WASHINGTON – The Bush administration came under fire Wednesday in an extraordinary double-barreled shot at the motives of the president and the former Enron executive who now serves as Bush's secretary of the Army, Tom White.
Democratic Sen. Ernest "Fritz" Hollings of South Carolina, chairman of the Senate Commerce Committee which has been investigating the energy giant's collapse, said White manipulated his post as head of the Army to win contracts for Enron.
"They were trying to get Army business so [Bush] takes a vice president of Enron, puts him in as secretary of the Army and his first concern wasn't for the troops, his concern was for power contracts," Hollings told a group of reporters Wednesday.
Hollings then defended his charge by claiming that White's plan to save tax dollars by having the Army buy energy from private firms was really a payoff to energy interests.
"Well, that's the first thing he announced. [Bush] said, 'Gosh, he's got a wonderful military record, but he's got an even better money-making record, making over a $100 million over at Enron,' and so he came in and said we've got to deregulate faster so he could get business for Enron and the likes of Enron."
As Army secretary, White has never advocated deregulation and denies doing favors for Enron. The Pentagon and the Army declined to comment about the attack on Secretary White, saying he will address the matter when he testifies on Capitol Hill Thursday.
White House spokesman Ari Fleischer cited the factual inaccuracies in the remarks by Hollings during a press briefing and said, "They make him look less than serious and not to be taken seriously."
A Republican leadership source on Capitol Hill called the remarks pathetic and said they don't even need to respond.
But Hollings wasn't finished with the Bush administration's relationship to the failed conglomerate, which on Dec. 2 declared the largest bankruptcy in the nation's history.
Despite remarks the same day by Federal Reserve Board Chairman Alan Greenspan saying that — when all the evidence is collected — investigators will find Enron's collapse was triggered by financial markets' sudden loss of confidence in the company, Hollings charged the administration with helping Enron cover up its losses by allowing offshore tax havens.
Enron had about 800 offshore companies. Hollings said the Clinton administration, under former Treasury Secretary Larry Summers, tried to restrict such tax havens but the Bush administration changed course. That turnaround may have actually made it easier for Usama bin Laden, leader of the Al Qaeda terrorist network accused of the Sept. 11 attacks, to coordinate the terrorist acts, he said, because terrorists sometimes use offshore accounts to finance their operations.
Hollings specifically cited White House economic adviser Larry Lindsey in changing the Bush administration's position.
"In comes the administration with whom? Larry Lindsey. Larry Lindsey was the $50,000-a-year consultant for Enron who was running around saying that it was unconstitutional to try to close down these things. And so they immediately, this time last year, closed down the Larry Summers effort and you had 9/11," he said.
However, the Treasury Department, which has been tracking financial accounts of terrorists, said that it has been tracing the Al Qaeda accounts and they did not go through offshore tax havens.
It was only one of several misstatements Hollings has made over the course of the Enron investigation, in which he incorrectly identified Bush budget director Mitch Daniels, Security and Exchange Commission Chairman Harvey Pitt and Energy Secretary Spencer Abraham as former employees of Enron.
On top of that, aides say Hollings, 80, misspoke when he botched a line referring to Attorney General John Ashcroft as the energy secretary.
"When the president comes in and he appoints the secretary of energy (sic) who's had to recuse himself on account of his conflict of interest ..."
Ashcroft, who took money from Enron during his 2000 senatorial campaign, much like many other members of Congress, has recused himself from the investigation, leaving Deputy Attorney General Larry Thompson to take over the Enron investigation.
Hollings mentioned that during a Senate hearing Tuesday on Justice Department appropriations, saying Thompson should also recuse himself because of former ties to Enron.
Ashcroft responded that he is not in a position to tell Thompson what to do on the matter.