Agency Will Sue for Records of Cheney Energy Meetings
January 31, 2002
The New York Times
By DON VAN NATTA Jr.
WASHINGTON, Jan. 30 -
The General Accounting
Office said today that it would sue
the White House to try to force
Vice President Dick Cheney to
release documents detailing
contacts between corporate
executives and the
administration's energy task
force.
In a letter to the White House
and Congressional leaders, David
M. Walker, the comptroller
general of the United States and
director of the accounting office,
said he intended to ask a federal
judge to order Mr. Cheney to give
Congress the identities of energy
industry executives who helped
the Bush administration
formulate a national energy
policy last year. Mr. Walker said
he was also seeking the subject
that each executive discussed
with task force members. Mr.
Cheney was the chairman of the
task force.
The announcement today sets up
a legal showdown between the
accounting office - an
investigative arm of Congress - and the Bush
administration with potential political consequences for
the White House. The dispute over task force records has
made it more difficult for the White House to distance
itself from the collapse of the Enron Corporation
(news/quote), whose executives met with Mr. Cheney and
other energy task force members a half-dozen times last
year.
Also today, a Congressional committee asked Kenneth L.
Lay, Enron's former chairman and chief executive, to
explain what Enron did in response to a whistle-blower's
assertion last summer that a major division had overstated
profits by hundreds of millions of dollars.
The division, Enron Energy Services, was run by Lou L.
Pai, who sold $353 million in Enron stock over the past
three years, and Thomas E. White, who left to become
secretary of the Army last June. In August a former
manager, Margaret Ceconi, sent an e-mail message to Mr.
Lay asserting that the company was shifting more than
$500 million in losses out of the division.
Today, the House Energy and Commerce Committee, one
of 10 Congressional committees investigating Enron's
collapse, sent a letter to Mr. Lay demanding to know
whether he did anything in response to Ms. Ceconi's
accusations.
On another front, Treasury Secretary Paul H. O'Neill tried
to calm financial markets one day after stock prices
tumbled on concern among investors that other
companies have hidden their financial problems. Mr.
O'Neill said the administration was reviewing proposals to
tighten or expand requirements for financial disclosure
and reporting by companies. A decision on which
proposals to pursue was likely within two weeks, he said.
Mr. O'Neill told reporters that the administration's
disclosure plan would have a strict enforcement
mechanism "to assure that if there's a failure to perform,
that the justice will be swift and sure."
He said he did not believe there were systemic flaws in
corporate accounting and financial reporting.
"It's clear there are some cracks we need to fix," Mr.
O'Neill said. "But I don't think the problems are
fundamental. Therefore, I don't think there will be an
enduring problem in the financial markets, even though
there are obviously a few cases in the last few days that
have been concerning people."
Enron's fallout reached another of the nation's big banks
today, as Bank of America (news/quote) confirmed that
four employees whose units did business with Enron had
left or had announced their resignations in the last few
days.
Steve Bragg, the head of the natural resources group at
the investment banking subsidiary, Bank of America
Securities, resigned today. Mr. Bragg "decided to pursue
other interests," said Tara Burke, a spokeswoman for the
bank. Three executives in Texas also "left the bank at the
end of last week," Ms. Burke said.
The departed Texas employees included James Allred and
Jo Tamalis in Houston and Marcia Bateman in Dallas. Ms.
Tamalis was an investment banker working with energy
companies, and had handled loans by the bank to Enron.
The other two worked on the lending side of the bank, Ms.
Burke said. An executive close to the bank said Ms.
Bateman and Mr. Allred had also done work for Enron.
Bank of America wrote off $231 million in loans tied to
Enron at the end of the fourth quarter, another
spokeswoman, Eloise Hale, said. It continues to hold $272
million in exposure to Enron.
A G.A.O. lawsuit would be the first against a member of
the executive branch for failing to cooperate with a
Congressional inquiry in the agency's 80-year history. Mr.
Walker said in an interview today that he intended to hire
an outside law firm to represent the agency, which plans
to file the suit in Federal District Court in Washington
within the next several weeks.
Democrats in Congress have sought energy task force
documents since last April after reports that corporate
contributors to the Bush- Cheney presidential campaign
were granted special access. The request has become
more urgent in recent weeks as Congressional
investigators have tried to learn whether Enron executives
might have steered the administration's energy policy to
serve its interests.
In his letter, Mr. Walker said that if the accounting office
failed to try to gain access to the records, any future
administration "seeking to insulate its activities from
oversight and public scrutiny could do so simply by
assigning these activities to the vice president or a body
under the White House's direct control."
"We would have strongly preferred to avoid litigation in
connection with this matter," Mr. Walker wrote in the
three-page letter to the White House and Congressional
leaders. "But given the request by the four Senate
committee chairmen and subcommittee chairmen, our
rights to this information and the important principle and
precedents involved, G.A.O. will take the steps necessary
to file suit in United States District Court."
Mr. Walker, who was appointed in 1998 by President Bill
Clinton on the recommendation of a bipartisan
Congressional panel, holds a 15-year term in the position.
His job as comptroller general is to respond to requests
from members of Congress to research various subjects.
The accounting office is seeking lists of people present at
each meeting last year of the energy task force. It also
seeks lists of people that each member of the task force
met with, including the date, subject and location of each
meeting. Mr. Walker described it as "who met with whom,
when and about what."
Last spring, the agency had sought the minutes and notes
of all meetings held by task force officials, but it is no
longer seeking that information.
In recent days, the clash over access to the task force
records has played out in a public way. President Bush
and Mr. Cheney have spoken about the importance of
protecting the identities of outside advisers to ensure they
are able to receive "unvarnished" advice.
Mr. Walker has said the White House has rebuffed efforts
to resolve the dispute through negotiation. Today, he
accused the White House of misrepresenting the facts.
"One of the frustrating things about this to me is we have
a very constructive working relationship with this
administration," Mr. Walker said. "And while we
occasionally have had a few minor problems with records
access, we have never had a situation like this."
A senior administration official, who spoke on condition of
anonymity, said today that the administration believed
that the agency had no authority to seek the information
from the vice president. The official said that if the
agency's request was granted, it would set a precedent for
requests for records of discussions the president and vice
president have with senior aides.
"It's very, very dangerous to have that kind of situation,"
the official said. "And I think the interpretation of the
statutes that G.A.O. is relying upon that would produce or
would purport to produce that kind of power upon the
G.A.O. would be unconstitutional."
Ari Fleischer, the White House spokesman, said the
administration was prepared to fight for the principle in
court.
"The White House expects to win because our case is
strong in law, it's strong in policy and it's strong in
principle," Mr. Fleischer said in Winston-Salem, N.C.,
where the president tried to generate support for his new
volunteer corps. "Conversely, we do not believe the G.A.O.
has a strong case to make, either in law, policy or
principle."
The documents were first sought by Representative Henry
A. Waxman, Democrat of California, and Representative
John D. Dingell, Democrat of Michigan. Mr. Dingell
applauded the decision of the agency to go forward with a
lawsuit, saying, "It is unfortunate that since our request
for information last April, the vice president has chosen to
stonewall rather than cooperate."
The White House learned about the agency's intention to
file the lawsuit this morning shortly after the president
presented Mr. Cheney with a cake in honor of his 61st
birthday.
In another Enron-related matter, two Democratic
lawmakers, Mr. Dingell and Representative Edward J.
Markey of Massachusetts, criticized an effort to repeal the
Public Utility Holding Company Act of 1935. Utilities and
some members of Congress have long sought to roll back
the law, which limits utilities' ability to acquire other
power companies and to diversify.
The lawmakers warned that "in light of the unfolding
Enron scandal" a repeal should be reconsidered. In the
Senate, a spokesman for Jeff Bingaman, the New Mexico
Democrat who is chairman of the Energy and Natural
Resources Committee, said the panel would hold a
hearing next Wednesday to re-examine proposals to
repeal the law.
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