Endrun

Endrun

Endrun

A summary of what's in the major U.S. newspapers.
Jan. 11 2002 4:48 AM

Endrun

The papers are stuffed with Enron news. The Los Angeles Times'lead says the company's accounting firm, Arthur Andersen, announced yesterday that some of its employees have destroyed a "significant" number of financial documents relating to Enron. Anderson says it may have shredded papers even after the SEC subpoenaed some Enron-related files in November. Whoops. USA Today's lead focuses on President Bush's order to review regulations to make sure that employees' 401(k) accounts won't be gutted if their company runs into trouble. The New York Timesand Washington Postlead with news that in October Enron's chairman, Kenneth Lay, phoned the secretary of treasury and the secretary of commerce to discuss his company's precarious situation. The Wall Street Journal's top business story is the document destruction. The first story in its worldwide newsbox is that the United States began transporting al-Qaida prisoners yesterday to the American base in Guantanamo, Cuba. The Pentagon has said it might sedate prisoners during the flight. Amnesty International complained that that would violate the Geneva Convention. Soon after the prisoner transport took off from Kandahar, Marines at the airport came under small arms fire. Nobody was hit, and nobody was caught.

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The papersreport that Commerce Secretary Donald Evans said that Lay asked him to put in a kind word for Enron with a credit-rating service (he declined). An Enron spokesperson denied that the request was made and said Lay was just being nice and letting the government know that Enron might go belly up and thus shock the financial markets. 

The NYT is careful to avoid implying that Lay was asking for a bailout. The WP, though, states in its subhead, "CEO sought intervention before bankruptcy." 

The White House's spokesman, Ari Fleischer, said the President was only made aware of Enron's calls yesterday morning. 

Fleischer added that the calls were SOP. "It's not uncommon for people who are in the community, business community or in the labor community, to talk to a cabinet secretary to tell them about the financial status of their business."

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The NYT reports "several congressmen demanded again today that the White House release records of all its contacts with Enron executives." The Times then quotes one of the congressional critics at length. Presumably the administration has articulated a reason why it won't release the records, but the paperdoesn't include it (or note the lack of a response, if that's the case).

The NYT asks a good question about the revelation that Enron's accounting firm recently destroyed some of company's documents: In order to avoid endless piles of paper, the company has a policy of destroying old and unneeded  records. Were these shreddings simply part of that policy? Enron says it's not sure yet.

Attorney General Ashcroft recused himself from the Justice Department's investigation of Enron because he received $50,000 in campaign donations from the company during his last run for Senate. The entire U.S. Attorney's office in Houston also recused itself from the investigation.

According to the NYT, the Enron fiasco has "reawakened Washington's now-familiar scandal machinery." The White House is desperately trying to distance itself from Enron. It won't be easy. Enron execs have been among the president's largest donors for years. Bush is also a long-time friend of the company's chairman. Still, nobody has suggested that the President did anything improper. 

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Five congressional committees have sent out subpoenas related to Enron.

"This is the perfect storm," said one Democratic congressional staffer. "It's the biggest bankruptcy in American corporate history, a bankruptcy where a small number of executives enriched themselves while thousands of employees were left with worthless stock. And in 2001, Enron is the most influential company in Washington. When you piece it all together, there are many questions that need to be answered."

The papers report that Israel destroyed about 50 Palestinian houses in retaliation for the attack earlier this week on one of its military outposts. Israel said the houses were used by snipers. The U.N. said 114 families were made homeless by the operation. 

Following yesterday's report in the NYT, the papers all note that President Bush warned Iran not to meddle in Afghanistan. Iran, meanwhile, denied anonymous Pentagon claims that it has harbored al-Qaida troops. 

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The NYT says that investigators are increasingly convinced that Richard Reid, the thwarted shoe bomber, was connected to al-Qaida.

Meanwhile, one French official claims he knows the origin of the shoe-bomb concept. "The CIA first trained fighters in how to make these bombs during the war with the Soviets in Afghanistan," he said.

The papers note that the Pentagon is sending about 100 U.S. troops to advise soldiers in the Philippines who are fighting a Muslim separatist group that apparently has some connection to al-Qaida. The Pentagon said the U.S. troops are going to support Filipino soldiers, but said there is the chance they could be involved in combat.

Oh Brother USAT's business section reports that on February 3, the Coen brothers, auteurs of such films as Miller's Crossing and Fargo, are set to release their latest masterpiece: a Super Bowl special H&R Block ad. In a press release, the Coens explain, "We have always been fascinated with the mysteries of the tax code and with the people who struggle so mightily to plumb its depths."