Archive for Wednesday, June 20, 2001

Conflict of interest clouds Army’s utility decisions

June 20, 2001

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— The new Army secretary wants to shift control of more military base utilities into private hands, a multimillion-dollar business that his former energy company is pursuing.

Army Secretary Thomas White has said he would step away from decisions involving Enron Energy Services, where he served as vice chairman until this year, if there was a clear conflict of interest.

The former brigadier general is consulting with lawyers on whether he should remove himself from Enron-related decisions and is in the process of selling more than $25 million in company stock, the Army says.

For the last two years, the Pentagon has been seeking to save money by hiring companies with energy expertise to run the electric, natural gas and other utilities on military bases.

White said last week he was frustrated by the slow pace of the program and wanted to see it accelerated.

Enron has already won one such contract and has a bid pending to run utilities at several Texas bases.

A military ethics expert questioned White's decision to raise the utility issue so soon on the job.

"When you have that interest in the past, to bring that up as the very first thing, I don't think that was a very smart move on his part because, again, it brings that appearance of conflict," said former Army Maj. Jeffrey Whitman, an ethics professor at Susquehanna University in Selinsgrove, Pa.

Whitman said White should recuse himself if there is a clear conflict of interest as defined by federal law and in any case will have to tread carefully on Enron issues.

"It certainly gives the appearance of a conflict of interest, and oftentimes in situations like this appearances can become reality," Whitman said.

White House spokeswoman Claire Buchan said President Bush and the staff involved in White's nomination were unaware Enron was seeking Army contracts.

Buchan said she was confident White is working with counsel "to ensure that he is in full compliance not only with the letter of the ethics laws but with the spirit of them."

Houston-based Enron has a bid pending to run utilities at seven Air Force bases, a naval base and the Army's Fort Bliss in Texas, company spokeswoman Peggy Mahoney said.

"I can only say the federal government is one of the largest users of energy, and so we continually look for ways to offer a product for them," she said.

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