- The Washington Times - Thursday, January 17, 2002

House Speaker Sam Rayburn had a simple, hard-and-fast rule about taking campaign contributions from powerful special interests who demanded something in return for their money.

"Anyone who can't drink their booze, eat their food, and take their money, and then vote against them the next day doesn't belong in politics," Mr. Rayburn often lectured his colleagues. Ol' Sam colorfully added one other offering to the list of emoluments that some accepted, but decorum forbids mentioning it here.

The Enron Corp., before its meteoric collapse last year, was a major player in Washington politics and its top executives dispensed millions of dollars in campaign contributions to candidates in both parties, including the Bush campaign. But when a desperate Kenneth Lay, the energy giant's chairman, called two of Mr. Bush's top Cabinet officials to beg them for help to keep the company from plunging into bankruptcy, they turned him down cold.

The stories that have tumbled out of Washington since Mr. Lay's phone calls were first disclosed by the White House last week have focused on his calls, but not so much on the administration's response. And that response was not to intervene.

Mr. Lay, chief executive of what was once the nation's seventh-largest corporation in revenues, was certainly one of the most well-connected business moguls in America. And he made a lot of phone calls to powerful people in and out of government to help him save a company that had engaged in legally questionable practices of outside partnerships to hide its mounting debt from investors and auditors.

Last October, when a credit agency was about to give the energy giant's bonds a failing score, Mr. Lay called Commerce Secretary Donald Evans and Treasury Secretary Paul O'Neill, asking for help to shore up its credit rating to keep Enron afloat. Mr. Evans was Mr. Bush's campaign chairman, his chief fund-raiser, and one of the president's closest advisers. Mr. Lay also called Peter Fisher, Treasury's undersecretary for finance, as many as six to eight times.

Mr. Lay made every argument he could muster that if Treasury did not step in to help Enron survive, then it would have a disastrous effect on the bond markets and on the big banks that held Enron's debts. With the economy already in recession, a major corporate failure would rattle the financial markets, thus hurting the prospects for an early recovery.

The bottom line in all of this, a testament to the way our free market works, is that Mr. Evans and Mr. O'Neill concluded that Enron's collapse would not result in any negative rippling effects in the economy. While it is not clear whether either of them knew about Enron's questionable practices, they certainly knew Enron was a major contributor to the president's campaign and what the news stories would say if they moved to save a company on the brink of failure.

But Mr. Lay sought out other help, calling on former Treasury Secretary Robert Rubin to approach Mr. O'Neill on his behalf. Mr. Rubin's calls did not get as much media attention as Mr. Lay's calls to Mr. Bush's top aides, but they should have. Mr. Rubin's bank, Citigroup, held nearly $1 billion in Enron debt. Mr. O'Neill, knowing of Citigroup's heavy exposure, was "unimpressed by Rubin's arguments," a Treasury official told me.

The Democrats, eager to tarnish the Bush administration's squeaky-clean ethical record, are jumping all over this story, trying to play both sides of the issue. First, they questioned the ethical propriety of Mr. Lay's phone calls to top Cabinet officials and raised questions about why they took the calls and did not inform President Bush about them.

It's a silly accusation because a president dealing with a war and recession, who knows how to delegate authority, does not need to be told of every call that comes into his Cabinet. "I'm a big boy. I know how to handle these things," Mr. O'Neill said.

Then, when that charge did not seem to have any traction, Democrats asked why the administration did not move to save Enron to protect its employees from losing all of their retirement savings.

"I am deeply troubled that the White House stood by and let this happen to thousands of families," said California Rep. Henry Waxman, ranking Democrat on a House panel that is investigating Enron.

If Mr. Waxman is looking for someone to pin the blame on, he can go back to the late 1990s, when Enron began hiding its debt and inflating its earnings through multiple outside partnerships. "The government's regulators in those days were Clinton appointees," a Republican strategist told me.

But Bill Clinton and his gang in those days were much too busy greasing the skids for a number of Enron deals, including a power plant in India helped by a $302 million Export-Import Bank loan and easing regulations on nuclear and coal-burning utilities at Enron's request. In one year, 1996, Enron contributed $100,000 to the Democratic Party.

What a change from the previous administration, which extorted money from big contributors in exchange for policy payoffs. The Bush campaign accepted perfectly legal campaign contributions from their supporters at Enron, and then, following Sam Rayburn's ethical dictum, flatly rejected requests for special favors when they came into power.

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