How Enron Helped the Secretary of the Army Build an $8 Million Fortress

Army Secretary Thomas White just put the finishing touches on a $4.6 million mansion in Naples, Florida, using funds some lawmakers have said White, the former vice chairman of Enron, obtained by selling his stock in the company using inside information. But Democrats in both houses said this week they have given up on their investigation of whether White knew about or was involved in Enron’s manipulation of California’s electricity market or if he sold his stock in the company using information that was not available to the public.

“We just don’t have the power to put Secretary White under anymore scrutiny,” said a high-ranking aide to Congressman Henry Waxman, a California Democrat who has been White’s most vocal critic. “It seems that Enron has become old news. We haven’t turned up any evidence that we can use against Secretary White from our investigations. It’s over.”

The aide said Waxman sent a letter to White Aug. 6 questioning the Army Secretary about his sale of Enron stock but White never responded. Waxman never pursued White for a response. Senator Barbara Boxer, D-California, who called for White’s resignation after he testified before a Senate committee investigating White’s role at Enron, has turned her attention to other “pressing issues,” an aide to Boxer said, refusing to elaborate.

White is the highest ranking Bush administration appointee who worked at Enron. He held 405,710 shares of Enron stock, more than any other member of the Bush administration did.

During the past three months, federal investigators probing the collapse of Enron Corporation have frozen the personal bank accounts of some of Enron’s former executives, alleging the money–including bonuses and stock options–belongs to the company’s shareholders because it was obtained through a series of fraudulent transactions. Federal investigators are paying close attention to any former Enron executive spending large sums of cash. Even Kenneth Lay, Enron’s former chairman, and Jeffrey Skilling, Enron’s former president; are laying low and are being cautious not to draw too much attention to themselves by going on any sort of spending spree, according to people close to Skilling and Lay.

But White, who sold his stock in Enron for more than $20 million is virtually immune to any of the criticism dogging other former executives of the one-time high-flying energy company.

White built the $4 million mansion on a $4.6 million piece of property in Old Naples, according to a report in Sunday’s Naples Daily News.

White spent 10 years at Enron. He earned his entire fortune from his tenure at the company and funded.

White received a certificate of occupancy from the city of Naples on Dec. 12. A certificate of occupancy is needed from a city building official before the owner is allowed to move into the mansion, the paper reported.

The two-story, 15,145-square-foot home at 2 Gulf Shore Blvd. S. attracted local attention earlier this year because White wanted to build a 6-foot, 9-inch wall, a 6-foot, 11-inch gate and gateposts that would be 10 feet, 1 inch tall, the Naples Daily News reported.

The city’s code allows walls to be 3 feet tall and gates and gateposts 6 feet tall. Some Naples City Council members refused to give White permission to violate the code because they felt the property would look like a fortress, according to the Naples Daily News report

Architectural Land Design changed the numbers to a 3-foot, 11-inch wall with 18 inches of wrought iron on top, a 7-foot gate and gateposts that would be 7 feet, 6 inches tall, the Naples Daily News said.

White sold some of the Enron stock in October 2001 after he spoke by telephone to Enron executives when the company started showing signs of unraveling. Some lawmakers have alleged that White received a tip about the company’s accounting scandals and quickly sold his stock to avoid huge multimillion-dollar losses. But the allegations are still unproven.

White’s telephone calls to former Enron executives, however, should be enough for federal investigators to probe White for possible insider trading violations. The government is reportedly trying to build an insider trading case against Lay, who also sold his stock in Enron following conversations Lay had with other company executives prior to Enron’s collapse, according to the New York Times.

White, meanwhile, is preparing to lead tens of thousands of our nation’s soldiers into a war with Iraq. That too should be investigated.

JASON LEOPOLD can be reached at: jasonleopold@hotmail.com

 

JASON LEOPOLD is the former Los Angeles bureau chief of Dow Jones Newswires where he spent two years covering the energy crisis and the Enron bankruptcy. He just finished writing a book about the crisis, due out in December through Rowman & Littlefield. He can be reached at: jasonleopold@hotmail.com

[i]
[i]
[CDATA[ $('input[type="radio"]
[CDATA[ $('input[type="radio"]
[CDATA[ $('input[type="radio"]
[CDATA[ $('input[type="radio"]