Overshadowed By Enron

President Bush steps off Air Force One after landing in New Orleans.
President Bush's advisers, fearing the Enron Corp. bankruptcy controversy could divert attention from his second-year agenda, are debating what to do about a political problem they helped create.

From the first belated disclosure that the energy giant sought help from Bush's team, the White House has helped fuel the story by refusing to release some details and offering others in dribs and drabs.

“Whatever the underlying facts are, they are creating the impression that there's something to hide,” said Joe Lockhart, a veteran of scandal-control strategy as press secretary to President Clinton.

Nearly two-thirds of Americans - 63 percent - believe the Bush administration isn't telling everything it knows about its relationship with Enron, according to a recent CBS News poll.

Also, by more than two to one, Americans think that Enron executives did have at least some influence on the administration’s energy policy. Among those who did think Enron had influence, most say that influence was inappropriate.

Those paying a lot of attention to the story are more suspicious of the administration than those who are not, according to the poll. They also are more likely to think that members of the Bush administration have traded favors for contributions.

With the Enron story gathering steam, Republicans are divided over how to respond, and Democrats are split on whether it will be a potent political issue.

White House officials hope Bush's State of the Union address Jan. 29 will shift focus from Enron to his domestic policy agenda, the war on terrorism and efforts to prevent future attacks.

But some Republicans outside the administration say that won't be enough. They're pushing for more disclosures and an internal investigation.

“The answer is for George Bush to come out and very specifically take the measure on by saying, `My treasury secretary talked to Enron and nothing was done. My commerce secretary talked to Enron and nothing was done,”' said Eddie Mahe, a GOP consultant in Washington.

He also urged Bush to announce an internal investigation into all White House contacts with Enron. Although the president has refused to launch a formal internal inquiry, Mahe said, “I would hope that George W. Bush would understand and believe that it's the right thing to do. And if somebody did something wrong, he should throw them out.”

Bush spokesman Ari Fleischer has said the White House will not try to determine which administration officials had contacts with Enron executives. However, he said, aides were informally keeping track and disclosing those contacts in which Enron chiefs sought help from the government.

Fleischer called requests for full accounting “a fishing expedition.”

The Clinton White House also was slow to turn over information and quick to denounce its critics.

“I think we've learned from recent history that there doesn't have to be underlying unehical behavior - that the process itself can be as damaging as any alleged wrongdoing,” Lockhart said.

But several other Democrats, particularly those outside Washington, said Bush's performance in the war against terrorism is more important to voters than Enron. Some Democrats are leery about clashing with a wartime president.

“I'd like to be able to say, `Oh, man, we've got something we can kill him with.' But I can't,” said Charles Whitehead, former chairman of the Florida Democratic Party. “They've said there's nothing to this, and the public believes them.”

Among the White House's actions regarding Enron:

  • Commerce Secretary Donald Evans and Treasury Secretary Paul O'Neill spoke with Enron Chairman Kenneth Lay as the company was collapsing last fall, but they did not disclose the contacts until this month.
  • Fleischer said that, to his knowledge, no White House officials had been told of Lay's calls. Three days later, Evans disclosed he had told White House chief of staff Andrew Card about the contacts.
  • White House economic adviser Larry Lindsey, who has several financial contacts with Enron, conducted an internal review of the company's impact on energy markets as it was foundering. The review was disclosed belatedly on a television news show.
  • Asked about his ties to Lay, the president said he “first got to know Ken” in 1994, when he was “a supporter of Ann Richards,” the Democratic Texas governor later defeated by Bush. However, Bush knew Lay from their work on the 1992 Republican National Convention and his father's presidential library. And he received thousands more campaign dollars from Lay than Richards.

    None of the actions points to wrongdoing, but Democrats are using the Enron debacle to portray Bush as a patron of wealthy donors.

    “Enron is a metaphor for the Bush administration,” said Democratic national chairman Terry McAuliffe. “The wealthiest people took their money off the table and the average people got stiffed.”

    GOP pollsters said some of their survey data suggests the Enron story may be increasing the perception that Bush cares more about the rich than the problems of average Americans.

    Other Republicans say Enron is a major distraction, but nothing more.

    “The biggest casualty was Bush's historic education reforms that were totally overshadowed by this business scandal,” said Scott Reed, who managed Bob Dole's 1996 presidential campaign.

    Still, he predicted Lay's congressional testimony will be “a political Armageddon. It is going to be the biggest thing to hit Washington since the campaign finance scandal” in the Clinton White House.

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