Enron-White House Dealings Probed

WASHINGTON (AP) - A cascade of revelations about the bankrupt Enron Corp. and its dealings with Bush administration officials is raising questions about potential conflicts of interest as the Justice Department (news - web sites) investigates the politically connected company.

The White House revealed Thursday that Enron officials sought the administration's help last fall shortly before the energy-trading company melted down along with the life savings of many of its employees. Several administration officials - and Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) - received telephone calls from the Enron chairman, Kenneth Lay.

Enron's auditing firm, whose work is under investigation by federal regulators, disclosed that its employees had destroyed a ``significant'' number of documents - which a congressional source said was thousands of pages - related to Houston-based Enron.

In another startling development in a day brimming with them, Attorney General John Ashcroft (news - web sites) disqualified himself from Justice's criminal inquiry into Enron's conduct. The energy-trading company donated thousands of dollars to Ashcroft's Senate campaign in 2000. In Houston, Enron's hometown, U.S. Attorney Michael Shelby announced that his entire office disqualified itself from the investigation because he and other local prosecutors ``have family relationships with individuals who are arguably affected by the Enron bankruptcy.''

Bush, who counts Enron among his biggest political contributors, pledged to pursue aggressively the investigation into whether the company defrauded investors, including 401(k) plan holders, by concealing vital information about its finances.

``Ken Lay is a supporter,'' the president said. ``But what anybody's going to find is that this administration will fully investigate issues, such as the Enron bankruptcy, to make sure we can learn from the past and make sure that workers are protected.''

Treasury Secretary Paul O'Neill said Friday: ``On first blush it looks like Enron operated within the rules and regulations ... with regard to how they managed their 401(k) plan, and if they did, then we need to look and see if there are appropriate changes we could make.'' He was interviewed on ABC's ``Good Morning America.''

Bush said he saw Lay twice last year, but they did not discuss Enron's financial problems. Lay sought help last fall from Commerce Secretary Don Evans, Bush's chief political fund-raiser and confidant, and contacted O'Neill about the firm's financial problems, O'Neill and Evans said Thursday. Enron also revealed that Lay called Greenspan, the independent Fed chairman, about the company's problems.

Lay denied that he sought help from the officials. Enron said Lay's calls to O'Neill, Evans and Greenspan were simply to give them a ``heads-up'' about Enron's problems.

``He felt an obligation to let them know what was going on,'' Enron said in a statement. ``At no time did he ask for any assistance from the government, nor did he intend to leave the impression that he was asking for assistance.''

Dave Skidmore, a spokesman for the Federal Reserve, said Lay contacted Greenspan on Oct. 26, and ``the chairman did nothing in response to the call. It would have been inappropriate.'' Skidmore would not characterize the conversation. Lay also first reached out to Evans on Oct. 26. The two eventually spoke three days later. The first of Lay's two conversations with O'Neill was Sunday, Oct. 28.

Enron's bankruptcy, already the subject of criminal, civil and congressional investigations, threatens to pull the White House into a political quagmire even as Bush's approval ratings reach near-record levels because of the war against terror.

``It is now clear the White House had knowledge that Enron was likely to collapse but did nothing to try to protect innocent employees and shareholders who ultimately lost their life savings,'' said Rep. Henry Waxman (news), D-Calif.

Firing back, Bush spokesman Ari Fleischer (news - web sites) urged Democrats to avoid ``partisan witch hunts, endless investigations or fishing expeditions.'' Democrats hope to make a political issue out of the administration's many ties to Enron.

The bankruptcy has forced White House officials to face questions once posed to the scandal-tainted Clinton White House.

Would Bush support naming a special prosecutor to investigate? Fleischer said no. He also said he did not know any White House aides who had hired lawyers.

And there was a development reminiscent of Clinton's Whitewater: missing documents.

The big accounting firm that audited Enron's books, Arthur Andersen LLP, notified investigators that it had destroyed a ``significant'' number of documents related to the company. Andersen said it didn't know whether its directive to preserve documents demanded by government investigators was violated.

At the Securities and Exchange Commission (news - web sites), already investigating Andersen's auditing work for Enron, Enforcement Director Stephen Cutler said destruction of documents was ``an extremely serious matter'' but would not deter the SEC from pursuing its probe.

As for the company's contacts last fall, administration officials said Lay told Evans on Oct. 29 that he would welcome any support to help the company deal with a bond-rating firm that was considering downgrading Enron. Enron's credit rating was critical because, if lowered, $3.9 billion in debt would come due. Of that amount, $2.4 billion previously had been hidden in partnerships that were created to keep debt off Enron's books.

In a brief interview, Evans said Lay told him: ``I would appreciate any support you could give.'' Evans said Lay was not more specific. In response to the plea, Evans said, ``I did nothing.''

Evans said he didn't tell the president about the call because ``I didn't think he needed to know.''

In one of two conversations with O'Neill, Lay discussed a past example in which the Federal Reserve pressured several large financial institutions to bail out a Connecticut hedge fund, Fleischer said.

The calls to Evans and O'Neill came after investors and the public learned of the extent of Enron's problems, when the company posted major losses Oct. 16.

Enron filed for bankruptcy Dec. 2, after months of conjecture about its finances.

-Bush raised nearly $114,000 in political action committee money and individual donations from Enron during the presidential campaign. Enron also gave hundreds of thousands of dollars to Bush's two gubernatorial campaigns in Texas. Independent analyses show that Enron employees donated almost $800,000 from 1999 to 2001 to Bush, members of Congress and both parties. Most went to GOP causes.

-Lay met with Vice President Dick Cheney (news - web sites) or his aides six times last year before release of the administration's energy plan. A Cheney spokeswoman said he last talked with Lay in June, and never about Enron's financial status.

-Senior Bush adviser Karl Rove owned Enron stock at the beginning of Bush's term but sold it because of federal ethics rules. Economics adviser Larry Lindsey earned $50,000 from Enron for serving on a company board last year.

-Marc Racicot, whom Bush has appointed chairman of the Republican National Committee (news - web sites), was a lobbyist for Enron last year. Racicot said he will do no more lobbying work after he takes the GOP's top job.

Mr. President, How dare you be so ethical?!

In case anybody missed it, there's a full-scale, no-holds-barred air war going on right now. A massive one. Daisy-cutters, 2,000-pound bunker-busters -- you name it. Bombs are dropping faster than you can blink. Squadrons of B-52s -- AKA 'big ugly fat fellows' -- are prowling the heavens, pounding enemy positions, unleashing their fiery wrath, carpet bombing around-the-clock....the works.
What's that you say? Haven't heard of this? Thought the war was over, eh? Well Fuggedaboudit! Flick on the idiot box, kick up your feet, sit back and enjoy (Drum roll, please?) -- OPERATION ENRON!!! Yep, folks, it's Enron at dawn, Enron at noon, Enron at dusk. Enron 24/7. The media high command has declared an air war against the Bush administration; The White House, like the mountains of Tora Bora, has become ground zero for media strike bombardiers.
Kidding aside, never -- ever -- in my life have I seen anything quite like what we're witnessing right now.
Media bias is one thing. We've all seen it. We've all tasted it. Heaven knows we've all groused about it, perennially. Bernard Goldberg's bombshell has soared to near the top of the New York Times best-seller list, and for good reason.
But, Ladies and Gentlemen, what we're witnessing goes beyond simple 'bias' -- well beyond. This isn't bias, this is fraud. Wholesale fraud.
The media is perpetrating one of the greatest frauds ever: To wit, the fabrication of a pseudo-political "scandal" -- out of whole cloth.
This isn't "news" "reporting", this is orgy-making -- a veritable orgy of innuendo. It would take years to tally all the libel and slander, all the malicious rumor-mongering, all the baseless smears -- the torrent of lies, insults and calumnies spewed straight from the bowels of our "major media" these past two days -- alone.
Question: Why is the media doing this? That's simple: Because they can.
Any proof of administration wrongdoing? No, not the vaguest hint, not the slightest intimation of official wrongdoing nor impropriety -- and even the media jackals know it.
Any proof of malfeasance or criminal activity by anyone in the Bush White House? Nope. None has been shown, none has been presented. Nothing even remotely resembling an allegation, even. But heck, who needs proof, anyway? Washington craves a 'scandal', and Enron fills the bill nicely, thank you very much.
No proof of a 'cover-up'? Then fabricate some! Of course, we all know Bush had nothing to do with the shredding* of documents, the massive cover-up by Enron's auditor. But oh, yummy, yummy -- how exquisitely delicious to find ominous buzz phrases like 'document-shredding', 'cover-up' and the name George W. Bush jammed together in the same sentence, eh? Who cares if they don't belong together? Who cares if Bush did absolutely nothing wrong? This is not about truth or fairness or facts or evidence: This is purely -- first and foremost -- about vengence. Avenging whom or what, you ask? Why, the media's darling golden-boy, William Jefferson Clinton, who eles?
But the haters have a major problem on their hands, and it's this: Signs are this phony "scandal" is headed in the opposite direction -- away from implicating current administration officials.
Indeed, think of how ludicrous this sounds: Democrats want to know -- not why there were -- but why there weren't any quid-pro-quo shenanigans. Why didn't you do any special favors on behalf of your big campaign contributor, Mr. President? Why didn't you bail out your rich oil buddy when he came beckoning and calling?
In other words, what the heck is the matter with you, Mr. President? Why, O why, didn't you do something wrong? Lotting the treasury to bailout fat-cats; seedy backroom deals, bribery, extortion -- that's what we do here in Washington! How dare you be so ethical, so squeaky clean, Mr. President?!?!
Bottom line: Democrats want to know why Enron's generous contributions didn't buy it any favors from this administration. How utterly UN-Clinton-esque can this President get, eh?
This is the first "scandal" in history in which no wrongdoing IS the scandal du jour. No special favors, no shenanigans, no quid-pro-quo -- now that's an outrage!
The Attorney General recusing himself? What?! This is earthshaking! Explosive! How scandalous!
Why the AG recusing himself to avoid tainting the probe should be seen as "scandalous"? You go figure.
But that's the nub of the problem with Enron as political "news": Its string of farcical flaws and fallacies.
It's why "Enron" will soon be running on fumes -- politically worthless, just like the company's stock. Absent some 'hook' -- proof of government cover-up, official malfeasance, etc. -- "Enron" inexorably reverts to its rightful place in the business page of the newspaper.
Already people are asking: Where's the beef?
*Ironies of ironies: The wholesale document destruction by Enron's auditor, Arthur Andersen LLP, raises an interesting dilemma, particularly in light of the close ties between Ken Lay and the previous administration. Clinton was known to personally intervene on Enron's behalf on a number of occasions. Generous campaign donations would follow. The documents destroyed may have revealed a nexus.
My intrepid prediction: Enron will backfire on Democrats. Americans will see them as grossly over-reaching -- the "hearings" as sheer vindicativeness, an unwelcomed extention of Campaign 2000. Their vicious and spiteful crusade will be seen as bloodsport -- a thinly veiled, all-out effort to cripple this President; the Democrats' ultimate goal is to assassinate him, politically, with constant, deadly attacks and smears.
But it won't work, because it can't work. The public will not look to fondly at their "Wanted: Dead or Alive" modus operandi at politics (again, figuritively speaking).
A political party whose sole obession, whose only mission is to bring down the President -- come hell or high water -- is a party destined, rightfully, for the ash heap.
Fate will deal the Democrats, tone deaf and blinded by hate, a cruel blow, indeed. So let them nurse their hatred -- let them beat the dead horse of Enron: They will only bring down the wrath of a people, of a nation, still smoldering over September 11.
My two cents...
"JohnHuang2"

Thanks, my friend =^)

Here's my very latest essay:

Suddenly, literally overnight, the 'Enron affair' has transmogrified from 'White House scandal' to Democrat pickle -- major-league pickle, actually. The breakneck turn of the tables, politically, has been nothing short of stunning -- even by Washington standards.
The Democrats, who only days ago could barely contain their glee -- champing at the bit to tar and feather Bush with the ghastly Enron debacle -- are abruptly succumbing to a surprising case of cold feet. The haters are discovering, much to their chagrin, that the Enron affair -- should they pursue it -- could boomerang right back on them, and in more ways than they might imagine -- or want to bargain for.
A Sunday Washington Post piece, "Enron Also Courted Democrats", by senior writer Dan Morgan, told the story. The cryptic message between-the-lines: Dems, be careful what you wish for....
Washington's flagship liberal newspaper was worried, alright -- and for good reason.
From company documents and former employees, the tapestry of influence-peddling and money-for-favors the Post had unearthed, ironically enough, could prove hugely embarrassing to Democrats, including the party's most prominent members.
Indeed, in the last campaign cycle alone, Enron Corp. poured more than a half of million greenbacks into Democrat coffers -- $532,000 to be exact. That's a scant less than the figure the company reportedly gave Republicans: $623,000. One out of 2 members of the House and nearly 3 out of 4 members of the Senate have, at one time or another, received campaign contributions from Enron.
Clearly, this undercuts the basic tenet of the Democrats' "case", namely that Enron and Republicans are merely two heads of the same evil monster. By lavishing both parties with company largess, Enron was wisely hedging its bets. Politically, the bipartisan nature of its "beneficence" means Democrats have no moral leg to stand on: If accepting a donation from Enron 'taints' the recipient somehow, then Senator Joseph Lieberman, who has pocketed Enron* gratuity himself, should immediately recuse his position as chair of one of several committees probing the affair.
It does not suffice when Sen. Lieberman asserts, as he did last Sunday on CBS' Face the Nation, that since the donation in question dates several years back, he sees no conflict-of-interests. Not only is this self-serving excuse wholly inconsistent, it is morally bankrupt.
Sen. Lieberman should not exempt himself from the very standards he sets for others, for what is good for the Goose is good for the Gander. By refusing to recuse himself, he undercuts his already frail credibility -- and that of the committee he chairs. By practicing such double standards, Democrats expose themselves for the partisan hypocrites they are. Their primary intention, obviously enough, isn't to probe Enron, per se, as much as to score cheap political points and, ultimately, bring down the President.
Yet, for reasons aforementioned, they will fulfill neither intent. If anything, their rabid campaign of smear and innuendo contains the seeds of a mighty public backlash.
Thus, neither side on Capitol Hill stands to gain politically from the Enron debacle.
Complicating things further for Democrats, it's been widely reported that former Clinton Treasury Secretary Robert Rubin last November lobbied a senior ranking Treasury official on behalf of Citigroup, whose executive committee he chairs. Enron's debt ratings were about to be slashed, and Mr. Rubin improperly urged Undersecretary Peter Fisher to intercede with credit agencies on Enron's behalf. Citigroup holds approximately $3 billion of Enron's debt.
But beyond opening Democrats up to charges of rancid hypocrisy, some of the shenanigans reported by the Post appear to cross the rubicon of criminality.
The Clinton administration had provided Enron with massive public funding for many of its overseas projects, but one in particular stands out as a clear case of 'quid-pro-quo'. In June of '96, Clinton golfing buddy and Enron chief Kenneth Lay cut a check totaling $100,000 to the DNC just four days prior to winning final approval from India of a major Enron development there -- one which Clinton had moved heaven and earth to secure. In fact, as the Post points out, Clinton took such a keen interest in this one undertaking, he "deputized" as project overseer his own chief-of-staff, Thomas 'Mack' McLarty III. But the sleaziness didn't end there: Enron later hired McLarty as a full time advisor.
Oh, and did I mention what Jack Quinn, Elizabeth Moler and Linda Robertson all share in common? This: All three were Clinton administration big-wigs, and all three went to work for Enron.
Interesting, eh?
Bottom line: Mr. Lay's ties with the Clinton administration, and with Clinton personally, were exceedingly close, and mutally profitable.
Yet, despite generous campaign contributions, Mr Lay has receieved zip-zero-nada from the Bush administration. In fact, Bush officials wisely rebuffed pressure from Enron -- and Enron's main creditor -- to intercede on the troubled company's behalf.
Ironically enough, it is the nexus between the Clinton administration, Enron and campaign contributions which cries out for a thorough investigation. Accordingly, watch the media frenzy over this 'story' disappear after some initial fireworks from Capitol Hill later this month as hearings gear up. The 'hearings' will go no where, it's easy to predict.
The underlying moral of this story is especially interesting, one which, unsurprisingly, totally escapes the attention of a cynical press. From it we learn how, even in politics, good character will trump money -- every time. Ken Lay was able to buy off the Clinton administration lock, stock and barrel (garnering endless favors-for-cash, at taxpayers' expense)-- but Mr. Lay got nothing -- absolutely nothing -- from President George W. Bush, notwithstanding his lavish campaign donations. The reason? It's as simple and clear as it gets: This President is not for sale. Not now, not ever -- not at any price. His administration is a textbook example of good government. All the campaign finance laws in the world will never substitute for exemplary character and moral integrity -- the qualities this President exudes.
Honor, probity, personal rectitude -- these are Bush's defining traits, and give this President his special appeal.
President George W. Bush is living testimony to why we don't need McCain-Feingold to have honest government -- the kind of government Americans can trust.
And that, my friends, is the real moral of the story.
*Raising more thorny 'conflict-of-interests' questions, Sen. Lieberman reportedly accepted lavish campaign contributions from Citigroup, to the tune of $112,546. According to Enron court filings, Citigroup happens to be the company's largest creditor, with outstanding loans totaling $3 billion. In other words, insofar as appearances go, Mr. Rubin may as well chair Lieberman's committee. The notion that Lieberman can lead an "impartial" investigation of a company which burned his top campaign contributor is laughable on its face. I rest my case.
My two cents...
"JohnHuang2"

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