White House discloses review on Enron's impact on economy

Wednesday, January 16, 2002

AP White House CorrespondentWASHINGTON (AP) -- White House economic adviser Larry Lindsey studied the economic impact of the potential collapse of Enron Corp. as the Texas-based energy firm struggled for its financial life, the Bush administration disclosed Wednesday.

Lindsey served on an Enron board and received $50,000 from the company in 2000.

The disclosure by White House press secretary Ari Fleischer came amid growing questions about the relationship between Enron and the Bush administration. President Bush is a longtime friend of Enron Chairman Kenneth Lay and Enron has been a major contributor to his campaigns.

Two members of Bush's Cabinet said last week they were contacted by Lay about Enron's financial troubles. Lay told Cabinet Secretary Donald Evans he would appreciate any help the administration could give.

Evans told White House chief of staff Andrew Card about the call. Budget director Mitch Daniels said Lay called him in October to discuss the prospects for Bush's economic stimulus bill, which would help Enron.

The administration says it took no action on Lay's behalf.

Fleischer refused to tell reporters Wednesday whether the White House is trying to trace every Enron call to administration officials. He said, however, the administration had disclosed instances in which Enron sought help.

In his daily briefing, Fleischer revealed that Bush's economic team studied the Enron situation amid reports that the company was failing. Lindsey has said he had no contact with Enron officials about the company's financial woes.

"On the broader (question) of whether Enron's collapse has broader implications for the economy, I think if the administration didn't look at that you would be asking why didn't the administration look at that. Of course they should look at that, and they did," Fleischer said, adding that he did not know exactly when the study was done.

Peter R. Fisher, the undersecretary of Treasury in charge of financial markets who also was contacted by Enron, informed Treasury Secretary Paul O'Neill that did didn't think the company's collapse would hurt U.S. and global markets. O'Neill also was contacted by Lay last year.

Lindsey's team came to the same conclusion as Fisher, Fleischer said. He said he did not know if Lindsey and Fisher talked about the case.

Fleischer said he also didn't know whether Bush was told about the study or its results.

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