Enron's Close Ties to Bush

W A S H I N G T O N, Dec. 10, 2001 -- When the energy-trading firm Enron collapsed recently after disclosing financial irregularities, thousands of employees lost their jobs and investors lost billions. Enron's fall also crippled one of President Bush's most loyal corporate supporters.

The Houston-based company was among the first to back Bush when he ran for governor of Texas. Enron and its executives went on to become the largest source of financial support for Bush's gubernatorial campaigns, giving more than $500,000, according to a study by the Center for Public Integrity.

"Enron was the number one career patron for George W. Bush," said center director Charles Lewis. "There was no company in America closer to George W. Bush than Enron."Lewis says the company's goal in backing Bush and other politicians was to encourage further deregulation of the energy industry.

"Enron made a decision that they needed government to go their way and they put the money out to make sure that happened," he said.

Loyalty and Access

Congressional hearings open this week into Enron's financial implosion, which culminated in a Dec. 2. bankruptcy filing. The Labor Department, the Justice Department and the Securities and Exchange Commission are all investigating Enron. It's unclear to what extent the inquiries are examining the longstanding ties between administration officials and the company, which was once the seventh-largest U.S. corporation in terms of revenue.

Enron CEO Kenneth Lay has been a friend of Bush and the Bush family for years. When Gov. Bush ran for president, Enron gave him access to a company jet. (The Bush campaign reimbursed the company roughly $25,000 for the flights.)

In April 2000, when Enron opened a new baseball stadium named for the firm, then-candidate Bush sat right in front of Lay in the Enron box.

Since 1999, Enron and its executives have given more than $2 million to the Bush campaign and other GOP causes. Democrats got about a quarter of that amount.

As Bush assumed the presidency, Enron had unusual access to the new administration's deliberations about energy policy and appointments to important posts. Lay served on the Bush transition team and helped interview candidates for the Federal Energy Regulatory Commission, which oversees the gas pipelines and electricity grids that are key to Enron's business. Earlier this year, the commission's chairman, Curtis Hebert, who was being considered for reappointment by the White House, declared himself "offended" by Lay's lobbying efforts. Hebert later quit the panel.

When Vice President Dick Cheney drafted a new energy policy, he met with Lay and other Enron executives. Enron was reportedly the only company to be granted such a meeting.

Lay declined to be interviewed for this story.

Washington Posts

Enron alumni also fill prominent slots in the Bush administration. The president's chief economic adviser, Larry Lindsey, and the top trade negotiator, Robert Zoellick, both served as advisers to the company. Secretary of the Army Thomas White was an Enron executive before joining the administration. When he assumed the Army post, White was forced to sell more than $25 million in Enron stock, according to a financial disclosure form he filed.

Rep. Henry Waxman, D.-Calif., has been pressing Cheney to detail his contacts with the troubled company.

"There is a very intimate connection between Enron and the Bush administration. How could they not have known what was happening?" Waxman said in an interview last week. "I think we need to find out what people in the administration knew, many of whom used to work for Enron. We ought to find out whether they ignored warning signs."

In the past, the White House has resisted requests for information about its dealings with the energy industry. The General Accounting Office, the investigative and auditing arm of Congress, threatened to sue Cheney earlier this year after he declined to turn over documents about his meetings with Enron and others interested in the energy policy he was developing. After the Sept. 11 attacks, GAO said the effort to get Cheney's records was no longer a priority.

Despite the administration's numerous ties to Enron, the White House has deflected questions about the company's failure. Reporters who asked White House Press Secretary Ari Fleischer about Enron were referred to the Treasury Department.

However, Fleischer said last week that Congress has grounds to investigate how Enron fell so far so fast.

"It's very understandable why people in Congress… charged with oversight of any implications of Enron's bankruptcy would seek hearings," he said.