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Army Chief Should Quit

April 04, 2002

Secretary of the Army Thomas E. White worked as an executive at Enron for 11 years but claims he knew nothing of the shady practices that led to its downfall. Maybe White really was clueless during his time at Enron, but he is not doing himself any favors by failing to properly explain his dealings with the failed energy giant after he left it.

White unloaded $3.08 million worth of Enron stock in October, after having sold about $9 million in shares earlier last year. At the time he was regularly talking with his former colleagues. Now, instead of providing answers to Congress about the substance of those conversations, he is portraying himself as another victim of Enron's collapse. He has even filed for retirement benefits from the company, whose downfall is likely to condemn thousands of less-well-connected investors and former employees to retirements much more modest than they'd ever imagined.

The questions about White's conduct grew after he told the House Government Reform Committee in January that he had had seven meetings and 22 phone conversations with Enron executives, including one with Kenneth L. Lay. Those talks, White said, were "personal in nature." However, on the evening of March 22, as Congress was about to recess, White suddenly admitted that he had had an additional 44 conversations with Enron executives on his home telephone. These chats, he said, were not necessarily personal and would have involved "some comment or discussion" relating to Enron's financial condition. In fact, Secretary White had at least 73 conversations within 10 months of entering the Bush administration, at the very time that Enron was unraveling.

Then there is the matter of White's conduct while at Enron, where he was second-in-command of the Enron Energy Services Division. According to former Enron employees, White was part of a 1998 effort in which staff members tapped away on defunct computers to persuade visiting Wall Street analysts that the division was far more active in trading electricity and gas futures than it was in reality. Former Enron employees have also implicated White's division in the creation of illusory earnings, which were at the heart of the firm's problems.

White has said he wasn't there for the visit and has distanced himself from Enron's other suspect activities. He has also said, however, that if his involvement in Enron becomes a "major distraction" he will step down. That point has been reached. White may not have done anything illegal. But the secretary of the Army needs to be like Caesar's wife--beyond suspicion. White's conduct during and after his tenure at Enron does not meet that standard. He should resign.

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