Scum sucker central:
Army Secretary Defends His
Sale of Enron Stock
By JAMES DAO
ASHINGTON, March 27 — Thomas E.
White, a former Enron (news/quote)
executive who is now Army secretary, defended
today the timing of his sale of millions of dollars in
Enron stock late last year, saying that numerous
conversations he had with Enron executives at that
time did not guide his decisions.
"There was never, ever anything that could be
construed as insider information, nonpublic
information," Mr. White told reporters in an
hourlong discussion at the Pentagon. "I never sold
any stock based on what anyone told me at Enron."
In his most detailed explanation and vigorous defense of his Enron conduct to date, Mr. White asserted that
he was unaware of a negative earnings report from the company until it was publicly released on Oct. 16, a
development that caused the stock's value to plummet. He also said he did not know that the Securities and
Exchange Commission had begun an investigation of Enron until the company disclosed it on Oct. 22.
During October, Mr. White sold about $3 million in Enron stock and made contact with former Enron
colleagues at least 13 times. He said today that those contacts were purely personal, suggesting that his
decisions were based on publicly available information and his own intuition.
"I believed in that corporation right up to the time it went into bankruptcy," he said, contending that he had
losses while divesting himself of Enron stock. "You can tell that I must have, by what I never cashed out and
what I took over the cliff with me."
Mr. White also disclosed today that he had turned over documents, including
phone logs and e-mail messages, to a Justice Department task force that is
investigating Enron's collapse.
Mr. White said he had hired outside counsel to represent him on Enron
matters, adding that he had not been interviewed by investigators. The Army
is also collecting Enron-related documents for the task force.
Mr. White was an Enron executive for 11 years before becoming Army
secretary last May.
Throughout the session, Mr. White, a former Army brigadier general who
served in Vietnam, was cheerful, almost loquacious as he fielded questions
about Enron, his use of a military jet for a private trip and his future at the
Pentagon.
At one point, he even deferred answering a question on Army affairs, saying
he wanted to make sure all the Enron questions had been asked.
But he refused to talk about his time as an Enron executive, when he ran
several major units. One of those units, Enron Energy Services, has been
accused of overstating its profits by hundreds of millions of dollars the last
three years, when Mr. White was vice chairman.
He did assert, however, that he did not know that Enron had formed outside
partnerships that were used to inflate profits, according to an investigation by
an Enron board committee. Those units, which have become a focus of
criminal inquiries, were known by many of the company's senior executives at
the time.
"The fact that there were these partnerships," Mr. White said, "and who had
an interest in them, and the fact that the Enron board of directors apparently
passed a resolution waiving standards of conduct of the corporation to permit
the chief financial officer of the corporation to sit on both sides of the table,
was never discussed in any meeting that I was ever a part of when I was a
member of the management committee of the corporation for 11 years."
"So when I read about it in the newspaper," he added, "I was as appalled as
anyone else."
Mr. White defended his use of an Army jet to fly himself and his wife, Susan,
to Colorado in early March to deal with the sale of a $6.5 million house they
owned in Aspen. Pentagon officials have said Mr. White was required to fly
on a military plane at that time because he was on a special rotation requiring
senior officials to travel outside of Washington on aircraft with secure
communications lines.
Mr. White said today that he had already bought commercial tickets to fly to
Colorado when he was told he must take the Army plane instead. He said he
paid twice for his wife's trip: once for the Army flight and once for her unused
commercial ticket.
As the highest-ranking member of the Bush administration to have worked
for Enron, Mr. White has come under fire on Capitol Hill and from consumer
watchdog groups for being slow to disclose the number of contacts he had
with senior Enron officials and the extent of his company holdings.
In recent weeks, for example, Mr. White has disclosed that he held options to buy 665,000 shares of Enron
stock until January, a month after he was required to divest himself of all company stock.
Last week, Mr. White also disclosed that from June 2001 to February 2002, he had made 49 more
telephone calls to former Enron colleagues than he had first disclosed in January when he sent a letter to
Representative Henry A. Waxman, the ranking Democrat on the House Government Reform Committee.
Mr. White said today that he had recalled the additional phone calls only recently. But he acknowledged that
he should have qualified his original letter to Mr. Waxman to reflect the possibility that his contacts involving
Enron had been more extensive.
Philip M. Schiliro, the chief of staff for Mr. Waxman, said Mr. White's news conference today had left many
serious questions unanswered.
"If the same facts applied to Hillary Clinton or any member of the Clinton administration," Mr. Schiliro said,
"Republicans would be calling for a special counsel and would be subpoenaing thousands of pages of
information."
Mr. White repeatedly asserted that he had honored his pledge to recuse himself from all Enron-related
matters since becoming the Army's top civilian official last May, adding that no one at his former company
ever asked him to do any favors for the company.
He also said that no one in the administration had suggested he consider resigning, that the Army's senior
uniformed leadership had not lost faith in him and that Defense Secretary Donald H. Rumsfeld had expressed
full confidence in him as recently as Tuesday.
But he said that he would resign without prodding if he ever became too busy defending himself to complete
his Army duties.
"I came back to town for one very simple reason, and that was I thought I could do something good for
soldiers and their families," he said. "If I ever get to the point where that is no longer possible, it doesn't make
any point to stay."
nytimes.com
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