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Money > Reuters > Report January 12, 2002 1510 IST |
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Rating firms say no calls from Bush admin on EnronThree major rating agencies said on Friday the Bush administration did not contact them to discuss beleaguered energy trading giant Enron Corp's credit ratings. "We were not, at any time, contacted by anyone in the White House or government regarding our Enron rating," said Mimi Barker, a Standard & Poor's spokeswoman. Enron's collapse entangled the Bush administration on Thursday as the White House said two Cabinet officers were warned of its looming financial crisis, and Attorney General John Ashcroft recused himself from a criminal probe into Enron. The US Department of Justice said on Wednesday it had opened a criminal probe into Enron, which filed for bankruptcy protection on December 2. Thousands of employees were let go, and many of their retirement savings were destroyed as Enron's share price plunged. Bush's team has close ties to Enron and its chairman, Kenneth Lay, a major Bush campaign contributor. 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, the White House said. "He never asked me to help him at all," O'Neill said in a televised interview on Friday. Evans, speaking on CNBC, said Lay had alerted him to media reports that Enron's credit rating was under review, and mentioned Enron's large presence in energy trading markets. "He said: 'I want you to know that Moody's (Investors Service) is currently reviewing it. If there's any kind of support you could give us we would welcome that.' But he certainly didn't ask for me to call them (Moody's) or anything like that," Evans said. He said Lay called on about Oct. 29, a day after the first of Lay's two calls to O'Neill. Later that day, Moody's cut the embattled energy trading giant's senior unsecured debt rating to "Baa2," two notches above "junk" status, and warned it may cut the rating again. Moody's attributed its action to a deterioration in Enron's financial flexibility resulting from big write-downs and equity charges from previously undisclosed partnership investments. Moody's said on Friday it was not aware of any attempts by government officials to contact it about Enron's ratings. "I have no knowledge of any contact by the Bush administration regarding Enron's ratings," said John Cline, a Moody's spokesman. Treasury spokeswoman Michele Davis said on Friday, Enron's president, Lawrence "Greg" Whalley, talked to Peter Fisher, Treasury's Under Secretary for Domestic Finance, about "six to eight" times in late October and early November, in which the Treasury official felt he was asked to intervene on behalf of the beleaguered energy firm. "Under Secretary Fisher inferred he was being asked to encourage the banks to extend credit. He made no such calls," she said. The other agency, Fitch, also said on Friday it was not contacted by the government. "We were not contacted by the Bush administration on Enron's ratings," said James Jockle, spokesman for Fitch. ALSO READ:
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