Posted on 01/14/2002 2:38:11 PM PST by Dane
Monday January 14 5:46 PM ET
Bush Team May Have Feared Enron Aid
By MARCY GORDON, AP Business Writer
WASHINGTON (AP) - The meltdown of Enron Corp. threatened broader financial problems, but administration officials chose to do nothing - even after being reminded by Enron that the government intervened in 1998(when Rober Rubin was Treasury Secretary and Clinton was worrying about a "daliance" in the Oval Office with an intern) to prevent the collapse of a big fund for wealthy investors.
Fears of a conflict of interest involving a big Bush donor may have led to the inaction, analysts suggest.
In any event, the White House should have made public the extent of the energy-trading giant's financial woes when Cabinet officials learned of them in calls from Enron executives last fall, some analysts(Henry Waxman's fax suggests) said Monday.
Because of Enron's heavy donations to President Bush (news - web sites)'s campaigns, administration officials ``were tied at the hip to Enron,'' said Bill Allison, an official of the private Center for Public Integrity. That made it hard to help.
``The appearance would have looked terrible,'' Allison said. ``They felt that they couldn't act on behalf of Enron because of the political fallout.''
White House spokesman Ari Fleischer (news - web sites) has said that, as far as he knows, nobody at the White House was told of calls from Enron's chairman to Bush Cabinet secretaries. Fleischer said Monday he was unaware of any other contacts between Enron and White House officials, but he said Bush aides were not searching for any.
Commerce Secretary Don Evans said Sunday he had discussed calls from Enron's chairman with Treasury Secretary Paul O'Neill, who also had been contacted, and later told Andrew Card, White House chief of staff, but that Card never informed the president.
Enron was the nation's seventh-biggest company in revenue, and its collapse has hurt both individual investors and big pension funds around the country. Florida's fund, for example, has lost more than $300 million. Also roiling the financial system was the impact on major banks, which had loaned billions to the high-flying company that had been a darling of Wall Street and viewed as a technological innovator.
As the company struggled to maintain its credit rating last fall, Enron Chairman Kenneth Lay - Bush's largest campaign benefactor - phoned O'Neill and raised the example of government intervention in the case of hedge fund Long-Term Capital Management, according to O'Neill.
O'Neill and Evans have said they saw no need to inform Bush of telephone conversations they had with Lay in late October and November as Enron careened toward collapse and its stock price slid. The company entered the biggest corporate bankruptcy in U.S. history on Dec. 2, leaving countless investors burned and thousands of employees out of work and stripped of their retirement savings, which were heavy with Enron stock.
Given the magnitude of the troubles at Enron, ``I think they (administration officials) had an obligation to be public about the controversy,'' said Paul Light, director of government studies at the Brookings Institution, a think tank.
The White House should have disclosed the Enron phone contacts to the press immediately, Light suggested.
As for intervening to help Enron, he said, the millions of dollars in Enron campaign donations ``create an appearance problem that would make any action - legitimate or not - questionable.''
But David Ruder, who was chairman of the Securities and Exchange Commission (news - web sites) in 1987-89, said administration officials simply concluded that Enron's troubles didn't warrant government action.
``It seems to me that they made the right call,'' Ruder said.
While Enron investors and employees were deeply affected by the collapse, there were no strong ripples through the overall U.S. economy, he noted.
By contrast, in Ruder's view, a failure of Long-Term Capital - which teetered during the Asian financial crisis in the fall of 1998 - could have had a serious domino effect on the system.
The Federal Reserve (news - web sites) stepped in and orchestrated a $3.6 billion rescue of the hedge fund by U.S. and European banks and brokerage houses, which took control of it. Fed Chairman Alan Greenspan (news - web sites) has said the central bank acted to avert potential damage to the U.S. and world economies.
The banks and brokerage firms lending to the fund could have faced huge losses, and there could have been panic selling and losses for other investors.
Lay also contacted Greenspan about Enron's troubles. In this case, the Fed chairman decided to do nothing.
Yep!
We dont have a lying .....sleaze ball .....drug smoking ........intern servicing .....dufus in the White House...
We have a REAL PRESIDENT finally!
Had they done this they would have stood accused of interfering in the market and manipulating the price of the stock.
Dog....Before I lay me down to sleep I am going to say a prayer that the above is true. Because I am not convinced.
Where do I begin?
Yesterday I saw Carville interviewed on Wolf Blitzer. After some dialogue or another Carville mentioned that he turned out to have a great ability to come up with quick "sound bytes". I had to agree with the bald creep, who I totally dislike as do most folks on this forum. The concept of "sound bytes" in an internetting, multi-tasking, shaving-during-the-today show public has come of age.
The Dems are hoping that their sound bytes of "oil", "big-business", and "Texas" will be picked up by Joe Blow. The Dems know full well that William the Clinton is hip deep in Enron abuses, but they'll risk it. So long as they keep saying the buzz words..."oil", "Texas", and "big business", the association by the guy shaving while perky Katie plays her part in such mentions, will get the drift.
"The Repubs must be helping big business again," said shaving guy will think.
They are so good at this...the Dems. They are good at it because a)they understand the notion b)most "conservative" sorts of folks normally read the ENTIRE article before reaching conclusions and c)the Repubs don't fight back because they don't know how.
How do you fight sound bytes?
The Enron thing is being used to try to take the publics mind off Daschles efforts to prevent Bush from fixing the economy.
I just watched Lou Dobbs scold a reporter on the air on CNNFN for slanting the news against Bush. Lou pointed out that Enron gave big bucks to both parties. He also pointed out that they accused bush of helping his contibutors in Enron. When that turned out to be a lie they accused Bush of not helping his friends in Enron. What Lou showed is that 4 other companies have had bigger dollar amount losses than Enron in the last year. Enron lost 70 billion. But Cisco systems lost 300 billion and no one is doing any thing for their employees. I found it interesting that CNNFN was more balanced than any coverage I have seen.
But this means nothing. The problem is 35,000 Ford motor company emplyees just got notice they are losing their jobs. GM and Chrysler workers are scared an nervous.
Many of those Ford workers are aware that Daschle and company said last spring and summer that there was no problem with the economy. They said Bush was nuts to say there was a problem. Bush started talking fix the economy in the 2000 election. Bush says problem coming. Democrats say no problem. Two guesses when the problem comes who gets blamed for not fixing it?
Daschle has been saying we don't need a stimulus package.
What nearly ever autoworker knows by now is that he may be next to get the ax. Seniority is by plant and they are closing plants. Scary to even old timers. They are talking do something. Dubya is saying do something and Daschle is saying NO. Daschle is too stuborn to back up, so his fellow Democrats are trying a smoke screen with media help.
It won't work. Most laboring people think Enron is some guy that used to date Madonna. The labor base of the democratic party doesn't understand much, but stimulus package they understsand. There has been one every time they have been laid off and it got them their jobs back.
Daschle is working on losing the economy for the Democrats like Hoover did for the Republicans 71 years ago.
The Democrats are scared out of their skins. They have lots of reasons to be scared.
Actually, yes. My income tax rate went from 30+% down to 19% (same job). And I sleep better at night knowing that adults are in charge.
Oh this is too sweet. Ms. Democrat, labor union, big business hating MurryMom, coming to the defense of "Big Energy"(as your and your leader Tommy Dashcle called them).
When are you going to proclaim your "yes" to drilling in ANWR?
If they had it would of been illegal. Never mind that Clinton didn't have any problems with committing illegalities. I guess people just can't tell the difference between someone who abides by the law and someone who doesn't. I find that disturbing.
We're all better off, now that we have someone who understands who are enemies are and how to destroy them.
This is SO TRUE!!
Everyone read what Tator said!....Really read it!
Yes, thank you, I am. I was in cash until Clinton's economy began to fall in the early summer of 2000. I was prepared to take advantage of the slide, and am up 37% for the last 12 months. Investing is a risk. Don't invest in the market if you have to have the money.
/john
Oh, heck yeah. The impeached *Perjurer tried to shakedown Microsoft and totally mismanaged the oil situation. What a *putz. Luckily, both debacles have begun to stabilize.
...following 8 straight years of economic prosperity?
What was the *Crinton administration's official comment one day after Black Tuesday? (You DO remember Black Tuesday - don't cha?)
Awww MurryMom. You are the bastion of no facts, logic or reasoning. Even Judith Haney does a better job of presenting her arguments.
A question for you. What did the Clinton/Gore team do starting in the Spring of 2000, when the dot.coms started to tank?
Another question? Why did the Clinton/Gore team let thousands of Russians went hungry in the 90's while their economy was just starting to adapt to capialism?
Is anybody better off now than when Bill Clinton was President? What will Dumbya say when his opponent in '04 raises the issue of 4 years of economic failure, following 8 straight years of economic prosperity?
Actually yes, I make more now than I ever have and got the highest merit raise on 01/01/2002 than in either of the previous two years. My income/debt ratio is the lowest it has been in 5 years. But I suppose that is due to the residual effects of the Clinton/Gore years, right?
I find it strange that you appear to believe that the proper response is to take tax dollars away from Americans and use them to bolster a corrupt and incompetent foreign regime.
Easily the best post of the night Mr. Tator. The Dems are scared and thrashing...
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.