February 2, 2002
White House Told to Save Enron Records
By STEPHEN LABATON and DON VAN NATTA Jr.
ASHINGTON, Feb. 1 — The Justice Department directed the White House staff tonight to preserve records of contacts between government officials and Enron (news/quote) executives over the last three years, a sign that federal prosecutors have significantly broadened their criminal investigation to include the company's political dealings in Washington.

The request, made in a letter this evening from the Justice Department to the White House counsel, prompted the administration to notify agencies throughout the executive branch not to destroy any Enron-related records.

"We believe that documents in the possession of the White House, its staff and employees may contain information relevant to our investigation into the financial condition of Enron and statements made by Enron employees and agents relating to its financial condition and business interests," said the letter from Christopher A. Wray, an aide to the deputy attorney general.

It instructed the White House and other agencies to safeguard all documents, electronic records and computer files that "relate in any way to Enron's financial condition and/or business interests."

The destruction of documents at Enron, which has filed for bankruptcy protection, and its auditing firm, Arthur Andersen, is at the center of the Justice Department's criminal investigation into fraud allegations.

Administration officials vowed to comply with the request but played down its political implications, pointedly noting that it covered a period that started before President Bush came to Washington. White House officials said tonight that they were uncertain about the extent of Enron- related documents they had.

"The White House is one of a number of agencies that has received this request, going back to the Clinton administration," said Claire Buchan, a White House spokeswoman. "We intend to fully comply with the request as part of our ongoing commitment to be cooperative with the investigation."

Still, the request foreshadows the likelihood that some of the documents will be sought by criminal investigators, and as such, could pose a political problem for the administration, which has refused to turn over government records to Congress. The White House will now have to justify denying records to Congress while sending them to the Justice Department and possibly a grand jury.

For months, top administration officials have spurned a demand by the General Accounting Office, an investigative arm of Congress, for records of meetings of Vice President Dick Cheney and the administration's energy task force with executives from Enron and other energy companies. Congressional investigators are seeking to determine what role Enron and the other companies played in formulating the administration's energy policy last spring.

"This new development makes it all the more important that the administration release the information the General Accounting Office is seeking," said Henry A. Waxman, the California Democrat who is the ranking minority member of the House Government Reform Committee and has been the among the most vocal in Congress in demanding the records. "There should be no appearance that the White House is hiding information."

Just hours before the White House disclosed the Justice Department request, President Bush, meeting with Republican lawmakers, vigorously defended his refusal to turn over the records of the energy task force to Congress, according to several people who attended the meeting.

Mr. Bush's impassioned statement to party members holding a strategy session at the Greenbrier resort in West Virginia echoed his administration's public stand. Congressional Republicans applauded Mr. Bush's insistence that withholding the records was a matter of constitutional principle.

The president's ardent defense came a day after a federal district judge in Washington questioned in a related case the contention by the White House that it has a constitutional right to keep information about the meetings secret.

Judge Emmet G. Sullivan ruled Thursday that the energy task force must explain why it should not be forced to turn over records of the meetings. The ruling came in a lawsuit filed by Judicial Watch, the legal watchdog group in Washington, that closely tracks the lawsuit the accounting office is expected to file soon against the White House.

The administration argued that turning over information like the names of attendees and the subjects discussed at meetings of the energy task force would interfere with the president's constitutional power to obtain confidential advice from his closest advisers.

But Judge Sullivan said that was not adequate. Citing what he called "insufficient guidance to the court to analyze the constitutional concerns" raised in the case, the judge ordered the White House to provide a brief defending its position by Tuesday.

In another development, Democrats in Congress investigating the company attacked the credibility of a special committee of Enron directors expected to release a report this weekend on the complex partnership deals central to the company's demise.

Two senior Democrats on the House Energy and Commerce Committee, John D. Dingell of Michigan and Peter Deutsch of Florida, suggested that the report could lack credibility because one committee member, Herbert S. Winokur Jr., authorized the creation of some of the partnerships.

In a letter to William C. Powers Jr., the chairman of the special committee, who is expected to testify before Congress on Monday, the two lawmakers complained that "Mr. Winokur is essentially investigating his own actions and approving or disapproving the resulting report."

"You can understand," their letter continued, "why disinterested observers might conclude that the report's independence, or at least the appearance of independence, has been compromised."

Minutes of a June 28, 1999, Enron board meeting show that Mr. Winokur was present when the board heard a presentation on the formation of investment partnerships named LJM that would be headed by the company's chief financial officer, Andrew S. Fastow.

Mr. Winokur "played a direct role in approving the LJM partnerships in 1999, appearing to have had direct knowledge of both their structure and the potential conflicts Mr. Fastow's role presented to Enron," the letter said.

A message left at Mr. Winokur's home in Connecticut was not answered, and Mr. Powers, through a spokeswoman, said that he had seen the letter but declined to comment on it.

Representative Waxman asked Thomas E. White, the secretary of the Army, to meet with him next week to discuss the Enron affair. Mr. White left a senior executive position at Enron last year to join the administration. Mr. White did not immediately respond to the congressman's request.

Separately, Democratic leaders in Congress criticized Mr. Bush's proposal to bolster 401(k) plan safeguards so that workers do not concentrate their retirement savings in company stock as employees at Enron did. Representative Richard A. Gephardt of Missouri, the House Democratic leader, called Mr. Bush's proposal "half-measures." The Senate majority leader, Tom Daschle of South Dakota said the Bush plan "would do little, if anything, to restore public confidence in the private pension system."

But Representative Tom DeLay of Texas, the House majority whip, said the proposals "strike a sound and appropriate balance between protecting individuals and preserving their freedom to diversify" investments in their retirement accounts.



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