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Cheney refuses to co-operate with Enron inquiry

Andrew Gumbel
Sunday 27 January 2002 20:00 EST
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Despite mounting pressure on President George Bush's administration to explain the full extent of its dealings with Enron, the bankrupt Texas energy company, Dick Cheney, the Vice-President, insisted yesterday he had no intention of disclosing the full list of industry lobbyists he consulted while drawing up a controversial national energy plan last year.

Mr Cheney has been pressed for months to explain how often he met officials from Enron and other energy companies, and how influential they were in lobbying for tax breaks, looser government regulations and new business opportunities, such as the opening of the Arctic National Wildlife Refuge in Alaska to oil exploration.

Pressure has built since Enron collapsed under a mountain of accounting irregularities. Its extensive political contacts, notably with Bush administration officials, have grown into a scandal.

The General Accounting Office, the investigative arm of Congress, has threatened to take the White House to court in the next few days to force the release of Mr Cheney's contact list, and its efforts are being cheered by several Democratic congressmen determined to cause maximum embarrassment.

Henry Waxman, a California Democrat, has identified 17 points in the energy plan that would have specifically benefited Enron and has applied continual pressure on the White House to explain itself.

Mr Cheney, speaking on morning television shows, insisted full disclosure was out of the question. Revealing details of closed-door meetings, he said, "would make it virtually impossible for me to have confidential conversations with anybody". He said: "You cannot accept that proposition without putting a chill over the ability of the President and Vice-President to receive unvarnished advice."

Although Mr Cheney said his position on the issue had remained unchanged since last summer, when accusations of undue influence on the energy plan were first raised, the White House has ceded some ground in recent weeks, acknowledging there were at least six meetings between Enron officials and the White House.

The Bush administration finds itself in a hazardous position politically, since Enron is now a byword for all the worst kinds of influence-peddling in American politics.

In an opinion poll published yesterday on behalf of CBS and The New York Times, more than half the respondents said they believed the White House was either lying or failing to tell the full story of its involvement with the company. The poll also found the country was following the scandal closely, with 75 per cent of respondents saying they were pay attention to it – a number that has risen in the past two weeks.

Several dozen administration officials are former Enron consultants or significant former stock-holders. The President had close dealings with the company for at least a decade, and was on first-name terms with the now ousted company chairman, Kenneth Lay.

The scandal also appears to be doing particular damage to the Republican Party, with 45 per cent of respondents in the poll saying – correctly – that Enron gave more campaign money to Mr Bush's party than to the Democrats.

In recent days, the White House has sought to distance itself from the debacle. President Bush said last week he was outraged by Enron's conduct. The administration, meanwhile, has been conducting a hasty review of its $70m (£50m) contracts with Enron and Arthur Andersen, its scandal-tainted auditor.

In his interviews, Mr Cheney said there was no evidence of wrongdoing by any government official and the scandal lay in the behaviour of corporate executives, not politicians. He promised reform of numerous loopholes exposed by Enron's collapse, although he gave no specifics – and he made no reference to the fact that many of them were the result of legislation sponsored by recipients of Enron campaign funds.

Every day has brought new, damaging developments. On Friday, a former Enron vice-chairman, Cliff Baxter, committed suicide in his car.

The New York Times also reconstructed negotiations of a proposed merger three years ago between Enron and the German company Veba. According to the account, Veba pulled out of the deal because of concerns over Enron's unorthodox accounting – evidence that the rot should have been clear to regulators far earlier.

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