Enron and friends

Outside editorial

Posted: Friday, January 11, 2002

The following editorial appeared in today's Akron Beacon Journal:

Ari Fleischer, the White House press secretary, warned Democrats on Capitol Hill to resist investigations into links between the Enron Corp. and the administration of George W. Bush. "The American people are tired of partisan witch hunts and endless investigations," he argued Thursday. He's right. Any investigation should have substance and credibility. In that sense, the president and his colleagues face the tougher test.

The Department of Justice aided the cause this week. Officials announced the formation of a special task force, bringing together U.S. attorneys from several cities. All have been separately pursuing inquiries into Enron and its sudden fall. Together, they will sharpen the criminal investigation and raise the stakes.

Many analysts described the coordinated effort as unprecedented.

In many ways, the Enron story is one of a kind. Rarely has a company plunged so quickly, from No. 7 on the Fortune 500 into bankruptcy. It began in 1985 with the merger of two pipeline companies. By 2000, it had peaked, valued at $70 billion, brokering energy deals around the globe. Today, it is worth roughly $540 million.

Thousands of employees lost their jobs and savings when the stock collapsed. As part of the firm's retirement plan, workers were barred from selling their shares until age 50. That didn't stop company executives from reaping timely windfalls. They also concealed company debts through a maze of partnerships and overstated earnings. The chief executive of Arthur Andersen, the accounting firm for Enron, told Congress that the energy firm, in its deception, may have committed "illegal acts."

The Securities and Exchange Commission and several congressional committees have launched investigations. President Bush announced Thursday working groups to analyze pension laws and corporate disclosure rules....

The Bush White House won't easily remain in the shadows. Ari Fleischer cautions adversaries. He really should be concerned with administration friends.

Kenneth Lay, the founder and chief executive of Enron, has long been a pal and supporter of the president. Enron executives donated heavily to the Bush campaign. Vice President Dick Cheney or his aides met six times with Enron representatives last year. After suggesting otherwise, White House officials have acknowledged they received a warning from Enron about its imminent collapse.

Imagine the Republican fury if the same circumstances surrounded Bill Clinton. John Ashcroft, the attorney general, smartly recused himself from the investigation. The Bush White House should be aware that the measure of its integrity will be revealed in how aggressively the Justice Department looks into Enron.

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