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THE FALL OF ENRON

Firm Did Not Get His Help, President Says

Enron: Bush also defends refusal to release energy task force's records. GOP lawmakers concerned about fallout from company's collapse.

January 29, 2002|EDWIN CHEN | TIMES STAFF WRITER

WASHINGTON — President Bush on Monday called the Enron Corp. debacle "a corporate governance issue . . . not a political issue," and he declared unequivocally that his administration provided no help to the now-bankrupt energy company despite large contributions from its employees, directors and political action committee to his presidential campaign.

"There are some on Capitol Hill who want to politicize this issue," Bush said, clearly seeking to inoculate himself against political fallout in the burgeoning controversy.

"And, you know, Enron had made contributions to a lot of people around Washington, D.C. And if they came to this administration looking for help, they didn't find any," the president added.

Bush's comments--his most extensive yet on Enron--came a day after a poll showed that 45% of those surveyed believe Enron had closer ties to Republicans than Democrats; only 10% believed Democrats had closer ties. In the CBS/New York Times poll, more than half also said the Bush administration is either hiding something or lying about the Enron matter.

President Defends Stance on Records

Republicans on Capitol Hill are growing deeply concerned over such perceptions, fearful that Enron could derail key Bush priorities--including a national energy policy--as the president enters his second year in office.

That angst was further fueled by Bush's adamant refusal Monday to disclose White House contacts last year with Enron and other energy industry executives while Vice President Dick Cheney developed the administration's controversial energy policy.

With nearly a dozen congressional committees looking into various aspects of the Enron collapse, the matter is likely to hang heavily over the administration, even as Bush delivers his State of the Union address tonight and then campaigns for his agenda around the country.

At a Rose Garden news conference on Monday, the president spoke animatedly as he defended his refusal to release details of Cheney's energy task force.

Pivoting from his lectern, Bush pointed to the Oval Office and asked rhetorically: "Should an administration be allowed to have private conversations in this office without everybody knowing about it?"

With fervor, the president answered his own question, saying:

"This is part of how you make decisions, is to call people in and say, 'What's your opinion? What's your opinion on stem cell? What's your opinion on energy? What's your opinion on the war?' "

Demands by Congress for such information amount to an "encroachment on the executive branch's ability to conduct business," Bush said.

"We're not going to let the ability for us to discuss matters between ourselves to become eroded. It's not only important for us, for this administration, it's an important principle for future administrations," he continued.

"In order for me to be able to get good, sound opinions, those who offer me opinions, or offer the vice president opinions, must know that every word they say is not going to be put into the public record," the president added.

Friendship With Lay Poses Another Problem

The General Accounting Office, the nonpartisan investigative arm of Congress, is threatening to sue the administration to gain access to those task force records.

In his State of the Union address tonight, Bush is not expected to mention Enron directly. He may call for pension reform--an Enron-related topic, since the company's bankruptcy left thousands of its employees with retirement plans that are all but worthless.

The president made his remarks on Enron and the looming legal battle with the GAO during a wide-ranging joint news conference with visiting Afghan interim leader Hamid Karzai.

As the repercussions of Enron's collapse continue to spread, the White House has become increasingly defensive--in part because of campaign contributions to Bush and other Republicans, and in part because of a friendship between the president and Enron's just-ousted chairman, Kenneth L. Lay.

It was unclear to whom Bush was referring Monday when he accused "some" of seeking to politicize the issue. The committees probing the Enron matter in the House are chaired by Republicans.

Bush's comment about contacts between Enron and his administration was a reference to previously disclosed calls from Lay to Commerce Secretary Don Evans and Treasury Secretary Paul H. O'Neill. Both Cabinet secretaries said they did nothing after the calls that could be construed as helping Enron.

The Houston-based company, the seventh-largest in the country until its sudden demise, has been the source of large campaign donations for the last decade or more. While its employees, directors and political action committee gave to Democrats as well, 74% of nearly $6 million in various types of contributions went to Republicans. Bush personally raised more than $114,000 in PAC and individual contributions from Enron in the 1999-2000 election cycle. Bush's inauguration fund received $300,000 from the company.

'This Is Not a Political Issue'

Presidential counselor Karen Hughes, one of Bush's top advisors, further sought on Monday to distance the president from Lay, whom Bush had once nicknamed "Kenny Boy."

In an interview on CNN, Hughes said Bush was "understandably outraged" over Enron's accounting practices and treatment of its employees, and she quoted him as having said: "This stinks."

During the Rose Garden session, Bush characterized Enron's collapse as "a corporate governance issue. This is a business problem that our country must deal with and must fix--that is, full disclosure of liabilities, full understanding of the effects of decisions on pension funds, reform of the pension system, perhaps."

"This is not a political issue," he added.

The president said Enron "went bust" for one simple reason. "It seems like to me--and we'll wait for the facts to come out--it went broke because there was not full disclosure of finances."

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