- The Washington Times - Thursday, July 25, 2002

Senate Democrats investigating the collapse of Enron Corp. said yesterday that they have no plans to question former Clinton Treasury Secretary Robert Rubin, a top official at Citigroup Inc., over its role in hiding Enron's debt from investors.
"I don't," said Sen. Joseph I. Lieberman, chairman of the Governmental Affairs Committee, when asked whether he intended to call Mr. Rubin as a witness.
But he said it was up to Sen. Carl Levin, Michigan Democrat and chairman of the subcommittee probing Enron's internal practices, to decide whether to question Mr. Rubin.
Mr. Levin said he "probably" will call the chief executive officers of Citigroup and J.P. Morgan Chase & Co. to testify, but not Mr. Rubin.
Asked whether he thought Mr. Rubin's testimony might be appropriate, Mr. Levin said, "I'd rather go to the top."
Mr. Rubin, who enjoyed a stellar reputation as Treasury secretary, is chairman of Citigroup's executive committee. In November, he sought the Bush administration's help with Wall Street credit-rating agencies on behalf of Enron when those agencies were about to downgrade Enron's ratings.
Citigroup is Enron's largest creditor and is one of the top contributors to Mr. Lieberman and his political network in the past five years.
Congressional Republicans said Senate Democrats are playing politics by issuing subpoenas for Bush White House aides in the Enron probe but shielding a former Clinton official from sensitive questions. Top Democrats have criticized President Bush repeatedly for his ties to Enron and a former chief executive officer of the company, Kenneth L. Lay.
"You can't ask questions on one side if you're not going to ask questions on the other side if something like this is done," said Senate Minority Leader Trent Lott, Mississippi Republican. "I think that they may want to call in Mr. Rubin and others before the Government Affairs Committee, and if that's where the trail leads and see what happened."
A House Republican yesterday said Congress should compel the testimony of Mr. Rubin and of Sen. Jon Corzine, New Jersey Democrat, who was chairman of the investment banking firm Goldman Sachs Group Inc. before he spent $60 million of his fortune to win a seat on Capitol Hill.
"If we're going to have hearings, Mr. Lieberman, let's have Goldman Sachs, let's have Citigroup brought to the dais," said Rep. Mark Foley of Florida.
Democrats "have been talking about the vice president and the president," Mr. Foley said on the House floor. "Let me suggest to them, if they want to have good hearings, let's call Senator Corzine, who headed Goldman Sachs. Let's call Secretary Robert Rubin, the Clinton secretary of treasury, who heads Citigroup.
"When we talk about Enron, we ought to talk about all the players," Mr. Foley said. "And there seems to be some real mischief. In fact Mr. Corzine used $60 million to run for the Senate. Goldman Sachs was hyping Enron stocks past $90. They encouraged people to buy it."
A spokeswoman for Goldman Sachs could not be reached for comment. Mr. Corzine has denied inflating stock prices while chairman of Goldman Sachs and said investors make their own decisions about whether to buy stocks at certain prices.
On Tuesday, Senate investigators accused J.P. Morgan Chase and Citigroup of helping Enron hide debt and boost cash flow before filing for bankruptcy last year. At a hearing, J.P. Morgan Chase and Citigroup officials defended themselves against charges that they helped Enron amass by September an estimated $5 billion in various dealings that were effectively hidden debt.
William Harrison, chief executive of J.P. Morgan Chase, said the bank acted "properly and with integrity" in all of its dealings with Enron.
Mr. Lott said reports that the banks may have helped Enron hide debt in offshore arrangements "need to be explored."
"I don't know Mr. Rubin's involvement," Mr. Lott said. "I think he did a lot of good things when he was secretary of treasury, and I'm not alleging anything improper, but I do think, if they were involved in this kind of operation, I think it needs to be explored. It looks on its face suspicious."
Another Clinton White House official, former chief of staff Erskine Bowles, is taking heat for a corporate scandal as a board member of Merck Pharmaceutical Inc., which is accused of inflating revenue by $12 billion. Mr. Bowles is running for the Democratic nomination for the Senate in North Carolina, and the state Republican Party yesterday criticized him for "his unwillingness to explain his role in a string of disastrous investments while a managing partner of investment bank Forstmann Little that led to the loss of more than $100 million for Connecticut retirees."


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