As an example of just how far the Enron effect is carrying, one of the three Republicans opposing incumbent California Gov. Gray Davis in this year’s elections drew criticism Tuesday because a small Houston-based energy firm in which he invested has ties to one of Enron’s off-balance-sheet partnerships.

According to state financial disclosure documents, Bill Simon, Jr. remains a heavy investor (and was previously on the board) of Hanover Compressor Co., which had trading in its stock halted on Jan. 25, an Associated Press report said. Trading resumed this week, but Hanover’s stock price dropped over concerns that it was involved in similar partnerships to the ones at the center of bankruptcy-mired Enron’s problems, the AP report said.

Simon, whose company, William E. Simon & Sons, specializes in investing in privately held companies until they go public, holds more than $1 million in Hanover stock and made more than $100,000 in 2001 from selling it, the news report said, noting that Hanover “seems to have a stable business plan that is being caught in the turmoil surrounding the Enron collapse.”

Meanwhile, one of Simon’s competitors for the Republican nomination — the leading contender, former Los Angeles Mayor Richard Riordan — said Tuesday he has returned a $500 political contribution from Enron Corp. After initially saying he had no contributions from Enron, Riordan now said he learned of a contribution about 10 days ago and immediately decided to return it. Riordan had criticized Davis for allegedly having received more than $100,000 from Enron and refusing to return any of it.

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