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Widening Probe of Texas-Based Enron Could Dog Bush as Whitewater Plagued Clinton An AP News Analysis
By Tom Raum Associated Press Writer
Published: Jan 10, 2002
WASHINGTON (AP) - The expanding investigation into the collapse of Enron Corp. and the company's close ties to the Bush administration could quickly turn into a consuming political liability for President Bush in spite of his currently high approval ratings. And Democrats are pressing hard for just that.
At this point, no one is alleging wrongdoing by Bush or top members of his administration in the bankruptcy of the Houston-based energy trading company, a failure that cost thousands of jobs and ravaged the retirement savings of many employees.
But such investigations tend to take on a life of their own. And Democrats, sensing a congressional election-year opportunity, are working hard to turn up the heat.
Some Democrats are likening the probe to the Whitewater and campaign fund-raising investigations that plagued former President Clinton.
"The reason this is so potentially devastating to Bush is that it brings to life in very real terms the notion that when push comes to shove, he's for the big business special interests and not for the little guy," said former Clinton press secretary Joe Lockhart.
The controversy deepened on Thursday with the disclosure by the White House that Enron Chairman Kenneth L. Lay, a longtime friend of the president, called two of Bush's Cabinet officers - Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans - before the company filed for bankruptcy late last year.
The disclosure came a day after the Justice Department announced it was opening a criminal investigation of the energy company's collapse, including whether it defrauded investors by deliberately concealing information about its finances.
Attorney General John Ashcroft, who received campaign contributions from Enron executives during his failed 2000 senatorial bid, stepped aside from the investigation.
The collapse, the largest corporate bankruptcy ever, is also being probed by the Labor Department and by the Securities and Exchange Commission, which is looking into the company's destruction of possibly key financial documents; and by five congressional committees.
Sen. Joseph Lieberman, D-Conn., leading one of those inquiries, is promising "a search for the truth, not a witch hunt."
But some Republicans - including White House spokesman Ari Fleischer - used just that term, "witch hunt," on Thursday in describing the widening investigation.
"There's not even smoke here, let alone a fire," said Charles Black, a veteran GOP consultant.
"They can keep it going in terms of probing Enron, looking into what happened to those people who lost their pensions, what happened to the accounting. All those are legitimate issues," said Black. "But there's no evidence that any elected officials did anything for Enron."
Bush, a former Texas oilman himself, on Thursday told reporters, "I have never discussed with Mr. Lay the financial problems of the company." And Fleischer said that no one in the administration offered to intervene on Enron's behalf.
"This is hardly going to be a scandal that brings down President Bush, but it will be a nagging problem for the Bush administration for some time to come," said Larry Sabato, a University of Virginia political scientist.
But Sabato said it has all the ingredients to become all-consuming "because the Bush administration is so laden with corporate types and people with ties to the energy industry. It's understandable to the American people. It's the big boys versus the little guys who got hurt."
"These things can be an enormous distraction. But by the end of the Clinton administration, we learned that the best thing to do is assign a team to disclose everything, and to keep everyone else out of it," said Paul Begala, a former Clinton political adviser.
Lanny Davis, who was special counsel to Clinton from 1996 to 1998, urged Democrats to not take the same low road he claims Republicans took in pursuing the Whitewater and related inquiries.
He said so far he sees nothing in the Enron case to link Bush administration officials to the collapse other than innuendo. "Let's go after the serious stuff," including why Enron employees were prevented from unloading their Enron stock in their 401(k) retirement plans as the share prices plunged from over $80 to under $1, Davis said.
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EDITOR'S NOTE - Tom Raum has covered national and international affairs for The Associated Press since 1973.
AP-ES-01-10-02 1859EST

Enron gave 667,000 dollars to Democrats in the last election cycle.

AND

-Lloyd Bensten, Clintons first treasury secretary was a recipient of Enrons largesse. At the time of his campaign for Senate, he received the second largest donation from Enron according to the Center for Responsive Politics.

-Robert Rubin, Benstens successor, was involved with Enron while he worked as an investment banker Goldman & Sachs. Clinton first hired Rubin to head his National Economic Council. Soon afterwards, Rubin wrote on Goldman Sachs stationery to former clients, including Enron, in which he ''looked forward to continuing to work with you in my new capacity.''

-In Aug. 1993, McLarty arranged an invitation for Lay to play golf with Clinton in Vail, Colorado. This date irritated Oscar White, chief executive of Coastal, another natural gas company that had helped the Clinton election campaign raise funding. These connections to the Democratic administration have helped Enron considerably -Ken Silverstein Counterpunch

-Clinton officials publicly helped Enron win the contract in India as well as in Indonesia. Enron had received U.S. government funds to build power plants in China, the Philippines and Turkey. Enron also won contracts in Pakistan and Russia while accompanying senior U.S. government officials on state trips. In June 1996, four days before India granted final approval to Enron's project, Lay's company gave $100,000 to the DNC.

-According to the Houston Chronicle, Enron got permission to build a pipeline from Mozambique to South Africa after National Security Adviser Anthony Lake threatened to withhold aid to Mozambique if it didnt approve the project.

-The bulk of Enron's alleged chicanery had to have happened during the Clinton administration.

- Lee. P Brown (D) of Houston received $250,000 just before Enron filed Chapter 11. Enron campaigned against the conservative candidate for mayor.

-Kenneth Lay hired the firm of Clinton's former chief of staff Mack McLarty.

-The Center for Responsive Politics lists Democratic Senators Chuck Schumer of New York, John Breaux of Louisiana, and Jeff Bingaman of New Mexico--chair of the Senate Energy Committee--among the top beneficiaries of Enron's political donations

-Kenneth Lay retained as his top D.C. lobbyist Linda Robertson, a Democrat who worked for the Clinton Treasury Department.

-Dynegy greased Henry Waxman's palms with thousands of dollars.

-Democratic Senatorial Campaign Committee received three checks from the Houston-based energy and trading giant totaling $100,000. Karen Denne, an Enron spokeswoman, said the company had a record of two checks written to the committee -- dated Sept. 24 and Nov. 2

- No. 20 on the Enron money list since 1989 is the Senate's leading Democrat, Tom Daschle of South Dakota.

-Enron was apparently a big backer of the Kyoto Treaty .