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Bush Defends Administration Conduct in Enron Hearings

By Mike Allen

Just before a new round of congressional hearings into the collapse of Enron Corp., President Bush Tuesday portrayed his own family as a victim of the energy company’s failure and said his administration had handled its contacts with desperate Enron executives exactly right.

“What I’m outraged about is that shareholders and employees didn’t know all the facts about Enron,” Bush said. “My own mother-in-law bought stock last summer, and it’s not worth anything now. If she had known all the facts, I don’t know what decision would have been made, but she didn’t know all the facts. And a lot of shareholders didn’t know all the facts. And that’s wrong.”

Bush’s comments, made while he toured a Caterpillar dealership here, marked the first time he has directly taken on the Enron debacle since it began dominating the news nearly two weeks ago. With daily disclosures about White House ties to the Texas energy giant threatening to drown out Bush’s agenda, the president offered a vigorous defense of his administration’s conduct, and even tried to align himself with the thousands of Enron shareholders left with worthless stock.

The White House said the first lady’s mother, Jenna Welch, bought 200 shares of Enron at $40.90 a share on Sept. 21, 1999, and sold them all for 42 cents a share on Dec. 4, two days after the bankruptcy filing. That was a loss of $8,096.

Bush also made a preemptive strike against the upcoming Capitol Hill investigations of Enron, several of which are likely to explore his administration’s treatment of major donors, including Enron executives. While Bush acknowledged that Congress has a right to investigate the collapse of the company, he warned investigators against meddling. “The Congress also needs to stay focused on the American people,” Bush said. “We’re running a war. We’ve got to make sure our homeland is secure, and we’ve got to make sure people can find work. We’ll take care of our business.”

The new wave of hearings will begin on Thursday and will likely last months. “I’m confident that all the facts will come out on Enron,” Bush said. “And I’m also confident that if Congress has the right attitude, we can get a lot done.”

White House officials, who had said that the public was paying little attention to the matter, were stunned last week by a CBS News poll in which 63 percent of the respondents said they thought Bush officials were not disclosing everything they knew about the administration’s relationship with Enron.

The White House disclosed on Jan. 10 that Enron’s chairman and chief executive, Kenneth Lay, had contacted Treasury Secretary Paul O’Neill and Commerce Secretary Donald Evans shortly before he disclosed massive losses that set off a death spiral for the stock price of Enron, which in December filed the largest bankruptcy in U.S. history.

Tuesday, Bush was asked if he was worried that the Enron case is creating a negative perception about him or his policies. “Our administration has done the exact right thing,” he said. “There has been a couple of contacts with people in my Cabinet. And my Cabinet officers said: No help here.”

Bush pointed to an investigation of the handling of Enron employees’ pension funds that was begun by the Labor Department “before anybody started paying attention to Enron.”