Cabinet members didn't tell president about Enron calls

WASHINGTON -- Two Bush cabinet members said Sunday they never considered intervening in Enron's spiral toward bankruptcy, nor informed President Bush of requests for help from the fallen energy giant.

"Companies come and go. It's ... part of the genius of capitalism," said Treasury Secretary Paul O'Neill, when asked if he was surprised at the sudden collapse of Enron. The company's failure has left the one-time energy trading behemoth's stock virtually worthless and thousands of workers' pension funds in disarray.

Last fall, a month before Enron declared bankruptcy, O'Neill received two telephone calls from Enron's chief executive, Kenneth Lay. Lay also called Commerce Secretary Don Evans at the time, reaching out for help to harness the energy company's financial slide.

O'Neill's view of Enron's collapse was characterized as "cold-blooded" and reflective of "the 18th century, but not the 21st century" by Sen. Joseph Lieberman, D-Conn., whose Committee on Governmental Affairs is leading Senate investigations into the Enron debacle.

Serious questions

Separately, Lieberman said that an internal Arthur Andersen LLP memo on Oct. 12 directing that all but basic Enron working papers be destroyed "raises very serious questions about whether obstruction of justice occurred."

Andersen this past week revealed that Enron documents had been destroyed. But Lieberman said most troubling was that the memo, disclosed in a report in Time magazine, "was specifically about Enron" and not a general directive to clean out files. Congressional investigators want to find out why Andersen did not raise flags about Enron's business practices.

Andersen, in a statement Sunday, acknowledged "there were internal communications that raise questions" about the handling of Enron documents and that the company "is committed to getting the facts and taking appropriate actions in the Enron matter."

The statement said it would be inappropriate to comment further on the Time magazine report.

Lieberman and Sen. John McCain, R-Ariz., said on CBS' "Face the Nation" the administration may have been right in not intervening to try to save Enron.

But they said the government's response -- as well as earlier federal monitoring of its business practices -- may have been hampered by the energy company's freewheeling flow of campaign contributions.

"We're all tainted by the millions and millions of dollars that were contributed by Enron executives, which ... creates the appearance of impropriety," said McCain, a longtime voice for campaign finance reform.

McCain acknowledged getting $9,500 in Enron contributions in two Senate campaigns.