- The Washington Times - Saturday, January 12, 2002

Enron Corp. sought to use its political clout and deep pockets to curry favor with the Clinton administration for a proposed $3 billion power plant project in India, giving $100,000 to the Democratic Party when the deal was being completed.
The Houston-based firm, which later saw the India project fail, is now the focus of a Justice Department task force investigation into accusations that Enron executives improperly shielded investors from financial losses and blocked employees from selling billions of dollars' worth of plummeting stocks.
The company also has been targeted by several congressional committees, including a number of Democrats and some Republicans who want to know what political favors if any Enron sought from the Bush administration.
In 1995 and into 1996, Enron officials personally discussed the power plant proposal with President Clinton's former chief of staff, Thomas F. "Mack" McLarty.
The discussions occurred at Mr. Clinton's suggestion, after the president had forwarded a handwritten note Nov. 22, 1995, to Mr. McLarty concerning the project, enclosing a newspaper article on Enron and the pros and cons of the proposed $3 billion Indian venture.
Mr. McLarty had long since been replaced as chief of staff at the time of the Clinton note but remained at the White House as a key adviser to the president. Mr. McLarty eventually contacted Enron's chairman, Kenneth L. Lay, to begin what would be a series of meetings during the next nine months.
Meanwhile, the White House closely monitored the Enron project through the U.S. ambassador's office in New Delhi. The project, at the time, was India's largest foreign investment, involving officials from the western Maharashtra state and the Enron-subsidiary, Dabhol Power Corp. Enron controlled 65 percent of the project, while Bechtel and General Electric each held 10 percent of the shares. The remaining 15 percent was owned by the Maharashtra State Electricity Board.
In 1996, four days before India granted approval for Enron's project, the Houston firm contributed $100,000 to the Democratic Party. The note from Clinton to his former chief of staff was first reported by Time magazine in 1997.
Mr. McLarty was traveling yesterday and unavailable for comment. His spokesman, Rich Klein, said Mr. McLarty sought only to help Enron compete for markets overseas, as he did for several U.S. businesses.
"What he did is what government is supposed to do, make sure that U.S. companies have the opportunity to find markets overseas and to help them look for those opportunities globally," Mr. Klein said.
Enron has denied that its $100,000 gift to the Democratic Party was repayment for the Clinton administration's attention to the India project, and White House special counsel Lanny Davis argued at the time that Mr. McLarty acted out of concern for a major U.S. investment overseas. Records show it was Mr. McLarty on whom Mr. Clinton often prevailed to meet with people who had been identified by the president as potential major contributors. Those meetings included:
International oil consultant Roger Tamraz, for whom Mr. McLarty later asked the Energy Department if the administration could not be more supportive of a Caspian Sea pipeline proposal. Mr. Tamraz contributed $200,000 to the Democratic Party.
Legal publisher Vance Opperman, for whom Mr. McLarty directed a White House lawyer to query the Justice Department about a pending case protested by Mr. Opperman. His donation total to the Democrats was $350,000.
Miami computer executive Mark Jimenez, for whom Mr. McLarty arranged a White House meeting to discuss political unrest in an important Latin American market. Mr. Jimenez's contribution total to the Democrats was $325,000. He later was indicted on charges of illegally reimbursing employees for donations they gave to the Clinton-Gore campaign. He has since fled to the Philippines.
Federal Express Chairman Fred Smith, for whom Mr. McLarty arranged a meeting with Mr. Clinton about Mr. Smith's concerns about Japanese trade practices. Mr. Smith gave $525,000 to the Democrats.
Mr. McLarty currently is chairman of McLarty Automotive Group, one of the nation's leading automotive dealership groups. He is also vice chairman of Kissinger McLarty & Associates in Washington and serves as a board member of Acxiom Corp., Entergy Systems Cos., the Financial Times Advisory Board of London, the Americas Society of New York City, the Inter-American Dialogue of Washington, and the M.D. Anderson Cancer Center in Houston.
In 1983, he became chairman of the board and chief executive officer of Arkla, a natural gas company based in Little Rock, Ark. He was appointed by the elder President Bush to the National Petroleum Council and the National Council on Environmental Quality, and Mr. McLarty was a member of the St. Louis Federal Reserve Board from 1989 through 1992.
Beginning in 1992, he served Mr. Clinton in several key positions: chief of staff, counselor to the president and special envoy for the Americas, with more than five years of service in the president's Cabinet and on the National Economic Council.

Copyright © 2018 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