- The Washington Times - Wednesday, July 31, 2002

Sen. Joseph Lieberman, chairman of the Enron-investigating Governmental Affairs Committee, announced yesterday that he would call former Secretary of Treasury Robert Rubin to testify before his committee "in a minute" if the senator determined that Mr. Rubin could shed light on Enron's collapse. A minute? How about in "a New York second," Mr. Chairman?
The question isn't whether Mr. Rubin could "add something," as Mr. Lieberman put it. He could add mountains. The real question is: Why hasn't the chairman of the Senate committee investigating Enron already arranged for Mr. Rubin to testify by now?
It's been nearly nine months since Mr. Rubin, who is a director of Citigroup (Enron's largest creditor) and chairman of the executive committee of its board of directors, telephoned Peter Fisher, Treasury's undersecretary for domestic finance. In that Nov. 8 phone call, Mr. Rubin beseeched Mr. Fisher to lobby the credit-rating agencies on behalf of Enron. The agencies were about to downgrade Enron's investment-grade rating.
Consider the circumstances under which Mr. Rubin made what would, in any conceivable case, be considered a major breach of ethics. On Oct. 16, Enron had announced a mysterious $1.2 billion reduction in shareholder equity. It also announced it was taking a $1 billion writeoff in the third quarter, attributed to losses incurred from off-the-books partnerships set up by its chief financial officer. On Oct. 31, Enron announced that the Securities and Exchange Commission had opened a formal investigation of Enron's finances. Meanwhile, Enron's stock price, which peaked at $90 in 2000, was falling like a rock. Then, on the morning of Nov. 8, Enron issued another blockbuster announcement: It was restating its earnings by nearly $600 million for the 1997-2001 period.
A significant credit-rating downgrade, which was imminent, could easily precipitate bankruptcy. It was at this extremely delicate moment that Mr. Rubin chose to make his highly questionable telephone call to Treasury's highest-ranking Democrat, who immediately rejected the imposition.
If Mr. Lieberman needs any perspective, he ought to consider this: "The request Rubin made of Fisher was akin to the owner of team faced with playoff elimination calling the league commissioner and asking him to see if he can get the referees to call the next game so the owner's team doesn't lose," James Higgins, a New York-based partner in a private equity firm, explained recently in the Weekly Standard.
Can Robert Rubin "add something"? Mr. Lieberman wants to know. The fact that Mr. Rubin hasn't been called to testify yet answers that question. The next question is: Will Mr. Lieberman continue to subtract from his once-impeccable ethical reputation?


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