Bush Says Privacy Is Needed on Data From Enron Talks
Bush Says Privacy Is Needed on Data From Enron Talks
STEPHEN LABATON and RICHARD A. OPPEL Jr. . NY Times . 29 january 2002
WASHINGTON, Jan. 28 President Bush today defended his refusal to turn over to Congress information about contacts between Enron (news/quote) and the administration's energy task force, saying the request was "an encroachment on the executive branch's ability to conduct business."
"We're not going to let the ability for us to discuss matters between ourselves to become eroded," the president said this afternoon at a session with reporters. "It's not only important for us, for this administration, it's an important principle for future administrations."
The president's comments, which were similar to remarks made over the weekend by Vice President Dick Cheney, makes a constitutional showdown between the White House and the General Accounting Office, an investigative arm of Congress, all but inevitable. The accounting office has sought White House records about a series of meetings last spring between the vice president's energy task force and executives from Enron, an energy trading company, and other companies.
David M. Walker, who as comptroller general of the United States heads the accounting office, said in an interview after the president's remarks, "Once the administration decided to create this task force and put the vice president in charge, we believe that changed the matter to clearly give the Congress and the G.A.O. right of access."
Mr. Walker added, "If all you have to do is create a task force, put the vice president in charge, detail people from different agencies paid by taxpayers, outreach to whomever you want and then you can circumvent Congressional oversight, that's a loophole big enough to drive a truck through."
Mr. Walker said he would decide by the end of the week whether to sue the administration and suggested that such a move was a near certainty. He said the accounting office was not seeking details like the minutes of meetings or notes of conversations but wanted to find out "who met with whom, when and about what."
Mr. Bush took strong exception to the characterization by some Democratic lawmakers that the proposals recommended by the energy task force in May reflected a "wish list" for Enron.
"Well, Enron went bust," Mr. Bush said. "Shortly after the report was put out, Enron went broke, and it went broke because, 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."
Repeating a regular theme of the White House, he described Enron's downfall as "a corporate governance issue" and not a political scandal affecting his administration.
Nonetheless, there were signs that the administration remained as preoccupied as the rest of Washington with Enron.
Karen P. Hughes, a senior adviser to Mr. Bush, said some of "what went wrong" could be traced back to the Clinton administration.
"There are legitimate questions as to where were the federal regulators when these accounting practices were occurring at Enron," Ms. Hughes said on the CNN program "Inside Politics."
Her remarks prompted strong protest from some Clinton advisers.
"The Clinton administration time and time again tried to enact legislation to protect the public from this kind of greed," said Paul Begala, a former adviser to Bill Clinton, "and they were blocked at every turn by Congressional Republicans."
On Capitol Hill, Senator Paul S. Sarbanes, Democrat of Maryland, who is chairman of the Banking Committee, said he intended to closely question Mr. Bush's nominees to the Securities and Exchange Commission about their views on regulating the accounting industry, whose performance has come under sharp criticism in the Enron case. Mr. Bush has nominated two partners from accounting firms to commission openings.
Congressional investigators, too, picked up the pace of their myriad Enron inquiries.
The Senate Energy and Natural Resources Committee, at a hearing on Tuesday morning, will examine whether energy legislation needs to be strengthened in the aftermath of the Enron collapse. It will also question any Enron role in the California energy crisis. The committee, the third in Congress this year to study fallout from the Enron case, will also focus on whether enough is being done to ensure that the nation is building enough power plants, transmission lines and pipelines for natural gas. In addition, the panel will examine whether more needs to be done to guard against price spikes in wholesale energy markets.
"The larger question," said Senator Jeff Bingaman, the New Mexico Democrat who is chairman of the committee, "is whether the regulatory structure that's currently in place is adequate to ensure the effective functioning of these markets, and to what extent does the Enron collapse cause us to believe we should be doing more?"
Mr. Bingaman said the Enron debacle demonstrated the need for new laws or regulations for accounting firms and for 401(k) retirement plans, but he said it was not yet clear whether that also held true for the nation's energy markets. "I want to see if the various regulatory agencies have the authority they need under current law," he said.
The committee is expected to discuss whether the Federal Energy Regulatory Commission needs additional authority to crack down when prices for electricity or natural gas soar. The commission, whose new chairman, Patrick Wood III, is scheduled to testify, came under withering criticism a year ago from California officials who asserted that the agency failed to punish efforts by power generators and traders to drive up electricity prices.
Mr. Wood, whom Enron endorsed for the job, has acknowledged recently that his agency has much to learn about deregulated energy markets and that it faces difficult challenges in understanding the operations of some of the companies it regulates.
At the hearing on Tuesday, Senator Dianne Feinstein, Democrat of California, plans to ask questions about Enron's opposition to the price restraints and the profits it made in California from trading electricity and natural gas. She has also asked Mr. Bingaman for a hearing to examine Enron's role in the crisis, asserting in a letter that "Enron's ability to deal in complex unregulated financial derivatives" was "very likely a key factor in driving up gas and electricity prices."
The committee is expected to focus on whether legislation is needed to tighten gaps in the regulation of energy commodity markets, and testimony is expected from James E. Newsome, the chairman of the Commodity Futures Trading Commission. One subject the panel is expected to discuss is a provision Enron and other companies won two years ago that exempted their online trading platforms from regulation under the Commodity Futures Modernization Act.
The most anticipated appearance will come on Monday, when Kenneth L. Lay, Enron's former chief executive, is set to appear before two committees. In a preview of what he might say, members of his family appeared on television today to discuss the hardships they have suffered in recent months. Mr. Lay's wife, Linda, suggested that the family was struggling to avoid bankruptcy, even though Mr. Lay has collected more than $300 million from Enron since 1989, mostly through the exercise of stock options.
"Everything we had mostly was in the one stock," she said on the NBC program "Today."
"Other than the home we live in," Ms. Lay said, "everything else is for sale."
In his remarks today, Mr. Bush suggested that the company had not received anything from the administration for all its political contributions.
"There are some on Capitol Hill who want to politicize this issue," he added. "This is not a political issue. It's a business issue. It's a business issue that this nation must deal with. 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."
He also suggested that Enron's collapse, and the loss of billions of dollars in investments by shareholders and employees, may warrant "reform of the pension system."
A group of 400 employees from Enron today filed the latest lawsuit against the company in an effort to regain some of the money they lost in stock held in their 401(k) plans.
In Chicago today, the chief executive of Arthur Andersen, the accounting
firm whose audits of Enron have made it a target of investigators probing
the company's collapse, acknowledged that the firm was losing business
because of the affair.