Enron scandal: Wakeham quits PCC role to face inquiry

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Lord Wakeham stood down as chairman of the Press Complaints Commission (PCC) yesterday, making him the first British casualty of the scandal over the collapsed American energy company Enron.

The Tory peer, who earns £80,000 a year as a director of Enron, announced that he was standing aside temporarily from his post as Britain's press watchdog, for which he was paid £156,000 a year. But the 14 separate investigations into the Enron affair are expected to last for months and newspaper industry leaders doubt he will return to the PCC job.

Lord Wakeham, 69, who will be questioned as part of the inquiries set up by Congress, said he saw it as "a matter of honour" to stand aside until a report by an independent investigation committee had been published. He said he was "co-operating actively" with the inquiries and had flown to Washington yesterday for talks with Enron's lawyers.

As Energy Secretary in the Thatcher government, he approved Enron's plans to build a £700m gas-fired power station, the biggest in Europe, on Teesside. Two years after leaving the Cabinet in 1994, he joined Enron as a non-executive director.

Crucially, he was a member of the company's audit committee, the body that should have spotted the accounting irregularities that have now come to light, American trade unions believe.

Yesterday it was revealed that the Tory peer did not include in the House of Lords' Register of Members' Interests that he was a director of Wessex Water, which was bought by Enron for £1.5bn in 1998. He has been a non-executive director of the water company since 2000 and is paid an estimated £19,000 a year for the part-time position.

The peer is not compelled to register all his directorships until the Lords' rules become more strict in April. He lists his directorship of the US-based Azurix Corporation, an Enron subsidiary created when it bought Wessex Water, but Wessex is a separate company. Lord Wakeham was unavailable for comment yesterday but Wessex Water confirmed he was a paid member of its board.

Yesterday's announcement by Lord Wakeham is a setback for the Tories, who have tried to put Labour under pressure over its links with Enron.

The Liberal Democrats, who led the calls for the PCC chairman to stand down, said Labour should follow suit by answering questions about its own relationship with Enron and the company's auditors, Andersen. Nick Harvey, the party's media spokesman, said: "As long as the Government continues to weave and dodge the questions from Parliament and the media, the suspicion of wrongdoing will remain in the minds of the public."

Lord Wakeham said: "As chairman of the PCC for the past seven years, I am only too aware of the damage that can be done to individuals and institutions that are thrust into the public spotlight.

"I am conscious that some see this position as incompatible with the chairmanship of the commission. I am very proud of everything we have achieved at the PCC and do not wish it to be damaged by continuing short-term speculation."

He will be replaced by the academic Professor Robert Pinker, 70, the PCC's privacy commissioner. Russell Twisk, the editor of Reader's Digest and a member of the PCC, said Lord Wakeham was a "superb chairman" and hoped he would return to the post "reinvigorated" after a temporary break.

But Charles Moore, the editor of The Daily Telegraph, said: "It really is time for a new era at the PCC. There was a somewhat collusive relationship between some of the newspapers and the PCC. It's become too much involved, too much part of the story, rather than standing back and giving fair adjudications."

Lord Wakeham has spoken only three times on the floor of the Lords in the past 18 months. All three speeches related to his public and business positions. In June 2001 and last month, the chairman of the Royal Commission on Lords reform spoke about the Government's plans for the upper chamber. In July 2001, he spoke briefly on behalf of Vosper Thornycroft, declaring his interest as chairman of the defence contractors. He has tabled no written questions.