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White House Acknowledges More Contacts With Enron
WASHINGTON, May 22 -- White House officials had more extensive contacts with Enron executives in 2001 than previously disclosed, according to a document released by the Bush administration today in response to a request for information from a Senate committee.
The document describes contacts -- including meetings, phone conversations, letters and e-mail messages -- that concerned the national energy policy report produced by Vice President Dick Cheney, the California energy crisis, Enron's collapse last fall and appointments to administration posts, including the head of the Federal Energy Regulatory Commission.
The White House document also disclosed that Enron executives, including Kenneth L. Lay, the former chairman, attended numerous White House functions, including the 2001 inaugural, the Easter Egg roll, T-ball games, speeches and social events.
The release of the information came hours after a deeply divided Senate panel voted to issue two subpoenas to the White House for information about contacts with Enron, with Democrats accusing the White House of resisting earlier requests for information and Republicans suggesting that the move was politically motivated.
The White House document released today was prepared in response to an earlier request for information from the Governmental Affairs Committee, whose chairman is Senator Joseph I. Lieberman of Connecticut, the former Democratic vice presidential nominee. While it came after the subpoena was issued, it was not a legal response to it.
Aides to Mr. Lieberman said tonight that after a brief review of the document, the panel regards it as short of the information being sought. "It appears the White House is still providing only what it thinks is relevant, rather than what the committee asked for," said Leslie Phillips, a spokeswoman for the committee. "We just don't know if the information is everything they collected, or just what they're willing to tell us. This would not have in any way averted a subpoena."
Before the White House document was released, a spokeswoman said administration officials were "rather perplexed" that the panel had "taken this highly unusual step to issue subpoenas without having reviewed" the material.
The vote in the Governmental Affairs Committee this morning was 9 to 8 along party lines to issue the subpoenas. It came after more than an hour's debate that included a heated exchange between Mr. Lieberman and Senator Thad Cochran, Republican of Mississippi.
The subpoenas were the first issued by Congress to the executive branch in the continuing inquiry into Enron's collapse and are likely to be resisted by the White House, which has often complained that Congress is encroaching on its executive power and constitutional prerogatives.
In another battle with Congress over the same kind of issue, the Justice Department sought today to dismiss a lawsuit filed by the General Accounting Office seeking to obtain records of meetings last year between energy industry executives and Mr. Cheney's energy task force.
The Justice Department's motion in federal district court here argues that the G.A.O. is trying to "improperly inject itself and the courts into the president's exercise of his powers." The G.A.O.'s position, the Justice Department said, "would revolutionize and violate the separation of powers doctrine that has made our nation's government so strong."
A spokesman for the G.A.O. declined to comment, citing the pending litigation.
In another development related to Enron today, many of the nation's largest energy traders told FERC that they did not engage in the manipulative trading tactics in California outlined in internal Enron memorandums released by the commission this month. But several of the companies, including Williams and Mirant, said some trades had similar characteristics to those outlined in the memos. The companies maintained, though, that the trades had been made under different circumstances or adhered to market rules.
The traders made filings today at the energy regulatory commission in response to a demand from investigators examining accusations of manipulation during the California power crisis of 2000-01. Today, the commission widened its investigation again, ordering natural gas traders in Texas and Western states to disclose whether they engaged in fake "wash trades," selling gas back and forth at the same price. Such trades do not incur losses or profits, but allow traders to claim inflated revenue. Investigators are examining whether wash trades also allowed traders to increase reported prices for gas and electricity, thus affecting prices for the entire market.
The subpoenas, delivered this afternoon to the offices of the president and vice president, call for all communications, including records of White House visits, between Enron and the White House since 1992 that in any way deal with eight federal agencies including the Federal Energy Regulatory Commission and the Securities and Exchange Commission. In addition, they seek records of contacts between the White House and officials at the eight agencies regarding Enron. They also seek records of contacts between Enron and the White House over the formulation of the national energy policy, covering similar ground as the G.A.O. except that the accounting office is also seeking records of contacts with other energy companies.
The subpoenas demand that information be turned over by June 5. The White House called the action unnecessary today but did not say whether it would contest the subpoenas.
Democrats on the committee said the White House had been dragging its feet for the nearly two months since the panel sent its first letter seeking the Enron-related information. "It's clear to me that there is a very determined decision not to respond to substantial parts of the committee's request for information," Mr. Lieberman said. "At the least, it's slow walking; at the worst, it's stonewalling."
But Republicans, led by Senator Fred Thompson of Tennessee, the ranking minority member of the committee, called the move premature and said there was no reason to burden the White House with a subpoena when the administration was preoccupied with the war against terrorism and even Democrats on the panel agreed there had been no suggestion of White House wrongdoing related to Enron's collapse.
The debate in the committee intensified after Mr. Cochran suggested that the subpoenas were a politically motivated fishing expedition intended to smear the White House.
"It makes me wonder, are we doing this to attract the attention of the public by suggesting" that the White House has some involvement? Mr. Cochran said. "It makes me very suspicious," he said, adding that the panel was seeking so much information from the White House that "if you got everything you asked for, you wouldn't know what to do with it."
In a sharp voice, Mr. Lieberman quickly responded to the "personal" criticism, telling Mr. Cochran, "Your suspicions are unwarranted, and in my opinion unfair."
In a letter tonight to Mr. Lieberman, the White House counsel, Alberto R. Gonzales, referring to the president's office, said, "Our inquiries thus far have disclosed no instance in which Enron approached any person within the E.O.P. or the office of the vice president seeking help in connection with its financial difficulties prior to bankruptcy."
"In addition," Mr. Gonzales said, "the communications we have identified thus far reflect only appropriate and responsible actions by government officials."
The seven-page document, released by the White House this evening, illustrates how Enron officials approached many people in the Bush administration with specific requests or to discuss specific topics, like electricity policies, tax credits for wind power, the California energy crisis, and legislation governing power-plant pollutants. It also shows that Mr. Lay recommended 21 people for jobs in the administration, though only 3 ultimately received appointments.
The document lists at least 19 meetings between White House and Enron officials -- including five meetings with Vice President Cheney's energy task force -- and at least a half-dozen phone calls. The actual number cannot be determined, as contacts with some White House officials are described as "a few communications" or as a "small number of telephone calls."
The information includes a number of contacts already disclosed, like a a half-hour meeting on April 17, 2001, between Mr. Lay and Mr. Cheney to talk about "energy policy and the energy crisis in California."
It also lists phone calls that Mr. Lay made to Karl Rove, Mr. Bush's chief political adviser, and another administration official, urging the appointments of Patrick Wood III and Nora Brownell to the Federal Energy Regulatory Commission. Both were eventually appointed, though in several crucial matters they have backed policies that Enron fought hard to defeat.
The document also notes calls Mr. Lay made to senior administration officials seeking assistance as Enron was collapsing late last year, and it details the debate in the administration about the company's problems. The White House has always said it did not do anything to intervene on Enron's behalf.
But the information released tonight does disclose at least a dozen new meetings or phone calls related to energy policy or issues of significant importance to Enron, mostly with three White House officials: Robert McNally, a special assistant to the president for economic policy, whose name had not been previously disclosed by the administration as having any contact with Enron; Lawrence B. Lindsey, the chairman of the National Economic Council; and Steve Ruhlen, deputy assistant to the vice president for legislative affairs.
For example, it says, "Dr. Lindsey had a few communications with Ken Lay in the winter and spring of 2001, most likely about the California electricity shortage."
At the time, Enron was aggressively fighting efforts to impose limits on soaring power prices in California. Administration officials came out against the price caps, but President Bush's two appointees to FERC, Mr. Wood and Ms. Brownell, supported a move last summer to impose price limits across the western United States that California officials credit with helping bring prices under control.
On April 6, 2001, Mr. Lindsey also attended a meeting with Mr. Lay, Mr. McNally and several other Enron and White House officials to discuss "electricity and bundling issues," the latter a reference to aspects of electricity deregulation. "Mr. Lay also talked to Dr. Lindsey after the September 11 attacks to state that confidence and investment plans were deteriorating in the wake of the attacks." The White House said Enron did not ask Mr. Lindsey for help as it collapsed last fall.
Without elaborating, the document also says that Mr. Lindsey "may have mentioned Enron in passing in explaining an economic concept relating to the electricity grid" during a meeting with Andrew H. Card Jr., the White House chief of staff. The rules governing the nation's electricity were a crucial policy issue for Enron, which sought to have the federal government wrest more control of the grid away from state utility commissions.
Mr. McNally appeared to have had even more contact with Enron officials, including seven meetings in 2001. "The main issues discussed in these communications were multi-emissions policy (Enron supported four-pollutant legislation on power plants) and electricity policy," the White House document said. Of the seven meetings, one, which included the director of the energy task force, had already been disclosed, and another was the April 6 meeting that also included Mr. Lindsey.
In the months before the energy policy report was released last May, Mr. Ruhlen "received a small number of telephone calls" from Pat Shortridge, whom the White House identified as an Enron governmental affairs official and personal friend of Mr. Ruhlen.
In the calls, Mr. Shortridge was seeking "information concerning the likely components of the president's energy plan." The calls were similar to others Mr. Ruhlen had with other energy executives, and in them he "disclaimed knowledge" of details of the plan, the White House said.
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