Enron gave cash to Democrats, sought pact help
By Jerry Seper
THE WASHINGTON TIMES
Enron Corp. donated $420,000 to Democrats over a three-year period while heavily lobbying the Clinton
administration to expedite passage of a 1997 global warming treaty that would have dramatically increased the
firm's sales of natural gas. Top Stories
Federal and confidential corporate records show that after donating thousands of dollars in soft money and PAC
donations beginning in 1995, Enron received easy access to President Clinton and Vice President Al Gore.
In one meeting, Enron Chairman Kenneth L. Lay met Mr. Clinton and Mr. Gore in the Oval Office, during which
the Enron boss was asked for input on a pending international energy conference in Kyoto, Japan.
The fallout from Enron's failure continued yesterday as Arthur Andersen LLP fired its lead Enron auditor after
finding that he ordered the destruction of "thousands of e-mails" and other documents sought by Securities and
Exchange Commission investigators.
The "expedited" document-shredding, ordered by David B. Duncan, started Oct. 23, a few days after the SEC first
asked the firm for information about Enron. It continued until Nov. 9, the day after Andersen received an SEC
subpoena for documents.
During their term in office, Clinton administration officials, mainly from the Energy Department and the
Environmental Protection Agency, often made themselves available for Enron executives to discuss the firm's
needs, according to records, even arranging for meetings with key congressional staffers.
The records surfaced this week amid questions by Democrats on whether meetings Enron executives later had with
the Bush administration were improper based on campaign donations by the firm to Republicans, although no
evidence has surfaced to show that Bush officials did anything to help the company.
Executives for the Houston-based energy giant, which filed for bankruptcy Dec. 2, sought help from the Clinton
administration in an effort to give the firm the ability to buy and sell trading credits to emit carbon dioxide as part
of a strategy to reduce greenhouse gases.
The new system would have encouraged new investments in gas-fired plants and pipelines and curtailed the use of
coal-fired power plants, which emit more carbon dioxide. Natural gas, electricity and their delivery systems
constitute Enron's major businesses.
During the July 1997 White House meeting, Mr. Lay personally lobbied Mr. Clinton and Mr. Gore to support a
"market-based" approach to what he described as the problem of global warming, an Enron economic strategy that
a December 1997 private internal memo said would be "good for Enron stock!!"
The memo, written by Enron executive John Palmisano, said the Kyoto treaty — later signed by Mr. Clinton and
leaders of 166 other countries, but never ratified by the Senate — "would do more to promote Enron's business
than will almost any other regulatory initiative outside of restructuring the energy and natural gas industries in
Europe and the United States."
In an August 1997 memo by Mr. Lay to all Enron employees, the chairman said Mr. Clinton and Mr. Gore had
"solicited" his view on how to address the issue of global warning "in advance of a climate treaty to be negotiated
at an international conference."
That memo said Mr. Clinton agreed a market-based solution, such as emissions trading, was the answer to
reducing carbon dioxide in the atmosphere. The Kyoto treaty calls for industrial nations to reduce emissions by
2012 to 5.2 percent below 1990 levels. Mr. Clinton never presented the treaty to the Senate for ratification
because of congressional opposition.
On Aug. 15, 1997, the Senate voted 95-0 for a resolution setting parameters for climate negotiations, saying U.S.
diplomats should not negotiate a climate treaty in which poor countries have fewer commitments than the United
States and other developed countries. The Senate vote guaranteed that the treaty would not be ratified.
Despite the Senate decision, Enron continued to push the Clinton administration well into 1998 for what the
company called a "restructuring" of legislation that would have been a "first step to solving the problems of global
climate change." The firm, according to the records, sought laws that would have favored Enron's natural gas
inventory and reduced competition from coal.
During a Feb. 20, 1998, meeting with Energy Secretary Federico Pena, Mr. Lay encouraged the Clinton
administration to seek electricity legislation favored by Enron, outlining for the secretary what the company
believed were the "important" pending legislative concerns.
"Today's meeting between Ken Lay and Energy Secretary Federico Pena to discuss electricity legislation went
very well," said the memo written by Jeff Keller, the firm's Washington governmental affairs chief.
"Secretary Pena indicated that the White House proposed bill is 'on the president's desk,' and that Clinton could be
convinced to release the White House proposal in the next few days," Mr. Keller said. "He suggested that
President Clinton might be motivated by some key contacts from important constituents."
Mr. Lay took that advice and sent a letter to Mr. Clinton that day, asking him to "move this matter forward."
Clinton administration officials have denied any wrongdoing, saying they were only responding to constituent
requests.
Enron's attorney, Robert S. Bennett, yesterday defended the firm, saying it was "again the victim" of existing
campaign finance laws.
"It's the old problem of campaign finance," Mr. Bennett said. "If you're accepting money, you're doing constituency
service. If your enemy is accepting money, it's buying influence."
In 1994, the Washington-based Export-Import Bank approved a $302 million loan toward a $3 billion
Enron-controlled power plant in India. Mr. Clinton took an interest in the deal, asking the U.S. ambassador to that
country and his former chief of staff, Thomas F. "Mack" McLarty, then a presidential adviser, to monitor the
proposal.
Mr. McLarty — who later became a paid Enron director — spoke with Mr. Lay on several occasions about the
plant. In 1996, four days before India granted approval for Enron's project, the Houston-based firm contributed
$100,000 to the Democratic Party.
The Justice Department has opened a criminal investigation of Enron to determine if company executives illegally
blocked employees from selling billions of dollars in plummeting shares from their 401(k) retirement accounts.
The probe also has focused on accusations that the executives cashed out their stock while hiding massive losses.
After Mr. Bush announced in February that he opposed regulation of carbon dioxide emissions and would abandon
the Kyoto accord, Enron was among several companies that vigorously urged him to salvage at least parts of the
pact. When a number of European nations joined in, Mr. Bush created a task force headed by Vice President
Richard B. Cheney to study counterproposals.
The administration is said to support the creation of a voluntary system that sets incentives and targets for
greenhouse gas emissions reductions. The Bush plan is expected to include an emissions trading system, help to
power plants that improves their equipment, and protection for farms and forests that absorb greenhouse gases.
The White House has said Mr. Cheney met with Enron representatives to discuss the administration's energy
policy once, with his aides doing the same on five other occasions. The meetings included one session just before
Enron made the largest corporate bankruptcy protection filing in U.S. history.
There is no evidence Mr. Cheney or others, including Commerce Secretary Donald L. Evans and Treasury
Secretary Paul H. O'Neill, with whom Mr. Lay also spoke, did anything for Enron, and Mr. Bush has pledged to
aggressively pursue the Enron investigation.
Mr. Lay is a longtime Bush campaign supporter and the Enron executive met twice last year with the president,
although both men said they did not discuss Enron's problems and have not spoken since about them. Federal
records show he was a member of the Bush presidential campaign's Pioneer Club, one of 214 persons who each
raised $100,000 for the race. Mr. Lay was the top campaign contributor to Mr. Bush's 2000 presidential campaign.
As a member of the Pioneer Club, Mr. Lay sent a letter to several hundred people, many of them Enron executives,
urging them to make the maximum contribution to Mr. Bush's campaign. "In no way is this a condition of
employment or continued employment at Enron," the letter said. Within three months, Enron executives had
donated more than $50,000 to the Bush campaign.
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