Return to Transcripts main page

American Morning

Justice Department Rejecting Request for Special Prosecutor to Lead Criminal Investigation of Enron

Aired February 05, 2002 - 08:04   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.
PAULA ZAHN, CNN ANCHOR: Up front this morning, Ken Lay and Enron. The Justice Department is rejecting a request for a special prosecutor to lead the criminal investigation of the bankrupt energy giant. Senate Commerce Committee Chairman Fritz Hollings called for the independent investigator, saying the Bush administration has too many ties to Enron.

Well, meanwhile the House Finance Committee had hoped to subpoena Enron's former head, Ken Lay, to appear at their hearing this morning. But that won't happen, because Lay's whereabouts were unknown last night.

Here again, we turn to CNN congressional correspondent Jonathan Karl, who joins us from Capitol Hill with the very latest on what we might expect later on this morning -- good morning, Jonathan.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Paula. Well, as for Ken Lay, his lawyer said last night to CNN simply that Ken Lay had gone back to Houston, and that's why he wasn't immediately able to find him last night to serve a subpoena that would force him to appear today. He said that was an unreasonable request. But he said, yes, Ken Lay will respond to a subpoena. He said he even has already talked to the committee about possibly appearing on February 12 or probably February 13.

But meanwhile, things got very political yesterday, Paula, when Fritz Hollings called for that special prosecutor, because he said the Bush administration is the government of Enron, and that there is no way that the Bush administration could independently or objectively investigate Enron. And when he called for the special prosecutor, he did in the context of unleashing some real zingers at the Bush administration's political ties -- listen to what he had to say.

(BEGIN VIDEO CLIP)

SEN. FRITZ HOLLINGS (D), SOUTH CAROLINA: So I don't think there should be any connection, in other words, it should be independent. Of course, finding somebody in this town independent of Enron is easier than finding bin Laden, I can tell you that.

I have never seen a better example of a cash-and-carry government than this Bush administration and Enron. To say no help here is like I did not have political relations with that man, Mr. Lay. That's what happened to Kenny boy.

(END VIDEO CLIP)

KARL: But as you said, Paula, the Justice Department is firmly rejecting the call for a special prosecutor. The Justice Department put out a statement in response to that diatribe from Fritz Hollings. It said in part, "No person involved in pursuing this investigation has any conflicts or any ties that would require a recusal." They said that the Justice Department will go forward. John Ashcroft, the attorney general, has recused himself, but ultimately the responsibility for this investigation lies with the deputy attorney general, Larry Thompson, who does not have any ties or any connection to Enron -- Paula.

ZAHN: So, Jonathan, we have heard how the administration is reacting to this very harsh attack from Senator Hollings, but what are you hearing from Republicans privately?

KARL: Well, privately, Republicans are actually happy to hear Hollings go off, because they think it was a reckless string of attacks. And they think that this only bolsters their case that Democrats are trying to politicize this whole investigation. And you saw a little bit of that publicly with the Republican National Committee, which came out and issued a statement almost immediately after that, which said that Hollings' accusations were wrong, and demanded a retraction. Now, Hollings not showing any signs of retracting those statements anytime soon.

But you notice that no other senior Democrat is coming out that forcefully and attacking the Bush administration on Enron. They don't want to go this far, because Democrats don't want to be seen as politicizing this.

ZAHN: Even Mitch Daniels, our next guest, who is the director of the Office of Management and Budget, sort of got dragged into this whole debate yesterday. What did you make of what he had to say about this ongoing investigation?

KARL: Well, Mitch Daniels was one of about 13 people in the Bush administration that Hollings had talked about as having, you know, being an Enron advisor or getting money from Enron or being in the tank with Enron. And you know, Daniels just came out and said, "No, this isn't true. I am independent, and you know, I am not compromised." And Mitch Daniels, again, a whole string of Republicans coming out and saying Republicans are taking the high ground here. It's the Democrats that are trying to turn this into a political circus.

ZAHN: All right, Jonathan Karl -- appreciate that update.

KARL: Sure.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.