Posted on 01/12/2002 7:10:08 AM PST by arete
WASHINGTON (CBS.MW) -- Former Treasury Secretary Robert Rubin called a top U.S. Treasury official in November, asking that the government intervene with credit agencies that were about to cut Enron's debt ratings, the Treasury Department disclosed Friday.
Rubin is now chairman of the executive committee at Citigroup (C: news, chart, profile), which is Enron's largest creditor to the tune of $3 billion, according to court documents in the collapsed energy trader's bankruptcy case.
A Treasury spokeswoman, Michele Davis, said in a statement released late Friday that Undersecretary Peter Fisher turned down Rubin's request to call the ratings agencies on behalf of Enron.
She said that on Nov. 8 Rubin asked him "what he thought of the idea of Fisher placing a call to rating agencies to encourage them to work with Enron's bankers to see if there is an alternative to an immediate downgrade."
Rubin said he thought that was a reasonable position, according to Davis' statement.
Fisher was among several government officials contacted by Enron Chief Executive Kenneth Lay in October and November, just before his company filed for the largest bankruptcy in U.S. history. Rubin is a Democrat who served under President Bill Clinton.
Role in bailouts
In the late 1990s, Rubin and Fisher, who was a top Federal Reserve official at the time, participated in several high-profile financial rescue efforts, including an effort led by the New York Federal Reserve Bank to stabilize the Long-Term Capital Management hedge fund.
An Enron spokeswoman declined to comment on the Rubin revelation. Representatives of Citigroup weren't immediately available for comment.
In the wake of Wednesday's news that the Justice Department opened a criminal probe of the Enron matter, U.S. officials have acknowledged that Lay also called Fed Chairman Alan Greenspan, Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans.
None of the officials gave Enron any assistance in rescheduling its debts or in averting the ratings downgrades that led to the bankruptcy filing, they have said.
In televised interviews, O'Neill said Lay didn't seek any bailout money. Evans' account, however, is that Lay did ask for help with the ratings agencies.
A Fed spokesman declined to characterize Greenspan's conversation with Lay.
Lay, who has close ties to President Bush and other administration officials, was a top fund-raiser in Bush's presidential campaign. He and has also contributed to many other Republicans' war chests, including Attorney General John Ashcroft, and he gave smaller amounts to some Democrats.
On Thursday, Bush vowed that his relationship with Lay wouldn't interfere with a full federal investigation surrounding the largest bankruptcy in U.S. history.
Davis, the Treasury spokeswoman, said undersecretary Fisher had six to eight phone conversations with Lay and other Enron officials, including President Lawrence "Greg" Whalley in October and November.
Ultimately, Fisher decided nothing should be done for Enron because its collapse posed no "spillover" threats to U.S. capital markets, Davis said.
Meanwhile, the congressional probe into Enron deepened as a Senate investigatory panel issued 51 subpoenas for documents relating to the financial collapse of the company that was once the nation's largest energy trader.
The Senate Permanent Subcommittee on Investigations issued the subpoenas to Enron, its auditor Andersen, and 49 individuals who worked for the Houston-based Enron dating back to January 1999. That list includes current and former members of Enron's board and company officers.
Looking into limited partnerships
As for the Senate panel's inquiry, no details on the kinds of documents sought were given. The return date on the subpoena is Jan. 31.
Andersen said Thursday that a "significant but undetermined number" of its Enron-related documents had been destroyed.
House investigators asked Andersen on Friday to turn over additional records Friday relating to the lost documents.
The Senate committee, chaired by Sen. Carl Levin, D-Mich., formally launched its investigation into Enron on Jan. 2. It is one of several congressional committees probing Enron.
Levin's committee is using its subpoena power in an attempt to uncover evidence about the internal dealings of Enron and its use of shadowy limited partnerships. It's been alleged that the partnerships were used to keep billions of dollars off the company balance sheet.
Levin told reporters Friday in Detroit he found it "troubling" that Andersen had destroyed documents, Dow Jones reported.
He said the committee's investigation wouldn't be affected by the Justice Department's newly announced criminal investigation.
The Justice Department is focusing on whether Enron executives committed financial fraud or violated insider-trading laws.
On Thursday, Attorney General John Ashcroft and his chief of staff removed themselves from any involvement in the investigation. Ashcroft received more than $50,000 in campaign contributions from Enron and Lay for his unsuccessful Senate re-election bid in 2000.
The Securities and Exchange Commission and the Labor Department are also conducting investigations.
In a related development, Bush said Thursday that the Treasury, Labor and Commerce departments are expected to convene a working group to examine whether pension laws should be amended to give workers better protection during bankruptcies.
Several Enron workers testified on Capitol Hill last month that their retirement savings were wiped out because the company blocked them from trading Enron stock in their retirement plans as the stock collapsed.
"At first blush, it looked like Enron operated within the rules and regulations that existed and still exist today with regards to how it manages its 401(k) plans," O'Neill told ABC's "Good Morning America" Friday.
I wonder how many times they will actually use the word "Democrat?" About none, would you say! I don't know if my blood pressure could stand a whole week of C-SPANs take on this, but I am curious. Other words to notice by their conspicuous absence will be:
Rubin, Goldman Sachs, Long Term Capital Fund, Ron Brown ---
Yes, it has been mentioned as a possibility. An economist I know very well whose specialty is fed-watching has told me that Greenspan wants Rubin to succeed him, and that, a month or two ago, the Bush administration was at least considering it. After Rubin's latest appearance alongside Daschle, I hope that the possibility has now been scuttled.
The Fed is very powerful. Greenspan still is in a position to embarrass Bush if he wants to. In fact, Greenspan's peculiar handling of the economy at the end of Bush Sr.'s term in office was probably responsible for Clinton's victory in 1992. "It's the Economy, Stupid!" Greenspan saw to it that the first Bush recovery came a month or two too late to do the incumbent president any good. Normally and traditionally, a fed chairman is expected to help out a sitting president with his timing of the business cycle, although Jimmy Carter probably lost his office because of a similar, deliberate mistiming twelve years earlier. Carter deserved it. His mismanagement of the economy was worthy of a banana republic.
So far, although his real sympathies are with the Democrats, Greenspan has treated Bush well. But that need not continue, and it would cause a firestorm if Bush tried to fire him. Still, appointing Rubin as Fed Chief would be like installing Judas as VP.
I did not know that C-SPAN made commentary or offered opinions or implied any favorites (well once I e-mailed my displeasure with one of the female moderators). I've watched them for at least 15 years, usually it's live camera or callers on Washington Journal, have I missed something? ...rto
C-SPAN chooses what segments of The Call-in shows to re-air.
When Clinton was president every appearance in front of a microphone was shown repeatedly. This does not occur with President Bush.
When C-SPAN does show an event of President Bush's, they FREQUENTLY post TBA on their schedule so that it is not really possible to program a VCR.
To me, all of these decisions are a way of showing an opinion, without stating an opinion.
Do you know of any other time that C-SPAN has had a five part "prime time series?" I thought they showed the House and the Senate until adjournment each day with fill-ins of other meetings and speeches. I have only been a viewer and listener of C-SPAN for the past 3-4 years, so I would appreciate it if you could point out for me other 'series' they have done, that I am just not aware of.
PS: I am always alert for biased news coverage and even found fault with FoxNews when they hired Geraldo and Greta and have suspicions of O'Reilly. My primary news sources are c-span, freerepublic.com, Rush, Brit Hume in that order with daily reading of the NYTimes.com (stay abreast of progressive reporting;^) and occassional scanning of the other news networks
When I go to their internet site, I see a conspicuous absence of programming which includes President Bush. If it was not for Rintense's thread, many of us would think our president was meeting no one and going nowhere.
Do you think the current coverage is equivalent to the camera time they gave Clinton?
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