Army Secretary's Job Hinges on Answers to Enron Queries
By Vernon Loeb and Ellen Nakashima
Washington Post Staff Writers
Wednesday, March 13, 2002; Page A11
Army Secretary Thomas E. White has thus far weathered the Enron Corp.
scandal and recent Enron-related divestiture concerns voiced by two
influential senators. He maintains strong support among senior Army officers
and tempered backing from the Bush administration and Capitol
Hill.
But even White's supporters say his tenure at the Pentagon is contingent
upon his ability to answer questions about his performance as vice
chairman of Enron Energy Services and about 30 or more meetings and
telephone contacts he has had with Enron executives since becoming
Army secretary in May.
"I think it is wait-and-see," said one senior administration official.
"He comes with a very good background and reputation. He has done a very
good job as secretary of the Army. I think the verdict is still out as to what impact
Enron may have."
The Justice Department began a criminal investigation of Enron in
January aimed at determining whether the company defrauded investors by
deliberately concealing crucial information about its finances. It has ordered
Pentagon officials to preserve any documents, correspondence or
e-mail related to the Houston-based energy giant.
White has not been implicated in any wrongdoing, although former Enron
employees have alleged that Enron Energy Services, which traded
energy to large power companies, used questionable accounting practices
during his tenure to overstate profits by hundreds of millions of dollars.
White has said he knew nothing about accounting irregularities.
Earlier this month, Sens. Carl M. Levin (D-Mich.) and John W. Warner
(R-Va.), chairman and ranking minority member of the Senate Armed
Services Committee, criticized White in a letter for retaining options
to purchase Enron stock until January, eight months after he told the
committee he would divest his holdings to avoid conflicts of interest.
Levin and Warner declined comment yesterday, but Senate sources
said the letter represented a warning to White about how seriously the
committee takes disclosure requirements. It should not be interpreted,
the sources said, as an attempt to force White from office.
In the House, Rep. Ike Skelton (Mo.), ranking Democrat on
the House Armed Services Committee, said yesterday that none of his colleagues on
the committee has raised the issue of White and Enron with him.
"I have no objections to his work as the Army secretary," Skelton said. "I think
he understands their culture, and his testimony has been right on the mark."
Rep. Henry A. Waxman (Calif.), ranking Democrat on the House
Government Reform Committee, called on Congress this week to investigate the
activities of two former Enron executives White brought with him to the Army.
Those executives are Geoffrey Prosch, a former Enron Energy Services
director and now principal deputy assistant secretary for installations, and
Dominic Izzo, an international engineering executive at Enron
who is principal deputy assistant secretary for civil works.
"The fact that Secretary White, Dominic Izzo and Geoffrey Prosch all went
directly from Enron to the Army -- and all had responsibility for
decisions that could affect Enron's interests -- raises serious
questions that Congress must pursue," Waxman said.
White, Prosch and Izzo declined comment yesterday.
An Army spokesman said neither Prosch nor Izzo were in position
to award contracts or participate in policy decisions that
could benefit Enron.
White said that he has recused himself from any decisions
involving Enron since becoming Army secretary, explaining in
earlier communications to Waxman that his contacts and meetings
with Enron executives dealt with personal matters only.
In response to Levin and Warner, the White House publicly
defended White, saying that his divestiture of his Enron holdings complied with "all
executive branch ethics requirements as regards conflict of
interest" and that White would meet the committee's more stringent requirements.
White, the highest-ranking former Enron executive to serve in the
Bush administration, became Army secretary as part of Defense Secretary
Donald H. Rumsfeld's plan to recruit corporate executives who could bring
business practices to the Pentagon.
One Army general called White "hands down the best secretary we have seen
here in anybody's memory -- he's smart, he's competent, he really
knows the Army, and he puts the Army's interest first all the time."
In a recent essay that appeared on a chat room frequented by
junior Army officers, retired Army Lt. Col. Greg Wilcox, a West Point graduate and
Vietnam veteran who now works for SRI International in Rosslyn, said
the symbolism of White's appointment could turn on the Army.
"Congress has been very willing to listen thus far, but if the Enron
affair explodes into a political problem for Secretary White, then the Army will
face increasing scrutiny and skepticism on Capitol Hill," Wilcox wrote.
White's popularity among the Army brass stems at least in part from
the fact that he is one of them. But even his promotion to brigadier general
more than a decade ago is the source of controversy.
White was "frocked" as a brigadier, or one-star, general in 1989
while working as an executive assistant to Colin L. Powell, then chairman of the
Joint Chiefs of Staff. In that status, he could pin on the star and be
called "general," before legally attaining the rank.
He was officially promoted on July 1, 1990, less than a month
before he left the Army to join Enron.
His promotion and speedy exit prompted consternation then, and still
rankles now, say former colleagues. The fact is, said one former
high-ranking defense official, that promotions are awarded on the
assumption of future service, not as a reward for past performance.
"Promotion is about continuing to serve," the official said.
"It's not a gift."
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