Army boss grilled over his Enron past

WASHINGTON -- Senate Democrats, continuing their offensive against the Bush administration's close ties to big business, grilled Army Secretary Thomas White on Thursday on his role at Enron Corp. before the company collapsed in scandal.

In sometimes hostile exchanges with White, lawmakers questioned the credibility of his statements that he knew nothing of the shoddy accounting practices and manipulation of California's energy market that Enron is alleged to have engaged in while he was vice chairman of a major Enron division.

They also questioned why federal regulators have not expanded their investigation of the Texas energy company to include White, now serving as the Army's top civilian.

"This looks to me like a textbook case of an administration insider getting kid glove treatment," Sen. Byron Dorgan, D-N.D., said.

White has not been implicated in any wrongdoing, although former Enron employees have alleged that the division he headed used questionable accounting practices during his tenure to overstate profits by hundreds of millions of dollars.

He told the panel that the accounting practices in question were standard in the industry at the time.

White defended the accounting practices of the Enron division and the propriety of 77 phone calls he made to Enron executives at the same time he was selling shares in the company worth more than $12 million.

He was vice chairman of Enron Energy Services, which traded energy to large power companies. Critics say the division engaged in questionable electricity trading that helped drive up power prices during the 2000-2001 California power crisis.

White told the panel he was unaware of transactions detailed in a December 2000 Enron memo that spelled out strategies critics say were meant to take advantage of California's power shortages improperly. He said that his division worked independently of Enron's wholesale unit, whose traders wrote a memo detailing schemes they dubbed Death Star, Fat Boy and Get Shorty to profit from the California energy crisis.

Dorgan said he found it hard to believe that White's division was unaware of what other divisions of Enron were doing.