- The Washington Times - Tuesday, January 29, 2002

LONDON The collapse of the American energy company Enron threatened yesterday to engulf Britain's Labor Party in a "cash-for-access" scandal.
Opposition politicians demanded an inquiry into the government's dealings with the failed company and its auditors, Arthur Andersen.
A spokesman for Prime Minister Tony Blair's office denied any impropriety, insisting that a series of meetings between Enron executives and ministers since Labor came to power had been part of the normal business of government.
But Conservative Party and Liberal Democratic Party members of Parliament claimed that Enron contributed about $54,000 to the Labor Party around the time the government made key decisions over energy policy, including the decision not to refer Enron's 1998 purchase of Wessex Water to the Monopolies and Mergers Commission.
Both moves benefited Enron. The company filed for bankruptcy on Dec. 2, and the U.S. Justice Department opened a criminal investigation.
The Labor government's nervousness was demonstrated by its decision to make public a detailed list of ministerial contacts with Enron.
Officials began a concerted damage-limitation exercise to counter accusations that the company's contributions had ensured privileged access to ministers. The Tories, as the Conservatives are commonly known, claimed that the links between Labor and Enron could dwarf the scandals that plagued the Tory government of Prime Minister John Major.
A Labor spokesman said Enron had made no formal donations to the party, although its European division was understood to have contributed about $54,000 between 1997 and 2000 through buying tables at Labor dinners and sponsoring a party conference reception in 1998.
Ralph Hodge, the former chairman of Enron Europe, was quoted over the weekend as saying the firm felt it had to give money to Labor to meet Cabinet ministers.
"Sponsorship and donations are the most efficient ways of getting access," he said.
Tim Collins, the Conservative Party vice chairman, said the decisions on Wessex Water and the lifting in 2000 of the government's moratorium on building new gas-fired power stations were made after Enron made what he termed "significant donations" to Labor.
Mr. Collins told Radio 4's "World at One" program: "It is a cash-for-access problem, and it is on a scale which dwarfs some of the problems of past administrations."
The Tories called for separate investigations by Sir Richard Wilson, the Cabinet secretary, and the committee on standards in public life.
Mr. Collins said any inquiry should cover the role of Jonathan Powell, Mr. Blair's chief of staff, in deciding who gained access to the prime minister, because before he entered government he was involved in party fund-raising.
David Davis, the Conservative Party chairman, called on Mr. Blair to make clear how the decision to abandon a moratorium on gas-fired power stations was made.
The moratorium was a Labor manifesto commitment, but was dropped in November 2000 after two years. The government insisted last night that at the time it had made clear it was only a temporary curb, aimed at removing distortions in the energy market.
However, documents released under the U.S. Freedom of Information Act two years ago indicated that Mr. Blair had intervened to water down the moratorium proposals.
Matthew Taylor, the Liberal Democrat Treasury spokesman, called for an inquiry by the House of Commons' public administration committee into Labor's links with Enron.
"We know that in the United States Enron used extensive political contacts to seek to further its interests, and there is good evidence of the same happening here," he said.

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