Posted on 03/11/2002 3:12:05 AM PST by Republican_Strategist
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Associated Press
Ex-Treasury Chief Made Pledge to Lay
By MARCY GORDON
AP Business Writer
WASHINGTON (AP) -- Just before taking office, former Treasury Secretary Lawrence Summers promised then-Enron chairman Kenneth Lay he would keep an eye on energy deregulation, an issue pushed by the energy-trading company, a letter released Thursday shows.
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Summers' note to Lay on May 25, 1999, responded to Lay's earlier letter congratulating Summers on succeeding Robert Rubin as President Clinton's treasury secretary. Lay lobbied Rubin, to whom he ultimately offered a seat on Enron's board, and Summers with easy cordiality on issues affecting Enron, Treasury Department documents show.
"I'll keep my eye on power deregulation and energy-market infrastructure issues," Summers told Lay in a handwritten "PS" at the bottom of his note.
"These were both issues that the administration and Treasury had been engaged in and issues that Larry Summers was active in when he was deputy secretary," a spokesman for Summers, now president of Harvard University, said Thursday. The spokesman did not want his name used.
The documents, released by Treasury in response to Freedom of Information Act requests from The Associated Press and other news organizations, indicate the breadth of Lay's charm offensive with Clinton officials. The Houston-based company was among President Bush's biggest campaign contributors, and Lay made a series of telephone calls to members of the Bush Cabinet as Enron spiraled toward bankruptcy last fall.
The Justice Department, the Securities and Exchange Commission and a dozen congressional committees are investigating Enron and its longtime auditor, the Arthur Andersen accounting firm.
Enron's chief accounting officer told company investigators that he and Enron's lead outside auditor often informed directors that the company was "in gray areas" with some of its complex accounting practices, according to a document released by congressional investigators.
Richard Causey, fired last month, said in a Nov. 30 interview that he and Arthur Andersen auditor David Duncan "made it clear routinely" to the Enron board's audit committee that Enron was "in gray areas on some of the accounting issues and that other people might have different views," according to notes of the interview.
Causey and Duncan have asserted their Fifth Amendment right against self-incrimination and refused to answer questions from members of the House Energy and Commerce Committee.
Attorneys for the two did not immediately return telephone calls seeking comment.
Former Enron chief executive Jeffrey Skilling has testified that he was unaware of accounting problems when he unexpectedly resigned in August.
Causey was interviewed at least three times in November and December by attorneys at Wilmer, Cutler & Pickering, the law firm hired by Enron's board of directors to investigate the company's failure. Notes of the interviews with him and other top Enron executives formed the background of a report by William Powers, dean of the University of Texas Law School and a former Enron director, which found a failure of leadership and management at Enron.
The House committee released the interview notes in response to a request by Skilling, whose sworn testimony last month has been challenged by the panel. The lawmakers, led by committee chairman Rep. Billy Tauzin, R-La., and oversight subcommittee head Rep. Jim Greenwood, R-Pa., have asked Skilling to clear up what they say are discrepancies between his testimony and accounts of his colleagues.
In a July 1998 note to Rubin beginning "Dear Bob," Lay told him he thought a recent magazine article on Rubin was "excellent" and noted the writer "made it clear that you're a very important reason for the country's economic performance over the past few years."
"I totally agree and am glad you're where you are," Lay gushed.
Documents also show that Bush's treasury secretary, Paul O'Neill, met with Skilling last April 5 to discuss the West Coast energy crisis and steel issues.
"We stand ready to be a resource to you, whether it is policy analysis, economic research or historical industry information," Skilling wrote O'Neill a few days later.
Enron had lobbied the government and Congress throughout against regulation of electricity markets and the trading of financial products, known as derivatives, tied to energy commodities.
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Typical of AP. The whole story is about the Clinton administration, yet they still have to throw in a line about Bush.
A pox on both their houses.
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