Republican bosses can't escape from Enron glare
Houston Chronicle
Jan. 19, 2002, 2:55AM
By R.G. RATCLIFFE
Copyright 2002 Houston Chronicle Austin Bureau
AUSTIN -- The mantra of the Republican National Committee meeting
Friday was: Enron is a business scandal, not a political issue.
But newly elected RNC Chairman Marc Racicot spent almost his entire
first news conference explaining what he had done as an Enron
lobbyist.
Presidential adviser Karl Rove admitted he had helped get former
Christian Coalition director Ralph Reed a consulting job with Enron
several years ago.
And the resignation of Texas Public Utility Chairman Max Yzaguirre
served notice that public officials can become collateral damage from
the largest corporate bankruptcy in U.S. history. Yzaguirre had been
an Enron executive before Gov. Rick Perry, a Republican, appointed
him to head the state's utility regulation agency last year.
The large flow of Enron political contributions to politicians of BOTH
parties and Enron Chairman Ken Lay's close ties to President Bush
have seethed with the possibility the energy trading company's
collapse will turn into a political scandal.
But the Republicans meeting in Austin to plot strategy for the 2002
congressional elections kept insisting Enron is only a business
scandal.
"This raises really troubling questions about corporate governance,"
said Rove. "If anybody tries to turn this into a political circus, it's going
to backfire."
Rove said the problems in Enron were developing during the Clinton
administration and questioned why the regulators did not find them
then. He said the Justice Department and Congress are investigating
the collapse and the loss of people's pensions and retirement funds.
"So I just don't see this having a big partisan edge," Rove said.
At the Democratic National Committee meeting in Washington,
Chairman Terry McAuliffe said he believes the Enron collapse will taint
the Bush administration even if no wrongdoing is found.
Saying that Enron "is a metaphor for the Bush administration,"
McAuliffe suggested that just as the failed Houston energy company's
faulty accounting led to its downfall and financial disaster for its
employees, the White House was guilty of using faulty financial
projections and not paying attention to working families.
While the Enron collapse has the potential to become a bipartisan
scandal, so far Republicans are taking the most heat.
Racicot drew quick criticism last month when Bush picked him to
become RNC chairman because he initially refused to give up his job
lobbying for Enron as a member of the Bracewell & Patterson law firm.
He later agreed not to lobby, but retained his law firm job.
Racicot, a former governor of Montana, Friday admitted he should have
dropped the lobbying job immediately, but said, "Where I come from,
people aren't quite as suspicious of one another."
Racicot said he worked last year for Enron helping to draft "electric
restructuring" legislation to be carried by U.S. Rep. Joe Barton,
R-Ennis, as well as a similar piece of legislation that was going to be
proposed by Sen. Jeff Bingaman, D-N.M.
Barton's bill, unveiled just weeks before Enron's financial woes came
to light, would have opened up electric transmission lines throughout
the South that Enron could have used to break into deregulated
electric markets.
Barton, who has received almost $29,000 in political donations from
Enron during the past decade, is the third-highest recipient of Enron
political largess among House members.
While Rove downplayed the scandal Friday, he also admitted he
helped get former Christian Coalition director Reed, now Georgia GOP
chairman, a consulting job with Enron in 1997.
"I put in a good word for him, but I can't even remember who I put in a
good word with," said Rove.
Reed met with Bush in April 1997 to discuss the then-governor's
re-election campaign. Reed the next day resigned from his position as
Christian Coalition executive director and set up his consulting
business.
An Enron spokesman that year said Reed had been hired to build
grass-roots support for electric deregulation.
Rove early last year was criticized for participating in energy talks
while still owning $100,000 in Enron stock. Rove sold the stock.
Chronicle reporter Bennett Roth contributed to this story.
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