- The Washington Times - Friday, March 1, 2002

ASSOCIATED PRESS

The government's top energy regulator met with senior Enron executives in the fall and received a phone call from Enron's chairman, continuing a series of contacts that had begun when the regulator was head of Texas' public utility commission, documents disclose.

Pat Wood, appointed by President Bush to head the Federal Energy Regulatory Commission (FERC) in August, told a lawmaker yesterday that he met Kenneth L. Lay, then Enron's chairman, in May 1996 at a meeting of the Governor's Business Council in Texas.

Between March 1997 and January 2001, Mr. Wood said, he had contacts with Mr. Lay, former Enron Chief Executive Officer Jeffrey Skilling and Enron Chief of Staff Steve Kean who visited Mr. Wood's office at the utility commission in January 1998.

In a related move, leaders of the House Energy and Commerce Committee, who have challenged the veracity of Mr. Skilling's recent testimony to Congress, wrote yesterday asking him to clarify his statements.

Their letter notes, for example, that Mr. Skilling testified on Feb. 7 that when he resigned in August, he believed Enron was in a strong financial position and that its financial reports accurately reflected its condition. Mr. Skilling also stated that he could not recall being involved in approving questionable transactions related to one of Enron's partnerships that were used to hide more than $1 billion in debt and that eventually brought the company down.

Documents obtained by the House committee contradict Mr. Skilling's sworn testimony, the panel's chairman, Rep. Billy Tauzin, Louisiana Republican, and the other lawmakers told him.

The documents show, for example, that Mr. Lay told company investigators last month that Mr. Skilling knew the details of many of the "Raptor" partnership transactions.

Before his resignation, "Skilling was taking Enron's stock decline personally and could not sleep at night," Mr. Lay is quoted as telling the investigators, appearing to contradict Mr. Skilling's assertion that he believed the company was in good shape.

"Chairman Tauzin remains convinced that Mr. Skilling was not candid in his statements before Congress," said Ken Johnson, a Tauzin spokesman. "Testifying under oath is sacred and anyone who violates that trust will be held accountable. We intend to aggressively pursue this until we get the truth."

Mr. Wood, who was Texas utility commissioner at the time, said he phoned Mr. Lay in March 1997, seeking Enron's support for a utility restructuring bill. He also phoned him in January 2001 to express concern about the company's shift in policy regarding a Texas market issue.

In November, when Enron was spiraling toward collapse, Mr. Lay called Mr. Wood, who was then the FERC chairman. E-mail of the phone message appears to indicate that Mr. Lay was calling to inform Mr. Wood of a proposed merger between Enron and a rival energy company, Dynegy. The merger was designed to rescue Enron, according to a document Mr. Wood provided the lawmaker. He said he didn't return the call.

During that time, Mr. Lay was calling several Bush administration officials, including the treasury and commerce secretaries, seeking help as Enron foundered.

Mr. Wood has been an advocate of market-oriented regulation of utilities, a position espoused by Enron, a big and aggressive Houston energy trader that had become a Wall Street favorite.

The company collapsed into the biggest bankruptcy in U.S. history on Dec. 2.

Mr. Lay, a friend of Mr. Bush and a major contributor to his campaigns, gave the White House recommendations last spring for appointments to FERC. The eight or so recommendations included names of Mr. Wood and Nora Brownell, whom Mr. Bush named as a member of the energy commission.

After Mr. Wood became the FERC chairman, Mr. Kean went to his office in Washington on Sept. 20 with two other Enron officials and representatives of other companies to discuss pipeline industry preparations after the September 11 attacks. In October, Mr. Wood sat at a table with Mr. Lay at an Enron-sponsored conference on U.S. energy policy at which Mr. Wood spoke.

He provided documents containing the information to Rep. Joe L. Barton, Texas Republican and chairman of a House energy subcommittee. It was requested on Feb. 13 by Rep. Henry A. Waxman, California Democrat and a member of the panel.


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