PRESIDENT BUSH appeared to be trying to distance himself yesterday from one of his biggest commercial backers ahead of a series of official investigations into its collapse.
Mr Bush said he had ordered a review of rules surrounding pension funds and the disclosure of information by corporations after Enron, the energy company, once America's seventh largest, applied for bankruptcy protection last month. It was the largest bankruptcy in American history.
His announcement was seen as an effort to distance the White House from the disaster of a company whose share price fell from £58 to 50p in less than a year.
He said he had never discussed the problems with any Enron executives including Kenneth Lay, chairman, who was a friend of the president and his father and of Vice-President Dick Cheney.
Questions and legal actions have already arisen over Mr Lay's efforts to save his company and his attempts to camouflage its problems, with some reports tying two senior members of the Bush administration to the company's final days.
The Justice Department is to set up a task force to investigate Enron's business activities and this is expected to focus on the behaviour of the board and the way in which employees' pensions were closely tied to the companies shares.
There have been accusations that the directors, including Mr Lay, defrauded investors by concealing vital information about the company's finances.
The collapse of Enron, which made huge sums of money by trading in electricity, gas and oil supply, cost thousands of jobs, ruined the pension funds of hundreds of people and cost investors billions of dollars.
It is also under investigation by Congress and the Securities and Exchange Commission, the main watchdog of share-trading activities in America.
Ari Fleischer, the president's spokesman, said the government was investigating whether pensioners and other investors could be helped.
Enron has many close links to politics. Mr Fleischer confirmed that Mr Lay met Paul O'Neill, the treasury secretary, and Don Evans, the commerce secretary, to discuss its problems.
In the months since Mr Bush entered the White House, Mr Lay has also discussed the administration's energy policy with Mr Cheney or members of his staff on at least six occasions.
Enron has offered financial support for Mr Bush from the time he first decided in 1993 to run for the governorship of Texas, with executives of the company donating more than £400,000 to his two gubernatorial campaigns and his presidential campaign, according to public records.
Enron was the 12th largest corporate donor to the Bush-Cheney campaign, giving £78,000. Both the company and, in a joint donation with his wife Linda, Mr Lay gave £70,000 to the committee that funded Mr Bush's inaugural gala.
Mr Lay has given more than £600,000 to political parties since 1989 and was linked closely to Ann Richards, the Democratic governor of Texas beaten by Mr Bush in 1994, but 90 per cent of his donations have gone to the Republican Party and its candidates, especially in his own, oil-dominated state.
Enron was also one of the biggest spending companies in lobbying circles in Washington.