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Bush defends handling of Enron, promises changes

US President George W Bush on Tuesday defended the administration's handling of Enron Corp's dramatic collapse and promised government action to better protect investors like his mother-in-law, who lost thousands on the company's stock.

"Our administration has done the exact right thing," the president said of contacts between the White House and Enron, Bush's biggest political patron, before the Houston-based trading company declared bankruptcy on December 2, the biggest filing of its kind in US history.

White House officials say they did nothing to help Enron, which ranked as Bush's biggest financial backer heading into the 2000 presidential election, after concluding its collapse would have little impact on energy markets and the economy.

Bush expressed "outrage" at the treatment of Enron employees and shareholders who were unaware of the extent of the firm's financial problems, and disclosed for the first time that the first lady's mother, Jenna Welch, bought stock in the company. "It's not worth anything" now, Bush said.

Welch bought 200 shares at $40.90 for an investment of $8,180 on September 21, 1999. She sold on Decemebr 4, at 42 cents a share, for $84, two days after Enron's bankruptcy filing, the White House said.

The president also urged anyone with "an accusation about some wrongdoing just let me know."

"A lot of shareholders didn't know all the facts and that's wrong," Bush told reporters traveling with him in West Virginia. "And so our government must do something about it, must make sure that the accounting practices that have been going on for quite a while are addressed, make sure there's full disclosure and the corporate (governance) issues are wide open for everybody to understand."

Bush's team has close ties to Enron and its chairman, Kenneth Lay. The company made some $623,000 in contributions to Bush's campaigns since 1993.

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 called Treasury Undersecretary Peter Fisher in late October and early November seeking help for the beleaguered energy-trading giant.

Bush said his Cabinet's response to Enron was: "No help here." The president said he spoke to O'Neill and Evans about their contacts with Enron, but did not say when that occurred.

The White House has sought to distance itself from the widening scandal surrounding Enron.

Thousands of employees lost their jobs and pensions and life savings in the former Wall Street darling's downfall, which began when the company acknowledged several hundred million dollars of previously undisclosed liabilities.

Several congressional committees, the Justice Department and the Securities and Exchange Commission are investigating the company's demise.

In response, the head of the SEC has proposed a tougher governing body for accountants. Commission Chairman Harvey Pitt said there would be no role in it for the American Institute of Certified Public Accountants, the trade group that now regulates the profession on its own, in conducting reviews and disciplining accounting firms.

Bush brushed aside suggestions that the scandal would prove a distraction as Congress takes up his top Budget priorities -- the war on terrorism and the economy.

"I believe Congress knows what it needs to do. It needs to fund the war. It needs to fund homeland security. It needs to work on ways to create jobs," the president said.

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