Washington — Enron Chairman Kenneth L. Lay reached out to two of President Bush's Cabinet officers when the energy company was collapsing, the White House disclosed Thursday as the Justice Department opened a criminal investigation into Enron's bankruptcy.
Atty. Gen. John Ashcroft, who received campaign contributions from Enron executives during his failed 2000 senatorial bid, said he would recuse himself from the investigation.
"The attorney general has not been involved in any aspect of initiating or conducting any investigation involving Enron," the Justice Department said.
The accounting firm that audited Enron's books, Arthur Andersen LLP, disclosed Thursday that a "significant but undetermined" number of documents related to the company had been destroyed.
Federal law enforcement agencies and congressional investigators are seeking the documents as part of their inquiries into the bankruptcy of the giant energy-trading company. The destroyed documents include electronic files and other documents related to its audit of Enron.
Bush, who received significant campaign contributions from Lay and other Enron executives, said he never has discussed Enron's financial problems with its embattled corporate chairman.
"What anybody's going to find out is that this administration will fully investigate issues such as the Enron bankruptcy, to make sure we can learn from the past and make sure workers are protected," Bush said.
But Lay did seek the ear of other top-level administration officials last fall.
According to White House press secretary Ari Fleischer, Lay telephoned Treasury Secretary Paul O'Neill amid Enron's collapse "to advise him about his concern about the obligations of Enron and whether they would be able to meet those obligations."
In a separate phone call to Commerce Secretary Don Evans, Lay similarly worried that the company might have to default on its obligations. He brought to the secretary's attention "that he was having problems with his bond rating and he was worried about its impact on the energy sector," Fleischer said.
After that conversation, Evans spoke to O'Neill "and they both agreed no action should be taken to intervene with their bond holders," Fleischer said.
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