Bush Ends Silence on Bankruptcy of Enron
WASHINGTON -- President Bush on Friday broke his public silence on the collapse of Enron Corp., declaring that he has had no recent contact with executives at the Houston-based energy company and expressing concern for the former employees who had lost their life savings.
In his remarks, the president sought to distance himself from a company whose executives had contributed heavily in recent years to his campaign and other Republican causes.
Enron officials, before the company’s fall, enjoyed access to the White House and a number of lawmakers--Republicans and Democrats--on Capitol Hill.
But the company is the subject of multiple investigations, and Bush said Friday that he will let those probes lead where they may.
“There will be a lot of government inquiry into Enron and what took place there,” the president said in a news conference at his ranch in Crawford, Texas. “I’m deeply concerned about the citizens of Houston who worked for Enron, who lost life savings.”
On Dec. 2, Enron, once the world’s largest energy trader, filed for Chapter 11 bankruptcy protection as the value of its stock dwindled within a year from about $90 a share to less than a dollar. The company and its affiliates reported assets of about $50 billion in its bankruptcy filing, the largest on record.
A number of investigations have been launched into possible accounting irregularities or other wrongdoing in connection with the company’s collapse.
At least three congressional committees are looking into the matter. So is the Securities and Exchange Commission. Federal prosecutors also have asked the company for documents.
A Washington attorney for Enron applauded Bush’s statements.
“I believe the president’s remarks were very appropriate, and there are going to be all of these inquiries,” Robert S. Bennett said.
Bennett said Enron has launched its own investigation of what went wrong.
“People should not rush to judgment,” he said. “We do have to find out what happened and why.”
Many former Enron employees, now jobless, are asking the same questions. Some held significant portions of their 401(k) retirement funds in company stock and lost hundreds of millions of dollars, one lawsuit alleges. Employees were blocked from selling the shares in their plans when the stock began its steepest decline.
Sens. Barbara Boxer (D-Calif.) and Jon Corzine (D-N.J.) have introduced legislation that seeks to change 401(k) rules in response to the collapse.
Other lawmakers from both parties are rushing to distance themselves from Enron.
The National Republican Senatorial Committee said Dec. 14 that it intends to return a $100,000 contribution from the company. The Democratic Senatorial Campaign Committee said this week that it plans to donate $100,000 received from Enron to charity.
In all, the company and its executives have given $5.8 million over the last dozen years to candidates and political causes. About three-quarters of the money has gone to Republicans.
Kenneth L. Lay, Enron’s chairman and chief executive, was a major donor and fund-raiser for Bush.
Because federal regulation has been a major factor in its core energy-trading business, Enron has much at stake in Washington.
Even before the president took office in January, Lay enjoyed access to people who would become leading figures in the Bush administration’s energy policy. He served on a transition team advising the incoming administration on energy policy. He also spoke with Vice President Dick Cheney, himself a former oil company executive, as the administration was putting together an energy initiative.
But Bush declared Friday, in response to a reporter’s question, that he had not had any contact with Lay or any other Enron official in the last six weeks.
It was the first time Bush had publicly addressed the issue of Enron since the bankruptcy filing.
Bennett, who also represented former President Clinton, had no criticism of Bush. But he said some others in Washington were running “for the high ground” as Enron sinks.
“That’s OK,” Bennett said. “That’s part of what happens in a highly controversial case in Washington.”
Lay, who earlier this month declined requests to testify before congressional committees, expects to come to Capitol Hill to answer questions in early February after Congress returns from its holiday recess.
