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Reporter's Notebook: The Enron Scandal

Aired February 9, 2002 - 08:19   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Former Enron Chairman Ken Lay has been subpoenaed to appear before a Senate committee on Tuesday. The chairman of the panel says there is a possibility Lay will testify. But a spokeswoman for Lay says he's still weighing his options.

Enron is the focus of our "Reporter's Notebook" this hour.

CNN congressional correspondent Kate Snow joins us from Washington to answer your e-mail questions and take your phone calls. That number is, as you see on the screen there, is 404-221-1855.

And the first thing we want to hear about is what are your thoughts about this picture?

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: That is -- oh.

O'BRIEN: We grabbed that from the post office here in Atlanta. We took the numbers out of there. That, I'm very sorry about that. On behalf of the entire staff, the huge, voluminous staff of CNN SATURDAY MORNING, we are so sorry to do that to you.

SNOW: That's all right.

O'BRIEN: Because, look at her in person. Compare the two.

SNOW: Compare that to that photo.

O'BRIEN: It's really...

SNOW: I'm like this.

O'BRIEN: Yes, I know.

Anyway...

SNOW: Yes, I was very serious.

O'BRIEN: It's good to see you. Thank you for being with us.

SNOW: Good to see you, too.

O'BRIEN: And we're going to say right at the outset at 10:00 a.m. Eastern you're going to talk a little bit more about this as you do a little roundtable up there in Washington. SNOW: Exactly.

O'BRIEN: We appreciate you coming in early on our behalf and taking some of the e-mails for us.

SNOW: No sweat.

O'BRIEN: Let's go right to the e-mail, shall we? Dale Friesen, who is, I guess he's the dean of our e-mail list these days, he's one of our frequent contributors. "What are the liabilities in making the Enron debacle an issue in the upcoming elections?"

Good question, as always, Dale.

SNOW: Right, and, you know, Democrats are weighing that right now. They would love to make Enron a big issue. They think it's a winning issue for them. They've done some polling. They've found, Miles, that they're not doing so well in a lot of areas. For example, the president has over 80 percent approval right now when it comes to the war on terrorism. So they're looking for an issue.

And one of the things they found when they did this polling, I'm told by Democrats, is that they can get a lot of play out of the argument of sort of the big guy versus the little guy, Enron executives making millions and millions of dollars while the employees are getting nothing and, you know, losing all their money in their 401(k)s.

So they definitely think they've got an issue there. But I think they also worry that if they play their hand too much on that issue that it could come back to get them. They don't want to over play their hand on that -- Miles.

O'BRIEN: Well, you've got to be careful because, was it Fritz Hollings who said it would be easier to find Osama bin Laden than find a member of Congress in either party who hasn't taken a little cashola from Enron, right?

SNOW: Exactly. Exactly. You look at the lists, there are some good lists out there now of who got money from Enron and from Andersen. And you look at the lists and they're really Democrats and Republicans alike, more Republicans than Democrats. Republicans are real quick to point out that there are Democrats on the list, but if you really look at it, it's weighted a lot more towards Republicans.

O'BRIEN: All right, let's take a phone call. Gwen is on the line from Atlanta. Good morning, Gwen. Thanks for being with us.

GWEN: Good morning. I would like to know the executive order that Bush signed to keep the public from getting those papers, the presidential papers, do you think that the papers that Cheney has will be included in those papers?

SNOW: Are you talking about the idea -- I'm sorry, I'm hearing myself back. She's talking about... O'BRIEN: She's talking about the whole issue of whether the executive branch will be releasing any documents relating to conversations with Enron or Enron people about Enron. And obviously thus far the position of the executive branch is no thanks.

SNOW: Exactly. I think she mixed up a couple of things.

O'BRIEN: Yes.

SNOW: One is that the president has told departments to save documentation about Enron just as a precaution in case, you know, in the lawsuits that are obviously coming and in the criminal case that's probably coming from the Justice Department they might need some of those records. Separately from that, they have not officially claimed executive privilege over those documents relating -- and not even documents, but records and information relating to Dick Cheney, the vice president, who ran the energy task force. That's what this lawsuit from the GAO, the General Accounting Office, which is the investigative arm of Congress, they're going to file suit probably either this week or next, to try to get more information about Dick Cheney's energy task force.

And in that, the president and the vice president have said look, we can have meetings. People come here all the time to Washington to meet with us. We shouldn't have to give up information on every single meeting that we have. But the Congress, on the other hand, is asking for more information. They say they don't want much. They don't want the minutes, they just want to know who did he have meetings with, when did he have these meetings and what were they all about and what executives from energy companies were involved.

O'BRIEN: Let's go back to the e-mail, referring back to some of the testimony we saw this week. "Jeff Skilling, in his congressional appearance, insisted that he was not aware that he was part of the control process related to transactions done between Enron and those partnerships. He claims that at one Enron finance committee board meeting in 2000 that he was in and out of the room."

SNOW: Right.

O'BRIEN: "Since the minutes show the substance of what was discussed, wouldn't he have had to know the substance of conversations whether he was in the room or not, since he would have approved those minutes? And if this is the case, why then were all those distractions allowed to stand -- I found his testimony incredible." I think there's probably a lot of people in Washington who would go along with that e-mailer's comments there.

SNOW: This e-mailer sounds a lot like some of the members of Congress who were sitting on the dais the other day who were incredulous that Mr. Skilling was saying this. And they pressed him on that very point, that point that he brings up about this meeting that happened in Florida, I think it was. It was a board meeting. And Jeffrey Skilling said that the power had gone out and it was a little confusing because they were trying to work in the dark and he was in and out of the room and maybe he didn't hear when Andy Fastow, who was basically his deputy, said that Jeffrey Skilling was supposed to sign off on all these various partnerships that Enron was doing, these outside dealings, outside partnerships.

So Mr. Skilling is saying I don't recall Mr. Fastow saying that. I don't recall hearing him say I was supposed to sign off on all these things and he testified that he didn't think he had to sign off on all of these deals. The members of Congress didn't exactly believe him on some of those points -- Miles.

O'BRIEN: Everything but the 18 1/2 minute gap here, I think, Kate.

Let's go to another phone caller. Thomas is on the line from Oklahoma. Good morning, Thomas.

THOMAS: Good morning.

O'BRIEN: Your question, sir?

THOMAS: Well, the other day I found out that a friend of mine that's the head cook at a school here in town, that they had some of her retirement benefits invested in Enron. Now, I think this is going to hurt a lot more people than you can imagine, because how many other places that had money invested in them.

O'BRIEN: Well, that's a good point. I mean for those of us with mutual funds as part of our 401(k)s, probably very few of us are unscathed by this, right, Kate?

SNOW: Yes, I think that's true. You know, the lesson, I think, of Enron -- I'm certainly no financial expert, but I think the lesson that we're hearing on Capitol Hill from the law makers who are looking into this is don't put all your eggs in one basket. If you've got a mutual fund or you -- your mutual fund generally is going to be invested in a lot of different things but if you've got a 401(k) that you're controlling, you know, don't put everything in one stock, whether it's Enron or AOL Time Warner, because you never know what's going to happen is sort of the message.

O'BRIEN: All right, we're kind of running out of time, Kate, but I want to get this one more e-mail in because this one persists, and I think we've got, we ought to clear this one up. This is David Stephenson from Rome, New York. "Is it true that Vice President Dick Cheney made millions on Enron's stock when he sold it just before the company crashed? If so, he must have benefited from insider information and why has this not been mentioned more in the media?"

SNOW: I wish I knew more. I don't have the facts in front of me about what Mr. Cheney did with his Enron stock. If I'm not mistaken, I think he divested himself. There's rules that when you come into power and you go into the administration, when the Bush administration came in, you've heard a lot about a lot of administration members who had some connections to Enron -- the secretary of the army, for example, who had connections and had worked for Enron and had a lot of stock in Enron. They had to by law get rid of certain amounts of their stock and their holdings. So I would be very surprised if that's accurate, but I would have to check on that. But I think that Mr. Cheney would have gotten rid of it.

O'BRIEN: And, you know, undoubtedly, even if it is, I mean certainly a blind trust is established for the people of Mr. Cheney's ilk and he would not have any direct knowledge of transactions at that level.

Kate, let's look at this picture one more time. I just want to get this -- all right. It's just not even close. It's not even close. We apologize. If you ever come back, and I hope you do, and I wouldn't blame you if you decided to bolt our program forever, we promise to improve your visage.

SNOW: All right.

O'BRIEN: Kate Snow from Washington, thanks for taking those questions for us.

SNOW: Thanks Miles.

O'BRIEN: We appreciate it.

SNOW: OK.

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