A Washington, D.C.-based legal watchdog group has called for a special counsel to investigate possible connections between executives of failed energy giant Enron Corp. and members of the Bush and Clinton administrations.
The head of the legal group Judicial Watch, chairman and chief counsel Larry Klayman, said in a statement yesterday that despite his recusal, Attorney General John Ashcroft’s Justice Department is still “hopelessly conflicted in investigating White House and Cabinet-level contacts with Enron representatives.”
“A special counsel can begin to assure the American people that a thorough investigation is conducted,” Klayman said.
Reports thus far have tied Enron to President Bush, as well as other GOP and Democratic lawmakers, through campaign contributions the corporation has made in the past. Because of those contributions, Ashcroft Thursday recused himself and his chief of staff, David Ayres, from any department investigations.
Enron contributed to Ashcroft’s senatorial campaigns.
Judicial Watch also charged Enron with having ties to the Clinton administration. Besides donating to Clinton’s presidential campaigns, officials with the legal group charged: “Enron is also a prominent player in the Clinton-era fund-raising scandal, in which Commerce Department trade mission seats were sold in exchange for political contributions.”
Enron chairman Kenneth Lay “went on one of these scandalous trade missions with the late Ron Brown to India in January 1995 and received hundreds of millions of dollars of aid from the Clinton administration for its energy projects in India,” said the statement.
Furthermore, Judicial Watch charged that “Enron even attempted to enter into joint ventures with John Huang’s Lippo Group (a Chinese intelligence front operation, according to government reports) as a result of the Clinton administration trade trips.”
Lay, also a major donor to Bush’s campaign, attempted to solicit the administration’s financial help last fall. The administration has acknowledged that Lay contacted Commerce Secretary Donald Evans and Treasury Secretary Paul O’Neill, but neither official offered any assistance.
According to Treasury officials yesterday, Enron President Lawrence “Greg” Walley also called Peter Fischer, the department’s undersecretary for domestic finance, “six to eight times” last year to try to arrange a bankruptcy-avoiding credit extension.
“As Enron’s negotiations with its bankers for an extension of credit neared a decision point, the president of Enron asked Undersecretary Fisher to call the banks,” spokeswoman Michele Davis said.
Though no evidence has surfaced thus far to suggest illegality, “this contact in particular seems improper on its face and deserves an independent investigation,” Klayman said.
Justice Department officials expressed confidence that any Enron probe would be handled properly and thoroughly.
“We’re putting together a team here made up of experienced career professionals – some who are the best prosecutors in this line of investigation in the country,” Bryan Sierra, a spokesman for the department, told WorldNetDaily yesterday. “We’re confident that that experience will be put to good use here.”
Outside of Ashcroft’s office, Sierra said the department wasn’t worried about any conflicts of interest.
Other agencies are also examining Enron’s failure. Harvey Pitt, chairman of the Security and Exchange Commission, said last month the agency was “investigating Enron’s meltdown and its tragic consequences.”
“Until all the facts are known, there is nothing that can or should be said about who may be responsible for this terrible failure,” Pitt wrote in the Wall Street Journal Dec. 11. “The public can be confident, however, that we will deal with any wrongdoing and wrongdoers swiftly and completely, to ensure full protection of investor interests.”
To make matters worse, Enron auditor Arthur Andersen LLP said its employees had destroyed a “significant number of documents” related to the company. One report said a congressional source placed the figure of documents destroyed “in the thousands.”
Bush administration officials have pledged to investigate the bankruptcy, which saw corporate executives cashing out their stocks earlier last year, when they were selling higher, while company employees were forbidden from doing so, costing many their life savings.
“On first blush, it looks like Enron operated within the rules and regulations,” O’Neill said on ABC’s “Good Morning, America” program yesterday, “with regard to how they managed their 401(k) plan. And if they did, then we need to look and see if there are appropriate changes we could make.”
Enron officials denied they were attempting to influence the administration.
“He felt an obligation to let them know what was going on,” the company said in a statement of Lay’s calls to O’Neill and Evans, as well as to Federal Reserve Chairman Alan Greenspan.
“At no time did he ask for any assistance from the government, nor did he intend to leave the impression that he was asking for assistance,” the statement said.
Democrats made quick work of the brewing scandal.
“It is now clear the White House had knowledge that Enron was likely to collapse but did nothing to try to protect innocent employees and shareholders who ultimately lost their life savings,” said Rep. Henry Waxman, D-Calif., known for his oft-passionate defense of Clinton during his various scandals.
Enron filed for bankruptcy Dec. 2 after months of rumors it was suffering financial trouble. Yesterday, company officials announced that USB Warburg was the successful bidder for Enron’s North American wholesale electricity and natural-gas trading business.
“Terms of the proposed transaction, which is subject to Bankruptcy Court approval, call for Enron to retain a residual interest in the income of the business,” said a company press release.
“This is a key milestone as we build the new Enron and work to establish a platform for restructuring the company and emerging from Chapter 11 bankruptcy protection,” Lay said of the deal.
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