-Caveat Lector-
<A HREF="http://www.newswithviews.com/your_government14.htm";>New Page In The
Enron/Bush Fiasco 2</A>
http://www.newswithviews.com/your_government14.htm
Excerpt: "Many of Enron’s pre-bankruptcy 20,000 employees were barred by the
company from cashing in their 401(k) retirement plans, primarily consisting
of Enron stock, while key executives including Chairman Kenneth Lay, former
President and CEO Jeff Skilling, and CFO Andrew Fastow reportedly personally
made more than $1 billion selling Enron shares before the collapse".
�
ENRON EXPLODING - MAY CONNECT TO MONEY LAUNDERING
�
by Michael C. Ruppert
NewsWithViews.com
� � � FTW January 11, 2002 Even as Attorney General John Ashcroft today
recused himself from involvement in any Justice Department investigation into
the mushrooming Enron scandal, larger conflicts of interest potentially
more damaging to the Bush Administration -- are becoming increasingly
apparent. The conflicts involve the Chairman of the Securities and Exchange
Commission (SEC), Harvey Pitt and the head of Congress’ investigative arm,
the General Accounting Office (GAO), David Walker. Both agencies are charged
with investigating allegedly criminal behavior by the energy trading firm,
once the seventh largest company in America, which has now become the single
largest bankruptcy in world history and may soon become the largest financial
and political scandal in American history.
� � � � As new revelations of Enron’s unethical and insider-based
improprieties, apparently facilitated by more than $2 million in Bush
campaign donations, continue to flash across TV screens on a daily, sometimes
hourly, basis -- more serious allegations of criminal money-laundering
activities by a respected financial expert suggest that what is already known
about Enron’s behavior is but the barest tip of a razor sharp iceberg that
could sink the Bush presidency.
� � � � Spokespersons for Pitt and Walker both denied to FTW in interviews on
January 10 that there is any reason for the heads of these two agencies, long
regarded as the last and best protections against unchecked government
corruption, to recuse themselves from Enron investigations even though their
respective agencies have key statutory obligations to investigate the growing
scandal.
� � � � SEC Chairman Harvey Pitt, who took office in August of this year, after
most of the acts leading to the Enron collapse had been committed, was,
according to a Jan. 9, 2001 report by the Center for Public Integrity, a�
partner in the law firm of Fried, Frank, Harris, Shriver and Jacobson. In
that capacity he represented accounting firm Arthur Andersen, Enron’s
auditor, which disclosed in a press release dated yesterday, that “in recent
months individuals in the firm involved with the Enron engagement disposed of
a significant but undetermined number of electronic and paper documents and
correspondence related to the Enron engagement.”
� � � � This is significant because Andersen, one of the big five accounting
firms, had routinely signed off on falsified financial statements concealing
almost $20 billion in “off-balance-sheet” debt from stock and bond holders,
regulatory agencies and Enron employees. Many of Enron’s pre-bankruptcy
20,000 employees were barred by the company from cashing in their 401(k)
retirement plans, primarily consisting of Enron stock, while key executives
including Chairman Kenneth Lay, former President and CEO Jeff Skilling, and
CFO Andrew Fastow reportedly personally made more than $1 billion selling
Enron shares before the collapse.
� � � � SEC spokeswoman Christi Harlan told FTW, “The Chairman filed an
agreement that he would recuse himself from votes in any matters where he had
a conflict of interest. The investigation is being run by the enforcement
division and they keep him [Pitt] advised. � “Once the Commission launches an
investigation to go forward they just do their thing. There’s no requirement
for a vote until an action is recommended.”
� � � � Harlan stated that the enforcement division acts autonomously from any
input from the Chairman’s office and that the head of the division has
management oversight for any investigations. This appears to be a different
SEC practice from the long-respected partnership of SEC chairman Arthur
Levitt and enforcement director Richard Walker who were known as a team for
their single-minded and thorough non-partisan investigation of securities
violations in the 1980s and 90s. Walker was recruited by Deutschebank shortly
after the attacks of September 11th, 2001.
� � � � When asked if, in spite of his past representation of Andersen, Pitt
was confident that there would be no conflict of interest or any resultant
influence on the Enron probe, Harlan said, “Absolutely!”
� � � � Comptroller General of the United States David M. Walker, who heads the
GAO, has an even more obvious dilemma. Until November 9, 1998 he was a
partner, board member and global managing director at Andersen. As persistent
questions bubble about Andersen’s possible complicity in Enron’s criminal
falsification of financial statements Walker’s past relationship with
Andersen management raises a question about his own ability to investigate in
an unbiased fashion.
� � � � GAO spokesman Jeff Nelligan told FTW, “There is no link, no reason to
recuse at all. When Mr. Walker was at Arthur Andersen he had nothing to do
with Enron and he left well before all of this took place. He’s been gone for
three plus years now.”
� � � � The possibility that Walker had no knowledge of Enron activities (Enron
was Arthur Andersen’s second largest account paying Andersen some $52 million
last year) is questionable given his position as a director and board member.
And the statement that he was not at Andersen when Enron’s financial
statements were being falsified is flatly contradicted by a 2001 Enron
corporate filing with the SEC (form 8-K) which states that “Enron will
restate its financial statements from 1997 to 2000 and the first and second
quarters of 2001” to account for the fraudulent or grossly negligent
financial statements given to the SEC by Enron executives and certified by
Andersen.
� � � � Walker was on the board of Andersen for almost two years while Enron
was cooking the books and Andersen was signing off on it.
� � � � Many of the Andersen connections and possible improprieties have been
noted by Rep John Dingell (D), MI the ranking member of the House Energy and
Commerce Committee. On December 5, 2001 Dingell wrote to Pitt with a series
of detailed accounting questions that, when addressed in any one of eight
announced Enron investigations, cannot help but draw Andersen deeper into the
controversy.
� THE ENRON ADMINISTRATION
� � � � A January 3 letter from Vice President Dick Cheney (former CEO of oil
construction giant Halliburton) to California Congressman Henry Waxman
disclosed that between January and September of 2001 Enron executives,
including Lay, had met on six occasion with Cheney’s National Energy Policy
Development Group. The letter did not disclose details of the meetings but
did reveal that the last such meeting occurred on October 10th just six days
before Enron publicly announced the hidden debt, triggering the collapse of
its share price.
� � � � The October 10th meeting was approximately two weeks before Enron’s
Chair, Ken Lay made calls, as reported by the Associated Press on January 10,
to Treasury Secretary Paul O’Neil and Commerce Secretary Don Evans to discuss
the fallout from Enron’s pending collapse. Lay is a long-time personal friend
of George Herbert Walker Bush and has headed the company which has given over
$2 million in hard and soft campaign donations to George W. Bush and the
Republican Party since 1999.
� � � � A pending constitutional crisis loomed this summer as the GAO and
Waxman moved closer to suing the Vice President for refusing to let Congress
know what his energy task force was debating behind the same closed doors
that proved to be no barrier for Enron. Waxman’s letters, frequently copied
to Dingell and Walker, established a robust paper trail closing off avenues
of escape for the Administration in its repeated refusals to cooperate.
� � � � A January 10th letter from Waxman to Attorney General John Ashcroft
inquiring about his acceptance or more than $75,000 in campaign contributions
from Enron during his 2000 Senate campaign from Missouri was followed, within
hours, by Ashcroft’s announcement that he would have nothing to do with the
Justice Department’s investigation of Enron. However, Ashcroft has chosen the
less aggressive investigatory tactic of creating an in-house task force to
investigate Enron, rather than empanelling a grand jury capable of bringing
criminal charges.
� � � � As of press time the Department of Justice has not returned a call from
FTW asking why the less aggressive approach was chosen.
� � � � Other Bush figures connected to or having a financial stake in Enron
include Presidential advisor Karl Rove, U.S. Trade Representative Robert
Zoellick (formerly on Enron’s advisory council) and multi-millionaire
Secretary of the Army Thomas White who is a former Enron executive. Lawrence
Lindsay, the President’s economic advisor, formerly served on an Enron
advisory board. The newly elected Chairman of the Republican Party (RNC),
former Montana Governor Marc Racicot, is Enron’s former chief lobbyist with
the firm of Bracewell and Patterson. Racicot has indicated that he will not
sever his relationships with the firm and may continue to lobby as he leads
the Republican Party. As RNC he has unobstructed access to all key decisions
and votes made by Republican members of Congress.
� � � � Racicot is not subject to any governmental regulation or oversight
because he is not a federal employee.
� � � � Enron influence throughout the Bush Administration is nearly
ubiquitous. Several news stories have reported that CEO Lay, who had
supported Bush since his first run for Texas Governor has actually cast an
imperial thumbs up or thumbs down on cabinet-level appointees and key
regulatory officials including the head of the Federal Energy Regulatory
Commission which controls electrical rates for providers and oil, gas and
electricity movements throughout U.S. markets.
� CUTTING TO THE CHASE AND CLUES OF GREATER CRIMES
� � � � When asked about Justice’s decision to create a task force instead of
convening a grand jury, a former federal prosecutor with experience in
government corruption and energy matters told FTW, on condition of anonymity,
“I’m a little relieved by Ashcroft’s recusal but a task force is not a grand
jury and cannot charge criminal offenses. There is still one or more steps
removed from actual criminal charges. Given the evidence of criminal behavior
a task force, then, is less than a perfect solution. It’s not really any
solution.”
� � � � The former prosecutor added that Andersen’s destruction of records,
“is extraordinary. Andersen has known for many months that documents in their
possession might very well become the subject of civil and criminal
discovery. It was incumbent upon Andersen, at the moment that it knew that
these documents might become a part of litigation, to suspend their records
retention schedules. It was Andersen’s lawyers’ duty to advise Andersen to
err on the side of retention. That is considered ‘best practices’ for record
retention in virtually every major company. The decision makers who failed to
flag the documents at the proper time critically ill served the partnership.”
� � � � Catherine Austin Fitts, a former Assistant Secretary of Housing and
Urban Development (HUD) and a past Managing Director of the Wall Street
investment bank Dillon Read noted that Enron’s trading patterns, internet
money movements and [other activities] were consistent with a large-scale
money laundering operation.
� � � � She told FTW, “The fact that subpoenas were not issued months ago to
obtain all Enron Online off shore and onshore digital and paper trading
records and corresponding bank records defies logic, unless one presumes that
Enron's generous donations have bought them time for a shredding party that
protects all the beneficiaries of the real dollars that flowed through the
Enron money pipeline. If my years working on the clean up of BCCI and the S&L
crisis taught me one thing that I would communicate today to the
shareholders, retirees and employees who have been harmed, it is this: People
like the people on the board of Enron absolutely make money on insider
trading, bid rigging and fraud, and they do so with help from the highest
levels. They are superb at financial fraud because they are superb at
persuading people that they are respectable and legitimate. The money they
steal buys a lot of respectability.
� “Presume the worst form of fraud and criminal enterprise is plausible. If
not, then we are looking at gross negligence that, according to traditional
standards of fiduciary responsibility, in fact constitutes criminality and
fraud. Either way the specifics come out -- intentional fraud or gross
negligence -- the Enron board and management are criminals.� That is a fact.
The rule of law says that they should be held to the same standards of
accountability as the millions of people they and their institutions have
evicted from their homes, thrown into jail, denied health care and jobs or
had burnt at the proverbial stake. The rule of decency says that any American
who will continue to do business or associate with these individuals is part
of the culture of corruption that has neatly disconnected action from
accountability.
� “I will bet every last dollar I have that Enron was the largest laundromat
of stolen and tax evading dollars in American history and that the Department
of Justice's primary goal is cover-up --- to make sure that the money trail
disappears forever.”
� � � � Fitts is also well qualified to speak on issues of government
impropriety. She has recently successfully beaten a five-year Department of
Justice attempt to destroy her reputation after she had discovered
mismanagement of government funds and other improprieties at HUD in the mid
1990s. Her ordeal has recently resulted in statements completely exonerating
her and revealing that there was no legal basis for the government to have
begun the investigations of her company, Hamilton Securities, in the first
place. Emerging from the ordeal as a recognized innovative thinker on
economics, Fitts routinely consults with major economic-financial research
groups in the U.S. and Europe and has just participated in the New York Times
drug policy forum with Nobel Laureate, economist Milton Friedman.
� Mike Ruppert, 49, was born in Washington, D.C. An Honors graduate of UCLA
in Political Science, he comes from a family rooted in intelligence and the
military. As an undergraduate he interned for LA Police Chief Ed Davis and
worked at 5 LAPD Divisions before graduating and becoming an officer in 1973.�
During Mike's five plus years of active service, he received thirteen
citations and four commendations. Twice the CIA attempted to recruit Mike:
the first time just before he graduated and again after he was a highly
praised field officer and budding narcotics investigator. In 1977 he
discovered CIA bringing drugs into the U.S. through New Orleans in an
operation supervised by his then fiancée, a CIA agent. He began to speak out
and was forced out of LAPD in November 1978 after being shot at and
threatened. He has been speaking out publicly ever since. In 1981 he spoke
out about CIA and drugs inside the White House during a visit to his college
classmate Craig Fuller. Fuller later served as Chief of Staff to Vice
President Bush.
As a freelance writer in the 80s he was published in The Los Angeles Times.
Other stories include more than 30 on drug and alcohol dependence. Mike is a
past member of the Board of Directors of the National Council on Alcoholism
for the San Fernando Valley.
Michael Ruppert is the Publisher/Editor of “From The Wilderness,” a monthly
newsletter read in 27 countries and by two committees and 20 members of the
U.S. Congress. He may be reached at <A
HREF="mailto:[EMAIL PROTECTED]";>[EMAIL PROTECTED]</A>. The FTW web site is
located at <A HREF="http://www.copvcia.com/";>www.copvcia.com</A>.
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