House Democrat Demands Rove Probe

ByABC News
July 17, 2001, 4:14 PM

W A S H I N G T O N, July 17 -- A top congressional Democrat is calling for the Justice Department to investigate Karl Rove, one of President Bush's closest advisers, for doing work that could have affected companies in which he owned stock.

California Rep. Henry Waxman, ranking Democrat on theHouse Government Reform Committee, sent a letter today to White House Counsel Alberto Gonzalez demanding the Justice Department investigate whether Rove violated ethics laws. (Full text of letter: PDF format)

In the nine-page letter, Waxman cites news reports identifying two companies held by Rove that were affected by the sweeping White House energy policy: Enron and General Electric. According to published reports, Rove had $60,000 invested in Enron stock and owned $80,000 in GE stock.

Rove also held $110,000 in Intel stock when he met withsenior executives of the company on March 12, at the same time the tech giant was seeking government approval of a merger. The merger with an Intel subsidiary and a Dutch company was approved in May.

"If the news reports of Mr. Rove's conduct are accurate, Mr. Rove discussed federal policies with senior executives of companies in which he had substantial investments," Waxman writes. "This is exactly the type of conflict of interest that the ethics laws are designed to prevent."

A White House spokeswoman responded to Waxman's letter with a defense of Rove's conduct, arguing that he "followed all of the ethical guidelines and acted appropriately in his role as senior adviser to the president." The spokeswoman went on to accuse Waxman of playing the "politics of personal destruction."

"This is the same old finger-pointing that does nothing to change the tone and achieve bipartisan results on behalf of the American people," she said.

Responding to earlier letters from Waxman on the matters, Gonzalez defended Rove's handling of his financial holdings. Gonzalez claimed that Rove, the mastermind behind Bush's presidential campaign, had tried to divest his stocks sooner but was advised to hang on to the investments until he could receive an exemption that would let him sell the holdings without paying capital gains taxes.