Bush Cabinet members defend Enron contacts
WASHINGTON (CNN) -- Two Bush Cabinet officials Sunday defended their contacts with the chairman of bankrupt energy trader Enron, while a leading Democrat, Sen. Joseph Lieberman, vowed to conduct a "very aggressive, very comprehensive and very fair" investigation into the Enron matter.
Commerce Secretary Don Evans and Treasury Secretary Paul O'Neill received calls from Enron's chairman and CEO Kenneth Lay last fall as the once high-flying company was heading toward collapse.
Evans said that in the October 29 phone call Lay told him the company's credit rating was being reviewed by Moody's, a rating service.
"[He] said to me he didn't know if there was any support that we could give them at Moody's, but, if there was, he would welcome that," Evans said on the NBC program "Meet the Press." "I listened to him and told him, 'Thank you very much.' "
Evans said he did not offer any assistance to Lay or Enron, concluding that it would be "an egregious abuse for me to step in." He said he discussed the phone call with O'Neill, who concurred.
Several weeks later as bad news about Enron's finances began to mount, Evans said he did inform White House Chief of Staff Andrew Card about the phone call.
"With all the ongoing activity at Enron, I thought the White House ought to know," he said.
In an interview Sunday on Fox News, O'Neill said he had two phone calls from Lay, one in late October and another in early November.
In the first, Lay told him that he wanted Treasury Department officials to talk to people at Enron about the company's complex derivative contracts "to assure ourselves that their problems were not going to get translated into larger problems for the U.S. and the world capital markets."
In the second call, Lay told him that rating agencies were looking at Enron, O'Neill said.
Officials: No inside information received
Asked why he never discussed the potential problems at Enron with President Bush, O'Neill said, "I didn't think this was worthy of me running across the street and telling the president. I don't go across the street and tell the president every time somebody calls me."
Both Cabinet officials said phone calls from Lay were not unusual. They also said they did not receive any inside information indicating the extent of Enron's financial problems that the public did not have.
"What we knew, what I knew, I think what those of us in the administration knew was public property," O'Neill said. "Everyone knew from Enron's disclosures that they were struggling. We didn't know more than that."
At the time Lay called him, Evans said that "there were some 12 to 13 Wall Street research analysts that had a strong buy on Enron, and they know a lot more about Enron than I know about Enron.
"So I didn't feel ... I was privy to any information ... that wasn't already disclosed that was suggesting to me the company was going to collapse," he said.
O'Neill also defended the decision not to take any federal action to help Enron as its stock price collapsed and it was forced into bankruptcy.
"Unless there's an issue related to the company that reaches to public responsibility ... in the American capitalist system, companies are responsible for their actions," O'Neill said.
"The company had a duty to inform its shareholders and its employees about things that were going on inside the company. That's not a federal government responsibility."
Lieberman: Investigation to focus on 'corporate scandal'
But Lieberman, D-Connecticut, chairman of the Senate Governmental Affairs Committee that is investigating the Enron affair, called the treasury chief's comment "outrageous."
"Those are statements that might have been made by the secretary of the treasury in the 18th century but not in the 21st century," he said on CBS's "Face the Nation." "The death that Enron experienced was not a natural death.
"We know that they were trading fast and loose with offshore corporate entities that were hiding their debt from the public," Lieberman said. "We know that they were saying things to the public ... about how the stock was going to go up and, at the same time, they were selling their stock right then. This is not capitalism as we want it to be."
Lieberman said his investigation will focus on the "corporate scandal" -- how the collapse happened -- as well as what federal regulators did or did not do in the years leading up to Enron's collapse.
"Where were the people who are supposed to be protecting us -- the federal government regulatory agencies, the board of directors of Enron, the independent auditors who were not protecting us?" he asked. "And what's the goal here? To the best of our ability, to make sure that we act in a way that something like this never happens again."
Enron and its executives were major contributors to both political parties, giving millions in campaign contributions to President Bush and members of Congress. Vice President Dick Cheney also has disclosed that he met with Lay during discussions of the administration's energy policy last year.
"We don't know enough to know whether any of that influence in any way stopped the administration or agencies of our federal government from protecting average shareholders who lost their life savings when Enron collapsed," Lieberman said. "That's the question we're going to ask."
U.S. Sen. John McCain, R-Arizona, said the Enron case is another illustration of the need for campaign finance reform to eliminate the perception that companies such as Enron can buy access and influence through contributions.
"It taints all of us," McCain said on "Face the Nation." "It creates the impression that improprieties are being carried out because of the influence of these huge amounts of money."
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