A Question of Balance on Inquiry

The Enron Corp. scandal is approaching a stage where questions about the investigative process may threaten the White House as much as revelations about its substantive dealings with the bankrupt energy giant.

In the next several days, the most pointed questions confronting the administration may not be whether officials provided favored treatment for Enron as it slid toward ruin. Instead, the White House is likely to be pressed about whether it is providing enough information to the public--and whether the Justice Department can be trusted to perform an unbiased investigation into the company’s collapse.

Like the Clinton administration before it, the Bush White House may soon learn that Washington investigations tend to feed on themselves, generating a sustained stream of controversies about the inquiry itself--with or without evidence of underlying wrongdoing.

“The average person out there believes two things: politicians are corrupt and hiding things; and where there is smoke, there is fire,” said University of Virginia political scientist Larry J. Sabato, author of a book about Washington scandals. “The questions being raised today are the smoke. You don’t need fire to do damage to the administration.”

The smoke grew thicker Friday, when some government reform advocates--citing the dense web of connections between the administration and Enron--issued the first calls for the Justice Department to appoint an outside counsel to manage the investigation.

“This company . . . is inextricably tied to the president and top officials in this administration. And therefore, for public credibility . . . there ought to be an outside counsel,” said Fred Wertheimer, president of Democracy 21, a nonpartisan group.

Likewise, Charles Lewis, executive director of the nonpartisan Center for Public Integrity, said, “Having watched the independent counsels and all the special counsels that have been named over the years, this is a classic situation . . . where you would do something like that. So the stars are lined up to necessitate consideration of this.”

Congress let the law establishing the independent counsel’s office expire in the backlash against Kenneth W. Starr’s inquiry into President Clinton. But Lewis and Wertheimer note that the Justice Department still has the authority to name an outside counsel to conduct the investigation.

“When the independent counsel law was not renewed, one of the arguments was that the Justice Department could bring in an outside counsel when it needs one. It needs one,” Wertheimer said.

White House officials say they see no need for an outside counsel. “What you have is a situation where the administration is on a multi-front effort leading the investigation, through the Department of Justice and the Department of Labor,” White House spokeswoman Claire Buchan said.

Political strategists in both parties believe that a sustained focus on Enron’s collapse will likely hurt the administration at least somewhat, even if no evidence emerges that officials provided the company any favors.

The sheer demands of responding to the overlapping investigations--several congressional committees also are probing the company’s failure--create distracting burdens on staff members. One GOP lobbyist said Friday he was fielding questions from White House aides wondering if they needed to retain lawyers.

Said one former Clinton White House aide: “As somebody who lived through this, I would not underestimate the drain on a White House when you spend your whole day running around trying to find a phone message that [Enron Chairman and Chief Executive] Ken Lay left for [Vice President] Dick Cheney eight months ago.”

More significantly, operatives in both parties believe that the close ties between Enron and Bush--the company has been among the most generous financial contributors to his campaigns--may again expose the president to charges prevalent before the Sept. 11 terrorist attacks: that he is too sympathetic to corporate interests.

“This is going to be very useful to Democrats in 2002 and maybe even 2004, because . . . I can’t think of an administration as close to corporate and energy interests as this Bush administration,” Sabato said. “And you have that powerful image, that powerful populist image, of the greedy big boys versus the little guys who get hurt.”

Beyond this broader political threat, the White House faces the day-to-day challenge of responding to the overlapping inquiries. In the days ahead, demands from the press and Congress for a full accounting of all administration contacts with Enron officials are likely to intensify after the revelations this week that Lay spoke with Commerce Secretary Don Evans and Treasury Secretary Paul H. O’Neill weeks before the firm’s Dec. 2 bankruptcy filing. Both officials said they did nothing to aid Enron.

The White House said Friday it is not seeking to compile a comprehensive list of administration contacts with Enron. But it said it was encouraging individual departments to respond to such requests from the media as they arise.

If the administration holds to its opposition to an outside counsel or refuses to provide full details about the substance of its Enron contacts, it could face days, if not weeks, of media debate about whether it is fully cooperating with the various investigations.

But after watching Clinton’s death-match struggles with independent counsels, no president is likely to be inclined to accept demands for such an investigation. “Everybody who watched Clinton knows you do not go down that slippery slope lightly,” one high-ranking GOP strategist said.

Democrats also face difficult choices about how aggressively to pressure the administration concerning Enron. On the one hand, many may be reluctant to be seen as hectoring a popular commander in chief during a time of military action.

On the other hand, because so many congressional Republicans repeatedly agitated for independent counsels under Clinton, Democrats may feel entirely justified to call for one in a case in which so many administration officials have business and political connections to the company under investigation.

“I think the leadership will be reluctant to [call for an independent counsel],” one congressional Democratic leadership aide said. “But I wouldn’t be surprised if there are those within the party . . . who will do it. And I don’t think the leaders are going to be out there aggressively saying, ‘Don’t do that.’ ”

Still, after accusing the Republicans of politicizing the use of special counsels under Clinton, some Democrats caution that it would look inconsistent if they urge such an investigation against Bush.

“If, after all the denunciations of the independent counsel statute and the misuse of it, if we go down that road, it would be hypocritical,” said Lanny J. Davis, a former White House lawyer for Clinton. “We have to trust the Justice Department . . . and not create a monster [with a special counsel].”

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Times staff writer James Gerstenzang contributed to this report.