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Bush Officials Attempt To Distance Administration From Enron Scandal
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| Bush enjoyed hefty campaign contributions from Enron chief executive, kenneth Lay |
WASHINGTON, Jan. 11 (IslamOnline & News Agencies) - Administration officials in U.S. President, George W. Bush’s office have disclosed that Enron Corp.’s top official -- one of Bush's biggest campaign donors -- sought help from the administration to avoid a bankruptcy filing in the weeks before the giant energy concern collapsed last year, wiping out the pensions of thousands of workers.
The Washington Post reported that Enron Chief Executive, Kenneth L. Lay, had conversations about his company's dire financial situation with Treasury Secretary, Paul H. O'Neill, and Commerce Secretary, Donald L. Evans.
Lay told Evans, Bush's former campaign manager, that he would welcome help stopping a private credit rating agency from downgrading Enron debt - an event that could force Enron into bankruptcy.
Administration officials said Thursday, January 10, that Evans did not intervene. Enron filed for bankruptcy protection December 2, 2001 -- the largest such case in U.S. history.
Bush backed a criminal investigation into the bankrupt energy titan corporation, distancing himself from an exploding financial scandal.
U.S. Attorney General, John Ashcroft, removed himself from the probe because of his relationship with the company, a generous supporter of both Ashcroft in his failed senatorial bid and Bush since his days as Texas governor.
As the probe began, Arthur Andersen LLP, the outside accountant for the failed Houston-based firm, said they had destroyed a "significant but undetermined number" of documents related to its audit of the firm.
Arthur Andersen said they destroyed the electronic and paper documents before receiving a subpoena from the U.S. Securities and Exchange Commission, earning a sharp rebuke from U.S. regulators.
The collapse of Enron on December 2 was the biggest bankruptcy in U.S. history. Many Enron staff had their pensions in company shares and lost their life savings.
Bush, who has enjoyed hefty campaign contributions from Enron chief executive Ken Lay, denied having any conversations with him about the firm's woes before its collapse.
"I have never discussed with Mr. Lay the financial problems of the company," Bush told reporters at the White House.
"He supported my candidacy," he acknowledged, but added: "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."
Bush spokesman, Ari Fleischer, said Lay had called O'Neill and Evans as he faced mounting debt woes in October.
But both senior officials had decided Enron’s failure did not warrant their intervention, he said.
According to Fleischer, Bush was not informed of the contacts.
The president learned about Enron's financial situation "last fall", Fleischer said. "And I could not tell you if he learned as a result of the media accounts when everybody wrote that Enron had gone bankrupt or through any other mechanism. He learned last fall."
As signs of an uncomfortably close Enron-White House relationship mounted, Ashcroft and his chief of staff, David Ayresm, rescued themselves from the probe.
The Justice Department said in a statement that the move stemmed from "the totality of the circumstances of the relationship between Enron and the attorney general."
The independent watchdog Center for Public Integrity said the Enron chief executive gave $25,000 to a leadership committee headed by Ashcroft when the attorney general was still a U.S. senator.
Enron donated $113,800 to Bush's presidential run, said another report by the Center for Responsive Politics.
The firm has made total political contributions of $5.77 million since 1989, the center said, of which 73 percent went to Republicans and the rest to Democrats.
Bush, for his part, said he last saw Lay at a Houston charity event organized by his mother Barbara Bush in spring 2001.
Lay also visited the White House soon after Bush took office, the president said, but only as part of a group of about 20 other business leaders who were there to discuss the economy.
Arthur Andersen, for its part, said it had notified the Securities and Exchange Commission (SEC), the Justice Department, Congress and other relevant agencies that it destroyed documents.
"Destruction of documents is obviously an extremely serious matter," SEC enforcement director, Stephen Cutler, said in a statement.
"Documents are an essential ingredient in our investigation," he added. "The destruction of documents by Arthur Andersen will not deter us from pursuit of our investigation and will be included within the scope of our investigation."
"In recent months individuals in the firm involved with the Enron engagement disposed of a significant but undetermined number of electronic and paper documents and correspondence relating to the Enron engagement," it said in a brief statement.
Arthur Andersen said it destroyed the documents before receiving a subpoena by the Securities and Exchange Commission.
"After receiving the SEC subpoena the firm issued an instruction to preserve documents. At this time, we have not been able to determine whether that instruction was violated."
The SEC said the matter would be investigated.
Arthur Andersen also said it was investigating the facts and working to "determine appropriate disciplinary actions."
Bush said he had asked O'Neill, Evans and Labor Secretary Elaine Chao to mull reforms to pension rules to protect people's savings in future bankruptcies.
The Treasury Department, the Federal Reserve, the SEC, and the Commodity Futures Trading Commission also would analyze corporate disclosure rules, he said.
On Wall Street, Enron stock plummeted 12 cents, or 15.19 percent, to 67 cents. Once the biggest energy trader in the United States, Enron had traded at 83 dollars last year.
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