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CNN Saturday Morning News
Justice Department to Examine Links Between Enron, White House
Aired February 02, 2002 - 09:05 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: President Bush is at Camp David this weekend monitoring events very closely. The White House is also keeping an eye on a number of issues, including new developments in the Enron scandal, as well as plans to unveil the president's new budget on Monday.
Standing by at the White House is our Kelly Wallace, in her familiar place.
We were just talking about Enron just a little bit ago. This Justice Department request, is -- it just gets more curiouser and curiouser, as they say, Kelly.
KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: It does, Miles. You know, certainly it comes as the administration has certainly tried to distance itself from the collapse of Enron. But just as you noted, the Justice Department in a letter to the White House last night telling the White House to hold on to any documents, e-mails, notes, going back to January 1999, those are the last few years of the Clinton administration to the present, saying that the information could be relevant in its criminal investigation.
So a sign the Justice Department is widening its probe to look into any contacts between Enron executives and federal officials. In a letter to the White House, the deputy attorney general saying, quote, "We believe that documents in the possession of the White House, its staff and employees, may contain information relevant to our investigation into the financial condition of Enron and statements made by Enron employees and agents relating to its financial condition and business interests."
Now, administration officials continue to say, Miles, that no one here did anything wrong. The White House has said that Enron executives contacted two cabinet secretaries, the commerce secretary and the Treasury secretary, also an Enron executive talking to a top Treasury Department official in the fall. In some cases the executives apparently asking for the government to step in if possible to help prevent the company's financial collapse. Bush advisers say that no official decided to step in, that the government did nothing wrong, that everyone acted appropriately.
A little backdrop here, Miles, though, what could be difficult for this White House, because as you know the administration is refusing to turn over information to Congress's investigative arm, the General Accounting Office, when it comes to Vice President Cheney's energy task force and meetings with energy executives, including some meetings with Enron officials. White House aides say that this information should not be revealed. They have really a constitutional right for the vice president to meet with people in private to develop policy.
But it could get complicated, because if the Justice Department says we need all this information for the criminal probe, members of Congress could say, Well, then, members of Congress should get that information as well -- Miles.
O'BRIEN: All right, Kelly. Tomorrow's budget day. It's a big -- or, excuse me, Monday is budget day, I should say.
WALLACE: Monday.
O'BRIEN: It's not Sunday just yet. And the one thing I think we can say with certainty is, there's going to be a big increase for the Pentagon. What more-- any other details that are kind of leaking out this weekend?
WALLACE: They're starting to leak out a little bit, yes. The president himself, Miles, you heard him say actually the week before his State of the Union address, his budget would increase defense spending by more than $48 billion. It looks like the number may be closer to about $45 billion. Nonetheless, it is the largest increase, really, since the Reagan years in almost 20 years. It looks like money certainly will go to counter terrorism, buying new weapons, missile defense, also a 4.1 percent across the board pay raise for the men and women of the armed forces. They did get a pay raise last year, this would be a pay raise on top of that.
And you know, Miles, the politics here, it looks like really the president is envisioning major growth in the Defense Department budget, really growing it out to the year 2007, almost to what the highest budget ever was for defense, really, back in during the Reagan years, it was about $450 billion. And at a time where the country is fighting a war on terrorism overseas, there's obviously lots of support for giving the military what it needs.
But you have heard some Democrats expressing some concern. You are-- we are returning to deficit spending this year. The surplus is gone. So there's a lot of question about there's just not as much money left, where that money should go, and questioning if all the money should go to defense or some other domestic priorities. So look for that fight to heat up in the weeks ahead -- Miles.
O'BRIEN: You know, I'm sure there's going to be a big debate on just how to spend that money at the Pentagon, because our whole concept of how threats are perceived and how the U.S. fights wars has now changed, hasn't it?
WALLACE: Exactly. You know, you have heard some people making that argument in the case of missile defense, a missile defense system. Obviously what the country witnessed on September 11, terrorist attack using airplanes to attack the United States, a missile defense system potentially obviously would not have protected the country.
On the other side, you have people saying now more than ever more needs to be done to protect the country from these type of attacks as well as any type of weapons of mass destruction, any type of missile attack.
So the debate really heating up. You know, no one will argue, Miles, that more needs to be done to beef up the military to make sure it is as strong as it possibly can be. But as you say, with all the changes, just where that money should go, what's the best way to spend the money, look for lots of debate on that point.
O'BRIEN: CNN's Kelly Wallace at the White House, thank you very much, as always. Appreciate it.
WALLACE: Sure.
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