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Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?

To: Patricia Trinchero who wrote (802)	1/18/2002 3:35:52 PM
From: Mephisto	Respond to of 5185

Congress Rebuffed on Energy Documents The NewnYork Times January 18, 2002 The New York Times By ELISABETH BUMILLER W ASHINGTON, Jan. 17 - The White House refused again today to turn over documents demanded by Congress as part of an inquiry into workings of the administration's energy task force, including records of a meeting that Vice President Dick Cheney had with Kenneth L. Lay, chairman of the Enron Corporation. Ari Fleischer, the White House press secretary, said releasing such documents to the General Accounting Office, the investigative arm of Congress, would undermine executive privilege and the candor of people who meet with administration officials. ``We're handling it the way we're handling it because there's a principle involved,'' Mr. Fleischer said. He dismissed a Congressional report that said 17 provisions in the administration's energy policy appeared to benefit Enron. Mr. Fleischer called the study, by Representative Henry A. Waxman, Democrat of California, a ``partisan waste of taxpayer money.'' Mr. Waxman, the ranking Democrat on the House Government Reform Committee and who is investigating the White House ties to Enron, released his study on Wednesday. In a letter sent on Wednesday to Mr. Cheney, Mr. Waxman said, ``It seems clear that there is no company in the country that stood to gain as much from the White House plan as Enron.'' But the letter also said that the administration's energy policies did not benefit Enron exclusively and that some ``may have independent merit.'' Although the White House has refused since August to turn over the documents related to its energy plan, the administration is facing renewed calls for the information since the Justice Department started a criminal investigation into Enron and the administration disclosed its contacts with the company. Mr. Cheney's office did say in a letter to Mr. Waxman this month that staff members of the energy panel met Enron executives four times last year. Mr. Fleischer said the administration would not waver, even as Democrats said the decision not to release the documents gave the appearance of a cover-up. Mr. Fleischer told reporters, ``I really think the public does not share the judgment that there is somehow some political malfeasance here.'' The General Accounting Office has threatened since early September to sue the White House to force it to release the information from the energy panel. On Jan. 9, the G.A.O. announced that it would decide on filing a suit in a month. Today an official at the agency said that a suit was under review. The accounting office has never sued another government department for not cooperating with an inquiry. In another meeting today, with labor leaders at the headquarters of the Teamsters union, Mr. Bush pressed for passage of his energy bill, which is stalled in the Senate. Some labor leaders strongly back the White House proposals, including drilling for oil in the Arctic National Wildlife Refuge, because they expect that exploration will create thousands of jobs. ``This energy bill that we're working on is a jobs bill,'' Mr. Bush told the leaders, who included James P. Hoffa, president of the Teamsters, and Douglas McCarron, president of the United Brotherhood of Carpenters. Mr. Bush, who spoke to the group in a large conference room, said: ``We've got Republicans sitting around this table. We've got Democrats sitting around this table. We've probably got some people who don't care about politics sitting around this table. But all of us know that the energy bill that's now stuck in the Senate, that can't get voted on in the Senate, will be good for America.'' Senator Tom Daschle of South Dakota, the Democratic leader, opposes drilling and has stopped committee action on the bill. But White House officials hope that organized labor can help them win some Democratic votes for the bill. It is unclear how much the investigations into Enron's contacts with the White House will affect prospects for the bill. The Senate returns from a recess next week. It was an unusually busy day for Mr. Bush, who was followed throughout by an NBC camera crew for a program about a day in the president's life. After meeting the labor leaders, Mr. Bush signed into law the $130 million Safe and Stable Families program, which includes $25 million to help children whose fathers are in prison. The president also spoke to Prime Minister Tony Blair of Britain about India and Pakistan, had lunch at the White House with Mr. Cheney, met in the Oval Office with the president of Lithuania, dropped by a meeting in the Roosevelt Room of his new Council on Bioethics and had a cocktail party in the White House residence for Republican members of Congress. ``He likes to have members of Congress down for no particular reason,'' Mr. Fleischer said. nytimes.com

To: Patricia Trinchero who wrote (802)	1/18/2002 10:31:39 PM
From: Ron	Read Replies (2) \| Respond to of 5185

Enron's Lay Hypes Stock to Employees in Sept Transcript By Kevin Drawbaugh WASHINGTON (Reuters) - Enron Corp. ENRNQ.PK Chairman Kenneth Lay told employees the company's stock was "an incredible bargain" on Sept. 26 -- only weeks before Enron fell apart and its stock price plunged, according to a transcript of an Enron intranet chat site obtained by Reuters on Friday. "My personal belief is that Enron stock is an incredible bargain at current prices and we will look back a couple of years from now and see the great opportunity that we currently have," Lay wrote in reply to an employee question on Enron's "ethink" intranet site, the transcript showed. In a succession of statements in the transcript, Lay reassured Enron workers the Houston-based energy trading giant was safe and sound, even as it teetered on the brink of one of the biggest corporate collapses in U.S. history. Just over two months after the Sept. 26 chat session, Enron filed the largest U.S. bankruptcy ever, wiping out billions of dollars in investor equity, destroying over 5,000 jobs and stirring controversy from Wall Street to Washington. "How he could do this in good conscience is anybody's guess. This is unconscionable," said Eli Gottesdiener, who heads a Washington law firm that is suing Enron on behalf of Enron employees who had 401(k) retirement accounts. Gottesdiener provided Reuters with the ethink transcript, which he said he got from a fired Enron manager who is now a client and involved in the Enron legal action. Ethink was a no-holds-barred internal Enron site where employees could ask top corporate executives questions, said Eric Thode, an Enron spokesman in Houston. Thode said the transcript was authentic, but declined comment on Lay's remarks. "This is part of the documents that have been sent to Washington. It's an authentic transcript," Thode said. Eight congressional committees, the Justice Department, the Securities and Exchange Commission and the Labor Department are investigating Enron and combing mountains of documents. ANDERSEN "APPROVED" OUTSIDE PARTNERSHIPS -- LAY In one passage of the ethink transcript, an Enron employee asked Lay about the company's heavy use of special-purpose vehicles (SPVs), or outside partnerships, in its finances and the role of the company's long-time auditor, the accounting firm Andersen, in reviewing the vehicles. Lay replied: "In many cases, not only has the local Arthur Andersen office approved these vehicles, but they have also been approved at Arthur Andersen's headquarter office from some of the world's leading experts on these types of financing." On Thursday, Enron fired Andersen as its auditor. The firing came two days after Andersen said it had fired the lead partner in charge of its Enron audits. The Big Five firm said the partner ordered audit-related documents to be destroyed after learning that they were being sought by federal agents. Asked about Lay's comments regarding Andersen's approval of the SPVs, Andersen spokesman Charlie Leonard said, "Andersen has been a strong advocate of getting the truth out about what took place in Houston ... Andersen is on record as a strong advocate of changing these disclosure rules to bring more transparency and greater accountability to the audit process." Documents obtained by congressional investigators have shown top Andersen executives discussed concerns about Enron's finances, but set them aside, as long ago as February 2001, when Enron's stock was $70-$80 a share. Lay was personally warned of financial trouble in August by Enron vice president Sherron Watkins in a whistle-blower letter that was obtained by congressional investigators. At the time, the stock was worth $35-$45 a share. In the Sept. 26 transcript, an employee worriedly asked Lay how workers could help to boost the Enron stock price, which by then had fallen to about $25, far below an August 2000 all-time high of $90.56. Lay suggested Enron employees "talk up the stock." He said, "The company is fundamentally sound. The balance sheet is strong. Our financial liquidity has never been stronger." Three weeks later, Enron reported its first quarterly loss in four years, took $1 billion in charges on poorly performing businesses and wrote down shareholder's equity by $1.2 billion, triggering a crisis in investor confidence. Asked by another employee about declining morale at Enron and the slumping share price, Lay replied: "I encourage you to continue to do the very best job that you can and if you, and all of our other employees, do the same thing, we will ride the up trend in the stock price together." Between February 1999 and July 2001, Lay sold more than 1.8 million shares of Enron stock for total sales proceeds exceeding $101.3 million, according to a lawsuit filed against him and other Enron executives in Houston by Amalgamated Bank. Enron's stock was booted from the New York Stock Exchange on Tuesday. On Friday, it closed at 51.5 cents a share in the Pink Sheets market. reuters.com