February 9, 2002


Time for a Special Counsel

By ERNEST F. HOLLINGS

ASHINGTON -- This week, when Kenneth Lay, former Enron chairman and George W. Bush's largest campaign contributor, failed to show up to testify before Congress, I became convinced that it is time to appoint a special counsel to investigate Enron. We need to name a special counsel, rather than relying on the Justice Department, because conflicts of interest abound in this case, particularly at the Justice Department. Federal law allows the attorney general to appoint such a counsel when the Justice Department's involvement would present a conflict of interest.

Attorney General John Ashcroft recused himself from the Enron case because he had taken $57,000 from Enron in his failed bid for the Senate in 2000. His chief of staff also recused himself, since he was Mr. Ashcroft's 2000 campaign manager. That leaves Larry Thompson, deputy attorney general, to oversee the case — or to appoint a special counsel.

While Mr. Thompson is a capable attorney, his former law firm has represented both Enron and Arthur Andersen, giving a taint of a conflict of interest. Moreover, Mr. Thompson may already be the busiest man in Washington because he is overseeing the Justice Department's counterterrorism activities.

A special counsel can also be appointed if there are "extraordinary circumstances" that would cause the appointment to be in the public's interest. What could be more extraordinary than the largest bankruptcy in American history? When was the last time a corporate collapse had Wall Street so jittery, with investors questioning the accounting practices of every company and so many ripples spreading out through the economy?

I also find it to be "extraordinary circumstances" when a top executive commits suicide, voluminous documents are shredded and witness after witness takes the Fifth Amendment. And in my 35 years in the Senate, I have never witnessed a corporation so extraordinarily committed to buying government. In the last decade, Enron gave campaign contributions to 186 House members and 71 senators, including $3,500 to me.

In the 2000 election, Mr. Lay and his employees, as well as Enron and its political action committee, contributed some $700,000 to Mr. Bush and the Republican party. There was money for the party convention, the recount of votes in Florida, the Bush inaugural. And Enron airplanes for the campaign.

The Bush administration says it did nothing for Mr. Lay this fall when he sought its help. I believe this. But what about help given before? The administration has provided jobs for a stable of Enron alumni and friends. Thomas White, a former vice chairman of an Enron subsidiary, became the secretary of the Army and quickly moved to turn the military's energy needs over to private hands, like those of his former employer.

Patrick Wood III abruptly replaced Curtis Hebert as head of the Federal Energy Regulatory Commission; Mr. Hebert hadn't agreed with Mr. Lay on electricity deregulation. The trade representative, Robert Zoellick, had served on an Enron advisory board. Energy Secretary Spencer Abraham took $13,500 from Enron as a senator. I could recite many more connections.

Mr. Thompson, who is now in charge, ought to pick someone with the credibility of an Archibald Cox, who developed a sterling reputation with the public for his objectivity during the Watergate investigation. If someone of this ilk finds no wrongdoing, people would have confidence that the investigation was done right.

In addition, the Senate should have one committee investigating Enron, not six. Senator Ted Stevens, a Republican from Alaska, and I have asked the Senate leadership to establish a bipartisan select committee to address the policy implications of Enron's collapse. The policy concerns are vast: consumer fraud, electricity deregulation, employee pension funds, Securities and Exchange Commission regulations, auditing and accounting standards, tax compliance and shareholder rights.

Through a special counsel and a select committee, the government will ensure a thorough investigation without a taint of conflict. Only then will the American public know the Enron problem and its associated consequences are not swept under the rug.

Ernest F. Hollings, a senator from South Carolina, is chairman of the Commerce, Science and Transportation Committee.