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For Immediate Release
Office of the Press Secretary
The White House
January 17, 2002
Press Briefing by Ari Fleischer
(Enron, etc)
Q: Ari, a spokesman for Congressman Waxman, reacting to what you said earlier, called it a disappointing reaction. He said, we had hoped for better from this White House. And he said that he and the Congressman, they don't want to draw conclusions, they would much rather have the White House release the information they're seeking. So, a, your reaction to Congressman Waxman's spokesman's comments; and, b, why not release, to put any questions to rest about if Enron had undue influence over the White House energy plan?
MR. FLEISCHER: On the second point, there's nothing new here. On the first point, Congressman Waxman has produced a study which -- in which he alleges that the energy policy review that was carried out by this administration had provisions in there that somehow uniquely benefited or benefited the Enron Corporation, as opposed to the country or the nation, which is in need of a comprehensive national energy policy.
One of the provisions that Congressman Waxman cited in there is a provision called PUHCA, which is a provision which the administration believes should be repealed, because it prevents more efficient operation in the energy market, as companies work with each other or are able to purchase other electricity companies.
That PUHCA measure has been passed previously by House committees in overwhelming bipartisan votes. So I think that alone tells you that there is widespread bipartisan support for it, for good and valid reasons, because it makes economic sense, it makes energy sense, and that's why the President's energy policy recommended it.
The recommendations in the President's energy plan were made because the President and the Vice President believe very strongly that they are the best policies to help make America more energy-independent and to reduce the likelihood, which all Americans have suffered, or many Americans have suffered, of blackouts and brownouts.
We are a nation without a comprehensive energy plan. The allegation by Congressman Waxman that anything was put in that plan for political purposes is, of itself, a partisan waste of taxpayer money. Taxpayer money needs to be invested in an investigation of criminal wrongdoing, and that's why the President's Department of Justice is reviewing whether or not anybody at Enron or anywhere else engaged in criminal activity. That is a wise, good use of taxpayer money and the President is dedicated to it.
Taxpayer money will be used to get the Cabinet Secretaries to complete the review the President has authorized them to begin to determine how other actions can be taken to protect people so this never happens again and to protect people's pensions and review any changes that need to be made on pension laws.
But if others want to pursue politics, if others want to play the blame game, that is their prerogative. It happens in this town from time to time, and it's always a waste of taxpayer money.
Q: Can I just quickly follow? They say it's not partisan, that they're just asking questions. And the Vice President's office revealed there were six meetings between either the Vice President or aides on the task force and Enron officials, and so they're just asking for more information about those meetings, again to answer the question with Enron out there --
MR. FLEISCHER: If they're alleging that the PUHCA provision, for example, was put in there at the behest of Enron Corporation, then why did it enjoy such bipartisan support on Capitol Hill when it was voted on previously by many Democrats? Is Mr. Waxman going to suggest that those Democrats were influenced?
Q: Ari, but all that said, you know the political environment you're operating in, given what's going on with Enron right now. So why take the position -- and even if you're right, this is presidential prerogative, why not -- why are you appearing in sort of taking the same tack that the Clinton administration did on similar issues? Why not fully disclose, put it all out there, and have it be resolved once and for all?
MR. FLEISCHER: Again, there's nothing new here. The administration is going to continue to pursue this to get to the bottom of any criminal wrongdoing at Enron or anywhere else that could have been involved -- and that's through the Department of Justice. The policy reviews will continue, and the administration will continue to be forthcoming in answering questions and providing information.
But I think everybody has seen the way this town operates. Washington, D.C. must fully investigate what's taken place with Enron. Washington, D.C. must fully move to protect people's pensions. But if Washington goes down the usual path of partisan fishing expeditions, I think they're going to lose the support of the public. The public wants to know that people here in this town are focused on the wrongdoing where the wrongdoing occurs, and not engaging in wasteful fishing expeditions.
Q: I mean, why not, then, just say okay, there's no "there" there, let's just put it out here and end this, so that we're not going down this --
MR. FLEISCHER: You say why not put "it" out? Would you define "it"?
Q: The task force information, the documents they have requested. I mean, why take on the GAO? Why allow this to happen if that's what it's all about, is partisan politics?
MR. FLEISCHER: So you're asking that uniquely about the energy review that was taken on by the administration. Is that correct?
Q: Yes.
MR. FLEISCHER: Okay. On that topic, there is a very important principle involved here. And that is the right of the government and all future presidencies, whether they're Democratic or Republican, to conduct reviews, to receive information from constituents regardless of their party or their background in a thoughtful and deliberative fashion.
And it has always been the right of people in our country to petition their government, to talk to their government, no matter what their background or who they are. The suggestion that any contact with the government is somehow sinister and, therefore, it should be examined to determine exactly what conversations that you have with anybody on any topic in conducting an energy review, which is a vital policy issue and a legitimate one in the eyes of, I think, Democrats and Republicans alike, is a principle that has big implications beyond what we're talking about today.
The White House is keenly aware of the political demands from some. But there are also principles involved in having a government that is able to thoughtfully, fully and deliberately gather information from all types of concerned Americans.
Q: And at what point is that principle outweighed by the need to reassure the public that everything has gone on the up-and-up?
MR. FLEISCHER: I think the public is very uneasy about what happened with Enron and they want it investigated. And it will be. This Justice Department has announced a criminal investigation of Enron, and that will be pursued fully.
I think the public is very uneasy about their pensions. The public wants to know if what happened to Enron can happen to them. People who work in other companies who have pensions worry about their 401Ks. Properly so. And the President directed a review of the Cabinet Secretaries to see if anything could change.
Bill, I really think the public does not share the judgment that there is somehow some political malfeasance here. I think the public has heard that cry from politicians in Washington where politicians turned to partisanship, one-party investigations, the blame game. What they have seen in the Bush administration is, whether it was former Clinton Treasury Secretary Robert Rubin or Ken Lay ask for something similar, this administration did the right thing for the right reasons because they acted on the basis of policy.
Q: If the public were to be reassured that nothing that happened behind closed doors in the meetings of the energy policy deliberative committee, whether it was with Enron officials or the officials of any other public company, wouldn't that simplify your job of reassuring the public that nothing untoward happened?
MR. FLEISCHER: No, Bill, because I think really you're asking to prove a negative. And I remind you that as part of what is going on, the Department of Justice is investigating from a criminal point of view, from a wrongdoing point of view, so the reviews are being done. And if there were to be something, there is an avenue that people could look into that is a thoughtful, deliberative government angle. Nothing like that has taken place here.
So the answer is to the release, nothing new. You're asking for us to prove a negative, and that's a road that we're not traveling.
Q: So you won't release the records? I mean --
Q: When you say nothing new --
MR. FLEISCHER: Nothing new. That's what we've always indicated. We'll stand on that principle.
Q: In other words, you won't release the records?
Q: That's actually what I want to ask -- there's no way you're going to bend from it? You guys have made a final decision and are no longer reviewing the question of whether or not you release the records? You won't release them, period, because of what you just outlined?
MR. FLEISCHER: Yes, Ron, there's nothing moving now to do that. That's correct. We will always continue to work with the Congress and work closely with the Congress. I can't make to you one hundred percent guarantee blanket predictions about all events in life to come, but I can answer your questions faithfully about the status today.
Q: Ari, just to follow on Kelly's original question. Are you saying specifically that nothing was put in the energy plan at Enron's request?
MR. FLEISCHER: What was put in the energy plan was put in at the need to help address an energy shortage in America, not as the result of a request of any one company or any one person. It was done because it's the right policy for the country. In fact, if you really want to take a look at some things, some of the things that Enron wanted the most, they didn't get, such as a global warming agreement by the United States. The previous administration, of course, did enter into an agreement on global warming, which I think was very pleasing to Enron. This administration took a look at that matter and, on policy grounds, decided that would not be the most helpful step to protect America's workers, America's economy.
If you look down the list of things, several things that were sought by Enron that the administration did not include because it was reviewed for policy reasons, things that were in there were all put in there because they were the best energy policy for our country that has severe energy problems.
Q: Okay, and also, do you deny the assertion that for whatever reason a provision might have been put in the policy, that one or more of them may uniquely benefit Enron?
MR. FLEISCHER: I don't know about uniquely benefit.
Q: Primarily benefit --
MR. FLEISCHER: I have no idea how to measure it. Our nation is a nation that has energy needs and there are regions of the country that have blackouts, that have brownouts. There is a need to move to change the infrastructure in the United States. Certainly, when California was suffering from the brownouts and blackouts it had last summer, one of the steps that could have been taken to alleviate California's problems was to make it easier to move energy from one region of the country that has surplus to California, which had a deficit. That is designed to help people in California. If anybody else would have benefitted as a result, that's tangential. There is a problem that had to be addressed.
Q: Can I just follow up on a couple things? First of all, you said you would work with Congress. But this is Congressman Waxman's report. He says he identifies 17 specific Enron lobbying proposals which he says ended up in the energy plan that the President rolled out. Now, are you saying you would call this a waste of taxpayers' money? It is completely illegitimate for a United States congressman, in the wake of this gigantic bankruptcy by a company apparently acting in a rogue fashion when it came to accounting and other matters, it's completely illegitimate for that member of Congress to inquire whether or not this company, which had given a lot of money to the administration, got anything in the return?
MR. FLEISCHER: I would never use that word in describing the actions of a member of Congress. What I have said is when you take a look at what the facts are in this case, that we are nation that does indeed have energy problems -- particularly last summer where the fears of blackout and brownout were most pronounced, and last winter as the Clinton administration worked with California officials to begin addressing their energy problems -- there is a recognition that the country has an old energy infrastructure which needs to be modernized to help consumers, to help the public.
When you take a look at the things that this administration has done in saying no to things that would have definitely been sought by Enron, such as global warming, such as elimination of carbon dioxide as part of the pollutant strategy, and which Enron would have wanted to trade carbon credits -- and then you take a look at the things that were included in the energy plan, based on policy and based on energy needs, I think the conclusion is that the administration acted on the basis of sound policy because our country has an energy problem.
It put things in and it left things out based on a policy review, again just as the administration acted when it got a phone call from Bob Rubin or Ken Lay. The reaction was policy. The review that Mr. Waxman has suggested, which ignores the facts that many of his colleagues voted to support a repeal of the PUHCA provisions that he cited were put in here, is a partisan waste of money.
Q: So the answer it sounds like to Congressman Waxman's inquiries is, we're good; we discharged the public trust in accordance with the highest standards of morality, and trust us on that. And you don't need to look into any of the actual context, the content of the conversations between Enron executives and members of the task force, who, from Enron, actually showed up and talked to members of the task force. Trust us.
MR. FLEISCHER: I think the American people want this invested fully and entirely. They want to know about any criminal wrongdoing. They want to know what can be done to protect their pensions. As I said before and I'll say again, we're pleased to leave the politics to others.
Q: Ari, not releasing the documents from the GAO you said is the right of the government and all future Presidents to conduct reviews in a thoughtful manner. Can you just articulate why you think releasing it would hinder that?
MR. FLEISCHER: Because I think on any number of issues on which there are reviews being done by the administration on anything, if the standard was that anybody and everybody who comes in to talk to anybody in the White House, any conversation they have must be released, I think it has a potential to tell people, well, you know, I want to go in there and just talk to the government, I want to go be able to meet with my congressman, give my thoughts to the congressman, but if a new standard is put in place where to do so would require any conversation, anything that anybody ever says to anybody in government life must be publicly reported, I think people will say, I -- you know, I'll keep my advice to myself.
It's a principle. It's a principle, Bill. And once the principle changes in one case, it makes it easier to change in the next case, not only for the President. Congress, of course, has its own rules. People can always go in and see their congressman about any issue, about any grant, about any proposal, about any legislation. And I think if you were to ask those members of Congress, will you release every conversation you had, will you release every email you had, will you release every piece of paper you had about those meetings, they would suggest to you that absent a compelling reason, a suggestion of wrong doing, they probably would not.
Q: First question. Have you discovered any new contacts recorded by any other governmental agencies between Enron and members of the executive wing? And I have a second question for you.
MR. FLEISCHER: No, I have nothing new to report.
Q: Second question I have for you, this morning you said that the economic team had discussed among themselves when the Enron situation started getting dire, I think you said, and after it became public that Enron was really in deep water, and you said -- what is it exactly that they discussed or analyzed and did not inform the President?
MR. FLEISCHER: I'm sorry, what's your question?
Q: My question is, what did the economic analyze --
MR. FLEISCHER: That was put out at length in writing last night. You have the statement from last night that described it all.
Q: Did they inform the President at all of their discussions?
MR. FLEISCHER: No. Larry Lindsey was asked that on CNN's show, Evans, Novak, Hunt and Shields last Saturday, and he said no, there was nothing -- no determination made, because, he said, as it were, the impact more broadly on other markets was a non-event. There was no impact on other markets.
Q: I know the administration has said that the President wants to make sure that no one ever loses their pension again in 401Ks. But has the administration done any kind of outreach to the people who have lost their pensions, or has Larry Lindsey or anybody taken a look at what can be done to help those specific people?
MR. FLEISCHER: The specific employees of Enron?
Q: That's right.
MR. FLEISCHER: Yes. Immediately upon the declaration of bankruptcy, the Department of Labor sent a team down to Houston to meet with Enron employees and to provide them information about benefits that they're entitled to under the law. That was an immediate reaction by a team at the Department of Labor.
Q: Has the President done any outreach, or anybody else here, to them, to follow that?
MR. FLEISCHER: No, that would be done through the President's agency here, which is the Department of Labor.
Q: I wanted to follow up on Ellen. We think the same way. How strong is the administration's commitment to doing this quickly, without having the litigants go through long, expensive legal trials? Can you immediately freeze the assets of those who made millions and somehow channeled the money to those who were defrauded?
MR. FLEISCHER: That's all being reviewed, anything of that nature, by the courts. Bankruptcy proceedings are in the hands of the courts, and that's where those matters will be solved.
Q: But are you asking them to speed it up? This could take months or years.
MR. FLEISCHER: I don't think it would be appropriate for the White House to direct a court to speed up or slow down any actions that are legal.
Q: Ari, did Enron come to the administration during its review of energy policy and make specific proposals about what should be included?
MR. FLEISCHER: I think you need to address that question directly to the people who were involved in the policy. I can't tell you if they did or if they didn't. As you know from the letter that was released by the Vice President's office, they were met with on several occasions.
Q: Right. But how would we get an answer to that question?
MR. FLEISCHER: Just pose it to the people on the review. I'll try to ask that, as well.
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Q: Ari, a number of politicians in both parties are disgorging the contributions that they have received from Enron and, in some cases, from Arthur Andersen, as well, and contribute them to the fund that's been established to help Enron employees. Is the President going to do that?
MR. FLEISCHER: Well, of course, what many of them are doing is in the context of the current election cycle, and the President, of course, running for a presidential office is under a different set of rules from the Congress. The President receives federal matching funds for his race, so if reelection were to become the issue, that is all through federal matching funds, no private contributions.
Q: But he received, before he got the matching funds from the general election, he received large amounts of Enron money for the primary --
MR. FLEISCHER: And that's why I drew your attention to the analogy that most Congress members are doing it for their upcoming election.
Q: Well, but they're saying that they're doing this, in some cases -- Schumer, for example, said he was doing this to clear the air and to make sure that no one could question his motives. Is the President not interested --
MR. FLEISCHER: Ken, if there's any action on that, I'll report it.
Q: Ari, we hear a lot of stuff from the podium about the political ramifications, the legal ramifications about Enron. The President is a man of means who has had means. These people who lost their money through Enron have no life savings now. What has the President said privately to you on a human standpoint about these people?
MR. FLEISCHER: Well, frankly, what he has said privately is the same thing that he's said publicly. If you will recall, he was asked that very question at the ranch when General Franks was visiting him in December and early January, and the President said that his heart goes out to the employees of Houston.
These people who worked for Enron have not only lost their paychecks, but they have lost a considerable amount of their retirement checks. And that's why this is such a serious matter, and that's why the Department of Justice is investigating how it could have come to be that people were unsuspecting, had no knowledge, the price dropped and the blackout period was imposed. And the President wants to make sure that any action is taken so that others can be protected so it does not happen to them.
Q: Has he tried to reach out to any of these families or any of these people? I mean, we've heard stories of people who are having it hard to go to the grocery store, to calculate how much money they have to spend.
MR. FLEISCHER: Through the Department of Labor -- the Department of Labor is the appropriate agency that is --
Q: No, has the President reached out?
MR. FLEISCHER: Through the Department of Labor.
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Q: What has the President said in private about Ken Lay? Does he still consider him a good friend? And would he take money from him in the future?
MR. FLEISCHER: Well, I think he was asked that question -- a similar question in the Oval Office. Ken Lay is and was a supporter of the President. And it doesn't matter. A criminal investigation is going to proceed. And the President wants to make sure that that criminal investigation will take itself wherever it needs to go, and that justice should be done. And it doesn't matter who was involved, whether they knew the President or didn't know the President. The Department of Justice is undertaking a criminal review.
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Q: Ari, yesterday, the President's Budget Director made a comment about the need for corporate statesmanship in this country. That was in response to a question he was asked about Enron executives cashing in $1 billion of stock while the workers got nothing. I was wondering whether the White House was thinking about this topic at all, especially since we're in a recession -- whether there was a message going to be coming out from the President about the need for chief executives, themselves, to be an example to forego salary increases and bonuses and all the other wonderful perks they get, and not only just to talk about sympathizing with workers, but to require sacrifice among the country's chief executives.
MR. FLEISCHER: Well, one of the things that the President has asked the Department of Labor, Treasury and Commerce to review as far as what policy changes can be made, learning the lessons of Enron, is to take a particular look at the blackout period that is imposed, and to determine whether or not workers should be given an advanced notice of the blackout period coming so they're not just slammed down on so they can't diversify or sell if they so desire. And the President thinks that the way to help people is to make sure that people who are punished through no action, no fault of their own, cannot be put in a similar position, and that's where the President has directed the review.
Q: Ari, after Mr. Lindsey's panel determined that Enron would have little impact on the markets, who did he report that information to, beyond the members of the Economic Council?
MR. FLEISCHER: I couldn't tell you fully who he reported it to. Larry is on record himself as saying he did not inform that to the President. Again, as Larry said on CNN last Saturday, some five days ago, he said that the review showed that they would not have any broader impact on overall markets. I think he said it was, as it were, a non-event, because it did not have such an impact.
Q: So there were no internal communications, either written, electronic, or spoken?
MR. FLEISCHER: No, I didn't say that. The economic team surely talked among themselves.
Q: Shouldn't he have reported to the Chief of Staff, for instance, just to at least say this is not going to be a problem?
MR. FLEISCHER: I have no idea if he did or if he didn't. The point of the matter is, as he said, it was a non-event.
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Q: Are you worried that the frustration on the Hill over Enron is going to hurt your ability to get votes on the energy report when it comes out next month, since it's going to be out at the same time there's hearings going on on Enron?
MR. FLEISCHER: I think the frustration on the Hill about Enron is wisely and properly focused on Enron, on the people who are associated with Enron in terms of the auditing and how it could have happened, and on policy reviews.
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Q: Can you clarify what you said about the release of documents to the GAO? When did the administration decide to definitively not release that? You had been telling us you were reviewing it.
MR. FLEISCHER: No, there has been no change. The Vice President's office is the one who has been addressing this issue. There has been no change in that to report.
Q: Are you still reviewing it or you aren't going to release it?
MR. FLEISCHER: There is no change in our status on that.
Q: Clarify the status.
Q: Is there a review underway or not?
MR. FLEISCHER: It means that the administration will continue to stand by the principle that I enunciated earlier.
Q: And, as you know, frequently these standoffs are resolved through the principle of comity between the branches; that if there is a way without harming future -- this administration or future Presidents' right, as they see it, to candid advice, they may be able to share it. GAO specifically requesting the documents seems to be one of the sticking points with the Vice President's counsel who says GAO doesn't have the statutory authority. Is there some way, perhaps, to work around that if it was a member of Congress, him or herself or a committee, rather than the GAO which seems to be an institution that the Vice President --
MR. FLEISCHER: There was a similar question that came up earlier in the briefing and I answered that question, saying there is a principle here and the administration will continue to adhere to the principle. There is no change today. I told you that I can't speak for every action conceivably that could possibly ever be taken in the future. But there is no change to be reported today. There is no change today.
Q: Can you clarify something for me? The average American, if they receive a lot of money from someone in support of something, they consider that person a friend. Does President Bush consider Mr. Lay a friend, or just someone who --
MR. FLEISCHER: There is no question, Ken Lay is and was a supporter, friend of the President's. But I think it also is no surprise to anybody that companies like Enron Corporation play both sides of the street. They give money to candidates and politicians in both parties. That is what Enron has done in many cases, and I think the numbers are half the Senate and three-quarters of the House, or vice-versa, have received funding from Enron.
Q: When you say "supporter, friend," what does that friendship entail? Hanging out, Rangers games, what?
MR. FLEISCHER: Hanging out -- that's not something I've really seen President Bush do very much.
Q: Oh, yes, he has, trust me.
MR. FLEISCHER: It's hard to hang in a bubble. (Laughter.)
Q: I mean, you know what I'm saying. But what does it mean? What does his friendship entail?
MR. FLEISCHER: April, I don't know how to make a linear description of friends.
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