Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (46569)	1/17/2002 2:11:54 AM
From: stockman_scott	Respond to of 65232

Rubin Foiled the Democrats' Best-Laid Plans Bloomberg - 1/15/02 Caroline Baum New York, Jan. 15 (Bloomberg) -- Enron appeared to be a dream come true for Democrats, a scandal that fell in their laps when they needed to damage a popular Republican president. They wanted to make it their Whitewater. The close ties between President George W. Bush and Enron Corp.'s CEO Kenneth Lay (Lay is the biggest individual contributor to Bush's presidential and Texas gubernatorial campaigns); the apparent conflict of interest, with Enron standing to benefit from government regulatory decisions; the destruction of documents by auditor Arthur Andersen; the calls from Enron executives to the Treasury and Commerce Departments as the energy-trading powerhouse was coming apart; the huge profits made by corporate insiders on the sale of their Enron shares compared with the catastrophic losses suffered by ordinary employees in their 401k accounts: Enron had it all. Too bad for the Democrats one of their own got in the way. Squeaky Clean Bob Rubin, the former Clinton Administration treasury secretary and Citigroup executive committee chairman, tried to use his standing in Washington to help his company on Wall Street. Not in the same way Ken Lay did, mind you. Ken Lay did what any CEO would do: He acted in the best interests of his shareholders. Questionable Ethics Rubin did him one better. On Nov. 8, he called Treasury undersecretary for domestic finance Peter Fisher, an old bailout hand, having orchestrated Wall Street's rescue of Long-Term Capital Management in 1998, and asked him what he thought of the idea of calling the rating agencies to try and avert a downgrade. At the time, Enron was rated ``Baa3,'' the lowest investment grade rating, by Moody's Investors Service and was on review for a possible downgrade. Rubin's call ``was a soft-sell,'' said Michele Davis, a Treasury spokesperson. ``He asked Fisher what he thought of the idea of Fisher placing a call to rating agencies to encourage them to work with Enron bankers to see if there was an alternative to an immediate downgrade.'' A downgrade to junk status would have scotched the proposed takeover of Enron by Dynegy, Inc. A junk rating would have made it almost impossible for Enron to act as a counter-arty on energy trades, the most lucrative part of its business. A Lot to Lose Citigroup, which was advising Enron on the takeover by Dynegy, stood to lose hefty fees if the deal fell through. Moody's downgraded Enron on Nov. 28. The Dynegy merger collapsed that day. Enron declared bankruptcy on Dec. 2. It's one thing for Ken Lay to make calls to the Treasury, to the Commerce Department, to the Federal Reserve, hoping to invoke the too-big-to-fail doctrine. It is incumbent on a CEO to act in the interest of his shareholders. It's quite another thing for Rubin to use his government contacts to attempt to compromise a private rating agency, whose function is to provide an independent evaluation of credit risk, to avoid a decision that would hurt his bank. Investors large and small make decisions based on a company's credit rating. If ratings can be manipulated, what purpose do they serve? While Citicorp has refused to quantify its loan exposure to Enron, the bank was the largest arranger of syndicated loans to the company and is believed to have the largest exposure to Enron along with J.P. Morgan Chase. Citigroup will release fourth-quarter earnings on Thursday. Separation of Powers Yesterday, on ABC's ``This Week,'' Sam Donaldson asked Treasury Secretary Paul O'Neill about the Rubin phone call. ``I never would have made such a call,'' O'Neill said. The secretary went on to explain that when he left Washington after his stint at the Office of Management and Budget in the 1970s, ``I made a deliberate decision that I was not going to trade on what I knew about the government and people that I knew in the government.'' Each phone call by Enron to the Bush administration for the purpose of providing information or asking, directly or indirectly, for help, was met with a firm ``no.'' There is no impropriety there unless the facts change. Meanwhile, the Enron story has provided enough juicy material for a half-dozen Congressional hearings. The Democrats would love to use them to chip away at Bush's strong popularity ratings and deflect attention from his acknowledged success as a war president. They have one of their own, Bob Rubin, to thank for ruining their fun.

To: RR who wrote (46569)	1/17/2002 4:18:00 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

Enron CEO Selling Colo. Properties...I feel SO SORRY for him... Maybe Ken baby is starting to feel guilty....or maybe he needs a little cash to pay his massive legal bills...or maybe he knows he'll be paying fines...or maybe he knows the money he used to buy these condos really wasn't his <G>... ________________________________________ Enron Chairman Kenneth Lay Puts Properties in Aspen, Colo., on Market for $15 Million Thursday January 17, 3:11 pm Eastern Time ASPEN, Colo. (AP) -- Three of the four Aspen properties owned by Enron Corp. (NYSE:ENE - news) chairman Kenneth Lay have been listed for sale for more than $15 million. The properties owned by Lay and his wife, Linda, include two single-family homes and an undeveloped lot at the base of Red Mountain, Aspen broker Joshua Saslove said Wednesday. He said the properties have been in the market since mid-November. Enron, which entered the biggest bankruptcy in the country's history on Dec. 2, has no legal interest in the properties. One home, listed at $6.15 million, has four bedrooms, 4 1/2 baths, a two-car garage and caretaker's quarters, broker Heidi Houston said. The price was listed at $5,000 less than what the Lays paid for it in August 2000, according to county records. The second residence, a five-bedroom log-and-stone house, was listed at $6.5 million. The Lays paid $4.8 million for it in November 1999. The undeveloped lot is listed for $2.9 million. Assessor records show the Lays bought it in 1998 for $1.65 million. The Lays plan to keep a 4,200-square-foot home that the Pitkin County assessor's office has valued at $3 million, Saslove said. Records show they purchased it in 1991 for just under $2 million. Lay, Enron's chairman and chief executive, is under investigation for selling $101 million of his Enron stock over the last year when Enron executives were telling their employees their pension plans, in Enron stock, were secure. The pensions are expected to be worthless under the bankruptcy.