Tuesday, February 5, 2002

A top Senate Democrat yesterday called for a special prosecutor in the Enron investigation, saying the Bush administration ran a “cash-and-carry government” for the failed energy firm.
“There’s a culture of government corruption,” said Sen. Ernest F. Hollings of South Carolina, chairman of the Commerce, Science and Transportation Committee. “I’ve never seen a better example of cash-and-carry government than this Bush administration and Enron.”
He said the secretary of the Army “was moving to take over” the Pentagon’s electricity contracts for Enron to broker; that the Federal Energy Regulatory Commission was “moving to deregulate” the electric industry; that Treasury Secretary Paul H. O’Neill “was canceling the repeal of off-shore tax havens” and that Vice President Richard B. Cheney “was either lobbying India or lobbying California” on Enron’s behalf for power projects.
White House spokesman Scott McClellan called those accusations “false and unsubstantiated allegations.”
“It is disappointing that some are more interested in reading off of partisan Democratic attack memos than working together to try to prevent something like this from happening again,” Mr. McClellan said. “The president believes we need to work together to implement the pension reforms he outlined.”
Political strategists James Carville, Bob Shrum and Stan Greenberg wrote a memo last week advising Democrats to exploit the administration’s ties to Enron for political advantage in this election year.
Mr. Hollings, whose panel will issue a subpoena today for former Enron Corp. CEO Kenneth L. Lay, said Deputy Attorney General Larry Thompson should not handle the Justice Department’s probe of Enron because his former law firm had Enron as a client.
“I don’t think there should be any connection . It should be independent,” Mr. Hollings said. “Of course, finding somebody in this town independent of Enron is easier than finding [terrorist Osama] bin Laden.”
The Justice Department said in a statement that there is no reason for a special prosecutor.
“No conflict of interest exists,” the department said. “No person involved in pursuing this investigation has any conflict or any ties that would require a recusal.”
Enron gave nearly $6 million in political contributions to federal candidates since 1989, 73 percent of which went to Republicans. The firm was the 12th-largest donor to the Bush presidential campaign.
Mr. Hollings himself received $3,500 from Enron, a relatively small amount that he called “an insult.”
Mr. Hollings’ comments, which came hours after Mr. Lay snubbed his committee, were by far the most partisan rhetoric by a Democrat trying to link the bankruptcy scandal to the Bush administration. He listed several Bush aides who had been paid advisers to Enron and said the panel should probe those ties.
Mr. Hollings even compared the White House’s denials that it did political favors for Enron to President Clinton’s infamous finger-wagging denial of having sex with intern Monica Lewinsky.
“To say, ‘No help here,’ is like ‘I did not have political relations with that man, Mr. Lay,’” Mr. Hollings said.
But other Democrats were reluctant yesterday to publicly endorse Mr. Hollings’ call to examine the ties of several White House aides to Enron.
“That’s not something we’ve discussed as a committee,” said Sen. Byron L. Dorgan of North Dakota, chairman of the Senate Democratic Policy Committee. “I deeply respect Senator Hollings’ opinion. I haven’t gotten to that point yet.”

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