ENRONgate..!

...ENRON has contributed to the political campaigns of at least 50% of the House & 75% of the Senate members, both Republicans & Democrats (have to keep both parties happy!)...Bush staff members have (had?) stock in this company...the company has given money to many Texas politicians...it has had special access to senior officials in Congress and the White House, such as Cheney & Ashcroft...it contributed $45,000 to Sen. Gordon Smith (R) of Oregon, who sees nothing wrong with that and has no intention to give back the money...these contributions were also made during the Clinton administration...the business is headquartered in Houston, TX, and have given at least $114,000 to Bush...this is the largest bankruptcy in history...

...In a pair of e-mails to his employees in August, the chairman of now-bankrupt ENRON touted the company's stock and declared that the energy trader giant's growth has never been more certain.

Our performance has never been stronger; our business model has never been more robust. ... We have the finest organization in American business today, Ken Lay said in an Aug. 14 e-mail just two months before ENRON's long-hidden financial problems surfaced.

In an Aug. 27 e-mail, Lay announced the details of an employee stock option program which spoke of a significantly higher price for ENRON stock in the future. Selling for $37 a share in August, ENRON stock now sells for 68 cents. The stock was at $83 a share a year ago.
It appears that you misled your employees into believing that Enron was prospering and that its stock price would rise, Rep. Henry Waxman, the ranking Democrat on the House Government Reform Committee, said in a letter Saturday to Lay. Waxman released the e-mails along with the letter to Lay, whose political donations along with those of other ENRON executives have made the company President Bush's biggest financial supporter through two governor's races and the presidential election.

...ENRON locked employees into their 401(K) accounts; would not allow them to sell stock, which has resulted in workers losing most of their retirement fund...the bank that held the 401(K) funds is trying to sue ENRON...Lay kept touting ENRON's success & growth until the very end...

...We're all tainted by the millions and millions of dollars that were contributed by ENRON executives, which ... creates the appearance of impropriety, said McCain, a longtime voice for campaign finance reform. McCain acknowledged getting $9,500 in Enron contributions in two Senate campaigns.

Lieberman, who said he received $1,000 from ENRON in his 1994 Senate campaign, said one focus of his committee's investigation will be ''whether any of the influence'' from Enron money affected the administration's handling of the Enron collapse, or oversight by federal agencies.

I don't feel at all compromised, added Lieberman, referring to his committee's investigation.
Since 1990, ENRON and its employees contributed $5.77 million to political campaigns, about three-fourths of it to GOP candidates. About half of the money was spent in the 2000 election, with President Bush a major beneficiary.

O'Neill and Evans said Sunday that while they received calls from Lay in late October and early November, they dismissed any suggestion of intervening to help the company.

Evans said that Lay was looking for all the possible ways that he could stabilize his company'and asked that Evans consider contacting credit rating agencies. ''I considered it and said, Thank you for the call,'' Evans said on NBC's Meet the Press.

...again, a point to bring up...1/13/02: CNN will have a story called The Enemy Within; it refers to Osama bin Laden, should it refer to Ken Lay!?...how does one define an enemy?...

...1/14/02: trading of ENRON stock suspended on the NYSE as of 1/10/02 at 67 cents per share...inside trading suspected, as all but basic audit reports were destroyed...per Lieberman, the Bush administration has done nothing wrong...ENRON was the seventh largest company, and their stock dropped as low as 12 cents...the questions remain: Should Bush have acted? Sooner than this? How? 188 House members received contributions from ENRON...Congress did not officially reconvene until the third week of January...

Who's Who in ENRONgate...

Kenneth L. Lay, ENRON chairman and CEO; served as ENRON's CEO from 1985 until Jeffrey Skilling's election in early 2001; re-elected to job by board after Skilling's resignation in August. Lay helped transform ENRON from a regional natural gas pipeline company to global energy behemoth.
Jeffrey Skilling, former ENRON president and CEO; resigned in August 2001 for what he said were personal reasons after more than a decade at the company.
Mark Frevert, Enron vice chairman.
Lawrence "Greg" Whalley, Enron president and chief operating officer.
Jeffrey McMahon, Enron chief financial officer.
Andrew Fastow, former Enron chief financial officer, ousted in October.
Robert Bennett, the attorney representing Enron in Washington, who also represented former President Bill Clinton in the Paula Jones case.
Carl Levin, Democratic U.S. senator from Michigan, chairman of the Senate Permanent Subcommittee on Investigations, said Something was very rotten in the state of Enron.
Joe Lieberman, Democratic U.S. senator from Connecticut, chairman of the Senate Governmental Affairs Committee.
Joseph Berardino, CEO of Enron auditor Andersen, testified in December that his firm told Enron's audit committee that some of the company's actions might have been illegal.
Harvey Pitt, chairman of the Securities and Exchange Commission.
Dick Cheney, U.S. vice president, met with ENRON CEO Kenneth Lay in April for a half-hour and discussed energy policy issues. He or members of the administration's energy task force met six times with Enron representatives, the White House says.
George W. Bush, U.S. president, said he wants federal agencies to look into ENRON and "appreciate the importance" of its bankruptcy on employees and others. ENRON officials have been key Bush contributors.

...1/15/02: 2 months before the end, ENRON management said the company would implode...the company auditing ENRON invested in a mutual fund while investigating said fund at the same time...a VP said accounting scandals plus the veil of secrecy could destroy the company...much of the company's debt was kept off the accounting books...ENRON executives did not care about the energy sector, but their own best interests...UBS will get ENRON, but will not inherit its debts...JPMorgan Chase & Citigroup made deals with the company...

"The problem with experience is...once you have it, you're too old to use it."

...1/16/02: two members of Bush's Cabinet said last week they were contacted by Lay about ENRON's financial troubles. Lay told Commerce Secretary Donald Evans he would appreciate any help the administration could give.

Evans told White House chief of staff Andrew Card about the call. Budget director Mitch Daniels said Lay called him in October to discuss the prospects for Bush's economic stimulus bill, which would help ENRON. The administration says it took no action on Lay's behalf.
White House aides have asked agency officials to inform them of any instances in which ENRON executives sought help from the administration. The same question has been put to White House officials who might have contact with Enron executives seeking help.
But he said the White House will not disclose each contact between Enron executives and administration officials. The White House feels no need to do so, absent any allegations or suggestions of wrongdoing, he said.

The position could put the White House at odds with congressional investigators who want to delve into Bush administration contacts with ENRON. It would not surprise me at all if there have been conversations with people at Enron throughout the government, the spokesman said.

All pertinent documents were to be destroyed by 10/29/01...however, deleted E-mail messages can be accessed on the hard drive or in back-up files...

...1/17/02: ENRON Corp. fired accounting firm Andersen on Thursday, blaming the auditor for destroying ENRON documents government investigators were seeking for probe into the fallen energy trader's aggressive and murky bookkeeping.

ENRON Chairman and Chief Executive Ken Lay said the company had been willing to give Andersen, which earned $1 million a week for its work with the Houston-based energy conglomerate in 2000, the benefit of the doubt pending an internal investigation into Enron accounting practices.

We can't afford to wait any longer in light of recent events, including the reported destruction of documents by Andersen personnel and the disciplinary actions taken against several of Andersen's partners working in its Houston office, Lay said in a statement. ENRON's board of directors decided to fire Andersen at a meeting on Thursday.

Andersen viewed the firing as an after-the-fact gesture. As a matter of fact, our relationship with Enron ended when the company's business failed and it went into bankruptcy. Andersen is committed to continuing to address the issues related to the collapse of Enron in a forthright and candid manner, said Andersen spokesman Patrick Dorton.

As auditor, Anderson had to sign off on ENRON's accounting practices, many of which contributed to a loss of shareholder confidence that sent the one-time Wall Street darling into the largest Chapter 11 bankruptcy in history. ENRON's aggressive bookkeeping hid billions of debt off the balance sheet, and later led to a reduction of four years' worth of earnings to the tune of some $600 million.

That Enron has now fired them after getting into all this trouble, I would liken it to double jeopardy for Arthur Andersen. They were Enron's auditors and now they have been unceremoniously jettisoned, said John Olson, an analyst at Sanders Morris Harris, a Houston-based investment bank.They're probably better off now than they were before, because they are facing a lot of litigation.