Ex-Enron chairman offered seat on company's board to then-Treasury secretary, documents show - NewsOn6.com - Tulsa, OK - News, Weather, Video and Sports - KOTV.com |

Ex-Enron chairman offered seat on company's board to then-Treasury secretary, documents show


WASHINGTON (AP) _ On one day in 1999, former Enron chairman Kenneth Lay sent notes signed ``Ken'' to Robert Rubin, who was stepping down as treasury secretary, and to congratulate Rubin's successor, Lawrence Summers.

Lay lobbied Rubin, to whom he offered a seat on Enron's board, and Summers with the same easy cordiality on issues affecting Enron, documents obtained Wednesday show.

The notes and letters show that Lay pressed Enron's interests to Clinton administration officials. Last month, the Bush administration disclosed a series of telephone calls from Lay _ one of President Bush's biggest campaign contributors _ to members of the Bush Cabinet as the company slid toward bankruptcy last fall.

The new documents were provided by the Treasury Department under a Freedom of Information Act request by The Associated Press.

The Justice Department and the Securities and Exchange Commission are investigating Enron and its longtime auditor, the Arthur Andersen accounting firm, which has acknowledged widespread destruction by its employees of Enron-related documents.

Andersen is offering $700 million to $800 million in a possible settlement of lawsuits by Enron employees, creditors and shareholders, The Wall Street Journal reported Thursday. The Washington Post mentioned a ``starting point'' of around $250 million.

Officials of Chicago-based Andersen did not confirm the reports. ``Reaching out to the groups affected in this case is consistent with our commitment to address the issues raised by Enron's collapse in a straightforward and constructive manner,'' the accounting firm said in a statement. ``We think it is in the best interests of all parties to deal expeditiously and responsibly with what has occurred.''

With Congress' investigation of Enron's collapse widening to Wall Street, the House Energy and Commerce Committee planned Thursday to send letters seeking information to about a dozen big investment firms.

Committee investigators are trying to determine whether Enron officials pressured the firms _ including Merrill Lynch & Co., First Union Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Credit Suisse First Boston _ to invest in the partnerships or promised them special deals if they did so or raised money from other investors.

Enron's foreign projects received $650 million in loans from the U.S. Export-Import Bank and around half a billion dollars from the Overseas Private Investment Corp. over a nine-year span beginning in 1992, documents released by Sen. Charles Grassley, R-Iowa, show. Grassley, the senior Republican on the Senate Finance Committee, says the projects provided ``tremendous benefit to Enron's operation.''

Eximbank and OPIC say their financial assistance is being repaid with revenue from the operating projects.

Enron's current chief executive officer said Wednesday that someone could end up in jail on charges stemming from the government's investigation of the company and the complex web of partnerships _ used to hide more than $1 billion in debt _ that eventually brought it down.

``Given the enormity of the damage that's been created, I think it's going to be difficult to not hold one or more people accountable,'' said Stephen Cooper, who took the helm of Enron after Lay resigned last month as chairman.

Investors nationwide lost money, and thousands of Enron employees lost their retirement savings in accounts loaded with Enron stock as the energy-trading company collapsed.

Rubin, who left the government in mid-1999, is chairman of the executive committee of Citigroup, one of the banks that lent hundreds of millions of dollars to Enron. Rubin called Treasury's undersecretary for domestic finance, Peter Fisher, last Nov. 8 to seek his intervention on Enron's behalf. At the time, rating agencies were poised to downgrade their opinions on the financial status of Houston-based Enron.

On May 14, 1999, after Rubin announced he was leaving his post, Lay wrote him: ``If you are considering joining any corporate boards, I would like very much to talk to you. Given the way Enron has evolved, not only do we badly need a person with your experience and insights ... but also I think you would find serving on our board intellectually and otherwise interesting.''

Rubin did not join Enron's board of directors.

Leah Johnson, Rubin's spokeswoman at Citigroup's New York headquarters, noted that he received 30 to 40 offers to join corporate boards at that time. ``Rubin had no interest'' in the Enron board position, Johnson said. She did not comment further.

Also on May 14, Lay wrote a note to Summers, Rubin's successor, congratulating him on becoming Treasury chief and promising to be available ``if there is anything at all I or Enron could do for you or the department.''

Lay's spokeswoman, Kelly Kimberly, declined to comment on the documents.

In another letter, dated Dec. 3, 1998, Lay urged Rubin to approve Houston's application to be named an ``empowerment zone,'' a status that brings tax breaks and other incentives meant to promote economic revival.

Enron had some 20,000 employees when it filed for bankruptcy on Dec. 2. It has been one of the largest employers in Houston, which has not been designated as an empowerment zone.

Enron had lobbied throughout the government and Congress against regulation of electricity markets and the trading of financial products, known as derivatives, tied to energy commodities. In an Oct. 8, 1999, letter to Summers, Lay said Enron was troubled by the idea. He indicated he was prompted to write by a speech in which a Treasury assistant general counsel suggested federal regulators might be considering regulation of the huge global derivatives market that exists outside of commodities exchanges.
Powered by Frankly
News On 6
303 N. Boston Ave.
Tulsa, OK 74103
Newson6.com is proud to provide Oklahomans with timely and relevant news and information, sharing the stories, pictures and loves of Oklahomans across our great state.
All content © Copyright 2000 - 2018 KOTV. Oklahoma Traveler™ is a registered trademark of Griffin Communications. All Rights Reserved.
For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.