Army Secretary Juggles Enron, Troops

Army Secretary Juggles Enron, Troops
Thu Mar 28, 2:12 AM ET
By JOHN J. LUMPKIN, Associated Press Writer

WASHINGTON - Army Secretary Thomas White says he will give up his post should the federal investigation into his previous employer, Enron Corp., pull him too much from his military duties during the war on terror.
"I thought I could do something good for soldiers and their families," White said Wednesday in an interview with reporters. "That is my focus. If I ever get to a point where that's no longer possible, it doesn't make any sense to stay when somebody else could do a better job."
The former Enron executive said he is complying with requests for documents from
the Justice Department (news - web sites), which is investigating the company's activities.
"I'm a big boy. I was in it," White said. "I'm not a victim. I'm not a perpetrator, either."
He said he is turning over to the Defense Department "a bunch" of military and personal documents relating to Enron. The Pentagon will supply the papers to Justice Department investigators.
It's unclear if the papers include documents related to White's role, as head of the Enron subsidiary Enron Energy Services, in a 1999 deal in which the company won a $25 million, 10-year contract to provide utility services to Fort Hamilton, an Army base in Brooklyn, New York City.
White said he would resign if the Enron investigation should take too much of his time or if he should feel his role in the matter caused troops to lose confidence in his leadership. He denied wrongdoing in his dealings at Enron.
He said he was as surprised as the rest of the country by the energy trading company's collapse in December and the subsequent allegations of massive fraud.
White said he has sold all of his interests in Enron, as required by his Army post.
He said he retains membership in an annuity fund for Enron retirees. The fund has paid nothing since Enron's collapse, however, and White has joined other retirees in filing a claim in the company's bankruptcy.
White acknowledged frequent contacts with Enron officials during the company's collapse but said none provided him insider information that affected his stock sales. He reiterated earlier statements that no one at Enron asked him to use his influence to help the company, and he had not done so.
He said virtually all his conversations with former Enron colleagues "would have involved some comment or discussion relating in at least a general way to Enron's financial condition."
White's critics have said they want to know whether his conversations with Enron officials prompted him to finish his stock sales quickly, before Enron's shares hit bottom. Enron's stock hit a low of 26 cents by the end of November, White's deadline to sell.
White made about $12 million from selling his Enron shares, the last of which he sold Oct. 30 at $12.86 a share.
"This is a textbook example of why we have ethics rules," the top Democrat on the House Government Reform panel, Rep. Henry Waxman, D-Calif., said in early March. "Had Secretary White divested his holdings in a timely way, no questions would be raised about his conduct."
White also acknowledged traveling with his wife on an Army aircraft to Colorado at the beginning of March. While there he completed a house sale in Aspen, raising questions as to whether he used a military plane for personal business.
White said he was traveling outside Washington as part of the Bush administration's "continuity of government" plan, which requires some senior leaders to be outside the capital to ensure government survivability should a major terror attack occur.
He said he also went to Dallas and Seattle on official Army business during the trip and described Colorado as a convenient weekend stopover in between.
In another Enron development Wednesday, Sen. Joe Lieberman, chairman of the Governmental Affairs Committee, asked the White House to disclose further contacts with Enron.
In a letter dated Wednesday, the Connecticut Democrat requested detailed information from the White House and the U.S. archivist about communications between Enron and eight government agencies involved in energy policy, dating from 1992.
The agencies include the departments of Labor, Energy and Commerce and the Federal Energy Regulatory Commission.
Lieberman said he "will not hesitate to ask for anything that helps us to investigate as thoroughly as possible what the federal government might have done to prevent, or at least anticipate, Enron's demise."


Army secretary says he's clean on Enron
Ex-employee made $31 million last year

Washington Post Thursday, March 28, 2002
Washington -- In his first extensive remarks on the Enron Corp. controversy, Army Secretary Thomas White said yesterday that he had had no improper contacts with ex-colleagues from the company that employed him for 11 years.
White said Defense Secretary Donald Rumsfeld spoke with him Monday and Tuesday about how he was faring in his job, and Rumsfeld was "very supportive, " White said. The two talked about news reports on White's contacts with former Enron colleagues and his performing personal business while on the job, White said.
"I've been very clear with the secretary that if I ever get to the point as the secretary where the Enron business represents a major and material distraction . . . or if the president or the secretary of defense ever expresses to me that they don't have any confidence in my ability to do this job . . . then I wouldn't stay," White said at the Pentagon.
He also said he would resign if he felt he had lost the confidence of uniformed members of the Army. He said that no one had suggested he resign and that he had not considered doing so.
White, the highest-ranking Bush administration official to come from Enron, acknowledged that he had spoken to Rumsfeld several times about his job as Army secretary since the company declared bankruptcy Dec. 2. In recent weeks, White's relationship with the company has come under increasing scrutiny.
White made more than $31 million from Enron last year, including his salary and bonuses, severance package and sale of Enron stock. He sold roughly half his stock in June and September and the other half on Oct. 24 and 30. White headed Enron Energy Services, a subsidiary of Enron.
On Friday, White notified Rep. Henry Waxman, D-Los Angeles, that he or his wife had had 44 more phone contacts with former Enron colleagues than he had told Waxman previously; of the 73 total contacts, at least a dozen came in October, as Enron's finances began to deteriorate and he sold more than half his Enron shares.
"I have tried to be as forthright as I could," White said. "That's why I sent the update. No good deed goes unpunished."
Pressed as to why he had not mentioned the additional calls initially, he conceded that he "should have."
"In hindsight, somebody told me never to make an absolute statement in this town," White said. "Always qualify it -- to the best of, this, that and the other thing. I should have qualified the response more."
He insisted that in all the conversations, "there was never any exchange of what I would call insider information, nonpublic information, anything that gave me any advantage whatsoever in the divestiture of my stock, period."
He said he had believed in the company right up until it declared bankruptcy. "You could tell that I must have by what I never cashed out and what I took over the cliff with me," he said. "It is not the selling pattern of someone who has any sort of particular information."


The Army Secretary's Business
Thursday, March 28, 2002
SINCE BECOMING secretary of the Army, former senior Enron executive Thomas E. White has still found time to conduct non-Defense Department business. That would be of little moment were it not for the possibility that how the secretary spends his personal time may conflict with the public interest he is sworn to uphold. What brings all this to mind is a series of actions involving Mr. White that have caught the eye of Congress.
It's not every administration official of secretarial rank who can get called on the carpet for personal behavior by influential senators of both parties. In fact, it seldom happens. But Secretary White found himself on the receiving end of a rebuke from Sens. Carl Levin (D-Mich.) and John Warner (R-Va.), chairman and ranking minority member of the Senate Armed Services Committee, for retaining options to purchase Enron stock until January, eight months after he told the committee he would divest his holdings to avoid potential conflicts of interest. "An inaccurate representation" and violation of his Senate ethics agreement, they charged.
Next, there's the matter of Secretary White's involvement with his former employer, Enron, since assuming office. White House press secretary Ari Fleischer said Mr. White "has not worked on any Enron-related matters since Day One." Yet last October he had as many as 13 meetings with or calls to Enron officials prior to his decision to sell more than 200,000 Enron shares at the end of that month. Those calls are among the more than 40 he made from his home to former or current Enron colleagues since taking office last May. In all, the secretary has reported 84 phones calls, attempted calls and meetings between last June and February. That the October calls were made during a crucial time when Enron's errors and financial misstatements were coming to light -- and the company was starting its decline toward bankruptcy -- has raised congressional eyebrows. Was information provided that could have been used to decide whether to hold or sell stock? The issue is not whether Mr. White made money or lost money. As New York University legal ethics professor Stephen Gillers said, "The question is whether inside information enables you to lose less money than you otherwise would have lost." Yesterday Secretary White said that he had had no improper contacts with former colleagues from the company that employed him for 11 years, and that he had turned over "a bunch" of Enron-related documents to investigators.
Then there's the matter of the secretary's travels -- those fortuitous concatenations of circumstances by which Mr. White found himself flown by the military to a briefing in Florida, followed by three days of personal leave to visit waterfront property he owned in Naples, followed by a drive to Tampa for another briefing and a military flight back to Washington. And the Army jet flight he and his wife took to Colorado to close on the sale of their three-story Aspen house -- a trip chalked up to official business, though his Army business was in Seattle.
Members of Congress understandably want a better accounting of how the secretary, a former Army general who is well regarded by the Pentagon brass, has been spending his time. Congress is not alone.
2002 The Washington Post Company


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