- The Washington Times - Thursday, January 3, 2002

Senate Democrats yesterday said they will investigate whether the Bush administration should have acted sooner to protect investors from the collapse of Texas energy giant Enron Corp., one of the biggest contributors to the Bush presidential campaign.

Sens. Joseph I. Lieberman of Connecticut and Carl Levin of Michigan said at a press conference that they will issue subpoenas within a week for Enron documents and will begin hearings in the Governmental Affairs Committee Jan. 24, the day after Congress returns to work.

"This is going to be a search for the truth, not a witch hunt," said Mr. Lieberman, who ran for vice president on the Democratic ticket in 2000.

When a reporter noted that Enron Chairman Kenneth Lay is a longtime friend of President Bush he was a member of the Bush campaign's "Pioneer" club who raised $100,000 or more Mr. Lieberman replied, "We're going to go wherever that search takes us, and we're not ruling anything out.

"It's a matter of public record that executives of Enron had close relationships with people who are now in the Bush administration," Mr. Lieberman said. "They also had close relationships with some Democrats, it's fair to say. Knowing that Mr. Lay, at least, and others played an active role in the formulation of energy policy by the Bush administration we've got to ask whether the advice rendered was at all self-serving. And we will ask those questions."

Some Republicans say the probe is politically motivated.

"They see an opportunity to tie Republicans to big business and big oil," said a high-ranking Republican congressional aide. "It has the potential to annoy the president in his home state."

Mr. Bush has supported government investigations into the bankruptcy of the company that was rated last year as seventh among the Fortune 500 firms. The Justice Department, the Securities and Exchange Commission and the House Energy and Commerce Committee also have begun investigations.

Since the 1989-90 election cycle, Enron has made nearly $5.8 million in campaign contributions, with 73 percent going to Republicans. The company contributed $113,800 to the Bush campaign, including the use of corporate jets, ranking as the campaign's 12th-largest donor.

The company also donated $100,000 to Senate Democrats one week before filing for bankruptcy. The company's attorney said it was simply a reflection that Democrats now control the Senate.

Houston-based Dynegy Inc. in early November offered $8.4 billion to buy the ailing company. But Dynegy dropped out of the picture soon after Enron eliminated nearly $600 million in debt with earnings revised through 1997, and its credit rating was downgraded to junk status.

On Dec. 2, Enron filed for bankruptcy in New York to keep creditors and lawsuits at bay so the company could try to preserve its trading operation. Its stock price has plummeted from $80 a year ago to less than $1 per share.

Mr. Lieberman said his committee will investigate why Enron's auditors allowed the firm to overstate its profits for four years "using what appear now to be very questionable accounting practices." He said the panel also will ask why Enron's board of directors allowed financial arrangements "that some claim were intended to hide company holdings from public view."

In a statement, Sen. Susan Collins, Maine Republican, praised the Democrats for starting the probe.

"There are many questions surrounding the conduct of Enron's top management that need to be answered promptly and publicly," Mrs. Collins said. "I'm particularly concerned with reports that top executives at Enron were selling their shares of company stock at very high profits while lower-level employees were forbidden from selling theirs."

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