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White House not reviewing Enron contacts

By Kelly Wallace
CNN Washington Bureau

WASHINGTON (CNN) -- The White House said Wednesday it is not conducting a formal internal review to determine whether Enron executives contacted other federal officials to discuss the ailing company's financial situation.

White House press secretary Ari Fleischer, in a somewhat contentious exchange with reporters asking about such a review during his daily briefing, compared it to a "fishing expedition."

Fleischer said the administration planned to look into contacts between Bush administration officials and Enron executives only if there were allegations of wrongdoing or in response to specific questions from reporters.

"If you are asking is the White House engaged in any effort to determine ... if any contact was made with anybody at Enron for any reason, I suggest to you that there is no hint there of any wrongdoing," Fleischer said.

"If you have any information, any evidence that you would like to bring forward about any wrongdoing, we will do our best to track it down for you," he said. "But other than that I would liken it to a fishing expedition."

Fleischer acknowledged that federal agencies have been alerted to respond to any inquiries they might get from the press regarding contacts between the administration and Enron.

White House press secretary Ari Fleischer has a contentious exchange with reporters over Enron questions (January 16)

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"All the agencies are aware ... that if there are any questions that the press is asking about those contacts, they should look into it and see if they can't answer reporters questions," Fleischer said.

No allegations, no review

When asked to clarify his comments later, Fleischer told CNN the White House press office had advised the press offices of all federal agencies that if Enron contacted any official at that agency about its financial position and if reporters ask about those contacts, press officers should answer the questions.

When pressed whether this meant that each agency was checking to see if Enron contacted officials, Fleischer said reporters should check with each agency about how it was handling the matter. He continued to say no "formal" review was under way.

Fleischer, during the earlier exchange with reporters, seemed to suggest a formal review of contacts between federal officials and Enron executives would imply someone had done something wrong.

"No one but no one has made any allegation or suggestion of wrongdoing," said Fleischer. "And by asking the White House, 'Are you chronicling something?' you're suggesting that there should be something to chronicle because there might be wrongdoing."

Last week, the administration revealed that Enron Chairman Kenneth Lay contacted Commerce Secretary Don Evans and Treasury Secretary Paul O'Neill about the company's financial problems.

It also said Treasury Undersecretary Peter Fisher was contacted "several" times by an Enron executive. In each case, officials said, the Bush appointees acted "appropriately" and did not intervene to prevent the company's collapse.

Fleischer said he has revealed to the media all the contacts between White House officials and Enron executives that he is "aware of."

Although several congressional committees are investigating the Enron collapse, Fleischer said the White House has received no request so far from lawmakers to detail contacts between Bush administration officials and Enron concerning the company's financial situation.

The administration also said Wednesday the president's economic team looked at whether there could be "any broader market-wide implications to Enron's bankruptcy," but said this review, carried out from late October through November, was not made in response to a call from an Enron executive.

"Obviously, I think if the economic team at the White House, having seen what was happening to Enron, reading about it in the papers every day, did not ask the question, 'Does this have an impact really on the economy?' they wouldn't have been doing their jobs," Fleischer said.

He said Lawrence Lindsey, the president's chief economic adviser, did not talk to anyone from Enron while leading the review. Fleischer said he could not say whether Bush was notified about the economic team's review or its findings.

Concern about energy markets

Lindsey, during a Saturday appearance on CNN's "Novak, Hunt and Shields," said his team was "monitoring" the energy markets to make sure Enron's financial problems would not cause major problems in the markets.

"It was obvious Enron was in trouble, so we were all concerned about what it might do to the energy markets," Lindsey said.

"My staff was monitoring the energy markets to make sure spreads weren't widening, but there was no need to do anything the markets functioned perfectly, and as a result it was sort of the crisis that didn't happen."

He added, "Obviously, there is a crisis here for the people who worked for Enron, for the shareholders of Enron who have lost a lot of money."

A similar review was done at the Treasury Department after Enron contacted the agency. The White House in a statement late Wednesday said Lindsey's team coordinated with the Treasury and Energy departments.

Both the Treasury Department and the president's economic team concluded that a collapse of Enron would not have a devastating impact on the energy markets or the U.S. economy, Fleischer said.

The White House also said that at around the same time the Labor Department and the Securities and Exchange Commission had "identified serious problems" that could affect Enron's employees and shareholders, and that is why the Labor Department and the SEC began investigations of Enron.

"These actions demonstrate that as public reports showed that Enron was suffering from severe financial deterioration, the administration acted to protect people's pensions and analyze whether broader markets would be affected," said the White House. "The government did exactly what the government should do."




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