Cabinet members deny helping Enron because of political ties
BY STEVEN THOMMA
Knight Ridder
WASHINGTON -- Senior members of the Bush administration on Sunday said they did not intervene to help bankrupt energy giant Enron Corp. and did not alert President Bush or the public because the company's problems were public knowledge.
In an effort to insulate the administration from a fast-growing scandal, Commerce Secretary Don Evans and Treasury Secretary Paul O'Neill tried to dispel suggestions that the administration might have tried to help the company because of its political connections. Company executives contributed to Bush as well as to dozens of Republicans and Democrats in Congress.
Evans and O'Neill also dismissed suggestions that the administration could have done something to save the retirement funds of thousands of Enron employees. Rep. Henry Waxman, D-Calif., has complained that the administration should have acted to save the company and the employees who had invested heavily in its stock.
Evans said he received a call from Lay last Oct. 29 informing him of the company's problems with its credit ratings and seeking help. Hours later, Evans met with O'Neill for a regular lunch. ``He agreed with my judgment not to do anything,'' Evans said on NBC's Meet the Press.
``Companies come and go. It's . . . part of the genius of capitalism,'' O'Neill said on ``Fox News Sunday.''
Both cabinet officers portrayed their talks with Lay as neither unusual nor surprising, given news reports that the Houston-based firm was ailing and its stock was sinking fast.
``At that point in time, tens of thousands of employees had already lost their life savings because the stock value had already collapsed,'' Evans said.
He added that Enron stock had lost 90 percent of its value by the time Lay called him.
``I frankly think what Ken told me over the phone was not new news. You all had been reporting for weeks that Enron had problems, that they were in trouble,'' O'Neill added during his Sunday appearance on Fox News.
O'Neill said the calls from Enron chairman Lay were brief, did not seek any specific help and came at a time last fall when he was focused on seizing the financial assets of terrorists and working on a proposal to stimulate the economy.
``I didn't think this was worthy of me running across the street and telling the president,'' O'Neill said of a phone call from Lay. ``I don't go across the street and tell the president every time someone calls me.''
Enron declared bankruptcy Dec. 2, and while top executives had been selling their stock for months at higher prices, thousands of employees watched helplessly as retirement accounts invested in company stock were wiped out. Employees had been blocked from their accounts during a change of plan administrators.
As criminal and congressional inquiries into the largest bankruptcy in American history accelerated, Democrats appeared divided over whether to focus on the company and its accounting firm or on the Bush administration.
Sen. Joseph Lieberman, D-Conn., chairman of the Governmental Affairs Committee, cited a newly revealed memo showing that the Arthur Andersen accounting firm ordered documents destroyed last autumn, four days before Enron revealed a $618 million loss for the third quarter.
``We know that Arthur Andersen, the supposedly independent auditor, covered up facts very relevant to the condition of Enron,'' Lieberman said on CBS's ``Face the Nation.''
``This kind of memo to destroy documents raises very serious questions about whether obstruction of justice occurred here,'' he said. ``If this memo was what it looks like, I'm afraid that the folks at Arthur Andersen could be on the other end of an indictment before this is over.''
Company officials did not return calls for comment Sunday.
Sen. Carl Levin, D-Mich., chairman of the Governmental Affairs Subcommittee on Investigations, said he is focusing on ``deceptive'' practices by Enron and Arthur Andersen that concealed financial problems from investors and the public. Levin said he accepts the Bush administration's word that it did nothing to help Enron.
But Rep. John Dingell, D-Mich., the senior Democrat on the House Energy and Commerce Committee, urged a broader look at Enron's ties to the Bush administration, including its role in the formulation of Bush's proposed energy policy. Said Dingell: ``All this ties together.''
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