contacted Mr. Rubin and his successor, Lawrence H. Summers, on several other issues, including Houston's effort to win tax breaks for urban renewal projects and the Clinton administration's approach to regulating derivatives trading.
The Clinton administration's efforts to help Enron in other countries was part of a broader push by Mr. Clinton and his first commerce secretary, Ronald H. Brown, to become advocates for American businesses around the world.
When he was killed in a plane crash in Croatia in 1996, Mr. Brown was on a trade mission intended to help Enron, among other companies. The Export-Import Bank and the Overseas Private Investment Corporation continued granting new loans to Enron projects through 2000.
The financing deals during the 1990's "obviously were a tremendous benefit to Enron's operation," said Senator Charles E. Grassley, Republican of Iowa.
"The disclosure of this information sheds light on the government's actions in support of Enron over the years," he said.
But some of the deals supported by the Clinton administration also led Enron to seek help from the Bush administration. Mr. Lay had several conversations last year with Donald L. Evans, the current commerce secretary, about Enron's troubled Dabhol power plant project in India.
The power plant, which was supported by both the Overseas Private Investment Corporation and Export- Import Bank loans, has been shut since June by a dispute between Enron and the government of the state in which the plant is situated. Vice President Dick Cheney raised the issue in June with Sonia Gandhi, the leader of India's main opposition party.
So far, Enron's bankruptcy has not resulted in any losses to taxpayers from the loans to Enron projects abroad. In most of the deals, repayment is tied to the performance of the specific projects abroad rather than to the parent company's financial health.
Of the total $675 million the Export-Import Bank lent to Enron projects, about $510 million remains outstanding, said Cheryl Crispen, a spokeswoman for the bank. She said all of the loans continue to be paid on time.
Of the $544 million in loans from the investment corporation, $454 million remains outstanding. The loans continue to be paid back on time. Last week, the investment corporation canceled two loan commitments for Enron power plant projects in South America, saying the deadline for moving ahead with the projects had passed.
Separately, Enron announced today that James V. Derrick Jr., the company's executive vice president and general counsel, would retire on March 1.
Mr. Derrick, 57, will be succeeded by Robert H. Walls Jr., the deputy general counsel, the company said.
Congressional investigators have raised questions about the degree of seriousness with which Mr. Derrick investigated early reports of problems with Enron's accounting.
