Enron's political gifts haunt Texas Republican politicians

Source: http://www.chron.com/cs/CDA/printstory.hts/metropolitan/1183507

SAN ANTONIO (AP) 12-22-01 -- After Enron Corp.'s financial meltdown and congressional investigation, politicians and political groups have been hurrying to distance themselves from the former energy trading giant.

That includes returning political contributions from the Houston-based company that has sought protection from creditors in federal bankruptcy court. A national Republican political committee last week returned a $100,000 campaign donation from Enron.

Texas Attorney General John Cornyn and former state Supreme Court justice Greg Abbott are among politicians who received more than $1 million in donations from Enron and Enron executives from 1997 through 2000, according to an analysis of public records by Texans for Public Justice.

Cornyn, who won election in 1998, accepted $158,000 from Enron during the four-year period. Gov. Rick Perry received $187,000, and former Gov. George W. Bush received $238,000. Abbott received $12,600.

"That money to Cornyn puts him in a position where he needs to make sure he responds to consumers," Dan Lambe, executive director for Texas Watch, told the San Antonio Express-News in Friday's editions.

A Democratic candidate to succeed Cornyn said political contributions returned to Enron could be shared in some way by employees and shareholders sunk by the collapse.

"It's in the best interests of the state of Texas to have that estate be as big as it could possibly be," said Kirk Watson, a former Austin mayor.

As attorney general, Watson said he would also protect against outside criticism of the office's independence by including an independent investigator in the inquiry in the Enron collapse, which would be as open and public as possible and completed quickly.

Watson said there are "extraordinary circumstances that create questions in the case of Enron and in the level of campaign contributions.

"Texans deserve to have an open, vigorous investigation that's free of favoritism," said Watson, who will probably face Abbott, also a Republican, in the November election to succeed Cornyn. The attorney general is seeking the U.S. Senate seat being given up by Phil Gramm.

Cornyn, since Enron's Chapter 11 filing, has appointed a task force to probe the state's losses and joined other parties asking that court proceedings take place in Houston rather than New York.

State agencies are building a list of Enron-related liabilities, said Cornyn spokeswoman Jane Shepperd. She said the state has 180 days to present the court with details, which already include $1.2 million in an unpaid gas contract with the General Land Office.

Texas Watch officials also have asked Cornyn to consider former Enron employees in his inquiry. Thousands of employees were left out of work with decimated retirement savings. Many had Enron stock which the company had frozen in their 401(k) accounts, unable to sell during last month's collapse.

The Securities and Exchange Commission is examining Enron's use of questionable partnerships that allowed the company to keep some $500 million in debt off its books, and has issued subpoenas to accounting firm Arthur Andersen LLP related to its longtime auditing of Enron's accounts.

Enron Chairman and Chief Executive Kenneth Lay, who declined to testify before Congress, is a friend of President Bush and one of his largest campaign contributors, donating $250,000 to the Republican Party during Bush's run for president and raising at least $100,000 for Bush from other donors.

Enron and its employees have given more money to Bush's various campaigns than any other donor, according to the watchdog Center for Public Integrity.

Lay built the world's largest energy trader by buying electricity from generators and selling it to consumers. Enron, which only months ago was the nation's seventh-biggest in revenue, later acknowledged it overstated profits for four years.

Perry has come under fire for appointing the former Enron de Mexico chief, Max Yzaguirre, to head the Public Utility Commission. The governor said Wednesday it was "totally coincidental" that he took a $25,000 contribution from Enron CEO Ken Lay the day after appointing Yzaguirre to head the commission.

Some Democrats have accepted Enron contributions. House Speaker Pete Laney, D-Hale Center, accepted $8,000 while former Comptroller John Sharp received $7,000 from Enron, according to Texas Watch.