Enronepotism

A summary of what's in the major U.S. newspapers.
Feb. 2 2002 8:12 AM

Enronepotism

The Washington Post and the Los Angeles Times lead with the Department of Justice's request that the White House preserve communications relating to Enron that might aid the DOJ's investigation of the company. The New York Times fronts this story and leads with a sneak peek at the Bush administration's plans for increased military spending, to be unveiled officially on Monday. The proposal will call for a $120 billion increase in defense spending over the next five years, with the biggest bump to come from purchasing weapons and other military supplies.

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Letters to the White House and the Commerce, Energy, and Treasury Departments request that all materials relating to Enron dating back as far as January 1999 be preserved. All thepapers note that this dates back to the Clinton administration, but only the NYT notes that this fact was a major part of the Bushies' spin. The NYT sees the request as a sign that the investigation is broadening significantly to include Enron's political maneuvering in D.C. and that administration must now justify sending the documents to DOJ when they refused to send them to the General Accounting Office. The WP and the LAT note, however, that nothing in the DOJ letter requests that any documents be handed over. Only the WP reminds readers that until now the administration had made no "formal effort" to preserve Enron-related documents.

President Bush proposed a 12 percent increase in 2002 defense spending during his State of the Union address, and the NYT says that on Monday he will propose an increase of around 30 percent through 2007. The proposal is not quite Reagan-sized—it's "slightly smaller" than the 1981-1985 buildup, the largest peacetime increase in the country's history. Democrats cited in the story say that Bush is likely to get the most of the increases he asks for, but lawmakers in both parties are balking at his proposal to create a $10 billion "contingency fund" that the president could spend on military operations without congressional approval.

Another NYT front-pager finds traces of nepotism in the dealings of former Enron CEO Kenneth Lay. Lay and his son Mark invested in a number of tech companies that Enron later signed deals with and invested in. Enron also acquired a company co-owned by Mark Lay that was under a criminal investigation for embezzlement and gave him an executive position with a six-figure salary at Enron as part of the deal. Meanwhile, a travel agency co-owned by papa Lay's sister received over $10 million in bookings—more than half its total revenue—from a certain Houston-based energy concern.

The WP notes Bush's assurance yesterday to the king of Jordan that the United States will not sever ties with Yasser Arafat. While Bush also said that the United States would not renew its efforts to broker a peace settlement in the region until Arafat takes concrete steps to fight terrorism, the story says that Bush's gesture is likely to ease tension between the United States and its Arab allies. It also mentions an interview with the Israeli prime minister, published yesterday, urging the United States to "boycott" Arafat, a petition Prime Minister Sharon is expected to repeat when he visits the White House this week. The NYT reefers a story stating that Sharon met covertly with three emissaries of Arafat this week—his first meeting with any Palestinian official since he took office last year.

The NYT and LAT both front stories about growing dissent among reservists in the Israeli army. What one LAT source calls an "elite group" of over 100 reservists have signed ads in Israeli newspapers saying that they will no longer serve to protect settlements in the West Bank and Gaza. The army's chief of staff called the statements "an incitement to rebellion" and recommended that the protesters be suspended from duty.

All the papers note the conflicting reports on the status of kidnapped Wall Street Journal reporter Daniel Pearl. A phone call to the U.S. Embassy in Islamabad demanded a $2 million ransom for his release, while an e-mail sent to the offices of CNN and Fox News claimed he was already dead. All the papers quote the ominous e-mail: "We have killed Mr Danny Now Mr. bush can find his body in the grave yards of Karachi we have thrown him there." [sic] The late-closing LAT noted that so far Pakistani police have searched around 300 of Karachi's graveyards and found nothing.

The NYT goes inside with a bizarre twist on the kidnapping: NBC has pulled promos for next week's episode of The West Wing, written in December, that highlighted a plot line about a kidnapped American journalist in the Congo.

Back to Ken Lay and son for a beat: The epilogue to the NYT's Enron story offers compelling proof that even God had some cronies at Enron. After leaving Enron and paying a $315,000 settlement in a civil case related to the embezzlement investigation, Mark Lay has decided to enroll in a Baptist seminary in Texas. "I think God impressed on me that's where he wanted me," he said.

Andrew Nieland is a writer in New York.

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