In testimony last week before the Senate Commerce Committee, Army Secretary Thomas White stated that he has not been contacted by the Federal Energy Regulatory Commission (FERC) about his possible involvement in the manipulation of California’s deregulated energy market while he headed Enron Energy Services. He also confirmed that he has not been contacted by the Securities and Exchange Commission (SEC) about whether he profited from the sale of Enron stock because of insider information.
Given these statements by Mr. White, it does not appear that these regulatory agencies, both headed by appointees of President Bush, are serious about determining whether the Army secretary committed any wrongdoing during his tenure at Enron. We, as many others, are concerned about the diligence with which these agencies are pursuing those corporate leaders whose actions have been called into question during the evolving corporate crime wave.
If the SEC launches an insider trading investigation of Martha Stewart based on the fact that she made one or two phone calls to an insider at ImClone and then sold her 4,000 shares of stock, it seems obvious that if Mr. White had 77 conversations with Enron employees and sold $12 million in stock prior to the company’s collapse, someone should look into it.
In addition, documents have been made public that raise serious questions about whether Enron Energy Services, the Enron unit headed by White between 1998 and 2001, was involved in schemes, with nicknames such as “Fat Boy” and “Get Shorty,” to manipulate California’s deregulated energy markets during an electricity crisis that cost consumers and the state treasury billions of dollars and drove the state’s largest electricity utility into bankruptcy. FERC records show that despite White’s testimony that his Enron division was a retail seller of electricity, Enron Energy Services was registered as a wholesale energy trader and did conduct trades with other Enron units that served to drive up prices.
President Bush should call for, and Attorney General John Ashcroft should appoint, a special counsel to investigate whether White participated in or knew about possibly illegal market manipulation and whether he benefited from stock sales based on insider knowledge or committed any other crimes.
Joan Claybrook is director of Public Citizen.