Monday January 28, 8:46 am Eastern Time

Forbes.com Top Of The News: Enron The Death Star By Dan Ackman

Arthur Andersen , Enron 's auditor, has admitted to widespread shredding of Enron documents; Enron's own employees have charged that the company itself destroyed documents. On Jan. 25, Enron's former vice chairman, who had criticized the company's practices, was found dead, apparently by his own hand. Not one of Enron's top executives has spoken publicly about the company since its demise; its public securities filings, prior to its colossal failure, were themselves impregnable.

While many of Enron's secrets will almost certainly be revealed in the months ahead through criminal and congressional investigations and civil lawsuits, to date it remains a corporate death star, a black hole of information. Into this mix walks Vice President Dick Cheney. Over the weekend, he said he was prepared to do constitutional battle with Congress rather than release information about his energy task force.

Cheney, in interviews with Sunday morning chat shows, said that the General Accounting Office (GAO), the congressional agency demanding task force documents, was overstepping its authority. He insisted the executive branch had a right to keep the documents secret to preserve its ability to get "unvarnished" advice from outside the government.

David Walker, the head of the GAO, and the White House both acknowledged over the weekend that the matter might be resolved in court. Walker has made his demand and told the Associated Press, "The ball is in the White House's court."

The White House said recently that representatives of Enron met six times on energy issues last year with Cheney or his aides. Cheney claims the task force offered the company no favors. "Now, the fact is, Enron didn't get any special deals," he said on ABC. "Enron's been treated appropriately by this administration." The latter statement also refers to the situation where Treasury SecretaryPaul O'Neilland Commerce SecretaryDon Evansrefused to intervene when Enron was in the final throes of the crisis that ended with its bankruptcy on Dec. 2.

Cheney also said that turning over the documents would undermine the presidency. "We've seen it in cases like this before, where it's demanded that presidents cough up and compromise on important principles," Cheney said. As a result, "We are weaker today as an institution because of the unwise compromises that have been made over the last 30 to 35 years." Before becoming vice president, Cheney was chief executive of Halliburton , a Dallas-based oilfield services company.

In response, Walker told The New York Times that Cheney's constitutional claims are a smokescreen. "This is not about the vice president's constitutional position," he said. "It's about his capacity as chairman of the national energy policy development group. From day one, this has not had anything to do with the constitutional position of the vice president. I know they want to present it that way because they think people will be more sympathetic, but that's not factually accurate."

The dispute over energy task force records goes back to the months before Enron's Oct. 16 announcement that it was forced to reduce shareholder equity by $1.2 billion, owing to "related party" transactions, the revelation that precipitated its downfall. The Enron crisis has given the battle for the records new life and made it more politically charged.

Environmental groups such as the Sierra Club and the Natural Resources Defense Council have filed their own lawsuits seeking the same information. But a GAO suit would raise the imbroglio to a new level. The accounting agency has never before turned to the courts to get information from a federal official.

If Enron received no special deals from the Cheney task force, that is at least in part because the task force recommendations have not been enacted by Congress as the Senate is now in opposition to many of its proposals. The task force's 105-point plan was premised on the declaration of an "energy crisis," which, to the extentit ever existed, has now passed asenergy prices have fallen sharplysince the spring of 2001.

While the administration apparently refused to bail out the Houston-based energy trader this fall, its political campaign goes back years and has been much more successful at both the federal level and state levels.

Enron's political agenda had, broadly speaking, three major components, according to former government officials, lobbyists and legal experts. The company was invested in energy deregulation, specifically law that would encourage and require electricity and gas companies to allow outside energy producers to transmit power on their transmission lines or pipelines.

It was deeply involved in regulatory and legislative battles to keep over-the-counter derivatives trading (which became its primary business), exempt from regulation. It was also active in lobbying for preservation of current accounting rules, rules of which it took dramatic advantage.

"They were a really go-go company; it had lots of very young, very smart people in a big hurry," says Richard Pierce, a law professor at George Washington University, who has acted as a lobbyist himself. Enron didn't get everything it wanted, he says and, at least in the field of energy deregulation, there were powerful forces, such as local utilities, arrayed against it. Enron "wanted to change all the rules really, really quickly and make a new America," Pierce says.

With its demise having led to many battles--including one of constitutional dimension between Congress and the White House--Enron seems to be, even now, getting its wish.

-- (Cheney the mole @ corrupting. our Constitution), January 28, 2002

Answers

The issue belongs in court, the supreme court. We the people, after a 90's of unchallenged executive privilege issues, need to have a resolution. Something hopefully that won't redefine but reimpress the constitutional privileges and responsiblities of the executive branch in this regard. Probably won't help around here but the rest of the country would kind of like to have it nailed down a bit.

-- Carlos (riffraff@cybertime.net), January 29, 2002.

"The issue belongs in court, the supreme court."

Uh-oh, the last time I heard the repugs say that, the result was NOT good! The Fascist rightwing judges seem to think they have the right to trounce all over our Democracy.

"Probably won't help around here but the rest of the country would kind of like to have it nailed down a bit."

You assume a lot about "the rest of the country". Methinks you underestimate the American people. Most people are fully aware that our government is appointed by the people, paid for by the hard-earned dollars of the people, and is expected to serve the people in a manner which is determined BY THE PEOPLE. This includes the right of the people to know EVERYTHING which the government does. The only reason the government would try to hide something from the people is if it involves activity which is illegal or dishonest. Our Constitution does not give our government the right to conceal ANYTHING from the people. If it did, our country would have become a Fascist dictatorship a long time ago.

-- (The people are entitled to the truth @ the whole truth. and nothing but The Truth!), January 29, 2002.

Your problem is not solvable. Given "Facist rightwing judges" on the Supreme Court and all the other conspirators at every level of government I think you may as well give up.

-- Carlos (riffraff@cybertime.net), January 29, 2002.

Sorry Carlos, I'm not as apathetic as you. When it comes to defending our Democracy, I will never "give up".

-- (truth @ reigns. "Supreme"), January 29, 2002.

The only reason the government would try to hide something from the people is if it involves activity which is illegal or dishonest.

Of course. Therefore, we must DEMAND that the government finally publish the full specifications on the W-88 nuclear warhead. NOW. No more delay. Right? I mean, why would the defense establishment hide that from us? We PAID for it, after all!

Or, when *Congressional* committees meet behind closed doors to discuss personnel issues, or to resolve labor disputes, or to set policy, the news media should be there, adding their airheaded and clueless commentary to everything that happens. Right? Why should Congresscreatures be allowed to go meet with foreign leaders in private, or meet with AFL-CIO people in private, and ... why, they should publish lists of EVERYONE who attended these meetings, release minutes of just what was discussed, and all that stuff!!! Right now!

Right?

Heh. Nice try. This is MORE politics. Eventually, it will dawn on you that it's not working, too. (Hope springs eternal.)

I think what's REALLY beginning to frustrate the Bush-haters in this forum is that the man's popularity continues to skyrocket. Just like Clinton's did.

I chuckled at the Republicans who just couldn't kill that Clinton guy, no matter how hard they tried. I had no idea that the Democrats would take up the empty gun and provide 8 MORE years of entertainment when Bush took office. :)

-- Stephen M. Poole (smpoole7@bellsouth.net), January 30, 2002.

Stephen:

Of course you're right, it's ridiculous to claim that the public has the right to know every detail on every single thing.

But in this particular case, I agree with Senator Fred Thompson (Republican, TN). There are many cases where executive priviledge (sp?) can validly be invoked. This isn't one of them.

-- Peter Errington (petere7@starpower.net), January 30, 2002.

He says that the law is on his side. If it is, then he *should* tell Congress to get bent. It really doesn't matter to me if Cheney does or does not hand over this data. I don't think it will matter one wit what Enron said or didn't say during their meetings. So what Enron wanted regulations to benefit them? Doesn't every company? Enron can ask all they want. But they would have to convince a Congress to vote it into law. That's a tall order.

It seems none of the liberals had any problem with LAWYERS and a first lady (a private citizen) making up health care policy. At least Cheney consulted with the private sector cognizant on the topic.

And I really don't get how Enron failing has anything to do with recommendations for the energy policy. Their failure had already been set in motion when this task force came up. So they had 'secret' discussions. Please someone tell me what could possibly be in those discussions that have any bearing on the Enron scandal.

-- Maria (anon@ymous.com), January 30, 2002.

Field and Stream Magazine, 1/30/02

Top Democrats have enthusiastically joined the Hunting and Fishing community. Beginning today, they enlisted GAO bureaucratic-outdoorspersons in a witch-hunt and a fishing expedition.

Although we are gratified by their passion, we urge them to reconsider. These particular hunting/fishing grouds are barren. Their ultimate failure will be an embarrassment to all right thinking huntspersons.

-- Diana (goddess@the.hunt), January 30, 2002.

LOL! Dimwit Poole doesn't even recognize the difference between a national energy policy and national security!

Cheney is a powermaniac, he gets frustrated unless he can pretend that everything is for "his eyes only" and he has ultimate power over the people.

He is suffering from delusions, our energy policy is not a military secret. Much as he would like to pretend he is involved in the Gulf War all over again, he isn't, it's just our energy policy.

-- (buy@clue.dimwit), January 30, 2002.

-- Fun With Dick (add @ your. caption), January 30, 2002.

"Dammit! I want my money back on that Rogaine shit! Been using it for 3 months now, and NUTHIN!"

-- (hee @ hee. hee), January 30, 2002.

"Jeeezus freeekin keeeerist! If I'd known Kenny Boy was gonna shred his documents I'd have shredded ours too! Now I'm stuck holdin the bag! God frikkin dammit!!"

-- (grrr-grrr@mumble.-mumble), January 30, 2002.

"Anybody seen David Walker?"

-- (psychotic@power.freak), January 30, 2002.

Peter,

I can't disagree with that *in principle,* and *if* that's as far as it goes. What the White House suspects though, is that as soon as they turn over that list of people, Bush's enemies will instantly say, "hey, looka here! Ken Lay, and Doodink Hoodwink, and Tom Terrible were at that meeting! We need to look further and request MORE documents, and ask for the White House tapes and ... and ..."

They did it to Clinton, remember. In the beginning, Clinton tried to cooperate on Whitewater (up to a point). The Republicans twisted each mere POSSIBILITY into a "need for more information, just to be sure." See?

So, in principle, you may be right. Maybe there's no justification at all for Cheney not to release those names. But I will say this: the ability of the White House (or Congress, or your local mayor, for that example) to have secret, off-the-record chats with civic and business leaders to get ideas must be protected, too. You need to be able to sit down with them and say, "gloves off, no one takes anything personally, give me some ideas."

One large corporation that I worked for many years ago did that with all of us in management at least once a week. If *half* the stuff that we discussed in those meetings had ever become public, we would have been toast. :)

(And of course, the fact that we AGREED not to make public those discussions freed us up to look at possibilities that we otherwise would have had to ignore.)

-- Stephen M. Poole (smpoole7@bellsouth.net), January 30, 2002.

"But I will say this: the ability of the White House (or Congress, or your local mayor, for that example) to have secret, off-the-record chats with civic and business leaders to get ideas must be protected, too. You need to be able to sit down with them and say, "gloves off, no one takes anything personally, give me some ideas.""

That's a crock. What kind of "ideas" would need to be kept secret unless they were deceptive or dishonest?? Don't give me that military crap either, we're talking about BUSINESS here.

-- In America (no amount of @ lies and deception. are "acceptable"), January 30, 2002.

"What kind of "ideas" would need to be kept secret unless they were deceptive or dishonest??"

"And if you are not guilty, why do you object to our snooping in your closet? You must have something to hide, you must be guilty! Paredon!"

-- (Che@Viva. la revolucion!), January 30, 2002.

Cheney's stonewall not sound

Jules Witcover

Originally published Jan 30, 2002

WASHINGTON - In the emerging Enron scandal, the White House has made itself a target by asserting executive privilege to shield the inner workings of Vice President Dick Cheney's task force that last year shaped President Bush's energy policy. But there is plenty of precedent for doing so.

Through the years, White House privacy claims for secret meetings and conversations have been invoked by Republicans and Democrats alike in fending off prying eyes and ears. Administrations of both parties have justified business done in private as imperative to ensure that presidents and their chief subordinates receive candid counsel from those called to advise them.

What sets apart the current attempt to protect the privacy of Mr. Cheney's task force is that the folks seeking access are not of the same cloth as the probing Democrats of the Watergate scandal or the Republicans hot on the trail of Bill and Hillary Clinton in the Whitewater affair.

The snoop demanding access to the whisperings in the Cheney energy speakeasy is the General Accounting Office, the bipartisan and generally esteemed creature of Congress. After more Cheney stonewalling on Sunday's television talk shows, GAO director David Walker has said he intends to take the Bush administration to court - the first time such a drastic step has ever been taken by the agency.

Coming in the midst of the multiple Enron investigations in Congress, which inevitably will have partisan colorations, the nonpartisan GAO quest just as inevitably raises suspicions that the Bush administration has something to hide about what Enron representatives said to Mr. Cheney and aides then formulating the nation's energy policy.

The invoking of the privilege is in itself nothing unusual. Long before Richard Nixon resorted to it in his eventually futile effort to cover up the Watergate scandal, other presidents and aides were using it, and afterward as well. Less than a decade ago, the Clinton administration effectively resisted efforts to open secret task force meetings by First Lady Hillary Clinton at which her husband's health care proposal was crafted.

In that case, health care professional and consumer groups sought to let the light of day in by arguing in court that since Mrs. Clinton was not a government official, only the wife of one, executive privilege could not be used to keep her task force doings in the dark. The pertinent law stipulated that any meeting involving non-government people had to be open.

The Association of American Physicians and Surgeons and health care consumer groups complained that health maintenance organizations and insurance companies were involved in making health care policy in the task force, just as energy consumers now allege that giant energy corporations such as Enron had their heads in Mr. Cheney's task force tent.

In the Clinton task force case, lawyers for the administration argued that the health care plan was devised by "an amorphous horde" of more than 500 people operating in "creative confusion" and therefore was not a formal advisory committee under obligation to release its working papers or records.

The comment inspired a lawyer for the petitioners to respond: "This was not some amorphous horde. Ant colonies and bee colonies sometimes look like a horde, too. But they follow a system. They follow their queen. Here it is absolutely no different."

Over the next two years, the courts ruled for and against the petitioners a couple of times, and in 1998, a judge ordered the Clinton administration, Mrs. Clinton and Ira Magaziner, an aide who oversaw the task force, to pay nearly $286,000 in medical and legal fees. But that finding, too, was thrown out.

If President Bush had had the benefit of hindsight, he might have been wise to follow Bill Clinton's example and put his wife, Laura, who apparently has no aspirations to be a government official, in charge of the energy task force. But he didn't, and so Mr. Cheney as the man in the hot seat has no easy dodge.

Defenders of the president in the Enron matter have been able to cite his subordinates' refusal to help the Houston firm when approached, and to dismiss the case as a corporate, not a political, problem. But if his administration through Mr. Cheney continues to stonewall the nonpolitical GAO, he is likely to find it otherwise.

Jules Witcover writes from The Sun's Washington bureau.

-- (Cheney@should.resign), January 30, 2002.