Enron chairman gave list of favored names to White House; Bush named two as energy regulators

Friday, February 1st 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ A few months after the White House got a list of recommended candidates from former Enron Chairman Kenneth Lay, a friend and backer of President Bush, two of them were appointed to a federal energy commission.

Lay gave the list of names to Clay Johnson, Bush's personnel director, White House spokeswoman Anne Womack said Thursday. Among the eight or so names were Pat Wood, now chairman of the Federal Energy Regulatory Commission, and Nora Brownell, a member of the commission.

``It was one of many, many recommendations that he (Johnson) received'' from industry executives, members of Congress and state officials, Womack said in an interview.

Confirmation of Lay's recommendations to the White House last spring comes as congressional panels investigate the relationship between Houston-based Enron Corp., which filed for bankruptcy Dec. 2, and the Bush administration.

Bush will ask Congress to revamp pension laws to give workers greater flexibility to diversify their company savings accounts, a response to the Enron failure that cost workers their life's savings and created a political problem for the White House.

The Justice Department and the Securities and Exchange Commission are investigating Enron's complex accounting and what role its auditor, Arthur Andersen, played in the company's collapse. Andersen has acknowledged destroying Enron-related documents.

A senator leading an investigation said Thursday that Enron had not cooperated in providing important information on the complex web of partnerships used by the company to conceal massive debts. The company's attorney said it doesn't have the documents sought.

As head of a major campaign donor, Enron, wielding significant influence in Washington, Lay enjoyed access to top government officials of both parties. The White House has acknowledged that Lay met once privately last year with Vice President Dick Cheney, who headed a task force that formulated the administration's national energy policy.

Lay disclosed the existence of the list of Enron favorites in an interview being broadcast Friday on PBS' ``NOW with Bill Moyers.''

``I brought a list, we certainly presented a list. ... As I recall, I signed a letter which in fact had some recommendations as to people that we thought would be good (FERC) commissioners,'' Lay said in the interview, which was taped in May but never aired.

Bush, as Texas governor, had appointed Wood in 1995 as head of the state's Public Utilities Commission. Wood has been an advocate of market-oriented regulation of utilities, a position espoused by Enron, a big, aggressive energy trader that had become a favorite of Wall Street.

Bush appointed Wood as FERC chairman in August, replacing Curt Hebert.

Hebert said in the PBS interview that Lay ``has asked me to take certain positions but I've had those conversations with Ken Lay for a long time. And have disagreed with him for a long time.''

Brownell, a member of Pennsylvania's Public Utility Commission, was nominated by Bush in March. During her time on the state commission, Brownell helped oversee Pennsylvania's electricity deregulation.

Lay will be the star witness next week as a blizzard of hearings by several congressional panels put the Enron collapse under intense public scrutiny.

Enron officials ``just simply have not cooperated'' in providing the documents sought, said Sen. Byron Dorgan, D-N.D., chairman of a Senate Commerce subcommittee. ``We again renew our request.''

An estimated 3,000 partnerships, some with names of ``Star Wars'' characters such as Jedi, were created by Enron, which took a 97 percent stake in each of them and brought in outside investors for the remainder. The partnerships were kept off Enron's books and helped create the accounting debacle that pushed the company into the biggest U.S. corporate bankruptcy filing ever.

Dorgan said the committee had no immediate plan to subpoena the documents from the company.

Robert Bennett, a Washington attorney representing Enron, said, ``We have been fully cooperating with them.''

Bennett said the committee has asked Enron for documents that the company doesn't have and must be obtained from the partnerships or people representing them.

``We are exercising enormous good faith in cooperating with that committee,'' the attorney said in a telephone interview.

In a related dispute between Congress and the Bush administration, investigators at the General Accounting Office told the White House on Wednesday they would sue to make officials identify the industry executives, including some from Enron, who met last year with Cheney's energy task force.