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CounterPunch
January
31, 2003
Thomas White's
$13 Million Deal
SEC Should Probe
Sale of Army Secretary's Mansion
by JASON LEOPOLD
A lifelong Army veteran with no corporate experience
takes a job at an upstart energy company, earns tens of millions
of dollars in questionable stock sales before the company goes
belly up and lands a powerful position working in the administration
of the President of the United States.
Such is the story of Army Secretary Thomas
White, the former vice chairman of Enron, who proved to the nation
Friday that his tenure at the disgraced energy company paid off
well when he sold his Florida mansion for a staggering $13.9
million. Meanwhile, thousands of Enron investors lost billions
of dollars and employees of the company lost their life savings
when the company imploded a year ago in a wave of accounting
scandals.
But White, like other Enron executives,
has repeatedly denied having any knowledge of the company's financial
machinations, despite the fact that the unit he ran, Enron Energy
Services, inflated the value of its energy contracts--according
to dozens of former employees--and has been directly linked to
the California energy crisis. Had the true value of EES' contracts
been known to investors, White would not be the wealthy man that
he is today and might very well be living in a one-bedroom apartment
in Washington, D.C.
Now White is getting ready to lead hundreds
of thousands of the country's soldiers into a war with Iraq.
This is a man that clearly should not be managing a multibillion
military budget. Nor should he be serving in the administration
of the President. Even though White testified about his work
at Enron before a senate committee hearing last July, there are
numerous questions about his sale of Enron stock shortly before
the company collapsed that have yet to be answered. The sale
of his home--where antiwar activists have recently staged protests--will
only fuel speculation that White did indeed use inside information
to unload the bulk of his Enron stock before the company filed
what was then the largest bankruptcy in U.S. history. At best,
the Securities and Exchange Commission should revisit that issue.
White bought the beachfront property
in 2000 for $6.5 million. He tore down an adjacent 2,000 square-foot
home and built a 15,145 square-foot mansion and invested $10.5
million of his own money into the construction, which was completed
last month.
In May of 2001, White was tapped by President
Bush to serve as Secretary of the Army. He sold some of his Enron
shares, but not all of it as required by law. In October 2001,
while the nation was still reeling from the September 11 terrorist
attacks and ground troops were dismantling the Taliban government
in Afghanistan, White made dozens of phone calls to his former
Enron colleagues. He testified before the Senate committee that
he was "concerned" about his old friends, but after
those phone calls White unloaded the rest of his stock. Between
May and October of 2001, White sold 405,710 shares for $14 million.
Meanwhile, Enron's lower-level employees were restricted from
selling their own shares. It's common knowledge that White financed
his Naples home with proceeds from the sale of Enron stock. But
if White was concerned that he wouldn't be able to complete his
mansion and needed to know whether he should dump his shares
of Enron than that is clearly a violation of the Securities and
Exchange Act, which is criminal.
Senate Democrats must reopen this issue
and demand that White explain whether the construction of his
mansion coincided with his sale of Enron stock and whether the
proceeds from the October sale helped to fund the project.
President Bush said in his State of the
Union speech Tuesday that he would be tough on the corporate
executives who commit white-collar crimes. The President should
start with his own administration, particularly Secretary White.
Bush may have the only presidential administration
in history that has been accused of misdeeds while working in
the corporate sector and have treated the most vicious corporate
scandals with a mere slap on the wrist. But that's what you get
when you have a bunch of ex-CEO's running the country.
Jason Leopold
can be reached at: jasonleopold@hotmail.com
Yesterday's
Features
Muqtedar Khan
Heavy
Rhetoric, Wistful Thinking and Hydrogen Cars: a response to Bush's
State of the Union
William Hughes
An
Open Letter to France:
Justice is On Your Side
David Wilson
Meet
the Gloucester Weapons Inspectors: the Protest at the Fairford
Stealth Bomber Base
Anthony Gancarski
Free
Press? "There's No Damn Thing"
Josh Frank
Who Would Jesus Bomb?: 10 Reasons to Oppose War on Iraq
Abu Spinoza
Iraq: Web Resources
Dr. Gerry Lower
Class Warfare Against the Poor
Natalie Johnson Lee
Green
Party Response to Bush's State of the Union
Russell Mokhiber and
Robert Weissman
Stealing Money from Kids
Maria Tomchick
Bush's Smallpox Boondoggle
Paul di Rooij
War: It's Already Started
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