Enron not only firm to seek U.S. help, just less successful than others

Trolling federal deep pockets

Posted: Sunday, January 27, 2002

WASHINGTON -- Enron officials may have wound up empty-handed when they came calling on the Bush administration. But corporate pleas for government help are hardly novel. For years, distressed companies have been beating a well-worn path to Washington.

The government helped rescue the former Chrysler Corp. in 1980, motorcycle maker Harley Davidson in 1983 and a slew of failed savings and loans in the late 1980s and early 1990s.

Washington intervened in 1998 to prevent the collapse of Long-Term Capital Management, a Connecticut-based investment fund for wealthy investors. And last fall it provided $5 billion in grants and $10 billion in loan guarantees to help U.S. airlines recover from Sept. 11-related losses.

Even as Congress investigates the collapse of the Houston-based energy giant, top steel executives are busy trying to lay the groundwork for their own possible multibillion-dollar government aid package.

Democrats say contacts by former Enron CEO Kenneth Lay and other top company officials underscore a too-cozy relationship between the Bush administration and the energy industry.

But Democrats haven't complained about efforts by Thomas J. Usher, chairman of USX Corp., the parent of U.S. Steel, to get government help for his troubled industry.

Usher and other industry officials are seeking high tariffs to protect American steel from imports, an issue now before Bush. Usher also wants the government to assume the roughly $12 billion cost of health and pension benefits for retirees of three companies whose assets U.S. Steel is trying to buy.

The three companies -- Bethlehem Steel Corp., National Steel Corp. and Wheeling-Pittsburgh Corp., -- have filed for Chapter 11 bankruptcy protection, the same route taken by Enron.

The consolidation could turn U.S. Steel into ''a growth-oriented, world-competitive steel company with a global reach,'' Usher says.

The proposal has the tentative support of the United Steelworkers' union and is backed by many lawmakers from steel-producing states. The group pushing it has hired Joe Lockhart, press secretary for the Clinton White House, as a consultant.

''I don't think there's anything per se that is improper about any company looking to Washington for help,'' Lockhart said in an interview. ''The only question is, when help is provided, is it done on the merits, or is it done because of influence?''

''Every administration goes to bat for certain companies,'' said Paul Light, director of governmental studies at the Brookings Institution. He cited work done by the Clinton administration for the entertainment industry in helping to protect movie and music copyrights.

But Enron's efforts seemed heavy handed and misdirected while U.S. Steel at least ''is working the right branch of government,'' Light said. ''There wasn't much the Bush administration could have done for Enron. Enron should have been focusing its fire on Capitol Hill, looking for a bailout.''

Congressional panels opened investigations last week into the Enron collapse and the loss of thousands of jobs and billions of retirement and investment dollars. In all, some 11 House and Senate panels have jumped in.

Most of the inquiry so far has focused on the conduct by Enron officials and their accountants, Arthur Andersen LLP, in the shredding of thousands of pages of Enron and Andersen documents.

So far, little evidence has surfaced to suggest the Bush administration did anything to help Enron. That's surely a position Bush and his top aides are trying to foster.

''My Cabinet officers said: 'No help here,''' Bush said last week when asked about Enron's contacts with Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans. He complained that Enron employees and investors were kept in the dark about the company's financial woes -- and said his mother-in-law had even lost money on Enron stock.

Will U.S. steel companies find a welcome mat in Washington after Enron's chilly reception?

''There's a great deal of support for doing something, without being too specific at this point'' Senate Majority Leader Tom Daschle, D-S.D. said.

A $12 billion aid package? ''It's too early to come to a conclusion about a number,'' he said.



CONTACT US

  • Switchboard: 907-283-7551
  • Circulation and Delivery: 907-283-3584
  • Newsroom Fax: 907-283-3299
  • Business Fax: 907-283-3299
  • Accounts Receivable: 907-335-1257
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING

MORRIS ALASKA NEWS