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White House told not to destroy Enron papers

Stepping up its criminal probe of Enron Corp's collapse, the Justice Department told President George W Bush's staff on Friday not to destroy any documents related to the bankrupt energy trading company, Bush's biggest political contributor.

The White House said it would comply with the request, which calls for staff to retain all written and electronic notes, letters and files related to Enron's financial condition and business interests since January 1, 1999. Enron has made some $623,000 in contributions to Bush's campaigns since 1993.

"We believe that documents in the possession of the White House, its staff and employees may contain information relevant to our investigation," Christopher Wray, principal associate deputy attorney general, said in a letter to the White House counsel's office. Officials said the letter applied to the White House and other federal agencies.

The Justice Department also asked the White House to retain notes and memos stemming from contacts with anyone who works or worked for the Houston-based company -- from top Enron executives to those who may have acting unofficially or indirectly on its behalf.

A Justice Department task force and the FBI have been conducting a criminal investigation into Enron's collapse, in which thousands of workers lost their jobs and pension savings amid allegations that the company misled investors about its accounting practices. Enron's December 2 bankruptcy was the biggest in US history.

The Bush White House has close ties to Enron and its former chairman, Kenneth Lay.

Last autumn, Lay called Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans, Bush's 2000 campaign manager, to warn them of Enron's mounting financial problems.

Enron President Lawrence "Greg" Whalley also spoke repeatedly with Treasury Undersecretary Peter Fisher in late October and early November, seeking help for the beleaguered company.

On Thursday the White House disclosed that Lay had recommended candidates to fill top government posts, including Pat Wood, now chairman of the Federal Energy Regulatory Commission.

"Enron made contributions to a lot of people around Washington, DC, and if they came to this administration looking for help they didn't find any," Bush said this week in his administration's defense.

The Justice Department's request would cover some documents from the Clinton administration, which left office in January 2001.

"All documents relating to these subjects should be preserved, even if there would be a question whether the document would be a presidential or federal record or even if its destruction might otherwise be permitted," Wray wrote.

"At this time, we are only requesting that you ensure the retention of these records," he added.

The Justice Department had no comment.

WHITE HOUSE ALERTS STAFF

The White House said it immediately issued an e-mail alert to its offices and employees, instructing them to comply with the Justice Department's request.

"We intend to fully comply with it in keeping with our commitment to providing all the information relevant," White House spokeswoman Claire Buchan said.

Earlier this month, Justice Department officials and FBI agents descended on Enron's headquarters to collect evidence of document shredding after the Securities and Exchange Commission launched its probe in October.

Congressional committees have also launched investigations into Enron's finances, including an estimated 3,000 outside partnerships central to Enron's unraveling. The partnerships were used by Enron to keep debt off its highly leveraged balance sheet and to enhance earnings.

Democrats have raised questions about Bush's ties to Enron and its top executives, and have asked if the firm used influence in secret meetings with Vice President Dick Cheney to shape a favorable administration energy policy.

The administration has disclosed that representatives of Enron met six times with Cheney or his staff involved in energy policy. The last contact took place in October, just days before Enron announced a charge against earnings, the first hint of its spectacular unraveling.

But the White House has refused to give congressional investigators records related to those meetings.

The General Accounting Office, Congress' investigative arm, announced this week that it would take the unprecedented step of filing suit against the administration to obtain the papers. The White House asserts that the GAO is not entitled to the internal records and has promised to fight their release in court.

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