In the wake of the financial meltdown and bankruptcy of energy giant Enron Corp., Rep. Henry Waxman (D-CA) has stepped up his call for Vice President Dick Cheney to disclose “secret contacts” that a White House task force had with Enron, a “major Republican contributor,” while drafting the national energy policy. He further says Enron’s failure is taking its toll on top Bush administration officials, several of whom have large holdings of the company’s stock.

Given Enron’s financial collapse, “it is important to know whether Enron communicated pertinent facts about its financial situation to the task force. It is also important to know to what extent the task force relied on information from Enron that may have been unreliable or self-serving,” Waxman wrote in a letter Tuesday to Cheney. The emerging reports about “Enron’s illicit financial dealings call into question the accuracy of information previously provided” by the Houston-based company.

“It is appropriate to ask whether Enron communicated to you [Cheney] or others affiliated with your task force information about its precarious financial position…since this information was apparently hidden from investors and the public until quite recently,” he said. The White House task force issued its energy policy, which was designed to boost the nation’s energy supplies, last May.

Waxman’s letter detailed the close financial ties between Enron and the Bush administration, which so far has refused to comment on the energy trader’s plight. “Enron gave over $110,000 to President Bush’s presidential campaign, making it one of the campaign’s top backers. In total, [Enron Chairman Ken] Lay and the company’s employees have donated nearly $2 million to Mr. Bush since 1993,” he said.

Additionally, “one of the officials who served on the task force — Lawrence Lindsay, the president’s chief economic advisor — ‘served on an Enron advisory board’ and reportedly received $50,000 last year from Enron. Several other senior White House aides apparently owned Enron stock or served as paid consultants to the company, including your own chief of staff. Senior advisor Karl Rove, who owned over $60,000 worth of Enron stock, has reportedly ‘spoken frequently about energy policy’ with Mr. Lay. U.S. Trade Representative Robert Zoellick served on Enron’s advisory council. And Secretary of the Army Thomas White, a former Enron executive, valued his company stock between $25 million and $50 million earlier this year,” Waxman told Cheney.

“Perhaps as a result of these contacts, Enron and Mr. Lay appear to have exerted a significant influence on the task force,” he wrote. Waxman also quoted a Dec. 4 New York Times report that said Enron had an “unusual opportunity to influence” President Bush’s choices for the Federal Energy Regulatory Commission, which oversees the energy markets in which Enron operates. “When Mr. Bush picked people to fill two vacant Republican slots on the five-member Commission, both had the backing of Enron as well as other companies,” according to the article.

“Further complicating this extraordinary situation,” Waxman wrote, “is the fact that senior Enron executives were enriching themselves at the same time that Enron was lavishing large campaign contributions on President Bush and the Republican party and apparently influencing the administration’s energy policies.”

Senior Enron officials “reaped huge profits by selling company stock. [They] sold 1.8 million shares valued at about $106 million through July of this year. According to corporate filings, Mr. Lay realized $123 million in 2000 by exercising stock options. In addition Mr. Lay has cashed in shares for a further $25 million this year,” Waxman said.

“These executive windfalls contrast starkly with the devastating losses suffered by Enron’s rank-and-file employees and small investors. A recently filed class-action lawsuit indicates that Enron’s current and former employees have lost a staggering $1 billion from their 401(k) accounts in the wake of the company’s collapse,” he noted.

“At the very least, the confluence of these actions creates an appearance of impropriety. I urge you [Cheney] to re-evaluate your refusal to provide the public with information about the administration’s dealings with Enron. Enron’s collapse has shaken the public confidence in energy markets. Continued secrecy from the White House will only compound public concerns.”

Cheney and the White House have refused to turn over information about the task force’s meetings and dealings to the General Accounting Office (GAO), which launched an investigation last May at the urging of Waxman and Rep. John Dingell (D-MI). The GAO was preparing in September to bring “possible litigation” to obtain the sought-after information, but the agency suspended its investigation in the wake of the Sept. 11 terrorist strikes.

The two congressmen claimed that the closed-door task force meetings violated the sunshine laws and the “letter and spirit” of the Federal Advisory Committee Act. Their request for the probe was prompted by news reports that the task force had met privately with large campaign contributors, such as Enron’s Lay, to formulate the president’s energy policy.

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