Administration: Enron President Sought Aid

Jan. 11 -- The Treasury Department acknowledged today that Enron's president sought government help in receiving a credit extension while the staggering energy company was trying to avoid bankruptcy last fall.

A Treasury spokeswoman said today that Enron President Lawrence "Greg" Whalley asked Undersecretary for Domestic Finance Peter Fisher to intervene with bankers to help the company get a much-needed credit extension. Undersecretary Fisher spoke with Whalley six or eight times in late October and early November, but did not intervene on the company's behalf.

With the Enron controversy reaching a fever pitch, members of the Bush administration have been downplaying the significance of contacts they've had with the beleagured energy company's CEO Kenneth Lay.

The White House has acknowledged contacts between Enron's CEO and Cabinet members, disclosing that Lay contacted both Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans last fall, as the firm was entering a very public downward spiral leading to the biggest bankruptcy filing in U.S. history.

But in an interview with ABC's Good Morning America, Treasury Secretary Paul O'Neill said Lay's call was simply to give the Treasury secretary a "heads-up" about the financial problems the company was having, not to ask for government help.

"It's the kind of thing I would expect expect any big company executive to do if they understood how the government works and that the Treasury department has some responsibility to make sure the world capital markets are not unsettled by events that are going on in the private sector," O'Neill said. "I thought it was business as usual."

President Bush has also said he never talked about the firm's prospects with Lay.

No Intervention; Should Problems Have Been Publicized

O'Neill and Evans decided not to intervene in the matter. President Bush said Thursday he only learned of the problems at Enron — his most staunch campaign contributor over the years — when they became public knowledge.

A government bailout of a troubled company is not unheard of. The government most recently bailed out hedge fund Long Term Capital Management in 1998. But the issue of whether or not Enron — formerly the world's leading energy-trading firm, and a company with close ties to the White House — specifically asked for help raises some unsettling questions for the Bush administration.