Enron scandal threatens Cheney

Who knew what? - Congress ready to force Vice-President to reveal minutes of talks with failed giant
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The Independent US

The Enron scandal yesterday threatened Vice-President Dick Cheney, as Congress said it was ready to go to court to force him to hand over documents that could show the influence the energy group wielded in the Bush administration.

In an unprecedented move, the General Accounting Office, the lower house's investigative body, has signalled that it plans to sue for last year's records of the energy task force, which was headed by Mr Cheney, including minutes of its consultations with Enron.

The task force held at least six meetings with Enron executives but Mr Cheney has refused to turn over the records, saying that to do so would be an invasion of privacy. Enron, which has its head office in Houston, was a major contributor to Texas governor George W Bush's successful bid for the White House. Critics say that, in exchange for its money the company secured the deregulation policy it had long sought.

Yesterday David Walker, comptroller-general of the General Accounting Office, said: "Unless we get the information, it looks as if we'll be heading to court." Never, he declared, had his group been so "absolutely stonewalled" by a government task force.

In an attempt to distance itself from the scandal, the White House ordered a review of $70m (£50m) of federal contracts with Enron and the company's auditors, Arthur Andersen, saying the accusations of fraud against both companies cast doubt on whether they should continue to do government work.

But this will not blunt scrutiny of the tangled relations between the Bush administration and Enron, whose collapse last December was the biggest corporate bankruptcy in US history and is now the subject of a criminal investigation by the Justice Department. Kenneth Lay, who resigned last week as Enron chairman, was a friend of George Bush and was referred to by the President as "Kenny Boy".

On Friday, Congressional and government investigators lost a potential witness with the apparent suicide of another former Enron executive, J Clifford Baxter. Mr Baxter, 43, was found dead in his car in a wealthy Houston suburb, having apparently shot himself in the head. A suicide note is understood to refer to the collapse of the company.

Until his resignation last May, Mr Baxter was Enron's vice-chairman and among the few in the company to protest – in vain – about the secret, off-balance sheet partnerships which led to its collapse. But Mr Baxter was also one of 29 senior Enron officials who have been accused in a civil law suit of having sold $1.1bn of stock while the company was falsifying its financial figures. Hours before his death, investigators from one of the 11 Congressional committees probing the collapse were trying to finalise agreement for him to give evidence.

David Duncan, Andersen's lead Enron auditor, refused to testify to Congress unless he was granted immunity from prosecution. Mr Duncan is accused of ordering thousands of Enron documents to be shredded, even after he knew its finances were under investigation.

In another potential embarrassment for Mr Bush, Democrats are demanding that Thomas White, the Army Secretary and a former Enron executive, also be summoned to give evidence on Capitol Hill. Between 1998 and May 2001, when he joined the Administration, he was deputy head of Enron Energy Services. Mr White, who promised a dose of business efficiency to shake up the Army's bureaucratic ways, is under intense pressure to tell what he knew of the dubious financial practices which doomed Enron.

Amid the turmoil, the Enron affair has relaunched efforts to reform US campaign finance laws. Despite fierce opposition by the Republican leadership, a majority of House members have signed a petition to bring a reform bill to the floor next month. The Senate has already passed a similar bill.

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