- The Washington Times - Saturday, February 2, 2002

The Justice Department, as part of its criminal investigation of Enron Corp., yesterday ordered the White House not to destroy any records concerning conversations and meetings federal officials had with Enron executives about the company's financial situation.
The order, sent to White House Counsel Alberto Gonzalez, includes all correspondence, e-mails, computer records, notes, memos and related files at the White House and other federal agencies dating to Jan. 1, 1999, two years before President Bush took office.
Last night, the White House, which announced the Justice Department order, issued an e-mail to its employees instructing them to "comply with the Department of Justice's request in all respects."
A criminal investigation into Enron's financial collapse was begun last month by the Justice Department, aimed at determining whether executives hid financial losses from investers and sold their shares of plummeting Enron stock for huge profits while preventing employees from cashing in retirement accounts.
Earlier yesterday, Mr. Bush announced that he will ask Congress to give workers more power over their pension plans and retirement accounts to prevent a reocurrence of the Enron bankruptcy.
Seeking to upstage Democrats, who say Enron received favors from the adminstration, Mr. Bush offered a proposal that would forbid senior corporate executives from selling company stock during periods when workers are unable to trade on their plans.
The plan also would require companies to provide frequent employee updates on the status of their 401(k) accounts.
"If you're corporate America, you're responsible for making sure you reveal all your assets and liabilities to your shareholders and your employees," Mr. Bush told Republican congressional leaders at a retreat in White Sulphur Springs, W.Va. "This is a matter of fairness. It's a matter of openness. It's a matter of respect for the process."
Mr. Bush urged Congress to act on his pension reform proposals "as quickly as possible."
Enron filed for bankruptcy Dec. 2, the largest corporate filing in U.S. history. The firm, which once boasted earnings of more than $100 billion, saw its stock drop from $85 a share to less than a dollar.
"All documents relating to these subjects should be preserved, even if there would be a question whether the document would be a presidential or federal record or even if its destruction might otherwise be permitted," Christopher Wray, principal associate deputy attorney general, wrote in a letter to Mr. Gonzalez.
"We believe that documents in the possession of the White House, its staff and employees may contain information relevant to our investigation," Mr. Wray wrote.
Mr. Bush, longtime friend of former Enron Chairman Kenneth L. Lay, has denied any wrongdoing concerning contacts the firm had with the administration. The White House has said the company received no special treatment despite meetings between Enron officials and the administration.
Democrats have pushed for more information on meetings or conversations the firm had with administration officials.
The Justice Department order does not compel the White House to turn over any records, only to preserve them in the event the department wants to review them. The order was signed by Mr. Wray because Attorney General John Ashcroft has recused himself from the investigation. Mr. Ashcroft received campaign donations from Enron during his unsuccessful run last year for a U.S. Senate seat in Missouri.
The order comes as Congress prepares next week to hear from several former Enron executives. Two of them, Andrew Fastow, the company's former chief financial officer, and Michael Kopper, an Enron executive, have already told the House Committee on Energy and Commerce that they plan to assert their Fifth Amendment rights and refuse to testify.
Mr. Lay and Enron's former chief executive officer, Jeffrey Skilling, also are expected to appear.
The president's proposal follows new recommendations of a Cabinet-level Task Force on Retirement Security empaneled Jan. 10, comprising Treasury Secretary Paul V. O'Neill, Labor Secretary Elaine Chao and Commerce Secretary Donald L. Evans.
Under the Bush proposal, workers would get 30 day's notice before their accounts could be frozen. Current law allows companies to temporarily block employees from trading on their 401(k) accounts during "blackout periods" times when employers change pension plan features or administrators.
The task force recommended eliminating the "safe harbor" companies enjoy during blackout periods, when they are not responsible for the results of workers' investments. The proposal calls for employers to be responsible for the consequences of the workers' "inability to independently control their investments if they violated their duty to act in the interests of the workers when they created the blackout period," the White House said.
The Bush plan would allow employees who participate in a 401(k) plan for three years to sell company stock and diversify their holdings. Many companies now make matching contributions to workers in the form of company stock, and some require the stock to be held for decades.
A Task Force recommendation would require companies to give workers quarterly benefit statements that include information about accounts, including the value of their assets, their rights to diversify and the importance of maintaining a diverse portfolio. Under current law, the reports are due annually.
Senate Majority Leader Tom Daschle of South Dakota criticized Mr. Bush's proposal, saying that it "would do little, if anything, to restore public confidence in the private pension system."
Mr. Daschle said it includes proposals that would introduce "new conflicts of interest by allowing investment advisors to steer people into investments in which the advisors may have a financial stake."

Sign up for Daily Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide