For Immediate Release
Office of the Press Secretary
January 10, 2002
Press Briefing by Ari Fleischer
The James S. Brady Briefing Room
Listen to the Briefing
12:20 P.M. EST
- President's schedule
- Enron/Secretaries O'Neill and Evans
- Help for workers who lost savings
- Congressional investigation
- Prevention of future such bankruptcies
- Investment of Social Security funds
- India/Home Minister visit
- China
- Greece/Prime Minister visit
- Call for a budget summit
MR. FLEISCHER: Good afternoon. Let me give
you a report on the President's day. The President this
morning spoke to Egyptian President Mubarak. The President
called President Mubarak to discuss the situation in the Middle East
and the campaign against terrorism. The President said that
he will continue General Zinni's mission to help the parties achieve a
cease-fire and to implement the Tenet-Mitchell
agreement. And the President also, however, registered his
deep concern about the arms shipment intercepted last week.
Both leaders agreed to continue their efforts to help bring peace
to the Middle East. They also pledged to cooperate closely
to eradicate terrorism. The President expressed his
appreciation for Egypt's help in this regard. And the
leaders noted their satisfaction that the U.S. will speed up economic
assistance the Egypt in order to help Egypt address its economic
situation.
The President also did a drop-by of the National Security Advisor's
meeting with the Home Minister of India. The drop-by was
designed to underscore the United States commitment to strong bilateral
relations with India and to work together to combat terrorism in all
its manifestations.
The President again expressed his outrage over the recent terrorist
attacks in New Delhi and Srinagar. The President told
Minister Advani that he has urged President Musharraf to take
appropriate steps against extremists operating in and from
Pakistan. The President also stressed the importance of
solving the India-Pakistan differences through diplomatic and political
means.
The President will be shortly departing to sign into law the
Defense Appropriations measure at the Pentagon. This measure
will give the Pentagon what it needs to fight the war on terrorism
now. It provides more than $26 billion of spending above
last year's level. It also provides for a much needed, very
important pay increase for military personnel, as well as assistance to
help military personnel receive better housing wherever they are
based.
The President later today will meet with the Prime Minister of
Greece to also talk about the war on terrorism, as well as the upcoming
Olympics in Greece.
And one final note I want to report to you on. Secretary
Chao was joined this morning by Secretary Evans of Commerce, and
Secretary Mineta of the Department of Transportation at the Department
of Labor's work force recovery conference which took place at the
Washington, D.C. Convention Center. Thousands of people
attended the conference this morning to receive information from the
federal government to help them at this day-long job and skills
fair. More than 200 representatives from the government
agencies and the private sector were there. And the
conference was planned to help people in the Washington, D.C.
metropolitan area who have lost jobs as a result of the aftermath of
the September 11th attacks. So the President is very pleased to see
his administration is bringing help to people who need it.
Q Ari, when you spoke this morning to
Secretary O'Neill and Secretary Evans, was it your impression that when
Mr. Lay called them last fall, he was asking for a bailout, in the
style that was given to Long Term Capital Management, organized by the
Federal Reserve, but supplied by private sector?
MR. FLEISCHER: I can't speak for anybody other than
Secretary Evans and O'Neill in this case, in terms of what they told
me. And what was told to me this morning was, Secretary
O'Neill said that he had been contacted by Mr. Lay in the fall of last
year, and Mr. Lay brought to the Secretary's attention his concerns
about whether or not Enron would be able to meet its
obligations. And he expressed his concern about the
experience that Long Term Capital went through, when Long Term Capital
went bankrupt.
Secretary O'Neill then contacted Under Secretary Fisher to ask him
to evaluate whether the comparison was apt. And the
Department of Treasury was advised that it was not apt, as a result of
Secretary Fisher's review.
Q It sounds like he was asking for a
bailout.
MR. FLEISCHER: I don't characterize it one way or
another. I just report to you what was said. I
leave the characterization to others. That was the
conversation with Secretary O'Neill.
Q Ari, did that conversation with Secretary
O'Neill happen before October 16th of last year, when Enron announced a
very surprising charge against its earnings, that they had $500 million
of losses that had been previously unreported? Did the
Secretary know that before investors and workers did?
MR. FLEISCHER: The Secretary told me the date was
October. He did not know the exact date. But I'm
sure Treasury would be more than happy to provide it.
Q Would he have had an obligation, if he
knew that information, to pass it on to investors and workers?
MR. FLEISCHER: Terry, again -- Terry, on all the
questions I answered this morning, what you asked me about -- didn't
the administration have any contacts where they were given information
by Enron about their financial condition -- I've given you everything I
have on that topic from the Secretaries. I'm sure they'll be
happy to go into that with you.
Q One more. On the criminal
investigation that is underway, John Ashcroft received $25,000 -- his
own PAC received $25,000. Is that a conflict of
interest? Can he independently investigate -- manage the
investigation of this situation, given that his campaign was a personal
financial benefactor?
MR. FLEISCHER: The President has full faith and
confidence in the professional prosecutors at the Department of Justice
and the Attorney General to do what is right in pursuing this
investigation, which must be pursued, to get to the bottom of all of
the allegations of criminal wrongdoing by Enron. The
Department of Justice has conflict of interest rules, and if there is
anything that the Attorney General was aware of that would trigger it,
the President knows he will take appropriate action.
Q Did Mr. Lay call Mr. Evans the same day as
he called Secretary O'Neill?
MR. FLEISCHER: Well, since I don't have the day that he
called Secretary O'Neill, I can't answer that. It was a
similar time frame, yes. They both recall it was October.
Q Did either of the two of them pass along
that information to the President in that same time frame?
MR. FLEISCHER: They did not.
Q They did not? So they made this
decision on their own. without withholding anyone?
MR. FLEISCHER: That's correct.
Q How about anyone at the White House, like
senior officials, any other -- it was all in the Commerce and Treasury
Department?
MR. FLEISCHER: There's nobody here that I'm aware of
that anybody's brought to my attention.
Q Given the ramifications of this from an
economic and regulatory standpoint, and also potentially from a
political standpoint, because of the generosity of this company and its
executives not only to the President and Republicans, but to Democrats
as well, you understand the political ramifications of this as
well. And people have been asking here for weeks about
contacts between the company and the President and the
administration. Why are we just hearing about these
conversations that took place months ago, now?
MR. FLEISCHER: Every question you've asked me before or
asked the President was about the President. I speak for the
President. This morning, Secretary O'Neill, Secretary Evans
made the information known, and we immediately shared it and provided
it to you.
What's important here, in the President's opinion, is that this
needs to be investigated from a criminal point of view to determine
what went wrong with Enron, as well as from the Department of Labor, to
protect the pensioners who worked for Enron, the employees of
Enron. But in addition, it's very important to look at
policies to make certain this doesn't happen to anybody
else. And that's what the President announced this morning.
Q But, Ari, you also speak for the
government. You come here some days and tell us about the
Secretary of Labor going to speak to a skills
conference. You sometimes update us on things on the war on
terrorism, or Secretary O'Neill's actions on the financial front on the
war on terrorism.
Nobody at that moment in your office or the economic advisors sent
out a government-wide advisory saying, hey, this is coming up a
lot? Anybody talk to Enron? Anyone talk to Ken
Lay, anyone having anything to do with this, and to get a
chronology of contacts with the government?
MR. FLEISCHER: That's correct. There has been
no such effort like that.
Q When did the President learn that the two
Secretaries had talked to Enron?
MR. FLEISCHER: This morning.
Q They did not tell him until this morning?
MR. FLEISCHER: That's correct. I think it
should surprise no one that people in the administration receive phone
calls from people who are either in business or in
unions. It happens every day. It's not uncommon
for people to receive phone calls from business leaders across the
country, from union officials across the country. That
happens as a common occurrence, is always taking place.
Q But, Ari, nobody is looking at this in a
vacuum. And you understand that. Everybody
understands that Don Evans ran the Bush campaign, and now he's
Secretary of Commerce. There are close ties with this
administration and Ken Lay. So I guess the question to
follow on John's point is, why didn't the alarm bells go off sooner to
give us as much as -- give the American people as much as the
administration had about contacts with regard to a huge financial
collapse?
MR. FLEISCHER: As soon as you asked the question we gave
you the answer. As soon as I had the information, you got it
today. I think your question should be just the opposite --
provide it to you today.
Q Are you saying there were no questions
posed about contacts in the past?
MR. FLEISCHER: Not to me about the
administration. I was asked a question yesterday morning
about the White House, and I answered it.
Q Ari, first of all, do we know if any other
Cabinet Secretaries have had contact with Ken Lay or representatives of
Enron? Have you now gone through all of the rest of the
Cabinet to --
MR. FLEISCHER: As I indicated this morning, I cannot
speak definitively for each and every entity or soul in this
government. I'm sure you're free to ask, you're free to find
out. But I want to remind you that communication is not a
wrongdoing. What took place here was, they received phone
calls and took no action. The charge has been, did the
government take any action. And the answer from these two
officials is no. And I think if you were going to go down this road, I
think it's also fair to say, who in the entire town had any contact
with Enron or phone calls.
Q When did the President learn of the
financial straits of Enron, and who told the President that?
MR. FLEISCHER: He learned last fall, and I couldn't tell
you if he learned as a result of media accounts when everybody wrote
that Enron had gone bankrupt, or through any other
mechanism. He learned last fall.
Q But Enron didn't go bankrupt until
December. And we're talking about telephone calls in
mid-October.
MR. FLEISCHER: That's when the President
learned. Last fall.
Q So nobody sat down with the President at
any point and -- Ken Lay felt the need to warn the Treasury Secretary
and warn the Commerce Department, but nobody warned the President that
the biggest energy trading company, the biggest bankruptcy was on the
verge of happening, and nobody told the President?
MR. FLEISCHER: Bankruptcies happen in our
economy. And 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, and it ends there. That is not uncommon.
Q But I'm trying to get a yes or no --
MR. FLEISCHER: I think it's just curious, because your
questions always seem to be, up until today --
Q Are you saying that nobody told the
President?
MR. FLEISCHER: In the case of those two, that's what I
said, and I told you the President learned about it --
Q And how about nobody else?
MR. FLEISCHER: The President learned about it last
fall. I indicated to you I don't know the exact mechanism of
how the President learned about the bankruptcy --
Q Why did he suddenly take note of it?
MR. FLEISCHER: -- but he learned about it last fall.
Q As far as the Home Minister of India's
visit to the White House is concerned, did the President give him any
commitment -- like he said yesterday that he needs a clear promise from
Pakistan General Musharraf as far as terrorism is concerned? Because
the Home Minister was sending a message that if Pakistan does not apply
or take action, then options for India are still open. So
where do we stand today if Pakistan doesn't take any actions?
MR. FLEISCHER: Well, the President is appreciative of
the steps that have been taken by President
Musharraf. President Musharraf has taken some positive
steps. He has condemned the terrorist attacks; he has
arrested the leaders of the Jaish-e- Mohammed and the Lashkar-e-Toiba
organization. He's closed their offices. The President
believes there's room for additional work to be done and President
Musharraf is moving forward. And the President reminds all
in the region that the war there is against terrorism and not a war
between India and Pakistan.
Q Just to follow. As far as China
is concerned, nuclear weapons and all that, I've been -- for the last
five years or so that the future threat of the United States will be
China, and now those reports are coming true. So where do we
stand as to the future Chinese threat to the U.S. on nuclear weapons
are concerned? And Pakistan is buying -- General Musharraf
was in Pakistan while the U.S. was fighting in Afghanistan, and he
bought 46 of the fighter planes with U.S. money which the U.S. gave
Pakistan, $1 billion.
MR. FLEISCHER: Well, as the President said when he
visited Shanghai last year and met with President Jiang, the President
sees opportunities for much progress to be made with
China. China is now a member of the World Trade
Organization. The President believes that there is much the
United States and China can do, particularly on the trade
front. There are issues where the United States and China
disagree, and in all cases, any disagreements will, of course, be
resolved through political dialogue and through diplomacy.
Q Yes, I want to ask you about
Enron. The President said he's worried about the effect on
the stockholders, on the pensioners and on the American
people. Is there anything the government can do to help
people who have lost all their savings?
MR. FLEISCHER: That's what the Department of Labor is
looking at now in regards specifically to the Enron
case. The Department of Labor -- what's happened as a result
of the President's announcement today is the government is proceeding
on two tracks. One is the investigative track, dealing
directly with Enron, and on that front, the Department of Justice
yesterday announced a criminal investigation of Enron to determine
whether or not there is criminal wrongdoing.
By the same token, the Department of Labor is also reviewing and
investigating Enron to see what took place with the workers' pensions
at Enron to see if anything can be done. More broadly than
that, the President thinks it is just crucial to focus on how to
prevent this from ever happening again. There are major
policy implications that have to be explored.
So, today, the President directed his government to take a look at,
one, how to protect people's pensions as a result of the way pension
rules are written for people's benefits within the corporations, as
well as taking a look at the accounting practices, procedures that are
underway so people have accurate financial information.
Q The President said this morning he hadn't
talked to Mr. Lay in the last six weeks. He also said that
the last time he saw him was last spring. Have you been able
to establish when the last conversation between the two was?
MR. FLEISCHER: It seems like it was last spring.
Q So they never talked in between last
spring and --
MR. FLEISCHER: That's what the President said this
morning; that's correct.
Q I'm just wondering -- you're painting a
picture then -- and I'm wondering if this is accurate -- that the
President made a specific effort to stay out of the loop on this, or
are you saying that when the decision by the administration was made
not to offer any kind of bailout to Enron, that in fact the President
made that decision or at least signed off on that decision, or was he
specifically not part of it?
MR. FLEISCHER: No, it was exactly as I indicated to you
this morning. Secretary Evans talked to Secretary O'Neill, and they
agreed that no action should be taken.
Q Did the President know about
that? Did he sign off on that conclusion? Or, as
I suggested earlier --
MR. FLEISCHER: That was, appropriately so, between the
Cabinet Secretaries.
Q You didn't answer the question,
Ari. The question was, did he sign off on it? And
the other question is, did he make a specific decision to distance
himself from any discussions or decisions about Enron, or from even
being briefed as to the accurate and current condition of their
financial --
MR. FLEISCHER: I repeat my answer to
you. Secretary Evans called Secretary O'Neill, and they
agreed that no action should be taken in response to the call to
Secretary Evans.
Q The answer is no, he wasn't briefed and
didn't sign off?
MR. FLEISCHER: That's what I've said to
you. I'll say it for the second time now.
Q No, you didn't say it, Ari.
Q Ari, this morning you warned Congress
against launching partisan investigations on this issue against the
administration. Would it be improper for Congress to look
into ties or possible contacts between Enron officials and
administration or White House officials? Would that be
improper?
MR. FLEISCHER: I think that it's very important for the
federal government, at all levels, from the Executive Branch to the
legislature, to look very carefully at what has happened to Enron, to
determine whether it was criminal wrong doing on behalf of Enron, and
also to see what needs to be done to protect people so this cannot
happen to them and their companies, and to protect people's pensions.
If this were to become what people have become so used to in
watching Washington, which is a politically-charged, a
politically-motivated effort to blame one party, or to look only at one
party, when clearly Enron is a corporation that has given hundreds of
thousands of dollars to both parties, then I think people would think
that the Congress is not on the right path. And I hope that
won't happen. It's very important for Congress to take a
good hard look at the facts here, and to develop good
policies. And that would serve the country well.
Q What are you saying, exactly?
MR. FLEISCHER: John?
Q Can I follow up on the answer?
MR. FLEISCHER: Go ahead. Follow up, and we'll
go to John.
Q Are you saying that Congress should only
look into contacts between Enron and the administration if it also
looks into contacts between Enron and Democrats? Or are you
just saying that they shouldn't look into contacts between Enron and
the administration at all?
MR. FLEISCHER: It's appropriate to take a look into what
led to the bankruptcy of Enron, and whether or not anything was done
wrong in the process of Enron going bankrupt. But if that's
a politically-charged or politically motivated effort, then I think the
American people are going to say that this is just another fishing
expedition, another endless investigation, the type that they've soured
on over the last many years.
Q You still haven't answered the
question. Can Congress look into contact between Enron and
administration officials? Is that proper, or not?
MR. FLEISCHER: Again, it depends if it's done --
Congress has the right to do as it sees fit, and Congress will act as
it sees fit. I think that it's important for Congress to act
in a way that helps solve the policy problems, and not in a way that is
suggestive of partisan, politically-charged investigations, that I
think people have been tired of.
Q Ari, these two Cabinet Secretaries are
officers, if you will, of the United States government. The
United States government has regulatory and statutory authority over
pension plans, over 401K plans, over publicly-held and publicly-traded
companies. If Ken Lay conveyed to them information about the
company's finances that was contrary to what the company was saying
publicly at the time about its finances, did they not have a legal and
fiduciary responsibility to tell the SEC, to tell the Labor Department,
to tell other regulatory agencies in the government to look into this
company and make sure everything was okay?
MR. FLEISCHER: I think those are questions you can
properly address to the agencies to see at what point -- and as I told
you last fall, the government began monitoring all of these issues, so
those efforts did begin --
Q No phone calls to other agencies to put
them on alert?
MR. FLEISCHER: -- those efforts did begin last
fall. I can only relate to you everything that I have been
told by the Secretaries this morning. I think these are
appropriate questions, and I know the Secretaries will be happy to take
them.
Q Ari, has anybody in the administration had
contact with Moody's or other credit grading agencies concerning
Enron?
MR. FLEISCHER: I can only tell you about what Secretary
Evans told me this morning, and he did not. Again, you ask
about anybody in the administration -- I can tell you the President did
not. And I just don't know if anybody else in the
administration -- it's a very big administration. There's no
information that I have that would lead me to suggest the answer to
that is yes.
Q Ari, does the President feel he was
appropriately served and informed by his Cabinet officers, who
apparently at least considered the possibility of a bailout for this
company with huge political and economic consequences?
MR. FLEISCHER: Again, I think you need to -- it's your
words, it's nobody else's words, about what they considered or what the
nature of it was.
Q You said they were informed of the
situation, looked and decided it --
MR. FLEISCHER: To answer your question directly, the
President is pleased with the actions that his Cabinet Secretaries
took. He thinks they acted wisely and properly.
Q A couple of questions. First of
all, you just said that we should take a look and see if anything could
be done that could prevent this from ever happening again. A
couple of minutes before that, you said bankruptcies
happened. What -- prevent what from ever happening again?
MR. FLEISCHER: Well, under the rules for 401Ks and
pensions that are under the purview of the Department of Labor to
protect pensions of employees, they have options they can look at, and
this is exactly what the President charged the Department of Labor in
looking at today.
One issue involves exposure. Are people's pensions
flexible enough that they are invested in more than just the company in
which they work. Obviously, if your entire retirement program depends
on your company's retirement assets or stock market portfolio, then you
are very vulnerable to that company going either up or going
down. Diversification in portfolio is a way to spread out
that risk and to serve people very well.
Obviously, many people who have been invested in the stock market,
in companies, are going to retire in great comfort and with a lot of
wealth because they were invested in companies. But the
question the Department of Labor will now look at as a result of the
President's direction is diversification. That's one
example.
Holding periods is another example. The President is
concerned about a situation in which regular working employees could
not sell their stocks while others were able to. The
President charged the Department of Labor with taking a look at the
holding periods by which employees are prohibited from selling their
stocks as part of their retirement funds. Those are the
types of things that can be done to help other workers to keep their
pensions.
Q In a related question, what does this say
to the President's desire to allow people to invest a portion of their
Social Security in the stock market, given that, as you said,
bankruptcies happen, apparently quite large ones?
MR. FLEISCHER: This is not the first bankruptcy, and it
won't be the last bankruptcy in a free and capitalistic economy, in
which the going-ups and the going-downs allow people to make
investments and retire with wealth. And the President
continues to believe, and as I indicated, there are many people who are
enjoying retirement in wealth and in comfort as a result of now, for
the first time, being given access to 401Ks in their retirement
plans. It's been a very healthy trend throughout society
that people have been able to retire with money invested in
companies. And it's led to, throughout the '90s, in fact,
one of the greatest expansions in people's wealth, as a result of the
increased ownership Americans have had through mutual funds and through
stocks.
So it's a widespread phenomenon throughout the economy that people
have their money invested in their company's retirement plans, and it
served people well. The President wants to make certain,
though, that in those instances in which there are bankruptcies,
protections can be put in place. They have been in the
past. The President has directed the Secretary of Labor to
look at how those protections can be improved.
Q But that does not speak to the investment
of Social Security funds in the stock market. The President
is no less committed to that now than before Enron's bankruptcy?
MR. FLEISCHER: No, that's just what I
indicated. The President remains fully committed to it
because of the reasons I gave. As a result of people being
invested in the stock market and having 401Ks, people are now retiring
with more money than they ever did before, even with companies going
bankrupt.
Q Ari, back on the investigations, are you
aware of any White House officials hiring outside attorneys at this
point?
MR. FLEISCHER: No.
Q Have there been any -- in anticipation of
the investigations, have there been any discussions yet where people
are beginning to anticipate who might be called in any of the various
investigations, either through Justice or up on the Hill? Here at the
White House specifically.
MR. FLEISCHER: Nothing that I've been told about, or am
aware of, no.
Q There have been no communications, no
meetings --
MR. FLEISCHER: I'm not aware of any of that
here. I'm not aware of any of that involving people in the
former administration. I'm not aware of any of that.
Q May I follow up Jacobo's
question? I know this sounds idealistic, but is there any
mechanism in the government to get the money back to the people who
very naively lost their funds? They were not responsible for
what happened to them. Can the money be taken away from
those who profited if it's found that fraud was committed?
MR. FLEISCHER: That's a question you need to address to
the Department of Labor. It's all covered by the labor laws
dealing with pensions.
Q Would the White House like to see this
happen if possible? The President has expressed concern --
MR. FLEISCHER: I'm not going to -- that's something the
Department of Labor is more expert in.
Q Mr. Fleischer, a question and protest in
the meantime. My name is Lambros Papantoniou, correspondent
here in Washington of the Greek opposition leading newspaper in Athens,
assigned to the White House. Earlier today, I was told officially that
only my name was excluded from the three correspondents from the pool
which is going to cover today's meeting between President Bush and the
Greek Prime Minister Costas Simitis. The exclusion was purely on a
politically-based criteria.
The Office of the Prime Minister, next-door, is claiming that you,
the White House, eliminated my name from the list; something I do not
believe at all. Since this is an act of bias and
discrimination against the treatment of the press and the democratic
rules, could you please comment. (Laughter.)
MR. FLEISCHER: Let me take a look at that. As
you know --
Q -- clarify what happened
exactly? Who -- because they say exactly the opposite, which
I do not believe.
MR. FLEISCHER: Let me take a look at it. This
is the first that I've heard about any of this. As you know,
any time there is a pool event, we must shrink the press corps down to
a group that is sizeable to fit everybody in. So we'll take
a look at whether you were part of that pool or not.
Q -- correspondents here in Washington, we
are three, and excluded only one. I'm not talking about
those who are coming from overseas. So it is very important
to pay your attention. And you told us that they are going
to discuss terrorism and also the Olympic Games. Do you know
if they're going to discuss also the examination of the framework of
Greek-Turkish relations?
MR. FLEISCHER: Let me suggest you allow the meeting to
take place. And there will be a pool report, and let's see if you're
going to be part of that pool or not; I'll take a look.
Q I wanted to get back to Ken's
question. Has Judge Gonzales or anyone in the White House
sort of taken on the responsibility of doing information-gathering or
being the point person for any requests for information from the White
House? Has the President organized a way to deal with this
Enron situation?
MR. FLEISCHER: The only request that I'm aware of that
has been received by the White House were requests made to the Vice
President's Office and the Vice President's Counsel has been pursuing
that.
Q Is there any move to consolidate the
effort to put information together and be responsive to requests in one
central place?
MR. FLEISCHER: I think one thing you've always seen in
this White House, we always work together, we are one team and we work
very closely together and talk with each other. But if
you're asking something more formal, if you're making comparisons to
the way business used to be done in the White House, we don't always do
our business -- we do our business a little differently.
Q May I ask this again? Has the
President felt, for appearance's sake alone, that it was necessary for
him to keep distance between what was happening with Enron and
himself?
MR. FLEISCHER: No. I mean, I think you've
seen that in the times that you've asked the President
questions. He's answered them directly.
You ask me questions; I answer them directly. This
morning, when I had the answer -- the question was, has anybody in the
administration had contact -- I shared everything I knew with you.
But I want to remind you that communication is routine between this
country and the people in government. What you're asking
about is wrongdoing, and I haven't heard anything in here, from
anybody, suggesting wrongdoing. You've only said contact,
communication, as if there is something wrong, inherently, with contact
and communication, and there is not.
Q That's actually my point, which is, given
that all that is accurate -- that's why I asked the question about why,
for instance, when Ken Lay calls the administration and says, we might
be interested in a bailout or what can be done, and the administration
makes the decision to say, no, not in this case, not appropriate --
given the size of the company, given the importance to the economy, and
given, quite frankly, the personal relationship and business political
relationship that the President has had, that he wouldn't either be
informed or actually make that conclusion or sign off on it, as he will
with other very important matters.
MR. FLEISCHER: Again, it's at the Secretary
level. And the Secretaries determined that they would not
intervene, and no action was taken. That is what took place,
and properly so.
Q But what you have, in this case, Enron is
the largest single donor to George Bush's political career -- from his
house race, to his governorship, to his presidential run. So
there is certainly the appearance here of a possible conflict of
interest. Why wouldn't the President want to know what was
going on with this company? The better to keep his distance
from it, if necessary. Why wouldn't his subordinates feel it
appropriate to feed him the information that they got, however
belatedly?
MR. FLEISCHER: I think that just the opposite is
suggested, that the government acted as the government
should. It took a look at this from a substantive matter,
from when Mr. Lay made those phone calls, and decided the appropriate
step was not to intervene or take any action. I think if
anything else were done, you would be making just the opposite charge,
that he took action because of his prior relationship with Mr.
Lay. And that is not the case here. That did not
happen. This was done based on judgment of the Cabinet
Secretaries and the merits, and they decided properly and wisely so, in
the President's opinion, that the government should not have intervened
in any way after Mr. Lay made the phone call to Secretary Evans.
Q But, Ari, the question is -- looking at it
a little bit differently, the reason to inform the President may not be
because this is a friend of his or a big political
donor. The President, throughout the fall, was well-informed
about the trouble in the airline industry. This is an
economic question. And this is a big company that went
bankrupt. A lot of people were hurt by it. There
were questions about the impact it might have on the energy
sector. For economic reasons -- the President's in the
middle of a recession, doing everything he can -- why didn't these
people feel it made sense to at least alert him that a major company
that might have a dramatic effect on a big sector, and you're worried
about the economy, why didn't they tell him?
MR. FLEISCHER: I think the answer to that is very much
in what I told you earlier this morning, and repeated again right now,
that when Mr. Lay called Secretary O'Neill to raise the issue involving
Long Term Capital and the experience Long Term Capital had, in which it
did have an impact, sector-wide, he brought that to the attention of
the Secretary of Treasury and said that he thought the financial
condition -- this is what Mr. Lay told Secretary O'Neill -- that the
financial condition of Enron could have similar implications as Long
Term Capital.
Secretary O'Neill asked Under Secretary Fisher to explore
that. Under Secretary Fisher and the Treasury Department
concluded that was not the case, that this was isolated and unique, and
focused on Enron Corporation, and was not symptomatic of anything
sector-wide. Just to the contrary of what you said.
Q I just want to make sure that I
understand. Even now, with three months hindsight, the
President is not in any way, at all disappointed that he wasn't
informed of any of this?
MR. FLEISCHER: No, the President was aware, of course,
last fall about what the condition of Enron was, just like everybody
else was.
Q About the specific conversations with
Secretary Evans and Secretary O'Neill?
MR. FLEISCHER: The President thinks they acted properly
in all times, and did the right thing.
Q -- in three months hindsight?
MR. FLEISCHER: That's correct.
Q Can I make sure we're not missing a
question here? You say you're not aware of any communication
after those conversations by Secretary Evans or Secretary O'Neill to
the White House or senior officials here. Does that include
the Vice President and his staff?
MR. FLEISCHER: Nothing that was brought to my attention
or that I'm aware of. Again, I cannot speak with 100-percent
certainty about every single person in the administration that has
thousands of people, or even for the top officials in which there are
scores. And I know you'll ask all the relevant questions.
But, again, I just want to remind everybody the difference between
communication and contact and wrongdoing. And I think these
same questions are going to be addressed to this administration -- I
recognize that. I think in fairness, they need to be
addressed if you are pursuing this line. This has been a situation
that's been underway for any number of years.
Q Ari, the criminal investigation of
President Clinton's "Pardongate" was assigned to the U.S. Attorney for
the Southern District of New York last February. Now, Mary
Jo White has retired without one word about this major scandal of
fearful abuse of the presidency. And my question is, will
President Bush, rather than allowing this to just die, give any
consideration to assigning this to Time Magazine's Person of the Year,
who is a very effectively experienced as a New York federal
prosecutor? I mean, he's not going to let this die, is he,
Ari?
MR. FLEISCHER: Again, any questions involving Justice
investigations are Justice matters.
Q All right. When the President
was with the Texas Rangers, he never called for the Atlanta Braves or
the Cleveland Indians to change their names, because a few professional
Indians so demanded. So he doesn't support the current drive
to get the Washington Redskins to change their name, does he?
MR. FLEISCHER: Not a topic I've talked with him about.
Q Ari, a few minutes ago -- back on China --
you said the U.S. from time to time will have differences with Beijing
and will endeavor to work out and resolve those
differences. But is the President at all concerned about an
apparent pattern by Beijing to essentially ignore the U.S. concerns
about religious persecution and continue in that --
MR. FLEISCHER: And that is -- you put your finger on,
one of the biggest differences between the United States and Beijing,
and that is, the importance of China respecting religious freedom and
people's right to worship as they see fit. That is an issue
in which the United States and China have differed, and that has been
made very clear to Chinese officials and continues to be made clear to
Chinese officials.
Q John Spratt, who is the ranking member of
the House Budget Committee, today called for a budget summit to try to
delineate some parameters for the budget and prevent -- reduce the
deficits. Does the White House -- are you aware of that, and
do you have a response to that?
MR. FLEISCHER: The President looks forward to submitting
his budget to the Congress, which will take place in early February,
and then he hopes that Congress will give it a fair
consideration. The President believes that the process that
Congress has with the House and Senate committees taking up the budget
and considering them is the best process.
This will be an interesting year, because now the Senate, of
course, being in Democrat hands, will have to come out with a budget
resolution, and the House will come up with a budget
resolution. It will be very interesting to see, given the
Senate's new control, what 50 senators in the Democratic Party and the
Senate will be able to come up with.
Q Thank you, Ari.
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