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CNN Sunday Morning
Enron-White House Relationship Continues Causing Controversy
Aired January 13, 2002 - 09:12 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.
KYRA PHILLIPS, CNN ANCHOR: More questions and few answers this morning as the investigation of fallen energy giant, Enron, shifts into high gear. A high-ranking Democrat has asked some tough questions from Enron CEO.
Congressman Henry Waxman has asked Kenneth Lay to explain two upbeat e-mails sent to employees that talked up the company's future, even though it was sliding toward bankruptcy. Waxman also wants to know why Enron barred workers from selling their Enron stock after the company acknowledged its financial problems. Enron also had some links to the Bush administration.
And CNN's John King is at the White House with more on this. John, how worried is the Bush administration about this investigation?
JOHN KING, CNN WHITE HOUSE CORRESPONDENT: Well, Kyra, Bush administration officials say they have absolutely nothing to hide, but they also acknowledge that this is likely to become a political question -- some would say controversy -- for weeks, if not months.
The administration initially reacted a bit defensively to all these questions about contacts between senior Enron officials and senior Bush administration officials. Ken Lay, the CEO, is a long- time Bush family friend, not only of the president, but also of his father. He's close to the vice president. Many officials in the administration actually have worked as consultants for Enron. So there are a great deal of questions about contacts.
But you will see today, the Sunday news shows, you'll see the Commerce secretary, the secretary of the Treasury out talking publicly. They've been on CNN over the weekend, and as early as Friday and Thursday as well. The administration saying that the bottom line will be at the end of all these investigations, that a major political contributor of the president called and asked for help and the answer was no.
That won't satisfy people in Congress initially. You mentioned Henry Waxman, a key Democrat on the House Government Reform Committee. He wants to know everything about the administration's contacts with Enron. He wants to know if in any way once they became aware in the administration of Enron's financial difficulties, did they do anything to try to help.
There's a provision in what the president wanted in a stimulus package that you could say would have helped Enron. It would have helped a lot of companies, but would have helped Enron specifically as well. So Congress will ask a lot of questions about this, but the Bush administration says in the end though the answer will be, and they insist the answer will be, that a friend of the president asked for help and the answer was no.
PHILLIPS: So the focus will be on whether the company deliberately lied about its financial position?
KING: That is one of the questions, and then there's a subplot to that. One of the things Congressman Waxman wants to know is, if the secretary of the Treasury and if the secretary of Commerce knew that Enron was in trouble and that Enron was saying different things in public, did they have a responsibility to put other government agencies on alert. Did they have a responsibility to pressure the company to be more candid and honest.
Bush administration officials say when those conversations took place between cabinet members and senior Enron officials, that there was public knowledge of the company's troubles, perhaps not detailed public knowledge, but that Enron was already on record.
But one of the things you mentioned in the lead-in, Henry Waxman wants to know, why was Ken Lay writing optimistic e-mails to company employees at around the time he was calling Bush administration officials, there's a month or so difference, around the time he was calling them and saying the company was in trouble.
In one of those e-mails he said he wants to know if --- Henry Waxman says to Ken Lay, if you sent those e-mails, then "they create the appearance that you misled Enron employees about the value of their investments." And of course, it was critical because many Enron employees were putting their savings into the company's 401(k) plan and buying Enron stock in doing so.
PHILLIPS: Well, John, since we've been talking about the subject matter, I continue to get bombarded with e-mail. I just want to sneak one in here, if you don't mind.
KING: Not at all.
PHILLIPS: This one comes from John. He says, "if these same set of circumstances had occurred during the Clinton Administration, the outcry from the Republicans and the various news media would have been so deafening that impeachment proceedings would be the talk of D.C. by now. Why is the reaction to George W. Bush administration indiscretion so muted, compared with Clinton-era political scandals?"
KING: Well, I'd have to say I would, I guess disagree somewhat with the premise of the question. The inquiries are just beginning in the past few days. The Bush administration has launched investigations of its own. Congress will launch its investigations.
There are many committees looking into this in Congress, and as Congressman Waxman is asking questions, he serves on the same committee as Congressman Dan Burton, who is the chairman of that committee, who is the Republican that many Clinton Administration officials came to, I'll use the word dislike. They might use a stronger term. There will be some to and fro here. There's a great deal of media inquiry into this, media inquiry into the contacts between Bush administration officials.
As of this moment, Sunday morning here in Washington, there is no evidence that anyone in the Bush administration did anything to help this company, but there are a lot of questions. We're asking them at CNN. Others are asking them in the news media. Congress is asking them as well.
And you can be sure in the weeks and months ahead, Congress will be asking for any and all documentation of contacts between the company and the administration.
And if any evidence surfaces that the administration did help the company, did reach out to help the company or in any way help hide information that should have been put in the public domain, then you can be certain those investigations will intensify.
PHILLIPS: John King, great to see you on this Sunday. Thanks so much.
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