Posted on 01/12/2002 8:25:23 AM PST by Bad~Rodeo
WASHINGTON, Jan. 12 (UPI) -- A Senate panel probing energy conglomerate Enron Corp.'s sudden collapse sent a subpoena Friday to Texas Republican Sen. Phil Gramm's wife, Wendy Gramm, panel sources confirmed, while a new contact with a Bush administration official -- by a prominent Democrat -- was disclosed by the Treasury Department.
Wendy Gramm has been a member of Enron's board of directors for eight years and of the crucial Audit and Compliance Committee as the giant company's financial condition was deteriorating.
Her subpoena is among 51 issued by the Senate Permanent Subcommittee on Investigations chaired by Sen. Carl Levin, D-Mich., seeking documents from Enron, the Arthur Andersen LLP accounting firm, and current and former officers, employees and board members of Enron.
Of the 51 subpoenas, 49 went to individuals, one to Enron Corp. and one to the Andersen firm seeking documents as far back as January 1999.
Phil Gramm is the second-largest recipient in the Senate of financial contributions from Enron, receiving $97,350 from the company between 1989 and 2001, according to data provided by The Center for Responsive Politics. The senator receiving the largest contribution from Enron is Sen. Kay Bailey Hutchinson, R-Texas, who received $99,500.
The subpoenas came as government and congressional scrutiny of the collapse intensified.
Friday evening, the Treasury Department disclosed that Clinton administration Treasury Secretary Robert Rubin contacted a department under secretary in early November to suggest he call ratings agencies who were poised to downgrade Enron's credit rating.
A Treasury spokesperson said Rubin, now chairman of the executive committee of a banking conglomerate with hundreds of millions of dollars of exposure to the Enron collapse, Citigroup, called Under Secretary for Domestic Finance Peter Fisher to ask what he thought of Fisher contacting the ratings agencies to encourage them to "worth with" Citibank and other Enron banks.
The spokesperson said Fisher responded negatively, saying he did not think such a call was appropriate and Rubin responded that he thought that was a reasonable position. "Fisher made no such call," the Treasury spokesperson said.
It was Fisher to whom Enron President Lawrence Whalley made six to eight calls in late October and early November, calls a Treasury spokesperson earlier Friday said Fisher took to be suggestions he call Enron's banks.
Then too, the department maintains, Fisher decided not to do anything.
Over Thursday and Friday, it was disclosed that Enron's chairman, Kenneth Lay, contacted top Bush Treasury Secretary Paul O'Neill, Commerce Secretary Don Evans and Alan Greenspan, chairman of the Federal Reserve, in October about Enron's financial difficulties.
Secretary of Commerce Evans said Lay sought assistance from the federal government, but Lay said in a statement late Thursday that he only sought to alert top financial leaders that his mammoth firm was having difficulties. O'Neill said he agreed with Evans that nothing was to be done.
President Bush, who has received political and financial support from Enron and Lay in all his political races, said the Enron chief did not contact him.
Several prominent Democrats have attempted to use the various Enron entreaties as evidence of a close association with the Bush administration but no one has accused White House officials of wrongdoing.
When Enron received no outside financial assistance and as the ratings agencies ultimately downgraded its credit standing, the company reported to stockholders that it had $500 million of previously unreported debt. The subsequent selloff of Enron stock was swift and dramatic -- and left many of the company's 21,000 employees with life savings that diminished to near nothing as the stock fell below a dollar a share.
As several employees later told a congressional hearing, they were prohibited from selling their Enron stock from their 401K retirement plans even though top executives sold $1 billion in shares while they still retained their value.
The company sought protection under Chapter 11 of the U.S. Bankruptcy Code on Dec. 2.
Arthur Andersen, the company's auditing firm, reported in testimony in December that it told Enron officials that some of their financial transactions might be illegal. Joseph Berardino, Andersen chairman, also testified that Enron withheld financial information from Andersen. He admitted that his firm's accountants may also have made some mistakes.
Then Thursday, Andersen disclosed that a "significant" number of correspondence, electronic files and other data may have been destroyed, some of it after investigations had begun.
Well before the Enron debacle began gathering steam, on Sept. 5, Sen. Gramm announced that he would not seek re-election after serving 18 years in the Senate. During his retirement announcement, Gramm said that he had achieved his goals as a senator and would move on to another career.
Gramm's spokesman, Larry Neal, declined comment on the subpoenas, but said Enron had nothing to do with Gramm's decision not to seek another term.
"He outlined in detail in his retirement announcement his reasons for leaving, and those were his only reasons," Neal said.
The House Energy and Commerce Committee, run by Republican Rep. Billy Tauzin, R-La., also wants to talk to Wendy Gramm. Tauzin requested the interview with Wendy Gramm by name in a Dec. 10 letter to Enron.
The spectacular financial collapse of Houston-based Enron has drawn broad scrutiny from a host of federal agencies and congressional committees.
On Wednesday, it was revealed that the Justice Department had opened a criminal investigation into the Enron matter.
On Thursday both U.S. Attorney General John Ashcroft in Washington and U.S. Attorney Michael T. Shelby in Houston recused themselves from the investigation. Selby's office announced that he and several other attorneys had relatives who were employed by Enron.
Ashcroft received a $25,000 contribution from Enron during his run for re-election to the Senate from Missouri and in an unsuccessful attempt to win the Republican presidential nomination.
The Securities and Exchange Commission also has opened a probe into whether Enron officers were capitalizing on their knowledge of the firm's financial condition when they sold millions of dollars in stock prior to its nosedive.
The agency also wants to determine whether Enron financial claims to investors were misleading and whether Arthur Andersen's audit of those statements was proper.
The House Energy and Commerce Committee led by Tauzin and Ranking Minority Member John Dingell, D-Mich., Friday announced that it was demanding a host of financial records -- including some that Arthur Anderson says were destroyed -- as well as interviews with Enron's financial oversight officials.
That request covers 43 areas of Enron's finances and corporate behavior including all earnings-related documents and memos, details about the finances and discussions related to several outside investment vehicles operated outside the company's normal procedures.
In the Senate, a Commerce Committee subcommittee -- led by North Dakota Democrat Byron Dorgan -- already has held a hearing on the loss of pension funds when the stock price collapsed. At that hearing, a top Arthur Andersen official said he thought there was a possibility that criminal acts had been committed by the company.
Dorgan plans more hearings into the loss of the retirement funds but so far has been unsuccessful in getting Lay to appear before the committee.
The Senate Government Affairs Committee also announced an investigation on Jan. 2 into the collapse, choosing to focus on whether government agencies failed to detect, or ignored, signs of the impending collapse. The committee plans a hearing on Jan. 24, according to Chairman Joe Lieberman, D-Conn.
The House Government Reform Committee has been slower to formally step into the fray, but its ranking member, California Democrat Henry Waxman, has been vocal about the possibility that Enron used undue influence on administration officials to avoid additional scrutiny of its finances and practices before the collapse. Waxman also has been engaged in a fight with the Bush administration over releasing details of meetings between Enron officials and high-ranking Bush administration officials, when the White House was preparing a national energy policy.
On Jan. 3 the vice president's office provided Waxman with a list of contacts between the vice president or his staff and Enron officials. The letter, from David S. Addington, the vice president's counsel, said that neither the vice president nor his staff had ever discussed Enron's financial status with the company's representatives.
(Mark Benjamin is UPI's chief congressional correspondent, and Nicholas M. Horrock is UPI's chief White House correspondent.)
No. But, It was her job to know what was going on. People treat directorships as plum prestige assignments when in reality they have an important role to fulfill overseeing managment on behalf of the shareholders. Simple ignorance may be enough to avoid prosecution but it should not be enough to protect her from shareholder lawsuits.
You keep saying that and yet provide no proof?
Just the high fives from the other members of his liberal democrat socialist neo-communist cell.
I said last night during my "daily rant" on Paltalk that when the ENRON fiasco was over, some pre-determined politicians would "retire to spend more time with their families" and that they would be the "scapegoats" for the Enron fiasco.
It didn't take long for those comments to be proven right.
Looks like Sen. Phil Gramm will be the first victim, because of his wife's position with ENRON.
More to come folks! But they ain't all gonna be Pubbies. There's a whole lotta Democrats who are about to go into a world of hurt over this one too!
You are really very poorly informed to hurl an insult like that at me, implying that I got that info from Mother Jones. President George HW Bush was a terrible president with regards to domestic policies. With regards to economic policy the government did a lot more bad things to the Americans under George HW Bush than they did when Bill Clinton was president. Reagan's recovery stalled and unemployment went up under George Bush. It came back under Clinton. That's reality friend and if you'd read the conservative journals during the last 15 years you'd know that.
George Bush senior maliciously attacked all board members of the S&L's and as I say there were 20,000 of them. These were more ordinary Americans although they were overwhelmingly Republican that Bush assaulted. Why shouldn't the same standards be applied to a prominent Republican's wife today? What is so different about Wendy Gramm today really other than the fact that her husband is a prominent Republican from Texas? Enron wasn't insured by the FDIC, sure that's a big difference, but so what? Her malfeasance still cost a lot of people a lot, so the federal government should sue. Doesn't matter if she wasn't involved in the bad decisions, she's a member of the board, she's guilty, that's the standard senior Bush used then, why shouldn't it used today?
I merely wanted to highlight how wrong it was for George Bush senior to do what he did 10 years ago. George Bush senior did that so that he could please his rich liberal friends. He attacked 20,000 Americans unjustly even though they were Republicans just to make the liberals happy. George Bush did a lot of other terrible things to the Americans also. Many jobs were lost even permanently because of him. The Americans should know about it and we should be very wary of his son as a result.
That is my angle, but you are very sharp to poke holes through what I said.
***Joe Liberman's Largest Contributor is Enron's Largest Creditor****
Uh, he didn't do that, the S & L's did that. You seem to have some burr up your butt about that. I guess you would rather had Clinton & his cronies during the S&L mess. That way all you had to do was go to a "coffee" and leave a donation.
I think that Wendy Gramm should be sued by the federal government and her family's assets should be depleted in that process regardless of whether it is just or not. Ten years ago president Bush did that to 20,000 Americans even though their only crime was similarly sitting on the Board of Directors of an S&L that went bankrupt.
I remember those days and I remember that Phil Gramm did not speak out about that injustice 10 years ago. Wendy Gramm being the wife of a prominent Texas Republican may be protected. It's not fair.
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