Army Secretary’s ‘Smoking Gun’ Enron E-mail Blows Away

At first, the explosive e-mail was quoted as, "Close a bigger deal to hide the loss.” Then it was corrected by Salon.com to read, "Close a bigger deal. Hide the loss before the 1Q.” Then it became the basis for a New York Times op-ed blast that Army Secretary and former Enron executive Thomas White had drafted the e-mail as part of covering up a financial scandal at the energy giant. Now the allegations about cover-up have been retracted from one online news service – but the New York Times arrogantly won’t fess up to its errors.

This week, Salon.com editors apologized to readers: "After careful review, Salon’s editors have decided to take down from our Web site an article entitled ‘Tom White played key role in covering up Enron losses’ that we published on Aug. 29… [W]e have been unable to independently confirm the authenticity of an e-mail from former Enron executive and current Army Secretary Thomas White that was quoted in the article.”

The plot thickens with free-lancer Jason Leopold, author of the Salon article, grimly maintaining in an Oct. 2 letter to andrewsullivan.com that his smoking-gun White e-mail is the real McCoy: "Frankly, Salon caved in to others in the media who were questioning the authenticity of the e-mail. They should be ashamed. I assume the fact that Salon is in financial straits is the reason they hung me out to dry.”

Leopold continued: "Do you really expect Tom White to say that he wrote this email? Come on! Of course he is going to deny it. I have a responsibility – I would be happy to provide the many documents I have on Thomas White, including the emails, to anyone who asks. You may provide them with my e-mail address.”

Fair enough, says the White camp, but Leopold apparently won’t take yes for an answer.

As White spokesman Charles Krohn told NewsMax Thursday afternoon: "Two days ago I received a call from Leopold offering to send me the e-mail SA White allegedly wrote. I sent him an e-mail asking for it, and he sent me back another e-mail saying he would provide several items, but wanted to talk to me first later in the day. I never heard from him.”

Krohn continued, "Secretary White’s position is the same as he wrote to the New York Times Sept. 19: ‘I am not aware of the document, nor to the best of my knowledge, has Mr. Leopold contacted me to validate his interpretation. For the record, I do not recall saying or writing anything close to the quote attributed to me.’”

Krohn added, "I cannot say for certain that the e-mail Leopold has is authentic for a forgery, but at this point I’m inclined to believe the latter.”

If the evidence of the e-mail and its authorship by White is so compelling, wondered Krohn, why did not Leopold present it to Salon.com – thereby ending its concerns before it felt compelled to retract the article?

As to Leopold’s charge that the secretary would dissemble in any event, Krohn said, "Both Secretary White and I resent this, because it implies Mr. White is not capable of an honest evaluation. For the record, I volunteered to share Mr. White’s reaction to the e-mail with Mr. Leopold.”

Krohn concluded to NewsMax: "So far as I know, no one has ever successfully accused Mr. White of telling anything but the truth. Soldiers feel a kinship with Sec. Army White rarely witnessed in the history of the Army. If he were a phony, soldiers would be the first to know.”

The editors at Salon.com in their statement to readers further explained that they had received a phone call from an editor at the Financial Times informing them that several paragraphs of the story by Leopold had previously appeared in a February story in that paper.

Salon editors explained, "We reviewed the complaint, discovered that it was legitimate, and posted a correction notice as soon as we were able to confirm the details. As we reported in that notice, ‘Leopold ... told Salon that he accidentally copied the passages while writing his own story, and never noticed the error during the editing of the story, or after it was published.’

"Whatever its basis, this sort of plagiarism is a serious breach of journalistic trust, and caused us to go back over every detail and aspect of the original article. Our review led us to take this latest step.”

When Secretary White appeared before the Senate Commerce Committee in July, he answered a barrage of critics, such as Sen. Barbara Boxer, D-Calif., about his days as an executive with Enron.

Instead of faltering under cross-examination, White completely won over critics with his candid testimony.

For months before his congressional appearance, White had been a favorite whipping boy of the media, which had been grasping at straws to link the Bush administration and scandal-ridden Enron. Because White was the only top Enron executive appointed by President Bush, he became the convenient scapegoat.

But the "guilt by association” effort quickly faded when White made his appearance on Capitol Hill and stressed a critical point: The Enron division he headed had nothing to with the company’s Wholesale division, which engaged in the financial gimmickry that ultimately brought down the energy services giant.

"[T]he interests of EES [Enron Energy Services, the division White headed] were entirely different from those of Enron Wholesale Services, and it always operated on a strictly arms-length basis with Enron Wholesale that reflected its different business interests,” White testified.

"I was never aware of or read the memos on alleged power trading strategies at the Wholesale Services. … I never worked for Wholesale Services. I was never involved in its trading operations. ...”

Answers such as this and other information White provided Congress seemed to mollify Hill criticism about White’s previous Enron ties. When NewsMax asked Krugman if the Times planned to react to the retraction of the Salon.com e-mail information he had relied on for the op-ed piece, Krugman would not comment.

In an article Sept. 19, NewsMax.com summarized some of the distortions in the Krugman story.

Distortion: White made a windfall on Enron stock by selling out before it collapsed. Krugman wrote of White: "The strategy worked. Enron collapsed, but not before insiders made off with nearly $1 billion. The sender of that blunt e-mail [Tom White, later appointed secretary of the Army with the strong endorsement of Vice President Dick Cheney] sold $12 million in stocks just before they became worthless.”

One of White’s defenders told NewsMax.com, "In fact, Tom White sold his remaining shares near the low point – not the high point" of Enron’s trading price.

He continued: "If he had insider knowledge that Enron was about to collapse, he would have sold his stock before he become secretary of the Army. Asking for an extension was one of the great financial misjudgments of his life. But it was based on his belief that the stock would rise, not fall.”

Distortion: White was an incompetent businessman. Krugman’s column went on to say: "Mr. Cheney [Vice President Dick Cheney] supposedly chose Thomas White for his business expertise. But when it became apparent that the Enron division he ran was a money-losing fraud, the story changed. We were told that Mr. White was an amiable guy who had no idea what was actually going on, that his colleagues referred to him behind his back as Mr. Magoo. Just the man to run the Army in a two-front Middle Eastern war. …”

White has maintained, as he testified to Congress under oath in July, that his division was making money when he left Enron. That fact has never been disputed, and not one member of the Senate Commerce Committee has challenged that assertion.

Distortion: Enron documents show White’s malfeasance. Krugman claims: "Jason Leopold, a reporter writing a book about California’s crisis, has acquired Enron documents that show Mr. White fully aware of what his division was up to. Mr. Leopold reported his findings in the online magazine Salon, and has graciously shared his evidence with me. It’s quite damning.”

Leopold’s conclusions, first reported in the left-wing Nation magazine, have been shown to be without merit.

For example, a source quoted by Leopold in his Nation column, Lee Jestings, sent a letter to Nation’s editor maintaining that many of the allegations about White attributed to him were simply not true.

Jestings wrote: "He [Leopold] attributed comments to me that were never discussed and are absolutely not true. In reference to energy contracts signed with major California customers in 1998 the article incorrectly states, ‘Jestings said he told White that EES would actually lose money this way, but White said Enron would make up the difference by selling electricity on the spot market … which Enron had bet would skyrocket in 2000.’"

Jestings added, "The article continues the lies by stating that ‘Jestings said he continued to complain to White that the profits declared by the retail unit were not real.’"

Jestings responded: "These statements were never made to Leopold and are absolutely false. I had significant responsibility for these 1998 contracts and believed that they would be profitable, and therefore would never have made such statements....”

Jestings concluded: "Leopold then states that ‘Jestings said he resigned from EES in 2000 because he did not agree with the way EES reported profits.’ This is not true. I resigned in early 1999 for personal reasons and not because of the way EES reported profits. In fact, EES was not making profits when I left. … [White] is an honest and ethical man and deserves fair reporting.”

Enron Execs have many more "smoking guns" that are coming to the surface in private negotiations that makes White insignificant at best.

The tip of the iceberg, Andrew Fastow, was in chains.

Nearly two dozen Enron execs continue to privately rat on everybody else and their dog ad nauseam in return for a life after Enron.

Hardcopy evidence being introduced into evidence includes drug profiteering for laundering to cover personal debts and losses, possible ties to major counterfeiting of millions worth of $100 bills, theft of multi-millions in securities from other corporations (again costing individual investors their personal monies), and murder to cover up the above activities.

Other activities on the upper floors of the Enron office suites include directives for personal threats to lower level execs who did not go along with the program(s) and actual murders of "problematic" individuals.

You must remember that Enron was international, and used monies and people like chessmen.

Many transactions and people may never be found...

If I ran a newspaper, and this incident of gross negligence occurred, I would order the perps to write a retraction, the length of which was as many, or more if necessary, column inches as was devoted to the original story. I would also order that the retraction be placed in the same, or more prominent, physical area of the paper where the original story appeared. Apologies would be included in the retraction.
If that was done to my satisfaction, then I might think twice about firing the guy.

This is very interesting that Salon.com stocks bolted from 2 cents a share to 1 cent a share. They are barely holding on. When they are finally gone don't worry another liberal mag will take their place..

Theirs a Ping list for anything on Salon I am on it but don't know how that Ping thang works. Is their a button to push?

Forging an email is quite simple. Spammers forge the "sending address" every day. To validate an email, the approach that is done has to be quite forensic.

The big question I have, is how did the freelance reporter who provided the story to Salon get the original email? Who provided it to him? What was the provenance of the email? How can he be sure that it was not a forgery? What is the basis for that assurance?

The news media is dumber than a pack of cockroaches when it comes to this kind of stuff. Note that the mainstream media didn't break the story. It went from
(a) freelance weasal, to
(b) a web based "journalism" site, to
(c) the New York Times.

This is how the liberal media smears someone. The NYT is too savvy to do this on their own. They won't report it until someone else "breaks" the story - then they reference that other reporter to give them cover.

This is also how false facts take on a life of their own. Bogus statistics get created by some group with an axe to grind, who publishes them. Someone else picks them up and references them. 10 years later the statistics are "common knowledge" - even though the 1st source made them up out of whole cloth.

"... Salon.com stocks bolted from 2 cents a share to 1 cent a share ... ."

is there a unit of money below one cent?

y'know, they could give salon shares away at supermarkets. people could take them home and then paste them into books, and then, when the books were full, trade them for valuable items such as this steaming pile of s**t - oops, i mean progressive art (i have a grant from the nea, you know).

yes sir. every morning, i wake up, go the bathroom, et voila, another priceless masterpiece. it's a miracle, i tell ya.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.