Accessibility links

Breaking News

Enron Failure May Pit Congress Against White House - 2002-01-13

The largest business failure in American history is grabbing news headlines. Investigations into the bankruptcy of the Enron Corporation are likely to pit the United States Congress and the White House against one another.

Enron President Kenneth Lay is one of the biggest political contributors to President George Bush, giving the president money to fund each campaign for office.

So, the question now is, when Mr. Lay called two of President Bush's cabinet secretaries last fall when Enron was in deep financial trouble, was he asking for a government bail out? Treasury Secretary Paul O'Neill said "no."

Secretary O'Neill said, "He called me to tell me that they were deep into conversations with Dynergy another, energy company. And that sustaining their credit rating was a critical aspect of the deal. It was an information call. He asked me for nothing."

Mister O'Neill made his comments on the ABC television show This Week.

Democratic lawmakers in the Senate are poised to hold hearings into the collapse of Enron. It appears that company executives, including Kenneth Lay, may have known the energy giant was in trouble but didn't tell employees and shareholders.

It's been revealed that Mr. Lay and 28 other Enron executives sold shares of stock between early 1999 and July 2001 for over $1 billion.

Then, last August, Kenneth Lay sent e-mails to employees telling them the company was in excellent financial shape.

On December 2, Enron filed for bankruptcy. Employees and shareholders, whose stock was once worth up to $83 dollars a share, are now left with shares worth less than 70 cents per share.

Also appearing on This Week was Democratic Senator Carl Levin of Michigan, who heads a sub-committee that will be looking into potential wrongdoing by Enron Corporation. Senator Levin is certain Enron was searching for a government bailout in calling Bush Administration officials. "I think when Ken Lay denies it and other representatives of Enron deny that they were asking for things, it is false," he said. "It is just as false as their financial statements."

But Senator Levin says he accepts Treasury Secretary O'Neill when he says nothing was done in response to those requests.